<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JANUARY 10, 1997
Rock-Tenn Company
------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Georgia 0-23340 62-0342590
- ------------------------ ---------------------------------- ---------------------------------
(State of incorporation) (Commission File Number) (IRS Employer Identification No.)
504 Thrasher Street
Norcross, Georgia 30071
- ---------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (770) 448-2193
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS
Rock-Tenn Company ("Rock-Tenn" or "The Company") today reported financial
results for the first fiscal quarter ending December 31, 1996.
Net income for the December 1996 quarter was $7.4 million or $.22 per share
compared to $11.8 million or $.35 per share for the same quarter last year.
Net sales for the December 1996 quarter were $208.3 million compared to $219.4
million in the same quarter last year.
Bradley Currey, Jr., Rock-Tenn's chairman and chief executive officer, noted
that the Company's results for the first fiscal quarter were hurt by an
earlier than anticipated seasonal slow down in shipments of converted products
and continuing pricing pressure on recycled paperboard. Mr. Currey also stated
that general market conditions were stabilizing and that the outlook for
physical volume is encouraging.
The Company recently announced two strategic initiatives to fuel growth:
On December 20, 1996, Rock-Tenn announced that it had reached an agreement
in principal to acquire for cash all of the outstanding capital stock of the
parent of Waldorf Corporation, a manufacturer of folding cartons, 100%
recycled paperboard and recycled corrugating medium. This acquisition is
expected to make Rock-Tenn the second largest producer of folding cartons in
North America and the largest producer of 100% recycled paperboard, excluding
containerboard and gypsum wallboard.
On January 8, 1997, Rock-Tenn announced that it had entered into a
letter of intent with Sonoco Products Company to combine their fiber
partition businesses into a new joint venture.
Consummation of the acquisition and of the joint venture are subject to
satisfaction of a number of conditions including negotiation and execution
of definitive agreements, obtaining certain regulatory approvals and the
satisfactory completion of due diligence.
The Company also has stated that it expects initially to finance the Waldorf
transaction, including refinancing of Waldorf's long-term debt, with cash and
borrowings under a new $400 million credit facility. The Company also has
stated its intention to repay a portion of such borrowings with the net
proceeds of a public offering of equity securities. The Company currently
anticipates that the public offering will consist of up to 6,000,000 shares of
its Class A Common Stock and will be completed during the first half of 1997
subject, however, to prevailing market conditions.
Mr. Currey further stated, that while the Company expects to incur costs to
consolidate the Waldorf acquisition and Sonoco joint venture over the next few
quarters, the Company believes that the synergies and cost efficiencies
associated with these businesses will contribute to enhanced sales and profits
for Rock-Tenn over the long-term.
A copy of the press release relating to the Company's financial results for the
first quarter is attached hereto as Exhibit 99.1.
<PAGE> 3
<TABLE>
<CAPTION>
(000 OMITTED) ROCK-TENN COMPANY WALDORF CORPORATION SONOCO PARTITION DIVISION
--------------------------- ---------------------- --------------------------
NUMBER OF NUMBER OF ESTIMATED NUMBER OF
YE 9/30/96 MANF FACILITIES YE 6/30/96 FACILITIES YE 12/31/96 FACILITIES
---------- --------------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
SALES
CONVERTING SEGMENT
FOLDING CARTON $403,113 17 $257,160 6
LAMINATED PAPERBOARD 123,379 5
CORRUGATED 112,031 7
PARTITION 97,236 8 $50,000 7
PLASTICS 43,937 3
- ----------------------------------------------------------------------------------------------------------------
SUBTOTAL 779,696 40 257,160 6 50,000 7
- ----------------------------------------------------------------------------------------------------------------
PAPERBOARD SEGMENT
RECYCLED BOX BOARD 268,630 8 129,624 2
CORRUGATING MEDIUM --- 0 62,477 1
RECYCLED FIBER 12,772 11 --- 4
- ----------------------------------------------------------------------------------------------------------------
