Veritiv Announces Fourth Quarter and Full Year 2019 Financial Results

ATLANTA, Feb. 27, 2020 /PRNewswire/ -- Veritiv Corporation VRTV, a North American leader in business-to-business distribution solutions, today announced financial results for the fourth quarter and full year ended December 31, 2019.

"Our consolidated fourth quarter and full year 2019 results were highlighted by strong free cash flow, as well as improved Adjusted EBITDA margins in Packaging and Facility Solutions. However, challenges in our Print and Publishing segments negatively impacted our overall revenues and earnings for both the quarter and year," said Mary Laschinger, Chairman and CEO of Veritiv Corporation. "Our strong free cash flow performance in 2019 was driven by improved working capital as lower sales volumes and process improvements from our Optimization initiatives significantly reduced both accounts receivable and inventory, leading to substantial debt reduction in 2019. Looking ahead, we remain focused on growing our Packaging business, implementing our Optimization initiatives, and adapting to continuing structural declines in the print and publishing industries."    

For the three months ended December 31, 2019, compared to the three months ended December 31, 2018:

• Net sales were $1.8 billion, a decrease of 17.7% from the prior year. There was a negligible impact from foreign currency.
• Net income was $3.4 million, compared to net income of $9.3 million in the prior year. Net integration, acquisition and restructuring charges were $16.1 million in the fourth quarter of 2019 compared to $(0.2) million in the prior year.
• Basic and diluted earnings per share were $0.21 and $0.21, respectively, compared to $0.59 and $0.57, respectively, in the prior year.
• Adjusted EBITDA was $47.2 million, a decrease of 18.1% from the prior year.
• Adjusted EBITDA as a percentage of net sales was 2.6%, unchanged from the prior year.

For the year ended December 31, 2019, compared to the year ended December 31, 2018:

• Net sales were $7.7 billion, a decrease of 11.9% from the prior year. Net sales decreased 11.7% from the prior year, excluding the negative effect of foreign currency (0.2%) in 2019.
• Net loss was $(29.5) million, compared to net loss of $(15.7) million in the prior year. Net integration, acquisition and restructuring charges were $46.3 million in 2019 and $53.1 million in the prior year.
• Basic and diluted loss per share were $(1.84) compared to $(0.99) in the prior year.
• Adjusted EBITDA was $155.9 million, a decrease of 15.9% from the prior year.
• Adjusted EBITDA as a percentage of net sales was 2.0%, a decrease of 10 basis points from the prior year.

For the year ended December 31, 2019, net cash flows provided by operating activities were $281.0 million and free cash flow was $246.9 million.

Veritiv Corporation will host a live conference call and webcast today, February 27, 2020, at 10 a.m. (ET) to discuss its fourth quarter and full year 2019 financial results. To participate, callers within the U.S. and Canada can dial (833) 241-7249, and international callers can dial (647) 689-4213, both using conference ID number 7882178. Interested parties can also listen online at ir.veritivcorp.com. A replay of the call and webcast will be available online for a limited period of time at ir.veritivcorp.com shortly after the live webcast is completed.

Important information regarding U.S. generally accepted accounting principles ("U.S. GAAP") and related reconciliations of non-GAAP financial measures to the most comparable U.S. GAAP measures can be found in the schedules to this press release, which should be thoroughly reviewed.

About Veritiv

Veritiv Corporation VRTV, headquartered in Atlanta and a Fortune 500® company, is a leading North American business-to-business distributor of packaging, facility solutions, print and publishing products and services; and also a provider of logistics and supply chain management solutions. Serving customers in a wide range of industries, Veritiv has distribution centers throughout the U.S., Canada and Mexico, and team members helping shape the success of its customers. For more information about Veritiv and its business segments visit www.veritivcorp.com.

Safe Harbor Provision

Certain statements contained in this press release regarding Veritiv Corporation's (the "Company") future operating results, performance, business plans, prospects, guidance and any other statements not constituting historical fact are "forward-looking statements" subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Where possible, the words "believe," "expect," "anticipate," "continue," "intend," "should," "will," "would," "planned," "estimated," "potential," "goal," "outlook," "may," "predicts," "could," or the negative of such terms, or other comparable expressions, as they relate to the Company or its business, have been used to identify such forward-looking statements. All forward-looking statements reflect only the Company's current beliefs and assumptions with respect to future operating results, performance, business plans, prospects, guidance and other matters, and are based on information currently available to the Company. Accordingly, the statements are subject to significant risks, uncertainties and contingencies, which could cause the Company's actual operating results, performance, business plans, prospects or guidance to differ materially from those expressed in, or implied by, these statements. 

