Le Lézard
Classified in: Business
Subject: EARNINGS

Sonoco Reports First Quarter 2024 Results


HARTSVILLE, S.C., April 30, 2024 (GLOBE NEWSWIRE) -- Sonoco Products Company ("Sonoco" or the "Company") (NYSE: SON), one of the largest sustainable global packaging companies, today reported financial results for its first quarter ended March 31, 2024.

Summary:

First Quarter 2024 Consolidated Results   
(Dollars in millions except per share data)   
       
  Three Months Ended     
 GAAP ResultsMarch 31, 2024April 2, 2023 Change   
         
 Net sales1$1,638$1,730 (5)%  
 Operating profit$112$230 (51)%  
 Net income attributable to Sonoco$65$148 (56)%  
 EPS (diluted)$0.66$1.50 (56)%  
         
 1Net sales for the three months ended April 2, 2023 include $33 million from recycling operations. Effective January 1, 2024, recycling operations are conducted as a procurement function, hence, recycling sales margins are only reflected in cost of sales.   
         
  Three Months Ended     
 Non-GAAP Results2March 31, 2024April 2, 2023 Change   
         
 Adjusted operating profit$176$213 (18)%  
 Adjusted EBITDA$245$276 (11)%  
 Adjusted net income attributable to Sonoco ("Adjusted Earnings")$111$138 (19)%  
 Adjusted EPS (diluted)$1.12$1.40 (20)%  
         

2 See the Company's definitions of non-GAAP financial measures, explanations as to why they are used, and reconciliations to the most directly comparable U.S. generally accepted accounting principles ("GAAP") financial measures later in this release.

"Sonoco delivered first quarter results in line with our expectations", said Sonoco's President and CEO, Howard Coker. "While the overall demand environment remains muted and price/cost headwinds persist, focused execution and operating discipline delivered $51 million of productivity from value creating capital investments and business simplification initiatives over the past several years. On the strategic front, we continued to make notable progress on portfolio alignment with the sale of our Protective Solutions business, integration of our flexibles and thermoformed businesses, and strengthening our strategic pipeline of both organic and inorganic investment opportunities."

First Quarter 2024 Segment Results
(Dollars in millions except per share data)

Sonoco reports its financial results in two reportable segments: Consumer and Industrial, with all remaining businesses reported as All Other.

  Three Months Ended  
 Consumer PackagingMarch 31, 2024 April 2, 2023Change 
        
 Net sales$911  $958 (5)% 
 Segment operating profit$93  $96 (4)% 
 Segment operating profit margin 10%  10%   
 Segment Adjusted EBITDA1$129  $129 ?% 
 Segment Adjusted EBITDA margin1 14%  13%   
            
  Three Months Ended   
 Industrial Paper PackagingMarch 31, 2024 April 2, 2023Change  
        
 Net sales2$593  $616 (4)% 
 Segment operating profit$66  $94 (30)% 
 Segment operating profit margin 11%  15%   
 Segment Adjusted EBITDA1$95  $121 (21)% 
 Segment Adjusted EBITDA margin1 16%  20%   
            
  Three Months Ended   
 All OtherMarch 31, 2024 April 2, 2023Change  
        
 Net sales$134  $156 (14)% 
 Operating profit$17  $23 (24)% 
 Operating profit margin 13%  15%   
 Adjusted EBITDA1$21  $26 (20)% 
 Adjusted EBITDA margin1 16%  17%   
            

1Segment and All Other Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See the Company's reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures later in this release.
2Net sales for the three months ended April 2, 2023 include $33 million from recycling operations.

Balance Sheet and Cash Flow Highlights

Guidance(1)         
Second Quarter 2024

Full Year 2024

Commenting on the Company's outlook, Coker said, "At the midpoint of second quarter 2024 guidance, we expect sequential adjusted earnings per share improvement of 16% over first quarter results from increased sales in metal packaging and trade paper and continued strong productivity across all businesses. We will continue to make progress on our portfolio simplification efforts while remaining focused on financial discipline and returning capital to our shareholders."

(1)Although the Company believes the assumptions reflected in the range of guidance are reasonable, given the uncertainty regarding the future performance of the overall economy, the effects of inflation, the continued challenges in global supply chains, potential changes in raw material prices, other costs, and the Company's effective tax rate, as well as other risks and uncertainties, including those described below, actual results could vary substantially. Further information can be found in the section entitled "Forward-looking Statements" in this release.

