Sonoco Reports Second Quarter and Year-to-Date 2015 Financial Results


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Sonoco Reports Second Quarter and Year-to-Date 2015 Financial Results

Company Completes Review of Mexico Packaging Center Misstatements


Restates Historical Consolidated Financial Results

Notifies of Late Filing of Second Quarter Form 10-Q

HARTSVILLE, S.C., Aug. 20, 2015 (GLOBE NEWSWIRE) -- Sonoco (NYSE:SON), one of the largest diversified global packaging companies, today reported consolidated financial results for the second quarter and year-to-date periods ending June 28, 2015, and restated financial results for the period ended June 29, 2014. The Company previously reported preliminary second quarter 2015 results on July 16, 2015.

Company Completes Review of Mexico Packaging Center Misstatements; Restates Historical Consolidated Financial Results; Notifies of Late Filing of Second Quarter Form 10-Q
As previously reported, in July 2015, the Company discovered the operating results for a packaging center in Irapuato, Mexico, part of the Company’s Display and Packaging segment, had been overstated since 2012. Sonoco, working with outside accounting and legal consultants, conducted a thorough review of financial results which was recently completed. Through this review, the Company determined that reported consolidated revenue and cost of sales had been misstated from 2012 through the first quarter of 2015, resulting in a cumulative overstatement of income before income taxes of $32.4 million and net income of approximately $23.3 million, or $.23 per diluted share. On July 16, 2015, the Company previously reported it expected the cumulative pre-tax impact to be approximately $3 million for the first quarter of 2015 and approximately $30 million for all prior periods, for a total of $33 million.

The Company concluded that the misstatements warranted a restatement of the Company’s financial statements for the years ended December 31, 2012, 2013, and 2014 as well as the interim periods within 2014 and the first quarter of 2015. As a result of the work required to complete its investigation of the Mexico packaging center misstatements, the Company was unable to timely file its Quarterly Report on Form 10-Q for the period ended June 28, 2015.  The Company has received a letter from the New York Stock Exchange (NYSE) indicating that, as a result of its failure to timely file its 2015 second quarter Quarterly Report on Form 10-Q, the Company is not in compliance with the continued listing requirements under the timely filing criteria outlined in Section 802.01E of the NYSE-Listed Company Manual. The Company expects to file such report next week, as well as an amended 2014 Annual Report on Form 10-K/A and an amended Quarterly Report on Form 10-Q/A for the period ended March 29, 2015, containing restated financial statements for the years ended December 31, 2014, 2013, and 2012 and the first quarter of 2015. These reports will contain more information regarding the restatement’s impact to the Company’s consolidated and segment financial statements as well as information about the material weaknesses in the Company’s internal control over financial reporting. Filing these reports will also bring the Company into compliance with the NYSE listing requirements.

Tables shown in this news release detail certain restatements to previously issued financial statements. Further information about the Company’s quarter and year-to-date results for the period ended June 28, 2015, can be found in the Company’s July 16, 2015, news release reporting preliminary results for the 2015 second quarter and in a presentation on the Company’s investor relations website at www.sonoco.com.

Second Quarter Results

  • Second quarter 2015 GAAP earnings per diluted share were $.63, compared with $.57 per diluted share in the same period of 2014, as restated. On July 16, 2015, Sonoco previously reported preliminary estimated second quarter 2015 GAAP earnings per diluted share of $.61.
  • Base net income attributable to Sonoco (base earnings*) for second quarter 2015 was $.68 per diluted share, compared with $.61 in the same period of 2014, as restated. The Company previously reported estimated base earnings of $.66 per diluted share for second quarter 2015. 

Year-to-date 2015 Results

  • Year-to-date 2015 GAAP earnings per diluted share were $1.47 per diluted share, compared with $1.06 in the same period in 2014, as restated. The Company previously reported year-to-date 2015 GAAP preliminary estimated results of $1.44
  • Year-to-date 2015 base earnings were $1.22, compared with $1.11 in the same period in 2014, as restated.  The Company previously reported year-to-date preliminary estimated base earnings of $1.19.

*Base earnings and base earnings per diluted share are non-GAAP financial measures adjusted to remove restructuring charges, asset impairment charges, acquisition expenses and other items, if any, the exclusion of which the Company believes improves comparability and analysis of the underlying financial performance of the business.

The following tables reconcile non-GAAP financial measures to the most closely applicable GAAP financial measures. See definition of Non-GAAP Financial Measures on page 10.

