Fourth Quarter Earnings Exceed Expectations; 2006 Earnings Reach All-time
High
Record 2006 Cash Flow from Operations More Than Doubled Year Over Year
HARTSVILLE, S.C., Feb. 7 /PRNewswire-FirstCall/ -- Sonoco (NYSE: SON),
the global packaging company, today reported earnings per diluted share for
the fourth quarter of 2006 of $.39, compared with $.38 for the same period
in 2005, it was announced by Harris E. DeLoach, Jr., chairman, president
and chief executive officer. Results for the fourth quarter of 2006
included after-tax restructuring charges of $17.4 million ($.17 per diluted
share) related to previously announced cost-reduction measures primarily
focused on certain of the Company's international operations. Results for
the fourth quarter of 2005 included after-tax restructuring and
non-recurring or infrequent and unusual expenses totaling $19.6 million
($.20 per diluted share) related to additional tax expense associated with
the repatriation of foreign earnings, an increase in the environmental
reserve at a subsidiary's paper operation and restructuring charges.
(Logo: http://www.newscom.com/cgi-bin/prnh/19991006/SNCLOGO )
Base earnings per diluted share for the fourth quarter of 2006 were
$.56, compared with $.58 for the same period of 2005. Base earnings is a
non-GAAP financial measure that excludes restructuring charges and certain
non- recurring or infrequent and unusual expenses, as applicable.
Additional information about base earnings, base earnings per share and
base operating profit (pre-tax base earnings) along with reconciliations to
the most closely applicable GAAP financial measure is provided later in
this news release.
"Base earnings during the fourth quarter of 2006 were above the high
end of our guidance and First Call's mean estimate and just under the
unusually robust results generated in the same period in 2005," said
DeLoach. "Base operating profit increased year over year as strong
productivity and increased selling prices more than offset higher costs of
labor, material, energy and freight; slightly lower volumes; and an
unfavorable shift in the mix of business. However, base earnings were lower
in the fourth quarter of 2006, compared with the same period in 2005 due to
a higher effective tax rate on base operating profit."
Net sales for the fourth quarter of 2006 were $990 million, up 3.6
percent, compared with $955 million in the same period in 2005. According
to DeLoach, "Sales increased in our Tubes and Core/Paper, Consumer
Packaging and Packaging Services segments during the fourth quarter. The
overall increase in sales was due primarily to higher selling prices and
favorable foreign currency translation."
Net income for the fourth quarter of 2006 was $39.5 million, compared
with $38.8 million for the fourth quarter of 2005. Base earnings totaled
$56.9 million, compared with $58.4 million for the same period in 2005.
Cash generated from operations for the fourth quarter of 2006 was
$151.7 million, compared with $66.7 million for the same period in 2005.
Cash flow increased due primarily to lower benefit plan contributions, as
the Company contributed $2.9 million in the fourth quarter of 2006, versus
$65.5 million in the same period of 2005. In addition, the Company's
working capital improvement initiatives contributed to the improvement in
cash from operations. Capital expenditures and cash dividends were $35.8
million and $24 million, respectively, in the fourth quarter of 2006.
For the twelve months ended December 31, 2006, net sales were $3.7
billion, up 3.6 percent, compared with $3.5 billion for 2005. Net income
for 2006 was $195.1 million ($1.92 per diluted share), up 21 percent,
compared with $161.9 million ($1.61 per diluted share) during 2005. Net
income in 2006 was negatively impacted by after-tax restructuring charges
of $20.9 million, all of which relate to previously announced
cost-reduction and restructuring activities. Net income for 2005 was
negatively impacted by $10.1 million of additional tax expense associated
with the repatriation of foreign earnings, a $7.6 million after-tax expense
to increase an environmental reserve and $13 million of after-tax
restructuring costs.
In 2006, the Company adopted Statement of Financial Accounting
Standards No. 123(R), "Share-Based Payments," which requires the expensing
of the grant- date fair value of stock options and other equity-based
compensation. As a result, net income and base earnings in 2006 include
after-tax stock option charges of $2.8 million ($.03 per diluted share).
Prior to 2006, the Company expensed stock options based on their intrinsic
value. Because the Company has only granted at-market options, which have
an intrinsic value of zero, 2005 results did not include any corresponding
stock option expense.
