Sonoco Reports Strong Second Quarter 2022 Results

HARTSVILLE, S.C., July 21, 2022 -- Sonoco (NYSE: SON), one of the largest sustainable global packaging companies, today reported financial results for its second quarter ended July 3, 2022.

Second Quarter Highlights

• Net sales were a record $1.91 billion, an approximately 38 percent increase from last year's second quarter 2021 sales of $1.38 billion.
• GAAP net income per diluted share was $1.33, compared with a loss of $(3.34) in the same period in 2021.
• GAAP net income includes net after-tax, non-base charges totaling $42.1 million, or $0.43 per diluted share. These charges largely consist of amortization of acquired intangibles, acquisition-related expenses, including certain aspects of purchase accounting, other restructuring costs, and an increase in the Last In, First Out ("LIFO") inventory reserve. In the second quarter of 2021, GAAP earnings included net after-tax, non-base charges of $427.8 million, or $4.27 per diluted share, as further described in the Second Quarter Review.
• Base net income attributable to Sonoco ("base earnings") was $1.76 per diluted share, an approximately 89 percent increase from $0.93 per diluted share in the same period of 2021. The 2021 base earnings results throughout the release have been revised to conform with the Company’s base earnings definition which excludes amortization of acquisition intangibles. (See base earnings definition, explanation and reconciliation to GAAP earnings later in this release.)
• Cash flow from operations was $184.5 million for the first half of 2022, compared with $102.0 million in the same period of 2021. Free cash flow was a provision of $40.3 million, compared with $9.4 million generated in the same period of 2021. (See free cash flow definition, explanation and reconciliation to cash flow from operations later in this release.)

2022 Third-quarter and Full-Year Guidance

• Third-quarter base earnings is expected to be in a range of $1.35 to $1.45 per diluted share. Base net income for the third quarter of 2021 was $1.00 per diluted share.
• The Company has increased its outlook for full-year base earnings to a range of $6.20 to $6.30 per diluted share. Full-year base earnings per diluted share in 2021 was $3.93.
• Full-year 2022 guidance for cash provided from operations remains unchanged at a range of $690 million to $740 million and free cash flow guidance remains at $365 million to $415 million.

Note: Third-quarter and full-year 2022 GAAP guidance are not provided in this release due to the likely occurrence of one or more of the following, the timing and magnitude of which we are unable to reliably forecast: restructuring costs and restructuring-related impairment charges, acquisition/divestiture-related costs, gains or losses on the sale of businesses or other assets, and the income tax effects of these items and/or other income tax-related events. These items could have a significant impact on the Company's future GAAP financial results.

CEO Comments
Commenting on the Company’s performance, Howard Coker, President and Chief Executive Officer, said, "Our Sonoco team delivered strong second-quarter results which exceeded the high-end of our raised guidance. Our current-quarter performance represents a step-change improvement year-over-year and resulted in record sales and record net income driven by continued strong execution in our Consumer Packaging and Industrial Paper Packaging segments. Overall, the Company's second-quarter earnings primarily benefited from continued strong strategic pricing performance across most of our businesses, continued strong results from the Sonoco Metal Packaging ("Metal Packaging") acquisition and productivity gains. These positive factors were partially offset by the impact of foreign currency translation.

"Our Consumer Packaging segment achieved record sales while operating profit grew approximately 114 percent versus the prior-year period primarily due to continued strong performance from Metal Packaging and Global Rigid Paper Containers, continued solid price/cost performance and improved productivity despite continued supply chain disruptions. Our Industrial Paper Packaging segment also produced record sales and operating profit, which improved approximately 57 percent versus the prior year period primarily from continued strong price/cost performance. Finally, our All Other group of businesses showed improvement during the quarter with operating profit up approximately 6 percent over the same period in the prior year due to positive price/cost performance and productivity."

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Source: Sonoco

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