             
          Non-GAAP Adjustments  
Three Months Ended June 28, 2015 (Unaudited) GAAP   Restructuring / Asset
Impairment
Charges(1)
  Other Adjustments(3)   Base
                   
Net sales      $   1,248,590     $   -     $   -     $   1,248,590  
Cost of sales       1,008,274         -         -         1,008,274  
Gross profit       240,316         -         -         240,316  
Selling, general and administrative expenses     130,887         -         (1,703 )       129,184  
Restructuring/Asset impairment charges     10,445         (10,445 )       -         -  
Income before interest and income taxes     98,984         10,445         1,703         111,132  
Interest expense, net       13,601         -         -         13,601  
Income before income taxes     85,383         10,445         1,703         97,531  
Provision for income taxes     24,023         3,683         3,282         30,988  
Income before equity in earnings of affiliates     61,360         6,762         (1,579 )       66,543  
Equity in earnings of affiliates, net of taxes     3,269         -         -         3,269  
Net income         64,629         6,762         (1,579 )       69,812  
Net (income) attributable to noncontrolling interests     (250 )       (55 )       -         (305 )
Net income attributable to Sonoco $    64,379     $    6,707     $    (1,579 )   $    69,507  
                   
Per Diluted Share   $    0.63     $    0.07     $    (0.02 )   $    0.68  
                   
                   
          Non-GAAP Adjustments    
Three Months Ended June 29, 2014 (Unaudited) GAAP
(As Restated)
  Restructuring / Asset
Impairment
Charges(1)
  Other Adjustments(3)   Base
(As Restated)
                   
Net sales      $   1,247,616     $   -     $   -     $   1,247,616  
Cost of sales       1,018,666         -         -         1,018,666  
Gross profit       228,950         -         -         228,950  
Selling, general and administrative expenses     126,455         -         (1,246 )       125,209  
Restructuring/Asset impairment charges     3,671         (3,671 )       -         -  
Income before interest and income taxes     98,824         3,671         1,246         103,741  
Interest expense, net       13,135         -         -         13,135  
Income before income taxes     85,689         3,671         1,246         90,606  
Provision for income taxes     29,271         977         46         30,294  
Income before equity in earnings of affiliates     56,418         2,694         1,200         60,312  
Equity in earnings of affiliates, net of taxes     3,126         -         -         3,126  
Net income         59,544         2,694         1,200         63,438  
Net (income) attributable to noncontrolling interests     (125 )       (13 )       -         (138 )
Net income attributable to Sonoco $    59,419     $    2,681     $    1,200     $    63,300  
                   
Per Diluted Share   $    0.57     $    0.03     $    0.01     $    0.61  
   
                   
(1) Restructuring/Asset impairment charges are a recurring item as Sonoco’s restructuring programs 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.
(2) Included in 2015 Restructuring/Asset impairment charges are  disposal and income tax gains related to the sale of two of the Company's metal end and closures  plants.
(3) Other adjustments consist primarily of acquisition-related costs and non-base income tax charges
 


          Non-GAAP Adjustments  
Six Months Ended June 28, 2015 (Unaudited) GAAP   Restructuring / Asset
Impairment
Charges(1,2)
  Other Adjustments(3)   Base
                   
Net sales      $   2,454,642     $   -     $   -     $   2,454,642  
Cost of sales       1,993,936         -         -         1,993,936  
Gross profit       460,706         -         -         460,706  
Selling, general and administrative expenses     227,552         -         29,674         257,226  
Restructuring/Asset impairment charges     10,086         (10,086 )       -         -  
Income before interest and income taxes     223,068         10,086         (29,674 )       203,480  
Interest expense, net       26,822         -         -         26,822  
Income before income taxes     196,246         10,086         (29,674 )       176,658  
Provision for income taxes     50,244         15,276         (9,232 )       56,288  
Income before equity in earnings of affiliates     146,002         (5,190 )       (20,442 )       120,370  
Equity in earnings of affiliates, net of taxes     4,315         -         -         4,315  
Net income         150,317         (5,190 )       (20,442 )       124,685  
Net (income) attributable to noncontrolling interests     (158 )       (70 )       -         (228 )
Net income attributable to Sonoco $    150,159     $    (5,260 )   $    (20,442 )   $    124,457  
                   
Per Diluted Share   $    1.47     $    (0.05 )   $    (0.20 )   $    1.22  
                   
                   
          Non-GAAP Adjustments    
Six Months Ended June 29, 2014 (Unaudited) GAAP
(As Restated)
  Restructuring / Asset
Impairment
Charges(1)
  Other Adjustments(4)   Base
(As Restated)
                   
