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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the year ended June 30, 1998
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Commission file number: 33-60032
Buckeye Retirement Plus Savings Plan
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Buckeye Technologies Inc.
1001 Tillman Street, Memphis, TN 38112
901-320-8100
Plan Number 001
Internal Revenue Service -- Employer Identification No. 62-1518973
June 30, 1998 and 1997
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<PAGE>
Audited Financial Statements and
Supplemental Schedules
Buckeye Retirement Plus Savings Plan
June 30, 1998 and 1997
with Report of Independent Auditors
<PAGE>
Buckeye Retirement Plus Savings Plan
Audited Financial Statements and Supplemental Schedules
June 30, 1998 and 1997
Contents
Report of Independent Auditors........................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits.......................2
Statement of Changes in Net Assets Available for Benefits.............4
Notes to Financial Statements.........................................5
Supplemental Schedules
Line 27a--Schedule of Assets Held for Investment Purposes..............9
Line 27d--Schedule of Reportable Transactions.........................10
<PAGE>
Report of Independent Auditors
Buckeye Investment Committee
We have audited the accompanying statements of net assets available for benefits
of Buckeye Retirement Plus Savings Plan as of June 30, 1998 and 1997, and the
related statement of changes in net assets available for benefits for the year
ended June 30, 1998. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at June
30, 1998 and 1997, and the changes in net assets available for benefits for the
year ended June 30, 1998, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of June 30, 1998, and reportable transactions for the
year then ended are presented for the purpose of additional analysis and are not
a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in the statements of net assets available for
benefits as of June 30, 1998 and 1997 and the statement of changes in net assets
available for benefits for the year ended June 30, 1998, is presented for
purposes of additional analysis rather than to present the net assets available
for benefits and changes in net assets available for benefits of each fund.
These supplemental schedules and fund information are the responsibility of the
Plan's management. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
December 14, 1998
1
<PAGE>
<TABLE>
<CAPTION>
Buckeye Retirement Plus Savings Plan
Statement of Net Assets Available for Benefits,
With Fund Information
Non-Participant
Participant Directed Directed
------------------------------------------------------------------------ ------------
Money Growth & Buckeye Buckeye
Market Income Balanced Income Growth International Stock Stock
Fund Fund Funds Funds Funds Fund Fund Fund Other Total
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair
value:
Shares in registered
investment companies $ - $333,084 $1,792,293 $16,413,536 $440,961 $52,224 $ - $ - $ $19,032,098
Common stock of
Buckeye Technologies - - - - - - 9,396,219 6,994,443 - 16,390,662
Inc.
Cash and cash
equivalents 558,594 - - - - - - - 19,033 577,627
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Total investments 558,594 333,084 1,792,293 16,413,536 440,961 52,224 9,396,219 6,994,443 19,033 36,000,387
Contributions receivable:
Employer - - - - - - - 2,533,838 - 2,533,838
Participants - - - - - - - - 185,526 185,526
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Total contributions
receivable - - - - - - - 2,533,838 185,526 2,719,364
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Net assets available for
benefits $558,594 $333,084 $1,792,293 $16,413,536 $440,961 $52,224 $9,396,219 $9,528,281 $204,559 $38,719,751
==========================================================================================================
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Buckeye Retirement Plus Savings Plan
Statement of Net Assets Available for Benefits,
With Fund Information
Non-Participant
Participant Directed Directed
-------------------------------------------------------------------- ---------------
Money Stock Growth & Buckeye Buckeye
Market Bond Balanced Index Income Growth Stock Stock
Fund Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair
value:
Shares in registered
investment companies $ - $314,803 $1,424,177 $3,039,052 $2,883,153 $7,613,634 $ - $ - $15,274,819
Common stock of
Buckeye - - - - - - 5,244,480 3,428,798 8,673,278
Technologies Inc.
