================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------------------------------------------------
FORM 10-Q
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|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ____ to ____
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Commission file number: 33-60032
Buckeye Technologies Inc.
incorporated pursuant to the Laws of Delaware
--------------------------------------------------------------------------------
Internal Revenue Service -- Employer Identification No. 62-1518973
1001 Tillman Street, Memphis, TN 38112
901-320-8100
--------------------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes |X| No ____
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes |X| No ____
As of November 11, 2003, there were outstanding 36,997,350 Common Shares of the
Registrant.
================================================================================
INDEX
BUCKEYE TECHNOLOGIES INC.
--------------------------------------------------------------------------------
ITEM PAGE
PART I - FINANCIAL INFORMATION
1. Financial Statements:
Condensed Consolidated Statements of Operations for the Three Months Ended September 30,
2003 and 2002.......................................................................... 3
Condensed Consolidated Balance Sheets as of September 30, 2003 and June 30, 2003............ 4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30,
2003 and 2002.......................................................................... 5
Notes to Condensed Consolidated Financial Statements........................................ 6
2. Management's Discussion and Analysis of Financial Condition and Results of Operations....... 16
3. Quantitative and Qualitative Disclosures About Market Risk 21
4. Controls and Procedures 21
PART II - OTHER INFORMATION
6. Exhibits and Reports on Form 8-K............................................................ 22
SIGNATURES 23
2
Item 1. Financial Statements
PART I - FINANCIAL INFORMATION
BUCKEYE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months 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 and other................ 429 90
------------- -------------
Loss before income taxes............................................... (3,575) (778)
Income tax benefit..................................................... (1,144) (259)
------------- -------------
Net loss............................................................... $(2,431) $ (519)
============= =============
Earnings (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................... 36,975 36,949
Effect of dilutive stock options....................................... - -
------------- -------------
Adjusted weighted average shares for diluted earnings per share........ 36,975 36,949
============= =============
See accompanying notes.
3
BUCKEYE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30 June 30
2003 2003
-----------------------------------------
(Unaudited)
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.............................. 922,911 909,733
Less accumulated depreciation.............................. (327,713) (315,595)
-----------------------------------------
595,198 594,138
Goodwill................................................... 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 obligation........... 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 obligation.................................... 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
=========================================
See accompanying notes.
4
BUCKEYE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended
September 30
---------------------------------------
2003 2002
---------------------------------------
Operating activities
Net loss.......................................................... $(2,431) $ (519)
Adjustments to reconcile net loss to net cash provided by (used in)
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
Changes 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
=======================================
See accompanying notes.
5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(In thousands)
NOTE A -- BASIS OF PRESENTATION
Our accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(including normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months ended
September 30, 2003 are not necessarily indicative of the results that may be
expected for the year ending June 30, 2004. All significant intercompany
accounts and transactions have been eliminated in consolidation. For further
information and a listing of our significant accounting policies, refer to the
financial statements and notes thereto included in our Annual Report on Form
10-K for the year ended June 30, 2003. Except as otherwise specified, references
to years indicate our fiscal year ending June 30, 2004 or ended June 30 of the
year referenced and comparisons are to the corresponding period of the prior
year.
NOTE B -- SEGMENT INFORMATION
We report results for two segments, specialty fibers and nonwoven
materials. The specialty fiber segment is an aggregation of cellulosic fibers
based on both wood and cotton. Management makes financial decisions and
allocates resources based on the sales and operating income of each segment. We
allocate selling, research, and administration expenses to each segment and
management uses the resulting operating income to measure the performance of the
segments. The financial information attributed to these segments is included in
the following table:
Three Months Ended Specialty Nonwoven
September 30 Fibers Materials Corporate Total
------------------------------------------------------------------------------------------------------------
Net sales 2003 $107,318 $53,210 $(4,697) $155,831
2002 112,345 47,388 (3,308) 156,425
------------------------------------------------------------------------------------------------------------
Operating income (loss) 2003 10,291 2,487 (1,447) 11,331
2002 11,640 484 (686) 11,438
------------------------------------------------------------------------------------------------------------
Depreciation and amortization of 2003 6,704 4,268 825 11,797
intangibles 2002 7,533 3,791 961 12,285
------------------------------------------------------------------------------------------------------------
Capital expenditures 2003 9,089 599 37 9,725
2002 3,566 673 348 4,587
The corporate segment includes operating elements such as segment eliminations
and charges related to restructuring. Corporate net sales represents the
elimination of intersegment sales included in the specialty fibers reporting
segment. We account for intersegment sales as if the sales were to third
parties, that is, at current market prices.
NOTE C -- RESTRUCTURING COSTS
During the three months ended September 30, 2003, we entered into a
second phase of our restructuring program designed to deliver cost reductions
through reduced overhead expenses across the company. This program was a
continuation of the program initiated in the fourth quarter of fiscal 2003. This
phase of the program will enable us to improve our operating results through
reduced salaries, benefits, other employee related expenses and operating
expenses. As a result of this restructuring, approximately 50 positions will be
6
eliminated. These positions include manufacturing, sales, product development
and administrative functions throughout the organization. Voluntary and
involuntary termination benefits related to this phase of the program of $857
were accrued and $7 were paid during the three months ended September 30, 2003.
We expect payments related to this phase of the restructuring to continue
throughout fiscal 2004. The total cost of this phase of the restructuring
program is estimated to be approximately $3,000 in fiscal 2004.
