Seventh graph, first sentence of release should read: Buckeye has scheduled a conference call for October 28, 2010 at 9:00 a.m. ET to discuss first quarter fiscal year 2011 results. (sted Buckeye has scheduled a conference call for October 28, 2009 at 9:00 a.m. ET to discuss first quarter fiscal year 2011 results.).
The corrected release reads:
BUCKEYE ANNOUNCES FIRST QUARTER FY 2011 RESULTS
Net Income of $64.4 million or $1.59 per share including $51.3 million or $1.26 per share from Cellulosic Biofuel Credits
Adjusted 1Q EPS of $0.34 compared to $0.12 in 1Q-FY10 and $0.26 in 4Q-FY10
Sales up 14.0% versus Year-Ago Quarter
Reduced Long-term Debt by an additional $73 million
Retired remaining $140MM of Public Notes and closed on new 5-year $300 million Bank Revolver in October
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 (“CBC”) 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 (“AFMC”).
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, “Buckeye’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 – $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.”
Mr. Crowe went on to say, “This 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 $500 million in stockholder’s equity for the first time since becoming a public company. We continue to be encouraged about our outlook.”
Buckeye has scheduled a conference call for October 28, 2010 at 9:00 a.m. ET to discuss first quarter fiscal year 2011 results. Those interested in listening by telephone may dial in at (888) 437-9318 within the United States. International callers should dial (719) 325-2103. Supplemental material for the call will be available on the Company’s website at www.bkitech.com or at www.streetevents.com.
Buckeye, a leading manufacturer and marketer of specialty fibers and nonwoven materials, is headquartered in Memphis, Tennessee, USA. The Company currently operates facilities in the United States, Germany, Canada, and Brazil. Its products are sold worldwide to makers of consumer and industrial goods.
Note Regarding Non-GAAP Financial Measures
*This release includes certain financial information not derived in accordance with generally accepted accounting principles (“GAAP”). The non-GAAP measures used are “adjusted operating income”, “adjusted net income”, and “adjusted earnings per share” and are equal to net income, operating income and earnings per share excluding income from alternative fuel mixture credits, cellulosic biofuel credits, restructuring cost and early debt extinguishment cost. The Company believes that the presentation of these non-GAAP measures provides information that is useful to investors as it allows for a more meaningful comparison of these financial measures to prior periods, but this information should not be considered a substitute for any measures derived in accordance with GAAP. The Company manages its business units by financial measures which exclude these two items. Operating income and earnings per share targets for our all-employee bonus and at-risk compensation also exclude the benefit of all of these items.
1st Quarter | 4th Quarter | ||||||||||
($ in Millions) | 2011 | 2010 | 2010 | ||||||||
Operating income | |||||||||||
Operating income in accordance with GAAP | 23.6 | 48.0 | 19.1 | ||||||||
Special items: | |||||||||||
Restructuring costs | 0.6 | 0.7 | 0.1 | ||||||||
AFMC / CBC | --- | (35.8 | ) | --- | |||||||
Adjusted operating income | 24.2 | 12.9 | 19.2 | ||||||||
Net income | |||||||||||
Net income in accordance with GAAP | 64.4 | 39.2 | 9.7 | ||||||||
Special items, after-tax: | |||||||||||
Restructuring costs | 0.6 | 0.5 | 0.1 | ||||||||
AFMC / CBC | (51.3 | ) | (35.1 | ) | --- | ||||||
Early Extinguishment of Debt | --- | (0.1 | ) | 0.8 | |||||||
Adjusted net income | 13.7 | 4.5 | 10.6 | ||||||||
Earnings per share (EPS) | |||||||||||
EPS in accordance with GAAP | $ | 1.59 | $ | 1.00 | $ | 0.24 | |||||
Special items, after-tax, per share: | |||||||||||
Restructuring costs | 0.01 | 0.01 | --- | ||||||||
AFMC / CBC | (1.26 | ) | (0.89 | ) | --- | ||||||
Early Extinguishment of Debt | --- | --- | 0.02 | ||||||||
Adjusted EPS | $ | 0.34 | $ | 0.12 | $ | 0.26 |
Note Regarding Forward-Looking Statements
This press release also contains forward-looking statements within the meaning of 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. “Forward-looking statements” generally can be identified by the use of forward-looking terminology such as “assumptions,” “target,” “guidance,” “outlook,” “plans,” “projection,” “may,” “will,” “would,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “potential,” or “continue (or the negative or other derivatives of each of these terms or similar terminology). The “forward-looking statements” 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 management’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 Company’s Annual Report on Form 10-K and other period filings with the Securities and Exchange Commission.
