Bemis Company, Inc. (BMS) reported fourth quarter 2012 adjusted earnings of 52 cents per share, up 7% from 45 cents earned in the year-ago quarter. The result surpassed the Zacks Consensus Estimate of 49 cents and was at the upper end of management's EPS guidance of 47 cents to 52 cents. Including one-time items, EPS in the reported quarter stood at 38 cents, up 73% from 22 cents in the year-ago quarter.
Net sales slid 3% year over year to $1.234 billion, ahead of the Zacks Consensus Estimate of $1.227 billion. Positive impact from acquisitions and improved sales mix were offset by lower unit volume.
Cost of products sold decreased 5% to $998 million in the quarter. Gross profit increased 8% to $236 million. Selling, general and administrative expenses increased 5% to $125 million. Adjusted operating income jumped 13% to $101 million.
Bemis recently announced the realignment of its reporting structure to three segments - U.S. Packaging, Global Packaging and Pressure Sensitive Materials. The company earlier had two business segments -- Flexible Packaging and Pressure Sensitive Materials.
In the new system, the Flexible Packaging business segment has been segregated to U.S. Packaging and Global Packaging business segments, while the Pressure Sensitive Materials segment remains unchanged.
Net sales from the U.S. Packaging segment amounted to $711 million, down 3% year over year. However, adjusted segment operating profit increased 40% to $121 million from $87 million.
Net sales from the Global Packaging segment declined 3% to $389 million. Adjusted segment operating profit plunged 61% to $10 million.
Net sales from the Pressure Sensitive Materials segment totaled $133 million, a decline of 2.6% from the year-ago quarter. Segment operating profit was $8.8 million, a 35.4% increase from $6.5 million recorded a year ago.
Fiscal 2012 Performance
Bemis reported adjusted EPS of $2.15 in fiscal 2012, up 8% from the year ago EPS of $1.99 and surpassing the Zacks Consensus Estimate of $2.12. The reported EPS was at the upper end of management guidance of $2.10 to $2.15.
Including one-time items, EPS stood at $1.66 in 2012 compared with $1.73 in the prior year. Revenue declined 3.4% to $5.139 billion, ahead of the Zacks Consensus Estimate of $5.134 billion.
As of Dec 31, 2012, Bemis had cash and cash equivalents of $114 million, up from $110 million as of Dec 31, 2011. Total debt of the company reduced to $1.43 billion as of Dec 31, 2012 from $1.57 billion as of Dec 30, 2011. The debt-to-capitalization ratio decreased to 46.5% as of Dec 31, 2012 from 49.8% as of Dec 30, 2011.
Total cash flow from operating activities for 2012 remained flat at $421.3 million compared to 2011. During the year, Bemis utilized its cash flow from operations to fund $104 million in dividends, $19 million for an acquisition, $136 million in capital expenditures and $157 million in debt reduction.
Management expects adjusted EPS in the range of 50 cents to 56 cents for the first quarter of 2013. For 2013, EPS is projected to range between $2.30 and $2.45. Capital expenditures are estimated at around $175 million while cash flow from operations is expected to exceed $430 million.
Weak volume, cautious consumer spending environment, sluggish European economic outlook and rising food costs remain major causes of concern. However, savings from the Bemis cost reduction program due to the closure of unproductive facilities will help offset these pressures.
Neenah, Wisconsin-based Bemis Company is a global manufacturer of flexible packaging products and pressure sensitive materials sold primarily to the food industry. The company also sells its products to other customers in the chemical, agri-business, medical, pharmaceutical, personal care, electronics, automotive, construction, and graphic industries. Bemis currently retains a Zacks Rank #3 (Hold).
Among the peers of Bemis Company, Packaging Corporation of America (PKG) reported fourth quarter adjusted income of 61 cents per share compared to 40 cents per share in the year-ago quarter. On the other hand, Graphic Packaging Holding Company (GPK) and Sealed Air Corporation (SEE) are yet to announce their fourth quarter results.