Veritiv Corp. to expand restructuring plan, cost may hit $100M

ATLANTA (News release) -- On December 16, the Board of Directors of Veritiv approved an expansion of the restructuring plan previously announced on July 9.

"We commenced the 2020 Restructuring Plan earlier this year in response to the impact of the COVID-19 pandemic on our business operations and the ongoing secular changes in our Print and Publishing segments. The Expansion will result in the closure of additional warehouse facilities, repositioning of inventory to expand our service radius, and other actions. The expanded 2020 Restructuring Plan is expected to further align our cost structure with ongoing business needs as we execute on our stated corporate strategy. We expect the Expansion to generate incremental annualized savings, including supply chain productivity improvements, in the range of approximately $12 to $22M beginning in 2021, in addition to the $80 to $90M of expected annualized savings associated with the 2020 Restructuring Plan, as announced in July. We estimate the Expansion will result in additional cash expenditures and charges of between $17 and $33M We expect these expenditures and charges will consist of approximately $5 to $6M in employee termination and other one-time compensation costs, $7 to $18M in real estate exit costs, $5M in inventory related charges and up to $4M in other exit costs. Based on the results to date from execution of the 2020 Restructuring Plan, as originally announced, we have reduced our overall cost estimates for the 2020 Restructuring Plan. We now estimate that the 2020 Restructuring Plan, as expanded, will result in total cash expenditures and charges of between $77 and $101M up slightly from the $75 to $90M announced in July. We expect to substantially complete the 2020 Restructuring Plan, as expanded, by the end of 2021."

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