Sonoco Products Company Earnings Call Nuggets: Consumer Retrenching and the Thermoform Business

Sonoco Products Company (NYSE:SON) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Consumer Retrenching

George Staphos – Bank of America Merrill Lynch: I guess the first question I had is on the volume trend in Consumer. Can you provide a bit more granularity, I appreciate the percentages, but what your customers were saying was behind the decline, is it the same old that we’ve heard from lot of the other companies guys. Consumer retrenching because of higher food prices and are they seeing any light at the end of the tunnel in terms of the volume outlook for 2013. I had a couple of follow ons after that?

M. Jack Sanders – President and COO: Well I would tell you some of that is what we’ve heard. We believe that there is weakness in package foods relative to the consumer demand. We also heard that there was significant inventory destocking that was actually occurring towards the end of the year, bringing inventories back down to pre-holiday levels. Some impact I would guess from Sandy, minor format changes. I would say the biggest issue George relative to volume in the fourth quarter for consumer was the way it actually occurred we had a reasonable October volumes were down in November slightly but then they dropped off significantly in December which was sort of the phenomenon we saw in 2011 on the industrial side and that creates a significant deleverage for us, but it was the way it flowed in it was a little bit different.

George Staphos – Bank of America Merrill Lynch: Lot of the companies who have echoed your comments Jack have said that backlog picked up in January. Now you don’t necessarily have backlog in flexible packaging or plastic bottles. But have you seen a pickup in your January orders or what the customer are saying or is it still fairly sluggish given the health of the consumer or however you are seeing it?