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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM__________ TO__________
COMMISSION FILE NUMBER 0-23340
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ROCK-TENN COMPANY
(Exact name of registrant as specified in its charter)
GEORGIA 62-0342590
(state or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
504 THRASHER STREET, NORCROSS, GEORGIA 30071
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (770) 448-2193
Securities Registered Pursuant to Section 12(B) of the Act:
CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE
Securities Registered Pursuant to Section 12(G) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the registrant as of December 7, 2000 (based on the last reported closing price
per share of Class A Common Stock as reported on the New York Stock Exchange on
such date) was approximately $68 million.
As of December 7, 2000, the registrant had 22,457,514 and 10,813,265 shares
of Class A Common Stock and Class B Common Stock outstanding, respectively.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the fiscal year ended
September 30, 2000 are incorporated by reference in Part II. Portions of the
Proxy Statement for the Annual Meeting of Shareholders to be held on January 26,
2001 are incorporated by reference in Parts III and IV.
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INDEX TO FORM 10-K
ROCK-TENN COMPANY
PAGE
REFERENCE
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PART I
Item 1. Business.................................................... 3
Item 2. Properties.................................................. 7
Item 3. Legal Proceedings........................................... 8
Item 4. Submission of Matters to a Vote of Securityholders.......... 8
Item X. Executive Officers of the Registrant........................ 8
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters....................................... 11
Item 6. Selected Financial Data..................................... 11
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 11
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk...................................................... 11
Item 8. Financial Statements and Supplementary Data................. 11
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................. 11
PART III
Item 10. Directors and Executive Officers of the Registrant.......... 12
Item 11. Executive Compensation...................................... 12
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................ 12
Item 13. Certain Relationships and Related Transactions.............. 12
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K....................................................... 13
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PART I
ITEM 1. BUSINESS
Unless the context otherwise requires, "we", "us", "our" or "Rock-Tenn"
refers to the business of Rock-Tenn Company and its subsidiaries, including RTS
Packaging, LLC, which we refer to as RTS. We own 65% of RTS and conduct our
partition products business through RTS.
GENERAL
We are a leading converter of recycled and virgin paperboard and a leading
manufacturer of recycled clay-coated and specialty paperboard. Our paperboard
converting businesses include folding cartons, solid fiber partitions, plastic
packaging and other products, corrugated packaging and corrugated sheet stock.
We also produce corrugating medium and laminated paperboard products, as well as
collect and sell recycled fiber. We operate 66 converting operations, 12
paperboard mills and one distribution facility. These facilities are located in
24 states, Canada, Mexico and Chile.
PRODUCTS
We report our results of operations in three industry segments: (1)
packaging products, (2) paperboard and (3) specialty corrugated packaging and
display. For financial information relating to our segments, please see the
information set forth in Note 11 to our audited consolidated financial
statements incorporated by reference into "Item 8 -- Financial Statements and
Supplementary Data" in this Annual Report. At the end of fiscal 2000, we
evaluated the composition of our segments. As a result, all previously reported
financial information relating to our segments has been restated to reflect the
new composition of each segment.
PACKAGING PRODUCTS
We primarily manufacture three lines of packaging products:
- folding cartons,
- solid fiber partitions, and
- plastic packaging.
Folding Cartons. We believe that we are the third largest producer of
folding cartons in North America. Customers use our folding cartons to package
frozen, dry and perishable food items, paper goods, hardware products, textile,
automotive, apparel and other products. We manufacture folding cartons from
recycled or virgin paperboard, which we print, coat, die-cut and glue in
accordance with customer specifications. We then ship finished cartons to
customers' plants for packing and sealing. We operate 19 folding carton plants
and one distribution facility. Sales of folding cartons to unaffiliated
customers accounted for 40.5%, 42.9% and 45.3% of our net sales in fiscal 2000,
1999 and 1998, respectively.
Partition Products. We believe that we are the largest manufacturer of
solid fiber partitions in North America, which we market principally to glass
container manufacturers. We manufacture fiber partitions from 100% recycled
specialty paperboard. Our solid fiber partitions come in varying thicknesses to
meet different structural requirements for high speed casing, uncasing and
filling lines due to their precision die-cut construction. We focus on
developing high quality, value-added partition products for specific
applications to meet customers' packaging needs. We operate 12 solid fiber
partition plants. Sales of fiber partition products to unaffiliated customers
accounted for 9.3%, 10.3% and 10.8% of our net sales in fiscal 2000, 1999 and
1998, respectively.
Plastic Packaging Products. We manufacture custom thermoformed plastic
converted products and extruded plastic roll stock for sale to the food service,
industrial products, consumer products, healthcare and food processor markets.
We use contact heat and radiant heat thermoforming equipment to manufacture
thermoformed products from plastic roll stock in a wide range of thicknesses,
expanding the range of product
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applications. We also operate extruders to manufacture plastic roll stock in a
wide range of resins and colors. We use virgin and recycled plastic resin
purchased from third parties in the extrusion process, including high impact
polystyrene, high density polyethylene, polypropylene, polyethylene
terephthalate (PET) and K resin blends. We operate two plastic packaging plants.
