Veritiv (VRTV) Tops Q4 EPS by $2.63, Revenues Beat

Veritiv (NYSE: VRTV) reported Q4 EPS of $1.90, $2.63 better than the analyst estimate of ($0.73). Revenue for the quarter came in at $1.6 billion versus the consensus estimate of $1.56 billion.

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

• Net sales were $1.6 billion, a decrease of 10.5% from the prior year.
• Income before income taxes was $41.0 million, compared to $3.9 million in the prior year.
• Net income was $32.0 million, compared to $3.4 million in the prior year. Net restructuring charges were $11.8 million in the fourth quarter of 2020 compared to $11.9 million in the prior year.
• Basic and diluted earnings per share were $2.01 and $1.90, respectively, compared to $0.21 and $0.21, respectively, in the prior year.
• Adjusted EBITDA was $61.7 million, an increase of 30.7% from the prior year.
• Adjusted EBITDA as a percentage of net sales was 3.8%, an increase of 120 basis points from the prior year.

"The combination of Packaging sales growth over prior year and improving core sales trends from the prior two quarters in our other segments led to record net income and Adjusted EBITDA in the fourth quarter," said Sal Abbate, Chief Executive Officer. "We made significant progress this year towards our vision of being a leading provider of packaging products, services and solutions. Despite the challenging market environment, the fundamentals of our business improved in a step-wise manner, driven by Packaging segment growth and the execution of our multi-year strategy, including our broad-based efficiency programs."

"We generated record cash flow in 2020 due to strong earnings and our ongoing efforts to improve working capital," said Stephen Smith, Senior Vice President and Chief Financial Officer. "At the end of December 2020, our net debt to Adjusted EBITDA leverage ratio was 2.1x, down from 4.1x in the prior year."

2021 Guidance

The 2020 Restructuring Plan, as announced in July and amended in December, remains on schedule and on target. The Company expects full year 2021 revenue to be relatively flat to prior year, with performance varying by segment. During the first half of the year, revenues are expected to be unfavorably impacted by the negative effects of the COVID-19 pandemic across all segments, with the exception of Packaging. However, the Company expects a broader economic rebound in the second half of the year.

Based on these factors, the Company expects income before taxes for full year 2021 to be in the range of $60 to $80 million and Adjusted EBITDA to be in the range of $195 to $205 million. Our 2021 free cash flow is expected to be at least $75 million, driven by earnings and continuing working capital discipline. We will continue to invest in business growth and expect capital expenditures for the year to be approximately $35 million.

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

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