VRS - Earnings call transcript Q2 2021

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Operator

Good morning and welcome to Verso Corporation's Second Quarter Earnings Conference Call. All participants are in listen-only mode. There will be an opportunity to ask questions at the end of today's presentation [Operator Instructions] Please note this conference is being recorded. A replay of this call will be available on the Investor page of Verso's website after 11:00 a.m. Eastern Time today. like and the Treasurer, I'd Verso's over time, President Vice Tim this to presentation turn to At Nusbaum. Please go ahead.

Timothy Nusbaum

Thank morning. good you and

second to market section www.versoco.com. results this The set the of as financial Investors Corporation we the call XXXX announced will are which were in refer well for as website morning the The of opened. Verso the Verso's slides earnings during release before quarter available

Executive Officer; me I statements more Verso's understanding vary to Chief order one management's or are Joining better uncertainties. everyone a the President President Should performance underlying course these Vice in are or call would actual the of give the and of remind results Officer. subject may Brian materially Nebel, certain our Randy and of will forward-looking and be risks on or today we to that or Financial Senior prove incorrect, in assumptions making you should to from call uncertainties Cullen, risks estimates and Chief materialize These forward-looking expectations. statements. like

further under regarding would which like our posted filings uncertainties website please refer information our tab. you the to SEC and various are our on associated the If Investor with versoco.com risks business,

should discuss be Randy today's this GAAP I'd Nebel. during evaluating to prepared with in GAAP in and information results call of the considered measures, addition, earnings as in In are believe of accordance hand presentation like our in or point, we non-GAAP to not be presentation substitute At reconciliations available a measures we additional to this release. over comparable useful will isolation can which our The performance.

Randy Nebel

Good morning everyone. you Tim. Thank

moment the want Atlas the to proposal Before take I from we to quarter, discuss a Holdings. unsolicited discuss

Committee a Board $XX special an proposal Today, formed to the evaluate our independent common we announced Beckler for the unsolicited As action has Atlas two directors, independent believes we determine of that you all receipt thoroughly Verso thereto. shares M. outstanding and thereto Verso composed alternatives seen and and XX, acquire stock K. to of share proposal of of disinterested Special special in per the is on and alternatives of committee confirmed committee Directors to The in July have assist, advisors Taylor. review to proposal and course is evaluate Robert retained the best of the Nancy it cash. stockholders. non-executive and its The interest

release, further and further the we comment As intend disclosures do deem disclose regarding or noted on appropriate until developments we or as earning unless evaluation Committee's in the required. to not Special

be not will We commenting proposal further into today, now results. dive the on let's the

X, for Turning to this a benefits focused Verso of with positive combining executing was macro strong trends. quarter a Slide the strategy

for we of increased XX% to team We very have but work driving I am have to a proud this do, sequentially in to $XXX the business the progress made that of lot date. Revenue million.

Quinnesec Mill These and costs improved the cash adjusted to in strong cost was and EBITDA outage increases return able order of a million million portfolio. an the at across million realized auction and related operational and with XX.X%. $XX we stock. our strong Shipments at the million XXX% Verso's product to strong. $XX spite input in million are remaining Verso much shareholders North quarter, coated to our annual freesheet in repurchase $XX factors price Our our operating which performance. Multiple rates during backlogs with generation $X of adjusted margin results strong form of $XX in increased rates modified to America were Dutch EBITDA in at an we achieved maintenance inflation. to very contributed

but we the As to paramount Verso. safety for the to delivered better. Verso strive performance first importance of is always good year, safety do said I have half before, employee of

Our on execute our operations performance, strategy. customer-centric continue our improve aggressively on and focus strength core to

This keenly be to In we Verso grow the base but Verso. supportive in reduced X, quarter and many preferred well development year focused Verso to on XXXX. positioned XX% reduction. last order of our to also tons and Verso only serve cost is in off. listening Slide has continuing some is in capital of its while the performance of creating to tons the XXX,XXX improvement. opportunity trends Our of from them. the second XXX,XXX will business. very that in the to supplier, analyzed projects second to the with customer quarter is capacity that has that areas we starting product customers been maximizing continue pay improve high-return customer outlined is best we're productivity, and of not implemented strategy profitability, are ensuring On Industry to to

to the the freesheet The annual coated steady machine XXXX, mentioned removed service represented of quarter challenging. Slide second reflects These impact X domestic capacity to with a which a due from costs increasing of Wisconsin quarter remain same in first year. in freesheet and XXXX delays of in capacity remains although increase have service the conversions and over capacity. availability, quarter while past demand is shipment previously freight Verso container logical the and EBITDA the better economic chain Rapids improvement low, led paper to adjusted the the over market supply factors with July more Verso positioned efficient XX% coated closures a as we platform. reopening XXX,XXX year up tons profiles of and in Imports strong major predictable last freight the over combined environment.

