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Buckeye reports record sales, earnings

August 10, 2012

Higher selling prices offset $10 million sales reduction due to divestiture of King converting business and lower shipment volumes.

Airlaid producer Buckeye Technologies announced record sales and earnings for fiscal year 2012. Net sales for the year (adjusted to exclude discontinued American operations) were $895 million, a new record, and up $14 million or 2% compared to fiscal 2011, as higher selling prices offset a $10 million sales reduction due to the divestiture of the King converting business and lower shipment volumes from both the Foley wood specialty mill and nonwovens business. Nonwovens sales were down from $264 million to $239 million for the year.

Adjusted net income for the 2012 fiscal year was a record $111 million compared to $91 million in fiscal 2011. The growth in adjusted net income was due to significantly higher selling prices for high-end specialty wood and cotton fiber products which more than offset the impact of lower fluff pulp prices. Net income also benefited in fiscal year 2012 from reduced selling, research and administrative expenses and lower interest expense. Within the nonwovens division, income decreased from $13.7 million to $11.7 million.

For the fourth quarter, sales were $225 million, down 10% versus the prior year period. Part of the reduction was related to the King converting business but lower shipments were seen at the Foley specialty wood plant. Net income was $26.2 million for the quarter, off slightly from last year. Meanwhile, nonwovens sales dipped from $69 million for the fourth quarter of 2011 to $61 million for this period.

“Fiscal year 2012 was another year of record sales and earnings,” says chairman and CEO John Crowe. “During the year, we continued to generate significant cash flow, allowing us to invest in high rate of return capital projects, return cash to our shareholders through dividends and share repurchases, and essentially eliminate our debt. With a strong operating performance and actions taken to address underperforming assets, we delivered a return on invested capital (ROIC) in fiscal year 2012 of 16.5%, well above our cost of capital. While Buckeye is well positioned to continue to increase shareholder value, we believe that global economic uncertainty may generate a headwind for us in fiscal 2013.”

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