Bemis Company Inc. Q3 2008 Earnings Call Transcript

Oct.28.08 | About: Bemis Company, (BMS)

Bemis Company Inc.

Q3 2008 Earnings Call

October 28, 2008 10:00 am ET

Executives

Melanie Miller - VP and Treasurer

Henry Theisen - President and CEO

Gene Wulf - SVP and CFO

Analysts

Ghansham Panjabi - Wachovia

George Staphos - Banc of America Securities

Reik Read - Robert Baird

Claudia Hueston - JPMorgan

Chris Manuel - KeyBanc Capital Markets

Mark Wilde - Deutsche Bank

Joseph Naya - UBS

Todd Peters - American Century

Operator

Good day, everyone, and welcome to the Bemis third quarter 2008 earnings release conference call. This call is being recorded.

For opening remarks and introductions, I will now turn the call over to Vice President and Treasurer for Bemis Company, Ms. Melanie Miller. Ms. Miller, please go ahead.

Melanie Miller

Thank you. Today is October 28, 2008. The replay of this call will be available on our website, www.bemis.com, under the Investor Relations section. Joining me for this call today are Bemis Company's President and Chief Executive Officer, Henry Theisen; and our Senior Vice President and Chief Financial Officer, Gene Wulf.

Today, Gene will begin with comments on financial details followed by Henry who will provide additional details on the market environment. After our comments, we will answer any questions you have. However, in order to allow everyone an opportunity to participate, we ask that you limit yourself to one question at a time with a related follow-up and then fall back in to the queue for any additional questions.

Before we begin, I'd like to remind that everyone statements regarding the future performance of the company made in this teleconference are forward-looking and are subject to certain risks and uncertainties. Actual results may differ materially from historical, expected or projected or results due to a variety of factors including currency fluctuations, changes in raw material costs and availability, industry competition, consumer buying trends, our ability to pass along increased costs in our selling prices, interest rate fluctuations, the availability of bank financing, and regional economic conditions.

A more complete list of risk factors is included in our regular SEC filings, including the most recently filed Form 10-K for the year ended December 31st, 2007.

Now, I'll turn the call over to Gene Wulf.

Gene Wulf

Good morning, everyone, and thank you for joining us.

This morning Bemis reported third quarter 2008 earnings per share of $0.44, which is $0.04 ahead of the third quarter of 2007 and in the middle of our guidance range of $0.42 to $0.46.

Third quarter net sales increased 8.7% from the third quarter of 2007. Excluding the benefit of currency, net sales would have increased by 5.8%. Flexible packaging net sales increased by 10.9% compared to the third quarter of 2007.

Currency benefits provided 2.8% sales growth. The remaining 8.1% increase in net sales reflects double-digit sales growth in markets representing about 60% of our flexible packaging sales, the offset by decreases in sales to markets, representing about 14%. The remaining market categories are unchanged or up modestly. Specifically, we enjoyed net sales growth in markets for packaging of meat and cheese, dairy and liquids, dry foods, bakery products, medical devices and industrial products.

In the Industrial products market, which represent about 5% of flexible packing net sales, the sales growth reflected the pass-through of raw material cost increases, partially offset by lower unit volumes. Demand in this market has slowed in light of its exposure to the housing industry.

In the meat and cheese market, representing almost 30% of flexible packaging sales, we experienced healthy unit volume growth in North America and in Europe, which was boosted further by increases in price and mix. Our new polyester platform is supporting growth in North America, and we have successfully introduced new meat and cheese market products into European markets.

In dairy and liquids markets, which represent about 8% of flexible packaging net sales, increased sales in North America and South America. Both contributed to higher unit volumes in this market compared to last year.

Net sales of packaging products to dry foods and bakery markets also increased compared to last year's third quarter, as a result of both increased sales volume and increased price mix. Dry foods and bakery markets make up about 6% and 4% of flexible packaging net sales respectively.

Sales to medical device markets increased nicely this quarter. Volumes were particularly strong in North America. The market also benefited from improved price mix. On the other hand, we experienced decreased net sales compared to the third quarter of 2007 in markets for confectionary and snack products and overwraps for multi-packs like bottled beverages.

