BMS » Topics » Flexible Packaging

This excerpt taken from the BMS 8-K filed Jan 28, 2010.

Flexible Packaging

Flexible packaging, which represented about 85 percent of total Company net sales during the quarter, reported net sales of $770.5 million in the fourth quarter of 2009, an increase of 5.4 percent compared to net sales of $731.3 million for the fourth quarter of 2008.  Currency related effects increased flexible packaging net sales by 7.1 percent and a June 2009 acquisition increased net sales by 3.6 percent.  Unit sales volume and mix both had a positive impact on flexible packaging sales during the quarter, offset by lower selling prices which reflect generally lower input costs compared to 2008.  Segment operating profit for the fourth quarter of 2009 was $90.7 million, or 11.8 percent of net sales.  Segment operating profit for the fourth quarter of 2008 was $66.2 million, or 9.1 percent of net sales.  The effect of currency translation increased operating profit in the fourth quarter of 2009 by $3.5 million compared to the same quarter of 2008.  Operating profit improvement in the fourth quarter was driven by increased sales of higher value-added products and the ongoing benefits of Bemis’ World Class Manufacturing initiatives.

 

For the total year ended 2009, flexible packaging net sales of $3.0 billion represented a 5.4 percent decrease compared to 2008.  Currency effects accounted for a sales decline of 3.3 percent compared to 2008 and an acquisition in 2009 increased net sales by 1.6 percent.  The remaining 3.7 percent decrease in net sales was driven by lower unit sales volume.  Operating profit increased to $390.4 million, or 13.1 percent of net sales, compared to $315.9 million, or 10.0 percent of net sales in 2008.  The net effect of currency translation reduced operating profit in 2009 by $8.6 million compared to 2008.  Improved operating profit reflects the combined impact of improved sales mix, production efficiency initiatives, and decreasing input costs during the first half of 2009.

 

Commenting on the results of this business segment, Theisen said, “I am pleased to report a record level of annual flexible packaging operating profit and the highest annual profit margins as a percentage of net sales since 2004. By expanding sales of our value-added products into new markets and across all geographic regions, and maintaining a persistent focus on production improvements using our World Class Manufacturing initiatives, we have created positive momentum in our business.  Our innovative new products address our customers’ sustainable packaging initiatives and offer total system cost savings by reducing material content through the development of thinner, tougher films; extending shelf life; reducing waste; and improving line speeds in our customers’ operations.  We look forward to further expanding our product portfolio in 2010 with additional flexible packaging products from the Alcan Packaging Food Americas acquisition.”

 

This excerpt taken from the BMS 8-K filed Oct 27, 2009.

Flexible Packaging

Bemis’ flexible packaging business segment, which represented about 85 percent of total Company net sales, reported net sales of $764.1 million in the third quarter of 2009.  This represents a 7.5 percent decrease compared to net sales of $826.4 million for the third quarter of 2008.  Currency effects reduced net sales by 3.8 percent.  The positive net sales impact of the June 2009 acquisition of the South American rigid packaging operations of Huhtamaki Oyj was 2.2 percent during the quarter.  The remaining 5.9 percent decrease in net sales was driven principally by lower unit volumes.  Segment operating profit for the third quarter of 2009 was $106.0 million, or 13.9 percent of net sales.  Excluding the effect of the gain on sale of property described in the attached schedule, “Reconciliation of Non-GAAP Data,” operating profit for the third quarter of 2009 would have been $102.4 million, or 13.4 percent of net sales.  This compares to operating profit for the third quarter of 2008 of $82.4 million, or 10.0 percent of net sales.  The net effect of currency translation and foreign exchange gains decreased operating profit in the third quarter of 2009 by $1.3 million compared to the same quarter of 2008.  Higher operating profit in

 



 

This excerpt taken from the BMS 8-K filed Jul 17, 2009.

Flexible Packaging

 

Bemis’ flexible packaging business segment, which represented about 85 percent of total Company net sales this quarter, reported net sales of $733.5 million in the second quarter.  This represents a 9.9 percent decrease compared to net sales of $813.9 million for the second quarter of 2008.  Currency effects reduced net sales by 6.6 percent.  The remaining 3.3 percent decrease in net sales was driven principally by lower unit volumes.  Segment operating profit for the second quarter of 2009 was $102.1 million, or 13.9 percent of net sales.  Segment operating profit for the second quarter of 2008 was $88.9 million, or 10.9 percent of net sales.  The net effect of currency translation and foreign exchange gains decreased operating profit in the second quarter of 2009 by $5.0 million compared to the same quarter of 2008.  Higher operating profit reflects the impact of both lower raw material costs in 2009 and the benefit of cost improvement programs.

