CHICAGO--(BUSINESS WIRE)--
Donnelley Financial Solutions (NYSE: DFIN) today reported
financial results for the fourth quarter and full year 2017.
Highlights:
|
| Fourth-quarter 2017 | Full-year 2017 |
|
Net Sales
| $224.8 million | $1,004.9 million |
|
GAAP Net earnings (loss)(1) | ($23.7) million | $9.7 million |
|
Non-GAAP Adjusted EBITDA(2) | $32.9 million | $174.1 million |
|
Operating Cash Flow
| $57.7 million | $91.4 million |
|
Free Cash Flow(2) | $49.9 million | $63.6 million |
|
| | | |
(1)
| |
Includes $22.4 million of additional income tax expense in the
fourth quarter of 2017 related to the U.S. Tax Cuts and Jobs Act.
|
| |
(2)
| |
Non-GAAP Adjusted EBITDA and Free Cash Flow are non-GAAP measures
that exclude the impact of items
noted in the reconciliation tables below. See the tables below for
amounts and reconciliations to the most comparable GAAP measures.
|
| |
| |
| |
|
-
Reduced outstanding debt by $128.7 million during 2017, ending the
year with total debt of $458.3 million, and cash of $52.0 million
-
Company issues full-year 2018 guidance
“I am pleased with our results for 2017, our first full year as a
standalone company,” said Daniel N. Leib, Donnelley Financial’s
President and Chief Executive Officer. “Revenue increased by $21
million, driven by growth in Investment Markets, Language Solutions and
International, while softer than expected transactional activity
resulted in a modest decline in U.S. capital markets. The revenue growth
we achieved, coupled with aggressive cost management, drove $63.6
million of free cash flow in 2017, most of which was used to reduce the
Company's debt. Within the first five quarters of the spin-off from R.R.
Donnelley, we have reduced our total debt by nearly $180 million, ending
2017 with gross leverage of 2.6x. In addition, we ended the year with
$52 million of cash.”
Leib continued, “In light of our strengthened financial position, the
market opportunities we see and the benefits of the recently announced
tax legislation, we will increase our investments in 2018 to drive
long-term growth. Our targeted gross leverage range remains in the range
of 2.25x to 2.75x.”
Net Sales
Net sales in the fourth quarter of 2017 were $224.8 million, an increase
of $3.8 million, or 1.7%, from the fourth quarter of 2016. After
adjusting for changes in foreign exchange rates, organic sales increased
1.0% from the fourth quarter of 2016 driven primarily by growth in
transactional, compliance and Venue revenue within U.S. Capital Markets,
which was partially offset by declines in U.S. Investment Markets and
International.
GAAP Earnings (loss)
Fourth-quarter 2017 net loss was $23.7 million, or $0.71 per diluted
share, compared to net loss of $0.8 million, or $0.02 per diluted share,
in the fourth quarter of 2016. The fourth-quarter 2017 net loss included
additional income tax expense of $22.4 million, or $0.67 per diluted
share, related to the impact of the U.S. Tax Cuts and Jobs Act. The
fourth-quarter net loss included after-tax charges of $28.4 million and
$4.9 million in 2017 and 2016, respectively, all of which are excluded
from the presentation of non-GAAP net earnings. Additional details
regarding the amount and nature of these and other items are included in
the attached schedules.
Non-GAAP Adjusted EBITDA and Net Earnings (loss)
Non-GAAP adjusted EBITDA in the fourth quarter of 2017 was $32.9
million, compared to $27.7 million in the fourth quarter of 2016.
Non-GAAP adjusted EBITDA margin in the fourth quarter of 2017 was 14.6%,
210 basis points higher than in the fourth quarter of 2016. The increase
in non-GAAP adjusted EBITDA and non-GAAP adjusted EBITDA margin was
primarily driven by company-wide cost reductions and increased activity
within U.S. Capital Markets, partially offset by reduced activity within
International and U.S. Investment Markets, as well as higher
employee-related expenses.
Non-GAAP net earnings totaled $4.7 million, or $0.14 per diluted share,
in the fourth quarter of 2017 compared to non-GAAP net earnings of $4.1
million, or $0.13 per diluted share, in the fourth quarter of 2016.
Reconciliations of net earnings to non-GAAP adjusted EBITDA and non-GAAP
net earnings, as well as non-GAAP adjusted EBITDA margin, are presented
in the attached schedules.
