Veritiv (VRTV) Misses Q3 EPS by 26c, Revenues Miss

Veritiv (NYSE: VRTV) reported Q3 EPS of $0.31, $0.26 worse than the analyst estimate of $0.57. Revenue for the quarter came in at $1.9 billion versus the consensus estimate of $2.04 billion.

"Our consolidated third quarter results were highlighted by strong cash flow, as well as improved margins and Adjusted EBITDA in Packaging and Facility Solutions. However, challenges in our Print segment negatively impacted our overall revenues and earnings," said Mary Laschinger, Chairman and CEO of Veritiv Corporation. "Given the year-to-date performance in Print, and our current outlook for the remainder of the year, we are lowering our 2019 Adjusted EBITDA guidance to $150 to $160 million, down from $165 to $180 million. However, we are raising our expectation for free cash flow from at least $85 million to at least $170 million."

For the three months ended September 30, 2019, compared to the three months ended September 30, 2018:

• Net sales were $1.9 billion, a decrease of 12.2% from the prior year. Net sales decreased 13.5% 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 third quarter of 2019.
• Net income was $5.1 million, compared to net income of $1.4 million in the prior year. Net integration, acquisition and restructuring charges were $12.1 million in the third quarter of 2019 compared to $13.3 million in the prior year.
• Basic and diluted earnings per share were $0.32 and $0.31, respectively, compared to $0.09 in the prior year.
• Adjusted EBITDA was $45.0 million, a decrease of 14.6% from the prior year.
• Adjusted EBITDA as a percentage of net sales was 2.3%, a decrease of 10 basis points from the prior year.

"Improved working capital was the primary driver of our positive cash flow performance in the third quarter. Lower sales volumes and process improvements significantly reduced both accounts receivable and inventory," said Stephen Smith, Senior Vice President and Chief Financial Officer of Veritiv Corporation. "Our strong cash flow generation year-to-date has enabled significant debt reduction as our net debt to Adjusted EBITDA ratio is now 3.6x versus 4.8x in the prior year period. In addition, we have lowered our long-term debt, net of current portion, by over $270 million or 27% year-over-year."

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

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