Confectionary and snack market sales make up about 8% of flexible packaging sales and volumes have been under pressure for several years due to competitive pressure and consumer trends.

Sales of our overwraps packaging for beverages, what we refer to as multi-pack packaging, have been slowing in 2008 after years of double-digit growth. While the package itself continues to expand into new applications, the growth of the market for these applications has slowed considerably this year in conjunction with related consumer buying trends. This market represents about 5% of our flexible packaging sales.

In our pressure sensitive materials business segment, net sales for the third quarter of 2008 decreased 1.5% compared to the third quarter of 2007. Excluding the impact of currency, net sales would have decreased 4.5%. This business segment is considerably more sensitive to economic conditions than our flexible packaging segment. While flexible packaging is focused on food and consumer product markets, the pressure sensitive materials segment has considerable exposure to label and promotional markets that are much more sensitive to general economic conditions.

Looking at specific pressure sensitive product lines and excluding the impact of currency, net sales of our label products declined about 5% compared to last year's third quarter. Label products represent about 57% of our sales in this segment. Our graphic products sales decreased by about 8%, as volume declines with higher input cost being passed through increased selling prices.

Graphic products represent about 30% of our pressure sensitive material sales. In technical products, which represent the remaining 13% of our total segment sales, total sales improved this quarter by about 6%, reflecting an improvement in sales mix as new products continued to be commercialized. Unit volumes in this particular product line continued to be negatively impacted by our exposure to the housing and automotive industries.

Leaving sales and moving further to the income statement, gross margin, as a percent of net sales was 16.9% for the third quarter of 2008, a decrease from 17.8% in the third quarter of 2007, and 17.6% in the second quarter of 2008.

Gross margins were under pressure this quarter with the substantial increases in input cost that we have experienced at the end of the second quarter. While we have increased our selling prices in response to these higher costs, there is a time lag built into our business model that negatively affects our margins during periods of increasing raw material costs.

Along with pass-through, these higher raw material costs in the form of higher selling prices, our business teams are diligently implementing cost management strategies to offset increases and other input costs, such as chemicals, maintenance supplies, energy and freight.

Spending on SG&A expense during the third quarter was down slightly from earlier this year and comparable to last year's levels. SG&A expense, as a percent of sales decreased as higher selling prices and good cost management impacted both sides of the equation. Other costs of income include $9.2 million of financial income, about 45% of which represents the interest income from cash balances held.

These cash balances were held at international subsidiaries and have been producing interest income over the past several years. In order to make cash available for debt reduction, we've paid a dividend to Bemis from two of those subsidiaries in the fourth quarter.

The effect of this dividend will be to reduce interest income earned in the fourth quarter compared to the previous quarters with the corresponding, but somewhat smaller decrease in interest expense. The remaining 55% of the financial income reflects fiscal incentives at international locations. As we have explained in the past, while it is classified as other income, the fiscal incentives relate to specific flexible packaging operations and are included in our calculation of segment operating profit.

For the third quarter, year-over-year interest expense was down $2.9 million. This decrease is a reflection of lower debt levels and the lower average interest rates.

With regard to segment performance, operating profit, as a percent of net sales was lower than last year's third quarter level, due primarily to the impact of weaker economy and rising resin cost.

In our flexible packaging segment, we recorded $82.4 million of operating profit for the third quarter of 2008. This equates to 10% of net sales. Currency translation benefits added about $1.5 million to operating profit. Last year, we recorded $81.6 million of operating profit for the second quarter or 10.9% of net sales.

Operating profit in our pressure sensitive materials segment was $9 million or 5.7% of net sales, compared with $9.1 million or 5.7% of net sales for the third quarter of 2007. In this challenging economic environment with lower volumes in the segment; we were pleased to have maintained consistency in our profitability.

