Buckeye Reports Fourth 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)--July 31, 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 $5.2 million after tax (14 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 June June: see month. 30, 2003. The loss was due to a $5.4 million after tax impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of idle equipment, principally an uninstalled airlaid machine acquired with the purchase of Walkisoft in 1999, and severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when payments to employees at the Lumberton Lumberton, city (1990 pop. 18,601), seat of Robeson co., S N.C., on the Lumber River; founded 1787, inc. 1852. It is in an agricultural area, with tobacco, grains, soybeans, and livestock. plant whose closure was previously announced. Excluding the impairment and 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. , the Company achieved one cent earnings per share ($0.2 million after tax) in April-June 2003. This compares to a loss of seven cents per share ($2.6 million after tax) in the same period a year ago, which excluded impairment and restructuring charges of $6.9 million after tax. During fiscal year 2003, the Company incurred a loss of $24.9 million after tax (67 cents per share), including impairment 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). costs of $24.7 million after tax (also 67 cents per share). This compares to a loss of $26 million after tax (74 cents per share) in fiscal year 2002, which included a $19.1 million after tax (54 cents per share) impairment and restructuring charge. Excluding impairment and restructuring charges, the Company's results improved by 19 cents per share from a loss of $6.9 million after tax in fiscal year 2002 (20 cents per share) to a loss of $0.2 million after tax in fiscal year 2003 (one cent per share). 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 April-June quarter were $168 million, 5% above the $160.1 million in the same quarter of the prior year. Net sales for fiscal year 2003 were $641.1 million, 1% above the $635.2 million achieved in 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 that, "April-June was another challenging quarter. We have strengthened our operations by increasing productivity and achieving numerous cost reductions. Pricing and product mix of our 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. business is improving, and we intend to reduce our fluff pulp production substantially over the next several years. This shift of a higher percentage of our products to specialty applications will improve our results in fiscal year 2004 and beyond." Mr. Ferraro went on to say, "Our focus remains on debt reduction. During the year we just completed, we reduced our net debt by $25.4 million (from $630.4 million to $605 million). As we go forward, we plan to limit capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. to $40 million in fiscal year 2004 and apply our free cash flow to further debt reduction." Buckeye, a leading manufacturer and marketer of specialty cellulose 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)
June 30 June 30
2003 2002
---------- ----------
Assets
Current assets:
Cash and cash equivalents $ 49,977 $ 56,006
Cash, restricted 3,375 3,375
Short-term investments - 8,863
Accounts receivable, net 126,283 97,516
Inventories 136,705 145,103
Deferred income taxes and other 26,307 29,653
---------- ----------
Total current assets 342,647 340,516
Property, plant and equipment, net 594,138 627,752
Goodwill, net 129,631 120,399
Intellectual property and other, net 44,239 46,070
---------- ----------
Total assets $1,110,655 $1,134,737
========== ==========
Liabilities and stockholders' equity
Current liabilities:
Trade accounts payable $ 37,007 $ 33,789
Accrued expenses 48,360 47,196
Current portion of capital lease
obligations 583 793
Current portion of long-term debt 41,718 22,000
---------- ----------
Total current liabilities 127,668 103,778
Long-term debt 619,474 675,396
Deferred income taxes 79,498 79,295
Capital lease obligations 2,700 3,029
Other liabilities 19,431 19,579
