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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended DECEMBER 31, 1997
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
----- -----
Commission File Number 0-23340
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ROCK-TENN COMPANY
(Exact name of registrant as specified in its charter)
Georgia 62-0342590
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
504 Thrasher Street, Norcross, Georgia 30071
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 448-2193
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N/A
--------------------------------------------------------------
(Former name or former address, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Indicate the number of shares of each of the issuer's classes of common stock,
as of the latest practicable date:
Class Outstanding as of February 2, 1998
- ----------------------------------- ----------------------------------
Class A Common Stock, .01 par value 22,749,001
Class B Common Stock, .01 par value 11,760,054
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ROCK-TENN COMPANY
INDEX
Page No.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Statements of Income for the three months
ended December 31, 1997 and 1996 1
Condensed Consolidated Balance Sheets at December 31, 1997 and
September 30, 1997 2
Condensed Consolidated Statements of Cash Flows for the three months
ended December 31, 1997 and 1996 3
Notes to Condensed Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
Index to Exhibits 13
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PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
ROCK-TENN COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended
December 31, December 31,
1997 1996
- --------------------------------------------------------------------------------------
Net sales $ 316,475 $ 208,318
Cost of goods sold 235,130 154,725
--------- ---------
Gross profit 81,345 53,593
Selling, general and administrative
expenses 55,739 39,511
--------- ---------
Income from operations 25,606 14,082
Interest income 98 496
Interest expense (9,000) (2,442)
Minority interest in income of
consolidated subsidiary (965) --
--------- ---------
Income before income taxes 15,739 12,136
Provision for income taxes 7,062 4,737
--------- ---------
Net income $ 8,677 $ 7,399
Weighted average number of common and
common equivalent shares outstanding 35,218 34,075
--------- ---------
Earnings per common and common
equivalent share $ .25 $ .22
========= =========
Cash dividends per common share $ .075 $ .075
========= =========
See accompanying notes
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ROCK-TENN COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
December 31, September 30,
1997 1997
- ---------------------------------------------------------------------------------------
(Unaudited)
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 2,835 $ 3,345
Accounts receivable (net of allowance for
doubtful accounts of $3,343 and $3,632) 108,994 115,162
Inventories 101,472 94,035
Other current assets 3,372 5,073
---------- ---------
Total current assets 216,673 217,615
Property, plant and equipment at cost:
Land and buildings 166,181 163,528
Machinery and equipment 707,536 696,039
Leasehold improvements 4,152 13,636
Transportation equipment 14,074 4,117
---------- ----------
891,943 877,320
Less accumulated depreciation and amortization (338,470) (326,146)
---------- ----------
Net property, plant and equipment 553,473 551,174
Goodwill 323,190 325,697
Other assets 17,126 19,200
---------- ----------
$1,110,462 $1,113,686
========== ==========
- ---------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable $ 41,010 $ 54,471
Income taxes payable 4,481 --
Accrued compensation and benefits 27,784 34,500
Current maturities of long-term debt 57,379 41,282
Other current liabilities 22,629 21,892
---------- ----------
TOTAL CURRENT LIABILITIES 153,283 152,145
Long-term debt due after one year 481,346 492,340
Deferred income taxes 78,247 78,288
Other liabilities 6,911 6,296
Commitments and contingencies
Minority interest 14,390 13,405
Shareholders' equity:
Preferred stock, $.01 par value;
50,000,000 shares authorized; no
shares outstanding at December 31,
1997 and September 30, 1997 -- --
Class A common stock, $.01 par value;
175,000,000 shares authorized,
22,687,864 outstanding at December 31,
1997 and 22,582,976 outstanding at
September 30, 1997; Class B common stock,
$.01 par value; 60,000,000 shares
authorized; 11,747,447 outstanding
at December 31, 1997 and 11,791,350
outstanding at September 30, 1997 344 344
Capital in excess of par value 127,161 126,363
Retained earnings 251,690 245,592
Other (2,910) (1,087)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 376,285 371,212
