NORCROSS, Ga.
,
Jan. 28, 2014
(GLOBE NEWSWIRE) -- RockTenn (NYSE:RKT) today reported earnings for the quarter ended
December 31, 2013
of
$1.50
per diluted share and adjusted earnings of
$1.66
per diluted share. Adjusted earnings per diluted share increased 23% over the prior year quarter.
|
|
Three Months
|
Three Months
|
|
Ended
|
Ended
|
|
December 31
,
|
December 31
,
|
|
2013
|
2012
|
|
|
|
Earnings per diluted share
|
$1.50
|
$1.18
|
|
|
|
Restructuring and other costs and operating losses and transition costs due to plant closures |
0.16 |
0.17 |
|
|
|
Adjusted earnings per diluted share
|
$1.66
|
$1.35
|
First Quarter Results
- Net sales of
$2,363 million
for the first quarter of fiscal 2014 increased
$76 million
compared to the first quarter of fiscal 2013. Segment income of
$235 million
increased
$26 million
or 13% over the prior year quarter.
- RockTenn's restructuring and other costs and operating losses and transition costs due to plant closures for the first quarter of fiscal 2014 were
$0.16
per diluted share after-tax. These costs primarily consisted of
$10 million
of pre-tax facility closure charges and
$7 million
of pre-tax acquisition and integration costs. The pre-tax facility closure charges primarily consisted of equipment impairments and carrying costs for facilities acquired in the Smurfit-Stone acquisition.
Chief Executive Officer's Statement
RockTenn Chief Executive Officer,
Steve Voorhees, stated, "The success of our team in executing our strategy drove our 23% increase in adjusted earnings per share over the prior year quarter. We used our cash flow in the quarter to buy back
$53 million
of RockTenn stock, acquire NPG for
$60 million
, pay dividends of
$26 million
and reduce our leverage ratio from 1.95 to 1.84 times. We expect to continue to improve our business performance and generate strong free cash flow during the remainder of fiscal 2014."
Segment Results
In the first quarter of fiscal 2014, we announced a realignment of our operating responsibilities and a related change to our segments for financial reporting purposes. The changes primarily reflect the creation of a Merchandising Displays segment which was removed from the
Consumer Packaging
segment. We have reclassified prior results to the extent presented herein and we filed a Current Report on Form 8-K with the
SEC
on
December 17, 2013
, to present reclassified historical information in accordance with our new reportable segment structure.
Mill and Converting Tons Shipped
Corrugated Packaging
segment shipments of approximately 1,814,000 tons decreased approximately 3.6% or approximately 67,000 tons compared to the prior year quarter due to lower customer demand for containerboard and corrugated containers. In the quarter, we took approximately 250,000 tons of downtime including approximately 157,000 tons of economic downtime and slowbacks.
Consumer Packaging
segment shipments of approximately 378,000 tons increased 2.6% or approximately 10,000 tons compared to the prior year quarter primarily due to higher converting shipments.
Corrugated Packaging Segment
Corrugated Packaging
segment net sales increased
$62 million
to
$1,652 million
and segment income increased
$20 million
to
$158 million
in the first quarter of fiscal 2014 compared to the prior year quarter. The increased sales and earnings are primarily related to higher selling prices which were partially offset by lower volumes and higher commodity and other costs.
Corrugated Packaging
segment EBITDA margin was 16.3% for the first quarter of fiscal 2014 up 90 basis points over the prior year quarter.
Consumer Packaging Segment
Consumer Packaging
segment net sales increased
$19 million
and segment income increased
$3 million
in the first quarter of fiscal 2014 compared to the prior year quarter. Segment income was impacted primarily by higher selling prices and converting volumes which were partially offset by higher commodity and other costs.
Consumer Packaging
segment EBITDA margin was 16.9% for the first quarter of fiscal 2014, essentially flat compared to the prior year quarter.
