NewPage Announces Second Quarter 2008 Financial Results



    MIAMISBURG, Ohio, Aug. 12 /CNW/ -- NewPage Corporation (NewPage) today
announced its results of operations for the second quarter of 2008, including
the financial results of Stora Enso North America (SENA) that was acquired on
December 21, 2007.  Net sales were $1,063 million in the second quarter of
2008 compared to $495 million in the second quarter of 2007, an increase of
$568 million, or 115%, primarily as a result of the acquisition. Net loss was
$21 million in the second quarter of 2008 compared to zero in the second
quarter of 2007.  Earnings before interest, taxes, depreciation and
amortization (EBITDA) were $103 million for the second quarter of 2008
compared to EBITDA of $66 million for the second quarter of 2007.
    
    (Logo:  http://www.newscom.com/cgi-bin/prnh/20080514/NEWPAGELOGO )
    
    "The U.S. economy caught up with the coated paper market during the
second quarter and we saw a dramatic slowdown in demand for coated papers and
rapid increases in input costs," said Mark A. Suwyn, NewPage chairman and
chief executive officer.  "We took immediate actions and curtailed production
to limit inventory growth, raised prices in April and again in July, and
initiated additional productivity programs to offset the rising costs.  In
addition to accelerating the permanent shutdowns we previously announced as
part of the integration of Stora Enso North America, we also announced the
closure of our mill in Kimberly, Wisconsin, to align capacity with market
demand."

    The following schedule details key performance and cost metrics for the
second quarter:

    
                                                          Second Quarter
                                                        2008           2007
    

    
    Coated paper volume - 000s tons                      875            517
    Price per ton of coated paper                       $988           $876
    Market downtime - 000s tons                           18              0
    Maintenance expense - $ million                     $101            $41
    Gross margin                                         8.4%          11.3%
    SG&A expense - % of net sales                        5.9%           4.6%
    
    "From an operations perspective, we were challenged during the quarter to
manage the decrease in demand for our coated products along with increased
inflation for energy, raw materials and transportation," said Richard D.
Willett, Jr., NewPage president and chief operating officer. "Despite the
difficult actions we've had to initiate, we are still able meet the needs of
our customers.  The rapid integration of our production capability allows us
to produce most products on multiple paper machines at the mills with the
lowest costs.  We are moving ahead on all of our key initiatives such as the
business systems integration, Lean Six Sigma activities, capital investments
to drive cost productivity, and accelerating improvements across the company.
These actions will enable NewPage to remain financially strong and maintain
its position as the clear industry leader."
    Cost of sales continued to increase in the second quarter of 2008
compared to the second quarter of 2007, driven by sales of the acquired
business and higher oil and natural gas prices and their effect on energy,
transportation and raw materials.  "We expect crude oil and energy costs to
remain high throughout the year," said Willett. "As a result of these
continued inflationary pressures, we raised sales prices, and will continue to
closely monitor input costs."
    As a result of restructuring plans announced during the first quarter of
2008, cost of sales included pretax charges of $8 million in the second
quarter of 2008, consisting of $6 million of accelerated depreciation expense
and $2 million of employee-related costs.  In addition, the company incurred
$13 million of integration related expenses during the quarter.  "Our
integration activities continued throughout the quarter and we remain on track
to meet our previously announced long-term target of $265 million in annual
synergies from the SENA acquisition," added Willett.
    Interest expense for the second quarter was $68 million in 2008 compared
to $32 million for the same period in 2007.   The increase was primarily due
to higher outstanding debt balances resulting from financing the acquisition.
    NewPage closed the quarter with $466 million of liquidity, including $41
million of cash and $425 million of additional borrowing availability under
the revolving credit facility.
    
    Conference Call
    
    The NewPage Second Quarter 2008 Conference Call and Webcast is scheduled
for today, August 12, 2008, at 11 a.m. Eastern time.  The live conference call
and presentation slides may be accessed on the NewPage Web site at
www.NewPageCorp.com.  Click on the link to the Conference Call and Webcast and
follow the instructions to access the webcast in listen and view mode.  Please
go to the Web site at least one hour prior to the call to register, download
and install any necessary audio software.  The call will be available live and
stored on the Web site for five weeks.
    Analysts and investors may access the call by dialing 800-398-9367
(toll-free domestic) or (612) 338-1294 (international).  A replay of the call
can be accessed via telephone 800-475-6701 (toll-free domestic) or
320-365-3844 (international), access code 953737. The replay will be available
starting at 1:00 p.m. (ET) on August 12, 2008, and will remain available until
noon (ET) on September 16, 2008.
    
