Veritiv (VRTV) Tops Q1 EPS by $1.20, Revenues Beat

Veritiv (NYSE: VRTV) reported Q1 EPS of ($0.02), $1.20 better than the analyst estimate of ($1.22). Revenue for the quarter came in at $1.7 billion versus the consensus estimate of $1.63 billion.

"Our consolidated first quarter 2020 results were highlighted by a significant improvement in Adjusted EBITDA and free cash flow as our Optimization program led to improved margins, a reduction in our overall cost structure, and more effective working capital management," said Mary Laschinger, Chairman and CEO of Veritiv Corporation. "As an essential business operating in this challenging environment, we will continue to prioritize and ensure the safety and well-being of our employees, serve the needs of our customers and suppliers and protect the business for the long term. We believe the flexibility of our business model and adequate liquidity position us well to manage the impact of the Coronavirus on our business."

For the three months ended March 31, 2020, compared to the three months ended March 31, 2019:

• Net sales were $1.7 billion, a decrease of 12.1% from the prior year. Net sales decreased 13.4% from the prior year, excluding the negative effect of foreign currency (0.1%) and the positive effect of one more shipping day (1.4%) in the first quarter of 2020.
• Net loss was $(0.4) million, compared to net loss of $(26.7) million in the prior year. There were no net integration, acquisition and restructuring charges in the first quarter of 2020 compared to $6.7 million in the prior year.
• Basic and diluted loss per share were $(0.02), compared to $(1.68) in the prior year.
• Adjusted EBITDA was $36.2 million, an increase of 77.5% from the prior year.
• Adjusted EBITDA as a percentage of net sales was 2.1%, an increase of 100 basis points from the prior year.

For the quarter ended March 31, 2020, net cash flows provided by operating activities were $84.8 million and free cash flow was $75.9 million.

"Our first quarter free cash flow generation was strong principally due to lower inventories and higher accounts payable, in part because of continued process improvements from our Optimization efforts," said Stephen Smith, Senior Vice President and Chief Financial Officer of Veritiv Corporation. "Our liquidity position remains solid, having recently refinanced our Asset-Based Lending Facility under substantially similar terms and extending the Facility to 2025. At the end of the first quarter, we had approximately $286 million of available borrowing capacity under the Facility. Also at the end of March 2020, our net debt to Adjusted EBITDA leverage ratio was 3.5x, down from 4.7x in the prior year period."

For earnings history and earnings-related data on Veritiv (VRTV) click here.

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