(2) Second quarter and full year 2024 GAAP guidance are not provided in this release due to the likely occurrence of one or more of the following, the timing and magnitude of which we are unable to reliably forecast without unreasonable efforts: restructuring costs and restructuring-related impairment charges, acquisition/divestiture-related costs, gains or losses on the sale of businesses or other assets, and the income tax effects of these items and/or other income tax-related events. These items could have a significant impact on the Company's future GAAP financial results. Accordingly, a quantitative reconciliation of Adjusted EPS guidance has been omitted in reliance on the exception provided by Item 10 of Regulation S-K.        

Effective January 1, 2024, the Company integrated its flexible packaging and thermoformed packaging businesses within the Consumer 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. Beginning this reporting period, the Company's consumer thermoformed businesses moved from the All Other group of businesses to the Consumer segment. The Company's Industrial segment was not affected by these changes.

Conference Call Webcast
Management will host a conference call and webcast to further discuss these results beginning at 8:30 am EDT, Wednesday, May 1, 2024. The live conference call and a corresponding presentation can be accessed via the Company's Investor Relations website at https://investor.sonoco.com. To listen via telephone, please register in advance at https://edge.media-server.com/mmc/p/95xz4bah/. Upon registration, all telephone participants will receive the dial-in number along with a unique PIN number that can be used to access the call. A replay of the conference call and webcast will be archived on the Company's Investor Relations website for at least 30 days.

Contact Information:
Lisa Weeks
Vice President of Investor Relations & Communications
[email protected]        
843-383-7524

About Sonoco
With net sales of approximately $6.8 billion in 2023, Sonoco has approximately 22,000 employees working in more than 300 operations around the world, serving some of the world's best-known brands. With our corporate purpose of Better Packaging. Better Life., Sonoco is committed to creating sustainable products and a better world for our customers, employees and communities. Sonoco was named one of America's Most Responsible Companies by Newsweek. For more information on the Company, visit our website at www.sonoco.com.

Forward-looking Statements
Statements included herein that are not historical in nature, 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. In addition, the Company and its representatives may from time to time make other oral or written statements that are also "forward-looking statements." Words such as "assume," "believe," "committed," "continue," "could," "estimate," "expect," "focused," "future," "guidance," "likely," "may," "ongoing," "outlook," "potential," "seek," "strategy," "will," or the negative thereof, and similar expressions identify forward-looking statements.

Forward-looking statements in this communication include statements regarding, but not limited to: the Company's future operating and financial performance, including second quarter and full year 2024 outlook and the anticipated drivers thereof; the Company's ability to support its customers and manage costs; opportunities for productivity and other operational improvements; price/cost, customer demand and volume outlook; expected benefits from and integration efforts related to acquisitions and divestitures; the Company's expectations with respect to the VPPA and its contribution to the Company's emissions reduction goals; the effectiveness of the Company's strategy and strategic initiatives, including with respect to capital expenditures, portfolio simplification and capital allocation priorities; the Company's pipeline of organic and inorganic investment opportunities; the effects of the macroeconomic environment and inflation on the Company and its customers; and the Company's ability to generate continued value and return capital to shareholders.

Such forward-looking statements are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management. Such information includes, without limitation, discussions as to guidance and other estimates, perceived opportunities, expectations, beliefs, plans, strategies, goals and objectives concerning our future financial and operating performance. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict.

Therefore, actual results may differ materially from those expressed or forecasted in such forward-looking statements.

Such risks, uncertainties and assumptions include, without limitation, those related to: the Company's ability to execute on its strategy, including with respect to acquisitions (and integrations thereof), divestitures, cost management, productivity improvements, restructuring and capital expenditures, and achieve the benefits it expects therefrom; the operation of new manufacturing capabilities; the Company's ability to achieve anticipated cost and energy savings; the 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; the costs of labor; the effects of inflation, fluctuations in consumer demand, volume softness, and other macroeconomic factors on the Company and the industries in which it operates and that it serves; the Company's ability to meet its environmental and sustainability goals, including with respect to greenhouse gas emissions; and to meet other social and governance goals, including challenges in implementation thereof; and the other risks, uncertainties and assumptions discussed in the Company's filings with the Securities and Exchange Commission, including its most recent reports on Forms 10-K and 10-Q, particularly under the heading "Risk Factors." The Company undertakes no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed herein might not occur.

