Sonoco Raises Second-Quarter 2022 Financial Guidance
Sonoco Provides Second-Quarter 2022 Financial Update
Based on strong April and May results combined with its current June forecast,
Information on Second Quarter Financial Release Date and Management Conference Call
About
Founded in 1899,
Non-GAAP Financial Measures and Reconciliations
Base net income per diluted share mentioned in this release is a non-GAAP financial measure adjusted to exclude restructuring-related items, asset impairment charges, acquisition/divestiture-related expenses, non-operating pension costs, amortization expense on acquisition intangibles, certain income tax-related events and other items, if any, the exclusion of which the Company believes improves comparability and analysis of the ongoing operating performance of the business.
This non-GAAP financial measure is not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, this non-GAAP financial measure is not based on any comprehensive set of accounting rules or principles.
Whenever
For the second quarter ending
The following tables present the reconciliations of the Company’s non-GAAP financial measures to their most directly comparable GAAP financial measures for the three-month periods ended
For the three months ended |
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Dollars in thousands, except per share data | GAAP |
Restructuring/Asset Impairments(1) |
Amortization of Acquisition Intangibles(2) |
Acquisition/ Divestiture Related(3) |
Other Adjustments(4) |
Base |
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Operating profit | $ | 169,061 | $ | 12,142 | $ | 18,800 | $ | 48,352 | $ | 12,438 | $ | 260,793 | ||||||||
Non-operating pension costs | 1,324 | — | — | — | (1,324 | ) | — | |||||||||||||
Interest expense, net | 19,065 | — | — | — | — | 19,065 | ||||||||||||||
Income before income taxes | 148,672 | 12,142 | 18,800 | 48,352 | 13,762 | 241,728 | ||||||||||||||
Provision for income taxes | 35,289 | 1,635 | 4,630 | 11,756 | 7,738 | 61,048 | ||||||||||||||
Income before equity in earnings of affiliates | 113,383 | 10,507 | 14,170 | 36,596 | 6,024 | 180,680 | ||||||||||||||
Equity in earnings of affiliates, net of tax | 2,224 | — | — | — | — | 2,224 | ||||||||||||||
Net income | 115,607 | 10,507 | 14,170 | 36,596 | 6,024 | 182,904 | ||||||||||||||
Net (income)/loss attributable to noncontrolling interests | (274 | ) | 61 | — | — | — | (213 | ) | ||||||||||||
Net income attributable to |
115,333 | 10,568 | 14,170 | 36,596 | 6,024 | 182,691 | ||||||||||||||
Per diluted common share* | $ | 1.17 | $ | 0.11 | $ | 0.14 | $ | 0.37 | $ | 0.06 | $ | 1.85 | ||||||||
*Due to rounding individual items may not sum across |
(1) Restructuring/asset impairment charges are a recurring item as Sonoco’s restructuring programs usually require several years to fully implement and the Company is continually seeking to take actions that could enhance its efficiency. Although recurring, these charges are subject to significant fluctuations from period to period due to the varying levels of restructuring activity and the inherent imprecision in the estimates used to recognize the impairment of assets and the wide variety of costs and taxes associated with severance and termination benefits in the countries in which the restructuring actions occur. In the first quarter of 2022, the Company recognized asset impairment charges of
(2) Beginning in 2022, the Company redefined base results to exclude amortization of intangible assets related to acquisitions.
(3) Consists of legal, professional, and other service fees related to acquisition and divestiture transactions, whether potential or consummated, and charges related to the partial amortization of inventory "step-ups" associated with purchase accounting adjustments on acquisition transactions. The majority of these charges relate to the
(4) Other Adjustments include after-tax charges of
For the three months ended |
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Dollars in thousands, except per share data | GAAP |
Restructuring/Asset Impairments(1) |
Amortization of Acquisition Intangibles(2) |
Acquisition/ Divestiture Related(3) |
Other Adjustments(4) |
Base |
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Operating profit | $ | 120,309 | $ | 6,846 | $ | 12,749 | $ | 10,025 | $ | 2,487 | $ | 152,416 | ||||||
Non-operating pension costs | 7,284 | — | — | — | (7,284 | ) | — | |||||||||||
Interest expense, net | 17,731 | — | — | — | — | 17,731 | ||||||||||||
Income before income taxes | $ | 95,294 | $ | 6,846 | $ | 12,749 | $ | 10,025 | $ | 9,771 | $ | 134,685 | ||||||
Provision for income taxes | 24,045 | 1,626 | 3,158 | 2,123 | 3,510 | 34,462 | ||||||||||||
Income before equity in earnings of affiliates | $ | 71,249 | $ | 5,220 | $ | 9,591 | $ | 7,902 | $ | 6,261 | $ | 100,223 | ||||||
Equity in earnings of affiliates, net of tax | 1,044 | — | — | — | — | 1,044 | ||||||||||||
Net income | $ | 72,293 | $ | 5,220 | $ | 9,591 | $ | 7,902 | $ | 6,261 | $ | 101,267 | ||||||
Net loss attributable to noncontrolling interests | 4 | — | — | — | — | 4 | ||||||||||||
Net income attributable to |
$ | 72,297 | $ | 5,220 | $ | 9,591 | $ | 7,902 | $ | 6,261 | $ | 101,271 | ||||||
Per diluted common share* | $ | 0.71 | $ | 0.05 | $ | 0.09 | $ | 0.08 | $ | 0.06 | $ | 1.00 | ||||||
*Due to rounding individual items may not sum across |
(1) Restructuring charges are a recurring item as Sonoco’s restructuring programs usually require several years to fully implement and the Company is continually seeking to take actions that could enhance its efficiency. Although recurring, these charges are subject to significant fluctuations from period to period due to the varying levels of restructuring activity and the inherent imprecision in the estimates used to recognize the impairment of assets and the wide variety of costs and taxes associated with severance and termination benefits in the countries in which the restructuring actions occur. Asset impairment charges totaling
(2) Beginning in 2022, the Company redefined base results to exclude amortization of intangible assets related to acquisitions. Prior year has been revised to conform with current year presentation.
