SONOCO PRODUCTS CO

Previous wording

Statements included in this Quarterly Report on Form 10-Q that are not historical in nature, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, 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 “Exchange Act”). In addition, Sonoco Products Company (the “Company” or “Sonoco”) and its representatives may from time to time make other oral or written statements that are also “forward-looking statements.” Words such as “anticipate,” “assume,” “believe,” “can,” “consider,” “continue,” “could,” “develop,” “estimate,” “expect,” “forecast,” “future,” “goal,” “guidance,” “intend,” “is designed to,” “likely,” “maintain,” “may,” “might,” “objective,” “ongoing,” “opportunity,” “outlook,” “plan,” “possible,” “potential,” “predict,” “seek,” “strategy,” “will,” “would,” or the negative thereof, and similar expressions identify forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding:

Current wording

Statements included in this Quarterly Report on Form 10-Q that are not historical in nature, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, 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 “Exchange Act”). In addition, Sonoco Products Company (the “Company” or “Sonoco”) and its representatives may from time to time make other oral or written statements that are also “forward-looking statements.” Words such as “anticipate,” “assume,” “believe,” “can,” “consider,” “continue,” “could,” “develop,” “estimate,” “expect,” “forecast,” “future,” “goal,” “guidance,” “intend,” “is designed to,” “likely,” “maintain,” “may,” “might,” “objective,” “ongoing,” “opportunity,” “outlook,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “strategy,” “will,” “would,” or the negative thereof, and similar expressions identify forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding:

Previous wording

•the Company’s proposed acquisition of Eviosys, including the satisfaction of conditions precedent thereto and the anticipated timing and financing thereof, and the anticipated benefits of the acquisition, including with respect to market leadership, strategic alignment, customer relationships, sustainability, innovation and cost synergies;

Current wording

•the Company’s proposed acquisition of Titan Holdings I B.V. (“Eviosys”), including the satisfaction of conditions precedent thereto and the anticipated timing and financing thereof, and the anticipated benefits of the acquisition, including with respect to market leadership, strategic alignment, customer relationships, sustainability, innovation and cost synergies;

Previous wording

•effects and timing of, and anticipated costs, synergies and gains resulting from our other contemplated, pending and completed acquisitions and divestitures, including the Company’s acquisitions of Ball Metalpack Holding, LLC, renamed Sonoco Metal Packaging, the remaining interest in RTS Packaging, LLC (“RTS Packaging”) and a paper mill in Chattanooga, Tennessee (the “Chattanooga Mill”), Inapel Embalagens Ltda. (“Inapel”), and the Company’s sale of its Sonoco Sustainability Solutions (“S3”) business, its U.S. and Mexico BulkSak businesses, its South Carolina timberland properties and its Protective Solutions business (“Protexic”);

Current wording

•effects and timing of, and anticipated costs, synergies and gains resulting from our other contemplated, pending and completed acquisitions and divestitures, including the Company’s acquisitions of Ball Metalpack Holding, LLC, renamed Sonoco Metal Packaging, the remaining ownership interest in RTS Packaging, LLC (“RTS Packaging”), a paper mill in Chattanooga, Tennessee (the “Chattanooga Mill”), and Inapel Embalagens Ltda. (“Inapel”), the Company’s sale of its Sonoco Sustainability Solutions (“S3”) business, its U.S. and Mexico BulkSak businesses, its South Carolina timberland properties, and its Protective Solutions business (“Protexic”), the pending sale of two of its production facilities in China, and the potential divestitures of the Company’s ThermoSafe and thermoformed and flexible packaging (“TFP”) businesses;

Previous wording

•ability to manage the mix of business and execute on the Company’s portfolio simplification strategy, including with respect to divestitures;

Current wording

•ability to manage the mix of business and execute on the Company’s portfolio simplification strategy, including with respect to divestitures such as the potential divestitures of its ThermoSafe and TFP businesses;