Impact of the U.S. Tax Cuts and Jobs Act
The Company recorded additional income tax expense of $22.4 million, or
$0.67 per diluted share, in the fourth quarter of 2017 related to the
impact of the U.S. Tax Cuts and Jobs Act. The additional income tax
expense represents the Company’s initial estimate of the transition tax
imposed on accumulated foreign earnings and the remeasurement of the
Company's net deferred tax asset.
2018 Guidance
The Company provides the following full-year guidance for 2018, which
includes increased operating expense and capital expenditures related to
investments targeted toward driving long-term revenue growth:
| 2018 Guidance |
|
Net sales
|
Approximately $1 billion,
representing organic growth in the
range of 1% to 2%
|
|
Non-GAAP adjusted EBITDA(1) | $165-$175 million |
|
Depreciation and amortization
|
Approximately $50 million |
|
Interest expense
|
Approximately $37 million |
|
Non-GAAP effective tax rate
|
29% to 31%
|
|
Diluted share count
|
Approximately 34 million
|
|
Capital expenditures
| $40 to $45 million |
|
Free cash flow(2) | $55 to $60 million |
|
(1)
|
|
Pension income excluded from non-GAAP adjusted EBITDA beginning in
2018; pension income of $3.3 million was included in full-year 2017
non-GAAP adjusted EBITDA
|
|
(2)
| |
Defined as operating cash flow less capital expenditures. 2018 free
cash flow guidance includes approximately $15 million for
spinoff-related transition expenses.
|
| |
|
Certain components of the guidance given above are provided on a
non-GAAP basis only, without providing a reconciliation to guidance
provided on a GAAP basis. Information is presented in this manner,
consistent with SEC rules, because the preparation of such a
reconciliation could not be accomplished without “unreasonable efforts.”
The Company does not have access to certain information that would be
necessary to provide such a reconciliation, including non-recurring
items that are not indicative of the Company’s ongoing operations. Such
items include, but are not limited to, restructuring charges, impairment
charges, spinoff-related transaction expenses, acquisition-related
expenses, gains or losses on investments and business disposals and
other similar gains or losses not reflective of the Company's ongoing
operations. The Company does not believe that this information is likely
to be significant to an assessment of the Company’s ongoing operations,
given that it is not an indicator of business performance.
Conference Call
Donnelley Financial will host a conference call and simultaneous webcast
to discuss its fourth-quarter results today, Wednesday, February 28, at
9:00 a.m. Eastern Time (8:00 a.m. Central Time). The live webcast will
be accessible on Donnelley Financial’s web site: www.dfsco.com.
Individuals wishing to participate must
register in advance at http://www.meetme.net/DFIN.
After registering, participants will receive dial-in numbers, a
passcode, and a personal identification number (PIN) that is used to
uniquely identify their presence and automatically join them into the
audio conference. A webcast replay will be archived on the Company’s web
site for 30 days after the call. In addition, a telephonic replay of the
call will be available for seven days at 630.652.3042, passcode 7739939#.
About Donnelley Financial
Donnelley Financial (NYSE: DFIN) provides software and services that
enable clients to communicate with confidence in a complex regulatory
environment. With 3,400 employees in 61 locations across 18 countries,
we provide thousands of clients globally with innovative tools for
content creation, management and distribution, as well as data analytics
and multi-lingual localization services. Leveraging advanced technology,
deep-domain expertise and 24/7 support, we deliver cost-effective
solutions to meet the evolving needs of our clients.
For more information about Donnelley Financial, visit dfsco.com.
Use of non-GAAP Information
This news release contains certain non-GAAP measures, including non-GAAP
SG&A, non-GAAP SG&A as % of total net sales, non-GAAP income from
operations, non-GAAP operating margin, non-GAAP adjusted EBITDA,
non-GAAP adjusted EBITDA margin, non-GAAP effective tax rate, non-GAAP
net earnings, non-GAAP diluted earnings per share, free cash flow and
organic net sales. The Company believes that these non-GAAP measures,
when presented in conjunction with comparable GAAP measures, provide
useful information about the Company’s operating results and liquidity
and enhance the overall ability to assess the Company’s financial
performance. The Company uses these measures, together with other
measures of performance under GAAP, to compare the relative performance
of operations in planning, budgeting and reviewing the performance of
its business.
Our non-GAAP statement of operations measures, non-GAAP SG&A, non-GAAP
SG&A as % of total net sales, non-GAAP income from operations, non-GAAP
operating margin, non-GAAP adjusted EBITDA, non-GAAP adjusted EBITDA
margin, non-GAAP effective tax rate, non-GAAP net earnings and non-GAAP
diluted earnings per share, are adjusted to exclude the impact of
certain costs, expenses, gains and losses and other specified items that
management believes are not indicative of our ongoing operations. These
adjusted measures exclude the impact of expenses associated with the
Company’s acquisition activities, spin-off related expenses, share-based
compensation and eliminate potential differences in results of
operations between periods caused by factors such as depreciation and
amortization methods, historic cost and age of assets, financing and
capital structures, taxation positions or regimes, restructuring,
impairment and other charges and gain or loss on certain equity
investments and asset sales.