Stockholders' equity 261,884 253,660
---------- ----------
Total liabilities and stockholders' equity $1,110,655 $1,134,737
========== ==========
BUCKEYE TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in $000)
Quarter Ended Year Ended
June 30 June 30
----------------------- -----------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net sales $168,014 $160,128 $641,082 $635,218
Cost of goods sold 147,602 139,800 558,221 557,963
----------- ----------- ----------- -----------
Gross margin 20,412 20,328 82,861 77,255
Selling, research
and administrative
expenses 10,543 10,449 37,896 37,101
Impairment of long-
lived assets 6,757 9,984 36,503 9,984
Restructuring costs 1,636 640 1,636 1,605
----------- ----------- ----------- -----------
Operating income
(loss) 1,476 (745) 6,826 28,565
Net interest
expense and
amortization of
debt costs 11,222 12,410 46,464 48,051
Foreign exchange,
amortization of
intangibles, other 197 2,235 2,378 3,438
----------- ----------- ----------- -----------
Loss before income
taxes and
cumulative effect
of change in
accounting (9,943) (15,390) (42,016) (22,924)
Income tax benefit (4,782) (5,891) (17,122) (8,420)
----------- ----------- ----------- -----------
Loss before
cumulative effect
of change in
accounting (5,161) (9,499) (24,894) (14,504)
Cumulative effect
of change in
accounting
(net of tax of $0) - - - (11,500)(a)
----------- ----------- ----------- -----------
Net loss $(5,161) $(9,499) $(24,894) $(26,004)
=========== =========== =========== ===========
Loss per share
before cumulative
effect of change in
accounting
Basic earnings
(loss) per share $(0.14) $(0.27) $(0.67) $(0.42)
Diluted earnings
(loss) per share $(0.14) $(0.27) $(0.67) $(0.42)
Cumulative effect
of change in
accounting
Basic earnings
(loss) per share $ - $ - $ - $(0.33)
Diluted earnings
(loss) per share $ - $ - $ - $(0.33)
Earnings (loss) per share
Basic earnings
(loss) per share $(0.14) $(0.27) $(0.67) $(0.74)
Diluted earnings
(loss) per share $(0.14) $(0.27) $(0.67) $(0.74)
Weighted average
shares for basic
earnings per share 36,973,478 35,743,955 36,965,263 34,905,662
Adjusted weighted
average shares for
diluted earnings
per share 36,973,478 35,743,955 36,965,263 34,905,662
EBITDA $22,121 $20,456 $92,678 $84,210
(a) This reflects the impairment of Goodwill in the Company's
converting business, in accordance with the Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets.
BUCKEYE TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000)
Year Ended June 30,
-------------------
2003 2002
--------- --------
OPERATING ACTIVITIES
--------------------
Net Loss $(24,894) $(26,004)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Cumulative effect of change in accounting - 11,500
Impairment of long-lived assets 36,503 9,984
Depreciation and depletion 46,500 45,096
Amortization 5,588 5,525
Provision for deferred income taxes (13,489) 9,142
Other, net 585 1,701
Change in operating assets and liabilities
Accounts receivable (25,267) 10,688
Inventories 14,284 (3,411)
Prepaid expenses and other assets 13,827 (10,807)
Accounts payable and other current
liabilities 1,569 (25,489)
-------- --------
Net Cash provided by (used in) Operating Activities 55,206 27,925
INVESTING ACTIVITIES
--------------------
Purchases of property, plant & equipment (28,424) (35,972)
Redemption of short-term investments 8,863 (8,863)
Other (872) (1,292)
-------- --------
Net Cash used in Investing Activities (20,433) (46,127)
FINANCING ACTIVITIES
--------------------
Net proceeds from sale of equity interests - 26,233
Net borrowings (payments) under credit lines (19,923) 54,040
Payments for debt issuance costs (671) (2,157)
Principal payments on long-term debt and other (22,539) (18,459)
Net Cash provided by (used in) Financing
Activities (43,133) 59,657
-------- --------
Effect of foreign currency rate fluctuations on
cash 2,331 1,619
Increase (Decrease) in Cash and Cash Equivalents (6,029) 43,074
-------- --------
Cash and Cash Equivalents at beginning of period 56,006 12,932
-------- --------
Cash and Cash Equivalents at end of period $ 49,977 $ 56,006
======== ========
BUCKEYE TECHNOLOGIES INC.
