Net sales for the second quarter of 2020 were $1.25 billion, down 8.4% from last year's second quarter sales of $1.36 billion. The sales decline was driven by lower volume/mix, a stronger U.S. dollar and lower selling prices. These negative impacts were partially offset by increased sales from acquisitions.
GAAP net income attributable to Sonoco in the second quarter was $55.2 million, or $0.55 per diluted share, a decrease of $25.9 million, compared with $81.2 million, or $0.80 per diluted share, in 2019.
Gross profit was $248 million in the second quarter compared to $275.3 million in the same period in 2019. Gross profit as a percentage of sales was 19.9%, down from 20.2% in the same period in 2019.
“Our Sonoco team did a tremendous job during the quarter to produce bottom-line results which were in line with our expectations despite facing the toughest operating environment since the Great Recession,” Howard Coker, president and CEO, said.
"Results from our diverse portfolio of Consumer- and Industrial-related businesses mirrored the current divergent macroeconomic environment. Our Consumer Packaging segment produced record results during the quarter due to strong demand for food packaging driven by consumers' stay-at-home eating habits, while our Paper and Industrial Converted and Protective Solutions segments were dragged down by extremely weak demand in most of our industrial served markets due to virus-related shutdowns,” added Coker.
"We're also very pleased with our strong cash flow generation during the quarter which shows the resiliency of our business and the focus of our team on this very important activity. Sonoco's liquidity position is stronger than ever and we will keep this, along with our investment-grade credit rating, as a top priority."
For the first six months of 2020 net sales were $2.55 billion, down $162.6 million, compared with $2.71 billion in the first six months of 2019. Sales declined 6% in the first half of the year as lower volume/mix stemming from the virus-driven recession, lower selling prices and a negative impact from foreign exchange translation more than offset sales added from acquisitions.
GAAP net income attributable to Sonoco for the first half of 2020 was $135.7 million or $1.34 per diluted share, compared with $154.8 million or $1.53 per diluted share in the first half of 2019. Earnings in the first half of 2020 included $39.8 million in after-tax charges largely consisting of restructuring and non-operating pension costs. Earnings in the first half of 2019 included after-tax charges totaling $27.8 million mostly related to restructuring and non-operating pension costs.
Current year-to-date gross profit was $514.6 million, compared with $545.5 million in 2019. Year-to-date gross profit as a percentage of sales in 2020 was 20.2%, compared with 20.1% in 2019.
Although net income decreased year over year, cash generated from operations for the first six months of 2020 was $281 million, compared with $40.1 million in 2019, an increase of $241 million. The increase is largely attributable to a $198 million year-over-year reduction in pension and retirement plan contributions, net of non-cash pension expenses.
Free cash flow for the first six months of 2020 was $123.1 million, compared with a negative $144.9 million in the same period last year, an increase of $268 million, driven by the year-to-date increase in operating cash flow and a decrease in capital spending. During the first half of 2020, net capital expenditures and cash dividends were $71.6 million and $86.3 million, respectively, compared with $100.8 million and $84.2 million, respectively, in 2019.
As of June 28, 2020, total debt was approximately $2.27 billion, compared with $1.68 billion as of December 31, 2019. The company's total-debt-to-total-capital ratio was 55.6% as of June 28, 2020, compared to 48.1% at the end of 2019.