Sonoco Sees Sales Increase for Quarter

Sonoco reported sales for the second quarter  were $712.4 million, versus $647.7 million for the same period in 2001. Excluding one-time items, net income for the second quarter of 2002 was $38.8 million, versus $38.7 million in the second quarter of 2001. Including one-time items, net income for the second quarter of 2002 was $37.7 million, versus $16.9 million in the second quarter of 2001.

For the first six months of 2002, sales were $1.37 billion, versus $1.28 billion in the same period last year. Excluding one-time items, net income for the first half of 2002 was $73.2 million, versus $76.1 million for the first six months in 2001. "Despite continuing weak general economic conditions, sales were up 10 percent during the second quarter, compared with the same period last year, driven principally by acquisitions and increased volumes in the industrial and consumer segments. Company-wide volumes, including the impact of acquisitions completed in 2001, were up 12.7 percent, compared with the same period last year.

"Meanwhile, the Company's price/cost relationship declined further in the second quarter, principally reflecting the partial impact of approximately $30 per ton in average price increases during the quarter for OCC (old corrugated containers), Sonoco's principal raw material for its paperboard that is used primarily for conversion into engineered carriers in its industrial sector. These increases in OCC cost came on the heels of already weakening converted product pricing. In response to increases in general operating costs and increased raw material costs, the Company is aggressively instituting price increases in paperboard and converted products in the United States, Canada and Europe. Although the company will not realize the full impact of its price increases until later this year, when fully implemented, the increases should at least offset the higher OCC costs," said Harris DeLoach, Jr., president and CEO.

He also noted that Sonoco's recovered paper operations, which are net sellers of OCC, experienced a significant increase in sales and earnings during the second quarter.