Base earnings for 2006 totaled $216 million ($2.13 per diluted share),
up 12.1 percent, compared with $192.6 million ($1.92 per diluted share) for
2005. The increase in base earnings for 2006 was primarily due to
productivity improvements and maintaining a positive selling price/material
cost relationship. These favorable factors were partially offset by
increased costs for energy, freight and labor, along with an unfavorable
shift in the mix of business.
For the full year 2006, cash generated from operations was a record
$482.6 million, more than doubling the $227.4 million for 2005. The
increase in cash flow during 2006 is primarily attributable to increased
earnings, a decline in pension contributions and the Company's working
capital improvement initiatives. Cash generated from operations in 2006 was
used to fund capital expenditures of $123.3 million and to pay dividends of
$94.8 million. Additionally, the Company repurchased 2.5 million shares of
Sonoco common stock for approximately $83 million and made net payments on
debt of $23.6 million. As announced on December 1, 2006, Sonoco intends to
utilize available cash to repurchase approximately 1.5 million shares of
its common stock during 2007 in open market transactions aimed at
offsetting the dilution from stock based compensation. The Company's board
has approved the reinstatement of the first 1.5 million shares repurchased
into the existing five million share authorization.
"2006 was a strong year for Sonoco. We achieved record sales, net
income and cash flow from operations. We produced a third consecutive year
of operating margin improvement driven by strong productivity gains and a
continued focus on price management, cost reductions and the turnaround of
under-performing operations. Our initiative to reduce working capital
strengthened cash flow, which we used to further grow the Company, increase
dividends, reduce debt and buy back stock. We continued to grow sales from
new products and received a number of awards for packaging innovation. In
addition, our employees developed new initiatives to better serve the
changing needs of our customers," DeLoach said. "While we are proud of what
was accomplished in 2006, we remain focused on accelerating top-line
growth, further improving margins and building cash flow to help meet our
ongoing objective of providing shareholders with average annual
double-digit total returns."
First Quarter 2007 Outlook
Both the upcoming quarter and annual forecasts are given assuming no
significant change in companywide volumes and/or prices due to a change in
general economic conditions. Sonoco expects first quarter 2007 base
earnings to be in the range of $.47 to $.50 per diluted share. The first
quarter of the calendar year has historically been Sonoco's weakest quarter
of the year. However, as a result of the Company's accounting calendar, the
first quarter of 2007 will benefit from six more calendar days than the
same period in 2006. As previously announced, the Company expects full-year
2007 base earnings per diluted share to be in the range of $2.28 to $2.31.
The Company's earnings guidance reflects an expected effective tax rate of
approximately 35 percent during the coming year.
Segment Review
The Company uses a non-GAAP financial measure when discussing the
operational results of its segments. Base Operating Profit at the segmental
level is defined as the segments' portion of consolidated income before
Income Taxes, excluding restructuring charges, net interest expense and
certain non- recurring or infrequent and unusual items. A reconciliation of
Base Operating Profit Sonoco to GAAP Income before Income Taxes for each of
the Company's three reportable segments and All Other Sonoco is provided
later in this news release.
Consumer Packaging
The Consumer Packaging segment includes the following products: round
and shaped rigid packaging, both composite and plastic; printed flexible
packaging; and metal and plastic ends and closures.
Fourth quarter 2006 sales for the Consumer Packaging segment were
$350.3 million, compared with $343.1 million in the fourth quarter of 2005.
Base operating profit for this segment was $29.5 million, compared with
$31.7 million in the fourth quarter of 2005.
The Consumer Packaging segment's 2006 fourth quarter sales increased as
a result of higher selling prices, the favorable impact of foreign currency
translation and acquisitions. Sales were negatively impacted by lower
volumes in rigid paper containers in North America and in metal ends and
closures. Domestic operations were able to offset volume shortfalls and an
unfavorable shift in the mix of business with price increases, cost
management and productivity improvements. However, international
operations, mainly Europe and Latin America, were not able to overcome
operating inefficiencies, resulting in lower profits for the segment as a
whole, when compared with 2005.
