SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------------------------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D) OF THE
THE SECURITIES ACT OF 1934
--------------------------------------------------------------------------------
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): October 19, 2004
--------------------------------------------------------------------------------
BUCKEYE TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-60032 62-1518973
(State of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
1001 Tillman Street, Memphis, Tennessee 38112
(Address of principal executive offices)
Registrant's telephone, including area code (901) 320-8100
--------------------------------------------------------------------------------
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On October 19, 2004, Buckeye Technologies Inc. (the "Company") issued a
press release regarding its results of operations for the quarter ended
September 30, 2004, including a statement of operations for that quarter, a
consolidated balance sheet as of September 30, 2004, a consolidated statement of
cash flow for that quarter, and supplemental financial data. In addition, on
October 20, 2004, the Company will hold a teleconference at 8:30 a.m. Central to
discuss the quarter. The teleconference can be accessed via the website
www.streetevents.com, the Company's website homepage at www.bkitech.com or via
telephone at (888) 855-5428 within the United States or (719) 457-2665 for
international callers.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized,
BUCKEYE TECHNOLOGIES INC.
/S/ KRISTOPHER J. MATULA
-----------------------------------------------
Kristopher J. Matula
Executive Vice President and Chief Financial Officer
October 19, 2004
MEMPHIS, Tenn.--(BUSINESS WIRE)--Oct. 19, 2004--Buckeye Technologies Inc.
(NYSE:BKI) today announced that it earned $4.4 million after tax (12 cents per
share) in the quarter ended September 30, 2004. The Company's results include
$0.8 million after tax (2 cents per share) in restructuring costs, primarily
related to the previously announced closure of its facility in Cork, Ireland.
During the same quarter of the prior year, the Company's restated net income was
$3.1 million after tax (8 cents per share) which included $5.7 million after tax
benefit (15 cents per share) from an accounting change related to its method of
accounting for planned maintenance shutdowns. July-September 2003 also included
$2.7 million after tax charge (minus 7 cents per share) related to the early
extinguishment of debt and restructuring charges.
Excluding the impact of accounting changes and expenses related to the early
extinguishment of debt and restructuring, the Company earned $5.2 million after
tax in July-September 2004 compared to $0.1 million after tax in the same
period a year ago.
Net sales for the July-September quarter were $167.3 million, 7.4% above the
$155.8 million achieved in the prior year.
Buckeye Chairman, David B. Ferraro, commented, "We made progress during
July-September in improving the financial performance of our business. Revenue
and profitability increased in both our specialty fibers and nonwoven materials
segments. We reduced debt by $20 million. The changes we have made to improve
our operations are having a positive impact."
Mr. Ferraro further stated, "We ceased producing airlaid nonwoven materials at
Cork, Ireland in late July. We have successfully transitioned the majority of
the product previously produced at Cork to our larger dual-line plants in
Europe and North America. This has increased the capacity utilization rate at
our other airlaid nonwovens facilities."
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.
Certain matters discussed in this press release may constitute forward-looking
statements within the meaning of the federal securities laws that involve risks
and uncertainties, including but not limited to economic, competitive,
governmental, and technological factors affecting the Company's operations,
financing, markets, products, services and prices, and other factors.
For further information on factors which could impact the Company and the
statements contained herein, please refer to public filings with the Securities
and Exchange Commission.
