SEC Filing | Sonoco

1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended April 2, 2000 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: 843-383-7000 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 May 7, 2000: Common stock, no par value: 99,448,330 --------------------------------------

2 SONOCO PRODUCTS COMPANY INDEX PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS: Condensed Consolidated Balance Sheets - April 2, 2000 (unaudited) and December 31, 1999 Condensed Consolidated Statements of Income - Three Months Ended April 2, 2000 (unaudited) and March 28, 1999 (unaudited) Condensed Consolidated Statements of Cash Flows - Three Months Ended April 2, 2000 (unaudited) and March 28, 1999 (unaudited) Notes to Condensed Consolidated Financial Statements Report of Independent Accountants ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK PART II. OTHER INFORMATION 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 CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars and shares in thousands) April 2, 2000 December 31, (unaudited) 1999 * ----------- ----------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 40,266 $ 36,515 Trade accounts receivable, net of allowances 354,841 346,845 Other receivables 28,202 28,847 Inventories: Finished and in process 113,255 94,133 Materials and supplies 153,815 154,231 Prepaid expenses and other 58,553 62,510 ----------- ----------- 748,932 723,081 PROPERTY, PLANT AND EQUIPMENT, NET 1,009,082 1,032,503 COST IN EXCESS OF FAIR VALUE OF ASSETS PURCHASED, NET 250,305 254,580 OTHER ASSETS 284,645 286,856 ----------- ----------- Total Assets $ 2,292,964 $ 2,297,020 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Payable to suppliers $ 177,348 $ 192,859 Accrued expenses and other 164,252 139,175 Notes payable and current portion of long-term debt 61,553 84,597 Taxes on income 20,559 -- ----------- ----------- 423,712 416,631 LONG-TERM DEBT 843,346 819,540 POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 34,423 36,278 DEFERRED INCOME TAXES AND OTHER 125,174 123,351 SHAREHOLDERS' EQUITY Common stock, no par value Authorized 300,000 shares 99,443 and 101,448 shares issued and outstanding at April 2, 2000 and December 31, 1999, respectively 7,175 7,175 Capital in excess of stated value 383,719 427,591 Accumulated other comprehensive loss (139,769) (123,008) Retained earnings 615,184 589,462 ----------- ----------- Total Shareholders' Equity 866,309 901,220 ----------- ----------- Total Liabilities and Shareholders' Equity $ 2,292,964 $ 2,297,020 =========== =========== * The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. See accompanying Notes to Condensed Consolidated Financial Statements

4 SONOCO PRODUCTS COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (Dollars and shares in thousands except per share) Three Months Ended -------------------------- April 2, March 28, 2000 1999 ---------- ---------- Net sales $ 676,299 $ 560,479 Cost of sales 524,638 425,902 Selling, general and administrative expenses 67,426 59,270 Gain on assets held for sale -- (3,500) --------- --------- Income before interest and taxes 84,235 78,807 Interest expense 15,519 12,470 Interest income (763) (1,038) --------- --------- Income before income taxes 69,479 67,375 Provision for income taxes 26,422 24,591 --------- --------- Income before equity in earnings of affiliates/ Minority interest in subsidiaries 43,057 42,784 Equity in earnings of affiliates/Minority interest in subsidiaries 1,960 1,163 --------- --------- Net income $ 45,017 $ 43,947 ========= ========= Average common shares outstanding: Basic 100,908 101,815 Assuming exercise of options 176 1,001 --------- --------- Diluted 101,084 102,816 ========= ========= Per common share Net income: Basic $ 0.45 $ 0.43 ========= ========= Diluted $ 0.45 $ 0.43 ========= ========= Cash dividends per common share $ .19 $ .18 ========= ========= See accompanying Notes to Condensed Consolidated Financial Statements

