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Bemis Company Reports First Quarter Results and Maintains Full Year 2018 Guidance
Copyright Business Wire 2018

Bemis Company, Inc. (NYSE:BMS) today reported financial results for its first quarter ended March 31, 2018. Refer to the reconciliation of Non-GAAP measures detailed in the attached schedule, including adjusted earnings per share, adjusted EBITDA, and net debt.


Refer to the reconciliation of Non-GAAP measures detailed in the attached schedule, including adjusted earnings per share, referenced in this release.

"We delivered first quarter earnings above our most recent expectations, driven by improving operations and the benefits of Agility, which is our plan to fix, strengthen, and grow our business," said William F. Austen, Bemis Company's President and Chief Executive Officer. "Compared to the prior first quarter, profits increased in our U.S. segment due to the benefits of Agility and operational improvements. Profits increased in our Rest of World segment due to growth and strength in our healthcare packaging business. Profits were down in our Latin American segment due to the impact of the economic environment in Brazil compared to one year ago, as anticipated. We continue to take action in Latin America to drive margin expansion throughout the remainder of 2018."

Austen continued, "We are maintaining our full year 2018 guidance. Through Agility, we are making progress to improve our business. We continue to execute our plan to create a more agile, streamlined, and efficient business."


As part of the Company's previously-announced improvement plan called "Agility" to fix, strengthen, and grow its business, the fix aspect of this plan includes a restructuring and cost savings target of $65 million pre-tax by the end of 2019. The Company expects approximately $35 million of benefit in 2018. During the first quarter of 2018, Agility-related savings totaled approximately $8 million, reflecting a solid pace to meet the Company's full year 2018 savings plan. These savings include benefits from reducing administrative positions and other SG&A costs.


U.S. Packaging

U.S. Packaging net sales of $666.0 million for the first quarter of 2018 represented an increase of 2.6 percent compared to the same period of 2017. The increase in net sales was driven primarily by sales price and mix partially offset by lower unit volumes of approximately 1 percent. Lower unit volumes were driven by the Company's planned shutdown of its Shelbyville, Tennessee facility.

U.S. Packaging operating profit increased to $87.2 million in the first quarter of 2018, or 13.1 percent of net sales, compared to $83.5 million, or 12.9 percent of net sales, in 2017. The increase in U.S. Packaging operating profit was driven by improved operations and cost savings from the Company's Agility plan.

Latin America Packaging

Latin America Packaging net sales of $169.4 million for the first quarter of 2018 represented a decrease of 4.8 percent compared to the same period of 2017. Currency translation decreased net sales by 4.6 percent. Organic sales were approximately flat reflecting increased selling prices offset by decreased unit volumes of approximately 8 percent. As anticipated, lower unit volumes for the first quarter were driven by the economic environment in Brazil that incrementally degraded starting in the second quarter of the prior year.

Latin America Packaging operating profit for the first quarter was $8.0 million, compared to $13.6 million for the same period in 2017. Compared to the prior year, lower profits in Latin America Packaging were driven by the impacts of the challenging economic environment in Brazil, including lower unit volumes.

Rest of World Packaging

Rest of World Packaging net sales of $192.0 million for the first quarter of 2018 represented an increase of 13.9 percent compared to the same period of 2017. Currency translation increased net sales by 8.8 percent. The acquisition of Evadix increased net sales by 1.1 percent. Organic sales growth of 4.0 percent reflects increased unit volumes across the segment averaging approximately 12 percent partially offset by sales price and mix of products sold. Higher sales in the Company's Asia-Pacific business were the primary driver of unfavorable sales price and mix in the Rest of World segment for the quarter.

Rest of World Packaging operating profit increased to $16.5 million in the first quarter of 2018, or 8.6 percent of net sales, compared to $13.6 million, or 8.1 percent of net sales, in 2017. Improvement in Rest of World Packaging operating profit was driven primarily by increased sales volume in the Company's healthcare packaging business.


Cash flow from operations for the three months ended March 31, 2018 was $54.3 million, compared to $94.5 million in the prior year. First quarter 2018 results were in line with the Company's expectations and normal seasonality of cash flows. As compared to the prior year, cash flow was lower primarily due to the prior year including the benefit of certain extended payment terms that the Company negotiated with suppliers and has maintained on an on-going basis.

Total company net debt to adjusted EBITDA was 2.7 times at March 31, 2018.

Capital expenditures totaled $46.2 million for the three months ended March 31, 2018, reflecting planned investment to support productivity improvements in the U.S. Packaging segment and growth initiatives throughout the Company's business.


Management maintained its full year 2018 adjusted diluted earnings per share guidance in the range of $2.75 to $2.90.

"We delivered a solid start to our 2018 plan," said William F. Austen, Bemis Company's President and Chief Executive Officer. "Our teams are focused on continuing to deliver our commitments and to improving our business both in the near-term and the long-term. We continue to execute Agility to deliver cost savings, and we continue to lay an even stronger foundation for long-term growth through our agile lane initiative which aligns our people, processes, and assets to excel at short-run business."

Management maintained its full year 2018 cash from operations guidance in the range of $420 to $450 million, which includes approximately $50 million of restructuring and related cash costs.

Management continues to expect capital expenditures for 2018 between $150 and $160 million.

Management continues to expect an effective income tax rate for 2018 of approximately 24 percent, which includes the benefit of U.S. Tax Reform.


