Delaware
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46-3234977
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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1000 Abernathy Road NE
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Building 400, Suite 1700
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Atlanta, Georgia
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30328
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(Address of principal executive offices)
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(Zip code)
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
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2016
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2015
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2016
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2015
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||||||||
Net sales (including sales to related party of $9.1, $8.0, $18.1 and $17.0, respectively)
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$
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2,060.8
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$
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2,159.3
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$
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4,080.6
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$
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4,297.2
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Cost of products sold (including purchases from related party of $46.6, $67.1, $102.9 and $136.5, respectively) (exclusive of depreciation and amortization shown separately below)
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1,687.9
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1,768.3
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3,342.4
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3,530.2
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||||
Distribution expenses
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121.7
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129.5
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249.2
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260.2
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Selling and administrative expenses
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207.7
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218.0
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408.6
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428.6
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Depreciation and amortization
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13.6
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15.3
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27.1
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28.8
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||||
Integration expenses
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6.1
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10.3
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12.3
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20.3
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||||
Restructuring charges (income)
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(0.3
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)
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2.2
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1.4
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5.6
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||||
Operating income
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24.1
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15.7
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39.6
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23.5
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||||
Interest expense, net
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6.4
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6.4
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12.9
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12.8
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||||
Other expense (income), net
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3.6
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(1.5
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)
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5.1
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2.0
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||||
Income before income taxes
|
14.1
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10.8
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21.6
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8.7
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||||
Income tax expense
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6.2
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6.5
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10.4
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6.6
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Net income
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$
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7.9
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$
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4.3
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$
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11.2
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$
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2.1
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Earnings per share:
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Basic and diluted earnings per share
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$
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0.49
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$
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0.27
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$
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0.70
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$
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0.13
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Weighted average shares outstanding:
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Basic and diluted
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16.00
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16.00
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16.00
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16.00
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
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2016
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2015
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2016
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2015
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Net income
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$
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7.9
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$
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4.3
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$
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11.2
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$
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2.1
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Other comprehensive income (loss):
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||||||||
Foreign currency translation adjustments
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(1.6
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)
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0.1
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2.2
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(6.5
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)
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||||
Change in fair value of cash flow hedge, net of $0.1 and $0.2 tax for 2016
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0.0
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—
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(0.3
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)
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—
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Pension liability adjustments, net of $0.0 and $0.1 tax for 2016
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0.1
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—
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0.2
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—
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Other comprehensive income (loss)
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(1.5
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)
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0.1
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2.1
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(6.5
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)
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||||
Total comprehensive income (loss)
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$
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6.4
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$
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4.4
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$
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13.3
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$
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(4.4
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)
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June 30, 2016
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December 31, 2015
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||||
Assets
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Current assets:
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Cash
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$
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46.1
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$
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54.4
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Accounts receivable, less allowances of $31.7 and $33.3, respectively
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999.2
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1,037.5
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Related party receivable
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4.6
