Sonoco Reports Fourth-Quarter and Full-Year 2020 Results
Fourth-Quarter and Full-Year Highlights
- Fourth-quarter 2020 GAAP loss per diluted share was
$(0.12) , compared with GAAP earnings per diluted share of$0.44 in 2019. Full-year 2020 GAAP earnings per diluted share were$2.05 , compared to$2.88 in 2019. - 2020 fourth-quarter results include net after-tax charges of
$0.94 per diluted share. The main components of these charges were$0.56 related to non-cash asset impairments and$0.17 from the loss on the divestiture of the Company'sEurope contract packaging business. Additionally, the net charges include restructuring, non-operating pension and acquisition/divestiture costs. Prior-year results included net after-tax charges of$0.31 per diluted share mostly due to asset impairments, restructuring actions, non-operating pension costs and acquisition costs. - Base net income attributable to
Sonoco (base earnings) for the quarter was$0.82 per diluted share, compared with$0.75 in 2019. Full-year 2020 base earnings per diluted share were$3.41 , compared to$3.53 in 2019. (See base earnings definition, explanation and reconciliation to GAAP earnings later in this release.)Sonoco previously provided fourth-quarter and full-year 2020 base earnings guidance of$0.70 to$0.80 and$3.29 to$3.39 per diluted share, respectively. - Fourth-quarter 2020 net sales were
$1.38 billion , up from$1.31 billion in 2019. Full-year 2020 net sales were$5.24 billion , compared to$5.37 billion in 2019. - Full-year cash flow from operations was
$705.6 million in 2020, compared with$425.9 million in 2019. Free cash flow in 2020 was$349.3 million , compared with$74.3 million in 2019. (See free cash flow definition and reconciliation to cash flow from operations later in this release.) - On
November 30, 2020 ,Sonoco sold itsEurope contract packaging business, part of theDisplay and Packaging segment, for$120 million in cash, net of working capital and other adjustments.
First-Quarter and Full-Year 2021 Guidance
- Base earnings for the first quarter of 2021 are estimated to be in the range of
$0.80 to$0.90 per diluted share, compared to$0.94 per diluted share in the first quarter of 2020. - Full-year 2021 base earnings are expected to be in the range of
$3.40 to$3.60 per diluted share. - Full-year 2021 cash flow from operations and free cash flow are expected to be between
$570 million to$600 million and$270 million to$300 million , respectively. See details later in this release which include a change to the definition of free cash flow. - The Company will change its operating and reporting structure in 2021 and will begin to report its results in two segments,
Consumer Packaging andIndustrial Paper Packaging . The Company's remaining businesses which will primarily consist of our healthcare and protective packaging businesses will be reported as "All Other" in our future earnings releases and financial statements. The Company has determined this reporting structure appropriately represents the management of its business portfolio going forward.
Note: First-quarter and full-year 2021 GAAP guidance are not provided in this release due to the likely occurrence of one or more of the following, the timing and magnitude of which we are unable to reliably forecast: gains or losses on the sale of businesses or other assets, restructuring actions, asset impairment charges, acquisition/divestiture costs, certain income tax related events and other items. These items could have a significant impact on the Company's future GAAP financial results.
CEO Comments
Commenting on the Company’s full-year and fourth-quarter results,
"In the fourth quarter, our businesses performed well as we exceeded the high end of our base earnings guidance and volume/mix drove a 4 percent improvement in sales growth. Some of this is the impact of two additional days in the current-year quarter, but a strong volume/mix improvement, nonetheless. Our
"Finally, we achieved record cash flow from operations and free cash flow in 2020 reflecting our solid earnings performance and disciplined focus on managing working capital.
