NewPage Q1 Revenues Skyrocket 150 Percent
Sales up following Stora Enso acquisition; company files for IPO.
Coated magazine paper manufacturer NewPage Corporation has announced that its first quarter revenues were $1.2 billion, a 150 percent increase from $476 million in the first quarter in 2007, and net income was $7 million, up from a $20 million loss during the same period last year.
NewPage’s sharp spike in revenue comes a little more than four months after the Miamisburg, Ohio-based company acquired Stora Enso North America. As a result of the acquisition, NewPage incurred $9 million in pretax charges, including $6 million in accelerated depreciation and inventory write-offs. NewPage’s coated paper volume jumped 104 percent in the first quarter over the same period in 2007.
EBITDA was $158 million for the quarter, compared to $46 million in the first quarter of 2007. NewPage had more than $4.7 billion in year-end pro forma net revenue for 2007.
In a statement, chairman and CEO Mark A. Suwyn indicated that while much of the first quarter increase in volume was because of the Stora Enso acquisition, a planned increase in the average price of paper caused customers to buy more before the spike. “Demand for our products was strong as a result of rationalized industry supply from reduced imports and capacity closures, as well as some inventory builds by customers in advance of a price increase.”
In January, NewPage announced a major restructuring as a way to integrate the Stora Enso facilities. As part of the plan, NewPage said it would close certain operations in Maine, Ohio and Wisconsin, affecting about 600 employees,
Earlier this month, NewPage announced a proposed initial offering of common stock. Goldman, Sachs & Co. is representing NewPage in the process. According to its filing with the Securities and Exchange Commission, NewPage hopes to raise $805 million.
In December, fellow paper company Verso Paper also filed for an IPO. The company was reportedly looking to raise about $300 million. Verso is expected to report its first quarter earnings Thursday.