---------- ----------
$1,110,462 $1,113,686
========== ==========
See accompanying notes
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ROCK-TENN COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
Three Months Ended
December 31, December 31,
1997 1996
- --------------------------------------------------------------------------------------
OPERATING ACTIVITIES:
Net income $ 8,677 $ 7,399
Items in income not affecting cash:
Depreciation and amortization 17,302 12,107
Gain on sale of property, plant and equipment (150) (83)
Minority interest in income of consolidated
subsidiary 965 --
Change in operating assets and liabilities:
Accounts receivable 5,924 9,488
Inventories (7,693) (1,144)
Other assets (401) (712)
Accounts payable (13,364) (7,254)
Accrued liabilities (3,423) (1,286)
Income taxes payable 4,481 1,697
Other 60 (34)
--------- ---------
(14,416) 755
--------- ---------
CASH PROVIDED BY OPERATING ACTIVITIES 12,378 20,178
FINANCING ACTIVITIES:
Net additions to revolving credit facilities 12,000 67
Additions to long-term debt -- 1,500
Repayments of long-term debt (6,900) (5,133)
Sales of common stock 798 606
Cash dividends paid (2,579) (2,493)
--------- ---------
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 3,319 (5,453)
INVESTING ACTIVITIES:
Capital expenditures (17,402) (21,501)
Proceeds from sale of property, plant and equipment 596 427
Increase (decrease) in unexpended industrial
revenue bond proceeds 610 (171)
Cash paid for intangibles -- (269)
--------- ---------
CASH USED FOR INVESTING ACTIVITIES (16,196) (21,514)
Effect of exchange rate changes on cash (11) (7)
Decrease in cash and cash equivalents (510) (6,796)
Cash and cash equivalents at beginning of period 3,345 50,876
--------- ---------
Cash and cash equivalents at end of period $ 2,835 $ 44,080
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes $ 1,015 $ 2,806
Interest (net of amounts capitalized) 7,776 900
See accompanying notes
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. INTERIM FINANCIAL STATEMENTS
The accompanying condensed consolidated financial statements of Rock-Tenn
Company and its subsidiaries (the "Company") have not been audited by
independent auditors. The condensed consolidated balance sheet at September 30,
1997 has been derived from the audited consolidated financial statements. In the
opinion of the Company's management, the condensed consolidated financial
statements reflect all adjustments, which are of a normal recurring nature,
necessary for a fair presentation of the results of operations for the
three-month periods ended December 31, 1997 and 1996, the Company's financial
position at December 31, 1997 and September 30, 1997, and the cash flows for the
three month periods ended December 31, 1997 and 1996.
Certain notes and other information have been condensed or omitted from the
interim financial statements presented in this Quarterly Report on Form 10-Q.
Therefore, these financial statements should be read in conjunction with the
Company's Annual Report on Form 10-K for the fiscal year ended September 30,
1997.
The results for the three months ended December 31, 1997 are not necessarily
indicative of results that may be expected for the full year.
NOTE 2. ACCOUNTING POLICIES
The Company uses interest cap agreements to synthetically manage the interest
rate characteristics of its outstanding debt and to limit the Company's exposure
to rising interest rates. Interest rate differentials to be received as a result
of interest rate cap agreements are accrued and recognized as an adjustment of
interest expense related to the designated debt. Interest rate cap purchase
expenses are amortized to interest expense ratably during the life of the
agreement.
The Company uses swap agreements to synthetically manage the selling prices of
certain of its board and to limit the Company's exposure to falling board
prices. Board price differentials to be paid or received as a result of the
board swap agreements are recognized as an adjustment to sales in the period in
which the sale is made.
NOTE 3. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results will differ from those estimates and the differences could be
material.
NOTE 4. INVENTORIES
Substantially all U.S. inventories are stated at the lower of cost or market,
with cost determined on the last-in, first-out (LIFO) basis. An actual valuation
of inventory under the LIFO method can only be made at the end of each year
based on the inventory levels and costs at that time. Accordingly, interim LIFO
estimates must necessarily be based on management's projection of expected
year-end inventory levels and costs. Because these are subject to many factors
beyond management's control, interim results are subject to the final year-end
LIFO inventory valuation.