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3.9
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Inventories
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692.9
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720.6
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Other current assets
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110.4
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108.8
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Total current assets
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1,853.2
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1,925.2
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Property and equipment, net
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356.4
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363.7
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Goodwill
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50.2
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50.2
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Other intangibles, net
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28.4
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30.2
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Deferred income tax assets
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67.0
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73.3
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Other non-current assets
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30.9
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34.3
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Total assets
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$
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2,386.1
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$
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2,476.9
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Liabilities and shareholders' equity
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Current liabilities:
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Accounts payable
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$
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604.1
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$
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565.1
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Related party payable
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11.1
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|
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10.7
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|
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Accrued payroll and benefits
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96.7
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120.5
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Other accrued liabilities
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90.6
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100.4
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Current maturities of long-term debt
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2.6
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2.8
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Financing obligations to related party, current portion
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14.9
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14.7
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Total current liabilities
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820.0
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814.2
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Long-term debt, net of current maturities
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697.5
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800.5
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||
Financing obligations to related party, less current portion
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187.0
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197.8
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||
Defined benefit pension obligations
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27.8
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|
28.7
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|
||
Other non-current liabilities
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105.3
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|
105.6
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|
||
Total liabilities
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1,837.6
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|
|
1,946.8
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|
||
Commitments and contingencies (Note 10)
|
|
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|
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Shareholders' equity:
|
|
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|
||||
Preferred stock, $0.01 par value, 10.0 million shares authorized, none issued
|
—
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—
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Common stock, $0.01 par value, 100.0 million shares authorized, 16.0 million shares issued and outstanding
|
0.2
|
|
|
0.2
|
|
||
Additional paid-in capital
|
571.3
|
|
|
566.2
|
|
||
Accumulated earnings (deficit)
|
9.9
|
|
|
(1.3
|
)
|
||
Accumulated other comprehensive loss
|
(32.9
|
)
|
|
(35.0
|
)
|
||
Total shareholders' equity
|
548.5
|
|
|
530.1
|
|
||
Total liabilities and shareholders' equity
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$
|
2,386.1
|
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|
$
|
2,476.9
|
|
|
Six Months Ended June 30,
|
||||||
Operating Activities
|
2016
|
|
2015
|
||||
Net income
|
$
|
11.2
|
|
|
$
|
2.1
|
|
Depreciation and amortization
|
27.1
|
|
|
28.8
|
|
||
Amortization of deferred financing fees
|
2.2
|
|
|
2.2
|
|
||
Provision for allowance for doubtful accounts
|
(2.6
|
)
|
|
5.8
|
|
||
Deferred income tax provision
|
6.5
|
|
|
5.5
|
|
||
Stock-based compensation
|
5.1
|
|
|
1.9
|
|
||
Other non-cash items, net
|
4.1
|
|
|
2.6
|
|
||
Changes in operating assets and liabilities
|
|
|
|
|
|
||
Accounts receivable and related party receivable
|
43.8
|
|
|
84.6
|
|
||
Inventories
|
31.9
|
|
|
(44.2
|
)
|
||
Accounts payable and related party payable
|
36.9
|
|
|
53.1
|
|
||
Accrued payroll and benefits
|
(28.8
|
)
|
|
(6.3
|
)
|
||
Other
|
(14.6
|
)
|
|
(11.7
|
)
|
||
Net cash provided by operating activities
|
122.8
|
|
|
124.4
|
|
||
Investing Activities
|
|
|
|
||||
Property and equipment additions
|
(17.8
|
)
|
|
(22.6
|
)
|
||
Proceeds from asset sales
|
4.9
|
|
|
0.2
|
|
||
Net cash used for investing activities
|
(12.9
|
)
|
|
(22.4
|
)
|
||
Financing Activities
|
|
|
|
||||
Change in book overdrafts
|
0.9
|
|
|
(18.5
|
)
|
||
Borrowings of long-term debt
|
2,202.5
|
|
|
2,292.8
|
|
||
Repayments of long-term debt
|
(2,308.8
|
)
|
|
(2,346.3
|
)
|
||
Payments under equipment capital lease obligations
|
(1.8
|
)
|
|
(2.0
|
)
|
||
Payments under financing obligations to related party
|
(11.2
|
)
|
|
(6.8
|
)
|
||
Net cash used for financing activities
|
(118.4
|
)
|
|
(80.8
|
)
|
||
Effect of exchange rate changes on cash
|
0.2
|
|
|
0.6
|
|
||
Net change in cash
|
(8.3
|
)
|
|
21.8
|
|
||
Cash at beginning of period
|
54.4
|
|
|
57.6
|
|
||
Cash at end of period
|
$
|
46.1
|
|
|
$
|
79.4
|
|
Supplemental Cash Flow Information
|
|
|
|
|
|
||
Cash paid for income taxes, net of refunds
|
$
|
2.0
|
|
|
$
|
1.1
|
|
Cash paid for interest
|
10.3
|
|
|
10.5
|
|
||
Non-Cash Investing and Financing Activities
|
|
|
|
|
|
||
Non-cash additions to property and equipment
|
$
|
1.9
|
|
|
$
|
5.0
|
|
Standard
|
|
Description
|
|
Effective Date
|
|
Effect on the Financial Statements or Other Significant Matters
|
Accounting Standards Update ("ASU") 2014-09,
Revenue from Contracts with Customers
|
|
The standard will replace existing revenue recognition standards and significantly expand the disclosure requirements for revenue arrangements. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with remaining performance obligations as of the effective date.
|
|
January 1, 2018; early adoption date is no earlier than the annual period beginning after December 15, 2016
|
|
The Company is currently evaluating the alternative methods of adoption (full retrospective or modified retrospective), and the effect on its Consolidated Financial Statements and related disclosures. The Company plans to adopt this ASU on January 1, 2018.
|
ASU 2015-11,
Simplifying the Measurement of Inventory
|
|
The standard requires companies to measure inventory at the lower of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. This ASU will not apply to inventories measured by either the last-in first-out (LIFO) method or retail inventory method.
|
|
January 1, 2017
|
|
The Company plans to adopt this ASU on January 1, 2017. Given that the majority (approximately 87% of the June 30, 2016 inventory balance) of the Company's inventory is measured using LIFO, it is not expected that the adoption of these provisions will have a material effect on its Consolidated Financial Statements.
|
ASU 2016-02,
Leases (Topic 842)
|
|
The standard requires lessees to put most leases on their balance sheet but recognize expenses in their statement of operations in a manner similar to current accounting guidance. The new standard also eliminates the current guidance related to real estate specific provisions.
|
|
January 1, 2019; early adoption is permitted
|
|
The Company is currently evaluating the impact the ASU will have on its Consolidated Financial Statements and related disclosures. The Company plans to adopt this ASU on January 1, 2019.
|
ASU 2016-09,
Compensation-Stock Compensation (Topic 718)
|
|
The standard was issued as part of the Financial Accounting Standards Board's simplification initiative. The areas for simplification involve several aspects of the accounting for share-based payment transactions, including income tax consequences, award classification as either equity or liabilities, and classification on the statement of cash flows.
|
|
January 1, 2017; early adoption is permitted
|
|
The Company adopted this ASU on January 1, 2016. The adoption did not materially impact the financial statements or related disclosures.
|
ASU 2016-13,
Financial Instruments-Credit Losses (Topic 326)
|
|
The standard will replace the currently required incurred loss impairment methodology with guidance that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to be considered in making credit loss estimates.