Free cash flow is a non-GAAP financial measure and is defined by the
Company as net cash flow provided by operating activities less capital
expenditures. By adjusting for the level of capital investment in
operations, the Company believes that free cash flow can provide useful
additional basis for understanding the Company’s ability to generate
cash after capital investment and provides a comparison to peers with
differing capital intensity.
Organic net sales is a non-GAAP financial measure and is defined by the
Company as reported net sales adjusted for the impact of changes in
foreign exchange rates and acquired and disposed businesses.
These non-GAAP measures should be considered in addition to, not a
substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP. In addition, these measures are
defined differently by different companies in our industry and,
accordingly, such measures may not be comparable to similarly-titled
measures of other companies.
Use of Forward-Looking Statements
This news release includes certain "forward-looking statements" within
the meaning of, and subject to the safe harbor created by, Section 21E
of the Securities Exchange Act of 1934, as amended, with respect to the
business, strategy and plans of Donnelley Financial and its expectations
relating to future financial condition and performance. Statements that
are not historical facts, including statements about Donnelley Financial
management’s beliefs and expectations, are forward-looking statements.
Words such as "believes," "anticipates," "estimates," "expects,"
"intends," "aims," "potential," "will," "would," "could," "considered,"
"likely," "estimate" and variations of these words and similar future or
conditional expressions are intended to identify forward-looking
statements but are not the exclusive means of identifying such
statements. While Donnelley Financial believes these expectations,
assumptions, estimates and projections are reasonable, such
forward-looking statements are only predictions and involve known and
unknown risks and uncertainties, many of which are beyond Donnelley
Financial’s control. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend upon
future circumstances that may or may not occur. Actual results may
differ materially from Donnelley Financial’s current expectations
depending upon a number of factors affecting the business and risks
associated with the performance of the business. These factors include
such risks and uncertainties detailed in Donnelley Financial’s periodic
public filings with the SEC, including but not limited to those
discussed under "Risk Factors" in Donnelley Financial's Form 10-K for
the fiscal year ended December 31, 2016, those discussed under
“Cautionary Statement” in Donnelley Financial’s quarterly Form 10-Q
filings, and in other investor communications of Donnelley Financial’s
from time to time. Donnelley Financial does not undertake to and
specifically declines any obligation to publicly release the results of
any revisions to these forward-looking statements that may be made to
reflect future events or circumstances after the date of such statement
or to reflect the occurrence of anticipated or unanticipated events.
|
| | |
| | |
Donnelley Financial Solutions, Inc. |
Consolidated Balance Sheets
|
As of December 31, 2017 and December 31, 2016
|
(UNAUDITED) |
(in millions, except per share data) |
