Buckeye Reports First Quarter Results.Business Editors MEMPHIS Memphis, city, ancient Egypt Memphis (mĕm`fĭs), ancient city of Egypt, capital of the Old Kingdom (c.3100–c.2258 B.C.), at the apex of the Nile delta and 12 mi (18 km) from Cairo. , Tenn.--(BUSINESS WIRE)--Oct. 20, 2003 Buckeye buckeye: see horse chestnut. buckeye Any of about 13 trees and shrubs of the genus Aesculus (family Hippocastanaceae), native to North America, southeastern Europe, and eastern Asia. Technologies Inc. (NYSE NYSE See: New York Stock Exchange :BKI BKI Babbar Khalsa International BKI Kota Kinabalu, Sabah, Malaysia - Kota Kinabalu (Airport Code) BKI Bible Knowledge Institute BKI Brasil Kaffe Import (Danish Coffee Importer) ) today announced that it incurred a loss of $2.4 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. (seven cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. ) in the quarter ended September September: see month. 30, 2003. The loss was due to a $2.1 million after-tax expense (six cents per share) for the early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt related to the refinancing Refinancing An extension and/or increase in amount of existing debt. of $150 million of 8.5% senior subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes due 2005 and previously announced restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $0.6 million after-tax (two cents per share). Excluding the expenses related to the early extinguishment of debt and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). noted above, the Company earned a profit of one cent per share ($0.3 million after-tax) in the quarter ended September 30, 2003. This compares to a loss of one cent per share ($0.5 million after-tax) in the same period a year ago. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the July-September quarter were $155.8 million, slightly below the $156.4 million in the same quarter of the prior year. Buckeye Chairman David B. Ferraro Fer`ra´ro prop. n. 1. Geraldine Anne Ferraro erson>, a United States politician. Born in 1935, she was a congresswoman from New York in the United States Congress from 1978 to 1984, and ran unsuccessfully in 1984 a candidate for Vice commented, "Sales during the just completed quarter, which is always our seasonally slowest quarter, were restrained by our need to maintain adequate inventories during our major Foley fo·ley n. 1. A technical process by which sounds are created or altered for use in a film, video, or other electronically produced work. 2. A person who creates or alters sounds using this process. plant maintenance shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down which was conducted during the first eight days of October October: see month. . The shutdown was completed in an exemplary fashion with all major projects being accomplished as planned and, importantly, with no serious injuries or safety incidents. The Foley plant is now back to operating at its full productive capacity." Mr. Ferraro further stated, "The major accomplishment of the July-September quarter was our successful placement of $200 million of senior notes which have a maturity date of October 2013 and a coupon A certificate evidencing the obligation to pay an installment of interest or a dividend that must be cut and presented to its issuer for payment when it is due. Coupons are usually attached to a document, such as a promissory note, bond, share of stock, or a bearer of 8.5%. This debt placement, combined with the refinancing of our bank credit facility, which is currently in progress, ensures that the Company will have sufficient liquidity and financial flexibility for the next five years." Buckeye, a leading manufacturer and marketer of specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. cellulose cellulose, chief constituent of the cell walls of plants. Chemically, it is a carbohydrate that is a high molecular weight polysaccharide. Raw cotton is composed of 91% pure cellulose; other important natural sources are flax, hemp, jute, straw, and wood. and absorbent absorbent /ab·sor·bent/ (-sor´bent) 1. able to take in, or suck up and incorporate. 2. a tissue structure involved in absorption. 3. a substance that absorbs or promotes absorption. products, is headquartered in Memphis, Tennessee For the ancient Egyptian capital, see . Memphis is a city in the southwest corner of Tennessee, and the county seat of Shelby County. Memphis rises above the Mississippi River on the 4th Chickasaw Bluff just below the mouth of the Wolf River. , USA. The Company currently operates facilities in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Ireland Ireland, Irish Eire (âr`ə) [to it are related the poetic Erin and perhaps the Latin Hibernia], island, 32,598 sq mi (84,429 sq km), second largest of the British Isles. and Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. . Its products are sold worldwide to makers of consumer and industrial goods industrial goods npl → bienes mpl de producción . Certain matters discussed in this press release may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 BALANCE SHEETS
(in $000)
September 30 June 30
2003 2003
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 26,282 $ 49,977
Cash, restricted 3,375 3,375
Accounts receivable, net 110,591 126,283
Inventories 139,109 136,705
Deferred income taxes and other 29,777 26,307
------------ ------------
Total current assets 309,134 342,647
Property, plant and equipment, net 595,198 594,138
Goodwill, net 129,883 129,631
Intellectual property and other, net 46,230 44,239
------------ ------------
Total assets $ 1,080,445 $ 1,110,655
============ ============
Liabilities and stockholders' equity
Current liabilities:
Trade accounts payable $ 34,810 $ 37,007
