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RockTenn Fiscal 4th Quarter Income Climbs

Nov. 3, 2009 - RockTenn reported earnings for the quarter ended September 30, 2009 of $1.72 per diluted share. The Company’s adjusted earnings were $1.21 per diluted share, excluding specific items related to the alternative fuel tax credit and restructuring charges. Adjusted earnings per diluted share increased 34% over the prior year quarter adjusted earnings of $0.90 per diluted share.

Fourth Quarter Results

  • Net sales of $729.0 million for the fourth quarter of fiscal 2009 decreased $56.7 million over the fourth quarter of fiscal 2008.
  • Segment income increased to $128.9 million compared to $90.3 million in the prior year quarter, a 43% increase over the prior year quarter. Segment income includes the alternative fuel tax credit of $21.4 million, net of expenses. This tax credit is scheduled to expire on December 31, 2009.
  • RockTenn’s pre-tax restructuring and other costs, net of related minority interest, were $2.1 million, or $0.04 per diluted share after-tax, for the fourth quarter of fiscal 2009 consisting primarily of plant closing related asset impairments.

RockTenn Chairman and Chief Executive Officer James A. Rubright stated, “RockTenn delivered another quarter of strong earnings growth over the prior year quarter as adjusted earnings increased 34%. Our free cash flow continued to be strong, and our net debt repayment and dividends totaled $7.81 per share in fiscal 2009 as we capitalized on the low cost positions we have developed in all of our businesses. We expect to continue to generate strong cash flow in fiscal 2010 as we expect input costs to remain relatively stable, and demand for containerboard and bleached paperboard to improve.”

SEGMENT RESULTS

Paperboard and Containerboard Tons Shipped and Average Price

Total tons shipped in the fourth quarter of fiscal 2009 decreased by 15,647 tons over the prior year quarter and increased on a sequential quarter basis by 48,398 tons. The average selling price for all paperboard and containerboard grades decreased $28 per ton from the prior year quarter and decreased $7 per ton on a sequential quarter basis.

Consumer Packaging Segment

Consumer Packaging segment net sales increased 0.3% in the fourth quarter of fiscal 2009 compared to the prior year quarter, due to higher folding carton volumes partially offset by lower paperboard volumes. Segment income increased $43.9 million over the prior year quarter to $74.6 million due primarily to $21.4 million of alternative fuel tax credit, lower recycled fiber and energy costs and greater income contributed from our folding carton business.

Corrugated Packaging Segment

Corrugated Packaging segment net sales decreased $38.5 million to $186.7 million in the fourth quarter of fiscal 2009 compared to the prior year quarter, due to lower volumes. Segment income was $37.1 million in the fourth quarter of fiscal 2009 and segment return on sales was 19.9%.

Merchandising Displays Segment

Merchandising Displays segment net sales decreased $5.2 million over the prior year fourth quarter. Segment income was $9.1 million in the fourth quarter of fiscal 2009 and $11.7 million in the prior year quarter.

Specialty Paperboard Products Segment

Specialty Paperboard Products segment net sales decreased $15.0 million in the fourth quarter of fiscal 2009 compared to the prior year quarter primarily due to decreased volumes and lower recycled fiber prices. Segment income was $8.1 million in the fourth quarter of fiscal 2009 and $8.5 million in the prior year quarter.

Cash Provided By Operating Activities

Net cash provided by operating activities in the fourth quarter of fiscal 2009 was $117.3 million compared to $83.9 million in the prior year quarter. Cash from operations was reduced by the voluntary contribution of $16 million to our pension plans in the quarter, bringing our total contributions in the fiscal year to $40 million.

Financing and Investing Activities

We reduced net debt by $78.3 million in the quarter and $286.5 million in the twelve months ended September 30, 2009. Our Credit Agreement Debt/EBITDA ratio was 2.36 times at September 30, 2009. On August 14, 2009 we amended our receivables-backed financing facility to increase the facility to $135 million. The amended facility continues to expire on July 13, 2012.

About RockTenn

RockTenn is one of North America’s leading manufacturers of paperboard, containerboard and consumer and corrugated packaging, with annual net sales of approximately $2.8 billion. The Company operates locations in the United States, Canada, Mexico, Chile and Argentina.

SOURCE: RockTenn




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