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Preliminary estimated purchase price: | (in millions) | ||
Fair value of Veritiv shares transferred | $ | 284.7 | |
Cash payments associated with customary working capital and net indebtedness adjustments | 39.1 | ||
Fair value of contingent liability associated with the Tax Receivable Agreement | 59.4 | ||
Total preliminary estimated purchase price | $ | 383.2 |
Preliminary Allocation: | (in millions) | ||
Cash | $ | 70.9 | |
Accounts receivable | 448.4 | ||
Inventories | 353.8 | ||
Deferred income tax assets | 71.7 | ||
Property and equipment | 299.0 | ||
Goodwill | 26.0 | ||
Other intangible assets | 31.5 | ||
Other current and non-current assets (including below market leasehold agreements) | 61.8 | ||
Accounts payable | (284.2 | ) | |
Long-term debt (including equipment capital leases) | (313.2 | ) | |
Financing obligations to related party | (233.1 | ) | |
Defined benefit pension obligations | (30.3 | ) | |
Other current and non-current liabilities (including above market leasehold agreements) | (119.1 | ) | |
Total purchase price | $ | 383.2 |
Value (in millions) | Estimated Weighted Average Useful Life (in years) | ||||
Customer relationships | $ | 24.3 | 14.8 | ||
Trademarks/Trade names | 4.1 | 3.6 | |||
Non-compete agreements | 3.1 | 1.0 | |||
Total identifiable intangible assets acquired | $ | 31.5 |
• | Deferred income tax assets and liabilities; |
• | Contingent liability associated with the Tax Receivable Agreement; and |
• | Other intangible assets. |
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(in millions) | |||
Legal, consulting and other professional fees | $ | 2.9 | |
Retention compensation | 3.4 | ||
Information technology conversion costs | 2.1 | ||
Other | 1.6 | ||
Total integration expenses | $ | 10.0 |
(in millions) | Severance and Related Costs | Other Direct Costs | Total | ||||||
Liability at December 31, 2014 | $ | 3.7 | $ | 0.2 | $ | 3.9 | |||
Costs incurred | 1.9 | 1.5 | 3.4 | ||||||
Payments | (2.7 | ) | (0.4 | ) | (3.1 | ) | |||
Liability at March 31, 2015 | $ | 2.9 | $ | 1.3 | $ | 4.2 |
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(in millions) | March 31, 2015 | December 31, 2014 | |||||
ABL Facility | $ | 786.4 | $ | 847.8 | |||
Equipment capital lease obligations | 10.0 | 11.0 | |||||
Total debt | 796.4 | 858.8 | |||||
Less: current portion of long-term debt | (3.6 | ) | (3.8 | ) | |||
Long-term debt, net of current maturities | $ | 792.8 | $ | 855.0 |
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Three Months Ended March 31, | |||||||
(in millions) | 2015 | 2014 | |||||
Income (loss) from continuing operations before income taxes | $ | (2.1 | ) | $ | 9.3 | ||
Income tax expense | 0.1 | 3.7 | |||||
Effective income tax rate | (4.8 | )% | 39.8 | % |
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Three Months Ended March 31, | |||
(in millions) | 2014 | ||
Intercompany sales and purchases, net | $ | 128.8 | |
Cash pooling and general financing activities | (170.7 | ) | |
Corporate allocations including income taxes | 13.2 | ||
Total net transfers to International Paper | $ | (28.7 | ) |
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Three Months Ended March 31, 2015 | |||||||
(in millions) | U.S. | Canada | |||||
Components of net periodic benefit cost (credit): | |||||||
Service cost | $ | 0.4 | $ | 0.1 | |||
Interest cost | 0.8 | 0.8 | |||||
Expected return on plan assets | (1.4 | ) | (0.9 | ) | |||
Net periodic benefit cost (credit) | $ | (0.2 | ) | $ | 0.0 |
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(in millions) | Contingent Liability | |||
Balance at December 31, 2014 | $ | 60.5 | ||
Purchase accounting adjustment | 0.6 | |||
Change in fair value adjustment | 1.3 | |||
Balance at March 31, 2015 | $ | 62.4 |
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(in millions) | March 31, 2015 | December 31, 2014 | |||||