Accrued expenses 49,918 48,360
Current portion of capital lease
obligations 595 583
Current portion of long-term debt - 41,718
------------ ------------
Total current liabilities 85,323 127,668
Long-term debt 629,232 619,474
Deferred income taxes 80,445 79,498
Capital lease obligations 2,547 2,700
Other liabilities 19,528 19,431
Stockholders' equity 263,370 261,884
------------ ------------
Total liabilities and stockholders' equity $ 1,080,445 $ 1,110,655
============ ============
BUCKEYE TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in $000)
Quarter Ended
September 30
------------------------
2003 2002
----------- -----------
Net sales $ 155,831 $ 156,425
-
Cost of goods sold 133,870 136,044
----------- -----------
Gross margin 21,961 20,381
Selling, research and administrative
expenses 9,592 8,943
Restructuring costs 1,038 -
----------- -----------
Operating income 11,331 11,438
Net interest expense and amortization of
debt costs 11,177 12,126
Loss on early extinguishment of debt 3,300 -
Foreign exchange, amortization of
intangibles, other 429 90
----------- -----------
Loss before income taxes (3,575) (778)
Income tax benefit (1,144) (259)
----------- -----------
Net loss $ (2,431) $ (519)
=========== ===========
Loss per share
Basic earnings (loss) per share $ (0.07) $ (0.01)
Diluted earnings (loss) per share $ (0.07) $ (0.01)
Weighted average shares for basic earnings
per share 36,974,915 36,948,900
Adjusted weighted average shares for
diluted earnings per share 36,974,915 36,948,900
BUCKEYE TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000)
Quarter Ended
September 30
--------------------
OPERATING ACTIVITIES 2003 2002
-------------------- --------- ---------
Net income (loss) $ (2,431) $ (519)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 11,186 11,427
Amortization 1,441 1,502
Loss on early extinguishment of debt 3,300 -
Deferred income taxes and other 1,359 1,557
Change in operating assets and liabilities
Accounts receivable 16,169 (6,160)
Inventories (1,615) 4,179
Other assets (3,603) (775)
Accounts payable and other current
liabilities (251) (2,070)
--------- --------
Net cash provided by operating activities 25,555 9,141
INVESTING ACTIVITIES
--------------------
Purchases of property, plant and equipment (9,725) (4,587)
Other (303) (211)
--------- --------
Net cash used in investing activities (10,028) (4,798)
FINANCING ACTIVITIES
--------------------
Net payments under revolving line of credit (55,250) (5,781)
Issuance of long term debt 200,000 -
Payments for debt issuance costs (6,029) (380)
Payments related to early extinguishment of
debt (2,115) -
Payments on long term debt and other (175,001) (22,197)
--------- --------
Net cash used in financing activities (38,395) (28,358)
Effect of foreign currency rate fluctuations on
cash (827) (374)
Decrease in cash and cash equivalents (23,695) (24,389)
--------- --------
Cash and cash equivalents at beginning of period 49,977 56,006
--------- --------
Cash and cash equivalents at end of period $ 26,282 $ 31,617
========= ========
BUCKEYE TECHNOLOGIES INC.
SUPPLEMENTAL FINANCIAL DATA
(in $ millions except per share data)
Results Variances
---------- ----------------------------
Jul-Sep 03 vs Jul-Sep 03 vs
Jul-Sep 03 Apr-Jun 03 Jul-Sep 02
---------- ------------- -------------
Net sales $155.8 $(12.2) $(0.6)
Gross margin 22.0 1.6 1.6
% of sales 14.1% 2.0 pts 1.1 pts
Operating income 11.3 9.8 (0.1)
Net loss (2.4) 2.8 (1.9)
Adjusted weighted average
shares for diluted earnings
per share (millions) 37.0 - 0.1
Diluted earnings (loss) per
share (0.07) 0.07 (0.06)
Depreciation, depletion and
amortization charged against
operating income 11.2 (0.4) (0.3)
Purchases of property, plant
and equipment 9.7 0.5 5.1
Asset impairment (before tax) - (6.8) -
Restructuring costs (before
tax) 1.0 (0.6) 1.0
Loss on early extinguishment
of debt (before tax) 3.3 3.3 3.3
Adjusted EBITDA (1) 24.0 1.9 0.2
Net debt (2) 598.6 (6.4) (27.9)
Credit facility availability
at end of period 43.4 13.0 27.5
Notes
-----
(1) We calculate EBITDA as earnings before net interest expense plus
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 certain 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 revolving credit facility, and it provides useful
information concerning our ability to comply with debt covenants.
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.)
conventionally computed in accordance with GAAP. We caution you
that amounts presented may not be comparable to similar measures
disclosed by other companies.
Results Variances
---------- ----------------------------
Jul-Sep 03 vs Jul-Sep 03 vs
Jul-Sep 03 Apr-Jun 03 Jul-Sep 02
---------- -------------- -------------
Net income (loss) (2.4) 2.8 (1.9)
Income tax expense (1.1) 3.7 (0.8)
Net interest expense 10.5 (0.1) (1.0)
Amortization of debt costs 0.7 0.1 0.1
Early extinguishment of debt 3.3 3.3 3.3
Depreciation, depletion and
amortization 11.8 (0.4) (0.3)
---------- -------------- ------------
EBITDA 22.8 9.4 (0.6)
Interest income 0.2 (0.1) (0.2)
Asset impairments - (6.8) -
Restructuring charges 1.0 (0.6) 1.0
---------- -------------- ------------
Adjusted EBITDA 24.0 1.9 0.2
========== ============== ============
(2) We present net debt as an additional means by which investors can
evaluate our financial condition, liquidity and ability to satisfy
rating agency and creditor requirements. We calculate net debt as
debt and capital lease obligations less interest rate swap non-
cash fair value adjustment to debt, cash, cash equivalents,
restricted cash and short-term investments. Using this information
along with long-term debt and capital lease obligation balances
provides a more complete analysis of our financial position.
