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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
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Commission file number: 33-60032
Buckeye Technologies Inc.
incorporated pursuant to the Laws of Delaware
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Internal Revenue Service-- Employer Identification No. 62-1518973
1001 Tillman Street, Memphis, TN 38112
901-320-8100
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No ____
As of May 10, 2002, there were outstanding 34,798,900 Common Shares of the
Registrant.
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INDEX
BUCKEYE TECHNOLOGIES INC.
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ITEM PAGE
PART I - FINANCIAL INFORMATION
1. Financial Statements (Unaudited):
Condensed Consolidated Statements of Operations for the Quarter Ended March 31, 2002 and
2001; Nine Months Ended March 31, 2002 and 2001........................................ 3
Condensed Consolidated Balance Sheets as of March 31, 2002 and June 30, 2001................ 4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2002
and 2001............................................................................... 5
Notes to Condensed Consolidated Financial Statements........................................ 6
2. Management's Discussion and Analysis of Financial Condition and Results of Operations....... 9
PART II - OTHER INFORMATION
6. Exhibits and Reports on Form 8-K............................................................ 13
SIGNATURES 14
2
PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Quarter Ended Nine Months Ended
March 31 March 31
---------------------------- ----------------------------
2002 2001 2002 2001
---------------------------- ----------------------------
Net sales.............................................. $164,225 $181,933 $475,090 $556,538
Cost of goods sold..................................... 146,279 144,259 418,163 427,194
---------------------------- ----------------------------
Gross margin........................................... 17,946 37,674 56,927 129,344
Selling, research and administrative expenses.......... 9,551 10,332 26,652 36,167
Restructuring costs.................................... 965 - 965 -
---------------------------- ----------------------------
Operating income....................................... 7,430 27,342 29,310 93,177
Net interest expense and amortization of debt costs.... 12,261 11,677 35,641 34,236
Other expense.......................................... 682 1,492 1,203 2,052
---------------------------- ----------------------------
Income (loss) before income taxes and
cumulative effect of change in accounting........ (5,513) 14,173 (7,534) 56,889
Income taxes........................................... (1,344) 4,883 (2,529) 18,745
---------------------------- ----------------------------
Income (loss) before cumulative effect of
change in accounting............................ (4,169) 9,290 (5,005) 38,144
Cumulative effect of change in accounting
(net of tax of $0 and of $1,286, respectively). - - (11,500) 3,249
---------------------------- ----------------------------
Net income (loss)...................................... $ (4,169) $ 9,290 $ (16,505) $41,393
============================ ============================
Earnings (loss) per share before cumulative effect of
change in accounting
Basic earnings (loss) per share........... $(0.12) $ 0.27 $(0.14) $ 1.10
Diluted earnings (loss) per share......... $(0.12) $ 0.27 $(0.14) $ 1.07
Cumulative effect of change in accounting
Basic earnings (loss) per share........... $ - $ - $(0.33) $ 0.09
Diluted earnings (loss) per share......... $ - $ - $(0.33) $ 0.09
Earnings (loss) per share
Basic earnings (loss) per share............ $(0.12) $ 0.27 $ (0.48) $ 1.19
Diluted earnings (loss) per share.......... $(0.12) $ 0.27 $ (0.48) $ 1.16
Weighted average shares for basic earnings per share... 34,762 34,398 34,626 34,650
Effect of dilutive stock options....................... - 505 - 892
---------------------------- ----------------------------
Adjusted weighted average shares for diluted earnings
per share........................................ 34,762 34,903 34,626 35,542
============================ ============================
See accompanying notes.
