02.12.16
Sonoco reported consolidated financial results for its fourth quarter and full-year 2015.
Highlights include fourth quarter 2015 GAAP earnings per diluted share were $.55, compared with $.48 in 2014. Fourth quarter 2015 GAAP results include $.09 per diluted share, after tax, in asset impairment and restructuring expenses and other non-base charges, net of gains related to releases of deferred tax valuation allowances, compared with $.13 per diluted share, after-tax, in asset impairment and restructuring charges, acquisition expenses and acquisition inventory step-up costs in the fourth quarter of 2014.
Base net income attributable to Sonoco (base earnings) for fourth quarter 2015 was $.64 per diluted share, compared with $.61 in 2014. Sonoco previously provided fourth quarter base earnings guidance of $.59 to $.64 per diluted share.
Fourth quarter 2015 net sales declined 3.8% to $1.27 billion, due primarily to the negative impact of foreign currency translation. Cash flow from operations for the fourth quarter was $146 million, compared with $151 million in 2014. Free cash flow in the quarter was $49 million, compared with $78 million in 2014.
2015 Full-Year highlights include full-year 2015 GAAP earnings per diluted share were $2.44, compared with $2.19 in 2014. Full-year 2015 base earnings were $2.51 per diluted share, up 4.2% from $2.41 per diluted share in 2014.
Net sales for 2015 were $4.96 billion, down 1% from $5.02 billion in 2014. Cash flow from operations for 2015 was $453 million, up 8.4% from $418 million in 2014. Free cash flow was $155 million, compared to $120 million in 2014.
Full-year 2016 base earnings are projected to be in the range of $2.64 and $2.74 per diluted share, with a targeted mid-point of $2.69 per diluted share. Base earnings for the first quarter of 2016 are projected to be in the range of $.57 to $.62 per diluted share. Base earnings in the first quarter of 2015 were $.54 per diluted share. The 2016 free cash flow is projected to be approximately $140 million.
Sonoco’s Board of Directors approved repurchasing up to $100 million in common stock in open market transactions beginning immediately. The board also restored the company’s residual share repurchase authorization to its original five million shares.
“Despite diverging global economic conditions and headwinds stemming from the continued strength of the U.S. dollar, Sonoco put up solid results led by record fourth quarter performances in our Consumer Packaging and Protective Solutions segments, partially offset by lower results in our Paper and Industrial Converted Products segment,” said Jack Sanders, Sonoco president and CEO. “Overall, gains from a positive price/cost relationship; volume growth, particularly in our Consumer Packaging and Protective Solutions segments; acquisition earnings; and a lower effective tax rate more than offset a negative mix in some of our businesses, the impact of foreign currency translation and higher labor, pension, maintenance and other operating costs.
“Operating profit in our Consumer Packaging segment improved just over 8% and reached a record for the fifth consecutive quarter,” added Sanders. “This quarter’s improvement was a result of a positive price/cost relationship, acquisition earnings and solid volume growth, partially offset by higher pension and other operating costs, lower manufacturing productivity and unfavorable exchange rate changes. Operating profits in our Display and Packaging segment showed significant improvement due to a positive/price cost relationship, manufacturing productivity improvements and the reimbursement of excess costs by a customer.
“Operating profit in our Paper and Industrial Converted Products segment declined 32.4% from the prior-year quarter. More than half of the negative variance for the segment was directly related to the impact of declining market conditions on our one corrugating medium paper machine with the balance essentially stemming from unfavorable exchange rates changes and higher pension expense.
“In our Protective Solutions segment, operating profits grew nearly 12% due to continued strong volume growth, a positive price/cost relationship and manufacturing productivity improvements, which more than offset negative mix and higher labor, maintenance and other operating costs,” Sanders added.
GAAP net income attributable to Sonoco in the fourth quarter was $56.1 million, or $.55 per diluted share, compared with $49.0 million, or $.48 per diluted share, in the prior year. Base earnings in the fourth quarter were $65.5 million, or $.64 per diluted share, compared with$62.5 million, or $.61 per diluted share, in 2014.
Fourth quarter base earnings exclude $9.4 million in net expenses, or $.09 per diluted share, consisting of after-tax asset impairment and restructuring expenses and certain other one-time charges, partially offset by certain income tax valuation allowance releases. Base earnings in the fourth quarter of 2014 excluded $13.5 million, after tax, or $.13 per diluted share, of restructuring and asset impairment costs and acquisition-related expenses.
