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Buckeye reports decline

December 6, 2012

Buckeye Technologies reported sales decreased 15% to $197 million during the first quarter of fiscal 2013. Much of this decrease was attributed to sales lost from the June steam drum failure at its Foley, SC site as well as a sale of the Merfin Systems converting business. Operating income was down $4.4 million to $39 million.

“Our first quarter fiscal 2013 financial results came in as we expected, except that the impact of the June outage at Foley on the quarter was less than expected,” says chairman and CEO John B. Crowe. “We are experiencing some weaker conditions in a few of the specialty fibers markets, namely in tire cord, auto filtration and fluff pulp. We are seeing positive signs as well, though, in the LCD/LED markets for our cotton specialty fibers, where we see growth returning in 2013, and in nonwovens, where our shipment volume is up year over year. We were pleased to see our gross margin improve to above 25% in the quarter. During the quarter, we made good progress on our Specialty Expansion Project and the Oxygen Delignification Project at our Florida wood fibers facility. Both are important projects and are expected to come on-line in April and July 2013 respectively, and will be key contributors for revenue growth and cost reduction. In our Nonwovens business, we continue to work toward transitioning the supply of our current customers from our Delta facility to our other two Nonwovens facilities following the Delta closure, which remains on schedule for December 2012.”

Nonwovens sales were down from $64.6 million to $58.3 million while operating income doubled to $5.5 million.

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