The first phase of the restructuring program initiated in fiscal 2003
was mainly due to the partial closure of our Lumberton facility resulting in the
consolidation of our U.S. cotton linter pulp production at our Memphis,
Tennessee facility. During the three months ended September 30, 2003, additional
expenses of $174 were recorded and $1,420 were paid for this phase of the
program. These additional expenses included $227 for miscellaneous costs
associated with the partial closure of the Lumberton facility. While we ceased
producing cotton cellulose at our Lumberton facility at the end of August 2003,
we are still continuing to supply our cotton cellulose paper customers with
product produced at Lumberton. Approximately 10 employees were asked to remain
into the second quarter of fiscal 2004. We estimate the remaining expenses for
this phase of the restructuring program to be approximately $690, which we
expect will be recognized and paid in the second quarter of fiscal 2004.
During the year ended June 30, 2002, we entered into a restructuring
program designed to deliver cost reductions through reduced overhead expenses.
As a result of the restructuring, approximately 200 positions were eliminated
and we closed engineering offices located in Finland. During the three months
ended September 30, 2003, miscellaneous expenses of $17 were paid and the
accrual was fully utilized as of September 30, 2003. We do not expect any
additional payments or expenses related to this program.
Restructuring expenses are included in "Restructuring Costs" in the
statements of operations. The following table summarizes the expenses and
accrual balances by reporting segments for the three months ended September 30,
2003.
Three Months Ended
September 30, 2003
-----------------------------
Accrual
Balance as Accrual
of Balance as of Program Total
June 30, Additional September 30, Charges Estimated
2003 Charges Payments 2003 to Date Charges
--------------------------------------------------------------------------------------------------- ------------------------
2003 Restructuring Program-Phase 2
--------------------------------------------------------------------------------------------------- ------------------------
Severance and employee benefits
Specialty fibers $ - $ 627 $ - $ 627 $627 $1,375
Nonwoven materials - 37 (7) 30 37 40
Corporate - 200 - 200 200 1,585
----------------------------------------------------------- ------------------------
Total 2003 Program-Phase 2 - 864 (7) 857 864 3,000
2003 Restructuring Program-Phase 1
--------------------------------------------------------------------------------------------------- ------------------------
Severance and employee benefits
Specialty Fibers 1,437 (53) (1,101) 283 1,408 1,500
Nonwovens Materials 87 - (49) 38 87 87
Other miscellaneous expenses
Specialty Fibers - 227 (227) - 232 830
Nonwovens Materials 83 - (43) 40 83 83
----------------------------------------------------------- ------------------------
Total 2003 Program-Phase 1 1,607 174 (1,420) 361 1,810 2,500
2002 Restructuring Program
--------------------------------------------------------------------------------------------------- ------------------------
Nonwoven materials 17 - (17) - 1,605 1,605
--------------------------------------------------------------------------------------------------- ------------------------
Total All Programs $1,624 $1,038 $(1,444) $1,218 $4,279 $7,105
=========================================================== ========================
7
NOTE D - RECENTLY ISSUED ACCOUNTING STANDARDS
During the first quarter of 2004, we adopted Statement of Financial
Accounting Standards No. ("SFAS") 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity, and SFAS 149,
Amendment of Statement 133 on Derivative Instruments and Hedging Activity. The
adoption of these statements did not have any effect on our financial position
or results of operations.
NOTE E -- INVENTORIES
The components of inventory consist of the following:
September 30 June 30
2003 2003
--------------------------------
(In thousands)
Raw materials....................... $33,377 $36,827
Finished goods...................... 80,860 75,394
Storeroom and other supplies........ 24,872 24,484
--------------------------------
$139,109 $136,705
================================
NOTE F -- DEBT
The components of long-term debt
September 30 June 30
2003 2003
---------------------------------
Senior Notes due:
2013 $200,000 $ -
Senior Subordinated Notes due:
2005 - 149,816
2008 99,700 99,688
2010 153,418 155,470
Credit facilities 169,114 227,315
Notes payable - 21,903
Other 7,000 7,000
---------------------------------
629,232 661,192
Less current portion - 41,718
---------------------------------
$629,232 $619,474
=================================
Senior notes - On September 22, 2003 we placed privately $200,000 in
aggregate principal amount of 8.5% senior notes due October 1, 2013. The notes
are unsecured obligations and are senior to any of our subordinated debt. The
notes are guaranteed by our direct and indirect domestic subsidiaries that are
also guarantors on our senior secured indebtedness. We used the net proceeds
from the private placement to redeem our $150,000 senior subordinated notes due
2005, make a permanent reduction of $40,000 to our revolving credit facility and
pay the related transaction costs. On September 22, 2003, we called the senior
subordinated notes due in 2005. These notes were redeemed on October 22, 2003.
During the three months ending September 30, 2003, $3,300 was expensed
related to the early extinguishment of the $150,000 senior subordinated notes
due 2005. These expenses included a $2,115 call premium and $1,185 related to
the write-off of deferred financing costs.
8
Revolving credit facility - We amended our revolving credit facility on
July 28, 2003 to modify the financial covenants from June 30, 2003 through March
31, 2005. Additionally, this amendment authorized the issuance of $200,000 of
senior notes, to refinance our $150,000 of senior subordinated notes due in
2005, and required a permanent reduction in the credit facility of $40,000.
During the three months ended September 30, 2003, we used proceeds from the
private placement of senior notes and cash on hand to reduce the outstanding
balance on the credit facility by $75,000 to $132,500 and to make our final
$22,000 payment to UPM-Kymmene. As of September 30, 2003 we had $42,500
available on the revolving credit facility. On November 5 2003, we paid the
outstanding balance with proceeds from the issuance of our new credit facility
(see Note J - Subsequent Events to our Condensed Consolidated Financial
Statements).
