STOCK OF THE WEEK: ROCK -TENN

FOR ALL YOUR PACKAGING NEEDS

The Rock-Tenn Company Rock Tenn is one of North America’s leading packaging companies focusing on developing packaging and paperboard products that bring high value to its customers. Founded in 1936, The Company operates manufacturing facilities throughout the United States, Canada, Mexico and Chile, and employs approximately 8,800 people. Headquartered in Norcross, Georgia, Rock-Tenn is listed on the NYSE (RKT).

The Company is set-up into three separate divisions- (1) Packaging products segment consists of facilities that produce folding cartons and solid fiber interior packaging for food, hardware, apparel and other consumer goods. (2) Merchandising displays and corrugated packaging segment consists of facilities that produce temporary and permanent point of purchase displays, corrugated packaging and corrugated sheet stock. (3) Paperboard segment consists of facilities that collect recovered paper and that manufacture 100% recycled clay-coated and specialty paperboard, including gypsum paperboard liner, 100% corrugating medium and laminated paperboard products used in book covers, furniture and automotive components.

Rock-Tenn Company has a diverse portfolio of International, National, Regional and Local customers across a wide range of consumer and industrial products. Production facilities are strategically located to provide the highest level of responsiveness. Their industry-leading structural and graphic design services, specialized manufacturing capabilities and experienced sales team give them the flexibility and resources to provide customers with new, innovative products and services.

Recently at the 2004 Paperboard Packaging Council Awards (PPC), Rock-Tenn received 22 awards. In the 61 year history of PPC this has never been achieved by a company. Some of the Consumer packaging that Rock-Tenn developed and received awards for were Delmonte, Federal Express, Bacardi, Edwards Frozen Foods, Hershey and Kraft Foods.

The research and development team at (Rock-Tenn ), seem to be a key elements in their high performance, quality way of doing business. With many trade mark products, Rock-Tenn seems to have a lead on their competitors. With the steady climb of wine consumption in the U.S. at 232 million cases in 2003 and climbing, Wineguard, their trade mark product, a solid fiber partition for protecting wine bottles during shipping, caught my eye.

Rock-Tenn Company is also one of the largest consumers of scrap paper in the country. Since the 1890’s Rock-Tenn has been handling all grades of recovered paper, including old corrugated containers, office papers, old newspapers and printers' mix. As a valued supplier to their own and outside paper mills, their job is to supply paper—regardless of the market price. That means they are in the business for the long-term and go out of their way to provide dependable paper recovery services to their customers.

On Nov. 2, 2004, Rock-Tenn Company reported financial results for the fourth quarter and fiscal year 2004, which ended September 30, 2004. Net sales for the fourth quarter of fiscal 2004 were $417.9 million, up 8.5% from the prior year quarter. The Company reported net income of $6.6 million for the quarter ending September 30, 2004.

Rock-Tenn Company Chairman and Chief Executive Officer James A. Rubright stated, "Fourth quarter sales increased in each of our segments, as we expected, due to strong demand for our products. Aggregate segment income also increased compared to the prior year quarter due to margin from higher sales, significant cost reductions, and some realizations from announced price increases more than offsetting much higher energy and raw material prices.”

The Company reported net sales of $1.6 billion for the fiscal year ending September 30, 2004, a 10.3% increase from the previous year. However, net income was down $17.6 million, for the fiscal year ending September 30, 2004, compared to $29.6 million, in the prior fiscal year.

"Our 10.3% increase in sales for the fiscal year reflects the strong competitive positions we have built in our businesses through investments in cost-reducing technologies, which allowed us to take advantage of strengthening demand for our products. Throughout the year we built our market-share in the folding carton business. We also increased sales of merchandising displays through sales to new customers and growth in our position at other key customers. Our paperboard mills also demonstrated their strong market position, operating at 96% of capacity over the year, taking less than 2% of economic downtime."

After looking at Rock-Tenn’s financial report for 4th quarter and year end you can see why their 52 week high came on 6/29/04 @$17.00. Why, then, did their 52 week low of $9.75 come just a few months ago? (4/28/05). 2nd quarter financial results ending March 31, 2005 were not as welcoming.

Net sales were down slightly. However, their net income dropped 93%. Chairman and CEO James A. Rubright stated, "This quarter's results reflect the impact of higher costs of recycled fiber, purchased paperboard, natural gas, chemicals and freight. We had anticipated a decline in folding carton volume due to the closing of our St. Paul facility in January. However, demand for both folding cartons and clay coated recycled paperboard was much weaker than we anticipated. These cost pressures and weak demand more than offset improvements in operations and our intense cost reduction efforts."

After doing much research on the Rock-Tenn Company, it appears they know how to do their job very well and have a good reputation in their industry. Their stock is on the up swing again closing at $12.00 on June 13th. However, can they anticipate their future of higher material costs and learn how to package themselves successfully?

