MIAMISBURG, Ohio, Feb. 28, 2019 -- Verso Corporation (NYSE: VRS) today reported financial results for the fourth quarter and full year of 2018.
Fourth Quarter 2018 Highlights:
- Net sales up $56 million, or 9%, from fourth quarter 2017.
- Net income of $86 million, up 139% from fourth quarter 2017; $2.44 per diluted share; $22 million special item.
- Adjusted EBITDA of $96 million, up 48% versus fourth quarter 2017.
- No debt outstanding, $26 million of cash and cash equivalents at December 31, 2018.
"Considerable sales growth, materially enhanced profitability and $211 million in debt reduction marked 2018 as a fantastic, banner year in Verso's history," said Verso Chief Executive Officer B. Christopher DiSantis. "With stronger pricing, effective mix management, and new Specialty and Packaging products as underlying drivers, we continue to explore every available opportunity to capitalize on our strengthened balance sheet, build a more diversified, sustainable business, and create value for our stockholders."
Results of Operations – Comparison of Three Months Ended December 31, 2018 to Three Months Ended December 31, 2017
Comments on Results of Operations - Comparison of Three Months Ended December 31, 2018 to Three Months Ended December 31, 2017
- Net sales in the fourth quarter of 2018 increased by $56 million or 9% compared to the prior year. This growth in sales is primarily attributable to higher specialty paper and pulp sales volume, an increase in packaging paper volume from the restart of previously shuttered No. 3 paper machine at our Androscoggin Mill, increased price across all product lines and favorable product mix, partially offset by general softening of demand for coated papers.
- Operating income was $63 million in the fourth quarter of 2018, an increase of $40 million compared to the fourth quarter of 2017. This increase in operating income is primarily attributable to favorable average net selling price and product mix, lower SG&A expense and lower restructuring charges, partially offset by decreased total sales volume, higher raw material costs and higher planned major maintenance costs, primarily because of timing related to major maintenance outages.
- SG&A expense in the fourth quarter of 2018 decreased $2 million compared to the same period in 2017, primarily attributable to lower costs associated with our strategic alternatives initiative.
- Restructuring charges in the fourth quarter of 2018 decreased $2 million compared to the same period in 2017, primarily attributable to the closure and relocation of the Memphis office headquarters and closure of our Wickliffe Mill in 2017.
- Interest expense in the fourth quarter of 2018 decreased $8 million over the same period in 2017, driven by the reduction in amounts outstanding under our revolving credit facility and the payoff of our term loan on September 10, 2018.
- Other (income) expense in the fourth quarter of 2018 includes $22 million of income related to a countervailing duty Settlement Agreement with certain Canadian producers of supercalendered paper. Additionally, the fourth quarter of 2018 and 2017 include income of $3 million and $7 million, respectively, associated with the non-operating components of net periodic pension cost (income) in connection with the adoption of a new accounting standard in the first quarter of 2018. Other (income) expense in the fourth quarter of 2017 also includes $7 million of income related to the extinguishment of our obligation in December 2017 in connection with the unwind of a New Market Tax Credit transaction.