Exhibit 99.1
RockTenn Reports Results for the Second Quarter of Fiscal 2012
NORCROSS, Ga.--(BUSINESS WIRE)--April 25, 2012--RockTenn (NYSE:RKT) today reported earnings for the quarter ended March 31, 2012 of $0.44 per diluted share and adjusted earnings of $0.97 per diluted share.
| | Three Months | | Three Months | | Six Months | | Six Months |
| | Ended | | Ended | | Ended | | Ended |
| | March 31, | | March 31, | | March 31, | | March 31, |
| | | 2012 | | 2011 | | 2012 | | 2011 |
| | | | | | | | |
| Earnings per diluted share | | $ | 0.44 | | $ | 0.92 | | $ | 1.50 | | $ | 2.19 |
| | | | | | | | |
| Restructuring and other costs and operating losses | | | | | | | | | | | | |
| and transition costs due to plant closures | | | 0.36 | | | 0.12 | | | 0.48 | | | 0.13 |
| Loss on extinguishment of debt | | | 0.17 | | ― | | | 0.17 | | ― |
| | | | | | | | | |
| Adjusted earnings per diluted share | | $ | 0.97 | | $ | 1.04 | | $ | 2.15 | | $ | 2.32 |
| | | | | | | | | | | | |
Second Quarter Results
- Net sales of $2,282.9 million for the second quarter of fiscal 2012 increased $1,490.0 million over the second quarter of fiscal 2011, primarily as a result of the May 27, 2011, Smurfit-Stone acquisition.
- Segment income of $157.3 million, adjusted to eliminate $6.7 million of pre-tax losses at our recently closed Matane, Quebec containerboard mill, was $164.0 million up $70.3 million or 75.0% over the prior year quarter, primarily as 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 $0.36 per diluted share after-tax, for the second quarter of fiscal 2012. These costs consisted primarily of $19.3 million of pre-tax facility closure charges primarily related to the Matane mill and corrugated container plants acquired in the Smurfit-Stone acquisition, $7.7 million of pre-tax operating losses and transition costs primarily in connection with the Matane mill closure and consolidating converting facilities and $8.7 million of pre-tax integration and acquisition costs that primarily consisted of professional services and other employee costs.
- We recognized a pre-tax loss on extinguishment of debt of $19.5 million, or $0.17 per diluted share in connection with the redemption of our 9.25% senior notes due March 2016 at a redemption price equal to 104.625% of par and to expense unamortized deferred financing and discount costs.
Chairman and Chief Executive Officer’s Statement
RockTenn Chairman and Chief Executive Officer James A. Rubright stated, “RockTenn’s adjusted earnings of $.97 per share reflect very strong earnings and margin growth in our consumer packaging businesses. Our corrugated segment results were reduced by continued competitive domestic box markets amid stable domestic containerboard pricing and by lower export pricing for containerboard and pulp. Export demand and pricing and pulp pricing are improving from the seasonal and cyclical bottom we believe we experienced in the quarter.”
Segment Results
Containerboard and Paperboard Tons Produced
Total tons produced in the second quarter of fiscal 2012 were approximately 2.17 million tons, an increase of approximately 1.6 million tons over the prior year quarter due to the Smurfit-Stone acquisition, and a sequential decrease of approximately 124,000 tons from the first quarter of fiscal 2012. The sequential quarter decrease was primarily due to scheduled maintenance and market related downtime in our containerboard mills.
Corrugated Packaging Segment
Corrugated Packaging segment net sales increased $1,296.5 million to $1,505.9 million in the second quarter of fiscal 2012 compared to the prior year quarter, due primarily to the Smurfit-Stone acquisition. Segment income of $68.7 million, adjusted to eliminate $6.7 million of pre-tax losses at our recently closed Matane, Quebec containerboard mill, increased to $75.4 million in the second quarter of fiscal 2012 compared to $30.1 million in the prior year quarter. Corrugated Packaging segment EBITDA margin was 11.8% for the second quarter of fiscal 2012.
Consumer Packaging Segment
Consumer Packaging segment net sales increased $79.8 million in the second quarter of fiscal 2012 compared to the prior year quarter, primarily due to increased display sales including those from the Smurfit-Stone acquisition and generally higher selling prices throughout the segment. Segment income was $84.4 million in the second quarter of fiscal 2012 compared to $61.0 million in the prior year quarter due primarily to increased display sales, generally higher selling prices, lower recycled and virgin fiber and energy costs that were partially offset by higher chemical and freight costs. Consumer Packaging segment EBITDA margin was 16.8% for the second quarter of fiscal 2012.
Recycling and Waste Solutions Segment
Recycling and Waste Solutions segment net sales increased $255.3 million over the prior year second quarter to $296.1 million primarily due to the Smurfit-Stone acquisition. Segment income was $4.2 million in the second quarter of fiscal 2012 compared to $2.6 million in the prior year.
Cash Provided From Operating, Financing and Investing Activities
At March 31, 2012, total debt was $3.4 billion and our Leverage Ratio (as hereinafter defined) was 2.78 times, well below our maximum credit agreement covenant of 3.75 times. Net debt decreased by $61.7 million in the March quarter to $3.4 billion. Cash provided by operations was $192.7 million in the second quarter of fiscal 2012, after pension and postretirement funding more than expense of $40.0 million. We also invested $120.6 million in capital expenditures and returned $14.1 million in dividends to our shareholders.
Conference Call
We will host a conference call to discuss our results of operations for the second quarter of fiscal 2012 and other topics that may be raised during the discussion at 9:00 a.m., Eastern Time, on April 26, 2012. 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 May 10, 2012 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 and recycling solutions. 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.
