RockTenn results steady in quarter but down year-on-year
Net sales decreased $109.7m to $2.4bn compared to Q4 2011 and segment income was down 13.4% over the prior year quarter.
The firm recorded $23.1m in restructuring and other costs relating to $11.5m of pre-tax integration and acquisition costs, and $11.4m of pre-tax facility closure charges primarily related to corrugated container and recycled facilities acquired in the Smurfit-Stone Acquisition.
In the Containerboard and Paperboard segment, total tons produced in the fourth quarter of 2012 were 2.32 million tons, a decrease of 72,000 tons over the prior year quarter, and a sequential increase of 187,000 tons from the third quarter of 2012.
RockTenn said the sequential quarter increase was primarily due to seasonal strength and fewer scheduled major maintenance outages at our containerboard mills.
Segment decrease
Corrugated Packaging segment net sales decreased $29.2m to $1,597.3 million in Q4 2012 compared to the prior year quarter.
Segment income decreased $40.8m to $112.8m in Q4 after adjusting the current year quarter and prior year quarter to eliminate $0.2m and $4m of pre-tax acquisition inventory step-up, respectively.
The decrease is related to $18.3m of incremental maintenance outage expense compared to the prior year quarter, the impact of lower mill volumes and lower selling prices and start-up costs and lost production after the major capital investments at the Hodge, LA mill.
The firm also recorded $6.7m of pre-tax losses at the closed Matane, Quebec containerboard mill in the twelve months ended 30 September.
Consumer Packaging segment net sales decreased $7.3m in Q4 compared to the prior year quarter.
Segment income was $98.8m in Q4 compared to $82.1m in the prior year quarter, including $18.2m received in connection with the termination and settlement of a paperboard supply agreement, net of legal fees in the period.
Continued headwinds
James A. Rubright, chairman and chief executive officer, said: “We are pleased with the earnings we recorded in our fourth fiscal quarter, which are up strongly over the third quarter despite the continued headwinds of the slow progress of the domestic economic recovery.
“During the fourth fiscal quarter, we implemented a $50 per ton increase in domestic containerboard and we are following that with price increases in boxes and sheets.
“Given our contractual arrangements, we expect that by the end of the March quarter we will be realizing most of the anticipated benefit of those increases, which will be partially offset by lower prices in our consumer segment and higher commodity input costs.”