BUCKEYE TECHNOLOGIES INC. | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(unaudited) | ||||||||||||
(In thousands, except per share data) | ||||||||||||
Three Months Ended | ||||||||||||
September 30, 2010 | June 30, 2010 | September 30, 2009 | ||||||||||
Net sales | $ | 202,075 | $ | 205,130 | $ | 177,274 | ||||||
Cost of goods sold | 165,762 | 171,995 | 152,367 | |||||||||
Gross margin | 36,313 | 33,135 | 24,907 | |||||||||
Gross margin as a percentage of sales | 18.0 | % | 16.2 | % | 14.0 | % | ||||||
Selling, research and administrative expenses | 11,671 | 13,441 | 11,549 | |||||||||
Amortization of intangibles and other | 479 | 483 | 473 | |||||||||
Restructuring costs | 552 | 144 | 764 | |||||||||
Alternative fuel mixture credits | - | - | (35,842 | ) | ||||||||
Other operating income | (7 | ) | (27 | ) | - | |||||||
Operating income | 23,618 | 19,094 | 47,963 | |||||||||
Net interest expense and amortization of debt costs | (3,597 | ) | (3,671 | ) | (5,289 | ) | ||||||
Early extinguishment of debt | - | (1,234 | ) | 165 | ||||||||
Foreign exchange and other | (614 | ) | 172 | (100 | ) | |||||||
Income before income taxes | 19,407 | 14,361 | 42,739 | |||||||||
Income tax expense (benefit) | (45,018 | ) | 4,645 | 3,507 | ||||||||
Net income | $ | 64,425 | $ | 9,716 | $ | 39,232 | ||||||
Computation of diluted earnings per share under the two-class method | ||||||||||||
Net income attributable to shareholders | $ | 64,425 | $ | 9,716 | $ | 39,232 | ||||||
Less: Distributed and undistributed income allocated to participating securities | (1,186 | ) | - | - | ||||||||
Distributed and undistributed income available to shareholders | $ | 63,239 | $ | 9,716 | $ | 39,232 | ||||||
Diluted average weighted shares outstanding | 39,716 | 39,964 | 39,136 | |||||||||
Diluted earnings per share | $ | 1.59 | $ | 0.24 | $ | 1.00 |
BUCKEYE TECHNOLOGIES INC. | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
(In thousands) | |||||||||
September 30 | June 30 | September 30 | |||||||
2010 | 2010 | 2009 | |||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 22,400 | $ | 22,121 | $ | 23,255 | |||
Accounts receivable, net | 126,887 | 122,960 | 113,395 | ||||||
Income tax and AFMC Receivable | 24,513 | 68,356 | 32,114 | ||||||
Inventories | 85,862 | 74,850 | 82,861 | ||||||
Deferred income taxes and other | 10,101 | 9,541 | 7,382 | ||||||
Total current assets | 269,763 | 297,828 | 259,007 | ||||||
Property, plant and equipment, net | 530,790 | 524,475 | 532,851 | ||||||
Goodwill | 2,425 | 2,425 | 2,425 | ||||||
Deferred income taxes | 14,824 | - | - | ||||||
Intellectual property and other, net | 26,569 | 27,726 | 26,141 | ||||||
Total assets | $ | 844,371 | $ | 852,454 | $ | 820,424 | |||
Liabilities and stockholders' equity | |||||||||
Current liabilities: | |||||||||
Trade accounts payable | $ | 33,715 | $ | 39,376 | $ | 28,943 | |||
Accrued expenses | 49,020 | 44,007 | 42,922 | ||||||
Short-term debt | - | 198 | - | ||||||
Current portion of long-term debt | 17,580 | 67,000 | - | ||||||
Total current liabilities | 100,315 | 150,581 | 71,865 | ||||||
Long-term debt | 147,420 | 170,332 | 295,000 | ||||||
Deferred income taxes | 6,602 | 56,344 | 48,961 | ||||||
Other liabilities | 77,644 | 37,876 | 34,722 | ||||||
Stockholders' equity | 512,390 | 437,321 | 369,876 | ||||||
Total liabilities and stockholders' equity | $ | 844,371 | $ | 852,454 | $ | 820,424 |