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Inventories at December 31, 1997 and September 30, 1997 were as follows (in
thousands):
December 31, September 30,
1997 1997
------------ -------------
(Unaudited)
Finished goods and work in process $ 70,585 $ 64,933
Raw materials 40,016 37,474
Supplies 12,561 12,318
-------- --------
Inventories at first-in, first-out (FIFO) cost 123,162 114,725
LIFO reserve (21,690) (20,690)
-------- --------
Net inventories $101,472 $ 94,035
======== ========
NOTE 5. NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards No. 128 ("SFAS 128") establishes
accounting standards for computation, presentation and disclosure requirements
for earnings per share for entities with publicly held common stock. The Company
adopted SFAS 128 effective October 1, 1997. This adoption did not have a
material impact on the Company's consolidated financial statements.
In October 1996, the Accounting Standards Executive Committee of the AICPA
issued Statement of Position 96-1 ("SOP 96-1"). SOP 96-1 provides accounting
guidance on issues relating to the recognition, measurement and disclosure of
environmental liabilities. The Company adopted SOP 96-1 effective October 1,
1997. This adoption did not have a material impact on the Company's consolidated
financial statements.
NOTE 6. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share (in thousands, except per share data):
Three Months Ended
December 31, December 31,
1997 1996
- --------------------------------------------------------------------------------------
Numerator:
Net income $ 8,677 $ 7,399
Denominator:
Denominator for basic earnings per
share - weighted average shares 34,416 33,171
Effect of dilutive stock options 802 904
--------- ---------
Denominator for diluted earnings per
share - weighted average shares
and assumed conversions 35,218 34,075
========= =========
Basic earnings per share $ 0.25 $ 0.22
========= =========
Diluted earnings per share $ 0.25 $ 0.22
========= =========
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the condensed
consolidated financial statements and notes thereto, included herein, and the
Company's audited consolidated financial statements and notes thereto for the
fiscal year ended September 30, 1997 which have been filed with the Securities
and Exchange Commission as part of the Company's Annual Report on Form 10-K.
GENERAL
On January 21, 1997, the Company acquired all of the outstanding capital stock
of the parent of Waldorf Corporation ("Waldorf"), a manufacturer of folding
cartons and 100% recycled paperboard and a manufacturer of 100% recycled
corrugating medium. On June 9, 1997, the Company acquired substantially all of
the assets of Rite Paper Products, Inc., a manufacturer of laminated paperboard
components primarily for the ready-to-assemble furniture industry. On July 9,
1997, the Company acquired substantially all of the assets and certain of the
liabilities of The Davey Company, a manufacturer of recycled paperboard used by
the book manufacturing industry for book covers. On September 5, 1997, the
Company and Sonoco Products Company combined their respective fiber partition
businesses into a new entity named RTS Packaging, LLC ("RTS")which is owned 65%
by the Company.
SEGMENT INFORMATION
The Company operates principally in two industry segments: converted products
and paperboard. The converted products segment is comprised of facilities that
produce folding cartons, fiber partitions, corrugated containers, corrugated
displays, thermoformed plastic products and laminated paperboard products. The
paperboard segment consists of facilities that manufacture 100% recycled
clay-coated and uncoated paperboard and that collect recovered paper.