 

Commenting on the flexible packaging segment results, Theisen said, “We have successfully managed our flexible packaging business through this cycle of raw material cost escalation and reduction, capturing the short term benefits as costs declined during 2009 after realizing the short term negative impact as costs increased during 2008.  The improvements that we have made in our flexible packaging business through our World Class Manufacturing program initiatives and other cost management efforts are beginning to appear in the form of higher operating profit now that margin pressures from raw material cost increases have reversed.  I am pleased to report that our European flexible packaging operations continue to deliver record operating profits in 2009, reflecting improved cost management, manufacturing efficiencies, and a higher mix of proprietary product sales.  While the benefit of the lower raw material costs will be reduced in the second half of the year, we expect our operating performance to continue to reflect the improvements in our manufacturing operations.”

 



 

This excerpt taken from the BMS 8-K filed Apr 28, 2009.

Flexible Packaging

 

Bemis’ flexible packaging business segment, which represented about 85 percent of total Company net sales this quarter, reported net sales of $715.2 million in the first quarter.  This represents an 8.5 percent decrease compared to net sales of $781.6 million for the first quarter of 2008.  Currency effects reduced net sales by 8.7 percent.  Segment operating profit for the first quarter of 2009 was $91.4 million, or 12.8 percent of net sales.  Results for the quarter were negatively impacted by severance charges associated

 



 

with workforce reduction events intended to adjust workforce levels to better match market demands for certain product lines.  Excluding the impact of these severance costs, segment operating profit for the first quarter of 2009 would have been $92.5 million, or 12.9 percent of net sales.  (See attached schedule: “Reconciliation of Non-GAAP Data”.)  Segment operating profit for the first quarter of 2008 was $78.6 million, or 10.1 percent of net sales.  The net effect of currency translation and foreign exchange losses decreased operating profit in the first quarter of 2009 by $7.1 million compared to the same quarter of 2008.  Higher operating profit reflects the impact of both lower raw material costs in 2009 and the benefit of cost improvement programs.

 

Commenting on the flexible packaging segment results, Theisen said, “I am pleased to report that our flexible packaging business recorded record first quarter operating profit.  Our flexible packaging business segment is benefiting from a temporary raw material cost advantage which is expected to moderate during the second quarter as customer contract mechanisms adjust to reflect current raw material costs.  In addition, our aggressive efforts to manage production costs will continue to benefit Bemis going forward.  While we have experienced a slower business environment across many of our flexible packaging markets, we are pleased to report continued growth in the areas of our business where we have been investing, including packaging for processed meat and cheese, dairy and liquids, and medical devices.  Our South American operations are achieving healthy sales growth, partially offsetting the negative impact of local currency fluctuations.  Our European operations continue to improve.  Globally, our operations are prudently managing costs to accommodate inconsistent market demand.  Overall, this has been a strong quarter for our flexible packaging operations in the face of unusual market challenges.”

 

This excerpt taken from the BMS 8-K filed Jan 27, 2009.

Flexible Packaging

Flexible packaging, which represented about 84 percent of total Company net sales during the quarter, reported net sales of $731.3 million in the fourth quarter, a decrease of 3.1 percent compared to net sales of $754.8 million for the fourth quarter of 2007.  Currency related effects reduced flexible packaging net sales by 6.9 percent.  Segment operating profit for the fourth quarter of 2008 was $66.2 million, or 9.1 percent of net sales.  Segment operating profit for the fourth quarter of 2007 was $83.3 million, or 11.0 percent of net sales, which included restructuring related income of $1.2 million.  The net effect of currency translation and foreign exchange losses decreased operating profit in the fourth quarter of 2008 by $8.7 million compared to the same quarter of 2007.

 

For the total year ended 2008, flexible packaging net sales of $3.2 billion represented a 5.0 percent increase compared to 2007.  Currency effects accounted for sales growth of 1.4 percent during 2008.  Excluding the impact of currency, the increase in net sales reflects generally higher selling prices and increased sales volumes across a number of markets.  Operating profit decreased to $315.9 million, or 10.0 percent of net sales, compared to $346.6 million, or 11.5 percent of net sales in 2007.  The net effect of currency translation and foreign exchange losses reduced operating profit in 2008 by $4.4 million compared to 2007.  Operating profit in 2007 included restructuring related income of $1.5 million.

