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RockTenn Reports Results Third Quarter Fiscal 2012 Earnings Of $0.81 Per Share On Solid Operating Performance And Improving Corrugated Industry Fundamentals

RockTenn (NYSE:RKT) today reported earnings for the quarter ended June 30, 2012 of $0.81 per diluted share and adjusted earnings of $0.95 per diluted share.

                   
    Three Months   Three Months   Nine Months   Nine Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
      2012   2011   2012   2011
 
Earnings (loss) per diluted share $ 0.81 $ (0.60 ) $ 2.31 $ 1.30
 
Restructuring and other costs and operating losses and transition costs due to plant closures

0.14

0.71

0.61

0.96

Loss on extinguishment of debt 0.49 0.17 0.58
Acquisition inventory step-up 0.69 0.81
                   
Adjusted earnings per diluted share     $ 0.95   $ 1.29     $ 3.09   $ 3.65

Third Quarter Results

  • Net sales of $2,303.2 million for the third quarter of fiscal 2012 increased $921.1 million over the third quarter of fiscal 2011, primarily as a result of the May 27, 2011, Smurfit-Stone acquisition.
  • Segment income was $159.3 million up $13.6 million or 9.3% over the prior year quarter after adjusting the prior year quarter to eliminate $55.4 million of pre-tax acquisition inventory step-up. The increase was primarily a result of the Smurfit-Stone acquisition and increased profitability in our Consumer Packaging segment.
  • RockTenn’s restructuring and other costs and operating losses and transition costs due to plant closures, net of related noncontrolling interest were $0.14 per diluted share after-tax, for the third quarter of fiscal 2012. These costs consisted primarily of $7.5 million of pre-tax integration and acquisition costs, including professional services, employee and other costs, $6.2 million of pre-tax facility closure charges primarily related to corrugated container plants acquired in the Smurfit-Stone Acquisition, the permanent shutdown of the medium machine at Hodge, Louisiana containerboard mill, net of a gain on sale of our Columbus, Indiana laminated converting facility and $1.9 million of pre-tax operating losses and transition costs primarily related to corrugated container plants acquired in the Smurfit-Stone acquisition.

Chairman and Chief Executive Officer’s Statement

RockTenn Chairman and Chief Executive Officer James A. Rubright stated, “RockTenn’s third quarter earnings per share reflect continued solid performance across our business units with particularly strong results in our consumer segment where lower recycled fiber and energy costs, strong operating performance and sales growth in merchandising displays drove segment earnings up 37% over the prior year quarter. Our corrugated segment performance, while generally above our expectations, reflected approximately $10 million ($.09 per share) in expense from higher than expected costs, lost production and supply chain disruption associated primarily with major capital projects at our Hodge, Louisiana mill.

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