SONOCO PRODUCTS COMPANY Item 7.01 Regulation FD Disclosure.
Sonoco Products Company (the "Company") uses certain financial performance measures ("non-GAAP financial measures"), both internally and externally, that are not in conformity with generally accepted accounting principles ("GAAP") to assess and communicate the financial performance of the Company. These non-GAAP financial measures reflect the Company's GAAP operating results adjusted to remove amounts (including the associated tax effects) relating to: restructuring initiatives; asset impairment charges; environmental charges; acquisition/divestiture-related costs; gains or losses from the divestiture of businesses; losses from the early extinguishment of debt; property insurance recoveries in excess of recorded losses; non-operating pension costs; certain income tax events and adjustments; and other items, if any. The Company's management believes the exclusion of these items improves the period-to-period comparability and analysis of the underlying financial performance of the business. The adjusted non-GAAP results are identified using the term "base," for example, "base earnings." As previously disclosed, beginning in the first quarter of 2022, the Company will also reflect adjustments in these non-GAAP financial measures to exclude amortization expense on acquisition intangibles in determining the Company's base results and segment operating profit. This change is being made to better align the Company's definition of base earnings with those of its peers, better reflect the Company's operating performance, and increase the usefulness of such measures to the investing community. The Company is providing in this Current Report on Form 8-K recasted disclosure of the base results and segment operating profit previously presented for each quarter of 2021 and for the full years endedDecember 31, 2021 and 2020, in order to reflect the exclusion of amortization of acquisition intangibles. This Form 8-K does not reflect events occurring subsequent to the filing of the Company's Annual Report on Form 10-K for the year endedDecember 31, 2021 (the "2021 Form 10-K") and does not modify or update the disclosures therein in any way, other than as necessary to reflect the change in base results and segment operating profit as described above. The information in this Form 8-K should be read in conjunction with the 2021 Form 10-K and our subsequent filings with theSEC .
The following table presents operating profit attributable to each of the Company's segments, revised to exclude amortization expense associated with acquisition intangibles, during each fiscal quarter of 2021:
Three Months Ended
October 3, December 31,
Dollars in thousands April 4, 2021 July 4, 2021 2021 2021
Operating profit:
Segment operating profit:
Consumer Packaging $ 81,360 $ 65,296 $ 66,341 $ 61,929
Industrial Paper Packaging 52,299 59,818 55,451 59,230
All Other 18,757 15,607 12,895 15,801
Restructuring/Asset impairment (charges)/income (6,846) 1,445 (3,488) (5,321)
Amortization of acquisition intangibles (12,749) (12,111) (12,257) (12,302)
Other non-base (charges)/income, net (12,512) 5,236 7,570 (14,596)
Consolidated $ 120,309 $ 135,291 $ 126,512 $ 104,741 --------------------------------------------------------------------------------
The following table presents operating profit attributable to each of the
Company's segments, revised to exclude amortization expense associated with
acquisition intangibles, during the years ended
Year Ended
Dollars in thousands December 31, 2021 December 31, 2020
Operating profit:
Segment operating profit:
Consumer Packaging $ 274,926 $ 304,437
Industrial Paper Packaging 226,798 184,495
All Other 63,060 90,956
Restructuring/Asset impairment charges (14,210) (145,580)
Amortization of acquisition intangibles (49,419)
(52,899)
Other non-base (charges)/income, net (14,302) (23,605)
Consolidated $ 486,853 $ 357,804
The following tables present the reconciliation of the Company's non-GAAP
financial measures to their most directly comparable GAAP financial measures for
each of the periods presented. These tables have been revised to reflect the
exclusion of amortization expense associated with acquisition intangibles from
base results.
