Connect with FOLIO:


Price Increases Help Verso Paper Drive Net Sales Up in 2011

Three machine closures in 4Q expected to have favorable EBITDA impact in 2012.

Bill Mickey By Bill Mickey


In 2011 Memphis-based Verso Paper, like the rest of the paper industry, had a year of "significant activity," as president and CEO Mike Jackson described it in the company's year-end financials. Net sales for the year were up 7.3 percent to $1.7 billion versus $1.6 billion for 2010.

Losses for the year show a more complicated picture: About $83 million in "special item" costs, such as costs related to the shutting down of three paper machines, debt refinancing and goodwill impairments, were tacked on to a pre-item loss of about $54 million. New product development costs were about $5 million for the year. In all, Verso recorded a net loss of $137 million.

However, according to the company, the pre-item loss of $54 million is down significantly from 2010's pre-item loss of $126 million.

The three machine shutdowns—a No. 2 coated groundwood machine in Bucksport, Maine and two supercalendered machines in Sartell, Minnesota—happened in the fourth quarter, reducing annual capacity by 193,000 tons. The shutdowns accounted for $24.5 million in charges, but Jackson expects the closures "to have a favorable EBITDA impact during 2012."

The 7.3 percent net sales increase was reflective of a 9.4 percent price increase across all products initiated in 2010 and the second quarter of 2011. Actual sales volume was down 2 percent.

More on Verso's full-year 2011 and fourth-quarter financials can be seen here.

Bill Mickey By Bill Mickey

RECENTLY in M and A and Finance dots icon
MOST READ on FOLIO: dots icon


Find What You Need dots icon

Folio: Marletplace

Seach top vendors, suppliers, service providers & more

Browse & Search the Full Directory Now