References to our Website Address

References to our website address and domain names throughout this release are for informational purposes only, or to fulfill specific disclosure requirements of the Securities and Exchange Commission's rules or the New York Stock Exchange Listing Standards. These references are not intended to, and do not, incorporate the contents of our website by reference into this release.

 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars and shares in thousands except per share data)
      
   Three Months Ended
    March 31, 2024  April 2, 2023  
Net sales$1,637,543  $1,729,783
Cost of sales 1,299,990   1,355,355
Gross profit 337,553   374,428
Selling, general, and administrative expenses 193,482   187,976
Restructuring/Asset impairment charges 31,618   28,814
Gain on divestiture of business and other assets ?   72,010
Operating profit 112,453   229,648
Non-operating pension costs 3,295   3,658
Net interest expense 27,662   32,670
Income before income taxes 81,496   193,320
Provision for income taxes 17,360   46,912
Income before equity in earnings of affiliates 64,136   146,408
Equity in earnings of affiliates, net of tax 1,137   1,856
Net income 65,273   148,264
Net (income)/loss attributable to noncontrolling interests (96)  55
Net income attributable to Sonoco$65,177  $148,319
      
Weighted average common shares outstanding ? diluted 99,159   98,615
      
Diluted earnings per common share$0.66  $1.50
Dividends per common share$0.51  $0.49
 


FINANCIAL SEGMENT INFORMATION (Unaudited)
(Dollars in thousands)
    
    Three Months Ended
    March 31, 2024 April 2, 2023
Net sales:    
 Consumer Packaging $910,577  $958,008 
 Industrial Paper Packaging  593,060   615,855 
 Total reportable segments  1,503,637   1,573,863 
 All Other  133,906   155,920 
 Net sales $1,637,543  $1,729,783 
       
     
Operating profit:    
 Consumer Packaging $93,027  $96,494 
 Industrial Paper Packaging  65,844   94,367 
 Segment operating profit  158,871   190,861 
 All Other  17,125   22,560 
 Corporate    
 Restructuring/Asset impairment charges  (31,618)  (28,814)
 Amortization of acquisition intangibles  (22,939)  (21,164)
 Gains from divestiture of business and other assets  ?   72,010 
 Other operating charges, net  (8,986)  (5,805)
 Operating profit $112,453  $229,648 
       


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
    
   Three Months Ended
   March 31, 2024 April 2, 2023
      
Net income$65,273  $148,264 
Net (gains)/losses on asset impairments, disposition of assets and divestiture of business and other assets 8,364   (53,064)
Depreciation, depletion and amortization 90,559   82,137 
Pension and postretirement plan (contributions), net of non-cash expense 115   (523)
Changes in working capital 770   (91,489)
Changes in tax accounts 4,567   23,618 
Other operating activity (3,413)  (10,941)
Net cash provided by operating activities 166,235   98,002 
      
Purchases of property, plant and equipment, net (86,357)  (11,996)
Proceeds from the sale of business, net ?   13,839 
Cost of acquisitions, net of cash acquired (452)  ? 
Net repayments (1,774)  (62,541)
Cash dividends (50,144)  (47,731)
Payments for share repurchases (9,139)  (10,576)
Other, including effects of exchange rates on cash 1,907   3,216 
Net increase in cash and cash equivalents 20,276   (17,787)
Cash and cash equivalents at beginning of period 151,937   227,438 
Cash and cash equivalents at end of period$172,213  $209,651 
    


CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
   March 31, 2024 December 31, 2023
Assets   
Current Assets:   
 Cash and cash equivalents$172,213 $151,937
 Trade accounts receivable, net of allowances 939,724  904,898
 Other receivables 102,357  106,644
 Inventories 749,022  773,501
 Prepaid expenses 101,288  113,385
    2,064,604  2,050,365
Property, plant and equipment, net 1,921,848  1,906,137
Right of use asset-operating leases 332,587  314,944
Goodwill 1,796,077  1,810,654
Other intangible assets, net 828,085  853,670
Other assets 255,079  256,187
   $7,198,280 $7,191,957
Liabilities and Shareholders' Equity   
Current Liabilities:   
 Payable to suppliers and other payables$1,116,351 $1,107,504
 Notes payable and current portion of long-term debt 453,710  47,132
 Accrued taxes 7,248  10,641
    1,577,309  1,165,277
Long-term debt, net of current portion 2,630,424  3,035,868
Noncurrent operating lease liabilities 282,877  265,454
Pension and other postretirement benefits 142,422  142,900
Deferred income taxes and other 137,766  150,623
Total equity 2,427,482  2,431,835
   $7,198,280 $7,191,957
  

