Sonoco Sees Sales Rise for Quarter

Sonoco reported net sales for the fourth quarter of 2004 were $885 million, versus $730 million for the same period in 2003. "Sales for the fourth quarter of 2004 were up approximately 21.2 percent over the same period in 2003, principally reflecting increased volume and higher average prices for domestic engineered carriers and paperboard, recovered paper, rigid paper and plastic containers, molded and extruded plastics, easy-open closures and wire and cable reels; the acquisition of CorrFlex Graphics, LLC; the formation of the joint venture between the European engineered carriers and coreboard operations of Sonoco and Ahlstrom Corporation; and, to a lesser extent, the favorable impact of foreign exchange translation," stated Harris DeLoach, president and CEO.

Income from continuing operations for the fourth quarter of 2004 was $35 million, versus $19 million in the fourth quarter of 2003. "The increase in year-over-year income from continuing operations for the fourth quarter of 2004 was primarily the result of increased volumes in the Engineered Carriers and Paper and the Consumer Packaging segments; productivity initiatives; the acquisition in May 2004 of the CorrFlex Graphics, LLC point-of-purchase business; and the specific items detailed above," said DeLoach.

Despite the increase, the company reported weaker earnings. The company cited higher start-up costs for the company's new multi-line, easy-open closure operation in Brazil and new rigid plastic container plants in California and Wisconsin, as well as the costs associated with the movement of production between plants.

For the year, net sales were $3.2 billion, compared with $2.8 billion for the full year 2003. Income from continuing operations was $151.2 million, versus $78.2 million in 2003.

Income for the full year 2004 was negatively impacted by after-tax restructuring charges of about $14.4 million, compared with $36.8 million for 2003; before and after-tax charges of approximately $5.6 million related to prior years for an adjustment in the company's wholly owned subsidiary in Spain; after-tax charges of approximately $2.9 million related to the establishment of reserves for claims against the Company as a result of a legal judgment; and by a $3.6 million after-tax charge related to the cost of replacing certain executive life insurance policies.