<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC
20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 28, 1997 Commission File No. 1-11261
SONOCO PRODUCTS COMPANY
Incorporated under the laws I.R.S. Employer Identification
of South Carolina No. 57-0248420
Post Office Box 160
Hartsville, South Carolina 29551-0160
Telephone: 803-383-7000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock at November 2, 1997:
Common stock, no par value: 95,727,099
<PAGE> 2
SONOCO PRODUCTS COMPANY
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
Consolidated Balance Sheets - September 28, 1997 and
December 31, 1996
Consolidated Statements of Income - Three Months and
Nine Months Ended September 28, 1997 and
September 29, 1996
Consolidated Statements of Cash Flows -
Nine Months Ended September 28, 1997 and
September 29, 1996
Notes to Consolidated Financial Statements
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 2. CHANGES IN SECURITIES
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURE
<PAGE> 3
SONOCO PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars and shares in thousands)
<TABLE>
<CAPTION>
September 28,
1997 December 31,
(unaudited) 1996 *
-------------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 57,114 $ 71,260
Trade accounts receivable, net of allowances 354,201 329,963
Other receivables 24,534 38,240
Inventories:
Finished and in process 123,423 123,224
Materials and supplies 122,365 137,236
Prepaid expenses 20,737 26,121
Deferred income taxes 10,788 11,605
----------- -----------
713,162 737,649
PROPERTY, PLANT AND EQUIPMENT, NET 1,042,220 995,415
COST IN EXCESS OF FAIR VALUE OF ASSETS PURCHASED, NET 431,353 455,567
OTHER ASSETS 222,975 198,909
----------- -----------
Total assets $ 2,409,710 $ 2,387,540
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Payable to suppliers $ 192,616 $ 205,741
Accrued expenses and other 155,408 111,804
Accrued wages and other compensation 20,277 29,428
Notes payable and current portion of
long-term debt 100,886 102,062
Taxes on income 30,173 26,081
----------- -----------
499,360 475,116
LONG-TERM DEBT 705,671 791,026
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 104,453 107,265
DEFERRED INCOME TAXES AND OTHER 108,506 93,520
SHAREHOLDERS' EQUITY
Serial preferred stock, no par value
Authorized 30,000 shares
0 and 2,395 shares issued and outstanding at
September 28, 1997 and December 31, 1996, respectively -- 119,756
Common stock, no par value
Authorized 150,000 shares
95,684 and 89,864 shares issued and outstanding at
September 28, 1997 and December 31, 1996, respectively 7,175 7,175
Capital in excess of stated value 187,103 50,378
Translation of foreign currencies (81,140) (56,572)
Retained earnings 878,582 799,876
----------- -----------
Total shareholders' equity 991,720 920,613
----------- -----------
Total liabilities and shareholders' equity $ 2,409,710 $ 2,387,540
=========== ===========
</TABLE>
*The year-end consolidated balance sheet data was derived from audited financial
statements but does not include all disclosures required by generally accepted
accounting principles.