SUBTOTAL 281,402 19 192,101 7
- ----------------------------------------------------------------------------------------------------------------
TOTAL SALES 1,061,098 59 449,261 13 50,000 7
INTERSEGMENT SALES (184,987) (72,192)
- ----------------------------------------------------------------------------------------------------------------
NET OUTSIDE SALES 876,111 377,069 50,000
- ----------------------------------------------------------------------------------------------------------------
COST OF GOODS SOLD 632,202 306,418 NOT AVAILABLE
-------- --------
GROSS PROFIT 243,909 70,651
S,G & A EXPENSE 151,752 24,565
-------- --------
OPERATING INCOME 92,157 46,086
NET INTEREST EXPENSE 9,688 14,215
-------- --------
INCOME BEFORE TAXES 82,469 31,871
INCOME TAXES 31,344 14,499
- ----------------------------------------------------------------------------------------------------------------
NET INCOME $ 51,125 $ 17,372
- ----------------------------------------------------------------------------------------------------------------
PAPERBOARD SHIPMENTS (IN TONS)
CLAY-COATED RECYCLED 192 262
UNCOATED RECYCLED 434 ---
RECYCLED MEDIUM --- 157
- ----------------------------------------------------------------------------------------------------------------
TOTAL 626 419 NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(C) EXHIBITS
Exhibit
No. Description
- ------- -----------
99.1 -- Press Release dated January 10, 1997
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 10, 1997 ROCK-TENN COMPANY
By: /s/ David C. Nicholson
----------------------------
David C. Nicholson
Senior Vice President, Chief
Financial Officer, Secretary
<PAGE> 6
EXHIBIT INDEX
Exhibit Sequentially
No. Exhibit Numbered Page
- ------- ------- -------------
99.1 -- Press Release dated January 10, 1997
<PAGE> 1
EXHIBIT 99.1
PRESS RELEASE
ROCK-TENN COMPANY REPORTS FINANCIAL RESULTS FOR THE
FIRST QUARTER OF FISCAL 1997
Norcross, Georgia, January 10, 1997 -- Rock-Tenn Company ("NYSE:RKT") today
reported financial results for the first fiscal quarter ending December 31,
1996.
Net income for the December 1996 quarter was $7.4 million or $.22 per share
compared to $11.8 million or $.35 per share for the same quarter last year.
Net sales for the December 1996 quarter were $208.3 million compared to $219.4
million in the same quarter last year.
Bradley Currey, Jr., chairman and chief executive officer, commented, "as we
reported in December, financial results for the first fiscal quarter were hurt
by an earlier than anticipated seasonal slow down in shipments of converted
products and continuing pricing pressure on recycled paperboard. Currently, we
are seeing a stabilization of general market conditions and the outlook for
physical volume is encouraging."
The Company recently announced two strategic initiatives to fuel growth:
On December 20, 1996, Rock-Tenn announced that it had reached an agreement
in principal to acquire for cash all of the outstanding capital stock of
the parent of Waldorf Corporation, a manufacturer of folding cartons, 100%
recycled paperboard and recycled corrugating medium. This acquisition is
expected to make Rock-Tenn the second largest producer of folding cartons
in North America and the largest producer of 100% recycled paperboard,
excluding containerboard and gypsum wallboard.
On January 8, 1997, Rock-Tenn announced that it had entered into a letter
of intent with Sonoco Products Company to combine their fiber partition
businesses into a new joint venture.
Consummation of the acquisition and of the joint venture are subject to
satisfaction of a number of conditions including negotiation and execution of
definitive agreements, obtaining certain regulatory approvals and the
satisfactory completion of due diligence.
The Company also has stated that it expects initially to finance the Waldorf
transaction, including refinancing of Waldorf's long-term debt, with cash and
borrowings under a new $400 million credit facility. The Company also has
stated its intention to repay a portion of such borrowings with the net
proceeds of a public offering of equity securities. The Company currently
anticipates that the public offering will consist of up to 6,000,000 shares of
its Class A Common Stock and will be completed during the first half of 1997
subject, however, to prevailing market conditions.
