<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC
20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended April 2, 2000 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: 843-383-7000
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 May 7, 2000:
Common stock, no par value: 99,448,330
--------------------------------------
<PAGE> 2
SONOCO PRODUCTS COMPANY
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
Condensed Consolidated Balance Sheets -
April 2, 2000 (unaudited) and
December 31, 1999
Condensed Consolidated Statements of
Income - Three Months Ended April 2,
2000 (unaudited) and March 28, 1999
(unaudited)
Condensed Consolidated Statements of Cash
Flows - Three Months Ended April 2, 2000
(unaudited) and March 28, 1999 (unaudited)
Notes to Condensed Consolidated Financial
Statements
Report of Independent Accountants
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURE
<PAGE> 3
SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars and shares in thousands)
<TABLE>
<CAPTION>
April 2,
2000 December 31,
(unaudited) 1999 *
----------- -----------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 40,266 $ 36,515
Trade accounts receivable, net of allowances 354,841 346,845
Other receivables 28,202 28,847
Inventories:
Finished and in process 113,255 94,133
Materials and supplies 153,815 154,231
Prepaid expenses and other 58,553 62,510
----------- -----------
748,932 723,081
PROPERTY, PLANT AND EQUIPMENT, NET 1,009,082 1,032,503
COST IN EXCESS OF FAIR VALUE OF ASSETS PURCHASED, NET 250,305 254,580
OTHER ASSETS 284,645 286,856
----------- -----------
Total Assets $ 2,292,964 $ 2,297,020
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Payable to suppliers $ 177,348 $ 192,859
Accrued expenses and other 164,252 139,175
Notes payable and current portion of long-term debt 61,553 84,597
Taxes on income 20,559 --
----------- -----------
423,712 416,631
LONG-TERM DEBT 843,346 819,540
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 34,423 36,278
DEFERRED INCOME TAXES AND OTHER 125,174 123,351
SHAREHOLDERS' EQUITY
Common stock, no par value
Authorized 300,000 shares
99,443 and 101,448 shares issued and outstanding at
April 2, 2000 and December 31, 1999, respectively 7,175 7,175
Capital in excess of stated value 383,719 427,591
Accumulated other comprehensive loss (139,769) (123,008)
Retained earnings 615,184 589,462
----------- -----------
Total Shareholders' Equity 866,309 901,220
----------- -----------
Total Liabilities and Shareholders' Equity $ 2,292,964 $ 2,297,020
=========== ===========
</TABLE>
* The year-end condensed 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 Condensed Consolidated Financial Statements
<PAGE> 4
SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars and shares in thousands except per share)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
April 2, March 28,
2000 1999
---------- ----------
<S> <C> <C>
Net sales $ 676,299 $ 560,479
Cost of sales 524,638 425,902
Selling, general and administrative expenses 67,426 59,270
Gain on assets held for sale -- (3,500)
--------- ---------
Income before interest and taxes 84,235 78,807
Interest expense 15,519 12,470
Interest income (763) (1,038)
--------- ---------
Income before income taxes 69,479 67,375
Provision for income taxes 26,422 24,591
--------- ---------
Income before equity in earnings of affiliates/
Minority interest in subsidiaries 43,057 42,784
Equity in earnings of affiliates/Minority
interest in subsidiaries 1,960 1,163
--------- ---------
Net income $ 45,017 $ 43,947
========= =========
Average common shares outstanding:
Basic 100,908 101,815
Assuming exercise of options 176 1,001
--------- ---------
Diluted 101,084 102,816
========= =========
Per common share
Net income:
Basic $ 0.45 $ 0.43
========= =========
Diluted $ 0.45 $ 0.43
========= =========
Cash dividends per common share $ .19 $ .18
========= =========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
<PAGE> 5
SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
April 2, March 28,
2000 1999
---------- ----------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 88,843 $ 73,405
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (22,618) (31,472)
Cost of acquisitions, exclusive of cash -- (24,322)
Proceeds from non-operating notes receivable -- 34,000
Proceeds from the sale of assets 528 14,477
Other, net (1,153) (933)
-------- --------
Net cash used by investing activities (23,243) (8,250)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 3,519 37,578
Principal repayment of debt (21,699) (36,407)
Net increase (decrease) in commercial paper borrowings 20,200 (38,000)
Cash dividends (19,295) (18,332)
Common shares acquired (46,364) --
Common shares issued 2,089 2,301
-------- --------
Net cash used by financing activities (61,550) (52,860)
-------- --------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH (299) (937)
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 3,751 11,358
Cash and cash equivalents at beginning of period 36,515 57,249
-------- --------
Cash and cash equivalents at end of period $ 40,266 $ 68,607
======== ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
<PAGE> 6
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1: BASIS OF INTERIM PRESENTATION
In the opinion of the management of Sonoco Products Company
(the "Company"), the accompanying unaudited condensed
consolidated financial statements contain all adjustments
(consisting of only normal recurring adjustments) necessary to
present fairly the consolidated financial position, results of
operations, and cash flows for the interim periods reported
hereon. Operating results for the three months ended April 2,
2000, are not necessarily indicative of the results that may
be expected for the year ending December 31, 2000. These
condensed 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, 1999.