Sales of plastic packaging products to unaffiliated customers accounted for
4.3%, 3.6% and 3.5% of our net sales in fiscal 2000, 1999 and 1998,
respectively.
PAPERBOARD
We collect recovered paper and produce four paperboard products:
- 100% recycled clay-coated paperboard,
- 100% recycled specialty paperboard,
- 100% recycled corrugating medium, and
- laminated paperboard.
Clay-Coated and Specialty Paperboard and Corrugating Medium. We are the
second largest U.S. manufacturer of 100% recycled paperboard (excluding
linerboard, medium and paperboard used in the manufacture of gypsum wallboard).
We market our recycled clay-coated and specialty paperboard to manufacturers of
folding cartons, solid fiber partitions, laminated paperboard products, tube and
core products, set-up boxes and other paperboard products. We also manufacture
recycled corrugating medium, which we market to corrugated sheet manufacturers.
We operate 12 paperboard mills. Sales of recycled paperboard (including
corrugating medium) to unaffiliated customers accounted for 17.3%, 16.4% and
15.5% of our net sales in fiscal 2000, 1999 and 1998, respectively.
Laminated Paperboard Products. We believe we are the largest U.S. producer
of laminated paperboard products for the book cover and furniture markets and
that customers recognize our expertise in laminating recycled paperboard. We
convert uncoated paperboard into specialty laminated paperboard products for use
in book covers and binders, furniture, automotive components, fiber drums and
other industrial products. We operate six laminated paperboard products plants.
Sales of laminated paperboard products to unaffiliated customers accounted for
9.3%, 11.2% and 12.6% of our net sales in fiscal 2000, 1999 and 1998,
respectively.
Recycled Fiber. We operate 14 paper recovery facilities that collect paper
from a number of sources including factories, commercial printers, office
buildings, retail stores and paper converters as well as from other wastepaper
collectors. After sorting and baling, we transfer collected paper to our
paperboard mills for processing or sell it principally to other U.S.
manufacturers of recycled paperboard. Several of our paper recovery facilities
are located near our paperboard mills. This helps minimize freight costs and
provides an additional source of supply of recovered paper for our operations,
which is the principal raw material used to produce recycled paperboard. We also
operate a marketing and brokerage group for servicing large national accounts.
Sales of recovered paper to unaffiliated customers accounted for 3.3%, 2.1% and
2.0% of our net sales in fiscal 2000, 1999 and 1998, respectively.
SPECIALTY CORRUGATED PACKAGING AND DISPLAY
We manufacture corrugated packaging and corrugated sheet stock in a range
of flute configurations and structural designs. We market corrugated packages
and corrugated sheet stock products primarily in the Southeastern U.S. To make
corrugated sheet stock, we simultaneously feed linerboard and corrugating medium
into a corrugator that flutes the medium to specified sizes, glues the
linerboard and fluted medium together and slits and cuts the resulting
corrugated paperboard into sheets in accordance with customer specifications. We
market corrugated sheets to corrugated box manufacturers. We also convert
corrugated sheets into corrugated products ranging from one-color protective
cartons to graphically brilliant point-of-purchase containers and displays. We
operate one corrugator and five corrugated packaging plants.
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We believe we are the second largest manufacturer of temporary promotional
displays in North America. We manufacture promotional displays for sale to many
of the largest national consumer products companies and to smaller national and
regional consumer products companies. We also provide contract packing services
for completed displays, which may include customer products. We operate one
corrugated display manufacturing facility, six contract packing facilities and
nine display sales and design centers. Sales of our corrugated packaging and
display products to unaffiliated customers accounted for 16.0%, 13.5% and 10.3%
of our net sales in fiscal 2000, 1999 and 1998, respectively.
SALES AND MARKETING
In fiscal 2000, we sold:
- packaging products to approximately 3,200 customers,
- recovered paper and paperboard products to approximately 1,800 customers,
and
- specialty corrugated packaging and display products to approximately
1,100 customers.
None of our customers accounted for more than 5% of our net sales in fiscal
2000. We generally manufacture our products pursuant to customers' orders. Some
of our products are marketed to key customers. The loss of any key customer
could have an adverse effect on the net income attributable to the applicable
segment and, depending on the significance of such product line to our
operations, our results of operations. We believe that we have strong
relationships with our customers.
Each of our product lines is marketed through its own sales force. Each
sales force maintains direct sales relationships with customers. We also market
several product lines, including folding cartons and book covers, through
independent sales representatives and independent distributors, respectively.
Sales personnel are supervised by regional sales managers, plant general
managers or the general manager for the particular product line, who support and
coordinate the sales activities within their designated area. We pay our
paperboard and laminated paperboard products sales personnel a base salary, and
we generally pay our packaging products sales personnel a base salary plus
commission. We pay our independent sales representatives on a commission basis.
COMPETITION
The packaging products and paperboard industries are highly competitive,
and no single company dominates either industry. Our competitors include large,
vertically integrated packaging products and paperboard companies and numerous
smaller companies. In the folding carton and specialty corrugated container
markets, we compete with a significant number of national, regional and local
packaging suppliers. In the fiber partition, point-of-purchase display,
thermoformed plastic packaging and laminated paperboard products markets, we
compete with a smaller number of national, regional and local companies offering
highly specialized products. We also compete with foreign companies in the book
cover market. In the paperboard segment, we compete with integrated and
non-integrated national, regional and local companies manufacturing various
grades of recycled and recycled content paperboard. Our paperboard also competes
with virgin paperboard.
