1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC
20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 29, 1997 Commission File No. 1-11261
SONOCO PRODUCTS COMPANY
----------
Incorporated under the laws I.R.S. Employer Identification
of South Carolina No. 57-0248420
Post Office Box 160
Hartsville, South Carolina 29551-0160
Telephone: 803-383-7000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock at August 1, 1997:
Common stock, no par value: 90,575,159
2
SONOCO PRODUCTS COMPANY
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets - June 29, 1997 and
December 31, 1996
Consolidated Statements of Income -
Three Months and Six Months Ended June 29, 1997
and June 30, 1996
Consolidated Statements of Cash Flows -
Six Months Ended June 29, 1997 and
June 30, 1996
Notes to Consolidated Financial Statements
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURE
3
SONOCO PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars and shares in thousands)
(unaudited)
June 29, December 31,
1997 1996
----------- -----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 62,391 $ 71,260
Trade accounts receivable, net of allowances 349,360 329,963
Other receivables 31,384 38,240
Inventories:
Finished and in process 121,263 123,224
Materials and supplies 123,342 137,236
Prepaid expenses 24,713 26,121
Deferred income taxes 11,279 11,605
----------- -----------
723,732 737,649
PROPERTY, PLANT AND EQUIPMENT, NET 1,041,048 995,415
COST IN EXCESS OF FAIR VALUE OF ASSETS PURCHASED, NET 438,594 455,567
OTHER ASSETS 215,940 198,909
----------- -----------
Total Assets $ 2,419,314 $ 2,387,540
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Payable to suppliers $ 209,381 $ 205,741
Accrued expenses and other 129,866 111,804
Accrued wages and other compensation 31,128 29,428
Notes payable and current portion of
long-term debt 103,374 102,062
Taxes on income 18,945 26,081
----------- -----------
492,694 475,116
LONG-TERM DEBT 742,764 791,026
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 104,026 107,265
DEFERRED INCOME TAXES AND OTHER 112,354 93,520
SHAREHOLDERS' EQUITY
Serial preferred stock, no par value
Authorized 30,000 shares
2,394 and 2,395 shares issued and outstanding as of
June 29, 1997 and December 31, 1996, respectively 119,706 119,756
Common stock, no par value
Authorized 150,000 shares
90,404 and 89,864 shares issued and outstanding as of
June 29, 1997 and December 31, 1996, respectively 7,175 7,175
Capital in excess of stated value 60,549 50,378
Translation of foreign currencies (73,601) (56,572)
Retained earnings 853,647 799,876
----------- -----------
Total shareholders' equity 967,476 920,613
----------- -----------
Total Liabilities and Shareholders' Equity $ 2,419,314 $ 2,387,540
=========== ===========
See accompanying Notes to Consolidated Financial Statements
4
SONOCO PRODUCTS COMPANY
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars and shares in thousands except per share data)
Three Months Ended Six Months Ended
------------------------ ------------------------------
June 29, June 30, June 29, June 30,
1997 1996 1997 1996
--------- --------- ----------- -----------
Net sales $ 714,167 $ 689,855 $ 1,401,815 $ 1,359,086
Cost of sales 548,021 522,221 1,083,698 1,035,096
Selling, general and administrative expenses 75,729 78,174 147,535 151,967
Interest expense 14,889 13,614 28,438 25,192
Interest income (931) (1,692) (2,029) (2,911)
--------- --------- ----------- -----------
Income from operations before income taxes 76,459 77,538 144,173 149,742
Taxes on income 29,590 30,549 55,795 58,998
--------- --------- ----------- -----------
Income from operations before equity in earnings
of affiliates/Minority interest in subsidiaries 46,869 46,989 88,378 90,744
Equity in earnings of affiliates/Minority interest
in subsidiaries (838) (234) (1,101) (741)
--------- --------- ----------- -----------
Net income 46,031 46,755 87,277 90,003
Preferred dividends (1,347) (1,941) (2,413) (3,882)
--------- --------- ----------- -----------
Net income available to common shareholders $ 44,684 $ 44,814 $ 84,864 $ 86,121
========= ========= =========== ===========
Average common shares outstanding:
Assuming no dilution 90,105 91,119 90,105 91,119
Assuming full dilution 97,165 100,494 97,165 100,494