With regard to cash flow and liquidity, we paid down about $36 million of debt this quarter. Our outstanding debt increased during the first half of 2008, primarily as a result of higher working capital balances and remained somewhat higher than the levels of December 2007, as those higher raw material costs and selling prices worked through working capital.

Debt to total capitalization, calculated as debt plus deferred taxes and equity, as of September 30 were 32.5%. This compares to 32.9% at December 31, 2007. On August 15, our seven-year $250 million bond issue matured and we paid it off with commercial paper. As an A1P2 rated company, we used commercial paper to fund our daily working capital needs.

During the unusual financial markets we have observed over the past month-and-a-half, we have continued to issue and redeem commercial paper on a daily basis. We were pleased that we were able to issue commercial paper rates similar to earlier in the quarter. At times, the maturities we issued were shorter than desired, but we've been able to successfully fund our company and navigate this liquidity crisis without the need to draw down credit lines.

At the end of September, we had $445 million of commercial paper outstanding with the maturity spread throughout the fourth quarter. We plan to continue to participate in this commercial paper market since it represents good liquidity and a low cost of borrowing. Let me remind you that our commercial paper program is supported by $625 million in backup credit facilities.

Cash flow from operations for the third quarter of 2008 was $78.6 million, an increase from the first two quarters of 2008, but less than the strong cash flow of $104 million achieved during the third quarter of 2007. The difference from last year to this year is primarily driven by increased levels of working capital resulting from increased input cost to increased selling prices.

Our cash flow for the total year 2008 will likely come in below record levels of 2007, but we do anticipate a high level of cash flow during the fourth quarter as higher price receivables are collected, raw material costs subside a bit and inventory levels decrease to normal lower fourth quarter levels.

As we said in the past, we continue to expect our investment in capital expenditures to be in the $125 million range for our 2008 capital plan, well below levels of the past few years. In today's economic environment, trying to forecast into the future is extremely difficult. Like you, we see the consumers' low confidence level in the global economy and the attitude to conserve and protect their personal financial situation.

Although our pressure sensitive materials segment feel the brunt of their fiscal attitude, our flexible packaging segment remains predominantly focused on defensive markets. Consumers can defer the purchase of a new car or new carpeting for their home, but the family must be fed. In light of these factors, we are setting our guidance for the fourth quarter in the range of $0.40 to $0.44 per share or $1.72 to $1.76.

Now, let me turn the call over the Henry for his comments.

Henry Theisen

Thank you, Gene. First, I'd like to comment on the third quarter, and then I would like to address what we expect to see over the next few months.

In our pressure sensitive materials segment, which represents only about 16% of our total Bemis sales, the market continues to be tough due to competitive pressures and the slowing global economy. This market is very sensitive to economic conditions, and our volumes tend to reflect the general health of the economy.

In addition, competitive pressures associated with the new capacity installed in North American label product market has also impacted our business. We have a lot of experience managing costs to match a volatile demand environment, and I am pleased with the performance of our business under these considerable pressures.

In our flexible packaging operations, we initiated world class manufacturing programs, which are in various stages of implementation around our global operations. These programs are making a difference and improving process efficiency and flexibility in our manufacturing operations. This is not a one-time exercise or a restructuring program of any kind. It is a plant-by-plant program in which all plant personnel are involved in improvements, and progress is measured and celebrated at all levels.

Our European flexible packaging operations continue to make progress with the world class manufacturing program they initiated in 2006. In the European market, acceptance of our unique polyester sealant films technology is also improving operating results in the region.

This quarter's total Bemis volume growth in flexible packaging from market categories like meat and cheese, dairy and liquids, medical device and dry foods reflects the commercialization of new business over the past year and stabilization of demand for core products.

During the second half of last year, we clearly saw an unusual volume decline in normally stable food and consumer products markets. We attributed this decline last year to the destocking of the customers' pantry. In 2008, we have been stabilizing unit volume levels, but we still noticed recognizable trends in certain markets.

For instance, the growth that we have seen for years in the bottled water market that uses our overwrap for bundling bottles has slowed considerably.