5 SONOCO PRODUCTS COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Dollars in thousands) Three Months Ended ------------------------- April 2, March 28, 2000 1999 ---------- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES $ 88,843 $ 73,405 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (22,618) (31,472) Cost of acquisitions, exclusive of cash -- (24,322) Proceeds from non-operating notes receivable -- 34,000 Proceeds from the sale of assets 528 14,477 Other, net (1,153) (933) -------- -------- Net cash used by investing activities (23,243) (8,250) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of debt 3,519 37,578 Principal repayment of debt (21,699) (36,407) Net increase (decrease) in commercial paper borrowings 20,200 (38,000) Cash dividends (19,295) (18,332) Common shares acquired (46,364) -- Common shares issued 2,089 2,301 -------- -------- Net cash used by financing activities (61,550) (52,860) -------- -------- EFFECTS OF EXCHANGE RATE CHANGES ON CASH (299) (937) -------- -------- NET INCREASE IN CASH AND CASH EQUIVALENTS 3,751 11,358 Cash and cash equivalents at beginning of period 36,515 57,249 -------- -------- Cash and cash equivalents at end of period $ 40,266 $ 68,607 ======== ======== See accompanying Notes to Condensed Consolidated Financial Statements

6 SONOCO PRODUCTS COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 1: BASIS OF INTERIM PRESENTATION In the opinion of the management of Sonoco Products Company (the "Company"), the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the consolidated financial position, results of operations, and cash flows for the interim periods reported hereon. Operating results for the three months ended April 2, 2000, are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. These condensed 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, 1999. NOTE 2: DIVIDEND DECLARATIONS On February 2, 2000, the Board of Directors declared a regular quarterly dividend of $.19 per share. This dividend was paid March 10, 2000 to shareholders of record as of February 18, 2000. On April 19, 2000, the Board of Directors voted to raise the regular quarterly dividend to $.20 per share payable June 9, 2000, to all shareholders of record May 19, 2000. NOTE 3: ACQUISITIONS/DISPOSITIONS There were no acquisitions or dispositions during the first quarter of 2000. NOTE 4: NEW ACCOUNTING PRONOUNCEMENT On June 15, 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" (FAS 133). The effective date of FAS 133 has been deferred by FAS 137. FAS 133 is now effective for all fiscal quarters of all fiscal years beginning after June 15, 2000 and requires that all derivative instruments be recorded on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. Management of the Company anticipates that, due to its limited use of derivative instruments, the adoption of FAS 133 will not have a significant effect on the Company's results of operations or its financial position.

7 SONOCO PRODUCTS COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED (unaudited) NOTE 5: COMPREHENSIVE INCOME The following table reconciles net income to comprehensive income (dollars in thousands): Three Months Ended ------------------------- April 2, March 28, 2000 1999 ----------- ---------- Net income $ 45,017 $ 43,947 Other comprehensive loss: Foreign currency translation adjustments (16,761) (24,492) -------- -------- Comprehensive income $ 28,256 $ 19,455 ======== ======== The following table summarizes the components of the current period change in the accumulated other comprehensive loss balance (dollars in thousands): Foreign Minimum Accumulated Currency Pension Other Translation Liability Comprehensive Adjustments Adjustment Loss ----------- ---------- ------------- Balance at January 1, 2000 $(118,882) $(4,126) $(123,008) Year to date change (16,761) -- (16,761) --------- ------- --------- Balance at April 2, 2000 $(135,643) $(4,126) $(139,769) ========= ======= =========

8 SONOCO PRODUCTS COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED (unaudited) NOTE 6: FINANCIAL SEGMENT INFORMATION Sonoco reports its results in two primary segments, Industrial Packaging and Consumer Packaging. The industrial packaging segment includes engineered carriers / paper (paper and plastic tubes and cores, paper manufacturing, and recovered paper operations); and protective packaging (designed interior packaging and protective reels). The consumer packaging segment includes composite cans; flexible packaging (printed flexibles, high density bag and film products, and container seals); and packaging services and specialty products (e-Marketplace services, folding cartons, and paper glass covers and coasters). FINANCIAL SEGMENT INFORMATION (UNAUDITED) (Dollars in thousands) Three Months Ended -------------------------------- April 2, 2000 March 28, 1999 -------------- -------------- Net Sales Industrial Packaging $ 363,362 $ 307,890 Consumer Packaging 312,937 245,676 Other* -- 6,913 --------- --------- Consolidated $ 676,299 $ 560,479 ========= ========= Operating Profit Industrial Packaging $ 52,999 $ 43,435 Consumer Packaging 31,236 31,744 Other* -- 128 Gain on assets held for sale -- 3,500 Interest, net (14,756) (11,432) --------- --------- Consolidated $ 69,479 $ 67,375 ========= ========= * Includes net sales and operating profits of divested businesses.

