Verso Corporation Reports Second Quarter 2021 Financial Results

Second Quarter 2021 Highlights:
• Net sales of $329 million, a 23% increase over second quarter 2020 and 17% increase over first quarter 2021
• Net income of $16 million compared to a net loss of $34 million in second quarter 2020 and a net loss of $90 million in the first quarter 2021
• Adjusted EBITDA of $52 million compared to $(9) million in second quarter 2020 and $30 million in first quarter 2021
• Adjusted EBITDA margin of 15.8% compared to a negative margin in second quarter 2020 and a 10.6% margin in first quarter 2021
• $246 million in available liquidity including $117 million in cash
• Returned $59 million in capital to shareholders in repurchases and dividends

Net sales
Net sales for the three months ended June 30, 2021 increased $61 million, or 23%, compared to the three months ended June 30, 2020, driven by increases in volume and favorable price/mix as the economy began to open, partially offset by $30 million, or 11%, attributable to our idled Duluth and Wisconsin Rapids mills. Total company sales volume was up from 346 thousand tons during the three months ended June 30, 2020, to 369 thousand tons during the same period of the current year. Of the 23 thousand ton volume increase, 82 thousand tons were attributable to an increase in volume, partially offset by 59 thousand tons attributable to our idled Duluth and Wisconsin Rapids mills.

Operating income (loss)
Operating income was $11 million for the three months ended June 30, 2021, an increase of $53 million when compared to operating loss of $42 million for the three months ended June 30, 2020.

Operating results for the three months ended June 30, 2021 were positively impacted by:
• Favorable price/mix of $31 million driven by price increase realization across all grades, led by pulp price improvements
• Higher sales volume resulting in an increase of $8 million
• Improved operating income from closed and idled mills of $9 million
• Lower depreciation expense of $5 million
• Lower net operating expenses of $11 million driven primarily by improved performance and cost reduction initiatives across our mill system
• Lower planned major maintenance costs of $6 million driven by reduced scope of planned outages

Operating results for the three months ended June 30, 2021 were negatively impacted by:
• Inflationary costs of $5 million driven by purchased pulp, energy and freight
• Higher selling, general and administrative expenses of $4 million driven primarily by an increase in incentive expense and other general expenses
• Higher restructuring charges of $6 million associated with the permanent shutdown of our Duluth Mill in December 2020
• Higher other operating expenses of $2 million primarily related to a loss on the sale of our Duluth Mill of $3 million
http://investor.versoco.com/2021-08-06-Verso-Corporation-Reports-Second-Quarter-2021-Financial-Results-and-Declares-Quarterly-Cash-Dividend-of-0-10-per-Share

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