|
|
January 1, 2020; early adoption for fiscal years beginning after December 15, 2018
|
|
The Company is currently evaluating the impact the ASU will have on its Consolidated Financial Statements and related disclosures. The Company plans to adopt this ASU on January 1, 2020.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Integration management
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
Retention compensation
|
0.9
|
|
|
3.1
|
|
|
2.0
|
|
|
6.6
|
|
||||
Information technology conversion costs
|
1.3
|
|
|
2.2
|
|
|
2.4
|
|
|
4.3
|
|
||||
Rebranding
|
0.5
|
|
|
1.7
|
|
|
1.2
|
|
|
2.5
|
|
||||
Legal, consulting and other professional fees
|
0.5
|
|
|
2.5
|
|
|
1.0
|
|
|
5.4
|
|
||||
Other
|
0.9
|
|
|
0.8
|
|
|
1.9
|
|
|
1.5
|
|
||||
Total integration expenses
|
$
|
6.1
|
|
|
$
|
10.3
|
|
|
$
|
12.3
|
|
|
$
|
20.3
|
|
(in millions)
|
Severance and Related Costs
|
|
Other Direct Costs
|
|
Non-Cash Items
|
|
Total
|
||||||||
Balance at December 31, 2015
|
$
|
1.7
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
Costs incurred
|
0.7
|
|
|
0.3
|
|
|
0.7
|
|
|
1.7
|
|
||||
Payments
|
(0.9
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(1.3
|
)
|
||||
Other adjustments
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
(0.7
|
)
|
||||
Balance at March 31, 2016
|
1.5
|
|
|
0.3
|
|
|
—
|
|
|
1.8
|
|
||||
Costs incurred
|
0.9
|
|
|
1.5
|
|
|
(2.7
|
)
|
|
(0.3
|
)
|
||||
Payments
|
(0.6
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
(1.6
|
)
|
||||
Other adjustments
|
—
|
|
|
—
|
|
|
2.7
|
|
|
2.7
|
|
||||
Balance at June 30, 2016
|
$
|
1.8
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
2.6
|
|
(in millions)
|
Severance and Related Costs
|
|
Other Direct Costs
|
|
Total
|
||||||
Balance 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
|
)
|
|||
Balance at March 31, 2015
|
2.9
|
|
|
1.3
|
|
|
4.2
|
|
|||
Costs incurred
|
1.0
|
|
|
1.2
|
|
|
2.2
|
|
|||
Payments
|
(1.1
|
)
|
|
(0.7
|
)
|
|
(1.8
|
)
|
|||
Balance at June 30, 2015
|
$
|
2.8
|
|
|
$
|
1.8
|
|
|
$
|
4.6
|
|
(in millions)
|
June 30, 2016
|
|
December 31, 2015
|
||||
Asset-Based Lending Facility (the "ABL Facility")
|
$
|
692.0
|
|
|
$
|
795.5
|
|
Equipment capital lease obligations
(1)
|
8.1
|
|
|
7.8
|
|
||
Total debt
|
700.1
|
|
|
803.3
|
|
||
Less: current portion of long-term debt
|
(2.6
|
)
|
|
(2.8
|
)
|
||
Long-term debt, net of current maturities
|
$
|
697.5
|
|
|
$
|
800.5
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
||||||||||||
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
||||||||
Income before income taxes
|
$
|
14.1
|
|
|
$
|
10.8
|
|
|
$
|
21.6
|
|
|
$
|
8.7
|
|
|
Income tax expense
|
$
|
6.2
|
|
|
$
|
6.5
|
|
|
$
|
10.4
|
|
|
$
|
6.6
|
|
|
Effective tax rate
|
44.0
|
%
|
|
60.2
|
%
|
|
48.1
|
%
|
|
75.9
|
%
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Sales to Georgia-Pacific, reflected in net sales
|
|
$
|
9.1
|
|
|
$
|
8.0
|
|
|
$
|
18.1
|
|
|
$
|
17.0
|
|
Purchases of inventory from Georgia-Pacific, recognized in cost of products sold
|
|
$
|
46.6
|
|
|
$
|
67.1
|
|
|
$
|
102.9
|
|
|
$
|
136.5
|
|
(in millions)
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Inventories purchased from Georgia-Pacific that remained on Veritiv's balance sheet
|
|
$
|
27.0
|
|
|
$
|
25.2
|
|
Related party payable to Georgia-Pacific
|
|
$
|
11.1
|
|
|
$
|
10.7
|
|
Related party receivable from Georgia-Pacific
|
|
$
|
4.6
|
|
|
$
|
3.9
|
|
|
Three Months Ended June 30, 2016
|
|
Three Months Ended June 30, 2015
|
||||||||||||
(in millions)
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
||||||||
Components of net periodic benefit cost (credit):
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
0.5
|
|
|
$
|
0.0
|
|
|
$
|
0.5
|
|
|
$
|
0.0
|
|
Interest cost
|
0.9
|
|
|
0.8
|
|
|
0.9
|
|
|
0.9
|
|
||||
Expected return on plan assets
|
(1.3
|
)
|
|
(0.9
|
)
|
|
(1.3
|
)
|
|
(0.9
|
)
|
||||
Amortization of net loss
|
0.1
|
|
|
0.0
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (credit)
|
$
|
0.2
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.1
|
|
|
$
|
0.0
|
|
|
Six Months Ended June 30, 2016
|
|
Six Months Ended June 30, 2015
|
||||||||||||
(in millions)
|
U.S.
