Verso Paper posts wider first quarter loss
May 16, 2007 - Verso Paper Holdings LLC today reported its results for the first quarter ended on March 31, 2007.
Highlights for the first quarter of 2007 include:
- Revenues of $359.8 million in 2007 compared to $389.8 million during the prior year period.
- Operating loss of ($2.3) million versus operating loss of ($0.1) million in the prior year period.
- Net loss of ($29.9) million for the quarter versus net loss of ($2.2) million in the prior year period.
- Adjusted EBITDA of $33.0 million versus $42.7 million during the prior year. (Note: Adjusted EBITDA is a non-GAAP measure and is defined and reconciled to Net Income later in this release).
"Our first quarter 2007 results for Verso Paper, which traditionally is the weakest quarter of the year for the magazine and catalog business, was influenced by market challenges driven by the economics of supply and demand. This was particularly true for the coated groundwood segment of our business," said Mike Jackson, President and CEO of Verso Paper.
"During the first quarter, we took 23,000 tons of downtime at two of our facilities in an effort to balance supply and demand. This downtime resulted in $4 million of unabsorbed costs in our first quarter EBITDA and Net Income. In addition, we also continue to focus on reducing selling, general and administrative costs even as we build out our organization to a stand alone business by July 31, 2007, and we continue to drive down our operating costs through improved efficiencies and material usage."
Net sales for the three months ended March 31, 2007 were $359.8 million compared to $389.8 million for the three months ended March 31, 2006. The decrease was the result of a 2.6% decrease in average price and a 5.3% decrease in volume for the three months ended March 31, 2007, compared to the three months ended March 31, 2006.
Cost of sales for the three months ended March 31, 2007 was $345.9 million, compared to $374.6 million for the three months ended March 31, 2006, a decrease of 7.6%. Our gross margin excluding depreciation expense for the three months ended March 31, 2007 of 12.1% represented a slight increase compared to the same period in 2006. Depreciation expense for the three months ended March 31, 2007 was $29.6 million compared to $31.5 million for the three months ended March 31, 2006.
Based in Memphis, Tennessee, Verso Paper is one of the leading North American suppliers of coated papers, which are used primarily in media and marketing applications, including catalogs, magazines, commercial printing applications, such as high-end advertising brochures, annual reports and direct mail advertising.
SOURCE: Verso Paper LLC