NOTE 2: DIVIDEND DECLARATIONS
On February 2, 2000, the Board of Directors declared a regular
quarterly dividend of $.19 per share. This dividend was paid
March 10, 2000 to shareholders of record as of February 18,
2000.
On April 19, 2000, the Board of Directors voted to raise the
regular quarterly dividend to $.20 per share payable June 9,
2000, to all shareholders of record May 19, 2000.
NOTE 3: ACQUISITIONS/DISPOSITIONS
There were no acquisitions or dispositions during the first
quarter of 2000.
NOTE 4: NEW ACCOUNTING PRONOUNCEMENT
On June 15, 1998, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities"
(FAS 133). The effective date of FAS 133 has been deferred by
FAS 137. FAS 133 is now effective for all fiscal quarters of
all fiscal years beginning after June 15, 2000 and requires
that all derivative instruments be recorded on the balance
sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or
other comprehensive income, depending on whether a derivative
is designated as part of a hedge transaction and, if it is,
the type of hedge transaction. Management of the Company
anticipates that, due to its limited use of derivative
instruments, the adoption of FAS 133 will not have a
significant effect on the Company's results of operations or
its financial position.
<PAGE> 7
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(unaudited)
NOTE 5: COMPREHENSIVE INCOME
The following table reconciles net income to comprehensive income
(dollars in thousands):
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
April 2, March 28,
2000 1999
----------- ----------
<S> <C> <C>
Net income $ 45,017 $ 43,947
Other comprehensive loss:
Foreign currency translation adjustments (16,761) (24,492)
-------- --------
Comprehensive income $ 28,256 $ 19,455
======== ========
</TABLE>
The following table summarizes the components of the current
period change in the accumulated other comprehensive loss
balance (dollars in thousands):
<TABLE>
<CAPTION>
Foreign Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustments Adjustment Loss
----------- ---------- -------------
<S> <C> <C> <C>
Balance at January 1, 2000 $(118,882) $(4,126) $(123,008)
Year to date change (16,761) -- (16,761)
--------- ------- ---------
Balance at April 2, 2000 $(135,643) $(4,126) $(139,769)
========= ======= =========
</TABLE>
<PAGE> 8
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(unaudited)
NOTE 6: FINANCIAL SEGMENT INFORMATION
Sonoco reports its results in two primary segments, Industrial
Packaging and Consumer Packaging. The industrial packaging segment
includes engineered carriers / paper (paper and plastic tubes and
cores, paper manufacturing, and recovered paper operations); and
protective packaging (designed interior packaging and protective
reels). The consumer packaging segment includes composite cans;
flexible packaging (printed flexibles, high density bag and film
products, and container seals); and packaging services and specialty
products (e-Marketplace services, folding cartons, and paper glass
covers and coasters).
FINANCIAL SEGMENT INFORMATION (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------
April 2, 2000 March 28, 1999
-------------- --------------
<S> <C> <C>
Net Sales
Industrial Packaging $ 363,362 $ 307,890
Consumer Packaging 312,937 245,676
Other* -- 6,913
--------- ---------
Consolidated $ 676,299 $ 560,479
========= =========
Operating Profit
Industrial Packaging $ 52,999 $ 43,435
Consumer Packaging 31,236 31,744
Other* -- 128
Gain on assets held for sale -- 3,500
Interest, net (14,756) (11,432)
--------- ---------
Consolidated $ 69,479 $ 67,375
========= =========
</TABLE>
* Includes net sales and operating profits of divested businesses.
<PAGE> 9
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Directors of Sonoco Products Company
We have reviewed the accompanying condensed consolidated balance sheet of Sonoco
Products Company as of April 2, 2000, and the related condensed consolidated
statements of income and cash flows for the three-month periods ended April 2,
2000 and March 28, 1999. These financial statements are the responsibility of
the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated interim financial statements
for them to be in conformity with generally accepted accounting principles.