Foreign currency translation adjustments | $ | (21.3 | ) | $ | (14.7 | ) | |
Adjustments to pension and other benefit liabilities, net of tax | (7.4 | ) | (7.4 | ) | |||
Total accumulated other comprehensive loss | $ | (28.7 | ) | $ | (22.1 | ) |
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Three Months Ended March 31, | |||
(in millions) | 2014 | ||
Total stock-based compensation expense | $ | 1.1 | |
Income tax benefit related to stock-based compensation | $ | 1.0 |
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(in millions) | Print | Publishing | Packaging | Facility Solutions | Corporate & Other | Total | |||||||||||||||||
Three Months Ended March 31, 2015 | |||||||||||||||||||||||
Net sales | $ | 820.7 | $ | 309.5 | $ | 675.2 | $ | 309.1 | $ | 23.4 | $ | 2,137.9 | |||||||||||
Adjusted EBITDA | $ | 15.5 | $ | 6.5 | $ | 45.7 | $ | 6.8 | $ | (46.1 | ) | $ | 28.4 | ||||||||||
Restructuring charges | $ | 0.9 | $ | — | $ | 0.8 | $ | 0.9 | $ | 0.8 | $ | 3.4 | |||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||||
Net sales | $ | 544.8 | $ | 189.2 | $ | 394.2 | $ | 179.2 | $ | — | $ | 1,307.4 | |||||||||||
Adjusted EBITDA | $ | 8.3 | $ | 3.7 | $ | 25.7 | $ | 0.1 | $ | (25.2 | ) | $ | 12.6 | ||||||||||
Restructuring income | $ | (0.1 | ) | $ | — | $ | — | $ | (0.1 | ) | $ | — | $ | (0.2 | ) |
Three Months Ended March 31, | |||||||
(in millions) | 2015 | 2014 | |||||
Income (loss) from continuing operations before income taxes | $ | (2.1 | ) | $ | 9.3 | ||
Interest expense, net | 6.4 | — | |||||
Depreciation and amortization | 13.5 | 4.6 | |||||
Restructuring charges (income) | 3.4 | (0.2 | ) | ||||
Non-restructuring stock-based compensation | 1.0 | 1.1 | |||||
LIFO income | (5.2 | ) | (3.8 | ) | |||
Non-restructuring severance charges | 0.4 | 1.7 | |||||
Integration expenses | 10.0 | — | |||||
Fair value adjustment on TRA contingent liability | 1.3 | — | |||||
Other | (0.3 | ) | (0.1 | ) | |||
Total Adjusted EBITDA | $ | 28.4 | $ | 12.6 |
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Preliminary estimated purchase price: | (in millions) | ||
Fair value of Veritiv shares transferred | $ | 284.7 | |
Cash payments associated with customary working capital and net indebtedness adjustments | 39.1 | ||
Fair value of contingent liability associated with the Tax Receivable Agreement | 59.4 | ||
Total preliminary estimated purchase price | $ | 383.2 |
Preliminary Allocation: | (in millions) | ||
Cash | $ | 70.9 | |
Accounts receivable | 448.4 | ||
Inventories | 353.8 | ||
Deferred income tax assets | 71.7 | ||
Property and equipment | 299.0 | ||
Goodwill | 26.0 | ||
Other intangible assets | 31.5 | ||
Other current and non-current assets (including below market leasehold agreements) | 61.8 | ||
Accounts payable | (284.2 | ) | |
Long-term debt (including equipment capital leases) | (313.2 | ) | |
Financing obligations to related party | (233.1 | ) | |
Defined benefit pension obligations | (30.3 | ) | |
Other current and non-current liabilities (including above market leasehold agreements) | (119.1 | ) | |
Total purchase price | $ | 383.2 |
Value (in millions) | Estimated Weighted Average Useful Life (in years) | ||||
Customer relationships | $ | 24.3 | 14.8 | ||
Trademarks/Trade names | 4.1 | 3.6 | |||
Non-compete agreements | 3.1 | 1.0 | |||
Total identifiable intangible assets acquired | $ | 31.5 |
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(in millions) | |||
Legal, consulting and other professional fees | $ | 2.9 | |
Retention compensation | 3.4 | ||
Information technology conversion costs | 2.1 | ||
Other | 1.6 | ||
Total integration expenses | $ | 10.0 |
(in millions) | Severance and Related Costs | Other Direct Costs | Total | ||||||
Liability at December 31, 2014 | $ | 3.7 | $ | 0.2 | $ | 3.9 | |||
Costs incurred | 1.9 | 1.5 | 3.4 | ||||||
Payments | (2.7 | ) | (0.4 | ) | (3.1 | ) | |||