| | | | | |
|
| | December 31, 2017 | | | December 31, 2016 | |
| Assets | | | | | | | | |
|
Cash and cash equivalents
| |
$
|
52.0
| | |
$
|
36.2
| |
|
Receivables, less allowances for doubtful accounts of
$7.3 in 2017 (2016 - $6.4)
| | |
165.2
| | | |
156.2
| |
|
Receivables from R.R. Donnelley (1) | | |
—
| | | |
96.0
| |
|
Inventories
| | |
23.3
| | | |
24.1
| |
|
Prepaid expenses and other current assets
| |
|
29.6
| | |
|
17.1
| |
|
Total Current Assets
| |
| 270.1 | | |
| 329.6 | |
|
Property, plant and equipment - net
| | |
34.7
| | | |
35.5
| |
|
Goodwill
| | |
447.4
| | | |
446.4
| |
|
Other intangible assets - net
| | |
39.9
| | | |
54.3
| |
|
Software-net
| | |
41.1
| | | |
41.6
| |
|
Deferred income taxes
| | |
22.2
| | | |
37.0
| |
|
Other noncurrent assets
| |
|
38.1
| | |
|
34.5
| |
| Total Assets | | $ | 893.5 | | | $ | 978.9 | |
| | | | | | | |
|
| Liabilities | | | | | | | | |
|
Accounts payable
| |
$
|
67.8
| | |
$
|
85.3
| |
|
Accrued liabilities
| |
|
119.2
| | |
|
100.7
| |
|
Total Current Liabilities
| |
| 187.0 | | |
| 186.0 | |
|
Long-term debt
| | |
458.3
| | | |
587.0
| |
|
Deferred compensation liabilities
| | |
22.8
| | | |
24.4
| |
|
Pension and other postretirement benefits plan liabilities
| | |
52.5
| | | |
56.4
| |
|
Other noncurrent liabilities
| |
|
23.5
| | |
|
14.0
| |
| Total Liabilities | |
| 744.1 | | |
| 867.8 | |
| | | | | | | |
|
| Equity | | | | | | | | |
|
Common stock, $0.01 par value
| | | | | | | | |
|
Authorized: 65.0 shares;
| | | | | | | | |
|
Issued: 33.8 shares in 2017 (2016 - 32.6 shares)
| | |
0.3
| | | |
0.3
| |
|
Treasury stock, at cost: less than 0.1 shares in 2017
| | |
(0.9
|
)
| | |
—
| |
|
Additional paid-in capital
| | |
205.7
| | | |
179.9
| |
|
Retained earnings (deficit)
| | |
8.9
| | | |
(0.8
|
)
|
|
Accumulated other comprehensive loss
| |
|
(64.6
|
)
| |
|
(68.3
|
)
|
| Total Equity | |
| 149.4 | | |
| 111.1 | |
| Total Liabilities and Equity | | $ | 893.5 | | | $ | 978.9 | |
| | | | | | | |
|
|
(1) Beginning in the quarter ended September 30, 2017, R.R.
Donnelley ("RRD") no longer qualified as a related party.
| |
|
|
|
| | |
| | |
| Donnelley Financial Solutions, Inc. |
Consolidated and Combined Statements of Operations
|
For the Three and Twelve Months Ended December 31, 2017 and 2016
|
(UNAUDITED) |
(in millions, except per share data) |
| | | | | |
|
| | For the Three Months Ended December 31, | | | For the Twelve Months Ended December 31, | |
| | 2017 GAAP | |
| ADJUSTMENTS TO NON-GAAP | |
| 2017 NON-GAAP | |
| 2016 GAAP | |
| ADJUSTMENTS TO NON-GAAP | |
| 2016 NON-GAAP | | | 2017 GAAP | |
| ADJUSTMENTS TO NON-GAAP | |
| 2017 NON-GAAP | |
| 2016 GAAP | |
| ADJUSTMENTS TO NON-GAAP | |
| 2016 NON-GAAP | |
|
Services net sales
| |
$
|
160.7
| | |
$
|
—
| | |
$
|
160.7
| | |
$
|
144.5
| | |
$
|
—
| | |
$
|
144.5
| | |
$
|
632.1
| | |
$
|
—
| | |
$
|
632.1
| | |
$
|
598.6
| | |
$
|
—
| | |
$
|
598.6
| |
|
Products net sales
| |
|
64.1
| | |
|
—
| | |
|
64.1
| | |
|
76.5
| | |
|
—
| | |
|
76.5
| | |
|
372.8
| | |
|
—
| | |
|
372.8
| | |
|
384.9
| | |
|
—
| | |
|
384.9
| |
| Total net sales | |
| 224.8 | | |
| — | | |
| 224.8 | | |
| 221.0 | | |
| — | | |
| 221.0 | | |
| 1,004.9 | | |
| — | | |
| 1,004.9 | | |
| 983.5 | | |
| — | | |
| 983.5 | |
|
Services cost of sales (1)
| | |
88.5
| | | |
—
| | | |
88.5
| | | |
82.5
| | | |
—
| | | |
82.5
| | | |
328.7
| | | |
—
| | | |