We previously audited in accordance with generally accepted auditing standards,
the consolidated balance sheet as of December 31, 1999, and the related
consolidated statements of operations, changes in shareholders' equity and cash
flows for the year then ended (not presented herein); and in our report dated
January 26, 2000, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 1999, is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
/s/PricewaterhouseCoopers LLP
----------------------------------
PricewaterhouseCoopers LLP
Charlotte, North Carolina
May 12, 2000
<PAGE> 10
SONOCO PRODUCTS COMPANY
Item 2. 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. Forward-looking statements include statements regarding
offsetting high raw material costs, adequacy of income tax provision,
refinancing of debt, adequacy of cash flows, and financial strategies and the
results expected from them. Such forward-looking statements are based on current
expectations, estimates and projections about our industry, management's beliefs
and certain assumptions made by management. Such information includes, without
limitation, discussions as to estimates, expectations, beliefs, plans,
strategies, and objectives concerning our future financial and operating
performance. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict. Therefore, actual results may differ materially from those expressed or
forecasted in such forward-looking statements. Such risks and uncertainties
include, without limitation; availability and pricing of raw materials; success
of new product development and introduction; ability to maintain or increase
productivity levels; international, national and local economic and market
conditions; ability to maintain market share; pricing pressures and demand for
products; continued strength of our paperboard-based engineered carrier and
composite can operations; currency stability and the rate of growth in foreign
markets; and actions of government agencies.
FIRST QUARTER 2000 COMPARED WITH FIRST QUARTER 1999
RESULTS OF OPERATIONS
Consolidated net sales for the first quarter of 2000 were $676.3 million,
compared with $560.5 million in the first quarter of 1999. This year's first
quarter sales included 4 to 6 more billing days (depending on the specific
business) than the first quarter of 1999. Volume, which increased in most
businesses, coupled with acquisitions made during 1999, increased sales by
approximately $82 million. Sales also benefited from selling price increases of
approximately $41 million. Last year's first quarter included $6.9 million of
sales from operations that were divested in March 1999. On a comparable basis,
excluding divested businesses, sales for the first quarter of 2000 from ongoing
operations were $676.3 million, versus $553.6 million in the first quarter of
1999.
Net income for the first quarter of 2000 was $45.0 million, compared with $43.9
million in the same quarter last year. Sonoco's reported net income in the first
quarter of 1999 included a gain of $3.5 million from the sale of the Company's
labels business in the United Kingdom and its label machinery businesses in the
United Kingdom and the United States. Excluding this gain, net income in the
first quarter of 1999 was $40.4 million. The Company's reported earnings per
diluted share were $.45 and $.43 in the first quarter of 2000 and 1999,
respectively. Excluding the gain, earnings per diluted share in the first
quarter of 1999 were $.39.
First quarter results were impacted by significant raw material price increases,
particularly resin and old corrugated containers. These additional costs were
more than offset by continued volume growth throughout
<PAGE> 11
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(UNAUDITED), CONTINUED
FIRST QUARTER 2000 COMPARED WITH FIRST QUARTER 1999, CONTINUED
the Company's businesses, strong productivity improvement, a decreased tax rate,
and strong pension fund returns. In addition, stock repurchases contributed to
the improvement in per share results.
Selling price increases will take effect in the second quarter of 2000 to
recover the higher raw material costs. However, due to the normal delay in price
/ cost recovery, the second quarter 2000 earnings per share will be negatively
impacted while the third and fourth quarters will benefit, thus leaving no
expected impact to earnings per share on an annual basis.
CONSUMER PACKAGING SEGMENT
The consumer packaging segment includes composite cans; flexible packaging
(printed flexibles, high density bag and film products, and container seals);
and packaging services and specialty products (e-Marketplace services, folding
cartons, and paper glass covers and coasters).
First quarter 2000 sales were $312.9 million, compared with $252.6 million in
the same quarter of 1999. On a comparable basis, excluding sales from divested
operations, first quarter 1999 sales were $245.7 million. Operating profits in
this segment were $31.2 million, compared with $31.7 million in the first
quarter of 1999.
The increase in first quarter 2000 sales in the consumer segment resulted
primarily from acquisitions, more billing days, and higher selling prices,
compared with the same period last year. Sales in 2000 reflect the impact of the
third quarter 1999 acquisitions of Graphic Packaging Corporation's flexible
packaging business and Crown, Cork & Seal's composite can business.
The domestic composite can businesses experienced unit volume growth of
approximately 4% in the first quarter of 2000 compared with the first quarter of
last year. The additional unit volume was due largely to the acquisition of
Crown, Cork & Seal's composite can business and strong sales in the snack
product line. Volumes were particularly strong in the first two months of the
quarter before experiencing a downturn in March due in part to certain customers
utilizing excess inventories created as a result of planning for potential Year
2000 issues. The volume shortfalls experienced in March should be temporary and
volume has already begun to return to expected levels in April.
