Adjusted net income for the 2012 fiscal year was a record $111 million, or $2.76 per share, compared to $91 million or $2.23 per share in fiscal 2011.
The growth in adjusted net income was due to significantly higher selling prices for our high-end specialty wood and cotton fiber products which more than offset the impact of lower fluff pulp prices. Net income also benefited in fiscal year 2012 from reduced selling, research and administrative expenses and lower interest expense.
Fourth quarter adjusted net income was $26.2 million or $0.66 per share. This excludes net after-tax charges of $2.8 million, or $0.08 per share, primarily relating to the sale of our Americana, Brazil cotton linter pulp plant and adjustments relating to the cellulosic biofuel credit.
Adjusted net income was off slightly compared to the prior year period’s $27.8 million or $0.68 per share, which excluded an after-tax non-cash asset impairment charge of $13.0 million, or $0.32 per share, relating to plans to close our Canadian nonwovens plant by the end of December 2012 as well as other special items of $0.6 million or $0.01 per share.
Net sales were $225 million for the fourth quarter of fiscal 2012, down $24 million or 10% versus record net sales of $249 million in the fourth quarter of fiscal 2011 (which have been adjusted to exclude discontinued Americana operations). About $5 million of the reduction in sales was related to the divestiture of our King converting business. Sales from our Foley specialty wood plant were down $10 million due to lower shipment volume. Last year’s sales benefited from significant shipments from inventory.
Sales from the Memphis specialty cotton plant were off $5 million due to supply chain inventory corrections and lower growth projections in the LED TV market. In spite of the reduction in sales revenue and the $0.06 negative earnings impact of the June steam drum failure outage at Foley, adjusted EPS of $0.66 was only down by $0.02 per share compared to the year ago quarter.
Higher selling prices in Specialty Fibers, lower costs and the elimination of underperforming businesses offset most of the impact of lower sales revenue and the June production outage. We generated $50 million in free cash flow during the quarter, including $6 million in net proceeds from the sale of our Americana assets.
We repurchased 750,000 shares ($22 million) during the quarter, bringing total year repurchases to 1.2 million shares ($33 million), or 3% of outstanding shares at the beginning of the year. We also reduced debt by $12 million to $59 million. At the end of the quarter our cash and short term investments stood at $47 million.
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