On the other side, packaging for single-service coffee is an interesting beneficiary of the economic downturn, as consumers appear to be maintaining their gourmet coffee habit by investing in single-serve quality coffee service options. We have seen our cup [inletting] structures used in single-serve coffeemakers grow substantially over the past year.

With all of the defensive benefits of our exposure to food and consumer product markets, we continue to be cautious about predicting near term growth. We have all heard about trends toward cooking at home to save money instead of going to the restaurants. Of course, this should boost demand for our customers' retail products, and in turn, demand Bemis flexible packaging.

While we do sell packaging into the institutional markets, this trend will improve sales of retail packaging, which uses more of Bemis' value-added convenience features.

The most significant impact in our business in 2008 has been for the volatile prices for direct materials, indirect supplies and energy costs. During the second quarter of 2008, our suppliers announced unprecedented increases in the cost of resin.

Resin is also the primary raw material in many other markets, which are very sensitive to the economy, including the housing and automotive markets. These resins are a byproduct of the hydrocarbon stream. This demand for resin in other markets is starting to wane; we expect to see lower prices. Although we have seen prices weaken in commodity polyethylene resins in late September and October, Hurricane Ike shutdown several facilities in early September, which resulted in a supply shortage and supported a high price for certain resins produced in the Sabine Pass and Beaumont, Texas.

As we have described many times, our business model attempts to insulate our long-term results from the impact of raw material cost fluctuations, although there is a short-term effect. Given a normal movement up or down in resin costs, we would expect to experience a one quarter lag of margin pressure or margin benefit from these trends.

However, rapidly increasing and decreasing raw material costs in a short window of time, quickly puts selling prices and input costs in line. Over the long-term, we expect to maintain margin dollars and continue to compete in the market with innovative products, quality manufacturing, and customer service.

Our fourth quarter estimate reflects our currently strong backlog of business, the benefits of our ongoing cost management, and world-class manufacturing efforts, and our ability to react quickly to changes in the market. Current decreases in raw material costs would generally not impact our results until the first quarter of 2009. Risk to our current quarter estimates relate primarily to customer order patterns, which may be disrupted by their financial market concerns and year-end inventory planning.

The fourth quarter is generally a slower sales quarter for Bemis, so it is important for us to monitor these trends to ensure that we are managing our operations to appropriately deal with any potential disruptions.

As you know, our markets are traditionally stable and we have worked hard to increase the flexibility of our operations without additional capital expenditures. We continue to maintain that our business model generates the best long-term performance results even at times the volatile input costs like we've experienced in 2008. With this solid foundation firmly in place, we are prepared for the challenges that a soft, global economy will bring.

Now, I would like to open it up for questions.

Question-and-Answer-Session

Operator

(Operator Instructions). We will take our first question from Ghansham Panjabi of Wachovia.

Ghansham Panjabi - Wachovia

Hello and good morning.

Henry Theisen

Good morning, Ghansham.

Ghansham Panjabi - Wachovia

The pantry destocking that you referred to last year, have you seen similar signs of that in the European flexible packaging business as well?

Gene Wulf

Our European flexible packaging business was pretty stable in the third quarter and we just see a quite a bit of growth relating to PET sealants. Overall, our division leaders in Europe are worried about the effects of a slowdown in the economy. We have not seen it through the third quarter, but they are concerned about it going into the fourth quarter.

Ghansham Panjabi - Wachovia

Okay. Just as a follow up, what was the FX impact on the EPS line for the first nine months of the year? Thanks.

Melanie Miller

I apologize I do not have that. I am not sure we get in to those details because of the fact that it varies so much by the various businesses, so I will have to get back to you on that one.

Operator

We will take our next question from George Staphos of Banc of America Securities.

George Staphos - Banc of America Securities

Thanks, hi everyone, Good morning.

Henry Theisen

Good morning, George.

George Staphos - Banc of America Securities

How are you? Two questions around inventory? First off, might one reason why you do not see a pronounced effect from lower resin prices in the fourth quarter, B, the accounting, perhaps you bought a bit of inventory at higher cost levels, and it will take some time to have that move through the system, and then in general in the fourth quarter, can you help us project roughly what working capital benefit we should see in the models? Thank you.

