Rock-Tenn Reports Strong Sales and Segment Income Increases for the Second Quarter of Fiscal 2008

Rock-Tenn Company (NYSE:RKT) today reported earnings for the quarter ended March 31, 2008 of $0.45 per diluted share. The Company’s adjusted earnings were $0.66 per diluted share, excluding specific items related primarily to the Southern Container acquisition effective March 2, 2008, which represents a 16% increase over the prior year quarter adjusted earnings of $0.57 per diluted share.                             2Q 2Q Six Months Six Months   2008 2007 Fiscal 2008 Fiscal 2007   Net income per diluted share $ 0.45 $ 0.55 $ 0.91 $ 0.94   Acquisition bridge financing fee 0.05 — 0.05 — Unamortized financing fees from prior credit facility 0.03 — 0.03 — Acquisition inventory step-up 0.12 — 0.12 — Restructuring and other costs, net 0.01 0.02 0.06 0.03             Adjusted earnings per diluted share $ 0.66 $ 0.57 $ 1.17 $ 0.97                   Second Quarter Results Net sales of $685.9 million for the second quarter of fiscal 2008 increased $100.2 million, or 17.1%, over the second quarter of fiscal 2007 due to increased net sales in each of our segments and the Southern Container acquisition. Segment income was $57.2 million compared to $54.6 million in the prior year quarter, or an increase of 4.8% over the prior year quarter. Segment income, adjusted to eliminate the acquisition inventory step up discussed below, was $64.3 million, up 17.8% over the prior year quarter. Income for the second quarter of fiscal 2008 was reduced by the acquisition bridge financing fee and write off of deferred financing fees of $4.9 million pre-tax, or $0.08 per diluted share after-tax, in connection with the Southern Container acquisition. GAAP requires that an acquirer step up the value of the inventory acquired, which in the case of finished goods approximates selling price less cost to sell. This effectively eliminates the profit that the acquired company would have realized upon the sale of that inventory. For us, this write up reduced our income for the month of March 2008 by $7.1 million pre-tax, or $0.12 per diluted share after-tax, as the acquired inventory was sold and charged to cost of sales. Rock-Tenn’s pre-tax restructuring and other costs were $0.8 million, or $0.01 per diluted share after-tax, for the second quarter of fiscal 2008 primarily related to Southern Container integration expenses of $1.1 million and deferred compensation expense funded into escrow by Southern Container’s stockholders of $0.7 million for key Southern Container employees that are to be paid one year after the acquisition closing. We must record deferred compensation expense for these payments under GAAP although we have no claim to the escrowed funds. The integration and deferred compensation expense was largely offset by a gain in fair value less cost to sell of a facility held for sale. Rock-Tenn’s pre-tax restructuring and other costs were $1.2 million, or $0.02 per diluted share after-tax, for the second quarter of fiscal 2007. Segment Results In the second quarter of fiscal 2008 we revised our segments to move our St. Paul, MN corrugated medium mill into our Corrugated Packaging segment. All segment information included in the financial statements presented has been reclassified to reflect this revision. We have included the results of Southern Container’s operations since the effective date of the acquisition in our Corrugated Packaging segment. Consumer Packaging Segment Consumer Packaging segment net sales were $336.0 million in the second quarter of fiscal 2008 compared to $312.8 million in the prior year quarter, due to higher unit pricing in the fiscal 2008 quarter and increased sales volumes of approximately 2%. Segment income increased $3.3 million over the prior year quarter to $16.4 million