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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| | | | | |
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 29, 2020
or
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| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No. 001-11261
SONOCO PRODUCTS COMPANY
| | | | | | | | |
Incorporated under the laws of South Carolina | | I.R.S. Employer Identification No. 57-0248420 |
1 N. Second St.
Hartsville, South Carolina 29550
Telephone: 843/383-7000
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
| Title of each class | Trading
Symbol(s) | Name of each exchange on which registered |
| No par value common stock | SON | New York Stock Exchange, LLC |
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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | | | | | | | |
| Large accelerated filer | | ☒ | | Accelerated filer | | ☐ |
| Non-accelerated filer | | ☐ | | Smaller reporting company | | ☐ |
| | | | Emerging growth company | | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock at April 24, 2020:
Common stock, no par value: 100,329,316
SONOCO PRODUCTS COMPANY
INDEX
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| Item 1. | | |
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| Item 2. | | |
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| Item 4. | | |
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| Item 1. | | |
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| Item 1A. | | |
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| Item 2. | | |
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| Item 6. | Exhibits. | |
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars and shares in thousands)
| | | | | | | | | | | | | | |
| | March 29,
2020 | | December 31,
2019* |
| Assets | | | | |
| Current Assets | | | | |
| Cash and cash equivalents | | $ | 123,335 | | | $ | 145,283 | |
| Trade accounts receivable, net of allowances | | 737,760 | | | 698,149 | |
| Other receivables | | 98,648 | | | 113,754 | |
| Inventories, net: | | | | |
| Finished and in process | | 181,785 | | | 172,223 | |
| Materials and supplies | | 318,311 | | | 331,585 | |
| Prepaid expenses | | 53,989 | | | 60,202 | |
| | 1,513,828 | | | 1,521,196 | |
| Property, Plant and Equipment, Net | | 1,236,827 | | | 1,286,842 | |
| Goodwill | | 1,412,055 | | | 1,429,346 | |
| Other Intangible Assets, Net | | 372,724 | | | 388,292 | |
| Deferred Income Taxes | | 41,500 | | | 46,502 | |
| Right of Use Asset-Operating Leases | | 286,533 | | | 298,393 | |
| Other Assets | | 148,670 | | | 155,718 | |
| Total Assets | | $ | 5,012,137 | | | $ | 5,126,289 | |
| Liabilities and Equity | | | | |
| Current Liabilities | | | | |
| Payable to suppliers | | $ | 538,348 | | | $ | 537,764 | |
| Accrued expenses and other | | 355,247 | | | 367,114 | |
| Notes payable and current portion of long-term debt | | 452,827 | | | 488,234 | |
| Accrued taxes | | 17,382 | | | 11,380 | |
| | 1,363,804 | | | 1,404,492 | |
| Long-term Debt, Net of Current Portion | | 1,187,904 | | | 1,193,135 | |
| Noncurrent Operating Lease Liabilities | | 242,381 | | | 253,992 | |
| Pension and Other Postretirement Benefits | | 304,361 | | | 304,798 | |
| Deferred Income Taxes | | 81,055 | | | 76,206 | |
| Other Liabilities | | 77,191 | | | 77,961 | |
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| Sonoco Shareholders’ Equity | | | | |
| Common stock, no par value | | | | |
Authorized 300,000 shares 100,329 and 100,198 shares issued and outstanding at March 29, 2020 and December 31, 2019, respectively | | 7,175 | | | 7,175 | |
| Capital in excess of stated value | | 307,813 | | | 310,778 | |
| Accumulated other comprehensive loss | | (909,153) | | | (816,803) | |
| Retained earnings | | 2,338,429 | | | 2,301,532 | |
| Total Sonoco Shareholders’ Equity | | 1,744,264 | | | 1,802,682 | |
| Noncontrolling Interests | | 11,177 | | | 13,023 | |
| Total Equity | | 1,755,441 | | | 1,815,705 | |
| Total Liabilities and Equity | | $ | 5,012,137 | | | $ | 5,126,289 | |
