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Verso Paper Corp. Reports Fourth Quarter And Year-End 2012 Results

Stocks in this article: VRS

“In the fourth quarter we experienced our normal seasonal slowdown in demand. Despite this, our year end inventories and order book were in good condition as we entered 2013. Pricing was stable during the fourth quarter in our major grades and market pulp prices began to recover. Adjusted EBITDA of $41.1 million for the fourth quarter of 2012 was below the prior year same period level of $47.7 million. This was a significant result after the consideration of a 17% drop in volume related to capacity closures across our system and a decline in average selling prices. The work we continue to put into our ‘R Gap’ process to lower our manufacturing costs and other cost control measures across our system helped us to offset the impacts of these lower volumes and prices, as reflected in our year over year results,” said David Paterson, President and Chief Executive Officer of Verso.

“As we enter 2013, we are seeing operating rates being sustained at levels above 90% and volumes and pricing at or above our forecasted levels for the first quarter. For the full year we remain cautious as the U.S. economy remains sluggish.”

Verso’s net sales for 2012 decreased $247.9 million, or 14.4%, compared to 2011, reflecting an 11.1% decrease in volume for all of our products, which was driven by the shutdown of three paper machines late last year and the closure of the Sartell mill in the third quarter of this year, as well as a 3.7% decrease in sales prices compared to 2011.

For the year ended December 31, 2012, Verso recorded special items totaling $57.8 million, or $1.09 per diluted share, primarily related to restructuring costs associated with the closure of our Sartell mill, offset by the proceeds from the insurance settlement related to the fire and explosion at our Sartell mill. For the year ended December 31, 2011, special items of $82.8 million, or $1.57 per diluted share, were 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.

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