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): January 20, 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 January 20, 2004, Buckeye Technologies Inc. (the "Company") issued a press
release regarding its results of operations for the three and six months ended
December 31, 2003, including a statement of operations for those periods, a
consolidated balance sheet as of December 31, 2003, a consolidated statement of
cash flow for those periods, and supplemental financial data. In addition, on
January 21, 2004, the Company will hold a teleconference at 9:30 a.m. Central
to discuss the second quarter. The teleconference can be accessed via the
website www.streetevents.com, the Company's website homepage at www.bkitech.com
or via telephone at (800) 310-1961 within the United States or (719) 457-2692
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
January 20, 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 Technologies Inc. (ticker: BKI, exchange: New York Stock Exchange) News
Release - 20-Jan-2004
Buckeye Reports October-December Results
MEMPHIS, Tenn.--(BUSINESS WIRE)--Jan. 20, 2004--Buckeye Technologies Inc.
(NYSE:BKI) today announced that it incurred a loss of $10.0 million after tax
(27 cents per share) in the quarter ended December 31, 2003. The loss was due to
the combination of previously reported refinancing, restructuring, and
impairment costs of $3.8 million after tax (10 cents per share) and higher than
normal expenses which were described in the Company's December 16 earnings
warning. The actual results are within the 27-30 cents per share loss estimate
which was previously provided.
Net sales for the October-December quarter were $160.3 million, 5% above the
$153.1 million in the same quarter of the prior year and 3% above the $155.8
million in the immediately preceding quarter which ended September 30, 2003.
Buckeye Chairman David B. Ferraro commented, "Although we are extremely
disappointed in our October-December results, the high costs which led to these
losses are related to special situations and one-time events in the just
completed quarter. We are pleased with the growth in our sales and confident
that this will continue over the remainder of the fiscal year."
Buckeye, a leading manufacturer and marketer of specialty cellulose and
absorbent products, is headquartered in Memphis, Tennessee, USA. The Company
currently operates facilities in the United States, Germany, Canada, Ireland 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.
BUCKEYE TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
(in $000)
December 31 June 30
2003 2003
---------- ----------
Assets
Current assets:
Cash and cash equivalents $ 15,269 $ 49,977
Cash, restricted - 3,375
Accounts receivable, net 108,430 126,283
Inventories 127,211 136,705
Deferred income taxes and other 30,754 26,307
---------- ----------
Total current assets 281,664 342,647
Property, plant and equipment, net 604,981 594,138
Goodwill, net 134,213 129,631
Intellectual property and other, net 43,067 44,239
---------- ----------
Total assets $1,063,925 $1,110,655
========== ==========
Liabilities and stockholders' equity Current liabilities:
Trade accounts payable $ 26,612 $ 37,007
Accrued expenses 41,498 48,360
Current portion of capital lease
obligations 607 583
Current portion of long-term debt - 41,718
---------- ----------
Total current liabilities 68,717 127,668
Long-term debt 621,210 619,474
Deferred income taxes 79,948 79,498
Capital lease obligations 2,390 2,700
Other liabilities 19,631 19,431
Stockholders' equity 272,029 261,884
---------- ----------
Total liabilities and stockholders' equity $1,063,925 $1,110,655
========== ==========
BUCKEYE TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in $000)
Three Months Ended
----------------------------------------
December 31, September 30, December 31,
2003 2003 2002
------------- ------------- ------------
Net sales $ 160,279 $ 155,831 $ 153,146
Cost of goods sold 143,993 133,870 131,351
----------- ----------- -----------
Gross margin 16,286 21,961 21,795
Selling, research and
administrative expenses 12,948 9,592 8,837
Impairment of long-lived
assets 942 - -
Restructuring costs 2,691 1,038 -
----------- ----------- -----------
Operating income (295) 11,331 12,958
Net interest expense and
amortization of debt costs 12,510 11,177 11,683