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| * | The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
See accompanying Notes to Condensed Consolidated Financial Statements
SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars and shares in thousands except per share data)
| | | | | | | | | | | | | | | | | | |
| | | | | | Three Months Ended | | |
| | | | | | March 29, 2020 | | March 31, 2019 |
| Net sales | | | | | | $ | 1,303,296 | | | $ | 1,351,705 | |
| Cost of sales | | | | | | 1,036,706 | | | 1,081,584 | |
| Gross profit | | | | | | 266,590 | | | 270,121 | |
| Selling, general and administrative expenses | | | | | | 123,888 | | | 142,561 | |
| Restructuring/Asset impairment charges | | | | | | 12,599 | | | 10,672 | |
| Operating profit | | | | | | 130,103 | | | 116,888 | |
| Non-operating pension costs | | | | | | 7,579 | | | 6,041 | |
| Interest expense | | | | | | 16,529 | | | 16,032 | |
| Interest income | | | | | | 484 | | | 647 | |
| Income before income taxes | | | | | | 106,479 | | | 95,462 | |
| Provision for income taxes | | | | | | 26,756 | | | 22,624 | |
| Income before equity in earnings of affiliates | | | | | | 79,723 | | | 72,838 | |
| Equity in earnings of affiliates, net of tax | | | | | | 513 | | | 930 | |
| Net income | | | | | | 80,236 | | | 73,768 | |
| Net loss/(income) attributable to noncontrolling interests | | | | | | 209 | | | (105) | |
| Net income attributable to Sonoco | | | | | | $ | 80,445 | | | $ | 73,663 | |
| Weighted average common shares outstanding: | | | | | | | | |
| Basic | | | | | | 100,855 | | | 100,640 | |
| Diluted | | | | | | 101,071 | | | 101,072 | |
| Per common share: | | | | | | | | |
| Net income attributable to Sonoco: | | | | | | | | |
| Basic | | | | | | $ | 0.80 | | | $ | 0.73 | |
| Diluted | | | | | | $ | 0.80 | | | $ | 0.73 | |
See accompanying Notes to Condensed Consolidated Financial Statements
SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE (LOSS)/INCOME (unaudited)
(Dollars in thousands)
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| | | | | | Three Months Ended | | |
| | | | | | March 29, 2020 | | March 31, 2019 |
| Net income | | | | | | $ | 80,236 | | | $ | 73,768 | |
| Other comprehensive income/(loss): | | | | | | | | |
| Foreign currency translation adjustments | | | | | | (95,212) | | | (2,972) | |
| Changes in defined benefit plans, net of tax | | | | | | 5,780 | | | 7,156 | |
| Changes in derivative financial instruments, net of tax | | | | | | (4,555) | | | 1,864 | |
| Other comprehensive (loss)/income | | | | | | $ | (93,987) | | | $ | 6,048 | |
| Comprehensive (loss)/income | | | | | | (13,751) | | | 79,816 | |
| Net loss/(income) attributable to noncontrolling interests | | | | | | 209 | | | (105) | |
| Other comprehensive loss/(income) attributable to noncontrolling interests | | | | | | 1,637 | | | (120) | |
| Comprehensive (loss)/income attributable to Sonoco | | | | | | $ | (11,905) | | | $ | 79,591 | |
See accompanying Notes to Condensed Consolidated Financial Statements
SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN TOTAL EQUITY (unaudited)
(Dollars in thousands)
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| Total
Equity | | Common Shares | | | Capital in
Excess of
Stated Value | | Accumulated
Other
Comprehensive
Loss | | Retained
Earnings | | Noncontrolling
Interests |
| | | Outstanding | Amount | | | | | | | | |
| December 31, 2018 | $ | 1,772,278 | | | | 99,829 | | $ | 7,175 | | | | $ | 304,709 | | | | $ | (740,913) | | | | $ | 2,188,115 | | | | $ | 13,192 | |
| Net income | 73,768 | | | | | | | | | | | | | | | | | | 73,663 | | | | 105 | |
| Other comprehensive income/(loss): | | | | | | | | | | | | | | | | | | | | | | | | |
| Translation loss | (2,972) | | | | | | | | | | | | | | (2,852) | | | | | | | | (120) | |
| Defined benefit plan adjustment, net of tax | 7,156 | | | | | | | | | | | | | | 7,156 | | | | | | | | | |
| Derivative financial instruments, net of tax | 1,864 | | | | | | | | | | | | | | 1,864 | | | | | | | | | |
