ITEM 2. PROPERTIES
The main plant and corporate offices are located in Hartsville, South Carolina. The Company has 172 branch or manufacturing operations in the United States, 26 in Canada and 68 in 21 international countries.
Information about the Company's manufacturing operations by segment follows:
The Company believes that its properties are suitable and adequate for current needs and that the total productive capacity is adequately utilized.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
In the normal course of business, the Company is a party to various legal proceedings incidental to its business and is subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which it operates. On May 3, 1994, a civil action was filed against the Company in the United States District Court for the District of Massachusetts by Integrated Bagging Systems Corporation and BPI Packaging Technologies, Inc. for alleged patent infringement. The suit also seeks to have a patent owned by the Company declared invalid. There are no new developments in this matter, and the Company believes this lawsuit is without merit. The Company will vigorously defend its position and expects to prevail.
Although the level of future expenditures for legal and environmental matters is impossible to determine with any degree of probability, it is management's opinion that such costs, when finally determined, will not have a material adverse effect on the consolidated financial position of the Company.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market and Market Prices of Common Stock
The Company's common stock began trading on the New York Stock Exchange (NYSE) March 8, 1995, under the stock symbol "SON." Prior to that date, the common stock was traded on the NASDAQ National Market System. The Comparative Highlights in the 1994 Annual Report to Shareholders (Exhibit 13 of this report) shows, by quarter, the high and low price on the NASDAQ market for the latest two years, and is hereby incorporated by reference herein.
Approximate Number of Security Holders
There were approximately 34,000 shareholder accounts as of March 5, 1995.
Dividends
The Comparative Highlights in the 1994 Annual Report to Shareholders is hereby incorporated by reference herein. There are certain restrictions with respect to the maintenance of financial ratios and the disposition of assets in several of the Company's loan agreements that may affect the Company's ability to pay dividends. The most restrictive covenant requires that tangible net worth at the end of each fiscal quarter be greater than $365 million. The Company is prohibited from paying cash dividends if these requirements are not met. Additionally, the terms of the Company's $2.25 Series A Cumulative Convertible Preferred Stock prohibits payment of dividends on any junior class of stock, including the Company's Common Stock, unless full cumulative dividends on the $2.25 Series A Cumulative Convertible Preferred Stock have been paid or declared and set aside for payment for all past dividend payment periods.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
The Selected Eleven-Year Financial Data in the 1994 Annual Report to Shareholders provides the required data, and is hereby incorporated by reference herein.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information presented under Management's Discussion and Analysis of the 1994 Annual Report to Shareholders is hereby incorporated by reference herein.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Accountants.
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Directors of Sonoco Products Company:
We have audited the consolidated financial statements of Sonoco Products Company as of December 31, 1994 and 1993, and for each of the three years in the period ended December 31, 1994, which financial statements are included on pages 28 through 37 of the 1994 Annual Report to Shareholders of Sonoco Products Company and incorporated by reference herein. We have also audited the financial statement schedule listed in Item 14 of this form 10-K. These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Sonoco Products Company as of December 31, 1994 and 1993, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 1994, in conformity with generally accepted accounting principles. In addition, in our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein.
As discussed in Notes 14 and 15 to the consolidated financial statements, the Company changed its method of accounting for postretirement benefits other than pensions and income taxes in 1992.
/s/ Coopers & Lybrand, L.L.P. ----------------------------- COOPERS & LYBRAND, L.L.P.
Charlotte, North Carolina February 1, 1995
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA, CONTINUED
Consolidated Financial Statements
The consolidated financial statements and notes to consolidated financial statements for the Company included in the 1994 Annual Report to Shareholders are hereby incorporated by reference herein.
Supplementary Financial Data
The Comparative Highlights in the 1994 Annual Report to Shareholders is hereby incorporated by reference herein.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Identification of Directors
Information about the Directors of the Company and Compliance with the Securities Exchange Act of 1934 is shown on pages 5 through 10 and page 30, respectively, of the Definitive Proxy Statement (included as Exhibit 99-1 of this report) and is hereby incorporated by reference herein.
Identification of Executive Officers
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT, CONTINUED
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT, CONTINUED
Family Relationships
C. W. Coker and F. L. H. Coker are brothers and the first cousins of J. L. Coker and P. C. Coggeshall, Jr.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Executive Compensation - Directors and Officers as shown on pages 13 - 21 of the Proxy Statement, included as Exhibit 99-1 of this report, is hereby incorporated by reference herein.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The security ownership of management as shown on page 12 of the Proxy Statement, Exhibit 99-1 of this report, is hereby incorporated by reference herein.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with management as shown on pages 22 - 23 of the Proxy Statement, included as Exhibit 99-1 of this report, is hereby incorporated by reference herein.
III-3
SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Data incorporated by reference from the attached 1994 Annual Report to Shareholders (included as Exhibit 13 of this report):
Comparative Highlights (Selected Quarterly Financial Data)
Consumer Packaging Review
Industrial Packaging Review
Management's Discussion and Analysis of Financial Condition and Results of Operations
Consolidated Balance Sheets as of December 31, 1994 and 1993
Consolidated Statements of Income for the years ended December 31, 1994, 1993 and 1992
Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows for the years ended December 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
Shareholders' Information (Selected Financial Data)
Data submitted herewith:
Report of Independent Accountants (included under Item 8)
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K, CONTINUED
Financial Statement Schedule:
Schedule II - Valuation and Qualifying Accounts
All other schedules are omitted because they are not required, are not applicable or the required information is given in the financial statements or notes thereto.
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K, CONTINUED
Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the fourth quarter of 1994.
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992 (DOLLARS IN THOUSANDS)
(1) Includes amounts written off, translation adjustments and payments.
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on this 30th day of March 1995.
SONOCO PRODUCTS COMPANY
/s/ C. W. Coker --------------------------------- C. W. Coker Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report is signed below by the following person on behalf of the Registrant and in the capacities indicated on this 30th day of March 1995.
/s/ F. T. Hill, Jr. -------------------------------- F. T. Hill, Jr. Vice President - Finance (Principal Accounting Officer)
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
SIGNATURES, CONTINUED
/s/ C. W. Coker Chief Executive Officer and ------------------------ Director (Principal Executive Officer) C. W. Coker
/s/ T. C. Coxe, III Senior Executive Vice President and ------------------------ Director (Principal Financial Officer) T. C. Coxe, III
/s/ L. Benatar Director ------------------------ L. Benatar
/s/ C. J. Bradshaw Director ------------------------ C. J. Bradshaw
/s/ R. J. Brown Director ------------------------ R. J. Brown
Director ------------------------ F. L. H. Coker
/s/ J. L. Coker Director ------------------------ J. L. Coker
/s/ A. T. Dickson Director ------------------------ A. T. Dickson
/s/ R. E. Elberson Director ------------------------ R. E. Elberson
/s/ J. C. Fort Director ------------------------ J. C. Fort
/s/ P. Fulton Director ------------------------ P. Fulton
/s/ R. C. King, Jr. Director ------------------------ R. C. King, Jr.
Director ------------------------ E. H. Lawton, Jr.
/s/ H. L. McColl, Jr. Director ------------------------ H. L. McColl, Jr.
/s/ E. C. Wall, Jr. Director ------------------------ E. C. Wall, Jr.
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