BUCKSPORT, Maine — Verso Paper on Thursday reported continued losses for the fourth quarter of 2008, which ended on Dec. 31.
Verso reported a net loss of $33.6 million or 64 cents per share compared to a net loss of $8.1 million or 21 cents per share for the same period in 2007. In addition, the company announced it has suspended the payment of dividends on its common stock indefinitely, and has elected not to make a dividend payment for the fourth quarter.
Net sales declined to $375.88 million in the fourth quarter, compared to $445.8 million for the same period last year.
The losses were driven by the overall global financial situation and a weakened demand for coated paper, which reflects a contraction in the advertising and print media the company supplies, according to President and CEO Mike Jackson. Customers also are holding elevated inventory, which has depressed the demand further.
In a press release Thursday, Jackson noted that the company had reduced production by almost 75,000 tons in the fourth quarter, and anticipated an additional reduction of 100,000 tons during the first half of 2009.
Both of the company’s mills in Maine — at Jay and at Bucksport — have taken significant downtime in the past several months and are planning more this month. Last week, the company announced the Bucksport mill will shut down all four of its paper machines for two weeks beginning Monday, idling most of the mill’s 756 workers.
At Jay, with 900 employees, the downtime will be staggered among three of the mill’s four papermaking machines.
For 2008, the company reported an overall increase in net sales of 8.5 percent on the strength of an average increase of price per ton of about 16.5 percent. The gains from the price increase were offset partially by a 6.8 percent decrease in total sales volume for the year.
Jackson said he anticipates a “challenging 2009,” and indicated the company has taken appropriate actions, including salary freezes, work force planning improvements and new product opportunities. He said the company anticipates the first quarter 2009 earnings will be down from the fourth quarter of 2008.
Meanwhile, the price of Verso stock continued to decline Thursday, dropping to 40 cents a share, the lowest level this year, before rebounding slightly to 42 cents a share later in the day. The stock price has plummeted from its initial IPO price of $12 a share in May, and last month the New York Stock Exchange notified the company that it had fallen below the NYSE’s continued listing standard of $1 a share. At the time of the NYSE notice on Feb. 2, the stock was selling at 96 cents a share.
Under NYSE rules, Verso has six months to bring the share price and 30-day average share price back to more than $1 a share.