| Other comprehensive income/(loss) | $ | 6,048 | | | | | | | | | | | | | | $ | 6,168 | | | | | | | | $ | (120) | |
| Dividends | (41,534) | | | | | | | | | | | | | | | | | | (41,534) | | | | | |
| Dividends paid to noncontrolling interests | (214) | | | | | | | | | | | | | | | | | | | | | | (214) | |
| Issuance of stock awards | 399 | | | | 340 | | | | | | 399 | | | | | | | | | | | | | |
| Shares repurchased | (7,395) | | | | (133) | | | | | | (7,395) | | | | | | | | | | | | | |
| Stock-based compensation | 4,560 | | | | | | | | | | 4,560 | | | | | | | | | | | | | |
| Impact of new accounting pronouncements | (6,771) | | | | | | | | | | | | | | | | | | (6,771) | | | | | |
| March 31, 2019 | $ | 1,801,139 | | | | 100,036 | | $ | 7,175 | | | | $ | 302,273 | | | | $ | (734,745) | | | | $ | 2,213,473 | | | | $ | 12,963 | |
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| Total Equity | | Common Shares | | | Capital in
Excess of
Stated Value | | Accumulated
Other
Comprehensive
Loss | | Retained
Earnings | | Noncontrolling
Interests |
| | | Outstanding | Amount | | | | | | | | |
| December 31, 2019 | $ | 1,815,705 | | | 100,198 | | $ | 7,175 | | | $ | 310,778 | | | $ | (816,803) | | | $ | 2,301,532 | | | $ | 13,023 | |
| Net income/(loss) | 80,236 | | | | | | | | | | | 80,445 | | | (209) | |
| Other comprehensive income/(loss): | | | | | | | | | | | | |
| Translation loss | (95,212) | | | | | | | | (93,575) | | | | | (1,637) | |
| Defined benefit plan adjustment, net of tax | 5,780 | | | | | | | | 5,780 | | | | | |
| Derivative financial instruments, net of tax | (4,555) | | | | | | | | (4,555) | | | | | |
| Other comprehensive loss | $ | (93,987) | | | | | | | | $ | (92,350) | | | | | $ | (1,637) | |
| Dividends | (43,339) | | | | | | | | | | (43,339) | | | |
| Dividends paid to noncontrolling interests | — | | | | | | | | | | | | | |
| Issuance of stock awards | 376 | | | 196 | | | | 376 | | | | | | | |
| Shares repurchased | (3,938) | | | (65) | | | | (3,938) | | | | | | | |
| Stock-based compensation | 597 | | | | | | 597 | | | | | | | |
| Impact of new accounting pronouncements | (209) | | | | | | | | | | (209) | | | |
| March 29, 2020 | $ | 1,755,441 | | | 100,329 | | $ | 7,175 | | | $ | 307,813 | | | $ | (909,153) | | | $ | 2,338,429 | | | $ | 11,177 | |
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See accompanying Notes to Condensed Consolidated Financial Statements
SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in thousands)
| | | | | | | | | | | | | | |
| | Three Months Ended | | |
| | March 29, 2020 | | March 31, 2019 |
| Cash Flows from Operating Activities: | | | | |
| Net income | | $ | 80,236 | | | $ | 73,768 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
| Asset impairment | | 3,106 | | | 1,400 | |
| Depreciation, depletion and amortization | | 60,824 | | | 58,614 | |
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| Share-based compensation expense | | 597 | | | 4,560 | |
| Equity in earnings of affiliates | | (513) | | | (930) | |
| Cash dividends from affiliated companies | | 350 | | | 525 | |
| Net (gain)/loss on disposition of assets | | (2,520) | | | 2,160 | |
| Pension and postretirement plan expense | | 14,722 | | | 7,056 | |
| Pension and postretirement plan contributions | | (24,812) | | | (17,353) | |
| Net increase/(decrease) in deferred taxes | | 6,933 | | | (1,092) | |
| Change in assets and liabilities, net of effects from acquisitions and foreign currency adjustments: | | | | |
| Trade accounts receivable | | (64,868) | | | (40,036) | |
| Inventories | | (12,185) | | | (20,631) | |
| Payable to suppliers | | 6,820 | | | 14,763 | |
| Prepaid expenses | | (2,853) | | | (2,637) | |
| Accrued expenses | | 16,338 | | | (16,865) | |
| Income taxes payable and other income tax items | | 4,687 | | | 11,400 | |
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| Other assets and liabilities | | 851 | | | 17,617 | |
| Net cash provided by operating activities | | 87,713 | | | 92,319 | |
| Cash Flows from Investing Activities: | | | | |