Earnings per common share:
Assuming no dilution $ .49 $ .50 $ .94 $ .95
========= ========= =========== ===========
Assuming full dilution $ .47 $ .47 $ .90 $ .90
========= ========= =========== ===========
Dividends per common share $ .18 $ .165 $ .345 $ .315
========= ========= =========== ===========
See accompanying Notes to Consolidated Financial Statements
5
SONOCO PRODUCTS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in thousands)
Six Months Ended
--------------------------
June 29, June 30,
1997 1996
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 87,277 $ 90,003
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization 74,064 66,073
Equity in earnings of affiliates/Minority interest in subsidiaries 1,101 741
Deferred taxes 5,796 684
Loss on disposition of assets 636 1,096
Changes in assets and liabilities, net of effects from acquisitions,
dispositions and foreign currency adjustments:
Accounts receivable (24,870) (25,475)
Inventories 4,839 (9,070)
Prepaid expenses 1,942 6,150
Payables and taxes (9,037) (2,766)
Other assets and liabilities (14,025) 15,768
--------- ---------
Net cash provided by operating activities 127,723 143,204
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (110,519) (96,754)
Cost of acquisitions, exclusive of cash (13,211) (55,711)
Other, net (1,651) (54,682)
Proceeds from the sale of assets 64,219 912
--------- ---------
Net cash (used) by investing activities (61,162) (206,235)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in commercial paper borrowings (56,791) 134,500
Proceeds from issuance of debt 38,823 43,655
Principal repayment of debt (32,157) (37,422)
Cash dividends - common and preferred (33,506) (32,594)
Shares acquired - common and preferred (133) (18,595)
Common shares issued 9,436 11,437
--------- ---------
Net cash (used) provided by financing activities (74,328) 100,981
--------- ---------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH (1,102) (343)
--------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (8,869) 37,607
Cash and cash equivalents at beginning of period 71,260 61,624
--------- ---------
Cash and cash equivalents at end of period $ 62,391 $ 99,231
========= =========
See accompanying Notes to Consolidated Financial Statements
6
SONOCO PRODUCTS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited), continued
(Dollars in thousands)
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Six Months Ended
---------------------------------
June 29, June 30,
1997 1996
------- -------
Interest paid $26,724 $20,507
Income taxes paid $50,871 $76,358
See accompanying Notes to Consolidated Financial Statements
7
SONOCO PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1: BASIS OF INTERIM PRESENTATION
In the opinion of the Company, the accompanying unaudited consolidated
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position and
results of operations for the interim periods reported hereon.
Operating results for the six months ended June 29, 1997, are not
necessarily indicative of the results that may be expected for the year
ending December 31, 1997. These consolidated financial statements
should be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's annual
report for the fiscal year ended December 31, 1996.
NOTE 2: DIVIDEND DECLARATIONS
On July 16, 1997, the Board of Directors declared a regular quarterly
dividend of $.18 per share. This 289th consecutive dividend will be
payable September 10, 1997 to shareholders of record as of August 15,
1997. The Board also declared a quarterly dividend of $.5625 per share
on the $2.25 Series A Cumulative Convertible Preferred Stock, payable
on October 31, 1997, to shareholders of record as of October 10, 1997.
NOTE 3: ACQUISITIONS/DISPOSITIONS
During the first quarter of 1997, the Company completed the sale of its
screen print operations acquired in the 1993 acquisition of Engraph,
Inc. This division was sold because it did not fit with the Company's
overall focus on the packaging industry. In addition, the Company
signed a letter of intent to form a joint venture with the Rock-Tenn
Company, combining their fibre partitions businesses into a joint
venture company called RTS Packaging. This transaction is still
awaiting regulatory approval.