Senior subordinated notes - Under the indentures governing our senior
subordinated notes, as well as the indenture that governs the notes, our ability
to incur additional debt is limited. Under these indentures, additional debt
must be incurred as so-called "ratio debt" or, alternatively, must be permitted
in form and amount as "Permitted Indebtedness." In order to incur ratio debt, a
specified consolidated fixed charge coverage ratio (as defined in the
subordinated note indentures) must equal or exceed 2:1 (measured on a rolling
four-quarter basis). At March 31, 2002, our fixed charge cover ratio fell below
2:1. This development did not breach any covenant or constitute an event of
default under any of our debt agreements. However, until such time as the ratio
again equals or exceeds 2:1, we can only incur debt that is Permitted
Indebtedness.
On October 16, 2003, we successfully completed a solicitation of
consents from holders of our notes due in 2008 (2008 notes) to amend this
indenture to conform certain provisions of the 2008 notes to the provisions in
our notes due in 2010 and to current market practice. This amendment allows us
to refinance our revolving credit facility, while we are still limited to
Permitted Indebtedness as defined in the indentures.
Under each such indenture, the ratio test is measured on a rolling
four-quarter basis. While we can offer no assurance in this regard, we believe
that our operating results will improve over the next several quarters and that
such improved results together with recent reductions in our outstanding debt,
will enable us to exceed the required 2:1 ratio necessary to incur ratio debt
under the senior subordinated note indentures and the senior notes indenture.
Interest rate swap - In May 2001, we entered into an interest rate swap
on $100,000 of 8% fixed rate notes maturing in October 2010. The swap converts
interest payments from a fixed rate to a floating rate of LIBOR plus 1.97%. This
arrangement qualifies as a fair value hedge under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. As such, the net effect from the
interest rate swap is recorded as part of interest expense. The swap agreement
settles quarterly until maturity in October 2010. During the three months ended
September 30, 2003 and 2002, the swap reduced the Company's interest expense by
$1,238 and $1,049, respectively. Based upon current interest rates for similar
transactions, the fair value of the interest rate swap agreement was recorded as
an asset and a corresponding increase in debt of $4,000 at September 30, 2003
and $6,067 at June 30, 2003.
On October 15, 2003, the swap counter party exercised its right to
change the termination date of the swap from October 15, 2010 to October 15,
2003. By exercising this right, the swap counter party paid us $4.0 million as
an early termination fee.
Other credit facilities - Our $30,000 receivables based credit facility
matures on December 4, 2003. We intend to refinance this facility with available
long-term credit facilities and therefore have included the balance in long-term
debt. At September 30, 2003, we had $24,800 outstanding on our receivables based
credit facility.
On September 30, 2003, we renewed our Canadian credit facility. The
renewal extended the maturity to November 30, 2004 and required a 20% reduction
of the principal to Canadian $16,000 (U.S. $11,900 equivalent based on exchange
rates in effect at September 30, 2003) at September 30, 2003. All other terms
and conditions remained the same.
9
NOTE G -- COMPREHENSIVE INCOME (LOSS)
The components of comprehensive income (loss) consist of the following:
Quarter Ended
September 30
2003 2002
---------------------------
(In thousands)
Net loss........................................ $(2,431) $ (519)
Foreign currency translation adjustments - net.. 3,907 (13,708)
---------------------------
Comprehensive income (loss)..................... $ 1,476 $(14,227)
===========================
The change in the foreign currency translation adjustment is primarily
due to fluctuations in the exchange rate of the US dollar and the euro of
$4,197, the Brazilian real of $(425) and the Canadian dollar of $135 for the
three months ended September 30, 2003.
NOTE H - STOCK-BASED COMPENSATION
At September 30, 2003, the Company has stock-based compensation plans
which it accounts for under recognition and measurement principles of APB
Opinion No. 25, Accounting for Stock Issued to Employees, and related
Interpretations. No stock-based compensation cost is reflected in the statements
of operations. The following table illustrates the effect on net loss and
earnings per share if the Company had applied the fair value recognition
provisions of SFAS 123 to stock-based compensation.
Three Months Ended
September 30
----------------------------------
2003 2002
----------------------------------
Net loss as reported $(2,431) $(519)
Deduct: Total stock-based compensation expense determined
under fair value based method, net of related tax
effects (538) (878)
----------------------------------
Pro forma net loss $(2,969) $(1,397)
==================================
Basic earnings per share:
As reported $(0.07) $(0.01)
Pro forma $(0.08) $(0.04)
Diluted earnings per share:
As reported $(0.07) $(0.01)
Pro forma $(0.08) $(0.04)
NOTE I - CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
The guarantor subsidiaries presented below represent our subsidiaries
that will be subject to the terms and conditions outlined in the indenture
governing the senior notes and will guarantee the notes, jointly and severally,
on a senior unsecured basis. The non-guarantor subsidiaries presented below
represent the foreign subsidiaries and the receivables subsidiary which will not
guarantee the senior notes. Each subsidiary guarantor is 100% owned by Buckeye
Technologies Inc. and all guarantees are full and unconditional.
Supplemental financial information for Buckeye Technologies Inc. and
our guarantor subsidiaries and non-guarantor subsidiaries for the senior notes
is presented in the following tables.