    About NewPage Corporation
    
    Headquartered in Miamisburg, Ohio, NewPage Corporation is the largest
coated paper manufacturer in North America, based on production capacity, with
$4.7 billion in pro forma net sales for the year ended December 31, 2007. The
company's product portfolio is the broadest in North America and includes
coated freesheet, coated groundwood, supercalendered, newsprint and specialty
papers. These papers are used for corporate collateral, commercial printing,
magazines, catalogs, books, coupons, inserts, newspapers, packaging
applications and direct mail advertising.
    NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan,
Minnesota, Nova Scotia, and Wisconsin. These mills currently have a total
annual production capacity of approximately 4.5 million tons of paper,
including approximately 3.3 million tons of coated paper, approximately
900,000 tons of uncoated paper and approximately 300,000 tons of specialty
paper.
    
    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.  Forward-
looking statements include, without limitation, any statement that may
predict, forecast, indicate or imply future results, performance or
achievements, and may contain the words "believe," "anticipate," "expect,"
"estimate," "intend," "project," "plan," "will likely continue," "will likely
result," or words or phrases with similar meaning.  Forward-looking statements
involve risks and uncertainties, including, but not limited to, economic,
competitive, governmental and technological factors outside of our control,
that may cause our business, strategy or actual results to differ materially
from the forward-looking statements.  Factors that could cause actual results
to differ materially from the forward-looking statements include, among
others, our ability to realize the anticipated benefits of the acquisition of
SENA, including anticipated synergies; our substantial level of indebtedness;
changes in the supply of, demand for, or prices of our products; the
activities of competitors, 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; general economic and business conditions in the
United States and Canada and elsewhere; 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 Corporation
                Consolidated Statements of Operations (unaudited)
                   Second Quarter Ended June 30, 2008 and 2007
                                  (in millions)
    

    
                                                 Second Quarter Second Quarter
                                                      Ended          Ended
                                                  June 30, 2008  June 30, 2007
    

    
    Net sales                                        $1,063           $495
    

    
    Cost of sales                                       974            439
    Selling, general and administrative expenses         62             23
    Interest expense                                     68             32
    Other (income) expense, net                          (2)             -
    

    
    Income (loss) before income taxes                   (39)             1
    Income tax (benefit)                                (18)             1
    

    
    Net income (loss)                                  $(21)            $-
    



    
                               NewPage Corporation
                Consolidated Statements of Operations (unaudited)
                     First Half Ended June 30, 2008 and 2007
                                  (in millions)
    

    
                                           First Half Ended  First Half Ended
                                              June 30, 2008     June 30, 2007
    

    
    Net sales                                        $2,253              $971
    

    
    Cost of sales                                     2,032               877
    Selling, general and administrative expenses        117                49
    Interest expense                                    139                65
    Other (income) expense, net                          (8)                -
    

    
    Income (loss) before income taxes                   (27)              (20)
    Income tax (benefit)                                (13)                -
    

    
    Net income (loss)                                  $(14)             $(20)
    



    
                               NewPage Corporation
                Condensed Consolidated Balance Sheets (unaudited)
                       June 30, 2008 and December 31, 2007
                                  (in millions)
    

    
                                                     June 30,     December 31,
                                                       2008           2007
    ASSETS
    Cash and cash equivalents                           $41           $143
    Accounts receivable, net                            339            351
    Inventories                                         688            584
    Other current assets                                 45             43
    

    
      Total current assets                            1,113          1,121
    

    
    Property, plant and equipment, net                3,461          3,564
    Other assets                                        266            198
    

    
    TOTAL ASSETS                                     $4,840         $4,883
    

    
    LIABILITIES AND STOCKHOLDER'S EQUITY
    Accounts payable                                   $324           $338
    Accrued expenses                                    263            290
    Current maturities of long-term debt                 16             16
    