Cash and cash 425,967 1,184 15,861 7,266 317 24,642 233,997 205,762 914,996
equivalents
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Total investments 425,967 315,987 1,440,038 3,046,318 2,883,470 7,638,276 5,478,477 3,634,560 24,863,093
Contributions receivable:
Employer - - - - - - - 1,818,461 1,818,461
Participants 7,998 2,955 12,538 30,801 50,445 54,498 20,627 - 179,862
---------------------------------------------------------------------------------------------------
Total contributions
receivable 7,998 2,955 12,538 30,801 50,445 54,498 20,627 1,818,461 1,998,323
Accrued income 1,795 1,852 11,550 24 25 96 77 259 15,678
===================================================================================================
Net assets available for
benefits $435,760 $320,794 $1,464,126 $3,077,143 $2,933,940 $7,692,87 $5,499,181 $5,453,280 $26,877,094
===================================================================================================
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Buckeye Retirement Plus Savings Plan
Statement of Changes in Net Assets Available for Benefits,
With Fund Information
Year ended June 30, 1998
Non-Participant
Participant Directed Directed
---------------------------------------------------------------------------------- -------------
Stock Money Growth & Buckeye Buckeye
Index Market Income Balanced Income Growth International Stock Stock
Fund Fund Fund Funds Funds Funds Fund Fund Fund Other Total
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net
assets:
Investment income:
Net appreciation
in fair value of
investments $ 254,733 $ - $16,227 $194,881 $ 1,570,699 $554,313 $ 6,303 $2,400,449 $1,847,799 $ - $6,845,404
Interest and
dividends 10,456 23,631 18,847 89,384 586,678 525 - 539 3,009 - 733,069
Contributions:
Employer - - - - - - - - 2,533,838 - 2,533,838
Participants 194,229 46,015 35,920 143,292 1,128,893 392,748 1,547 852,038 - 185,526 2,980,208
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Total contributions 194,229 46,015 35,920 143,292` 1,128,893 392,748 1,547 852,038 2,533,838 185,526 5,514,046
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Total additions 459,418 69,646 70,994 427,557 3,286,270 947,586 7,850 3,253,026 4,384,646 185,526 13,092,519
Deductions from net
assets:
Benefit payments 39,346 52,355 15,834 90,925 185,254 253,251 - 369,670 200,235 - 1,206,870
Administrative 4,525 2,397 1,485 4,997 10,228 10,694 - 8,554 112 - 42,992
expenses
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Total deductions 43,871 54,752 17,319 95,922 195,482 263,945 - 378,224 200,347 - 1,249,862
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Net increase prior
to transfers to
successor
trustee
and interfund
transfers 415,547 14,894 53,675 331,635 3,090,788 683,641 7,850 2,874,802 4,184,299 185,526 11,842,657
Transfers to
successor
trustee (3,355,735) (1,632) (2,357) (12) 10,669,568 (7,309,832) - - - - -
Interfund
transfers (net) (136,955) 109,572 (39,028) (3,456) (280,760) (625,718) 44,374 1,022,236 (109,298) 19,033 -
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Net increase
(decrease) (3,077,143) 122,834 12,290 328,167 13,479,596 (7,251,909) 52,224 3,897,038 4,075,001 204,559 11,842,657
Net assets
available for
benefits:
Beginning of
year 3,077,143 435,760 320,794 1,464,126 2,933,940 7,692,870 - 5,499,181 5,453,280 - 26,877,094
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End of year $ - $558,594 $333,084 $1,792,293 $16,413,536 $ 440,961 $52,224 $9,396,219 $9,528,281 $204,559 $38,719,751
=================================================================================================================
See accompanying notes.
</TABLE>
<PAGE>
Buckeye Retirement Plus Savings Plan
Notes to Financial Statements
June 30, 1998
1. Description of Plan
The following description of the Buckeye Retirement Plus Savings Plan (the Plan)
provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
General
The Plan is a contributory defined contribution plan covering all full-time
salaried and hourly employees of Buckeye Technologies Inc. (the Plan Sponsor),
formerly Buckeye Cellulose Corporation, and its wholly owned subsidiaries,
Buckeye Florida Limited Partnership and Buckeye Florida Corporation. Employees
are eligible upon completion of 1,000 hours of service during their first year
of employment or during any plan year (July 1 to June 30).
As of July 1, 1997, full-time salaried management employees of Buckeye
Lumberton, Inc. (Lumberton), formerly Alpha Cellulose Corporation, were included
in the Plan. Effective July 1, 1998 all remaining full-time salaried and hourly
employees of Lumberton became eligible for the Plan. The total net assets of the
Alpha Cellulose Corporation Cash Option Thrift Plan, approximately $6.3 million,
were merged with the Plan on July 1, 1998.
Contributions
Employer--The Plan Sponsor may make a contribution equal to 4% of each
participant's annual gross compensation if certain financial goals are met.
Participant--Eligible participants may contribute up to 10% of gross
compensation to the Plan. Participants may also contribute a portion or all of
incentive compensation.
Participant Accounts
Each participant's account is credited with the participant's contributions,
employer contribution, and allocations of Plan earnings and administrative
expenses. Earnings in each investment fund are allocated to participants'
accounts based on the relative value of the account balances prior to any
allocation of current year contributions. Subsequent to June 30, 1996, employer
contributions are made in the form of purchases of the common stock of the Plan
Sponsor and are not subject to direction by participants.
Vesting
Participants are immediately vested in all contributions to the Plan plus actual
earnings thereon.
<PAGE>
Buckeye Retirement Plus Savings Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Payment of Benefits
On termination of service due to death, disability or retirement, a participant
may elect to receive distributions from the Plan. The forms of payment include
annuities and lump-sum distributions. For termination of service due to other
reasons, a participant may receive the value of the vested interest in his or
her account as a lump-sum distribution, or the account may be rolled over to
another qualified plan or IRA.