Merchandising Displays Segment
Merchandising Displays segment net sales increased
$23 million
over the prior year first quarter to
$185 million
primarily due to higher volumes. Segment income increased
$8 million
in the first quarter of fiscal 2014 compared to the prior year quarter primarily due to the impact of higher volumes. Merchandising Displays segment EBITDA margin was 11.9% for the first quarter of fiscal 2014 up 290 basis points over the prior year quarter.
Recycling Segment
Recycling segment net sales decreased
$27 million
over the prior year first quarter to
$100 million
primarily as the impact of lower volumes due primarily to soft export markets for recovered fiber and several collection facility closures which were partially offset by increased selling prices. Segment income decreased
$4 million
in the first quarter of fiscal 2014 compared to the prior year quarter primarily due to impact of lower volumes and market conditions which were partially offset by the impact of cost structure improvements.
Cash Provided From Operating, Financing and Investing Activities
Cash provided by operations was
$305 million
in the first quarter of fiscal 2014 up
$27 million
compared to the prior year quarter, after pension funding in excess of expense of
$35 million
. We reduced net debt (as defined) by
$80 million
in the December quarter to
$2.73 billion
and at
December 31, 2013
, our Leverage Ratio (as defined) was 1.84 times. Total debt was
$2.75 billion
at
December 31, 2013
. We invested
$101 million
in capital expenditures, repurchased
$53 million
of shares, returned
$26 million
in dividends to our shareholders and acquired
NPG Holding, Inc.
, a specialty display company, for
$60 million
.
Conference Call
We will host a conference call to discuss our results of operations for the first quarter of fiscal 2014 and other topics that may be raised during the discussion at
9:00 a.m., Eastern Time
, on
January 29, 2014
. 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 12, 2014
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
and
Argentina
. For more information, visit
www.rocktenn.com
.
Cautionary Statements
Statements in this release that do not relate strictly to historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on our current expectations, beliefs, plans or forecasts and use words such as will, estimate, anticipate, project, intend, or expect, or refer to future time periods, and include statements made in this report regarding, among other things our belief that we expect to continue to improve our business performance and generate strong free cash flow during the remainder of fiscal 2014. These statements are subject to certain risks and uncertainties including with respect to our expectations regarding 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. These expectations are based on assumptions that management believes are reasonable; however, undue reliance should not be placed on these forward-looking statements because these risks and uncertainties could cause actual results to differ materially from those contained in any forward-looking statements. There are many other factors and uncertainties that impact these forward-looking statements that we cannot predict accurately, including our ability to achieve benefits from the Smurfit-Stone acquisition, including synergies, performance improvements and successful implementation of capital projects. 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, 2013
