Verso Paper Corp. First Quarter May 9, 2013

Transcription

1 Verso Paper Corp. First Quarter 2013 Earnings Conference Call May 9, 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 3 First Quarter 2013 Overview Seasonally slower 1 st quarter volumes; overall pricing flat sequentially and year over year Inventories 31,000 tons below last year s levels; 20,000 tons below excluding shuttered Third capacity level since Q112 Delivered gas cost for Maine mills almost $22 million above last year s levels; over $15 million higher sequentially Closed the sales of the Sartell Mill site and the Fiber Farm in Minnesota Completed an exchange offer for the Senior Unsecured Holding Company term loan; no significant debt maturities until 2016 ($143 million Senior Subordinated Notes) with balance of maturities in 2019 Received $13.7 million Section 1603 grant relative to Bucksport Renewable Energy Project

4 4 First Quarter 2013 Financial Overview Click Volume to edit (000 Master Tons) text styles $Millions Sales 406 $375 $361 $333 Q1 12 Q4 12 Q1 13 Q1 12 Q4 12 Q1 13 Adjusted EBITDA Adjusted Operating Income $41 $14 $25 $20 Q1 12 Q4 12 Q1 13 Sartell Mill & Bucksport No. 2 PM ($7) ($7) Q1 12 Q4 12 Q1 13

5 Key Click Revenue to edit Metrics Master title style Q Q Q Coated Volume 1 350,100 tons 329,700 tons 290,200 tons Coated Price (per ton) $866 $873 $863 HW Pulp Volume 65,000 tons 73,100 tons 70,700 tons HW Pulp Price (per ton) $505 $501 $526 1 Q includes approx. 50,000 tons of CGW and SC from machines permanently shut prior to Q

6 $ Millions Click Adjusted to edit EBITDA Master Q1 title 13 vs. style Q (2) 14 (18) Gas in Maine was $22 Million Unfavorable (1) 20 Q1 12 Volume Price/Mix Operations Input Prices SG&A, Distrib. & Other Q1 13 6

7 $ Millions Click Adjusted to edit EBITDA Master Q1 13 title vs. style Q (4) (1) (5) (10) (1) 20 Gas in Maine was $15 Million Unfavorable Q4 12 Volume Price/Mix Operations Input Prices SG&A, Distrib. & Other Q1 13 7

8 Unprecedented Click to edit Delivered Master Gas title Costs style in the State of Maine 1Q13 Segment Chemicals vs. 1Q12 1Q13 vs. 4Q12 Comments Y/Y - Latex prices down 4%, starch prices up 27%, clay prices up 1% Q/Q Latex prices down 3%, starch prices up 4%, clay prices up 3% Wood Y/Y - Wood prices are down 6% Q/Q Prices are down 2% Energy Energy prices driven by natural gas prices in Maine. Limited supply, oversubscribed delivery infrastructure and extreme winter conditions pushed daily average gas prices to historical levels for the quarter. 8

9 $/MMBTU Commodity and Delivered Natural Gas Price Trend Andro & Bucksport Natural Gas Prices Total Delivered Cost - Bucksport Total Delivered Cost - Andro Nymex Commodity 9

10 $/MMBTU Delivered Quarterly Natural Gas Cost Comparison 1st Qtr rd Qtr st Qtr rd Qtr st Qtr rd Qtr st Qtr rd Qtr st Qtr 2013 Bucksport Andro Quinnesec 1 10

11 Outlook for 2 Click to edit nd Quarter 2013 Master title style Stronger volume driving inventories to very low levels Paper pricing fairly flat; pulp prices continue to increase Announced Fourth price increases level effective July 1 for No. 5 CGW ($40/ton), No. 4 CGW ($30/ton)» Fifth and level CFS ($30/ton) Manufacturing operations cost impacted by scheduled maintenance outage at Androscoggin Input prices, especially energy, move lower Working capital to show seasonal decline 11

12 APPENDIX

13 Recently completed exchange transaction for the Senior Unsecured Holding Company Term Loan In January 2013, completed exchange offer for $86 million of loans under the Verso Paper Finance Holdings Inc. Credit Agreement maturing on February 1, 2013 into $73 million of 11.75% Senior Secured Notes due 2019 $272 $418 $50 $396 $13 $143 $ nd Priority FRN Sr Subordinated Notes Cash Flow Revolver ABL Facility Secured Notes (1.5 Lien) 1 st Priority Sr Secured Notes 2 nd Priority Sr Secured Notes 13

14 Liquidity and Net Debt Liquidity $MM 3/31/12 12/31/12 3/31/13 Revolver * Balance Drawn Letters of Credit Remaining Capacity Cash Total Liquidity $216 $204 $159 *ABL availability limited to $135 borrowing base Net Debt $MM 3/31/12 12/31/12 3/31/13 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 1,209 1,107 1,239 Unsecured Term Loan Net Holdco Debt $1,295 $1,200 $1,239 14

15 Adjusted Net Income (Loss)/EPS Reconciliation ($ Millions) Q1 12 Q4 12 Q1 13 Net Income (Loss) ($74) $26 ($38) Special Items $35 ($48) ($3) Adjusted Net Income (Loss) ($39) ($22) ($41) Diluted Shares (MM) Earnings per Diluted Share ($1.40) $0.48 ($0.72) Special Items $0.66 ($0.90) ($0.06) Adjusted Earnings per Share ($0.74) ($0.42) ($0.78) 15

16 Special Items Million Fire Insurance Restructuring $ Q1 12 Q4 12 Per Share Million $ Per Share ($53) ($1.00) $5 $0.10 Million $ Q1 13 Per Share Million $ $1 $0.02 Early Retirement of Debt $30 $ $3 $0.05 Hedge Losses $5 $ ($4) ($0.07) Other ($3) ($0.06) Total Special Items $35 $0.66 ($48) ($0.90) ($3) ($0.06) 16

17 EPS Before Special Items Q1 13 vs. Q4 12 (.42) (.08) (.02) (.09).02 (.19) (.78) Q4 12 Volume Price/Mix Operations Input Prices SG&A, Distrib. & Other Q