Verso Paper reports 4Q net income of $25.5 million

Mar 07, 2013. /Lesprom Network/. Verso Paper’s net sales for the 4Q 2012 decreased $89.3 million, or 19.8%, compared to the 4Q 2011, reflecting a 17% 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 3Q of this year, as well as a 3.4% decrease in the average sales price per ton for all of products. Verso’s gross margin was 14% for the 4Q 2012 compared to 12.6% for the 4Q 2011, as the company said in a press release received by Lesprom Network. Verso reported net income of $25.5 million in the 4Q 2012, or $0.48 per diluted share, which included $47.4 million of net gains from special items, or $0.90 per diluted share, primarily due to proceeds from the insurance settlement related to the fire and explosion at Sartell mill. Operating income was $60.9 million in the 4Q 2012, compared to operating loss of $36 million in the 4Q 2011. EBITDA was $87.9 million in the 4Q 2012, compared to ($4.9) million in the 4Q 2011, and Adjusted EBITDA before pro forma effects of profitability program of $41.1 million in the 4Q 2012, compared to $47.7 million in the 4Q 2011. “In the 4Q 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 4Q 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 CEO of Verso. 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 3Q of this year, as well as a 3.7% decrease in sales prices compared to 2011. Excluding special items, net loss was $116 million, or adjusted diluted loss per share of $2.19, for the year ended December 31, 2012. 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. Verso Paper Corp. is a leading North American producer of coated papers, including coated groundwood and coated freesheet, and specialty paper products.