VERITIV : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

May 05, 2021 at 04:07 pm EDT

Certain statements contained in this report regarding the Company's future
operating results, performance, business plans, prospects, guidance, the 2020
Restructuring Plan and any other restructuring, statements related to the impact
of COVID-19 and any other statements not constituting historical fact are
"forward-looking statements" subject to the safe harbor created by the Private
Securities Litigation Reform Act of 1995. Where possible, the words "believe,"
"expect," "anticipate," "continue," "intend," "should," "will," "would,"
"planned," "estimated," "potential," "goal," "outlook," "may," "predicts,"
"could," or the negative of such terms, or other comparable expressions, as they
relate to the Company or its business, have been used to identify such
forward-looking statements. All forward-looking statements reflect only the
Company's current beliefs and assumptions with respect to future operating
results, performance, business plans, prospects, guidance and other matters, and
are based on information currently available to the Company. Accordingly, the
statements are subject to significant risks, uncertainties and contingencies,
which could cause the Company's actual operating results, performance, business
plans, prospects or guidance to differ materially from those expressed in, or
implied by, these statements.

Factors that could cause actual results to differ materially from current
expectations include risks and other factors described under the heading "Risk
Factors" and elsewhere in our Annual Report on Form 10-K and elsewhere in the
Company's publicly available reports filed with the Securities and Exchange
Commission ("SEC"), which contain a discussion of various factors that may
affect the Company's business or financial results. Such risks and other
factors, which in some instances are beyond the Company's control, include:
adverse impacts of the COVID-19 pandemic; the industry-wide decline in demand
for paper and related products; increased competition from existing and
non-traditional sources; procurement and other risks in obtaining packaging,
facility products and paper from our suppliers for resale to our customers;
changes in prices for raw materials; changes in trade policies and regulations;
increases in the cost of fuel and third-party freight and the availability of
third-party freight providers; the loss of any of our significant customers;
uncertainties as to the structure, timing, benefits and costs of the 2020
Restructuring Plan or any future restructuring plan that the Company may
undertake; adverse developments in general business and economic conditions that
could impair our ability to use net operating loss carryforwards and other
deferred tax assets; our ability to adequately protect our material intellectual
property and other proprietary rights, or to defend successfully against
intellectual property infringement claims by third parties; our ability to
attract, train and retain highly qualified employees; our pension and health
care costs and participation in multi-employer pension, health and welfare
plans; the effects of work stoppages, union negotiations and labor disputes; our
ability to generate sufficient cash to service our debt; increasing interest
rates; our ability to refinance or restructure our debt on reasonable terms and
conditions as might be necessary from time to time; our ability to comply with
the covenants contained in our debt agreements; costs to comply with laws, rules
and regulations, including environmental, health and safety laws, and to satisfy
any liability or obligation imposed under such laws; changes in tax laws;
adverse results from litigation, governmental investigations or audits, or
tax-related proceedings or audits; regulatory changes and judicial rulings
impacting our business; the impact of adverse developments in general business
and economic conditions as well as conditions in the global capital and credit
markets on demand for our products and services, our business including our
international operations, and our customers; foreign currency fluctuations;
inclement weather, widespread outbreak of an illness, anti-terrorism measures
and other disruptions to our supply chain, distribution system and operations;
our dependence on a variety of information technology and telecommunications
systems and the Internet; our reliance on third-party vendors for various
services; cybersecurity risks; and other events of which we are presently
unaware or that we currently deem immaterial that may result in unexpected
adverse operating results.

For a more detailed discussion of these factors, see the information under the
heading "Risk Factors" and elsewhere in our Annual Report on Form 10-K and in
our other filings we make with the SEC. Forward-looking statements are made only
as of the date hereof, and the Company undertakes no obligation to update or
revise the forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law. In addition, historical
information should not be considered as an indicator of future performance.

The following discussion of the Company's financial condition and results of operations for the three months ended March 31, 2021 should be read in conjunction with the Condensed Consolidated Financial Statements and Notes thereto, included elsewhere in this report.


