Previous Statements by VRS
» Verso Paper's CEO Discusses Q3 2011 - Earnings Call Transcript
» Verso Paper CEO Discusses Q2 2011 Results - Earnings Call Transcript
» Verso Paper's CEO Discusses Q1 2011 Results - Earnings Conference Call
» Verso Paper CEO Discusses Q4 2010 - Earnings Call Transcript
If you would like further information regarding the various risks and uncertainties associated with our business, please refer to our various SEC filings which are posted on our website versopaper.com under the Investor Relations tab. Mike?Mike Jackson Thank you, Bob, and good morning, everyone. If you would reference slide three, let me start off by saying that we certainly broke away from tradition as our fourth quarter volumes and pricing were virtually flat with the third quarter. As most of you know, the fourth quarter is always have to drop off in volume from the third quarter and so given the traditional seasonality issues and the current pressures in the marketplace this was an outstanding result in these two areas. Even with the modest economic conditions our fourth quarter 2011 volume for our core product line was up 5% from the fourth quarter of 2010. The volume number along with our price being up 5% drove a revenue improvement of $43 million. The final EBITDA number of $48 million was also favorably impacted by our operational costs being down $9 million over the fourth quarter of 2010. Unfortunately, although, input costs did ease a bit from last quarter, input costs were up $23 million compared to last year and our average pulp price was up 11% from the fourth quarter of 2010. Given those headwinds the $48 million was certainly well earned. During our last call, we mentioned that we’d be very focused on year end inventories. Our group did a very good job here in both our coated groundwood and coated freesheet levels were down from Q3 levels and actually we ended the year slightly better than our target. During the quarter, we had a successful start up of our $45 million Quinnesec Green Energy Project. You may remember that this project in 2012 will deliver about $11 million a year in savings. We’ll talk more about our energy strategy later in the call. We do believe that this project on the net costs per megawatt basis is at world class levels.
Q4 2011 was certainly an active quarter for our organization. In the early stages of the fourth quarter we announced that we would permanently be shutting down three machines, two machines were at our Sartell Mill and produced total of 103,000 tons of SC paper.The machine -- the other machine was our number two above quote which produced about 90,000 tons of coated groundwood. All three of these machines were shutdown in the quarter. They have been on time and we believe very respectfully for the impacted employees. We’ll give more detail on the cost of the shutdowns later, but we do expect that those machine shutdowns will be EBITDA positive in 2012 for the company. I’ll hand this over to Bob now and then we’d back to address our outlook for the year, as well as give an update as I mentioned on our energy strategy progress. Bob? Robert Mundy If you turn to the slide four, as Mike said, our volume for the quarter it was very comparable to the seasonally strong third quarter and noticeably up versus the fourth quarter of 2010. Sequentially, sales were down slightly due to volume and price being less than 1% below third quarter levels. However, revenues were up over 10% versus last year on much stronger volume and prices of being about 4% above the quarter, previous quarter. Adjusted operating income and net earnings for the fourth quarter were comparable to last year’s fourth quarter, but down from the third quarter of 2011 due to the slightly lower paper volume and price, pulp prices being about $50 per ton lower and some remaining unabsorbed fixed cost related to the timing of shutting down the three paper machines Mike spoke of. If you turn to slide five, you can see that coated volumes were about 21,000 tons higher than last year’s fourth quarter and almost flat with the seasonally strong third quarter. Coated prices were over $40 per ton above last year’s fourth quarter and only $4 per ton lower on a sequential basis. Read the rest of this transcript for free on seekingalpha.com