Sonoco (NYSE: SON), one of the largest diversified global packaging companies, today reported financial results for its second quarter ended June 28, 2020, and provided an update related to the impact of the COVID-19 pandemic on the Company.
Second Quarter Highlights
*Second-quarter 2020 GAAP earnings per diluted share were $0.55, compared with $0.80 in 2019.
*Second-quarter 2020 GAAP earnings included net after-tax charges of $24.9 million related primarily to operational restructuring activity and non-operating pension costs. In the second quarter of 2019, GAAP earnings included net after-tax charges of $15.3 million related mostly to restructuring actions and non-operating pension costs.
*Base net income attributable to Sonoco (base earnings) for second-quarter 2020 was $0.79 per diluted share, compared with $0.95 in 2019. (See base earnings definition, explanation and reconciliation to GAAP earnings later in this release.) Sonoco previously provided second-quarter 2020 base earnings guidance of $0.73 to $0.83 per diluted share.
*Second-quarter 2020 net sales were $1.25 billion, compared with $1.36 billion in 2019.
*Cash flow from operations was $281.0 million in the first half of 2020, compared to $40.1 million in 2019. Free cash flow was $123.1 million, compared with $(144.9) million in the first six months of 2019. (See free cash flow definition and reconciliation to cash flow from operations later in this release.)
Second Quarter Review
Net sales for the second quarter of 2020 were $1.25 billion, down 8.4 percent 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. Second-quarter GAAP earnings included net after-tax non-base charges totaling $24.9 million, $16.7 million of which were related to operational restructuring activities primarily related to capacity reductions in the Company’s North America paper mill network. The remaining non-base charges consist mostly of non-operating pension costs and a non-base income tax charge related to the settlement of an income tax audit. In the second quarter of 2019, GAAP earnings included $15.3 million of after-tax non-base net charges, $10.0 million of which were related to restructuring activities with the remaining $5.3 million consisting primarily of non-operating pension costs. Adjusted to exclude these items, base earnings in the second quarter of 2020 were $80.1 million, or $0.79 per diluted share, compared with $96.5 million, or $0.95 per diluted share in 2019, a decrease of $16.3 million. Base earnings and base earnings per diluted share are non-GAAP financial measures adjusted to remove restructuring-related items, asset impairment charges, acquisition expenses, non-operating pension costs, and certain income tax-related events and other items, if any, the exclusion of which the Company believes improves comparability and analysis of the ongoing operating performance of the business. (See base earnings definition, explanation and reconciliation to GAAP earnings later in this release.)
Gross profit was $248.0 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 percent, down from 20.2 percent in the same period in 2019. Second-quarter selling, general and administrative expenses decreased $10.8 million from the prior year to $121.4 million. This decrease was largely driven by a significant focus across the business on reducing controllable costs as well as the impact of the pandemic on travel, employee medical and other expenses.
more detail at: https://investor.sonoco.com/news-releases/news-release-details/sonoco-reports-second-quarter-2020-results