Fourth-Quarter Review
Net sales for the fourth quarter were
The GAAP net loss attributable to
Fourth-quarter GAAP results include after-tax charges of
Gross profits were
Segment Review
Sonoco’s
Fourth-quarter 2020 sales for the segment were
Fourth-quarter 2020 segment sales increased 10.1 percent compared to the prior-year's quarter driven by an almost 6 percent improvement in volume/mix, and sales added from the
Fourth-quarter 2020 sales for this segment were
Sales declined 20.0 percent compared to the prior year’s quarter mostly due to the divestiture of our
Segment operating profit declined
Paper and Industrial Converted Products
The Paper and Industrial Converted Products segment includes the following products: paperboard tubes, cores and cones; fiber-based construction tubes; wooden, metal and composite wire and cable reels and spools; and recycled paperboard, corrugating medium, recovered paper and material recycling services.
Fourth-quarter 2020 sales for the segment were
Segment sales increased 3.6 percent from the prior-year's quarter driven by an almost 2 percent improvement in volume/mix and higher selling prices. Global paperboard and corrugated medium demand improved slightly during the quarter offset by reduced recycled pulp international sales. Globally tube, core and cone volume/mix improved slightly in the quarter as demand growth in
Segment operating profit declined 28.0 percent from the prior year's quarter as strong productivity improvements and positive volume/mix were more than offset by a negative price/cost relationship stemming from increased recovered paper prices and higher operating costs. Segment operating margin declined 310 basis points to 7.1 percent.
Protective Solutions
The Protective Solutions segment includes the following products: custom-engineered, paperboard-based and molded foam protective packaging and components; and temperature-assured packaging.
Fourth-quarter 2020 sales were
Segment sales increased 17.1 percent from the prior-year's quarter due primarily to a nearly 16 percent improvement in volume/mix stemming from strong demand for temperature-assured, fiber-based and molded foam protective packaging. Segment operating profit improved 42.5 percent due to strong volume/mix and productivity improvements partially offset by a negative price/cost relationship and higher operating costs. Segment operating margin was 11.0 percent for the quarter, up from 9.0 percent in the prior year.
Corporate/Tax
Net interest expense for the fourth quarter of 2020 increased to
2020 Full-Year Results
2020 net sales were
GAAP net income attributable to
Base earnings in 2020 were
2020 Cash Flow and Free Cash Flow
For 2020, cash generated from operations was
Net capital expenditures and cash dividends were
Free cash flow for 2020 was
As of
Full-Year 2021 and First Quarter Outlook
The ultimate impact of the COVID-19 pandemic on
Full-year 2021 operating cash flow and free cash flow are expected to be in a range of
The Company’s 2021 cash flow guidance includes several key assumptions including no change in working capital balances during the year and
In addition, the Company is moving forward with the previously announced termination of the Sonoco Pension Plan for Inactive Participants. Following completion of a limited lump sum offering early in the second quarter of 2021, the Company expects to settle all remaining liabilities under this plan through the purchase of annuities in mid-2021. The Company anticipates making additional contributions to this plan of approximately
Although the Company believes the assumptions reflected in the range of guidance are reasonable, given uncertainty regarding the future performance of the overall economy, continued effects of the pandemic, and potential changes in raw material prices, other costs, and to the Company's effective tax rate, as well as other risks and uncertainties, including those described below, actual results could vary substantially.
As previously mentioned,
Commenting on the Company’s 2021 outlook, Coker said, "Entering 2021, we feel good about how our balanced mix of consumer- and industrial-related businesses are progressing despite the uncertain COVID-impacted economic outlook. The positive momentum we experienced at the end of 2020 seems to be continuing into the first quarter. Our
"We're proud of how our people have grown comfortable operating in uncomfortable times. We remain confident that
Conference Call Webcast
Management will host a conference call and webcast to further discuss these results beginning at
About
Founded in 1899,
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. In addition, the Company and its representatives may from time to time make other oral or written statements that are also “forward-looking statements.” Words such as “estimate,” “project,” “intend,” “expect,” “believe,” “consider,” “plan,” “strategy,” “opportunity,” “commitment,” “target,” “anticipate,” “objective,” “goal,” “guidance,” “outlook,” “forecast,” “future,” “re-envision, ” “assume,” “will,” “would,” “can,” “could,” “may,” “might,” “aspires,” “potential,” or the negative thereof, and similar expressions identify forward-looking statements.