Cautionary Statements
Statements herein regarding, among other things our belief that export demand and pricing and pulp pricing are improving from the seasonal and cyclical bottom we believe we experienced in the quarter constitute forward-looking statements within the meaning of the federal securities laws. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement. With respect to these statements, we have made assumptions regarding, among other things, expected economic, competitive and market conditions generally; expected volumes and price levels of purchases by customers; fiber and energy costs; costs associated with facility closures; competitive conditions in our businesses and possible adverse actions of our customers, our competitors and suppliers. Management believes its assumptions are reasonable; however, undue reliance should not be placed on these estimates, which are based on current expectations. There are many factors and uncertainties that impact these forward-looking statements that we cannot predict accurately, including our ability to integrate Smurfit-Stone or to achieve benefits from the Smurfit-Stone acquisition, including synergies and performance improvements. Further, our business is subject to a number of general risks that would affect any such forward-looking statements including, among others, decreases in demand for our products; increases in energy, raw materials, shipping and capital equipment costs; reduced supply of raw materials; fluctuations in selling prices and volumes; intense competition; the potential loss of certain key customers; changes in environmental and other governmental regulation; and adverse changes in general market and industry conditions. These risks are more particularly described in our filings with the Securities and Exchange Commission, including under the caption “Business―Forward-Looking Information” and “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2011. The information contained in this release speaks as of the date hereof and we do not undertake any obligation to update this information as future events unfold.
| ROCK-TENN COMPANY |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
| (UNAUDITED) |
| (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) |
| | | | | | | | |
| | | | | | | | | |
| | | | | | | | |
| | FOR THE THREE MONTHS ENDED | | FOR THE SIX MONTHS ENDED |
| | March 31, | | March 31, | | March 31, | | March 31, |
| | 2012 | | 2011 | | 2012 | | 2011 |
| | | | | | | | | |
| | | | | | | | |
| NET SALES | | $ | 2,282.9 | | | $ | 792.9 | | | $ | 4,550.6 | | | $ | 1,554.0 | |
| | | | | | | | |
| Cost of Goods Sold | | | 1,922.1 | | | | 626.6 | | | | 3,797.6 | | | | 1,208.9 | |
| | | | | | | | | |
| | | | | | | | |
| Gross Profit | | | 360.8 | | | | 166.3 | | | | 753.0 | | | | 345.1 | |
| Selling, General and Administrative Expenses | | | 229.6 | | | | 88.3 | | | | 455.5 | | | | 171.5 | |
| Restructuring and Other Costs, net | | | 28.1 | | | | 6.3 | | | | 38.4 | | | | 6.9 | |
| | | | | | | | | |
| | | | | | | | |
| Operating Profit | | | 103.1 | | | | 71.7 | | | | 259.1 | | | | 166.7 | |
| Interest Expense | | | (32.2 | ) | | | (16.2 | ) | | | (64.9 | ) | | | (32.9 | ) |
| Loss on Extinguishment of Debt | | | (19.5 | ) | | | - | | | | (19.5 | ) | | | - | |
| Interest Income and Other Income, net | | | 0.5 | | | | - | | | | 0.9 | | | | - | |
| Equity in Income of Unconsolidated Entities | | | 1.4 | | | | 0.3 | | | | 2.1 | | | | 0.6 | |
| | | | | | | | | |
| | | | | | | | |
| INCOME BEFORE INCOME TAXES | | | 53.3 | | | | 55.8 | | | | 177.7 | | | | 134.4 | |
| | | | | | | | |
| Income Tax Expense | | | (20.6 | ) | | | (17.5 | ) | | | (68.2 | ) | | | (44.8 | ) |
| | | | | | | | | |
| | | | | | | | |
| CONSOLIDATED NET INCOME | | | 32.7 | | | | 38.3 | | | | 109.5 | | | | 89.6 | |
| | | | | | | | | |
| | | | | | | | |
Less: Net Income Attributable to Noncontrolling Interests | | | (0.8 | ) | | | (1.3 | ) | | | (0.9 | ) | | | (2.3 | ) |
| | | | | | | | | |
| | | | | | | | |
NET INCOME ATTRIBUTABLE TO ROCK-TENN COMPANY SHAREHOLDERS | | $ | 31.9 | | | $ | 37.0 | | | $ | 108.6 | | | $ | 87.3 | |
| | | | | | | | | |
| | | | | | | | |
| 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 | | $ | 31.9 | | | $ | 37.0 | | | $ | 108.6 | | | $ | 87.3 | |
Less: Distributed and undistributed income available to participating securities | | | (0.2 | ) | | | (0.7 | ) | | | (0.6 | ) | | | (1.2 | ) |
