DAYTON, Ohio, May 15 -- NewPage Corporation today announced its financial results of operations for the first quarter of 2006. First quarter financial results reflect the carbonless paper business as a discontinued operation. Net sales for the continuing coated paper business were $507 million in the first quarter of 2006 compared to $445 million for the first quarter of 2005, an increase of 13.9%. Net loss was $64 million in the first quarter of 2006 compared to net income of $3 million in the first quarter of 2005. Discontinued operations included losses of $6 million for 2006 and $3 million for 2005. EBITDA was $11 million for the first quarter of 2006 compared to EBITDA of $64 million for the first quarter of 2005. Significant items affecting comparability between periods include a non- cash charge of $39 million for the mark-to-market value of the purchased option contract, a basket of options based on a mix of natural gas, market pulp and the euro. It is intended to protect against significant declines in coated paper market prices. Also included in the quarter were $8 million for transition costs and $7 million of equity award expense, including $6 million for our former chief executive officer, offset by LIFO effect of $4 million. Included in loss from discontinued operations were non-cash charges and sale- related costs of $9 million. The increase in net sales was largely the result of an increase in coated paper sales volume from 495,000 tons in the first quarter of 2005 to 540,000 tons in the first quarter of 2006 and an increase in average coated paper prices from $859 per ton in 2005 to $886 per ton in 2006. "For the first quarter of 2006, coated paper sales volume was very strong, largely due to good demand, buying ahead of anticipated second quarter price increases and recent industry capacity closures; and industry operating rates are at their highest level in several years," said Mark A. Suwyn, chairman of the board and chief executive officer. "Pricing was up as a result of our previously announced pricing actions and we anticipate additional realization in the second quarter." Cost of sales for the first quarter of 2006 was $451 million compared to $411 million for first quarter of 2005, an increase of 9.7%. Our gross margin for 2006 improved to 11.0%, compared to 7.6% for 2005. During the quarter, the higher gross margin was due to higher sales prices, productivity improvement initiatives, lower depreciation and amortization expense and lower maintenance costs, offset by higher wood, energy, and chemical costs. "In the first quarter of 2006, our coated system operations ran well. We continue to experience the effects of inflation due to changes in crude oil and other energy costs that affect the cost of certain papermaking raw materials, purchased energy and distribution," said Suwyn. "We are aggressively working to offset those costs through productivity and pricing initiatives." Maintenance expenses in the first quarter 2006 were $36 million, down slightly from the first quarter 2005 of $41 million. Maintenance expense will be higher in the second and third quarters compared to the first quarter due to planned annual maintenance outages. Selling, general and administrative expenses were $38 million for 2006 compared to $23 million for 2005. The increase was primarily a result of transitional costs of $8 million relating to the setup of our company as a stand-alone business, including costs related to the completion of the transition of information technology and human resources, and equity award expense of $7 million, including $6 million recognized for our former chief executive officer. As a percentage of net sales, selling, general and administrative expenses increased in 2006 to 7.4% from 5.2% in 2005. As of April 28, 2006, the company had $159 million of borrowing availability under its revolving senior secured credit facility with $80 million outstanding. "Effective April 1, we completed the sale of our carbonless business operations to P.H. Glatfelter Company, including the facilities in Fremont and Chillicothe, Ohio, for $80 million in cash plus an estimated working capital adjustment," said Suwyn. "As stated previously, we expect the Rumford hydro facilities sale to close in the second quarter of 2006. The combined gross proceeds from both sales will be approximately $225 million." Suwyn added, "Beginning with the creation of NewPage a year ago, we quickly took steps to become a stand-alone enterprise, keep the momentum in productivity, maintain our close relationships with our customers and reduce our debt. With the completion of the sale of our carbonless business operations, we are now free to put all of our energies into being the best coated paper business in North America."