Forward-looking statements include, but are not limited to, statements regarding: availability and supply of raw materials, and offsetting high raw material costs, including the impact of potential changes in tariffs; potential impacts of the COVID-19 coronavirus on business, operations, and financial conditions; improved productivity and cost containment; improving margins and leveraging strong cash flow and financial position; effects of acquisitions and dispositions; realization of synergies resulting from acquisitions; costs, timing and effects of restructuring activities; adequacy and anticipated amounts and uses of cash flows; expected amounts of capital spending; refinancing and repayment of debt; financial and business strategies and the results expected of them; financial results for future periods; producing improvements in earnings; profitable sales growth and rates of growth; market leadership; research and development spending; expected impact and costs of resolution of legal proceedings; extent of, and adequacy of provisions for, environmental liabilities and sustainability commitments; adequacy of income tax provisions, realization of deferred tax assets, outcomes of uncertain tax issues and tax rates; goodwill impairment charges and fair values of reporting units; future asset impairment charges and fair values of assets; anticipated contributions to pension and postretirement benefit plans, fair values of plan assets, long-term rates of return on plan assets, and projected benefit obligations and payments; expected impact of implementation of new accounting pronouncements; creation of long-term value and returns for shareholders; continued payment of dividends; and planned stock repurchases.
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, perceived opportunities, expectations, beliefs, plans, strategies, goals and objectives concerning our future financial and operating performance. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual results may differ materially from those expressed or forecasted in such forward-looking statements. The risks, uncertainties and assumptions include, without limitation:
- availability and pricing of raw materials, energy and transportation, including the impact of potential changes in tariffs and escalating trade wars, and the Company's ability to pass raw material, energy and transportation price increases and surcharges through to customers or otherwise manage these commodity pricing risks;
- impacts arising as a result of the COVID-19 Coronavirus global pandemic on our results of operations, financial condition, value of assets, liquidity, prospects, growth, and on the industries in which we operate and that we serve, resulting from, without limitation, recent and ongoing financial market volatility, potential governmental actions, changes in consumer behaviors and demand, changes in customer requirements, disruptions of the Company’s suppliers and supply chain, availability of labor and personnel, necessary modifications to operations and business, and uncertainties about the extent and duration of the pandemic;
- costs of labor;
- work stoppages due to labor disputes;
- success of new product development, introduction and sales;
- success of implementation of new manufacturing technologies and installation of manufacturing equipment, including the startup of new facilities and lines;
- consumer demand for products and changing consumer preferences;
- ability to be the low-cost global leader in customer-preferred packaging solutions within targeted segments;
- competitive pressures, including new product development, industry overcapacity, customer and supplier consolidation, and changes in competitors' pricing for products;
- financial conditions of customers and suppliers;