Distributed and undistributed income available to Rock-Tenn Company shareholders | | $ | 31.7 | | | $ | 36.3 | | | $ | 108.0 | | | $ | 86.1 | |
| | | | | | | | |
| Diluted weighted average shares outstanding | | | 71.9 | | | | 39.2 | | | | 71.8 | | | | 39.3 | |
| | | | | | | | |
| Diluted earnings per share | | $ | 0.44 | | | $ | 0.92 | | | $ | 1.50 | | | $ | 2.19 | |
| | | | | | | | | | | | | | | | |
| ROCK-TENN COMPANY |
| SEGMENT INFORMATION |
| (UNAUDITED) |
| (IN MILLIONS) |
| | | | | | | | |
| | | | | | | | | |
| | | | | | | | |
| | FOR THE THREE MONTHS ENDED | | FOR THE SIX MONTHS ENDED |
| | March 31, | | March 31, | | March 31, | | March 31, |
| | 2012 | | 2011 | | 2012 | | 2011 |
| | | | | | | | | |
| | | | | | | | |
| NET SALES: | | | | | | | | |
| | | | | | | | |
| Corrugated Packaging | | $ | 1,505.9 | | | $ | 209.4 | | | $ | 3,028.7 | | | $ | 407.7 | |
| Consumer Packaging | | | 647.6 | | | | 567.8 | | | | 1,268.0 | | | | 1,112.3 | |
| Recycling and Waste Solutions | | | 296.1 | | | | 40.8 | | | | 625.5 | | | | 82.7 | |
| Intersegment Eliminations | | | (166.7 | ) | | | (25.1 | ) | | | (371.6 | ) | | | (48.7 | ) |
| | | | | | | | | |
| | | | | | | | |
| TOTAL NET SALES | | $ | 2,282.9 | | | $ | 792.9 | | | $ | 4,550.6 | | | $ | 1,554.0 | |
| | | | | | | | | |
| | | | | | | | |
| SEGMENT INCOME: | | | | | | | | |
| | | | | | | | |
| Corrugated Packaging (1) | | $ | 68.7 | | | $ | 30.1 | | | $ | 178.0 | | | $ | 67.5 | |
| Consumer Packaging | | | 84.4 | | | | 61.0 | | | | 164.7 | | | | 132.0 | |
| Recycling and Waste Solutions | | | 4.2 | | | | 2.6 | | | | 7.7 | | | | 4.9 | |
| | | | | | | | | |
| | | | | | | | |
| TOTAL SEGMENT INCOME | | $ | 157.3 | | | $ | 93.7 | | | $ | 350.4 | | | $ | 204.4 | |
| | | | | | | | | |
| | | | | | | | |
| Restructuring and Other Costs, net | | | (28.1 | ) | | | (6.3 | ) | | | (38.4 | ) | | | (6.9 | ) |
| Non-Allocated Expenses | | | (24.7 | ) | | | (15.4 | ) | | | (50.8 | ) | | | (30.2 | ) |
| Interest Expense | | | (32.2 | ) | | | (16.2 | ) | | | (64.9 | ) | | | (32.9 | ) |
| Loss on Extinguishment of Debt | | | (19.5 | ) | | | - | | | | (19.5 | ) | | | - | |
| Interest Income and Other Income, net | | | 0.5 | | | | - | | | | 0.9 | | | | - | |
| | | | | | | | | |
| | | | | | | | |
| INCOME BEFORE INCOME TAXES | | $ | 53.3 | | | $ | 55.8 | | | $ | 177.7 | | | $ | 134.4 | |
| | | | | | | | | |
| | | | | | | | |
(1) After $6.7 million of pre-tax losses at our Matane, Quebec containerboard mill in the three and six months ended March 31, 2012 and after inventory step-up expense of $0.4 million pre-tax in the six months ended March 31, 2012. |
| | |
| ROCK-TENN COMPANY |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (UNAUDITED) |
| (IN MILLIONS) |
| | | | | | | | | |
| | | | | | | | |
| | FOR THE THREE MONTHS ENDED | | FOR THE SIX MONTHS ENDED |
| | March 31, | | March 31, | | March 31, | | March 31, |
| | | 2012 | | 2011 | | 2012 | | 2011 |
| | | | | | | | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | |
| Consolidated net income | | $ | 32.7 | | | $ | 38.3 | | | $ | 109.5 | | | $ | 89.6 | |
| | | | | | | | |
| Adjustments to reconcile consolidated net income to net cash provided by operating activities: | | | | | |
| Depreciation and amortization | | | 132.6 | | | | 37.2 | | | | 265.3 | | | | 73.9 | |
| Deferred income tax expense | | | 17.9 | | | | 6.7 | | | | 60.8 | | | | 26.5 | |
| Loss on extinguishment of debt | | | 19.5 | | | | - | | | | 19.5 | | | | - | |
| Share-based compensation expense | | | 6.5 | | | | 5.4 | | | | 11.8 | | | | 9.4 | |
| Gain on disposal of plant and equipment and other, net | | | (5.4 | ) | | | (0.3 | ) | | | (6.0 | ) | | | (0.1 | ) |
| Equity in income of unconsolidated entities | | | (1.4 | ) | | | (0.3 | ) | | | (2.1 | ) | | | (0.6 | ) |
| Settlement of interest rate swaps | | | - | | | | - | | | | (2.8 | ) | | | - | |
| Pension funding (more) less than expense | | | (40.0 | ) | | | 3.1 | | | | (108.2 | ) | | | 8.5 | |
| Impairment adjustments and other non-cash items | | | 13.9 | | | | 0.5 | | | | 15.5 | | | | 0.7 | |
| Changes in operating assets and liabilities, net of acquisitions: | | | | | | | |
| Accounts receivable | | | (58.5 | ) | | | (44.7 | ) | | | 73.7 | | | | 5.5 | |
| Inventories | | | 12.9 | | | | 7.9 | | | | (56.5 | ) | | | (8.7 | ) |