SUPPLEMENTAL FINANCIAL DATA
(in $ millions except per share data)
Variances
------------------------
Apr-Jun Apr-Jun
Results 03 03 FY03
-------------- vs vs vs
Apr-Jun Jan-Mar Apr-Jun
03 FY03 03 02 FY02
------- ------ ------- -------- -------
Net Sales $168.0 641.1 $4.5 $7.9 $5.9
Gross Margin 20.4 82.9 0.1 0.0 5.6
Operating Income before
Impairment and
Restructuring (1) 9.9 45.0 (0.8) 0.0 4.8
Net Income (Loss) before
Impairment and
Restructuring (2) 0.2 (0.2) 0.6 2.8 6.7
Adjusted weighted average
shares for diluted earnings
per share (millions) 37.0 37.0 0.0 1.2 2.1
Diluted Earnings (Loss) Per
Share before Impairment and
Restructuring (3) 0.01 (0.01) 0.02 0.08 0.19
EBITDA (4) 22.1 92.7 (0.3) 1.6 8.5
% of sales 13.2% 14.5% (0.5)pts 0.4 pts 1.2 pts
Depreciation, Depletion &
Amortization 11.6 46.7 (0.3) (0.4) 1.4
Capital Spending 9.2 28.4 1.1 1.9 (7.5)
Net Debt (5) 605.0 605.0 (4.1) (25.4) (25.4)
Credit Facility Availability
at End of Period 30.4 30.4 5.4 19.3 19.3
Notes
-----
(1) Operating Income before Impairment and Restructuring is presented
to assist in evaluating the performance of the Company's on-going
operations enabling meaningful comparisons of past and present
operating results. This information along with Operating Income
(Loss) provides for a more complete analysis of results of
operations. Operating Income (Loss) is the most directly
comparable GAAP measure.
Operating Income (Loss) 1.5 6.8 20.5 2.2 (21.7)
Asset impairment 6.8 36.5 (23.0) (3.2) 26.5
Restructuring costs 1.6 1.6 1.6 1.0 0.0
------- ------ ------ ------ ------
Operating Income before
Impairment and
Restructuring 9.9 45.0 (0.8) (0.0) 4.8
======= ====== ====== ====== ======
(2) Net Income (Loss) before Impairment and Restructuring is presented
to assist in evaluating the performance of the Company's on-going
operations enabling meaningful comparisons of past and present
results. This information along with Net Income (Loss) provides
for a more complete analysis of results of operations. Net Income
(Loss) is the most directly comparable GAAP measure.
Net Income (Loss) (5.2) (24.9) 14.6 4.3 1.1
Cumulative effect of
change in accounting
(SFAS 142), net of tax 0.0 0.0 0.0 0.0 (11.5)
Asset impairment, net
of tax 4.3 23.6 (15.0) (1.7) 17.6
Restructuring costs,
net of tax 1.1 1.1 1.1 0.2 (0.5)
------- ------ ------ ------ ------
Net Income (Loss) before
Impairment and
Restructuring 0.2 (0.2) 0.6 2.8 6.7
======= ====== ====== ====== ======
(3) Diluted Earnings (Loss) Per Share before Impairment and
Restructuring is presented to assist in evaluating the performance
of the Company's on-going operations enabling meaningful
comparisons of past and present results. This information along
with Diluted Earnings (Loss) Per Share provides for a more
complete analysis of results of operations. Diluted Earnings
(Loss) Per Share is the most directly comparable GAAP measure.
Diluted Earnings (Loss)
Per share (0.14) (0.67) 0.39 0.13 0.07
Cumulative effect of
change in accounting
(SFAS 142) 0.0 0.0 0.0 0.0 (0.33)
Asset impairment, net
of tax 0.12 0.64 (0.40) (0.05) 0.47
Restructuring costs,
net of tax 0.03 0.03 0.03 0.0 (0.02)
------- ------ ------ ------ ------
Diluted Earnings (Loss)
Per Share before
Impairment and
Restructuring 0.01 (0.01) 0.02 0.08 0.19
======= ====== ====== ====== ======
(4) EBITDA is presented as an additional means of evaluating the
Company's financial condition, liquidity and its ability to
satisfy rating agency and creditor requirements. The Company
incurs significant non-cash charges, including depreciation and
amortization, related to the capital assets utilized in its
operations. EBITDA is a central measure used in the Company's
compliance with debt covenants related to its credit facility.