Net sales for the fourth quarter were $1.27 billion, down approximately 4% from $1.32 billion in last year’s quarter, reflecting a nearly $75 million negative impact of foreign currency translation. Absent this impact, reported sales would have increased as net acquisitions accounted for $29 million of additional sales and solid volume growth, primarily in Consumer Packaging and Protective Solutions, were only partially offset by lower selling prices stemming from a year-over-year decline in recovered paper and resin costs.
Gross profit was $239 million in the fourth quarter, down 3%, compared with $247 million in the prior-year quarter. Gross profit would have been higher year over year absent the negative impact of currency rate changes. Gross profit as a percent of sales improved to 18.9%, compared with 18.7% in the same period in 2014.
Net sales for 2015 were $4.96 billion, down 1%, compared with $5.02 billion in 2014. The negative impact of foreign currency translation reduced reported sales by approximately $276 million in 2015, more than offsetting $236 million in sales added by acquisitions net of divestitures. Favorable volume/mix was essentially offset by lower selling prices stemming from declining recovered paper and resin costs.
Net income attributable to Sonoco for 2015 was $250.1 million, or $2.44 per diluted share, up 12%, from $225.9 million, or $2.19 per diluted share, in 2014. Fiscal year 2014 earnings were negatively impacted by $.22 per diluted share, after-tax, for restructuring and other related charges and acquisition expenses.
Base earnings for 2015 were $256.7 million, or $2.51 per diluted share, compared with $248.6 million, or $2.41 per diluted share for 2014.
Current-year gross profit was a record $929 million, up 2.4%, compared with $908 million in 2014. The prior-year acquisition of Weidenhammer Packaging Group, a European composite can business, was a benefit to gross profit, offset by the negative impact of currency rate changes. Gross profit as a percent of sales was 18.7%, compared with 18.1% in 2014.
In 2015, cash generated from operations was $453 million, up 8.4%, compared with $418 million in 2014. Free cash flow for 2015 was $155 million, compared with $120 million last year. For the year, the Company used available cash to reduce debt, net of proceeds, by approximately $115 million.
As of Dec. 31, 2015, total debt was approximately $1.13 billion, compared with $1.25 billion at Dec. 31, 2014, including no outstanding commercial paper.
Highlights include fourth quarter 2015 GAAP earnings per diluted share were $.55, compared with $.48 in 2014. Fourth quarter 2015 GAAP results include $.09 per diluted share, after tax, in asset impairment and restructuring expenses and other non-base charges, net of gains related to releases of deferred tax valuation allowances, compared with $.13 per diluted share, after-tax, in asset impairment and restructuring charges, acquisition expenses and acquisition inventory step-up costs in the fourth quarter of 2014.
Base net income attributable to Sonoco (base earnings) for fourth quarter 2015 was $.64 per diluted share, compared with $.61 in 2014. Sonoco previously provided fourth quarter base earnings guidance of $.59 to $.64 per diluted share.
Fourth quarter 2015 net sales declined 3.8% to $1.27 billion, due primarily to the negative impact of foreign currency translation. Cash flow from operations for the fourth quarter was $146 million, compared with $151 million in 2014. Free cash flow in the quarter was $49 million, compared with $78 million in 2014.
2015 Full-Year highlights include full-year 2015 GAAP earnings per diluted share were $2.44, compared with $2.19 in 2014. Full-year 2015 base earnings were $2.51 per diluted share, up 4.2% from $2.41 per diluted share in 2014.
Net sales for 2015 were $4.96 billion, down 1% from $5.02 billion in 2014. Cash flow from operations for 2015 was $453 million, up 8.4% from $418 million in 2014. Free cash flow was $155 million, compared to $120 million in 2014.
Full-year 2016 base earnings are projected to be in the range of $2.64 and $2.74 per diluted share, with a targeted mid-point of $2.69 per diluted share. Base earnings for the first quarter of 2016 are projected to be in the range of $.57 to $.62 per diluted share. Base earnings in the first quarter of 2015 were $.54 per diluted share. The 2016 free cash flow is projected to be approximately $140 million.
Sonoco’s Board of Directors approved repurchasing up to $100 million in common stock in open market transactions beginning immediately. The board also restored the company’s residual share repurchase authorization to its original five million shares.