Previous wording

•availability, transportation and pricing of raw materials, energy and transportation, including the impact of potential changes in tariffs or sanctions and escalating trade wars, and the impact of war, general regional instability and other geopolitical tensions (such as the ongoing conflict between Russia and Ukraine as well as the economic sanctions related thereto, and the ongoing conflict in Israel and Gaza), and the Company’s ability to pass raw material, energy and transportation price increases and surcharges through to customers or otherwise manage these commodity pricing risks;

Current wording

•availability, transportation and pricing of raw materials, energy and transportation, including the impact of potential changes in tariffs or sanctions and escalating trade wars, and the impact of war, general regional instability and other geopolitical tensions (such as the ongoing conflict between Russia and Ukraine as well as the economic sanctions related thereto, and the ongoing conflicts in the Middle East), and the Company’s ability to pass raw material, energy and transportation price increases and surcharges through to customers or otherwise manage these commodity pricing risks;

Previous wording

•economic disruptions resulting from war and other geopolitical tensions (such as the ongoing military conflict between Russia and Ukraine and the ongoing conflict in Israel and Gaza), public health events (such as the COVID-19 pandemic), terrorist activities, and natural disasters; and

Current wording

•economic disruptions resulting from war and other geopolitical tensions (such as the ongoing military conflict between Russia and Ukraine and the ongoing conflict in Israel and Gaza), public health events, terrorist activities, and natural disasters; and

Previous wording

Sonoco’s goal is to increase its long-term profitability and return capital to shareholders. Over the past several years, the Company has simplified its business portfolio around fewer, bigger businesses, which has reduced operating complexity and improved agility. For example, in June 2024, the Company announced it had entered into an agreement to acquire Eviosys, a leading European manufacturer of food cans, ends and closures, for approximately $3.9 billion. The transaction is expected to expand Sonoco’s global leadership in metal food can and aerosol packaging and to facilitate Sonoco’s ability to partner with customers and advance innovation and sustainability in metal packaging offerings. In addition, in September 2023, the Company acquired the remaining equity interest in RTS Packaging from joint venture partner WestRock Company, to further strengthen and expand the Company’s 100% recycled fiber-based packaging solutions. In addition, the Company acquired Inapel in December 2023, significantly expanding its presence in the flexibles packaging services market in Latin America.

Current wording

Sonoco’s goal is to increase its long-term profitability and return capital to its shareholders. Over the past several years, the Company has simplified its business portfolio around fewer, bigger businesses, which has reduced operating complexity and improved agility. For example, in June 2024, the Company announced it had entered into an agreement to acquire all of the issued and outstanding equity interests in Eviosys, a leading European manufacturer of food cans, ends and closures, for approximately €3.6 billion (approximately $3.9 billion). The transaction is expected to expand Sonoco’s global leadership in metal food can and aerosol packaging and to facilitate Sonoco’s ability to partner with customers and advance innovation and sustainability in metal packaging offerings. In addition, in September 2023, the Company acquired the remaining ownership interest in RTS Packaging from joint venture partner WestRock Company, to further strengthen and expand the Company’s 100% recycled fiber-based packaging solutions. In addition, the Company acquired Inapel in December 2023, significantly expanding its presence in the flexibles packaging services market in Latin America.

Previous wording

Sonoco’s portfolio transformation strategy also includes significant divestitures. In April 2024, Sonoco completed the divestiture of Protexic, which manufactured molded expanded polypropylene and expanded polystyrene foam components serving the automotive, electronics, appliances, and other markets. In 2023, the Company completed the divestitures of its U.S. and Mexico Bulksak businesses, which consisted of the manufacture and distribution of flexible intermediate bulk containers, plastic and fiber pallets, and custom fit liners, and its S3 business, which provided customized waste and recycling management programs. The Company believes that these and other potential divestitures will enable greater strategic clarity and operational focus while also generating proceeds to fund deleveraging and capital investments in core businesses.

