Buckeye Technologies sales down 10% in Q3 FY'13

Net sales for the quarter were down $21.5 million, or 10%, compared to the year ago quarter. Shipment volume was down 3% with nonwovens volume up 11% and specialty fibers volume off 4%.

The Company continued to experience weak demand in some of our high-end specialty fiber markets, particularly from the European tire cord market. Selling prices were down year over year in the fluff pulp market. Cotton specialty fibers selling prices were also lower as we passed through reductions in raw cotton linter costs to our customers. Product mix was unfavorable, as we shipped about 5,500 tons this quarter into the commodity viscose staple fiber market.

Adjusted operating income of $31.4 million for the third fiscal quarter of 2013 was down $10.5 million compared to the year ago quarter, due to lower volume, selling prices and unfavorable product mix in our specialty fibers segment. Nonwovens operating income improved by $2.8 million, an increase of 92%, compared to the year-ago quarter due to increased sales and increased capacity utilization.

Adjusted net income of $21.0 million, or $0.53 per share, excludes a net after-tax gain of $7.3 million, or $0.18 per share, from the sale of the land and building and impairment and restructuring charges related to the closure of our Delta airlaid nonwovens plant, which ceased production in November and a tax benefit related to discontinued operations.

Adjusted net income was down $6.0 million, or $0.14 per share, compared to the prior year period’s $27.0 million, or $0.67 per share, which excluded after-tax costs of $1.2 million, or $0.03 per share, related to the closure of the cotton linter pulp plant in Americana, Brazil, the sale of the converting business in King, North Carolina, and accrued interest expense related to cellulosic biofuel credits.

Comparing the third fiscal quarter of 2013 to the second fiscal quarter of 2013, sales were down $8.8 million, or 4%. Shipment volume was down 9% with nonwovens volume up 6% and specialty fibers volume off 11%. While demand from the European tire cord and global LED screen markets remained weak, we began to see some improvement during the quarter and were able to reduce our shipments into the viscose staple fiber market by almost 7,000 tons.

Adjusted operating income was down $5.0 million, of which $6.6 million was due to the insurance recovery in the second quarter. Otherwise, third quarter adjusted operating income was better than the second quarter due to improved nonwovens performance and lower selling, research and administrative expenses. Adjusted EPS of $0.53 was down $0.07 versus the second quarter, of which $0.11 was due to the second quarter insurance recovery.