For the three months ended
Amortization of
Dollars in thousands, except per Restructuring/Asset Acquisition
share data GAAP Impairment(1) Intangibles Other Adjustments(2) Base
Operating profit $ 120,309 $ 6,846 $ 12,749 $ 12,512 $ 152,416
Non-operating pension costs 7,284 - - (7,284) -
Interest expense, net 17,731 - - - 17,731
Income before income taxes $ 95,294 $ 6,846 $ 12,749 $ 19,796 $ 134,685
Provision for income taxes 24,045 1,626 3,158 5,633 34,462
Income before equity in earnings of affiliates$ 71,249 $ 5,220 $ 9,591 $ 14,163$ 100,223 Equity in earnings of affiliates, net of tax 1,044 - - - 1,044 Net income$ 72,293 $ 5,220 $ 9,591 $ 14,163$ 101,267 Net loss attributable to noncontrolling interests, net of tax 4 - - -
4
Net income attributable to Sonoco$ 72,297 $ 5,220 $ 9,591 $ 14,163$ 101,271 Per diluted common share*$ 0.71 $ 0.05 $ 0.09 $ 0.14$ 1.00 *Due to rounding individual items may not sum across --------------------------------------------------------------------------------
For the three months ended
Amortization of
Dollars in thousands, except per share Restructuring/Asset Acquisition
data GAAP Impairment(1) Intangibles Other Adjustments(2) Base
Operating profit $ 135,291 $ (1,445) $ 12,111 $ (5,236) $ 140,721
Non-operating pension costs 555,009 - - (555,009) -
Interest expense, net 14,794 - - 2,165 16,959
Loss from the early extinguishment of
debt 20,184 - - (20,184) -
(Loss)/income before income taxes$ (454,696) $ (1,445) $ 12,111 $ 567,792$ 123,762 (Benefit from) Provision for income taxes (118,151) 715 3,000 146,939
32,503
(Loss)/income before equity in earnings of affiliates$ (336,545) $ (2,160) $ 9,111 $ 420,853$ 91,259 Equity in earnings of affiliates, net of tax 2,306 - - - 2,306 Net (loss)/income$ (334,239) $ (2,160) $ 9,111 $ 420,853$ 93,565 Net loss attributable to noncontrolling interests, net of tax 169 - - -
169
Net (loss)/income attributable to Sonoco$ (334,070) $ (2,160) $ 9,111 $ 420,853$ 93,734 Diluted weighted average common shares outstanding(5): 100,082 - - 543 100,625 Per diluted common share*$ (3.34) $ (0.02) $ 0.09 $ 4.18$ 0.93 *Due to rounding individual items may not sum across For the six months ended July 4, 2021 Amortization of Dollars in thousands, except per share Restructuring/Asset Acquisition data GAAP Impairment(1) Intangibles Other Adjustments(2) Base Operating profit$ 255,600 $ 5,401 $ 24,860 $ 7,276$ 293,137 Non-operating pension costs 562,293 - - (562,293) - Interest expense, net 32,525 - - 2,165 34,690 Loss from the early extinguishment of debt 20,184 - - (20,184)
-
(Loss)/income before income taxes$ (359,402) $ 5,401 $ 24,860 $ 587,588$ 258,447 (Benefit from) Provision for income taxes (94,106) 2,341 6,158 152,572
66,965
(Loss)/income before equity in earnings of affiliates$ (265,296) $ 3,060 $ 18,702 $ 435,016$ 191,482 Equity in earnings of affiliates, net of tax 3,350 - - - 3,350 Net (loss)/income$ (261,946) $ 3,060 $ 18,702 $ 435,016$ 194,832 Net loss attributable to noncontrolling interests, net of tax 172 - - -
172
Net (loss)/income attributable to Sonoco$ (261,774) $ 3,060 $ 18,702 $ 435,016$ 195,004 Diluted weighted average common shares outstanding(5): 100,571 - - 498 101,069 Per diluted common share*$ (2.60) $ 0.03 $ 0.19 $ 4.30$ 1.93
*Due to rounding individual items may not sum across
--------------------------------------------------------------------------------
For the three months ended
Amortization of
Dollars and shares in thousands, Restructuring/Asset Acquisition
except per share data GAAP Impairment(1) Intangibles Other Adjustments(2) Base
