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Buckeye Specialty Fibers earnings flat versus April-June quarter

31
Oct '08
Buckeye Technologies Inc announced that net sales in the July-September quarter grew by 12.1% over the prior year to $221.3 million, a new sales record for the Company. Net income for the quarter was $8.9 million ($0.23 per share), compared with $13.5 million ($0.34 per share) in the prior year.

During the same quarter of the prior year, the Company's results included a $2.2 million ($0.06 per share) tax benefit related to a reduction in Germany's tax rate.

Income before taxes, at $14.4 million, was down $4.0 million compared to the year ago quarter as a $5.9 million decrease in operating income was partially offset by a $1.7 million reduction in interest expense.

In spite of substantial selling price increases across all businesses, our gross margin has declined from 20.6% of sales in the year ago quarter to 16.0% in the quarter just completed due to rapidly escalating input costs at all of our plants and lower capacity utilization at our airlaid nonwovens plants. Compared to the April-June quarter, operating income rose $2.9 million and gross margin improved from 15.2% to 16.0%.

Chairman and Chief Executive Officer John B. Crowe said, "We are pleased with the improvement in our operating results compared to the April-June quarter, particularly with the increase in sales and earnings in our Nonwoven Materials segment. We were also able to hold operating income for our Specialty Fibers segment constant with the April-June quarter."

"While we only saw a small increase in fluff pulp prices during the quarter, we were able to offset escalating input costs through a combination of surcharges and selling price increases on our specialty products and improved performance at our Perry, Florida wood cellulose mill."

"We continued to generate strong cash flow and increased our cash balance by $8 million while slightly reducing our long-term debt during the quarter. I believe that all of our efforts in recent years to reduce debt, take out costs, improve our product mix, and put a new credit facility in place in July 2007 have positioned us well for these uncertain economic times. We will continue to focus on maintaining and improving the strength of our balance sheet, particularly in this economic environment."

Buckeye Technologies Inc


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