Verso Corp (NYSE:VRS) Q2 2020 Earnings Conference Call - Final Transcript

Aug 06, 2020 • 11:30 am ET

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Verso Corp (NYSE:VRS) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, and welcome to Verso Corporation's Second Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. A replay of this call will be available on the Investors page of Verso's website after 1:30 p.m. Eastern Time today.

At this time, I'd like to turn the presentation over to Verso's Treasurer, Tim Nusbaum.

Executive
Tim Nusbaum

Thank you, and good morning. Second quarter 2020 financial results for Verso Corporation were announced this morning before the market opened. The earnings release as well as a set of slides we will refer to during the call are available on Verso's Investors web page at Verso's website, www.versoco.com. Joining me on the call today are Adam St. John, Verso's President and Chief Executive Officer; and Allen Campbell, Senior Vice President and Chief Financial Officer.

I'd like to remind everyone that in the course of the call in order to give you a better understanding of our performance, we'll be making certain forward-looking statements. These forward-looking statements are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize or should underlying assumptions or estimates prove incorrect, actual results may vary materially from management's expectations. If you will like further information regarding the various risks and uncertainties associated with our business, please refer to our SEC filings, which are posted on our website, versoco.com, under the Investor tab.

In addition, during today's call, we will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this information, additional information should not be considered in isolation whereas a substitute for results prepared in accordance with GAAP and reconciliations to comparable GAAP measures are available in our earnings release.

At this point, I'd like to turn the presentation over to Adam St. John.

Executive
Adam St. John

Thank you, Tim. Good morning, everyone. Let's get started with Slide 4 of the presentation. These are certainly unprecedented times as COVID-19 continues to impact our industry. With the nation's staying home, schools closing and large-scale sporting and entertainment events canceled, the demand for our products has decreased significantly. The numbers speak for themselves.

Year-to-date operating rates for coated free sheet and coated groundwood are at 74% and 72%, respectively, which are recent lows as a result of COVID demand challenges with reported year-over-year prices down over $70 a ton for both coated freesheet and coated grounded rolls and down $39 a ton for coated freesheet sheets. This impacted our financial performance. We reported revenues of $268 million with an adjusted EBITDA loss of $9 million, so as expected, a tough quarter right along with others in the industry.

That said, during the quarter, we took decisive proactive actions not only to respond to the economic environment but also to establish a stronger operating model and strategy for the longer-term success of Verso. We consolidated the business to our two most profitable mills, Escanaba and Quinnesec. We sharpened our operating focus with a strategy around specialty, graphic and pulp, and we accelerate