The primary competitive factors in the packaging products and paperboard
industries are price, design, product innovation, quality and service, with
varying emphasis on these factors depending on the product line and customer
preferences. We believe that we compete effectively with respect to each of
these factors. However, to the extent any of our competitors becomes more
successful with respect to any key competitive factor, our business could be
materially adversely affected.
The packaging products and recycled paperboard industries have undergone
significant consolidation in recent years. We believe that current trends within
these industries will result in further consolidation. Within the packaging
products industry, larger corporate customers with an expanded geographic
presence have tended in recent years to seek suppliers who can, because of their
broad geographic presence, efficiently and economically supply all of the
customers' packaging needs. In addition, during recent years, purchasers of
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recycled paperboard and packaging products have demanded higher quality products
meeting stricter quality control requirements. These market trends could
adversely affect our results of operations or, alternatively, favor our products
depending on our competitive position in specific product lines.
GOVERNMENTAL REGULATION
HEALTH AND SAFETY REGULATIONS
Our operations are subject to federal, state, local and foreign laws and
regulations relating to workplace safety and worker health including the
Occupational Safety and Health Act and regulations promulgated thereunder. This
Act, among other things, establishes asbestos and noise standards and regulates
the use of hazardous chemicals in the work place. Although we do not use
asbestos in manufacturing our products, some of our facilities contain asbestos.
For those facilities where asbestos is present we have properly contained this
asbestos or we have implemented comprehensive operations and maintenance plans
for those facilities. We do not believe that future compliance with health and
safety laws and regulations will have a material adverse effect on our results
of operations, financial condition or cash flows.
ENVIRONMENTAL REGULATION
We are subject to various federal, state, local and foreign environmental
laws and regulations, including those regulating the discharge, storage,
handling and disposal of a variety of substances. These laws and regulations
include, among others, the Comprehensive Environmental Response, Compensation
and Liability Act, which we refer to as CERCLA, the Clean Air Act (as amended in
1990), the Clean Water Act, the Resource Conservation and Recovery Act
(including amendments relating to underground tanks) and the Toxic Substances
Control Act. These environmental regulatory programs are primarily administered
by the U.S. Environmental Protection Agency. In addition, some states in which
we operate have adopted equivalent or more stringent environmental laws and
regulations or have enacted their own parallel environmental programs, which are
enforced through various state administrative agencies.
We do not believe that future compliance with these environmental laws and
regulations will have a material adverse effect on our results of operations,
financial condition or cash flows. However, environmental laws and regulations
are becoming increasingly stringent. Consequently, our compliance and
remediation costs could increase materially. In addition, we cannot currently
assess with certainty the impact that the future emissions standards and
enforcement practices under the 1990 amendments to the Clean Air Act will have
on our operations or capital expenditure requirements. However, we believe that
any such impact or capital expenditures will not have a material adverse effect
on our results of operations, financial condition or cash flows.
We estimate that we will spend $1.0 to $2.0 million for capital
expenditures during fiscal year 2001 in connection with matters relating to
environmental compliance.
In addition, we may choose to modify or replace the coal-fired boilers at
two of our facilities in order to operate cost effectively while complying with
emissions regulations under the Clean Air Act. We estimate these improvements
will cost approximately $9.0 million.
We have been identified as a potentially responsible party, which we refer
to as a PRP, at eight active "superfund" sites pursuant to CERCLA or comparable
state statutes. No remediation costs or allocations have been determined with
respect to such sites other than costs that were not material to us. Based upon
currently available information and the opinions of our environmental compliance
managers and general counsel, although there can be no assurance, we believe
that any liability we may have at any site will not have a material adverse
effect on our results of operations, financial condition or cash flows.
On February 9, 1999, we received a letter from the Michigan Department of
Environmental Quality, which we refer to as MDEQ, in which MDEQ alleges that we
are in violation of the Michigan Natural Resources and Environmental Protection
Act, as well as the facility's wastewater discharge permit at one of our
Michigan facilities. The letter alleges that we exceeded several numerical
limitations for chemical parameters outlined in the wastewater permit and
violated other wastewater discharge criteria. MDEQ further
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alleges that we are liable for contamination contained on the facility property
as well as for contributing contamination to the Kalamazoo River site. The
letter requests that we commit, in the form of a binding agreement, to undertake
the necessary and appropriate response activities and response actions to
address contamination in both areas. We have agreed to enter into an
administrative consent order pursuant to which improvements will be made to the
facility's wastewater treatment system and we will pay a $75,000 fine for the
alleged violations. We have also agreed to pay an additional $30,000 for past
and future oversight costs incurred by the State of Michigan. Once the final
order has been executed, we expect to pay this additional amount in three equal
payments over the next three years. The cost of making upgrades to the process
waste system and wastewater treatment systems is estimated to be approximately
$1,000,000. Nothing contained in the order will constitute an admission of
liability or any factual finding, allegation or legal conclusion on our part.
