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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 September 30, 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 November 13, 2002, there were outstanding 36,973,478 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 Income for the Quarter Ended September 30, 2002 and
2001................................................................................... 3
Condensed Consolidated Balance Sheets as of September 30, 2002 and June 30, 2002............ 4
Condensed Consolidated Statements of Cash Flows for the Quarter Ended September 30, 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
4. Controls and Procedures 11
PART II - OTHER INFORMATION
6. Exhibits and Reports on Form 8-K............................................................ 13
SIGNATURES 14
CERTIFICATIONS 15
2
PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Quarter Ended
September 30
-----------------------------------
2002 2001
-----------------------------------
Net sales............................................ $156,425 $155,157
Cost of goods sold 136,044 135,112
---------------- --------------
Gross margin......................................... 20,381 20,045
Selling, research and administrative expenses........ 8,943 8,621
---------------- --------------
Operating income..................................... 11,438 11,424
Net interest expense and amortization of debt costs.. 12,126 10,830
Foreign exchange, amortization of intangibles and other 90 576
---------------- --------------
Income (loss) before income taxes and cumulative
effect of change in accounting.................... (778) 18
Income tax expense (benefit)......................... (259) 6
---------------- --------------
Income (loss) before cumulative effect of change
in accounting..................................... (519) 12
Cumulative effect of change in accounting
(net of tax of $0)................................ - (11,500)
---------------- --------------
Net income (loss).................................... $ (519) $ (11,488)
================ ==============
Earnings (loss) per share before cumulative effect of
change in accounting
Basic earnings (loss) per share............. $ (.01) $ 0.00
Diluted earnings (loss) per share........... $ (.01) $ 0.00
Cumulative effect of change in accounting
Basic earnings (loss) per share............ $ - $ (.33)
Diluted earnings (loss) per share.......... $ - $ (.33)
Earnings (loss) per share
Basic earnings (loss) per share........... $ (.01) $ (.33)
Diluted earnings (loss) per share......... $ (.01) $ (.33)
Weighted average shares for basic earnings per share 36,949 34,443
Effect of dilutive stock options - -
---------------- --------------
Adjusted weighted average shares for diluted earnings per share 36,949 34,443
================ ==============
See accompanying notes.
3
PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
September 30 June 30
2002 2002
---------------------------
Assets
Current assets:
Cash and cash equivalents............................. $ 31,617 $ 56,006
Cash, restricted...................................... 3,375 3,375
Short-term investments................................ 8,863 8,863
Accounts receivable-net............................... 103,333 98,152
Inventories........................................... 140,092 145,103
Deferred income taxes and other....................... 30,025 29,653
----------------------------
Total current assets 317,305 341,152
Property, plant and equipment............................... 902,050 905,545
Less accumulated depreciation............................... (287,395) (277,793)
----------------------------
614,655 627,752
Goodwill, net............................................... 114,150 120,399
Intellectual property and other, net........................ 50,849 46,070
-----------------------------
Total assets............................. $1,096,959 $1,135,373
=============================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable...................................... $ 27,704 $ 33,789
Accrued expenses...................................... 51,086 47,832
Current portion of capital lease obligations....... 549 793
Current portion of long-term debt..................... - 22,000
-----------------------------
Total current liabilities 79,339 104,414
Long-term debt........................................ 674,837 675,396
Accrued postretirement benefit obligations............ 19,214 19,163
Deferred income taxes................................. 80,578 79,295
Capital lease obligations.......................... 3,076 3,029
Other liabilities..................................... 482 416
Stockholders' equity........................................ 239,433 253,660
------------------------------
Total liabilities and stockholders' equity............ $1,096,959 $1,135,373
==============================
See accompanying notes.