Gene Wulf

Well, George, this is Gene.

George Staphos - Banc of America Securities

Hey, Gene.

Gene Wulf

On the inventory side, you are right. What happens is, we order inventory as we get commitments from our customers to order materials, and so through a FIFO basis, that flows through, and so what we ordered today will be produced in about three to four weeks, and then they will take it over the next 90 days, so that is why the impact of lower resin prices really does not impact us until a quarter following a change or a drop.

Then in terms of what happens to our working capital at the end of the quarter, last year in the fourth quarter, we had a really strong fourth quarter in terms of lowering our working capital. We are anticipating we are going to get an improvement in working capital, as we hit a seasonal low for inventories as we come up to end of year, plus we expect to see lower resin prices that will also impact us on that working capital side.

Operator

We will take our next question from Reik Read of Robert Baird.

Reik Read - Robert Baird

Hey, good morning. You have talked about in your comments, potential changes in buying patterns within the food category. Is that something, Henry that you are seeing at this point or something that you are concerned about? If you can talk about how historically in periods like this, have those changes played out?

Henry Theisen

Good morning, Reik. Changes in the buying patterns, we have not seen other than in a few specific areas like we pointed out. Bottled water was a good example where a consumer can make the decision to use tap water rather than bottled water. So there is a few segments like that that we saw.

Overall, we currently do not see any changes in the consumer buying products. The things that they wanted to buy for convenience, the things they wanted to buy for easy open, especially the meal kits, things like that are all going strong, and we do not see anybody changing down or swapping out or not wanting to buy those higher-quality items. So we do not see that.

We are mostly just concerned with the economy, and not really knowing where this is going to take us. As far as what we have seen compared to the past, I do not know if we really in a long time have been in any situation similar to this to really compare it to.

Operator

We will take our next question from Claudia Hueston of JPMorgan.

Claudia Hueston - JPMorgan

Thanks very much. Good morning.

Gene Wulf

Good morning.

Henry Theisen

Claudia.

Claudia Hueston - JPMorgan

I was hoping you could provide just a little bit more color on some of the geographic trends you are seeing in flexible packaging, particularly in Latin America and some of the other emerging markets. I mean is there much of a sign of any slowdown there at all?

Henry Theisen

Well, probably the closest we would have to Latin America is our South American Dixie Toga, and Dixie Toga had excellent sales throughout the year and especially in the third quarter. We are expecting to see good sales in Brazil and in that region of the world in the fourth quarter.

However, when I talk to the management team there, they also are starting to get a little nervous about the effects of the global economy. So, it looks like we will have good sales in the fourth quarter, but there is concern in that part of the world also.

Gene Wulf

It will also be impacted by currency in the fourth quarter. We saw late in the third quarter the currency in Brazil and European currency start to devalue. So that is going to have an impact on us going into the fourth quarter.

Claudia Hueston - JPMorgan

Okay. Thanks very much. Then may be just as quick follow-up, is there any guidance on the corporate expense lines, since it did move around a little bit more than I expected, just going forward?

Gene Wulf

We do not have any guidance at this time.

Operator

We will take your next question from Chris Manuel of KeyBanc Capital Markets.

Chris Manuel - KeyBanc Capital Markets

Good morning.

Henry Theisen

Good morning, Chris.

Chris Manuel - KeyBanc Capital Markets

A couple of questions for you. Thanks for the color on the geography and what you are seeing on some volume trends. Can you help us maybe a little bit, as the quarter progressed, did you start to see any slowdowns in order do you think due to pre-buys as resins started to come off?

Particularly and the way I am thinking about that is, as you talked about earlier that you order 30 days or 40 day or three to four weeks ahead and deliver subsequent, do you think that the volume impact or what you have been embedded in the numbers here for the fourth quarter could see a massive uptick beginning next year as we start to see lower resin prices?

Just maybe a little color on how things progressed through the quarter and what you are thinking from volume looking out over the next six months.