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ROCK-TENN COMPANY
INDUSTRY SEGMENT INFORMATION
(UNAUDITED)
(IN THOUSANDS EXCEPT FOR TONNAGE DATA)
================================================================================
FOR THE THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1997 1996
- --------------------------------------------------------------------------------
NET SALES:
Converted Products $ 260,588 $ 184,437
Paperboard 121,368 66,546
Intersegment Eliminations (65,481) (42,665)
- --------------------------------------------------------------------------------
TOTAL 316,475 208,318
- --------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES:
Converted Products 9,580 4,939
Paperboard 18,004 11,004
Corporate Expense (1,978) (1,861)
Interest Expense (9,000) (2,442)
Interest Income 98 496
Minority Interest in Income of
Consolidated Subsidiary (965) --
- --------------------------------------------------------------------------------
TOTAL $ 15,739 $ 12,136
================================================================================
Paperboard shipped (in tons) 286,988 160,305
================================================================================
RESULTS OF OPERATIONS
Net Sales (Unaffiliated Customers). Net sales for the quarter ended December 31,
1997 increased 51.9% to $316.5 million from $208.3 million for the quarter ended
December 31, 1996. Net sales increased primarily as a result of the acquisitions
made during fiscal 1997 (the "1997 Acquisitions") and formation of RTS.
Net Sales (Aggregate) - Converted Products Segment. Net sales of converted
products before intersegment eliminations for the quarter ended December 31,
1997 increased 41.3% to $260.6 million from $184.4 million for the quarter ended
December 31, 1996. The increase for the quarter ended December 31, 1997 was
primarily a result of the 1997 Acquisitions and formation of RTS.
Net Sales (Aggregate) - Paperboard Segment. Net sales of paperboard before
intersegment eliminations for the quarter ended December 31, 1997 increased
82.6% to $121.4 million from $66.5 million for the quarter ended December 31,
1996. The increase for the quarter ended December 31, 1997 was primarily a
result of the 1997 Acquisitions. In addition, during the December 1997 quarter,
shipments of uncoated recycled paperboard increased by 9.4% and the average net
selling prices for recycled paperboard excluding recycled corrugating medium
increased by 8.0% compared to the same quarter last year.
Cost of Goods Sold. Cost of goods sold for the quarter ended December 31, 1997
increased 52.0% to $235.1 million from $154.7 million for the quarter ended
December 31, 1996. Cost of goods sold as a percentage of net sales for the
quarters ended December 31, 1997 and 1996 was 74.3%. The increase in cost of
goods sold resulted primarily from a 34.6%, or $18 per ton, increase in the
average cost of recovered paper, the Company's primary raw material, for the
quarter ended December 31, 1997 compared to the quarter ended December 31, 1996.
This cost
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increase was offset by the impact of higher average net selling prices and
volumes of paperboard shipped resulting in flat cost of goods sold as a
percentage of net sales from the quarter ended December 31, 1996 to the quarter
ended December 31, 1997.
Substantially all U.S. inventories of the Company are valued at the lower of
cost or market with cost determined on the last-in, first-out (LIFO) inventory
valuation method, which management believes generally results in a better
matching of current costs and revenues than under the first-in, first-out (FIFO)
inventory valuation method. In periods of decreasing costs, the LIFO method
generally results in lower cost of goods sold than under the FIFO method. In
periods of increasing costs, the results are generally the opposite. The
Company's quarterly results of operations reflect LIFO estimates based on
management's projection of expected year-end inventory levels and costs. Because
these estimates are subject to many factors beyond management's control, interim
results are subject to the final year-end LIFO inventory valuation.
Since some of the Company's competitors principally use the FIFO method, the
following supplemental data is presented to illustrate the comparative effect of
LIFO and FIFO accounting on the Company's results of operations. Cost of goods
sold determined under the LIFO method was $1 million higher and $.4 million
lower than it would have been under the FIFO method in the quarter ended
December 31, 1997 and 1996, respectively. Net income was $.6 million lower and
$.2 million higher than it would have been under the FIFO method in the quarter
ended December 31, 1997 and 1996, respectively. These supplemental FIFO earnings
reflect the after tax effect of LIFO each year.
Gross Profit. Gross profit for the quarter ended December 31, 1997 increased
51.7% to $81.3 million from $53.6 million for the quarter ended December 31,
1996. Gross profit as a percentage of net sales was 25.7% for the quarters ended
December 31, 1997 and 1996.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the quarter ended December 31, 1997 increased 41.0%
to $55.7 million from $39.5 million for the quarter ended December 31, 1996.