<PAGE> 12
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(UNAUDITED), CONTINUED
FIRST QUARTER 2000 COMPARED WITH FIRST QUARTER 1999, CONTINUED
CONSUMER PACKAGING SEGMENT, CONTINUED
Volumes in the European composite can businesses were weaker overall in the
first quarter of 2000 compared with the same period last year primarily due to
shortfalls in snack can sales. Volumes were stronger in Latin America, largely
due to increased sales of composite cans for powdered infant formula produced at
a new facility in Delicias, Mexico.
Volume in the high density film products operations was higher in the first
quarter of 2000 compared with the same period last year, particularly in the
retail segment of the business. Operating profits were approximately $4 million
lower than last year's first quarter operating profits due to unrecovered resin
price increases. These operations have experienced a 56% increase in resin
prices since the end of March 1999. Additional selling price increases will take
effect in the second quarter 2000 to recover part of the resin price increases.
INDUSTRIAL PACKAGING SEGMENT
The industrial packaging segment includes engineered carriers / paper (paper and
plastic tubes and cores, paper manufacturing, and recovered paper operations);
and protective packaging (designed interior packaging and protective reels).
First quarter 2000 sales for the industrial packaging segment were $363.4
million, compared with $307.9 million in the same period last year. Operating
profits for this segment were $53.0 million, compared with $43.4 million in the
first quarter of 1999.
The increase in sales and profits in this segment resulted primarily from
increased volume in paper and plastic tubes and cores, compared with the first
quarter of 1999, which experienced direct and indirect adverse effects from the
downturn in the Asian economy. In addition, more calendar days in the first
quarter 2000, productivity improvements, and the impact of previously announced
price increases in response to rising general operating and raw material costs,
contributed to improved first quarter 2000 results compared to the same period
last year.
In the domestic integrated paper and engineered carriers business, first quarter
unit volume increased approximately three percent on a comparable billing day
basis from the same period last year. Selling prices for engineered carriers
were higher compared with last year's first quarter as prices were raised in
order to pass through higher recovered paper costs. Two $10 per ton price
increases in old corrugated containers (OCC) were
<PAGE> 13
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(UNAUDITED), CONTINUED
FIRST QUARTER 2000 COMPARED WITH FIRST QUARTER 1999, CONTINUED
INDUSTRIAL PACKAGING SEGMENT, CONTINUED
experienced in the first quarter of 2000 bringing the total increases in OCC to
$55 per ton since March 1999. OCC costs have continued to increase in the second
quarter of 2000. Additional selling price increases will take effect for
converted products in North America in the second quarter of 2000. Similar
increases in recovered paper costs have been experienced in the Company's
operations in Europe where selling price increases will also be implemented in
the second quarter. These selling price increases are not expected to fully
recover the raw material cost increases in the second quarter of 2000, but full
recovery is expected over the second half of 2000.
Strong volume in the Company's protective packaging operations contributed to
higher sales and earnings in the first quarter of 2000 compared with the first
quarter of 1999. Part of the increase in volume is due to a new designed
interior packaging facility in San Luis Potosi, Mexico, which began production
in the second half of 1999. In addition, productivity improvements contributed
to the improved performance of these operations.
CORPORATE
General corporate expenses have been allocated as operating costs to each of the
segments. Net interest expense was approximately $3.3 million higher in the
first quarter of 2000 compared with the same quarter of 1999 due to a
combination of higher average interest rates and higher debt balances as a
result of funding acquisitions and stock repurchases. Under a previously
announced plan to repurchase at least enough common shares to prevent dilution
related to stock options, the Company repurchased approximately 2.5 million
shares during the first quarter of 2000 for approximately $46.4 million, for an
average price of $18.74 per share.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's financial position remained strong through the first quarter of
2000. The debt-to-capital ratio, after adjusting debt levels for excess cash
related to the issuance of restricted purpose bonds, increased to 48.2% at April
2, 2000, from 47.5% at December 31, 1999. The increase is primarily attributable
to the reduction of total equity resulting from the repurchase of $46.4 million
of the Company's common stock.
Working capital increased $18.8 million to $325.2 million during the first
quarter of 2000, driven by net increases in current assets, particularly trade
accounts receivable and inventory. Strong volume in the fourth quarter resulted
in lower than optimal inventory levels at December 31, 1999. Although trade
accounts receivable balances were above the December 1999 levels, they continued
to decline relative to days sales outstanding for the same period last year.
