Verso Corporation reported financial results for the first quarter of 2018, including net sales of $639 million, net loss of $2 million, and Adjusted EBITDA of $41 million. "Verso had a good start in the first quarter of 2018, with sales revenue up 4 percent to $639 million, Adjusted EBITDA (a non-GAAP measure) up 58 percent to $41 million, and Adjusted EBITDA margin up 2.2 percentage points compared to the first quarter of 2017," said Verso Chief Executive Officer, B. Christopher DiSantis. "We continued to grow our specialty papers business, now 24 percent of total revenue, and are seeing the benefits of our SG&A cost improvement initiatives, with an improvement of $8 million versus the first quarter of 2017. Looking ahead, we have positioned Verso well to benefit from improved operating rates and are building a better business." Click Read More below for additional information.
Verso Corporation (NYSE: VRS) today reported financial results for the second quarter of 2020 and announced that it will pay a special cash dividend of $3.00 per share of common stock and a quarterly cash dividend of $0.10 per share of common stock, each to be paid on September 28, 2020.
Second Quarter 2020 Highlights:
*Net sales of $268 million, down $334 million compared to second quarter 2019
*Net loss of $(34) million or $(0.99) per diluted share, compared to net loss of $(112) million or $(3.23) per diluted share in second quarter 2019
*Adjusted EBITDA of $(9) million, compared to $44 million in second quarter 2019
“As expected, the second quarter was extremely challenging for Verso. The rapidly-evolving COVID-19 pandemic continues to force many of our end use customer segments to significantly reduce their print advertising, therefore decreasing demand for our graphic papers, and impacting our financial performance,” said Verso President and Chief Executive Officer Adam St. John. “During these uncertain and unprecedented times, the safety and health of our essential employees remain our top concern as we take decisive, proactive actions to respond to the economic environment and adverse market conditions. Strategically, the decision to idle our Duluth and Wisconsin Rapids mills allows us to streamline our business and build a stronger, more flexible operating model and product strategy around our remaining two high performing mills. We believe this strategy, together with our cost reduction efforts, including managing SG&A under 5% of revenues and controlling capital spending, will create a cash generating platform and long-term value for all of our stakeholders. As we navigate this ever changing environment, we remain steadfast in positioning our business for long-term stockholder value, including returning considerable capital to our stockholders through means such as cash dividends and share repurchases. With this additional special cash dividend, we have ramped up delivery on our commitment to return to our stockholders a substantial portion of the net cash proceeds from the sale of our Androscoggin and Stevens Point mills.”
Net sales for the second quarter of 2020 decreased by $334 million compared to the second quarter of 2019, as a result of significant declines in sales volume and unfavorable price/mix. Of the $334 million, or 55%, net sales decline, $65 million, or 11%, was attributable to the closure of our Luke Mill in June 2019 and $134 million, or 22%, was a result of the sale of our Androscoggin and Stevens Point mills in February 2020. Total company sales volume was down from 646 thousand tons during the second quarter of 2019, to 346 thousand tons during the same period of the current year. Of the 300 thousand ton volume decline, 66 thousand tons were attributable to the closure of our Luke Mill in June 2019, 131 thousand tons were a result of the sale of our Androscoggin and Stevens Point mills in February 2020 and the additional decline in volume resulted from lower customer demand driven by the COVID-19 pandemic. We expect the COVID-19 pandemic to continue to have a negative impact on our net sales in the third quarter of 2020.
Operating loss was $42 million for the second quarter of 2020, an improvement of $70 million when compared to operating loss of $112 million for the second quarter of 2019.
Operating results for the second quarter of 2020 were positively impacted by:
Lower input costs of $6 million, driven by lower chemical, energy and purchased pulp costs, partially offset by higher wood costs
Lower depreciation expense of $82 million due primarily to $76 million in accelerated depreciation associated with the closure of our Luke Mill in June 2019
Reduced planned major maintenance costs of $14 million, driven primarily by the deferral of the annual outage at our Wisconsin Rapids Mill
Lower Selling, general and administrative expenses of $13 million, driven primarily by cost reduction initiatives in connection with the sale of our Androscoggin and Stevens Point mills in February 2020, lower equity compensation expense and lower severance costs
Lower restructuring charges of $40 million associated with the closure of our Luke Mill in June 2019
Operating results for the second quarter of 2020 were negatively impacted by:
Unfavorable net selling price and product mix of $36 million
Lower sales volume resulting in a decrease of $45 million in net operating income, driven by the impact of the COVID-19 pandemic, the sale of our Androscoggin and Stevens Point mills in February 2020 and the closure of our Luke Mill in June 2019
Higher net operating expenses of $4 million driven primarily by market downtime and a necessary extension of the planned outage at our Quinnesec Mill, partially offset by improved performance and cost reduction initiatives across our mill system
more detail at: http://investor.versoco.com/2020-08-06-Verso-Corporation-Announces-3-00-Special-Cash-Dividend-and-Reports-Second-Quarter-2020-Financial-Results