SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D) OF THE
THE SECURITIES ACT OF 1934
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): August 2, 2004
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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
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ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On July 26, 2004, Buckeye Technologies Inc. (the "Company") issued a press
release regarding its results of operations for the ear ended June 30, 2004,
including a statement of operations for that quarter, a consolidated balance
sheet as of June 30, 2004, a consolidated statement of cash flow for that
quarter, and supplemental financial data. In addition, on August 3, 2004, the
Company will hold a teleconference at 9:30 a.m. Central to discuss the year end.
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) 857-6929
within the United States or (719)457-2600 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
July 26, 2004
News from
[OBJECT OMITTED]
FOR IMMEDIATE RELEASE Contacts: Kris Matula, Executive Vice President
and Chief Financial Officer
901-320-8588
Gordon Mitchell
Investor Relations Manager
901-320-8256
Website: www.bkitech.com
BUCKEYE REPORTS FOURTH QUARTER RESULTS
MEMPHIS, TN August 2, 2004 - Buckeye Technologies Inc. (NYSE:BKI) today
announced that it earned $1.4 million after tax ($.04 per share) in the quarter
ended June 30, 2004. The Company's results include $2 million after tax in
restructuring and impairment charges primarily related to the previously
announced closures of its facilities in Cork, Ireland and Lumberton, North
Carolina.
During the same quarter of the prior year, the Company incurred a loss of $5.2
million after tax ($.14 per share) which included $5.4 million after tax in
restructuring and impairment charges, primarily relating to the partial closure
of the Lumberton plant and the impairment of idle nonwovens equipment.
Excluding the impairment and restructuring charges, the Company earned $3.4
million after tax ($.09 per share) in April-June 2004. This compares to earnings
of $0.2 million after tax ($.01 per share) in the same period a year ago.
During fiscal year 2004, the Company incurred a loss of $38.2 million after tax
($1.03 per share) including impairment, restructuring, and refinancing costs of
$36.6 million after tax ($.99 per share). This compares to a loss of $24.9
million after tax ($.67 per share) in fiscal 2003, which included a $24.7
million after tax impairment and restructuring charge (also $.67 per share).
Net sales for the April-June quarter were $168 million, equal to sales in the
same quarter of the prior year. Net sales for fiscal 2004 were $656.9 million,
2.5% above the $641.1 million achieved in the prior year.
Buckeye Chairman, David B. Ferraro, stated, "Although fiscal 2004 was a
disappointing year for Buckeye, we are encouraged by recent strengthening trends
in our markets. The restructuring steps we have taken are improving our
efficiency and enabling us to more effectively utilize our capacity. We are
confident that we have implemented the right plans to improve future earnings."
Mr. Ferraro went on to say, "During April-June, we achieved a gross margin of
15.5%, which represents a 3.4 percentage point improvement over the 12.1% gross
margin achieved during the year ago quarter. We remain committed to achieving
additional margin improvement and restoring our profitability to historical
levels."
Buckeye, a leading manufacturer and marketer of specialty fiber 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.
Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Year Ended
June 30, March 31, June 30, June 30, June 30,
2004 2004 2003 2004 2003
------------- ------------- ------------ ------------ -------------
Net sales............................................ $168,042 $172,761 $168,014 $656,913 $641,082
Cost of goods sold................................... 142,053 151,031 147,602 579,472 558,221
------------- ------------- ------------ ------------ -------------
Gross margin......................................... 25,989 21,730 20,412 77,441 82,861
Selling, research and administrative expenses........ 10,438 9,445 10,543 42,423 37,896
Impairment of long-lived assets...................... 1,075 43,891 6,757 45,908 36,503
Restructuring costs.................................. 2,073 143 1,636 5,945 1,636
------------- ------------- ------------ ------------ -------------
Operating income (loss) 12,403 (31,749) (1,476) (16,835) 6,826
Net interest expense and amortization of debt costs.. 11,305 11,369 11,222 46,361 46,464
Loss on early extinguishment of debt................. - - - 4,940 -
Foreign exchange, amortization of intangibles, other. 268 149 197 1,971 2,378
------------- ------------- ------------ ------------ -------------
Income (loss) before income taxes.................... 830 (43,267) (9,943) (70,107) (42,016)
Income tax benefit................................... (580) (15,762) (4,782) (26,197) (17,122)
------------- ------------- ------------ ------------ -------------
Income (loss) before cumulative effect of change in
accounting...................................... 1,410 (27,505) (5,161) (43,910) (24,894)
Cumulative effect of change in accounting (net of
tax of $3,359)................................. - - - 5,720 -
------------- ------------- ------------ ------------ -------------
Net income (loss).................................... $ 1,410 $(27,505) $(5,161) $(38,190) $(24,894)
Earnings (loss) per share before cumulative effect of
change in accounting
Basic earnings (loss) per share......... $0.04 $(0.74) $(0.14) $(1.18) $(0.67)
Diluted earnings (loss) per share $0.04 $(0.74) $(0.14) $(1.18) $(0.67)
Cumulative effect of change in accounting
Basic earnings (loss) per share........ $ - $ - $ - $ 0.15 $ -
Diluted earnings (loss) per share...... $ - $ - $ - $ 0.15 $ -
Earnings (loss) per share
Basic earnings (loss) per share........ $0.04 $(0.74) $(0.14) $(1.03) $(0.67)
Diluted earnings (loss) per share...... $0.04 $(0.74) $(0.14) $(1.03) $(0.67)
Weighted average shares for basic earnings per share. 37,234 37,009 36,973 37,075 36,965
Adjusted weighted average shares for diluted
earnings per share................................ 37,369 37,009 36,973 37,075 36,965
Proforma amounts, assuming change in accounting
method is applied retroactively:
Net income (loss).................................... $1,410 $(27,505) $(4,816) $(43,910) $(23,513)
Basic earnings (loss) per share...................... $ 0.04 $ (0.74) $ (0.13) $ (1.18) $ (0.64)
Diluted earnings (loss) per share.................... $ 0.04 $ (0.74) $ (0.13) $ (1.18) $ (0.64)
Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
June 30
2004 2003
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Assets
Current assets:
Cash and cash equivalents................................ $ 27,235 $ 49,977
Cash, restricted......................................... 3,375
Accounts receivable, net................................. 112,367 126,283
Inventories.............................................. 107,439 136,705
Deferred income taxes and other.......................... 10,207 13,537
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Total current assets.......................................... 257,248 329,877
Property, plant and equipment, net............................ 537,632 594,138
Goodwill, net................................................. 130,172 129,631
Intellectual property and other, net.......................... 41,023 44,239
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Total assets.................................................. $ 966,075 $ 1,097,885
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Liabilities and stockholders' equity
Current liabilities:
Trade accounts payable................................... $ 27,130 $ 37,007
Accrued expenses......................................... 45,337 48,360
Current portion of capital lease obligation............ 632 583
Current portion of long-term debt........................ 16,972 41,718
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Total current liabilities..................................... 90,071 127,668
Long-term debt................................................ 587,076 619,474
Deferred income taxes......................................... 37,956 66,728
Capital lease obligation...................................... 2,068 2,700
Other liabilities............................................. 19,559 19,431
Stockholders' equity.......................................... 229,345 261,884