STOCK OF THE WEEK: ROCK -TENN

FOR ALL YOUR PACKAGING NEEDS

The Rock-Tenn Company Rock Tenn is one of North America’s leading packaging companies focusing on developing packaging and paperboard products that bring high value to its customers. Founded in 1936, The Company operates manufacturing facilities throughout the United States, Canada, Mexico and Chile, and employs approximately 8,800 people. Headquartered in Norcross, Georgia, Rock-Tenn is listed on the NYSE (RKT).

The Company is set-up into three separate divisions- (1) Packaging products segment consists of facilities that produce folding cartons and solid fiber interior packaging for food, hardware, apparel and other consumer goods. (2) Merchandising displays and corrugated packaging segment consists of facilities that produce temporary and permanent point of purchase displays, corrugated packaging and corrugated sheet stock. (3) Paperboard segment consists of facilities that collect recovered paper and that manufacture 100% recycled clay-coated and specialty paperboard, including gypsum paperboard liner, 100% corrugating medium and laminated paperboard products used in book covers, furniture and automotive components.

Rock-Tenn Company has a diverse portfolio of International, National, Regional and Local customers across a wide range of consumer and industrial products. Production facilities are strategically located to provide the highest level of responsiveness. Their industry-leading structural and graphic design services, specialized manufacturing capabilities and experienced sales team give them the flexibility and resources to provide customers with new, innovative products and services.

Recently at the 2004 Paperboard Packaging Council Awards (PPC), Rock-Tenn received 22 awards. In the 61 year history of PPC this has never been achieved by a company. Some of the Consumer packaging that Rock-Tenn developed and received awards for were Delmonte, Federal Express, Bacardi, Edwards Frozen Foods, Hershey and Kraft Foods.

The research and development team at (Rock-Tenn ), seem to be a key elements in their high performance, quality way of doing business. With many trade mark products, Rock-Tenn seems to have a lead on their competitors. With the steady climb of wine consumption in the U.S. at 232 million cases in 2003 and climbing, Wineguard, their trade mark product, a solid fiber partition for protecting wine bottles during shipping, caught my eye.

Rock-Tenn Company is also one of the largest consumers of scrap paper in the country. Since the 1890’s Rock-Tenn has been handling all grades of recovered paper, including old corrugated containers, office papers, old newspapers and printers' mix. As a valued supplier to their own and outside paper mills, their job is to supply paper—regardless of the market price. That means they are in the business for the long-term and go out of their way to provide dependable paper recovery services to their customers.

On Nov. 2, 2004, Rock-Tenn Company reported financial results for the fourth quarter and fiscal year 2004, which ended September 30, 2004. Net sales for the fourth quarter of fiscal 2004 were $417.9 million, up 8.5% from the prior year quarter. The Company reported net income of $6.6 million for the quarter ending September 30, 2004.

Rock-Tenn Company Chairman and Chief Executive Officer James A. Rubright stated, "Fourth quarter sales increased in each of our segments, as we expected, due to strong demand for our products. Aggregate segment income also increased compared to the prior year quarter due to margin from higher sales, significant cost reductions, and some realizations from announced price increases more than offsetting much higher energy and raw material prices.”

The Company reported net sales of $1.6 billion for the fiscal year ending September 30, 2004, a 10.3% increase from the previous year. However, net income was down $17.6 million, for the fiscal year ending September 30, 2004, compared to $29.6 million, in the prior fiscal year.

"Our 10.3% increase in sales for the fiscal year reflects the strong competitive positions we have built in our businesses through investments in cost-reducing technologies, which allowed us to take advantage of strengthening demand for our products. Throughout the year we built our market-share in the folding carton business. We also increased sales of merchandising displays through sales to new customers and growth in our position at other key customers. Our paperboard mills also demonstrated their strong market position, operating at 96% of capacity over the year, taking less than 2% of economic downtime."

After looking at Rock-Tenn’s financial report for 4th quarter and year end you can see why their 52 week high came on 6/29/04 @$17.00. Why, then, did their 52 week low of $9.75 come just a few months ago? (4/28/05). 2nd quarter financial results ending March 31, 2005 were not as welcoming.

Net sales were down slightly. However, their net income dropped 93%. Chairman and CEO James A. Rubright stated, "This quarter's results reflect the impact of higher costs of recycled fiber, purchased paperboard, natural gas, chemicals and freight. We had anticipated a decline in folding carton volume due to the closing of our St. Paul facility in January. However, demand for both folding cartons and clay coated recycled paperboard was much weaker than we anticipated. These cost pressures and weak demand more than offset improvements in operations and our intense cost reduction efforts."

After doing much research on the Rock-Tenn Company, it appears they know how to do their job very well and have a good reputation in their industry. Their stock is on the up swing again closing at $12.00 on June 13th. However, can they anticipate their future of higher material costs and learn how to package themselves successfully?

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