10
STATEMENTS OF OPERATIONS
Three Months Ended September 30, 2003
Guarantors
------------------------------
Buckeye Non-
Technologies US Guarantor Consolidating
Inc. Subsidiaries Subsidiaries Adjustments Consolidated
------------------------------------------------------------------------------
Net sales $18,741 $90,104 $54,533 $(7,547) $155,831
Cost of goods sold 14,778 77,397 49,168 (7,473) 133,870
------------------------------------------------------------------------------
Gross margin 3,963 12,707 5,365 (74) 21,961
Selling, research and administrative expenses 2,594 4,751 2,247 - 9,592
Restructuring costs 214 592 232 - 1,038
------------------------------------------------------------------------------
Operating income (loss) 1,155 7,364 2,886 (74) 11,331
Other income (expense):
Interest income/(expense) and
amortization of debt (10,517) (72) (588) - (11,177)
Other income/(expense), including equity
income in affiliates (1,042) (513) 131 (2,305) (3,729)
Intercompany interest income/(expense) 7,281 (4,922) (2,359) - -
Intercompany miscellaneous
income/(expense) (320) (686) 1,006 - -
-------------------------------------------------------------------------------
Income/(loss) before income taxes and
cumulative effect of change in accounting (3,443) 1,171 1,076 (2,379) (3,575)
-------------------------------------------------------------------------------
Income tax expense/(benefit) (1,012) 111 457 (699) (1,144)
-------------------------------------------------------------------------------
Net income (loss) $ (2,431) $ 1,060 $ 619 $ (1,680) $ (2,431)
===============================================================================
STATEMENTS OF OPERATIONS
Three Months Ended September 30, 2002
Guarantors
------------------------------
Buckeye Non-
Technologies US Guarantor Consolidating
Inc. Subsidiaries Subsidiaries Adjustments Consolidated
------------------------------------------------------------------------------
Net sales $23,343 $90,955 $45,871 $(3,744) $156,425
Cost of goods sold 17,740 81,590 39,661 (2,947) 136,044
------------------------------------------------------------------------------
Gross margin 5,603 9,365 6,210 (797) 20,381
Selling, research and administrative expenses 2,083 4,951 1,909 - 8,943
------------------------------------------------------------------------------
Operating income (loss) 3,520 4,414 4,301 (797) 11,438
Other income (expense):
Interest income/(expense) and
amortization of debt (10,981) (138) (1,007) - (12,126)
Other income/(expense), including equity
income in affiliates (511) (1,044) 2,063 (598) (90)
Intercompany interest income/(expense) 7,347 (4,905) (2,442) - -
Intercompany miscellaneous
income/(expense) (393) (987) 1,380 - -
-------------------------------------------------------------------------------
Income/(loss) before income taxes and
cumulative effect of change in accounting (1,018) (2,660) 4,295 (1,395) (778)
-------------------------------------------------------------------------------
Income tax expense/(benefit) (499) (639) 1,562 (684) (259)
-------------------------------------------------------------------------------
Net income (loss) $ (519) $(2,021) $2,733 $ (711) $ (519)
===============================================================================
11
BALANCE SHEETS
As of September 30, 2003
Guarantors
------------------------------
Buckeye Non-
Technologies US Guarantor Consolidating
Inc. Subsidiaries Subsidiaries Adjustments Consolidated
-------------------------------------------------------------------------------
Assets
Current Assets
Cash and cash equivalents $ 1,010 $ 2,962 $22,310 $ - $ 26,282
Restricted cash and short-term investments - - 3,375 - 3,375
Accounts receivable net of allowance 3,219 45,150 62,222 - 110,591
Inventories 26,061 68,630 44,321 97 139,109
Other current assets 13,412 18,329 (1,964) - 29,777
Intercompany accounts receivable - 19,931 - (19,931) -
-------------------------------------------------------------------------------
Total current assets 43,702 155,002 130,264 (19,834) 309,134
Property, plant and equipment, net 53,123 354,223 187,852 - 595,198
Goodwill and intangibles 3,701 56,362 100,270 - 160,333
Intercompany notes receivable 414,932 - - (414,932) -
Other assets, including investment in
subsidiaries 342,490 361,824 109,934 (798,468) 15,780
-------------------------------------------------------------------------------
Total assets $857,948 $927,411 $528,320 $(1,233,234) $1,080,445
===============================================================================
Liabilities and stockholders' equity
Current liabilities
Trade accounts payable $ 4,934 $20,785 $ 9,091 $ - $ 34,810
Other current liabilities 12,980 28,310 9,223 - 50,513
Intercompany accounts payable 14,646 - 5,286 (19,932) -
-------------------------------------------------------------------------------
Total current liabilities 32,560 49,095 23,600 (19,932) 85,323
Long-term debt 590,618 2,000 36,614 - 629,232
Deferred income taxes (6,320) 67,671 19,094 - 80,445
Other liabilities 5,640 15,312 1,123 - 22,075
Intercompany notes payable - 236,350 178,581 (414,931) -
Stockholders'/invested equity 235,450 556,983 269,308 (798,371) 263,370
-------------------------------------------------------------------------------
Total liabilities and stockholders' equity $857,948 $927,411 $528,320 $(1,233,234) $1,080,445
===============================================================================
12
BALANCE SHEETS
As of June 30, 2003
Guarantors
-------------------------------
Buckeye Non-
Technologies US Guarantor Consolidating
Inc. Subsidiaries Subsidiaries Adjustments Consolidated
--------------- --------------- -------------- ---------------- ---------------
Assets
Current Assets
Cash and cash equivalents $26,075 $ 4,349 $19,553 $ - $ 49,977
Restricted cash and short-term investments - - 3,375 - 3,375
Accounts receivable net of allowance 6,672 42,657 76,954 - 126,283
Inventories 28,711 61,532 46,291 171 136,705
Other current assets 9,573 18,913 (2,179) - 26,307
Intercompany accounts receivable 9,553 - - (9,553) -
-------------------------------------------------------------------------------
Total current assets 80,584 127,451 143,994 (9,382) 342,647
Property, plant and equipment, net 51,753 354,057 188,328 - 160,309
Goodwill and intangibles 3,698 56,575 100,036 - 160,309
Intercompany notes receivable 379,941 - - (379,941) -
Other assets, including investment in
subsidiaries 337,654 279,717 107,625 (711,435) 13,561
-------------------------------------------------------------------------------
