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Bemis Co. reports strong results

By: Jim Johnson

January 30, 2014

After focusing on integration of acquired plants and closures of others in recent years, Bemis Co. Inc. is looking at 2014 as a year of growth.

The Neenah, Wis.-based company, as part of its year-end earnings report, unveiled what Chief Operating Officer William F. Austen called “a robust capital expenditure plant for 2014 that supports our long-term growth strategy.”

“In recent years, we have been focused on integrating 25 acquired plants across five countries in addition to closing nine pants impacted by our facility consolidation program,” he said on a conference call to discuss earnings.

“Now that this hard work is complete, we are focused on executing our growth agenda. In 2014, we are investing in state-of-the-art capacity to support top-line growth and further strengthen our competitive position,” Austen said.

Bemis expects to spend between $175 million to $200 million on capital expenditures this year to support those efforts.

Increased capital spending this year will include investments in the growing market for flexible liquid packaging, medical packaging and the company’s sealant and protective film extrusion platform in Asia, he said. “In addition, we are investing in select research and development projects that will create long-term growth opportunities.”

“Current market trends support these investments,” Austen said.

News of the capital spending plans comes as Bemis reported record diluted earnings per share in 2013 on slightly lower overall revenue.

The flexible packaging and pressure sensitive materials maker earned $212.6 million, or $2.04 per share, on revenue of $5.03 billion in 2013. That compares with earnings of $173.8 million, or $1.66 per share, on revenue of $5.14 billion in 2012.

Adjusted diluted earnings would have been $2.28 per share in 2013 up from $2.15 per share in 2012, Bemis said.

The company earned $56.2 million, or 54 cents per share, on revenue of $1.22 billion during the fourth quarter of last year. That compares with earnings of $40.1 or 38 cents per share, on revenue of $1.24 billion for the fourth quarter of 2012.

“We delivered on our strategy to achieve sustainable improvements in sales mix and optimized our footprint with the completion of our facility consolidation program,” CEO Henry Theisen said in a statement. “With the challenges of relocating production equipment behind us, we expect our future performance metrics to improve. As we begin 2014, we are experiencing positive sales momentum in our priority growth areas.”

Packaging sales in the United States accounted for $3 billion in revenue in 2013 while global packaging added another $1.5 billion. Pressure sensitive net sales totaled $553.2 million, the company said.

Bemis also provided earning guidance of $2.40 to $2.55 per diluted share, a 5- to 12-percent increase compared to 2013. First quarter guidance is 55 to 60 cents per diluted share.

“As we finish 2013 and enter early 2014, our orders and our backlog are strong across all geographies. We are now cautiously optimistic about modestly higher volume trends going forward,” Theisen said on the conference call.

The CEO also indicated the company repurchased 1 million shares of stock during the fourth quarter and 2 million for the entire year.