Current wording

Sonoco’s portfolio transformation strategy also includes significant divestitures. For example, in September 2024, the Company entered into agreements to divest two of its production facilities in China. In April 2024, Sonoco completed the divestiture of Protexic, which manufactured molded expanded polypropylene and expanded polystyrene foam components serving the automotive, electronics, appliances, and other markets. In 2023, the Company completed the divestitures of its U.S. and Mexico Bulksak businesses, which consisted of the manufacture and distribution of flexible intermediate bulk containers, plastic and fiber pallets, and custom fit liners, and its S3 business, which provided customized waste and recycling management programs.

Previous wording

The Company is focused on efficient capital deployment into these larger, core business units to improve economic returns and improve integration effectiveness and speed for acquired strategic assets. In parallel, Sonoco has continued to work on commercial, operational, and supply chain excellence programs intended to shift the mix of our business towards higher-valued products and increase overall productivity, as well as strategic pricing initiatives intended to better capture input costs and the value of the services provided.

Current wording

The Company is focused on efficient capital deployment into these larger, core business units to improve economic returns and improve integration effectiveness and speed for acquired strategic assets. In parallel, Sonoco has continued to work on commercial, operational, and supply chain excellence programs intended to shift the mix of our business towards higher-valued products and increase overall productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, as well as strategic pricing initiatives intended to better capture input costs and the value of the services provided.

Previous wording

Effective January 1, 2024, the Company integrated its flexible packaging and thermoformed packaging businesses within the Consumer Packaging segment in order to streamline operations, enhance customer service and better position the business for accelerated growth. As a result, the Company changed its operating and reporting structure to reflect the way it now manages its operations, evaluates performance, and allocates resources. Accordingly, the Company’s consumer thermoformed businesses have moved from the All Other group of businesses to the Consumer Packaging segment. Also effective January 1, 2024, the Company began conducting its recycling operations, part of the Industrial Paper Packaging segment, as a procurement function. As a result, no recycling net sales are recorded and the margin from the Company’s recycling operations reduces “Cost of sales.”

Current wording

Effective January 1, 2024, the Company integrated its flexible packaging and thermoformed packaging businesses within the Consumer Packaging segment in order to streamline operations, enhance customer service, and better position the business for accelerated growth. As a result, the Company changed its operating and reporting structure to reflect the way it now manages its operations, evaluates performance, and allocates resources. Accordingly, the Company’s consumer thermoformed businesses moved from the All Other group of businesses to the Consumer Packaging segment. Also effective January 1, 2024, the Company began conducting its recycling operations, part of the Industrial Paper Packaging segment, as a procurement function. As a result, no recycling net sales are recorded and the margin from the Company’s recycling operations reduces “Cost of sales.”

Previous wording

Net sales for the second quarter of 2024 declined by $81.8 million or 4.8%, to $1.62 billion, compared to $1.71 billion in the same period last year. The decline was primarily driven by the absence of $44.9 million sales related to the Protexic divestiture in April 2024, the absence of $33.7 million sales related to the closure of a thermoformed food packaging plant in November 2023, lower sales of $22.5 million resulting from the accounting for the Company’s recycling operations as a procurement function effective January 1, 2024, and lower selling prices of $32.4 million. Overall volumes, including revenue from acquisitions, increased over the prior period.

Current wording

Net sales for the third quarter of 2024 declined by $34.6 million or 2.0%, to $1.68 billion, compared to $1.71 billion in the same period last year. The decline was primarily driven by the absence of $39.5 million sales related to the Protexic divestiture in April 2024, the absence of $32.6 million sales related to the closure of a thermoformed food packaging plant in November 2023, lower sales of $20.6 million resulting from the accounting for the Company’s recycling operations as a procurement function effective January 1, 2024, and lower selling prices of $16.8 million. Partially offsetting these decreases were increases in overall volumes, including net sales from acquisitions, of $76.0 million over the prior-year period.