| Purchases of property, plant and equipment | | (33,851) | | | (42,157) | |
| Cost of acquisitions, net of cash acquired | | (3,973) | | | (455) | |
| Proceeds from the sale of assets | | 3,188 | | | 493 | |
| Investment in affiliates and other, net | | 462 | | | 1,150 | |
| Net cash used in investing activities | | (34,174) | | | (40,969) | |
| Cash Flows from Financing Activities: | | | | |
| Proceeds from issuance of debt | | 156,237 | | | 15,566 | |
| Principal repayment of debt | | (7,833) | | | (34,651) | |
| Net change in commercial paper | | (185,000) | | | 31,000 | |
| Net increase/(decrease) in outstanding checks | | 6,594 | | | (10,993) | |
| Proceeds from cross-currency swap | | 14,480 | | | — | |
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| Cash dividends | | (43,202) | | | (41,136) | |
| Dividends paid to noncontrolling interests | | — | | | (214) | |
| Shares repurchased | | (3,938) | | | (7,395) | |
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| Net cash used in financing activities | | (62,662) | | | (47,823) | |
| Effects of Exchange Rate Changes on Cash | | (12,825) | | | 412 | |
| Net (Decrease)/Increase in Cash and Cash Equivalents | | (21,948) | | | 3,939 | |
| Cash and cash equivalents at beginning of period | | 145,283 | | | 120,389 | |
| Cash and cash equivalents at end of period | | $ | 123,335 | | | $ | 124,328 | |
See accompanying Notes to Condensed Consolidated Financial Statements
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)
Note 1: Basis of Interim Presentation
In the opinion of the management of Sonoco Products Company (the “Company” or “Sonoco”), the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments, unless otherwise stated) necessary to state fairly the consolidated financial position, results of operations and cash flows for the interim periods reported herein. Operating results for the three months ended March 29, 2020, are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. 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 on Form 10-K for the fiscal year ended December 31, 2019.
With respect to the unaudited condensed consolidated financial information of the Company for the three-month periods ending March 29, 2020 and March 31, 2019 included in this Form 10-Q, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate report dated May 6, 2020 appearing herein, states that they did not audit and they do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited financial information because that report is not a “report” or a “part” of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Act.
Note 2: New Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting". The ASU is intended to provide optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The relief offered by this guidance, if adopted, is available to companies for the period March 12, 2020 through December 31, 2022. The Company does not expect the discontinuation of LIBOR to have a material impact on its consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments," which requires measurement and recognition of expected versus incurred credit losses for financial assets held. The measurement of expected credit losses should be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. The guidance is effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods. The Company adopted ASU 2016-13 in 2020, using the modified retrospective approach and recorded a cumulative-effect adjustment to retained earnings of $209, which was offset by a $279 increase to the allowance for doubtful accounts and a $70 decrease to deferred income tax liabilities as of January 1, 2020.
During the three-month period ended March 29, 2020, there have been no other newly issued nor newly applicable accounting pronouncements that have had, or are expected to have, a material impact on the Company’s financial statements. Further, at March 29, 2020, there were no other pronouncements pending adoption that are expected to have a material impact on the Company’s consolidated financial statements.