 

Commenting on the results of this business segment, Theisen said, “This has been a demanding year for our flexible packaging business.  We recorded improved sales volumes in several of our key markets, including packaging for meat and cheese, dairy and liquids, and medical markets.  The benefits of this sales growth were offset by declines in sales volume for protective display films as well as packaging for industrial, confectionery and snack, pet food, and multipacks markets.  We responded decisively to recover increasing raw material costs during the second half of 2008, but the rapid decline in economic conditions during the fourth quarter created a difficult operating environment for many of our businesses.  We are entering 2009 with a strong core business and well prepared to react promptly to future market fluctuations.”

 



 

This excerpt taken from the BMS 8-K filed Oct 28, 2008.

Flexible Packaging

 

Flexible packaging, which represented about 84 percent of total Bemis net sales during the quarter, reported net sales of $826.4 million in the third quarter, a 10.9 percent increase compared to net sales of $745.4 million for the third quarter of 2007.  Currency related sales growth totaled 2.8 percent.  Segment operating profit for the third quarter of 2008 was $82.4 million, or 10.0 percent of net sales.  Segment operating profit for the third quarter of 2007 was $81.6 million, or 10.9 percent of net sales.  Currency benefits added $1.5 million to operating profit in the third quarter of 2008.  This quarter’s operating profit reflects the impact of higher input costs incurred in 2008.

 

Commenting on the flexible packaging segment results, Theisen said, “Healthy sales growth in our flexible packaging segment was driven by a combination of volume growth and price increases across the majority of our end markets.  We recorded double-digit sales growth in nearly 60 percent of our markets, with sales declines limited to pet products, overwrap for bottled water, and confectionery and snack markets.  Performance in our medical device packaging operations has improved after last year’s disruption from the start-up of new equipment and facilities.  Our European teams continue to deliver improved operating results as they reap the benefits of customer acceptance of new product offerings and implement a World Class Manufacturing program.  In this volatile global economic environment, we are aggressively responding to market conditions and will continue to work diligently to maintain our sales momentum and protect our operating profit.”

 

This excerpt taken from the BMS 8-K filed Jul 29, 2008.

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.”

 

This excerpt taken from the BMS 8-K filed Apr 29, 2008.

Flexible Packaging

 

Flexible packaging, which represented about 83 percent of total Company net sales during the quarter, reported net sales of $781.6 million in the first quarter, a 5.2 percent increase compared to net sales of $743.2 million for the first quarter of 2007.  Currency related sales growth totaled 4.8 percent.  Segment operating profit for the first quarter of 2008 was $79.3 million, or 10.1 percent of net sales.  Segment operating profit for the first quarter of 2007 was $88.2 million, or 11.9 percent of net sales.  Currency benefits added $2.3 million to operating profit in the first quarter of 2008.  Lower operating profit reflects the impact of generally higher input costs in 2008 compared to the previous year.

 

Commenting on the flexible packaging segment results, Theisen said, “During the first quarter, we experienced higher specialty resin costs which negatively impacted operating profit levels in our flexible packaging business segment.   These and other inflationary cost pressures are being managed with selling price increases and profit improvement programs that we expect to result in improved performance for the remainder of the year.  Flexible packaging unit sales volume increased modestly compared to last year and to last quarter, which primarily reflects the scale up of new business awarded in 2007 and stabilizing consumer demand in North America.  We are encouraged by increased sales volume and mix improvements in our European flexible packaging business and are pleased with the start-up of our new medical device packaging plant in Northern Ireland.  Our continuing focus on cost management and productivity improvement will be critical to ensure that the benefits of improving volume levels deliver profit momentum to the flexible packaging segment in 2008.”

 

This excerpt taken from the BMS 8-K filed Jan 29, 2008.

Flexible Packaging

 

Flexible packaging, which represented about 83 percent of total Company net sales during the quarter, reported net sales of $754.8 million in the fourth quarter, an increase of 1.6 percent compared to net sales of $743.3 million for the fourth quarter of 2006.  Currency related sales growth of 4.8 percent was partially offset by lower sales volumes in several markets.  Segment operating profit for the fourth quarter of 2007 was $83.3 million, or 11.0 percent of net sales, which included restructuring related income of $1.2 million.  Segment operating profit for the fourth quarter of 2006 was $83.6 million, or 11.2 percent of net sales, which included restructuring and related charges of $4.1 million.  Excluding the impact of restructuring and related activities, segment operating profit as a percentage of net sales would have been 10.9 percent in the fourth quarter of 2007 compared to 11.8 percent a year ago.   Currency benefits added $2.4 million to operating profit in the fourth quarter of 2007.