Long-term debt and capital lease obligations are the most directly
comparable GAAP measures.
as of Sep 03 vs Sep 03 vs
Sep 03 Jun 03 Sep 02
---------- -------------- ------------
Current portion of capital
lease obligation 0.6 - 0.1
Current portion of long-term
debt - (41.7) -
Long-term debt 629.2 9.7 (45.6)
Capital lease obligation 2.5 (0.2) (0.6)
---------- -------------- ------------
Total debt on balance sheet 632.3 (32.2) (46.1)
less: Interest rate swap non-
cash fair value adjustment
to debt (4.0) 2.1 4.1
less: Cash, cash equivalents,
restricted cash, and short-
term investments (29.7) 23.7 14.1
---------- -------------- ------------
Net debt 598.6 (6.4) (27.9)
========== ============== ============
BUCKEYE TECHNOLOGIES INC.
SUPPLEMENTAL FINANCIAL DATA
(in $ millions)
Results Variances
---------- ----------------------------
Jul-Sep 03 vs Jul-Sep 03 vs
Jul-Sep 03 Apr-Jun 03 Jul-Sep 02
---------- ------------- -------------
Comparative Segment Results Analysis
------------------------------------
Specialty Net sales 107.3 (11.6) (5.0)
Fibers Operating income 10.3 2.2 (1.3)
Depreciation and
amortization (a) 6.7 (0.1) (0.8)
Capital expenditures 9.1 1.3 5.5
Total assets (at the
end of the period) 475.9 (40.2) 2.4
Nonwovens Net sales 53.2 0.4 5.8
Materials Operating income 2.5 0.8 2.0
Depreciation and
amortization (a) 4.3 (0.1) 0.5
Capital expenditures 0.6 (0.7) (0.1)
Total assets (at the
end of the period) 359.5 (1.1) 16.2
Corporate Net sales (4.7) (1.0) (1.4)
Operating income (b) (1.4) 7.0 (0.7)
Depreciation and
amortization (a) 0.8 0.3 (0.2)
Capital expenditures - (0.1) (0.3)
Total assets (at the
end of the period) 245.0 11.0 (35.2)
Total Net sales 155.8 (12.2) (0.6)
Operating income (b) 11.3 9.9 (0.1)
Depreciation and
amortization (a) 11.8 0.1 (0.5)
Capital expenditures 9.7 0.5 5.1
Total assets (at the
end of the period) 1,080.4 (30.3) (16.6)
(a) 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.
(b) Asset impairment and restructuring costs are included in
operating income for the corporate segment.
BUCKEYE TECHNOLOGIES INC.
SUPPLEMENTAL FINANCIAL DATA
(in $ millions)
Comparative Segment Information (Fiscal 2003 by Quarter)
--------------------------------------------------------
Specialty Nonwoven
Fibers Materials Corporate Total
--------- --------- ---------- -------
Net sales Jul-Sep 02 112.3 47.4 (3.3) 156.4
Oct-Dec 02 113.9 45.8 (6.6) 153.1
Jan-Mar 03 121.4 49.9 (7.7) 163.6
Apr-Jun 03 118.9 52.8 (3.7) 168.0
--------- --------- ---------- -------
Total FY 2003 466.5 195.9 (21.3) 641.1
--------- --------- ---------- -------
Operating income Jul-Sep 02 11.6 0.5 (0.7) 11.4
(loss) Oct-Dec 02 12.8 0.3 (0.1) 13.0
Jan-Mar 03 9.4 1.5 (29.9) (19.0)
Apr-Jun 03 8.1 1.7 (8.4) 1.4
--------- --------- ---------- -------
Total FY 2003 41.9 4.0 (39.1) 6.8
--------- --------- ---------- -------
Depreciation and Jul-Sep 02 7.5 3.8 1.0 12.3
amortization Oct-Dec 02 7.5 3.8 1.1 12.4
Jan-Mar 03 7.5 4.1 1.0 12.6
Apr-Jun 03 6.8 4.4 0.5 11.7
--------- --------- ---------- -------
Total FY 2003 29.3 16.1 3.6 49.0
--------- --------- ---------- -------
Capital Jul-Sep 02 3.6 0.7 0.3 4.6
expenditures Oct-Dec 02 6.1 0.5 - 6.6
Jan-Mar 03 7.2 0.7 0.1 8.0
Apr-Jun 03 7.8 1.3 0.1 9.2
--------- --------- ---------- -------
Total FY 2003 24.7 3.2 0.5 28.4
--------- --------- ---------- -------
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