(3) Consists of legal, professional, and other service fees related to acquisition and divestiture transactions, whether potential or consummated.
(4) Includes non-operating pension costs, the loss from the divestiture of the
For the three months ended |
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Dollars in thousands, except per share data | GAAP | Restructuring/Asset Impairment(1) | Amortization of Acquisition Intangibles | Other Adjustments(2) | Base | |||||||||||||
Operating profit | $ | 135,291 | $ | (1,445 | ) | $ | 12,111 | $ | (5,236 | ) | $ | 140,721 | ||||||
Non-operating pension costs | 555,009 | — | — | (555,009 | ) | — | ||||||||||||
Interest expense, net | 14,794 | — | — | 2,165 | 16,959 | |||||||||||||
Loss from the early extinguishment of debt | 20,184 | — | — | (20,184 | ) | — | ||||||||||||
(Loss)/income before income taxes | $ | (454,696 | ) | $ | (1,445 | ) | $ | 12,111 | $ | 567,792 | $ | 123,762 | ||||||
(Benefit from) Provision for income taxes | (118,151 | ) | 715 | 3,000 | 146,939 | 32,503 | ||||||||||||
(Loss)/income before equity in earnings of affiliates | $ | (336,545 | ) | $ | (2,160 | ) | $ | 9,111 | $ | 420,853 | $ | 91,259 | ||||||
Equity in earnings of affiliates, net of tax | 2,306 | — | — | — | 2,306 | |||||||||||||
Net (loss)/income | $ | (334,239 | ) | $ | (2,160 | ) | $ | 9,111 | $ | 420,853 | $ | 93,565 | ||||||
Net loss attributable to noncontrolling interests, net of tax | 169 | — | — | — | 169 | |||||||||||||
Net (loss)/income attributable to |
$ | (334,070 | ) | $ | (2,160 | ) | $ | 9,111 | $ | 420,853 | $ | 93,734 | ||||||
Diluted weighted average common shares outstanding(3) | 100,082 | — | — | 543 | 100,625 | |||||||||||||
Per diluted common share* | $ | (3.34 | ) | $ | (0.02 | ) | $ | 0.09 | $ | 4.18 | $ | 0.93 | ||||||
*Due to rounding individual items may not sum across |
(1) Restructuring/Asset impairment charges are a recurring item as Sonoco’s restructuring actions usually require several years to fully implement and the Company is continually seeking to take actions that could enhance its efficiency. Although recurring, these charges are subject to significant fluctuations from period to period due to the varying levels of restructuring activity and the inherent imprecision in the estimates used to recognize the impairment of assets and the wide variety of costs and taxes associated with severance and termination benefits in the countries in which the restructuring actions occur.
(2) Other Adjustments are primarily comprised of costs related to potential and actual acquisitions and divestitures, non-operating pension costs (including settlement charges), losses on the early extinguishment of debt, gains from insurance proceeds, and gains/losses from the divestiture of businesses, net of the applicable tax effect.
(3) Due to the magnitude of certain expenses considered by management to be non-base, the Company reported a 2021 GAAP net loss attributable to
Forward-looking Statements
Statements included herein 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. Such forward-looking statements are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management. Such information includes, without limitation, discussions as to guidance and other estimates, price/cost recovery across Sonoco’s business, expected benefits from the acquisition of
Additional information concerning some of the factors that could cause materially different results is included in the Company’s reports on forms 10-K, 10-Q and 8-K filed with the
Contact:Lisa Weeks 843-383-7524 lisa.weeks@sonoco.com
Source: Sonoco Products Company