BUCKEYE TECHNOLOGIES INC. | ||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
(unaudited) | ||||||||||||||
(In thousands) | ||||||||||||||
Three Months Ended | ||||||||||||||
September 30, 2010 | June 30, 2010 | September 30, 2009 | ||||||||||||
OPERATING ACTIVITIES | ||||||||||||||
Net income | $ | 64,425 | $ | 9,716 | $ | 39,232 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation | 11,974 | 11,951 | 11,294 | |||||||||||
Amortization | 677 | 670 | 748 | |||||||||||
Loss on early extinguishment of debt | - | 1,234 | (165 | ) | ||||||||||
Deferred income taxes | (65,435 | ) | 7,583 | 201 | ||||||||||
Noncurrent AFMC refund payable | 41,144 | - | - | |||||||||||
Loss (gain) on disposal of equipment | 99 | (459 | ) | 31 | ||||||||||
Provision for bad debts | 112 | 270 | (159 | ) | ||||||||||
Excess tax benefit from stock based compensation | (10 | ) | (707 | ) | - | |||||||||
Stock-based compensation expense | 817 | 563 | - | |||||||||||
Other | (132 | ) | 6,148 | (414 | ) | |||||||||
Change in operating assets and liabilities | ||||||||||||||
Accounts receivable | (1,376 | ) | (7,837 | ) | (201 | ) | ||||||||
Income tax and AFMC receivable | 43,843 | 5,453 | (22,740 | ) | ||||||||||
Inventories | (9,749 | ) | 7,205 | 5,769 | ||||||||||
Other assets | 897 | (1,054 | ) | (1,400 | ) | |||||||||
Accounts payable and other liabilities | (5,246 | ) | 10,355 | 1,905 | ||||||||||
Net cash provided by operating activities | 82,040 | 51,091 | 34,101 | |||||||||||
INVESTING ACTIVITIES | ||||||||||||||
Purchases of property, plant & equipment | (11,916 | ) | (17,771 | ) | (8,762 | ) | ||||||||
Proceeds from sale of assets | 4 | 8 | - | |||||||||||
Proceeds from State of Florida grant | - | - | 7,381 | |||||||||||
Other | (72 | ) | (110 | ) | (16 | ) | ||||||||
Net cash used in investing activities | (11,984 | ) | (17,873 | ) | (1,397 | ) | ||||||||
FINANCING ACTIVITIES | ||||||||||||||
Net borrowings (payments) under line of credit | (72,534 | ) | (10,497 | ) | 77,529 | |||||||||
Payments on long term debt and other | - | (25,000 | ) | (110,000 | ) | |||||||||
Payments for debt issuance costs | - | (650 | ) | - | ||||||||||
Payments related to early extinguishment of debt | - | (1,700 | ) | - | ||||||||||
Excess tax benefit from stock based compensation | 10 | 707 | - | |||||||||||
Net proceeds from sale of equity interests | 41 | 3,906 | 122 | |||||||||||
Payment of dividend | (1,617 | ) | - | |||||||||||
Other | - | (684 | ) | - | ||||||||||
Net cash used in financing activities | (74,100 | ) | (33,918 | ) | (32,349 | ) | ||||||||
Effect of foreign currency rate fluctuations on cash | 4,323 | (4,114 | ) | 839 | ||||||||||
Increase (decrease) in cash and cash equivalents | 279 | (4,814 | ) | 1,194 | ||||||||||
Cash and cash equivalents at beginning of period | 22,121 | 26,935 | 22,061 | |||||||||||
Cash and cash equivalents at end of period | $ | 22,400 | $ | 22,121 | $ | 23,255 |
BUCKEYE TECHNOLOGIES INC. | |||||||||||||
SUPPLEMENTAL FINANCIAL DATA | |||||||||||||
(unaudited) | |||||||||||||
(In thousands) | |||||||||||||
Three Months Ended | |||||||||||||
SEGMENT RESULTS | September 30, 2010 | June 30, 2010 | September 30, 2009 | ||||||||||
Specialty Fibers | |||||||||||||
Net sales | $ | 142,792 | $ | 148,690 | $ | 122,159 | |||||||
Operating income (a) | 22,140 | 19,276 | 8,537 | ||||||||||
Depreciation and amortization (b) | 7,787 | 7,760 | 7,040 | ||||||||||
Capital expenditures | 10,903 | 16,026 | 7,436 | ||||||||||
