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TheStreet Open House

RockTenn Reports First Quarter Fiscal 2013 Results

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.

Conference Call

We will host a conference call to discuss our results of operations for the first quarter of fiscal 2013 and other topics that may be raised during the discussion at 9:00 a.m., Eastern Time, on January 23, 2013. The conference call will be webcast live with an accompanying slide presentation, along with a copy of this press release, at www.rocktenn.com.

Investors who wish to participate in the webcast via teleconference should dial 888-790-4710 (inside the U.S.) or 773-756-0961 (outside the U.S.) at least 15 minutes prior to the start of the call and enter the passcode ROCKTENN. Replays of the call will be available through February 6, 2013 and can be accessed at 866-351-2785 (U.S. callers) and 203-369-0055 (outside the U.S.).

About RockTenn

RockTenn (NYSE: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.

 
 
ROCK-TENN COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
     
 
 
FOR THE THREE MONTHS ENDED
December 31, December 31,
2012 2011
               
 
NET SALES $ 2,287.1 $ 2,267.7
 
Cost of Goods Sold 1,877.6 1,875.5
               
 
Gross Profit 409.5 392.2
Selling, General and Administrative Expenses 223.0 225.9
Restructuring and Other Costs, net 16.1 10.3
               
 
Operating Profit 170.4 156.0
Interest Expense (29.1 ) (32.7 )
Loss on Extinguishment of Debt (0.2 ) -
Interest Income and Other Income (Expense), net - 0.4
Equity in Income of Unconsolidated Entities 0.6 0.7
               
 
INCOME BEFORE INCOME TAXES 141.7 124.4
 
Income Tax Expense (54.8 ) (47.6 )
               
 
CONSOLIDATED NET INCOME 86.9 76.8
               
 
Less: Net Income Attributable to Noncontrolling
Interests (0.9 ) (0.1 )
               
 
NET INCOME ATTRIBUTABLE TO ROCK-TENN
COMPANY SHAREHOLDERS $ 86.0 $ 76.7
               
 
Computation of diluted earnings per share under the two-class method (in millions, except per share data):
 
Net income attributable to Rock-Tenn Company
shareholders $ 86.0 $ 76.7
Less: Distributed and undistributed income
available to participating securities   -     (0.4 )
Distributed and undistributed income available
to Rock-Tenn Company shareholders $ 86.0   $ 76.3  
 
Diluted weighted average shares outstanding 72.7 71.7
 
Diluted earnings per share $ 1.18   $ 1.06  
 
 

ROCK-TENN COMPANY
SEGMENT INFORMATION
(UNAUDITED)
(IN MILLIONS)
       
             
 
FOR THE THREE MONTHS ENDED
December 31, December 31,
2012 2011
             
 
NET SALES:
 
Corrugated Packaging $ 1,589.9 $ 1,522.8
Consumer Packaging 611.3 620.4
Recycling 251.8 329.4
Intersegment Eliminations (165.9 ) (204.9 )
             
TOTAL NET SALES     $ 2,287.1       $ 2,267.7  
 
SEGMENT INCOME:
 
Corrugated Packaging (1) $ 137.8 $ 109.3
Consumer Packaging 66.5 80.3
Recycling 4.3 3.5
             
TOTAL SEGMENT INCOME     $ 208.6       $ 193.1  
 
Restructuring and Other Costs, net (16.1 ) (10.3 )
Non-Allocated Expenses (21.5 ) (26.1 )
Interest Expense (29.1 ) (32.7 )
Loss on Extinguishment of Debt (0.2 ) -
Interest Income and Other Income (Expense), net - 0.4
             
INCOME BEFORE INCOME TAXES     $ 141.7       $ 124.4  

(1) Includes inventory step-up expense of $0.4 million in the three months ended December 31, 2011.

