NEENAH, Wis.--(BUSINESS WIRE)--Bemis Company, Inc. (NYSE: BMS) announced today its planned actions in a restructuring and cost savings program to improve efficiency and profitability that further positions the Company for long-term success. The Company will implement these initiatives while maintaining the high quality products, best-in-class service, and culture of respect and innovation consistent with Bemis’ standards.
“Improving the performance of our U.S. Packaging business is a key priority in creating value for our shareholders," said William F. Austen, Bemis Company's President and Chief Executive Officer. "During April, we began a review to align our U.S. manufacturing and administrative cost structures with the demands of our customer base to better position the Company in the current environment and for its long-term success. Given the challenges in the Brazilian economic environment, we also expanded the scope of our review to include our entire global business. We are targeting a total company cost savings plan of $55 to $60 million as we create a more agile, streamlined, and efficient business that is well-positioned for the long-term.”
Optimizing manufacturing capacity. The Company has definitive plans to close two manufacturing facilities; work performed at these facilities will be transferred to other Bemis locations. The Company will initiate the closing of one of these facilities in 2017 and the other in 2018. Benefits from these two plant closures will be approximately $10 million when fully implemented. The Company continues to evaluate opportunities to consolidate additional facilities.
Reducing SG&A Cost Structure. The Company will reduce its administrative support cost structure to align with the current business environment. These activities will result in a reduction of approximately 300 positions, or 5 percent of the global administrative workforce, over the next three years. Impacted employees will receive job placement assistance and severance benefits to assist in their transition. The cost savings from these changes will be approximately $20 million over the next three years.
The Company will provide additional details associated with its targeted savings plan in the coming quarters as part of its regular earnings reporting cycle.
Austen commented, “We are focused on improving our business and further positioning ourselves for long-term profitable success. As we begin to implement the first steps of this cost savings plan in 2017, we will also continue our comprehensive review to finalize the remaining cost savings, to outline future capital spending, to explore ways to offset headwinds of the current economic environment in Brazil, and to reshape our go-to-market efforts to align with the evolving U.S. packaged food landscape.”
Austen continued, “The strong foundational elements of Bemis Company remain unchanged. We are committed to our dividend program and returning free cash flow to our shareholders, to developing opportunities for organic and inorganic growth, and to providing an attractive, long-term investment for our shareholders.”
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:
- A failure to realize the full potential of our restructuring activities;
- 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 ability of our foreign operations to maintain working efficiencies, as well as properly adjust to continuing changes in global politics, legislation, and economic conditions;
- 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;
- Changes in governmental regulations, particularly in the areas of environmental, health and safety matters, fiscal incentives, and foreign investment;
- Changes in the competitive conditions within our markets, as well as changes in the demand for our goods; and
- Changes in our ability to attract and retain high performance employees.
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.
INVESTOR CONFERENCE CALL
Bemis Company, Inc. will webcast its next investor telephone conference regarding its second quarter 2017 financial results on July 27, 2017 at 10:00 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.
ABOUT BEMIS COMPANY, INC.
Bemis Company, Inc. (“Bemis” or the “Company”) is a major supplier of flexible and rigid plastic packaging used by leading food, consumer products, healthcare, and other companies worldwide. Founded in 1858, Bemis reported 2016 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 17,500 individuals worldwide. More information about Bemis is available at our website, www.bemis.com.