Net sales      $   2,437,648     $   -     $   -     $   2,437,648  
Cost of sales       1,998,937         -         -         1,998,937  
Gross profit       438,711         -         -         438,711  
Selling, general and administrative expenses     250,205         -         (1,270 )       248,935  
Restructuring/Asset impairment charges     5,663         (5,663 )       -         -  
Income before interest and income taxes     182,843         5,663         1,270         189,776  
Interest expense, net       25,778         -         -         25,778  
Income before income taxes     157,065         5,663         1,270         163,998  
Provision for income taxes     51,782         1,388         55         53,225  
Income before equity in earnings of affiliates     105,283         4,275         1,215         110,773  
Equity in earnings of affiliates, net of taxes     4,602         -         -         4,602  
Net income         109,885         4,275         1,215         115,375  
Net (income) attributable to noncontrolling interests     (48 )       (15 )       -         (63 )
Net income attributable to Sonoco $    109,837     $    4,260     $    1,215     $    115,312  
                   
Per Diluted Share   $    1.06     $    0.04     $    0.01     $    1.11  
   
(1) Restructuring/Asset impairment charges are a recurring item as Sonoco’s restructuring programs 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.
(2) Included in 2015 Restructuring/Asset impairment charges are  disposal and income tax gains related to the sale of two of the Company's metal end and closures
plants.
(3) Other adjustments consist primarily of acquisition-related costs, a gain related to the release of reserves related to the partial settlement of the Fox River environmental claims, and an income tax gain from the release of a valuation allowance against tax loss carryforwards in Spain.
(4) Other adjustments consist primarily of acquisition-related costs and non-base income tax charges
 

Second Quarter and Year-to-Date Segment Results 

Sonoco reports its financial results in four operating segments: Consumer Packaging, Paper and Industrial Converted Products, Protective Solutions, and Display and Packaging. Segment operating results do not include restructuring and asset impairment charges, acquisition expenses, interest income and expense, income taxes or certain other items, if any, the exclusion of which the Company believes improves comparability and analysis. 

       
FINANCIAL SEGMENT INFORMATION (Unaudited)      
(Dollars in thousands)      
                   
      THREE MONTHS ENDED   SIX MONTHS ENDED
          June 29, 2014       June 29, 2014
      June 28, 2015   (As Restated)   June 28, 2015   (As Restated)
Net sales                  
  Consumer Packaging $   531,114     $   473,666     $   1,050,991     $   938,591  
  Display and Packaging      141,604         162,751         287,389         320,179  
  Paper and Industrial Converted Products     448,876         490,016         871,187         945,626  
  Protective Solutions      126,996         121,183         245,075         233,252  
  Consolidated $    1,248,590     $    1,247,616     $    2,454,642     $    2,437,648  
                   
Income before interest and income taxes:            
  Segment operating profit:              
  Consumer Packaging $   57,530     $   42,831     $   111,558     $   91,014  
  Display and Packaging      1,035         4,727         1,873         7,542  
  Paper and Industrial Converted Products     38,963         46,543         66,760         76,293  
  Protective Solutions      13,604         9,640         23,289         14,927  
  Restructuring/Asset impairment charges     (10,445 )       (3,671 )       (10,086 )       (5,663 )
  Other non-base income/(charges)     (1,703 )       (1,246 )       29,674         (1,270 )
  Consolidated $    98,984     $    98,824     $    223,068     $    182,843  
                                 

About Sonoco

Founded in 1899, Sonoco is a global provider of a variety of consumer packaging, industrial products, protective packaging, and displays and packaging supply chain services. With annualized net sales of approximately $5 billion, the Company has 20,800 employees working in more than 330 operations in 34 countries, serving some of the world’s best known brands in some 85 nations. Sonoco is a proud member of the 2014/2015 Dow Jones Sustainability World Index. For more information on the Company, visit our website at www.sonoco.com.

Forward-looking Statements
Statements included in 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 Exchange Act of 1934, as amended. In addition, the Company and its representatives may from time to time make other oral or written statements that are also "forward-looking statements." Words such as “estimate,” “project,” “intend,” “expect,” “believe,” “consider,” “plan,” “strategy,” “opportunity,” "commitment," “target,” “anticipate,” “objective,” “goal,” “guidance,” “outlook,” “forecast,” “future,” "re-envision," “will,” “would,” "can," "could," "may," "might," “aspires,” "potential," or the negative thereof, and similar expressions identify forward-looking statements.