Selling, general and administrative expenses as a percentage of net sales for
the quarter ended December 31, 1997 decreased to 17.6% from 19.0% for the
quarter ended December 31, 1996. The increase in these expenses resulted
primarily from the 1997 Acquisitions and formation of RTS. The decrease in
selling, general and administrative expenses as a percentage of net sales
resulted from decreased salary and benefit costs as a percentage of net sales
offset somewhat by higher goodwill amortization expense during the quarter ended
December 31, 1997 compared to the quarter ended December 31, 1996.
Segment Operating Income.
Operating Income - Converted Products Segment. Operating income attributable to
the converted products segment for the quarter ended December 31, 1997 increased
95.9% to $9.6 million from $4.9 million for the quarter ended December 31, 1996.
Operating margin for the quarter ended December 31, 1997 was 3.7% compared to
2.7% for the quarter ended December 31, 1996. The increase in operating income
was primarily the result of improvements in operating margins in each of the
Company's converting businesses, before the effect of the 1997 Acquisitions,
compared to the quarter ended December 31, 1996. The higher operating margin
achieved in these businesses was primarily the result of increased productivity
which resulted in better absorption of fixed overhead costs and somewhat higher
selling prices. During the fourth quarter of fiscal 1997, the Company began
implementing price increases with respect to most of its converted products to
recover cost increases in paperboard. The converting business acquired in the
Waldorf acquisition incurred a net loss for the quarter ended December 31, 1997,
partially offsetting the improvements in operating income in the Company's other
converting businesses.
Operating Income - Paperboard Segment. Operating income attributable to the
paperboard segment for the quarter ended December 31, 1997 increased 63.6% to
$18.0 million from $11.0 million for the quarter ended December 31, 1996.
Operating margin for the quarter ended December 31, 1997 was 14.8% compared to
16.5% for the quarter ended December 31, 1996. The increase in operating income
was primarily the result of the Waldorf acquisition. The decrease in operating
margin was primarily a result of certain manufacturing inefficiencies and lower
volumes at one of the Company's uncoated paperboard mills and the impact of
lower margins in the corrugating medium
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business acquired in the Waldorf acquisition compared to the overall operating
margin of the paperboard segment in the quarter ended December 31, 1996.
Interest Expense. Interest expense for the quarter ended December 31, 1997
increased to $9.0 million from $2.4 million for the quarter ended December 31,
1996. The increase in interest expense for the quarter ended December 31, 1997
was primarily due to an increase in the average outstanding borrowings during
the quarter ended December 31, 1997 as a result of the Waldorf acquisition.
Provision for Income Taxes. Provision for income taxes increased to $7.1 million
for the quarter ended December 31, 1997 from $4.7 million for the quarter ended
December 31, 1996. The Company's effective tax rate increased to 44.9% for the
quarter ended December 31, 1997 compared to 39.0% for the quarter ended December
31, 1996. This increase in the effective tax rate was primarily due to the
effect of increased goodwill amortization relating to the Wadorf acquisition and
other costs that are not deductible for federal income tax purposes.
Net Income and Earnings Per Common and Common Equivalent Share. Net income for
the quarter ended December 31, 1997 increased 17.6% to $8.7 million from $7.4
million for the quarter ended December 31, 1996. Net income as a percentage of
net sales decreased to 2.7% for the quarter ended December 31, 1997 from 3.6%
for the quarter ended December 31, 1996. Earnings per common and common
equivalent share for the quarter ended December 31, 1997 increased 13.6% to $.25
from $.22 for the quarter ended December 31, 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company has funded its working capital requirements and capital expenditures
(including acquisitions) from net cash provided by operating activities,
borrowings under term notes and bank credit facilities and proceeds received in
connection with the issuance of industrial revenue bonds and debt and equity
securities. The Company maintains a revolving credit facility under which it has
aggregate borrowing availability of $450.0 million. At December 31, 1997, the
Company had $398.0 million outstanding under its revolving credit facility. The
revolving credit facility terminates in 2002. Cash and cash equivalents, $2.8
million at December 31, 1997, decreased from $3.3 million at September 30, 1997.
