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Buckeye Announces First Quarter FY 2011 Results

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  Published in House and Home on Wednesday, October 27th 2010 at 14:22 GMT by Market Wire
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MEMPHIS, Tenn.--([ BUSINESS WIRE ])--Buckeye Technologies Inc. (NYSE:BKI) today announced first quarter net income of $64.4 million or $1.59 per share. First quarter earnings included net income of $51.3 million, or $1.26 per share, from cellulosic biofuel credits (aCBCa) generated in 2009. This compared to net income of $39.2 million or $1.00 per share in the prior year comparable period, which included net income of $35.1 million, or $0.89 per share, from alternative fuel mixture credits (aAFMCa).

"continue (or the negative or other derivatives of each of these terms or similar terminology). The aforward-looking statements"

Net sales were $202 million for the first quarter of fiscal 2011, up 14% versus net sales of $177 million in the first quarter of fiscal 2010 due to higher selling prices and improved mix. Shipment volume for the specialty fibers segment was down 7% year over year as we rebuilt inventories after the fourth quarter power outage at our Florida specialty wood pulp facility and limited raw material availability constrained shipments from our specialty cotton fibers plants. Nonwovens shipment volume was up 9% year over year.

Excluding income from the AFMC and CBC tax credits and certain other items listed below*, adjusted net income was $13.7 million, or $0.34 per share versus first quarter fiscal 2010 net income of $4.5 million, or $0.12 per share. The $0.22 per share increase in adjusted EPS, compared to last year, was largely driven by higher selling prices and improved mix in the specialty fibers segment.

Comparing the first quarter to the fourth quarter of FY10, adjusted EPS* was up $0.08. Sales were down $3 million in spite of higher selling prices as shipment volume overall was down 5%. Increased selling prices on fluff pulp and specialty cotton fibers combined with increased nonwovens production and shipment volumes accounted for about half of the improved profitability in the first quarter. The reduced impact of the fourth quarter power outage on the first quarter of FY11 relative to the fourth quarter of FY10 accounted for the rest of the improvement.

Chairman and Chief Executive Officer John B. Crowe said, aBuckeyea™s first quarter results exceeded our expectations going into the quarter. Earnings showed strong improvement compared both to the same quarter a year ago and to the immediately preceding quarter. We continue to be sold out in specialty wood and can sell all the cotton pulp we can make although we are still raw material constrained. Fluff pulp demand and prices continue to be strong. Nonwovens demand continues to grow. Input costs have remained fairly stable with the exception of cotton linters. We continue to work on profit improvement initiatives, and as such during the quarter we made the decision to consolidate all production at our Delta, B.C. Canada airlaid facility on the newer of the two machines at that site. This is expected to result in a cost reduction of $2.5 a" $3.0 million per year, and a total restructuring charge of approximately $1 million over the first two quarters of this fiscal year. Our Foley energy independence project is on schedule with phase one coming on line next month and full completion scheduled for the fall of 2011.a

Mr. Crowe went on to say, aThis was a milestone quarter for Buckeye, as we paid our first ever quarterly dividend in September, retired all of our remaining public debt on October 1, and put a new 5-year $300 million bank revolver in place on October 22. We also exceeded $500 million in stockholdera™s equity for the first time since becoming a public company. We continue to be encouraged about our outlook.a

Buckeye has scheduled a conference call forOctober 28, 2009 at 9:00 a.m. ET to discuss first quarter fiscal year 2011 results. Those interested in listening by telephone may dial in at (888) 437-9318within the United States. International callers should dial(719) 325-2103. Supplemental material for the call will be available on the Companya™s website at [ www.bkitech.com ] or at [ www.streetevents.com ].

Buckeye, a leading manufacturer and marketer of specialty fibers and nonwoven materials, is headquartered in Memphis, Tennessee, USA. The Company currently operates facilities in the United States, Germany, Canada, and Brazil. Its products are sold worldwide to makers of consumer and industrial goods.

Note Regarding Non-GAAP Financial Measures

*This release includes certain financial information not derived in accordance with generally accepted accounting principles (aGAAPa).The non-GAAP measures used are aadjusted operating incomea, aadjusted net incomea, and aadjusted earnings per sharea and are equal to net income, operating income and earnings per share excluding income from alternative fuel mixture credits, cellulosic biofuel credits, restructuring cost and early debt extinguishment cost.The Company believes that the presentation of these non-GAAP measures provides information that is useful to investors as it allows for a more meaningful comparison of these financial measures to prior periods, but this information should not be considered a substitute for any measures derived in accordance with GAAP.The Company manages its business units by financial measures which exclude these two items. Operating income and earnings per share targets for our all-employee bonus and at-risk compensation also exclude the benefit of all of these items.

Note Regarding Forward-Looking Statements

This press release also contains forward-looking statements within the meaningof the federal securities laws and is intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. aForward-looking statementsa generally can be identified by the use of forward-looking terminology such as aassumptions,a atarget,a aguidance,a aoutlook,a aplans,a aprojection,a amay,a awill,a awould,a aexpect,a aintend,a aestimate,a aanticipate,a abelieve,a apotential,a or acontinue (or the negative or other derivatives of each of these terms or similar terminology). The aforward-looking statementsa include, without limitation, statements regarding the economic outlook for the Company and the demand for its products, expected cost reductions and restructuring charges and the expected completion of our Foley energy independence project. These statements are based on managementa™s estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results could differ materially from those projected as a result of certain factors. A discussion of factors that could cause results to vary is included in the Companya™s Annual Report on Form 10-K and other period filings with the Securities and Exchange Commission.