See accompanying Notes to Consolidated Financial Statements
<PAGE> 4
SONOCO PRODUCTS COMPANY
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars and shares in thousands except per share)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------------------- ----------------------------------
September 28, September 29, September 28, September 29,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales $ 709,588 $ 703,422 $ 2,111,403 $ 2,062,508
Cost of sales 556,181 545,476 1,639,879 1,580,572
Selling, general and administrative expenses 72,983 78,838 220,518 230,806
Interest expense 13,982 14,428 42,420 39,620
Interest income (1,308) (1,630) (3,337) (4,542)
--------- --------- ----------- -----------
Income from operations before income taxes 67,750 66,310 211,923 216,052
Taxes on income 26,070 26,127 81,865 85,125
--------- --------- ----------- -----------
Income from operations before equity in
earnings of affiliates/Minority interest
in subsidiaries 41,680 40,183 130,058 130,927
Equity in earnings of affiliates/Minority
interest in subsidiaries 215 (275) (886) (1,016)
--------- --------- ----------- -----------
Net income 41,895 39,908 129,172 129,911
Preferred dividends (648) (1,835) (3,061) (5,717)
--------- --------- ----------- -----------
Net income available to
common shareholders $ 41,247 $ 38,073 $ 126,111 $ 124,194
========= ========= =========== ===========
Average common shares outstanding:
Assuming no dilution 91,082 90,960 90,433 90,960
Assuming full dilution 98,352 99,328 97,562 99,328
Earnings per common share:
Assuming no dilution $ .45 $ .42 $ 1.39 $ 1.37
========= ========= =========== ===========
Assuming full dilution $ .42 $ .41 $ 1.32 $ 1.31
========= ========= =========== ===========
Dividends per common share $ .18 $ .165 $ .525 $ .48
========= ========= =========== ===========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
<PAGE> 5
SONOCO PRODUCTS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
--------------------------------
September 28, September 29,
1997 1996
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 129,172 $ 129,911
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization 112,729 105,781
Equity in earnings of affiliates/Minority interest
in subsidiaries 886 1,016
Deferred taxes 5,329 (307)
Loss on disposition of assets 4,460 1,743
Changes in assets and liabilities, net of effects
from acquisitions, dispositions and foreign
currency adjustments:
Accounts receivable (18,850) (56,573)
Inventories 4,995 (12,847)
Prepaid expenses 5,694 1,797
Payables and taxes (5,300) 38,238
Other assets and liabilities (13,571) 2,307
--------- ---------
Net cash provided by operating activities 225,544 211,066
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (162,176) (156,560)
Cost of acquisitions, exclusive of cash (17,647) (73,512)
Others, net (5,591) (79,608)
Proceeds from the sale of assets 70,872 2,327
--------- ---------
Net cash used by investing activities (114,542) (307,353)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 52,371 67,867
Principal repayment of debt (50,143) (33,319)
Net (decrease) increase in commercial paper borrowings (91,891) 195,000
Cash dividends (50,466) (49,373)
Common and preferred shares acquired (137) (78,914)
Common shares issued 15,677 16,449
--------- ---------
Net cash (used) provided by financing activities (124,589) 117,710
--------- ---------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH (559) (147)
--------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (14,146) 21,276
Cash and cash equivalents at beginning of period 71,260 61,624
--------- ---------
Cash and cash equivalents at end of period $ 57,114 $ 82,900
========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
<PAGE> 6
SONOCO PRODUCTS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited), continued
(Dollars in thousands)
SUPPLEMENTAL CASH FLOW DISCLOSURES:
<TABLE>
<CAPTION>
Nine Months Ended
--------------------------------
September 28, September 29,
1997 1996
------------- -------------
<S> <C> <C>
Interest paid $34,988 $30,971
Income taxes paid $72,276 $96,383
</TABLE>
Non-Cash Transaction
As of September 28, 1997, the Company converted all but 20 shares of its
2,394,125 outstanding shares of $2.25 Series A Cumulative Convertible Preferred
Stock to common shares at a rate of 2.074 common shares per share of preferred
stock. Those shares not converted were redeemed at a rate of $51.938 per
preferred share.
See accompanying Notes to Consolidated Financial Statements
<PAGE> 7
SONOCO PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1: BASIS OF INTERIM PRESENTATION
In the opinion of the Company, the accompanying unaudited
consolidated statements contain all adjustments (consisting of
only normal recurring adjustments) necessary to present fairly
the financial position and results of operations for the
interim periods reported hereon. Operating results for the
nine months ended September 28, 1997, are not necessarily
indicative of the results that may be expected for the year
ending December 31, 1997. These consolidated financial
statements should be read in conjunction with the consolidated
financial statements and the notes thereto included in the
Company's annual report for the fiscal year ended December 31,
1996.
NOTE 2: DIVIDEND DECLARATIONS
On October 15, 1997, the Board of Directors declared a regular
quarterly dividend of $.18 per share of common stock. This
290th consecutive dividend will be payable December 10, 1997
to shareholders of record as of November 21, 1997.
NOTE 3: ACQUISITIONS/DISPOSITIONS
During the first quarter of 1997, the Company completed the
sale of its screen print operations acquired in the 1993
acquisition of Engraph, Inc. This division was sold because it
did not fit with the Company's overall focus on the packaging
industry.