9 REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Directors of Sonoco Products Company We have reviewed the accompanying condensed consolidated balance sheet of Sonoco Products Company as of April 2, 2000, and the related condensed consolidated statements of income and cash flows for the three-month periods ended April 2, 2000 and March 28, 1999. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial statements for them to be in conformity with generally accepted accounting principles. We previously audited in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1999, and the related consolidated statements of operations, changes in shareholders' equity and cash flows for the year then ended (not presented herein); and in our report dated January 26, 2000, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1999, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /s/PricewaterhouseCoopers LLP ---------------------------------- PricewaterhouseCoopers LLP Charlotte, North Carolina May 12, 2000

10 SONOCO PRODUCTS COMPANY Item 2. 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. Forward-looking statements include statements regarding offsetting high raw material costs, adequacy of income tax provision, refinancing of debt, adequacy of cash flows, and financial strategies and the results expected from them. 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 estimates, expectations, beliefs, plans, strategies, 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. Such risks and uncertainties include, without limitation; availability and pricing of raw materials; success of new product development and introduction; ability to maintain or increase productivity levels; international, national and local economic and market conditions; ability to maintain market share; pricing pressures and demand for products; continued strength of our paperboard-based engineered carrier and composite can operations; currency stability and the rate of growth in foreign markets; and actions of government agencies. FIRST QUARTER 2000 COMPARED WITH FIRST QUARTER 1999 RESULTS OF OPERATIONS Consolidated net sales for the first quarter of 2000 were $676.3 million, compared with $560.5 million in the first quarter of 1999. This year's first quarter sales included 4 to 6 more billing days (depending on the specific business) than the first quarter of 1999. Volume, which increased in most businesses, coupled with acquisitions made during 1999, increased sales by approximately $82 million. Sales also benefited from selling price increases of approximately $41 million. Last year's first quarter included $6.9 million of sales from operations that were divested in March 1999. On a comparable basis, excluding divested businesses, sales for the first quarter of 2000 from ongoing operations were $676.3 million, versus $553.6 million in the first quarter of 1999. Net income for the first quarter of 2000 was $45.0 million, compared with $43.9 million in the same quarter last year. Sonoco's reported net income in the first quarter of 1999 included a gain of $3.5 million from the sale of the Company's labels business in the United Kingdom and its label machinery businesses in the United Kingdom and the United States. Excluding this gain, net income in the first quarter of 1999 was $40.4 million. The Company's reported earnings per diluted share were $.45 and $.43 in the first quarter of 2000 and 1999, respectively. Excluding the gain, earnings per diluted share in the first quarter of 1999 were $.39. First quarter results were impacted by significant raw material price increases, particularly resin and old corrugated containers. These additional costs were more than offset by continued volume growth throughout

11 SONOCO PRODUCTS COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED), CONTINUED FIRST QUARTER 2000 COMPARED WITH FIRST QUARTER 1999, CONTINUED the Company's businesses, strong productivity improvement, a decreased tax rate, and strong pension fund returns. In addition, stock repurchases contributed to the improvement in per share results. Selling price increases will take effect in the second quarter of 2000 to recover the higher raw material costs. However, due to the normal delay in price / cost recovery, the second quarter 2000 earnings per share will be negatively impacted while the third and fourth quarters will benefit, thus leaving no expected impact to earnings per share on an annual basis. CONSUMER PACKAGING SEGMENT The consumer packaging segment includes composite cans; flexible packaging (printed flexibles, high density bag and film products, and container seals); and packaging services and specialty products (e-Marketplace services, folding cartons, and paper glass covers and coasters). First quarter 2000 sales were $312.9 million, compared with $252.6 million in the same quarter of 1999. On a comparable basis, excluding sales from divested operations, first quarter 1999 sales were $245.7 million. Operating profits in this segment were $31.2 million, compared with $31.7 million in the first quarter of 1999. The increase in first quarter 2000 sales in the consumer segment resulted primarily from acquisitions, more billing days, and higher selling prices, compared with the same period last year. Sales in 2000 reflect the impact of the third quarter 1999 acquisitions of Graphic Packaging Corporation's flexible packaging business and Crown, Cork & Seal's composite can business. The domestic composite can businesses experienced unit volume growth of approximately 4% in the first quarter of 2000 compared with the first quarter of last year. The additional unit volume was due largely to the acquisition of Crown, Cork & Seal's composite can business and strong sales in the snack product line. Volumes were particularly strong in the first two months of the quarter before experiencing a downturn in March due in part to certain customers utilizing excess inventories created as a result of planning for potential Year 2000 issues. The volume shortfalls experienced in March should be temporary and volume has already begun to return to expected levels in April.

