Aug 06, 2007. /Lesprom Network/. NewPage Corporation announced on August 6, 2007 its financial results of operations for the second quarter of 2007. Net sales were $495 million in the second quarter of 2007 compared to $490 million in the second quarter of 2006, an increase of 1.0%. The increase was driven by favorable price and volume for pulp and uncoated paper, partially offset by market softness for coated paper. The company's weighted-average selling price for coated paper was $876 per tonne in the second quarter of 2007, down from $894 per tonne in the second quarter of 2006, and coated paper sales volumes in the second quarter of 2007 were 517 000 tonnes compared to 522 000 tonnes in the second quarter of 2006. The company did not take any market- related downtime for coated paper in the second quarter of 2007 or 2006. "Second quarter 2007 coated paper volume and price were down somewhat compared to the second quarter of 2006, primarily due to lower prices and volume in coated groundwood products. In the second half of this year, we expect improved volume and pricing as over 1.1 million tonnes of capacity are being removed from the industry," said Mark A. Suwyn, chairman of the board and chief executive officer. "In addition, low-priced imports continue to dampen freesheet demand and pricing somewhat as we believe some Asian producers may be trying to circumvent the new preliminary dumping and countervailing duties. Looking forward the supply improvements will be moderated somewhat as advertisers and publishers adjust to increased postal rates for catalogs and magazines." Financial comparisons of the second quarter of 2007 to the second quarter of 2006 include the effects of several significant prior-year items which distort relatively stable operating performance. Net income was zero in the second quarter of 2007 compared to $50 million in the second quarter of 2006. EBITDA was $66 million for the second quarter of 2007 compared to $125 million for the second quarter of 2006. Significant items in 2006 included a $66 million gain on the sale of the hydroelectric generating facilities in Rumford, Maine, $6 million of unrealized non-cash losses on the basket option contract and $9 million of non-cash charges and sale-related costs included in loss from discontinued operations. Cost of sales for the second quarter of 2007 was $439 million compared to $432 million for the second quarter of 2006. Gross margin for the second quarter of 2007 declined slightly to 11.3%, compared to 11.9% for the second quarter of 2006. The lower gross margin was primarily driven by lower average sales prices and a greater percentage of uncoated and pulp sales. Energy costs in the second quarter of 2007 increased slightly over the second quarter of 2006 partially offset by a decrease in the costs for certain papermaking chemicals. Maintenance expense at the mills totaled $41 million and $43 million in the second quarter of 2007 and 2006, respectively. "We are well-positioned to benefit from an improved pricing and capacity environment in the second half," said Richard D. Willett, Jr., president and chief operating officer. "Our Lean Six Sigma initiative is firmly established and we're seeing increased cost savings from our efforts to make facilities more efficient. For 2007, we are on plan to train more than 1 000 employees on process improvement techniques to maximize performance." "As we look to the seasonally stronger third and fourth quarters, we believe that business drivers such as the announced industry capacity closures, the effects of the duties imposed on low-priced imports, economic growth and advertising spending will remain favorable to NewPage," commented Mr. Suwyn. "We remain committed to continuously driving down our production costs and generating cash flow to reduce debt and strengthen our balance sheet." NewPage Corporation, headquartered in Dayton, Ohio, is a leading U.S. producer of coated papers in North America. The company produces coated papers in sheets and rolls with many finishes and weights to offer design flexibility for a wide array of end uses. With more than 4 300 employees, NewPage operates integrated pulp and paper manufacturing mills located in Escanaba, Michigan; Luke, Maryland; Rumford, Maine; and Wickliffe, Kentucky. These mills have a combined annual capacity of approximately 2.2 million tonnes of coated paper.