Total assets $853,630 $817,800 $539,983 $(1,100,758) $1,110,655
===============================================================================
Liabilities and stockholders' equity
Current liabilities
Trade accounts payable $ 6,153 $20,659 $10,195 - $ 37,007
Other current liabilities 12,553 25,978 52,129 1 90,661
Intercompany accounts payable - 1,710 7,843 (9,553) -
-------------------------------------------------------------------------------
Total current liabilities 18,706 48,347 70,167 (9,552) 127,668
Long-term debt 617,474 2,000 - - 619,474
Deferred income taxes (6,320) 67,671 18,147 - 79,498
Other liabilities 5,543 15,387 1,201 - -
Intercompany notes payable - 211,392 168,549 (379,941) -
Stockholders'/invested equity 218,227 473,003 281,919 (711,265) 261,884
-------------------------------------------------------------------------------
Total liabilities and stockholders' equity $853,630 $817,800 $539,983 $(1,100,758) $1,110,655
===============================================================================
13
STATEMENTS OF CASH FLOWS
Three Months Ended September 30, 2003
Guarantors
-------------------------------
Buckeye Non-
Technologies US Guarantor
Inc. Subsidiaries Subsidiaries Consolidated
---------------------------------------------------------------
Net cash provided by (used for) operations $25,636 $(19,126) $19,045 $25,555
Investing activities:
Purchases of property, plant and equipment (2,319) (6,774) (632) (9,725)
Other - (303) - (303)
---------------------------------------------------------------
Net cash used in investing activities (2,319) (7,077) (632) (10,028)
Financing activities
Net borrowings (payments) under revolving
line of credit (55,250) - - (55,250)
Payments for debt issuance and
extinguishment (8,144) - - (8,144)
Net issuance of (payments on) long-term
debt and other 15,012 24,816 (14,829) 24,999
---------------------------------------------------------------
Net cash provided by (used in)
financing activities (48,382) 24,816 (14,829) (38,395)
Effect of foreign currency rate fluctuations - - (827) (827)
Increase (decrease) in cash and cash
equivalents (25,065) (1,387) 2,757 (23,695)
Cash and cash equivalents at beginning
of period 26,075 4,349 19,553 49,977
---------------------------------------------------------------
Cash and cash equivalents at end of period $1,010 $ 2,962 $22,310 $ 26,282
===============================================================
STATEMENTS OF CASH FLOWS
Three Months Ended September 30, 2002
Guarantors
-------------------------------
Buckeye Non-
Technologies US Guarantor
Inc. Subsidiaries Subsidiaries Consolidated
---------------------------------------------------------------
Net cash provided by (used for) operations $ (86) $8,032 $1,195 $9,141
Investing activities:
Purchases of property, plant and equipment (757) (3,235) (595) (4,587)
Other - (211) - (211)
---------------------------------------------------------------
Net cash used in investing activities (757) (3,446) (595) (4,798)
Financing activities
Net borrowings (payments) under revolving
lines of credit (5,781) - - (5,781)
Payments for debt issuance costs (249) - (131) (380)
Net issuance of (payments on) long-term
debt and other (17,423) (3,474) (1,300) (22,197)
---------------------------------------------------------------
Net cash used in financing activities (23,453) (3,474) (1,431) (28,358)
Effect of foreign currency rate fluctuations - - (374) (374)
Increase (decrease) in cash and cash
equivalents (24,296) 1,112 (1,205) (24,389)
Cash and cash equivalents at beginning
of period 36,443 1,358 18,205 56,006
---------------------------------------------------------------
Cash and cash equivalents at end of period $12,147 $2,470 $17,000 $31,617
===============================================================
14
NOTE J - SUBSEQUENT EVENTS
On October 21, 2003, the union at our Perry, Florida plant ratified a
new labor agreement. The new agreement expires on March 31, 2008.
On November 5, 2003, we established a $220,000 senior secured credit
facility, comprised of a $70,000 revolving credit facility (the revolver)
maturing on September 15, 2008 and a $150,000 term loan (the term loan) maturing
on October 15, 2010. This facility amends and restates our existing $215,000
revolving credit facility. We used the proceeds of the new credit facility to
pay the outstanding balance on the revolving credit facility plus transaction
fees and expenses. The interest rate applicable to borrowings under the revolver
is the agent's prime rate plus 1.50% to 1.75% or a LIBOR based rate ranging from
LIBOR plus 2.50% to LIBOR plus 3.25%. The interest rate applicable to the term
loan is the agent's prime rate plus 1.50% or a LIBOR based rate plus 2.50%. The
credit facility is secured by substantially all of our assets located in the
United States and has covenants that are substantially the same as those for the
prior facility.
15
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following management's discussion and analysis describes the
principal factors affecting the results of operations, liquidity and capital
resources, as well as the critical accounting policies and estimates of Buckeye.
This discussion should be read in conjunction with the accompanying financial
statements and our Annual Report on Form 10-K for the year ended June 30, 2003,
which include additional information about our practices and the transactions
that underlie our financial results.
Critical Accounting Policies
The preparation of our financial statements requires estimates,
assumptions and judgements that affect our assets, liabilities, revenues and
expenses. Our management bases these estimates and assumptions on historical
data and trends, current fact patterns, expectations and other sources of
information they believe are reasonable. Actual results may differ from these
estimates under different conditions. For a full description of our critical
accounting policies, see the Management's Discussion and Analysis in our 2003
Annual Report on Form 10-K.
Results of Operations
Buckeye manufactures and distributes value-added cellulose-based
specialty products used in numerous applications including disposable diapers,
personal hygiene products, engine air and oil filters, food casings, rayon
filaments, acetate plastics, thickeners and papers.
Except as otherwise specified, references to years indicate our fiscal
year ending June 30, 2004 or ended June 30 of the year referenced and
comparisons are to the corresponding period of the prior year.