4
PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Quarter Ended
September 30
--------------------------------
2002 2001
--------------------------------
Operating activities
Net loss.......................................................... $ (519) $(11,488)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Cumulative effect of change in accounting.................. - 11,500
Depreciation............................................... 11,427 10,682
Amortization............................................... 1,502 961
Deferred income taxes and other............................ 1,557 1,919
Changes in operating assets and liabilities:
Accounts receivable.................................... (6,160) 1,755
Inventories............................................ 4,179 (11,978)
Other assets........................................... (775) (591)
Accounts payable and other current liabilities......... (2,070) (5,063)
---------------------------------
Net cash provided by (used in) operating activities............... 9,141 (2,303)
Investing activities
Purchases of property, plant and equipment........................ (4,587) (16,791)
Other............................................................. (211) (94)
----------------------------------
Net cash used in investing activities............................. (4,798) (16,885)
Financing activities
Proceeds from exercise of stock options........................... - 3,605
Net borrowings (payments) under revolving line of credit.......... (5,781) 17,522
Payments for debt issuance costs.................................. (380) (791)
Principal payments on long term debt and other.................... (22,197) -
----------------------------------
Net cash provided by (used in) financing activities............... (28,358) 20,336
Effect of foreign currency rate fluctuations on cash.............. (374) (28)
----------------------------------
Increase (decrease) in cash and cash equivalents.................. (24,389) 1,120
Cash and cash equivalents at beginning of period.................. 56,006 12,932
----------------------------------
Cash and cash equivalents at end of period........................ $31,617 $14,052
==================================
See accompanying notes.
5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(In thousands)
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 months ended September 30, 2002
are not necessarily indicative of the results that may be expected for the year
ended June 30, 2003. 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, 2002. Certain amounts in the 2001 financial statements have been
reclassified to conform with the 2002 financial statement presentation.
NOTE B -- CHANGE IN ACCOUNTING
Under the guidelines of SFAS 142, the Company has completed its initial
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.
Based on this assessment, effective July 1, 2001, the Company has
reduced its goodwill by $11,500 in its small single site 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 did not support its
goodwill on a discounted basis. Under SFAS 142, the impairment adjustment
recognized at adoption of the new rules was reflected as a cumulative effect of
accounting change in the 2002 consolidated statement of operations. Impairment
adjustments recognized after adoption, if any, are required to be recognized as
operating expenses.
NOTE C -- RESTRUCTURING COSTS
During the year ended June 30, 2002, the Company entered into a
restructuring program. The program was designed to deliver cost reductions
through reduced overhead expenses. The cost recorded during the year ended June
30, 2002, comprised mainly of severance and other employee benefit costs, was
$1,605.
Involuntary termination benefits of $1,497 have been paid, leaving an
accrual of $108 at September 30, 2002. Payments related to the restructuring
program are expected to be completed during the current fiscal year. As a result
of the restructuring, approximately 200 positions have been eliminated. All
costs of the program were reported in the statements of operations under
restructuring and impairment costs. The nonwovens and cotton operations in North
America and Europe are impacted by this cost reduction program. As part of this
restructuring, the Company closed engineering offices located in Finland.
6
NOTE D -- RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2002, the Financial Accounting Standards Board issued Statement
No. 146, Accounting for Costs Associated with Exit or Disposal Activities (SFAS
146). SFAS 146 nullifies Emerging Issues Task Force Issues No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring) and requires that
a liability for the costs associated with an exit or disposal activity be
recognized when the liability is incurred, as opposed to the date of an entity's
commitment to an exit plan. The Company does not expect the adoption of SFAS 146
to have a significant financial impact on its Consolidated Financial Statements.
NOTE E -- INVENTORIES
The components of inventory consist of the following:
September 30 June 30
2002 2002
------------------------------
(In thousands)
Raw materials.......................... $ 32,974 $ 36,902
Finished goods......................... 83,917 84,906
Storeroom and other supplies........... 23,201 23,295
---------------- -------------
$140,092 $145,103
==============================
NOTE F -- DEBT
Revolving Credit Facility - The Company amended its Revolving Credit
Facility on August 20, 2002. This amendment waived the requirement that the
Company sell additional equity. In addition, the banks consented to Buckeye's
immediate prepayment of the $22,000 note due on October 1, 2002 to UPM-Kymmene.
This note was paid on August 21, 2002.
Interest Rate Swap - In May 2001, the Company entered into an interest
rate swap on $100 million of 8% fixed rate notes payable maturing in October
2010. The swap converts interest payments from a fixed rate to a floating rate
of LIBOR plus 1.97%. This arrangement qualifies as a fair value hedge under SFAS
No. 133 Accounting for Derivative Instruments and Hedging Activities. As such,
the net effect from the interest rate swap is recorded as part of interest
expense. The swap agreement settles quarterly until maturity in October 2010.