During the second quarter of 1997, the Company announced the formation
of joint ventures in Brazil and Chile. The Brazilian joint venture,
Sonoco For-Plas, is owned 51% by the Company and is a major supplier of
"peel off" metal ends and plastic components such as overcaps for cans.
The joint venture will continue to supply its traditional line of
products and plans to add composite cans and other consumer packaging
products. The Company also formed a joint venture with Conotex of
Santiago, Chile for the manufacture of composite cans, tubes, and
cores. The new business, owned 51% by the Company, plans to add new
equipment and technologies in order to extend its offerings to current
customers and expand into new markets.
8
SONOCO PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(unaudited)
NOTE 4: FINANCIAL SEGMENT INFORMATION
The Financial Segment Information provided below should be read in
conjunction with the Management's Discussion and Analysis immediately
following the Notes to Consolidated Financial Statements.
FINANCIAL SEGMENT INFORMATION (UNAUDITED)
(DOLLARS IN THOUSANDS)
Three Months Ended Six Months Ended
--------------------------------- -----------------------------------
June 29, 1997 June 30, 1996 June 29, 1997 June 30, 1996
------------- ------------- ------------- -------------
Total Revenue
Industrial Packaging $ 411,835 $ 402,080 $ 802,781 $ 786,595
Consumer Packaging 312,697 298,363 619,069 593,874
--------- --------- ----------- -----------
Consolidated $ 724,532 $ 700,443 $ 1,421,850 $ 1,380,469
========= ========= =========== ===========
Sales to Unaffiliated Customers
Industrial Packaging $ 401,511 $ 391,948 $ 782,811 $ 766,118
Consumer Packaging 312,656 297,907 619,004 592,968
--------- --------- ----------- -----------
Consolidated $ 714,167 $ 689,855 $ 1,401,815 $ 1,359,086
========= ========= =========== ===========
Operating Profit
Industrial Packaging $ 60,009 $ 55,736 $ 110,203 $ 107,511
Consumer Packaging 30,408 33,724 60,379 64,511
Interest, net (13,958) (11,922) (26,409) (22,280)
--------- --------- ----------- -----------
Consolidated $ 76,459 $ 77,538 $ 144,173 $ 149,742
========= ========= =========== ===========
9
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
Statements included in Management's Discussion and Analysis of Financial
Condition and Results of Operations that are not historical in nature, are
intended to be, and are hereby identified as "forward looking statements" for
purposes of the safe harbor provided by section 21E of the Securities Exchange
Act of 1934, as amended. The Company cautions readers that forward looking
statements, including without limitation those relating to the Company's future
business prospects, revenues, working capital, liquidity, capital needs,
interest costs, and income, are subject to certain risks and uncertainties that
could cause actual results to differ materially from those indicated in the
forward looking statements.
SECOND QUARTER 1997 COMPARED WITH SECOND QUARTER 1996
RESULTS OF OPERATIONS
Consolidated net sales for the second quarter of 1997 were $714.2 million,
compared with $689.9 million in the second quarter of 1996. Net income available
to common shareholders for the second quarter was $44.7 million, compared with
$44.8 million in the second quarter of 1996. Fully diluted earnings per share
for the second quarter of 1997 were $.47, equal to the record second quarter
results in 1996. Second quarter earnings per share were favorably impacted by
the repurchase of 3.44 million common share equivalents during the second half
of 1996. Second quarter performance was in line with Management's expectations
that earnings for the first two quarters of 1997 would be flat, to slightly
down, compared with 1996, and then improve in the second half of the year. The
second half performance is expected to be line with the Company's traditional
growth objectives, which will result in another record year for the Company.
INDUSTRIAL PACKAGING SEGMENT
The industrial packaging segment includes tubes; cores; cones; roll wrap; molded
plugs and related products and services; fibre drums; plastic drums;
intermediate bulk containers; injection molded and extruded plastics; paper
manufacturing and recovered paper collections; fibre partitions; molded pulp;
corner posts; reels for wire and cable packaging; adhesives; converting
machinery; and forest products.
