Tenn Company reported financial results for the fiscal third quarter. Net sales for the fiscal third quarter were $386.4 million compared to net sales of $357.1 million in the prior year quarter. Net income for the quarter was $7.2 million, compared to net income of $5.5 million in the comparable quarter of the prior fiscal year.
"Folding carton sales were up 15.6% over last year and up 6% excluding the impact of the Cartem-Wilco acquisition. Merchandising display sales were up 9.5 percent over the prior year quarter. While our recycled paperboard mills operated at 95 percent utilization and our sales price increased by $26 per ton over the prior year quarter, our operating income declined primarily due to higher recovered fiber costs and much higher energy costs,” said James Rubright, Rock-Tenn’s chairman and CEO.
The company reported sales in its Packaging Products group increased 14.4 percent for the quarter to $228.3 million from $199.7 million in the fiscal third quarter of 2002. Packaging Products segment operating income was $9.5 million in the fiscal third quarter of 2003 compared to $14.6 million in the prior year quarter. Return on sales for the fiscal third quarter of 2003 decreased to 4.1 percent from 7.3 percent in the prior year quarter.
The increase in sales for the Packaging Products segment in the third quarter of 2003 was primarily due to higher volumes in folding carton sales, which increased 15.6 percent from the year ago period.
Paperboard segment sales increased 0.9 percent to $130.3 million in the fiscal third quarter of 2003 from $129.1 million in the same quarter of 2002, despite a decline in sales in the company's Laminated Paperboard Products division.
Total tons shipped in the quarter for the Paperboard segment were 279,706 tons, a 0.1 percent increase from the 279,336 tons shipped in the same quarter last year.
The Company's recycled paperboard mills operated at 95 percent of capacity. Operating income in the segment was $5.6 million compared to $9.0 million the prior year period. The decline in operating income was caused primarily by continued weakness in demand for ready-to-assemble furniture components and competitive pricing for clay-coated recycled boxboard. Return on sales was 4.3 percent in the third quarter of 2003 compared to 7.0 percent in the third quarter of 2002.