Definition and Reconciliation of Non-GAAP Financial Measures

The Company's results determined in accordance with U.S. generally accepted accounting principles ("GAAP") are referred to as "as reported" or "GAAP" results. The Company uses certain financial performance measures, both internally and externally, that are not in conformity with GAAP ("non-GAAP financial measures") to assess and communicate the financial performance of the Company. These non-GAAP financial measures, which are identified using the term "Adjusted" (for example, "Adjusted Operating Profit"), reflect adjustments to the Company's GAAP operating results to remove amounts (including the associated tax effects) relating to:

1Restructuring and restructuring-related asset impairment charges are a recurring item as the Company's restructuring programs usually require several years to fully implement, and the Company is continually seeking to take actions that could enhance its efficiency. Although recurring, these charges are subject to significant fluctuations from period to period due to the varying levels of restructuring activity, the inherent imprecision in the estimates used to recognize the impairment of assets, and the wide variety of costs and taxes associated with severance and termination benefits in the countries in which the restructuring actions occur.

The Company's management believes the exclusion of the amounts related to the above-listed items improves the period-to-period comparability and analysis of the underlying financial performance of the business.

In addition to the "Adjusted" results described above, the Company also uses Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA is defined as net income excluding the following: interest expense; interest income; provision for income taxes; depreciation, depletion and amortization expense; non-operating pension costs; net income/loss attributable to noncontrolling interests; restructuring/asset impairment charges; changes in LIFO inventory reserves; gains/losses from the divestiture of businesses and other assets; acquisition, integration and divestiture-related costs; other income; derivative gains/losses; and other non-GAAP adjustments, if any, that may arise from time to time. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales.

The Company's non-GAAP financial measures are not calculated in accordance with, nor are they an alternative for, measures conforming to GAAP, and they may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles.

The Company presents these non-GAAP financial measures to provide investors with information to evaluate Sonoco's operating results in a manner similar to how management evaluates business performance. The Company consistently applies its non-GAAP financial measures presented herein and uses them for internal planning and forecasting purposes, to evaluate its ongoing operations, and to evaluate the ultimate performance of management and each business unit against plans/forecasts. In addition, these same non-GAAP financial measures are used in determining incentive compensation for the entire management team and in providing earnings guidance to the investing community.

Material limitations associated with the use of such measures include that they do not reflect all period costs included in operating expenses and may not be comparable with similarly named financial measures of other companies. Furthermore, the calculations of these non-GAAP financial measures are based on subjective determinations of management regarding the nature and classification of events and circumstances that the investor may find material and view differently.

To compensate for any limitations in such non-GAAP financial measures, management believes that it is useful in evaluating the Company's results to review both GAAP information, which includes all of the items impacting financial results, and the related non-GAAP financial measures that exclude certain elements, as described above. Further, Sonoco management does not, nor does it suggest that investors should, consider any non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Whenever reviewing a non-GAAP financial measure, investors are encouraged to review and consider the related reconciliation to understand how it differs from the most directly comparable GAAP measure.

The following tables reconcile the Company's non-GAAP financial measures to their most directly comparable GAAP financial measures for each of the periods presented:

Adjusted Operating Profit, Adjusted Income Before Income Taxes, Adjusted Provision for Income Taxes, Adjusted Earnings, and Adjusted EPS

 For the three-month period ended March 31, 2024
Dollars in thousands, except per share dataOperating ProfitIncome Before Income TaxesProvision for Income TaxesNet Income Attributable to SonocoDiluted EPS
As Reported (GAAP)$112,453 $81,496 $17,360 $65,177 $0.66 
Acquisition, integration and divestiture-related costs 5,661  5,661  1,452  4,209  0.04 
Changes in LIFO inventory reserves 431  431  108  323  ? 
Amortization of acquisition intangibles 22,939  22,939  5,573  17,366  0.18 
Restructuring/Asset impairment charges 31,618  31,618  7,067  24,584  0.25 
Non-operating pension costs ?  3,295  823  2,472  0.02 
Net gain from derivatives (286) (286) (72) (214) ? 
Other adjustments 3,180  3,180  5,605  (2,425) (0.03)
Total adjustments 63,543  66,838  20,556  46,315  0.46 
Adjusted$175,996 $148,334 $37,916 $111,492 $1.12 
Due to rounding, individual items may not sum appropriately.
 