- ability to maintain or increase productivity levels, contain or reduce costs, and maintain positive price/cost relationships;
- ability to negotiate or retain contracts with customers, including in segments with concentration of sales volume;
- inventory management strategies of customers;
- timing of introduction of new products or product innovations by customers;
- collection of receivables from customers;
- ability to improve margins and leverage cash flows and financial position;
- ability to manage the mix of business to take advantage of growing markets while reducing cyclical effects of some of the Company’s existing businesses on operating results;
- ability to maintain innovative technological market leadership and a reputation for quality;
- ability to attract and retain talented and qualified employees, managers and executives;
- ability to profitably maintain and grow existing domestic and international business and market share;
- ability to expand geographically and win profitable new business;
- ability to identify and successfully close suitable acquisitions at the levels needed to meet growth targets, and successfully integrate newly acquired businesses into the Company’s operations;
- the costs, timing and results of restructuring activities;
- availability of credit to us, our customers and suppliers in needed amounts and on reasonable terms;
- effects of our indebtedness on our cash flow and business activities;
- fluctuations in interest rates and our borrowing costs;
- fluctuations in obligations and earnings of pension and postretirement benefit plans;
- accuracy of assumptions underlying projections of benefit plan obligations and payments, valuation of plan assets, and projections of long-term rates of return;
- timing of funding pension and postretirement benefit plan obligations;
- cost of employee and retiree medical, health and life insurance benefits;
- resolution of income tax contingencies;
- foreign currency exchange rate fluctuations, interest rate and commodity price risk and the effectiveness of related hedges;
- changes in
U.S. and foreign tariffs, tax rates, and tax laws, regulations and interpretations thereof; - the adoption of new, or changes in, accounting standards or interpretations;
- challenges and assessments from tax authorities resulting from differences in interpretation of tax laws, including income, sales and use, property, value added, employment, and other taxes;
- accuracy in valuation of deferred tax assets;
- accuracy of assumptions underlying projections related to goodwill impairment testing, and accuracy of management’s assessment of goodwill impairment;
- accuracy of assumptions underlying fair value measurements, accuracy of management’s assessments of fair value and fluctuations in fair value;
- ability to maintain effective internal controls over financial reporting;
- liability for and anticipated costs of resolution of legal proceedings;
- liability for and anticipated costs of environmental remediation actions;
- effects of environmental laws and regulations;
- operational disruptions at our major facilities;
- failure or disruptions in our information technologies;
- failures of third party transportation providers to deliver our products to our customers or to deliver raw materials to us;
- substantially lower than normal crop yields;
- loss of consumer or investor confidence;
- ability to protect our intellectual property rights;
- changes in laws and regulations relating to packaging for food products and foods packaged therein, other actions and public concerns about products packaged in our containers, or chemicals or substances used in raw materials or in the manufacturing process;
- changing consumer attitudes toward plastic packaging;