During the second quarter of 1997, the Company announced the
formation of joint ventures in Brazil and Chile. The Brazilian
joint venture, Sonoco For-Plas, is owned 51% by the Company
and is a major supplier of "peel off" metal ends and plastic
components such as overcaps for cans. The Company also formed
a joint venture, owned 51% by the Company, with Conotex of
Santiago, Chile, for the manufacture of composite cans, tubes,
and cores.
During the third quarter of 1997, the Company and Rock-Tenn
Company completed the formation of a joint venture that
combines both companies' fibre partition businesses into a
separate company called RTS Packaging. RTS Packaging is owned
65% by the Rock-Tenn Company and 35% by the Company. The
Company also purchased Industrial Machine Company of St.
Louis, Missouri, which produces equipment and tooling,
primarily for the Paper Converting and Food Processing
industries.
NOTE 4: PREFERRED STOCK CONVERSION
As of September 28, 1997, the Company converted all but 20
shares of its 2,394,125 outstanding shares of $2.25 Series A
Cumulative Convertible Preferred Stock to common shares at a
rate of 2.074 common shares per share of preferred stock.
Those shares not converted were redeemed at a rate of $51.938
per preferred share.
<PAGE> 8
SONOCO PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(unaudited)
NOTE 5: FINANCIAL SEGMENT INFORMATION
The Financial Segment Information provided below should be
read in conjunction with the Management's Discussion and
Analysis immediately following the Notes to Consolidated
Financial Statements.
FINANCIAL SEGMENT INFORMATION (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------- ----------------------------------
September 28, September 29, September 28, September 29,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Total Revenue
Industrial Packaging $ 406,848 $ 401,738 $ 1,209,629 $ 1,188,333
Consumer Packaging 313,642 311,643 932,711 905,517
--------- --------- ----------- -----------
Consolidated $ 720,490 $ 713,381 $ 2,142,340 $ 2,093,850
========= ========= =========== ===========
Sales to Unaffiliated Customers
Industrial Packaging $ 395,975 $ 391,839 $ 1,178,786 $ 1,157,957
Consumer Packaging 313,613 311,583 932,617 904,551
--------- --------- ----------- -----------
Consolidated $ 709,588 $ 703,422 $ 2,111,403 $ 2,062,508
========= ========= =========== ===========
Operating Profit
Industrial Packaging $ 50,480 $ 50,317 $ 160,683 $ 157,828
Consumer Packaging 29,944 28,791 90,323 93,302
Interest, net (12,674) (12,798) (39,083) (35,078)
--------- --------- ----------- -----------
Consolidated $ 67,750 $ 66,310 $ 211,923 $ 216,052
========= ========= =========== ===========
</TABLE>
<PAGE> 9
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
Statements included in Management's Discussion and Analysis of Financial
Condition and Results of Operations 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. The Company cautions readers that forward looking
statements, including without limitation those relating to the Company's future
business prospects, revenues, working capital, liquidity, capital needs,
interest costs, and income, are subject to certain risks and uncertainties that
could cause actual results to differ materially from those indicated in the
forward looking statements.
THIRD QUARTER 1997 COMPARED WITH THIRD QUARTER 1996
RESULTS OF OPERATIONS
Consolidated net sales for the third quarter of 1997 were $709.6 million,
compared with $703.4 million in the third quarter of 1996. Net income available
to common shareholders for the third quarter was $41.2 million, compared with
$38.1 million in the third quarter of 1996. Fully diluted earnings per share for
the third quarter of 1997 increased to $.42 from $.41 for the same quarter in
1996. While the Company continued to experience strong unit volume in most of
its businesses, third quarter earnings per share were negatively impacted by
cost increases for old corrugated containers (OCC), the Company's major raw
material. Price increases for converted paper products were implemented to
recover these costs; however, these price increases did not take effect until
late in the third quarter. Consequently, the unrecovered cost increases
depressed earnings for the quarter by about $.05 per share, when compared to the
third quarter of 1996. The decline of raw material prices late in the third
quarter, combined with the converted products price increases, should eliminate
a similar negative impact on year-to-year results in the fourth quarter. The
Company expects earnings improvement in the fourth quarter, reflecting increased
volume and improved productivity, which should result in another record year.