During the quarters ended September 30, 2002 and 2001, the swap reduced the
Company's interest expense by $1.0 million and $0.6 million, respectively. Based
upon current interest rates for similar transactions, the fair value of the
interest rate swap agreement resulted in an asset and an increase in debt of
$8.1 million at September 30, 2002 and $4.8 million at September 30, 2001.
Receivables Based Credit Facility - On September 3, 2002, the Company
amended its $30,000 receivables based credit facility. The amendment extends the
maturity to December 4, 2003 and reduces the interest rate to one-week LIBOR
plus 0.75%.
7
NOTE G -- COMPREHENSIVE LOSS
The components of comprehensive loss consist of the following:
Quarter Ended
September 30
2002 2001
--------------------------
(In thousands)
Net loss.................................................. $ (519) $(11,488)
Foreign currency translation adjustments - net............ (13,708) 3,451
---------------------------
Comprehensive loss....................................... $(14,227) $(8,037)
===========================
The change in the foreign currency translation adjustment is primarily
due to fluctuations in the exchange rate of the US dollar and the euro of
$3,182, the Brazilian real of $6,291 and the Canadian dollar of $4,235 for the
quarter ended September 30, 2002.
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Critical Accounting Policies
The preparation of Buckeye's financial statements requires estimates,
assumptions and judgements that affect the Company's assets, liabilities,
revenues and expenses. The Company bases these estimates and assumptions on
historical data and trends, current fact patterns, expectations and other
sources of information it believes are reasonable. Actual results may differ
from these estimates under different conditions. For a full description of the
Company's critical accounting policies, see the Management's Discussion and
Analysis in the 2002 Annual Report on Form 10-K.
Results of Operations
Net sales for the first quarter ended September 30, 2002 were $156.4
million compared to $155.2 million for the same period in 2001, an increase of
$1.2 million or 0.8%. The increase in net sales was primarily due to 10% higher
shipment volumes, offset by lower sales prices for cotton cellulose products.
Operating income for the quarter ended September 30, 2002 was $11.4
million compared to $11.4 million for the same period in 2001. Cotton raw
material costs have recently fallen to more normal levels and the Company has
reduced its cotton sales prices to regain volume lost during the raw material
and sales price run-up during calendar year 2001.
Net interest expense and amortization of debt costs for the quarter
ended September 30, 2002 were $12.1 million compared to $10.8 million for the
same period in 2001, an increase of $1.3 million. The increase was due primarily
to the capitalization of $1.7 million of interest on large construction projects
during the 2001quarter. This was partially offset by lower debt levels and lower
interest rates in the quarter ended September 30, 2002.
Other expenses for the quarter ended September 30, 2002 were $0.1
million compared to $0.6 million for the quarter ended September 30, 2001. This
favorable variance primarily results from foreign currency gains in 2002 versus
foreign currency losses in 2001.
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 $11.5 million 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.
Financial Condition
Cash Flow
Cash flow provided by operating activities of $9.1 million for the
quarter ended September 30, 2002 was $11.4 million higher than the same quarter
in the prior year. This improved cash flow was primarily due to a reduction in
inventories in 2002 versus an increase in inventories in the same quarter in the
prior year. Cash provided from operations and cash on hand financed capital
expenditures of $4.6 million and debt repayments of $28.0 million during the
quarter ended September 30, 2002. The $12.2 million reduction in capital
expenditures versus the same quarter in 2001 is attributable to the completion
of construction of the large airlaid nonwovens machine at the Gaston plant
during the first quarter of 2001.
9
EBITDA and Net Debt information are included below as additional means
of evaluating the Company's financial condition, liquidity and its ability to
satisfy rating agency and creditor requirements. The Company incurs significant
noncash charges, including depreciation and amortization, related to the
material capital assets utilized in its operations. EBITDA is a central measure
used in the Company's compliance with debt covenants related to its credit
facility. This measure should not be considered as a superior alternative to net
income, operating income, cash flow from operations, or any other operating or
liquidity performance measure as defined by generally accepted accounting
principles (GAAP) in the United States. EBITDA, as defined by the revolving
credit facility (earnings before goodwill accounting change, interest, taxes,
depreciation and amortization, and nonrecurring charges) for the quarter ended
September 30, 2002 was $23.8 million compared to $21.7 million for the same
period in 2001. The 10% increase in EBITDA in 2002 reflects an increase in
non-cash charges in 2002.