- ability to meet sustainability targets and challenges in implementation;
- changing climate, climate change regulations and greenhouse gas effects;
- actions of domestic or foreign government agencies and changes in laws and regulations affecting the Company and increased costs of compliance;
- international, national and local economic and market conditions and levels of unemployment;
- economic disruptions resulting from terrorist activities and natural disasters; and
- accelerating inflation.
The Company undertakes no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed herein might not occur.
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
References to our Website Address
References to our website address and domain names throughout this release are for informational purposes only, or to fulfill specific disclosure requirements of the Securities and Exchange Commission’s rules or the New York Stock Exchange Listing Standards. These references are not intended to, and do not, incorporate the contents of our website by reference into this release.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | ||||||||||||||||||||
(Dollars and shares in thousands except per share) | ||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
Net sales | $ | 1,376,348 | $ | 1,308,850 | $ | 5,237,443 | $ | 5,374,207 | ||||||||||||
Cost of sales | 1,101,592 | 1,061,963 | 4,191,104 | 4,316,378 | ||||||||||||||||
Gross profit | 274,756 | 246,887 | 1,046,339 | 1,057,829 | ||||||||||||||||
Selling, general and administrative expenses | 157,063 | 135,771 | 528,439 | 530,867 | ||||||||||||||||
Restructuring/Asset impairment charges | 85,947 | 29,238 | 145,580 | 59,880 | ||||||||||||||||
Loss on disposition of a business | 14,516 | — | 14,516 | — | ||||||||||||||||
Operating Profit | 17,230 | 81,878 | 357,804 | 467,082 | ||||||||||||||||
Non-operating pension costs | 7,510 | 5,912 | 30,142 | 24,713 | ||||||||||||||||
Net interest expense | 18,759 | 15,510 | 72,070 | 61,603 | ||||||||||||||||
(Loss)/Income before income taxes | (9,039 | ) | 60,456 | 255,592 | 380,766 | |||||||||||||||
Provision for income taxes | 3,693 | 16,056 | 53,030 | 93,269 | ||||||||||||||||
(Loss)/Income before equity in earnings of affiliates | (12,732 | ) | 44,400 | 202,562 | 287,497 | |||||||||||||||
Equity in earnings of affiliates, net of tax | 1,449 | 931 | 4,679 | 5,171 | ||||||||||||||||
Net (loss)/income | (11,283 | ) | 45,331 | 207,241 | 292,668 | |||||||||||||||
Net (income)/loss attributable to noncontrolling interests | (359 | ) | (432 | ) | 222 | (883 | ) | |||||||||||||
Net (loss)/ income attributable to |
$ | (11,642 | ) | $ | 44,899 | $ | 207,463 | $ | 291,785 | |||||||||||
Weighted average common shares outstanding – diluted | 100,948 | 101,325 | 101,209 | 101,176 | ||||||||||||||||
Diluted earnings per common share | $ | (0.12 | ) | $ | 0.44 | $ | 2.05 | $ | 2.88 | |||||||||||
Dividends per common share | $ | 0.43 | $ | 0.43 | $ | 1.72 | $ | 1.70 | ||||||||||||
FINANCIAL SEGMENT INFORMATION (Unaudited) | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
Net sales | |||||||||||||||||||||
$ | 616,133 | $ | 559,552 | $ | 2,402,907 | $ | 2,333,386 | ||||||||||||||
109,416 | 136,722 | 475,685 | 554,125 | ||||||||||||||||||
Paper and Industrial Converted Products | 509,084 | 491,545 | 1,877,818 | 1,974,739 | |||||||||||||||||
Protective Solutions | 141,715 | 121,031 | 481,033 | 511,957 | |||||||||||||||||
Consolidated | $ | 1,376,348 | $ | 1,308,850 | $ | 5,237,443 | $ | 5,374,207 | |||||||||||||
Income before interest and income taxes: | |||||||||||||||||||||
Segment operating profit: | |||||||||||||||||||||
$ | 68,650 | $ | 46,615 | $ | 290,477 | $ | 228,416 | ||||||||||||||
5,755 | 6,467 | 30,603 | 27,723 | ||||||||||||||||||