 
 
ROCK-TENN COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN MILLIONS)
       
FOR THE THREE MONTHS ENDED
December 31, December 31,
      2012     2011
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income $ 86.9 $ 76.8
 
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization 138.1 132.7
Deferred income tax expense 50.2 42.9
Loss on extinguishment of debt 0.2 -
Share-based compensation expense 6.8 5.3
(Gain) loss on disposal of plant and equipment and other, net 0.7 (0.6 )
Equity in income of unconsolidated entities (0.6 ) (0.7 )
Settlement of interest rate swaps - (2.8 )
Pension funding more than expense (12.8 ) (68.2 )
Impairment adjustments and other non-cash items 2.7 1.6
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 74.7 132.2
Inventories (49.2 ) (69.4 )
Other assets 11.0 (10.9 )
Accounts payable (31.8 ) (56.8 )
Income taxes (8.3 ) 8.3
Accrued liabilities and other       8.9         (45.3 )
NET CASH PROVIDED BY OPERATING ACTIVITIES       277.5         145.1  
INVESTING ACTIVITIES:
 
Capital expenditures (92.0 ) (81.6 )
Cash paid for purchase of businesses, net of cash acquired - (87.5 )
Investment in unconsolidated entities - (1.6 )
Return of capital from unconsolidated entities 0.4 0.7
Proceeds from sale of property, plant and equipment       2.6         11.7  
NET CASH USED FOR INVESTING ACTIVITIES       (89.0 )       (158.3 )
FINANCING ACTIVITIES:
Additions to revolving credit facilities 31.8 104.4
Repayments of revolving credit facilities (14.5 ) (39.9 )
Additions to debt 150.1 26.0
Repayments of debt (326.9 ) (63.3 )
Debt issuance costs (1.3 ) (0.8 )
Issuances of common stock, net of related minimum tax withholdings (4.8 ) 2.0
Excess tax benefits from share-based compensation 4.4 -
Repayments to unconsolidated entity - (0.5 )
Cash dividends paid to shareholders (32.1 ) (14.1 )
Cash distributions to noncontrolling interests       (1.3 )       -  
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES       (194.6 )       13.8  
Effect of exchange rate changes on cash and cash equivalents (0.1 ) (1.3 )
 
DECREASE IN CASH AND CASH EQUIVALENTS (6.2 ) (0.7 )
 
Cash and cash equivalents at beginning of period       37.2         41.7  
Cash and cash equivalents at end of period     $ 31.0       $ 41.0  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Income taxes, net of refunds $ 8.4 $ (3.6 )
Interest, net of amounts capitalized       9.3         23.6  
 
 

ROCK-TENN COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN MILLIONS)
             
       
December 31, September 30,
2012 2012
             
 
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 31.0 $ 37.2
Restricted cash 11.3 40.6
Accounts receivable (net of allowances of $27.3 and $26.9) 1,000.7 1,075.6
Inventories 910.1 861.9
Other current assets 171.9 174.5
             
 
TOTAL CURRENT ASSETS 2,125.0 2,189.8
             
 
Property, plant and equipment at cost:
Land and buildings 1,209.1 1,207.7
Machinery and equipment 6,180.0 6,121.7
Transportation equipment 14.0 13.6
Leasehold improvements   20.3     20.0  
7,423.4 7,363.0
Less accumulated depreciation and amortization   (1,854.8 )   (1,751.6 )
Net property, plant and equipment 5,568.6 5,611.4
Goodwill 1,864.9 1,865.3
Intangibles, net 772.3 795.1
Other assets 211.3 225.5
             
 
TOTAL ASSETS $ 10,542.1 $ 10,687.1
             
 
LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Current portion of debt $ 87.4 $ 261.3
Accounts payable 677.5 708.9
Accrued compensation and benefits 184.9 211.4
Other current liabilities 216.3 226.7
             
 
TOTAL CURRENT LIABILITIES 1,166.1 1,408.3
             
 
Long-term debt due after one year 3,163.8 3,151.2
Pension liabilities 1,469.9 1,493.1
Postretirement medical liabilities 152.1 154.2
Deferred income taxes 930.5 888.8
Other long-term liabilities 179.3 173.9
Redeemable noncontrolling interests 11.2 11.4
 