Trade sales for the industrial packaging segment were $401.5 million, a 2.4%
increase over the $392.0 million recorded in the second quarter of 1996.
Operating profit for this segment was $60.0 million, a 7.7% increase over 1996's
second quarter results of $55.7 million.
The integrated global tube and core businesses experienced their strongest
volume in the history of the Company during the second quarter. The volume
growth was evident across all major product segments and in nearly every major
geographic region, and this performance was led by the domestic operations.
Pricing levels for tubes and cores were lower than the second quarter of 1996;
however, they appear to have stabilized. The industrial segment is also
benefiting from several initiatives undertaken in the past two years, including
the consolidation of several United States and European tube and core plants.
In the paper operations, volume was also up. Although approximately 85% of the
paperboard produced by the Company is used in the Company's internal converting
operations, the continued low selling prices for the corrugating medium and
linerboard sold to external markets negatively impacted profits by nearly $3.8
million for the second quarter, compared with the same period in 1996.
10
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED), CONTINUED
SECOND QUARTER 1997 COMPARED WITH SECOND QUARTER 1996, CONTINUED
RESULTS OF OPERATIONS, CONTINUED
Volume was strong in the molded and extruded plastics business during the second
quarter, with continued demand for the Company's new plastic heating trays for
the fast food industry. Volume also increased in both the textile and filtration
markets.
In the three segments of the industrial container group, which includes fibre
drums, plastic drums and intermediate bulk containers, volume increased over the
second quarter of 1996. Both the continued pricing pressure and the higher resin
costs were more than offset by increased productivity and cost-cutting
initiatives.
CONSUMER PACKAGING SEGMENT
The consumer packaging segment includes composite cans; fibre and plastic caulk
cartridges; capseals; flexible packaging; pressure-sensitive labels; label
application machinery; paperboard cartons; sleeves; blister packs; coasters and
glass covers; and high density film products.
Trade sales for the consumer packaging segment were $312.7 million for the
second quarter of 1997, a 5.0% increase over 1996's second quarter sales of
$297.9 million. Operating profit was $30.4 million for the second quarter of
1997, compared with $33.7 million in the second quarter of 1996.
The global composite can operations continued its strong performance through the
second quarter of 1997, with volume increases in the snack foods, nuts, and
adhesives and sealants markets. Volume was also up in the Capseals liners
business, which is located in England.
The flexible packaging group experienced volume increases in comparison to the
second quarter of 1996 in addition to solid improvements in both productivity
and scrap reduction. This improvement is expected to continue throughout the
rest of 1997.
Volume increased slightly for the label group, but selling prices have fallen in
comparison to the second quarter of last year. Product mix and continuing
reorganization efforts within the label group also had a negative effect on
results for the quarter. Modest improvement in the label operations is
anticipated during the remainder of the year, compared with a weaker second half
last year.
Volume was up in the high density film products business, led by increases in
sales of sacks for the high-volume retail market. However, this business was
affected by higher resin costs, which were not completely recovered in selling
prices.
11
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED), CONTINUED
JUNE 1997 YEAR-TO-DATE COMPARED WITH JUNE 1996 YEAR-TO-DATE
RESULTS OF OPERATIONS, CONTINUED
Consolidated net sales for the first six months of 1997 were $1.40 billion,
compared with $1.36 billion in the first six months of 1996. Net income
available to common shareholders for the first six months of this year was $84.9
million, compared with $86.1 million in the same period last year. Fully diluted
earnings per share for the first half of 1997 were $.90, equal to the first six
months of 1996.
During the first half of 1997, the Company continued to have strong performances
from its major businesses, the integrated global tube and core operations and
the global composite can business. Both of these businesses experienced volume
increases and continued to grow by adding market share and penetrating new
markets. Overall, the Company had volume gains in most of its major operations
around the world; however, some increased materials costs, particularly resin,
and selling price pressures weakened sales and earnings results for some
businesses.
