Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | May 02, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-36479 | |
Entity Registrant Name | VERITIV CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-3234977 | |
Entity Address, Address Line One | 1000 Abernathy Road NE | |
Entity Address, Address Line Two | Building 400, Suite 1700 | |
Entity Address, City or Town | Atlanta, | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30328 | |
City Area Code | 770 | |
Local Phone Number | 391-8200 | |
Title of 12(b) Security | Common stock, $0.01 par value | |
Trading Symbol | VRTV | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 13,546,579 | |
Entity Central Index Key | 0001599489 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 1,510.2 | $ 1,858.1 |
Cost of products sold (exclusive of depreciation and amortization shown separately below) | 1,144.1 | 1,455.4 |
Distribution expenses | 89.7 | 112.2 |
Selling and administrative expenses | 171.4 | 187.9 |
Depreciation and amortization | 10.1 | 12.7 |
Restructuring charges, net | 0 | 2.7 |
Operating income | 94.9 | 87.2 |
Interest expense, net | 4.7 | 3.5 |
Other (income) expense, net | 1 | (0.6) |
Income before income taxes | 89.2 | 84.3 |
Income tax expense | 20.5 | 5.8 |
Net income | $ 68.7 | $ 78.5 |
Earnings per share: | ||
Basic (in dollars per share) | $ 5.08 | $ 5.31 |
Diluted (in dollars per share) | $ 5 | $ 5.12 |
Weighted-average shares outstanding: | ||
Basic (in shares) | 13,530 | 14,770 |
Diluted (in shares) | 13,740 | 15,320 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 68.7 | $ 78.5 | |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | 2.9 | 2.6 | |
Pension liability adjustments, net of tax | [1] | (0.1) | 0 |
Other comprehensive income (loss) | 2.8 | 2.6 | |
Total comprehensive income (loss) | $ 71.5 | $ 81.1 | |
[1]Amounts shown are net of tax impacts, if any, which for the three months ended March 31, 2023 and 2022 were not significant. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 33 | $ 40.6 |
Accounts receivable, less allowances of $24.3 and $26.7, respectively | 789.8 | 889.6 |
Inventories | 470.9 | 423.9 |
Other current assets | 101.2 | 103.7 |
Total current assets | 1,394.9 | 1,457.8 |
Property and equipment (net of accumulated depreciation and amortization of $329.1 and $325.5, respectively) | 124.2 | 127.5 |
Goodwill | 96.3 | 96.3 |
Other intangibles, net | 34.5 | 35.6 |
Deferred income tax assets | 29.4 | 29 |
Other non-current assets | 347.6 | 343.4 |
Total assets | 2,026.9 | 2,089.6 |
Current liabilities: | ||
Accounts payable | 444.6 | 452.9 |
Accrued payroll and benefits | 44.1 | 106.2 |
Other accrued liabilities | 144.2 | 154.1 |
Current portion of debt | 13.6 | 13.4 |
Total current liabilities | 646.5 | 726.6 |
Long-term debt, net of current portion | 231.9 | 264.8 |
Defined benefit pension obligations | 0.8 | 0.4 |
Other non-current liabilities | 330.4 | 341.7 |
Total liabilities | 1,209.6 | 1,333.5 |
Commitments and contingencies (Note 11) | ||
Shareholders' equity: | ||
Preferred stock, $0.01 par value, 10.0 million shares authorized, none issued | 0 | 0 |
Common stock, $0.01 par value, 100.0 million shares authorized; shares issued - 17.5 million and 17.5 million, respectively; shares outstanding - 13.5 million and 13.5 million, respectively | 0.2 | 0.2 |
Additional paid-in capital | 611.3 | 613.1 |
Accumulated earnings | 532.8 | 472.6 |
Accumulated other comprehensive loss | (9.9) | (12.7) |
Treasury stock at cost - 4.0 million and 4.0 million shares, respectively | (317.1) | (317.1) |
Total shareholders' equity | 817.3 | 756.1 |
Total liabilities and shareholders' equity | $ 2,026.9 | $ 2,089.6 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Accounts receivable, allowances | $ 24.3 | $ 26.7 |
Property and equipment, accumulated depreciation and amortization | $ 329.1 | $ 325.5 |
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 17,500,000 | 17,500,000 |
Common stock, shares outstanding (in shares) | 13,500,000 | 13,500,000 |
Treasury stock, shares (in shares) | 4,000,000 | 4,000,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating activities | ||
Net income | $ 68.7 | $ 78.5 |
Depreciation and amortization | 10.1 | 12.7 |
Amortization and write-off of deferred financing fees | 0.4 | 0.4 |
Net (gains) losses on disposition of assets and sale of businesses | 0 | (2.3) |
Provision for expected credit losses | (1.7) | (0.6) |
Deferred income tax provision | (0.2) | (12.7) |
Stock-based compensation | 1.8 | 2.8 |
Other non-cash items, net | (0.2) | 0.5 |
Changes in operating assets and liabilities | ||
Accounts receivable | 102.2 | (25.8) |
Inventories | (45.7) | (8.8) |
Other current assets | 3.5 | (1.1) |
Accounts payable | 19.1 | 4.5 |
Accrued payroll and benefits | (69.3) | (50.6) |
Other accrued liabilities | (11.5) | 1 |
Other | (6.3) | (4.4) |
Net cash provided by (used for) operating activities | 70.9 | (5.9) |
Investing activities | ||
Property and equipment additions | (2.9) | (9.4) |
Proceeds from asset sales and sale of businesses, net of cash transferred | 0.2 | 0.2 |
Proceeds from insurance related to property and equipment | 0 | 2.1 |
Net cash provided by (used for) investing activities | (2.7) | (7.1) |
Financing activities | ||
Change in book overdrafts | (29) | 20.3 |
Borrowings of long-term debt | 1,459.5 | 1,515.2 |
Repayments of long-term debt | (1,488.8) | (1,481.8) |
Payments under right-of-use finance leases | (2.5) | (3.4) |
Payments under vendor-based financing arrangements | (3.4) | (3.2) |
Purchase of treasury stock | 0 | (10.4) |
Impact of tax withholding on share-based compensation | (3.6) | (29.5) |
Dividends paid to shareholders | (8.5) | 0 |
Other | (0.2) | 0.2 |
Net cash provided by (used for) financing activities | (76.5) | 7.4 |
Effect of exchange rate changes on cash | 0.7 | 0 |
Net change in cash and cash equivalents, including cash classified within assets-held-for-sale | (7.6) | (5.6) |
Less: cash included in assets-held-for-sale, end of period | 0 | (9.9) |
Net change in cash and cash equivalents | (7.6) | (15.5) |
Cash and cash equivalents at beginning of period | 40.6 | 49.3 |
Cash and cash equivalents at end of period | 33 | 33.8 |
Supplemental cash flow information | ||
Cash paid for income taxes, net of refunds | 21.6 | 15.1 |
Cash paid for interest | 4.2 | 2.9 |
Non-cash investing and financing activities | ||
Non-cash additions to property and equipment for right-of-use finance leases and vendor-based financing arrangements | 2.7 | 15.6 |
Non-cash additions to other non-current assets for right-of-use operating leases | $ 14.3 | $ 31.2 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock Issued | Additional Paid-in Capital | Accumulated Earnings | AOCL | [1] | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2021 | 17 | ||||||
Beginning balance at Dec. 31, 2021 | $ 635.8 | $ 0.2 | $ 633.8 | $ 143.2 | $ (24.3) | $ (117.1) | |
Beginning balance (in shares) at Dec. 31, 2021 | (2.4) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 78.5 | 78.5 | |||||
Other comprehensive income (loss) | 2.6 | 2.6 | |||||
Stock-based compensation | 2.8 | 2.8 | |||||
Issuance of common stock, net of stock received for minimum tax withholdings (in shares) | 0.5 | ||||||
Issuance of common stock, net of stock received for minimum tax withholdings | (29.5) | $ 0 | (29.5) | ||||
Treasury stock purchases (in shares) | (0.1) | ||||||
Treasury stock purchases | (10.4) | $ (10.4) | |||||
Ending balance (in shares) at Mar. 31, 2022 | 17.5 | ||||||
Ending balance at Mar. 31, 2022 | 679.8 | $ 0.2 | 607.1 | 221.7 | (21.7) | $ (127.5) | |
Ending balance (in shares) at Mar. 31, 2022 | (2.5) | ||||||
Beginning balance (in shares) at Dec. 31, 2021 | 17 | ||||||
Beginning balance at Dec. 31, 2021 | $ 635.8 | $ 0.2 | 633.8 | 143.2 | (24.3) | $ (117.1) | |
Beginning balance (in shares) at Dec. 31, 2021 | (2.4) | ||||||
Ending balance (in shares) at Dec. 31, 2022 | 17.5 | 17.5 | |||||
Ending balance at Dec. 31, 2022 | $ 756.1 | $ 0.2 | 613.1 | 472.6 | (12.7) | $ (317.1) | |
Ending balance (in shares) at Dec. 31, 2022 | (4) | (4) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 68.7 | 68.7 | |||||
Other comprehensive income (loss) | 2.8 | 2.8 | |||||
Stock-based compensation | 1.8 | 1.8 | |||||
Issuance of common stock, net of stock received for minimum tax withholdings (in shares) | 0 | ||||||
Issuance of common stock, net of stock received for minimum tax withholdings | (3.6) | $ 0 | (3.6) | ||||
Dividends | $ (8.5) | (8.5) | |||||
Ending balance (in shares) at Mar. 31, 2023 | 17.5 | 17.5 | |||||
Ending balance at Mar. 31, 2023 | $ 817.3 | $ 0.2 | $ 611.3 | $ 532.8 | $ (9.9) | $ (317.1) | |
Ending balance (in shares) at Mar. 31, 2023 | (4) | (4) | |||||
[1]Accumulated other comprehensive loss. |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Summary of Significant Accounting Policies | 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Veritiv Corporation ("Veritiv" or the "Company") is a North American business-to-business full-service provider of value-added packaging products and services, as well as facility solutions and print-based products and services. Veritiv was established in 2014, following the merger of International Paper Company's xpedx distribution solutions business and UWW Holdings, Inc., the parent company of Unisource Worldwide, Inc. ("Unisource"). Veritiv operates primarily throughout the United States ("U.S.") and Mexico. On May 2, 2022, the Company sold its Veritiv Canada, Inc. business. On September 1, 2022, the Company sold its logistics solutions business. These sales did not represent strategic shifts that will have a major effect on the Company's operations or financial results and they did not meet the requirements to be classified as discontinued operations. Basis of Presentation and Principles of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for a complete set of annual audited financial statements. The accompanying unaudited financial information should be read in conjunction with the Consolidated Financial Statements and Notes contained in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") for the year ended December 31, 2022. In the opinion of management, all adjustments, including normal recurring accruals and other adjustments, considered necessary for a fair presentation of the interim financial information have been included. The operating results for the interim periods are not necessarily indicative of results for the full year, particularly in light of the Company's divestitures and the ongoing impacts of the COVID-19 pandemic and its effects on the domestic and global economies. These financial statements include all of the Company's subsidiaries. All significant intercompany transactions between Veritiv's businesses have been eliminated. Use of Estimates The preparation of unaudited financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and certain financial statement disclosures. Estimates and assumptions are used for, but not limited to, revenue recognition, right-of-use ("ROU") asset and liability valuations, accounts and notes receivable valuations, inventory valuation, employee benefit plans, long-term incentive plans, income tax contingency accruals and valuation allowances, multi-employer pension plan ("MEPP") withdrawal liabilities, contingency accruals, goodwill and other intangible asset valuations. Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, actual results may ultimately differ from these estimates and assumptions. The COVID-19 pandemic has affected Veritiv's operational and financial performance to varying degrees and the Company could continue to experience impacts including, but not limited to, charges from potential adjustments of the carrying amount of accounts and notes receivables and inventory, asset impairment charges and deferred tax valuation allowances. The extent to which the COVID-19 pandemic continues to impact the Company's business, results of operations and financial condition will depend on future developments, which are uncertain and difficult to predict. Even after the COVID-19 pandemic has subsided, the Company may experience an impact to its business as a result of any economic recession, downturn or volatility, legislative and regulatory changes or long-term changes in customer behavior. Estimates are revised as additional information becomes available. Accounting Pronouncements Recently Adopted Accounting Standards Effective January 1, 2023, the Company adopted Accounting Standards Update ("ASU") 2022-04 , Liabilities- Supplier Finance Programs (Subtopic 405-50). This standard requires disclosure of the key terms of outstanding supplier finance programs and a rollforward of the related obligations. The amendments in this update do not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. The amendments in this update are effective for fiscal years beginning after December 15, 2022 on a retrospective basis, including interim periods within those fiscal years, except for the requirement to disclose rollforward information, which is effective prospectively for fiscal years beginning after December 15, 2023. The adoption did not, and is not expected to have in the future, any material impact on the Company's related disclosures. Effective March 17, 2023, the Company adopted ASU 2020-04 , Reference Rate Reform (Topic 848). This standard provides temporary optional expedients and exceptions to accounting guidance for certain contract modifications and hedging arrangements to ease financial reporting burdens as the market transitions from the London Interbank Offered Rate ("LIBOR") and other interbank reference rates to alternative reference rates, such as Term Secured Overnight Financing Rate (''SOFR"). The guidance is available for prospective application upon its issuance and can generally be applied to contract modifications and hedging relationships entered into March 12, 2020 through December 31, 2024. On March 17, 2023, the Company modified its Asset-Based Lending Facility, incorporating the transition from LIBOR to Term SOFR. The adoption did not materially impact the Company's consolidated financial statements and related disclosures. |
Revenue Recognition and Credit
Revenue Recognition and Credit Losses | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition and Credit Losses | 2. REVENUE RECOGNITION AND CREDIT LOSSES Revenue Recognition and Composition Certain revenues are derived from shipments which are made directly from a manufacturer to a Veritiv customer. The Company is considered to be a principal to these transactions. Revenues from these sales are reported on a gross basis on the Condensed Consolidated Statements of Operations and have historically represented approximately 35% of Veritiv's total net sales. As a normal business practice, Veritiv does not enter into contracts that require more than one year to complete or that contain significant financing components. The Company considers handling and delivery as activities to fulfill its performance obligations. Billings for third-party freight are accounted for as net sales and handling and delivery costs are accounted for as distribution expenses. Veritiv enters into incentive programs with certain of its customers, which are generally based on sales to those same customers. Veritiv follows the expected value method when estimating its retrospective incentives and records the estimated amount as a reduction to gross sales when revenue is recognized. Estimates of the variable consideration are based primarily on contract terms, current customer forecasts as well as historical experience. Customer product returns are estimated based on historical experience and the identification of specific events necessitating an adjustment. The estimated return value is recognized as a reduction of gross sales and related cost of products sold. The estimated inventory returns value is recognized as part of inventories, while the estimated customer refund liability is recognized as part of other accrued liabilities on the Condensed Consolidated Balance Sheets. As of March 31, 2023 and December 31, 2022, estimated inventory returns were not significant. A customer contract liability will arise when Veritiv has received payment for goods and services but has not yet transferred the items to a customer and satisfied its performance obligations. Veritiv records a customer contract liability for performance obligations outstanding related to payments received in advance for customer deposits on equipment sales and other sale arrangements requiring prepayment, which are included in accounts payable on the Condensed Consolidated Balance Sheets. Veritiv expects to satisfy these remaining performance obligations and recognize the related revenues upon delivery of the goods and services to the customer's designated location within 12 months following receipt of the payment. Most equipment sales deposits are held for approximately 90 days and other sale arrangements requiring prepayment initially cover a 60 - 90 day period but can be renewed by the customer. See the table below for a year-to-date summary of the changes to the customer contract liabilities balance: Customer Contract Liabilities (in millions) 2023 2022 Balance at January 1, $ 16.1 $ 21.8 Payments received 11.2 15.3 Revenue recognized from beginning of year balance (5.2) (11.4) Revenue recognized from current year receipts (7.0) (5.1) Other adjustments (1) — (1.1) Balance at March 31, $ 15.1 $ 19.5 (1) Reflects liabilities removed as part of the sale of a business. Historically, the Company's ten largest customers have generated approximately 10% - 15% of its consolidated annual net sales. Veritiv's principal markets are concentrated primarily across North America. Approximately 97% of its reported net sales for the three months ended March 31, 2023 were generated in the U.S. Veritiv evaluated the nature of the products and services provided to its customers as well as the nature of the customer and the geographical distribution of its customer base and determined that the best representative level of disaggregated revenue is the product category basis. The following is a brief description of the Company's three reportable segments, organized by major product category. This segment structure is consistent with the way the Chief Operating Decision Maker, who is Veritiv's Chief Executive Officer, makes operating decisions and manages the growth and profitability of the Company's business. The Company also has a Corporate & Other category, which includes certain assets and costs not primarily attributable to any of the reportable segments. Prior to its divestiture in September 2022, the Company's logistics solutions business, which provided transportation and warehousing solutions, was also included in Corporate & Other. • Packaging – The Packaging segment provides custom and standard packaging solutions for customers based in North America and in key global markets. This segment services its customers with a full spectrum of packaging product materials within flexible, corrugated and fiber, ancillary packaging, rigid and equipment categories. The business is strategically focused on higher growth industry sectors including manufacturing, food and beverage, wholesale and retail, healthcare and transportation, as well as specialty sectors based on industry and product expertise. This segment also provides supply chain solutions, structural and graphic packaging design and engineering, automation, workflow and equipment services and kitting. • Facility Solutions – The Facility Solutions segment sources and sells cleaning, break-room and other supplies in product categories that include towels and tissues, food service, personal protective equipment, cleaning chemicals and skincare, primarily in North America. Additionally, the Company offers total cost of ownership solutions with re-merchandising, budgeting and compliance reporting and inventory management. • Print Solutions – The Print Solutions segment sells and distributes commercial printing, writing and copying products and services primarily in North America. Veritiv's broad geographic platform of operations and services, coupled with the breadth of paper and graphics products, including exclusive private brand offerings, provides a comprehensive suite of solutions in paper procurement, print management, supply chain and distribution. See Note 12, Segment and Other Information , for the disaggregation of revenue and other information related to the Company's reportable segments and Corporate & Other. Credit Losses and Other Allowances The components of the accounts receivable allowances were as follows: (in millions) March 31, 2023 December 31, 2022 Allowance for credit losses $ 14.7 $ 17.7 Other allowances (1) 9.6 9.0 Total accounts receivable allowances $ 24.3 $ 26.7 (1) Includes amounts reserved for credit memos, customer discounts, customer short pays and other miscellaneous items. Below is a year-to-date rollforward of the Company’s allowance for credit losses: Packaging and Facility Solutions Print Solutions - High Risk Print Solutions - Medium/Low Risk (in millions) U.S. U.S. U.S. Rest of world Total Balance at December 31, 2022 $ 12.8 $ 2.7 $ 1.6 $ 0.6 $ 17.7 Add / (Deduct): Provision for expected credit losses (0.5) 0.2 (0.4) 0.0 (0.7) Write-offs charged against the allowance (1.3) 0.1 0.0 (0.2) (1.4) Recoveries of amounts previously written off 0.0 0.1 0.0 — 0.1 Other adjustments (1) — (1.0) — 0.0 (1.0) Balance at March 31, 2023 $ 11.0 $ 2.1 $ 1.2 $ 0.4 $ 14.7 (1) Other adjustments represent amounts reserved for foreign currency translation adjustments and reserves for certain customer accounts where revenue is not recognized because collectability is not probable. These adjustments may also include accounts receivable allowances recorded in connection with acquisitions and divestitures. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | 3. LEASES The Company leases certain property and equipment used for operations to limit its exposure to risks related to ownership. The major leased asset categories include: real estate, delivery equipment, material handling equipment and computer and office equipment. As of March 31, 2023, the Company operated from approximately 95 distribution centers of which approximately 90 were leased. These facilities are strategically located throughout the U.S. and Mexico in order to efficiently serve the customer base in the surrounding areas while also facilitating expedited delivery services for special orders. The Company also leases various office spaces for corporate and sales functions. The components of lease expense were as follows: (in millions) Three Months Ended Lease Classification Financial Statement Classification 2023 2022 Short-term lease expense (1) Operating expenses $ 1.4 $ 0.8 Operating lease expense (2) Operating expenses $ 21.1 $ 25.1 Finance lease expense: Amortization of right-of-use assets Depreciation and amortization $ 2.6 $ 3.7 Interest expense Interest expense, net 0.4 0.7 Total finance lease expense $ 3.0 $ 4.4 Total Lease Cost $ 25.5 $ 30.3 (1) Short-term lease expense is comprised of expenses related to leases with a term of twelve months or less, which includes expenses related to month-to-month leases. (2) Sublease income and variable lease expense are not included in the above table as the amounts were not significant for the periods presented. Supplemental balance sheets and other information were as follows: (in millions, except weighted-average data) March 31, 2023 December 31, 2022 Lease Classification Financial Statement Classification Operating Leases: Operating lease right-of-use assets Other non-current assets $ 302.2 $ 304.3 Operating lease obligations - current Other accrued liabilities $ 68.6 $ 67.9 Operating lease obligations - non-current Other non-current liabilities 262.4 266.0 Total operating lease obligations $ 331.0 $ 333.9 Weighted-average remaining lease term in years 5.7 5.9 Weighted-average discount rate 4.7 % 4.6 % Finance Leases: Finance lease right-of-use assets Property and equipment $ 29.9 $ 29.7 Finance lease obligations - current Current portion of debt $ 8.7 $ 8.8 Finance lease obligations - non-current Long-term debt, net of current portion 24.3 24.1 Total finance lease obligations $ 33.0 $ 32.9 Weighted-average remaining lease term in years 3.8 3.7 Weighted-average discount rate 4.5 % 4.2 % Cash paid for amounts included in the measurement of lease liabilities was as follows: (in millions) Three Months Ended March 31, Lease Classification Financial Statement Classification 2023 2022 Operating Leases: Operating cash flows from operating leases Operating activities $ 21.4 $ 25.0 Finance Leases: Operating cash flows from finance leases Operating activities $ 0.4 $ 0.7 Financing cash flows from finance leases Financing activities 2.5 3.4 Lease Commitments Future minimum lease payments at March 31, 2023 were as follows: (in millions) Finance Leases Operating Leases (1) 2023 (excluding the three months ended March 31, 2023) $ 8.1 $ 64.5 2024 8.9 74.5 2025 8.3 61.5 2026 5.5 55.3 2027 3.0 45.9 2028 1.9 29.4 Thereafter 1.0 46.2 Total future minimum lease payments 36.7 377.3 Amount representing interest (3.7) (46.3) Total future minimum lease payments, net of interest $ 33.0 $ 331.0 (1) Future sublease income of $1.8 million is excluded from the operating leases amount in the table above. Total future minimum lease payments at March 31, 2023 for finance and operating leases, including the amount representing interest, are comprised of $375.1 million for real estate leases and $38.9 million for non-real estate leases. At March 31, 2023, the Company had committed to additional future obligations of approximately $4.8 million for real estate operating leases that have not yet commenced and therefore are not included in the table above. These leases will commence within the next three months with an average lease term of approximately five years. |
Leases | 3. LEASES The Company leases certain property and equipment used for operations to limit its exposure to risks related to ownership. The major leased asset categories include: real estate, delivery equipment, material handling equipment and computer and office equipment. As of March 31, 2023, the Company operated from approximately 95 distribution centers of which approximately 90 were leased. These facilities are strategically located throughout the U.S. and Mexico in order to efficiently serve the customer base in the surrounding areas while also facilitating expedited delivery services for special orders. The Company also leases various office spaces for corporate and sales functions. The components of lease expense were as follows: (in millions) Three Months Ended Lease Classification Financial Statement Classification 2023 2022 Short-term lease expense (1) Operating expenses $ 1.4 $ 0.8 Operating lease expense (2) Operating expenses $ 21.1 $ 25.1 Finance lease expense: Amortization of right-of-use assets Depreciation and amortization $ 2.6 $ 3.7 Interest expense Interest expense, net 0.4 0.7 Total finance lease expense $ 3.0 $ 4.4 Total Lease Cost $ 25.5 $ 30.3 (1) Short-term lease expense is comprised of expenses related to leases with a term of twelve months or less, which includes expenses related to month-to-month leases. (2) Sublease income and variable lease expense are not included in the above table as the amounts were not significant for the periods presented. Supplemental balance sheets and other information were as follows: (in millions, except weighted-average data) March 31, 2023 December 31, 2022 Lease Classification Financial Statement Classification Operating Leases: Operating lease right-of-use assets Other non-current assets $ 302.2 $ 304.3 Operating lease obligations - current Other accrued liabilities $ 68.6 $ 67.9 Operating lease obligations - non-current Other non-current liabilities 262.4 266.0 Total operating lease obligations $ 331.0 $ 333.9 Weighted-average remaining lease term in years 5.7 5.9 Weighted-average discount rate 4.7 % 4.6 % Finance Leases: Finance lease right-of-use assets Property and equipment $ 29.9 $ 29.7 Finance lease obligations - current Current portion of debt $ 8.7 $ 8.8 Finance lease obligations - non-current Long-term debt, net of current portion 24.3 24.1 Total finance lease obligations $ 33.0 $ 32.9 Weighted-average remaining lease term in years 3.8 3.7 Weighted-average discount rate 4.5 % 4.2 % Cash paid for amounts included in the measurement of lease liabilities was as follows: (in millions) Three Months Ended March 31, Lease Classification Financial Statement Classification 2023 2022 Operating Leases: Operating cash flows from operating leases Operating activities $ 21.4 $ 25.0 Finance Leases: Operating cash flows from finance leases Operating activities $ 0.4 $ 0.7 Financing cash flows from finance leases Financing activities 2.5 3.4 Lease Commitments Future minimum lease payments at March 31, 2023 were as follows: (in millions) Finance Leases Operating Leases (1) 2023 (excluding the three months ended March 31, 2023) $ 8.1 $ 64.5 2024 8.9 74.5 2025 8.3 61.5 2026 5.5 55.3 2027 3.0 45.9 2028 1.9 29.4 Thereafter 1.0 46.2 Total future minimum lease payments 36.7 377.3 Amount representing interest (3.7) (46.3) Total future minimum lease payments, net of interest $ 33.0 $ 331.0 (1) Future sublease income of $1.8 million is excluded from the operating leases amount in the table above. Total future minimum lease payments at March 31, 2023 for finance and operating leases, including the amount representing interest, are comprised of $375.1 million for real estate leases and $38.9 million for non-real estate leases. At March 31, 2023, the Company had committed to additional future obligations of approximately $4.8 million for real estate operating leases that have not yet commenced and therefore are not included in the table above. These leases will commence within the next three months with an average lease term of approximately five years. |
Restructuring Charges
Restructuring Charges | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | 4. RESTRUCTURING CHARGES 2020 Restructuring Plan During 2020, the Company initiated a restructuring plan (the "2020 Restructuring Plan") to (1) respond to the impact of the COVID-19 pandemic on its business operations, (2) address the ongoing secular changes in its print and publishing operations and (3) further align its cost structure with ongoing business needs as the Company executes on its stated corporate strategy. As of December 31, 2022, the 2020 Restructuring Plan was complete. See Note 12, Segment and Other Information , for the impact that charges from this restructuring plan had on the Company's reportable segments. Other direct costs reported in the tables below include facility closing costs and other incidental costs associated with the development, communication, administration and implementation of these initiatives; unless otherwise indicated, costs incurred exclude any restructuring gains or losses on lease terminations and asset disposals. The following table presents a summary of restructuring charges, net, showing the cumulative amounts since the initiatives began: (in millions) Severance and Related Costs Other Direct Costs (Gain) Loss on Sale of Assets and Other Total Cumulative $ 41.4 $ 36.6 $ (8.4) $ 69.6 The following is a summary of the Company's 2020 Restructuring Plan liability activity for the current year: (in millions) Severance and Related Costs Other Direct Costs Total Balance at December 31, 2022 $ 0.9 $ 2.3 $ 3.2 Payments (0.4) (0.3) (0.7) Other non-cash items (0.1) 0.0 (0.1) Balance at March 31, 2023 $ 0.4 $ 2.0 $ 2.4 The total liability in the table above primarily consists of obligations to make future lease payments through the end of 2024 for properties that were exited before the lease expired; the majority of the noted severance obligation is expected to be paid by the end of 2023. The following is a summary of the Company's 2020 Restructuring Plan liability activity for the prior year comparable period: (in millions) Severance and Related Costs Other Direct Costs Total Balance at December 31, 2021 $ 4.7 $ 3.7 $ 8.4 Costs incurred 0.4 1.4 1.8 Payments (2.3) (2.1) (4.4) Balance at March 31, 2022 $ 2.8 $ 3.0 $ 5.8 In addition to the costs incurred in the table above, during the three months ended March 31, 2022, the Company expensed $0.9 million of Other Direct Costs, which was prepaid at December 31, 2021. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 5. DEBT The Company's debt obligations were as follows: (in millions) March 31, 2023 December 31, 2022 Asset-Based Lending Facility (the "ABL Facility") $ 199.9 $ 229.2 Commercial card program 1.4 1.6 Vendor-based financing arrangements 11.2 14.5 Finance leases 33.0 32.9 Total debt 245.5 278.2 Less: current portion of debt (13.6) (13.4) Long-term debt, net of current portion $ 231.9 $ 264.8 ABL Facility On March 17, 2023, the Company amended its ABL Facility to, among other things, replace LIBOR provisions with analogous SOFR provisions. The Company currently expects to complete the full transition to Term SOFR in the second quarter of 2023. All other significant terms remained substantially the same. The ABL Facility has aggregate commitments of $1.1 billion, a maturity date of May 20, 2026 and interest rates which are based on LIBOR, Term SOFR or the prime rate plus a margin rate. Availability under the ABL Facility is determined based upon a monthly borrowing base calculation which includes eligible customer receivables and inventory, less outstanding borrowings, letters of credit and certain designated reserves. As of March 31, 2023, the available additional borrowing capacity under the ABL Facility was approximately $681.8 million. As of March 31, 2023, the Company held $8.6 million in outstanding letters of credit. The ABL Facility has a springing minimum fixed charge coverage ratio of at least 1.00 to 1.00 on a trailing four-quarter basis, which will be tested only when specified availability is less than the limits outlined under the ABL Facility. At March 31, 2023, the above test was not applicable and based on information available as of the date of this report it is not expected to be applicable in the next 12 months. Commercial Card Program The Company has a commercial purchasing card program that is used for business purpose purchasing and must be paid in-full monthly. At March 31, 2023, the card carried a maximum credit limit of $37.5 million. The net change in the outstanding balance is included in other financing activities on the Condensed Consolidated Statements of Cash Flows. Vendor-Based Financing Arrangements On occasion, the Company enters into long-term vendor-based financing arrangements with suppliers to obtain products, services or property in exchange for extended payment terms. During the three months ended March 31, 2022, the Company entered into a vendor-based financing agreement with a principal amount of $18.5 million to finance the acquisition of certain internal use software licenses which is being paid in annual installments over a five-year term. The payments associated with this arrangement are classified as financing activities on the Condensed Consolidated Statements of Cash Flows. The Company has not entered into any other similar arrangements in the current year period. Finance Leases See Note 3, Leases , for additional information related to the Company's finance leases. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. INCOME TAXES The Company calculated the expense for income taxes during the three months ended March 31, 2023 and 2022, by applying an estimate of the annual effective tax rate for the full fiscal year to "ordinary" income (pre-tax income excluding unusual or infrequently occurring discrete items) for the reporting periods. The following table presents the Company's expense for income taxes and the effective tax rates: Three Months Ended March 31, (in millions) 2023 2022 Income before income taxes $ 89.2 $ 84.3 Income tax expense 20.5 5.8 Effective tax rate 23.0 % 6.9 % The difference between the Company's effective tax rates for the three months ended March 31, 2023 and 2022 and the U.S. statutory tax rate of 21.0% primarily relates to state income taxes (net of federal income tax benefit), vesting of stock compensation and non-deductible expenses. Additionally, the effective tax rate for the three months ended March 31, 2022 includes recognition of a deferred tax asset on the Company's investment in a foreign subsidiary. |
Defined Benefit Plans
Defined Benefit Plans | 3 Months Ended |
Mar. 31, 2023 | |
Retirement Benefits [Abstract] | |
Defined Benefit Plans | 7. DEFINED BENEFIT PLANS Veritiv maintains an open defined benefit pension plan in the U.S. for employees covered by certain collectively bargained agreements. Veritiv also maintains a defined benefit plan in the U.S., which includes frozen cash balance accounts for certain former Unisource employees, and formerly maintained similar plans for Canadian employees prior to the sale of Veritiv Canada, Inc. No other employees participate in Veritiv-sponsored defined benefit pension plans. Effective December 1, 2021, the Company divided the U.S. Veritiv Pension Plan by establishing a new Veritiv Hourly Pension Plan to provide benefits to certain employees who were accruing a benefit under the U.S. Veritiv Pension Plan pursuant to the terms of a collective bargaining agreement. Veritiv currently has the intent to terminate and settle the U.S. Veritiv Pension Plan by the end of 2023. The Veritiv Hourly Pension Plan will remain open. Total net periodic benefit cost (credit) associated with these plans is summarized below: Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 (in millions) U.S. U.S. Canada Components of net periodic benefit cost (credit): Service cost $ 0.4 $ 0.8 $ 0.1 Interest cost $ 0.6 $ 0.3 $ 0.6 Expected return on plan assets (0.6) (0.5) (1.1) Total other components $ 0.0 $ (0.2) $ (0.5) Net periodic benefit cost (credit) $ 0.4 $ 0.6 $ (0.4) The components of net periodic benefit cost (credit) other than the service cost component are included in other (income) expense, net on the Condensed Consolidated Statements of Operations. Amounts are generally amortized from accumulated other comprehensive loss over the expected future working lifetime of active plan participants. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 8. FAIR VALUE MEASUREMENTS At March 31, 2023 and December 31, 2022, the carrying amounts of cash and cash equivalents, receivables, payables, other components of other current assets and other accrued liabilities, and the short-term debt associated with the commercial card program approximate their fair values due to the short maturity of these items. Cash and cash equivalents may include highly-liquid investments with original maturities to the Company of three months or less that are readily convertible into known amounts of cash. Debt and Other Obligations Borrowings under the ABL Facility are at variable market interest rates, and accordingly, the carrying amount approximates fair value, which is a Level 2 measurement. The Company's one interest rate cap agreement, which was related to the ABL Facility, expired on September 13, 2022. Prior to its expiration, the fair value of the interest rate cap was derived from a discounted cash flow analysis based on the terms of the agreement and Level 2 data for the forward interest rate curve adjusted for the Company's credit risk and was not significant for the periods presented in this report. See Note 5, Debt , for additional information regarding the Company's ABL Facility and other obligations. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 9. EARNINGS PER SHARE Basic earnings per share for Veritiv common stock is calculated by dividing net income by the weighted-average number of shares of common stock outstanding during the respective periods. Diluted earnings per share is similarly calculated, except that the denominator is increased to include the number of additional common shares that would have been outstanding during those periods if the dilutive potential common shares had been issued, using the treasury stock method, except where the inclusion of such common shares would have an antidilutive impact. A summary of the numerators and denominators used in the basic and diluted earnings per share calculations is as follows: Three Months Ended (in millions, except per share data) 2023 2022 Numerator: Net income $ 68.7 $ 78.5 Denominator: Weighted-average shares outstanding – basic 13.53 14.77 Dilutive effect of stock-based awards 0.21 0.55 Weighted-average shares outstanding – diluted 13.74 15.32 Earnings per share: Basic $ 5.08 $ 5.31 Diluted $ 5.00 $ 5.12 Antidilutive stock-based awards excluded from computation of diluted earnings per share ("EPS") 0.02 0.14 Performance stock-based awards excluded from computation of diluted EPS because performance conditions had not been met 0.08 0.00 |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Shareholders' Equity | 10. SHAREHOLDERS' EQUITY Dividends The following table summarizes the Company's dividend declarations and payments made during the current year period. There were no comparable transactions in the prior year period. Declaration Date Record Date Payable Date Dividend Per Share Payment (in millions) February 27, 2023 March 9, 2023 March 31, 2023 $ 0.63 $ 8.5 May 8, 2023 May 18, 2023 June 5, 2023 0.63 N/A Total $ 1.26 $ 8.5 The payment of future dividends remains subject to the discretion of the Company's Board of Directors and will depend upon various factors then existing, including earnings, financial condition, results of operations, capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends, restrictions imposed by applicable law, general business conditions and other factors that Veritiv's Board of Directors may deem relevant. Treasury Stock - Share Repurchase Program On March 1, 2022, Veritiv announced that its Board of Directors authorized a $200 million share repurchase program (the "2022 Share Repurchase Program"). The 2022 Share Repurchase Program authorizes the Company, from time to time, to purchase shares of its common stock through open market transactions, privately negotiated transactions, forward, derivative or accelerated repurchase transactions, tender offers or otherwise, including Rule 10b5-1 trading plans, in accordance with all applicable securities laws and regulations. The timing and method of any repurchases, which will depend on a variety of market factors, including market conditions, are subject to results of operations, financial conditions, cash requirements and other factors. This authorization may be suspended, terminated, increased or decreased by the Board of Directors at any time. During the month ended March 31, 2022, the Company repurchased 78,025 shares of its common stock at a cost of approximately $10.4 million under its 2022 Share Repurchase Program. During the year ended December 31, 2022, the Company completed its repurchases under the 2022 Share Repurchase Program by repurchasing 1,564,420 shares of its common stock at a cost of $200 million, reaching the program's authorized repurchase limit. Veritiv Omnibus Incentive Plan In accordance with the Company's 2014 Omnibus Incentive Plan, as amended and restated as of March 8, 2017, shares of the Company's common stock were issued to plan participants whose Restricted Stock Units, Performance Share Units, Market Condition Performance Share Units and/or non-employee director grants (grants not deferred) vested during those periods. The net share issuance is included on the Condensed Consolidated Statements of Shareholders' Equity for the three