Currey further stated, "while we expect to incur costs to consolidate the
Waldorf acquisition and Sonoco joint venture over the next few quarters, we
believe the synergies and cost efficiencies associated with these businesses
will contribute to enhanced sales and profits for Rock-Tenn over the long-term."
<PAGE> 2
ROCK-TENN COMPANY
FINANCIAL AND OPERATING HIGHLIGHTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AND TONNAGE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended
December 31, December 31,
1996 1995
- ----------------------------------------------------------
<S> <C> <C>
NET SALES:
Converted Products Segment $184,437 $193,089
Paperboard Segment 66,546 72,963
Intersegment Eliminations (42,665) (46,690)
-------- --------
TOTAL NET SALES $208,318 $219,362
======== ========
NET INCOME $ 7,399 $ 11,785
======== ========
Earnings Per Common Share $ .22 $ .35
======== ========
Weighted Average Common Shares
Outstanding 34,075 33,932
======== ========
SEGMENT OPERATING MARGIN:
Converted Products 2.7% 3.4%
Paperboard 16.5% 23.1%
TONNAGE DATA:
Paperboard Shipped (in tons) 160,305 148,036
</TABLE>
<PAGE> 3
ROCK-TENN COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
=========================================================================
FOR THE THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
- -------------------------------------------------------------------------
<S> <C> <C>
NET SALES $208,318 $219,362
Cost of Goods Sold 154,725 161,203
- -------------------------------------------------------------------------
Gross Profit 53,593 58,159
Selling, General and Administrative Expenses 39,511 36,514
- -------------------------------------------------------------------------
Income from Operations 14,082 21,645
Interest Expense (2,442) (2,884)
Interest Income 496 248
- -------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 12,136 19,009
PROVISION FOR INCOME TAXES 4,737 7,224
- -------------------------------------------------------------------------
NET INCOME $ 7,399 $ 11,785
- -------------------------------------------------------------------------
Weighted Average Common Shares Outstanding 34,075 33,932
- -------------------------------------------------------------------------
Earnings Per Common Share $ .22 $ .35
=========================================================================
</TABLE>
<PAGE> 4
ROCK-TENN COMPANY
INDUSTRY SEGMENT INFORMATION
(UNAUDITED)
(IN THOUSANDS, EXCEPT TONNAGE DATA)
<TABLE>
<CAPTION>
==============================================================
FOR THE THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
- --------------------------------------------------------------
<S> <C> <C>
NET SALES:
Converted Products $184,437 $193,089
Paperboard 66,546 72,963
Intersegment Eliminations (42,665) (46,690)
- --------------------------------------------------------------
TOTAL $208,318 $219,362
- --------------------------------------------------------------
INCOME BEFORE TAXES:
Converted Products $ 4,939 $ 6,641
Paperboard 11,004 16,840
Corporate Expense (1,861) (1,836)
Interest Expense (2,442) (2,884)
Interest Income 496 248
- --------------------------------------------------------------
TOTAL $ 12,136 $ 19,009
==============================================================
Paperboard Shipped (in tons) 160,305 148,036
==============================================================
</TABLE>
<PAGE> 5
ROCK-TENN COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
==========================================================================================
FOR THE THREE MONTHS ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 7,399 $ 11,785
Items in Income Not Affecting Cash:
Depreciation and Amortization 12,107 11,893
Deferred Income Taxes 1,000 1,379
Gain on Sale of Property, Plant and Equipment (83) (113)
Net Changes in Operating Assets and Liabilities (245) 11,772
- ------------------------------------------------------------------------------------------
CASH PROVIDED BY OPERATING ACTIVITIES 20,178 36,716
- ------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Additions to Revolving Credit Facilities 67 ---
Additions to Long-Term Debt 1,500 ---
