PR Newswire
ATLANTA, Aug. 8, 2023
Second Quarter Highlights
ATLANTA, Aug. 8, 2023 /PRNewswire/ -- Veritiv Corporation (NYSE: VRTV), a leading full-service provider of business-to-business products, services and solutions, today announced financial results for the second quarter ended June 30, 2023.
"The second quarter highlighted the value of our diversified and complementary portfolio of products and industry verticals. Despite challenging macroeconomic conditions, Adjusted EBITDA for both Packaging and Facility Solutions improved sequentially and on a year-over-year basis, achieving record Adjusted EBITDA margins for these segments," said Sal Abbate, Chief Executive Officer. "This strong performance partially offset continued intense industry-wide destocking and slowing demand headwinds in Print Solutions, resulting in record second quarter consolidated Adjusted EBITDA margin."
Abbate concluded, "I am excited to have reached an agreement with an affiliate of Clayton, Dubilier & Rice, LLC (CD&R) to acquire Veritiv, which we believe delivers substantial value to our shareholders. This is a testament to our team's hard work and dedication over the past several years as the successful execution of our commercial and operational excellence strategies fundamentally improved our business. The transaction will further enhance our resources and offer greater financial and operational flexibility as we deliver innovative and sustainable solutions to our customers."
For the three months ended June 30, 2023, compared to the three months ended June 30, 2022:
For the six months ended June 30, 2023, compared to the six months ended June 30, 2022:
For the three months ended June 30, 2023, net cash provided by operating activities was $94.4 million and free cash flow was $91.3 million. For the six months ended June 30, 2023, net cash provided by operating activities was $165.3 million and free cash flow was $159.3 million.
"We are pleased with strong free cash flow of nearly $160 million generated during the first half of 2023." said Eric Guerin, Chief Financial Officer.
In light of the previously announced transaction with CD&R, Veritiv will not provide guidance or host a conference call or webcast to review the second quarter 2023 financial results.
1Adjusted EBITDA margin, a non-GAAP metric, is defined as Adjusted EBITDA as a percentage of net sales.
Important information regarding measures not presented in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and related reconciliations of non-GAAP financial measures to the most comparable U.S. GAAP measures can be found in the schedules to this press release, which should be thoroughly reviewed.
About Veritiv
Veritiv Corporation (NYSE: VRTV), headquartered in Atlanta, is a leading full-service provider of packaging, JanSan and hygiene products, services and solutions. Additionally, Veritiv provides print and publishing products. Serving customers in a wide range of industries both in North America and globally, Veritiv has distribution centers throughout the U.S. and Mexico, and team members around the world helping shape the success of its customers. For more information about Veritiv and its business segments visit www.veritiv.com.
Safe Harbor Provision
This release contains certain forward-looking statements that reflect Veritiv's current views with respect to certain current and future events. Specific forward-looking statements include, among others, statements regarding the consummation of the proposed transaction. These forward-looking statements are and will be, subject to many risks, uncertainties and factors which may cause future events to be materially different from these forward-looking statements or anything implied therein. These risks and uncertainties include, but are not limited to: the timing, receipt and terms and conditions of any required governmental or regulatory approvals of the proposed transaction that could reduce the anticipated benefits of or cause the parties to abandon the proposed transaction; risks related to the satisfaction of the conditions to closing the proposed transaction (including the failure to obtain necessary regulatory approvals or the necessary approvals of the Veritiv's stockholders) in the anticipated timeframe or at all; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of Veritiv's common stock; disruption from the proposed transaction making it more difficult to maintain business and operational relationships, including retaining and hiring key personnel; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement entered into in connection with the proposed transaction; risks related to disruption of management's attention from Veritiv's ongoing business operations due to the proposed transaction; significant transaction costs; the risk of litigation and/or regulatory actions related to the proposed transaction; global economic conditions; adverse industry and market conditions; the ability to retain management and other personnel; and other economic, business, or competitive factors. Any forward-looking statements in this release are based upon information available to Veritiv on the date of this release. Veritiv does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any statements expressed or implied therein will not be realized. Additional information on risk factors that could affect Veritiv may be found in Veritiv's filings with the Securities and Exchange Commission (the "SEC").
Additional Information and Where to Find it
This filing may be deemed solicitation material in respect of the proposed merger of an affiliate of Clayton, Dubilier & Rice, LLC with and into Veritiv. In connection with the proposed merger transaction, Veritiv will file with the SEC and furnish to Veritiv's stockholders a proxy statement and other relevant documents. This filing does not constitute a solicitation of any vote or approval. Stockholders are urged to read the proxy statement when it becomes available and any other documents to be filed with the SEC in connection with the proposed merger or incorporated by reference in the proxy statement because they will contain important information about the proposed merger.
Investors will be able to obtain free of charge the proxy statement and other documents filed with the SEC at the SEC's website at https://www.sec.gov. In addition, the proxy statement and Veritiv's annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge through Veritiv's website at https://ir.veritiv.com/ as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.
The directors, executive officers and certain other members of management and employees of Veritiv may be deemed "participants" in the solicitation of proxies from stockholders of Veritiv in favor of the proposed merger. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the stockholders of Veritiv in connection with the proposed merger will be set forth in the proxy statement and the other relevant documents to be filed with the SEC. You can find information about the Company's executive officers and directors in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in its definitive proxy statement for the 2023 annual meeting of stockholders as filed with the SEC on Schedule 14A on March 17, 2023.
Financial Statements
VERITIV CORPORATION | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(in millions, except per share data, unaudited) | ||||||||
| | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, | ||||
| | 2023 | | 2022 | | 2023 | | 2022 |
Net sales | | $ 1,457.3 | | $ 1,820.7 | | $ 2,967.5 | | $ 3,678.8 |
Cost of products sold (exclusive of depreciation and amortization | | 1,096.6 | | 1,410.9 | | 2,240.7 | | 2,866.3 |
Distribution expenses | | 88.7 | | 98.2 | | 178.4 | | 210.4 |
Selling and administrative expenses | | 163.5 | | 190.7 | | 334.9 | | 378.6 |
Gain on sale of businesses | | — | | (10.0) | | — | | (10.0) |
Depreciation and amortization | | 9.6 | | 11.1 | | 19.7 | | 23.8 |
Restructuring charges, net | | — | | 1.4 | | — | | 4.1 |
Operating income | | 98.9 | | 118.4 | | 193.8 | | 205.6 |
Interest expense, net | | 4.3 | | 4.0 | | 9.0 | | 7.5 |
Other (income) expense, net | | (1.9) | | (6.6) | | (0.9) | | (7.2) |
Income before income taxes | | 96.5 | | 121.0 | | 185.7 | | 205.3 |
Income tax expense | | 25.8 | | 29.9 | | 46.3 | | 35.7 |
Net income | | $ 70.7 | | $ 91.1 | | $ 139.4 | | $ 169.6 |
| | | | | | | | |
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