Exhibit 99
PRESS RELEASE DATED July 29, 2008
BEMIS COMPANY, INC.
One Neenah Center, 4th Floor
P.O. Box 669
Neenah, Wisconsin 54957-0669
For additional information please contact:
Melanie E. R. Miller
Vice President, Investor Relations
and Treasurer
(920) 527-5045
FOR IMMEDIATE RELEASE
BEMIS COMPANY REPORTS 2008 SECOND QUARTER RESULTS
NEENAH, WISCONSIN, July 29, 2008 – Bemis Company, Inc. (NYSE-BMS) today reported quarterly diluted earnings of $0.46 per share for the second quarter ended June 30, 2008, at the upper end of management’s guidance. This is compared to $0.47 per share for the same quarter of 2007. Net sales increased to a record $980.0 million for the second quarter of 2008, a 6.3 percent increase from $921.8 million for the same period of 2007. Currency benefits contributed 5.3 percent to net sales for the quarter.
“I am pleased to report that Bemis is regaining momentum in key markets where we have been investing in technology and processes,” said Henry Theisen, Bemis Company’s President and Chief Executive Officer. “Rapidly rising raw material costs and global economic uncertainty have created a challenging operating environment for our industry. Our business teams are aggressively responding to volatile raw material cost increases while maintaining their dedication to cost management and customer service initiatives. Prudent management of purchasing, pricing, and customer relationships is key to our success during this period. While I am confident in our ability to meet these challenges, we are adjusting our total year earnings per share guidance to reflect this uncertain environment.”
BUSINESS SEGMENTS
Flexible Packaging
Flexible packaging, which represented about 83 percent of total Bemis net sales during the quarter, reported net sales of $813.9 million in the second quarter, a 7.3 percent increase compared to net sales of $758.3 million for the second quarter of 2007. Currency related sales growth totaled 4.9 percent. Segment operating profit for the second quarter of 2008 was $88.9 million, or 10.9 percent of net sales. Segment operating profit for the second quarter of 2007 was $93.5 million, or 12.3 percent of net sales. Currency benefits added $2.9 million to operating profit in the second quarter of 2008. Lower operating profit in 2008 compared to the previous year reflects the impact of the time lag that occurs before higher raw material costs are reflected in increased selling prices.
Commenting on the flexible packaging segment results, Theisen said, “Net sales growth in this business segment was driven by a combination of volume growth in some markets and improved sales mix in other markets. While this challenging economic climate continues to create volatile business conditions, we are pleased with the strength of our business model and the benefits of our end market diversity. Solid sales growth in the European region, where we have introduced several new products, is providing positive profit momentum that we expect to be an important contributor going forward. Lower operating margins reflect the impact of higher raw material costs and inflationary pressures. In response, we are aggressively adjusting selling prices and maintaining a keen focus on cost management and process improvement. Prompt response to volatile market conditions will be vital to meeting our flexible packaging business goals for 2008.”
Pressure Sensitive Materials
Net sales from the pressure sensitive materials business segment for the second quarter of 2008 were $166.1 million, a 1.6 percent increase from net sales of $163.5 million in the second quarter of 2007. Currency related sales growth totaled 7.2 percent. Segment operating profit for the second quarter of 2008 was $9.1 million, or 5.5 percent of net sales, compared to the second quarter of 2007 when segment operating profit was $10.2 million, or 6.2 percent of net sales. Currency benefits added $1.2 million to operating profit in the second quarter of 2008.
“Our North American label product business is delivering relatively stable results,” said Theisen. “We continue to experience lower sales volumes for our higher margin technical products sold into markets that are impacted by weakness in the housing and automotive sectors. Our global graphic products are also experiencing generally weak economic conditions and a negative change in sales mix. Our diligent cost management and attention to excellence in customer service are expected to improve performance in this business segment once the economy begins to strengthen.”
Other Costs (Income), Net
For the second quarter of 2008, other costs and income included $8.8 million of financial income compared to $7.6 million for the second quarter of 2007.
Capital Structure
Total debt to total capitalization was 32.0 percent at June 30, 2008, compared to 32.9 percent at December 31, 2007. Total debt as of June 30, 2008 was $863.0 million, an increase of $19.7 million from the balance of $843.3 million at December 31, 2007. Cash flow from operations was $72.4 million in the second quarter of 2008. Increased working capital levels were driven by rising raw material costs and had a negative effect on cash flow from operations during the second quarter.
2008 Earnings Outlook
Rapidly increasing raw material costs and unpredictable consumer reaction to rising commodity costs will continue to increase pressure on operating profit during the second half of the year. In spite of this challenging cost environment, management expects third quarter 2008 diluted earnings per share to be in a range of $0.42 to $0.46, reflecting the ongoing benefits of successful cost management and productivity improvement programs. Management has adjusted total year 2008 guidance to a range of $1.75 to $1.83 per share in light of the current volatile raw material environment and uncertain economic conditions. The capital expenditures forecast continues to be in the $125 million range for 2008. Commenting on the outlook for the year, Theisen noted that market conditions remain difficult to predict. “Announcements of substantial raw material cost increases during the second quarter have set the stage for a challenging second half of the year. At Bemis, we remain diligent in our focus on strengthening our business model, customer relationships, and technological advantage in the industry. With this solid foundation, we expect to continue to be a dependable supplier to our customers and a valuable investment for our shareholders.”