The Company began seeing positive effects from the growth and cost-reduction
initiatives that were implemented during 1996. The earnings comparison for the
first half of this year against last year was extremely difficult. The Company
was able to match last year's outstanding earnings performance during the first
half and expects the second half performance to improve toward its traditional
growth objectives.
INDUSTRIAL PACKAGING SEGMENT
Trade sales for the industrial packaging segment for the first six months of
1997 increased 2.2% to $782.8 million, compared with $766.1 million in the first
half of 1996. Operating profit for this segment for the first half of 1997 was
$110.2 million, a 2.5% increase over 1996's first half results of $107.5
million.
Strong volume, led by market share increases and penetration of new markets, was
experienced in nearly every business during the first half of the year. While
profits were up for the first six months of 1997, there was some downward pull
caused by selling price pressures in the paper converting operations. In
addition, decreased selling prices for the linerboard and corrugating medium
sold to external markets negatively impacted profits by $7.8 million for the
first half of 1997, compared with the first half of 1996.
The Company's volume increases in its global tube and core operations were
driven by significant increases in the textile and film markets during the first
quarter of 1997 and the paper industry during the second quarter of 1997. The
results of the supply chain initiative of 1996, which closed seven tube and core
plants while expanding twenty others, became evident during the first half of
1997 and is expected to continue to have positive effects on results going
forward.
Sales were slightly down in the industrial container operations, reflecting
weaker demand for fibre drums during the first quarter of 1997 and declining
selling prices for plastic drums and intermediate bulk containers for the entire
first half of 1997. The solid performance of the molded and extruded plastics
operations was led by volume increases in the automotive, textile,
12
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED), CONTINUED
JUNE 1997 YEAR-TO-DATE COMPARED WITH JUNE 1996 YEAR-TO-DATE, CONTINUED
RESULTS OF OPERATIONS, CONTINUED
and filtration markets during the first quarter and the new product sales for
heating trays for the second quarter. The protective packaging and wire and
cable reels businesses maintained good volume throughout the first half of
1997.
CONSUMER PACKAGING SEGMENT
Trade sales for the consumer packaging segment during the first six months of
1997 were $619.0 million, compared with $593.0 million in the first half of
1996. Operating profit in this segment was $60.4 million for the first half of
1997, compared with $64.5 million in the first six months of last year.
Business remained strong in the composite can operations throughout the first
half of 1997 with volume gains in nearly every major product line. This business
continues to grow by adding new products, increasing market share, and
converting established products. International performance in this segment was
also strong during the first six months of 1997.
The consumer packaging segment was negatively influenced by the high density
film products operations due to decreased volume that was driven by customer's
inventory adjustments during the first quarter and to price pressures that kept
the division from recovering higher raw material costs during the second
quarter. The label business continued to be adversely affected by reorganization
and consolidation activities throughout the first half of the year. However,
flexible packaging's sales and profits improved for the first six months of the
year.
CORPORATE
General corporate expenses have been allocated as operating costs to each of the
segments. Interest expense increased in the first half of 1997 over 1996 due to
higher debt resulting from the 1996 share repurchase program, capital spending,
and acquisitions.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's financial position remained strong through the first six months of
1997. The debt to capital percentage, after adjusting debt levels for excess
cash related to the issuance of restricted purpose bonds, decreased to 44.6% at
June 29, 1997, from 47.2% at December 31, 1996. Debt decreased from year end
primarily as a result of principal reductions made with proceeds from the sale
of the screen print operations in March 1997.
Working capital decreased $31.5 million to $231.0 million during the first six
months of 1997. This decrease was driven by a decrease in inventories, which is
partially attributable to the sale of the screen print operations, and an
increase in accrued expenses and other liabilities.
