Mar 05, 2013. /Lesprom Network/. Appleton's 2012 net sales of $849.8 million decreased 0.9% compared to 2011 net sales of $857.3 million. Appleton's 4Q 2012 net sales of $205.5 million were flat when compared to 4Q 2011, as the company said in a press release received by Lesprom Network. Adjusting for the Company's decision to discontinue the sale of carbonless papers into certain non-strategic international markets, 4Q and full year 2012 net sales were up 7.9% and 3.1%, respectively. The Company's strong revenue growth from thermal papers almost entirely offset full year 2012 revenue declines in carbonless papers and Encapsys. Appleton reported a 2012 operating loss of $88.5 million compared to an operating loss of $9.4 million in 2011. Excluding one-time and other items as explained below, adjusted operating income was $74.8 million, $30 million higher than adjusted operating income reported for 2011. Costs related to ceasing papermaking operations at the West Carrollton, Ohio facility and transitioning to Domtar base paper were $117.4 million for the year and included $28.6 million of restructuring expense, $77.4 million of other related costs and $11.4 million of transition costs. "2012 was a strong year for Appleton, one marked by disciplined implementation of our strategy and ongoing transformation which will set the stage for the future," said Mark Richards, Appleton's chairman, president and CEO. The Company's decision to shed old, high-cost, non-integrated papermaking assets at its West Carrollton mill and have Domtar provide most of the base paper Appleton needs to produce its thermal, carbonless and other specialty paper products helped drive success in 2012 and better positioned the Company for future growth. Strong sales and earnings growth from the thermal papers segment, combined with the savings from the Domtar supply agreement, contributed to a 157% year over year improvement in fourth quarter adjusted operating income and a 67% improvement in full year results.” Carbonless Papers segment 4Q 2012 net sales of $91.1 million were down 14.6%, compared to 4Q 2011, on lower shipment volumes of approximately 18%. Excluding the impact of the Company's decision to discontinue the sale of carbonless papers into certain non-strategic international markets, 4Q 2012 carbonless shipment volumes were nearly 4% higher than the same quarter in 2011. Carbonless papers net sales for full year 2012 were $406.8 million which was 10.2% lower than prior year. Shipment volumes were approximately 13% lower than last year. Adjusting for the decision not to sell into certain non-strategic international markets, volumes declined approximately 2%. 4Q 2012 adjusted operating income was $11.2 million compared to adjusted operating income of $4.5 million in the same quarter last year. Adjusted operating income of $39.6 million was reported for the full year compared to adjusted operating income of $27.2 million for the same period of 2011. Thermal Papers segment 4Q 2012 net sales were $106.8, or 15.1%, higher than prior year on increased shipment volumes of approximately 19%. Current year thermal papers net sales were $411.7 million which was 11.0% higher than 2011 net sales. Full year shipment volume was about 9% higher than last year. Improved pricing and product mix also contributed to the increase in net sales. 4Q 2012 adjusted operating income was $9.6 million compared to adjusted operating income of $4.9 million in the prior year quarter. Thermal papers 2012 adjusted operating income of $39.5 compared to adjusted operating income of $16.9 million for the same period in 2011. Encapsys segment 4Q 2012 net sales were $12 million which was 10.9% higher than prior year. Encapsys net sales for 2012 were $51 million which was a decrease of 6.9% from 2011 net sales. Shipment volumes for 4Q and full year 2012 were approximately 5% higher and 12% lower than last year, respectively. The continued weak global economy continued to reduce the short-term demand for customer products using Encapsys microencapsulation. Encapsys volumes were also impacted by the decline in carbonless papers production. 4Q 2012 adjusted operating income of $2.6 million was $1.7 million higher than last year's 4Q, largely due to an increase in external shipment volumes. Full year 2012 adjusted operating income of $11.1 million was only slightly lower than 2011 operating income of $11.7 million. Appleton expects continued strong sales and earnings growth from its thermal papers segment due to increased demand for its tag, label and entertainment products as well as its point-of-sale receipt paper. Since January 1, Appleton has announced plans to increase coating capacity for its thermal receipt paper products by approximately 35,000 tons to meet increased market demand for its thermal products and to prepare for the potential withdrawal by the Koehler Paper Group from the U.S. market. Appleton produces thermal, carbonless and security papers and Encapsys products.