Univar (UNVR) Tops Q1 EPS by 3c, Revenues Beat

Univar (NYSE: UNVR) reported Q1 EPS of $0.31, $0.03 better than the analyst estimate of $0.28. Revenue for the quarter came in at $2.21 billion versus the consensus estimate of $2.12 billion.

First Quarter 2020 Highlights

• Net income (loss) of $55.9 million compared to $(63.9) million in the prior year first quarter; Adjusted net income(1) of $52.3 million compared to $49.7 million in the prior year first quarter.
• Earnings (loss) per diluted share of $0.33 compared to $(0.43) per diluted share in the prior year first quarter. Adjusted earnings per diluted share(1) of $0.31 in the quarter decreased from $0.33 in the prior year first quarter.
• Adjusted EBITDA(1) increased 0.9 percent to $161.6 million with Adjusted EBITDA margin(1) of 7.3 percent.
• Net cash used in operating activities decreased to $78.2 million from $123.5 million in the first quarter last year.
• Liquidity as of March 31, 2020 was $834.8 million inclusive of $379.7 million in cash-on-hand and additional availability under committed, asset-based credit facilities.

"Our number one priority is always safety and the health and well-being of our employees. I'm extremely proud of how our organisation has been rapidly able to adapt to new ways of working. The strength of our supplier and customer relationships, operating infrastructure, and the ability of the sales force to react quickly and decisively, enabled us to execute well in a challenging market, supporting an increasing number of customers," said David Jukes, president and chief executive officer.

"I'm pleased with our performance this quarter and our strong liquidity position. We remain positive about the path we are on but will remain agile to adjust to changing demand patterns as the impact of COVID-19 continues to develop."

2020 Actions & Outlook

As previously disclosed, the Company withdrew its full year Adjusted EBITDA guidance and plans to provide an update as appropriate once it has greater clarity regarding the implications of COVID-19 and the impacts on its business.

In anticipation of a continued challenging and uncertain economic environment, the Company has been actively managing its expense base and realizing cost reductions to maintain Univar Solutions' financial health while continuing to serve its suppliers and customers' needs. These include, but are not limited to the following:

• Salaried position eliminations;
• Elimination of merit-based salary increases for salaried employees for 2020;
• Suspension of all hiring for exempt and nonexempt positions, except for critical positions;
• Temporary furloughs to match changes in demand in certain locations; and
• Reduction in travel and other discretionary spending.

These savings represent in aggregate over $40 million in anticipated cost reductions for 2020, which are incremental to the net synergies expected from the Nexeo acquisition. The company is reducing its expected Nexeo net synergies in 2020 from $40 million to $35 million due to timing delays. However, Univar Solutions' target of achieving $120 million in annual net synergies by early 2022 remains unchanged.

In addition, the Company is lowering its anticipated capital expenditures to $95-$115 million from

$120-130 million, while the Company continues to invest in key operating and digital growth projects. The Company will continue to monitor the impact of COVID-19 and may take additional cost reduction measures as needed.

For earnings history and earnings-related data on Univar (UNVR) click here.

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