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)
Note 3: Acquisitions
On January 10, 2020, the Company completed the acquisition of a small tube and core operation in Jacksonville, Florida, from Design Containers, Inc. ("Jacksonville"), for total cash consideration of $3,973.
The preliminary fair values of the assets acquired in connection with the Jacksonville acquisition are as follows:
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| Jacksonville |
| Property, plant and equipment | $ | 2,773 | |
| Inventories | 150 | |
| Goodwill | 1,050 | |
| $ | 3,973 | |
Goodwill, all of which is expected to be deductible for income tax purposes, consists of increased access to certain markets. Jacksonville's financial results from January 10, 2020 to March 29, 2020 are included in the Company's Paper and Industrial Converted Products segment.
During the three months ended March 29, 2020, the Company continued to finalize its valuations of the assets acquired and liabilities assumed in the December 31, 2019 acquisition of Thermoform Engineered Quality, LLC, and Plastique Holdings, LTD (together "TEQ") and the August 9, 2019 acquisition of Corenso Holdings America, Inc. ("Corenso") based on new information obtained about facts and circumstances that existed as of their respective acquisition dates. As a result, the following measurement period adjustments were made to the previously disclosed preliminary fair values:
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| TEQ | | Corenso |
| Trade accounts receivable | $ | (41) | | | $ | — | |
| Inventories | (204) | | | (536) | |
| Property, plant and equipment | (27) | | | — | |
| Goodwill | 1,077 | | | 616 | |
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| Payable to suppliers | — | | | (80) | |
| Other net tangible assets/liabilities | (477) | | | — | |
| Deferred income taxes, net | (328) | | | — | |
| $ | — | | | | $ | — | |
The allocation of the purchase price of TEQ and Corenso to the tangible and intangible assets acquired and liabilities assumed was based on the Company's preliminary estimates of their fair value, based on information currently available. Management is continuing to finalize its valuations of certain assets and liabilities including, but not limited to, those listed in the table above, and expects to complete its valuations within one year from their respective dates of acquisition. In addition, final consideration for TEQ is subject to a post-closing adjustment for the change in working capital to the date of closing. This adjustment is expected to be completed by the end of the second quarter 2020.
The Company has accounted for its acquisitions as business combinations under the acquisition method of accounting, in accordance with the business combinations subtopic of the Accounting Standards Codification and has included their results of operations in the Company's Condensed Consolidated Statements of Income from their respective dates of acquisition.
Costs related to acquisitions and potential acquisitions and divestitures totaling $1,171 and $400 were incurred during the three months ended March 29, 2020 and March 31, 2019, respectively. These costs consist primarily of legal and professional fees and are included in "Selling, general and administrative expenses" in the Company's Condensed Consolidated Statements of Income.
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)
Note 4: Shareholders' Equity
Earnings per Share
The following table sets forth the computation of basic and diluted earnings per share:
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| | | | | | Three Months Ended | | |
| | | | | | March 29, 2020 | | March 31, 2019 |
| Numerator: | | | | | | | | |
| Net income attributable to Sonoco | | | | | | $ | 80,445 | | | $ | 73,663 | |
| Denominator: | | | | | | | | |
| Weighted average common shares outstanding: | | | | | | | | |
| Basic | | | | | | 100,855 | | | 100,640 | |
| Dilutive effect of stock-based compensation | | | | | | 216 | | | 432 | |
| Diluted | | | | | | 101,071 | | | 101,072 | |
| Net income attributable to Sonoco per common share: | | | | | | | | |
| Basic | | | | | | $ | 0.80 | | | $ | 0.73 | |
| Diluted | | | | | | $ | 0.80 | | | $ | 0.73 | |
| Cash dividends | | | | | | $ | 0.43 | | | $ | 0.41 | |
Potentially dilutive securities are calculated in accordance with the treasury stock method, which assumes the proceeds from the exercise of all dilutive stock appreciation rights (SARs) are used to repurchase the Company’s common stock. Certain SARs are not dilutive because either the exercise price is greater than the average market price of the stock during the reporting period or assumed repurchases from proceeds from the exercise of the SARs were antidilutive. These SARs may become dilutive in the future if the market price of the Company's common stock appreciates.