months ended March 31, 2023 and 2022. The related cash flow impacts are included in financing activities on the Condensed Consolidated Statements of Cash Flows. For additional information related to these plans, refer to the Company's Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2022. See the table below for information related to these transactions. (in millions) 2023 2022 Three months ended March 31, Shares issued 0.1 0.7 Shares recovered for minimum tax withholding (0.1) (0.2) Net shares issued 0.0 0.5 Accumulated Other Comprehensive Loss ("AOCL") Comprehensive income (loss) is reported on the Condensed Consolidated Statements of Comprehensive Income (Loss) and consists of net income and other gains and losses affecting shareholders' equity that, under U.S. GAAP, are excluded from net income. The following tables provide the components of AOCL (amounts are shown net of their related income tax effects, if any): (in millions) Foreign currency translation adjustments Retirement liabilities AOCL Balance at December 31, 2022 $ (16.6) $ 3.9 $ (12.7) Unrealized net gains (losses) arising during the period 2.9 (0.1) 2.8 Net current period other comprehensive income (loss) 2.9 (0.1) 2.8 Balance at March 31, 2023 $ (13.7) $ 3.8 $ (9.9) (in millions) Foreign currency translation adjustments Retirement liabilities Interest rate cap AOCL Balance at December 31, 2021 $ (25.2) $ 1.0 $ (0.1) $ (24.3) Unrealized net gains (losses) arising during the period 2.6 0.0 0.0 2.6 Net current period other comprehensive income (loss) 2.6 0.0 0.0 2.6 Balance at March 31, 2022 $ (22.6) $ 1.0 $ (0.1) $ (21.7) |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company is involved in various lawsuits, claims and regulatory and administrative proceedings arising out of its business relating to general commercial and contractual matters, governmental regulations, intellectual property rights, labor and employment matters, tax and other actions. Although the ultimate outcome of any legal proceeding or investigation cannot be predicted with certainty, based on present information, including the Company's assessment of the merits of the particular claim, the Company does not expect that any asserted or unasserted legal claims or proceedings, individually or in the aggregate, will have a material adverse effect on its results of operations, financial condition or cash flows. MEPPs The Company records an estimated undiscounted charge when it becomes probable that it has incurred a withdrawal liability when exiting a MEPP. Final charges for MEPP withdrawals are not known until the plans issue their respective determinations. As a result, these estimates may increase or decrease depending upon the final determinations. Charges not related to the Company's restructuring efforts are recorded as distribution expenses on the Condensed Consolidated Statements of Operations. Initial amounts are recorded as other non-current liabilities on the Condensed Consolidated Balance Sheets. Teamsters Pension Trust Fund of Philadelphia and Vicinity During the fourth quarter of 2022, in the course of negotiations for a collective bargaining agreement, Veritiv negotiated a complete withdrawal from the Teamsters Pension Trust Fund of Philadelphia and Vicinity to take effect on December 31, 2024, and recognized an estimated complete withdrawal liability of $4.9 million as of December 31, 2022, which was unchanged as of March 31, 2023. The withdrawal charge was recorded in distribution expenses as it was not related to a restructuring activity. As of March 31, 2023, the Company has not yet received the determination letter for the complete withdrawal from the Teamsters Pension Trust Fund of Philadelphia and Vicinity. The Company expects that payments will occur over an approximate 19-year period. Minneapolis Food Distributors Ind Pension Plan During the fourth quarter of 2021, in the course of negotiations for a collective bargaining agreement, Veritiv negotiated a complete withdrawal from the Minneapolis Food Distributors Ind Pension Plan to take effect on July 31, 2022, and recognized an estimated complete withdrawal liability of $0.5 million as of December 31, 2021. During the first quarter of 2023, the Company received the determination letter and recognized a final withdrawal liability of $0.6 million. The Company expects to make payments over an approximate four-year period. Western Pennsylvania Teamsters and Employers Pension Fund During the first quarter of 2020, Veritiv negotiated the complete withdrawal from the Western Pennsylvania Teamsters and Employers Pension Fund (the "Western Pennsylvania Fund"), a MEPP related to the second bargaining unit at its Warrendale, Pennsylvania location and recognized an estimated complete withdrawal liability of $7.1 million, which was unchanged as of March 31, 2023. During the second quarter of 2019, in the course of negotiations for a collective bargaining agreement, Veritiv negotiated a partial withdrawal from the Western Pennsylvania Fund and recognized an estimated partial withdrawal liability of $6.5 million, which was unchanged as of March 31, 2023. As of March 31, 2023, the Company has not yet received the determination letters for the full and partial withdrawals from the Western Pennsylvania Fund. The Company expects that payments will occur over an approximate 20-year period, which could run consecutively. |
Segment and Other Information
Segment and Other Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment and Other Information | 12. SEGMENT AND OTHER INFORMATION Veritiv's business is organized under three reportable segments: Packaging, Facility Solutions and Print Solutions. See Note 2, Revenue Recognition and Credit Losses , for descriptions of the Company's reportable segments and Corporate & Other. The following table presents net sales, Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, restructuring charges, net, integration and acquisition expenses and other similar charges including any severance costs, costs associated with warehouse and office openings or closings, consolidation, and relocation and other business optimization expenses, stock-based compensation expense, changes in the LIFO reserve, non-restructuring asset impairment charges, non-restructuring severance charges, non-restructuring pension charges (benefits), fair value adjustments related to contingent liabilities assumed in mergers and acquisitions and certain other adjustments), which is the metric management uses to assess operating performance of the segments, and certain other measures for each of the reportable segments and Corporate & Other for the periods presented: (in millions) Packaging Facility Solutions Print Solutions Total Reportable Segments Corporate & Other Total Three Months Ended March 31, 2023 Net sales $ 895.4 $ 180.2 $ 434.6 $ 1,510.2 $ — $ 1,510.2 Adjusted EBITDA 96.4 15.4 37.2 149.0 (45.2) Depreciation and amortization 5.4 1.2 1.1 7.7 2.4 10.1 Three Months Ended March 31, 2022 Net sales $ 1,003.1 $ 229.4 $ 596.6 $ 1,829.1 $ 29.0 $ 1,858.1 Adjusted EBITDA 97.4 13.4 54.6 165.4 (45.9) Depreciation and amortization 6.3 1.8 1.2 9.3 3.4 12.7 Restructuring charges, net 1.6 0.4 0.7 2.7 0.0 2.7 The table below presents a reconciliation of net income as reflected on the Condensed Consolidated Statements of Operations to Adjusted EBITDA for the reportable segments: Three Months Ended (in millions) 2023 2022 Net income $ 68.7 $ 78.5 Interest expense, net 4.7 3.5 Income tax expense 20.5 5.8 Depreciation and amortization 10.1 12.7 Restructuring charges, net — 2.7 Facility closure charges, including (gain) loss from asset disposition (0.1) (0.6) Stock-based compensation 1.8 2.8 LIFO reserve (decrease) increase (2.5) 11.0 Non-restructuring severance charges 0.3 1.7 Non-restructuring pension charges (benefits) 0.2 — Other 0.1 1.4 Adjustment for Corporate & Other 45.2 45.9 Adjusted EBITDA for reportable segments $ 149.0 $ 165.4 In February 2021, a Veritiv warehouse incurred significant damage as a result of a severe weather event, which included damage to the building structure and contents, as well as a loss of inventory. The total amount of the incurred loss and restoration cost is currently estimated to be approximately $13 million, the majority of which is expected to be covered by the Company's various insurance policies. From the date of the incident, a total net benefit of $2.8 million has been recognized in selling and administrative expenses on the Company's statements of operations, of which $0.1 million of expense and $2.1 million of benefit was recognized for the three months ended March 31, 2023 and 2022, respectively. During the three months ended March 31, 2023 and 2022, the Company received none and $2.1 million, respectively, in reimbursements related to the structural damage, which is reported as proceeds from insurance related to property and equipment on the Condensed Consolidated Statement of Cash Flows. Insurance proceeds not related to the structural damage are reported as cash flows from operating activities. |
Business and Summary of Signi_2
Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation |
Use of Estimates | Use of Estimates The preparation of unaudited financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and certain financial statement disclosures. Estimates and assumptions are used for, but not limited to, revenue recognition, right-of-use ("ROU") asset and liability valuations, accounts and notes receivable valuations, inventory valuation, employee benefit plans, long-term incentive plans, income tax contingency accruals and valuation allowances, multi-employer pension plan ("MEPP") withdrawal liabilities, contingency accruals, goodwill and other intangible asset valuations. Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, actual results may ultimately differ from these estimates and assumptions. The COVID-19 pandemic has affected Veritiv's operational and financial performance to varying degrees and the Company could continue to experience impacts including, but not limited to, charges from potential adjustments of the carrying amount of accounts and notes receivables and inventory, asset impairment charges and deferred tax valuation allowances. The extent to which the COVID-19 pandemic continues to impact the Company's business, results of operations and financial condition will depend on future developments, which are uncertain and difficult to predict. Even after the COVID-19 pandemic has subsided, the Company may experience an impact to its business as a result of any economic recession, downturn or volatility, legislative and regulatory changes or long-term changes in customer behavior. Estimates are revised as additional information becomes available. |