3
PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
March 31 June 30
2002 2001
---------------- -----------------
Assets
Current assets:
Cash and cash equivalents................................... $ 48,872 $ 12,932
Cash, restricted............................................. 3,375 -
Accounts receivable, net..................................... 99,028 104,589
Inventories.................................................. 145,074 136,780
Deferred income taxes and other.............................. 14,904 16,288
---------------- -----------------
Total current assets................................ 311,253 270,589
Property, plant and equipment..................................... 888,514 860,980
Less accumulated depreciation..................................... (262,758) (231,429)
---------------- -----------------
625,756 629,551
Goodwill, net..................................................... 117,791 131,688
Intellectual property and other, net.............................. 45,397 45,150
---------------- -----------------
Total assets........................................ $1,100,197 $1,076,978
================ =================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable............................................. $ 36,242 $52,645
Accrued expenses............................................. 47,165 51,457
Current portion of long-term debt............................ 53,968 21,895
---------------- -----------------
Total current liabilities........................... 137,375 125,997
Long-term debt............................................... 653,648 632,784
Accrued postretirement benefit obligation.................... 19,911 18,923
Deferred income taxes........................................ 70,000 65,781
Other liabilities............................................ 3,469 3,471
Stockholders' equity.............................................. 215,794 230,022
---------------- -----------------
Total liabilities and stockholders' equity................... $1,100,197 $1,076,978
================ =================
See accompanying notes.
4
PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended
March 31
---------------------------------------
2002 2001
---------------- -----------------
Operating activities
Net income (loss)................................................. $(16,505) $41,393
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Cumulative effect of change in accounting.................. 11,500 (3,249)
Depreciation............................................... 33,127 33,177
Amortization............................................... 3,990 5,973
Deferred income taxes and other............................ 3,877 5,561
Changes in operating assets and liabilities:
Accounts receivable.................................... 5,786 2,648
Inventories............................................ (7,875) (38,373)
Other assets........................................... 1,433 1,825
Accounts payable and other current liabilities......... (21,576) (23,293)
---------------- -----------------
Net cash provided by operating activities......................... 13,757 25,662
Investing activities
Purchases of property, plant and equipment........................ (28,706) (107,790)
Acquisition of business........................................... - (36,388)
Other............................................................. (829) (421)
---------------- -----------------
Net cash used in investing activities............................. (29,535) (144,599)
Financing activities
Purchase of treasury shares....................................... - (9,826)
Proceeds from exercise of stock options........................... 4,870 2,558
Net borrowings under revolving lines of credit.................... 64,841 155,902
Principal payments on long term debt.............................. (22,475) (35,531)
Other............................................................. 1,885 -
---------------- -----------------
Net cash provided by financing activities......................... 49,121 113,103
Effect of foreign currency rate fluctuations on cash.............. 2,597 (1,369)
---------------- -----------------
Increase (decrease) in cash and cash equivalents.................. 35,940 (7,203)
Cash and cash equivalents at beginning of period.................. 12,932 20,945
---------------- -----------------
Cash and cash equivalents at end of period........................ $48,872 $ 13,742
================ =================
See accompanying notes.
5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
of Buckeye Technologies Inc. and its subsidiaries (the Company) have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine months ended March 31,
2002 are not necessarily indicative of the results that may be expected for the
year ended June 30, 2002. All significant intercompany accounts and transactions
have been eliminated in consolidation. For further information and a listing of
the Company's significant accounting policies, refer to the financial statements
and notes thereto included in the Company's annual report on Form 10-K for the
year ended June 30, 2001.
Certain amounts in the 2001 financial statements have been reclassified
to conform with the 2002 financial statement presentation.
NOTE B - CHANGE IN ACCOUNTING METHOD
Through June 30, 2000, property, plant and equipment had been
depreciated on the straight-line method over the estimated useful lives of the
assets, which range from 5 to 40 years. Effective July 1, 2000, depreciation on
the Company's production machinery and equipment at cotton cellulose and airlaid
nonwovens plants was computed using the units-of-production method, which is
based upon the expected productive hours of the assets, subject to a minimum
level of depreciation. The Company believes the units-of-production method is
preferable to the method previously used because the new method recognizes that
depreciation of this machinery and equipment is related substantially to
physical wear due to usage rather than the passage of time. This method,
therefore, more appropriately matches production costs over the lives of the
production machinery and equipment of the cotton cellulose and airlaid nonwovens
plants with the revenues of those plants and results in a more accurate
allocation of the cost of the physical assets to the periods over their useful
lives. The cumulative effect of applying the new method for years prior to 2001
is an increase to income of $3,249 net-of-tax ($4,535 pre-tax) reported as a
cumulative effect of accounting change in the consolidated statements of
operations for the year ended June 30, 2001.
