RockTenn Reports First Quarter Fiscal 2013 Results
RockTenn Reports First Quarter Fiscal 2013 Results
NORCROSS, Ga.--(BUSINESS WIRE)-- RockTenn (NYS: RKT) 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.
Three Months | Three Months | |||||||
Ended | Ended | |||||||
December 31, | December 31, | |||||||
2012 | 2011 | |||||||
Earnings per diluted share | $ | 1.18 | $ | 1.06 | ||||
Restructuring and other costs and operating losses and transition costs due to plant closures | 0.17 | 0.12 | ||||||
Adjusted earnings per diluted share | $ | 1.35 | $ | 1.18 | ||||
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.
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 (NYS: 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 | ) | ||||||||
