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Bemis Company Prices Notes

BMS AVY

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Bemis Company Inc. (BMS - Analyst Report) has priced its public offer of $400 million of 4.5% senior notes due 2021.

Bemis Company intends to use the net proceeds to repay $300 million worth of 4.875% notes due 2012 as well as for general corporate purposes.

Bemis Company ended the second quarter of 2011 with a debt balance of $1.48 billion, an increase of 15% from 2010-end. The debt-to-capital ratio was 43.9% at second-quarter 2011-end, a 330-basis-point increase. The issuance of $400 million of debt will further increase the debt-to-capital ratio by 600 basis points.

The company will pay interest semi-annually on April 15 and October 15 of each year, beginning on April 15 next year. In the second quarter, Bemis Company incurred $18.1 million in interest.

Bemis Company’s second quarter results were weighed down by an increase in raw material prices, particularly specialty resin. Though operating earnings were below the year-ago results, they were in line with management’s guided range of 48 cents to 54 cents per share and also exceeded the Zacks Consensus Estimate by a penny.

The Zacks Consensus Estimate for third-quarter 2011 is 58 cents per share. For full years 2011 and 2012, the Zacks Consensus Estimates are, respectively, $2.12 per share and $2.42 per share.

The quantitative Zacks #3 Rank (short term Hold rating) for the company indicates no clear directional pressure on the stock over the near term.

Headquartered in Neenah, Wisconsin, Bemis Company Inc. 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. The company competes with Avery Dennison Corporation (AVY - Analyst Report).

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