DAYTON, Ohio (From the Business Journal) -- Verso Corp., which is moving its headquarters to Dayton, is looking to cut $55 million in costs this year as it saw a net loss to start off the year.
The paper company reported $616 million in net sales in the first quarter, bringing a net loss of $21 million, it said in its earnings. The company -- which acquired Dayton-based NewPage Holdings in 2014 -- has been trimming costs, with one of those moves being the consolidation its headquarters from Memphis to Miamisburg, which began this year.
"Verso is relentlessly pursuing opportunities to successfully adapt to the rapidly evolving coated papers marketplace," said Verso CEO B. Christopher DiSantis in the statement. "We are aggressively reducing our overhead expense by more than 10 percent, and after trimming our mill operational costs by an annualized $68 million in 2016, we've identified another $55 million in productivity and cost reduction opportunities this year."
Specifically, the company has launched a series of machine-glazed natural products and is looking at some low-cost machine conversion projects to cut costs as it continues to re-position itself. Verso operates seven mills around the country with a capacity for 3.15 million tons of coated and specialty paper, as well as 290,000 tons of pulp. It has about 300 customers, according to its annual report, including magazine and catalog publishers, commercial printers and paper merchants.
The company has seen sales decrease but it's also softened the blow by cutting operating costs down. Verso's sales have decreased 11 percent from $690 million in the first quarter of 2016, but it also posted an operating loss of $110 million that quarter for an overall $88 million net loss -- in major part as administrative expenses and restructuring changes ate into its performance last year.
The company emerged from bankruptcy in mid-2016. Since then, it says it has seen a decrease in sales volume and softer demand for coated papers, as well as reduced margins. It has reduced capacity at one paper mill and closed another.
The move to the Miami Township office cost $2 million but brought 42 of its top jobs into the Dayton region to grow its workforce here to about 250 people. In 2016, it saw a 15 percent net sales decline -- from $3.12 billion in sales in 2015 to $2.64 billion in sales.