Tubes and Cores/Paper
The Tubes and Cores/Paper segment includes the following products:
high- performance paper and composite paperboard tubes and cores,
fiber-based construction tubes and forms, recycled paperboard, linerboard
and recovered paper.
Fourth quarter 2006 sales for the Tubes and Cores/Paper segment were
$412.9 million, compared with $392.6 million in the same period in 2005.
Segment base operating profit for the fourth quarter of 2006 was $40.6
million, compared with $35.8 million in the 2005 quarter.
Fourth quarter sales in the Tubes and Cores/Paper segment were up year
over year due to higher selling prices in North American and European
operations and the favorable impact of foreign currency translation. Base
operating profit increased due to productivity improvements, most notably
in Europe, and increased selling prices, which were partially offset by
lower North American and European volumes and higher energy, labor and
freight costs.
Packaging Services
The Packaging Services segment includes the following products and
services: point-of-purchase displays, packaging fulfillment, contract
packing, brand artwork management and supply chain management.
Fourth quarter 2006 sales for the Packaging Services segment were
$131.3 million, compared with $124.5 million for the same period last year.
Segment base operating profit for the fourth quarter of 2006 was $12.1
million, compared with $11.6 million in last year's quarter.
Fourth quarter 2006 sales in the Packaging Services segment increased
due primarily to higher volume in point-of-purchase displays and
fulfillment and service center operations in addition to the favorable
impact of foreign currency translation. These benefits were partially
offset by the loss of sales from a single-plant folding carton operation
that was sold in at the end of 2005. Segment base operating profit
increased during the fourth quarter of 2006 due to higher sales partially
offset by an unfavorable shift in the mix of business.
All Other Sonoco
All Other Sonoco includes businesses which are not aggregated in a
reportable segment and include the following products: wooden, metal and
composite reels for wire and cable packaging, molded and extruded plastics,
custom-designed protective packaging, and paper amenities such as coasters
and glass covers.
Fourth quarter 2006 sales for All Other Sonoco were $95.1 million,
compared with $94.7 million in the same period in 2005. Base operating
profit for the businesses in the fourth quarter of 2006 was $10.9 million,
compared with $11.9 million in the 2005 quarter.
Fourth quarter 2006 sales for All Other Sonoco were essentially
unchanged as higher selling prices and the favorable impact of foreign
currency translation were partially offset by modest volume reductions in
wire and cable reels and molded and extruded plastics operations. Base
operating profit for the fourth quarter of 2006 declined slightly due to
lower volume in wire and cable reels and molded and extruded plastic
operations and higher energy, labor and freight costs.
Corporate
Depreciation and amortization expense for the fourth quarter of 2006
was $43.3 million, compared with $42.3 million in the fourth quarter of
2005. Net interest expense for the fourth quarter of 2006 decreased to
$11.2 million, compared with $11.5 million for the same period in 2005. The
decrease was due to lower average debt balances, which more than offset
higher interest rates.
The effective tax rate for the Company for the year ended December 31,
2006, was 34 percent, compared with 36.4 percent in 2005. The effective tax
rate for 2005 included the impact of additional tax expense of $10.1
million from repatriation of foreign earnings under the American Jobs
Creation Act.
Effective December 31, 2006, the Company adopted the balance sheet
recognition provisions of Financial Accounting Standards No. 158,
"Employers' Accounting for Defined Benefit Pension and Other Postretirement
Plans" (FAS 158). FAS 158 requires companies to recognize the funded status
of defined benefit plans on the balance sheet. Because FAS 158 is applied
on a prospective basis, only the 2006 balance sheet is affected by this
change. Compared to what the December 31, 2006, balances would have
otherwise been, applying FAS 158 reduced long-term assets by approximately
$260 million, increased long-term liabilities by approximately $30 million,
reduced long- term deferred tax liabilities by $110 million and reduced
shareholders' equity by $180 million. The majority of this impact relates
to the Company's U.S. qualified retirement plan which, although in an
over-funded position, had a significant prepaid expense balance that was
required to be removed from assets. The adoption of FAS 158 had no impact
on compliance with the Company's financial covenants.
