Buckeye Technologies Inc. (NYSE:BKI) today announced fourth quarter net income of $9.7 million or $0.24 per share. This compared to net income of $46.5 million or $1.20 per share in the prior year comparable period, which included net income of $39.6 million, or $1.02 per share, from alternative fuel mixture credits (“AFMC”). Adjusted net income* for the quarter (excluding certain items described below) was $10.6 million, or $0.26 per share versus fourth quarter fiscal 2009 adjusted net income $6.8 million, or $0.18 per share. Net sales were $205 million for the fourth quarter of fiscal 2010, up 16% versus net sales of $177 million in the fourth quarter of fiscal 2009.

Operating income for our specialty fibers segment was up $7.9 million in the fourth quarter compared to the same quarter a year ago, largely due to the return to profitability of our Memphis cotton specialty fibers plant. Our wood specialty fibers business benefited from higher fluff pulp prices, a favorable sales mix and lower input costs, but these improvements were offset by the impact of the June power outage ($4.2 million pre-tax or $0.07 per share) and other scheduled maintenance outages that took place during the quarter. Operating income for the nonwovens segment was down $0.6 million despite a 3% increase in shipment volume due to rising fluff pulp costs and unfavorable currency movements. Interest expense was down almost 50% year over year, but this benefit was offset by a return to a more normal effective tax rate in Q4 of this year compared to an unusually low tax rate in Q4 of last year.

Comparing the fourth quarter to the third quarter, adjusted EPS* was down $0.02, which was again impacted by the power outage. Shipment volume overall was flat, with nonwovens shipment volume up 7% and specialty fibers volume off 1%. Higher overall selling prices outweighed input cost increases driven by higher prices for cotton linters and purchased fluff pulp. Foley production volume was off approximately 8,000 tons versus the third quarter, 5,000 tons of which was due to the June power outage.

For fiscal year 2010, net sales were $756 million, up slightly from $755 million in fiscal 2009. Net income for the 2010 fiscal year was a record $115 million or $2.90 per share, which included income from AFMC of $1.94 per share. Excluding AFMC, goodwill impairment charges, and other special items, adjusted net income* for the entire fiscal year was $34.9 million, or $0.88 per share, compared to $22.6 million, or $0.58 per share in fiscal 2009.

Chairman and Chief Executive Officer John B. Crowe said, “Buckeye’s fourth quarter results were good, showing improvement compared to the same quarter a year ago. While earnings were down from the third quarter, I was pleased with the overall performance given the negative impact of the June 17th power failure and resulting voltage surge at our Florida facility. It is times like this when you see the strength and can-do attitude of your organization, which succeeded in holding the outage to a total of five days. Strong customer demand and increased selling prices were not enough to offset the $4.2 million in lost absorption and expenses associated with the outage and recovery during the quarter.”

Mr. Crowe continued, “We reduced total debt during the quarter to $238 million, which was significantly below our target of $250 million. During the 2010 fiscal year, we reduced our total debt by $90 million. Last week, we received a $67 million income tax refund for fiscal year 2010 and at the close of business on August 2nd, our total debt was less than $165 million. Buckeye is now well positioned to take a more balanced approach to the allocation of capital going forward, and to that end will begin paying a regular quarterly cash dividend of $0.04 per share, the first in the history of the Company, on September 15.”

Buckeye has scheduled a conference call for Wednesday morning, August 4, at 11:00 a.m. ET to discuss fourth quarter and fiscal year performance. Persons interested in listening by telephone may dial in at (877) 604-9673 within the United States. International callers should dial (719) 325-4792. Supplemental material for the call will be available on the Company’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.

*This release includes certain financial information not derived in accordance with generally accepted accounting principles (“GAAP”). The non-GAAP measures used are “adjusted operating income,” “adjusted net income,” and “adjusted earnings per share” and are equal to net income, operating income and earnings per share excluding income from alternative fuel mixture credits, goodwill impairment, restructuring cost, early debt extinguishment cost and investment tax credits relating to prior period expenditures. 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.