Rock-Tenn Reports Higher 1st Quarter Income
April 27, 2006 (Press Release) - Rock-Tenn Company today reported financial results for the quarter ended March 31, 2006 reflecting higher sales and operating income.
Second Quarter Developments:
- Net sales for the second quarter of fiscal 2006 increased 34% to $529.7 million, an increase of $135.3 million from the second quarter of fiscal 2005.
- The Company reported net income of $5.2 million, or $0.14 per diluted share, for the quarter compared to net income of $0.2 million, or $0.01 per diluted share, in the prior year quarter.
- Rock-Tenn recorded pre-tax restructuring and other costs of $3.5 million and operating losses of $0.9 million, aggregating $0.08 per diluted share, at the Company's previously closed folding carton facilities and the Kerman, California folding carton facility that will be closed in the third quarter of fiscal 2006.
Packaging Products Segment
Packaging Products segment net sales increased $100.9 million to $319.7 million in the second quarter of fiscal 2006 compared to the second quarter of fiscal 2005. Sales increased primarily from the GSPP assets acquired in June 2005 and strong demand for consumer packaging. Packaging Products segment operating income increased $7.7 million to $13.4 million in the second quarter of fiscal 2006 compared to the second quarter of fiscal 2005.
Merchandising Displays Segment
Merchandising Displays segment net sales were $85.4 million in the second quarter of fiscal 2006 and $86.1 million in the prior year quarter. Operating income for the segment was $4.2 million in the second quarter of fiscal 2006 and $4.8 million in the second quarter of fiscal 2005.
Paperboard segment net sales increased $73.9 million to $205.7 million in the second quarter of fiscal 2006 compared to the second quarter of fiscal 2005 as a result of sales from the bleached paperboard and pulp mill acquired in June 2005, strong demand for recycled paperboard and higher pricing. Paperboard segment operating income increased $12.2 million to $15.8 million in the second quarter of fiscal 2006 compared to the prior year quarter. The Company's coated recycled paperboard mills operated at 96% of capacity in the second quarter compared to 89% in the prior year quarter and 86% in the first quarter of fiscal 2006.
Chairman and Chief Executive Officer's Statement
Rock-Tenn Company Chairman and Chief Executive Officer James A. Rubright stated, "Operating earnings increased $15.9 million based on strong performance in our two largest business segments. Good demand and pricing improvements for recycled paperboard and the acquisition of our bleached board mill resulted in much higher earnings in our paperboard mills. Sales growth in our core folding carton business and the contributions from the folding carton plants acquired in 2005 increased packaging segment earnings 135% over the prior year. We believe that current paperboard pricing initiatives and lower energy costs during the second half of the year should continue to drive further earnings improvement over the balance of the year."
Rock-Tenn's net debt (as defined) was $846.6 million at March 31, 2006 compared to $874.6 million at December 31, 2005. The Company reduced net debt by $28.0 million during the quarter. Rock-Tenn's joint ventures in its Packaging Products segment made two acquisitions with a total purchase price of $7.7 million in the quarter.
Cash Provided By Operating Activities
Net cash provided by operating activities in the second quarter of fiscal 2006 was $51.1 million compared to net cash provided by operating activities of $14.2 million in the prior year quarter. The Company contributed $9.0 million to its pension plans during the quarter.
About Rock-Tenn Company
Rock-Tenn Company provides a wide range of marketing and packaging solutions to consumer products companies at low costs, with combined pro forma net sales of approximately $2.1 billion and operating locations in the United States, Canada, Mexico, Argentina and Chile. The Company is one of North America's leading manufacturers of packaging products, merchandising displays and bleached and recycled paperboard.
SOURCE: Rock-Tenn Company