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NewPage Announces increase sales in Q2

Friday, August 06, 2010

Press release from the issuing company

Miamisburg, Ohio - NewPage Corporation (NewPage) today announced its results of operations for the second quarter of 2010.  Net sales were $890 million in the second quarter of 2010 compared to $736 million in the second quarter of 2009, an increase of $154 million, or 21 percent.  The increase in net sales resulted primarily from higher sales volumes, partially offset by lower average paper prices during the quarter.  Net sales in the second quarter of 2009 were affected by decreased advertising spending and magazine and catalog circulation that was largely attributable to general economic factors and inventory reductions by customers.

Net loss attributable to NewPage was $(174) million in the second quarter of 2010 compared to $(6) million in the second quarter of 2009.  The increase in net loss was primarily a result of the expiration of the alternative fuel mixture tax credit, lower average sales prices, and higher interest expense during the second quarter of 2010 compared to the second quarter of 2009, partially offset by improved productivity, higher sales volumes and lower market-related downtime.  Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $10 million in the second quarter of 2010 compared to $149 million in the second quarter of 2009.

"We are seeing increasing demand for our products, and reported industry capacity utilization is well above the 90 percent level.  With improving underlying demand, we are working diligently to position the company to take full advantage of the market improvement," said George F. Martin, president and chief executive officer for NewPage.

The following schedule details key performance and cost metrics for the second quarter:

"NewPage ended the second quarter of 2010 with $120 million of liquidity, consisting of $7 million of cash and cash equivalents and $113 million available for borrowing under the revolving credit facility," said David J. Prystash, senior vice president and chief financial officer for NewPage.

Gross margin (loss) for the second quarter of 2010 was (2.7) percent, unchanged from the second quarter of 2009.

Interest expense in the second quarter of 2010 was $92 million compared to $67 million in the second quarter of 2009.  The increase was primarily due to higher interest rates on outstanding debt.

"We are optimistic about our results for the remainder of the year, with order volume continuing to improve each quarter and recently announced price increases starting to take effect in the third quarter of 2010," said Mr. Martin.  In the second quarter of 2010, North American printing paper demand increased 27 percent compared to the second quarter of 2009 as advertising and print media usage began to rebound.  "During the second quarter of 2010, NewPage experienced higher customer demand resulting in a total sales volume increase of 8 percent over the first quarter of 2010, and an increase of 29 percent compared to the second quarter of 2009.  As a result of higher demand, we took no market-related downtime in the second quarter of 2010 compared to 161,000 tons in the second quarter of 2009," Martin added.

NewPage, together with two other U.S. coated paper producers and the United Steelworkers Union, continues to pursue the antidumping and countervailing duty cases filed last year against Chinese and Indonesian imports of certain coated paper.  The U.S. International Trade Commission determined by unanimous vote in November 2009 that there is reasonable indication that the U.S. industry is being materially injured by unfairly traded Chinese and Indonesian imports.  The Department of Commerce announced its preliminary countervailing duty determinations in March 2010 and its preliminary dumping determinations in April 2010.  The final determinations in the cases are expected to be completed by the end of 2010.  "We believe imports continue to affect the North American market and feel strongly that the successful resolution of these cases will help create a level playing field," said Martin.

 

 

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