NOTE C - RESTRUCTURING COSTS
During the quarter ended March 31, 2002, the Company entered into a
restructuring program. The program is designed to deliver cost reductions
through reduced overhead expenses. The cost recorded during the quarter ended
March 31, 2002, comprised mainly of severance and other employee benefit costs,
is $965 before tax.
Involuntary termination benefits of $639 have been paid and $299 have
been accrued as of March 31, 2002. Payments related to the restructuring program
are expected to continue into the first quarter of fiscal year 2003. As a result
of the restructuring, approximately 130 positions have been eliminated. All
costs of the program are reported separately in the statements of operations as
restructuring costs. Several geographies and businesses are impacted by this
cost reduction program; however, most of the impact occurred outside the United
States.
6
NOTE D - BUSINESS COMBINATION
On August 1, 2000, the Company acquired the cotton cellulose business
of Fibra, S.A. (Americana), located in Americana, Brazil for $36,588, including
acquisition costs. The acquisition was funded using borrowings from the
Company's revolving credit facility. The acquisition was accounted for using the
purchase method of accounting. In May 2001, production at Americana was
suspended and capital improvements are planned to allow sales to market
customers. The operating results of Americana have been included in the
consolidated statements of income from the date of acquisition. The following
unaudited pro forma results of operations assume that the acquisition occurred
at the beginning of the periods presented.
Pro forma results of operations Nine Months Ended March 31
2002 2001
------------------------------
Net sales......................................................... $475,090 $557,168
Income (loss) before cumulative effect of change in accounting.... (5,005) 38,102
Net income (loss)................................................. (16,505) 41,351
------------------------------
Basic earnings (loss) per share................................... $ (0.48) $ 1.19
Diluted earnings (loss) per share................................. $ (0.48) $ 1.16
The pro forma financial information is presented for information purposes only
and is not necessarily indicative of the operating results that would have
occurred had the business combination been consummated as of the above dates,
nor is it necessarily indicative of future operating results.
NOTE E -- RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 141, Business Combinations
(SFAS No. 141) and No. 142, Goodwill and Other Intangible Assets (SFAS
No. 142). The Company adopted SFAS 142 on July 1, 2001 and discontinued the
amortization of goodwill. The following schedule adjusts reported net income
(loss) and related earnings per share to exclude amortization
expense related to goodwill, including any related tax effects, for all periods
presented:
Quarter Ended March 31, Nine Months Ended March 31,
2002 2001 2002 2001
------------------------------ ----------------------------------
Adjusted income (loss) before cumulative
effect of change in accounting......... $(4,169) $ 10,263 $ (5,005) $ 41,051
Net income (loss):
Originally reported net income (loss).. $(4,169) $ 9,290 $(16,505) $ 41,393
Add back: Goodwill Amortization....... - 973 - 2,907
(Net of taxes)
------------------------------ ----------------------------------
Adjusted net income (loss)............ $ (4,169) $ 10,263 $(16,505) $44,300
============================== ==================================
Adjusted earnings (loss) per share:
Basic................................. $(0.12) $ 0.30 $ (0.48) $ 1.28
Diluted............................... $(0.12) $ 0.29 $ (0.48) $ 1.24
Under the guidelines of SFAS 142, the Company has completed its
impairment assessments of the carrying value of goodwill. In the assessment of
the carrying value of goodwill, the Company developed its best estimate of
operating cash flows over the period approximating the remaining life of the
business' long-lived assets.
7
Based on this assessment, effective July 1, 2001, the Company has
reduced its goodwill by $11,500 in its converting business, which was purchased
as part of the Merfin acquisition in 1997. There was no tax benefit recorded as
a result of the reduction in the carrying value of the goodwill. The low growth
rate in the converting business does not support its goodwill on a discounted
basis.
