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Sales in Nonwoven Materials segment off 2% at Buckeye
May '09
Buckeye Technologies Inc. announced earnings for the January – March quarter of 11 cents per share compared to 26 cents per share in the same period last year due to reduced demand and associated production downtime in the Specialty Fibers segment resulting from the global economic downturn. This was 4 cents per share better than earnings for the October-December period excluding the impact of a goodwill impairment charge which reduced earnings by $3.30 per share in that quarter.

Net sales of $171.6 million for the quarter were down 15% compared to the same quarter a year ago, with sales in the Specialty Fibers segment down 18% and sales in the Nonwoven Materials segment only off 2%. Specialty Fibers sales were negatively impacted by reduced demand for cotton specialty fibers, wood specialty fibers used in automotive applications, and fluff pulp. Net sales for the quarter were down 7% compared to the October-December quarter, primarily driven by reduced sales from our Memphis cotton cellulose plant.

Chairman and Chief Executive Officer John B. Crowe said, “While not satisfied with our overall results, we were pleased that underlying earnings improved compared to the October-December quarter in spite of a drop in sales revenue. We continued to take market downtime at our Foley, Memphis and Americana plants during the quarter to match production to shipment demand, and effective May 1st, we will further reduce staffing at our Memphis cotton cellulose plant in order to match capacity to reduced demand levels for products supplied by this plant. On the average, selling prices were comparable to the preceding quarter, as the impact of the January 1st price increases on our high-end wood specialty fibers products was offset by lower prices for fluff pulp and other products. We started to see some significant reductions in raw materials, energy and transportation costs during the quarter and we believe that chemical costs peaked during the January – March quarter. Our Nonwoven materials segment also reported higher shipment volumes and improved operating income compared to the October-December quarter.”

Mr. Crowe went on to say, “We made progress toward our 2009 debt reduction goal, as we generated $12.2 million in free cash flow during the quarter, reduced our debt by $2.7 million and added $9.5 million to our cash balance. Also, during the month of April we have received $25.4 million in refunds related to the alternative fuels credit covering the period between February 12th and April 14th. We recognized no benefit related to this credit in the January-March quarter. We continue to believe that the Company is in much better condition to weather this downturn as compared with previous downturns because of the improvements in our balance sheet and cost structure.”

Buckeye Technologies Inc

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