in the second quarter of fiscal 2008. Segment return on sales increased to 4.9% compared to 4.2% in the prior year quarter. Paperboard and Containerboard Tons Shipped and Average Price Total tons shipped in the second quarter of fiscal 2008 increased by 67,793 over the prior year quarter. We shipped 56,183 tons from the Solvay containerboard mill acquired in the Southern Container acquisition, and bleached paperboard and market pulp tons shipped increased 3.3% and 12.9%, respectively, over the prior year quarter to 84,916 and 27,837 tons. The average selling price for all paperboard and containerboard grades increased $16 per ton over the prior year quarter with higher paperboard pricing more than offsetting the effect of including the increased mix of lower priced containerboard. Paperboard Segment Paperboard segment net sales increased $23.3 million in the second quarter of fiscal 2008 from the prior year quarter to $233.7 million on higher selling prices and an increase in tons shipped. Average recycled fiber costs increased $30 per ton over the prior year quarter and energy increased $5 per ton of recycled paperboard. Higher paperboard pricing offset most of these cost increases resulting in slightly lower segment income of $22.2 million compared to $23.4 million in the prior year quarter. Corrugated Packaging Segment Corrugated Packaging segment net sales increased $52.6 million over the prior year quarter to $114.2 million in the second quarter of fiscal 2008. The increase in segment net sales is due to the 29 days we recorded for the Southern Container acquisition and higher volumes and pricing for corrugated sheet stock and packaging. Segment income was $4.9 million in the second quarter of fiscal 2008 and $5.9 million in the prior year quarter. Segment income in the second quarter of fiscal 2008 adjusted for the step up in inventory of $7.1 million pre-tax discussed above, was $12.0 million. Merchandising Displays Segment Merchandising Displays segment net sales increased $11.7 million, or 14.2%, over the prior year second quarter, to $94.3 million in the second quarter of fiscal 2008 on strong demand for promotional displays. Record segment income of $13.7 million was 12.3% higher than the prior year quarter. Chairman and Chief Executive Officer’s Statement Rock-Tenn Company Chairman and Chief Executive Officer James A. Rubright stated, "The increase in Rock-Tenn’s sales and adjusted earnings in this challenging domestic economy demonstrates the resiliency of our food and consumer packaging focused businesses and the growth of our merchandising displays business. The very low cost positions we have achieved in coated recycled and bleached paperboard and containerboard continued to generate strong earnings and cash flow. Southern Container’s operations following the acquisition close exceeded our plan and increased adjusted earnings, as defined herein, by $.05 per share. Our merchandising displays business continued to grow, recording record sales and income during the quarter.” Cash Provided By Operating Activities Net cash provided by operating activities in the second quarter of fiscal 2008 was $12.7 million compared to $36.9 million in the prior year quarter. The decrease was primarily due to the use of funds for an increase in accounts receivable, an increase in our pension contributions compared to the prior year, and an increase in income taxes paid. Conference Call The Company will host a conference call to discuss its results of operations for the second quarter of fiscal 2008 and other topics that may be raised during the discussion at 8:30 a.m., Eastern Time, on April 29, 2008. The conference call will be webcast and can be accessed, along with a copy of this press release, at www.rocktenn.com. About Rock-Tenn Company Rock-Tenn Company is one of North