NOTE F -- INVENTORIES
The components of inventory consist of the following:
March 31 June 30
2002 2001
---------------------------------
Raw materials.................... $38,674 $ 39,008
Finished goods................... 84,043 76,384
Storeroom and other supplies..... 22,357 21,388
---------------------------------
$145,074 $136,780
=================================
NOTE G -- DEBT
Revolving Credit Facility. The Company amended its Revolving Credit
Facility on March 18, 2002 to modify the financial convenants for the period
March 31, 2002 through June 30, 2003. Interest rates were amended to range from
LIBOR plus 2.75% to 3.75% or the agent's prime rate plus 1.75% to 2.25%. The
Company has agreed that by August 31, 2002 it shall sell its nonredeemable
capital stock on arm's length terms in return for at least $30,000 in net sale
proceeds. On March 28, 2002, the Company borrowed the remaining availability on
its Revolving Credit Facility and invested the excess cash in a AAA rated money
market fund.
Senior Subordinated Notes. At March 31, 2002, the Company's fixed
charge coverage ratio (as defined in the subordinated note indentures) fell
below 2:1. As specified in those indentures, the Company's debt is now limited
to "Permitted Indebtedness" (also defined in the indentures), until the ratio
again equals or exceeds 2:1. Under the "Permitted Indebtedness" limitation, the
Company is limited to its current borrowings under the revolving credit facility
and may continue to borrow under its receivables based credit facility up to the
$30,000 limit. In addition, the Company has a $25,000 basket (as defined in
the 1995 Indenture) that can be used for any new indebtedness. In the event that
any principal is repaid on the receivables based credit facility, any new
borrowing under the receivables based credit facility will be counted against
the $25,000 basket.
The Company has no off-balance sheet financing.
NOTE H -- COMPREHENSIVE INCOME (LOSS)
The components of comprehensive income (loss) consist of the following:
Quarter Ended Nine Months Ended
March 31 March 31
---------------------------------------------------------
2002 2001 2002 2001
-------------- -------------------------------------------
Net income (loss)................................. $(4,169) $9,290 $(16,505) $41,393
Foreign currency translation adjustments - net.... (1,806) (15,096) (2,728) (23,266)
----------------------------- -------------------------
Comprehensive income (loss).......................... $(5,975) $(5,806) $(19,233) $18,127
============================= =========================
The change in the foreign currency translation adjustment is primarily due to
fluctuations in the exchange rate of the US dollar and the euro, the Brazilian
real and the Canadian dollar.
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Critical Accounting Policies
The Company's financial statements are based on the application of
accounting policies, which require management to make estimates and assumptions.
We believe the following are some of the more critical judgment areas in the
application of our accounting policies that currently affect our financial
condition and results of operations.
Inventories
Inventories are stated at the lower of cost or market. In assessing the
ultimate realization of inventories, we are required to make judgments as to
future demand requirements and estimated market values and compare that with the
current cost of inventory. If actual market conditions are less favorable than
those projected, inventory write-downs may be required.
Depreciation
The Company provides for depreciation on its production machinery and
equipment at the cotton cellulose and airlaid nonwovens plants using the
units-of-production depreciation method. The depreciation is based on the
expected productive hours of the assets and is subject to a minimum level of
depreciation. If the estimated productive hours of these assets change in the
future, the Company may be required to adjust depreciation expense per unit of
production, accordingly.
Goodwill and Other Acquired Intangible Assets
The Company has made acquisitions in the past that included a
significant amount of goodwill and other intangible assets. On July 1, 2001, the
Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill
and Other Intangible Assets" and discontinued the amortization of goodwill.
Under the guidelines of SFAS 142, goodwill is subject to an annual impairment
test based on its estimated fair value. Other intangible assets that meet
certain criteria will continue to be amortized over their useful lives and will
also be subject to an impairment test based on estimated fair value. Estimated
fair value is typically based on operating earnings adjusted by a discount
factor in valuing future cash flows. There are many assumptions and estimates
underlying the determination of an impairment loss. If the estimates of future
cash flows or their related assumptions change, additional impairment losses
could be recorded in the future.