Forward Looking Statements
Statements in this release that are not historical, including statements relating to the expected future performance of the Company, are considered “forward-looking” and are presented pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such content is subject to certain risks and uncertainties, including but not limited to future changes in cost or availability of raw materials, consumer buying patterns under certain economic conditions, the impact of weather conditions on consumer demand, changes in customer order patterns, the results of competitive bid processes, a failure in our information technology infrastructure or applications, foreign currency fluctuations, increased working capital requirements, and changes in prevailing market interest rates. Actual future results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors which are detailed in the Company’s regular SEC filings including the most recently filed Form
10-K for the year ended December 31, 2007.
Bemis Company, Inc. will webcast an investor telephone conference regarding its second quarter 2008 financial results this morning at 10 a.m., Eastern Time. Individuals may listen to the call on the Internet at www.bemis.com under “Investor Relations”. Listeners are urged to check the website ahead of time to ensure their computers are configured for the audio stream. Instructions for obtaining the required, free, downloadable software are available in a pre-event system test on the site.
Bemis Company is a major supplier of flexible packaging and pressure sensitive materials used by leading food, consumer products, manufacturing, and other companies worldwide. Founded in 1858, the Company reported 2007 net sales of $3.6 billion. The Company’s flexible packaging business has a strong technical base in polymer chemistry, film extrusion, coating and laminating, printing and converting. The Company’s pressure sensitive materials business specializes in adhesive technologies. Headquartered in Neenah, Wisconsin, Bemis employs about 15,700 individuals in 56 manufacturing facilities in 10 countries around the world. More information about the Company is available at our website, www.bemis.com.
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BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share amounts)
(unaudited)
| | Three Months Ended | | Six Months Ended | |
| | Jun 30, | | Jun 30, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
| | | | | | | | | |
Net sales | | $ | 979,959 | | $ | 921,820 | | $ | 1,927,241 | | $ | 1,830,950 | |
| | | | | | | | | |
Costs and expenses: | | | | | | | | | |
Cost of products sold | | 807,422 | | 744,907 | | 1,591,735 | | 1,476,886 | |
Selling, general and administrative expenses | | 88,235 | | 86,493 | | 176,979 | | 171,969 | |
Research and development | | 6,937 | | 6,475 | | 12,765 | | 12,700 | |
Interest expense | | 11,105 | | 12,653 | | 20,134 | | 25,143 | |
Other costs (income), net | | (9,141 | ) | (8,723 | ) | (18,246 | ) | (13,908 | ) |
Minority interest in net income | | 1,488 | | 1,089 | | 2,828 | | 1,678 | |
| | | | | | | | | |
Income before income taxes | | 73,913 | | 78,926 | | 141,046 | | 156,482 | |
| | | | | | | | | |
Provision for income taxes | | 27,500 | | 29,400 | | 52,300 | | 58,700 | |
| | | | | | | | | |
Net income | | $ | 46,413 | | $ | 49,526 | | $ | 88,746 | | $ | 97,782 | |
| | | | | | | | | |
Basic earnings per share of common stock | | 0.47 | | 0.47 | | $ | .89 | | $ | .93 | |
| | | | | | | | | |
Diluted earnings per share of common stock | | 0.46 | | 0.47 | | $ | .88 | | $ | .92 | |
| | | | | | | | | |
Cash dividends paid | | 0.22 | | 0.21 | | $ | .44 | | $ | .42 | |
| | | | | | | | | |
Weighted average common shares outstanding | | 99,643 | | 104,511 | | 99,880 | | 104,781 | |
Weighted average common shares and common stock equivalents outstanding | | 100,829 | | 105,593 | | 100,874 | | 106,059 | |
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BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(dollars in thousands)
(unaudited)
| | June 30 | | December 31 | |
| | 2008 | | 2007 | |
ASSETS | | | | | |
| | | | | |
Cash and cash equivalents | | $ | 171,013 | | $ | 147,409 | |
Accounts receivable, net | | 518,135 | | 448,200 | |
Inventories, net | | 526,868 | | 478,727 | |
Prepaid expenses | | 72,371 | | 62,607 | |
Total current assets | | 1,288,387 | | 1,136,943 | |
| | | | | |
Property and equipment, net | | 1,262,716 | | 1,248,456 | |
| | | | | |
Goodwill | | 665,133 | | 642,507 | |
Other intangible assets, net | | 104,996 | | 103,756 | |
Deferred charges and other assets | | 59,607 | | 59,734 | |
Total | | 829,736 | | 805,997 | |
| | | | | |