The order is expected to be completed during the first quarter of fiscal 2001.
EMPLOYEES
At September 30, 2000, we had 8,669 employees. Of these employees, 6,745
were hourly and 1,924 were salaried. Approximately 3,105 of our hourly employees
are covered by union collective bargaining agreements, which generally have
three-year terms. We have not experienced any work stoppages in the past 10
years, and management believes that our relations with our employees are good.
ITEM 2. PROPERTIES
The following table shows information about our paperboard mills:
FISCAL 2000
PRODUCTION
CAPACITY
LOCATION OF MILL (IN TONS) PAPERBOARD PRODUCED
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St. Paul, MN........................ 185,000 Recycled corrugating medium
Battle Creek, MI.................... 134,000 Clay-coated recycled paperboard
Aurora, IL.......................... 32,000 Specialty recycled paperboard
Dallas, TX.......................... 169,000 Clay-coated and specialty recycled
paperboard
Lynchburg, VA....................... 116,000* Specialty recycled paperboard
St. Paul, MN........................ 167,000 Clay-coated recycled paperboard
Chattanooga, TN..................... 130,000 Specialty recycled paperboard
Otsego, MI.......................... 87,000 Specialty recycled paperboard
Sheldon Springs, VT (Missisquoi 98,000 Clay-coated recycled paperboard
Mill).............................
Eaton, IN........................... 59,000 Specialty recycled paperboard
Cincinnati, OH...................... 51,000 Specialty recycled paperboard
Stroudsburg, PA..................... 52,000 Clay-coated recycled paperboard
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* Reflects a lower production capacity than fiscal 1999 because of the temporary
shutdown of one of our two paperboard machines at our Lynchburg, Virginia
paperboard mill. This paperboard machine is being converted to manufacture
gypsum wallboard facing paper and is owned by Seven Hills Paperboard, LLC, an
entity in which we own 49% of the equity.
In addition to our paperboard mills set forth above, we also operate 66
converting operations and one distribution facility that are located in 22
states (mainly in the Southwestern, Southeastern, Midwestern and Northeastern
U.S.), Canada, Mexico and Chile. Of our facilities, we own 68 and lease 11. Our
principal executive offices, which we own, are located in Norcross, Georgia. We
believe that our existing production capacity is adequate to service existing
demand for our products. We consider our plants and equipment to be in good
condition.
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ITEM 3. LEGAL PROCEEDINGS
We are a party to litigation incidental to our business from time to time.
We are not currently a party to any litigation that management believes, if
determined adversely to us, would have a material adverse effect on our results
of operations, financial condition or cash flows. For additional information
regarding litigation to which we are a party, which is incorporated by reference
into this item, see "Item 1 -- Business -- Environmental Regulation."
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM X. EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of our company are as follows:
NAME AGE POSITION HELD
- ------------------------------------- --- ------------------------------------------------
James A. Rubright.................... 54 Chairman of the Board and Chief Executive
Officer
Edward E. Bowns...................... 57 Executive Vice President and General Manager of
the Specialty Packaging and Display Group*
David E. Dreibelbis.................. 48 Executive Vice President and General Manager of
the Paperboard Group*
Nicholas G. George................... 50 Executive Vice President and General Manager of
the Folding Carton Group
Steven C. Voorhees................... 46 Executive Vice President and Chief Financial
Officer
Russell M. Currey.................... 39 Senior Vice President of Marketing and Planning
Vincent J. D'Amelio.................. 49 Executive Vice President and General Manager of
the Plastic Packaging Division
Terry W. Durham...................... 45 Executive Vice President and General Manager of
the Laminated Paperboard Products Division
James L. Einstein.................... 55 Executive Vice President and General Manager of
the Alliance Division
Paul J. England...................... 45 Executive Vice President and General Manager of
the Specialty Paperboard Division
Stephen P. Flanagan.................. 46 Executive Vice President and General Manager of
the Recycled Fiber Division
James K. Hansen...................... 62 Executive Vice President and General Manager of
the Coated Paperboard Division
John H. Morrison..................... 57 Executive Vice President and General Manager of
the Corrugated Packaging Division
Richard E. Steed..................... 49 President and Chief Executive Officer of RTS
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* The paperboard group consists of the recycled fiber, specialty paperboard,
coated paperboard and laminated paperboard products divisions and the
specialty packaging and display group consists of the plastic packaging,
corrugated packaging and Alliance divisions and RTS.
James A. Rubright has served as chairman of the board since January 2000
and chief executive officer since October 1999. Mr. Rubright served as
vice-chairman of the board from October 1999 until January 2000. Prior to
joining our company, Mr. Rubright served as executive vice president of Sonat,
Inc. with responsibility for Sonat's interstate natural gas pipeline group since
May 1997 and energy services businesses since May 1998. Mr. Rubright served as
senior vice president, general counsel and chief accounting officer of Sonat,
Inc. from May 1995 to May 1997.
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Edward E. Bowns has served as executive vice president and general manager
of our specialty packaging and display group since November 2000. From November
1990 to October 2000, Mr. Bowns was executive vice president and general manager
of our industrial products group. From February 1986 until November 1990, Mr.