Conference Call Webcast
Sonoco will host its regular quarterly conference call today,
Wednesday, February 7, 2007, at 2 p.m. Eastern time, to review its
financial results for the fourth quarter and full year of 2006. The live
conference call can be accessed in a "listen only" mode via the Internet at
http://www.sonoco.com/, under the "News" section. A telephonic replay of
the call will be available at 4:30 p.m. Eastern time on February 7, 2007,
to U.S. callers at 888/286-8010 and for international callers at
+617/801-6888. The access code for both replays is 77736586. The call will
be archived on the investor information section of the Sonoco Web site for
30 days.
About Sonoco
Founded in 1899, Sonoco is a $3.7 billion global manufacturer of
industrial and consumer packaging products and provider of packaging
services, with more than 300 operations in 35 countries, serving customers
in 85 nations. Additional information about Sonoco is available at
http://www.sonoco.com.
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
and Exchange Act of 1934, as amended. The words "estimate," "project,"
"intend," "expect," "believe," "plan," "anticipate," "objective," "goal,"
"guidance" and similar expressions identify forward-looking statements.
Forward-looking statements include, but are not limited to, statements
regarding offsetting high raw material costs, improved productivity and
cost containment, adequacy of income tax provisions, refinancing of debt,
adequacy of cash flows, anticipated amounts and uses of cash flows, effects
of acquisitions and dispositions, adequacy of provisions for environmental
liabilities, financial strategies and the results expected from them,
continued payments of dividends, stock repurchases and producing
improvements in earnings.
These forward-looking statements are based on current expectations,
estimates and projections about our industry, management's beliefs and
assumptions made by management. Such information includes, without
limitation, discussions as to guidance and other 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 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 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 and contain or
reduce costs;
- international, national and local economic and market conditions;
- fluctuations of obligations and earnings of pension and postretirement
benefit plans;
- ability to maintain market share;
- pricing pressures and demand for products;
- continued strength of our paperboard-based tubes and cores and
composite can operations;
- anticipated results of restructuring activities;
- resolution of income tax contingencies;
- ability to successfully integrate newly acquired businesses into the
Company's operations;
- currency stability and the rate of growth in foreign markets;
- use of financial instruments to hedge foreign currency, interest rate
and commodity price risk;
- liability for remediation of environmental problems;
- actions of government agencies;
- loss of consumer confidence; and
- economic disruptions resulting from terrorist activities.
The Company undertakes no obligation to publicly update or revise
forward- looking statements, whether as a result of new information, future
events or otherwise.
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 Securities and Exchange Commission. Such
reports are available from the Securities and Exchange Commission's public
reference facilities and its Web site, the Company's investor relations
department and the Company's Web site, http://www.sonoco.com.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars and shares in thousands except per share)
THREE MONTHS ENDED TWELVE MONTHS ENDED
Dec. 31 Dec. 31 Dec. 31 Dec. 31
2006 2005 2006 2005
Sales $989,538 $954,908 $3,656,839 $3,528,574
Cost of sales 796,268 766,409 2,951,799 2,867,623
Selling, general and
administrative expenses 100,175 110,038 358,952 364,967
Restructuring charges 19,987 2,777 25,970 21,237
Income before interest and taxes 73,108 75,684 320,118 274,747
Interest expense 13,293 14,050 51,952 51,559
Interest income (2,094) (2,558) (6,642) (7,938)
Income before income taxes 61,909 64,192 274,808 231,126
Provision for income taxes 26,842 29,585 93,329 84,174
Income before equity
in earnings of affiliates/
minority interest in subsidiaries 35,067 34,607 181,479 146,952
Equity in earnings of affiliates/
minority interest in subsidiaries 4,437 4,192 13,602 14,925
Net income $39,504 $38,799 $195,081 $161,877
Average shares outstanding
- diluted 102,216 100,859 101,534 100,418
Diluted earnings per share $.39 $.38 $1.92 $1.61
Dividends per common share $.24 $.23 $.95 $.91
FINANCIAL SEGMENT INFORMATION (Unaudited)
(Dollars in thousands)
