Bemis Company Reports Second Quarter Results, Adopts FIFO Inventory Accounting Method.MINNEAPOLIS--(BUSINESS WIRE)--July 23, 1999-- Bemis Company Bemis Company, Inc. is an American manufacturer of flexible packaging products and pressure-sensitive materials, which are distributed worldwide. Bemis is part of the S&P 500 index. References
tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings of $0.60 per share, up 18% from $0.51 per share in the second quarter of 1998. The 1998 earnings have been restated to reflect the Company's change to FIFO (First In First Out) A storage method that retrieves the item stored for the longest time. Contrast with LIFO. See traffic engineering methods. FIFO - first-in first-out (first-in, first-out first-in, first-out n. A method of inventory accounting in which the oldest remaining items are assumed to have been the first sold. In a period of rising prices, this method yields a higher ending inventory, a lower cost of goods sold, a higher gross ) inventory valuation method from LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO. LIFO - stack (last-in, first-out last-in, first-out n. A method of inventory accounting in which the most recently acquired items are assumed to have been the first sold. In a period of rising prices, this method yields a lower ending inventory, a higher cost of goods sold, a lower ). Revenues in the second quarter were $481.3 million, up two percent from $470.6 million in the year earlier quarter. For the first six months of 1999, diluted earnings were $0.96 per share compared with a restated $0.90 per share in the first half of 1998. The Company estimates that, had it remained on the LIFO inventory method, second quarter diluted earnings would have been reduced by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. two cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. using June June: see month. 30, 1999 inventory quantities. Bemis Bemis may refer to:
1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the of raw material prices. Management believes the change from LIFO to FIFO inventory valuation method benefits the company by providing the best matching of the applicable raw material cost of a unit of product to the product's selling price and, therefore, presents a clearer picture of operating results. The change also enables management to forecast costs more accurately. The change to FIFO inventory accounting will result in incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. tax payments of approximately $12 million expected to be spread over the next four years. These taxes have been reflected in the restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of prior years and will, therefore, have no effect on income for 1999 and future years. A schedule of restated net income and earnings per share for the previous three years is included in this release. The Company's flexible packaging operations reported a 4% increase in net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight and profit growth of about 20% compared to the second quarter of last year due to strong results in both high barrier plastic products and polyethylene polyethylene (pŏl'ēĕth`əlēn), widely used plastic. It is a polymer of ethylene, CH2=CH2, having the formula (-CH2-CH2-)n products. The pressure sensitive materials operations reported slightly lower sales and lower profits compared with the year earlier quarter, as that business' previously announced reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. and the costs of adding new focused manufacturing capacity affected profitability. Commenting on the results, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , John H. Roe, said "I am pleased with the overall results of the Company in the second quarter. Our flexible plastic packaging operations turned in a strong quarter and have excellent prospects heading into the second half of the year. We are expanding our share in several key markets, our manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. are running very efficiently, and we continue to do what it takes to be the preferred packaging supplier to many of the largest food and consumer products companies. With key raw material prices rising quickly, we must be very efficient throughout our manufacturing operations to maintain a high level of performance through the second half of the year. "Our pressure sensitive materials business continues to work through its reorganization and the activities associated with capacity expansion, but we are expecting sequential One after the other in some consecutive order such as by name or number. improvement in its results as the second half progresses. Our focus is on the efficient transition to a major new manufacturing facility in the second half of the year. We have good growth opportunities throughout this business and will be aggressively pursuing those with new products. "Looking at the balance of 1999, we expect second half earnings growth of about 20% compared with last year's restated results, with stronger growth occurring in the fourth quarter." Statements in this release which are not historical are considered "forward looking" and are subject to certain risks and uncertainties. Among these are the future direction of raw material prices, the Company's ability to achieve expected improvements in the operations of the pressure sensitive materials business, levels of domestic and international economic activity, and others noted in the Company's regular SEC filings. Bemis Company is a major supplier of flexible packaging and pressure sensitive materials used by leading food, consumer products, manufacturing, and other companies worldwide. -0-
BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in thousands of dollars except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998(a) 1999(a) 1998(a)
Net sales $481,259 $470,595 $931,866 $922,086
Costs and expenses:
Cost of products sold 372,956 369,449 727,105 732,279
Selling, general, and
administrative expenses 48,049 46,370 98,898 92,998
Research and development 3,653 3,113 6,156 6,021
Interest expense 5,198 5,627 10,342 10,867
Other costs (income), net (864) (189) 5,307 (942)
Minority interest in net
income 976 1,086 1,929 2,014
Income before income taxes 51,291 45,139 82,129 78,849
Provision for income taxes 19,700 17,500 31,800 30,500
=========================================
Net income $31,591 $27,639 $50,329 $48,349
Basic earnings per share
of common stock $.60 $.52 $.96 $.91
Diluted earnings per share
of common stock $.60 $.51 $.96 $.90
Cash dividends paid $.23 $.22 $.46 $.44
Average common shares and
common stock equivalents
outstanding 52,616 53,710 52,592 53,684
(a) Periods prior to April 1, 1999, have been restated to reflect
the second quarter 1999 change in method of accounting for inventory
to the first-in, first-out (FIFO) method from the last-in, first-out
(LIFO) method previously used for the majority of domestic inventory.
BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands of dollars)
(unaudited)
June 30, Dec. 31,
ASSETS 1999 1998(a)
------
Cash $19,494 $23,738
Accounts receivable - net 258,905 246,676
Inventories 267,329 241,585
Prepaid expenses and deferred charges 34,846 34,912
Total current assets 580,574 546,911
Property and equipment, net 744,282 740,101
Excess of cost of investments in
subsidiaries over net assets acquired 154,740 160,819
Other assets 19,636 34,195
Total 174,376 195,014
TOTAL ASSETS $1,499,232 $1,482,026
LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------
Current portion of long-term debt $2,749 $2,946
Short-term borrowings 3,449 3,553
Accounts payable 195,554 193,088
Accrued salaries and wages 28,719 31,629
Accrued income and other taxes 22,873 14,397
Total current liabilities 253,344 245,613
Long-term debt, less current portion 369,166 371,363
Deferred taxes 85,389 84,679
Other liabilities and deferred credits 59,389 54,655
Total liabilities 767,288 756,310
Minority interest 37,582 37,862
Stockholders' equity:
Common stock (59,098,203 and
59,056,047 shares ) 5,910 5,906
Capital in excess of par value 181,957 181,908
Retained income 734,628 708,362
Other comprehensive income (loss) (25,884) (6,116)
Treasury common stock (6,788,088
and 6,786,889 shares) (202,249) (202,206)
Total stockholders' equity 694,362 687,854
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $1,499,232 $1,482,026
(a) Periods prior to April 1, 1999, have been restated to reflect
the second quarter 1999 change in method of accounting for inventory
to the first-in, first-out (FIFO) method from the last-in, first-out
(LIFO) method previously used for the majority of domestic inventory.
BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of dollars)
(unaudited)
Six Months Ended
June 30,
1999(a) 19989a)
Cash flows from operating activities
Net income $50,329 $48,349
Non-cash items:
Depreciation and amortization 50,561 45,725
Minority interest in net income 1,929 2,014
Deferred income taxes, non-current
portion 1,097 (728)
Undistributed earnings of affiliated
companies 5,729 (509)
Loss (gain) on sale of property and
equipment 125 (17)
Cash provided by operations 109,770 94,834
Changes in working capital, net of
effects of acquisitions
and dispositions (32,400) (882)
Net change in deferred charges
and credits 4,732 (2,446)
Net cash provided by operating
activities 82,102 91,506
Cash flows from investing activities
Additions to property and equipment (58,349) (74,828)
Business acquisitions (1,424) (46,319)
Proceeds from sale of property and
equipment 974 1,419
Other 16 2
Net cash used in investing activities (58,783) (119,726)
Cash flows from financing activities
Change in long-term debt excluding debt
assumed in business acquisition (2,070) 47,454
Change in short-term debt 169 (329)
Cash dividends paid (24,063) (23,486)
Subsidiary dividends to minority
stockholders (1,835)
Common stock purchased for the treasury (43)
Stock incentive programs and related
tax effects 53 7,388
Net cash (used) provided by financing
activities (25,954) 29,192
Effect of exchange rates on cash (1,609) (38)
Net (decrease) increase in cash ($4,244) $934
(a) Periods prior to April 1, 1999, have been restated to reflect
the second quarter 1999 change in method of accounting for inventory
to the first-in, first-out (FIFO) method from the last-in, first-out
(LIFO) method previously used for the majority of domestic inventory.
BEMIS COMPANY, INC. AND SUBSIDIARIES
CONDENSED INCOME STATEMENT
Restated to Reflect Change to FIFO Inventory Method
(in thousands of dollars except per share amounts)
(unaudited)
For the 1998 quarters ended
Mar 31 Jun 30 Sep 30 Dec 31
Net sales $451,491 $470,595 $465,497 $460,421
Costs and expenses:
Cost of products sold 362,830 369,449 365,808 360,128
All other costs 54,951 56,007 54,848 58,953
Income before income
taxes 33,710 45,139 44,841 41,340
Provision for income
taxes 13,000 17,500 17,600 15,800
Net income $20,710 $27,639 $27,241 $25,540
Diluted earnings per share $0.39 $0.51 $0.51 $0.49
For the years ended Dec 31,
1998 1997 1996
Net sales $1,848,004 $1,877,237 $1,655,431
Costs and expenses:
Cost of products sold 1,458,215 1,485,494 1,268,824
All other costs 224,759 226,819 220,570
Income before income
taxes 165,030 164,924 166,037
Provision for income
taxes 63,900 63,500 63,000
Net income $101,130 $101,424 $103,037
Diluted earnings per share $1.90 $1.88 $1.93
Restated to reflect the second quarter 1999 change in method of accounting for inventory to the first-in, first-out (FIFO) method from the last-in, first-out (LIFO) method previously used for the majority of domestic inventory. |
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