Volume and net sales
Net sales for the three months ended September 30, 2003 were $155.8
million compared to $156.4 million for the same period in 2002, a decrease of
$0.6 million. Our sales were about level with the prior year quarter as a result
of two offsetting factors. Net sales of nonwoven materials increased by 12%
versus the prior year quarter, offset by lower specialty fiber sales. See
additional segment discussion below.
Operating income
Our operating income for the three months ended September 30, 2003 was
$11.3 million, a decrease of $0.1 million compared to the same period in 2002.
This decrease was primarily due to restructuring costs of $1.0 million
(explained in detail later in this discussion) offset by lower manufacturing
costs and improved sales mix.
Segment results
We report results in two segments: nonwovens materials and specialty
fibers. The specialty fiber segment is an aggregation of cellulosic fibers based
on both wood and cotton. We make financial decisions and allocate resources
based on the sales and operating income of each segment. We allocate selling,
research, and administration expense to each segment and we use the resulting
operating income to measure the performance of the segments. We exclude items
that are not included in measuring business performance, such as restructuring
costs, asset impairment and certain financing and investing costs.
Specialty fibers
External net sales for the three months ended September 30, 2003 were
$107.3 million compared to $112.3 million for the same period in 2002, a
decrease of $5.0 million or 4.5%. The decrease in net sales during the quarter
was due primarily to lower specialty fiber shipments and lower selling prices
for cotton based products.
Sales price increases and decreases for cotton based products are
influenced by the variability in the cost and supply of cotton fibers. As the
16
cost of these fibers fell over the last year, we reduced our sales prices. The
selling prices for our cotton based products decreased by approximately 7% for
the three months ended September 30, 2003 from the same period in 2002.
Market supply constraints, coupled with a weakening U.S. dollar and
higher energy costs, provided the basis for us to increase our list prices of
certain pulps by $40 - $50 per metric ton effective April 1, 2003. The higher
prices were partially implemented during the fiscal fourth quarter of 2003. The
full impact of dissolving wood price increases will not be felt until calendar
2004 when we renew our calendar year supply agreements.
Operating income for the three months ended September 30, 2003 was
$10.3 million (9.6% of net sales) compared to $11.6 million (10.3% of net sales)
for the same period in 2002, a decrease of $1.3 million. This decrease in
operating income is primarily a reflection of the margin compression for cotton
based products. Additionally, the 19% strengthening of the euro during the
preceding twelve months negatively impacted our Glueckstadt, Germany facility
where sales are made in U.S. dollars and costs are incurred in euros. These
decreases were partially offset by a more favorable specialty wood fiber sales
mix, operating the Americana facility for the entire quarter in 2003, and
operating expense reductions.
Nonwovens materials
Net sales for the three months ended September 30, 2003 were $53.2
million compared to $47.4 million in same period in 2002, an increase of $5.8
million or 12.2%. The increase in net sales was primarily due to an increase in
shipments and strengthening of the euro versus the U.S. dollar.
Nonwovens materials operating income for the three months ended
September 30, 2003 was $2.5 million (4.7% of net sales) compared to $0.5 million
(1.1% of net sales) during the same period in 2002, an improvement of $2.0
million. Our increase in operating income is reflective of improvements in
reliability, cost reductions, and increased volume.
Restructuring costs
During the three months ended September 30, 2003, we entered into a
second phase of our restructuring program designed to deliver cost reductions
through reduced overhead expenses across the company. This program was a
continuation of the program initiated in the fourth quarter of fiscal 2003. This
phase of the program will enable us to improve our operating results by
approximately $6.0 million annually through reduced salaries, benefits, other
employee related expenses and operating expenses. As a result of the
reorganization, approximately 50 positions will be eliminated. These positions
include manufacturing, sales, product development and administrative functions
throughout the organization. We expect payments related to this phase of the
restructuring to continue throughout fiscal 2004. The total cost of this phase
of the restructuring program is estimated to be approximately $3.0 million in
fiscal 2004.
The first phase of the restructuring program initiated in fiscal 2003
was mainly due to the partial closure of our Lumberton facility resulting in the
consolidation of our U.S. cotton linter pulp production at our Memphis,
Tennessee facility. During the three months ended September 30, 2003, additional
expenses of $0.2 million were recorded and $1.4 million were paid for this phase
of the program. These additional expenses included $0.2 million for
miscellaneous costs associated with the partial closure of the Lumberton
facility. While we ceased producing cotton cellulose at our Lumberton facility
at the end of August 2003, we are still continuing to supply our cotton based
specialty fiber customers with product produced at Lumberton. Approximately 10
employees were asked to remain into the second quarter of fiscal 2004. We
estimate the remaining expenses for this phase of the restructuring program to
be approximately $0.7 million, which we expect will be recognized and paid in
the second quarter of fiscal 2004.
17
During the year ended June 30, 2002, we entered into a restructuring
program designed to deliver cost reductions through reduced overhead expenses.
As a result of that restructuring, approximately 200 positions were eliminated
and we closed engineering offices located in Finland. During the three months
ended September 30, 2003, the remaining accrual for that restructuring was fully
utilized. We do not expect any additional payments or expenses related to this
program.
Net interest expense and amortization of debt costs
We incurred net interest expense and amortization of debt costs of
$11.2 million for the three months ended September 30, 2003 compared to $12.1
million for the same period in 2002. This decrease was primarily due to lower
interest rates in 2003 and lower average debt levels during the period. This was
partially offset by additional interest expense incurred during the last 8 days
of September when both the $150 million of senior subordinated notes due 2005
and the $200 million of senior notes due 2013 were outstanding.