|
|
Canada
|
|
U.S.
|
|
Canada
|
||||||||
Components of net periodic benefit cost (credit):
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
0.9
|
|
|
$
|
0.1
|
|
|
$
|
0.9
|
|
|
$
|
0.1
|
|
Interest cost
|
1.8
|
|
|
1.6
|
|
|
1.7
|
|
|
1.7
|
|
||||
Expected return on plan assets
|
(2.6
|
)
|
|
(1.8
|
)
|
|
(2.7
|
)
|
|
(1.8
|
)
|
||||
Amortization of net loss
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (credit)
|
$
|
0.2
|
|
|
$
|
0.0
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.0
|
|
(in millions)
|
|
Contingent Liability
|
||
Balance at December 31, 2015
|
|
$
|
63.0
|
|
Change in fair value adjustment recorded in other expense (income), net
|
|
1.8
|
|
|
Balance at March 31, 2016
|
|
64.8
|
|
|
Change in fair value adjustment recorded in other expense (income), net
|
|
2.0
|
|
|
Balance at June 30, 2016
|
|
$
|
66.8
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(in millions, except per share data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
7.9
|
|
|
$
|
4.3
|
|
|
$
|
11.2
|
|
|
$
|
2.1
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding – basic and diluted
|
16.00
|
|
|
16.00
|
|
|
16.00
|
|
|
16.00
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted earnings per share
|
$
|
0.49
|
|
|
$
|
0.27
|
|
|
$
|
0.70
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
||||||||
Antidilutive stock-based awards excluded from computation of diluted EPS
|
0.20
|
|
|
0.06
|
|
|
0.20
|
|
|
0.06
|
|
||||
Performance stock-based awards excluded from computation of diluted EPS because performance conditions had not been met
|
0.34
|
|
|
0.24
|
|
|
0.34
|
|
|
0.24
|
|
(in millions)
|
|
Foreign currency translation adjustments
|
|
Retirement liabilities
|
|
Interest rate swap
|
|
AOCL
|
||||||||
Balance at December 31, 2015
|
|
$
|
(27.1
|
)
|
|
$
|
(7.4
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(35.0
|
)
|
Unrealized net gains (losses) arising during the year
|
|
3.8
|
|
|
—
|
|
|
(0.3
|
)
|
|
3.5
|
|
||||
Amounts reclassified from AOCL
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Net current period other comprehensive income (loss)
|
|
3.8
|
|
|
0.1
|
|
|
(0.3
|
)
|
|
3.6
|
|
||||
Balance at March 31, 2016
|
|
(23.3
|
)
|
|
(7.3
|
)
|
|
(0.8
|
)
|
|
(31.4
|
)
|
||||
Unrealized net losses arising during the year
|
|
(1.6
|
)
|
|
—
|
|
|
0.0
|
|
|
(1.6
|
)
|
||||
Amounts reclassified from AOCL
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Net current period other comprehensive income (loss)
|
|
(1.6
|
)
|
|
0.1
|
|
|
—
|
|
|
(1.5
|
)
|
||||
Balance at June 30, 2016
|
|
$
|
(24.9
|
)
|
|
$
|
(7.2
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(32.9
|
)
|
(in millions)
|
|
Foreign currency translation adjustments
|
|
Retirement liabilities
|
|
AOCL
|
||||||
Balance at December 31, 2014
|
|
$
|
(14.7
|
)
|
|
$
|
(7.4
|
)
|
|
$
|
(22.1
|
)
|
Unrealized net losses arising during the year
|
|
(6.6
|
)
|
|
—
|
|
|
(6.6
|
)
|
|||
Net current period other comprehensive loss
|
|
(6.6
|
)
|
|
—
|
|
|
(6.6
|
)
|
|||
Balance at March 31, 2015
|
|
(21.3
|
)
|
|
(7.4
|
)
|
|
(28.7
|
)
|
|||
Unrealized net gains arising during the year
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Net current period other comprehensive income
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Balance at June 30, 2015
|
|
$
|
(21.2
|
)
|
|
$
|
(7.4
|
)
|
|
$
|
(28.6
|
)
|
(in millions)
|
Print
|
|
Publishing
|
|
Packaging
|
|
Facility Solutions
|
|
Corporate & Other
|
|
Total
|
||||||||||||
Three Months Ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
$
|
751.7
|
|
|
$
|
252.5
|
|
|
$
|
704.8
|
|
|
$
|
322.0
|
|
|
$
|
29.8
|
|
|
$
|
2,060.8
|
|
Adjusted EBITDA
|
19.7
|
|
|
5.9
|
|
|
59.2
|
|
|
13.9
|
|
|
(48.6
|
)
|
|
50.1
|
|
||||||
Depreciation and amortization
|
3.2
|
|
|
0.8
|
|
|
3.1
|
|
|
1.5
|
|
|
5.0
|
|
|
13.6
|
|
||||||
Restructuring charges (income)
|
(0.6
|
)
|
|
—
