UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 9, 2018
_____________________
VERSO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 001-34056 | 75-3217389 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
8540 Gander Creek Drive
Miamisburg, Ohio 45342
(Address, including zip code, of principal executive offices)
(877) 855-7243
(Registrants’ telephone number, including area code)
_______________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On May 9, 2018, Verso Corporation (“Verso”) issued a press release announcing its financial results for the fiscal quarter ended March 31, 2018. A copy of the press release is included as Exhibit 99.1 to this report. The press release, including the information contained therein, is furnished pursuant to Item 2.02, is not to be considered “filed” under the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any of Verso’s previous or future filings under the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit | |||
Number | Description of Exhibit | ||
99.1 | Press release issued by Verso on May 9, 2018. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 9, 2018 | |||
VERSO CORPORATION | |||
By: | /s/ Allen J. Campbell | ||
Allen J. Campbell | |||
Senior Vice President and Chief Financial Officer |
Verso Corporation Reports First Quarter 2018 Financial Results
MIAMISBURG, Ohio, May 9, 2018 /PRNewswire/ -- Verso Corporation (NYSE: VRS) today reported financial results for the first quarter of 2018, including net sales of $639 million, net loss of $2 million, and Adjusted EBITDA of $41 million.
Overview
"Verso had a good start in the first quarter of 2018, with sales revenue up 4 percent to $639 million, Adjusted EBITDA (a non-GAAP measure) up 58 percent to $41 million, and Adjusted EBITDA margin up 2.2 percentage points compared to the first quarter of 2017," said Verso Chief Executive Officer, B. Christopher DiSantis. "We continued to grow our specialty papers business, now 24 percent of total revenue, and are seeing the benefits of our SG&A cost improvement initiatives, with an improvement of $8 million versus the first quarter of 2017. Looking ahead, we have positioned Verso well to benefit from improved operating rates and are building a better business."
Results of Operations – Comparison of Three Months Ended March 31, 2018 to Three Months Ended March 31, 2017 | |||||
| |||||
| Three Months Ended
|
| Three Month | ||
(Dollars in millions) | 2017 |
| 2018 |
| $ Change |
Net sales | $ 616 |
| $ 639 |
| $ 23 |
Costs and expenses: |
|
|
|
|
|
Cost of products sold (exclusive of depreciation, |
|
|
|
|
|
amortization and depletion) | 562 |
| 581 |
| 19 |
Depreciation, amortization and depletion | 33 |
| 27 |
| (6) |
Selling, general and administrative expenses | 33 |
| 25 |
| (8) |
Restructuring charges | 2 |
| 1 |
| (1) |
Operating income (loss) | (14) |
| 5 |
| 19 |
Interest expense | 9 |
| 11 |
| 2 |
Other (income) expense | (2) |
| (4) |
| (2) |
Income (loss) before income taxes | (21) |
| (2) |
| 19 |
Income tax expense | - |
| - |
| - |
Net income (loss) | $ (21) |
| $ (2) |
| $ 19 |
Comments to Results of Operations - Comparison of Three Months Ended March 31, 2018 to Three Months Ended March 31, 2017
Guidance
The Company is providing the following guidance:
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
EBITDA consists of earnings before interest, taxes, depreciation, and amortization. Adjusted EBITDA reflects adjustments to EBITDA to eliminate the impact of certain items that we do not consider to be indicative of our ongoing performance. We use EBITDA and Adjusted EBITDA as a way of evaluating our performance relative to that of our peers and to assess compliance with our credit facilities. We believe that Adjusted EBITDA is a non-GAAP operating performance measure commonly used in our industry that provides investors and analysts with a measure of ongoing operating results unaffected by differences in capital structures, capital investment cycles, and ages of related assets among otherwise comparable companies.
We believe that the supplemental adjustments applied in calculating Adjusted EBITDA are reasonable and appropriate to provide additional information to investors.
Because EBITDA and Adjusted EBITDA are not measurements determined in accordance with Generally Accepted Accounting Principles (GAAP) and are susceptible to varying calculations, EBITDA and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies. You should consider our EBITDA and Adjusted EBITDA in addition to, and not as a substitute for, or superior to, our operating or net income or cash flows from operating activities, which are determined in accordance with GAAP.