Forward-looking statements include, but are not limited to, statements regarding: availability and supply of raw materials, and offsetting high raw material costs; improved productivity and cost containment; improving margins and leveraging strong cash flow and financial position; effects of acquisitions and dispositions; realization of synergies resulting from acquisitions; costs, timing and effects of restructuring activities; adequacy and anticipated amounts and uses of cash flows; expected amounts of capital spending; refinancing and repayment of debt; financial strategies and the results expected of them; financial results for future periods; producing improvements in earnings; profitable sales growth and rates of growth; market leadership; research and development spending; extent of, and adequacy of provisions for, environmental liabilities; adequacy of income tax provisions, realization of deferred tax assets, outcomes of uncertain tax issues and tax rates; goodwill impairment charges and fair values of reporting units; future asset impairment charges and fair values of assets; anticipated contributions to pension and postretirement benefit plans, fair values of plan assets, long-term rates of return on plan assets, and projected benefit obligations and payments; creation of long-term value and returns for shareholders; continued payment of dividends; and planned stock repurchases.

Such forward-looking statements are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management. Such information includes, without limitation, discussions as to guidance and other estimates, perceived opportunities, expectations, beliefs, plans, strategies, goals and objectives concerning our future financial and operating performance. These statements are not guarantees of future performance and are subject to certain 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, uncertainties and assumptions include, without limitation:

  • availability and pricing of raw materials, energy and transportation, and the Company's ability to pass raw material, energy and transportation price increases and surcharges through to customers or otherwise manage these commodity pricing risks;
  • costs of labor;
  • work stoppages due to labor disputes;
  • success of new product development, introduction and sales;
  • consumer demand for products and changing consumer preferences;
  • ability to be the low-cost global leader in customer-preferred packaging solutions within targeted segments;
  • competitive pressures, including new product development, industry overcapacity, and changes in competitors' pricing for products;
  • ability to maintain or increase productivity levels, contain or reduce costs, and maintain positive price/cost relationships;
  • ability to improve margins and leverage cash flows and financial position;
  • continued strength of our paperboard-based tubes and cores and composite can operations;
  • ability to manage the mix of business to take advantage of growing markets while reducing cyclical effects of some of the Company's existing businesses on operating results;
  • ability to maintain innovative technological market leadership and a reputation for quality;
  • ability to profitably maintain and grow existing domestic and international business and market share;
  • ability to expand geographically and win profitable new business;
  • ability to identify and successfully close suitable acquisitions at the levels needed to meet growth targets, and successfully integrate newly acquired businesses into the Company's operations;
  • the costs, timing and results of restructuring activities;
  • availability of credit to us, our customers and suppliers in needed amounts and on reasonable terms;
  • effects of our indebtedness on our cash flow and business activities;
  • fluctuations in obligations and earnings of pension and postretirement benefit plans;
  • accuracy of assumptions underlying projections of benefit plan obligations and payments, valuation of plan assets, and projections of long-term rates of return;
  • cost of employee and retiree medical, health and life insurance benefits;
  • resolution of income tax contingencies;
  • foreign currency exchange rate fluctuations, interest rate and commodity price risk and the effectiveness of related hedges;
  • changes in U.S. and foreign tax rates, and tax laws, regulations and interpretations thereof;
  • accuracy in valuation of deferred tax assets;
  • accuracy of assumptions underlying projections related to goodwill impairment testing, and accuracy of management's assessment of goodwill impairment;
  • accuracy of assumptions underlying fair value measurements, accuracy of management's assessments of fair value and fluctuations in fair value;
  • liability for and anticipated costs of environmental remediation actions;
  • effects of environmental laws and regulations;
  • operational disruptions at our major facilities;
  • failure or disruptions in our information technologies;
  • loss of consumer or investor confidence;
  • ability to protect our intellectual property rights;
  • actions of domestic or foreign government agencies and changes in laws and regulations affecting the Company;
  • international, national and local economic and market conditions and levels of unemployment; and
  • economic disruptions resulting from terrorist activities and natural disasters.

The Company undertakes no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed herein might not occur.

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 website, sec.gov, and from the Company’s investor relations department and the Company’s website, www.sonoco.com.