Factors that could cause actual results to differ materially from current expectations include risks and other factors described under "Risk Factors" in our Annual Report on Form 10-K and elsewhere in the Company's publicly available reports filed with the Securities and Exchange Commission ("SEC"), which contain a discussion of various factors that may affect the Company's business or financial results. Such risks and other factors, which in some instances are beyond the Company's control, include: the industry-wide decline in demand for paper and related products; increased competition from existing and non-traditional sources; adverse developments in general business and economic conditions as well as conditions in the global capital and credit markets impacting our Company and our customers; foreign currency fluctuations; our ability to attract, train and retain highly qualified employees; the effects of work stoppages, union negotiations and labor disputes; the loss of any of our significant customers; changes in business conditions in our international operations; procurement and other risks in obtaining packaging, facility products and paper from our suppliers for resale to our customers; changes in prices for raw materials; increases in the cost of fuel and third-party freight and the availability of third-party freight providers; changes in trade policies and regulations; inclement weather, widespread outbreak of an illness or responses thereto, anti-terrorism measures and other disruptions to our supply chain, distribution system and operations; our dependence on a variety of information technology and telecommunications systems and the Internet; our reliance on third-party vendors for various services; cyber-security risks; costs to comply with laws, rules and regulations, including environmental, health and safety laws, and to satisfy any liability or obligation imposed under such laws; regulatory changes and judicial rulings impacting our business; adverse results from litigation, governmental investigations or audits, or tax-related proceedings or audits; our ability to adequately protect our material intellectual property and other proprietary rights, or to defend successfully against intellectual property infringement claims by third parties; our pension and health care costs and participation in multi-employer pension, health and welfare plans; increasing interest rates; our ability to generate sufficient cash to service our debt; our ability to comply with the covenants contained in our debt agreements; our ability to refinance or restructure our debt on reasonable terms and conditions as might be necessary from time to time; changes in accounting standards and methodologies, and other events of which we are presently unaware or that we currently deem immaterial that may result in unexpected adverse operating results. The Company is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this document by wire services or Internet service providers. This press release is being furnished to the SEC through a Form 8-K. The Company's Annual Report on Form 10-K for the year ended December 31, 2019 to be filed with the SEC may contain updates to the information included in this release.

Financial Statements

Non-GAAP Measures

We supplement our financial information prepared in accordance with U.S. GAAP with certain non-GAAP measures including Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, restructuring charges, net, integration and acquisition expenses and other similar charges including any severance costs, costs associated with warehouse and office openings or closings, consolidation, and relocation and other business optimization expenses, stock-based compensation expense, changes in the LIFO reserve, non-restructuring asset impairment charges, non-restructuring severance charges, non-restructuring pension charges, net, fair value adjustments related to contingent liabilities assumed in mergers and acquisitions and certain other adjustments) because we believe investors commonly use Adjusted EBITDA and these other non-GAAP measures as key financial metrics for valuing companies. In addition, the credit agreement governing our asset-based lending facility permits us to exclude the foregoing and other charges in calculating "Consolidated EBITDA", as defined in the facility. We approximate foreign currency effects by applying the foreign currency exchange rate for the prior period to the local currency results for the current period.

Adjusted EBITDA and these other non-GAAP measures are not alternative measures of financial performance under U.S. GAAP. Non-GAAP measures do not have definitions under U.S. GAAP and may be defined differently by, and not be comparable to, similarly titled measures used by other companies. As a result, we consider and evaluate non-GAAP measures in connection with a review of the most directly comparable measure calculated in accordance with U.S. GAAP. We caution investors not to place undue reliance on such non-GAAP measures and to consider them with the most directly comparable U.S. GAAP measures. Adjusted EBITDA and these other non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analyzing our results as reported under U.S. GAAP. Please see the following tables for reconciliations of non-GAAP measures to the most comparable U.S. GAAP measures.

SOURCE Veritiv Corporation