INDUSTRIAL PACKAGING SEGMENT
The industrial packaging segment includes tubes; cores; cones; roll wrap; molded
plugs and related products and services; fibre drums; plastic drums;
intermediate bulk containers; injection molded and extruded plastics; paper
manufacturing and recovered paper collections; fibre partitions; molded pulp;
corner posts; reels for wire and cable packaging; adhesives; converting
machinery; and forest products.
Trade sales for the industrial packaging segment increased to $396.0 million,
compared with $391.8 million in the third quarter of 1996. Operating profit for
this segment was $50.5 million, compared with 1996's third quarter results of
$50.3 million.
The Company's paper operations ran at near-record levels to support internal
paper requirements. Unit volume growth in the Company's tube and core operations
increased when compared with the same quarter last year. In addition to strong
volume, these operations continued to benefit from several initiatives
undertaken in the past two years, including the consolidation of several tube
and core plants in the United States and Europe. However, the positive effects
of volume growth and productivity on earnings were partially offset by lower
selling prices and higher materials costs. Industrial converted products prices
in North America were increased on the first of September in response to the
higher OCC prices. Historically, full implementation of price increases lags
behind the increased recovered paper costs.
<PAGE> 10
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED), CONTINUED
THIRD QUARTER 1997 COMPARED WITH THIRD QUARTER 1996, CONTINUED
RESULTS OF OPERATIONS, CONTINUED
Volume was up slightly in the molded and extruded plastics business during the
third quarter due to continued demand for the Company's new plastic heating
trays for the fast food industry and volume increases in both the filtration and
wire markets.
Volume increased in the Company's plastic drum and intermediate bulk container
operations but was down slightly in fibre drums. Lower selling prices affected
all three segments of the industrial container operations.
CONSUMER PACKAGING SEGMENT
The consumer packaging segment includes composite cans; fibre and plastic caulk
cartridges; capseals; flexible packaging; pressure-sensitive labels; label
application machinery; paperboard cartons; sleeves; blister packs; coasters and
glass covers; and high density film products.
Trade sales for the consumer packaging segment increased slightly to $313.6
million for the third quarter of 1997, compared with 1996's third quarter sales
of $311.6 million. Third quarter operating profits were $29.9 million, an
increase of 3.8% from $28.8 million in 1996.
The global composite can operations continued their strong performance in
markets around the world, led by sales increases in packaging for the snack
food, nuts, and adhesives and sealants markets. Sales gains were recognized for
the new operations in Brazil and Chile and the Company's plant in Londerzeel,
Belgium, which began operations late in the third quarter of 1996.
The flexible packaging group experienced volume increases over the third quarter
of 1996 and continued to show strong improvements in productivity and scrap
reduction. Volume growth is expected to continue throughout the rest of 1997.
While volume increased slightly in the label business over the third quarter of
1996, selling prices were down from the same quarter of last year. This business
is expected to improve gradually throughout 1998.
Profits in the high density film products business were negatively impacted by
higher resin cost and competitive pricing pressures. However, resin prices have
recently declined slightly, and further decreases are anticipated.
<PAGE> 11
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED), CONTINUED
SEPTEMBER 1997 YEAR-TO-DATE COMPARED WITH SEPTEMBER 1996 YEAR-TO-DATE
RESULTS OF OPERATIONS, CONTINUED
Consolidated net sales for the first nine months of 1997 were $2.11 billion,
compared with $2.06 billion in the first nine months of 1996. Net income
available to common shareholders for the first nine months of this year was
$126.1 million, compared with $124.2 million in the same period last year. Fully
diluted earnings per share for the first three quarters of 1997 increased to
$1.32, higher than the record earnings of $1.31 for the first nine months of
1996.