Previous wording

GAAP operating profit for the second quarter of 2024 was $140.4 million, a decrease of 25.3% from the $187.9 million reported in the second quarter of 2023. The decrease in GAAP operating profit was primarily due to additional acquisition, integration and divestiture-related costs of $17.7 million, higher employee-related costs of $13.6 million and additional restructuring and asset impairment charges of $13.2 million as unfavorable price/cost was offset by higher productivity. Adjusted Operating Profit for the second quarter of 2024 was $193.0 million, a decrease of 8.5% from the $210.9 million reported for the same period in 2023.

Current wording

GAAP operating profit for the third quarter of 2024 was $128.1 million, a decrease of 21.4% from the $162.9 million reported in the third quarter of 2023. The decrease in GAAP operating profit was primarily due to lower net sales of $52.0 million and a $30.0 million loss on the pending sale of two production facilities in China, partially offset by decreased manufacturing expenses of $56.7 million. Adjusted Operating Profit for the third quarter of 2024 was $210.7 million, a decrease of 0.9% from the $212.5 million reported for the same period in 2023.

Previous wording

Cost of goods sold decreased by $81.8 million, or 6.1%, in the second quarter of 2024 compared with the same period last year. Thedecrease was primarily driven by increased productivity and lower costs related to the sale of Protexic, partially offset by cost of sales related to the acquisitions of Inapel, the Chattanooga mill and the remaining interest in RTS Packaging.

Current wording

Cost of goods sold decreased by $29.0 million, or 2.2%, in the third quarter of 2024 compared with the same period last year. The decrease was primarily driven by lower manufacturing expense and lower costs related to the sale of Protexic, partially offset by cost of sales related to the acquisitions of Inapel, the Chattanooga Mill and the remaining ownership interest in RTS Packaging, higher depreciation expense, and higher employee-related costs.

Previous wording

Selling, general and administrative costs increased by $31.4 million, or 18.4%, in the second quarter of 2024 compared with the same period last year, primarilydue to higher year-over-year acquisition, integration and divestiture-related costs of $17.7 million, increased employee-related costs of $13.6 million, and incremental costs of $8.2 million associated with the prior year acquisitions of Inapel, the remaining interest in RTS Packaging, and the Chattanooga Mill.

Current wording

Selling, general and administrative costs increased by $8.0 million, or 4.4%, in the third quarter of 2024 compared with the same period last year, primarilydue to higher year-over-year acquisition, integration and divestiture-related costs of $7.2 million and net incremental costs of $1.7 million associated with the prior year acquisitions of Inapel, the Chattanooga Mill, and the remaining ownership interest in RTS Packaging, and the current year divestiture of Protexic.

Previous wording

Restructuring/Asset impairment charges totaled $19.3 million in the second quarter of 2024, compared with $6.1 million during the same period last year. Additional information regarding restructuring and asset impairment charges is provided in Note 5 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Restructuring/Asset impairment charges totaled $8.2 million in the third quarter of 2024, compared with $18.1 million during the same period last year. Additional information regarding restructuring and asset impairment charges is provided in Note 5 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Gain on divestiture of business and other assets of $4.5 million in the second quarter of 2024 reflects gains from the Company’s divestitures of Protexic and the S3 business. Gains of divestiture of business and other assets of$7.4 million in the second quarter of 2023 reflects gains from the divestiture of the Company’s U.S. BulkSak business. See Note 3 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Current wording

Loss on divestiture of business and other assets of $31.8 millionin the third quarter of 2024 primarily reflects a loss on the pending sale of two production facilities in China. Loss on divestiture of business and other assets of$0.5 million in the second quarter of 2023 reflectsa loss from the divestiture of the Company’s U.S. BulkSak business. See Note 3 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Previous wording

