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RockTenn Reports Fourth Quarter Fiscal 2012 Results

RockTenn (NYSE:RKT) today reported earnings for the fiscal year ended September 30, 2012 of $3.45 per diluted share and adjusted earnings of $4.48 per diluted share and for the quarter ended September 30, 2012 of $1.14 per diluted share and adjusted earnings of $1.39 per diluted share.
Three Months Three Months Twelve Months Twelve Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
    2012     2011       2012     2011
Earnings per diluted share $ 1.14 $ 1.17 $ 3.45 $ 2.77
Restructuring and other costs and operating losses and
transition costs due to plant closures 0.19 0.35 0.80 1.32
Loss on extinguishment of debt 0.06 0.23 0.50
Non-cash loss on Canadian intercompany note 0.15 0.17
Acquisition inventory step-up 0.03 0.74
Adjusted earnings per diluted share   $ 1.39     $ 1.70       $ 4.48     $ 5.50

Fourth Quarter Results
  • Net sales of $2,353.8 million for the fourth quarter of fiscal 2012 decreased $109.7 million compared to the fourth quarter of fiscal 2011.
  • Segment income, adjusted to eliminate $0.2 million of pre-tax acquisition inventory step-up, was $208.8 million down $32.2 million or 13.4% over the prior year quarter after adjusting the prior year quarter to eliminate $4.0 million of pre-tax acquisition inventory step-up. Segment income in the fourth quarter of fiscal 2012 included $18.2 million received in connection with the termination and settlement of a paperboard supply agreement, net of legal fees in the period, that was mostly offset by $16.8 million of primarily higher start-up costs and lost production after the major capital investments at our Hodge, LA mill relative to our expectations at the beginning of the quarter.
  • RockTenn’s restructuring and other costs and operating losses and transition costs due to plant closures, net of related noncontrolling interest were $0.19 per diluted share after-tax, for the fourth quarter of fiscal 2012. These costs consisted primarily of $11.5 million of pre-tax integration and acquisition costs, including professional services, employee and other costs, and $11.4 million of pre-tax facility closure charges primarily related to corrugated container and recycled facilities acquired in the Smurfit-Stone Acquisition.
  • RockTenn’s loss on extinguishment of debt was $6.3 million, or $0.06 per diluted share in connection with the September 11, 2012 issuance of $350 million 3.50% March 2020 and $350 million 4.00% March 2023 senior notes and the extension and amendment of our Credit Agreement. The expense was primarily related to unamortized deferred financing costs.

Chairman and Chief Executive Officer’s Statement

RockTenn Chairman and Chief Executive Officer James A. Rubright stated, “We are pleased with the earnings we recorded in our fourth fiscal quarter, which are up strongly over the third quarter despite the continued headwinds of the slow progress of the domestic economic recovery. During the fourth fiscal quarter, we implemented a $50 per ton increase in domestic containerboard and we are following that with price increases in boxes and sheets. Given our contractual arrangements, we expect that by the end of the March quarter we will be realizing most of the anticipated benefit of those increases, which will be partially offset by lower prices in our consumer segment and higher commodity input costs.”

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