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|
(0.3
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
812.5
|
|
|
294.4
|
|
|
699.6
|
|
|
324.5
|
|
|
28.3
|
|
|
2,159.3
|
|
||||||
Adjusted EBITDA
|
18.4
|
|
|
7.4
|
|
|
51.8
|
|
|
10.6
|
|
|
(47.5
|
)
|
|
40.7
|
|
||||||
Depreciation and amortization
|
3.4
|
|
|
1.0
|
|
|
4.0
|
|
|
2.1
|
|
|
4.8
|
|
|
15.3
|
|
||||||
Restructuring charges
|
0.8
|
|
|
—
|
|
|
0.5
|
|
|
0.4
|
|
|
0.5
|
|
|
2.2
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Six Months Ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
1,510.8
|
|
|
514.8
|
|
|
1,376.3
|
|
|
623.0
|
|
|
55.7
|
|
|
4,080.6
|
|
||||||
Adjusted EBITDA
|
35.7
|
|
|
9.9
|
|
|
105.9
|
|
|
21.4
|
|
|
(87.9
|
)
|
|
85.0
|
|
||||||
Depreciation and amortization
|
6.4
|
|
|
1.7
|
|
|
6.1
|
|
|
3.0
|
|
|
9.9
|
|
|
27.1
|
|
||||||
Restructuring charges
|
0.3
|
|
|
—
|
|
|
0.4
|
|
|
0.5
|
|
|
0.2
|
|
|
1.4
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
1,633.2
|
|
|
603.9
|
|
|
1,374.8
|
|
|
633.6
|
|
|
51.7
|
|
|
4,297.2
|
|
||||||
Adjusted EBITDA
|
33.9
|
|
|
13.8
|
|
|
97.5
|
|
|
17.5
|
|
|
(93.6
|
)
|
|
69.1
|
|
||||||
Depreciation and amortization
|
6.8
|
|
|
1.6
|
|
|
7.8
|
|
|
3.9
|
|
|
8.7
|
|
|
28.8
|
|
||||||
Restructuring charges
|
1.6
|
|
|
—
|
|
|
1.4
|
|
|
1.3
|
|
|
1.3
|
|
|
5.6
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Income before income taxes
|
$
|
14.1
|
|
|
$
|
10.8
|
|
|
$
|
21.6
|
|
|
$
|
8.7
|
|
Interest expense, net
|
6.4
|
|
|
6.4
|
|
|
12.9
|
|
|
12.8
|
|
||||
Depreciation and amortization
|
13.6
|
|
|
15.3
|
|
|
27.1
|
|
|
28.8
|
|
||||
Restructuring charges (income)
|
(0.3
|
)
|
|
2.2
|
|
|
1.4
|
|
|
5.6
|
|
||||
Stock-based compensation
|
3.1
|
|
|
0.9
|
|
|
5.1
|
|
|
1.9
|
|
||||
LIFO (income) expense
|
2.2
|
|
|
(4.8
|
)
|
|
(3.1
|
)
|
|
(10.0
|
)
|
||||
Non-restructuring severance charges
|
1.4
|
|
|
1.0
|
|
|
2.2
|
|
|
1.4
|
|
||||
Integration expenses
|
6.1
|
|
|
10.3
|
|
|
12.3
|
|
|
20.3
|
|
||||
Fair value adjustments on TRA contingent liability
|
2.0
|
|
|
(1.7
|
)
|
|
3.8
|
|
|
(0.4
|
)
|
||||
Other
|
1.5
|
|
|
0.3
|
|
|
1.7
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
50.1
|
|
|
$
|
40.7
|
|
|
$
|
85.0
|
|
|
$
|
69.1
|
|
•
|
Print
– The Print segment sells and distributes commercial printing, writing, copying, digital, wide format and specialty paper products, graphics consumables and graphics equipment primarily in the U.S., Canada and Mexico. This segment also includes customized paper conversion services of commercial printing paper for distribution to document centers and form printers. 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. This segment also provides print management, procurement and supply chain management solutions to simplify paper and print procurement processes for Veritiv's customers.
|
•
|
Packaging
– The Packaging segment provides standard as well as custom and comprehensive packaging solutions for customers based in North America and in key global markets. The business is strategically focused on higher growth industries including light industrial/general manufacturing, food production, fulfillment and internet retail, as well as niche verticals based on geographical and functional expertise. Veritiv’s packaging professionals create customer value through supply chain solutions, structural and graphic packaging design and engineering, automation, workflow and equipment services, contract packaging, and kitting and fulfillment.
|
•
|
Facility Solutions
– The Facility Solutions segment sources and sells cleaning, break-room and other supplies such as towels, tissues, wipers and dispensers, can liners, commercial cleaning chemicals, soaps and sanitizers, sanitary maintenance supplies and equipment, safety and hazard supplies, and shampoos and amenities primarily in the U.S., Canada and Mexico. 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.
