Verso Paper ends Q1 with $250 million of liquidity, $1.22 billion debt

By Lisa Kerner

Charlotte, N.C., May 9 - Verso Paper Corp. ended the first quarter of 2011 with liquidity of $250 million, including $55 million of cash and $171 million remaining on its revolver as of March 31. The company had total debt of $1.22 billion.

The company refinanced $372 million of debt during the quarter, extending its maturity to 2019, said president and chief executive officer Mike Jackson during the company's earnings call on Monday.

Specifically, Verso refinanced its second-priority senior secured notes due 2014 and a portion of its first-priority senior secured notes due 2014 with new second-priority senior secured notes due 2019.

Verso's net sales for the first quarter of 2011 increased 14.6% to $416.6 million from $363.6 million for the prior-year period.

The company's gross margin was 15.4% for the quarter, compared with 7.4% for the same period in 2010 and 17.2% for the fourth quarter of 2010.

Sales volume was stable on both a sequential-quarter basis and year over year, according to a company news release.

Verso had a net loss of $44.6 million in the first quarter of 2011, or $0.84 per diluted share. This included $26.5 million of charges from special items, or $0.50 per diluted share, primarily due to $26.1 million of pre-tax net losses related to the early retirement of debt in connection with the debt refinancing.

For the first quarter of 2010, Verso reported a net loss of $53.6 million, or $1.02 per diluted share. This included $1.6 million of charges from special items, or $0.03 per diluted share, primarily due to costs associated with new product development.

First-quarter adjusted EBITDA results improved by $34 million compared to the first quarter of 2010.

Selling, general and administrative expenses were $18.6 million in the first quarter of 2011, compared with $16.2 million for the same period in 2010, primarily due to inflation of personnel-related costs.

Verso is a Memphis-based producer and seller of coated papers.

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