During the first nine months of 1997, the Company continued to have strong
performances from its major businesses, the integrated global tube and core
operations and the global composite can business. Both of these businesses
experienced volume and productivity increases and continued to grow by adding
market share and penetrating new markets. These increases were substantially
offset by the following: lower selling prices on linerboard and corrugating
medium; a surge in the cost of OCC in the third quarter; increased resin costs
in the high density film products division; and pricing pressures in the label
operations.
Overall, the Company had volume gains in most operations around the world and
showed good growth in its businesses. The Company has benefitted from
productivity and cost-reduction initiatives that were implemented beginning in
1996. The Company expects to see improved growth rates in the fourth quarter
that should provide the necessary momentum to produce 1998 earnings growth in
line with historical rates of 10% to 15%.
INDUSTRIAL PACKAGING SEGMENT
Trade sales for the industrial packaging segment for the first nine months of
1997 increased 1.8% to $1.18 billion, compared with $1.16 billion for the first
nine months of 1996. Operating profit for this segment for the first three
quarters of 1997 was $160.7 million, a 1.8% increase over 1996's first three
quarters results of $157.8 million.
In the paper operations, decreased selling prices for corrugating medium, which
is sold to Georgia Pacific, and linerboard, which is produced at a mill in
Canada, impacted profits through the end of the first three quarters of 1997
compared with the first three quarters of 1996.
The Company's volume increases in its global tube and core operations were
achieved in nearly every major product line. However, these increases were
partially offset by a decline in selling prices during the period. The 1996
reorganization of this business, which closed seven tube and core plants while
expanding twenty others, has continued to provide benefit through 1997.
Sales and profits were down slightly in the overall industrial container
business, driven by lower selling prices. However, the intermediate bulk
container operations were able to overcome this impact on earnings through
strong volume. The injection molded and extruded plastics operations showed
solid increases during the nine months of 1997, led by increased volume in the
textile and filtration businesses and new product sales in the food industry.
The protective packaging and reels operations continued to have volume and
profit gains throughout the nine months.
<PAGE> 12
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED), CONTINUED
SEPTEMBER 1997 YEAR-TO-DATE COMPARED WITH SEPTEMBER 1996 YEAR-TO-DATE, CONTINUED
RESULTS OF OPERATIONS, CONTINUED
CONSUMER PACKAGING SEGMENT
Trade sales for the consumer packaging segment during the first nine months of
1997 were $932.6 million, a 3.1% increase over $904.6 in the first nine months
of 1996. Operating profits in this segment were $90.3 million for the first
three quarters of 1997, compared with $93.3 million in the first three quarters
of last year.
Business remained strong in the composite can operations throughout the first
half of 1997, with volume gains in nearly every major product line. This
business continues to grow by adding new products and by working with customers
as they move into new international markets with products packaged in composite
cans.
The label business experienced a significant increase in volume and productivity
when compared to the first nine months of the prior year; however, this increase
did not fully offset the earnings effect of lower selling prices, initiated in
response to competitive pricing pressures within the industry.
Sales and profits for the flexible packaging group continued to improve
throughout the first nine months of 1997, compared with 1996, due to increased
sales volume and significant productivity improvements.
Profits in the consumer packaging segment for the nine months were impacted
negatively by increased resin costs in the high density film products business.
Resin cost has recently declined slightly, and further decreases are
anticipated.
CORPORATE
General corporate expenses have been allocated as operating costs to each of the
segments. Interest expense increased in the first three quarters of 1997 over
1996 due to higher debt resulting from the 1996 share repurchase program,
capital spending, and acquisitions.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's financial position remained strong through the first nine months
of 1997. The debt to capital percentage, after adjusting debt levels for excess
cash related to the issuance of restricted purpose bonds, decreased to 42.9% at
September 28, 1997, from 47.2% at December 31, 1996. Debt decreased from year
end due to the proceeds from the sale of the screen print operations in March
1997.
Working capital decreased $48.7 million to $213.8 million during the first nine
months of 1997. This decline was driven by a decrease in cash, a decrease in
inventories (partially attributable to the sale of the screen print operations),
and an increase in accrued expenses and other liabilities.