| Other assets | | | (21.8 | ) | | | (2.2 | ) | | | (32.7 | ) | | | (1.9 | ) |
| Accounts payable | | | 30.5 | | | | 36.3 | | | | (26.3 | ) | | | 10.7 | |
| Income taxes | | | 7.2 | | | | (1.1 | ) | | | 15.5 | | | | 1.2 | |
| Accrued liabilities and other | | | 46.1 | | | | 2.9 | | | | 0.8 | | | | (20.7 | ) |
| | | | | | | | | |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | | | 192.7 | | | | 89.7 | | | | 337.8 | | | | 194.0 | |
| | | | | | | | |
| INVESTING ACTIVITIES: | | | | | | | | |
| | | | | | | | |
| Capital expenditures | | | (120.6 | ) | | | (30.3 | ) | | | (202.2 | ) | | | (58.8 | ) |
| Cash paid for purchase of businesses, net of cash acquired | | | - | | | | - | | | | (87.5 | ) | | | - | |
| Investment in unconsolidated entities | | | (0.1 | ) | | | (1.5 | ) | | | (1.7 | ) | | | (1.2 | ) |
| Return of capital from unconsolidated entities | | | 0.4 | | | | 0.2 | | | | 1.1 | | | | 0.4 | |
| Proceeds from sale of property, plant and equipment | | | 20.9 | | | | 0.2 | | | | 32.6 | | | | 0.6 | |
| Proceeds from property, plant and equipment insurance settlement | | | - | | | | 0.3 | | | | - | | | | 0.3 | |
| | | | | | | | | |
| NET CASH USED FOR INVESTING ACTIVITIES | | | (99.4 | ) | | | (31.1 | ) | | | (257.7 | ) | | | (58.7 | ) |
| | | | | | | | |
| FINANCING ACTIVITIES: | | | | | | | | |
| | | | | | | | |
| Proceeds from issuance of notes | | | 748.9 | | | | - | | | | 748.9 | | | | - | |
| Additions to revolving credit facilities | | | 106.3 | | | | 3.1 | | | | 210.7 | | | | 23.1 | |
| Repayments of revolving credit facilities | | | (41.0 | ) | | | (20.0 | ) | | | (80.9 | ) | | | (29.3 | ) |
| Additions to debt | | | 257.0 | | | | 35.0 | | | | 283.0 | | | | 35.0 | |
| Repayments of debt | | | (1,145.4 | ) | | | (62.3 | ) | | | (1,208.7 | ) | | | (144.5 | ) |
| Debt issuance costs | | | (4.9 | ) | | | - | | | | (5.7 | ) | | | (0.5 | ) |
| Cash paid for debt extinguishment costs | | | (13.9 | ) | | | - | | | | (13.9 | ) | | | - | |
| Issuances of common stock, net of related minimum tax withholdings | | | (3.7 | ) | | | (4.5 | ) | | | (1.7 | ) | | | (3.7 | ) |
| Excess tax benefits from share-based compensation | | | 7.9 | | | | 0.5 | | | | 7.9 | | | | 0.6 | |
| Repayments to unconsolidated entity | | | 0.9 | | | | 0.7 | | | | 0.4 | | | | (0.3 | ) |
| Cash dividends paid to shareholders | | | (14.1 | ) | | | (7.9 | ) | | | (28.2 | ) | | | (15.7 | ) |
| Cash distributions to noncontrolling interests | | | - | | | | (1.2 | ) | | | - | | | | (3.2 | ) |
| | | | | | | | | |
| NET CASH USED FOR FINANCING ACTIVITIES | | | (102.0 | ) | | | (56.6 | ) | | | (88.2 | ) | | | (138.5 | ) |
| | | | | | | | |
| Effect of exchange rate changes on cash and cash equivalents | | | 2.6 | | | | (0.1 | ) | | | 1.3 | | | | (0.8 | ) |
| | | | | | | | |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | | (6.1 | ) | | | 1.9 | | | | (6.8 | ) | | | (4.0 | ) |
| | | | | | | | |
| Cash and cash equivalents at beginning of period | | | 41.0 | | | | 10.0 | | | | 41.7 | | | | 15.9 | |
| | | | | | | | | |
| | | | | | | | |
| Cash and cash equivalents at end of period | | $ | 34.9 | | | $ | 11.9 | | | $ | 34.9 | | | $ | 11.9 | |
| | | | | | | | | |
| | | | | | | | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | | | | | | | |
| Cash paid (received) during the period for: | | | | | | | | |
| Income taxes, net of refunds | | $ | (13.0 | ) | | $ | 11.3 | | | $ | (16.6 | ) | | $ | 16.2 | |
| Interest, net of amounts capitalized | | | 36.5 | | | | 27.3 | | | | 60.1 | | | | 32.0 | |
| | | | | | | | | |
| | | | | | | | |
| ROCK-TENN COMPANY |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (UNAUDITED) |
| (IN MILLIONS) |
| | | | | |
| | | | |
| | March 31, | | September 30, |
| | 2012 | | 2011 |
| | | | | |
| | | | |
| ASSETS |
| CURRENT ASSETS: | | | | |
| Cash and cash equivalents | | $ | 34.9 | | | $ | 41.7 | |
| Restricted cash | | | 41.1 | | | | 41.1 | |
| Accounts receivable (net of allowances of $29.0 and $30.1) | | | 1,054.5 | | | | 1,109.6 | |
| Inventories | | | 921.6 | | | | 849.8 | |
| Other current assets | | | 153.3 | | | | 186.7 | |
| | | | | |
| | | | |
| TOTAL CURRENT ASSETS | | | 2,205.4 | | | | 2,228.9 | |
| | | | | |
| | | | |
| Property, plant and equipment at cost: | | | | |
| Land and buildings | | | 1,168.5 | | | | 1,135.1 | |
| Machinery and equipment | | | 5,885.2 | | | | 5,691.1 | |
| Transportation equipment | | | 13.4 | | | | 12.8 | |