|
|
Three Months Ended
June 30, |
|
Increase (Decrease)
|
|
Six Months Ended
June 30, |
|
Increase (Decrease)
|
||||||||||||||||||||||
(in millions)
|
2016
|
|
2015
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
||||||||||||||
Net sales
|
$
|
2,060.8
|
|
|
$
|
2,159.3
|
|
|
$
|
(98.5
|
)
|
|
(5
|
)%
|
|
$
|
4,080.6
|
|
|
$
|
4,297.2
|
|
|
$
|
(216.6
|
)
|
|
(5
|
)%
|
Cost of products sold (exclusive of depreciation and amortization shown separately below)
|
1,687.9
|
|
|
1,768.3
|
|
|
(80.4
|
)
|
|
(5
|
)%
|
|
3,342.4
|
|
|
3,530.2
|
|
|
(187.8
|
)
|
|
(5
|
)%
|
||||||
Distribution expenses
|
121.7
|
|
|
129.5
|
|
|
(7.8
|
)
|
|
(6
|
)%
|
|
249.2
|
|
|
260.2
|
|
|
(11.0
|
)
|
|
(4
|
)%
|
||||||
Selling and administrative expenses
|
207.7
|
|
|
218.0
|
|
|
(10.3
|
)
|
|
(5
|
)%
|
|
408.6
|
|
|
428.6
|
|
|
(20.0
|
)
|
|
(5
|
)%
|
||||||
Depreciation and amortization
|
13.6
|
|
|
15.3
|
|
|
(1.7
|
)
|
|
(11
|
)%
|
|
27.1
|
|
|
28.8
|
|
|
(1.7
|
)
|
|
(6
|
)%
|
||||||
Integration expenses
|
6.1
|
|
|
10.3
|
|
|
(4.2
|
)
|
|
(41
|
)%
|
|
12.3
|
|
|
20.3
|
|
|
(8.0
|
)
|
|
(39
|
)%
|
||||||
Restructuring charges (income)
|
(0.3
|
)
|
|
2.2
|
|
|
(2.5
|
)
|
|
(114
|
)%
|
|
1.4
|
|
|
5.6
|
|
|
(4.2
|
)
|
|
(75
|
)%
|
||||||
Operating income
|
24.1
|
|
|
15.7
|
|
|
8.4
|
|
|
54
|
%
|
|
39.6
|
|
|
23.5
|
|
|
16.1
|
|
|
69
|
%
|
||||||
Interest expense, net
|
6.4
|
|
|
6.4
|
|
|
—
|
|
|
—
|
%
|
|
12.9
|
|
|
12.8
|
|
|
0.1
|
|
|
1
|
%
|
||||||
Other expense (income), net
|
3.6
|
|
|
(1.5
|
)
|
|
5.1
|
|
|
*
|
|
|
5.1
|
|
|
2.0
|
|
|
3.1
|
|
|
155
|
%
|
||||||
Income before income taxes
|
14.1
|
|
|
10.8
|
|
|
3.3
|
|
|
31
|
%
|
|
21.6
|
|
|
8.7
|
|
|
12.9
|
|
|
*
|
|
||||||
Income tax expense
|
6.2
|
|
|
6.5
|
|
|
(0.3
|
)
|
|
(5
|
)%
|
|
10.4
|
|
|
6.6
|
|
|
3.8
|
|
|
58
|
%
|
||||||
Net income
|
$
|
7.9
|
|
|
$
|
4.3
|
|
|
$
|
3.6
|
|
|
84
|
%
|
|
$
|
11.2
|
|
|
$
|
2.1
|
|
|
$
|
9.1
|
|
|
*
|
|
•
|
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 metrics do not reflect any cash requirements for such replacements.
|
(in millions)
|
Print
|
|
Publishing
|
|
Packaging
|
|
Facility Solutions
|
|
Corporate & Other
|
|
Total
|
||||||||||||
Three Months Ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
$
|
751.7
|
|
|
$
|
252.5
|
|
|
$
|
704.8
|
|
|
$
|
322.0
|
|
|
$
|
29.8
|
|
|
$
|
2,060.8
|
|
Adjusted EBITDA
|
$
|
19.7
|
|
|
$
|
5.9
|
|
|
$
|
59.2
|
|
|
$
|
13.9
|
|
|
$
|
(48.6
|
)
|
|
$
|
50.1
|
|
Adjusted EBITDA as a % of net sales
|
2.6
|
%
|
|
2.3
|
%
|
|
8.4
|
%
|
|
4.3
|
%
|
|
*
|
|
|
2.4
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
$
|
812.5
|
|
|
$
|
294.4
|
|
|
$
|
699.6
|
|
|
$
|
324.5
|
|
|
$
|
28.3
|
|
|
$
|
2,159.3
|
|
Adjusted EBITDA
|
$
|
18.4
|
|
|
$
|
7.4
|
|
|
$
|
51.8
|
|
|
$
|
10.6
|
|
|
$
|
(47.5
|
)
|
|
$
|
40.7
|
|
Adjusted EBITDA as a % of net sales
|
2.3
|
%
|
|
2.5
|
%
|
|
7.4
|
%
|
|
3.3
|
%
|
|
*
|
|
|
1.9
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Six Months Ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
$
|
1,510.8
|
|
|
$
|
514.8
|
|
|
$
|
1,376.3
|
|
|
$
|
623.0
|
|
|
$
|
55.7
|
|
|
$
|
4,080.6
|
|
Adjusted EBITDA
|
$
|
35.7
|
|
|
$
|
9.9
|
|
|
$
|
105.9
|
|
|
$
|
21.4
|
|
|
$
|
(87.9
|
)
|
|
$
|
85.0
|
|
Adjusted EBITDA as a % of net sales
|
2.4
|
%
|
|
1.9
|
%
|
|
7.7
|
%
|
|
3.4
|
%
|
|
*
|
|
|
2.1
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
$
|
1,633.2
|
|
|
$
|
603.9
|
|
|
$
|
1,374.8
|
|
|
$
|
633.6
|
|
|
$
|
51.7
|
|
|
$
|
4,297.2
|
|
Adjusted EBITDA
|
$
|
33.9
|
|
|
$
|
13.8
|
|