Henry Theisen

I do not think we saw any real pre-buy in the third quarter. This rapid drop of raw materials and oil hit so fast. So, I do not think there was any big pre-buy. As we go through the quarter, we started out the quarter with good backlogs. We feel good about the quarter.

As far as your question of what will people think is I think more going to be what they feel they should have as the proper inventory level as you come to the last couple of days of December in this year? The resin dropped so fast, I do not think people are pre-buying.

Operator

We will take our next question from Mark Wilde of Deutsche Bank.

Mark Wilde - Deutsche Bank

Hi, Gene, I wonder if it is possible for you to just help us walk through how FX is likely to play out for you in the fourth quarter if exchange rates stay right where they are at now?

Gene Wulf

Well, late in the third quarter, we have all seen all of the currencies around the world devalue to the dollar. In Brazil, we have had a substantial decrease in value. That is going to have a negative impact on the sales side as well as the profit side as we go in to Q4, as well as the European currencies have devalued.

So, I am not sure I am in a position to tell you exactly how much we think is going to happen, because I am not sure where that currency is going to be in 90 days. It dropped in Brazil much more rapidly than we anticipated. So, it will be very interesting to see what happens, but it certainly has dropped substantially.

Operator

We will take our next question from Joseph Naya of UBS.

Joseph Naya - UBS

Good morning. I was just wondering if you could talk to us a little bit about what you are seeing from your customers in terms of their reaction on the pricing side now, as resin has been coming off and the economy has softened. Are you getting more pushback on prices at this point where you do not have pass-through arrangements?

Henry Theisen

Good morning, Joseph. Yes, I think this is no different than any other time you see rising prices and you see fall in raw material costs. We worked very diligently and very hard to make sure that those raw material costs were passed through to our customers in terms of price increases to them.

As they see the price of gasoline and energy and raw materials drop, they are very much talking to us about when that will flow through their lines and when we will be reducing prices and making those adjustments. So it is a day-to-day negotiation with the customers, no different than any other time.

Gene Wulf

Actually, along that line is customers are always pushing back on price, regardless of prices are going up or going down. So, it is just a constant discussion we have.

Joseph Naya - UBS

Okay. Thanks.

Operator

We will now take a follow-up question from George Staphos of Banc of America Securities

George Staphos - Banc of America Securities

Thanks.

Henry Theisen

Hi, George.

George Staphos - Banc of America Securities

One question on cash flow and a follow-up on pricing and maybe [Joe's] question. On cash flow, again, working capital I think it was around numbers about a $30 million negative variance. I do not have my numbers in front of me. Should we expect a portion or all of that to be reversed in the fourth quarter? Any outlook on CapEx for '09? On pricing, are there any price increases that you are entitled to that have not yet been fully implemented, and when would those be taking effects? Thanks.

Gene Wulf

About working capital, I think you should see most of that passes way through in the fourth quarter. A lot of that was related to those two effects. One of them was related just to the rising costs of the raw materials increase your working capital. The other is, we took a look at when those hurricanes were coming up through the Gulf Coast, and we took a look at what materials we have that are sensitive that can only come from one or two spots and we did a little pre-buying to make sure that we would have critical materials, and we were very lucky to do that with the problems that existed in the Sabine Pass and Beaumont, Texas to keep our operations going.

So we expect the working capital to drop quite substantially in the fourth quarter. CapEx for 2009, we are in the middle of our planning stage, so I really do not have a good comment for you at where we are there. Prices, we have passed through 100% of our price initiatives to our customers.

Operator

(Operator Instructions). We are going back now to Mark Wilde of Deutsche Bank for a follow-up question.

Mark Wilde - Deutsche Bank

Thanks. In your comments, you mentioned that when resin prices cracked down sharply that the pass-through in terms of price can be much faster than normal. Are you concerned about that at all at this point?

Gene Wulf

No, that does not concern me. We pass-through those prices increases, we will recover those when it drops very quickly. We have a quick adjustment on prices with our customers. We do not want to do is get trapped into rising raw material costs later on that occur very quickly.

