Buckeye Technologies Inc. (NYSE:BKI) today announced second quarter net sales of $204.3 million and adjusted net income* of $23.6 million. Adjusted EPS* of $0.60 compared to $0.69 in 2Q-FY12 and $0.62 in 1Q-FY13. Net insurance recovery in 2Q-FY13 was $0.04 per share less than expected.
Net sales for the quarter were down $17.1 million or 8% compared to the year ago quarter. While shipment volume was up 6% year over year, product mix was unfavorable as we shipped about 12,000 tons into the viscose staple fiber market during the quarter as a result of weak demand in some of our high-end markets, particularly from the European tire cord market. The sale of the Merfin Systems converting business in the third quarter of fiscal 2012 accounted for $4.3 million of this reduction in net sales.
Adjusted operating income* of $36.4 million was down $6.7 million compared to the year ago quarter, largely due to unfavorable product mix, in spite of a $6.8 million net insurance benefit related to the June steam drum failure outage at Foley.
Adjusted net income* of $23.6 million, or $0.60 per share, excludes after-tax restructuring and asset impairment charges of $10.7 million or $0.27 per share relating to the closure of our Delta airlaid nonwovens plant, which ceased production in November. Adjusted net income* was down $4.3 million or $0.09 per share compared to the prior year period’s $27.9 million or $0.69 per share, which excluded after-tax costs of $3.6 million or $0.09 per share relating to the cellulosic biofuel credit, and after-tax impairment costs of $29.7 million or $0.74 per share relating to the sale of Merfin Systems and the closure of our cotton specialty fibers plant in Americana, Brazil.
Comparison with 1Q 2013
Comparing 2Q 2013 to 1Q 2013, sales were up $7.4 million or 4%. This was driven by a 31% increase in shipment volume from the Foley specialty wood fibers facility compared to a first quarter heavily impacted by the June steam drum failure outage. Shipment volume from our Memphis specialty cotton fibers plant was down 16% in spite of a small pick-up in demand for acetate pulp from the LCD market, and Nonwovens shipment volume was off 8% due to the end of production at our Delta plant and normal seasonal weakness. Adjusted operating income* was down $2.6 million as the favorable impact from the final insurance settlement related to the June outage and increased shipment volume was not enough to offset the unfavorable product mix impact and lower fluff pulp prices. Adjusted EPS* of $0.60 was only down $0.02 versus the first quarter.