Operating profit $ 126,512 $ 3,488 $ 12,257 $ (7,570) $ 134,687
Non-operating pension costs 525 - - (525) -
Interest expense, net 14,219 - - - 14,219
Income before income taxes $ 111,768 $ 3,488 $ 12,257 $ (7,045) $ 120,468
Provision for income taxes 2,564 312 3,036 16,683 22,595
Income before equity in earnings of affiliates$ 109,204 $ 3,176 $ 9,221 $ (23,728)$ 97,873 Equity in earnings of affiliates, net of tax 2,351 - - - 2,351 Net income$ 111,555 $ 3,176 $ 9,221 $ (23,728)$ 100,224 Net (income) attributable to noncontrolling interests, net of tax (415) - - -
(415)
Net income attributable to Sonoco$ 111,140 $ 3,176 $ 9,221 $ (23,728)
Per diluted common share*$ 1.12 $ 0.03 $ 0.09 $ (0.24)$ 1.00 *Due to rounding individual items may not sum across For the nine months ended October 3, 2021 Amortization of Dollars and shares in thousands, Restructuring/Asset Acquisition except per share data GAAP Impairment(1) Intangibles Other Adjustments(2) Base Operating profit$ 382,112 $ 8,889 $ 37,117 $ (294)$ 427,824 Non-operating pension costs 562,818 - - (562,818) - Interest expense, net 46,744 - - 2,165 48,909 Loss from the early extinguishment of debt 20,184 - - (20,184)
-
(Loss)/income before income taxes$ (247,634) $ 8,889 $ 37,117 $ 580,543$ 378,915 (Benefit from)/Provision for income taxes (91,542) 2,653 9,194 169,255
89,560
(Loss)/income before equity in earnings of affiliates$ (156,092) $ 6,236 $ 27,923 $ 411,288$ 289,355 Equity in earnings of affiliates, net of tax 5,701 - - - 5,701 Net (loss)/income$ (150,391) $ 6,236 $ 27,923 $ 411,288$ 295,056 Net (income) attributable to noncontrolling interests, net of tax (243) - - -
(243)
Net (loss)/income attributable to Sonoco$ (150,634) $ 6,236 $ 27,923 $ 411,288$ 294,813 Diluted weighted average common shares outstanding(5): 100,039 - - 468 100,507 Per diluted common share*$ (1.51) $ 0.06 $ 0.28 $ 4.09$ 2.93
*Due to rounding individual items may not sum across
--------------------------------------------------------------------------------
For the three months ended
Amortization of
Dollars and shares in thousands, Restructuring/Asset Acquisition
except per share data GAAP Impairment(1) Intangibles Other Adjustments(2) Base
Operating profit $ 104,741 $ 5,321 $ 12,302 $ 14,596 $ 136,960
Non-operating pension costs 5,598 - - (5,598) -
Interest expense, net 12,491 - - - 12,491
Income before income taxes $ 86,652 $ 5,321 $ 12,302 $ 20,194 $ 124,469
Provision for income taxes 24,112 2,710 3,047 (189) 29,680
Income before equity in earnings of
affiliates $ 62,540 $ 2,611 $ 9,255 $ 20,383 $ 94,789
Equity in earnings of affiliates,
net of tax 5,140 - - (1,394) 3,746
Net income $ 67,680 $ 2,611 $ 9,255 $ 18,989 $ 98,535
Net (income)/loss attributable to
noncontrolling interests, net of tax (2,523) - - 2,052 (471)
Net income attributable to Sonoco$ 65,157 $ 2,611 $ 9,255 $ 21,041$ 98,064 Per diluted common share*$ 0.66 $ 0.03 $ 0.09 $ 0.21$ 0.99 *Due to rounding individual items may not sum across For the year ended December 31, 2021 Amortization of Dollars and shares in thousands, except per Restructuring/Asset Acquisition share data GAAP Impairment(1) Intangibles Other Adjustments(3) Base Operating profit$ 486,853 $ 14,210 $ 49,419 $ 14,302$ 564,784 Non-operating pension costs 568,416 - - (568,416) - Interest expense, net 59,235 - - 2,165 61,400 Loss from the early extinguishment of debt 20,184 - - (20,184) - (Loss)/Income before income taxes$ (160,982) $ 14,210 $ 49,419 $ 600,737 $ -$ 503,384 (Benefit from)/Provision for income taxes (67,430) 5,363 12,241 169,066
119,240