America's leading manufacturers of paperboard, containerboard, packaging and merchandising displays, with pro forma annual net sales of approximately $3.0 billion. The Company operates locations in the United States, Canada, Mexico, Chilé and Argentina. ROCK-TENN COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE AMOUNTS)                     FOR THE THREEMONTHS ENDED FOR THE SIXMONTHS ENDED March 31, March 31, March 31, March 31, 2008 2007 2008 2007               NET SALES $ 685.9 $ 585.7 $ 1,282.2 $ 1,119.6   Cost of Goods Sold 560.0 473.3 1,049.3 909.6               Gross Profit 125.9 112.4 232.9 210.0 Selling, General and Administrative Expenses 75.3 63.5 140.5 124.8 Restructuring and Other Costs, net 0.8 1.2 3.8 1.7               Operating Profit 49.8 47.7 88.6 83.5 Interest Expense (21.6 ) (12.3 ) (33.4 ) (25.3 ) Interest and Other Income, net 0.1 - - 0.2 Equity in Income (Loss) of Unconsolidated Entities 0.2 0.4 (0.1 ) 0.7 Minority Interest in Income of Consolidated Subsidiaries (1.2 ) (1.1 ) (2.1 ) (3.0 )               INCOME BEFORE INCOME TAXES 27.3 34.7 53.0 56.1   Income Tax Expense (10.2 ) (13.0 ) (18.4 ) (19.3 )               NET INCOME $ 17.1 $ 21.7 $ 34.6 $ 36.8               Weighted Average Common Shares Outstanding-Diluted 38.2 39.8 38.1 39.3               Diluted Earnings Per Share $ 0.45   $ 0.55   $ 0.91   $ 0.94     ROCK-TENN COMPANY SEGMENT INFORMATION (UNAUDITED) (IN MILLIONS, EXCEPT TONNAGE DATA)                     FOR THE THREEMONTHS ENDED FOR THE SIXMONTHS ENDED March 31, March 31, March 31, March 31, 2008 2007 2008   2007               NET SALES:   Consumer Packaging Segment $ 336.0 $ 312.8 $ 663.3 $ 615.9 Paperboard Segment 233.7 210.4 447.5 400.7 Corrugated Packaging Segment 114.2 61.6 176.6 118.7 Merchandising Displays Segment 94.3 82.6 176.3 143.5 Intersegment Eliminations (92.3 ) (81.7 ) (181.5 ) (159.2 )               TOTAL NET SALES $ 685.9 $ 585.7 $ 1,282.2 $ 1,119.6               SEGMENT INCOME:   Consumer Packaging Segment $ 16.4 $ 13.1 $ 32.7 $ 24.8 Paperboard Segment 22.2 23.4 41.3 43.1 Corrugated Packaging Segment 4.9 5.9 9.5 11.9 Merchandising Displays Segment 13.7 12.2 21.7 17.3               TOTAL SEGMENT INCOME $ 57.2 $ 54.6 $ 105.2 $ 97.1               Restructuring and Other Costs, net (0.8 ) (1.2 ) (3.8 ) (1.7 ) Non-Allocated Expense (6.4 ) (5.3 ) (12.9 ) (11.2 ) Interest Expense (21.6 ) (12.3 ) (33.4 ) (25.3 ) Interest and Other Income, net 0.1 - - 0.2 Minority Interest in Income of Consolidated Subsidiaries (1.2 ) (1.1 ) (2.1 ) (3.0 )               INCOME BEFORE INCOME TAXES $ 27.3 $ 34.7 $ 53.0 $ 56.1                 Recycled Paperboard Shipped (in tons) 229,003 222,970 446,084 444,476 Containerboard Shipped (in tons) 102,092 46,219 146,791 90,834 Bleached Paperboard Shipped (in tons) 84,916 82,205 164,539 156,173 Pulp Shipped (in tons)   27,837     24,661     49,030       45,544   ROCK-TENN COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN MILLIONS)                   FOR THE THREEMONTHS ENDED   FOR THE SIXMONTHS ENDED March 31, March 31, March 31, March 31,     2008     2007       2008     2007     CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 17.1 $ 21.7 $ 34.6 $ 36.8   Items in income not affecting cash: Depreciation and amortization 31.6 25.5 57.4 51.5 Deferred income tax expense (2.0 ) 4.6 (4.7 ) 8.7 Share-based compensation expense 2.1 1.8 4.1 3.6 (Gain) loss on disposal of plant and equipment and other, net 0.1 0.3 (0.1 ) 1.2 Minority interest in income of consolidated subsidiaries 1.2 1.1 2.1 3.0 Equity in (income) loss of unconsolidated entities (0.2 ) (0.4 ) 0.1 (0.7 ) Proceeds from (payment on) termination of cash flow interest rate hedges - - (3.5 ) (0.2 ) Pension funding (more) less than expense (6.9 ) (1.7 ) (7.8 ) 1.8 Impairment adjustments and other non-cash items (1.4 ) 0.2 0.3 0.1 