Investment Options
Upon enrollment in the Plan, a participant may direct employer and participant
contributions in 10% increments in any of eleven investment options.
Participants may change their investment options quarterly.
Administrative Costs
Administrative costs of the Plan are paid by the Plan Sponsor at its discretion.
2. Significant Accounting Policies
Investments
Investments are stated at fair market value based on quoted market prices with
the change in carrying value reported as the net change in unrealized
appreciation or depreciation in aggregate fair value of investments. Purchases
and sales of investments are recorded on a trade-date basis. Interest income is
recorded on the accrual basis.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, and changes therein, and
disclosure of contingent assets and liabilities. Actual results could differ
from those estimates.
<PAGE>
3. Investments
Investments that represent 5% or more of the fair value of the Plan's net assets
are separately identified as follows:
<TABLE>
<CAPTION>
June 30
1998 1997
------------------------
<S> <C> <C>
Investments at fair value as determined
by quoted market price:
Balanced Fund:
Dodge & Cox Balanced Fund $ - $1,440,038
Stock Index Fund:
Vanguard Institutional Index Fund - 3,046,318
Growth Fund:
Janus Fund, Inc. - 7,638,276
Growth & Income Funds:
Spartan US Equity Index Fund 3,951,974 -
MAS Value Fund 3,809,392 2,883,470
Fidelity Growth & Income Fund 8,652,170 -
Common stock of Buckeye Technologies Inc. 16,390,662 9,113,037
</TABLE>
During 1998, the Plan's investments (including investments bought, sold, and
held during the year) appreciated in value by $6,845,404 as follows:
<TABLE>
<CAPTION>
Year ended
June 30,
1998
------------
<S> <C>
Investments at fair value as determined by
quoted market price:
Balanced Fund:
Dodge & Cox Balanced Fund $ 86,359
Stock Index Fund:
Vanguard Institutional Index Fund 254,733
Growth Fund:
Janus Fund, Inc. 536,302
Growth & Income Funds:
Spartan U.S. Equity Index Fund 483,286
MAS Value Fund 9,808
Fidelity Growth & Income Fund 1,114,073
Common stock of Buckeye Technologies Inc. 4,248,248
Other 112,595
============
$6,845,404
============
</TABLE>
<PAGE>
4. Related Party Transactions
The Plan purchased $4,288,107 and sold $981,821 of the Plan Sponsor's common
stock during the year. The stock held by the Plan at June 30, 1998 and 1997, had
a market value of $16,390,662 and $8,673,278, respectively.
5. Plan Termination
Although it has not expressed any intent to do so, the Plan Sponsor has the
right to terminate the Plan subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA). In the event of plan termination,
participants will be entitled to 100 percent of the value in their accounts.
6. Income Tax Status
The Internal Revenue Service ruled on June 30, 1995, that the Plan qualifies
under the applicable sections of the Internal Revenue Code (IRC) and the related
trust is, therefore, not subject to tax under present income tax law. The Plan,
which has been amended since receiving the determination letter, is required to
operate in conformity with the IRC to maintain its qualification. Management is
not aware of any course of action or series of events that have occurred that
might adversely affect the Plan's qualified status.
7. Year 2000 Issue (unaudited)
The Plan Sponsor intends to modify its internal information technology to be
ready for the year 2000, and has begun converting critical data processing
systems. The project also includes determining whether third party service
providers have reasonable plans in place to become year 2000 compliant. The Plan
Sponsor currently expects the project to be substantially complete by early
1999. The Plan Sponsor does not expect this project to have a significant effect
on Plan operations.
<PAGE>
<TABLE>
<CAPTION>
Buckeye Retirement Plus Savings Plan
EIN 62-1518973
Plan Number 001
Line 27a--Schedule of Assets Held for Investment Purposes
June 30, 1998
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest, Current
Lessor or Similar Party Collateral, Par or Maturity Value Cost Value
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Federated Short Term U.S.