Total Rock-Tenn Company shareholders' equity 3,468.7 3,405.7
Noncontrolling interests   0.5     0.5  
Total Equity 3,469.2 3,406.2
             
 
TOTAL LIABILITIES AND EQUITY     $ 10,542.1       $ 10,687.1  
 
 

Rock-Tenn Company Quarterly Statistics
                     
Key Financial Statistics
(In Millions, Unless Otherwise Specified)
 

1 st Quarter

2 nd Quarter

3 rd Quarter

4 th Quarter

Fiscal Year

 
Net Income (Loss) Attributable to Rock-Tenn Company Shareholders
2011

 

$  50.3

$ 37.0 $ (30.1) $ 83.9 $ 141.1
2012 76.7 31.9 58.2 82.3 249.1
2013 86.0
 
Diluted Earnings (Loss) per Share
2011

 

$  1.27

$ 0.92 $ (0.60) $ 1.17 $ 2.77
2012 1.06 0.44 0.81 1.14 3.45
2013 1.18
 
Depreciation & Amortization
2011

 

$  36.7

$ 37.2 $ 73.5 $ 130.9 $ 278.3
2012 132.7 132.6 131.4 137.6 534.3
2013 138.1
 
Capital Expenditures
2011

 

$  28.5

$ 30.3 $ 48.7 $ 91.9 $ 199.4
2012 81.6 120.6 146.1 104.1 452.4
2013 92.0
 
Mill System Operating Rates
2011 95.4% 98.3% 96.7% 99.1% 97.9%
2012 96.4% 90.6% 92.4% 97.7% 94.3%
2013 97.6%
 
 

Rock-Tenn Company Quarterly Statistics
                             
Segment Operating Statistics
(Sales and Income In Millions, Shipments in Thousands of Tons Unless Otherwise Specified)
 
 
1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter Fiscal Year
Corrugated Packaging Segment Sales
2011 $ 198.3 $ 209.4 $ 734.5 $ 1,626.5 $ 2,768.7
2012 1,522.8 1,505.9 1,545.2 1,597.3 6,171.2
2013 1,589.9
Corrugated Packaging Intersegment Sales
2011 $ 9.4 $ 11.1 $ 21.3 $ 39.9 $ 81.7
2012 32.3 30.8 28.7 29.8 121.6
2013 28.2
Corrugated Packaging Segment Income
2011 $ 37.4 $ 30.1 $ 80.0 (1) $ 153.6 (2) $ 301.1
2012 109.7 (3) 75.4 (4) 73.6 (5) 112.8 (6) 371.5
2013 137.8
Return On Sales
2011 18.9% 14.4% 10.9% (1) 9.4% (2) 10.9%
2012 7.2% (3) 5.0% (4) 4.8% (5) 7.1% (6) 6.0%
2013 8.7%
 
Containerboard Shipments (7)
2011 247.4 243.9 850.7 1,914.4 3,256.4
2012 1,832.0 1,695.9 1,722.9 1,859.1 7,109.9
2013 1,816.6
 
Bleached Linerboard Shipments
2011 - - 12.9 29.8 42.7
2012 29.3 28.5 32.3 31.0 121.1
2013 30.2
 
Pulp Shipments
2011 - - 28.7 71.2 99.9
2012 75.0 61.5 73.8 77.0 287.3
2013 73.4
 
Corrugated Containers Shipments - BSF (8)
2011 2.6 2.9 9.1 19.3 33.9
2012 19.0 19.1 19.5 19.7 77.3
2013 19.2
 
Corrugated Containers Per Shipping Day - MMSF (8)
2011 43.1 45.2 144.7 301.4 134.6
2012 317.2 298.3 309.3 313.0 309.3
2013 314.1

(1)

 

Excludes $55.4 million of inventory step-up expense.