Changes in operating assets and liabilities, net of acquisitions Accounts receivable (29.2 ) (23.6 ) (11.1 ) (1.8 ) Inventories 11.0 8.6 9.0 (2.6 ) Other assets (2.0 ) (0.3 ) (12.7 ) (3.5 ) Accounts payable 0.9 0.2 (13.5 ) (11.9 ) Income taxes payable (6.0 ) (2.1 ) 3.2 (9.7 ) Accrued liabilities (3.6 ) 1.0 (22.4 ) (7.1 )             NET CASH PROVIDED BY OPERATING ACTIVITIES $ 12.7   $ 36.9     $ 35.0   $ 69.2     INVESTING ACTIVITIES:   Capital expenditures (19.3 ) (23.5 ) (37.2 ) (40.8 ) Cash paid for purchase of businesses, net of cash received (808.4 ) (32.0 ) (809.2 ) (32.0 ) Investment in unconsolidated entities (0.2 ) (0.1 ) (0.2 ) (8.7 ) Return of capital from unconsolidated entities 0.2 0.2 0.4 4.1 Proceeds from sale of property, plant and equipment - 1.4 2.2 2.3 Proceeds from property, plant and equipment insurance settlement - - - 0.4             NET CASH USED FOR INVESTING ACTIVITIES $ (827.7 ) $ (54.0 )   $ (844.0 ) $ (74.7 )   FINANCING ACTIVITIES:   Proceeds from issuance of notes 198.6 - 198.6 - Additions to revolving credit facilities 162.8 31.7 202.3 32.0 Repayments of revolving credit facilities (91.4 ) (31.1 ) (109.1 ) (60.2 ) Additions to debt 756.0 10.1 766.0 21.9 Repayments of debt (162.1 ) (6.3 ) (169.3 ) (14.4 ) Debt issuance costs (27.3 ) - (27.3 ) - Restricted cash and investments (0.7 ) - (0.7 ) - Issuances of common stock 0.8 13.7 1.4 30.0 Excess tax benefits from share-based compensation 0.5 9.0 0.5 14.2 Advances from (repayments to) unconsolidated entity 3.0 (0.5 ) 1.0 (5.0 ) Cash dividends paid to shareholders (3.8 ) (4.0 ) (7.6 ) (7.4 ) Cash distributions to minority interest (0.7 ) (0.3 ) (1.4 ) (1.3 )             NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES $ 835.7   $ 22.3     $ 854.4   $ 9.8     Effect of exchange rate changes on cash and cash equivalents 0.3 0.1 0.3 0.4   INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 21.0 $ 5.3 $ 45.7 $ 4.7   Cash and cash equivalents at beginning of period 35.6 6.3 10.9 6.9               Cash and cash equivalents at end of period $ 56.6 $ 11.6 $ 56.6 $ 11.6               SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Income taxes, net of refunds $ 16.7 $ 1.5 $ 18.2 $ 6.1 Interest, net of amounts capitalized   21.1     20.0     27.0     28.2   ROCK-TENN COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN MILLIONS)                 March 31, December 31, September 30, 2008 2007 2007           ASSETS CURRENT ASSETS: Cash and cash equivalents $ 56.6 $ 35.6 $ 10.9 Restricted cash 8.1 - - Accounts receivable, net 292.5 212.6 230.6 Inventories 274.3 226.5 224.4 Other current assets 39.2 21.1 26.8 Assets held for sale 2.9 - 1.8           TOTAL CURRENT ASSETS 673.6 495.8 494.5           Property, plant and equipment at cost: Land and buildings 377.6 276.2 274.8 Machinery and equipment 1,763.4 1,379.8 1,368.6 Transportation equipment 17.4 11.0 10.8 Leasehold improvements   6.8     5.9     5.9   2,165.2 1,672.9 1,660.1 Less accumulated depreciation and amortization   (861.6 )   (844.9 )   (822.6 ) Net property, plant and equipment 1,303.6 828.0 837.5 Goodwill 788.8 364.9 364.5 Intangibles, net 191.9 66.4 67.6 Investment in unconsolidated entities 30.5 28.3 28.9 Restricted cash and marketable debt securities 11.4 - - Other assets 41.5 15.4 7.7           TOTAL ASSETS $ 3,041.3 $ 1,798.8 $ 1,800.7           LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Current portion of debt $ 247.7 $ 182.7 $ 46.0 Accounts payable 200.6 147.2 161.6 Accrued compensation and benefits 73.3 48.2 73.8 Other current liabilities 73.7 64.3 63.5           TOTAL CURRENT LIABILITIES 595.3 442.4 344.9           Long-term debt due after one year 1,599.2 555.6 667.8 Hedge adjustments resulting from terminated fair value interest rate derivatives or swaps 7.6 8.1 8.5           TOTAL LONG-TERM DEBT 1,606.8 563.7 