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 September 30, 2002, the Company was in compliance
with such covenants and believes it will remain in compliance throughout fiscal
year 2003.
Revolving Credit Facility - The Company amended its Revolving Credit
Facility on August 20, 2002. This amendment eliminated the requirement that the
Company sell additional equity. In addition, the banks consented to Buckeye's
immediate prepayment of the $22 million note due on October 1, 2002 to
UPM-Kymmene. This note was paid on August 21, 2002, thereby reducing the
Company's interest expense for the quarter ended September 30, 2002. The Company
has borrowed the entire availability on its $215 million Revolving Credit
Facility.
Receivables Based Credit Facility - On September 3, 2002, the Company
amended its $30 million receivables based credit facility. The amendment extends
the maturity from December 4, 2002 to December 4, 2003 and reduces the interest
rate to one-week LIBOR plus 0.75%. At September 30, 3002, the Company had unused
borrowing availability of $15.9 million on its receivables based credit
facility, reflecting a net debt repayment of $4.8 million during the quarter.
Senior Subordinated Notes - The Company's fixed charge coverage ratio
(as defined in the subordinated note indentures) is below 2:1. As specified in
those indentures, the Company's debt is now limited to a "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 able to maintain, its current borrowings under the
revolving credit facility. In addition, the Company has a $25 million basket (as
defined in the 1995 Indenture) that can be used for any new indebtedness. At
September 30, 2002, $4.1 million of this basket was used on borrowings from the
receivables based credit facility.
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, by the end of fiscal year 2003. While
there can be no assurances, the Company believes that its cash flow from
operations along with current cash, cash equivalents and short-term investments,
combined with available external financing, will be sufficient to fund capital
expenditures (expected to not exceed $40 million for this fiscal year), working
capital and service all debt requirements for the foreseeable future.
10
On March 15, 2002, the Company filed a Form S-3 shelf registration
statement. The shelf registration statement allows 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.
Interest Rate Swap - In May 2001, the Company entered into an interest
rate swap on $100 million of 8% fixed rate notes maturing in October 2010. The
swap converts interest payments from a fixed rate to a floating rate of LIBOR
plus 1.97%. This arrangement qualifies as a fair value hedge under SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. As such, the net
effect from the interest rate swap is recorded as part of interest expense. The
swap agreement settles quarterly until maturity in October 2010. During the
quarters ended September 30, 2002 and 2001, the swap reduced the Company's
interest expense by $1.0 million and $0.6 million, respectively. Based upon
current interest rates for similar transactions, the fair value of the interest
rate swap agreement was recorded as an asset and a corresponding increase in
debt of $8.1 million at September 30, 2002, $2.6 million at June 30, 2002 and
$4.8 million at September 30, 2001.
Total debt, including the $8.1 million debt recorded for the interest
rate swap agreement discussed above, at September 30, 2002 was $678.5 million, a
reduction of $22.8 million from June 30, 2002. The noncash increase in long-term
debt related to the interest rate swap agreement was $5.5 million and the
noncash decrease in debt due to foreign currency translation adjustments was
$0.3 million during the quarter ended September 30, 2002. Thus, the net
repayment of debt during the quarter totaled $28.0 million.
The Company holds a significant amount of cash, cash equivalents and
short-term investments due to the "Permitted Indebtedness" limitations described
above in the section on Senior Subordinated Notes. Net debt, defined as debt and
capital lease obligations, net of the interest rate swap, cash and cash
equivalents and short-term investments, was $626.5 million at September 30,
2002. Net debt at September 30, 2002 was $3.9 million lower than at June 30,
2002 and $35.5 million lower than the $662.0 million of net debt at September
30, 2001. Net debt is not a measure that is defined by GAAP and is provided as
supplemental information to facilitate an understanding of the Company's
financial condition.