(2)

Excludes $4.0 million of inventory step-up expense.

(3)

Excludes $0.4 million of inventory step-up expense.

(4)

Excludes $6.7 million of operating losses at the recently closed Matane, Quebec containerboard mill.

(5)

Excludes $0.2 million of inventory step-up expense.

(6)

Excludes $0.2 million of inventory step-up expense.

(7)

Includes Kraft Paper

(8)

MMSF - millions of square feet and BSF - billions of square feet

 
 

Rock-Tenn Company Quarterly Statistics
                     
Segment Operating Statistics
(Sales and Income In Millions, Shipments in Thousands of Tons Unless Otherwise Specified)
 
 
1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter Fiscal Year
Consumer Packaging Segment Sales
2011 $ 544.5 $ 567.8 $ 579.6 $ 667.9 $ 2,359.8
2012 620.4 647.6 628.9 660.6 2,557.5
2013 611.3
Consumer Packaging Intersegment Sales
2011 $ 3.8 $ 3.9 $ 6.8 $ 9.0 $ 23.5
2012 7.6 6.2 6.1 5.3 25.2
2013 6.4
Consumer Packaging Segment Income
2011 $ 71.0 $ 61.0 $ 61.1 $ 82.1 $ 275.2
2012 80.3 84.4 83.7 98.8 347.2
2013 66.5
Return on Sales
2011 13.0% 10.7% 10.5% 12.3% 11.7%
2012 12.9% 13.0% 13.3% 15.0% 13.6%
2013 10.9%
 
Recycled Paperboard Shipments (1)
2011 224.5 239.3 238.2 241.0 943.0
2012 222.8 236.8 231.8 237.9 929.3
2013 231.5
 
Bleached Paperboard Shipments
2011 84.4 85.1 77.4 88.0 334.9
2012 83.8 87.4 91.5 90.3 353.0
2013 87.6
 
Pulp Shipments
2011 22.1 24.0 20.9 25.1 92.1
2012 24.9 25.1 24.3 21.9 96.2
2013 26.7
 
Consumer Packaging Converting Shipments - BSF (2)
2011 5.0 5.2 5.2 5.3 20.7
2012 5.0 5.2 5.1 5.2 20.5
2013 4.9
 
Consumer Packaging Converting Per Shipping Day - MMSF (2)
2011 82.2 83.0 82.1 82.5 82.4
2012 83.5 81.0 80.6 83.1 82.0
2013 81.0

(1)

 

Recycled paperboard tons include coated and specialty paperboard, including gypsum paperboard liner tons by Seven Hills Paperboard LLC, our unconsolidated joint venture with Lafarge North America, Inc.

(2)

MMSF - millions of square feet and BSF - billions of square feet

 
 

Rock-Tenn Company Quarterly Statistics
 
Segment Operating Statistics
(Sales and Income In Millions, Shipments in Thousands of Tons Unless Otherwise Specified)
                     
 
1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter Fiscal Year
Recycling Segment Sales
2011 $ 41.9 $ 40.8 $ 147.4 $ 355.8 $ 585.9
2012 329.4 296.1 338.9 264.4 1,228.8
2013 251.8
Recycling Intersegment Sales
2011 $ 10.4 $ 10.1 $ 51.3 $ 137.8 $ 209.6
2012 165.0 129.7 175.0 133.4 603.1
2013 131.3
Recycling Segment Income
2011 $ 2.3 $ 2.6 $ 4.6 $ 5.3 $ 14.8
2012 3.5 4.2 2.2 (2.8) 7.1
2013 4.3
Return on Sales
2011 5.5% 6.4% 3.1% 1.5% 2.5%
2012 1.1% 1.4% 0.6% (1.1)% 0.6%
2013 1.7%
 
Fiber Reclaimed and Brokered
2011 211.6 213.7 773.9 1,759.6 2,958.8
2012 2,064.5 1,996.9 2,039.7 1,982.8 8,083.9
2013 1,945.0
 
 




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