Loss on early extinguishment
of debt 1,640 3,300 -
Foreign exchange,
amortization of intangibles,
other 1,125 429 928
----------- ----------- -----------
Income (loss) before income
taxes (15,570) (3,575) 347
Income tax benefit (5,557) (1,144) (193)
----------- ----------- -----------
Net income (loss) $ (10,013) $ (2,431) $ 540
=========== =========== ===========
Earnings (loss) per share
Basic earnings (loss) per
share $ (0.27) $ (0.07) $ 0.02
Diluted earnings (loss)
per share $ (0.27) $ (0.07) $ 0.02
Weighted average shares for
basic earnings per share 37,008,996 36,974,915 35,743,955
Adjusted weighted average
shares for diluted earnings
per share 37,008,996 36,974,915 35,743,955
Six Months Ended
-------------------------
December 31, December 31,
2003 2002
------------- ------------
Net sales $ 316,110 $ 309,571
-
Cost of goods sold 277,863 267,395
----------- -----------
Gross margin 38,247 42,176
Selling, research and administrative
expenses 22,540 17,780
Impairment of long-lived assets 942 -
Restructuring costs 3,729 -
----------- -----------
Operating income 11,036 24,396
Net interest expense and amortization of
debt costs 23,687 23,809
Loss on early extinguishment of debt 4,940 -
Foreign exchange, amortization of
intangibles, other 1,554 1,018
----------- -----------
Income (loss) before income taxes (19,145) (431)
Income tax benefit (6,701) (452)
----------- -----------
Net income (loss) $ (12,444) $ 21
=========== ===========
Earnings (loss) per share
Basic earnings (loss) per share $ (0.34) $ 0.00
Diluted earnings (loss) per share $ (0.34) $ 0.00
Weighted average shares for basic earnings
per share 36,991,956 36,957,048
Adjusted weighted average shares for
diluted
earnings per share 36,991,956 36,972,821
BUCKEYE TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000)
Three Months Ended Six Months Ended
---------------------------- ------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2003 2003 2002 2003 2002
--------- --------- -------- --------- --------
OPERATING ACTIVITIES
----------------------
Net income (loss) $(10,013) $(2,431) $540 $(12,444) $21
Adjustments to
reconcile net income
to net cash provided
by (used in) operating
activities:
Impairment of long-
lived assets 942 - - 942 -
Depreciation 11,539 11,186 11,633 22,725 23,060
Amortization 1,073 1,441 1,429 2,514 2,931
Loss on early
extinguishment of
debt 1,640 3,300 - 4,940 -
Deferred income taxes
and other 1,983 1,359 814 3,342 2,371
Change in operating
assets and
liabilities
Accounts receivable 1,268 16,169 8,378 17,437 2,218
Inventories 14,871 (1,615) (4,207) 13,256 (28)
Other assets (1,911) (3,603) 2,508 (5,514) 1,733
Accounts payable and
other current
liabilities (19,051) (251) (14,611) (19,302) (16,681)
--------- --------- -------- --------- --------
Net cash provided by
operating activities 2,341 25,555 6,484 27,896 15,625
INVESTING ACTIVITIES
Purchases of
property, plant &
equipment (11,465) (9,725) (6,609) (21,190) (11,196)
Other 10 (303) (216) (293) (427)
--------- --------- -------- --------- --------
Net cash used in
investing activities (11,455) (10,028) (6,825) (21,483) (11,623)
FINANCING ACTIVITIES
Proceeds from
exercise of options 433 - - 433 -
Net borrowings/
(payments) under
revolving lines of
credit (154,605) (58,110) 858 (212,715) (4,923)
Issuance of long-term
debt 150,000 200,000 - 350,000 -
Payments for debt
issuance costs (3,199) (6,029) (291) (9,228) (671)
Payments related to
early extinguishment
of debt - (2,115) - (2,115) -
Proceeds from
termination of swap 4,000 - - 4,000 -
Payments on long term
debt and other (520) (172,141) (67) (172,661) (22,264)
--------- --------- -------- --------- --------
Net cash provided by
(used in) financing
activities (3,891) (38,395) 500 (42,286) (27,858)
--------- --------- -------- --------- --------
Effect of foreign
currency rate
fluctuations on cash 1,992 (827) 479 1,165 105
Increase (Decrease) in
Cash and Cash
Equivalents (11,013) (23,695) 638 (34,708) (23,751)
--------- --------- -------- --------- --------
Cash and Cash
Equivalents at
beginning of period 26,282 49,977 31,617 49,977 56,006
--------- --------- -------- --------- --------
Cash and Cash
Equivalents at end of
period $15,269 $26,282 $32,255 $15,269 $32,255
========= ========= ======== ========= ========
BUCKEYE TECHNOLOGIES INC.