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Executive Overview

The COVID-19 Pandemic

The global outbreak of the novel coronavirus ("COVID-19"), which was declared a
pandemic by the World Health Organization on March 11, 2020, has led to adverse
impacts on the United States ("U.S.") and global economies and created
significant uncertainty regarding potential impacts to Veritiv Corporation's
("Veritiv" or the "Company") operations, supply chain and customer demand. The
COVID-19 pandemic has had widespread, rapidly evolving and unpredictable impacts
on global societies, economies, financial markets and business practices.
Federal and state governments have implemented measures in an effort to contain
the virus, including physical distancing recommendations, travel restrictions,
border closures, limitations on public gatherings, work-from-home
recommendations, supply chain logistical changes and closure of non-essential
businesses. Veritiv's logistics and distribution operations have fallen within
guidance provided by various government authorities on essential businesses,
services and workplaces and therefore the Company has not experienced any
closures of distribution centers. Veritiv serves customers across a broad range
of industry sectors and geographies, with varying COVID-19 impacts. Primarily
beginning in April 2020, unfavorable impacts from the COVID-19 pandemic have had
a negative impact on the Company's financial results, including decreased sales
activity. Sales activity during the first quarter of 2021 continued to be below
the same period in 2020 for the Company's reportable segments with the exception
of the Packaging segment, which is now above pre-COVID-19 levels.

Veritiv's first priority remains the health and safety of its employees,
customers and their families. The Company has taken steps to limit exposure and
enhance the safety of its facilities for employees working to continue to supply
vital products to its customers. In response to the pandemic, Veritiv initiated
its Corporate Incident Response Team and initiated enhanced health and safety
measures across its facilities. The Company modified practices at its
distribution centers and offices to adhere to guidance from the U.S. Centers for
Disease Control and Prevention and local health and governmental authorities
with respect to social distancing, enhanced cleaning protocols and usage of
personal protective equipment, where appropriate. In addition, the Company
implemented global travel restrictions and work-from-home policies for employees
who have the ability to work remotely.

In April 2020, Veritiv took several actions to help mitigate the effects of the
revenue decline and improve liquidity. These actions included (i) temporarily
reducing salaries for senior leaders ranging from 10% to 50% through June 2020,
(ii) temporarily reducing annual cash retainers for independent directors by 50%
through June 2020, (iii) placing approximately 15% of its salaried workforce on
temporary furloughs through mid-July 2020, (iv) adjusting its supply chain
operations staff depending on volume at specific locations, (v) suspending its
share repurchase program and (vi) reducing discretionary spending including
planned capital expenditures. In July 2020, Veritiv took additional actions in
response to the ongoing impacts of the COVID-19 pandemic to enhance liquidity,
including implementing cost-savings and cash preservation initiatives as
described under the "2020 Restructuring Plan" below. In addition, beginning with
the second quarter of 2020, the Company invested $75.0 million of its cash in
highly-liquid investments instead of paying down its long-term debt.

Veritiv's management expects that cash provided by operating activities and
available capacity under the Asset-Based Lending Facility (the "ABL Facility")
will provide sufficient funds to operate the business and meet other liquidity
needs. As of March 31, 2021, Veritiv had cash and cash equivalents of $109.0
million and also had $343.8 million in available additional borrowing capacity
under the ABL Facility. In April 2020, Veritiv refinanced and extended the
maturity date of the ABL Facility to April 2025.

The current circumstances are dynamic and the impacts of the COVID-19 pandemic
on the Company's business operations, including the duration and impact on
overall customer demand, cannot be reasonably estimated at this time. The extent
to which the COVID-19 pandemic impacts the Company's business, results of
operations, access to sources of liquidity and financial condition will depend
on future developments. These developments, which are highly uncertain and
cannot be predicted, include, but are not limited to, the duration, spread and
severity of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the
Company's employees, customers, suppliers and vendors and the remedial actions
and stimulus measures adopted by local and federal governments, the
availability, adoption and effectiveness of a vaccine and to what extent normal
economic and operating conditions can resume and be sustained. 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 that has
occurred or may occur in the future.
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Other Events

2021 Share Repurchase Program

On March 3, 2021, Veritiv announced that its Board of Directors authorized a
$50.0 million share repurchase program (the "2021 Share Repurchase Program").
Under this program the Company may purchase shares of its common stock through
open market transactions, privately negotiated transactions, forward,
derivative, or accelerated repurchase transactions, tender offers or otherwise,
in accordance with all applicable securities laws and regulations. This
authorization for the share repurchase program replaces the $25.0 million share
repurchase authorization previously approved by the Board of Directors in March
2020 (the "2020 Share Repurchase Program") and may be suspended, terminated,
increased or decreased by the Board at any time.

2020 Restructuring Plan



During the second quarter of 2020, the Company initiated a restructuring plan in
response to the impact of the COVID-19 pandemic on its business operations and
the ongoing secular changes in its Print and Publishing segments. During the
fourth quarter of 2020, the Company expanded the initial plan to further align
its cost structure with ongoing business needs as the Company executes on its
stated corporate strategy. The initial and expansion activities are collectively
referred to as the "2020 Restructuring Plan."

