Bemis Co. Inc., while saying the company is pleased with its long-term strategy, was tripped up in two markets during the first quarter. And that impacted financial results.
The Neenah, Wis.-based packaging company pointed to both Latin America and an “inefficient ramp-up” of an expanding health care packaging facility in Wisconsin as problem areas during the quarter.
“We stumbled operationally in ... two specific areas of our global business. In Latin America, we didn’t react to short term order patterns by properly reducing costs,” CEO William Austen told stock analysts on an earning conference calls April 28.
“And in our newly expanded Oshkosh health care packaging facility, we underestimated the hiring time line and learning curve associated with doubling the workforce and the impact it would have on the financials,” he said.
“In short, we disappointed ourselves. Our teams are working to rectify these issues,” he said.
The Latin America business involves rigid plastic packaging such as tubs for margarine, yogurt and ice cream.
Chief Financial Officer Michael Clauer also spoke about the first quarter challenges on the earnings call. This is what he had to say about the health care facility:
“While we are disappointed in the short-term financial results of this situation, improvement is under way and we anticipate the financial impact will be remedied by the third quarter and return the investment to its original financial objectives, albeit a few quarters behind schedule,” he said.
Bemis reported a profit of $56.2 million, or 59 cents per share, on sales of $967.9 million for the first quarter of this year.
That compares with a profit of $54.4 million, or 55 cents per share, on sales of $1.040 billion during the first quarter of 2015. The company had 95.9 million diluted shares during this reporting period and 98.8 million for last year’s reporting period.
“We have the will and a sense of urgency to perform at higher level each and every day,” Austen said.