12 SONOCO PRODUCTS COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED), CONTINUED FIRST QUARTER 2000 COMPARED WITH FIRST QUARTER 1999, CONTINUED CONSUMER PACKAGING SEGMENT, CONTINUED Volumes in the European composite can businesses were weaker overall in the first quarter of 2000 compared with the same period last year primarily due to shortfalls in snack can sales. Volumes were stronger in Latin America, largely due to increased sales of composite cans for powdered infant formula produced at a new facility in Delicias, Mexico. Volume in the high density film products operations was higher in the first quarter of 2000 compared with the same period last year, particularly in the retail segment of the business. Operating profits were approximately $4 million lower than last year's first quarter operating profits due to unrecovered resin price increases. These operations have experienced a 56% increase in resin prices since the end of March 1999. Additional selling price increases will take effect in the second quarter 2000 to recover part of the resin price increases. INDUSTRIAL PACKAGING SEGMENT The industrial packaging segment includes engineered carriers / paper (paper and plastic tubes and cores, paper manufacturing, and recovered paper operations); and protective packaging (designed interior packaging and protective reels). First quarter 2000 sales for the industrial packaging segment were $363.4 million, compared with $307.9 million in the same period last year. Operating profits for this segment were $53.0 million, compared with $43.4 million in the first quarter of 1999. The increase in sales and profits in this segment resulted primarily from increased volume in paper and plastic tubes and cores, compared with the first quarter of 1999, which experienced direct and indirect adverse effects from the downturn in the Asian economy. In addition, more calendar days in the first quarter 2000, productivity improvements, and the impact of previously announced price increases in response to rising general operating and raw material costs, contributed to improved first quarter 2000 results compared to the same period last year. In the domestic integrated paper and engineered carriers business, first quarter unit volume increased approximately three percent on a comparable billing day basis from the same period last year. Selling prices for engineered carriers were higher compared with last year's first quarter as prices were raised in order to pass through higher recovered paper costs. Two $10 per ton price increases in old corrugated containers (OCC) were

13 SONOCO PRODUCTS COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED), CONTINUED FIRST QUARTER 2000 COMPARED WITH FIRST QUARTER 1999, CONTINUED INDUSTRIAL PACKAGING SEGMENT, CONTINUED experienced in the first quarter of 2000 bringing the total increases in OCC to $55 per ton since March 1999. OCC costs have continued to increase in the second quarter of 2000. Additional selling price increases will take effect for converted products in North America in the second quarter of 2000. Similar increases in recovered paper costs have been experienced in the Company's operations in Europe where selling price increases will also be implemented in the second quarter. These selling price increases are not expected to fully recover the raw material cost increases in the second quarter of 2000, but full recovery is expected over the second half of 2000. Strong volume in the Company's protective packaging operations contributed to higher sales and earnings in the first quarter of 2000 compared with the first quarter of 1999. Part of the increase in volume is due to a new designed interior packaging facility in San Luis Potosi, Mexico, which began production in the second half of 1999. In addition, productivity improvements contributed to the improved performance of these operations. CORPORATE General corporate expenses have been allocated as operating costs to each of the segments. Net interest expense was approximately $3.3 million higher in the first quarter of 2000 compared with the same quarter of 1999 due to a combination of higher average interest rates and higher debt balances as a result of funding acquisitions and stock repurchases. Under a previously announced plan to repurchase at least enough common shares to prevent dilution related to stock options, the Company repurchased approximately 2.5 million shares during the first quarter of 2000 for approximately $46.4 million, for an average price of $18.74 per share. FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES The Company's financial position remained strong through the first quarter of 2000. The debt-to-capital ratio, after adjusting debt levels for excess cash related to the issuance of restricted purpose bonds, increased to 48.2% at April 2, 2000, from 47.5% at December 31, 1999. The increase is primarily attributable to the reduction of total equity resulting from the repurchase of $46.4 million of the Company's common stock. Working capital increased $18.8 million to $325.2 million during the first quarter of 2000, driven by net increases in current assets, particularly trade accounts receivable and inventory. Strong volume in the fourth quarter resulted in lower than optimal inventory levels at December 31, 1999. Although trade accounts receivable balances were above the December 1999 levels, they continued to decline relative to days sales outstanding for the same period last year.

