VOL. 127 | NO. 223 | Wednesday, November 14, 2012
Verso Paper Sees Third-Quarter Loss
By Bill Dries
Memphis-based Verso Paper Corp. took a net loss of $104.7 million in the third quarter compared to a year ago with the closure of its mill in Sartell, Minn.
Company executives decided in August they would not reopen the paper mill, which was destroyed in a May fire and explosion.
David Patterson, president and chief executive officer of Verso, said the decision was “difficult” and that Verso is “well into evaluating the options relative to the decommissioning of the site and marketing the property and assets for eventual sale.”
The third-quarter loss included $92.7 million of net charges from special items. Most were restructuring charges related to the Sartell mill closing.
In August, the company estimated closing the mill would come with an aggregate pre-tax charge to earnings of $114 million and indicated it would take most of that charge in the third quarter.
The charge includes $19 million for severances and benefit costs for the employees at the mill and $81 million in non-cash charges for the impairment of the property and equipment.
It was also during the third quarter that Verso announced it had ended discussions with NewPage Corp. and creditors of NewPage about a possible acquisition of the company.
Verso’s net sales for the third quarter were down $83.8 million compared to the third quarter of 2011. The closing at Sartell as well as the closure of three paper machines last year was blamed for the drop.
Patterson said the company saw a pick up in demand for coated freesheet and coated groundwood shipments during the quarter, which is seasonal.
“Industry operating rates were strong even though we continue to see a year over year drop off in advertising spending, which is impacted by the sluggish GDP growth,” he added.
Verso’s paper products are used primarily for media and marketing including magazines and commercial printing including brochures and direct mail advertising as well as annual reports.