2014

NewPage Reports Third Quarter 2013 Financial Results Company reports $21 million of net income. Results in line with expectations.

MIAMISBURG, Ohio, Nov. 7, 2013 /PRNewswire/ -- NewPage Holdings Inc. (NewPage) today reported its financial results for the third quarter of 2013.

Net income in the third quarter of 2013 was $21 million compared to a net loss of $47 million in the third quarter of 2012.  The increase was primarily driven by improved gross margin and lower reorganization items from the prior-year quarter.

Net sales in the third quarter of 2013 were $780 million compared to $803 million in the third quarter of 2012, a decline of 3 percent.  The decrease was primarily the result of lower sales volume of paper and lower average paper prices, partially offset by improved mix.

Operating cash flows in the third quarter of 2013 were $7 million, which included $2 million of bankruptcy-related payments. Operating cash flows in the third quarter of 2012 were $13 million, which included $17 million of bankruptcy-related payments.  For the nine months ended September 30, 2013, the company used $16 million of cash in operations, which included $60 million of bankruptcy-related payments.  For the nine months ended September 30, 2012, the company used $35 million of cash in operations, which included $51 million of bankruptcy-related payments and a $38 million interest payment on pre-petition debt.

Adjusted EBITDA (see Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA below) was $85 million in the third quarter of 2013 compared to $58 million in the third quarter of 2012.  

"Overall, our third quarter financial results are in line with our expectations," said George F. Martin, president and chief executive officer for NewPage. "A weaker commercial environment was largely offset by reduced controllable costs and lower inflation."

NewPage ended the third quarter with $292 million of total liquidity, consisting of $288 million of availability under the revolving credit facility and $4 million of available cash and cash equivalents. "During the third quarter, we maintained a strong liquidity position," said Jay A. Epstein, senior vice president and chief financial officer.  "In the fourth quarter, due to the seasonal nature of our business, we expect finished goods inventory to decline.  We will continue to focus on managing our working capital."

Lower year over year prices reflect the continuing decline in demand for printing and writing paper.  As reported by the Pulp and Paper Products Council or PPPC, North American demand for printing and writing papers declined 1.8 percent for the first nine months of the year compared to the same timeframe in 2012.  

Costs of sales declined during the third quarter on a year over year basis by $63 million.  Decreased volume and lower pension, depreciation and maintenance expenses were offset somewhat by inflation.  Inflation was lower than expected for the quarter driven largely by lower latex prices and lower wood costs.

Basis of Presentation
The implementation of the Chapter 11 plan and the application of fresh start accounting materially changed the carrying amounts and classifications reported in the company's consolidated financial statements and resulted in it becoming a new entity for financial reporting purposes. Accordingly, the company's consolidated financial statements for periods prior to December 31, 2012 will not be comparable to its consolidated financial statements as of December 31, 2012 or for periods subsequent to December 31, 2012. References to "Successor" or "Successor Company" refer to NewPage Holdings on or after December 31, 2012, after giving effect to the implementation of the Chapter 11 plan and the application of fresh start accounting. References to "Predecessor" or "Predecessor Company" refer to NewPage prior to December 31, 2012.

Additional Information
The NewPage Form 10-Q Quarterly Report to be filed with the U.S. Securities and Exchange Commission today will be available on the NewPage website. 

Conference Call and Webcast
The NewPage Third Quarter 2013 Conference Call and Webcast is scheduled for Friday, November 8, 2013, at    11 a.m. Eastern time. Analysts and investors may access the live call and presentation slides by clicking on the link Conference Call and Webcast and following the instructions. Please go to this link at least one hour prior to the call to register, download and install any necessary audio/video software. An archive of the Conference Call and Webcast will be available at www.NewPageCorp.com starting at 4 p.m. Eastern time on November 8, 2013. Analysts and investors may also access the Conference Call only by dialing (877)-870-4263 (toll-free domestic) or (412)-317-0790 (international) and referencing the NewPage Third Quarter 2013 Conference Call.