Repayments of Long-Term Debt (5,133) (12,505)
Sales of Common Stock 606 527
Purchases of Common Stock --- (161)
Cash Dividends Paid (2,493) (2,263)
- ------------------------------------------------------------------------------------------
CASH USED FOR FINANCING ACTIVITIES (5,453) (14,402)
- ------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (21,501) (18,306)
Proceeds from Sale of Property, Plant and Equipment 427 237
Increase in Unexpended Industrial Revenue Bond Proceeds (171) ---
Cash Paid for Intangibles (269) (117)
- ------------------------------------------------------------------------------------------
CASH USED FOR INVESTING ACTIVITIES (21,514) (18,186)
- ------------------------------------------------------------------------------------------
Effect of Exchange Rate Changes on Cash (7) (33)
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (6,796) 4,095
Cash and Cash Equivalents:
Beginning of Period 50,876 21,532
- ------------------------------------------------------------------------------------------
End of Period $ 44,080 $ 25,627
- ------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid During the Period For:
Income Taxes $ 2,806 $ 359
Interest (Net of Amounts Capitalized) 900 1,493
==========================================================================================
</TABLE>
<PAGE> 6
ROCK-TENN COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
=================================================================
DECEMBER 31, SEPTEMBER 30,
1996 1996
- -----------------------------------------------------------------
<S> <C> <C>
ASSETS:
Cash and Cash Equivalents $ 44,080 $ 50,876
Receivables - Net 68,034 78,041
Inventories - At LIFO Cost 59,598 58,505
Other Current Assets 1,640 1,908
- -----------------------------------------------------------------
TOTAL CURRENT ASSETS 173,352 189,330
- -----------------------------------------------------------------
Building and Equipment - Net 345,039 334,854
Intangible and Other Assets 58,080 57,504
- -----------------------------------------------------------------
TOTAL ASSETS $576,471 $581,688
=================================================================
LIABILITIES AND
SHAREHOLDERS' EQUITY:
Current Maturities of Long-Term Debt $ 7,293 $ 7,260
Other Current Liabilities 52,958 61,689
- -----------------------------------------------------------------
TOTAL CURRENT LIABILITIES 60,251 68,949
- -----------------------------------------------------------------
Long-Term Debt 135,741 139,344
Other Liabilities 1,945 1,104
Deferred Income Taxes 24,130 23,136
Shareholders' Equity 354,404 349,155
- -----------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $576,471 $581,688
=================================================================
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
AVERAGE
AVERAGE AVERAGE AVERAGE UNCOATED COATED RECOVERED RECOVERED
UNCOATED COATED PRICE TONS TONS TOTAL TONS PAPER COST PAPER TONS
PRICE/TON PRICE/TON ALL TONS SHIPPED SHIPPED SHIPPED PER TON PURCHASED
--------- --------- -------- -------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1Q 1995 $354 $495 $394 126,562 49,234 175,796 $86 180,057
2Q 1995 371 532 412 137,572 46,574 184,146 127 183,981
3Q 1995 407 555 446 130,319 47,770 178,089 171 183,367
4Q 1995 431 569 475 109,826 50,611 160,437 143 172,553
--------------------------------------------------------------------------------------------------------
FISCAL 1995 389 538 431 504,279 194,189 698,468 132 719,958
--------------------------------------------------------------------------------------------------------
1Q 1996 422 564 466 102,356 45,680 148,036 65 152,165
2Q 1996 400 523 438 106,293 48,802 155,095 53 154,578
3Q 1996 368 500 407 114,124 47,416 161,540 43 157,962
4Q 1996 354 476 392 111,377 50,578 161,955 44 164,694
--------------------------------------------------------------------------------------------------------
FISCAL 1996 385 514 425 434,150 192,476 626,626 51 629,399
--------------------------------------------------------------------------------------------------------
1Q 1997 350 469 389 107,150 53,155 160,305 52 160,203
2Q 1997
3Q 1997
4Q 1997
