“Market conditions in the fourth quarter were challenged by the seasonal slow-down as well as the tepid economic recovery. However, our sales volumes for the quarter were favorable compared to the fourth quarter of 2010. Our outlook for 2012 continues to see a balance of supply and demand which should support favorable operating rates.”
Verso’s net sales for 2011 increased $117.2 million, or 7.3%, compared to 2010, reflecting a 9.4% increase in the average sales price for all of our products while sales volume decreased 2.0% compared to 2010. Verso’s gross margin was 15.2% in 2011 compared to 12.1% in 2010.
For the year ended December 31, 2011, Verso recorded special items totaling $82.8 million, or $1.57 per diluted share, primarily related to restructuring costs associated with the shutdown of three paper machines, losses related to debt refinancing, goodwill impairment, and the negative impact of de-designating certain hedges. For the year ended December 31, 2010, special items of $4.7 million, or $0.09 per diluted share, were primarily related to new product development. In 2011, Verso reported a net loss of $137.1 million, or $2.61 per diluted share, and operating income of $15.7 million including special items. Verso reported a net loss of $131.1 million, or $2.50 per diluted share, and an operating loss of $3.9 million including special items in 2010.
Excluding special items, net loss was $54.3 million, or adjusted diluted loss per share of $1.02, for the year ended December 31, 2011. Excluding special items, net loss was $126.4 million, or adjusted diluted loss per share of $2.41, for the year ended December 31, 2010.Summary Results Results of Operations – Comparison of the Fourth Quarter of 2011 to the Fourth Quarter of 2010
|Three Months Ended|
|(Dollars in thousands)||2011||2010|
|Costs and expenses:|
|Cost of products sold - (exclusive of depreciation,|
|amortization, and depletion)||393,728||337,659|
|Depreciation, amortization, and depletion||31,113||30,796|
|Selling, general, and administrative expenses||18,268||21,778|
|Restructuring and other charges||24,464||-|
|Total operating expenses||486,268||390,233|
|Operating (loss) income||(35,986||)||17,451|
|Other income, net||(5||)||(346||)|
|Loss before income taxes||(67,768||)||(13,872||)|
|Income tax benefit||53||145|
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