About NewPage Corporation
NewPage is a leading producer of printing and specialty papers in North America with $3.1 billion in net sales for the year ended December 31, 2012. NewPage is headquartered in Miamisburg, Ohio, and owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota and Wisconsin. These mills have a total annual production capacity of approximately 3.5 million tons of paper.

The company's portfolio of paper products includes coated, supercalendered and specialty papers. These papers are used in commercial printing to create corporate collateral, magazines, catalogs, books, coupons, inserts and direct mail as well as in specialty paper applications including beverage bottle labels, food and medical packaging, pressure-sensitive labels and release liners. To learn more, visit www.NewPageCorp.com.

Forward-Looking Statements 
This press release may contain "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995.  All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws.  Forward-looking statements may include the words "may," "plans," "estimates," "anticipates," "believes," "expects," "intends" and similar expressions. Although we believe these forward-looking statements are based on reasonable assumptions, they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected or assumed in our forward-looking statements.  Factors that could cause actual results to differ materially from the forward-looking statements include changes in the supply of, demand for, or prices of our products; general economic and business conditions in the United States, Canada and elsewhere; the ability of our customers to continue as a going concern, including our ability to collect accounts receivable according to customary business terms; the activities of other suppliers, including those that may be engaged in unfair trade practices; changes in significant operating expenses, including raw material and energy costs; changes in currency exchange rates; changes in the availability of capital; changes in the regulatory environment, including requirements for enhanced environmental compliance; and other risks and uncertainties that are detailed in our filings with the Securities and Exchange Commission.  The company does not intend, and undertakes no obligation, to update any forward-looking statements.


NewPage Holdings Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

Three Months Ended September 30, 2013 and 2012

Dollars in millions, except per share amounts




Successor




Predecessor



2013




2012

Net sales

$

780



$

803








Cost of sales


715




778

Selling, general and administrative expenses


34




35

Interest expense


11




10

Other (income) expense, net


(1)




Income (loss) before reorganization items and income taxes


21




(20)

Reorganization items, net





26

Income (loss) before income taxes


21




(46)

Income tax (benefit)





1

Net income (loss)

$

21



$

(47)








Net income (loss) per share:







     Basic

$

2.91



$

(472,564)

     Diluted

$

2.90



$

(472,564)








Weighted average common shares outstanding:







     Basic


7,080,000




100

     Diluted


7,109,937




100

 


NewPage Holdings Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

Nine Months Ended September 30, 2013 and 2012

Dollars in millions, except per share amounts




Successor




Predecessor



2013




2012

Net sales

$

2,256



$

2,322








Cost of sales


2,116




2,229

Selling, general and administrative expenses


109




105

Interest expense


35




17

Other (income) expense, net


(1)




Income (loss) before reorganization items and income taxes


(3)




(29)

Reorganization items, net





74

Income (loss) before income taxes


(3)




(103)

Income tax (benefit)





(17)

Net income (loss)

$

(3)



$

(86)








Net income (loss) per share:







     Basic

$

(0.43)



$

(859,719)

     Diluted

$

(0.43)



$

(859,719)








Weighted average common shares outstanding:







     Basic


7,080,000




100

     Diluted


7,080,000




100

 


NewPage Holdings Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (unaudited)

September 30, 2013 and December 31, 2012

Dollars in millions, except per share amounts










Successor




Sept. 30,



Dec. 31,




2013



2012

ASSETS







Cash and cash equivalents


$

4


$

43

Accounts receivable, net



233



220

Inventories



550



472

Other current assets



28



41

  Total current assets



815



776








Property, plant and equipment, net



1,229



1,314

Other assets



143



124

TOTAL ASSETS


$

2,187


$

2,214








LIABILITIES AND EQUITY







Accounts payable


$

162


$

193

Other current liabilities



142



123

Current maturities of long-term debt



20



5

  Total current liabilities



324



321








Long-term debt



492



485

Other long-term obligations



567



595

Commitments and contingencies














EQUITY







Preferred stock, 100,000 shares authorized, $0.001 per share par value




Common stock, 16,000,000 shares authorized, 7,080,000 shares  issued






  and outstanding, $0.001 per share par value





Additional paid-in capital



813



813

Accumulated deficit



(3)