676.3           Accrued pension and other long-term benefits 39.4 46.2 47.3 Deferred income taxes 141.3 122.9 125.7 Other long-term liabilities 27.8 10.3 7.6 Minority interest 18.4 10.1 9.9   Shareholders' equity 612.3 603.2 589.0           TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,041.3   $ 1,798.8   $ 1,800.7     Rock-Tenn Company Quarterly Statistics           Paperboard and Containerboard Operating Statistics   1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Fiscal Year   Average Price Per Ton (a) (b)   All Tons 2006 $ 524 $ 526 $ 539 $ 561 $ 538 2007 558 571 588 596 578 2008 599 587   Tons Shipped Recycled Paperboard (a) (c) 2006 208,325 223,469 220,596 229,086 881,476 2007 221,506 222,970 225,135 223,527 893,138 2008 217,081 229,003   Containerboard (d) 2006 44,985 45,444 44,165 47,045 181,639 2007 44,615 46,219 45,304 46,793 182,931 2008 44,699 102,092   Bleached Paperboard 2006 79,152 80,719 76,579 83,799 320,249 2007 73,968 82,205 90,102 88,730 335,005 2008 79,623 84,916   Market Pulp 2006 14,994 27,911 23,645 20,019 86,569 2007 20,883 24,661 25,551 24,787 95,882 2008 21,193 27,837   Total (a) (d) 2006 347,456 377,543 364,985 379,949 1,469,933 2007 360,972 376,055 386,092 383,837 1,506,956 2008 362,596 443,848     (a) Average Price Per Ton and Tons Shipped include tons shipped by Seven Hills Paperboard LLC, our unconsolidated joint venture with Lafarge North America, Inc.   (b) Beginning in the second quarter of fiscal 2008, Average Price Per Ton includes coated and specialty recycled paperboard, containerboard, bleached paperboard and market pulp.   (c) Recycled paperboard tons shipped include coated and specialty paperboard.   (d) Containerboard tons shipped include corrugated medium and linerboard, which include the Solvay Mill tons beginning in March 2008.   Rock-Tenn Company Quarterly Statistics           Segment Sales and Segment Income (In Millions)   1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Fiscal Year Consumer Packaging Segment Sales 2006 $ 301.1 $ 319.7 $ 326.2 $ 320.8 $ 1,267.8 2007 303.1 312.8 319.0 326.0 1,260.9 2008 327.3 336.0 Consumer Packaging Segment Income 2006 $ 6.8 $ 13.4 $ 13.2 $ 11.6 $ 45.0 2007 11.7 13.1 12.4 12.1 49.3 2008 16.3 16.4 Return On Sales 2006 2.3 % 4.2 % 4.0 % 3.6 % 3.5 % 2007 3.9 % 4.2 % 3.9 % 3.7 % 3.9 % 2008 5.0 % 4.9 %   Paperboard Segment Sales 2006 $ 171.6 $ 188.0 $ 184.9 $ 200.6 $ 745.1 2007 190.3 210.4 227.2 227.5 855.4 2008 213.8 233.7 Paperboard Segment Income (Loss) 2006 $ (1.2 ) $ 14.2 $ 16.5 $ 25.3 $ 54.8 2007 19.7 23.4 32.3 28.3 103.7 2008 19.1 22.2 Return on Sales 2006 (0.7 )% 7.6 % 8.9 % 12.6 % 7.4 % 2007 10.4 % 11.1 % 14.2 % 12.4 % 12.1 % 2008 8.9 % 9.5 %   Corrugated Packaging Segment Sales 2006 $ 44.5 $ 49.6 $ 55.8 $ 60.4 $ 210.3 2007 57.1 61.6 61.1 62.7 242.5 2008 62.4 114.2 Corrugated Packaging Segment Income 2006 $ 0.6 $ 2.6 $ 3.4 $ 4.8 $ 11.4 2007 6.0 5.9 3.8 3.2 18.9 2008 4.6 4.9 Return on Sales 2006 1.3 % 5.2 % 6.1 % 7.9 % 5.4 % 2007 10.5 % 9.6 % 6.2 % 5.1 % 7.8 % 2008 7.4 % 4.3 %   Merchandising Displays Segment Sales 2006 $ 49.2 $ 55.8 $ 58.8 $ 69.4 $ 233.2 2007 60.9 82.6 76.8 85.5 305.8 2008 82.0 94.3 Merchandising Displays Segment Income 2006 $ 2.8 $ 3.2 $ 1.6 $ 8.8 $ 16.4 2007 5.1 12.2 10.8 10.6 38.7 2008 8.0 13.7 Return on Sales 2006 5.7 % 5.7 % 2.7 % 12.7 % 7.0 % 2007 8.4 % 14.8 % 14.1 % 12.4 % 12.7 % 2008 9.8 % 14.5 %   Rock-Tenn Company Quarterly Statistics           Key Financial Statistics (In Millions, except EPS Data)       1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Fiscal Year   Net Income (Loss) 2006 $ (9.0 ) $ 5.2 $ 11.0 $ 21.5 $ 28.7 2007 15.1 21.7 25.2 19.7 81.7 2008 17.5 17.1   Diluted EPS 2006 $ (0.25 ) $ 0.14 $ 0.30 $ 0.57 $ 0.77 2007 0.39 0.55 0.63 0.50 2.07 2008 0.46 0.45   Depreciation & Amortization 2006 $ 25.8 $ 25.9 $ 26.1 $ 26.5 $ 