Verso Paper Corp. Reports Third Quarter 2012 Results

Verso Paper Corp. (NYSE: VRS) today reported financial results for the third quarter and nine months ended September 30, 2012. Results for the quarters ended September 30, 2012 and 2011 include:
  • Adjusted EBITDA before pro forma effects of profitability program of $50.2 million in the third quarter of 2012, compared to $23.5 million in the second quarter of 2012 and $64.2 million in the third quarter of 2011. (Note: Adjusted EBITDA is a non-GAAP financial measure and is defined and reconciled to net income later in this release).
  • Net loss before items of $12.0 million, or $0.23 per diluted share, in the third quarter of 2012 compared to net loss before items of $43.1 million, or $0.81 per diluted share, in the second quarter of 2012 and net income before items of $0.8 million, or $0.01 per diluted share, in the third quarter of 2011.
  • The closure of the Sartell mill resulted in an aggregate pre-tax charge to earnings of approximately $97.2 million in the third quarter of 2012. This includes approximately $16.3 million for severance and benefit costs; $75.8 million in non-cash charges for fixed asset and other impairment charges; and $5.1 million related to other costs.

Overview

Verso’s net sales for the third quarter of 2012 decreased $83.8 million, or 18.4%, compared to the third quarter of 2011, reflecting a 14.9% decline in total sales volume, which was driven by the closure 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 4.0% decrease in the average sales price per ton for all of our products. Verso’s gross margin was 19.1% for the third quarter of 2012 compared to 17.8% for the third quarter of 2011.

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