 



 

For the total year, flexible packaging net sales of $3.0 billion were approximately equal to 2006 net sales levels.  Currency effects accounted for sales growth of 3.1 percent during 2007.  Excluding the impact of currency, the decrease in net sales reflects generally lower sales volumes across a number of markets.  Operating profit increased to $346.6 million, or 11.5 percent of net sales, including restructuring related income of $1.5 million.  Excluding restructuring and related activities, total year segment operating profit would have been $345.1 million or 11.5 percent of net sales compared to $364.1 million, or 12.1 percent of net sales in 2006.   The impact of currency translation was a $7.3 million benefit to operating profit in 2007.

 

Commenting on the results of this business segment, Curler said, “We began 2007 anticipating modest growth with a focus on achieving continued improvements in operational efficiency.  Unfortunately, our food and consumer product end markets began to show signs of weaker demand levels as the year progressed.  At mid-year, we shifted the focus of our business units to reduce costs and improve the flexibility of our operations to better respond to fluctuating production levels resulting from slowing volume demands.  Our business teams have responded to this challenge, and we are prepared for 2008 with a more competitive cost structure and our state-of-the-art production facilities.”

 

This excerpt taken from the BMS 8-K filed Oct 30, 2007.

Flexible Packaging

 

Flexible packaging, which represented about 82 percent of total Company net sales during the quarter, reported net sales of $745.4 million in the third quarter, a decrease of 0.5 percent compared to net sales of $749.1 million for the third quarter of 2006. Currency related sales growth of 3.1 percent was more than offset by lower sales volumes in several markets. Segment operating profit for the third quarter of 2007 was $81.5 million, or 10.9 percent of net sales, which included restructuring and related charges of $0.1 million. Segment operating profit for the third quarter of 2006 was $92.0 million, or 12.3 percent of net sales, which included restructuring and related charges of $5.1 million. Excluding restructuring and related charges, segment operating profit as a percentage of net sales would have been 11.0 percent in the third quarter of 2007 compared to 13.0 percent a year ago. Currency benefits added $1.9 million to operating profit in the third quarter of 2007.

 

Commenting on the results of this business segment, Curler said, “Softening consumer demand in many food and consumer product markets has negatively impacted our manufacturing cost absorption. In response, we are reducing workforce levels and lowering overall costs in order to match capacity with current market demand and improve our competitive position. We intend to leverage these cost control measures to gain market share.

 

Our medical device packaging business completed the transition to its new European plant and coating equipment, temporarily increasing costs and reducing production efficiencies in this quarter. We are pleased with customer response to our new facilities and capacity, and we are now well positioned to serve this high growth market and expand into the global pharmaceutical market.”

 

This excerpt taken from the BMS 8-K filed Jul 31, 2007.

Flexible Packaging

Flexible packaging, which represented about 82 percent of total Company net sales during the quarter, reported net sales of $758.3 million in the second quarter, a decrease of 1.2 percent compared to net sales of $767.5 million for the second quarter of 2006.  Currency related sales growth of 2.7 percent was more than offset by lower sales volumes in several markets.  Segment operating profit for the second quarter of 2007 was $93.5 million, or 12.3 percent of net sales.  Segment operating profit for the second quarter of 2006 was $88.6 million, or 11.5 percent of net sales, which included restructuring and related charges of $8.7 million.  Excluding restructuring and related charges, segment operating profit as a percentage of net sales would have been 12.3 percent in the second quarter of 2007 compared to 12.7 percent a year ago.   Currency benefits added $1.8 million to operating profit in the second quarter of 2007.

Commenting on the results of this business segment, Curler said, “The financial results do not reflect the substantial improvements that have been made in our flexible packaging segment this year.  While the efforts of our cost management and production efficiency programs have been successful, in this environment they have only served to offset the impact of inflation.  The most significant financial benefits of these cost and production improvements will be recognized with increased sales volume.  According to market sources, higher market prices for meat and dairy products have depressed market demand during what is normally a strong second quarter.  In addition, we experienced softer demand for packaging in markets for bakery, pet food, confectionery, industrial, and health and hygiene products.  We continue to record double-digit increases in sales of medical device packaging and multipack products for the beverage markets, and we expect this growth to continue.

“Substantial effort is being directed at commercialization of new business during the second half of 2007, although the unexpected delays to date have caused us to reduce our performance expectations for the total year.  Improving sales trends in certain food categories should have a positive impact on results during the second half of the year.”

This excerpt taken from the BMS 8-K filed Apr 26, 2007.