. 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 |
|
December 31
,
|
December 31
,
|
|
2013 |
2012 |
|
|
|
|
|
|
NET SALES
|
$ 2,362.6
|
$ 2,287.1
|
|
|
|
Cost of Goods Sold |
1,914.8 |
1,877.6 |
|
|
|
|
|
|
Gross Profit |
447.8 |
409.5 |
Selling, General and Administrative Expenses |
234.8 |
223.0 |
Restructuring and Other Costs, net |
17.6 |
16.1 |
|
|
|
|
|
|
Operating Profit |
195.4 |
170.4 |
Interest Expense |
(24.0) |
(29.1) |
Loss on Extinguishment of Debt |
-- |
(0.2) |
Interest Income and Other Income (Expense), net |
(0.8) |
-- |
Equity in Income of Unconsolidated Entities |
1.7 |
0.6 |
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES
|
172.3
|
141.7
|
|
|
|
Income Tax Expense |
(61.7) |
(54.8) |
|
|
|
|
|
|
CONSOLIDATED NET INCOME
|
110.6
|
86.9
|
|
|
|
|
|
|
Less: Net Income Attributable to Noncontrolling Interests |
(0.9) |
(0.9) |
|
|
|
|
|
|
NET INCOME ATTRIBUTABLE TO ROCK-TENN COMPANY SHAREHOLDERS
|
$ 109.7
|
$ 86.0
|
|
|
|
|
|
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
|
$ 109.7 |
$ 86.0 |
Less: Distributed and undistributed income available to participating securities |
(0.1) |
-- |
Distributed and undistributed income available to
Rock-Tenn Company
shareholders
|
$ 109.6 |
$ 86.0 |
|
|
|
Diluted weighted average shares outstanding |
73.3 |
72.7 |
|
|
|
Diluted earnings per share |
$ 1.50 |
$ 1.18 |
|
ROCK-TENN COMPANY
|
SEGMENT INFORMATION
|
(UNAUDITED)
|
(IN MILLIONS)
|
|
|
FOR THE THREE MONTHS ENDED |
|
December 31
,
|
December 31
,
|
|
2013 |
2012 |
|
|
|
|
|
|
NET SALES:
|
|
|
|
|
|
Corrugated Packaging
|
$ 1,651.9 |
$ 1,589.8 |
Consumer Packaging
|
472.1 |
452.8 |
Merchandising Displays |
184.6 |
161.9 |
Recycling |
99.6 |
126.8 |
Intersegment Eliminations |
(45.6) |
(44.2) |
|
|
|
|
|
|
TOTAL NET SALES
|
$ 2,362.6
|
$ 2,287.1
|
|
|
|
|
|
|
SEGMENT INCOME:
|
|
|
|
|
|
Corrugated Packaging
|
$ 157.7 |
$ 137.6 |
Consumer Packaging |
57.6 |
54.9 |
Merchandising Displays |
19.3 |
11.8 |
Recycling |
0.1 |
4.3 |
|
|
|
|
|
|
TOTAL SEGMENT INCOME
|
$ 234.7
|
$ 208.6
|
|
|
|
|
|
|
Restructuring and Other Costs, net |
(17.6) |
(16.1) |
Non-Allocated Expenses |
(20.0) |
(21.5) |
Interest Expense |
(24.0) |
(29.1) |
Loss on Extinguishment of Debt |
-- |
(0.2) |
Interest Income and Other Income (Expense), net |
(0.8) |
-- |
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES
|
$ 172.3
|
$ 141.7
|
|
ROCK-TENN COMPANY
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
(IN MILLIONS)
|
|
|
FOR THE THREE MONTHS ENDED |
|
December 31
,
|
December 31
,
|
|
2013 |
2012 |
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
Consolidated net income |
$ 110.6 |
$ 86.9 |
|
|
|
Adjustments to reconcile consolidated net income to net cash provided by operating activities: |
|
|
Depreciation and amortization |
143.2 |
138.1 |
Deferred income tax expense |
51.5 |
50.2 |
Loss on extinguishment of debt |
-- |
0.2 |
Share-based compensation expense |
9.5 |
6.8 |
(Gain) loss on disposal of plant and equipment and other, net |
(2.0) |
0.7 |
Equity in income of unconsolidated entities |
(1.7) |
(0.6) |
Pension and other postretirement funding more than expense |
(35.2) |
(12.8) |
Impairment adjustments and other non-cash items |
4.1 |
2.7 |
Changes in operating assets and liabilities, net of acquisitions: |
|
|
Accounts receivable |
171.0 |
74.7 |
Inventories |
4.2 |
(49.2) |
Other assets |
(12.6) |
11.0 |
Accounts payable |
(76.6) |
(31.8) |
Income taxes |
(7.6) |
(8.3) |