    
      Total current liabilities                         603            644
    

    
    Long-term debt                                    2,904          2,909
    Other long-term obligations                         339            351
    Deferred income taxes                               305            293
    Commitments and contingencies
    Minority interest                                    29             31
    

    
    Stockholder's equity:
      Common stock, 100 shares issued and
       outstanding, $0.01 per share par value             -              -
      Additional paid-in capital                        746            729
      Accumulated deficit                              (111)           (97)
      Accumulated other comprehensive income (loss)      25             23
    

    
        Total stockholder's equity                      660            655
    

    
    TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY       $4,840         $4,883
    



    
                               NewPage Corporation
           Condensed Consolidated Statements of Cash Flows (unaudited)
                     First Half Ended June 30, 2008 and 2007
                                  (in millions)
    

    
                                            First Half Ended First Half Ended
                                               June 30, 2008    June 30, 2007
    

    
    CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss)                                   $(14)            $(20)
    Adjustments to reconcile net income
     (loss) to net cash provided by (used in)
     operating activities:
      Depreciation and amortization                      149               67
      Non-cash interest expense                           12                4
      Loss on sale of assets                               2                1
      Deferred income taxes                              (13)               -
      LIFO effect                                         14                4
      Equity award expense                                15                1
      Changes in operating assets and liabilities       (176)             (31)
    

    
        Net cash provided by (used in)
         operating activities                            (11)              26
    

    
    CASH FLOWS FROM INVESTING ACTIVITIES
    Capital expenditures                                 (71)             (34)
    Payments for acquired business                        (6)               -
    Proceeds from sales of assets                          5                -
    

    
        Net cash provided by (used in) investing
         activities                                      (72)             (34)
    

    
    CASH FLOWS FROM FINANCING ACTIVITIES
    Payment of financing costs                             -               (1)
    Distributions from Rumford
     Cogeneration Company, L.P. to limited partners       (4)              (6)
    Loans to parent companies                             (6)              (4)
    Payments on long-term debt                            (8)              (7)
    

    
        Net cash provided by (used in) financing
         activities                                      (18)             (18)
    

    
    Effect of exchange rate changes on
     cash and cash equivalents                            (1)               -
    

    
    Net increase (decrease) in cash and
     cash equivalents                                   (102)             (26)
      Cash and cash equivalents at beginning of period   143               44
      Cash and cash equivalents at end of period         $41              $18
    



    
                               NewPage Corporation
            Reconciliation of Net Income (Loss) to EBITDA (unaudited)
           Second Quarter and First Half Ended June 30, 2008 and 2007
                                  (in millions)
    

    
                                         Second    Second    First     First
                                         Quarter   Quarter   Half      Half
                                         Ended     Ended     Ended     Ended
                                        June 30,  June 30,  June 30,  June 30,
                                          2008      2007      2008      2007
    


    
    Net income (loss)                     $(21)       $-      $(14)     $(20)
    Plus:
      Interest expense                      68        32       139        65
      Income tax (benefit)                 (18)        1       (13)        -
      Depreciation and amortization         74        33       149        67
    

    
    Earnings before interest, taxes,
     depreciation and amortization
     (EBITDA)                             $103       $66      $261      $112
    
    EBITDA is not a measure of our performance under accounting principles
generally accepted in the United States ("GAAP"), is not intended to represent
net income (loss), and should not be used as an alternative to net income
(loss) as an indicator of performance. EBITDA is shown because it is a primary
component of certain covenants under our senior secured credit facilities and
is a basis upon which our management assesses performance. In addition, our
management believes EBITDA is useful to investors because it and similar
measures are frequently used by securities analysts, investors and other
interested parties in the evaluation of companies with substantial financial
leverage. The use of EBITDA instead of net income (loss) has limitations as an
analytical tool, and you should not consider it in isolation, or as a
substitute for analysis of our results as reported under GAAP.




For further information:

For further information: Media Contact, Amber Garwood, +1-937-242-9093,
or Investor Contact, Jason Bixby, +1-937-242-9144, both of NewPage Corporation
Web Site: http://www.newpagecorp.com

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NEWPAGE CORPORATION

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