Accounting Pronouncements | Accounting Pronouncements Recently Adopted Accounting Standards Effective January 1, 2023, the Company adopted Accounting Standards Update ("ASU") 2022-04 , Liabilities- Supplier Finance Programs (Subtopic 405-50). This standard requires disclosure of the key terms of outstanding supplier finance programs and a rollforward of the related obligations. The amendments in this update do not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. The amendments in this update are effective for fiscal years beginning after December 15, 2022 on a retrospective basis, including interim periods within those fiscal years, except for the requirement to disclose rollforward information, which is effective prospectively for fiscal years beginning after December 15, 2023. The adoption did not, and is not expected to have in the future, any material impact on the Company's related disclosures. Effective March 17, 2023, the Company adopted ASU 2020-04 , Reference Rate Reform (Topic 848). This standard provides temporary optional expedients and exceptions to accounting guidance for certain contract modifications and hedging arrangements to ease financial reporting burdens as the market transitions from the London Interbank Offered Rate ("LIBOR") and other interbank reference rates to alternative reference rates, such as Term Secured Overnight Financing Rate (''SOFR"). The guidance is available for prospective application upon its issuance and can generally be applied to contract modifications and hedging relationships entered into March 12, 2020 through December 31, 2024. On March 17, 2023, the Company modified its Asset-Based Lending Facility, incorporating the transition from LIBOR to Term SOFR. The adoption did not materially impact the Company's consolidated financial statements and related disclosures. |
Revenue Recognition and Credi_2
Revenue Recognition and Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Customer Contract Liabilities | See the table below for a year-to-date summary of the changes to the customer contract liabilities balance: Customer Contract Liabilities (in millions) 2023 2022 Balance at January 1, $ 16.1 $ 21.8 Payments received 11.2 15.3 Revenue recognized from beginning of year balance (5.2) (11.4) Revenue recognized from current year receipts (7.0) (5.1) Other adjustments (1) — (1.1) Balance at March 31, $ 15.1 $ 19.5 (1) Reflects liabilities removed as part of the sale of a business. |
Schedule of Allowance for Doubtful Accounts | The components of the accounts receivable allowances were as follows: (in millions) March 31, 2023 December 31, 2022 Allowance for credit losses $ 14.7 $ 17.7 Other allowances (1) 9.6 9.0 Total accounts receivable allowances $ 24.3 $ 26.7 (1) Includes amounts reserved for credit memos, customer discounts, customer short pays and other miscellaneous items. |
Schedule of Allowance for Credit Losses | Below is a year-to-date rollforward of the Company’s allowance for credit losses: Packaging and Facility Solutions Print Solutions - High Risk Print Solutions - Medium/Low Risk (in millions) U.S. U.S. U.S. Rest of world Total Balance at December 31, 2022 $ 12.8 $ 2.7 $ 1.6 $ 0.6 $ 17.7 Add / (Deduct): Provision for expected credit losses (0.5) 0.2 (0.4) 0.0 (0.7) Write-offs charged against the allowance (1.3) 0.1 0.0 (0.2) (1.4) Recoveries of amounts previously written off 0.0 0.1 0.0 — 0.1 Other adjustments (1) — (1.0) — 0.0 (1.0) Balance at March 31, 2023 $ 11.0 $ 2.1 $ 1.2 $ 0.4 $ 14.7 (1) Other adjustments represent amounts reserved for foreign currency translation adjustments and reserves for certain customer accounts where revenue is not recognized because collectability is not probable. These adjustments may also include accounts receivable allowances recorded in connection with acquisitions and divestitures. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense and Cash Flows | The components of lease expense were as follows: (in millions) Three Months Ended Lease Classification Financial Statement Classification 2023 2022 Short-term lease expense (1) Operating expenses $ 1.4 $ 0.8 Operating lease expense (2) Operating expenses $ 21.1 $ 25.1 Finance lease expense: Amortization of right-of-use assets Depreciation and amortization $ 2.6 $ 3.7 Interest expense Interest expense, net 0.4 0.7 Total finance lease expense $ 3.0 $ 4.4 Total Lease Cost $ 25.5 $ 30.3 (1) Short-term lease expense is comprised of expenses related to leases with a term of twelve months or less, which includes expenses related to month-to-month leases. (2) Sublease income and variable lease expense are not included in the above table as the amounts were not significant for the periods presented. Cash paid for amounts included in the measurement of lease liabilities was as follows: (in millions) Three Months Ended March 31, Lease Classification Financial Statement Classification 2023 2022 Operating Leases: Operating cash flows from operating leases Operating activities $ 21.4 $ 25.0 Finance Leases: Operating cash flows from finance leases Operating activities $ 0.4 $ 0.7 Financing cash flows from finance leases Financing activities 2.5 3.4 |
Schedule of Supplemental Balance Sheet and Other Information | Supplemental balance sheets and other information were as follows: (in millions, except weighted-average data) March 31, 2023 December 31, 2022 Lease Classification Financial Statement Classification Operating Leases: Operating lease right-of-use assets Other non-current assets $ 302.2 $ 304.3 Operating lease obligations - current Other accrued liabilities $ 68.6 $ 67.9 Operating lease obligations - non-current Other non-current liabilities 262.4 266.0 Total operating lease obligations $ 331.0 $ 333.9 Weighted-average remaining lease term in years 5.7 5.9 Weighted-average discount rate 4.7 % 4.6 % Finance Leases: Finance lease right-of-use assets Property and equipment $ 29.9 $ 29.7 Finance lease obligations - current Current portion of debt $ 8.7 $ 8.8 Finance lease obligations - non-current Long-term debt, net of current portion 24.3 24.1 Total finance lease obligations $ 33.0 $ 32.9 Weighted-average remaining lease term in years 3.8 3.7 Weighted-average discount rate 4.5 % 4.2 % |
Schedule of Finance Lease Maturity | Future minimum lease payments at March 31, 2023 were as follows: (in millions) Finance Leases Operating Leases (1) 2023 (excluding the three months ended March 31, 2023) $ 8.1 $ 64.5 2024 8.9 74.5 2025 8.3 61.5 2026 5.5 55.3 2027 3.0 45.9 2028 1.9 29.4 Thereafter 1.0 46.2 Total future minimum lease payments 36.7 377.3 Amount representing interest (3.7) (46.3) Total future minimum lease payments, net of interest $ 33.0 $ 331.0 (1) Future sublease income of $1.8 million is excluded from the operating leases amount in the table above. |
Schedule of Operating Lease Maturity | Future minimum lease payments at March 31, 2023 were as follows: (in millions) Finance Leases Operating Leases (1) 2023 (excluding the three months ended March 31, 2023) $ 8.1 $ 64.5 2024 8.9 74.5 2025 8.3 61.5 2026 5.5 55.3 2027 3.0 45.9 2028 1.9 29.4 Thereafter 1.0 46.2 Total future minimum lease payments 36.7 377.3 Amount representing interest (3.7) (46.3) Total future minimum lease payments, net of interest $ 33.0 $ 331.0 (1) Future sublease income of $1.8 million is excluded from the operating leases amount in the table above. |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table presents a summary of restructuring charges, net, showing the cumulative amounts since the initiatives began: (in millions) Severance and Related Costs Other Direct Costs (Gain) Loss on Sale of Assets and Other Total Cumulative $ 41.4 $ 36.6 $ (8.4) $ 69.6 |
Summary of the Company's Restructuring Activity | The following is a summary of the Company's 2020 Restructuring Plan liability activity for the current year: (in millions) Severance and Related Costs Other Direct Costs Total Balance at December 31, 2022 $ 0.9 $ 2.3 $ 3.2 Payments (0.4) (0.3) (0.7) Other non-cash items (0.1) 0.0 (0.1) Balance at March 31, 2023 $ 0.4 $ 2.0 $ 2.4 The following is a summary of the Company's 2020 Restructuring Plan liability activity for the prior year comparable period: (in millions) Severance and Related Costs Other Direct Costs Total Balance at December 31, 2021 $ 4.7 $ 3.7 $ 8.4 Costs incurred 0.4 1.4 1.8 Payments (2.3) (2.1) (4.4) Balance at March 31, 2022 $ 2.8 $ 3.0 $ 5.8 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Obligations | The Company's debt obligations were as follows: (in millions) March 31, 2023 December 31, 2022 Asset-Based Lending Facility (the "ABL Facility") $ 199.9 $ 229.2 Commercial card program 1.4 1.6 Vendor-based financing arrangements 11.2 14.5 Finance leases 33.0 32.9 Total debt 245.5 278.2 Less: current portion of debt (13.6) (13.4) Long-term debt, net of current portion $ 231.9 $ 264.8 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes and the Effective Tax Rates | The following table presents the Company's expense for income taxes and the effective tax rates: Three Months Ended March 31, (in millions) 2023 2022 Income before income taxes $ 89.2 $ 84.3 Income tax expense 20.5 5.8 Effective tax rate 23.0 % 6.9 % |
Defined Benefit Plans (Tables)
Defined Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Benefit Costs and Credits | Total net periodic benefit cost (credit) associated with these plans is summarized below: Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 (in millions) U.S. U.S. Canada Components of net periodic benefit cost (credit): Service cost $ 0.4 $ 0.8 $ 0.1 Interest cost $ 0.6 $ 0.3 $ 0.6 Expected return on plan assets (0.6) (0.5) (1.1) Total other components $ 0.0 $ (0.2) $ (0.5) Net periodic benefit cost (credit) $ 0.4 $ 0.6 $ (0.4) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Summary of the Numerators and Denominators Used in the Basic and Diluted Earnings Per Share Calculation | A summary of the numerators and denominators used in the basic and diluted earnings per share calculations is as follows: Three Months Ended (in millions, except per share data) 2023 2022 Numerator: Net income $ 68.7 $ 78.5 Denominator: Weighted-average shares outstanding – basic 13.53 14.77 Dilutive effect of stock-based awards 0.21 0.55 Weighted-average shares outstanding – diluted 13.74 15.32 Earnings per share: Basic $ 5.08 $ 5.31 Diluted $ 5.00 $ 5.12 Antidilutive stock-based awards excluded from computation of diluted earnings per share ("EPS") 0.02 0.14 Performance stock-based awards excluded from computation of diluted EPS because performance conditions had not been met 0.08 0.00 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Dividend Declarations and Payments | The following table summarizes the Company's dividend declarations and payments made during the current year period. There were no comparable transactions in the prior year period. Declaration Date Record Date Payable Date Dividend Per Share Payment (in millions) February 27, 2023 March 9, 2023 March 31, 2023 $ 0.63 $ 8.5 May 8, 2023 May 18, 2023 June 5, 2023 0.63 N/A Total $ 1.26 $ 8.5 |
