Buckeye Announces July - September Quarter Results.

Company Reports another Record Sales Quarter

EPS was $0.23 versus $0.34 in Year-Ago Quarter which included $0.06 Tax Benefit

Nonwovens Earnings Improve by $2.8 million versus April-June Quarter on $4.1 million (7%) Increase in Sales

Specialty Fibers Earnings Flat versus April-June Quarter

MEMPHIS, Tenn. -- Buckeye Technologies Inc. (NYSE:BKI) today 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. Free cash flow(a) for the quarter was $11.0 million.

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 has scheduled a conference call for Wednesday morning, October 29th, at 11:00 a.m. ET to discuss first quarter performance. Persons interested in listening by telephone may dial in at [phone] within the United States. International callers should dial [phone]. Supplemental material for the call will be available on the Company's website at www.bkitech.com or at www.streetevents.com.

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.

(a)This release includes certain financial information not derived in accordance with generally accepted accounting principles ("GAAP"). The non-GAAP measure used is "free cash flow". The Company believes that the presentation of this non-GAAP measure provides information that is useful to investors as it indicates more clearly and concisely the amount of cash generated by operations that remains available for payment of debt, share repurchase or dividends after funding capital expenditures, but this information should not be considered a substitute for any measures derived in accordance with GAAP. The Company manages cash flows available for debt pay down by measuring "free cash flow", and includes this measure in all-employee bonus and at-risk compensation bonus targets.

Net Cash provided by Operating Activities $22,056

Less Purchases of Property, Plant & Equipment (11,105)

Free Cash Flow $10,951

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