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.