Net sales for our market pulp segment were $36.2 million in both the second quarter of 2012 and 2011. The average sales price per ton decreased 11.9% while sales volume increased 13.7% compared to the second quarter of 2011.
Net sales for our other segment increased 5.0% to $44.1 million in the second quarter of 2012 from $41.9 million in the second quarter of 2011. The improvement in 2012 was due to a 12.7% increase in sales volume, reflecting the continued development of new paper product offerings for our customers. The average sales price per ton decreased 6.8%.
Cost of sales. Cost of sales, including depreciation, amortization, and depletion, was $355.0 million in the second quarter of 2012 compared to $370.1 million in 2011. Our gross margin, excluding depreciation, amortization, and depletion, was 11.5% for the second quarter of 2012 compared to 15.1% for the second quarter of 2011, reflecting higher average sales prices during 2011. Depreciation, amortization, and depletion expenses were $31.8 million for the second quarter of 2012 compared to $31.6 million for the second quarter of 2011.
Selling, general, and administrative. Selling, general, and administrative expenses were $19.9 million in the second quarter of 2012 compared to $21.7 million for the same period in 2011.Interest expense. Interest expense for the second quarter of 2012 was $33.3 million compared to $31.6 million for the same period in 2011. Other income, net. Other income, net for the second quarter of 2012 was a gain of $22.1 million compared to a gain of $0.2 million for the second quarter of 2011. Included in the results for the second quarter of 2012 were gains of $21.8 million related to the early retirement of debt in connection with debt refinancing.
|Results of Operations – Comparison of the First Six Months of 2012 to the First Six Months of 2011|
|Six Months Ended|
|(Dollars in thousands)||2012||2011|
|Costs and expenses:|
|Cost of products sold - (exclusive of depreciation, amortization, and depletion)||660,465||691,008|
|Depreciation, amortization, and depletion||63,200||62,992|
|Selling, general, and administrative expenses||38,748||40,301|
|Restructuring and other charges||(21||)||-|
|Total operating expenses||762,392||794,301|
|Operating income (loss)||(21,835||)||21,070|
|Other loss, net||7,493||26,091|
|Loss before income taxes||(94,671||)||(68,895||)|
|Income tax benefit||(60||)||(2||)|
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