RockTenn Company Reports Operating Results (10-K)
Rocktenn Company has a market cap of $2.04 billion; its shares were traded at around $52.29 with a P/E ratio of 11.8 and P/S ratio of 0.68. The dividend yield of Rocktenn Company stocks is 1.53%. Rocktenn Company had an annual average earning growth of 11.5% over the past 10 years. GuruFocus rated Rocktenn Company the business predictability rank of 2.5-star.RKT is in the portfolios of George Soros of Soros Fund Management LLC, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors, John Keeley of Keeley Fund Management.
Highlight of Business Operations: The aggregate market value of the common equity held by non-affiliates of the registrant as of March 31, 2010, the last day of the registrants most recently completed second fiscal quarter (based on the last reported closing price of $45.57 per share of Class A Common Stock as reported on the New York Stock Exchange on such date), was approximately $1,680 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 2010, 2009, and 2008 was $138, $81, and $145, respectively. Recycled fiber prices and virgin 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 2010, 2009, and 2008 was $174, $149, and $134, respectively.
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 primarily use electricity to operate 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. At times, the costs of natural gas, oil, coal and electricity have fluctuated significantly. The average cost of energy used by our mills to produce a ton of paperboard during fiscal 2010 was $54 per ton compared to $56 per ton during fiscal 2009 and $74 per ton in fiscal 2008. The fiscal 2008 cost per ton includes our Solvay mill since it was acquired in March 2008. Our bleached paperboard mill uses wood by-products and pulp process wastes to supply a substantial portion of the mills energy needs. Our Solvay mill purchases its process steam under a long-term contract with an adjacent coal fired power plant with pricing based primarily on coal prices. The mills electric energy supply is favorably priced due to the availability of hydro-based electric power.
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