Log In | Become a Member | Contact Us

Leading printing executives into the future

Connect on Twitter | Facebook | LinkedIn

Featured:     European Coverage     Production Inkjet Analysis

NewPage Announces $42 Million loss, Increased Revenues

Friday, February 27, 2009

Press release from the issuing company

MIAMISBURG, Ohio -- NewPage Corporation (NewPage) today announced its financial results of operations for the fourth quarter and the full year 2008, which reflect the acquisition of Stora Enso North America Inc. (SENA) as discussed below. Net sales were $977 million in the fourth quarter of 2008 compared to $652 million in the fourth quarter of 2007, an increase of 50%. For the full year 2008, net sales were $4,356 million compared to $2,168 million for 2007, an increase of 101%. Net loss was $(42) million in the fourth quarter of 2008 compared to a net loss of $(4) million in the fourth quarter of 2007. For the full year 2008, there was a net loss of $(117) million compared to a net loss of $(8) million in 2007. Debt covenant EBITDA (earnings before interest, taxes, depreciation and amortization) was $144 million for the fourth quarter of 2008 compared to $110 million for the fourth quarter of 2007. For the full year, debt covenant EBITDA was $611 million in 2008 and $308 million in 2007.

The company's financial statements include the results of SENA since December 21, 2007, when NewPage completed the acquisition of SENA from Stora Enso Oyj, which effectively doubled the size of the company.

"The markets for our products fell markedly in the third and fourth quarters of 2008 as rising uncertainty over the direction of the economy halted or slowed much of the advertising spend," said Mark A. Suwyn, NewPage chairman of the board and chief executive officer. "There is evidence to suggest print advertising is more than holding its own versus other forms of advertising, but the sharp decline in total advertising spend has hit our customers hard. Despite these conditions, we increased EBITDA versus last year on a pro forma basis by proactively taking steps to match production to orders. We permanently shut more than 1.1 million tons of capacity, took additional market-related downtime and took steps to reduce costs accordingly. Our intention is to continue to manage production closely to customer demand."

"From an operations perspective, we had a solid year in terms of productivity, although these benefits were partially offset by higher costs for transportation and raw materials," said Richard D. Willett, Jr., NewPage president and chief operating officer. "During the fourth quarter, to manage through these challenges and because of lower customer demand, we took market- related downtime of approximately 60,000 tons, reduced our capital spending, and kept our workforce focused on driving down costs. Lean Six Sigma projects and productivity initiatives have dramatically helped to reduce the effects of inflation. During the year, employees across the company participated in projects generating more than $65 million of annualized savings. In addition, our integration efforts remain on track to achieve our identified synergies, although the full benefit will be delayed as a result of the lower customer demand."

Interest expense for the fourth quarter was $69 million in 2008 compared to $57 million in 2007. For the full year, interest expense in 2008 was $277 million compared to $154 million in 2007. The increase in 2008 resulted from interest expense on the debt incurred to finance the SENA acquisition, partly offset by lower interest rates. Additionally, in the fourth quarter of 2007 we recorded a write-off of $17 million of financing costs in 2007 as a result of the debt refinancing in connection with the acquisition of SENA.

For the full year, EBITDA was $477 million for 2008 and $284 million for 2007. The company also recorded the following items during 2008 and 2007.

NewPage closed the quarter with $344 million of liquidity, consisting of $3 million of cash and $341 million of borrowing availability under the revolving credit facility. There were no outstanding borrowings under the revolving senior secured credit facility as of December 31, 2008.




Email Icon Email

Print Icon Print

Become a Member

Join the thousands of printing executives who are already part of the WhatTheyThink Community.

Copyright © 2016 WhatTheyThink. All Rights Reserved