.comment-link {margin-left:.6em;}

Friday, June 17, 2011

Buckeye Technologies (BKI)

BKI (sec)

Makes cellulose based specialty products: 1) fibers (chemical cellulose, custom fibers, fluff pulp), 2) nonwoven materials.  Disposable diapers, pers hygene products, air/oil filters, etc.  #1 is much bigger and more profitable business.

Direct sales force, sales agents.  Founded 1992 technically, but go back 85 years via P&G.  Memphis.

10-Q ending March 2011.
40 million shares.
fair gross margins.  roughly 18% oper margins, 12% net margins.
Earned 70 cents for the Q.  5 cent dividends.

Balance sheet very (half depreciated) PP&E heavy, but overall not all that asset heavy.  Some debt.  PENSION PLAN.

Net income is fairly close to free cash flow.  Paying off debt.

They get some sort of "alternative fuel mixture credits", but it's down in the noise.

Medium capex was and is needed for wastewater treatment. $50 million over 5 years.

Big air quality EPA unknown capex in the future.

Manufacturing in US, Canada, Germany, Brazil.

Seems like good financial condition.

Repurchased 5.4 million shares a while back.

Looking at 14 A
Seems OK.  Big audit fees of over $1 million.
Insiders hold some stock, but not a lot.

Compensation levels are high, but comp ok. CEO=$1.6 million

Sales volumes have dropped 2008-2010.
There are relatively few specialty fibers producers when compared with the much larger commodity paper pulp markets.  The technical demands and unique requirements of the high-purity chemical cellulose or customized fiber pulp user tend to differentiate suppliers on the basis of their ability to meet the customer’s particular set of needs, rather than focusing only on pricing.  The high-purity chemical cellulose and customized fiber markets are less subject to price variation than commodity paper pulp markets.  Major competitors include Rayonier Inc., Borregaard, Sateri International Group (”Sateri”), Neucel Specialty Cellulose Ltd., Sappi Saiccor, Tembec Inc., and Archer Daniels Midland Company.
Big loss in 2009: impairment, restructuring.

Continuing on 10-k
Rough guess is a $20 stock, which is around the current price.

They spent a lot of time in the toilet back in 2002-2004 losing money.  I need to find a company that's in the toilet now (looks bad now but will snap out of it)

Thanks so much for sharing an amazing article! By the way, check out http://drashtacapital.com/ the most trusted and most reliable in Australia.
Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?