Foreign exchange, amortization of intangibles and other
Foreign exchange, amortization of intangibles and other expense for
the three months ended September 30, 2003 and 2002 were $0.4 million and $0.1
million, respectively. The $0.3 million unfavorable variance was due primarily
to a decrease of $1.1 million in foreign currency gains partially offset by the
absence of expenses related to the settlement of a lawsuit and the negative
impact of a natural gas forward contract recognized during the three months
ended September 30, 2002.
During the three months ending September 30, 2003, $3.3 million was
expensed related to the early extinguishment of the $150 million senior
subordinated notes due 2005. These expenses included a $2.1 million call premium
and $1.2 million related to the write-off of deferred financing costs.
Financial Condition
Cash flow
Cash flow provided by operating activities of $25.6 million for the
three months ended September 30, 2003 was $16.4 million higher than the same
quarter in the prior year. This improved cash flow was primarily due to a
reduction in accounts receivable in 2003 versus an increase in accounts
receivables in the same quarter in 2002. Approximately $6.0 million of the
accounts receivable decrease was a permanent reduction due to a change in our
cash management strategy. During the three months ended September 30, 2003, we
began discounting large letters of credit, enabling us to reduce our debt and
interest costs.
Cash provided from operations and cash on hand financed capital
expenditures of $9.7 million and were used to make debt payments net of issuance
proceeds of $30.3 million during the three months ended September 30, 2003. The
$5.1 million increase in capital expenditures versus the same quarter in 2002 is
attributable to the maintenance shutdown at the Foley plant during calendar
2003.
Contractual obligations
There have been no material changes to our contractual obligations
discussed in our June 30, 2003 Form 10-K other than those changes in long-term
debt discussed in the liquidity section which follows.
Liquidity and capital resources
We have the following major sources of financing: revolving credit
facility, receivables based credit facility, senior notes, and senior
subordinated notes. Our revolving credit facility, senior notes, and senior
subordinated notes contain various covenants. At September 30, 2003, we were in
compliance with such covenants and believe we will remain in compliance
throughout fiscal year 2004.
18
Senior notes - On September 22, 2003 we placed privately $200 million
in aggregate principal amount of 8.5% senior notes due October 1, 2013. The
notes are unsecured obligations and are senior to any of our subordinated debt.
The notes are guaranteed by our direct and indirect domestic subsidiaries that
are also guarantors on our senior secured indebtedness. We used the net proceeds
from the private placement to redeem our $150 million senior subordinated notes
due 2005, make a permanent reduction of $40 million to our revolving credit
facility and pay the related transaction costs. On September 22, 2003, we called
the senior subordinated notes due in 2005. These notes were redeemed on October
22, 2003. We incurred an additional $1.1 million of interest expense associated
with maintaining the 2005 notes through the call period. Of the $1.1 million, we
expensed $0.3 million during the three months ending September 30, 2003 and will
record the remaining $0.8 million during the three months ending December 31,
2003.
Senior subordinated notes - Under the indentures governing our senior
subordinated notes, as well as the indenture that governs the senior notes, our
ability to incur additional debt is limited. Under these indentures, additional
debt must be incurred as so-called "ratio" debt or, alternatively, must be
permitted in form and amount as "Permitted Indebtedness." In order to incur
ratio debt, a specified consolidated fixed charge coverage ratio (as defined in
the subordinated note indentures) must equal or exceed 2:1 (measured on a
rolling four-quarter basis). At March 31, 2002, our fixed charge cover ratio
fell below 2:1. This development did not breach any covenant or constitute an
event of default under any of our debt agreements. However, until such time as
the ratio again equals or exceeds 2:1, we can only incur debt that is Permitted
Indebtedness.
On October 16, 2003, we successfully completed a solicitation of
consents from holders of our notes due in 2008 (2008 notes) to amend this
indenture to conform certain provisions of the 2008 notes to the provisions in
our notes due in 2010 and to current market practice. This amendment allows us
to refinance our revolving credit facility while we are still limited to
Permitted Indebtedness as defined in the indentures.
Under each such indenture, the ratio test is measured on a rolling
four-quarter basis. While we can offer no assurance in this regard, we believe
that our operating results will improve over the next several quarters and that
such improved results together with recent reductions in our outstanding debt,
will enable us to exceed the required 2:1 ratio necessary to incur ratio debt
under the senior subordinated note indentures and the senior notes indenture.
Revolving credit facility - We amended our revolving credit facility on
July 28, 2003 to modify the financial covenants from June 30, 2003 through March
31, 2005. Additionally, this amendment authorized the issuance of $200 million
of senior notes, to refinance our $150 million of senior subordinated notes due
in 2005, and required a permanent reduction in the credit facility of $40
million. During the three months ended September 30, 2003, we used proceeds from
the private placement of senior notes and cash on hand to reduce the outstanding
balance on the credit facility by $75 million to $132.5 million and to make our
final $22 million payment to UPM-Kymmene. As of September 30, 2003 we had $42.5
million available on the revolving credit facility.
On November 5, 2003, we established a $220 million senior secured
credit facility, comprised of a $70 million revolving credit facility (the
revolver) maturing on September 15, 2008 and a $150 million term loan (the term
loan) maturing on October 15, 2010. This facility amends and restates our
existing $215 million revolving credit facility. We used the proceeds of the new
credit facility to pay the outstanding balance on the revolving credit facility
plus transaction fees and expenses. The interest rate applicable to borrowings
under the revolver is the agent's prime rate plus 1.50% to 1.75% or a LIBOR
based rate ranging from LIBOR plus 2.50% to LIBOR plus 3.25%. The interest rate
applicable to the term loan is the agent's prime rate plus 1.50% or a LIBOR
based rate plus 2.50%. The credit facility is secured by substantially all of
our assets located in the United States and has covenants that are substantially
the same as those for the prior facility.
