Verso Corporation Reports First Quarter 2020 Financial Results

Verso Corporation (NYSE: VRS) today reported financial results for the first quarter of 2020.

First Quarter 2020 Highlights:
• Net sales of $471 million, down $168 million compared to first quarter 2019
• Net income of $54 million or $1.52 per diluted share, including $88 million gain on sale of our Androscoggin and Stevens Point mills, compared to net income of $36 million or $1.03 per diluted share in first quarter 2019
• Adjusted EBITDA of $35 million, versus $69 million in first quarter 2019

Overview
“Our top concern during the COVID-19 pandemic is taking necessary precautions to protect the health and safety of our employees, their families, and our communities, while continuing to meet the needs and expectations of our customers, suppliers, business partners and stockholders,” said Verso President and Chief Executive Officer Adam St. John. “While the pandemic-related economic slowdown has had minimal impact on our first quarter results, it is starting to put further demand pressure on our graphic papers business. We have not seen similar pressure within our specialty, packaging and pulp business. With Verso’s liquidity and healthy balance sheet, we are well positioned to face the market challenges that are ahead of us. Verso has responded quickly by using our manufacturing expertise and flexibility to accelerate product development efforts and make new grades, while trimming and managing capital allocation and reducing operational and corporate costs across the company. We believe these actions, combined with our strong financial position and healthy balance sheet, will help us successfully manage through this crisis and beyond.”

Net sales
Net sales in the first quarter of 2020 decreased $168 million, or 26%, compared to the prior year as price/mix was unfavorable and sales volume declined. Total company sales volume was down from 665 thousand tons during the first quarter of 2019, to 554 thousand tons during the first quarter of 2020. Of the 111 thousand ton volume decline, 66 thousand tons were attributable to the closure of the Luke Mill. The remaining volume reduction was due to the continued decline of graphic paper demand and the sale of our Androscoggin and Stevens Point mills during the first quarter of 2020, partially offset by an increase in sales volume of packaging papers and market pulp.

Operating income
Operating income was $76 million in the first quarter of 2020, an increase of $39 million when compared to operating income of $37 million in the first quarter of 2019.
Operating results for the first quarter of 2020 were positively impacted by:
• Lower input costs of $10 million, driven by lower chemical, energy and purchased pulp costs, partially offset by higher wood costs
• Lower freight costs of $6 million
• Lower depreciation expense of $5 million
• Reduced planned major maintenance costs of $2 million
details at: http://investor.versoco.com/2020-05-11-Verso-Corporation-Reports-First-Quarter-2020-Financial-Results

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