NewPage reports net quarterly loss of $174 million

NewPage Corporation has reported a net quarterly loss of $174 million, compared to a net loss of $6 million a year ago.

Net sales were $890 million in the second quarter of 2010 compared to $736 million in the second quarter of 2009, an increase of $154 million, or 21%.

The increase in net sales resulted primarily from higher sales volumes, partially offset by lower average paper prices during the quarter. Net sales in the second quarter of 2009 were affected by decreased advertising spending and magazine and catalog circulation that was largely attributable to general economic factors and inventory reductions by customers.

The increase in net loss was primarily a result of the expiration of the alternative fuel mixture tax credit, lower average sales prices, and higher interest expense during the second quarter of 2010 compared to the second quarter of 2009, partially offset by improved productivity, higher sales volumes and lower market-related downtime. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $10 million in the second quarter of 2010 compared to $149 million in the second quarter of 2009.

"We are seeing increasing demand for our products, and reported industry capacity utilization is well above the 90 percent level. With improving underlying demand, we are working diligently to position the company to take full advantage of the market improvement," said George F. Martin, president and chief executive officer for NewPage.

"We are optimistic about our results for the remainder of the year, with order volume continuing to improve each quarter and recently announced price increases starting to take effect in the third quarter of 2010," said Mr. Martin. In the second quarter of 2010, North American printing paper demand increased 27 percent compared to the second quarter of 2009 as advertising and print media usage began to rebound. "During the second quarter of 2010, NewPage experienced higher customer demand resulting in a total sales volume increase of 8 percent over the first quarter of 2010, and an increase of 29 percent compared to the second quarter of 2009. As a result of higher demand, we took no market-related downtime in the second quarter of 2010 compared to 161,000 tons in the second quarter of 2009," Martin added.

Source: NewPage Corporation