Buckeye’s First Quarter FY 2013 Results
Buckeye Technologies Inc. (NYSE:BKI) today announced first quarter net sales of $197 million and adjusted net income* of $24.6 million or $0.62 per share. Net sales for the quarter were down $35 million or 15% compared to the year ago quarter, mainly due to lost sales resulting from the June steam drum failure outage at our Foley facility and weaker demand in some of our wood and cotton specialty fibers markets. The sale of the Merfin Systems converting business in the third quarter of fiscal 2012 accounted for $5 million of the year over year reduction in net sales.
Adjusted operating income of $39.0 million was down $4.4 million compared to the year ago quarter on lower sales volumes, although gross margin was very strong at 25.4% for the quarter compared to 24.3% in the year ago quarter, driven by margin improvements at our cotton cellulose and nonwovens plants. The June outage at our Foley mill had a negative impact of $2.2 million on first quarter operating income and $0.04 on EPS. Selling, general and administrative (SRA) expenses of $13.2 million were up $0.8 million year over year due to growth initiative consulting and legal fees incurred during the quarter.
Adjusted net income* of $24.6 million, or $0.62 per share, excludes net income of $5.5 million or $0.14 per share relating to the cellulosic biofuel credit and after-tax restructuring charges of $0.6 million or $0.02 per share. Adjusted net income* was down $5.3 million or $0.12 per share compared to the prior year period’s $29.9 million or $0.74 per share, which excluded net income of $11.2 million or $0.28 per share relating to the cellulosic biofuel credit. The year over year reduction in adjusted net income was driven by the drop in adjusted operating income mentioned above as well as by a higher effective tax rate.
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