Nonwoven Materials | |||||||||||||
Net sales | $ | 68,120 | $ | 63,912 | $ | 62,728 | |||||||
Operating income (a) | 4,603 | 3,746 | 5,144 | ||||||||||
Depreciation and amortization (b) | 3,727 | 3,642 | 3,807 | ||||||||||
Capital expenditures | 782 | 1,445 | 728 | ||||||||||
Corporate | |||||||||||||
Net sales | $ | (8,837 | ) | $ | (7,472 | ) | $ | (7,613 | ) | ||||
Operating income (loss) (a) | (3,125 | ) | (3,928 | ) | 34,282 | ||||||||
Depreciation and amortization (b) | 939 | 1,033 | 921 | ||||||||||
Capital expenditures | 231 | 300 | 598 | ||||||||||
Total | |||||||||||||
Net sales | $ | 202,075 | $ | 205,130 | $ | 177,274 | |||||||
Operating income (loss) (a) | 23,618 | 19,094 | 47,963 | ||||||||||
Depreciation and amortization (b) | 12,453 | 12,435 | 11,768 | ||||||||||
Capital expenditures | 11,916 | 17,771 | 8,762 | ||||||||||
(a) The corporate segment includes operating elements such as segment eliminations, amortization of intangibles, impairment of long-lived assets, alternative fuel mixture credits, charges related to restructuring, unallocated at-risk compensation and unallocated stock-based compensation for executive officers and certain other employees. Corporate net sales represents the elimination of intersegment sales included in the specialty fibers reporting segment. | |||||||||||||
(b) Depreciation and amortization includes depreciation, depletion and amortization of intangibles. | |||||||||||||
Three Months Ended | |||||||||||||
ADJUSTED EBITDA | September 30, 2010 | June 30, 2010 | September 30, 2009 | ||||||||||
Net income (loss) | $ | 64,425 | $ | 9,716 | $ | 39,232 | |||||||
Income tax expense | (45,018 | ) | 4,645 | 3,507 | |||||||||
Interest expense | 3,433 | 3,493 | 5,067 | ||||||||||
Amortization of debt costs | 198 | 187 | 269 | ||||||||||
Early extinguishment of debt | - | 525 | (165 | ) | |||||||||
Depreciation, depletion and amortization | 12,453 | 12,434 | 11,767 | ||||||||||
Alternative Fuel Mixture Credits | - | - | (35,842 | ) | |||||||||
EBITDA | 35,491 | 31,000 | 23,835 | ||||||||||
Non cash charges | 100 | 657 | 90 | ||||||||||
Adjusted EBITDA | $ | 35,591 | $ | 31,657 | $ | 23,925 | |||||||
We calculate EBITDA as earnings before cumulative effect of change in accounting plus interest expense, income taxes and depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by adding back the following items: asset impairment charges, non-cash charges and other (gains) losses and deducting any non-cash expense associated with alternative fuel mixture credits. You should not consider adjusted EBITDA to be an alternative measure of our net income, as an indicator of operating performance; or our cash flow, as an indicator of liquidity. Adjusted EBITDA corresponds with the definition contained in our US revolving credit facility, established on October 22, 2010, and it provides useful information concerning our ability to comply with debt covenants. Although we believe adjusted EBITDA enhances your understanding of our financial condition, this measure, when viewed individually, is not a better indicator of any trend as compared to other measures (e.g., net sales, net earnings, net cash flows, etc.). Prior period amounts have been adjusted to conform to the definition contained in our new credit facility. |
Contacts:
Steve Dean, 901-320-8352
Senior Vice
President and Chief Financial Officer
or
Daryn Abercrombie,
901-320-8908
Investor Relations
www.bkitech.com