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Verso Paper Corp. Reports Fourth Quarter And Year-End 2011 Results

Stocks in this article: VRS

Excluding special items, net loss was $16.4 million, or adjusted diluted loss per share of $0.31, and operating income was $15.6 million for the fourth quarter of 2011. Excluding special items, net loss was $13.0 million, or adjusted diluted loss per share of $0.25, and operating income was $18.6 million for the fourth quarter of 2010. Adjusted EBITDA before pro forma effects of profitability program was $47.7 million for the fourth quarter of 2011 compared to $50.5 million for the fourth quarter of 2010.

During the fourth quarter of 2011, Verso permanently shut down the No. 2 coated groundwood paper machine at the mill in Bucksport, Maine, and two supercalendered paper machines at the mill in Sartell, Minnesota, thereby reducing annual production capacity by 193,000 tons. The paper machine shutdowns resulted in charges of $24.5 million in the fourth quarter of 2011, of which approximately $13 million is expected to be cash expenditures, most of which will be expended in the first quarter of 2012. In the fourth quarter of 2011, Verso recognized a goodwill impairment charge of $18.7 million, which represents a write-off of the full balance of goodwill. Additionally, the fourth quarter results included $7.5 million of losses recognized due to the de-designation of certain energy-related derivative contracts.

“The fourth quarter of 2011 was one of significant activity for Verso driven by the execution of previously announced strategies relative to the machine closures at two of our facilities, said Mike Jackson, President and Chief Executive Officer of Verso. “These closures were accomplished in a timely and professional manner through the coordinated efforts of our employees. We expect these closures to have a favorable EBITDA impact during 2012.

“As many investors know, we committed to complete a biomass driven turbine energy project at our Quinessec mill by year end, and this was accomplished. The 28 megawatt project was officially commissioned in December, and performance criteria has not only been met, but has been exceeded. On a cost-per-megawatt basis this was a world-class installation.

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