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Total liabilities and stockholders' equity.................... $966,075 $ 1,097,885
=======================================
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Year Ended June 30
2004 2003
-------------------------------------
Operating activities
Net loss............................................. $ (38,190) $ (24,894)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Cumulative effect of change in accounting....... (5,720) -
Impairment charge of long-lived assets.......... 45,908 36,503
Depreciation.................................... 45,675 46,500
Amortization.................................... 4,227 5,588
Loss on early extinguishment of debt............ 4,940 -
Deferred income taxes........................... (27,340) (13,489)
Other........................................... 4,877 585
Changes in operating assets and liabilities:
Accounts receivable......................... 11,716 (25,267)
Inventories................................. 29,838 14,284
Prepaid expenses and other assets........... (1,302) 13,827
Accounts payable and other current liabilities (8,973) 1,569
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Net cash provided by operating activities............ 65,656 55,206
Investing activities
Purchases of property, plant and equipment........... (31,871) (28,424)
Redemption of short term investments................. - 8,863
Other................................................ (374) (872)
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Net cash used in investing activities................ (32,245) (20,433)
Financing activities
Proceeds from exercise of options 2,667 -
Net payments under revolving line of credit.......... (224,026) (19,923)
Issuance of long-term debt........................... 350,000 -
Payments for debt issuance costs..................... (9,070) (671)
Payments related to early extinguishment of debt..... (2,115) -
Proceeds from termination of swap 4,000 -
Principal payments on long-term debt and other....... (178,333) (22,539)
-------------------------------------
Net cash provided by (used in) financing activities.. (56,877) (43,133)
-------------------------------------
Effect of foreign currency rate fluctuations......... 724 2,331
Decrease in cash and cash equivalents................ (22,742) (6,029)
Cash and cash equivalents at beginning of year....... 49,977 56,006
-------------------------------------
Cash and cash equivalents at end of year............. $ 27,235 $ 49,977
=====================================
Buckeye Technologies Inc.
Supplemental Financial Data
(In $000)
(Unaudited)
Three Months Ended Year Ended
Segment Results June 30, March 31, June 30, June 30, June 30,
2004 2004 2003 2004 2003
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Specialty fibers
Net sales $118,165 $121,289 $118,892 $461,360 $466,524
Operating income (a) 12,714 10,896 8,159 28,198 41,935
Depreciation and amortization (b) 7,024 7,037 6,874 27,662 29,344
Capital expenditures 4,457 4,596 7,723 28,909 24,670
Nonwoven Materials
Net sales $55,987 $ 57,259 $ 52,804 $217,641 $195,860
Operating income (a) 2,595 1,349 1,659 7,580 3,978
Depreciation and amortization (b) 3,633 4,782 4,382 17,150 16,096
Capital expenditures 884 636 1,262 2,662 3,194
Corporate
Net sales $(6,110) $(5,787) $(3,682) $ (22,088) $ (21,302)
Operating income (a) (2,906) (43,994) (8,342) (52,613) (39,087)
Depreciation and amortization (b) 828 831 508 3,321 3,589
Capital expenditures 73 35 167 300 560
Total
Net sales $168,042 $172,761 $168,014 $656,913 $641,082
Operating income (a) 12,403 (31,749) 1,476 (16,835) 6,826
Depreciation and amortization (b) 11,485 12,650 11,764 48,133 49,029
Capital expenditures 5,414 5,267 9,152 31,871 28,424
(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 Year Ended
Adjusted EBITDA June 30, March 31, June 30, June 30, June 30,
2004 2004 2003 2004 2003
------------- ------------- ------------ ------------- -------------
Income (loss) before cumulative effect of change in
accounting $ 1,410 $(27,505) $(5,161) $(43,910) $(24,894)
Income tax benefit (580) (15,762) (4,782) (26,197) (17,122)
Net interest expense 10,900 11,043 10,623 44,401 43,964
Amortization of debt costs 405 326 599 1,960 2,500
Early extinguishment of debt - - - 4,940 -
Depreciation, depletion and amortization 11,485 12,650 12,212 48,133 49,029
------------- ------------- ------------ ------------- -------------
EBITDA 23,620 (19,248) 13,491 29,327 53,477
Interest income 216 247 237 923 1,062
Asset impairments 1,075 43,891 6,757 45,908 36,503
Loss on disposal of assets 304 20 122 998 632
Restructuring charges (c) 492 143 1,636 4,364 1,636
Restatement due to change in accounting - - - 8,525 -
------------- ------------- ------------ ------------- -------------
Adjusted EBITDA $25,707 $25,053 $22,243 $90,045 $93,310
============= ============= ============ ============= =============
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 June 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 the
quarter.