The Company expects internally generated cash flows along with borrowings
available under its commercial paper and other existing credit facilities to be
sufficient to meet operating and normal capital expenditure requirements.
<PAGE> 13
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED), CONTINUED
SEPTEMBER 1997 YEAR-TO-DATE COMPARED WITH SEPTEMBER 1996 YEAR-TO-DATE, CONTINUED
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES, CONTINUED
In February 1997, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 128 "Earnings per Share" (FAS 128). This standard is
effective for financial statements issued for periods ending after December 15,
1997, and will be implemented in the Company's financial statements for the year
ended December 31, 1997. The Company does not expect FAS 128 to have a material
impact on earnings per share.
<PAGE> 14
SONOCO PRODUCTS COMPANY
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to Item 3 of the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
Item 2. Changes in Securities
As of September 28, 1997, the Company converted all but 20
shares of its 2,394,125 outstanding shares of $2.25 Series A
Cumulative Convertible Preferred Stock to common shares at a
rate of 2.074 common shares per share of preferred stock. Those
shares not converted were redeemed at a rate of $51.938 per
preferred share.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit (11) - Computation of Earnings per Share
Exhibit (27) - Financial Data Schedule (for SEC use only)
(b) The Company filed a Current Report on Form 8-K on August
29, 1997, announcing the redemption on September 28,
1997 of all of its outstanding shares of $2.25 Series A
Cumulative Convertible Preferred Stock.
<PAGE> 15
SONOCO PRODUCTS COMPANY
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 thereunto duly authorized.
SONOCO PRODUCTS COMPANY
-----------------------
(Registrant)
Date: November 10, 1997 By: /s/ F. T. Hill, Jr.
----------------- -------------------
F. T. Hill, Jr.
Vice President and
Chief Financial Officer
<PAGE> 16
SONOCO PRODUCTS COMPANY
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
11 Computation of Earnings Per Share
27 Financial Data Schedule (for SEC use only)
<PAGE> 1
EXHIBIT (11)
SONOCO PRODUCTS COMPANY
COMPUTATION OF EARNINGS PER SHARE (UNAUDITED)
(Dollars in thousands, except per share)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------- ---------------------------------
September 28, September 29, September 28, September 29,
1997 1996 1997 1996
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Primary earnings
Net income available to common shareholders $ 41,247 $ 38,073 $ 126,111 $ 124,194
=========== =========== =========== ===========
Weighted average number
of common shares outstanding 91,081,791 90,959,645 90,433,177 90,959,645
Assuming exercise of options reduced by
the number of shares which could have
been purchased (at average price) with
proceeds from exercise of such options 2,569,350 2,072,276 2,108,291 2,072,276
----------- ----------- ----------- -----------
Weighted average number of shares
outstanding as adjusted 93,651,141 93,031,921 92,541,468 93,031,921
=========== =========== =========== ===========
Primary earnings per common share $ 0.44 $ 0.41 $ 1.36 $ 1.33
=========== =========== =========== ===========
Assuming full dilution
Net income available to common shareholders $ 41,247 $ 38,073 $ 126,111 $ 124,194
Elimination of preferred dividends 648 1,835 3,061 5,717
----------- ----------- ----------- -----------
Fully diluted net income $ 41,895 $ 39,908 $ 129,172 $ 129,911
=========== =========== =========== ===========
Weighted average number of
common shares outstanding 91,081,791 90,959,645 90,433,177 90,959,645
Assuming exercise of options reduced by
the number of shares which could have
been purchased (at the higher of the
end-of-period price or the average)
with proceeds from exercise of such options 2,790,259 2,072,276 2,326,254 2,072,276
Assuming conversion of preferred stock 4,480,194 6,296,499 4,802,596 6,296,499
----------- ----------- ----------- -----------
Weighted average number of
shares outstanding as adjusted 98,352,244 99,328,420 97,562,027 99,328,420
=========== =========== =========== ===========
Earnings per common share assuming full dilution $ 0.42 $ 0.41 $ 1.32 $ 1.31
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SONOCO PRODUCTS FOR THE NINE MONTHS ENDED SEPTEMBER 28,
1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
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0
0
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</TABLE>