This press release refers to non-GAAP financial measures: adjusted diluted earnings per share, organic sales growth or decline, adjusted EBITDA and net debt to adjusted EBITDA, and adjusted return on invested capital. These non-GAAP financial measures adjust for factors that are unusual or unpredictable. These measures exclude the impact of certain amounts related to the effect of changes in currency exchange rates, acquisitions, and restructuring, including employee-related costs, equipment relocation costs, accelerated depreciation and the write-down of equipment. These measures also exclude gains or losses on sales of significant property and divestitures, certain litigation matters, and certain acquisition-related expenses, including transaction expenses, due diligence expenses, professional and legal fees, purchase accounting adjustments for inventory and order backlog and changes in the fair value of deferred acquisition payments. This adjusted information should not be construed as an alternative to results determined in accordance with accounting principles generally accepted in the United States of America (GAAP). Management of the Company uses the non-GAAP measures to evaluate operating performance and believes that these non-GAAP measures are useful to enable investors to perform comparisons of current and historical performance of the Company. All historical non-GAAP information is reconciled with reported GAAP results. Forward looking non-GAAP measures contained in our 2018 outlook are reconciled to GAAP measures as practically as possible. However, we are not providing forward looking guidance for full year 2018 U.S. GAAP guidance or a reconciliation of full year 2018 adjusted EPS to U.S. GAAP EPS because we are unable to predict with reasonably certainty the ultimate outcome of certain significant items without unreasonable effort. These items include, but are not limited to, restructuring expenses, asset impairments, possible gains or losses on the sale of businesses or other assets, certain other gains or losses and the income tax effects of these items and/or other income tax-related events. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP EPS for the guidance period.


This release contains certain estimates, predictions, and other "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995, and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). Forward-looking statements are generally identified with the words "believe," "expect," "anticipate," "intend," "estimate," "target," "may," "will," "plan," "project," "should," "continue," or the negative thereof or other similar expressions, or discussion of future goals or aspirations, which are predictions of or indicate future events and trends and which do not relate to historical matters. Such statements are based on information available to management as of the time of such statements and relate to, among other things, expectations of the business environment in which we operate, projections of future performance (financial and otherwise), including those of acquired companies, perceived opportunities in the market and statements regarding our strategy and vision. Forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause actual results, performance, or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Factors that could cause actual results to differ from those expected include, but are not limited to:

-- The ability of our foreign operations to maintain working efficiencies, as well as properly adjust to continuing changes in global politics, legislation, and economic conditions;

-- A failure to realize the full potential of our restructuring activities;

-- Changes in the competitive conditions within our markets, as well as changes in the demand for our goods;

-- Changes in the value of our goodwill and other intangible assets;

-- Our ability to retain and build upon the relationships and sales of our key customers;

-- The potential loss of business or increased costs due to customer or vendor consolidation;

-- The costs, availability, and terms of acquiring our raw materials (particularly for polymer resins and adhesives), as well as our ability to pass any price changes on to our customers;

-- Changes in import and export regulation that could subject us to liability or impair our ability to compete in international markets;

-- Variances in key exchange rates that could affect the translation of the financial statements of our foreign entities;

-- Our ability to effectively implement and update our global enterprise resource planning ("ERP") systems;

-- Our ability to realize the benefits of our acquisitions and divestitures, and whether we are able to properly integrate those businesses we have acquired;

-- Fluctuations in interest rates and our borrowing costs, along with other key financial variables;

-- A potential failure in our information technology infrastructure or applications and their ability to protect our key functions from cyber-crime and other malicious content;

-- Changes in our credit rating;

-- Unexpected outcomes in our current and future administrative and litigation proceedings;

-- Changes in governmental regulations, particularly in the areas of environmental, health and safety matters, fiscal incentives, and foreign investment;

-- Our ability to effectively introduce new products into the market and to protect or retain our intellectual property rights;

-- Changes in our ability to attract and retain high performance employees; and

-- Our ability to manage all costs associated with our pension plans.

These and other risks, uncertainties, and assumptions identified from time to time in our filings with the Securities and Exchange Commission, including without limitation, those described under Item 1A "Risk Factors" of our Annual Report on Form 10-K and our quarterly reports on Form 10-Q, could cause actual future results to differ materially from those projected in the forward-looking statements. In addition, actual future results could differ materially from those projected in the forward-looking statements as a result of changes in the assumptions used in making such forward-looking statements.


Bemis Company, Inc. will webcast an investor telephone conference regarding its first quarter 2018 financial results this morning at 10:00 a.m., Eastern Time. Individuals may listen to the call on the Internet at 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, Inc. will webcast an investor telephone conference regarding its second quarter 2018 financial results on July 26, 2018 at 10:00 a.m., Eastern Time.


Bemis Company, Inc. ("Bemis" or the "Company") is a supplier of flexible and rigid plastic packaging used by leading food, consumer products, healthcare, and other companies worldwide. Founded in 1858, Bemis reported 2017 net sales from continuing operations of $4.0 billion. Bemis has a strong technical base in polymer chemistry, film extrusion, coating and laminating, printing, and converting. Headquartered in Neenah, Wisconsin, Bemis employs approximately 16,000 individuals worldwide. More information about Bemis is available at our website,

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SOURCE: Bemis Company, Inc.

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