Fourth quarter 2016 GAAP earnings per diluted share were $1.04, compared with $0.55 in 2015. Fourth quarter 2016 GAAP results include a net gain of $0.42 per diluted share, after tax, consisting of a gain from the sale of the company’s rigid plastics blowmolding operations in November 2016, partially offset by restructuring charges and acquisition expenses.
Base net income attributable to Sonoco for fourth quarter 2016 was $0.62 per diluted share, compared with $0.64 in 2015.
Fourth quarter 2016 net sales were $1.14 billion, down from $1.27 billion in 2015. Cash flow from operations was $50.0 million, and reflects payments of $64.4 million in taxes and fees from the sale of blowmolding operations, compared with $145.5 million in the previous year’s fourth quarter. Reflecting this decline in operating cash flow, free cash flow for the fourth quarter was a negative $29.2 million, compared with $49.3 million in 2015.
During the fourth quarter, Sonoco completed the sale of its rigid plastics blowmolding operations for approximately $280 million, excluding fees and taxes. In addition, the company completed the acquisition of Plastic Packaging, Inc., a Hickory, N.C. based flexible packaging company.
Full-year 2016 GAAP earnings per diluted share were $2.81, compared with $2.44 in 2015. Full-year 2016 base earnings were $2.72 per diluted share, up 8.7% from $2.51 per diluted share in 2015. Sonoco previously provided guidance for full-year base earnings in the range of $2.70 to $2.75 per diluted share.
Net sales for 2016 were $4.78 billion, down 3.7% from $4.96 billion in 2015. Cash flow from operations for 2016 was $398.7 million, and was reduced by $64.4 million in taxes and fees for the sale of the blowmolding operations, compared with $452.9 million in 2015. Free cash flow was $65.7 million, which was reduced by $64.4 million in cash taxes and fees associated with the sale of blowmolding, compared with $155.1 million in 2015.
“Sonoco’s results in the fourth quarter were at the mid-point of our guidance as we managed our diversified mix of businesses well,” said Jack Sanders, Sonoco president and CEO. “Gross profit margins were essentially flat year-over-year, despite rising raw material costs and a much greater than expected seasonal slowdown in business activity by many of our consumer and industrial customers.”
As of Dec. 31, 2016, total debt was approximately $1.05 billion, compared with $1.13 billion as of Dec. 31, 2015. At the end of 2016, the company had a total debt to total capital ratio of 40.4%, compared with 42.4% at December 31, 2015.
“We had a solid performance in 2016 despite flat to negative growth from many of our largest consumer product customers and generally muted GDP growth around the world,” Sanders reported. “Overall, we achieved record GAAP and base earnings, and gross profit and operating margins expanded to their highest levels in 10 years. Each of our four business segments reported year-over-year improvement in operating profit, with our targeted growth businesses - Consumer Packaging and Protective Solutions - reporting record operating profits.”