EBITDA as defined by the revolving credit facility is "earnings
before interest, taxes, depreciation and amortization, goodwill
impairment and extraordinary and nonrecurring gains and losses."
Using this information along with Operating Income (Loss) provides
for a more complete analysis of results of operations. Operating
Income (Loss) is the most directly comparable GAAP measure.
Net Income (Loss) (5.2) (24.9) 14.6 4.3 1.1
Interest expense 10.9 45.1 (0.2) (1.2) (1.4)
Income tax expense (4.8) (17.1) 7.1 1.1 (8.7)
Depreciation,
depletion, and
amortization 11.6 46.7 (0.4) (0.4) 1.4
Financing and
intangibles
amortization 1.2 4.8 (0.0) 0.0 0.6
Cumulative effect of
change in accounting
(SFAS 142) 0.0 0.0 0.0 0.0 (11.5)
Asset impairment 8.4 38.1 (21.3) (1.6) 28.1
Restructuring charges 0.0 0.0 0.0 (0.6) (1.6)
Other nonrecurring
(gain)/loss as per
credit facility 0.0 0.0 0.0 0.0 0.5
------- ------ ------ ------ ------
EBITDA 22.1 92.7 (0.3) 1.6 8.5
======= ====== ====== ====== ======
(5) Net Debt is presented as an additional means of evaluating the
Company's financial condition, liquidity and its ability to
satisfy rating agency and creditor requirements. The Company has
held a significant amount of cash, cash equivalents and short-term
investments due to the "Permitted Indebtedness" limitation defined
in the bond indentures. Net debt is defined as debt and capital
lease obligations, net of the interest rate swap, cash and 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 the
companies financial position. Long-Term Debt and Capital Lease
Obligations are most directly comparable GAAP measures.
as of Jun 03 vs Jun 03 vs
Jun 03 Mar 03 Jun 02
--------- --------- ----------
Current portion of capital lease
obligation 0.6 0.0 (0.2)
Current portion of long-term debt 41.7 1.3 19.7
Long-term debt 619.5 (2.1) (55.9)
Capital lease obligation 2.7 (0.2) (0.3)
--------- --------- ----------
Total Debt on Balance Sheet 664.5 (1.0) (36.7)
less: Interest rate swap non-cash fair
value adjustment to Debt (6.1) 2.2 (3.5)
less: Cash, cash equivalents,
restricted cash, and short-term
investments (53.4) (5.3) 14.9
--------- --------- ----------
Net Debt 605.0 (4.1) (25.4)
========= ========= ==========
(6) EBITDA reconciliation for comparative periods
Quarter Ended Year Ended
June 30, June 30,
-----------------------------------
2003 2002 2003 2002
-------- -------- -------- --------
Net Income (Loss) (5.2) (9.5) (24.9) (26.0)
Interest expense 10.9 12.1 45.1 46.5
Income tax expense (4.8) (5.9) (17.1) (8.4)
Depreciation, depletion, and
amortization 11.6 12.0 46.7 45.3
Financing and intangibles
amortization 1.2 1.2 4.8 4.2
Cumulative effect of change in
accounting (SFAS 142) 0.0 0.0 0.0 11.5
Asset impairment 8.4 10.0 38.1 10.0
Restructuring charges 0.0 0.6 0.0 1.6
Other nonrecurring (gain)/loss as
per
credit facility 0.0 0.0 0.0 (0.5)
-------- -------- -------- --------
EBITDA 22.1 20.5 92.7 84.2
======== ======== ======== ========
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