Interest rate swap - In May 2001, we entered into an interest rate swap
on $100 million of 8% fixed rate notes maturing in October 2010. The swap
converts interest payments from a fixed rate to a floating rate of LIBOR plus
19
1.97%. This arrangement qualifies as a fair value hedge under SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. As such, the net
effect from the interest rate swap is recorded as part of interest expense. The
swap agreement settles quarterly until maturity in October 2010. During the
three months ended September 30, 2003 and 2002, the swap reduced the Company's
interest expense by $1.2 million and $1.0 million, respectively. Based upon
current interest rates for similar transactions, the fair value of the interest
rate swap agreement was recorded as an asset and a corresponding increase in
debt of $4.0 million at September 30, 2003 and $6.1 million at June 30, 2003.
On October 15, 2003, the swap counter party exercised its right to
change the termination date of the swap from October 15, 2010 to October 15,
2003. By exercising this right, the swap counter party paid us $4.0 million as
an early termination fee.
Other credit facilities - Our $30 million receivables based credit
facility matures on December 4, 2003. We intend to refinance this facility with
available long-term credit facilities and therefore have included the balance in
long-term debt. At September 30, 2003, we had $24.8 million outstanding on our
receivables based credit facility.
On September 30, 2003, we renewed our Canadian credit facility. The
renewal extended the maturity to November 30, 2004 and required a 20% reduction
of the principal to Canadian $16 million (U.S. $11.9 million equivalent based on
exchange rates in effect at September 30, 2003) at September 30, 2003. All other
terms and conditions remained the same.
Net debt - Net debt is presented as an additional means of evaluating
our financial condition, liquidity and our ability to satisfy rating agency and
creditor requirements. Net debt was $598.7 million at September 30, 2003. Net
debt at September 30, 2003 was $6.3 million lower than at June 30, 2003 and
$27.8 million lower than the $626.5 million of net debt at September 30, 2002.
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.
September 30 June 30 September 30
2003 2003 2002
----------------- ----------- ----------------
Debt and capital lease obligations on balance sheet $632.4 $664.5 $678.5
Less: Interest rate swap non-cash fair value adjustment to
debt (4.0) (6.1) (8.1)
Cash, cash equivalents, restricted cash,
and short-term investments (29.7) (53.4) (43.9)
----------------- ----------- ----------------
Net debt $598.7 $605.0 $626.5
================= =========== ================
Forward-Looking Statements
Except for the historical information contained herein, the matters
discussed in this Form 10-Q are forward-looking statements that involve risks
and uncertainties that could cause actual results to differ materially,
including but not limited to, economic, competitive, governmental, and
technological factors affecting our operations, financing, markets, products,
services, prices, and other factors. We undertake no obligation to publicly
release the result of any revisions to these forward-looking statements to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events. For additional factors that could impact
future results, please see our 2003 Annual Report on Form 10-K on file with the
Securities and Exchange Commission.
20
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to our market risk except for the
interest rate implications caused by the changes in our debt structure. Our
amended and restated revolving credit facility improved our variable interest
rates by over 1.0%. We also fixed an additional $50 million of debt at 8.5%
which was previously variable rate debt. In addition, the early termination of
the swap will fix $100 million of debt at 8.0% that under the swap was
effectively variable debt.
Item 4. Controls and Procedures
Under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, we
conducted an evaluation as of September 30, 2003 of our disclosure controls and
procedures, as such term is defined under Rule 13-a14(c) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on their
evaluation, our principal executive officer and our principal financial officer
concluded that our disclosure controls and procedures are effective.
There have been no significant changes (including corrective actions
with regards to significant deficiencies or material weaknesses) in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date of the evaluation.
21
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Listing of Exhibits
10.1 Amended and Restated Credit Agreement dated November 5, 2003
among the Registrant, Fleet National Bank; Fleet Securities,
Inc.; Citigroup Global Markets Inc.; UBS AG; Citibank, N.A.; and
other lenders party thereto.
31.1 Certification of Chief Executive Officer, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002, signed by
David B. Ferraro, the Chief Executive Officer of Buckeye
Technologies Inc. on November 12, 2003.
31.2 Certification of Chief Financial Officer, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002, signed by
Kristopher J. Matula, the Chief Financial Officer of Buckeye
Technologies Inc. November 12, 2003.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
signed by David B. Ferraro, the Chief Executive Officer of
Buckeye Technologies Inc. on November 12, 2003.
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
signed by Kristopher J. Matula, the Chief Financial Officer of
Buckeye Technologies Inc. on November 12, 2003.
(b) Reports on Form 8-K
During the three months ended September 30, 2003, the following reports
were filed on Form 8-K:
- Report dated July 29, 2003 announcing the conference call regarding
operating results for the quarter ended June 30, 2003.
- Report dated August 1, 2003 announcing the press release regarding
the results of operations for the year ended June 30, 2003.
- Report dated September 17, 2003 announcing the issuance of press
releases regarding the private placement of $200 million of Senior
Notes due 2013 in a private offering, the participation of David
B. Ferraro, Chair and Chief Executive Officer, in the UBS Global
Paper & Forest Products Conference and the announcement that the
counter party to the interest rate swap agreement has notified
that it intends to call the interest rate swap.
- Report dated September 25, 2003 announcing the successful closure
of the private placement of $200 million of Senior Notes due 2013
and the commencement of a solicitation of consents from holders of
the outstanding Senior Notes due 2008.
(c) Items 1 through 5 are not applicable and have been omitted.
22
Pursuant to the requirements of Section 13 or 15(d) 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.
By: /S/ DAVID BE. FERRARO
---------------------
David B. Ferraro, Chief Executive Officer
Date: November 12, 2003
By: /S/ KRISTOPHER J. MATULA
------------------------
Kristopher J. Matula, Executive Vice President and Chief Financial Officer
Date: November 12, 2003
23