Liability at March 31, 2015 | $ | 2.9 | $ | 1.3 | $ | 4.2 |
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(in millions) | March 31, 2015 | December 31, 2014 | |||||
ABL Facility | $ | 786.4 | $ | 847.8 | |||
Equipment capital lease obligations | 10.0 | 11.0 | |||||
Total debt | 796.4 | 858.8 | |||||
Less: current portion of long-term debt | (3.6 | ) | (3.8 | ) | |||
Long-term debt, net of current maturities | $ | 792.8 | $ | 855.0 |
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Three Months Ended March 31, | |||||||
(in millions) | 2015 | 2014 | |||||
Income (loss) from continuing operations before income taxes | $ | (2.1 | ) | $ | 9.3 | ||
Income tax expense | 0.1 | 3.7 | |||||
Effective income tax rate | (4.8 | )% | 39.8 | % |
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Three Months Ended March 31, | |||
(in millions) | 2014 | ||
Intercompany sales and purchases, net | $ | 128.8 | |
Cash pooling and general financing activities | (170.7 | ) | |
Corporate allocations including income taxes | 13.2 | ||
Total net transfers to International Paper | $ | (28.7 | ) |
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Three Months Ended March 31, 2015 | |||||||
(in millions) | U.S. | Canada | |||||
Components of net periodic benefit cost (credit): | |||||||
Service cost | $ | 0.4 | $ | 0.1 | |||
Interest cost | 0.8 | 0.8 | |||||
Expected return on plan assets | (1.4 | ) | (0.9 | ) | |||
Net periodic benefit cost (credit) | $ | (0.2 | ) | $ | 0.0 |
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(in millions) | Contingent Liability | |||
Balance at December 31, 2014 | $ | 60.5 | ||
Purchase accounting adjustment | 0.6 | |||
Change in fair value adjustment | 1.3 | |||
Balance at March 31, 2015 | $ | 62.4 |
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(in millions) | March 31, 2015 | December 31, 2014 | |||||
Foreign currency translation adjustments | $ | (21.3 | ) | $ | (14.7 | ) | |
Adjustments to pension and other benefit liabilities, net of tax | (7.4 | ) | (7.4 | ) | |||
Total accumulated other comprehensive loss | $ | (28.7 | ) | $ | (22.1 | ) |
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Three Months Ended March 31, | |||
(in millions) | 2014 | ||
Total stock-based compensation expense | $ | 1.1 | |
Income tax benefit related to stock-based compensation | $ | 1.0 |
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(in millions) | Print | Publishing | Packaging | Facility Solutions | Corporate & Other | Total | |||||||||||||||||
Three Months Ended March 31, 2015 | |||||||||||||||||||||||
Net sales | $ | 820.7 | $ | 309.5 | $ | 675.2 | $ | 309.1 | $ | 23.4 | $ | 2,137.9 | |||||||||||
Adjusted EBITDA | $ | 15.5 | $ | 6.5 | $ | 45.7 | $ | 6.8 | $ | (46.1 | ) | $ | 28.4 | ||||||||||
Restructuring charges | $ | 0.9 | $ | — | $ | 0.8 | $ | 0.9 | $ | 0.8 | $ | 3.4 | |||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||||
Net sales | $ | 544.8 | $ | 189.2 | $ | 394.2 | $ | 179.2 | $ | — | $ | 1,307.4 | |||||||||||
Adjusted EBITDA | $ | 8.3 | $ | 3.7 | $ | 25.7 | $ | 0.1 | $ | (25.2 | ) | $ | 12.6 | ||||||||||
Restructuring income | $ | (0.1 | ) | $ | — | $ | — | $ | (0.1 | ) | $ | — | $ | (0.2 | ) |
Three Months Ended March 31, | |||||||
(in millions) | 2015 | 2014 | |||||
Income (loss) from continuing operations before income taxes | $ | (2.1 | ) | $ | 9.3 | ||
Interest expense, net | 6.4 | — | |||||
Depreciation and amortization | 13.5 | 4.6 | |||||
Restructuring charges (income) | 3.4 | (0.2 | ) | ||||
Non-restructuring stock-based compensation | 1.0 | 1.1 | |||||
LIFO income | (5.2 | ) | (3.8 | ) | |||
Non-restructuring severance charges | 0.4 | 1.7 | |||||
Integration expenses | 10.0 | — | |||||
Fair value adjustment on TRA contingent liability | 1.3 | — | |||||
Other | (0.3 | ) | (0.1 | ) | |||
Total Adjusted EBITDA | $ | 28.4 | $ | 12.6 |
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