Forward-Looking Statements
Except for the historical information contained herein, the matters
discussed in this Form 10-Q are forward-looking statements that involve risks
and uncertainties that could cause actual results to differ materially,
including but not limited to, economic, competitive, governmental, and
technological factors affecting the Company's operations, financing, markets,
products, services, prices, and other factors. The Company undertakes no
obligation to publicly release the result of any revisions to these
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. For additional
factors that could impact future results, please see the Company's 2002 Annual
Report on Form 10-K on file with the Securities and Exchange Commission.
11
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. The Company's chief
executive officer and chief financial officer have evaluated the effectiveness
of the design and operation of the Company's disclosure controls and procedures
(as defined in Exchange Act Rule 13a-14(c)) as of a date within 90 days of the
filing date of this quarterly report. Based on that evaluation, the chief
executive officer and chief financial officer have concluded that the Company's
disclosure controls and procedures are effective to ensure that material
information relating to the Company and the Company's consolidated subsidiaries
is made known to such officers by others within these entities, particularly
during the period this quarterly report was prepared, in order to allow timely
decisions regarding required disclosure.
Changes in Internal Control. There have not been any significant
changes in the Company's internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation.
12
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Listing of Exhibits
99.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, signed by Robert E. Cannon, the Chief Executive Officer
of Buckeye Technologies Inc. on November 14, 2002.
99.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, signed by Gayle L. Powelson, the Chief Financial Officer
of Buckeye Technologies Inc. on November 14, 2002.
(b) Reports on Form 8-K
During the quarter ended September 30, 2002, the following reports were
filed on Form 8-K:
- Report dated July 16, 2002 announcing the conference call
regarding operating results for the quarter ended June 30, 2002.
- Report dated August 21, 2002 announcing that the Company will not
sell additional equity.
- Report dated September 5, 2002 announcing the extension of its $30
million receivables based credit facility.
(c) Items 1 through 5 are not applicable and have been omitted.
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/ ROBERT E. CANNON
-------------------------------------
Robert E. Cannon, Chief Executive Officer
Date: November 14, 2002
By: /S/ GAYLE L. POWELSON
------------------------------------
Gayle L. Powelson, Senior Vice President, Chief Financial Officer
Date: November 14, 2002
14
Certification of Chief Executive Officer
Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
I, Robert E. Cannon, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Buckeye
Technologies Inc. ("Buckeye");
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report; and
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of Buckeye as of, and for, the
periods presented in this quarterly report.
4. Buckeye's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for Buckeye and have:
a) designed such disclosure controls and procedures to ensure
that material information relating to Buckeye, including
its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of Buckeye's disclosure
controls and procedures as of a date within 90 days prior
to the filing date of this quarterly report (the
"Evaluation Date"); and
c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation
Date;
5. Buckeye's other certifying officers and I have disclosed,
based on our most recent evaluation, to Buckeye's auditors and the
audit committee of Buckeye's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect Buckeye's
ability to record, process, summarize and report financial data
and have identified for Buckeye's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in Buckeye's
internal controls; and
6. Buckeye's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in
internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
Date: November 14, 2002
/S/ ROBERT E. CANNON
----------------------------
Chairman of the Board
and Chief Executive Officer
15
Certification of Chief Financial Officer
Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
I, Gayle L. Powelson, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Buckeye
Technologies Inc. ("Buckeye");
2. Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
quarterly report; and
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report,
fairly present in all material respects the financial
condition, results of operations and cash flows of Buckeye as
of, and for, the periods presented in this quarterly report.
4. Buckeye's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for Buckeye and have:
a) designed such disclosure controls and procedures to ensure
that material information relating to Buckeye, including its
consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which
this quarterly report is being prepared;
b) evaluated the effectiveness of Buckeye's disclosure
controls and procedures as of a date within 90 days prior
to the filing date of this quarterly report (the
"Evaluation Date"); and
c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation
Date;
5. Buckeye's other certifying officers and I have disclosed, based
on our most recent evaluation, to Buckeye's auditors and the
audit committee of Buckeye's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect Buckeye's
ability to record, process, summarize and report financial
data and have identified for Buckeye's auditors any
material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role
in Buckeye's internal controls; and
6. Buckeye's other certifying officers and I have indicated in
this quarterly report whether there were significant changes
in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
Date: November 14, 2002
/S/ GAYLE L. POWELSON
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Senior Vice President,
Chief Financial Officer
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