Operator

We will go back to George Staphos of Banc of America Securities for another follow-up question.

George Staphos - Banc of America Securities

Last question. On pressure sensitive materials, Gene or Henry, can you comment at all as to whether the pricing competition and that is a normal part of this segment in general, whether it is intensified at all because of some deceleration in demand? The follow-on would be how confident are you that you can sustain the margins you are at fairly good performance in the third quarter from our vantage point, in light of the macro environment, and in light of, perhaps, the price competition you talked to? Thanks. Good luck in the quarter.

Henry Theisen

The price competition in pressure sensitive business has been intense since Raflatac decided to put up their first plant in Carolina's and with the new plant that was in the Dickson that maintain that pricing pressure. I think it has been pretty constant through the time. We really have not had great volume growth in the US here. We have had a substantial amount of capacity added by Raflatac.

So I do not really think the pressuring prices are any different today than they were a year ago for us. I am very pleased with our management team, and how they have responded with their world-class manufacturing, the control of their costs, the efficiencies they have in the operations, and I am very proud of that the success they have and I think we can maintain those margins going forward.

We are also concentrating a lot and trying to grow our graphics business and trying to grow our technical business, so as the economy would pick up a little bit, we should see some improvements related to those market areas.

Gene Wulf

George, also in that label market, we are trying to focus in on the niche markets, as opposed to the high-volume markets and so in the niche markets, we believe we are able to maintain our pricing better than in the highly competitive markets.

Operator

We will now take a follow-up question from Chris Manuel of KeyBanc Capital Markets.

Chris Manuel - KeyBanc Capital Markets

Good morning, again. Just one quick follow-up. You talked about some of the new products and things that you have seen some success with here in the quarter and year-to-date, do you have any a metric you can share with us that is maybe a percent of your revenues that are new products that you generated in the last six, 12, 18, or over some period of time that just gives us a sense of how much your revenue is coming from new products?

Henry Theisen

We really do not have a good metric for that since so many of our product developments and our new products we offer are offshoots of current things, where you substitute resins, modify things to deliver certain performances.

There is no really good way to separate what is really just a modification to a current price than what we would be able to price. It is unlikely come out with something entirely different. It is a slow flow that goes through the operations of improvements and adjustments, and new characteristics.

Operator

(Operator Instructions). We will now take a question from Todd Peters of American Century.

Todd Peters - American Century

Hello. Thank you.

Henry Theisen

Good morning, Todd.

Todd Peters - American Century

Good morning. I missed it. I have two questions. Did you repurchase any shares in the quarter?

Gene Wulf

No, we did not.

Henry Theisen

I believe that is correct, right?

Gene Wulf

No repurchases.

Todd Peters - American Century

Okay. Then did you breakdown in the flexible packaging area, how much was volume and how much was price in the quarter?

Melanie Miller

No, we do not get into those details very substantially from one market to the other, but Gene did touch on in his commentary that in the markets where we grew, we had double-digit growth in about 60% of our flexible packaging markets. Only in one case that was industrial products, did we have a decrease in volume because of the types of markets industrial products are sold into.

In all other cases, we had nice volume increases. Obviously in this environment, also nice price mix increases, because we are passing along our higher material costs.

Todd Peters - American Century

All right, good. I am sorry. Then just one last one. When you talk about changing and buying patterns, are you referring to your customer that you sell your product to or the consumer at the end market retail level?

Henry Theisen

We are talking about the consumer at the end market and how much food are they going to buy, what types of foods are they going to buy.

Todd Peters - American Century

All right.

Melanie Miller

How that might impact our customers' orders to us for those same kinds of packaging.

Todd Peters - American Century

Okay. That is all I have. Thank you so much.

Henry Theisen

You are welcome.

Operator

We have no further questions. Ms. Miller, I would like to turn the conference back to you for any additional or closing remarks.

Melanie Miller

All right, thank you very much, everyone, for joining us today, and we will talk to you next quarter.

Operator

This does conclude today's conference. We thank you for joining us today and hope that you have a great day.

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