December 1, 2004
Via EDGAR Transmission
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Mr. H. Roger Schwall
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549-0405
Re: Buckeye Technologies Inc.
Form 10-K for the Fiscal Year Ended June 30, 2004
File No. 001-14030
Dear Mr. Schwall,
On behalf of our client, Buckeye Technologies Inc. ("Buckeye" or the
"Company"), we set forth below the Company's responses to the comments (the
"Comments") of the staff (the "Staff") of the Securities and Exchange Commission
(the "Commission"), dated October 25, 2004 and November 24, 2004, regarding the
Company's Annual Report on Form 10-K for its fiscal year ended June 30, 2004
(the "Form 10-K"), as filed with the Commission on August 26, 2004. For your
convenience, each response follows the sequentially numbered Comment copied in
bold from your letter of November 24, 2004. When we refer to pages or notes in
this letter, we refer to the page or note numbers in the Form 10-K.
To assist the Staff in its review, the Company has included with its
response to comment 1 a draft of revised disclosure for the Staff's
consideration.
Financial Statements
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Note 1 - Accounting Policies, page F-8
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Inventories, page F-8
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1. We have read the disclosure revisions that you have proposed in
response to prior comments 1 and 2 concerning the identification of
cost elements in your inventory accounting policy note, and
classification of amortization expense. It would be helpful if you
would describe in greater detail the prominent types of materials
included in your inventory. Please submit the revisions you believe
would be responsive. If you regard the disclosure revisions and
reclassifications requested in prior comments 1 and 2 as not material,
you may provide the changes proposed in future filings.
2
Buckeye Technologies Inc.
Form 10-K for the fiscal year ended June 30, 2004
File No. 001-14030
As requested, the Company will modify the disclosure with respect to its
inventories set forth under "Notes to Consolidated Financial Statements - Note
1. Accounting Policies - Inventories" so as to include more detailed disclosure
regarding prominent types of materials included in inventory. The Company
believes that these changes, as well as the changes that it has proposed to make
in future filings with respect to comment 2 of the Staff's letter to the Company
dated October 24, 2004 (pertaining to the amortization of intellectual property
assets), do not constitute material amendments to its existing public
disclosures. Accordingly, the Company hereby undertakes to include such modified
disclosure in its future filings rather than amending its prior filings at this
time. For your information, the Company expects its future disclosure with
respect to inventories to read as follows:
"Inventories
Inventories are valued at the lower of cost or market. The costs of
manufactured cotton-based specialty fibers and costs for nonwoven raw
materials are generally determined on the first-in, first-out (FIFO)
basis. Other manufactured products and raw materials are generally
valued on an average cost basis. Manufactured inventory costs include
material, labor and manufacturing overhead. Slash pine timber, cotton
fibers and chemicals are the principal raw materials used in the
manufacture of our specialty fiber products. Fluff pulp is the principal
raw material used in our nonwoven materials products. We take physical
counts of inventories at least annually, and we review periodically the
provision for potential losses from obsolete, excess or slow-moving
inventories."
Exhibits
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4. We have considered your response to prior comment 5, regarding the
schedule showing your computation of the Ratio of Earnings to Fixed
Charges that is required, and believe that it will be necessary to
amend your Form 10-K to include this schedule as an exhibit. You may
find the guidance in Rule 12b-15 of Regulation 12B, accommodating
amendments of individual items within the Form, helpful.
As requested, the Company is filing an amendment to its Form 10-K concurrently
with the submission of this letter. This amendment includes a schedule showing
its computation of the Ratio of Earnings to Fixed Charges as required under
Rules 601(a) and (b)(12) of Regulation S-K under the Securities Act of 1933. We
have enclosed a copy of this amendment as Exhibit A to this letter.
* * * * *
The Company has directed me to acknowledge on its behalf that it is
responsible for the adequacy and accuracy of the disclosure in its filings with
the Commission,
3
Buckeye Technologies Inc.
Form 10-K for the fiscal year ended June 30, 2004
File No. 001-14030
that Staff comments or changes to disclosure in response to Staff Comments in
the filings reviewed by the Staff do not foreclose the Commission from taking
any action with respect to such filings, and that the Company may not assert
Staff Comments as a defense in any proceeding initiated by the Commission or any
person under the federal securities laws of the United States.
* * * * *
If you have any questions concerning the foregoing, please do not hesitate
to contact me at the telephone number appearing above.
Very truly yours,
/s/ Thomas J. Friedmann
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Thomas J. Friedmann
cc: Gary Newberry, Securities and Exchange Commission
Karl Hiller, Securities and Exchange Commission
Kristopher J. Matula, Buckeye Technologies Inc.
Sheila Jordan Cunningham, Buckeye Technologies Inc.
David G. Schlitt, Ernst & Young LLP