Verso Corporation Reports Second Quarter 2015 Results

Verso Corporation (NYSE: VRS) today reported financial results for the second quarter of 2015. Results for the quarters ended June 30, 2015 and 2014 include:

*Net sales of $778 million in the second quarter of 2015 compared to $321 million in the second quarter of 2014.
*Operating income before special items of $14 million in the second quarter of 2015 compared to $12 million in the second quarter of 2014.
*Adjusted EBITDA before pro forma effects of the profitability program of $80 million in the second quarter of 2015, compared to $65 million in the second quarter of 2014 (Note: Adjusted EBITDA is a non-GAAP financial measure and is defined and reconciled to net income later in this release. Also note that for a more accurate comparison of our Adjusted EBITDA, prior periods have been adjusted to exclude Bucksport and to include the historical operations of NewPage, excluding the Biron and Rumford mills.)

Verso’s net sales for the second quarter of 2015 increased $457 million, or 142%, due primarily to the addition of net sales resulting from the NewPage acquisition, compared to the second quarter of 2014.

During the second quarter of 2015, Verso recorded special items affecting operating income totaling $9 million, or $0.11 per diluted share, primarily related to integrating the legacy Verso and NewPage operations, restructuring costs associated with the NewPage acquisition and closure of the Bucksport mill. During the second quarter of 2014, special items of $9 million, or $0.16 per diluted share, were primarily attributable to costs related to the NewPage acquisition.

“Verso’s results for the second quarter showed our resilience in the face of industry headwinds,” said Verso President and Chief Executive Officer David Paterson. “The results reflected strong performance improvements which include increased gross margin, a 16% reduction in SG&A compared to the first quarter of 2015, and double-digit adjusted EBITDA growth. As our integration efforts continue, our synergy achievement is ahead of expectations, with savings to date of $41 million.

“Looking ahead, we continue to focus on keeping our people safe, integrating the NewPage business, achieving additional synergies across the entire company, and exceeding our customers’ expectations.”

Net sales for the second quarter of 2015 increased 142% to $778 million from $321 million in the second quarter of 2014. Our sales increase was primarily driven by a 122% increase in total sales volume, from 407 thousand tons in 2014 to 902 thousand tons in 2015. The increase in volume resulted in $408 million of additional revenue, while the change in pricing contributed $48 million, as the average sales price per ton increased from $789 to $862, for all of our products in the second quarter of 2015 compared to the second quarter of 2014.

Net sales for our paper segment increased 163% to $723 million in second quarter of 2015 from $275 million in the second quarter of 2014, due to a 144% increase in paper sales volume to 802 thousand tons in the second quarter of 2015 compared to 329 thousand tons in the second quarter of 2014, supplemented by an 8% increase in average sales price per ton of paper to $900 in the second quarter of 2015, compared to $835 in the second quarter of 2014. The increased sales volume, which is primarily due to the addition of sales resulting from the NewPage acquisition, resulted in $395 million of additional revenue which was augmented by the impact for the change in price of $52 million. The increase in pricing was due to the addition of a different mix of paper products from NewPage.

Net sales for our pulp segment increased 20% in the second quarter of 2015 to $55 million from $46 million in the second quarter of 2015, due to a 30% increase in pulp sales volume to 100 thousand tons in the second quarter of 2015, compared to 77 thousand tons in the second quarter of 2014, while the average sales price per ton declined 6% to $557 in the second quarter of 2015 compared to $593 in the second quarter of 2014. The increased sales volume, which is primarily attributable to the addition of net sales as a result of the NewPage acquisition, contributed $13 million of additional revenue, while the change in pricing resulted in a decrease in revenue of $4 million. The price decline was attributable to market price reductions.
http://investor.versoco.com/releaseDetail.cfm?ReleaseID=927039

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