MIAMISBURG, Ohio (News release) -- Verso Corporation announced that it has filed a presentation with the U.S. Securities and Exchange Commission ("SEC") in connection with the Company's upcoming 2019 Annual Meeting of Stockholders (the "Annual Meeting") on January 31, 2020. The presentation is available on the SEC's website at www.sec.gov and at the "SEC Filings" section of the Company's website at http://investor.versoco.com/sec-filings.
Highlights of the presentation include:
- Verso has a track record of delivering strong financial results.
- Verso's stock has outperformed both its peer group and Russell 2000 Composite Index, with 49% appreciation over the last three years, versus 37% and 33%, respectively.
- From 2017 to 2018, Verso increased its Adjusted EBITDA from $134 million to $296 million, driven by price and mix improvements.
- From 2017 to 2018, Verso generated strong cash flow and successfully eliminated all of the Company's long-term debt.
- In late 2018, Verso made the difficult decision to close the Luke mill in order to manage capacity, moving higher margin products to other mills.
- Verso has also managed SG&A costs to the lowest level of its peer group though process improvements and controls.
- Verso has a highly qualified, conflict-free, diverse, and refreshed Board.
- Verso has taken significant steps to refresh and diversify its Board of Directors to include a mix of industry and executive experience as well as a range of additional relevant expertise in, among other areas, finance, public company operations, corporate governance, manufacturing and distribution.
- The Company conducted a comprehensive and thoughtful search process over the course of approximately a year and a half, assisted by leading executive search firms.
- In November 2019, the Board added Nancy M. Taylor, a former chief executive officer of a publicly traded global manufacturer, and Randy J. Nebel, a respected pulp and paper executive with significant industry, financial and leadership experience.
- In December 2019, the Board announced the nomination of Paula H. J. Cholmondeley and Dr. Robert Beckler, highly regarded paper and manufacturing executives, to stand for election at the Annual Meeting.
- With Ms. Cholmondeley's and Dr. Beckler's nominations, four of six independent directors have been nominated for election at the Annual Meeting in the last eight weeks.
- Following their election at the Annual Meeting, five of seven directors will have joined the Board in less than one year.
- Verso is pursuing a majority voting standard through a proposal to be voted upon at the Annual Meeting, seeking to replace the existing standard established by Verso's stockholders upon the Company's emergence from Chapter 11 in July 2016.
- Importantly, Board fees consist of a base retainer for each director, as well as Board Chair and committee Chair retainers. The Company has eliminated all supplemental Board fees. Director compensation and the Company's peer group will be revisited following the Annual Meeting to consider the Company's size after the Pixelle transaction.
- Verso plans to return significant capital to stockholders following the Pixelle Transaction, and continues to execute a clearly defined and successful strategy.
- As a result of the strategic review the Company launched in June 2019, Verso announced an agreement to sell our Androscoggin and Stevens Point Mills to Pixelle Specialty Solutions LLC (the "Pixelle Transaction") for $400 million in order to prioritize graphics operations and maximize value for all stockholders.
- Verso plans to return at least $225 million to stockholders. In order to most effectively maximize value of the return to stockholders, Verso's Board, as disciplined stewards of the Company's capital, will determine the method, timing and precise amounts of such returns promptly following the Pixelle Transaction closing after taking into account, among other things, the composition of the Company's then existing stockholder base, relevant tax considerations and existing market conditions.
- Verso is in the midst of a significant transformation to address the current headwinds in a challenging market. The Company continues to evolve with the macro environment and invest in capital projects with high risk adjusted returns to take advantage of market opportunities.
- For example, in 2018, Verso invested $17 million in the Androscoggin mill conversion at a fraction of the cost and time that other companies have spent to achieve operational status. Without such a conversion, the Androscoggin mill would have likely been shut down at a cost of ~$55 million.
- Atlas/Blue Wolf1 is pursuing a self-serving agenda and offers no credible strategy or plan, and its nominees have serious conflicts of interest.
- Atlas/Blue Wolf is engaging in a costly proxy contest as a result of its failed bidding process for Verso.
- Two of Atlas/Blue Wolf's nominees are directly conflicted, as one individual is affiliated with Twin Rivers Paper, a direct competitor of Verso and the very asset Atlas/Blue Wolf wants to merge with our Company.
- The second nominee provides advisory services to Atlas/Blue Wolf, and has been a nominee in other Atlas/Blue Wolf proxy fight campaigns.
- Atlas/Blue Wolf's nominees add no incremental value to Verso's Board slate, which already includes highly qualified and diverse paper industry executives who collectively have more than 150 years of relevant paper industry experience.
Verso stockholders are reminded that their vote is important, no matter how many or how few shares they own. The Company's Board of Directors unanimously urges stockholders to protect the value of their investment by using the WHITE proxy card to vote "FOR" all of Verso's director nominees: Dr. Robert K. Beckler, Paula H. J. Cholmondeley, Randy J. Nebel, Steven D. Scheiwe, Jay Shuster, Adam St. John and Nancy M. Taylor, and "FOR" the Pixelle Transaction.
The Board advises all stockholders to simply discard any proxy card or other proxy materials received from the Atlas Group.
1 Lapetus Capital II LLC ("Lapetus", and together with its affiliates, "Atlas," and BW Coated LLC and together with its affiliates, "Blue Wolf," and, collectively with Atlas, "Atlas/Blue Wolf")