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

Friday, August 21, 2015

Press release from the issuing company

HARTSVILLE, S.C. - 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.

Full Release

 

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Label & Packaging Editor

Jennifer Matt

Patrick Henry, Section Editor
Pat has covered graphic communications for nearly 30 years as a reporter, an editor, and a commentator.

 

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