Flexible Packaging

Flexible packaging, which represented about 82 percent of total Company net sales during the quarter, reported net sales of $743.2 million in the first quarter, compared to net sales of $740.2 million for the first quarter of 2006.  Currency related sales growth of 1.9 percent was substantially offset by lower sales volumes in certain markets.  Segment operating profit for the first quarter of 2007 was $88.4 million, or 11.9 percent of net sales, which included a net gain on the sale of a closed facility of $0.5 million.  Segment operating profit for the first quarter of 2006 was $70.9 million, or 9.6 percent of net sales, which included restructuring and related charges of $11.0 million.  Excluding restructuring and related charges and the net gain on the sale of the closed facility, segment operating profit as a percentage of net sales would have been 11.8 percent in the first quarter of 2007 compared to 11.1 percent a year ago.   Currency benefits added $0.8 million to operating profit in the first quarter of 2007.

“We are beginning to see the benefits of the improvements that we have made over the past year,” said Curler regarding the flexible packaging segment results.  “Our focus on cost management and production improvement has substantially improved both our production efficiency and our customer service levels.  Our recent investments in growing markets, including meat and cheese, medical products, dairy and liquids, and beverage overwrap, are contributing to improved results over last year.  These areas of emphasis are offsetting the impact of lower sales volumes in markets for dry foods, bakery, confectionery, and industrial products.  Considerable attention is being directed at these product lines where cost management projects have been initiated to improve our competitive position over the next 12 to 18 months.  Our broad array of new products for 2007 is creating new opportunities for sales growth in value-added markets.  The expansion of our global medical packaging facilities will be completed and operational later this year.  These facility improvements will expand our capabilities, improve our production efficiency, position Bemis to continue to grow in the medical device packaging market, and support our expansion into pharmaceutical packaging applications.”

This excerpt taken from the BMS 8-K filed Jan 25, 2007.

Flexible Packaging

Flexible packaging, which represented about 82 percent of total Company net sales during the quarter, reported net sales of $743.3 million in the fourth quarter, an increase of 3.2 percent compared to the same quarter in 2005.  Currency effects accounted for sales growth of 2.0 percent.  Segment operating profit for the fourth quarter of 2006 was $83.6 million, or 11.2 percent of net




sales, which included restructuring and related charges of $4.1 million.  Restructuring and related charges reflect the costs associated with our previously announced facility consolidation and capacity reduction efforts.  Segment operating profit for the fourth quarter of 2005 was $93.1 million, including a $5.4 million favorable impact related to the finalization of purchase accounting.  (See attached schedule: “Reconciliation of Non-GAAP Data”.)  Excluding restructuring and related charges from 2006 and the purchase accounting adjustment from the fourth quarter of 2005, segment operating profit as a percentage of net sales would have decreased to 11.8 percent from 12.2 percent a year ago.   Currency translation increased operating profit by $1.2 million in the fourth quarter of 2006.

For the total year, net sales of flexible packaging increased 5.1 percent to $3.0 billion.  Currency effects accounted for sales growth of 2.1 percent.  Operating profit increased to $335.1 million, or 11.2 percent of net sales, including restructuring and related charges of $29.0 million.  Excluding restructuring and related charges, total year segment operating profit would have been $364.1 million or 12.1 percent of net sales compared to $333.3 million, or 11.7 percent of net sales in 2005.   The impact of currency translation was a $6.5 million benefit to operating profit for 2006.

Commenting on the flexible packaging business segment results for the quarter, Curler said, “This year we reported healthy sales growth in nearly all of our flexible packaging markets.  Total year operating margins have improved, benefiting from restructuring related savings, improved cost management, enhanced production efficiencies and better sales mix.  The fourth quarter ended weaker than we had expected as orders and shipments slowed down during the month of December.  We attribute slower orders to a sharp decline in energy prices, motivating some customers to delay orders in an attempt to obtain lower pricing.  We also believe that slower shipping in December may reflect year-end inventory de-stocking by certain customers.  We expect this weakness to be short-lived as customers begin to rebuild inventory levels to meet seasonally stronger demand for products early in 2007.

In 2006, our product teams worked closely with customers to support their growth initiatives with value-added packaging that incorporates consumer convenience features and high performance film structures.  In 2007, our customers will experience another strong year of new products from Bemis.  We are expanding our product reach with the introduction of a broad array of new products and packaging features that will further strengthen our competitive position and improve sales mix.”

This excerpt taken from the BMS 8-K filed Oct 25, 2006.

