RockTenn First Quarter Fiscal 2013 Earnings Up 8% on Pricing

Jan. 22, 2013 - RockTenn today reported earnings for the quarter ended December 31, 2012 of $1.18 per diluted share and adjusted earnings of $1.35 per diluted share. Adjusted earnings per share increased 14% over the prior year quarter.

First Quarter Results

  • Net sales of $2,287 million for the first quarter of fiscal 2013 increased $19 million compared to the first quarter of fiscal 2012. Segment income of $209 million increased $16 million or 8% over the prior year quarter.
  • RockTenn’s restructuring and other costs and operating losses and transition costs due to plant closures were $0.17 per diluted share after-tax, for the first quarter of fiscal 2013. These costs consisted primarily of $9 million of pre-tax facility closure charges and $7 million of pre-tax integration costs.

Chairman and Chief Executive Officer’s Statement
RockTenn Chairman and Chief Executive Officer James A. Rubright stated, “Our 14% adjusted earnings per share increase over the prior year quarter reflects the progress we’ve made in the operating performance of our Corrugated Packaging segment and higher pricing from the fall 2012 containerboard and box price increases. Corrugated Packaging segment EBITDA margins increased to 15.4% for the quarter.”

SEGMENT RESULTS

Containerboard and Paperboard Tons Shipped
Corrugated Packaging segment tons shipped declined approximately 16,000 tons over the prior year quarter as we took two major maintenance outages and built approximately 74,000 tons of inventory in the current year quarter. Consumer Packaging segment paperboard and pulp shipments of approximately 346,000 tons increased 4% percent over the prior year quarter primarily on stronger demand for recycled paperboard.

Corrugated Packaging Segment
Corrugated Packaging segment net sales increased $67 million to $1,590 million in the first quarter of fiscal 2013 compared to the prior year quarter and segment income increased $29 million to $138 million in the first quarter of fiscal 2013 compared to the prior year quarter. The increased sales and earnings are primarily related to higher selling prices and lower recycled fiber and energy costs partially offset by $16 million of incremental maintenance outage expense and higher virgin fiber and chemical costs. Corrugated Packaging segment EBITDA margin was 15.4% for the first quarter of fiscal 2013.

Consumer Packaging Segment
Consumer Packaging segment net sales decreased $9 million in the first quarter of fiscal 2013 compared to the prior year quarter due primarily to lower selling prices. Segment income was $67 million in the first quarter of fiscal 2013 compared to $80 million in the prior year quarter due primarily to lower selling prices, and to lower income from promotional displays that resulted primarily from higher containerboard prices. Consumer Packaging segment EBITDA margin was 14.9% for the first quarter of fiscal 2013.

Recycling Segment
Recycling segment net sales decreased $78 million over the prior year first quarter to $252 million primarily as a result of lower selling prices and volume. Segment income increased $1 million to $4 million in the first quarter of fiscal 2013 compared to the prior year quarter primarily due to cost structure improvements. Recycling segment EBITDA margin was 3.0% for the first quarter of fiscal 2013.

Cash Provided From Operating, Financing and Investing Activities
Cash provided by operations was $278 million in the first quarter of fiscal 2013, after pension funding in excess of expense of $13 million. We reduced net debt (as defined) by $155 million in the December quarter to $3.22 billion and our Leverage Ratio (as defined) was 2.77 times. Total debt was $3.25 billion at December 31, 2012. We invested $92 million in capital expenditures and returned $32 million in dividends to our shareholders, including the acceleration of the February 2013 dividend.

RockTenn (RKT) is one of North America's leading integrated manufacturers of corrugated and consumer packaging. RockTenn’s 26,000 employees are committed to exceeding their customers’ expectations — every time. The Company operates locations in the United States, Canada, Mexico, Chile, Argentina and China. For more information, visit www.rocktenn.com.

SOURCE: RockTenn