SUPPLEMENTAL FINANCIAL DATA
(in $000)
Three Months Ended Six Months Ended
----------------------------- -------------------
SEGMENT RESULTS Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2003 2003 2002 2003 2002
--------- --------- --------- --------- ---------
Specialty Fibers
Net sales $114,588 $107,318 $113,880 $221,906 $226,225
Operating income(b) 2,822 10,291 12,745 13,113 24,385
Depreciation and
amortization(a) 6,897 6,704 7,462 13,601 14,995
Capital
expenditures 10,767 9,089 6,152 19,856 9,718
Nonwoven Materials
Net sales $ 51,185 $ 53,210 $ 45,853 $104,395 $ 93,241
Operating income(b) 1,149 2,487 312 3,636 796
Depreciation and
amortization(a) 4,467 4,268 3,762 8,735 7,553
Capital
expenditures 543 599 521 1,142 1,194
Corporate
Net sales $ (5,494) $ (4,697) $ (6,587) $(10,191) $ (9,895)
Operating income(b) (4,266) (1,447) (99) (5,713) (785)
Depreciation and
amortization(a) 837 825 1,177 1,662 2,138
Capital
expenditures 155 37 (64) 192 284
Total
Net sales $160,279 $155,831 $153,146 $316,110 $309,571
Operating income(b) (295) 11,331 12,958 11,036 24,396
Depreciation and
amortization(a) 12,201 11,797 12,401 23,998 24,686
Capital
expenditures 11,465 9,725 6,609 21,190 11,196
(a) Depreciation and amortization includes depreciation, depletion and
amortization of intangibles. Only the Corporate grouping has amortization of
intangibles that is excluded from the determination of operating income.
(b) Asset impairment and restructuring costs are included in operating income
for the corporate segment.
Three Months Ended Six Months Ended
----------------------------- -------------------
ADJUSTED EBITDA Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2003 2003 2002 2003 2002
--------- --------- --------- --------- ---------
Net income (loss) $(10,013) $ (2,431) $ 540 $(12,444) $ 21
Income tax expense (5,557) (1,144) (193) (6,701) (452)
Net interest expense 11,958 10,500 11,022 22,458 22,504
Amortization of debt
costs 552 677 661 1,229 1,305
Early extinguishment
of debt 1,640 3,300 - 4,940 -
Depreciation,
depletion and
amortization 12,201 11,797 12,094 23,998 24,233
-------- -------- -------- -------- --------
EBITDA 10,781 22,699 24,124 33,480 47,611
Interest income 210 250 239 460 566
Asset impairments 942 - - 942 -
Loss on disposal of
assets 530 144 99 674 322
Restructuring
charges 2,691 1,038 - 3,729 -
-------- -------- -------- -------- --------
Adjusted EBITDA $ 15,154 $ 24,131 $ 24,462 $ 39,285 $ 48,499
======== ======== ======== ======== ========
We calculate EBITDA as earnings before net interest expense plus income taxes
and depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by
adding back the following items: interest income, cumulative effect of changes
in accounting, asset impairment charges, restructuring charges and 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 which had availability
of $55.2 million on December 31, 2003, and it provides useful information
concerning our ability to comply with debt covenants. Although we believe
adjusted EBITDA enhances your understanding of our financial condition, this
measure, when viewed individually, is not a better indicator of any trend as
compared to other measures (e.g., net sales, net earnings, net cash flows,
etc.).