Nov 08, 2013. /Lesprom Network/. NewPage’s net income in the 3Q 2013 was $21 million compared to a net loss of $47 million in the 3Q 2012. The increase was primarily driven by improved gross margin and lower reorganization items from the prior-year quarter, as the company said in the press release received by Lesprom Network.

Net sales in the 3Q 2013 were $780 million compared to $803 million in the 3Q 2012, a decline of 3%. The decrease was primarily the result of lower sales volume of paper and lower average paper prices, partially offset by improved mix.

Operating cash flows in the 3Q 2013 were $7 million, which included $2 million of bankruptcy-related payments. Operating cash flows in the 3Q 2012 were $13 million, which included $17 million of bankruptcy-related payments.

For the nine months ended September 30, 2013, the company used $16 million of cash in operations, which included $60 million of bankruptcy-related payments. For the nine months ended September 30, 2012, the company used $35 million of cash in operations, which included $51 million of bankruptcy-related payments and a $38 million interest payment on pre-petition debt.

Adjusted EBITDA was $85 million in the 3Q 2013 compared to $58 million in the 3Q 2012.

"Overall, our 3Q financial results are in line with our expectations," said George F. Martin, president and CEO for NewPage. "A weaker commercial environment was largely offset by reduced controllable costs and lower inflation."

NewPage ended the 3Q with $292 million of total liquidity, consisting of $288 million of availability under the revolving credit facility and $4 million of available cash and cash equivalents. "During the 3Q, we maintained a strong liquidity position," said Jay A. Epstein, senior vice president and CFO. "In the 4Q, due to the seasonal nature of our business, we expect finished goods inventory to decline. We will continue to focus on managing our working capital."

Lower year over year prices reflect the continuing decline in demand for printing and writing paper. As reported by the Pulp and Paper Products Council or PPPC, North American demand for printing and writing papers declined 1.8% for the first nine months of the year compared to the same timeframe in 2012.

Costs of sales declined during the 3Q on a year over year basis by $63 million. Decreased volume and lower pension, depreciation and maintenance expenses were offset somewhat by inflation. Inflation was lower than expected for the quarter driven largely by lower latex prices and lower wood costs.

NewPage is a leading producer of printing and specialty papers in North America. NewPage and owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota and Wisconsin. These mills have a total annual production capacity of approximately 3.5 million tons of paper.