|
$
|
97.5
|
|
|
$
|
17.5
|
|
|
$
|
(93.6
|
)
|
|
$
|
69.1
|
|
Adjusted EBITDA as a % of net sales
|
2.1
|
%
|
|
2.3
|
%
|
|
7.1
|
%
|
|
2.8
|
%
|
|
*
|
|
|
1.6
|
%
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income
|
|
$
|
7.9
|
|
|
$
|
4.3
|
|
|
$
|
11.2
|
|
|
$
|
2.1
|
|
Interest expense, net
|
|
6.4
|
|
|
6.4
|
|
|
12.9
|
|
|
12.8
|
|
||||
Income tax expense
|
|
6.2
|
|
|
6.5
|
|
|
10.4
|
|
|
6.6
|
|
||||
Depreciation and amortization
|
|
13.6
|
|
|
15.3
|
|
|
27.1
|
|
|
28.8
|
|
||||
EBITDA
|
|
34.1
|
|
|
32.5
|
|
|
61.6
|
|
|
50.3
|
|
||||
Restructuring charges (income)
|
|
(0.3
|
)
|
|
2.2
|
|
|
1.4
|
|
|
5.6
|
|
||||
Stock-based compensation
|
|
3.1
|
|
|
0.9
|
|
|
5.1
|
|
|
1.9
|
|
||||
LIFO (income) expense
|
|
2.2
|
|
|
(4.8
|
)
|
|
(3.1
|
)
|
|
(10.0
|
)
|
||||
Non-restructuring severance charges
|
|
1.4
|
|
|
1.0
|
|
|
2.2
|
|
|
1.4
|
|
||||
Integration expenses
|
|
6.1
|
|
|
10.3
|
|
|
12.3
|
|
|
20.3
|
|
||||
Fair value adjustments on TRA contingent liability
|
|
2.0
|
|
|
(1.7
|
)
|
|
3.8
|
|
|
(0.4
|
)
|
||||
Other
|
|
1.5
|
|
|
0.3
|
|
|
1.7
|
|
|
—
|
|
||||
Adjusted EBITDA
|
|
$
|
50.1
|
|
|
$
|
40.7
|
|
|
$
|
85.0
|
|
|
$
|
69.1
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
2,060.8
|
|
|
$
|
2,159.3
|
|
|
$
|
4,080.6
|
|
|
$
|
4,297.2
|
|
Adjusted EBITDA as a % of net sales
|
|
2.4
|
%
|
|
1.9
|
%
|
|
2.1
|
%
|
|
1.6
|
%
|
|
Three Months Ended June 30,
|
|
2016 vs. 2015
|
|
Six Months Ended June 30,
|
|
2016 vs. 2015
|
||||||||||||||
(in millions)
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
||||||||||
Net sales
|
$
|
751.7
|
|
|
$
|
812.5
|
|
|
(7.5
|
)%
|
|
$
|
1,510.8
|
|
|
$
|
1,633.2
|
|
|
(7.5
|
)%
|
Adjusted EBITDA
|
$
|
19.7
|
|
|
$
|
18.4
|
|
|
7.1
|
%
|
|
$
|
35.7
|
|
|
$
|
33.9
|
|
|
5.3
|
%
|
Adjusted EBITDA as a % of net sales
|
2.6
|
%
|
|
2.3
|
%
|
|
|
|
2.4
|
%
|
|
2.1
|
%
|
|
|
|
Increase (Decrease)
|
||||||
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||
(in millions)
|
2016 vs. 2015
|
|
2016 vs. 2015
|
||||
Volume
|
$
|
(59.7
|
)
|
|
$
|
(119.2
|
)
|
Foreign currency
|
(2.9
|
)
|
|
(8.5
|
)
|
||
Price/Mix
|
1.8
|
|
|
5.3
|
|
||
Total change
|
$
|
(60.8
|
)
|
|
$
|
(122.4
|
)
|
|
Three Months Ended June 30,
|
|
2016 vs. 2015
|
|
Six Months Ended June 30,
|
|
2016 vs. 2015
|
||||||||||||||
(in millions)
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
||||||||||
Net sales
|
$
|
252.5
|
|
|
$
|
294.4
|
|
|
(14.2
|
)%
|
|
$
|
514.8
|
|
|
$
|
603.9
|
|
|
(14.8
|
)%
|
Adjusted EBITDA
|
$
|
5.9
|
|
|
$
|
7.4
|
|
|
(20.3
|
)%
|
|
$
|
9.9
|
|
|
$
|
13.8
|
|
|
(28.3
|
)%
|
Adjusted EBITDA as a % of net sales
|
2.3
|
%
|
|
2.5
|
%
|
|
|
|
1.9
|
%
|
|
2.3
|
%
|
|
|
|
Increase (Decrease)
|
||||||
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||
(in millions)
|
2016 vs. 2015
|
|
2016 vs. 2015
|
||||
Volume
|
$
|
(32.6
|
)
|
|
$
|
(77.5
|
)
|
Foreign currency
|
—
|
|
|
(0.1
|
)
|
||
Price/Mix
|
(9.3
|
)
|
|
(11.5
|
)
|
||
Total change
|
$
|
(41.9
|
)
|
|
$
|
(89.1
|
)
|
|
Three Months Ended June 30,
|
|
2016 vs. 2015
|
|
Six Months Ended June 30,
|
|
2016 vs. 2015
|
||||||||||||||
(in millions)
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
||||||||||
Net sales
|
$
|
704.8
|
|
|
$
|
699.6
|
|
|
0.7
|
%
|
|
$
|
1,376.3
|
|
|
$
|
1,374.8
|
|
|
0.1
|
%
|
Adjusted EBITDA
|
$
|
59.2
|
|
|
$
|
51.8
|
|
|
14.3
|
%
|
|
$
|
105.9
|
|
|
$
|
97.5
|
|
|
8.6
|
%
|
Adjusted EBITDA as a % of net sales
|
8.4
|
%
|
|
7.4
|
%
|
|
|
|
7.7
|
%
|
|
7.1
|
%
|
|
|
|
Increase (Decrease)
|
||||||