The following table reconciles Net income (loss) to EBITDA and Adjusted EBITDA for the presented periods:
|
| Three Months Ended March 31, | ||
(Dollars in millions) | 2017 |
| 2018 | |
Net income (loss) | $ (21) |
| $ (2) | |
Income tax expense | - |
| - | |
Interest expense, net | 9 |
| 11 | |
Depreciation, amortization and depletion | 33 |
| 27 | |
EBITDA | $ 21 |
| $ 36 | |
Adjustments to EBITDA: |
|
|
| |
| Restructuring charges (1) | 2 |
| 1 |
| Strategic initiatives costs (2) | - |
| 2 |
| Other items, net (3) | 3 |
| 2 |
Adjusted EBITDA | $ 26 |
| $ 41 | |
|
|
|
|
|
(1) | Charges are primarily associated with the closure and relocation of the Memphis office headquarters and closure of the Wickliffe mill. | |||
(2) | Professional fees and other charges associated with strategic alternatives initiative. | |||
(3) | For 2017, costs incurred in connection with the re-engineering of information systems, amortization of non-cash incentive compensation, costs associated with the temporary idling of the No. 3 paper machine at the Androscoggin mill, and miscellaneous other non-recurring adjustments. For 2018, amortization of non-cash incentive compensation, legal settlement gain associated with prior closed mill and miscellaneous other non-recurring adjustments. |
About Verso
Verso Corporation is the turn-to company for those looking to successfully navigate the complexities of paper sourcing and performance. The leading North American producer of printing and specialty papers and pulp, Verso provides insightful solutions that help drive improved customer efficiency, productivity, brand awareness and business results. Verso's long-standing reputation for quality and reliability is directly tied to our vision to be a company with passion that is respected and trusted by all. Verso's passion is rooted in ethical business practices that demand safe workplaces for our employees and sustainable wood sourcing for our products. This passion, combined with our flexible manufacturing capabilities and an unmatched commitment to product performance, delivery and service, make Verso a preferred choice among commercial printers, paper merchants and brokers, converters, publishers and other end users. For more information, visit us online at versoco.com.
Forward-Looking Statements
In this press release, all statements that are not purely historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this press release include, but are not limited to, our guidance for the second quarter of 2018 and the full year of 2018. Forward-looking statements may be identified by the words "believe," "expect," "anticipate," "project," "plan," "estimate," "intend," "potential" and other similar expressions. Forward-looking statements are based on currently available business, economic, financial, and other information and reflect management's current beliefs, expectations, and views with respect to future developments and their potential effects on Verso. Actual results could vary materially depending on risks and uncertainties that may affect Verso and its business. Verso's actual actions and results may differ materially from what is expressed or implied by these statements due to a variety of factors, including those risks and uncertainties listed under the caption "Risk Factors" in Verso's Form 10-K for the fiscal year ended December 31, 2017 and from time to time in Verso's other filings with the Securities and Exchange Commission. Verso assumes no obligation to update any forward-looking statement made in this press release to reflect subsequent events or circumstances or actual outcomes.
Conference Call
Verso will host a conference call on Wednesday, May 9, 2018 at 9 a.m. (EDT) to discuss first quarter 2018 financial results. Analysts and investors may access the live conference call only by dialing 888-317-6003 (U.S. toll-free), 866-284-3684 (Canada toll-free) or 412-317-6061 (international) and referencing elite entry number 9692788 and Verso Corporation. To register, please dial in 10 minutes before the conference call begins. The news release and first quarter 2018 results will be available on Verso's website at http://investor.versoco.com by navigating to the Financial Information page.
Analysts and investors may also access the live conference call and webcast by clicking on the event link https://www.webcaster4.com/Webcast/Page/1524/25758 or by visiting Verso's website at http://investor.versoco.com and navigating to the Events page. Please go to this link at least one hour before the call and follow the instructions to register, download and install any necessary audio/video software.
A telephonic replay of the call can be accessed at 877-344-7529 (U.S. toll-free), 855-669-9658 (Canada toll-free) or 412-317-0088 (international), access code 10120176. The replay will be available starting at 11 a.m. (EDT) Wednesday, May 9, 2018, and will remain available until June 9, 2018. An archive of the conference call and webcast will be available at http://investor.versoco.com starting at 11 a.m. (EDT) Wednesday, May 9, 2018, and will remain available for 120 days.
CONTACT: Investor contact: investor.relations@versoco.com, 937-528-3220; Media contact: Kathi Rowzie, Vice President, Communications and Public Affairs, 937-528-3700, kathi.rowzie@versoco.com
\VV