104.3 2007 26.0 25.5 26.0 26.2 103.7 2008 25.8 31.6   Capital Expenditures 2006 $ 13.5 $ 13.6 $ 19.1 $ 18.4 $ 64.6 2007 17.3 23.5 17.9 19.3 78.0 2008 17.9 19.3 Non-GAAP Measures We have included financial measures that are not prepared in accordance with GAAP. Any analysis of non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP. Below, we define the non-GAAP financial measures, provide a reconciliation of each non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with GAAP, and discuss the reasons that we believe this information is useful to management and may be useful to investors. These measures may differ from similarly captioned measures of other companies in our industry. Net Debt We have defined the non-GAAP measure "net debt” to include the aggregate debt obligations reflected in our consolidated balance sheet, less the hedge adjustments resulting from terminated fair value interest rate derivatives or swaps, the balance of our cash and cash equivalents, restricted cash and certain other investments that we consider to be readily available to satisfy these debt obligations. Our management uses net debt, along with other factors, to evaluate our financial condition. We believe that net debt is an appropriate supplemental measure of financial condition because it provides a more complete understanding of our financial condition before the impact of our decisions regarding the appropriate use of cash and liquid investments. Set forth below is a reconciliation of "net debt” to the most directly comparable GAAP measures, Current Portion of Debt and Total Long-Term Debt:       (In Millions) March 31, December 31, September 30, 2008 2007 2007   Current Portion of Debt $ 247.7 $ 182.7 $ 46.0 Total Long-Term Debt   1,606.8     563.7     676.3   1,854.5 746.4 722.3 Less: Hedge Adjustments Resulting From Terminated Fair Value Interest Rate Derivatives or Swaps   (7.6 )   (8.1 )   (8.5 ) 1,846.9 738.3 713.8 Less: Cash and Cash Equivalents (56.6 ) (35.6 ) (10.9 ) Less: Restricted Cash   (19.5 )   —     —   Net Debt $ 1,770.8   $ 702.7   $ 702.9   Adjusted Net Income and Adjusted Earnings per Diluted Share We also use the non-GAAP measures "adjusted net income” and "adjusted earnings per diluted share”. Management believes these non-GAAP financial measures provide our board of directors, investors, potential investors, securities analysts and others with useful information to evaluate the performance of the Company because it excludes restructuring and other costs, net, and other specific items that management believes are not indicative of the ongoing operating results of the business. The Company and the board of directors use this information to evaluate the Company’s performance relative to other periods. Set forth below are reconciliations of "adjusted net income” and "adjusted earnings per diluted share” to the most directly comparable GAAP measures, Net Income and Net Income per Diluted Share, respectively:                       (In Millions) 2Q 2Q Six Months Six Months   2008 2007 Fiscal 2008 Fiscal 2007   Net income $ 17.1 $ 21.7 $ 34.6 $ 36.8   Acquisition bridge financing fee 1.9 — 1.9 — Unamortized financing fees from prior credit facility 1.2 — 1.2 — Acquisition inventory step-up 4.3 — 4.3 — Restructuring and other costs, net – net of tax 0.5 0.8 2.4 1.1             Adjusted net income $ 25.0 $ 22.5 $ 44.4 $ 37.9                                         2Q 2Q Six Months Six Months   2008 2007 Fiscal 2008 Fiscal 2007   Net income per diluted share $ 0.45 $ 0.55 $ 0.91 $ 0.94   Acquisition bridge financing fee 0.05 — 0.05 — Unamortized financing fees from prior credit facility 0.03 — 0.03 — Acquisition inventory step-up 0.12 — 0.12 — Restructuring and other costs, net 0.01 0.02 0.06 0.03             Adjusted earnings per diluted share $ 0.66 $ 0.57 $ 1.17 $ 0.97