--------------------------------------------------------------------------------------------------------
FISCAL 1997
--------------------------------------------------------------------------------------------------------
<CAPTION>
CONVERTING CONVERTING PAPERBOARD PAPERBOARD CASH FROM
SEGMENT SEGMENT RETURN ON SEGMENT SEGMENT RETURN ON OPERATING
SALES (000) INCOME (000) SALES SALES (000) INCOME (000) SALES EPS ACTIVITIES (000)
----------- ------------ --------- ----------- ------------ --------- ----- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1Q 1995 $161,659 $4,860 3.0% $74,087 $13,925 18.8% $0.29 $14,264
2Q 1995 189,662 9,008 4.7% 82,631 12,382 15.0% 0.32 6,206
3Q 1995 201,010 10,545 5.2% 88,292 11,194 12.7% 0.32 22,045
4Q 1995 205,373 6,750 3.3% 84,358 13,863 16.4% 0.29 34,462
--------------------------------------------------------------------------------------------------------
FISCAL 1995 757,704 31,163 4.1% 329,368 51,364 15.6% 1.21 76,977
--------------------------------------------------------------------------------------------------------
1Q 1996 193,089 6,641 3.4% 72,963 16,840 23.1% 0.35 36,716
2Q 1996 193,347 7,627 3.9% 71,896 16,496 22.9% 0.36 20,510
3Q 1996 193,667 9,620 5.0% 69,858 16,328 23.4% 0.40 38,134
4Q 1996 199,593 11,330 5.7% 66,685 14,767 22.1% 0.40 28,170
--------------------------------------------------------------------------------------------------------
FISCAL 1996 779,696 35,218 4.5% 281,402 64,431 22.9% 1.50 123,530
--------------------------------------------------------------------------------------------------------
1Q 1997 184,437 4,939 2.7% 66,546 11,004 16.5% 0.22 20,178
2Q 1997
3Q 1997
4Q 1997
--------------------------------------------------------------------------------------------------------
FISCAL 1997
--------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
(000 OMITTED) ROCK-TENN COMPANY WALDORF CORPORATION SONOCO PARTITION DIVISION
--------------------------- ---------------------- --------------------------
NUMBER OF NUMBER OF ESTIMATED NUMBER OF
YE 9/30/96 MANF FACILITIES YE 6/30/96 FACILITIES YE 12/31/96 FACILITIES
---------- --------------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
SALES
CONVERTING SEGMENT
FOLDING CARTON $403,113 17 $257,160 6
LAMINATED PAPERBOARD 123,379 5
CORRUGATED 112,031 7
PARTITION 97,236 8 $50,000 7
PLASTICS 43,937 3
- ----------------------------------------------------------------------------------------------------------------
SUBTOTAL 779,696 40 257,160 6 50,000 7
- ----------------------------------------------------------------------------------------------------------------
PAPERBOARD SEGMENT
RECYCLED BOX BOARD 268,630 8 129,624 2
CORRUGATING MEDIUM --- 0 62,477 1
RECYCLED FIBER 12,772 11 --- 4
- ----------------------------------------------------------------------------------------------------------------
SUBTOTAL 281,402 19 192,101 7
- ----------------------------------------------------------------------------------------------------------------
TOTAL SALES 1,061,098 59 449,261 13 50,000 7
INTERSEGMENT SALES (184,987) (72,192)
- ----------------------------------------------------------------------------------------------------------------
NET OUTSIDE SALES 876,111 377,069 50,000
- ----------------------------------------------------------------------------------------------------------------
COST OF GOODS SOLD 632,202 306,418 NOT AVAILABLE
-------- --------
GROSS PROFIT 243,909 70,651
S,G & A EXPENSE 151,752 24,565
-------- --------
OPERATING INCOME 92,157 46,086
NET INTEREST EXPENSE 9,688 14,215
-------- --------
INCOME BEFORE TAXES 82,469 31,871
INCOME TAXES 31,344 14,499
- ----------------------------------------------------------------------------------------------------------------
NET INCOME $ 51,125 $ 17,372
- ----------------------------------------------------------------------------------------------------------------
PAPERBOARD SHIPMENTS (IN TONS)
CLAY-COATED RECYCLED 192 262
UNCOATED RECYCLED 434 ---
RECYCLED MEDIUM --- 157
- ----------------------------------------------------------------------------------------------------------------
TOTAL 626 419 NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
