Verso Paper Corp. Second Quarter August 8, 2013

Transcription

1 Verso Paper Corp. Second Quarter 2013 Earnings Conference Call August 8, 2013

2 Forward-Looking Statements In this presentation, all statements that are not purely historical facts are forward-looking statements within the meaning of Section 27A Second of the Securities level Act of 1933 and Section 21E of the Securities Exchange Act of Forward-looking statements may be identified by the words believe, expect, anticipate, project, plan, estimate, Fourth level intend and other similar expressions. Forwardlooking statements are based on currently available business, economic, financial and other information and reflect management s current beliefs, expectations and views with respect to future developments and their potential effects on Verso. Actual results could vary materially depending on risks and uncertainties that may affect Verso and its business. For a discussion of such risks and uncertainties, please refer to Verso s filings with the Securities and Exchange Commission. Verso assumes no obligation to update any forward-looking statement made in this presentation to reflect subsequent events or circumstances or actual outcomes. 2

3 Second Quarter 2013 Overview Volumes down 10% compared to last year s levels due to closure of Sartell Mill and Bucksport No. 2 paper machine Overall, Third prices level up slightly versus the first quarter and last year Announced price increases effective July 1 for No. 5 CGW ($40/ton), No. 4 CGW ($30/ton) and CFS ($30/ton) Manufacturing operations cost impacted by scheduled maintenance outage at Androscoggin Energy prices significantly lower than first quarter levels 3

4 Second Quarter 2013 Financial Overview Click Volume to edit (000 Master Tons) text styles $Millions Sales $365 $333 $330 Q2 12 Q1 13 Q2 13 Q2 12 Q1 13 Q2 13 Adjusted EBITDA Adjusted Operating Income $23 $20 $22 Q2 12 Q1 13 Q2 13 Sartell Mill & Bucksport No. 2 PM ($7) ($5) ($10) Q2 12 Q1 13 Q2 13 4

5 Key Click Revenue to edit Metrics Master title style Q Q Q Coated Volume 1 331,500 tons 290,200 tons 296,100 tons Coated Price (per ton) $860 $863 $855 HW Pulp Volume 67,900 tons 70,700 tons 66,600 tons HW Pulp Price (per ton) $534 $526 $572 1 Q includes approx. 36,000 tons of CGW and SC from machines permanently shut prior to Q

6 $ Millions Adjusted EBITDA Q2 13 vs. Q (2) 2 4 (1) (4) 22 Q2 12 Volume Price/Mix Operations Input Prices SG&A, Distrib. & Other Q2 13 6

7 $ Millions Adjusted Click to edit EBITDA Master Q2 13 title vs. style Q (1) (2) 22 (5) Q1 13 Volume Price/Mix Operations Input Prices SG&A, Distrib. & Other Q2 13 7

8 Much Lower Gas Costs versus Q1 13 Q2 13 Q2 13 Segment Chemicals Wood vs. Q2 12 vs. Q1 13 Comments Y/Y - Latex prices down 15%, starch prices up 4%, & clay prices up 2% Q/Q Latex flat, starch prices down 3%, & clay prices up 4%. Y/Y - Wood prices are down 3% Q/Q Prices are up 5% Energy Y/Y - Natural gas is up 45%, electricity is up 18%, and fuel oil is up 3% Q/Q Natural gas and electricity prices moved down due to much lower delivered cost of gas in Maine 8

9 Outlook for 3 Click to edit rd Quarter 2013 Master title style Seasonally stronger volumes comparable to last year s levels Paper prices Third move level up, but not at announced levels; pulp prices continue to increase Manufacturing operations cost improved from cost reduction initiatives and no scheduled maintenance outages Input prices fairly flat sequentially 9

10 APPENDIX

11 Liquidity and Net Debt Liquidity $MM 6/30/12 3/31/13 6/30/13 Revolver * - Balance Drawn Letters of Credit Remaining Capacity Cash Total Liquidity $139 $159 $157 *ABL availability limited to $199 borrowing base Net Debt $MM 6/30/12 3/31/13 6/30/13 Cash Revolver First Lien Notes (at par) Net First Lien Debt Lien Notes Sec Priority Sr. Notes (at par) Senior Sub notes Net Opco Debt 1,188 1,239 1,240 Unsecured Term Loan Net Holdco Debt $1,276 $1,239 $1,240 11

12 Adjusted Net Income (Loss)/EPS Reconciliation ($ Millions) Q2 12 Q1 13 Q2 13 Net Income (Loss) ($21) ($38) ($43) Special Items ($22) ($3) $4 Adjusted Net Income (Loss) ($43) ($41) ($39) Diluted Shares (MM) Earnings per Diluted Share ($0.39) ($0.72) ($0.81) Special Items ($0.42) ($0.06) $0.07 Adjusted Earnings per Share ($0.81) ($0.78) ($0.74) 12

13 Special Items Restructuring Early Retirement of Debt Million $ Q2 12 Q1 13 Per Share ($22) ($0.41) Million $ Per Share $1 $0.02 $3 $0.05 Million $ Q2 13 Per Share Million $ Hedge Losses ($4) ($0.08) ($4) ($0.07) $4 $0.07 Other $4 $0.08 ($3) ($0.06) Total Special Items ($22) ($0.41) ($3) ($0.06) $4 $

14 EPS Before Special Items Q2 13 vs. Q (.78) (.02) -0- (.04) (.74) (.09) Q1 13 Volume Price/Mix Operations Input Prices SG&A, Distrib. & Other 14 Q2 13