Paper and Industrial Converted Products | 35,987 | 50,009 | 154,330 | 219,052 | |||||||||||||||||
Protective Solutions | 15,588 | 10,939 | 51,579 | 50,201 | |||||||||||||||||
Restructuring/Asset impairment charges | (85,947 | ) | (29,238 | ) | (145,580 | ) | (59,880 | ) | |||||||||||||
Loss on disposition of business | (14,516 | ) | — | (14,516 | ) | — | |||||||||||||||
Other, net | (8,287 | ) | (2,914 | ) | (9,089 | ) | 1,570 | ||||||||||||||
Consolidated | $ | 17,230 | $ | 81,878 | $ | 357,804 | $ | 467,082 | |||||||||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Twelve Months Ended | ||||||||||||||||
2020 |
2019 |
|||||||||||||||
Net income | $ | 207,241 | $ | 292,668 | ||||||||||||
Asset impairment charges/losses on disposition of assets | 97,490 | 25,772 | ||||||||||||||
Depreciation, depletion and amortization | 255,359 | 239,140 | ||||||||||||||
Gain on adjustment of environmental reserve | — | (10,675 | ) | |||||||||||||
Pension and postretirement plan contributions, net of non-cash expense | 17,562 | (178,493 | ) | |||||||||||||
Changes in working capital | 51,465 | 36,863 | ||||||||||||||
Changes in tax accounts | (11,972 | ) | 10,757 | |||||||||||||
Other operating activity | 88,476 | 9,818 | ||||||||||||||
Net cash provided by operating activities |
705,621 | 425,850 | ||||||||||||||
Purchase of property, plant and equipment, net | (183,663 | ) | (181,320 | ) | ||||||||||||
Cost of acquisitions, net of cash acquired | (49,261 | ) | (298,380 | ) | ||||||||||||
Proceeds from the sale of business | 105,913 | — | ||||||||||||||
Net debt (repayments)/ borrowings | (14,195 | ) | 267,261 | |||||||||||||
Cash dividends | (172,626 | ) | (170,253 | ) | ||||||||||||
Other, including effects of exchange rates on cash | 27,776 | (18,264 | ) | |||||||||||||
Net increase in cash and cash equivalents | 419,565 | 24,894 | ||||||||||||||
Cash and cash equivalents at beginning of period | $ | 145,283 | $ | 120,389 | ||||||||||||
Cash and cash equivalents at end of period | $ | 564,848 | $ | 145,283 | ||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 564,848 | $ | 145,283 | ||||||||||||
Trade accounts receivable, net of allowances | 658,808 | 698,149 | ||||||||||||||
Other receivables | 103,636 | 113,754 | ||||||||||||||
Inventories | 450,691 | 503,808 | ||||||||||||||
Prepaid expenses and deferred income taxes | 52,564 | 60,202 | ||||||||||||||
1,830,547 | 1,521,196 | |||||||||||||||
Property, plant and equipment, net | 1,244,110 | 1,286,842 | ||||||||||||||
1,389,255 | 1,429,346 | |||||||||||||||
Other intangible assets, net | 321,934 | 388,292 | ||||||||||||||
Other assets | 491,413 | 500,613 | ||||||||||||||
$ | 5,277,259 | $ | 5,126,289 | |||||||||||||
Liabilities and Shareholders’ Equity |
||||||||||||||||
Current Liabilities: | ||||||||||||||||
Payable to suppliers and other payables | $ | 1,048,428 | $ | 904,878 | ||||||||||||
Notes payable and current portion of long-term debt | 455,784 | 488,234 | ||||||||||||||
Income taxes payable | 7,415 | 11,380 | ||||||||||||||
1,511,627 | 1,404,492 | |||||||||||||||
Long-term debt, net of current portion | 1,244,440 | 1,193,135 | ||||||||||||||
Pension and other postretirement benefits | 171,518 | 304,798 | ||||||||||||||
Deferred income taxes and other | 439,146 | 408,159 | ||||||||||||||
Total equity | 1,910,528 | 1,815,705 | ||||||||||||||
$ | 5,277,259 | $ | 5,126,289 | |||||||||||||
Definition and Reconciliation of Non-GAAP Financial Measures
The Company’s results determined in accordance with
These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles.
To compensate for these limitations, management believes that it is useful in understanding and analyzing the results of the business to review both GAAP information which includes all of the items impacting financial results and the non-GAAP measures that exclude certain elements, as described above. Whenever