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||
(in millions)
|
2016 vs. 2015
|
|
2016 vs. 2015
|
||||
Volume
|
$
|
11.8
|
|
|
$
|
12.5
|
|
Foreign currency
|
(5.8
|
)
|
|
(14.1
|
)
|
||
Price/Mix
|
(0.8
|
)
|
|
3.1
|
|
||
Total change
|
$
|
5.2
|
|
|
$
|
1.5
|
|
|
Three Months Ended June 30,
|
2016 vs. 2015
|
|
Six Months Ended June 30,
|
|
2016 vs. 2015
|
|||||||||||||||
(in millions)
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
|
2016
|
|
2015
|
|
Increase (Decrease) %
|
||||||||||
Net sales
|
$
|
322.0
|
|
|
$
|
324.5
|
|
|
(0.8
|
)%
|
|
$
|
623.0
|
|
|
$
|
633.6
|
|
|
(1.7
|
)%
|
Adjusted EBITDA
|
$
|
13.9
|
|
|
$
|
10.6
|
|
|
31.1
|
%
|
|
$
|
21.4
|
|
|
$
|
17.5
|
|
|
22.3
|
%
|
Adjusted EBITDA as a % of net sales
|
4.3
|
%
|
|
3.3
|
%
|
|
|
|
3.4
|
%
|
|
2.8
|
%
|
|
|
|
Increase (Decrease)
|
||||||
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||
(in millions)
|
2016 vs. 2015
|
|
2016 vs. 2015
|
||||
Volume
|
$
|
5.9
|
|
|
$
|
2.7
|
|
Foreign currency
|
(3.2
|
)
|
|
(9.1
|
)
|
||
Price/Mix
|
(5.2
|
)
|
|
(4.2
|
)
|
||
Total change
|
$
|
(2.5
|
)
|
|
$
|
(10.6
|
)
|
|
Six Months Ended June 30,
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
Net cash provided by (used for):
|
|
|
|
||||
Operating activities
|
$
|
122.8
|
|
|
$
|
124.4
|
|
Investing activities
|
(12.9
|
)
|
|
(22.4
|
)
|
||
Financing activities
|
(118.4
|
)
|
|
(80.8
|
)
|
|
|
|
VERITIV CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
Date:
|
August 9, 2016
|
|
By: /s/ Stephen J. Smith
|
|
|
|
Name: Stephen J. Smith
|
|
|
|
Title: Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Date:
|
August 9, 2016
|
|
By: /s/ W. Forrest Bell
|
|
|
|
Name: W. Forrest Bell
|
|
|
|
Title: Chief Accounting Officer
|
|
|
|
(Principal Accounting Officer)
|
Name of Grantee
:
|
[•]
|
Number of Deferred Share Units
:
|
[•]
|
Grant Date
:
|
[•]
|
Fully Vested Award
:
|
The Deferred Share Units are fully vested and nonforfeitable as of the Grant Date, and shall be paid to the Grantee in Shares at the time provided in the attached terms and conditions.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Veritiv Corporation;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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August 9, 2016
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/s/ Mary A. Laschinger
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Mary A. Laschinger
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Chairman and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Veritiv Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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August 9, 2016
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/s/ Stephen J. Smith
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Stephen J. Smith
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Senior Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Mary A. Laschinger
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Mary A. Laschinger
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Chairman and Chief Executive Officer
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August 9, 2016
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Stephen J. Smith
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Stephen J. Smith
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Senior Vice President and Chief Financial Officer
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August 9, 2016
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