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Lower nonwovens sales at Buckeye
18
Aug '08
Buckeye Technologies Inc announced that net sales in the April-June quarter grew by 7.6% over the prior year to $215.3 million, a new sales record for the Company. Earnings for the quarter were $9.3 million after tax ($0.24 per share, compared with $15.9 million ($0.41 per share) in the prior year.

During the same quarter of the prior year, the Company's results included a $2.0 million pre-tax benefit from a water conservation partnership payment, a $2.1 million pre-tax benefit from reversal of accrued interest related to cancellation of a contingent note owed to Stac-Pac Technologies Inc, and a $3.3 million tax benefit from adjustments relating to federal and state valuation allowances and credits. The combined benefit of these three items on our year ago fourth quarter earnings was $0.15 per share.

Increased selling prices across all of our businesses as compared to the year-ago quarter were sufficient to offset significantly higher raw materials, energy, chemicals and transportation costs.

However, reduced production volumes due to unplanned maintenance outages at our Perry, Florida wood cellulose mill and lower Nonwovens sales were the primary drivers behind a year-over-year reduction in Operating Income of $7.1 million.

Excluding reversal of the accrued Stac-Pac interest that impacted the fourth quarter of last year, our net interest expense was reduced by about $2 million compared to last year mainly due to the reduction in debt.

Also, our effective tax rate of 26.5% for the quarter, while higher than last year's 21.9% rate, was favorably impacted by about $1.3 million in adjustments relating to identification of additional R&D tax credits and tax planning associated with intercompany interest charges to our Brazilian subsidiary.

Net sales for the fiscal year grew 7.3% over the prior year to $825.5 million, also a new sales record for the Company. Earnings for the fiscal year were $47.1 million after tax ($1.20 per share) compared to $30.1 million after tax ($0.79 per share) in the prior year.

Chairman and Chief Executive Officer John B. Crowe said, "Fiscal year 2008 was an outstanding year for Buckeye. Building on the momentum from 2007, we achieved a variety of significant performance milestones, including our highest ever sales revenue, debt below $400 million and EPS up 52% over the prior year.

Due to the unprecedented cost escalation we have experienced over the past 6 months, we have implemented additional price increases and surcharges which went into effect on July 1st.

While oil and natural gas prices have moderated from recent peaks, we are still facing rising cost trends for energy, raw materials, chemicals and transportation in the July-September quarter compared to the April-June quarter."

Mr. Crowe went on to say, "We continue to involve the entire organization in Lean Enterprise as a key strategy to grow our business and improve margins, and we have made progress in eliminating waste and non-value added activities.

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