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Verso Paper Q2 Net Sales Decline, Closing of NewPage Acquisition Still on Track

Friday, August 15, 2014

Press release from the issuing company

MEMPHIS, TN - Verso Paper today reported financial results for the second quarter and six months ended June 30, 2014. Results for the quarters ended June 30, 2014 and 2013 include:

  • Net sales of $320.9 million in the second quarter of 2014 compared to $330.4 million in the second quarter of 2013.
  • Net loss before items of $34.3 million, or $0.64 per diluted share, in the second quarter of 2014, compared to net loss before items of $39.2 million, or $0.74 per diluted share, in the second quarter of 2013.
  • Adjusted EBITDA before pro forma effects of profitability program of $27.6 million in the second quarter of 2014, compared to $22.2 million in the second quarter of 2013.

Overview
Verso's net sales for the second quarter of 2014 decreased $9.5 million, or 2.9 percent, compared to the second quarter of 2013, reflecting a 4.2 percent decrease in average sales price per ton and a 1.4 percent increase in total sales volume. Prices for our pulp segment were higher while coated and other segment prices declined. Continued declines in the coated paper market were offset by operational and input price improvements.

"During the second quarter we experienced continued strength in the pulp and specialty paper segments of our business," said David Paterson, President and Chief Executive Officer of Verso. "We experienced double digit improvements in these segments over the previous year, and we expect them to remain strong into the third quarter of 2014. During the second quarter our coated papers segment continued to show weakness in both price and volumes on a year over year basis.

"On the operations side, we continued to reduce our costs utilizing our R-Gap process and managing our SG&A and capital costs. Finally, we continued to make good progress during the quarter on our proposed acquisition of NewPage."

Summary Results
Results of Operations—Comparison of the Second Quarter of 2014 to the Second Quarter of 2013:

Net Sales. Net sales for the second quarter of 2014 decreased 2.9 percent to $320.9 million from $330.4 million in the second quarter of 2013, reflecting a 4.2 percent decrease in average sales price per ton and a 1.4 percent increase in total sales volume.

Net sales for our coated papers segment decreased 10.9 percent in the second quarter of 2014 to $225.4 million from $253.1 million for the same period in 2013, due to a 6.0 percent decrease in paper sales volume and a 5.2 percent decline in average sales price per ton. The declines in sales volume and price were driven by declining demand for coated papers.

Net sales for our market pulp segment increased 20.1 percent in the second quarter of 2014 to $45.8 million from $38.2 million for the same period in 2013. Sales volume increased 16.1 percent due to additional sales of excess pulp at our Androscoggin mill driven by favorable market pulp prices. The average sales price per ton increased 3.5 percent compared to the second quarter of 2013.

Net sales for our other segment increased 26.6 percent to $49.7 million in second quarter of 2014 from $39.1 million in the second quarter of 2013. The overall increase was driven by a 32.8 percent increase in sales volume, partially offset by a 4.7 percent decrease in average sales price per ton.

Full Release

 

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