Non-GAAP Adjustments | |||||||||||||||||||||||||
Three Months Ended |
GAAP | Restructuring / Asset Impairment Charges(1) |
Acquisition Related Costs(2) |
Other Adjustments(3) |
Base | ||||||||||||||||||||
Operating profit | $ | 17,230 | $ | 85,947 | $ | 3,613 | $ | 19,190 | $ | 125,980 | |||||||||||||||
Non-operating pension costs | 7,510 | — | — | (7,510 | ) | — | |||||||||||||||||||
Interest expense, net | 18,759 | — | — | — | 18,759 | ||||||||||||||||||||
(Loss)/Income before income taxes | (9,039 | ) | 85,947 | 3,613 | 26,700 | 107,221 | |||||||||||||||||||
Provision for income taxes | 3,693 | 17,847 | 901 | 2,788 | 25,229 | ||||||||||||||||||||
(Loss)/Income before equity in earnings of affiliates | (12,732 | ) | 68,100 | 2,712 | 23,912 | 81,992 | |||||||||||||||||||
Equity in earnings of affiliates, net of taxes | 1,449 | — | — | — | 1,449 | ||||||||||||||||||||
Net (loss)/income | (11,283 | ) | 68,100 | 2,712 | 23,912 | 83,441 | |||||||||||||||||||
Net (income) attributable to noncontrolling interests | (359 | ) | (34 | ) | — | — | (393 | ) | |||||||||||||||||
Net (loss)/income attributable to |
$ | (11,642 | ) | $ | 68,066 | $ | 2,712 | $ | 23,912 | $ | 83,048 | ||||||||||||||
Per Diluted Share* | $ | (0.12 | ) | $ | 0.67 | $ | 0.03 | $ | 0.24 | $ | 0.82 | ||||||||||||||
*Due to rounding individual items may not sum across |
|||||||||||||||||||||||||
Non-GAAP Adjustments | |||||||||||||||||||||||||
Three Months Ended |
GAAP | Restructuring / Asset Impairment Charges(1) |
Acquisition Related Costs(2) |
Other Adjustments(4) |
Base | ||||||||||||||||||||
Operating profit | 81,878 | 29,238 | 2,914 | — | 114,030 | ||||||||||||||||||||
Non-operating pension costs | 5,912 | — | — | (5,912 | ) | — | |||||||||||||||||||
Interest expense, net | 15,510 | — | — | — | 15,510 | ||||||||||||||||||||
Income before income taxes | 60,456 | 29,238 | 2,914 | 5,912 | 98,520 | ||||||||||||||||||||
Provision for income taxes | 16,056 | 7,770 | 115 | (1,120 | ) | 22,821 | |||||||||||||||||||
Income before equity in earnings of affiliates | 44,400 | 21,468 | 2,799 | 7,032 | 75,699 | ||||||||||||||||||||
Equity in earnings of affiliates, net of taxes | 931 | — | — | — | 931 | ||||||||||||||||||||
Net income | 45,331 | 21,468 | 2,799 | 7,032 | 76,630 | ||||||||||||||||||||
Net (income) attributable to noncontrolling interests | (432 | ) | 207 | — | — | (225 | ) | ||||||||||||||||||
Net income attributable to |
$ | 44,899 | $ | 21,675 | $ | 2,799 | $ | 7,032 | $ | 76,405 | |||||||||||||||
Per Diluted Share* | $ | 0.44 | $ | 0.21 | $ | 0.03 | $ | 0.07 | $ | 0.75 | |||||||||||||||
*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. Additionally, 2020 includes net asset impairment charges totaling |
||||||||||
(2) Includes costs related to acquisitions and potential acquisitions. | ||||||||||
(3) Includes the pre-tax loss on the divestiture of the Company's contract packaging business in |
||||||||||
(4) Primarily non-operating pension expense. |
Non-GAAP Adjustments | |||||||||||||||||||||||||
Twelve Months Ended |
GAAP | Restructuring / Asset Impairment Charges(1) |
Acquisition Related Costs(2) |
Other Adjustments(3) |
Base | ||||||||||||||||||||
Operating profit | 357,804 | 145,580 | 4,671 | 18,934 | 526,989 | ||||||||||||||||||||
Non-operating pension costs | 30,142 | — | — | (30,142 | ) | — | |||||||||||||||||||
Interest expense, net | 72,070 | — | — | — | 72,070 | ||||||||||||||||||||
Income before income taxes | 255,592 | 145,580 | 4,671 | 49,076 | 454,919 | ||||||||||||||||||||
Provision for income taxes | 53,030 | 32,868 | 1,236 | 27,126 | 114,260 | ||||||||||||||||||||
Income before equity in earnings of affiliates | 202,562 | 112,712 | 3,435 | 21,950 | 340,659 | ||||||||||||||||||||