<PAGE> 14
SONOCO PRODUCTS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(UNAUDITED), CONTINUED
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES, CONTINUED
Cash generated from operations of $88.8 million was used to fund capital
expenditures of $22.6 million, pay dividends of $19.3 million, and repurchase
$46.4 million of the Company's common stock. 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.
EURO COMPLIANCE
On January 1, 1999, 11 of the 15 member countries of the European Union
established fixed conversion rates between their existing currencies and the
Euro and adopted the Euro as their common legal currency (the "Euro
Conversion"). The impact to the Company of the Euro Conversion has not been
material through the first quarter of 2000. The Company is currently unsure of
the potential impact that the Euro Conversion will have on its business,
financial condition, results of operations, and cash flows, particularly as it
relates to its European operations. However, the Company does not anticipate
that the Euro Conversion will have a material adverse effect on its future
business, financial condition, results of operations, or cash flows.
<PAGE> 15
SONOCO PRODUCTS COMPANY
PART I. FINANCIAL INFORMATION
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Information about the Company's exposure to market risk was
disclosed in its 1999 Annual Report on Form 10-K which was
filed with the Securities and Exchange Commission on March 24,
2000. There have been no material quantitative or qualitative
changes in market risk exposures since the date of that
filing.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company's annual meeting of shareholders was held on April
19, 2000. The following matters, as described more fully in the
Company's Proxy Statement, were approved by the shareholders at
this meeting:
(1) The following directors were elected:
<TABLE>
<CAPTION>
VOTES
----------------------------
Term For Withheld
------ ---------- ---------
<S> <C> <C> <C>
C. W. Coker 3-year 81,768,521 2,864,481
H. E. DeLoach, Jr. 3-year 79,920,744 4,712,258
A. T. Dickson 3-year 81,942,101 2,690,901
C. D. Spangler, Jr. 3-year 82,047,442 2,585,560
Dona Davis Young 3-year 81,719,277 2,913,725
</TABLE>
(2) The Performance-Based Annual Incentive Plan for Executive
Officers was approved by the shareholders by a vote of
79,424,831 for and 3,876,916 against, with 1,331,255 votes
abstaining.
(3) PricewaterhouseCoopers LLP, Certified Public Accountants,
was approved as the independent auditors of the
corporation for the fiscal year ending December 31, 2000.
The shareholders voted 84,203,411 for and 233,598 against
this appointment, with 195,993 votes abstaining.
There were 17,214,071 non-votes for each matter voted upon.
<PAGE> 16
SONOCO PRODUCTS COMPANY
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibit (10-7)-Performance-Based Annual Incentive
Plan for Executive Officers (incorporated by reference
to the Company's definitive Proxy Statement for the
2000 Annual Meeting of Shareholders filed with the SEC
on March 15, 2000)
Exhibit (27)-Financial Data Schedule (for SEC use only)
(b) No Current Reports on Form 8-K were filed by the Company
during the first quarter of 2000.
<PAGE> 17
S O N O C O P R O D U C T S C O M P A N Y
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: May 12, 2000
-------------------- By: /s/ F. T. Hill, Jr.
------------------------------
F. T. Hill, Jr.
Vice President and
Chief Financial Officer
<PAGE> 18
SONOCO PRODUCTS COMPANY
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
10-7 Performance-Based Annual Incentive Plan for
Executive Officers (incorporated by
reference to the Company's definitive Proxy
Statement for the 2000 Annual Meeting of
Shareholders filed with the SEC on March 15,
2000)
27 Financial Data Schedule for the first
quarter of 2000 (for SEC use only)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SONOCO PRODUCTS COMPANY FOR THE THREE MONTHS ENDED APRIL
2, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> APR-02-2000
<EXCHANGE-RATE> 1
<CASH> 32,006
<SECURITIES> 8,260
<RECEIVABLES> 360,292
<ALLOWANCES> 5,451
<INVENTORY> 267,070
<CURRENT-ASSETS> 748,932
<PP&E> 2,079,491
<DEPRECIATION> 1,070,409
<TOTAL-ASSETS> 2,292,964
<CURRENT-LIABILITIES> 423,712
<BONDS> 843,346
0
0
<COMMON> 7,175
<OTHER-SE> 859,134
<TOTAL-LIABILITY-AND-EQUITY> 2,292,964
<SALES> 676,299
<TOTAL-REVENUES> 676,299
<CGS> 524,638
<TOTAL-COSTS> 524,638
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 568
<INTEREST-EXPENSE> 15,519
<INCOME-PRETAX> 69,479
<INCOME-TAX> 26,422
<INCOME-CONTINUING> 45,017
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 45,017
<EPS-BASIC> 0.45
<EPS-DILUTED> 0.45
</TABLE>