The 2020 Restructuring Plan includes (i) a reduction of the Company's U.S.
salaried workforce by approximately 15% across all business segments and
corporate functions, (ii) the closure of certain warehouse facilities and retail
stores, (iii) adjustments to various compensation plans, (iv) repositioning of
inventory to expand the Company's service radius and (v) other actions.

The Company currently estimates it will incur total restructuring charges of
between $70 million and $87 million in connection with the 2020 Restructuring
Plan. These costs will include the following activities (i) employee termination
and other one-time compensation costs, (ii) real estate exit costs, (iii)
certain inventory related costs and (iv) other exit costs. Initial charges were
incurred and recorded in June 2020. The Company expects to substantially
complete the 2020 Restructuring Plan by the end of 2021. See   Note 4   of the
Notes to Condensed Consolidated Financial Statements for information related to
the Company's restructuring efforts.

Supply Chain Restructuring



On March 13, 2020, Veritiv announced that its Board of Directors authorized
Company management to evaluate alternatives to restructure the Company's
integrated supply chain in an effort to facilitate better alignment with the
supply chain needs of the Company's customers by segment, with a view towards
reducing complexity and lowering overall supply chain costs. Each of the
Company's reportable segments has different market dynamics and business and
service needs. Moreover, to address the ongoing and rapid secular decline of the
paper industry, management continues to explore opportunities to adapt the cost
structure necessary to support the Print segment. The Company is not currently
anticipating a separate restructuring of the supply chain operations in 2021 as
the changes made in conjunction with the 2020 Restructuring Plan have positioned
the Company to meet its near-term needs. There can be no assurance as to what
form any future restructuring may take or whether this on-going evaluation will
result in any restructuring. Additionally, any restructuring may result in a
significant charge to earnings in any given financial reporting period or
periods.

Business Overview

Veritiv is a leading North American business-to-business full-service provider
of value-added packaging products and services, as well as facility solutions,
print and publishing products and services. Additionally, Veritiv provides
logistics and supply chain management solutions to its customers. Veritiv was
established in 2014, following the merger (the "Merger") of International Paper
Company's xpedx distribution solutions business and UWW Holdings, Inc., the
parent company of Unisource Worldwide, Inc. The Company operates from
approximately 125 distribution centers primarily throughout the U.S., Canada and
Mexico.

Veritiv's business is organized under four reportable segments: Packaging,
Facility Solutions, Print, and Publishing and Print Management ("Publishing").
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.
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The Company also has a Corporate & Other category which includes certain assets
and costs not primarily attributable to any of the reportable segments, as well
as the Veritiv logistics solutions business which provides transportation and
warehousing solutions. The following summary describes the products and services
offered in each of the reportable segments:
•Packaging - Veritiv is a global provider of packaging products, services and
solutions. The Packaging segment provides custom and standard packaging
solutions for customers based in North America and in key global markets.
Veritiv services its customers with a full spectrum of packaging product
materials within the fiber-based, flexible and rigid categories. The business is
strategically focused on higher growth industry sectors including manufacturing,
food processing and service, fulfillment and internet retail, as well as niche
sectors based on industry and product expertise. Veritiv's packaging
professionals create customer value through supply chain solutions, structural
and graphic packaging design and engineering, automation, workflow and equipment
services and kitting.

•Facility Solutions - Veritiv is a global provider of hygiene and facility
solutions products and services. The Facility Solutions segment sources and
sells cleaning, break-room and other supplies such as towels, tissues,
commercial cleaning chemicals, personal protective equipment and safety
supplies, wipers, can liners, soaps and sanitizers, dispensers, sanitary
maintenance supplies and equipment, hazard supplies, and shampoos and amenities
primarily in North America. Through this segment, Veritiv manages a world class
network of leading suppliers in most facilities solutions categories.
Additionally, the Company offers total cost of ownership solutions with
re-merchandising, budgeting and compliance reporting, inventory management and a
sales-force trained to bring leading vertical expertise to the major North
American geographies.

•Print - The Print segment sells and distributes commercial printing, writing,
copying, digital, specialty products and graphics consumables primarily in North
America. Veritiv's broad geographic platform of operations coupled with the
breadth of paper and graphics products, including exclusive private brand
offerings, provides a foundation to service national, regional and local
customers across North America.