 For the three-month period ended April 2, 2023
Dollars in thousands, except per share dataOperating ProfitIncome Before Income TaxesProvision for Income TaxesNet Income Attributable to SonocoDiluted EPS
As Reported (GAAP)$229,648 $193,320 $46,912 $148,319 $1.50 
Acquisition, integration and divestiture-related costs 5,188  5,188  1,280  3,908  0.04 
Changes in LIFO inventory reserves (5,425) (5,425) (1,354) (4,071) (0.04)
Amortization of acquisition intangibles 21,164  21,164  5,127  16,037  0.16 
Restructuring/Asset impairment charges 28,814  28,814  6,634  22,014  0.22 
Gain on divestiture of business and other assets (72,010) (72,010) (17,122) (54,888) (0.55)
Non-operating pension costs ?  3,658  909  2,749  0.03 
Net loss from derivatives 6,085  6,085  1,518  4,567  0.05 
Other adjustments (43) (43) 955  (997) (0.01)
Total adjustments (16,227) (12,569) (2,053) (10,681) (0.10)
Adjusted$213,421 $180,751 $44,859 $137,638 $1.40 
Due to rounding, individual items may not sum appropriately.
 


Adjusted EBITDA and Adjusted EBITDA Margin   
 Three Months Ended 
Dollars in thousandsMarch 31, 2024April 2, 2023 
    
Net income attributable to Sonoco$65,177 $148,319  
Adjustments:   
Interest expense 31,220  34,232  
Interest income (3,558) (1,562) 
Provision for income taxes 17,360  46,912  
Depreciation, depletion, and amortization 90,559  82,137  
Non-operating pension costs 3,295  3,658  
Net income/(loss) attributable to noncontrolling interests 96  (55) 
Restructuring/Asset impairment charges 31,618  28,814  
Changes in LIFO inventory reserves 431  (5,425) 
Gain from divestiture of business and sale of other assets ?  (72,010) 
Acquisition, integration and divestiture-related costs 5,661  5,188  
Net (gain)/loss from derivatives (286) 6,085  
Other non-GAAP adjustments 3,180  (43) 
Adjusted EBITDA$244,753 $276,250  
    
Net Sales$1,637,543 $1,729,783  
Net Income Margin 4.0% 8.6% 
Adjusted EBITDA Margin 14.9% 16.0% 
        

Segment results, which are reviewed by the Company's management to evaluate segment performance, do not include the following: restructuring/asset impairment charges; amortization of acquisition intangibles; acquisition, integration and divestiture-related costs; changes in LIFO inventory reserves; gains/losses from the sale of businesses or other assets; gains/losses from derivatives; or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business. Accordingly, the term "segment operating profit" is defined as the segment's portion of "operating profit" excluding those items. All other general corporate expenses have been allocated as operating costs to each of the Company's reportable segments and the All Other group of businesses. Total operating profit is comprised of the sum of reportable segment and All Other operating profit plus certain items that have been allocated to Corporate, including amortization of acquisition intangibles; restructuring/asset impairment charges; changes in LIFO inventory reserves; acquisition, integration and divestiture-related costs; gains/losses from the sale of businesses or other assets; gains/losses on derivatives; and certain other items that were excluded from reportable segment and All Other operating profit.

The Company does not calculate net income by segment; therefore, Segment Adjusted EBITDA is reconciled to the most directly comparable GAAP measure of segment profitability, Segment Operating Profit, which is the measure of segment profit or loss in accordance with Accounting Standards Codification 280 - Segment Reporting, as prescribed by the Financial Accounting Standards Board.

Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation     
For the Three Months Ended March 31, 2024     
Dollars in thousandsConsumer Packaging segmentIndustrial Paper Packaging segmentAll OtherCorporateTotal
Segment and Total Operating Profit $93,027 $65,844 $17,125 $(63,543)$112,453 
Adjustments:     
Depreciation, depletion and amortization1 35,465  28,503  3,652  22,939  90,559 
Equity in earnings of affiliates, net of tax 13  1,124  ?  ?  1,137 
Restructuring/Asset impairment charges2 ?  ?  ?  31,618  31,618 
Changes in LIFO inventory reserves3 ?  ?  ?  431  431 
Acquisition, integration and divestiture-related costs4 ?  ?  ?  5,661  5,661 
Gain from divestiture of business and other assets ?  ?  ?  ?  ? 
Net gains from derivatives5 ?  ?  ?  (286) (286)
Other non-GAAP adjustments ?  ?  ?  3,180  3,180 
Segment Adjusted EBITDA $128,505 $95,471 $20,777 $? $244,753 
      
Net Sales$910,577 $593,060 $133,906   
Segment Operating Profit Margin 10.2% 11.1% 12.8%  
Segment Adjusted EBITDA Margin 14.1% 16.1% 15.5%  
            

1Included in Corporate is the amortization of acquisition intangibles associated with the Consumer segment of $16,102, the Industrial segment of $6,631, and the All Other group of businesses of $206.
2Included in Corporate are restructuring/asset impairment charges associated with the Consumer segment of $4,925, the Industrial segment of $22,603, and the All Other group of businesses of $1,148.
3Included in Corporate are changes in LIFO inventory reserves associated with the Consumer segment of $92 and the Industrial segment of $339.
4Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer segment of $(124) and the Industrial segment of $655.
5Included in Corporate are net gains on derivatives associated with the Consumer segment of $(43), the Industrial segment of $(190), and the All Other group of businesses of $(53).

Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation     
For the Three Months Ended April 2, 2023     
Dollars in thousandsConsumer Packaging segmentIndustrial Paper Packaging segmentAll OtherCorporateTotal
Segment and Total Operating Profit $96,494 $94,367 $22,560 $16,227 $229,648 
Adjustments:     
Depreciation, depletion, and amortization1 32,549  24,878  3,546  21,164  82,137 
Equity in earnings of affiliates, net of tax 75  1,781  ?  ?  1,856 
Restructuring/Asset impairment charges2 ?  ?  ?  28,814  28,814 
Changes in LIFO inventory reserves3 ?  ?  ?  (5,425) (5,425)
Acquisition, integration and divestiture-related costs4 ?  ?  ?  5,188  5,188 
Gain from divestiture of business and other assets5 ?  ?  ?  (72,010) (72,010)
Net losses from derivatives6 ?  ?  ?  6,085  6,085 
Other non-GAAP adjustments ?  ?  ?  (43) (43)
Segment Adjusted EBITDA$129,118 $121,026 $26,106 $? $276,250 
      
Net Sales$958,008 $615,855 $155,920   
Segment Operating Profit Margin 10.1% 15.3% 14.5%  
Segment Adjusted EBITDA Margin 13.5% 19.7% 16.7%  
            

1Included in Corporate is amortization of acquisition intangibles associated with the Consumer segment of $16,226, the Industrial segment of $2,934, and the All Other group of businesses of $2,004.
2Included in Corporate are restructuring/asset impairment charges associated with the Consumer segment of $2,680, the Industrial segment of $24,544, and the All Other group of businesses of $53.
3Included in Corporate are changes in LIFO inventory reserves associated with the Consumer segment of $6,102 and the Industrial segment of $(677).
4Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer segment of $779 and the Industrial segment of $289.
5Included in Corporate are gains from the sale of the Company's timberland properties in the amount of $(60,945) and the sale of its S3 business in the amount of $(11,065), both of which are associated with the Industrial segment.
6Included in Corporate are net losses on derivatives associated with the Consumer segment of $946, the Industrial segment of $3,912, and the All Other group of businesses of $1,170.

Free Cash Flow

The Company uses the non-GAAP financial measure of "Free Cash Flow," which it defines as cash flow from operations minus net capital expenditures. Net capital expenditures are defined as capital expenditures minus proceeds from the disposition of capital assets. Free Cash Flow may not represent the amount of cash flow available for general discretionary use because it excludes non-discretionary expenditures, such as mandatory debt repayments and required settlements of recorded and/or contingent liabilities not reflected in cash flow from operations.

 Three Months Ended
FREE CASH FLOWMarch 31, 2024 April 2, 2023
    
Net cash provided by operating activities$166,235  $98,002 
Purchase of property, plant and equipment, net (86,357)  (11,996)
Free Cash Flow$79,878  $86,006 
    
    


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