Equity in earnings of affiliates, net of taxes | 4,679 | — | — | — | 4,679 | ||||||||||||||||||||
Net income | 207,241 | 112,712 | 3,435 | 21,950 | 345,338 | ||||||||||||||||||||
Net (income) attributable to noncontrolling interests | 222 | (60 | ) | — | — | 162 | |||||||||||||||||||
Net income attributable to |
$ | 207,463 | $ | 112,652 | $ | 3,435 | $ | 21,950 | $ | 345,500 | |||||||||||||||
Per Diluted Share* | $ | 2.05 | $ | 1.11 | $ | 0.03 | $ | 0.22 | $ | 3.41 | |||||||||||||||
*Due to rounding individual items may not sum across | Non-GAAP Adjustments | ||||||||||||||||||||||||
Twelve Months Ended |
GAAP | Restructuring / Asset Impairment Charges(1) |
Acquisition Related Costs(2) |
Other Adjustments(4) |
Base | ||||||||||||||||||||
Operating profit | 467,082 | 59,880 | 8,429 | (9,999 | ) | 525,392 | |||||||||||||||||||
Non-operating pension costs | 24,713 | (24,713 | ) | — | |||||||||||||||||||||
Interest expense, net | 61,603 | — | — | — | 61,603 | ||||||||||||||||||||
Income before income taxes | 380,766 | 59,880 | 8,429 | 14,714 | 463,789 | ||||||||||||||||||||
Provision for income taxes | 93,269 | 15,520 | 1,147 | 994 | 110,930 | ||||||||||||||||||||
Income before equity in earnings of affiliates | 287,497 | 44,360 | 7,282 | 13,720 | 352,859 | ||||||||||||||||||||
Equity in earnings of affiliates, net of taxes | 5,171 | — | — | — | 5,171 | ||||||||||||||||||||
Net income | 292,668 | 44,360 | 7,282 | 13,720 | 358,030 | ||||||||||||||||||||
Net (income) attributable to noncontrolling interests | (883 | ) | 51 | — | — | (832 | ) | ||||||||||||||||||
Net income attributable to |
$ | 291,785 | $ | 44,411 | $ | 7,282 | $ | 13,720 | $ | 357,198 | |||||||||||||||
Per Diluted Share* | $ | 2.88 | $ | 0.44 | $ | 0.07 | $ | 0.14 | $ | 3.53 | |||||||||||||||
*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. Additionally, 2020 includes net asset impairment charges totaling |
|||||||||||||||||||||||||
(2) Includes costs related to acquisitions and potential acquisitions. | |||||||||||||||||||||||||
(3) Includes the pre-tax loss on the divestiture of the Company's contract packaging business in |
|||||||||||||||||||||||||
(4) Primarily the gain related to the release of an environmental reserve and non-operating pension expense. |
Twelve Months Ended | |||||||||||||||
Actual | Actual | ||||||||||||||
FREE CASH FLOW* | |||||||||||||||
Net cash provided by operating activities | $ | 705,621 | $ | 425,850 | |||||||||||
Purchase of property, plant and equipment, net | (183,663 | ) | (181,320 | ) | |||||||||||
Free Cash Flow Before Dividends | $ | 521,958 | $ | 244,530 | |||||||||||
Cash dividends | (172,626 | ) | (170,253 | ) | |||||||||||
Free Cash Flow | $ | 349,332 | $ | 74,277 | |||||||||||
Twelve Months Ended | |||||||||||||||
Estimated Low End | Estimated High End | ||||||||||||||
FREE CASH FLOW* | |||||||||||||||
Net cash provided by operating activities | $ | 570,000 | $ | 600,000 | |||||||||||
Purchase of property, plant and equipment | (300,000 | ) | (300,000 | ) | |||||||||||
Free Cash Flow | $ | 270,000 | $ | 300,000 | |||||||||||
* Free Cash Flow is a non-GAAP measure that does not imply the amount of residual cash flow available for discretionary expenditures, as it excludes mandatory debt service requirements and other non-discretionary expenditures. In 2020, free cash flow was defined as cash flow from operations minus net capital expenditures and cash dividends. Net capital expenditures are defined as capital expenditures minus proceeds from, and/or plus costs incurred in, the disposition of capital assets. Beginning in 2021, the Company defines Free Cash Flow as cash from operating activities less net capital expenditures. |
Contact:Roger Schrum +843-339-6018 roger.schrum@sonoco.com
Source: Sonoco Products Company