Date of Report (Date of earliest event reported): March 30, 2021
SONOCO PRODUCTS COMPANY
Commission File No. 001-11261
Incorporated under the laws
I.R.S. Employer Identification
of South Carolina
No. 57-0248420
1 N. Second St.
Hartsville, South Carolina29550
Telephone: 843/383-7000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
No par value common stock
SON
New York Stock Exchange, LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
Section 8-Other Events
Item 8.01Other Events
As previously disclosed, Sonoco Products Company (the "Company") changed its operating and reporting structure in January 2021 and, as a result, realigned certain of its reportable segments effective January 1, 2021. The revised structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as "All Other." The Company's former Protective Solutions and Display and Packaging segments have been eliminated and the underlying businesses and their results have been reallocated into All Other or, in certain cases, subsumed into the remaining two segments. Changes to the Consumer Packaging segment include moving the TEQ healthcare packaging and Industrial Plastics business units to All Other. The Industrial Paper Packaging segment, previously called Paper and Industrial Converted Products, remains unchanged except that it now includes the Company's fiber protective packaging business unit which was previously included in the Protective Solutions segment. All Other includes our healthcare and protective packaging businesses, including TEQ, Sonoco ThermoSafe, consumer and automotive molded foam, Alloyd retail security, and the U.S. Display and Packaging business units.
The Company is providing in this Form 8-K revisions to the segment information previously presented in the footnotes to the consolidated financial statements for each quarter of 2020 and 2019 and the full years ended December 31, 2020 and 2019, in order to reflect the new segment structure. The Current Report does not reflect events occurring subsequent to the filing of the 2020 Form 10-K and does not modify or update the disclosures therein in any way, other than as required to reflect the change in segments as described above. Beginning in 2021, Sonoco's financial statements will reflect the realignment of its reportable segments with prior periods adjusted accordingly. The information in this Form 8-K should be read in conjunction with the 2020 Form 10-K and our subsequent filings with the SEC.
The following tables set forth the Company's financial results by quarter and full year under the new reportable segment structure for the historical periods within and for 2020 and 2019:
Quarterly Reportable Segment Results (Unaudited)
2020
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
Net sales:
Consumer Packaging
$
540,569
$
573,167
$
546,208
$
569,915
$
2,229,859
Industrial Paper Packaging
502,491
455,025
490,368
543,590
1,991,474
All Other
260,236
217,293
275,738
262,843
1,016,110
Consolidated
$
1,303,296
$
1,245,485
$
1,312,314
$
1,376,348
$
5,237,443
Intersegment sales1:
Consumer Packaging
$1,106
$1,154
$919
$1,254
$4,433
Industrial Paper Packaging
24,502
24,508
24,528
25,719
99,257
All Other
2,682
1,475
1,814
1,979
7,950
Consolidated
$28,290
$27,137
$27,261
$28,952
$111,640
Operating profit:
Segment operating profit2:
Consumer Packaging
$
63,756
$
84,456
$
64,370
$
65,862
$
278,444
Industrial Paper Packaging
59,601
33,229
41,034
42,945
176,809
All Other
20,555
8,871
25,137
17,173
71,736
Restructuring/Asset impairment charges
(12,599)
(22,885)
(24,149)
(85,950)
(145,583)
Other, net
(1,210)
56
352
(22,803)
(23,605)
Consolidated operating profit
$130,103
$103,727
$106,744
$17,227
$
357,801
Quarterly Reportable Segment Results (Unaudited)
2019
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
Net sales:
Consumer Packaging
$
555,865
$
570,630
$
551,113
$
530,966
$
2,208,574
Industrial Paper Packaging
528,030
523,668
526,420
519,762
2,097,880
All Other
267,810
265,423
276,398
258,122
1,067,753
Consolidated
$
1,351,705
$
1,359,721
$
1,353,931
$
1,308,850
$
5,374,207
Intersegment sales1:
Consumer Packaging
$
774
$
1,004
$
1,307
$
2,215
$
5,300
Industrial Paper Packaging
25,590
24,660
27,757
32,984
110,991
All Other
2,875
2,582
2,513
2,773
10,743
Consolidated
$
29,239
$
28,246
$
31,577
$
37,972
$
127,034
Operating profit:
Segment operating profit2:
Consumer Packaging
$
55,729
$
57,195
$
52,237
$
42,247
$
207,408
Industrial Paper Packaging
55,336
68,057
66,153
55,436
244,982
All Other
16,895
19,083
20,677
16,347
73,002
Restructuring/Asset impairment charges
(10,672)
(13,355)
(6,615)
(29,238)
(59,880)
Other, net
(400)
(1,212)
6,096
(2,914)
1,570
Consolidated operating profit
$
116,888
$
129,768
$
138,548
$
81,878
$
467,082
1Intersegment sales are recorded at a market-related transfer price. Due to reclassifications of certain businesses within our reportable segments and All Other, certain intersegment sales are now intrasegment sales and thus totals for intersegment sales will differ from previously disclosed amounts.
2"Segment operating profit" is defined as the segment's portion of "Operating profit" excluding restructuring and asset impairment charges, acquisition and disposition-related expenses, interest income and expense, income taxes or certain other items, if any, the exclusion of which the Company believes improves comparability and analysis of the financial performance of the business. General corporate expenses have been allocated as operating costs to each of the Company's reportable segments and to the businesses included in All Other.
The following table sets forth financial information about each of the Company's new reportable segments and "All Other" for the years ended December 31, 2020 and 2019:
Years ended December 31 (Unaudited)
Consumer Packaging
Industrial Paper Packaging
All Other
Corporate
Consolidated
Total Revenue
2020
$
2,234,292
2,090,731
$
1,024,060
$
—
$
5,349,083
2019
2,213,874
2,208,871
1,078,496
—
5,501,241
Intersegment Sales1
2020
$
4,433
$
99,257
$
7,950
$
—
$
111,640
2019
5,300
110,991
10,743
—
127,034
Sales to Unaffiliated Customers
2020
$
2,229,859
$
1,991,474
$
1,016,110
$
—
$
5,237,443
2019
2,208,574
2,097,880
1,067,753
—
5,374,207
Income Before Income Taxes2
2020
$
278,443
$
176,809
$
71,737
$
(271,397)
$
255,592
2019
207,408
244,982
73,002
(144,626)
380,766
Depreciation, Depletion and Amortization3
2020
$
109,310
94,801
$
51,248
$
—
$
255,359
2019
107,948
86,861
44,331
—
239,140
Capital Expenditures
2020
$
59,040
$
87,549
$
24,701
$
22,837
$
194,127
2019
61,787
112,852
14,204
7,091
195,934
1Intersegment sales are recorded at a market-related transfer price. Due to reclassifications of certain businesses within our reportable segments and All Other, certain intersegment sales are now intrasegment sales and thus totals for intersegment sales will differ from previously disclosed amounts.
2Included in Corporate above are interest expense, interest income, restructuring/asset impairment charges, property insurance settlement gains, non-operating pension costs, acquisition-related charges, and other non-operational income and expenses associated with the following segments and the businesses included in All Other:
Consumer Packaging
Industrial Paper Packaging
All Other
Corporate
Total
2020
$
100,166
$
33,450
$
27,835
$
109,946
$
271,397
2019
40,831
5,491
1,828
96,476
144,626
The remaining amounts reported as Corporate consist of interest expense, interest income, non-operating pension costs, and other non-operational income and expenses not associated with a particular segment.
3Depreciation, Depletion and Amortization incurred in Corporate is allocated to the reportable segments and the businesses in All Other.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
