Rock-Tenn Company reported net sales for the third quarter of fiscal 2005 at $424.7 million

Aug 08, 2005. /Lesprom Network/. Rock-Tenn Company reported on Friday financial results for the quarter ended June 30, 2005, its third quarter of fiscal 2005. The company's results included 25 days of sales and income from the Gulf States paperboard and packaging businesses (GSPP) that were acquired on June 6, 2005. Net sales for the third quarter of fiscal 2005 were $424.7 million compared to net sales in the third quarter of fiscal 2004 of $397.3 million. The company reported income from continuing operations of $12.0 million, or $0.33 per diluted share, for the quarter compared to a loss of $4.1 million, or $0.12 per diluted share, in the prior year quarter. The GSPP assets contributed $40.1 million in net sales and $7.1 million to pre-tax operating income during the quarter. Operating income for the third quarter of fiscal 2005 included pre-tax restructuring and other costs of $0.8 million, or $0.01 per diluted share after-tax, and an additional $1.5 million pre-tax charge, or $0.03 per diluted share after-tax, due to the interim award determination in the Seven Hills arbitration proceeding. Net income for the quarter included $5.6 million after-tax, or $0.16 per diluted share, for a change in tax provision resulting primarily from the resolution of historical federal and state reserves. Packaging products segment sales were $239.2 million in the third quarter of fiscal 2005 compared to $231.5 million in the third quarter of fiscal 2004, primarily due to additional sales related to the GSPP acquisition offset by a decrease in net sales at other Rock-Tenn facilities. Packaging products segment operating income was $10.6 million and $11.7 million in the third quarters of fiscal 2005 and 2004, respectively. Increased operating income due to the GSPP acquisition was offset by lower volumes and higher operating costs at the other Rock-Tenn folding carton plants. Merchandising displays and corrugated packaging segment sales increased 10.1% from the prior year quarter to $83.5 million in the third quarter of fiscal 2005. The sales increase was primarily due to sales from the Athens corrugator, which Rock-Tenn acquired in August 2004. Operating income for the segment was $6.4 million in the third quarter of fiscal 2005, a 5% increase from the year ago quarter. Higher income from merchandising displays was somewhat offset by lower operating income from sales of corrugated packaging. Paperboard segment sales increased to $154.9 million in the third quarter of fiscal 2005 from $138.6 million in the third quarter of fiscal 2004 primarily as a result of the acquisition of the Demopolis mill. Operating income in the segment increased to $7.6 million in the third quarter of fiscal 2005 compared to $2.6 million in the prior year quarter. Recycled paperboard tons shipped in the third quarter of fiscal 2005 were 256,386 tons compared to 292,745 tons in the year ago quarter. The decline in recycled paperboard tons shipped was due to the closure of the Otsego mill in July 2004 and reduced tons shipped from clay-coated mills. The Company's recycled mills operated at 93% of capacity during the quarter compared to 98% in the prior year quarter. Sales price per ton from the recycled mills increased while fiber, energy, freight and chemical costs combined increased $7 per ton over the prior year quarter. The Demopolis mill operated at full capacity during the 25-day period Rock-Tenn owned the mill and shipped 26,713 tons of paperboard and 6,933 tons of softwood market pulp. Rock-Tenn company chairman and chief executive officer James A. Rubright stated, "Our strong improvement in operating results over year to date results reflects the contribution to earnings of the Gulf States plants that we acquired on June 6, 2005. All of the Gulf States plants operated very well and we achieved on the closing date the $13 million of annualized synergies we projected when we announced the acquisition in April. Operating results of our merchandising displays and paperboard segments improved over the prior year quarter, but the improvements were offset by the lower results of Rock-Tenn's folding carton plants." "The September quarter typically sees seasonal volume gains in our folding carton and display businesses where we expect results to exceed the June quarter. We continue to expect earnings accretion from the GSPP acquisition where the acquired assets are performing well." Rock-Tenn Company provides a wide range of marketing and packaging solutions to consumer products companies at low costs, with combined pro forma net sales of $2.1 billion and operating locations in the United States, Canada, Mexico and Chile. The company is one of North America's leading manufacturers of packaging products, merchandising displays and bleached and recycled paperboard.