Non-operating pension costs were $0.8 million higher in the second quarter of 2024 compared to the second quarter of 2023, primarily attributable to higher settlement losses in Canada and higher year-over-year interest cost, partially offset by increased expected returns on assets. Additional information regarding costs of the Company’s retirement plans is provided in Note 12 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Non-operating pension costs were $0.5 million lower in the third quarter of 2024 compared to the third quarter of 2023, primarily attributable to lower year-over-year interest cost and increased expected returns on assets. Additional information regarding costs of the Company’s retirement plans is provided in Note 12 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Net interest expense for the second quarter of 2024 decreased to $26.1 million, compared with $32.3 million during the second quarter of 2023. The decrease of $6.3 million was primarily due to lower year over year average debt balances and interest income from the Company’s cross-currency swaps.

Current wording

Net interest expense for the third quarter of 2024 increased to $55.6 million, compared with $29.7 million during the third quarter of 2023. The increase of $26.0 million was primarily due to higher interest from financing transactions relating to the pending Eviosys acquisition.

Previous wording

The Company’s operating and reporting structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other. The following table summarizes net sales attributable to each of the Company’s segments and the All Other group of businesses for the second quarters of 2024 and 2023:

Current wording

The Company’s operating and reporting structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other. The following table summarizes net sales attributable to each of the Company’s segments and the All Other group of businesses for the third quarters of 2024 and 2023:

Previous wording

The following table summarizes operating profit attributable to each of the Company’s reportable segments, the All Other group of businesses, and Corporate-related activity during the second quarters of 2024 and 2023:

Current wording

The following table summarizes operating profit attributable to each of the Company’s reportable segments, the All Other group of businesses, and Corporate-related activity during the third quarters of 2024 and 2023:

Previous wording

The following table summarizes Adjusted EBITDA attributable to each of the Company’s reportable segments and the All Other group of businesses during the second quarters of 2024 and 2023:

Current wording

The following table summarizes Adjusted EBITDA attributable to each of the Company’s reportable segments and the All Other group of businesses during the third quarters of 2024 and 2023:

Previous wording

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

Current wording

1 Adjusted EBITDA is a non-GAAP financial measure. See the Company’s reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure in “Non-GAAP Financial Measures — Quarterly Reconciliations of GAAP to Non-GAAP Financial Measures” below.

Previous wording

The following table summarizes restructuring/asset impairment charges attributable to each of the Company’s reportable segments, the All Other group of businesses, and Corporate-related activity during the second quarters of 2024 and 2023:

Current wording

The following table summarizes restructuring/asset impairment charges attributable to each of the Company’s reportable segments, the All Other group of businesses, and Corporate-related activity during the third quarters of 2024 and 2023:

Previous wording

Segment sales decreased approximately 4.5% compared to the corresponding prior year quarter due to the absence of $33.7 million in sales related to the closure of a thermoformed food packaging plant in November 2023, and lower pricing of $19.5 million, partially offset by a net $22.9 million increase in sales driven by the benefit of acquisitions.

Current wording

Segment sales remained flat compared to the corresponding prior year quarter as the absence of $32.6 million in sales related to the closure of a thermoformed food packaging plant in November 2023 and lower pricing of $21.4 million were offset by a $53.1 million increase in sales driven by higher net volumes, including an increase in sales from acquisitions.

Previous wording

Segment operating profit and Adjusted EBITDA increased by 10.9% and 10.5%, respectively. The increase was largely due to strong productivity of $24.6 million, which was partially offset by higher employee-related expenses. As a result, segment operating profit margin increased to 12.1% in the second quarter of 2024 from 10.4% in the same period last year.

Current wording

Segment operating profit and Adjusted EBITDA increased by 5.3% and 5.8%, respectively. The increase was largely due to higher productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, of $17.5 million, which was partially offset by lower price/cost and higher employee-related expenses. As a result, segment operating profit margin increased to 12.5% in the third quarter of 2024 from 11.9% in the same period last year.