(Loss)/Income before equity in earnings of affiliates$ (93,552) $ 8,847 $ 37,178 $ 431,671$ 384,144 Equity in earnings of affiliates, net of tax 10,841 - - (1,394) 9,447 Net (loss)/income$ (82,711) $ 8,847 $ 37,178 $ 430,277$ 393,591 Net (income)/loss attributable to noncontrolling interests, net of tax (2,766) - - 2,052
(714)
Net (loss)/income attributable to
8,847 $ 37,178 $ 432,329 $ 392,877
Diluted weighted average common shares
outstanding(5): 99,608 $ - - 469 100,077
Per diluted common share* $ (0.86) $ 0.09 $ 0.37 $ 4.32 $ 3.93
*Due to rounding individual items may not sum across
--------------------------------------------------------------------------------
For the year ended
Amortization of
Dollars and shares in thousands, except Restructuring/Asset Acquisition Base (as
per share data GAAP Impairment(1) Intangibles Other Adjustments(4) revised)
Operating profit $ 357,804 $ 145,580 $ 52,899 $ 23,605 $ 579,888
Non-operating pension costs 30,142 - - (30,142) -
Interest expense, net 72,070 - - - 72,070
Income before income taxes $ 255,592 $ 145,580 $ 52,899 $ 53,747 $ 507,818
Provision for income taxes 53,030 32,868 13,040 28,362
127,300
Income before equity in earnings of affiliates$ 202,562 $ 112,712 $ 39,859 $ 25,385 $
380,518
Equity in earnings of affiliates, net of tax 4,679 - - - 4,679 Net income$ 207,241 $ 112,712 $ 39,859 $ 25,385$ 385,197 Net loss/(income) attributable to noncontrolling interests, net of tax 222 (60) - -
162
Net income attributable to Sonoco$ 207,463 $ 112,652 $ 39,859 $ 25,385 $
385,359
Per diluted common share*$ 2.05 $ 1.11 $ 0.39 $ 0.25 $
3.81
*Due to rounding individual items may not sum across
(1) Restructuring/Asset impairment charges are a recurring item asSonoco's restructuring actions usually require several years to fully implement and the Company is continually seeking to take actions that could enhance its efficiency. Although recurring, 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. Additionally, 2020 includes net asset impairment charges totaling$100,242 mostly related to the Company's Plastics - Food thermoforming operations. (2) Other Adjustments are primarily comprised of costs related to potential and actual acquisitions and divestitures, non-operating pension costs (including settlement charges), losses on the early extinguishment of debt, gains from insurance proceeds, and gains/losses from the divestiture of businesses, net of the applicable tax effect. (3) Other Adjustments presented above reflects the combined total of "Acquisition/Divestiture Related Costs" and "Other Adjustments" included in the "Reconciliation of GAAP to Non-GAAP Financial Measures" table for the year endedDecember 31, 2021 in the Company's 2021 Form 10-K.
(4) Other Adjustments presented above reflects the combined total of
"Acquisition Related Costs" and "Other Adjustments" included in the
"Reconciliation of GAAP to Non-GAAP Financial Measures" table for the year ended
(5) Due to the magnitude of certain expenses considered by management to be non-base, the Company reported a 2021 GAAP net loss attributable toSonoco . In instances where a company incurs a net loss, including potential common shares in the denominator of a diluted earnings per-share computation will have an antidilutive effect on the per-share loss. GAAP therefore requires the exclusion of any unexercised share awards or other like instruments for purposes of calculating weighted average shares outstanding. Accordingly, the Company did not include any unexercised share awards or other like instruments in . . .
© Edgar Online, source