Bowns served as executive vice president and general manager of our partition
division. Mr. Bowns joined our company in October 1980 and has served in various
other capacities.
David E. Dreibelbis has served as executive vice president and general
manager of our paperboard group since November 2000. From September 1992 to
October 2000, Mr. Dreibelbis was the executive vice president and general
manager of our mill group. From July 1985 until September 1992, Mr. Dreibelbis
was executive vice president and general manager of our recycled division. Mr.
Dreibelbis joined our company in April 1979.
Nicholas G. George has served as executive vice president and general
manager of our folding carton group since June 1991. Mr. George was vice
president and general sales manager of our folding carton group from January
1991 until June 1991. Mr. George was vice president of folding sales, western
area, from July 1986 until January 1991. Mr. George joined our company in May
1980.
Steven C. Voorhees has served as executive vice president and chief
financial officer since September 2000. From November 1999 to August 2000, Mr.
Voorhees served as managing partner of Kinetic Partners LLC, a power plant
development and energy consulting firm. From July 1980 to October 2000, Mr.
Voorhees served as an executive of Sonat, Inc., an energy company. From 1995 to
2000, Mr. Voorhees served in a variety of executive positions including
executive vice president of Sonat Marketing, a natural gas marketing company,
executive vice president of Sonat Power Marketing, a natural gas marketing
company and as executive vice president of Sonat Power, a power plant
development company. During this time period Mr. Voorhees also served on the
board of directors of Citrus Corp., a joint venture of Sonat, Inc. and Enron
Corp. holding their respective interest in Florida Gas Transmission Company.
Russell M. Currey has served as senior vice president of marketing and
planning since December 1994. Mr. Currey served as executive vice president and
general manager of our recycled fiber division from September 1992 until August
1994. From February 1990 until September 1992, Mr. Currey served as manager of
strategic development for our paperboard group. From July 1986 until February
1990, he was general manager of one of our recycled fiber plants. Mr. Currey
joined our company in July 1983. Mr. Currey is the son of Bradley Currey, Jr.
and is the nephew of Robert B. Currey, both of whom are directors of our
company.
Vincent J. D'Amelio has served as executive vice president and general
manager of our plastic packaging division since July 1998. From 1994 until July
1998, he was vice president of manufacturing for our plastic packaging division.
Mr. D'Amelio joined our company in 1994.
Terry W. Durham has served as executive vice president and general manager
of our laminated paperboard products division since August 2000. From September
1997 through July 2000, Mr. Durham served as senior vice president and chief
operating officer of RTS. From April 1992 through August 1997, Mr. Durham was
division general manager of the fiber partition division of Sonoco Products
Company.
James L. Einstein has served as executive vice president and general
manager of our Alliance division since November 2000. From January 1995 until
October 2000, Mr. Einstein served as vice president and regional manager of our
display operations. Prior to joining our company, Mr. Einstein served as
president and chief executive officer of Alliance Display and Packaging Company
from 1991 until 1995.
Paul J. England has served as executive vice president and general manager
of our specialty paperboard division since September 1997. Mr. England served as
executive vice president and general manager of our recycled fiber division from
September 1994 until September 1997. From September 1989 to September 1994, Mr.
England served in various capacities, including general manager of one of our
paperboard mills. Mr. England joined our company in September 1989.
Stephen P. Flanagan has served as executive vice president and general
manager of our recycled fiber division since July 1998. From 1983 until 1995, he
was general manager of one of our recycled fiber plants.
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From 1995 until July 1998, Mr. Flanagan served as regional manager, southwest
region, for our recycled fiber division. Mr. Flanagan joined our company in
1983.
James K. Hansen has served as executive vice president and general manager
of our coated paperboard division since September 1997. Mr. Hansen served as
executive vice president and general manager of our mill division from May 1990
until September 1997. From 1984 until May 1990, he was general manager of one of
our paperboard mills. Mr. Hansen joined our company in April 1979.
John H. Morrison has served as executive vice president and general manager
of our corrugated packaging division since November 2000. From March 1986 to
October 2000, Mr. Morrison was executive vice president and general manager of
our corrugated packaging and display division. From 1967 until March 1986, Mr.
Morrison was employed by Union Camp Corporation, serving in various capacities,
including general manager of a corrugated manufacturing plant.
Richard E. Steed has served as the president and chief executive officer of
RTS since September 1997. From December 1991 until September 1997, Mr. Steed
served as executive vice president and general manager of our partition
division. From December 1986 until December 1991, Mr. Steed served as executive
vice president and general manager of our plastic packaging division. Mr. Steed
joined our company in December 1975.
All our executive officers are elected annually by and serve at the
discretion of either the board of directors or the chairman of the board. Mr.
