RockTenn Reports Fiscal First Quarter Results

Jan. 24, 2010 (Press Release) - RockTenn today reported earnings for the quarter ended December 31, 2010 of $1.27 per diluted share. The Company’s adjusted earnings were $1.28 per diluted share compared to the prior year quarter adjusted earnings of $0.94 per diluted share.

First Quarter Results

  • Net sales of $761.1 million for the first quarter of fiscal 2011 increased $70.3 million, or 10.2% over the first quarter of fiscal 2010.
  • Segment income of $104.4 million was $18.9 million, or 22.1% over the prior year quarter excluding $20.7 million of alternative fuel mixture credit, net of expenses in the prior year quarter.
  • RockTenn’s pre-tax restructuring and other costs, net of related noncontrolling interest, were $0.6 million, or $0.01 per diluted share after-tax, for the first quarter of fiscal 2011 consisting primarily of expense to recognize a liability for the estimated fair value of future lease payments at a closed facility.

Chairman and Chief Executive Officer’s Statement

RockTenn Chairman and Chief Executive Officer James A. Rubright stated, “RockTenn’s co-workers again produced outstanding results, with adjusted earnings per share up 36% over last year’s first quarter, with strong adjusted segment earnings increases in consumer and corrugated packaging and merchandising displays. Our free cash flow generation exceeded our expectations for the quarter, and we see continued strong cash flow generation through the balance of the year.”

SEGMENT RESULTS

Paperboard and Containerboard Tons Shipped and Average Price

Total tons shipped in the first quarter of fiscal 2011 increased by 13,833 tons over the prior year quarter. The average selling price for all paperboard and containerboard grades increased $73 per ton from the prior year quarter.

Consumer Packaging Segment

Consumer Packaging segment net sales increased 3.5% in the first quarter of fiscal 2011 compared to the prior year quarter, due to higher paperboard selling prices. Segment income increased $10.2 million to $52.3 million in the first quarter of fiscal 2011, excluding $20.7 million of alternative fuel mixture credit, net of expenses in the prior year quarter.

Corrugated Packaging Segment

Corrugated Packaging segment net sales increased $18.2 million to $198.3 million in the first quarter of fiscal 2011 compared to the prior year quarter, due to higher containerboard volumes and increased selling prices. Segment income increased $1.7 million to $36.4 million in the first quarter of fiscal 2011 and segment return on sales was 18.4%.

Merchandising Displays Segment

Merchandising Displays segment net sales increased $25.0 million over the prior year first quarter. Segment income increased to $11.4 million in the first quarter of fiscal 2011 compared to $4.2 million in the prior year quarter, and segment return on sales was 12.4%.

Specialty Paperboard Products Segment

Specialty Paperboard Products segment net sales increased $18.6 million in the first quarter of fiscal 2011 compared to the prior year quarter primarily due to higher recycled fiber prices, increased paperboard selling prices and increased solid fiber interior packaging sales due to a fourth quarter of fiscal 2010 acquisition. Segment income was $4.3 million in the first quarter of fiscal 2011 and $4.5 million in the prior year quarter.

Cash Provided By Operating Activities

Net cash provided by operating activities in the first quarter of fiscal 2011 was $104.3 million compared to $95.6 million in the prior year quarter. The increase was primarily due to higher earnings net of alternative fuel mixture credit which was partially offset by a net increase in operating assets and liabilities compared to a net decrease in the prior year quarter.

Financing and Investing Activities

We reduced net debt by $65.6 million in the first quarter of fiscal 2011 and $206.9 million in the twelve months ended December 31, 2010. Our Credit Agreement Debt/EBITDA ratio was 2.05 times at December 31, 2010, well below our maximum credit agreement covenant of 3.75 times.

SOURCE: RockTenn