BUCKEYE TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in $000)
(unaudited)
Three Months Ended
----------------------------------------
September 30, June 30, September 30,
2004 2004 2003 (a)
------------ ------------ ------------
Net sales $ 167,323 $ 168,042 $ 155,831
Cost of goods sold 137,694 142,053 134,240
------------ ------------ ------------
Gross margin 29,629 25,989 21,591
Selling, research and
Administrative expenses 9,726 10,438 9,592
Impairment of long-lived
Assets - 1,075 -
Restructuring costs 1,196 2,073 1,038
------------ ------------ ------------
Operating income 18,707 12,403 10,961
Net interest expense and
Amortization of debt costs 11,278 11,305 11,177
Loss on early extinguishment
of debt - - 3,300
Foreign exchange,
amortization of
intangibles, other 636 268 429
------------ ------------ ------------
Income (loss) before income
taxes 6,793 830 (3,945)
Income tax expense (benefit) 2,378 (580) (1,281)
------------ ------------ ------------
Income (loss) before
cumulative effect of change
in accounting 4,415 1,410 (2,664)
Cumulative effect of change
in accounting (net of tax
of $3,359) - - 5,720
Net income $ 4,415 $ 1,410 $ 3,056
============ ============ ============
Earnings (loss) per share
before cumulative effect of
change in accounting
Basic earnings (loss) per
share $ 0.12 $ 0.04 $ (0.07)
Diluted earnings (loss)
per share $ 0.12 $ 0.04 $ (0.07)
Cumulative effect of change
in accounting
Basic earnings (loss) per
share $ - $ - $ 0.15
Diluted earnings (loss)
per share $ - $ - $ 0.15
Earnings per share
Basic earnings (loss) per
share $ 0.12 $ 0.04 $ 0.08
Diluted earnings (loss)
per share $ 0.12 $ 0.04 $ 0.08
Weighted average shares for
basic earnings per share 37,311,757 37,233,800 36,974,915
Adjusted weighted average
shares for diluted earnings
per share 37,457,905 37,369,210 36,994,572
(a) Amounts have been restated from those previously reported based on the
cumulative effect of change in accounting.
BUCKEYE TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
(in $000)
September 30 June 30
2004 2004
----------- -----------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 23,836 $ 27,235
Accounts receivable, net 111,306 112,367
Inventories 114,552 107,439
Deferred income taxes and other 14,521 10,207
----------- -----------
Total current assets 264,215 257,248
Property, plant and equipment, net 530,201 537,632
Goodwill, net 135,450 130,172
Intellectual property and other, net 40,265 41,023
----------- -----------
Total assets $ 970,131 $ 966,075
=========== ===========
Liabilities and stockholders' equity Current liabilities:
Trade accounts payable $ 27,253 $ 27,130
Accrued expenses 51,970 45,337
Current portion of capital lease
obligations 652 632
Current portion of long-term debt 1,500 16,972
----------- -----------
Total current liabilities 81,375 90,071
Long-term debt 582,434 587,076
Deferred income taxes 39,924 37,956
Capital lease obligations 1,818 2,068
Other liabilities 19,342 19,559
Stockholders' equity 245,238 229,345
----------- -----------
Total liabilities and stockholders' equity $ 970,131 $ 966,075
=========== ===========
BUCKEYE TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000)
(unaudited)
Three Months Ended
---------------------------
September 30, September 30,
2004 2003 (a)
---------------------------
OPERATING ACTIVITIES
Net income $ 4,415 $ 3,056
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Cumulative effect of change in
accounting - (5,720)
Depreciation 11,393 11,186
Amortization 922 1,441
Loss on early extinguishment of debt - 3,300
Deferred income taxes 1,359 722
Other 454 637
Change in operating assets and
liabilities
Accounts receivable 2,059 16,169
Inventories (6,093) (1,615)
Other assets 837 (3,603)
Accounts payable and other current
liabilities 5,651 (18)
------------ ------------
Net cash provided by operating activities 20,997 25,555
INVESTING ACTIVITIES
Purchases of property, plant & equipment (4,970) (9,725)
Other 84 (303)
------------ ------------
Net cash used in investing activities (4,886) (10,028)
FINANCING ACTIVITIES
Proceeds from exercise of options 248 -
Net payments under revolving line of
credit - (55,250)
Issuance of long-term debt - 200,000
Payments for debt issuance costs (4) (6,029)
Payments related to early extinguishment
of debt - (2,115)
Payments on long term debt and other (20,230) (175,001)
------------ ------------
Net cash used in financing activities (19,986) (38,395)
------------ ------------
Effect of foreign currency rate
fluctuations on cash 476 (827)
Decrease in cash and cash equivalents (3,399) (23,695)
------------ ------------
Cash and cash equivalents at beginning of
period 27,235 49,977
------------ ------------
Cash and cash equivalents at end of period $ 23,836 $ 26,282
============ ============
(a) Amounts have been restated from those previously reported based on the
cumulative effect of change in accounting.