drive of future. to combined to financial with improvements optimistic was big many industry are our favorable dynamics for Verso Verso step forward we as second is helped the have respectable quarter we starting about performance. and another made the margins The return

the streams. approximately Mill XXX,XXX consolidated a of in to Moving and to Escanaba to minute value specialty and capacity X, papers. today diversified of the take graphic of Verso's operations revenue would clearly tons I strength slide has assets a define and like our reinforce our The

We strong papers to and asset its a Quinnesec and specialty, web structure. facility are strong a opportunities It about XXX,XXX a drive is coated opportunities improve that XXX,XXX is growth approximately focused of tons efficiencies freesheet capacity of cost graphic and pulp. with The has Mill sheet on and both and of also offerings market tons

market this in of the pulp internally consumed Some is mills.

converting investments pulp Verso We focused strategy. capital plant optimize making growth are with The is targeted offerings provides flexibility operation. on and in graphic paper Wisconsin expand reduce products to a production. Rapids our cost,

operation Mills. customer a of We positioned external are Escanaba focused on footprint. the product sheeting focus with state of the internal and are cost transforming convert operation sheeter roll approximately into Currently, sheeters XXX,XXX and a and to operations seven converting our Quinnesec better our art from tons

Consolidated annually, mills energy hours Power XXX,XXX together a purchases and CWPCo as Finally, five the of Water CWPCo we with XX utility Company known other some sells with megawatt regulated hydroelectric electricity to facilities also it own generating residential approximately turbines, homes. from operating produces paper utilities local

well CWPCo platform brings which Procter to The career our growth the Verso's and process our strength future and and for companies in platform, will for at to strategic XXX XX with of McDonald's of fully experience have now returns. broad energy credits, to integrated the including qualifies and and executive to majority turn mills total board, this renewable excited sold use leadership energy produce some energy he years on Verso the energy & offset for the as review. senior sustain the energy is financial crossed. addition workforce In positions new his Fortune of our We're leadership shareholder Cullen, Brian I over CFO skilled paper call Brian? financial Brian over and of making roles Gamble, holding

Brian Cullen

and of at performance. our team I'm the join clear also Thank supplier encouraged to of the preferred time graphic North specialty you, thrilled Randy. improving papers, a pulp. am I strategy to American be Verso especially papers by

Slide demand reduced level QX XX%. Bleached a resulted were than Now, increases finished financial being XXXX. X, I pulp, gears to The our of improved capacity, inventory average tailwinds. Northern improving our with shipments by overall highlights XX% led market up to by our of where We want realization the compared a greater result price up which production which our execution in was as which to goods experienced and price progress environment XX% shift Hardwood situation

the the As million million pulp price you mix proud see column, improvements XXXX year. is are result as the bridge and the QX resulted said, on that of That which in results inventory on of left quarter. slide down category. a improved benefit. the see by the for results of chart These this chemicals of service every topline This of on a levels nearly through well from was to worth the a adjusted came On chart, middle energy, $XX we in the XXXX of utilization team we pulp. building the look EBITDA strong you benefit headwinds, and numbers move the XX, all customers. QX as our realization spanning the results headlined QX showcasing inflationary $XX can $X total focused are of positive purchased XXXX as from recovery our of side momentum you million to will In

impacts, $X However, purchasing wood generated for the we million changes which a and encouragingly, highlighted resulted benefit some by positive in have also our strategy, to quarter.