THREE MONTHS ENDED TWELVE MONTHS ENDED
Dec. 31 Dec. 31 Dec. 31 Dec. 31
2006 2005 2006 2005
Net Sales
Consumer Packaging $350,266 $343,087 $1,304,754 $1,247,451
Tubes and Cores/Paper 412,931 392,618 1,525,558 1,482,057
Packaging Services 131,255 124,524 456,833 455,877
All Other Sonoco 95,086 94,679 369,694 343,189
Consolidated $989,538 $954,908 $3,656,839 $3,528,574
Income Before Income Taxes:
Consumer Packaging
- Operating Profit $29,470 $31,697 $109,624 $103,505
Tubes and Cores/Paper
- Operating Profit* 40,621 23,260 148,177 107,060
Packaging Services
- Operating Profit 12,059 11,620 39,181 44,813
All Other Sonoco
- Operating Profit 10,945 11,885 49,106 40,607
Restructuring charges (19,987) (2,777) (25,970) (21,237)
Interest, net (11,199) (11,493) (45,310) (43,622)
Consolidated $61,909 $64,192 $274,808 $231,126
* 2005 results include a charge of $12,500 related to increase in
environmental reserve
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
December 31, December 31,
2006 2005
Assets
Current Assets:
Cash and cash equivalents $86,498 $59,608
Trade accounts receivables 459,022 413,209
Other receivables 33,287 45,225
Inventories 303,848 318,316
Prepaid expenses and deferred taxes 60,143 49,142
942,798 885,500
Property, plant and equipment, net 1,019,594 943,951
Goodwill 667,288 573,903
Other intangible assets 95,885 73,037
Other assets 191,113 505,349
$2,916,678 $2,981,740
Liabilities and Shareholders' Equity
Current Liabilities:
Payable to suppliers and others $601,243 $495,860
Notes payable and current
portion of long-term debt 51,903 124,530
Accrued taxes 6,678 96
659,824 620,486
Long-term debt 712,089 657,075
Pension and other postretirement benefits 209,363 173,939
Deferred income taxes and other 116,334 266,926
Shareholders' equity 1,219,068 1,263,314
$2,916,678 $2,981,740
Definition and Reconciliation of Non-GAAP Financial Measures
The Company's results determined in accordance with U.S. generally
accepted accounting principles (GAAP) are referred to as "as reported"
results. Some of the information presented in the press release reflects
the Company's "as reported" results adjusted to exclude certain amounts
related to the Company's restructuring initiatives and certain
non-recurring or infrequent and unusual expenses. These adjustments result
in the non-GAAP financial measures referred to in this press release as
"Base Earnings," "Base Earnings per Diluted Share" and "Base Operating
Profit."
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. Sonoco continues to provide all information required by GAAP,
but it believes that evaluating its ongoing operating results may not be as
useful if an investor or other user is limited to reviewing only GAAP
financial measures. Accordingly, Sonoco uses these non-GAAP financial
measures for internal planning and forecasting purposes, to evaluate its
ongoing operations, and to evaluate the ultimate performance of each
business unit against budget all the way up through the evaluation of the
Chief Executive Officer's performance by the Board of Directors. In
addition, these same non-GAAP measures are used in determining incentive
compensation for the entire management team and in providing earnings
guidance to the investing community.
Sonoco management does not, nor does it suggest that investors should,
consider these non-GAAP financial measures in isolation from, or as a
substitute for, financial information prepared in accordance with GAAP.
Sonoco presents these non-GAAP financial measures to provide users
information to evaluate Sonoco's operating results in a manner similar to
how management evaluates business performance. Material limitations
associated with the use of such measures are that they do not reflect all
period costs included in operating expenses and may not reflect financial
results that are comparable to financial results of other companies that
present similar costs differently. Furthermore, the calculations of these
non-GAAP measures are based on subjective determinations of management
regarding the nature and classification of events and circumstances that
the investor may find material and view differently. 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
that includes the impact of restructuring charges and certain unusual
items, and the non-GAAP measures that exclude them. Whenever Sonoco uses a
non-GAAP financial measure, it provides a reconciliation of the non-GAAP
financial measure to the most closely applicable GAAP financial measure.
Investors are encouraged to review the related GAAP financial measures and
the reconciliation of these non-GAAP financial measures to their most
directly comparable GAAP financial measures as detailed below.