The average numbers of SARs that were not dilutive and, therefore, not included in the computation of diluted earnings per share during the three month periods ended March 29, 2020 and March 31, 2019 were as follows:
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| | | | | | Three Months Ended | | |
| | | | | | March 29, 2020 | | March 31, 2019 |
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| Anti-dilutive stock appreciation rights | | | | | | 589 | | | 305 | |
No adjustments were made to "Net income attributable to Sonoco" in the computations of earnings per share.
Stock Repurchases
On February 10, 2016, the Company’s Board of Directors authorized the repurchase of up to 5,000 shares of the Company's common stock. A total of 2,030 shares were purchased in 2016. No shares were repurchased under this authorization during 2017, 2018, 2019, or during the three months ended March 29, 2020. Accordingly, a total of 2,970 shares remain available for repurchase at March 29, 2020.
The Company frequently repurchases shares of its common stock to satisfy employee tax withholding obligations in association with certain share-based compensation awards. These repurchases, which are not part of a publicly announced plan or program, totaled 65 shares in the three months ended March 29, 2020 at a cost of $3,938, and 133 shares in the three months ended March 31, 2019 at a cost of $7,395.
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)
Dividend Declarations
On February 12, 2020, the Board of Directors declared a regular quarterly dividend of $0.43 per share. This dividend was paid on March 10, 2020 to all shareholders of record as of February 26, 2020.
On April 15, 2020, the Board of Directors declared a regular quarterly dividend of $0.43 per share. This dividend is payable on June 10, 2020 to all shareholders of record as of May 8, 2020.
Note 5: Restructuring and Asset Impairment
Due to its geographic footprint and the cost-competitive nature of its businesses, the Company is constantly seeking the most cost-effective means and structure to serve its customers and to respond to fundamental changes in its markets. As such, restructuring costs have been, and are expected to be, a recurring component of the Company's operating costs. The amount of these costs can vary significantly from quarter to quarter and from year to year depending upon the scope and location of the restructuring activities.
The table below sets forth restructuring and restructuring-related asset impairment charges by type incurred:
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| | | | | | Three Months Ended | | |
| | | | | | March 29, 2020 | | March 31, 2019 |
| Severance and Termination Benefits | | | | | | $ | 10,100 | | | $ | 6,300 | |
| Asset Impairment / Disposal of Assets | | | | | | 2,686 | | | 1,632 | |
| Other Costs | | | | | | (187) | | | 2,740 | |
| Total Restructuring/Asset Impairment Charges | | | | | | $ | 12,599 | | | $ | 10,672 | |
The table below sets forth restructuring and restructuring-related asset impairment charges by reportable segment:
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| | | | | | Three Months Ended | | |
| | | | | | March 29, 2020 | | March 31, 2019 |
| Consumer Packaging | | | | | | $ | 2,362 | | | $ | 7,255 | |
| Display and Packaging | | | | | | 2,880 | | | 375 | |
| Paper and Industrial Converted Products | | | | | | 5,356 | | | 874 | |
| Protective Solutions | | | | | | 473 | | | 442 | |
| Corporate | | | | | | 1,528 | | | 1,726 | |
| Total Restructuring/Asset Impairment Charges | | | | | | $ | 12,599 | | | $ | 10,672 | |
Restructuring and asset impairment charges are included in “Restructuring/Asset impairment charges” in the Condensed Consolidated Statements of Income.
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)
The following table sets forth the activity in the restructuring accrual included in “Accrued expenses and other” on the Company’s Condensed Consolidated Balance Sheets:
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| | Severance
and
Termination
Benefits | | Asset
Impairment/
Disposal
of Assets | | Other
Costs | | Total |
| Accrual Activity | | | | | | | | |
Liability at December 31, 2019 | | $ | 10,765 | | | $ | — | | | $ | 592 | | | $ | 11,357 | |
| 2020 charges | | 10,100 | | | 2,686 | | | (187) | | | 12,599 | |
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| Cash receipts/(payments) | | (7,919) | | | |