Previous wording

The primary products produced and sold within the Industrial Paper Packaging segment include goods produced from recycled fiber, including paperboard tubes, cones, and cores; paper-based protective packaging; and uncoated recycled paperboardfor folding cartons, can board and laminated structures. Products across this segment support multiple end markets, primarily in paper, textile, and films.

Current wording

The primary products produced and sold within the Industrial Paper Packaging segment include goods produced from recycled fiber, including paperboard tubes, cones, and cores; paper-based protective packaging; and uncoated recycled paperboardfor folding cartons, can board and laminated structures. Products across this segment support end markets, primarily in paper, textile, and films.

Previous wording

Segment sales increased 2.7% from the corresponding prior year quarter from organic volume improvements of $9.9 million in global paper and converted products and $51.0 million in revenues from the acquisitions of the remaining interest in RTS Packaging and the Chattanooga Mill. These increases were partially offset by lower quarter-over-quarter sales resulting from the prior year disposition of BulkSak, lower index-related pricing of $12.4 million, and the reduction in sales of $22.5 million related to the treatment of the segment’s recycling operations as a procurement function effective January 1, 2024.

Current wording

Segment sales increased 0.9% from the corresponding prior year quarter primarily due to the acquisitions of the remaining ownership interest in RTS Packaging and the Chattanooga Mill and the reduction in sales related to the treatment of the segment’s recycling operations as a procurement function effective January 1, 2024.

Previous wording

Segment operating profit and Adjusted EBITDA decreased 23.1% and 15.1%, respectively, as continued price/cost pressures lowered profitability by $46.5 million and higher employee-related expenses were only partially offset by strong productivity of $23.1 million and the benefit of higher volumes, including acquisitions, of $15.2 million. As a result, segment operating profit margin decreased to 11% in the second quarter of 2024 from 15% in the same period last year.

Current wording

Segment operating profit and Adjusted EBITDA decreased 6.4% and 3.1%, respectively, as continued price/cost pressures lowered profitability by $23.4 million and higher employee-related expenses were only partially offset by higher productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, of $17.7 million and the benefit of higher volumes, including acquisitions, of $8.4 million. As a result, segment operating profit margin decreased to 12% in the third quarter of 2024 from 13% in the same period last year.

Previous wording

Sales declined 36.2% from the same quarter of the prior year primarily due to the sale of Protexic.

Current wording

Sales declined 26.3% from the same quarter of the prior year primarily due to the sale of Protexic.

Previous wording

Operating profit and Adjusted EBITDA dropped by 39.1% and 37.3%, respectively, in the second quarter of 2024 compared to the same period last year, primarily due to the sale of Protexic, lower volumes and negative price/cost, partially offset by higher productivity. As a result, operating margin decreased to 14.6% in the second quarter of 2024 compared to 15.3% in the same quarter last year.

Current wording

All Other operating profit and Adjusted EBITDA dropped by 15.9% and 17.8%, respectively, in the third quarter of 2024 compared to the same period last year, primarily due to the sale of Protexic and negative price/cost, partially offset by higher productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives. As a result, operating margin increased to 16.3% in the third quarter of 2024 compared to 14.2% in the same quarter last year.

Previous wording

The following discussion provides a review of results for the six-month period ended June 30, 2024 compared with the six-month period ended July 2, 2023.

Current wording

The following discussion provides a review of results for the nine-month period ended September 29, 2024 compared with the nine-month period ended October 1, 2023.

Previous wording

Net sales for the first six months of 2024 decreased 5.1% to $3.3 billion, compared with $3.4 billion in the same period last year. The decline was primarily attributable to the absence of $44.9 million in sales related to the Protexic divestiture in April 2024, the absence of $40.9 million in sales related to the closure of a thermoformed food packaging plant in November 2023, lower sales of $55.4 million resulting from the accounting for the Company’s recycling operations as a procurement function beginning January 1, 2024, and lower pricing of $89.5 million. These decreases were partially offset by sales from acquisitions of $163.7 million.