13
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED), CONTINUED
JUNE 1997 YEAR-TO-DATE COMPARED WITH JUNE 1996 YEAR-TO-DATE, CONTINUED
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES, CONTINUED
The Company expects internally generated cash flows along with borrowings
available under its commercial paper and other existing credit facilities to be
sufficient to meet operating and normal capital expenditure requirements.
In February 1997, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 128 "Earnings per Share" (FAS 128). This standard is
effective for financial statements issued for periods ending after December 15,
1997, and will be implemented in the Company's financial statements for the year
ended December 31, 1997. The Company does not expect FAS 128 to have a material
impact on the earnings per share calculation.
14
SONOCO PRODUCTS COMPANY
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to Item 3 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1996.
Item 4. Submission of Matters to a Vote of Security Holders
Reference is made to Item 4 of the Company's Quarterly Report on Form
10-Q for the Quarter ended March 30, 1997.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit (11) - Computation of Earnings per Share
Exhibit (27) - Financial Data Schedule (for SEC use only)
(b) There were no reports on Form 8-K filed by the Company during
the quarter ended June 29, 1997.
15
S O N O C O P R O D U C T S C O M P A N Y
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SONOCO PRODUCTS COMPANY
(Registrant)
Date: August 13, 1997 By: /s/ F.T. Hill, Jr.
-------------------------- --------------------------
F.T. Hill, Jr.
Vice President and
Chief Financial Officer
16
SONOCO PRODUCTS COMPANY
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
11 Computation of Earnings Per Share
27 Financial Data Schedule (for SEC use only)
1
EXHIBIT (11)
SONOCO PRODUCTS COMPANY
COMPUTATION OF EARNINGS PER SHARE (UNAUDITED)
(Dollars in thousands, except per share)
Three Months Ended Six Months Ended
-------------------------------- --------------------------------
June 29, June 30, June 29, June 30,
1997 1996 1997 1996
----------- ------------ ----------- ------------
Primary earnings
Net income available to common shareholders $ 44,684 $ 44,814 $ 84,864 $ 86,121
Weighted average number
of common shares outstanding 90,232,522 91,118,603 90,105,267 91,118,603
Assuming exercise of options reduced by the
number of shares which could have been
purchased (at average price) with proceeds
from exercise of such options 1,986,942 2,126,956 1,877,762 2,073,118
----------- ------------ ----------- ------------
Weighted average number of shares
outstanding as adjusted 92,219,464 93,245,559 91,983,029 93,191,721
=========== ============ =========== ============
Primary earnings per common share $ 0.48 $ 0.48 $ 0.92 $ 0.92
=========== ============ =========== ============
Assuming full dilution
Net income available to common shareholders $ 44,684 $ 44,814 $ 84,864 $ 86,121
Elimination of preferred dividends 1,347 1,941 2,413 3,882
----------- ------------ ----------- ------------
Fully diluted net income $ 46,031 $ 46,755 $ 87,277 $ 90,003
=========== ============ =========== ============
Weighted average number of
common shares outstanding 90,232,522 91,118,603 90,105,267 91,118,603
Assuming exercise of options reduced by the
number of shares which could have been
purchased (at the higher of the
end-of-period or the average price) with
proceeds from exercise of such options 2,378,005 2,220,167 2,094,251 2,220,167
Assuming conversion of preferred stock 4,965,415 7,155,269 4,965,588 7,155,269
----------- ------------ ----------- ------------
Weighted average number of
shares outstanding as adjusted 97,575,942 100,494,039 97,165,106 100,494,039
=========== ============ =========== ============
Earnings per common share assuming full dilution $ 0.47 $ 0.47 $ 0.90 $ 0.90
=========== ============ =========== ============
5
1,000
6-MOS
DEC-31-1997
JAN-01-1997
JUN-29-1997
34,258
28,133
355,116
5,249
244,605
723,732
1,041,048
863,867
2,419,314
492,694
742,764
0
119,706
7,175
840,595
2,419,314
1,401,815
1,401,815
1,083,698
1,083,698
0
3,283
28,438
144,173
55,795
87,277
0
0
0
87,277
$.92
$.90