•Publishing - The Publishing segment sells and distributes coated and uncoated
commercial printing papers to publishers, retailers, converters, printers and
specialty businesses for use in magazines, catalogs, books, directories, gaming,
couponing, retail inserts and direct mail primarily in the U.S. This segment
also provides print management, procurement and supply chain management
solutions to simplify paper and print procurement processes for Veritiv's
customers.

Seasonality



The Company's operating results are subject to seasonal influences.
Historically, its higher consolidated net sales have occurred during the third
and fourth quarters while its lowest consolidated net sales have occurred during
the first quarter. The Packaging segment net sales have traditionally increased
each quarter throughout the year and net sales for the first quarter have
typically been less than net sales for the fourth quarter of the preceding
year.  Production schedules for non-durable goods that build up to the holidays
and peak in the fourth quarter drive this seasonal net sales pattern.  Net sales
for the Facility Solutions segment have traditionally peaked in the third
quarter due to increased summer demand in the away-from-home resort, cruise and
hospitality markets and from back-to-school activities. Within the Print and
Publishing segments, seasonality is driven by increased magazine advertising
page counts, retail inserts, catalogs and direct mail primarily due to
back-to-school, political election and holiday-related advertising and
promotions in the second half of the year. The COVID-19 pandemic disrupted the
Company's seasonal patterns in net sales across all segments and on a
consolidated basis in 2020 due to the significant impacts of the pandemic on
many of Veritiv's customers. The duration and extent of the COVID-19 pandemic is
highly uncertain and the magnitude of continuing seasonality disruption is
difficult to predict.

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Results of Operations, Including Business Segments

The following discussion compares the consolidated operating results of Veritiv for the three months ended March 31, 2021 and 2020:


                                                             Three Months Ended
                                                                  March 31,                           Increase (Decrease)
(in millions)                                              2021               2020                  $                     %
Net sales                                              $ 1,559.3          $ 1,707.3          $     (148.0)             (8.7)%

Cost of products sold (exclusive of depreciation and amortization shown separately below)

                     1,238.1            1,359.6                (121.5)             (8.9)%
Distribution expenses                                      101.5              123.4                 (21.9)             (17.7)%
Selling and administrative expenses                        166.4              203.6                 (37.2)             (18.3)%
Depreciation and amortization                               14.5               13.8                   0.7               5.1%

Restructuring charges, net                                   4.3                  -                   4.3                 *
Operating income (loss)                                     34.5                6.9                  27.6              400.0%
Interest expense, net                                        5.1                7.0                  (1.9)             (27.1)%
Other (income) expense, net                                 (1.0)              (0.1)                 (0.9)            (900.0)%
Income (loss) before income taxes                           30.4                0.0                  30.4                 *
Income tax expense (benefit)                                 9.1                0.4                   8.7                 *

Net income (loss)                                      $    21.3          $    (0.4)         $       21.7                 *


*- not meaningful


Net Sales
For the three months ended March 31, 2021, net sales decreased in all reportable
segments except Packaging. Primarily beginning in April 2020, the Company
experienced decreased net sales due to the negative impacts from the COVID-19
pandemic. The decline in net sales for the three months ended March 31, 2021 was
primarily due to continued impacts of the COVID-19 pandemic across the
non-Packaging segments and the continuing secular decline in the paper industry.
The Print segment experienced the largest impact as net sales decreased $129.0
million. See the "Segment Results" section for additional discussion. Management
expects net sales during the first half of 2021 to be unfavorably impacted in
each of the Company's reportable segments due to the continuing negative effects
of the COVID-19 pandemic, with the exception of the Packaging segment. The
duration and extent of the COVID-19 pandemic is highly uncertain and the
magnitude of net sales declines is difficult to predict.

Cost of Products Sold (exclusive of depreciation and amortization shown
separately below)
For the three months ended March 31, 2021, cost of products sold decreased
primarily due to lower net sales. Cost of products sold decreased at a faster
rate than net sales due to improvements in pricing.

Distribution Expenses
For the three months ended March 31, 2021, distribution expenses decreased by
$21.9 million, or 17.7%. The decrease was primarily due to (i) a $7.8 million
decrease in wages and temporary employee expenses, (ii) a $7.1 million
multi-employer pension plan withdrawal charge in the first quarter of 2020 that
did not repeat in 2021, (iii) a $4.7 million decrease in facility and equipment
rent expense and (iv) a $1.0 million decrease in freight and logistics expense.
The decrease in wages and temporary employee expenses was primarily driven by
actions taken by the Company in response to the COVID-19 pandemic, including
lowering headcount across the Company's distribution network. The decrease in
facility and equipment rent expense was primarily driven by consolidation of the
Company's facilities. The decrease in freight and logistics expense was
primarily driven by a decrease in third-party freight and fuel expenses mostly
related to lower net sales volumes. The Company expects wages and related costs
to decline in the first half of the year versus the comparable prior year period
as a result of the reduction in the Company's U.S. salaried workforce.