| Leasehold improvements | | | 14.8 | | | | 6.9 | |
| | | 7,081.9 | | | | 6,845.9 | |
| Less accumulated depreciation and amortization | | | (1,534.0 | ) | | | (1,318.7 | ) |
| Net property, plant and equipment | | | 5,547.9 | | | | 5,527.2 | |
| Goodwill | | | 1,814.7 | | | | 1,839.4 | |
| Intangibles, net | | | 810.3 | | | | 799.4 | |
| Other assets | | | 225.4 | | | | 171.1 | |
| | | | | |
| | | | |
| TOTAL ASSETS | | $ | 10,603.7 | | | $ | 10,566.0 | |
| | | | | |
| | | | |
| LIABILITIES AND EQUITY |
| CURRENT LIABILITES: | | | | |
| Current portion of debt | | $ | 260.0 | | | $ | 143.3 | |
| Accounts payable | | | 760.2 | | | | 780.7 | |
| Accrued compensation and benefits | | | 211.2 | | | | 220.0 | |
| Other current liabilities | | | 200.2 | | | | 174.3 | |
| | | | | |
| | | | |
| TOTAL CURRENT LIABILITIES | | | 1,431.6 | | | | 1,318.3 | |
| | | | | |
| | | | |
| Long-term debt due after one year | | | 3,148.4 | | | | 3,302.5 | |
| | | | |
| Pension liabilities | | | 1,313.4 | | | | 1,431.0 | |
| Postretirement medical liabilities | | | 158.5 | | | | 155.2 | |
| Deferred income taxes | | | 896.1 | | | | 827.1 | |
| Other long-term liabilities | | | 156.6 | | | | 153.3 | |
| Redeemable noncontrolling interests | | | 7.8 | | | | 6.3 | |
| | | | |
| Total Rock-Tenn Company shareholders' equity | | | 3,490.7 | | | | 3,371.6 | |
| Noncontrolling interests | | | 0.6 | | | | 0.7 | |
| Total Equity | | | 3,491.3 | | | | 3,372.3 | |
| | | | | |
| | | | |
| TOTAL LIABILITIES AND EQUITY | | $ | 10,603.7 | | | $ | 10,566.0 | |
| | | | | | | | | |
| | | | | | | | |
| Rock-Tenn Company Quarterly Statistics |
| | | | | | | | | | |
| Segment Operating Statistics |
| (Production in Thousands of Tons) |
| | 1st Quarter | | 2nd Quarter | | 3rd Quarter | | 4th Quarter | | Fiscal Year |
| | | | | | | | | | |
| Containerboard Production (1) | | | | | | | | | | |
2010 | | 234.2 | | | 231.6 | | | 243.4 | | | 246.1 | | | 955.3 | |
2011 | | 246.2 | | | 245.5 | | | 858.5 | | | 1,923.2 | | | 3,273.4 | |
2012 | | 1,843.5 | | | 1,736.5 | | | | | | | |
| | | | | | | | | | |
| Recycled Paperboard Production (2) | | | | | | | | | | |
2010 | | 223.6 | | | 227.8 | | | 234.2 | | | 235.1 | | | 920.7 | |
2011 | | 226.7 | | | 235.2 | | | 239.4 | | | 242.0 | | | 943.3 | |
2012 | | 227.3 | | | 234.6 | | | | | | | |
| | | | | | | | | | |
| SBS / SBL Production | | | | | | | | | | |
2010 | | 85.1 | | | 83.5 | | | 87.4 | | | 84.1 | | | 340.1 | |
2011 | | 87.4 | | | 86.6 | | | 87.3 | | | 123.7 | | | 385.0 | |
2012 | | 115.2 | | | 112.7 | | | | | | | |
| | | | | | | | | | |
| Pulp Production | | | | | | | | | | |
2010 | | 25.6 | | | 23.8 | | | 24.1 | | | 26.1 | | | 99.6 | |
2011 | | 23.4 | | | 26.2 | | | 47.1 | | | 101.1 | | | 197.8 | |
2012 | | 104.9 | | | 83.2 | | | | | | | |
| | | | | | | | | | |
| Total Production (3) | | | | | | | | | | |
2010 | | 568.5 | | | 566.7 | | | 589.1 | | | 591.4 | | | 2,315.7 | |
2011 | | 583.7 | | | 593.5 | | | 1,232.3 | | | 2,390.0 | | | 4,799.5 | |
2012 | | 2,290.9 | | | 2,167.0 | | | | | | | |
| | | | | | | | | | |
| Mill System Operating Rates | | | | | | | | | | |
2010 | | 94.2 | % | | 95.1 | % | | 98.2 | % | | 97.1 | % | | 96.2 | % |
2011 | | 95.4 | % | | 98.3 | % | | 96.7 | % | | 99.1 | % | | 97.9 | % |
2012 | | 96.4 | % | | 90.6 | % | | | | | | |
| | | | | | | | | | |
| Fiber Reclaimed and Brokered (4) | | | | | | | | | | |
2010 | | 222.4 | | | 233.7 | | | 229.8 | | | 220.7 | | | 906.6 | |
2011 | | 211.6 | | | 213.7 | | | 773.9 | | | 1,759.6 | | | 2,958.8 | |
2012 | | 1,966.1 | | | 1,896.1 | | | | | | | |
| | | | | | | | | | |
| (1) Includes Kraft Paper Production |
(2) Recycled paperboard tons produced include coated and specialty paperboard, including gypsum paperboard liner tons produced by Seven Hills Paperboard LLC, our unconsolidated joint venture with Lafarge North America, Inc. |
| (3) Containerboard, SBS/SBL and Pulp tons produced include the Smurfit-Stone tons beginning May 28, 2011. |
| (4) Fiber Reclaimed and Brokered tons shipped include the Smurfit-Stone tons beginning May 28, 2011. |
| |
| Rock-Tenn Company Quarterly Statistics |
| | | | | | | | | | |
| Segment Operating Statistics (Continued) |
| (Excluding Display Shipments) |
| | 1st Quarter | | 2nd Quarter | | 3rd Quarter | | 4th Quarter | | Fiscal Year |
| | | | | | | | | | |
| Corrugated Containers Shipments - BSF (1) (2) | | | | | | | | | |