Accumulated other comprehensive loss



(6)



  Total equity



804



813

TOTAL LIABILITIES AND EQUITY


$

2,187


$

2,214

 


NewPage Holdings Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)

Nine Months Ended September 30, 2013 and 2012

Dollars in millions











Successor



Predecessor




2013




2012

CASH FLOWS FROM OPERATING ACTIVITIES








Net income (loss)


$

(3)



$

(86)

Adjustments to reconcile net income (loss) to








net cash provided by (used for) operating activities:








  Depreciation and amortization



137




180

  Non-cash interest expense



5




62

  (Gain) loss on disposal of assets



1




4

  U.S. pension expense



2




25

  U.S. pension funding



(36)




(25)

  Equity award expense



12




  Non-cash reorganization items, net






12

  Debtor in possession financing costs






4

  Changes in operating assets and liabilities:








      Accounts receivable



(13)




(18)

      Inventories



(78)




(67)

      Other operating assets



(19)




8

      Accounts payable



(31)




5

      Accrued expenses and other obligations



7




(139)

    Net cash provided by (used for) operating activities


(16)




(35)









CASH FLOWS FROM INVESTING ACTIVITIES








Capital expenditures



(46)




(63)

Proceeds from sale of investment shares



4




Restricted cash






(1)

    Net cash provided by (used for) investing activities


(42)




(64)









CASH FLOWS FROM FINANCING ACTIVITIES








Payment of financing costs



(1)




Repayments of long-term debt



(4)




(63)

Borrowings on revolving credit facility



370




Payments on revolving credit facility



(346)




Proceeds from debtor in possession financing






331

Repayments of debtor in possession financing






(298)

Debtor in possession financing costs






(4)

    Net cash provided by (used for) financing activities


19




(34)

















Net increase (decrease) in cash and cash equivalents


(39)




(133)

  Cash and cash equivalents at beginning of period



43




142

  Cash and cash equivalents at end of period


$

4



$

9

 

NewPage Holdings Inc. and Subsidiaries

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA (unaudited)

Three Months And Nine Months Ended September 30, 2013 and 2012

Dollars in millions

















Three Months


Nine Months



Ended September 30,


Ended September 30,



Successor


Predecessor


Successor


Predecessor




2013



2012



2013



2012














Net income (loss)

$

21


$

(47)


$

(3)


$

(86)

Plus:













Interest expense


11



10



35



17


Income tax (benefit)




1





(17)


Depreciation and amortization


46



61



137



180

EBITDA

$

78


$

25


$

169


$

94














Plus:













Equity awards


4





12




(Gain) loss on disposal of assets




2



1



4


Non-cash U.S. pension expense




5





5


Integration and related severance costs






5



2


Reorganization items, net




26





74


Post-emergence bankruptcy-related items


1





4




Other


2





5



2

Adjusted EBITDA

$

85


$

58


$

196


$

181

 

EBITDA is defined as net income (loss) before interest expense, income taxes, depreciation and amortization. EBITDA and Adjusted EBITDA (as described in table above) are not measures of our performance under accounting principles generally accepted in the United States ("U.S. GAAP"), are not intended to represent net income (loss), and should not be used as alternatives to net income (loss) as indicators of performance. EBITDA and Adjusted EBITDA are shown because they are bases upon which our management assesses performance and are primary components of certain covenants under our revolving credit facility. In addition, our management believes EBITDA and Adjusted EBITDA are useful to investors because they and similar measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies. The use of EBITDA and Adjusted EBITDA instead of net income (loss) has limitations as an analytical tool, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP.  Our measures of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.

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SOURCE NewPage



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