References to our Website Address
References to our website address and domain names throughout this release are for informational purposes only, or to fulfill specific disclosure requirements of the Securities and Exchange Commission’s rules or the New York Stock Exchange Listing Standards. These references are not intended to, and do not, incorporate the contents of our website by reference into this release.

 
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
          December 31, 2014  
      June 28, 2015   (As Restated)  
Assets            
Current Assets:          
  Cash and cash equivalents $   217,775     $   161,168    
  Trade accounts receivable, net of allowances     676,578         653,737    
  Other receivables     41,003         38,580    
  Inventories       417,969         420,276    
  Prepaid expenses and deferred income taxes     95,507         100,028    
          1,448,832         1,373,789    
Property, plant and equipment, net     1,114,375         1,148,607    
Goodwill         1,160,932         1,177,962    
Other intangible assets, net     265,696         280,935    
Other assets       215,654         212,618    
      $    4,205,489     $    4,193,911    
Liabilities and Shareholders’ Equity      
Current Liabilities:          
  Payable to suppliers and other payables $   816,004     $   851,314    
  Notes payable and current portion of long-term debt     146,780         52,280    
  Income taxes payable     7,541         8,599    
      $   970,325     $   912,193    
Long-term debt, net of current portion     1,124,580         1,200,885    
Pension and other postretirement benefits     444,293         444,231    
Deferred income taxes and other      123,156         132,755    
Total equity       1,543,135         1,503,847    
      $    4,205,489     $    4,193,911    
                     


CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars and shares in thousands except per share)
                   
      THREE MONTHS ENDED   SIX MONTHS ENDED
          June 29, 2014       June 29, 2014
      June 28, 2015   (As Restated)   June 28, 2015   (As Restated)
                   
Net sales      $   1,248,590     $   1,247,616     $   2,454,642     $   2,437,648  
Cost of sales       1,008,274         1,018,666         1,993,936         1,998,937  
Gross profit       240,316         228,950         460,706         438,711  
Selling, general and administrative expenses     130,887         126,455         227,552         250,205  
Restructuring/Asset impairment charges     10,445         3,671         10,086         5,663  
Income before interest and income taxes $   98,984     $   98,824     $   223,068     $   182,843  
Net interest expense       13,601         13,135         26,822         25,778  
Income before income taxes and equity in earnings of affiliates     85,383         85,689         196,246         157,065  
Provision for income taxes     24,023         29,271         50,244         51,782  
Income before equity in earnings of affiliates     61,360         56,418         146,002         105,283  
Equity in earnings of affiliates, net of tax     3,269         3,126         4,315         4,602  
Net income         64,629         59,544         150,317         109,885  
Net loss attributable to noncontrolling interests     (250 )       (125 )       (158 )       (48 )
Net income attributable to Sonoco $    64,379     $    59,419     $    150,159     $    109,837  
                   
Weighted average common shares outstanding – diluted     102,424         103,446         102,362         103,590  
                   
Diluted earnings per common share $ 0.63     $ 0.57     $ 1.47     $ 1.06  
Dividends per common share $ 0.35     $ 0.32     $ 0.67     $ 0.63  
 
       
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
                   
      THREE MONTHS ENDED   SIX MONTHS ENDED
          June 29, 2014       June 29, 2014
      June 28, 2015   (As Restated)   June 28, 2015   (As Restated)
                   
Net income    $   64,629     $   59,544     $   150,317     $   109,885  
Asset impairment charges     2,187         299         2,462         791  
Depreciation, depletion and amortization     52,147         48,337         104,024         95,516  
Fox River environmental reserves     (488 )       (14,938 )       (33,263 )       (14,934 )
Net pension and postretirement plan contributions     6,852         241         2,847         (34,161 )
Changes in working capital     11,717         (19,007 )       (36,191 )       (75,978 )
Other operating activity       (24,292 )       (14,406 )       (19,955 )       24,415  
  Net cash provided by operating activities     112,752         60,070         170,241         105,534  
                   
Purchase of property, plant and equipment, net      (45,461 )       (46,880 )       (84,815 )       (82,298 )
(Costs of acquisitions, exclusive of cash)/Proceeds from dispositions     (15,697 )       (10,964 )       13,411         (10,964 )
Net debt proceeds       15,340         50,840         16,665         54,535  
Cash dividends       (35,116 )       (32,628 )       (67,379 )       (64,353 )
Shares acquired under announced buyback     -          (18,468 )       -          (27,103 )
Other, including effects of exchange rates on cash     (14,847 )       6,403         8,484         6,862  
                   