BUCKEYE TECHNOLOGIES INC.
SUPPLEMENTAL FINANCIAL DATA
(in $000)
(unaudited)
Three Months Ended
-----------------------------------------
SEGMENT RESULTS September 30, June 30, September 30,
2004 2004 2003 (d)
------------- ------------- -------------
Specialty Fibers
Net sales $ 118,046 $ 118,165 $ 107,318
Operating income (a) 16,898 12,714 9,921
Depreciation and
amortization (b) 6,961 7,024 6,704
Capital expenditures 3,914 4,457 9,089
Nonwoven Materials
Net sales $ 55,922 $ 55,987 $ 53,210
Operating income (a) 3,568 2,595 2,487
Depreciation and
amortization (b) 4,223 3,633 4,268
Capital expenditures 976 884 599
Corporate
Net sales $ (6,645) $ (6,110) $ (4,697)
Operating income (a) (1,759) (2,906) (1,447)
Depreciation and
amortization (b) 866 828 825
Capital expenditures 80 73 37
Total
Net sales $ 167,323 $ 168,042 $ 155,831
Operating income (a) 18,707 12,403 10,961
Depreciation and
amortization (b) 12,050 11,485 11,797
Capital expenditures 4,970 5,414 9,725
(a) Asset impairment and restructuring costs are included in operating income
for the corporate segment.
(b) Depreciation and amortization includes depreciation, depletion and
amortization of intangibles. Only the Corporate grouping has amortization of
intangibles that is excluded from the determination of operating income.
Three Months Ended
-----------------------------------------
ADJUSTED EBITDA September 30, June 30, September 30,
2004 2004 2003 (d)
------------- ------------- -------------
Income (loss) before
cumulative effect of
change in accounting $ 4,415 $ 1,410 $ (2,664)
Income tax benefit 2,378 (580) (1,281)
Net interest expense 10,895 10,900 10,500
Amortization of debt costs 383 405 677
Early extinguishment of debt - - 3,300
Depreciation, depletion and
amortization 12,050 11,485 11,797
------------ ------------ ------------
EBITDA 30,121 23,620 22,329
Interest income 164 216 250
Asset impairments - 1,075 -
Loss on disposal of assets 130 304 144
Restructuring charges (c) - 492 1,038
Restatement due to change in
accounting - - 370
------------ ------------ ------------
Adjusted EBITDA $ 30,415 $ 25,707 $ 24,131
============ ============ ============
We calculate EBITDA as earnings before cumulative effect of change in accounting
plus net interest expense, income taxes and depreciation and amortization.
Adjusted EBITDA further adjusts EBITDA by adding back the following items:
interest income, cumulative effect of changes in accounting, asset impairment
charges, restructuring charges and other (gains) losses. You should not consider
adjusted EBITDA to be an alternative measure of our net income, as an indicator
of operating performance; or our cash flow, as an indicator of liquidity.
Adjusted EBITDA corresponds with the definition contained in our US revolving
credit facility and it provides useful information concerning our ability to
comply with debt covenants. Prior year calculations have been restated to
conform with the current credit facility definition. Although we believe
adjusted EBITDA enhances your understanding of our financial condition, this
measure, when viewed individually, is not a better indicator of any trend as
compared to other measures (e.g., net sales, net earnings, net cash flows,
etc.).
On September 30, 2004 we had borrowing capacity of $67.7 million on the
revolving credit facility. The portion of this amount that we could borrow will
depend on our financial results and ability to comply with certain borrowing
conditions under the revolving credit facility.
(c) The definition of Adjusted EBITDA limits the add back of restructuring
charges to costs incurred from October 1, 2002 through June 30, 2004,
provided that the aggregate amount does not exceed $6.0 million. Since we
exceeded the $6.0 million threshold during the three months ended June 30,
2004 our add back was limited to $492 of the $2,073 of restructuring expense
recorded during that quarter. Restructuring charges of $1,196 incurred after
June 30, 2004 are not added back to Adjusted EBITDA.
(d) Amounts have been restated from those previously reported based on the
cumulative effect of change in accounting.