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RockTenn Reports 3rd Quarter Earnings

July 26, 2010 - RockTenn today reported earnings for the quarter ended June 30, 2010 of $1.14 per diluted share. The Company’s adjusted earnings were $1.14 per diluted share compared to the prior year quarter adjusted earnings of $1.42 per diluted share.

Third Quarter Results

  • Net sales of $771.9 million for the third quarter of fiscal 2010 increased $68.0 million compared to the third quarter of fiscal 2009.
  • Segment income was $101.4 million compared to $117.3 million in the prior year quarter excluding $32.7 million of alternative fuel tax credit, net of expenses in the prior year quarter.

Chairman and Chief Executive Officer’s Statement

RockTenn Chairman and Chief Executive Officer James A. Rubright stated, “RockTenn’s adjusted earnings of $1.14 per share increased 63% over adjusted earnings of $0.70 per share in the March quarter on moderating recycled fiber and wood costs, strengthening customer demand and realization of previously announced price increases. Our mill backlogs continue to be very strong and the overall demand environment continues to improve, providing a basis for our optimism regarding earnings improvement through fiscal 2011.”

SEGMENT RESULTS

Paperboard and Containerboard Tons Shipped and Average Price

Total tons shipped in the third quarter of fiscal 2010 increased by 63,756 tons over the prior year quarter and increased on a sequential quarter basis by 16,536 tons. The average selling price for all paperboard and containerboard grades increased $38 per ton from the prior year quarter and increased $32 per ton on a sequential quarter basis.

Consumer Packaging Segment

Consumer Packaging segment net sales increased 5.6% in the third quarter of fiscal 2010 compared to the prior year quarter, due to higher volumes and increased paperboard selling prices. Segment income was $49.1 million in the third quarter of fiscal 2010 and $50.3 million in the prior year quarter excluding $32.7 million of alternative fuel tax credit, net of expenses in the prior year quarter.

Corrugated Packaging Segment

Corrugated Packaging segment net sales increased $24.0 million to $210.5 million in the third quarter of fiscal 2010 compared to the prior year quarter, due to higher volumes and increased containerboard selling prices. Segment income was $35.9 million in the third quarter of fiscal 2010 and segment return on sales was 17.1%.

Merchandising Displays Segment

Merchandising Displays segment net sales increased $8.2 million over the prior year third quarter. Segment income increased to $8.4 million in the third quarter of fiscal 2010 compared to $8.0 million in the prior year quarter, and segment return on sales was 9.6%.

Specialty Paperboard Products Segment

Specialty Paperboard Products segment net sales increased $19.4 million in the third quarter of fiscal 2010 compared to the prior year quarter primarily due to higher recycled fiber prices and volumes and increased paperboard volumes. Segment income was $8.0 million in the third quarter of fiscal 2010 and $9.4 million in the prior year quarter. The decrease was due primarily to higher recycled fiber costs.

Cash Provided By Operating Activities

Net cash provided by operating activities in the third quarter of fiscal 2010 was $100.3 million compared to $114.4 million in the prior year quarter primarily due to lower earnings and a smaller net decrease in operating assets and liabilities in the current year quarter compared to the prior year period.

Financing and Investing Activities

We reduced net debt by $63.5 million in the third quarter and $311.5 million in the twelve months ended June 30, 2010. Our Credit Agreement Debt/EBITDA ratio was 2.14 times at June 30, 2010, well below our maximum permitted ratio of 4.25 times and the July 1, 2010 re-set of 3.75 times.

SOURCE: RockTenn




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