TOTAL ASSETS | | $ | 3,380,839 | | $ | 3,191,396 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
| | | | | |
Current portion of long-term debt | | $ | 10,856 | | $ | 1,758 | |
Short-term borrowings | | 111,706 | | 66,047 | |
Accounts payable | | 401,169 | | 384,673 | |
Accrued salaries and wages | | 74,774 | | 70,248 | |
Accrued income and other taxes | | 24,431 | | 11,824 | |
Total current liabilities | | 622,936 | | 534,550 | |
| | | | | |
Long-term debt, less current portion | | 740,454 | | 775,456 | |
Deferred taxes | | 157,983 | | 155,871 | |
Deferred credits and other liabilities | | 139,344 | | 124,261 | |
Total liabilities | | 1,660,717 | | 1,590,138 | |
| | | | | |
Minority interest | | 45,455 | | 38,926 | |
| | | | | |
Stockholders’ equity: | | | | | |
Common stock issued (117,073,260 and 116,941,126 shares) | | 11,707 | | 11,694 | |
Capital in excess of par value | | 336,100 | | 327,387 | |
Retained income | | 1,567,036 | | 1,523,659 | |
Other comprehensive income (loss) | | 258,165 | | 171,162 | |
Treasury common stock (17,422,771 and 16,422,771 shares) | | (498,341 | ) | (471,570 | ) |
Total stockholders’ equity | | 1,674,667 | | 1,562,332 | |
| | | | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 3,380,839 | | $ | 3,191,396 | |
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BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
| | Six Months Ended | |
| | June 30, | |
| | 2008 | | 2007 | |
Cash flows from operating activities | | | | | |
Net income | | $ | 88,746 | | $ | 97,782 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
Depreciation and amortization | | 83,752 | | 79,126 | |
Minority interest in net income | | 2,828 | | 1,678 | |
Excess tax benefit from share-based payment arrangements | | (52 | ) | (5,767 | ) |
Stock award compensation | | 8,806 | | 8,003 | |
Deferred income taxes | | (1,362 | ) | 2,615 | |
Income of unconsolidated affiliated company | | (885 | ) | (625 | ) |
Loss (gain) on sales of property and equipment | | 905 | | (326 | ) |
Non-cash restructuring related activities | | 0 | | 108 | |
Changes in working capital, net of effects of acquisitions | | (73,094 | ) | (38,135 | ) |
Net change in deferred charges and credits | | 18,301 | | 43,525 | |
| | | | | |
Net cash provided by operating activities | | 127,945 | | 187,984 | |
| | | | | |
Cash flows from investing activities | | | | | |
Additions to property and equipment | | (58,615 | ) | (95,428 | ) |
Business acquisitions and adjustments, net of cash acquired | | 0 | | (97 | ) |
Proceeds from sales of property and equipment | | 1,222 | | 7,611 | |
| | | | | |
Net cash used in investing activities | | (57,393 | ) | (87,914 | ) |
| | | | | |
Cash flows from financing activities | | | | | |
Proceeds from issuance of long-term debt | | 15,773 | | 12,087 | |
Repayment of long-term debt | | (17,726 | ) | (17,890 | ) |
Net borrowing of commercial paper | | 43,750 | | 30,550 | |
Net (repayment) borrowing of short-term debt | | (26,633 | ) | 1,095 | |
Cash dividends paid to stockholders | | (45,371 | ) | (45,725 | ) |
Common stock purchased for the treasury | | (26,771 | ) | (39,186 | ) |
Excess tax benefit from share-based payment arrangements | | 52 | | 5,767 | |
Stock incentive programs and related withholdings | | (1,364 | ) | (14,932 | ) |
| | | | | |
Net cash used in financing activities | | (58,290 | ) | (68,234 | ) |
| | | | | |
Effect of exchange rates on cash and cash equivalents | | 11,342 | | 9,320 | |
| | | | | |
Net increase in cash and cash equivalents | | 23,604 | | 41,156 | |
| | | | | |
Cash and cash equivalents balance at beginning of year | | 147,409 | | 112,160 | |
| | | | | |
Cash and cash equivalents balance at end of period | | $ | 171,013 | | $ | 153,316 | |
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BEMIS COMPANY, INC. AND SUBSIDIARIES
OPERATING PROFIT AND PRETAX PROFIT
(in millions)
(unaudited)
| | Three Months Ended | | Six Months Ended | |
| | June 30, | | June 30, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
| | | | | | | | | |
Flexible Packaging operating profit | | $ | 88.9 | | $ | 93.5 | | $ | 167.5 | | $ | 181.7 | |
| | | | | | | | | |
Pressure Sensitive Materials operating profit | | $ | 9.1 | | $ | 10.2 | | $ | 20.9 | | $ | 24.4 | |
| | | | | | | | | |
General Corporate Expenses | | $ | (11.5 | ) | $ | (11.0 | ) | $ | (24.5 | ) | $ | (22.8 | ) |
| | | | | | | | | |
Interest Expense | | $ | (11.1 | ) | $ | (12.7 | ) | $ | (20.1 | ) | $ | (25.1 | ) |
| | | | | | | | | |
Minority Interest in Net Income | | $ | (1.5 | ) | $ | (1.1 | ) | $ | (2.8 | ) | $ | (1.7 | ) |
| | | | | | | | | |
Income before Income Taxes | | $ | 73.9 | | $ | 78.9 | | $ | 141.0 | | $ | 156.5 | |
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