Buckeye CEO pleased with Q2 FY 2011 results

27 Jan '11

5 min read

Excluding AFMC and cellulosic biofuel tax credits, early debt retirement costs and restructuring expenses, adjusted net income was $20.3 million, or $0.50 per share versus second quarter fiscal 2010 adjusted net income of $8.8 million, or $0.22 per share. The $0.28 per share increase in adjusted EPS, compared to the prior year period, was largely driven by higher selling prices in the specialty fibers segment and reduced interest expense.

Also, the final insurance settlement related to the June power outage at our Florida specialty wood pulp facility added $0.05 (net of expenses) to second quarter EPS, representing a partial recovery of related costs of $0.04 per share in the July-September 2010 quarter and $0.06 per share in the April-June 2010 quarter.

Comparing the second quarter to the first quarter of FY11, sales were up $7.4 million as increased shipment volume from the Company's specialty cotton fibers plants combined with higher selling prices and improved mix in the specialty fibers segment offset the impact of reduced nonwovens shipment volumes. Adjusted EPS was up $0.16 from the first quarter's $0.34.

“The impact of the final insurance settlement on the second quarter versus the cost impact of the power outage on the first quarter accounted for $0.09 of the increase in adjusted EPS. Net interest expense was down $1.9 million due to the refinancing of $140 million of public debt at the beginning of the quarter with our lower cost bank revolver, accounting for another $0.03 improvement in EPS.

“The remaining $0.04 improvement was due to increased production volumes across our wood and cotton specialty fibers plants, an increase in specialty cotton shipment volume, and selling price increases for specialty cotton and fluff pulps, which were partially offset by lower operating income in nonwovens due to seasonally reduced volumes. Overall, gross margin improved from 18.0% in the first quarter to 21.2% in the second quarter.

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.

Buckeye Technologies Inc

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