Steed is elected annually and serves at the discretion of the managing board of
RTS.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The market price information under the heading "Shareholder
Information -- Price Range of Class A Common Stock" on page 53, the shareholder
information under the heading "Shareholder Information -- Common Stock" on page
53 and the dividend information under the heading "Five-Year Selected Financial
and Operating Highlights" on page 22 of the Annual Report to Shareholders for
the year ended September 30, 2000 are incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information under the heading "Five-Year Selected Financial and
Operating Highlights" for the years ended September 30, 1996 through 2000 on
page 22 of the Annual Report to Shareholders for the year ended September 30,
2000 is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information under the heading "Management Discussion and Analysis of
Results of Operations and Financial Condition" on pages 23 through 33 of the
Annual Report to Shareholders for the year ended September 30, 2000 is
incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information under the heading "Market Risk Sensitive Instruments and
Positions" on pages 29 through 30 of the Annual Report to Shareholders for the
year ended September 30, 2000 is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following financial statements of our company and our subsidiaries
included in the Annual Report to Shareholders for the year ended September 30,
2000 are incorporated herein by reference:
Consolidated Statements of Operations for the years ended September 30,
2000, 1999 and 1998.
Consolidated Balance Sheets as of September 30, 2000 and 1999.
Consolidated Statements of Shareholders' Equity for the years ended
September 30, 2000, 1999 and 1998.
Consolidated Statements of Cash Flows for the years ended September 30,
2000, 1999 and 1998.
Notes to Consolidated Financial Statements.
The information in Note 12, "Financial Results by Quarter (Unaudited)" for
the years ended September 30, 2000, 1999 and 1998 on page 49 of the Annual
Report to Shareholders for the year ended September 30, 2000 is incorporated
herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
11
12
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The sections under the heading "Election of Directors" entitled "Nominees
for Election -- Term Expiring 2004," "Nominee for Election -- Term Expiring
2002," "Incumbent Directors -- Term Expiring 2003," and "Incumbent
Directors -- Term Expiring 2002" in the Proxy Statement for the Annual Meeting
of Shareholders to be held January 26, 2001 are incorporated herein by reference
for information on the directors of the Registrant. See Item X in Part I hereof
for information regarding the executive officers of the Registrant. The section
under the heading "Other Matters" entitled "Section 16(a) Beneficial Ownership
Reporting Compliance" in the Proxy Statement for the Annual Meeting of
Shareholders to be held on January 26, 2001 is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The section under the heading "Election of Directors" entitled
"Compensation of Directors" and the sections under the heading "Executive
Compensation" entitled "Summary Compensation Table," "Option Grants Table,"
"Aggregated Options Table," "Pension Plan Table" and "Severance Agreements" in
the Proxy Statement for the Annual Meeting of Shareholders to be held on January
26, 2001 are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information under the heading "Common Stock Ownership by Management and
Principal Shareholders" in the Proxy Statement for the Annual Meeting of
Shareholders to be held on January 26, 2001 is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the heading "Certain Transactions" in the Proxy
Statement for the Annual Meeting of Shareholders to be held on January 26, 2001
is incorporated herein by reference.
12
13
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(A) 1. FINANCIAL STATEMENTS.
The following Consolidated Financial Statements of our company and our
consolidated subsidiaries and the Report of the Independent Auditors, included
in our Annual Report to Shareholders for the year ended September 30, 2000 are
incorporated by reference in Part II, Item 8:
Consolidated Statements of Operations for the years ended September 30,
2000, 1999 and 1998.
Consolidated Balance Sheets as of September 30, 2000 and 1999.
Consolidated Statements of Shareholders' Equity for the years ended
September 30, 2000, 1999 and 1998.
Consolidated Statements of Cash Flows for the years ended September 30,
2000, 1999 and 1998.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
No Current Reports on Form 8-K have been filed in the last quarter of
the fiscal year ended September 30, 2000
2. FINANCIAL STATEMENT SCHEDULE OF ROCK-TENN COMPANY.
The following financial statement schedule is included in Part IV of this
report:
Schedule II -- Valuation and Qualifying Accounts.
All other schedules are omitted because they are not applicable or not
required.
3. EXHIBITS.
EXHIBIT
NUMBER
- -------
2.1 -- Stock Purchase Agreement, dated January 21, 1997 between
Rock-Tenn Company and the Shareholders of Wabash Corporation
(incorporated by reference to the Registrant's Current
Report on Form 8-K dated January 21, 1997).
3.1 -- Restated and Amended Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1 to the
Registrant's Registration Statement on Form S-1, File No.
33-73312).
3.2 -- Articles of Amendment to the Registrant's Restated and
Amended Articles of Incorporation.
3.3 -- Bylaws of the Registrant (incorporated by reference to
Exhibit 3.2 to the Registrant's Registration Statement on
Form S-1, File No. 33-73312).
4.1 -- Credit Agreement, dated as of June 30, 2000 among Rock-Tenn
Company, The Lenders listed therein, SunTrust Bank, as
Agent, Bank of America, N.A., as Syndication Agent and
Wachovia Bank, N.A., as Documentation Agent (incorporated by
referenced to Exhibit 10 of the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2000).
4.2 -- Agreement to Provide Other Debt Instruments.
10.1 -- Rock-Tenn Company 1987 Stock Option Plan (incorporated by
reference to Exhibit 10.11 to the Registrant's Registration
Statement on Form S-1, File No. 33-73312).