Net increase/(decrease) in cash and cash equivalents     16,971         8,373         56,607         (17,787 )
Cash and cash equivalents at beginning of period     200,804         191,407         161,168         217,567  
Cash and cash equivalents at end of period $   217,775     $   199,780     $   217,775     $   199,780  
                               

Definition 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” or "GAAP" results. Some of the information presented in this press release reflects the Company’s “as reported” or "GAAP" results adjusted to exclude amounts related to restructuring initiatives, asset impairment charges, environmental charges, acquisition costs, excess insurance recoveries, losses from the early extinguishment of debt, and certain other items, if any, the exclusion of which management believes improves comparability and analysis of the underlying financial performance of the business. These adjustments result in the non-GAAP financial measures referred to in this press release as “Base Earnings” and “Base Earnings per Diluted Share.”                                                                          

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. 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 which includes all of the items impacting financial results and the non-GAAP measures that exclude certain elements, as described above. 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. Whenever reviewing a non-GAAP financial measure, investors are encouraged to fully review and consider the related reconciliation as detailed herein.                                    

Restated Quarterly Segment Results for 2013, 2014 and First Quarter 2015
Provided below are restated sales and operating profits, by segment, for the first quarter of 2015 and four quarters of 2013 and 2014.

   
THREE MONTHS ENDED (UNAUDITED) As Restated
      March 29, 2015
Net sales      
  Consumer Packaging $   519,877  
  Display and Packaging      145,785  
  Paper and Industrial Converted Products     422,311  
  Protective Solutions      118,079  
  Consolidated $    1,206,052  
       
Income before interest and income taxes:
  Segment operating profit:  
  Consumer Packaging $   54,028  
  Display and Packaging      838  
  Paper and Industrial Converted Products     27,797  
  Protective Solutions      9,685  
  Restructuring/Asset impairment charges     359  
  Other non-base income/(charges)     31,377  
  Consolidated $    124,084  
         


               
THREE MONTHS ENDED (UNAUDITED) As Restated   As Restated   As Restated   As Restated
      March 30, 2014   June 29, 2014   September 28, 2014   December 31, 2014
Net sales                  
  Consumer Packaging $   464,925     $   473,666     $   479,609     $   544,697  
  Display and Packaging      157,428         162,751         177,364         169,272  
  Paper and Industrial Converted Products     455,610         490,016         480,741         476,081  
  Protective Solutions      112,069         121,183         124,789         126,793  
  Consolidated $    1,190,032     $    1,247,616     $    1,262,503     $    1,316,843  
                   
Income before interest and income taxes:            
  Segment operating profit:              
  Consumer Packaging   48,183       42,831       49,769       59,808  
  Display and Packaging    2,815       4,727       2,007       1,131  
  Paper and Industrial Converted Products   29,750       46,543       48,996       36,980  
  Protective Solutions    5,287       9,640       10,277       8,799  
  Restructuring/Asset impairment charges     (1,992 )       (3,671 )       (5,908 )       (11,221 )
  Other non-base income/(charges)     (24 )       (1,246 )       888         (6,271 )
  Consolidated $    84,019     $    98,824     $    106,029     $    89,226  
                   
                   
THREE MONTHS ENDED (UNAUDITED) As Restated   As Restated   As Restated   As Restated
      March 31, 2013   June 30, 2013   September 29, 2013   December 31, 2013
Net sales                  
  Consumer Packaging $   463,300     $   475,013     $   473,332     $   481,888  
  Display and Packaging      147,869         159,151         172,006         159,547  
  Paper and Industrial Converted Products     454,207         473,217         467,847         463,609  
  Protective Solutions      117,131         120,510         118,610         114,420  
  Consolidated $    1,182,507     $    1,227,891     $    1,231,795     $    1,219,464  
                   
Income before interest and income taxes:            
  Segment operating profit:              
  Consumer Packaging   42,275       47,301       48,960       48,334  
  Display and Packaging    12       5,376       5,777         (1,959 )
  Paper and Industrial Converted Products   31,004       35,991       37,722       33,377  
  Protective Solutions    9,724       11,376       11,029       7,955  
  Restructuring/Asset impairment charges     (4,289 )       (8,678 )       (5,818 )       (6,253 )
  Other non-base income/(charges)     (866 )       (88 )       563         610  
  Consolidated $    77,860     $    91,278     $    98,233     $    82,064  
                                 

Contact: Roger Schrum
+843-339-6018
roger.schrum@sonoco.com

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