Schedule of Incentive Plan Shares Issued | See the table below for information related to these transactions. (in millions) 2023 2022 Three months ended March 31, Shares issued 0.1 0.7 Shares recovered for minimum tax withholding (0.1) (0.2) Net shares issued 0.0 0.5 |
Schedule of Accumulated Other Comprehensive Loss | The following tables provide the components of AOCL (amounts are shown net of their related income tax effects, if any): (in millions) Foreign currency translation adjustments Retirement liabilities AOCL Balance at December 31, 2022 $ (16.6) $ 3.9 $ (12.7) Unrealized net gains (losses) arising during the period 2.9 (0.1) 2.8 Net current period other comprehensive income (loss) 2.9 (0.1) 2.8 Balance at March 31, 2023 $ (13.7) $ 3.8 $ (9.9) (in millions) Foreign currency translation adjustments Retirement liabilities Interest rate cap AOCL Balance at December 31, 2021 $ (25.2) $ 1.0 $ (0.1) $ (24.3) Unrealized net gains (losses) arising during the period 2.6 0.0 0.0 2.6 Net current period other comprehensive income (loss) 2.6 0.0 0.0 2.6 Balance at March 31, 2022 $ (22.6) $ 1.0 $ (0.1) $ (21.7) |
Segment and Other Information (
Segment and Other Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting Information, by Segment | The following table presents net sales, Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, restructuring charges, net, integration and acquisition expenses and other similar charges including any severance costs, costs associated with warehouse and office openings or closings, consolidation, and relocation and other business optimization expenses, stock-based compensation expense, changes in the LIFO reserve, non-restructuring asset impairment charges, non-restructuring severance charges, non-restructuring pension charges (benefits), fair value adjustments related to contingent liabilities assumed in mergers and acquisitions and certain other adjustments), which is the metric management uses to assess operating performance of the segments, and certain other measures for each of the reportable segments and Corporate & Other for the periods presented: (in millions) Packaging Facility Solutions Print Solutions Total Reportable Segments Corporate & Other Total Three Months Ended March 31, 2023 Net sales $ 895.4 $ 180.2 $ 434.6 $ 1,510.2 $ — $ 1,510.2 Adjusted EBITDA 96.4 15.4 37.2 149.0 (45.2) Depreciation and amortization 5.4 1.2 1.1 7.7 2.4 10.1 Three Months Ended March 31, 2022 Net sales $ 1,003.1 $ 229.4 $ 596.6 $ 1,829.1 $ 29.0 $ 1,858.1 Adjusted EBITDA 97.4 13.4 54.6 165.4 (45.9) Depreciation and amortization 6.3 1.8 1.2 9.3 3.4 12.7 Restructuring charges, net 1.6 0.4 0.7 2.7 0.0 2.7 |
Schedule of Reconciliation of Income Before Income Taxes to Total Adjusted EBITDA | The table below presents a reconciliation of net income as reflected on the Condensed Consolidated Statements of Operations to Adjusted EBITDA for the reportable segments: Three Months Ended (in millions) 2023 2022 Net income $ 68.7 $ 78.5 Interest expense, net 4.7 3.5 Income tax expense 20.5 5.8 Depreciation and amortization 10.1 12.7 Restructuring charges, net — 2.7 Facility closure charges, including (gain) loss from asset disposition (0.1) (0.6) Stock-based compensation 1.8 2.8 LIFO reserve (decrease) increase (2.5) 11.0 Non-restructuring severance charges 0.3 1.7 Non-restructuring pension charges (benefits) 0.2 — Other 0.1 1.4 Adjustment for Corporate & Other 45.2 45.9 Adjusted EBITDA for reportable segments $ 149.0 $ 165.4 |
Revenue Recognition and Credi_3
Revenue Recognition and Credit Losses - Narrative (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Concentration Risk [Line Items] | |||
Contract with customer, term | 1 year | ||
Equipment sales deposits, approximate holding period | 90 days | ||
Number of reportable segments | segment | 3 | ||
Notes receivable, provision for (reversal of) expected credit losses | $ (1) | $ (0.5) | |
Notes receivable | $ 0.1 | $ 0.1 | |
Minimum | |||
Concentration Risk [Line Items] | |||
Other sale arrangements requiring prepayment initial coverage period | 60 days | ||
Maximum | |||
Concentration Risk [Line Items] | |||
Other sale arrangements requiring prepayment initial coverage period | 90 days | ||
Product Concentration Risk | Revenue from Contract with Customer Benchmark | Sales Channel, Directly to Consumer | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 35% | ||
Customer Concentration Risk | Revenue Benchmark | Minimum | Ten Largest Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10% | ||
Customer Concentration Risk | Revenue Benchmark | Maximum | Ten Largest Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 15% | ||
Geographic Concentration Risk | Revenue Benchmark | U.S. | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 97% |
Revenue Recognition and Credi_4
Revenue Recognition and Credit Losses - Remaining Performance Obligation (Details) | Mar. 31, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation satisfaction period | 12 months |
Revenue Recognition and Credi_5
Revenue Recognition and Credit Losses - Schedule of Customer Contract Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Change in Contract with Customer, Liability [Roll Forward] | ||
Beginning balance | $ 16.1 | $ 21.8 |
Payments received | 11.2 | 15.3 |
Revenue recognized from beginning of year balance | (5.2) | (11.4) |
Revenue recognized from current year receipts | (7) | (5.1) |
Other adjustments | 0 | (1.1) |
Ending balance | $ 15.1 | $ 19.5 |
Revenue Recognition and Credi_6
Revenue Recognition and Credit Losses - Schedule of Credit Losses (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Allowance for credit losses | $ 14.7 | $ 17.7 |
Other allowances | 9.6 | 9 |
Total accounts receivable allowances | $ 24.3 | $ 26.7 |
Revenue Recognition and Credi_7
Revenue Recognition and Credit Losses - Rollforward of Credit Losses (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance | $ 17.7 |
Provision for expected credit losses | (0.7) |
Write-offs charged against the allowance | (1.4) |
Recoveries of amounts previously written off | 0.1 |
Other adjustments | (1) |
Ending balance | 14.7 |
U.S. | Packaging and Facility Solutions | Operating Segments | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance | 12.8 |
Provision for expected credit losses | (0.5) |
Write-offs charged against the allowance | (1.3) |
Recoveries of amounts previously written off | 0 |
Other adjustments | 0 |
Ending balance | 11 |
U.S. | Print Solutions | Operating Segments | Risk Level, High | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance | 2.7 |
Provision for expected credit losses | 0.2 |
Write-offs charged against the allowance | 0.1 |
Recoveries of amounts previously written off | 0.1 |
Other adjustments | (1) |
Ending balance | 2.1 |
U.S. | Print Solutions | Operating Segments | Risk Level, Medium / Low | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance | 1.6 |
Provision for expected credit losses | (0.4) |
Write-offs charged against the allowance | 0 |
Recoveries of amounts previously written off | 0 |
Other adjustments | 0 |
Ending balance | 1.2 |
Rest of world | Reportable Geographical Components | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance | 0.6 |
Provision for expected credit losses | 0 |
Write-offs charged against the allowance | (0.2) |
Recoveries of amounts previously written off | 0 |
Other adjustments | 0 |
Ending balance | $ 0.4 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) distribution_center | |
Lessee, Lease, Description [Line Items] | |
Number of distribution centers | distribution_center | 95 |
Number of leased distribution centers | distribution_center | 90 |
Real Estate | |
Lessee, Lease, Description [Line Items] | |
Finance and operating lease payments due | $ 375.1 |
Operating lease not yet commenced | $ 4.8 |
Commencement period, leases not yet commenced | 3 months |
Operating lease not yet commenced, lease term | 5 years |
Non-Real Estate | |
Lessee, Lease, Description [Line Items] | |
Finance and operating lease payments due | $ 38.9 |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Short-term lease expense | $ 1.4 | $ 0.8 |
Operating lease expense | 21.1 | 25.1 |
Finance lease expense: | ||
Amortization of right-of-use assets | 2.6 | 3.7 |
Interest expense | 0.4 | 0.7 |
Total finance lease expense | 3 | 4.4 |
Total Lease Cost | $ 25.5 | $ 30.3 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet and Other Information (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other non-current assets | Other non-current assets |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other accrued liabilities | Other accrued liabilities |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other non-current liabilities | Other non-current liabilities |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property and equipment (net of accumulated depreciation and amortization of $329.1 and $325.5, respectively) | Property and equipment (net of accumulated depreciation and amortization of $329.1 and $325.5, respectively) |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current portion of debt | Current portion of debt |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term debt, net of current portion | Long-term debt, net of current portion |
Operating Leases: | ||
Operating lease right-of-use assets | $ 302.2 | $ 304.3 |
Operating lease obligations - current | 68.6 | 67.9 |
Operating lease obligations - non-current | 262.4 | 266 |
Total operating lease obligations | $ 331 | $ 333.9 |
Weighted-average remaining lease term in years | 5 years 8 months 12 days | 5 years 10 months 24 days |
Weighted-average discount rate | 4.70% | 4.60% |
Finance Leases: | ||
Finance lease right-of-use assets | $ 29.9 | $ 29.7 |
Finance lease obligations - current | 8.7 | 8.8 |
Finance lease obligations - non-current | 24.3 | 24.1 |
Total finance lease obligations | $ 33 | $ 32.9 |
Weighted-average remaining lease term in years | 3 years 9 months 18 days | 3 years 8 months 12 days |
Weighted-average discount rate | 4.50% | 4.20% |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating cash flows from operating leases | ||
Operating cash flows from operating leases | $ 21.4 | $ 25 |
Finance Leases: | ||
Operating cash flows from finance leases | 0.4 | 0.7 |
Financing cash flows from finance leases | $ 2.5 | $ 3.4 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Operating and Finance Lease Payments (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Finance Leases | ||
2023 (excluding the three months ended March 31, 2023) | $ 8.1 | |
2024 | 8.9 | |
2025 | 8.3 | |
2026 | 5.5 | |
2027 | 3 | |
2028 | 1.9 | |
Thereafter | 1 | |
Total future minimum lease payments | 36.7 | |
Amount representing interest | (3.7) | |
Total future minimum lease payments, net of interest | 33 | $ 32.9 |
Operating Leases | ||
2023 (excluding the three months ended March 31, 2023) | 64.5 | |
2024 | 74.5 | |
2025 | 61.5 | |
2026 | 55.3 | |
2027 | 45.9 | |
2028 | 29.4 | |
Thereafter | 46.2 | |
Total future minimum lease payments | 377.3 | |
Amount representing interest | (46.3) | |