2010 | | 2.7 | | 2.6 | | 2.9 | | 2.8 | | 11.0 |
2011 | | 2.6 | | 2.9 | | 9.1 | | 19.3 | | 33.9 |
2012 | | 19.0 | | 19.1 | | | | | | |
| | | | | | | | | | |
| Corrugated Containers Per Shipping Day - MMSF (1) (2) | | | | | | | |
2010 | | 43.7 | | 42.4 | | 45.0 | | 43.4 | | 43.6 |
2011 | | 43.1 | | 45.2 | | 144.7 | | 301.4 | | 134.6 |
2012 | | 317.2 | | 298.3 | | | | | | |
| | | | | | | | | | |
| Consumer Packaging Converting Shipments - BSF (1) | | | | | | | | | |
2010 | | 4.9 | | 4.9 | | 5.1 | | 5.2 | | 20.1 |
2011 | | 5.0 | | 5.2 | | 5.2 | | 5.3 | | 20.7 |
2012 | | 5.0 | | 5.2 | | | | | | |
| | | | | | | | | | |
| Consumer Packaging Converting Per Shipping Day - MMSF (1) | | | | | | | |
2010 | | 78.3 | | 78.7 | | 80.4 | | 82.0 | | 79.9 |
2011 | | 82.2 | | 83.0 | | 82.1 | | 82.5 | | 82.4 |
2012 | | 83.5 | | 81.0 | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
(1) MMSF - millions of square feet and BSF - billions of square feet |
| (2) Corrugated Container Shipments include Smurfit-Stone shipments beginning May 28, 2011. |
| |
| Rock-Tenn Company Quarterly Statistics |
| | | | | | | | | | | | | | |
| Segment Sales and Segment Income |
| (In Millions, except Return On Sales data) |
| | | | | | | | | | | | | | |
| | 1st Quarter | | | 2nd Quarter | | | 3rd Quarter | | | 4th Quarter | | | Fiscal Year |
| Corrugated Packaging Segment Sales | | | | | | | | | | | | | | |
2010 | | $ | 180.1 | | | | $ | 191.0 | | | | $ | 210.5 | | | | $ | 219.0 | | | | $ | 800.6 | |
2011 | | | 198.3 | | | | | 209.4 | | | | | 734.5 | | | | | 1,626.5 | | | | | 2,768.7 | |
2012 | | | 1,522.8 | | | | | 1,505.9 | | | | | | | | | | |
| Corrugated Packaging Intersegment Sales | | | | | | | | | | | | | | |
2010 | | $ | 7.3 | | | | $ | 8.6 | | | | $ | 9.6 | | | | $ | 11.8 | | | | $ | 37.3 | |
2011 | | | 9.4 | | | | | 11.1 | | | | | 21.3 | | | | | 39.9 | | | | | 81.7 | |
2012 | | | 32.3 | | | | | 30.8 | | | | | | | | | | |
| Corrugated Packaging Segment Income | | | | | | | | | | | | | | |
2010 | | $ | 35.8 | | | | $ | 21.9 | | | | $ | 36.7 | | | | $ | 49.1 | | | | $ | 143.5 | |
2011 | | | 37.4 | | | | | 30.1 | | | | | 80.0 | | (1) | | | 153.6 | | (2) | | | 301.1 | |
2012 | | | 109.7 | | (3) | | | 75.4 | | (4) | | | | | | | |
| Return On Sales | | | | | | | | | | | | | | |
2010 | | | 19.9 | % | | | | 11.5 | % | | | | 17.4 | % | | | | 22.4 | % | | | | 17.9 | % |
2011 | | | 18.9 | % | | | | 14.4 | % | | | | 10.9 | % | (1) | | | 9.4 | % | (2) | | | 10.9 | % |
2012 | | | 7.2 | % | (3) | | | 5.0 | % | (4) | | | | | | | |
| | | | | | | | | | | | | | |
| Consumer Packaging Segment Sales | | | | | | | | | | | | | | |
2010 | | $ | 497.8 | | | | $ | 516.9 | | | | $ | 543.5 | | | | $ | 574.7 | | | | $ | 2,132.9 | |
2011 | | | 544.5 | | | | | 567.8 | | | | | 579.6 | | | | | 667.9 | | | | | 2,359.8 | |
2012 | | | 620.4 | | | | | 647.6 | | | | | | | | | | |
| Consumer Packaging Intersegment Sales | | | | | | | | | | | | | | |
2010 | | $ | 2.8 | | | | $ | 2.6 | | | | $ | 3.9 | | | | $ | 3.7 | | | | $ | 13.0 | |
2011 | | | 3.8 | | | | | 3.9 | | | | | 6.8 | | | | | 9.0 | | | | | 23.5 | |
2012 | | | 7.6 | | | | | 6.2 | | | | | | | | | | |
| Consumer Packaging Segment Income | | | | | | | | | | | | | | |
2010 | | $ | 55.1 | | (5) | | $ | 55.7 | | (6) | | $ | 69.0 | | | | $ | 81.9 | | | | $ | 261.7 | |
2011 | | | 71.0 | | | | | 61.0 | | | | | 61.1 | | | | | 82.1 | | | | | 275.2 | |
2012 | | | 80.3 | | | | | 84.4 | | | | | | | | | | |
| Return on Sales | | | | | | | | | | | | | | |
2010 | | | 11.1 | % | (5) | | | 10.8 | % | (6) | | | 12.7 | % | | | | 14.3 | % | | | | 12.3 | % |
2011 | | | 13.0 | % | | | | 10.7 | % | | | | 10.5 | % | | | | 12.3 | % | | | | 11.7 | % |
2012 | | | 12.9 | % | | | | 13.0 | % | | | | | | | | | |
| | | | | | | | | | | | | | |
| Recycling and Waste Solutions Segment Sales | | | | | | | | | | | | | |
2010 | | $ | 28.6 | | | | $ | 44.2 | | | | $ | 40.7 | | | | $ | 37.1 | | | | $ | 150.6 | |
2011 | | | 41.9 | | | | | 40.8 | | | | | 147.4 | | | | | 355.8 | | | | | 585.9 | |
2012 | | | 329.4 | | | | | 296.1 | | | | | | | | | | |
| Recycling and Waste Solutions Intersegment Sales | | | | | | | | | | | | | |
2010 | | $ | 5.6 | | | | $ | 9.0 | | | | $ | 9.3 | | | | $ | 8.5 | | | | $ | 32.4 | |
2011 | | | 10.4 | | | | | 10.1 | | | | | 51.3 | | | | | 137.8 | | | | | 209.6 | |
2012 | | | 165.0 | | | | | 129.7 | | | | | | | | | | |
| Recycling and Waste Solutions Segment Income | | | | | | | | | | | | | |