Planned Maintenance Shutdowns
The Company accrues the cost of periodic planned maintenance shutdowns,
over the period between shutdowns, based on its estimates of incremental
spending and fixed overhead cost. If the estimates of costs or the period
between shutdowns are different than those projected, an adjustment to the
accrual may be required.
Restructuring Costs
During the quarter ended March 31, 2002, the Company entered into a
restructuring program. The program is designed to deliver cost reductions
through reduced overhead expenses. The cost recorded during the quarter ended
March 31, 2002, comprised mainly of severance and other employee benefit costs,
is $1.0 million before tax.
9
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (cont'd)
Involuntary termination benefits of $0.6 million have been paid and
$0.3 million have been accrued as of March 31, 2002. Payments related to the
restructuring program are expected to continue into the first quarter of fiscal
year 2003. As a result of the restructuring, approximately 130 positions have
been eliminated resulting in cost savings of over $7.0 million annually. All
costs of the program are reported separately in the statements of operations as
restructuring costs. Several geographies and businesses are impacted by this
cost reduction program; however, most of the impact occurred outside the United
States.
Results of Operations
Net sales for the quarter ended March 31, 2002 were $164.2 million
compared to $181.9 million for the same period in the prior fiscal year, a
decrease of $17.7 million or 9.7%. The decrease in net sales was primarily due
to lower sales prices of fluff pulp. Net sales for the nine-month period ended
March 31, 2002 were $475.1 million compared to $556.5 million for the same
period in the prior fiscal year, a decrease of $81.4 million or 14.6%. The
decrease in net sales was primarily due to lower sales prices of fluff pulp and
airlaid nonwovens and lower shipment volumes of cotton cellulose. These were
partially offset by higher sales prices of cotton cellulose.
Operating income for the quarter ended March 31, 2002 was $7.4 million
compared to $27.3 million for the same period in the prior fiscal year, a
decrease of $19.9 million or 72.9%. Operating income for the nine months ended
March 31, 2002 was $29.3 million compared to $93.2 million for the same period
in the prior fiscal year, a decrease of $63.9 million or 68.6%. Operating income
decreased mainly due to the sales issues previously noted and increased cost of
cotton raw materials. The decrease was partially offset by reduced sales,
research and administrative expenses of $9.5 million or 26.3% for the nine
months ended March 31, 2002.
Net interest expense and amortization of debt costs were $12.3 million
for the quarter ended March 31, 2002 compared to $11.7 million for the quarter
ended March 31, 2001. Net interest expense and amortization of debt costs were
$35.6 million for the nine months ended March 31, 2002 compared to $34.2 million
for the same period of the prior fiscal year. The increase was primarily due to
higher debt levels and lower capitalized interest, offset by lower interest
rates.
The Company's effective tax benefit rate was 24.4% for the quarter
ended March 31, 2002 compared to the effective tax rate of 34.5% for the quarter
ended March 31, 2001 primarily due to the write-off of foreign withholding taxes
that cannot be utilized as tax credits.
Financial Condition
Cash Flow
EBITDA represents earnings before interest, taxes, depreciation,
amortization and non-recurring items. EBITDA for the quarters ended March 31,
2002 and 2001 was $19.6 million and $39.2 million respectively. EBITDA for the
nine months ended March 31, 2002 and 2001 was $63.8 million and $129.9 million,
respectively. Cash provided by operating activities for the nine months ended
March 31, 2002 and 2001 were $13.8 million and $25.7 million, respectively. The
decrease of $11.9 million was due primarily to lower earnings partially offset
by a smaller increase in finished goods inventory in the nine months ended March
31, 2002. Additional borrowings from the credit facilities, along with the cash
provided from operations, were used to fund capital expenditures and to make the
$22.0 million note payment to UPM-Kymmene for the purchase of Walkisoft. Cash
used in investing activities for the nine months ended March 31, 2002 was $29.5
million compared to $144.6 million for the same period in the prior fiscal year.
The decrease is due mainly to the completion of the large airlaid nonwovens
machine at the Gaston County, North Carolina plant.
