DAYTON, Ohio, March 13 -- NewPage Corporation today announced its financial results of operations for the fourth quarter and for the full year 2005. Net sales were $595 million in the fourth quarter of 2005 compared to $533 million for the fourth quarter of 2004, an increase of 11.5%. For the full year 2005, net sales were $2,280 million compared to $2,176 million for the full year 2004, an increase of 4.8%. Net loss was $22 million in the fourth quarter of 2005 compared to a net loss of $252 million in the fourth quarter of 2004. For the full year 2005, a net loss of $65 million compared to a net loss of $301 million for the full year 2004. EBITDA was $41 million for the fourth quarter of 2005 compared to negative EBITDA of $201 million for the fourth quarter of 2004. Included in the fourth quarter of 2005 is an unrealized loss of $31 million for the mark-to-market value of the purchased option contract, LIFO effect of $4 million and transition costs of $6 million. EBITDA was $231 million for the full year 2005 compared to negative EBITDA of $100 million for the full year 2004. The 2004 financial results included a charge for goodwill impairment of $238 million, recorded in the fourth quarter of 2004. The increase in EBITDA from 2004 to 2005 was the result of higher coated paper prices partially offset by an unrealized loss of $25 million based on the non-cash mark-to-market value of a purchased option contract, and by higher inflation and higher energy costs. The purchased option contract is a basket of options based on a mix of natural gas, market pulp and the euro. The instrument is intended to protect against significant declines in coated paper market prices. The increase in net sales was largely the result of higher average coated paper prices of $875 per ton during the fourth quarter of 2005 compared to $838 per ton in the fourth quarter of 2004, and an increase in coated paper sales volumes of 537,000 tons in the fourth quarter of 2005 from 490,000 tons in the fourth quarter of 2004. Year over year, prices increased to $872 per ton in 2005 from $797 per ton in 2004. "The fourth quarter in 2005 was stronger than the comparable period in 2004 as markets rebounded in the second half," said Mark A. Suwyn, chairman of the board and interim chief executive officer. "For the year, coated volumes were lower due largely to industry-wide inventory adjustments and market softness in the second quarter 2005. We've been able to improve pricing year over year, and additional pricing initiatives are underway in the first quarter of 2006." Cost of sales for the fourth quarter of 2005 was $528 million compared to $522 million for the fourth quarter of 2004. For the full year, cost of sales was $2,091 million for 2005 compared to $2,145 million for 2004. During the year, the business experienced inflationary pressures for energy, chemicals and wood and additionally incurred costs to control inventory levels with market-related downtime. However, these cost pressures were offset by savings from productivity improvement programs and lower depreciation. "We had outstanding productivity performance in 2005, exceeding our goals, and have set similarly aggressive goals for 2006," said Suwyn. Maintenance expenses in the fourth quarter 2005 were up modestly from the third quarter 2005 due to planned maintenance outages. Coated system maintenance expenses in the fourth quarter of 2005 were $42 million compared to $46 million in the fourth quarter of 2004. For the full year, coated system maintenance expenses were $173 million in 2005 compared to $171 million for 2004. Selling, general and administrative expenses were $28 million in the fourth quarter 2005 compared to $33 million for the fourth quarter 2004, a decrease of 13.2%. Included in the fourth quarter financial results of 2005 are transitional costs of $6 million, including charges to costs of goods sold, related to establishing NewPage as a stand-alone company. "We have our corporate cost structure in place, and we were able to accomplish this at a lower run-rate than previously allocated to the predecessor organization. I'm pleased with the transition and the results," stated Suwyn. Selling, general and administrative expenses for the full year 2005 were $118 million compared to $129 million for the full year 2004, a decrease of 8.2%. Net cash provided by operating activities was $60 million in the fourth quarter of 2005 compared to $69 million in the fourth quarter of 2004. "In the fourth quarter, we continued to respond to higher inflation. Strong operations and continued productivity gains offset inflation in the fourth quarter," said Suwyn. "Our coated facilities ran well in 2005 with record operations. Debt reduction is one of our top priorities, and we are generating strong cash flows from operations. As of today, we have all of the critical elements in place and are running the company as a stand-alone business. We are monetizing non-core assets having signed definitive agreements in the first quarter of 2006 to sell our carbonless business operations and Rumford hydro facilities for combined gross proceeds of $224 million. Overall, we are pleased with our rapid progress." "The strong operating earnings and a focus on cash allowed us to reduce debt by $131 million between our start up in May and year end," said Suwyn. As of December 31, 2005, the company had $242 million of borrowing availability under its revolving senior credit facility with $46 million outstanding. Outlook "In 2005 and continuing into 2006, we made significant strides toward restructuring the company and reducing debt that will enable us to sharpen our focus on the coated paper business; and we are positioning NewPage for continued success going forward," added Suwyn. "In terms of our other priorities, we are delivering on the monetization of certain non-core assets." In January 2006, NewPage signed a definitive agreement to sell its two hydroelectric-generating facilities of the Rumford Falls Power Company to Brookfield Power for a cash sales price of $144 million. In February 2006, NewPage signed a definitive agreement with P.H. Glatfelter Company for the sale of the carbonless business facilities in Fremont and Chillicothe, Ohio for a cash sales price of $80 million. Both transactions are expected to close in the first half of 2006. "In compliance with our credit agreements, we will use the proceeds from both divestitures to pay down debt or reinvest in the business," said Suwyn. "Changes in crude oil and other energy costs will continue to affect the cost of certain papermaking raw materials, purchased energy and distribution," said Suwyn. "On a year over year basis, we expect inflation will continue to run high, although we are starting to experience some relief. We will continue to aggressively pursue productivity initiatives to offset inflation in 2006." "As we take a look at the market dynamics, the operating rates in the coated paper market continue to improve and business drivers such as capacity closures, GDP growth and advertising spend remain positive," Suwyn added. "We announced a $50 per ton price increase on most coated grades, an impact which we believe will be partially realized in the first quarter."