Flexible Packaging

Flexible packaging, which represented about 83 percent of total Company net sales during the quarter, reported record net sales of $749.1 million in the third quarter, an increase of 3.6 percent compared to the same quarter in 2005.  Currency effects accounted for sales growth of 2.0 percent.  Segment operating profit for the third quarter of 2006 was $92.0 million, or 12.3 percent of net sales, which included restructuring and related charges of $5.1 million.  Restructuring and related charges of $5.1 million reflect the costs associated with our previously announced facility consolidation efforts that include the closure of five flexible packaging plants.  Segment operating profit for the third quarter of 2005 was $89.0 million.  Excluding restructuring and related charges, segment operating profit as a percentage of net sales would have increased to 13.0 percent from 12.3 percent a year ago.

Commenting on the flexible packaging business segment results for the quarter, Curler said, “We have accomplished a significant culture change in our flexible packaging segment this year.  While our core aptitude for innovation, value-added products and customer intimacy continue to drive top line growth, we are improving the efficiency of our capital assets with productivity initiatives and quality-oriented cost management efforts.  These improvements will continue to spread throughout the organization and deliver a greater return on capital and a more efficient platform for future expansion.  This quarter, we enjoyed strong sales growth in our largest market, meat and cheese, and double-digit sales growth in a number of other important markets, including medical device, health and hygiene, bakery, multipack and pet products.   Raw material cost increases during the third quarter dampened operating margins as selling price adjustments lagged cost increases.  Sales mix improvements offset some of the short-term impact of the raw material cost increases.  Our customers have announced growth strategies that depend on the success of innovative new products and marketing initiatives.  We are pleased to be an integral player in these customer growth strategies and are well-positioned to meet the demands of our markets.”

This excerpt taken from the BMS 8-K filed Jul 27, 2006.

Flexible Packaging

Flexible packaging, which represented about 82 percent of total Company net sales during the quarter, reported record net sales of $767.5 million in the second quarter, an increase of 5.9 percent compared to the same quarter in 2005.  Currency effects accounted for sales growth of 2.1 percent.  Operating profit for the second quarter of 2006 was $88.6 million, or 11.5 percent of net sales, which included restructuring and related charges of $8.7 million.  Restructuring and related charges reflect the costs associated with our previously announced facility consolidation efforts that include the closure of five flexible packaging plants.  Operating profit for the second quarter of 2005 was $80.7 million.  Excluding restructuring and related charges, operating profit as a percentage of net sales would have increased to 12.7 percent  from 11.2 percent a year ago.

Commenting on the flexible packaging business segment results for the quarter, Curler said, “During the second quarter, our flexible packaging plants experienced strong, steady production volumes that allowed many of our plants to optimize manufacturing efficiencies and capitalize on recent productivity improvements.  Increasing demand for packaging for expanding markets such as meat and cheese, multipacks, medical products, dry foods, and liquids is creating opportunities for high margin growth as new capacity becomes available.  Moderating raw material costs also contributed to higher operating margins during the second quarter.  Material costs are expected to rise in the second half of the year, which would negatively impact operating margins in the near term.”

This excerpt taken from the BMS 8-K filed Apr 27, 2006.

Flexible Packaging

 

Flexible packaging, which represented about 82 percent of total company net sales during the quarter, reported record net sales of $740.2 million in the first quarter, an increase of 7.6 percent compared to the same quarter in 2005. Currency effects accounted for 2.2 percent of sales growth. Operating profit for the first quarter of 2006 was $70.8 million, which included restructuring and related charges of $11.0 million. Restructuring and related charges reflect the costs associated with facility consolidation efforts that include the planned closure of five flexible packaging plants. Operating profit for the first quarter of 2005 was $69.9 million. Excluding restructuring and related charges, operating profit as a percentage of net sales would have increased to 11.1 percent from 10.2 percent a year ago.

 

Commenting on the flexible packaging business segment results for the quarter, Curler said, “We are enjoying solid volume growth in most of our higher value-added product markets this quarter, including meat and cheese, dry foods like cereal and coffee, medical device products, and multipacks for products like bottled water. Overall flexible packaging unit volume is down modestly as we continue to experience year-over-year decreases in more price-sensitive markets where innovation is less important. Our customers are excited about our new products for the European market, and we have identified opportunities that will transform sales mix in that region to include higher value-added products. Packaging innovation continues to be a top priority for customers worldwide. At Bemis, we are leading with new ideas that will strengthen our market position around the globe.”

 

This excerpt taken from the BMS 8-K filed Jan 27, 2006.