Current wording

Net sales for the first nine months of 2024 decreased 4.1% to $4.9 billion, compared with $5.1 billion in the same period last year. The decline was primarily attributable to the absence of $90.5 million in sales related to the Protexic divestiture in April 2024, the absence of $73.6 million in sales related to the closure of a thermoformed food packaging plant in November 2023, lower sales of $76.8 million resulting from the accounting for the Company’s recycling operations as a procurement function beginning January 1, 2024, and lower pricing of $106.3 million. Partially offsetting these decreases was an increase in overall volume, including net sales from acquisitions, of $159.2 million over the prior-year period.

Previous wording

GAAP operating profit for the first six months of 2024 was $252.8 million, a decrease of 39.4% from the $417.5 million reported in the same period last year. The decrease in GAAP operating profit was primarily due to the absence of a $72.0 million benefit from the sale of the Company’s timberland properties and the divestiture of the S3 business in 2023, additional acquisition, integration and divestiture-related costs of $18.2 million, and higher restructuring and asset impairment charges of $16.0 million, as unfavorable price/cost was offset by higher productivity. Adjusted Operating Profit for the first six months of 2024 was $369.0 million, a decrease of 13.1% from the $424.4 million reported for the same period in 2023.

Current wording

GAAP operating profit for the first nine months of 2024 was $381.0 million, a decrease of 34.4% from the $580.4 million reported in the same period last year. The decrease in GAAP operating profit was primarily due to lower net sales of $337.8 million, a $30.0 million loss in the current period on the pending sale of two production facilities in China, the absence of a net $77.5 million benefit from the sale of the Company’s timberland properties and the divestitures of the S3 and U.S. BulkSak businesses in 2023, and additional acquisition, integration and divestiture-related costs of $25.4 million in the first nine months of 2024, partially offset by decreased manufacturing expenses of $297.9 million. Adjusted operating profit for the first nine months of 2024 was $579.6 million, a decrease of 9.0% from the $636.9 million reported for the same period in 2023.

Previous wording

GAAP net income attributable to Sonoco for the first six months of 2024 decreased to $156.0 million, or $1.57 per diluted share, compared to $263.0 million, or $2.66 per diluted share, reported for the same period of 2023. This decrease was primarily due to the absence of a $72.0 million benefit from the sale of the Company’s timberland properties and the divestiture of the S3 business in 2023, additional acquisition, integration and divestiture-related costs of $18.2 million and higher restructuring and asset impairment charges of $16.0 million, as unfavorable price/cost was offset by higher productivity. Adjusted Earnings for the six-month period ended June 30, 2024 decreased 12.9% to $238.3 million, or $2.40 per diluted share, from $273.6 million, or $2.77 per diluted share, in the six-month period ended July 2, 2023.

Current wording

GAAP net income attributable to Sonoco for the first nine months of 2024 decreased to $206.9 million, or $2.09 per diluted share, compared to $393.7 million, or $3.98 per diluted share, reported for the same period of 2023. This decrease was primarily due to a decrease in GAAP operating profit as described above and the absence of a $44.0 million gain from the step-up to fair value of the Company’s 35% ownership interest in RTS Packaging upon acquiring the remaining 65% ownership interest in September 2023, partially offset by a reduction in income tax expense of $61.2 million. Adjusted net income attributable to Sonoco and Adjusted diluted earnings per share for the nine-month period ended September 29, 2024 decreased 7.7% to $386.1 million, or $3.89 per diluted share, from $418.5 million, or $4.24 per diluted share, in the nine-month period ended October 1, 2023.

Previous wording

Cost of goods sold decreased $137.2 million, or 5.1% primarily related to increased productivity and lower costs related to the sale of Protexic, partially offset by cost of sales related to the acquisitions of Inapel, the Chattanooga mill, and the remaining interest in RTS Packaging.