2010 | | $ | 1.2 | | | | $ | 4.1 | | | | $ | 2.2 | | | | $ | 1.5 | | | | $ | 9.0 | |
2011 | | | 2.3 | | | | | 2.6 | | | | | 4.6 | | | | | 5.3 | | | | | 14.8 | |
2012 | | | 3.5 | | | | | 4.2 | | | | | | | | | | |
| Return on Sales | | | | | | | | | | | | | | |
2010 | | | 4.2 | % | | | | 9.3 | % | | | | 5.4 | % | | | | 4.0 | % | | | | 6.0 | % |
2011 | | | 5.5 | % | | | | 6.4 | % | | | | 3.1 | % | | | | 1.5 | % | | | | 2.5 | % |
2012 | | | 1.1 | % | | | | 1.4 | % | | | | | | | | | |
| | | | | | | | | | | | | | |
| (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 $20.7 million of alternative fuel mixture credit, net of expenses. |
| (6) Excludes $8.1 million of alternative fuel mixture credit. |
| |
| Rock-Tenn Company Quarterly Statistics |
| | | | | | | | | | |
| Key Financial Statistics |
| (In Millions, except EPS Data) |
| | | | | | | | | | |
| | 1st Quarter | | 2nd Quarter | | 3rd Quarter | | 4th Quarter | | Fiscal Year |
| | | | | | | | | | |
| Net Income (Loss) Attributable to Rock-Tenn Company Shareholders | | | | | | |
2010 | | $ | 56.3 | | $ | 32.8 | | $ | 45.1 | | | $ | 91.4 | | $ | 225.6 |
2011 | | | 50.3 | | | 37.0 | | | (30.1 | ) | | | 83.9 | | | 141.1 |
2012 | | | 76.7 | | | 31.9 | | | | | | |
| | | | | | | | | | |
| Diluted Earnings (Loss) per Share | | | | | | | | | | |
2010 | | $ | 1.43 | | $ | 0.83 | | $ | 1.14 | | | $ | 2.31 | | $ | 5.70 |
2011 | | | 1.27 | | | 0.92 | | | (0.60 | ) | | | 1.17 | | | 2.77 |
2012 | | | 1.06 | | | 0.44 | | | | | | |
| | | | | | | | | | |
| Depreciation & Amortization | | | | | | | | | | |
2010 | | $ | 37.5 | | $ | 36.8 | | $ | 36.4 | | | $ | 36.7 | | $ | 147.4 |
2011 | | | 36.7 | | | 37.2 | | | 73.5 | | | | 130.9 | | | 278.3 |
2012 | | | 132.7 | | | 132.6 | | | | | | |
| | | | | | | | | | |
| Capital Expenditures | | | | | | | | | | |
2010 | | $ | 12.3 | | $ | 18.3 | | $ | 30.3 | | | $ | 45.3 | | $ | 106.2 |
2011 | | | 28.5 | | | 30.3 | | | 48.7 | | | | 91.9 | | | 199.4 |
2012 | | | 81.6 | | | 120.6 | | | | | | |
| | | | | | | | | | |
Non-GAAP Financial Measures and Reconciliations
We have included financial measures that are not prepared in accordance with GAAP. Any analysis of non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP. Below, we define the non-GAAP financial measures, provide a reconciliation of each non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with GAAP, and discuss the reasons that we believe this information is useful to management and may be useful to investors. These measures may differ from similarly captioned measures of other companies in our industry. The following non-GAAP measures are not intended to be substitutes for GAAP financial measures and should not be used as such.
Net Debt
We have defined the non-GAAP measure “net debt” to include the aggregate debt obligations reflected in our consolidated balance sheet, less the hedge adjustments resulting from fair value interest rate derivatives or swaps and the balance of our cash and cash equivalents.
Our management uses net debt, along with other factors, to evaluate our financial condition. We believe that net debt is an appropriate supplemental measure of financial condition because it provides a more complete understanding of our financial condition before the impact of our decisions regarding the appropriate use of cash and liquid investments. Set forth below is a reconciliation of net debt to the most directly comparable GAAP measures, Current portion of debt and Long-term debt due after one year for the current quarter and the prior quarter.
| (In Millions) | | March 31, | | December 31, |
| | 2012 | | 2011 |
| | | | |
| Current Portion of Debt | | $ | 260.0 | | | $ | 161.0 | |
| Long-Term Debt Due After One Year | | | 3,148.4 | | | | 3,315.2 | |
| Total Debt | | | 3,408.4 | | | | 3,476.2 | |
| Less: Hedge Adjustments Resulting From Fair | | | | |
| Value Interest Rate Derivatives or Swaps | | | (0.3 | ) | | | (0.3 | ) |
| | | 3,408.1 | | | | 3,475.9 | |
| Less: Cash and Cash Equivalents | | | (34.9 | ) | | | (41.0 | ) |
| Net Debt | | $ | 3,373.2 | | | $ | 3,434.9 | |
| | | | | | | | |
Segment EBITDA Margins
Our management uses “Segment EBITDA Margins”, along with other factors, to evaluate our segment performance against our peers. Management believes that investors also use this measure to evaluate our performance relative to our peers.