10.2 -- Rock-Tenn Company 1989 Stock Option Plan (incorporated by
reference to Exhibit 10.12 to the Registrant's Registration
Statement on Form S-1, File No. 33-73312).
10.3 -- Rock-Tenn Company 1993 Employee Stock Option Plan
(incorporated by reference to Exhibit 10.13 to the
Registrant's Registration Statement on Form S-1, File No.
33-73312).
13
14
EXHIBIT
NUMBER
- -------
10.4 -- Rock-Tenn Company Key Employee Incentive Bonus Plan as
amended on October 27, 1994.
10.5 -- Rock-Tenn Company Supplemental Executive Retirement Plan
Effective as of October 1, 1994.
10.6 -- Joint Venture Agreement, dated September 5, 1997 between
Rock-Tenn Company, Rock-Tenn Partition Company, Sonoco
Products Company and Sonoco Partitions, Inc. (incorporated
by reference to Exhibit 10.8 to the Registrant's Annual
Report on Form 10-K for the year ended September 30, 1997).
10.7 -- Contribution Agreement, dated as of September 5, 1997 by and
among Rock-Tenn Company, Rock-Tenn Partition Company and RTS
Packaging, LLC (incorporated by reference to Exhibit 10.9 to
the Registrant's Annual Report on Form 10-K for the year
ended September 30, 1997).
10.8 -- Amended and Restated Operating Agreement of RTS Packaging,
LLC, dated as of September 5, 1997 between Rock-Tenn
Partition Company and Sonoco Partitions, Inc. (incorporated
by reference to Exhibit 10.10 to the Registrant's Annual
Report on Form 10-K for the year ended September 30, 1997).
10.9 -- Retention Agreement, effective October 1, 1999, by and
between Jay Shuster and Rock-Tenn Company (incorporated by
reference to Exhibit 10 of the Registrant's Quarterly Report
on Form 10-Q for the quarter ended December 31, 1999).
10.10 -- Severance Agreement, dated August 24, 2000, by and between
David C. Nicholson and Rock Tenn Company.
12 -- Statement re: Computation of Ratio of Earnings to Fixed
Charges.
13 -- Annual Report to Shareholders submitted herewith but not
"filed," except for those portions expressly incorporated by
reference herein.
21 -- Subsidiaries of the Registrant.
23 -- Report and Consent of Ernst & Young LLP.
27 -- Financial Data Schedule.(for SEC use only)
99.1 -- Audited Financial Statements for the Rock-Tenn Company 1993
Employee Stock Purchase Plan for the years ended September
30, 2000, 1999 and 1998.
99.2 -- Cautionary Statement relative to Forward-Looking Statements.
(B) REPORTS ON FORM 8-K
Not applicable.
(C) SEE ITEM 14(A)(3) AND SEPARATE EXHIBIT INDEX ATTACHED HERETO.
(D) NOT APPLICABLE.
14
15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ROCK-TENN COMPANY
Dated: December 20, 2000 By: /s/ JAMES A. RUBRIGHT
------------------------------------
James A. Rubright
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
- -------------------------------------------- ---------------------------------- -----------------
/s/ JAMES A. RUBRIGHT Director, Chairman of the Board December 20, 2000
- -------------------------------------------- and Chief Executive Officer
James A. Rubright (Principal Executive Officer)
/s/ STEVEN C. VOORHEES Executive Vice President and Chief December 20, 2000
- -------------------------------------------- Financial Officer (Principal
Steven C. Voorhees Financial and Accounting Officer)
/s/ STEPHEN G. ANDERSON Director December 20, 2000
- --------------------------------------------
Stephen G. Anderson
/s/ J. HYATT BROWN Director December 20, 2000
- --------------------------------------------
J. Hyatt Brown
/s/ ROBERT B. CURREY Director December 20, 2000
- --------------------------------------------
Robert B. Currey
/s/ A.D. FRAZIER, JR. Director December 20, 2000
- --------------------------------------------
A.D. Frazier, Jr.
/s/ LAWRENCE L. GELLERSTEDT, III Director December 20, 2000
- --------------------------------------------
Lawrence L. Gellerstedt, III
/s/ JOHN D. HOPKINS Director December 20, 2000
- --------------------------------------------
John D. Hopkins
/s/ LOU BROWN JEWELL Director December 20, 2000
- --------------------------------------------
Lou Brown Jewell
/s/ JAMES W. JOHNSON Director December 20, 2000
- --------------------------------------------
James W. Johnson
/s/ CHARLES R. SEXTON Director December 20, 2000
- --------------------------------------------
Charles R. Sexton
15
16
SIGNATURE TITLE DATE
- -------------------------------------------- ---------------------------------- -----------------
/s/ JOHN W. SPIEGEL Director December 20, 2000
- --------------------------------------------
John W. Spiegel
/s/ BRADLEY CURREY, JR. Director December 20, 2000
- --------------------------------------------
Bradley Currey, Jr.
16
17
INDEX TO EXHIBITS
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION OF EXHIBITS PAGE NO.
