RockTenn Company (RKT) filed Annual Report for the period ended 2009-09-30.
Rock-Tenn Company provides a wide range of marketing and packaging solutions to consumer products companies at low costs, with net sales and operating locations in the United States, Canada, Mexico, Argentina and Chile. The Company is one of North America's leading manufacturers of packaging products, merchandising displays and bleached and recycled paperboard. Rock-Tenn is uniquely equipped to provide solutions for our customers. The Company operates manufacturing facilities throughout the United States, Canada, Mexico and Chile. The Company hire the best people in the industry and our team's commitment to customer satisfaction is relentless. Rocktenn Company has a market cap of $1.85 billion; its shares were traded at around $48 with a P/E ratio of 10.4 and P/S ratio of 0.7. The dividend yield of Rocktenn Company stocks is 1.2%. Rocktenn Company had an annual average earning growth of 3.3% over the past 10 years.
Highlight of Business Operations:
The aggregate market value of the common equity held by non-affiliates of the registrant as of March 31, 2009, the last day of the registrant’s most recently completed second fiscal quarter (based on the last reported closing price of $27.05 per share of Class A Common Stock as reported on the New York Stock Exchange on such date), was approximately $962 million.
The primary raw materials that our paperboard operations use are recycled fiber at our recycled paperboard and containerboard mills and virgin fibers from hardwoods and softwoods at our bleached paperboard mill. The average cost per ton of recycled fiber that our recycled paperboard and containerboard mills used during fiscal 2009, 2008, and 2007 was $81, $145, and $115, respectively. Recycled fiber prices can fluctuate significantly. While virgin fiber prices have generally been more stable than recycled fiber prices, they also fluctuate, particularly during prolonged periods of heavy rain or during housing slowdowns. The average cost per ton of virgin fiber that our bleached paperboard mill used during fiscal 2009, 2008, and 2007 was $149, $134, and $116, respectively. Pursuant to a five year agreement entered into in June 2005, Gulf States Paper Corporation (“Gulf States”, currently known as the Westervelt Company) has essentially agreed to continue to sell to our bleached paperboard mill the supply of softwood chips that it made available to the mill before our acquisition of substantially all of the assets of Gulf States’ Paperboard and Packaging operations (“GSPP”) and the assumption of certain of Gulf States’ related liabilities in June 2005 (the “GSPP Acquisition”). This supply represents approximately 75% to 80% of the mill’s historical softwood chip supply requirements and approximately 23% of the mill’s total wood fiber supply requirement. We are in the process of evaluating extending the contract.
Energy is one of the most significant manufacturing costs of our mill operations. We use natural gas, electricity, fuel oil and coal to operate our mills and to generate steam to make paper. We use primarily electricity for our converting equipment. We generally purchase these products from suppliers at market rates. Occasionally, we enter into agreements to purchase natural gas at fixed prices. In recent years, the costs of natural gas, oil, coal and electricity have fluctuated significantly. The average cost of energy used by our recycled paperboard and containerboard mills, excluding our Solvay mill, to produce a ton of paperboard during fiscal 2009 was $64 per ton, compared to $90 per ton during fiscal 2008 and $78 per ton in fiscal 2007. Our bleached paperboard mill uses wood by-products and pulp process wastes to supply a substantial portion of the mill’s energy needs. Our Solvay mill purchases its process steam under a long-term contract with an adjacent coal fired power plant — with steam pricing based primarily on coal prices. The mill’s electric energy supply is low priced due to the availability of hydro-based electric power.
We estimate that we will spend approximately $5 to $6 million for capital expenditures during fiscal 2010 in connection with matters relating to safety and environmental compliance.
Rate This Article: |
  |