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Buckeye Technologies Inc. Reports Operating Results (10-K)

August 27, 2009 | About:
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Buckeye Technologies Inc. (BKI) filed Annual Report for the period ended 2009-06-30.

Buckeye Technologies Inc. is a leading manufacturer and worldwide marketer of value-added cellulose-based specialty products. The company utilizes its expertise in polymer chemistry and its state-of-the-art manufacturing facilities to develop and produce innovative and proprietary products for its customers. The company sells its products to a wide array of technically demanding niche markets in which its proprietary products and commitment to customer technical service give it a competitive advantage. Buckeye Technologies Inc. has a market cap of $404.6 million; its shares were traded at around $10.47 with a P/E ratio of 17.5 and P/S ratio of 0.5. Buckeye Technologies Inc. had an annual average earning growth of 23.8% over the past 5 years.

Highlight of Business Operations:

Our products are marketed and sold through a highly trained and technically skilled sales force. We maintain sales offices in the United States, Europe and China. Our worldwide sales are diversified by geographic region as well as end-product application. Our sales are distributed to customers in over 60 countries around the world. Our fiscal 2009 sales reflect this geographic diversity, with 45% of sales in North America, 34% of sales in Europe, 14% of sales in Asia, 4% of sales in South America and 3% in other regions. Approximately 84% of our worldwide sales for fiscal 2009 were denominated in U.S. dollars. Our products are shipped by rail, truck and ocean carrier. Geographic segment data and product sales data are included in Note 17, Segment Information, to the Consolidated Financial Statements.

Procter & Gamble is our largest customer accounting for 7% of our fiscal 2009 net sales. Our Specialty Fibers segment accounts for approximately 63% of the total sales to Procter & Gamble.

Although global demand for fluff pulp is growing by 3% to 5% annually, fluff pulp prices tend to vary directly with commodity paper pulp prices because fluff pulp is often produced in mills that also produce commodity paper pulp. Our strategy is to reduce our exposure to fluff pulp by increasing our sales of more specialized wood cellulose into new and existing markets. We use 40,000 to 50,000 metric tons of fluff pulp annually from our Perry, Florida wood cellulose facility as a key raw material in our airlaid nonwovens business. We currently produce less than 6% of the world s supply of fluff pulp. Major competitors include AbitibiBowater Inc., International Paper Company, GP Cellulose, LLC, Rayonier and Weyerhaeuser. (We believe the current global output of fluff pulp is in the range of 4.8 to 5.0 million tons annually). We understand that future increases in output at GP Cellulose s Brunswick mill and Domtar s Plymouth mill could add 300,000 to 500,000 tons of fluff output in the next 2 years.

Read the The complete ReportBKI is in the portfolios of NWQ Managers of NWQ Investment Management Co.

Rating: 3.3/5 (3 votes)

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