- ------- ----------------------- ----------
2.1 -- Stock Purchase Agreement, dated January 21, 1997 between
Rock-Tenn Company and the Shareholders of Wabash Corporation
(incorporated by reference to the Registrant's Current
Report on Form 8-K dated January 21, 1997)
3.1 -- Restated and Amended Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1 to the
Registrant's Registration Statement on Form S-1, File No.
33-73312)
3.2 -- Articles of Amendment to the Registrant's Restated and
Amended Articles of Incorporation
3.3 -- Bylaws of the Registrant (incorporated by reference to
Exhibit 3.2 to the Registrant's Registration Statement on
Form S-1, File No. 33-73312)
4.1 -- Credit Agreement, dated as of June 30, 2000 among Rock-Tenn
Company, The Lender listed therein, SunTrust Bank, as Agent,
Bank of America, N.A., as Syndication Agent and Wachovia
Bank, N.A., as Documentation Agent (incorporated by
reference to Exhibit 10 of the Registrant's Quarterly Report
on Form 10-Q for the quarter ended June 30, 2000).
4.2 -- Agreement to Provide Other Debt Instruments
10.1 -- Rock-Tenn Company 1987 Stock Option Plan (incorporated by
reference to Exhibit 10.11 to the Registrant's Registration
Statement on Form S-1, File No. 33-73312)
10.2 -- Rock-Tenn Company 1989 Stock Option Plan (incorporated by
reference to Exhibit 10.12 to the Registrant's Registration
Statement on Form S-1, File No. 33-73312)
10.3 -- Rock-Tenn Company 1993 Employee Stock Option Plan
(incorporated by reference to Exhibit 10.13 to the
Registrant's Registration Statement on Form S-1, File No.
33-73312)
10.4 -- Rock-Tenn Company Key Employee Incentive Bonus Plan as
amended on October 27, 1994.
10.5 -- Rock-Tenn Company Supplemental Executive Retirement Plan
Effective as of October 1, 1994.
10.6 -- Joint Venture Agreement, dated September 5, 1997 between
Rock-Tenn Company, Rock-Tenn Partition Company, Sonoco
Products Company and Sonoco Partitions, Inc. (incorporated
by reference to Exhibit 10.8 to the Registrant's Annual
Report on Form 10-K for the year ended September 30, 1997)
10.7 -- Contribution Agreement dated as of September 5, 1997 by and
among Rock-Tenn Company, Rock-Tenn Partition Company and RTS
Packaging, LLC (incorporated by reference to Exhibit 10.9 to
the Registrant's Annual Report on Form 10-K for the year
ended September 30, 1997)
10.8 -- Amended and Restated Operating Agreement of RTS Packaging,
LLC, dated as of September 5, 1997 between Rock-Tenn
Partition Company and Sonoco Partitions, Inc. (incorporated
by reference to Exhibit 10.10 to the Registrant's Annual
Report on Form 10-K for the year ended September 30, 1997)
10.9 -- Retention Agreement, effective October 1, 1999, by and
between Jay Shuster and Rock-Tenn Company (incorporated by
reference to Exhibit 10 of the Registrant's Quarterly Report
on Form 10-Q for the quarter ended December 31, 1999)
18
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION OF EXHIBITS PAGE NO.
- ------- ----------------------- ----------
10.10 -- Severance Agreement, dated August 24, 2000, by and between
David C. Nicholson and Rock-Tenn Company.
12 -- Statements re: Computation of Ratio of Earnings to Fixed
Charges
13 -- Annual Report to Shareholders submitted herewith but not
"filed," except for those portions expressly incorporated by
reference herein
21 -- Subsidiaries of the Registrant
23 -- Report and Consent of Ernst & Young LLP
27 -- Financial Data Schedule, (for SEC use only)
99.1 -- Financial Statements for the Rock-Tenn Company 1993 Employee
Stock Purchase Plan for the years ended September 30, 2000,
1999, 1998
99.2 -- Cautionary Statement relative to Forward-Looking Statements
19
SCHEDULE II
ROCK-TENN COMPANY
SEPTEMBER 30, 2000
(IN THOUSANDS)
CHARGED TO
BALANCE AT COSTS BALANCE AT
BEGINNING AND END OF
DESCRIPTION OF PERIOD EXPENSES OTHER DEDUCTIONS PERIOD
- ------------------------------------------- ---------- ---------- ----- ---------- ----------
Year ended September 30, 2000:
Allowance for Doubtful Accounts,
Returns............................... $3,610 $14,338 -- $14,216 $3,732
Reserve for Facility Closures and
Consolidation......................... 2,714 14,785(1) -- 13,719 3,780
Year ended September 30, 1999
Allowance for Doubtful Accounts,
Returns............................... 3,817 11,417 -- 11,624 3,610
Reserve for Facility Closures and
Consolidation......................... 3,884 3,050(1) -- 4,220 2,714
Year ended September 30, 1998:
Allowance for Doubtful Accounts,
Returns............................... 3,632 10,088 -- 9,903 3,817
Reserve for Facility Closures and
Consolidation......................... 5,615 1,903(1) -- 3,634 3,884
- ---------------
(1) This reserve was recorded in connection with plant closings and employee
terminations, net of reversals of $649, $300 and $247 in fiscal 2000, 1999
and 1998, respectively.