Accrued liabilities and other |
(53.9) |
8.9 |
|
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
304.5
|
277.5
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
Capital expenditures |
(100.6) |
(92.0) |
Cash paid for purchase of businesses, net of cash acquired |
(60.0) |
-- |
Return of capital from unconsolidated entities |
0.2 |
0.4 |
Proceeds from sale of property, plant and equipment |
3.3 |
2.6 |
Proceeds from property, plant and equipment insurance settlement |
2.7 |
-- |
|
|
|
NET CASH USED FOR INVESTING ACTIVITIES
|
(154.4)
|
(89.0)
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
Additions to revolving credit facilities |
20.0 |
31.8 |
Repayments of revolving credit facilities |
(21.9) |
(14.5) |
Additions to debt |
46.6 |
150.1 |
Repayments of debt |
(131.6) |
(326.9) |
Debt issuance costs |
-- |
(1.3) |
Issuances of common stock, net of related minimum tax withholdings |
(5.9) |
(4.8) |
Purchases of common stock |
(53.0) |
-- |
Excess tax benefits from share-based compensation |
10.2 |
4.4 |
Repayments to unconsolidated entity |
(0.2) |
-- |
Cash dividends paid to shareholders |
(25.8) |
(32.1) |
Cash distributions to noncontrolling interests |
(0.1) |
(1.3) |
|
|
|
NET CASH USED FOR BY FINANCING ACTIVITIES
|
(161.7)
|
(194.6)
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
(0.2) |
(0.1) |
|
|
|
DECREASE IN CASH AND CASH EQUIVALENTS
|
(11.8)
|
(6.2)
|
|
|
|
Cash and cash equivalents at beginning of period |
36.4 |
37.2 |
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
$ 24.6
|
$ 31.0
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
Cash paid during the period for: |
|
|
Income taxes, net of refunds |
$ 7.4 |
$ 8.4 |
Interest, net of amounts capitalized |
6.4 |
9.3 |
|
ROCK-TENN COMPANY
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED)
|
(IN MILLIONS)
|
|
|
December 31
,
|
September 30
,
|
|
2013 |
2013 |
ASSETS
|
CURRENT ASSETS:
|
|
|
Cash and cash equivalents |
$ 24.6 |
$ 36.4 |
Restricted cash |
9.2 |
9.3 |
Accounts receivable (net of allowances of
$22.8
and
$26.8
)
|
981.2 |
1,134.9 |
Inventories |
925.3 |
937.9 |
Other current assets |
326.5 |
297.9 |
|
|
|
TOTAL CURRENT ASSETS
|
2,266.8
|
2,416.4
|
|
|
|
Property, plant and equipment at cost: |
|
|
Land and buildings |
1,195.5 |
1,203.1 |
Machinery and equipment |
6,565.1 |
6,467.8 |
Transportation equipment |
14.5 |
13.8 |
Leasehold improvements |
24.7 |
24.7 |
|
7,799.8 |
7,709.4 |
Less accumulated depreciation and amortization |
(2,256.8) |
(2,154.7) |
Net property, plant and equipment |
5,543.0 |
5,554.7 |
Goodwill |
1,887.2 |
1,862.1 |
Intangibles, net |
691.2 |
699.4 |
Other assets |
203.2 |
200.8 |
|
|
|
TOTAL ASSETS
|
$ 10,591.4
|
$ 10,733.4
|
LIABILITIES AND EQUITY
|
CURRENT LIABILITES:
|
|
|
Current portion of debt |
$ 3.2 |
$ 2.9 |
Accounts payable |
738.3 |
802.1 |
Accrued compensation and benefits |
183.2 |
249.0 |
Other current liabilities |
203.5 |
189.4 |
|
|
|
TOTAL CURRENT LIABILITIES
|
1,128.2
|
1,243.4
|
|
|
|
Long-term debt due after one year |
2,750.3 |
2,841.9 |
Pension liabilities |
932.5 |
975.2 |
Postretirement medical liabilities |
115.9 |
118.3 |
Deferred income taxes |
1,132.3 |
1,063.1 |
Other long-term liabilities |
166.9 |
165.4 |
Redeemable noncontrolling interests |
14.0 |
13.3 |
|
|
|
Total Rock-Tenn Company
shareholders' equity
|
4,350.8 |
4,312.3 |
Noncontrolling interests |
0.5 |
0.5 |
Total Equity |
4,351.3 |
4,312.8 |
|
|
|
TOTAL LIABILITIES AND EQUITY
|
$ 10,591.4
|
$ 10,733.4
|