Government Treasury 558,594 units $ 558,594 $ 558,594
Strong Government Securities Fund 30,671 shares 319,057 333,084
*Fidelity Puritan Fund 83,647 shares 1,663,685 1,768,294
Dodge and Cox Balanced Fund 346 shares 23,120 23,999
Spartan U.S. Equity Index Fund 97,604 shares 3,483,868 3,951,974
MAS Value Fund 202,735 shares 3,393,876 3,809,392
*Fidelity Growth & Income Fund 196,596 shares 7,557,334 8,652,170
Newberger and Berman Genesis Trust Fund 8,026 shares 177,767 176,734
Pimco Capital Appreciation Fund 10,167 shares 245,120 264,227
*Fidelity Diversified International Fund 2,790 shares 49,196 52,224
*Buckeye Technologies Inc. Common Stock 685,610 shares 10,695,527 16,390,662
Other - 19,033 19,033
==========================
$28,186,177 $36,000,387
==========================
* Denotes party-in-interest to the Plan.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Buckeye Retirement Plus Savings Plan
EIN 62-1518973
Plan Number 001
Line 27d--Schedule of Reportable Transactions
Year ended June 30, 1998
Current
Value of
Identify Description Asset on Net
of of Purchase Selling Cost of Transaction Gain or
Party Involved Investment Price Price Asset Date (Loss)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Category (i)--single transactions
in excess of 5 percent of plan
assets:
Dodge & Cox Balanced Fund Sale of 22,295 shares $ - $1,555,067 $1,242,948 $1,555,067 $ 312,119
Janus Fund, Inc. Sale of 246,154 shares - 7,283,701 5,591,269 7,283,701 1,692,432
Vanguard Institutional Sale of 37,416 shares - 3,339,738 2,392,572 3,339,738 947,166
Index Fund
Category (iii)--series of
transactions in excess of 5 percent
of plan assets:
Buckeye Technologies Inc. Purchases of 202,782 shares 4,288,107 - 4,288,107 4,288,107 -
Dodge & Cox Balanced Fund Purchases of 2,760 shares 191,280 - 191,280 191,280 -
Janus Fund, Inc. Purchases of 11,857 shares 452,302 - 452,302 452,302 -
MAS Value Fund Purchases of 820,331 shares 1,554,740 - 1,554,740 1,554,740 -
Vanguard Institutional Purchases of 3,809 shares 332,598 - 332,598 332,598 -
Index Fund
Fidelity Institutional
Cash-US Govt. Portfolio Purchases of 5,492,178 units 5,492,178 - 5,492,178 5,492,178 -
Fidelity Puritan Fund Purchases of 88,494 shares 1,759,770 - 1,759,770 1,759,770 -
Fidelity Growth & Income Purchases of 209,411 shares 8,048,063 - 8,048,063 8,048,063 -
Fund
Spartan U.S. Equity Purchases of 105,324 shares 3,759,361 - 3,759,361 3,759,361 -
Index Fund
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Buckeye Retirement Plus Savings Plan
EIN 62-1518973
Plan Number 001
Line 27d--Schedule of Reportable Transactions (continued)
Current
Value of
Identity Description Asset on Net
of of Purchase Selling Cost of Transaction Gain or
Party Involved Investment Price Price Asset Date (Loss)
- ---------------------------------------------------------------------------------------------------------------------
Category (iii)--series of transactions in excess of 5 percent of plan assets
(continued):
<S> <C> <C> <C> <C> <C> <C>
Buckeye Technologies Inc. Sales of 41,432 shares $ - $ 981,821 $ 719,542 $ 981,821 $ 262,279
Dodge & Cox Balanced Fund Sales of 24,079 shares - 1,678,672 1,340,911 1,678,672 337,761
Janus Fund, Inc. Sales of 290,986 shares - 8,602,238 6,601,660 8,602,238 2,000,578
MAS Value Fund Sales of 1,071,913 shares - 1,185,512 1,143,295 1,185,512 42,217
Vanguard Institutional Sales of 40,826 shares - 3,636,732 2,607,200 3,636,732 1,029,532
Index Fund
Fidelity Institutional
Cash-US Govt. Portfolio Sales of 5,712,726 units - 5,712,726 5,712,726 5,712,726 -
Fidelity Puritan Fund Sales of 4,847 shares - 99,120 96,086 99,120 3,034
Fidelity Growth & Income Sales of 12,815 shares - 512,175 490,730 512,175 21,445
Fund
Spartan U.S. Equity Sales of 7,720 shares - 290,673 275,493 290,673 15,180
Index Fund
There were no category (ii) or (iv) reportable transactions during 1998.
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Retirement Plan Committee of the Employee Retirement Plans for Buckeye
Technologies Inc. has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BUCKEYE RETIREMENT PLUS SAVINGS PLAN
By: /s/ DAVID H. WHITCOMB
----------------------------------
David H. Whitcomb, Senior Vice President, Finance and Accounting
Date: December 21, 1998
BUCKEKE RETIREMENT PLUS SAVINGS PLAN
Exhibit Index
Exhibit No. Description
23 Consent of Independent Auditors
<PAGE>
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8, Number 33-80865) pertaining to the Buckeye Retirement Plus Savings Plan of
our report dated December 14, 1998 with respect to the financial statements and
schedules of the Buckeye Retirement Plus Savings Plan included in this Annual
Report (Form 11-K) for the year ended June 30, 1998.
/s/ ERNST & YOUNG LLP
-----------------------
Ernst & Young LLP
Memphis, Tennessee
December 17, 1998