Flexible Packaging

Flexible packaging, representing about 82 percent of total company net sales in 2005, delivered net sales of $720.1 million in the fourth quarter of 2005.  This is an increase of 25.3 percent from $574.8 million in the fourth quarter of 2004.  Acquisitions increased net sales by 22.5 percent in 2005.  The balance of the increase in net sales reflects an increase in price and mix, partially offset by a 1.2 percent reduction from currency translation and a 1.9 percent decrease in unit sales volume.  The fourth quarter of 2005 reflects a decrease in volume from the very strong levels of 2004, driven by price increases during 2005 that reduced unit sales volume in markets such as confectionery, frozen foods, bakery, pet products and industrial film.  Operating profit for the fourth

 

 



 

quarter was $93.1 million, an increase of 14.3 percent from the fourth quarter of 2004.  As a percentage of net sales, operating profit decreased to 12.9 percent from 14.2 percent a year ago.  Current quarter operating profit included a $5.4 million favorable impact related to depreciation and amortization resulting from the finalization of purchase accounting valuations for the Dixie Toga acquisition.  Currency translation was insignificant to operating profit for the fourth quarter of 2005.

 

For the total year, net sales of flexible packaging increased 27.0 percent to $2.9 billion.  Acquisitions accounted for 20.8 percent net sales growth.  The remaining 6 percent increase in sales is attributable to price and mix changes since total unit sales volume is unchanged from 2004 levels.  Operating profit increased to $332.7 million, or 11.7 percent of net sales, compared to $308.3 million, or 13.7 percent of net sales in 2004.   Operating profit in the fourth quarter of 2004 included a gain of $5.6 million from the sale of certain graphic assets.  The impact of currency translation was insignificant to sales growth and operating profit for 2005.

 

Commenting on the results of the flexible packaging business segment, Curler said, “Profitability in our flexible packaging business segment was dampened throughout 2005 by a challenging raw material environment.  Higher raw material costs and concerns about hurricane related shortages substantially increased the cost of production and disrupted customer order patterns during the year.  Unit sales volume increases in markets for meat and cheese, medical devices, dry foods, gardening products and overwrap for beverages were completely offset by decreases in markets for confectionery, bakery, frozen food and pet products.  During 2005, we invested in new capacity in high growth product areas and improved our order management procedures to better manage our existing capacity.  In 2006, we will reduce costs by closing less efficient capacity in certain areas, and we will continue to invest in the high growth product areas.”

 

This excerpt taken from the BMS 8-K filed Jan 25, 2006.

Flexible Packaging

Flexible packaging, representing about 82 percent of total company net sales in 2005, delivered net sales of $720.1 million in the fourth quarter of 2005.  This is an increase of 25.3 percent from $574.8 million in the fourth quarter of 2004.  Acquisitions increased net sales by 22.5 percent in 2005.  The balance of the increase in net sales reflects an increase in price and mix, partially offset by a 1.2 percent reduction from currency translation and a 1.9 percent decrease in unit sales volume.  The fourth quarter of 2005 reflects a decrease in volume from the very strong levels of 2004, driven by price increases during 2005 that reduced unit sales volume in markets such as confectionery, frozen foods, bakery, pet products and industrial film.     Operating profit for the fourth

 



 

This excerpt taken from the BMS 8-K filed Jul 27, 2005.

Flexible Packaging

Flexible packaging, representing about 82 percent of total company net sales, reported net sales of $724.7 million in the second quarter, an increase of 28.4 percent compared to the same quarter in 2004.  Excluding the impact of acquisitions, net sales increased by 8.5 percent, primarily reflecting price increases.  Currency effects accounted for about one percent of sales growth.  Operating profit for the second quarter was $80.7 million, an increase of 2.7 percent from $78.6 million in the second quarter of 2004.  As a percentage of net sales, operating profit decreased to 11.1 percent from 13.9 percent a year ago.

 

Commenting on the flexible packaging business segment results for the quarter, Curler said, “Higher resin costs, a shift in customer order patterns and a highly competitive environment have dampened operating profit in 2005.  While selling prices have been adjusted to reflect the higher raw material costs, the process took longer than anticipated and much of the benefit will be recognized during the second half of the year.  We are receiving new business with value added products in both North America and Europe, although the scaling up of orders is taking longer than anticipated.  Our joint venture in Mexico, which has struggled during the past year, will benefit during the second half of the year from new operations management and continued support from our North American flexible packaging management team.  We continue to be very pleased with our recent acquisition of Dixie Toga.  While the results for the second quarter were modestly accretive to earnings per share, Dixie Toga’s business is seasonally stronger during the second half of the year.”