10
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (cont'd)
Liquidity and Capital Resources
The Company has the following major sources of financing: revolving
credit facility, receivables based credit facility and senior subordinated
notes. The Company's revolving credit facility and senior subordinated notes
contain various covenants. At March 31, 2002, the Company was in compliance with
such covenants and believes it will be in compliance for the foreseeable future.
Revolving Credit Facility. The Company amended its Revolving Credit
Facility on March 18, 2002 to modify the financial convenants for the period
March 31, 2002 through June 30, 2003. On March 28, 2002, the Company borrowed
the remaining availability on its $215 million Revolving Credit Facility and
invested the excess cash in a AAA rated money market fund.
Receivables Based Credit Facility. At March 31, 2002, $29.9 million was
outstanding on the Company's $30.0 million receivables based credit facility.
The interest rate applicable to borrowings under this facility is one-week LIBOR
plus 0.95%, and the facility is secured by certain insured receivables. During
the quarter ended March 31, 2002, the Company reclassified the outstanding
amount of the receivables based credit facility to the current portion of
long-term debt. The Company intends to renew and, based on discussions with the
lender, believes it will be able to renew the loan for an additional year when
the credit facility matures on December 5, 2002.
Senior Subordinated Notes. At March 31, 2002, the Company's fixed
charge coverage ratio (as defined in the subordinated note indentures) fell
below 2:1. Falling below the 2:1 ratio does not breach any covenant and is not
an event of default under any of the Company's debt agreements. As specified in
those indentures, the Company's debt is now limited to "Permitted Indebtedness"
limitation (also defined in the indentures), until the ratio again equals or
exceeds 2:1. Under the "Permitted Indebtedness" limitation, the Company is
limited to but is able to maintain its current borrowings under the revolving
credit facility and to continue to borrow under its receivables based credit
facility. In addition, the Company has a $25.0 million basket (as defined in the
1995 Indenture) that can be used for any new indebtedness. In the event that any
principal is repaid on the receivables based credit facility, any new borrowing
under the receivables based credit facility will be counted against the $25
million basket.
While there can be no assurances, the Company believes that operating
results will improve and the Company will exceed the 2:1 ratio, which is
measured on a rolling four-quarter basis, in the next nine to twelve months.
On March 15, 2002, the Company filed a Form S-3 shelf registration
statement. The shelf registration statement will allow the Company to issue
various types of securities, including common stock, preferred stock and debt
securities, from time to time, up to an aggregate of $300 million. The Company
filed the registration statement to gain additional flexibility in accessing
capital markets for general corporate purposes. This S-3 registration statement
became effective on April 18, 2002.
While there can be no assurances, the Company believes that its cash
flow from operations along with current cash and cash equivalents will be
sufficient to fund capital expenditures (expected to total $37.0 million for
this fiscal year and $45.0 million for next fiscal year), meet operating
expenses and service all debt requirements for the foreseeable future.
11
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (cont'd)
Recently Issued Accounting Standards
Effective July 1, 2001 the Company adopted SFAS No. 142, Goodwill and
Other Intangible Assets, which establishes new accounting and reporting
requirements for goodwill and other intangible assets as described in our
critical accounting policies. Based on the assessment, effective July 1, 2001,
the Company has reduced its goodwill by $11,500 in the converting business,
which was purchased as part of the Merfin acquisition in 1997. There was no tax
benefit recorded as a result of the reduction in the carrying value of the
goodwill.
12
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
1. Exhibit 10.1
- Amendment No. 3 to the Credit Agreement dated March 18, 2002.
2. Reports on Form 8-K
- Report dated March 19, 2002 announcing its new credit
arrangements and updating its business outlook.
13
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Buckeye Technologies Inc.
By:/S/ DAVID B. FERRARO
--------------------------
David B. Ferraro, President and Chief Operating Officer
Date: May 14, 2002
-----------------------
By:/S/ GAYLE L. POWELSON
--------------------------
Gayle L. Powelson, Senior Vice President, Chief Financial Officer
Date: May 14, 2002
-----------------------
14