NewPage Corporation (NewPage) has announced its results of operations for the first quarter of 2011. Net sales were $904 million in the first quarter of 2011 compared to $817 million in the first quarter of 2010, an increase of $87 million, or 11 percent. The increase was primarily the result of higher sales volume of core paper and higher average core paper prices in the first quarter of 2011 compared to the first quarter of 2010. Gross margin (loss) for the first quarter of 2011 was 5.1 percent compared to (3.9) percent in the first quarter of 2010, primarily as a result of higher average core paper sales prices in the first quarter of 2011. During the first quarter of 2011, North American coated paper demand was flat compared to the first quarter of 2010.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization as further adjusted as shown in the attached reconciliation) was $85 million in the first quarter of 2011 compared to $15 million in the first quarter of 2010. The improvement was primarily the result of higher average paper prices and higher sales volume of core paper. Net income (loss) was $(88) million in the first quarter of 2011 compared to $(175) million in the first quarter of 2010.
"Overall our mill operations ran very well during the first quarter of 2011, and volume was in line with our seasonal expectations. We also saw continued price improvement in our core paper products during the quarter," said George F. Martin, president and chief executive officer for NewPage. "Our business also experienced significant increases in our input costs during the first quarter of 2011 due to higher prices for wood, purchased pulp, certain petroleum-based chemicals and transportation, and we expect this trend to continue throughout 2011."
During the first quarter of 2011, NewPage permanently closed the Whiting, Wisconsin mill. NewPage did not take any market-related downtime in the first quarter of 2011 compared to 39,000 tons in the first quarter of 2010.
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First Quarter |
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2011 |
2010 |
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Core paper sales volume – 000s tons |
829 |
792 |
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Price per ton of core paper |
$912 |
$858 |
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Total volume – 000s tons |
1,036 |
1,030 |
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Market-related downtime - 000s tons |
0 |
39 |
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Gross margin % |
5.1% |
(3.9)% |
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SG&A expense - % of net sales |
4.5% |
6.1% |
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NewPage ended the first quarter with $170 million of liquidity, consisting of $9 million of cash and cash equivalents and $161 million available for borrowing under the revolving credit facility. "We continue to evaluate the sale of nonstrategic assets, such as the recently announced sale of our cogeneration energy assets in Rumford, Maine, which is expected to close in the second or third quarter of 2011," said Martin.