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Selling and Administrative Expenses
For the three months ended March 31, 2021, selling and administrative expenses
decreased by $37.2 million, or 18.3%. The decrease was primarily due to (i) a
$28.6 million decrease in personnel expenses, (ii) a $3.5 million decrease in
bad debt expense, (iii) a $2.6 million decrease in professional fees expense and
(iv) a $2.4 million gain on the sale of a business. The decrease in personnel
expenses was primarily driven by (i) lower wages primarily as a result of
actions taken by the Company in response to the COVID-19 pandemic, (ii) a
decrease in commission expenses driven by lower net sales and (iii) a decrease
in travel and entertainment expenses in response to the COVID-19 pandemic,
partially offset by higher incentive compensation expenses. The Company expects
wages and related costs to decline in the first half of the year versus the
comparable prior year period as a result of the reduction in the Company's U.S.
salaried workforce.

Depreciation and Amortization For the three months ended March 31, 2021, depreciation and amortization increased by $0.7 million, or 5.1%. The increases were primarily due to increases in depreciation related to capitalized information technology and facilities expense.



Restructuring Charges, Net
For the three months ended March 31, 2021, restructuring charges, net, increased
by $4.3 million. The increase was due to net charges from the 2020 Restructuring
Plan occurring in 2021, which did not occur in the corresponding prior year
period. See   Note 4   of the Notes to Condensed Consolidated Financial
Statements for additional information related to the Company's restructuring
efforts.

Interest Expense, Net
For the three months ended March 31, 2021, interest expense, net, decreased by
$1.9 million, or 27.1%. The decrease was primarily due to (i) a lower average
balance on the Company's ABL Facility and (ii) lower average interest rates.

Other (Income) Expense, Net
For the three months ended March 31, 2021, other (income) expense, net, was
income of $1.0 million. This was a net improvement of $0.9 million as compared
to the same period in 2020. The improvement was primarily due to lower pension
expenses and higher foreign currency gains.

Effective Tax Rate
Veritiv's effective tax rate was 29.9% for the three months ended March 31,
2021. The effective tax rate for the three months ended March 31, 2020 was not
meaningful. The difference between the Company's effective tax rates and the
U.S. statutory tax rate of 21.0% primarily relates to state income taxes (net of
federal income tax benefit), non-deductible expenses, tax expense for stock
compensation vesting, Global Intangible Low-Taxed Income ("GILTI"), and the
Company's pre-tax book income (loss) by jurisdiction. In addition, for the three
months ended March 31, 2020, Veritiv recorded an estimated $2.1 million tax rate
benefit related to the carryback of net operating losses which are now available
due to the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act").

The historical volatility of the Company's effective tax rate has been primarily
due to both the level of pre-tax book income (loss) as well as variations in the
Company's income (loss) by jurisdiction. The Company may experience volatility
of the effective tax rate in future periods due to potential fluctuations in the
amount and source, including both foreign and domestic, of pre-tax book income
(loss) by jurisdiction, potential deferred tax valuation allowance increases in
jurisdictions, including the U.S., changes in amounts of non-deductible
expenses, and other items that could impact the effective tax rate.

Segment Results
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, net,
fair value adjustments related to contingent liabilities assumed in mergers and
acquisitions and certain other adjustments) is the primary financial performance
measure Veritiv uses to manage its businesses, to monitor its results of
operations, to measure its performance against the ABL Facility and to
incentivize its management.

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Veritiv believes investors commonly use Adjusted EBITDA as a key financial
metric for valuing companies. In addition, the credit agreement governing the
ABL Facility permits the Company to exclude these and other charges in
calculating Consolidated EBITDA, as defined in the ABL Facility. This common
metric is intended to align shareholders, debt holders and management. Adjusted
EBITDA is a non-GAAP financial measure and is not an alternative to net income,
operating income or any other measure prescribed by U.S. generally accepted
accounting principles ("U.S. GAAP").

Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of Veritiv's results as reported under U.S. GAAP. For example, Adjusted EBITDA:



•Does not reflect the Company's income tax expenses or the cash requirements to
pay its taxes; and
•Although depreciation and amortization charges are non-cash charges, it does
not reflect that the assets being depreciated and amortized will often have to
be replaced in the future and the foregoing metric does not reflect any cash
requirements for such replacements.

Other companies in the industry may calculate Adjusted EBITDA differently than
Veritiv does, limiting its usefulness as a comparative measure. Because of these
limitations, Adjusted EBITDA should not be considered as a measure of
discretionary cash available to Veritiv to invest in the growth of its business.
Veritiv compensates for these limitations by relying on the Company's U.S. GAAP
results and by using Adjusted EBITDA for supplemental purposes. Additionally,
Adjusted EBITDA is not an alternative measure of financial performance under
U.S. GAAP and therefore should be considered in conjunction with net income and
other performance measures such as operating income or net cash provided by
operating activities and not as an alternative to such U.S. GAAP measures.

Due to the shared nature of the distribution network to support the Packaging,
Facility Solutions and Print segments, distribution expenses are not a specific
charge to each segment, but are instead allocated to each segment based
primarily on operational metrics that correlate with changes in volume.
Accordingly, distribution expenses allocated to each segment are highly
interdependent on the results of other segments. Lower volume in any segment
that is not offset by a reduction in distribution expenses can result in the
other segments absorbing a larger share of distribution expenses. Conversely,
higher volume in any segment can result in the other segments absorbing a
smaller share of distribution expenses. The impact of this at the segment level
is that the changes in distribution expense trends may not correspond with
volume trends within a particular segment.

The Company sells thousands of products. In the Packaging and Facility Solutions
segments, Veritiv is unable to compute the impact of changes in sales volume
based on changes in sales of each individual product. Rather, the Company
assumes that the margin stays constant and estimates the volume impact based on
changes in cost of products sold as a proxy for the change in sales volume.
After any other significant sales variances are identified, the remaining sales
variance is attributed to price/mix.

The Company approximates foreign currency effects by applying the foreign
currency exchange rate for the prior period to the local currency results for
the current period. The Company believes the elimination of the foreign currency
translation impact provides better year-to-year comparability without the
distortion of foreign currency fluctuations.

The Company believes that the decline in demand for paper and related products
is due to the widespread use of electronic media and permanent product
substitution, more e-commerce, less print advertising, fewer catalogs and a
reduced volume of direct mail, among other factors. This trend, which may have
been accelerated by the COVID-19 pandemic, is expected to continue and will
place continued pressure on the Company's revenues and profit margins and make
it more difficult to maintain or grow Adjusted EBITDA within the Print and
Publishing segments.

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Included in the following table are net sales and Adjusted EBITDA for each of
the reportable segments and Corporate & Other:
                                                          Facility                                               Corporate &
(in millions)                          Packaging         Solutions           Print           Publishing             Other
Three Months Ended March 31, 2021
Net sales                             $  854.6          $   206.1          $ 323.2          $    148.1          $      27.3
Adjusted EBITDA                           78.0               11.5             12.3                 5.1                (47.4)
Adjusted EBITDA as a % of net sales        9.1  %             5.6  %           3.8  %              3.4  %                    *

Three Months Ended March 31, 2020
Net sales                             $  802.6          $   259.7          $ 452.2          $    166.7          $      26.1
Adjusted EBITDA                           59.6                9.0             11.2                 3.6                (47.2)
Adjusted EBITDA as a % of net sales        7.4  %             3.5  %           2.5  %              2.2  %                    *


* - not meaningful

See   Note 13   of the Notes to Condensed Consolidated Financial Statements for
additional information related to Adjusted EBITDA, including a reconciliation of
net income (loss) as reflected on the Condensed Consolidated Statements of
Operations to Adjusted EBITDA for reportable segments.

Packaging

The table below presents selected data for the Packaging segment:


                                                        Three Months Ended March 31,              Increase (Decrease)
(in millions)                                              2021                 2020                $             %
Net sales                                            $       854.6           $ 802.6          $      52.0          6.5  %
Adjusted EBITDA                                               78.0              59.6                 18.4         30.9  %
Adjusted EBITDA as a % of net sales                            9.1   %           7.4  %                           170 bps



The table below presents the components of the net sales change compared to the
prior year:
                                          Increase (Decrease)
                                           Three Months Ended
                                               March 31,
                      (in millions)          2021 vs. 2020
                      Volume             $               43.4
                      Foreign currency                    5.3
                      Price/Mix                           3.3

                      Total change       $               52.0