 

This excerpt taken from the BMS 8-K filed Apr 21, 2005.

Flexible Packaging

Flexible packaging, representing about 83 percent of total company net sales, reported net sales of $688.1 million in the first quarter, an increase of 27.7 percent compared to the same quarter in 2004.  Excluding the impact of acquisitions, net sales increased by 7.2 percent.  Currency effects accounted for less than one percent of sales growth.  Operating profit for the first quarter was $69.9 million, a decrease of 5.1 percent from the first quarter of 2004.  As a percentage of net sales, operating profit decreased to 10.2 percent from 13.7 percent a year ago.

 

Commenting on the flexible packaging business segment results for the quarter, Curler said, “Overall unit sales volume in flexible packaging increased modestly in the face of continued increases in selling prices.  Operating profit decreased as our normal pricing policy could not keep pace with rapidly increasing costs for certain raw materials in the latter part of 2004 and early 2005.  The impact of this time lag was magnified by strong order trends at the beginning of the quarter that weakened toward the end of the quarter.

 

In addition, with higher raw material costs, normal production waste has become much more expensive.  In order to decrease such costs, we have postponed certain capital investments until 2006 to divert engineering talent to waste reduction projects.  Considering the savings from these efforts, combined with our normal pricing strategy and a more cautious expectation of volume trends for the remainder of the year, we expect to regain operating profit levels consistent with 2004.

 

On a positive note, we are very pleased with our recent acquisition of Dixie Toga.  This is a profitable business in a growing region of the world that brings with it strong customer relationships and leading market positions.  Due to the impact of purchase accounting and acquisition related interest costs, the acquisition had little effect on the earnings per share for the first quarter.  We continue to expect operating results after the cost of debt to add $0.08 to $0.10 per share to the Bemis Company results for 2005.”

 

This excerpt taken from the BMS 8-K filed Jan 26, 2005.

Flexible Packaging

Flexible packaging, representing almost 80 percent of total company net sales in 2004, delivered net sales of $574.8 million in the fourth quarter of 2004.  This is an increase of 10.2 percent from $521.7 million in the fourth quarter of 2003, driven primarily by a 6.0 percent increase in unit sales volume.  Operating profit for the fourth quarter was $81.5 million, an increase of 22.6 percent from the fourth quarter of 2003.  As a percentage of net sales, operating profit increased to 14.2 percent from 12.7 percent a year ago.  Current quarter operating profit included $0.1 million of restructuring and related charges and a $5.6 million gain on the sale of certain flexible packaging assets.  Operating profit for the fourth quarter of 2003 included restructuring and related charges of $3.1 million.  Excluding the impact of these items in both 2003 and 2004, fourth quarter operating profit as a percent of net sales would have been substantially unchanged from the previous year’s level of 13.3 percent.  During 2004, higher raw material costs, transition costs associated with our Mexican joint venture, and increased benefit and incentive costs offset the operating profit benefits of improved sales mix and operating efficiencies.

 

For the total year, net sales of flexible packaging increased 7.1 percent to $2.2 billion.  The Mexican joint venture acquisition completed during May 2004 accounted for nearly 1.0 percent net sales growth.  Operating profit increased to $308.3 million, or 13.7 percent of net sales, compared to $263.7 million, or 12.6 percent of net sales in 2003.   Operating profit included a net gain of $0.7 million and a charge of $13.9 million resulting from restructuring and related activities for the years ending 2004 and 2003, respectively.  In addition, a gain of $5.6 million was recorded from the sale of manufacturing facility in Florence, Kentucky that supported internal rotogravure printing capabilities.  Excluding the impact of these items in both years, operating profit as a percent of net sales would have been 13.4 percent and 13.2 percent for the full years 2004 and 2003, respectively.

 


 


Commenting on the results of the flexible packaging business segment, Curler said, “The market for our flexible packaging products is expanding.  Our customers have a growing appetite for innovative film structures that perform well on their packaging lines and for graphics and convenience features that capture consumers’ attention on store shelves.  During 2004, our flexible packaging business segment successfully managed significant increases in raw material costs and achieved solid growth in unit sales volume.  Our expanded flexible packaging capabilities in Europe and Mexico will continue to transition into their regional markets during 2005.  Our North American business is healthy and growing at a steady pace.  This year we will be making substantial investments in new capacity to meet expected customer demand in 2006 and beyond.”

 

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GRAPHIC PACKAGING HOLDING CO (GPK)
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