Current wording

Cost of goods sold decreased $166.2 million, or 4.1%, primarily related to the sale of Protexic and improved productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, partially offset by cost of sales related to the acquisitions of Inapel, the Chattanooga Mill, and the remaining ownership interest in RTS Packaging.

Previous wording

Gross profit decreased $36.8 million, or 5.0%, year over year, while the Company’s gross profit margin percentage remained flat at 21.3% for the first six months of 2024, compared to the prior-year period. The decrease in gross profit was driven by volume and pricing declines, partially offset by positive margin related to the acquisitions of Inapel, the Chattanooga mill, and the remaining interest in RTS Packaging.

Current wording

Gross profit decreased $42.4 million, or 3.9%, year over year, while the Company’s gross profit margin percentage remained flat at 21.3% for the first nine months of 2024, compared to the prior-year period. The decrease in gross profit was driven by volume and price declines, partially offset by higher productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives and positive margin related to the acquisitions of Inapel, the Chattanooga Mill, and the remaining ownership interest in RTS Packaging.

Previous wording

Selling, general and administrative costs for the first six months of 2024 increased $36.9 million, or 10.3%, year over year. The increase was largely driven by higher year-over-year acquisition, integration and divestiture-related costs of $18.2 million, increased employee-related costs, and incremental costs of $16.6 million associated with the prior year acquisitions of Inapel, the Chattanooga mill, and the remaining interest in RTS Packaging.

Current wording

Selling, general and administrative costs for the first nine months of 2024 increased $44.9 million, or 8.3%, year over year. The increase was largely driven by higher year-over-year acquisition, integration and divestiture-related costs of $25.4 million, and net incremental costs of $13.6 million associated with the prior year acquisitions of Inapel, the Chattanooga Mill, and the remaining ownership interest in RTS Packaging, and the current year divestiture of Protexic.

Previous wording

Restructuring/Asset impairment charges totaled $50.9 million in the first six months of 2023, compared with $34.9 million of net charges in the same period last year. Additional information regarding restructuring and asset impairment charges is provided in Note 5 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Restructuring/Asset impairment charges totaled $59.1 million in the first nine months of 2024, compared with $53.0 million of net charges in the same period last year. Additional information regarding restructuring and asset impairment charges is provided in Note 5 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Gain on divestiture of business and other assets of $4.5 million in the first six months of 2024 reflects gains from the Company’s divestitures of Protexic and the S3 business. Gain on divestiture of business and other assets of $79.4 million in the first six months of 2023 reflects net gains from the sale of the Company’s timberland properties and the divestitures of its S3 and U.S. BulkSak businesses. See Note 3 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Current wording

Loss on divestiture of business and other assets of $27.3 million in the first nine months of 2024 primarily reflects a loss on the pending sale of two production facilities in China, partially offset by gains from the Company’s divestitures of Protexic and the S3 business. Gain on divestiture of business and other assets of $78.8 million in the first nine months of 2023 reflects net gains from the sale of the Company’s timberland properties and the divestitures of its S3 and U.S. BulkSak businesses. See Note 3 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Previous wording

Other income, net was $5.9 million in the second quarter of 2024, reflecting a gain upon the remeasurement to fair value of one of the Company’s investments in affiliates.

Current wording

Other income, net was $5.9 million in the first nine months of 2024, reflecting a gain upon the remeasurement to fair value of one of the Company’s investments in affiliates. Other income, net was $36.9 million in the first nine months of 2023, reflecting a gain of $44.0 million resulting from the remeasurement of the Company’s previously held ownership interest in RTS Packaging to fair value, partially offset by a loss of $7.1 million from the settlement of a contract associated with the acquisition of the Chattanooga Mill that was determined to have unfavorable terms given market conditions at the time of the acquisition. See Note 3 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.