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RockTenn Posts Fiscal 1Q 2010 Earnings

Jan. 26, 2010 - RockTenn today reported earnings for the quarter ended December 31, 2009 of $1.43 per diluted share. The Company’s adjusted earnings were $0.94 per diluted share, excluding primarily items related to the alternative fuel tax credit, gain on debt extinguishment and restructuring charges compared to the prior year quarter adjusted earnings of $0.96 per diluted share.

First Quarter Results

  • Net sales of $690.8 million for the first quarter of fiscal 2010 decreased $12.3 million compared to the first quarter of fiscal 2009.
  • Segment income increased to $106.2 million compared to $90.0 million in the prior year quarter, an 18% increase over the prior year quarter. Segment income includes the alternative fuel tax credit of $20.7 million, net of expenses. This tax credit expired on December 31, 2009.
  • RockTenn’s pre-tax restructuring and other costs, net of related noncontrolling interest, were $3.0 million, or $0.05 per diluted share after-tax, for the first quarter of fiscal 2010 consisting primarily of plant closing related asset impairments.
  • RockTenn incurred pre-tax operating losses at previously closed facilities of $0.4 million, or $0.01 per diluted share after-tax.
  • During the first quarter of fiscal 2010 we repurchased $19.5 million of our March 2013 Notes at an average price of approximately 98% of par and recorded an aggregate gain on extinguishment of debt of $0.5 million pre-tax, or $0.01 per diluted share after-tax.

RockTenn Chairman and Chief Executive Officer James A. Rubright stated, “RockTenn posted another quarter of strong earnings and cash flow generation, as cost savings and operational improvement programs and higher paperboard shipments largely offset higher input costs. In the seasonally weak December quarter, cash flow from operations was $96 million, up 84% over the prior year quarter.”

SEGMENT RESULTS

Paperboard and Containerboard Tons Shipped and Average Price
Total tons shipped in the first quarter of fiscal 2010 increased by 30,739 tons over the prior year quarter and decreased on a sequential quarter basis by 10,280 tons. The average selling price for all paperboard and containerboard grades decreased $46 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 2.9% in the first quarter of fiscal 2010 compared to the prior year quarter, due to higher paperboard volumes. Segment income increased $31.3 million over the prior year quarter to $62.8 million due primarily to $20.7 million of alternative fuel tax credit, lower chemical and energy costs and higher paperboard volumes.

Corrugated Packaging Segment
Corrugated Packaging segment net sales decreased $23.1 million to $180.1 million in the first quarter of fiscal 2010 compared to the prior year quarter, due to lower selling prices which were partially offset by higher containerboard volumes. Segment income was $34.7 million in the first quarter of fiscal 2010 and segment return on sales was 19.3%.

Merchandising Displays Segment
Merchandising Displays segment net sales decreased $8.0 million over the prior year first quarter. Segment income was $4.2 million in the first quarter of fiscal 2010 and $5.1 million in the prior year quarter.

Specialty Paperboard Products Segment
Specialty Paperboard Products segment net sales increased $4.5 million in the first quarter of fiscal 2010 compared to the prior year quarter primarily due to increased paperboard volumes and higher volumes in our recycled fiber operations. Segment income was $4.5 million in the first quarter of fiscal 2010 and $2.8 million in the prior year quarter.

Cash Provided By Operating Activities
Net cash provided by operating activities in the first quarter of fiscal 2010 was $95.6 million compared to $52.0 million in the prior year quarter primarily due to a net reduction in operating assets and liabilities compared to a net increase in the prior year quarter.

Financing and Investing Activities
We reduced net debt by $81.4 million in the quarter and $334.7 million in the twelve months ended December 31, 2009. Our Credit Agreement Debt/EBITDA ratio was 2.16 times at December 31, 2009, well below our maximum permitted ratio of 4.25 times.

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. RockTenn’s 10,000 employees are committed to exceeding their customers’ expectations – every time. The Company operates locations in the United States, Canada, Mexico, Chilé and Argentina. For more information, visit www.rocktenn.com

SOURCE: RockTenn




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