Set forth below is a reconciliation of Segment EBITDA margins to the most directly comparable GAAP measures, Segment Income and Segment Sales for the quarter ending March 31, 2012:
| (In Millions, except percentages) | | | | | | | | | | |
| | Corrugated
Packaging | | Consumer
Packaging | | Recycling
and Waste
Solutions | | Corporate
/ Other | | Consolidated |
| | | | | | | | | | |
| Segment Sales | | $ | 1,505.9 | | | $ | 647.6 | | | $ | 296.1 | | | $ | (166.7 | ) | | $ | 2,282.9 |
| | | | | | | | | | |
| Segment Income | | $ | 68.7 | | | $ | 84.4 | | | $ | 4.2 | | | | | $ | 157.3 |
Depreciation and Amortization | | | 101.9 | | | | 24.3 | | | | 3.3 | | | | 3.1 | | | | 132.6 |
Plus: Matane Mill EBITDA post closure loss | | | 6.5 | | | | — | | | | — | | | | — | | | | 6.5 |
| EBITDA | | $ | 177.1 | | | $ | 108.7 | | | $ | 7.5 | | | | | |
| | | | | | | | | | |
| Segment EBITDA Margins | | | 11.8 | % | | | 16.8 | % | | | 2.5 | % | | | | |
| | | | | | | | | | | | | | | | |
Credit Agreement EBITDA and Total Funded Debt
“Credit Agreement EBITDA” is calculated in accordance with the definition contained in our Credit Facility. Credit Agreement EBITDA is generally defined as Consolidated Net Income plus: consolidated interest expense, income taxes of the consolidated companies determined in accordance with GAAP, depreciation and amortization expense of the consolidated companies determined in accordance with GAAP, loss on extinguishment of debt and financing fees, certain non-cash and cash charges incurred, including certain restructuring and other costs, acquisition and integration costs, Smurfit-Stone Adjusted EBITDA as specified in the Credit Agreement, estimated synergies, charges and expenses associated with the write-up of inventory acquired and other items.
“Total Funded Debt” is calculated in accordance with the definition contained in our Credit Facility. Total Funded Debt is generally defined as aggregate debt obligations reflected in our balance sheet, less the hedge adjustments resulting from terminated and existing fair value interest rate derivatives or swaps, less certain cash, plus additional outstanding letters of credit not already reflected in debt and certain guarantees.
Our management uses Credit Agreement EBITDA and Total Funded Debt to evaluate compliance with our debt covenants and borrowing capacity available under our Credit Facility. Management believes that investors also use these measures to evaluate our compliance with our debt covenants and available borrowing capacity. Borrowing capacity is dependent upon, in addition to other measures, the “Credit Agreement Debt/EBITDA ratio” or the “Leverage Ratio,” which is defined as Total Funded Debt divided by Credit Agreement EBITDA. As of the March 31, 2012 calculation, our Leverage Ratio was 2.78 times. Our maximum permitted Leverage Ratio under the Credit Facility at March 31, 2012 was 3.75 times.
Set forth below is a reconciliation of Credit Agreement EBITDA for the twelve months ended March 31, 2012, to the most directly comparable GAAP measure, Consolidated Net Income:
| (In Millions) | | Twelve Months
Ended
March 31, 2012 |
| | |
| Consolidated Net Income | | $ | 165.9 |
| Interest Expense, net | | | 109.8 |
| Income Taxes | | | 92.9 |
| Depreciation and Amortization | | | 469.7 |
Smurfit-Stone Adjusted EBITDA for the period April 1, 2011 to May 27, 2011 | | | 86.0 |
| Additional Permitted Charges | | | 324.4 |
| Credit Agreement EBITDA | | $ | 1,248.7 |
| | | |
Set forth below is a reconciliation of Total Funded Debt to the most directly comparable GAAP measures, Current portion of debt and Long-term debt due after one year:
| (In Millions, except ratio) | | March 31, |
| | 2012 |
| | |
| Current Portion of Debt | | $ | 260.0 | |
| Long-Term Debt Due After One Year | | | 3,148.4 | |
| Total Debt | | | 3,408.4 | |
| Less: Hedge Adjustments Resulting From Terminated | | |
| Fair Value Interest Rate Derivatives or Swaps | | | (0.3 | ) |
| Total Debt Less Hedge Adjustments | | | 3,408.1 | |
| Plus: Letters of Credit, Guarantees and Other Adjustments | | | 68.1 | |
| Total Funded Debt | | $ | 3,476.2 | |
| | |
Credit Agreement EBITDA for the Twelve Months Ended March 31, 2012 | | $ | 1,248.7 | |
| | |
| Leverage Ratio | | | 2.78 | |
| | | | |
Adjusted Net Income and Adjusted Earnings per Diluted Share
We also use the non-GAAP measures “adjusted net income” and “adjusted earnings per diluted share”. Management believes these non-GAAP financial measures provide our board of directors, investors, potential investors, securities analysts and others with useful information to evaluate the performance of the Company because it excludes restructuring and other costs, net, and other specific items that management believes are not indicative of the ongoing operating results of the business. The Company and our board of directors use this information to evaluate the Company’s performance relative to other periods. We believe that the most directly comparable GAAP measures to adjusted net income and adjusted earnings per diluted share are Net income attributable to Rock-Tenn Company shareholders and Earnings per Diluted Share, respectively. Set forth at the beginning of this press release is a reconciliation of adjusted earnings per diluted share to Earnings per diluted share. Set forth below is a reconciliation of adjusted net income to Net income attributable to Rock-Tenn Company shareholders:
| | | | | | | | |
| | Three Months | | Three Months | | Six Months | | Six Months |
| | Ended | | Ended | | Ended | | Ended |
| | March 31, | | March 31, | | March 31, | | March 31, |
| (In Millions) | | 2012 | | 2011 | | 2012 | | 2011 |
| | | | | | | | |
| Net income attributable to Rock-Tenn Company shareholders | | $ | 31.9 | | $ | 37.0 | | $ | 108.6 | | $ | 87.3 |
| | | | | | | | |
Restructuring and other costs and operating losses and transition costs due to plant closures | | | 25.4 | | | 4.4 | | | 33.7 | | | 4.9 |
| Loss on extinguishment of debt | | | 12.3 | | | — | | | 12.3 | | | — |
| Acquisition inventory step-up | | | — | | | — | | | 0.3 | | | — |
| | | | | | | | | |
| Adjusted net income | | $ | 69.6 | | $ | 41.4 | | $ | 154.9 | | $ | 92.2 |
| | | | | | | | | | | | |
CONTACT:
RockTenn
John Stakel, 678-291-7900
SVP-Treasurer