Total future minimum lease payments, net of interest | 331 | $ 333.9 |
Future sublease income | $ 1.8 |
Restructuring Charges - Schedul
Restructuring Charges - Schedule of Restructuring Charges (Details) - 2020 Restructuring Plan $ in Millions | Dec. 31, 2022 USD ($) |
Total | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative | $ 69.6 |
Severance and Related Costs | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative | 41.4 |
Other Direct Costs | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative | 36.6 |
(Gain) Loss on Sale of Assets and Other | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative | $ (8.4) |
Restructuring Charges - Sched_2
Restructuring Charges - Schedule of Changes in Restructuring Liability - 2020 Restructuring Plan (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restructuring Reserve [Roll Forward] | ||
Costs incurred | $ 0 | $ 2.7 |
2020 Restructuring Plan | ||
Restructuring Reserve [Roll Forward] | ||
Balance at the beginning | 3.2 | 8.4 |
Costs incurred | 1.8 | |
Payments | (0.7) | (4.4) |
Other non-cash items | (0.1) | |
Balance at the end | 2.4 | 5.8 |
Severance and Related Costs | 2020 Restructuring Plan | ||
Restructuring Reserve [Roll Forward] | ||
Balance at the beginning | 0.9 | 4.7 |
Costs incurred | 0.4 | |
Payments | (0.4) | (2.3) |
Other non-cash items | (0.1) | |
Balance at the end | 0.4 | 2.8 |
Other Direct Costs | 2020 Restructuring Plan | ||
Restructuring Reserve [Roll Forward] | ||
Balance at the beginning | 2.3 | 3.7 |
Costs incurred | 1.4 | |
Payments | (0.3) | (2.1) |
Other non-cash items | 0 | |
Balance at the end | $ 2 | $ 3 |
Restructuring Charges - Narrati
Restructuring Charges - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
2020 Restructuring Plan | Other Direct Costs | |
Restructuring Cost and Reserve [Line Items] | |
Prepaid restructuring expensed during the period | $ 0.9 |
Debt - Long-Term Debt Obligatio
Debt - Long-Term Debt Obligations (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Commercial card program | $ 13.6 | $ 13.4 |
Finance leases | 33 | 32.9 |
Total debt | 245.5 | 278.2 |
Less: current portion of debt | (13.6) | (13.4) |
Long-term debt, net of current portion | 231.9 | 264.8 |
Vendor-based financing arrangements | ||
Debt Instrument [Line Items] | ||
Long-term debt | 11.2 | 14.5 |
Line of Credit | Asset-Based Lending Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 199.9 | 229.2 |
Commercial Card Program | ||
Debt Instrument [Line Items] | ||
Commercial card program | $ 1.4 | $ 1.6 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 17, 2023 | |
Line of Credit Facility [Line Items] | ||
Commercial card, maximum credit limit | $ 37,500,000 | |
Asset-Based Lending Facility | ||
Line of Credit Facility [Line Items] | ||
Minimum fixed coverage ratio | 100% | |
Asset-Based Lending Facility | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 1,100,000,000 | |
Remaining borrowing capacity | $ 681,800,000 | |
Outstanding letters of credit | 8,600,000 | |
Vendor-based financing arrangements | ||
Line of Credit Facility [Line Items] | ||
Principal amount | $ 18,500,000 | |
Debt instrument, term (in year) | 5 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 89.2 | $ 84.3 |
Income tax expense | $ 20.5 | $ 5.8 |
Effective tax rate | 23% | 6.90% |
Defined Benefit Plans (Details)
Defined Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
U.S. | ||
Components of net periodic benefit cost (credit): | ||
Service cost | $ 0.4 | $ 0.8 |
Interest cost | 0.6 | 0.3 |
Expected return on plan assets | (0.6) | (0.5) |
Total other components | 0 | (0.2) |
Net periodic benefit cost (credit) | $ 0.4 | 0.6 |
Canada | ||
Components of net periodic benefit cost (credit): | ||
Service cost | 0.1 | |
Interest cost | 0.6 | |
Expected return on plan assets | (1.1) | |
Total other components | (0.5) | |
Net periodic benefit cost (credit) | $ (0.4) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) | Sep. 13, 2022 derivative |
Interest Rate Cap | Asset-Backed Lending Facility | |
Business Acquisition [Line Items] | |
Interest rate cap agreement | 1 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net income | $ 68.7 | $ 78.5 |
Denominator: | ||
Weighted-average shares outstanding - basic (in shares) | 13,530 | 14,770 |
Dilutive effect of stock-based awards (in shares) | 210 | 550 |
Weighted-average shares outstanding - diluted (in shares) | 13,740 | 15,320 |
Earnings per share: | ||
Basic (in dollars per share) | $ 5.08 | $ 5.31 |
Diluted (in dollars per share) | $ 5 | $ 5.12 |
Antidilutive stock-based awards excluded from computation of diluted earnings per share (EPS) (in shares) | 20 | 140 |
Performance stock-based awards excluded from computation of diluted EPS because performance conditions had not been met (in shares) | 80 | 0 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Dividend Declarations And Payments (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 4 Months Ended | ||||
May 08, 2023 | Mar. 31, 2023 | Feb. 27, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | May 08, 2023 | |
Class of Stock [Line Items] | ||||||
Dividend Per Share (in dollars per share) | $ 0.63 | |||||
Dividend Payment | $ 8.5 | $ 8.5 | $ 0 | |||
Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Dividend Per Share (in dollars per share) | $ 0.63 | $ 1.26 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | Mar. 01, 2022 | |
Class of Stock [Line Items] | ||||
Stock repurchased, aggregate purchase price | $ 10,400,000 | |||
2022 Shares Repurchase Program | ||||
Class of Stock [Line Items] | ||||
Stock repurchase program, authorized amount | $ 200,000,000 | |||
Shares repurchased (in shares) | 78,025 | 1,564,420 | ||
Stock repurchased, aggregate purchase price | $ 10,400,000 | $ 200,000,000 |
Shareholders' Equity - Schedu_2
Shareholders' Equity - Schedule of Incentive Plan Shares Issued (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Equity [Abstract] | ||
Shares issued (in shares) | 0.1 | 0.7 |
Shares recovered for minimum tax withholding (in shares) | (0.1) | (0.2) |
Net shares issued (in shares) | 0 | 0.5 |
Shareholders' Equity - Schedu_3
Shareholders' Equity - Schedule of Other Comprehensive Income Included (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 756.1 | $ 635.8 | |
Unrealized net gains (losses) arising during the period | 2.8 | 2.6 | |
Net current period other comprehensive income (loss) | 2.8 | 2.6 | |
Ending balance | 817.3 | 679.8 | |
AOCL | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | [1] | (12.7) | (24.3) |
Ending balance | [1] | (9.9) | (21.7) |
Foreign currency translation adjustments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (16.6) | (25.2) | |
Unrealized net gains (losses) arising during the period | 2.9 | 2.6 | |
Net current period other comprehensive income (loss) | 2.9 | 2.6 | |
Ending balance | (13.7) | (22.6) | |
Retirement liabilities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 3.9 | 1 | |
Unrealized net gains (losses) arising during the period | (0.1) | 0 | |
Net current period other comprehensive income (loss) | (0.1) | 0 | |
Ending balance | $ 3.8 | 1 | |
Interest rate cap | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (0.1) | ||
Unrealized net gains (losses) arising during the period | 0 | ||
Net current period other comprehensive income (loss) | 0 | ||
Ending balance | $ (0.1) | ||
[1]Accumulated other comprehensive loss. |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Withdrawal from Multiemployer Defined Benefit Plan - Multiemployer Pension Plans - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2020 | Jun. 30, 2019 | |
Teamsters Pension Trust Fund of Philadelphia and Vicinity | |||||
Loss Contingencies [Line Items] | |||||
Withdrawal obligations | $ 4.9 | ||||
Multi-employer pension plans, settlement term | 19 years | ||||
Minneapolis Food Distributors Ind Pension Plan | |||||
Loss Contingencies [Line Items] | |||||
Withdrawal obligations | $ 0.6 | $ 0.5 | |||
Multi-employer pension plans, settlement term | 4 years | ||||
Western Pennsylvania Teamsters and Employers Pension Plan | |||||
Loss Contingencies [Line Items] | |||||
Withdrawal obligations | $ 7.1 | $ 6.5 | |||
Multi-employer pension plans, settlement term | 20 years |
Segment and Other Information -
Segment and Other Information - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 26 Months Ended | |
Feb. 28, 2021 USD ($) | Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | Mar. 31, 2023 USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 3 | |||
Incurred loss and restoration costs | $ 13 | |||
Net benefit of severe weather event | $ 2.8 | |||
Loss from severe weather event expense (benefit) | $ 0.1 | $ (2.1) | ||
Proceeds from insurance related to property and equipment | $ 0 | $ 2.1 |
Segment and Other Information_2
Segment and Other Information - Segment Reporting Information, by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 1,510.2 | $ 1,858.1 |
Depreciation and amortization | 10.1 | 12.7 |
Restructuring charges, net | 0 | 2.7 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 1,510.2 | 1,829.1 |
Adjusted EBITDA | 149 | 165.4 |
Depreciation and amortization | 7.7 | 9.3 |
Restructuring charges, net | 2.7 | |
Corporate & Other | ||
Segment Reporting Information [Line Items] | ||
Net sales | 0 | 29 |
Adjusted EBITDA | (45.2) | (45.9) |
Depreciation and amortization | 2.4 | 3.4 |
Restructuring charges, net | 0 | |
Packaging | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 895.4 | 1,003.1 |
Adjusted EBITDA | 96.4 | 97.4 |
Depreciation and amortization | 5.4 | 6.3 |
Restructuring charges, net | 1.6 | |
Facility Solutions | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 180.2 | 229.4 |
Adjusted EBITDA | 15.4 | 13.4 |
Depreciation and amortization | 1.2 | 1.8 |
Restructuring charges, net | 0.4 | |
Print Solutions | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 434.6 | 596.6 |
Adjusted EBITDA | 37.2 | 54.6 |
Depreciation and amortization | $ 1.1 | 1.2 |
Restructuring charges, net | $ 0.7 |
Segment and Other Information_3
Segment and Other Information - Reconciliation of Net Income (Loss) to Total Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Net income | $ 68.7 | $ 78.5 |
Interest expense, net | 4.7 | 3.5 |
Income tax expense | 20.5 | 5.8 |
Depreciation and amortization | 10.1 | 12.7 |
Restructuring charges, net | 0 | 2.7 |
Facility closure charges, including (gain) loss from asset disposition | (0.1) | (0.6) |
Stock-based compensation | 1.8 | 2.8 |
LIFO reserve (decrease) increase | (2.5) | 11 |
Non-restructuring severance charges | 0.3 | 1.7 |
Non-restructuring pension charges (benefits) | 0.2 | 0 |
Other | 0.1 | 1.4 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization | 7.7 | 9.3 |
Restructuring charges, net | 2.7 | |
Adjusted EBITDA | 149 | 165.4 |
Corporate & Other | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization | 2.4 | 3.4 |
Restructuring charges, net | 0 | |
Adjusted EBITDA | $ (45.2) | $ (45.9) |