14 SONOCO PRODUCTS COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED), CONTINUED FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES, CONTINUED Cash generated from operations of $88.8 million was used to fund capital expenditures of $22.6 million, pay dividends of $19.3 million, and repurchase $46.4 million of the Company's common stock. 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. EURO COMPLIANCE On January 1, 1999, 11 of the 15 member countries of the European Union established fixed conversion rates between their existing currencies and the Euro and adopted the Euro as their common legal currency (the "Euro Conversion"). The impact to the Company of the Euro Conversion has not been material through the first quarter of 2000. The Company is currently unsure of the potential impact that the Euro Conversion will have on its business, financial condition, results of operations, and cash flows, particularly as it relates to its European operations. However, the Company does not anticipate that the Euro Conversion will have a material adverse effect on its future business, financial condition, results of operations, or cash flows.

15 SONOCO PRODUCTS COMPANY PART I. FINANCIAL INFORMATION Item 3. Quantitative and Qualitative Disclosures About Market Risk Information about the Company's exposure to market risk was disclosed in its 1999 Annual Report on Form 10-K which was filed with the Securities and Exchange Commission on March 24, 2000. There have been no material quantitative or qualitative changes in market risk exposures since the date of that filing. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders The Company's annual meeting of shareholders was held on April 19, 2000. The following matters, as described more fully in the Company's Proxy Statement, were approved by the shareholders at this meeting: (1) The following directors were elected: VOTES ---------------------------- Term For Withheld ------ ---------- --------- C. W. Coker 3-year 81,768,521 2,864,481 H. E. DeLoach, Jr. 3-year 79,920,744 4,712,258 A. T. Dickson 3-year 81,942,101 2,690,901 C. D. Spangler, Jr. 3-year 82,047,442 2,585,560 Dona Davis Young 3-year 81,719,277 2,913,725 (2) The Performance-Based Annual Incentive Plan for Executive Officers was approved by the shareholders by a vote of 79,424,831 for and 3,876,916 against, with 1,331,255 votes abstaining. (3) PricewaterhouseCoopers LLP, Certified Public Accountants, was approved as the independent auditors of the corporation for the fiscal year ending December 31, 2000. The shareholders voted 84,203,411 for and 233,598 against this appointment, with 195,993 votes abstaining. There were 17,214,071 non-votes for each matter voted upon.

16 SONOCO PRODUCTS COMPANY PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K - ------- -------------------------------- (a) Exhibit (10-7)-Performance-Based Annual Incentive Plan for Executive Officers (incorporated by reference to the Company's definitive Proxy Statement for the 2000 Annual Meeting of Shareholders filed with the SEC on March 15, 2000) Exhibit (27)-Financial Data Schedule (for SEC use only) (b) No Current Reports on Form 8-K were filed by the Company during the first quarter of 2000.

17 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: May 12, 2000 -------------------- By: /s/ F. T. Hill, Jr. ------------------------------ F. T. Hill, Jr. Vice President and Chief Financial Officer

18 SONOCO PRODUCTS COMPANY EXHIBIT INDEX Exhibit Number Description ------ ----------- 10-7 Performance-Based Annual Incentive Plan for Executive Officers (incorporated by reference to the Company's definitive Proxy Statement for the 2000 Annual Meeting of Shareholders filed with the SEC on March 15, 2000) 27 Financial Data Schedule for the first quarter of 2000 (for SEC use only)

5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF SONOCO PRODUCTS COMPANY FOR THE THREE MONTHS ENDED APRIL 2, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 U.S. DOLLARS 3-MOS DEC-31-2000 JAN-01-2000 APR-02-2000 1 32,006 8,260 360,292 5,451 267,070 748,932 2,079,491 1,070,409 2,292,964 423,712 843,346 0 0 7,175 859,134 2,292,964 676,299 676,299 524,638 524,638 0 568 15,519 69,479 26,422 45,017 0 0 0 45,017 0.45 0.45