“Despite diverging global economic conditions and headwinds stemming from the continued strength of the U.S. dollar, Sonoco put up solid results led by record fourth quarter performances in our Consumer Packaging and Protective Solutions segments, partially offset by lower results in our Paper and Industrial Converted Products segment,” said Jack Sanders, Sonoco president and CEO. “Overall, gains from a positive price/cost relationship; volume growth, particularly in our Consumer Packaging and Protective Solutions segments; acquisition earnings; and a lower effective tax rate more than offset a negative mix in some of our businesses, the impact of foreign currency translation and higher labor, pension, maintenance and other operating costs.
“Operating profit in our Consumer Packaging segment improved just over 8% and reached a record for the fifth consecutive quarter,” added Sanders. “This quarter’s improvement was a result of a positive price/cost relationship, acquisition earnings and solid volume growth, partially offset by higher pension and other operating costs, lower manufacturing productivity and unfavorable exchange rate changes. Operating profits in our Display and Packaging segment showed significant improvement due to a positive/price cost relationship, manufacturing productivity improvements and the reimbursement of excess costs by a customer.
“Operating profit in our Paper and Industrial Converted Products segment declined 32.4% from the prior-year quarter. More than half of the negative variance for the segment was directly related to the impact of declining market conditions on our one corrugating medium paper machine with the balance essentially stemming from unfavorable exchange rates changes and higher pension expense.
“In our Protective Solutions segment, operating profits grew nearly 12% due to continued strong volume growth, a positive price/cost relationship and manufacturing productivity improvements, which more than offset negative mix and higher labor, maintenance and other operating costs,” Sanders added.
GAAP net income attributable to Sonoco in the fourth quarter was $56.1 million, or $.55 per diluted share, compared with $49.0 million, or $.48 per diluted share, in the prior year. Base earnings in the fourth quarter were $65.5 million, or $.64 per diluted share, compared with$62.5 million, or $.61 per diluted share, in 2014.
Fourth quarter base earnings exclude $9.4 million in net expenses, or $.09 per diluted share, consisting of after-tax asset impairment and restructuring expenses and certain other one-time charges, partially offset by certain income tax valuation allowance releases. Base earnings in the fourth quarter of 2014 excluded $13.5 million, after tax, or $.13 per diluted share, of restructuring and asset impairment costs and acquisition-related expenses.
Net sales for the fourth quarter were $1.27 billion, down approximately 4% from $1.32 billion in last year’s quarter, reflecting a nearly $75 million negative impact of foreign currency translation. Absent this impact, reported sales would have increased as net acquisitions accounted for $29 million of additional sales and solid volume growth, primarily in Consumer Packaging and Protective Solutions, were only partially offset by lower selling prices stemming from a year-over-year decline in recovered paper and resin costs.
Gross profit was $239 million in the fourth quarter, down 3%, compared with $247 million in the prior-year quarter. Gross profit would have been higher year over year absent the negative impact of currency rate changes. Gross profit as a percent of sales improved to 18.9%, compared with 18.7% in the same period in 2014.
Net sales for 2015 were $4.96 billion, down 1%, compared with $5.02 billion in 2014. The negative impact of foreign currency translation reduced reported sales by approximately $276 million in 2015, more than offsetting $236 million in sales added by acquisitions net of divestitures. Favorable volume/mix was essentially offset by lower selling prices stemming from declining recovered paper and resin costs.
Net income attributable to Sonoco for 2015 was $250.1 million, or $2.44 per diluted share, up 12%, from $225.9 million, or $2.19 per diluted share, in 2014. Fiscal year 2014 earnings were negatively impacted by $.22 per diluted share, after-tax, for restructuring and other related charges and acquisition expenses.
Base earnings for 2015 were $256.7 million, or $2.51 per diluted share, compared with $248.6 million, or $2.41 per diluted share for 2014.
Current-year gross profit was a record $929 million, up 2.4%, compared with $908 million in 2014. The prior-year acquisition of Weidenhammer Packaging Group, a European composite can business, was a benefit to gross profit, offset by the negative impact of currency rate changes. Gross profit as a percent of sales was 18.7%, compared with 18.1% in 2014.
In 2015, cash generated from operations was $453 million, up 8.4%, compared with $418 million in 2014. Free cash flow for 2015 was $155 million, compared with $120 million last year. For the year, the Company used available cash to reduce debt, net of proceeds, by approximately $115 million.
As of Dec. 31, 2015, total debt was approximately $1.13 billion, compared with $1.25 billion at Dec. 31, 2014, including no outstanding commercial paper.