improvement, XXXX. quarter. This up was and optimization the production improvement improved $XX absorption energy variances to QX Our with versus operations in led impacted as a together for production improvement usage million also positive COVID in of the

we of core Mill idling all additional to side our $X our Finally, of in that right adjusted compared year on of mills. EBITDA hand million the last assets more benefits with This maintenance resulted reductions realizing Duluth million major high-cost idled at closing the associated aligned the the in and an were cost with and not $X business. are bridge,

to XX the We coming our costs, our reducing to the focused cash months. in position. cash servicing Slide results remain will positive customers continue and generating on highlights

at were and EBITDA million the hold our working steady million we For available adjusted able to from position cash $XXX more to balance We million. added cash generation from contributions $XX from $XX our us capital primarily during quarter. to return investment also the $XX our improvements while enabling pension strong Most our and importantly, capital shareholders inventory cash million our reductions. requirements, to covered quarter,

from borrowing base, as lower a We our in ABL resulting revolver lower of liquidity result seen inventories. goods finished have a decrease our a

eliminate gone in mills. million focused costs shared $XX to steadfastly have bottom and as in we our chart $X As remain to continuing idled million we The QX we at progress XXXX. demonstrates on XXXX this at QX closed from the previously, have

$XX repurchase of an ongoing the with the Board $XXX together Slide in executed to we having to Androscoggin returned to share a have modified commitment quarter. date, shareholders. $XXX Stevens our this Point To XX, payment Turning in made million the $X.XX from million XXb-X dividend million and QX, return of and tender offer proceeds against commitment the Mill Dutch a program sales

We be third also of XX. of September shareholders declared dividend on will a to paid on quarter as XX that per share, $X.XX record September

the Finally, features year Slide XXXX. our for XX full outlook of

We cash, the in expected level to is projects second American between and provisions. be expenditures to expect required our be and the $XX for is prior The Escanaba XXXX $XX $XX at Act million million, Mills and our pension capital that which XXXX initiatives. versus due our for a years we implement reduced Quinnesec half prepare Rescue as to contribution million,

forward team the Our benefit from of Randy. a turn and to and idled part and results near strong increase meeting our in continue now possible will look business it we of this over costs cash lower to proud I as position improving at back you I be expected to as as I'm many is future. mills. closed to to our

Randy Nebel

hangs summary, on share like in Brian. to In poster all the I'd that with you you, Verso's Thank walls facilities. a

today including think vision values customers, of I forward, our encapsulates commitment the it core and going our to suppliers Verso investors. employees, and our

you call I the With remind would regarding we accepting for be not that, questions will that we I the Committee the now questions, Atlas Before Special open questions. open for call or to the process. proposal will like

Operator

comes Please ahead. question with Khorsand BWS Instructions] first from the Financial. [Operator And, Hamed go

Hamed Khorsand

rate how passed of you through of to much just timing that's Firstly, the realize QX the in are you the expecting more acceptance price talk could and increases about increases occurring you these and and price QX?

Randy Nebel

Good Hamed. morning,

the all remember increases, price don't acceptance our has on I of been very, high I but number rate very those. think exact

on we'll where monitor we're adjust we pricing to at see as and fit. continue We

not have year, whether we're we safe don't increases, increases been more have say I in but first we the of we're think unprecedented. project think, have price the going price we've it's I to kind to part to going of like

Hamed Khorsand

basis for inventory your to declining given a on that And, three last think? how meet now the sustainable the is I has demand it quarter-over-quarter been quarters

Randy Nebel

year mid-XXXs, with started we we're Well, XXX,XXX right Yes. about in last down of so now. an the and tons inventory

pulling that. on We're have been back slowly living So, inventory. we from

demand have some can our make think we mills not products that but managing is our something to make both job be I of will in some choose to spending a we're going also do to better anymore, money production. we will slight improvements in

So, of we're going able to I be to all think comfortably customers. our good satisfy

Hamed Khorsand

comment to you go just for kind as base? a the just committee customer of instead because one could any route Verso be to process And, decided creating of the distraction why negotiation directly this you and of

Randy Nebel

I don't for to made route committee to was guess that the into level decision basis that. was and the I the the Board at go made want go

the to make usual, to what for it company your no I keep matter way the go that's think and the become that's company and how distraction is like about business telling trying or got I a customers you as we're a sure doesn't process operate. this you

Operator

we this over call will turn At to questions. back have further time now I for remarks. no closing the any management

Randy Nebel

appreciated to a to talking great thank the of you Hamed, and end at for people really the that. your quarter. you for look safe third listening we day. Thanks Have and forward the question,

Operator

for The thank is attending presentation. conference you now concluded, today's

You disconnect. may now

Billerud Americas (VRS) 6 Aug 212021 Q2 Earnings call transcript