Net cash provided by operating activities for the three months ended December
31, 1997 was $12.4 million compared to $20.2 million for the quarter ended
December 31, 1996. This decrease was primarily the result of increases in net
current operating assets and liabilities offset by increased earnings before
depreciation and amortization expense. Net cash provided by financing activities
aggregated $3.3 million for the quarter ended December 31, 1997 and consisted
primarily of borrowings under the revolving credit facility, repayments of
long-term debt and dividend payments. Net cash used for financing activities
aggregated $5.5 million for the quarter ended December 31, 1996 and consisted
primarily of repayments of long-term debt and dividend payments. Net cash used
for investing activities was $16.2 million for the quarter ended December 31,
1997 compared to $21.5 million for the quarter ended December 31, 1996 and
consisted primarily of capital expenditures for the quarter ended December 31,
1997 and December 31, 1996.
Capital expenditures during the quarter ended December 31, 1997 aggregated $17.4
million and were used primarily for the purchase and upgrading of certain
machinery and equipment in essentially all of the Company's divisions and a new
building at the Company's home office. The Company estimates that its capital
expenditures will aggregate approximately $55.0 million for the remainder of
fiscal 1998. These expenditures will be used for the purchase and upgrading of
certain machinery and equipment in essentially all of the Company's divisions
and building expansions and improvements in two of the Company's divisions.
The Company historically has expanded its business through the acquisition of
other related businesses. The recycled paperboard and converted paperboard
products industries have undergone significant consolidation in recent years,
and the Company believes it will be able to capitalize on this trend in the
future.
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The Company, however, is currently in the process of integrating the operations
acquired in the 1997 Acquisitions into the Company's other operations and
rationalizing the operations contributed to RTS Packaging. Consequently,
although the Company cannot predict the extent to which it will pursue future
acquisitions, the Company currently expects that it will be less likely to
pursue additional acquisitions in the near term.
The Board of Directors has authorized the Company to repurchase from time to
time prior to July 31, 1998 up to 1.5 million shares of Class A common stock in
open market transactions on the New York Stock Exchange. In addition, the Board
has authorized the Company to repurchase from time to time shares of Class B
common stock pursuant to certain first offer rights contained in the Company's
Restated and Amended Articles of Incorporation, provided that the aggregate
number of shares of Class A and Class B common stock purchased under these
programs may not exceed 1.5 million shares. During the quarter ended December
31, 1997, the Company did not repurchase any shares of Class A or Class B common
stock. As of December 31, 1997, an aggregate of 716,500 shares had been
repurchased under these programs.
The Company anticipates that it will be able to fund its capital expenditures,
acquisitions, interest expense, stock repurchases, dividends and working capital
needs for the foreseeable future from cash generated from operations, borrowings
under its revolving credit facility, proceeds from the issuance of debt or
equity securities or other additional long-term debt financing.
The Company is utilizing both internal and external resources to evaluate the
potential impact of the situation commonly referred to as the "Year 2000
problem". The Year 2000 problem, which is common to most businesses, concerns
the inability of computer systems and devices to properly recognize and process
date-sensitive information when the year changes to 2000. The Company currently
believes it will be able to modify, upgrade or replace its affected systems and
devices in time to minimize any detrimental effects on operations. While it is
not possible at present to give an accurate estimate of the cost of this work,
the Company expects that such costs may be material to the Company's results of
operations in one or more fiscal quarters or years, but will not have a material
adverse impact on the long-term results of operations, liquidity or financial
position of the Company.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROCK-TENN COMPANY
(Registrant)
Date: February 4, 1998 By: /s/ DAVID C. NICHOLSON
-------------------- ------------------------------------------
David C. Nicholson, Senior Vice-President,
Chief Financial Officer, Secretary
(Principal Financial Officer, Principal
Accounting Officer and duly
authorized officer)
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ROCK-TENN COMPANY
INDEX TO EXHIBITS
Page No.
Exhibit 27 Financial Data Schedule (for SEC use only)
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