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Operating income for Specialty Fibers up - Buckeye
Apr '10
Buckeye Technologies Inc announced third quarter net income of $19.3 million or $0.49 per share compared to net income of $4.3 million or $0.11 per share in the same period last year. Third quarter earnings included net income of $4.2 million, or $0.11 per share, from alternative fuel mixture credits (AFMC) recognized during the quarter, which was partly offset by after-tax costs relating to restructuring and early retirement of debt totaling $2.5 million, or $0.07 per share.

In addition, income tax expense for the quarter was reduced by $7.4 million, or $0.19 per share for energy investment tax credits earned to-date on progress expenditures for our Foley Energy Independence project, of which $6.6 million or $0.17 per share was related to prior period expenditures. We expect to continue to receive investment tax credits over the next several years based on planned spending on energy projects at our Foley mill. Net sales were $191 million for the third quarter of fiscal 2010, up 11% versus net sales of $172 million in the third quarter of fiscal 2009.

Adjusted net income for the quarter was $11.0 million, or $0.28 per share versus third quarter fiscal 2009 adjusted net income $4.3 million, or $0.11 per share. “Adjusted net income” is a “non-GAAP financial measure” as defined by SEC rules that adjusts net income for AFMC, investment tax credits on prior period expenditures, restructuring and early debt retirement costs and is reconciled in the table below. This $0.17 per share increase in adjusted earnings per share compared to the same quarter a year ago was largely due to increased shipment volume, which was up about 19%, and the resulting improvement in capacity utilization. The impact of lower selling prices was offset by lower input costs.

Also contributing $0.06 to this improvement in adjusted net income was a 46% reduction in interest expense versus the same quarter a year ago largely due to the reduction in long-term debt, which has come down by $115 million over the past twelve months. This was partly offset by a higher tax rate (-$0.04).

Adjusted earnings per share of $0.28 in the just completed quarter were up $0.06 compared to the $0.22 earned in the second quarter. Adjusted operating income improved by $2.7 million, accounting for $0.04 of this improvement and reduced interest expense added another $0.01. Operating income for Specialty Fibers was up $4.1 million as increased selling prices due to strong demand in most of our markets more than offset higher costs for energy (driven primarily by cold weather) and transportation during the quarter. Operating income for Nonwovens was down $1.2 million as margins were compressed due to rising fluff pulp costs.

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