Reconciliation of GAAP(1) to Non-GAAP Financial Measures
(Dollars in millions, except per share data)
Base Earnings Per Diluted Share (2) Three Months Ended
Dec. 31 Dec. 31
(Unaudited) 2006 2005
Diluted Earnings Per Share, as reported (GAAP) $.39 $.38
Adjusted for:
Restructuring charges, net of tax (5) .17 .02
Environmental reserve, net of tax .08
Taxes on repatriation of foreign earnings .10
Base Earnings Per Share (Non-GAAP) $.56 $.58
Twelve Months Ended
Dec. 31 Dec. 31
(Unaudited) 2006 2005
Diluted Earnings Per Share, as reported (GAAP) $1.92 $1.61
Adjusted for:
Restructuring charges, net of tax (5) .21 .13
Environmental reserve, net of tax .08
Taxes on repatriation of foreign earnings .10
Base Earnings Per Share (Non-GAAP) $2.13 $1.92
Base Earnings (3) Three Months Ended
Dec. 31 Dec. 31
(Unaudited) 2006 2005
Net Income, as reported (GAAP) $39.5 $38.8
Adjusted for:
Restructuring charges, net of tax (5) 17.4 1.9
Environmental reserve, net of tax 7.6
Taxes on repatriation of foreign earnings 10.1
Base Earnings (Non-GAAP) $56.9 $58.4
Twelve Months Ended
Dec. 31 Dec. 31
(Unaudited) 2006 2005
Net Income, as reported (GAAP) $195.1 $161.9
Adjusted for:
Restructuring charges, net of tax (5) 20.9 13.0
Environmental reserve, net of tax 7.6
Taxes on repatriation of foreign earnings 10.1
Base Earnings (Non-GAAP) $216.0 $192.6
Base Operating Profit (4)
Three Months Ended
Dec. 31 Dec. 31
(Unaudited) 2006 2005
Consumer Packaging
- Base Operating Profit $29.5 $31.7
Tubes and Cores/Paper
- Base Operating Profit 40.6 35.8
Packaging Services
- Base Operating Profit 12.1 11.6
All Other Sonoco
- Base Operating Profit 10.9 11.9
Base Operating Profit 93.1 91.0
Restructuring charges (5) (20.0) (2.8)
Environmental reserve (12.5)
Interest, net (11.2) (11.5)
Income before income taxes (GAAP) $61.9 $64.2
Twelve Months Ended
Dec. 31 Dec. 31
(Unaudited) 2006 2005
Consumer Packaging
- Base Operating Profit $109.6 $103.5
Tubes and Cores/Paper
- Base Operating Profit 148.2 119.5
Packaging Services
- Base Operating Profit 39.2 44.8
All Other Sonoco
- Base Operating Profit 49.1 40.6
Base Operating Profit 346.1 308.4
Restructuring charges (5) (26.0) (21.2)
Environmental reserve (12.5)
Interest, net (45.3) (43.6)
Income before income taxes (GAAP) $274.8 $231.1
(1) Generally Accepted Accounting Principles
(2) Base Earnings Per Diluted Share is a non-GAAP financial measure of
earnings per share which excludes the impact of restructuring charges
and certain non-recurring or infrequent and unusual expenses.
Management believes it is useful to exclude these charges because they
are not expenses considered by management in assessing the core
profitability of our business.
(3) Base Earnings is a non-GAAP financial measure of net income, which
excludes the impact of restructuring charges and certain non-recurring
or infrequent and unusual expenses. Management believes it is useful
to exclude these charges because they are not expenses considered by
management in assessing the core profitability of our business.
(4) Base Operating Profit is a non-GAAP financial measure of income before
taxes, which excludes net interest expense, the impact of
restructuring charges and certain non-recurring or infrequent and
unusual expenses. Management believes it is useful to exclude these
charges because they are not expenses considered by management in
assessing the core profitability of our business.
(5) These restructuring charges are recurring as Sonoco's restructuring
programs usually require several years to fully implement and Sonoco
continually considers possible restructuring actions that could
enhance its efficiency. Accordingly, 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.
SOURCE Sonoco
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http://www.sonoco.com
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AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Roger Schrum of Sonoco, +1-843-339-6018, or
roger.schrum@sonoco.com
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