328.7
| | | |
297.1
| | | |
—
| | | |
297.1
| |
|
Services cost of sales with
R.R. Donnelley affiliates (1) (2)
| | |
—
| | | |
—
| | | |
—
| | | |
8.4
| | | |
—
| | | |
8.4
| | | |
19.5
| | | |
—
| | | |
19.5
| | | |
37.8
| | | |
—
| | | |
37.8
| |
|
Products cost of sales (1)
| | |
50.2
| | | |
—
| | | |
50.2
| | | |
46.3
| | | |
—
| | | |
46.3
| | | |
240.9
| | | |
—
| | | |
240.9
| | | |
226.2
| | | |
—
| | | |
226.2
| |
|
Products cost of sales with
R.R. Donnelley affiliates (1) (2)
| |
|
—
| | |
|
—
| | |
|
—
| | |
|
9.3
| | |
|
—
| | |
|
9.3
| | |
|
32.3
| | |
|
—
| | |
|
32.3
| | |
|
57.9
| | |
|
—
| | |
|
57.9
| |
| Total cost of sales (1) | |
| 138.7 | | |
| — | | |
| 138.7 | | |
| 146.5 | | |
| — | | |
| 146.5 | | |
| 621.4 | | |
| — | | |
| 621.4 | | |
| 619.0 | | |
| — | | |
| 619.0 | |
|
Selling, general and administrative
expenses (SG&A) (1)
| | |
61.7
| | | |
(8.5
|
)
| | |
53.2
| | | |
53.0
| | | |
(6.2
|
)
| | |
46.8
| | | |
232.9
| | | |
(23.5
|
)
| | |
209.4
| | | |
209.8
| | | |
(7.4
|
)
| | |
202.4
| |
|
Restructuring, impairment and other
charges - net
| | |
0.7
| | | |
(0.7
|
)
| | |
—
| | | |
1.8
| | | |
(1.8
|
)
| | |
—
| | | |
7.1
| | | |
(7.1
|
)
| | |
—
| | | |
5.4
| | | |
(5.4
|
)
| | |
—
| |
|
Depreciation and amortization
| |
|
12.8
| | |
|
—
| | |
|
12.8
| | |
|
13.2
| | |
|
—
| | |
|
13.2
| | |
|
44.5
| | |
|
—
| | |
|
44.5
| | |
|
43.3
| | |
|
—
| | |
|
43.3
| |
| Income from operations | |
| 10.9 | | |
| 9.2 | | |
| 20.1 | | |
| 6.5 | | |
| 8.0 | | |
| 14.5 | | |
| 99.0 | | |
| 30.6 | | |
| 129.6 | | |
| 106.0 | | |
| 12.8 | | |
| 118.8 | |
|
Interest expense-net
| | |
10.2
| | | |
—
| | | |
10.2
| | | |
11.4
| | | |
—
| | | |
11.4
| | | |
42.9
| | | |
—
| | | |
42.9
| | | |
11.7
| | | |
—
| | | |
11.7
| |
|
Investment and other income - net
| |
|
(0.1
|
)
| |
|
—
| | |
|
(0.1
|
)
| |
|
—
| | |
|
—
| | |
|
—
| | |
|
(0.1
|
)
| |
|
—
| | |
|
(0.1
|
)
| |
|
—
| | |
|
—
| | |
|
—
| |
| Earnings (loss) before income taxes | |
| 0.8 | | |
| 9.2 | | |
| 10.0 | | |
| (4.9 | ) | |
| 8.0 | | |
| 3.1 | | |
| 56.2 | | |
| 30.6 | | |
| 86.8 | | |
| 94.3 | | |
| 12.8 | | |
| 107.1 | |
|
Income tax expense (benefit)
| |
|
24.5
| | |
|
(19.2
|
)
| |
|
5.3
| | |
|
(4.1
|
)
| |
|
3.1
| | |
|
(1.0
|
)
| |
|
46.5
| | |
|
(10.1
|
)
| |
|
36.4
| | |
|
35.2
| | |
|
5.0
| | |
|
40.2
| |
| Net earnings (loss) | | $ | (23.7 | ) | | $ | 28.4 | | | $ | 4.7 | | | $ | (0.8 | ) | | $ | 4.9 | | | $ | 4.1 | | | $ | 9.7 | | | $ | 40.7 | | | $ | 50.4 | | | $ | 59.1 | | | $ | 7.8 | | | $ | 66.9 | |
| Net earnings (loss) per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Basic net earnings (loss) per share
| | $ | (0.71 | ) | | | | | | $ | 0.14 | | | $ | (0.02 | ) | | | | | | $ | 0.13 | | | $ | 0.29 | | | | | | | $ | 1.52 | | | $ | 1.81 | | | | | | | $ | 2.05 | |
|
Diluted net earnings (loss) per share
| | $ | (0.71 | ) | | | | | | $ | 0.14 | | | $ | (0.02 | ) | | | | | | $ | 0.13 | | | $ | 0.29 | | | | | | | $ | 1.51 | | | $ | 1.80 | | | | | | | $ | 2.04 | |
| Weighted average number of common shares outstanding (2): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Basic
| | | 33.6 | | | | | | | | 33.6 | | | | 32.6 | | | | | | | | 32.6 | | | | 33.1 | | | | | | | | 33.1 | | | | 32.6 | | | | | | | | 32.6 | |
|
Diluted
| | | 33.6 | | | | | | | | 33.9 | | | | 32.6 | | | | | | | | 32.6 | | | | 33.3 | | | | | | | | 33.3 | | | | 32.8 | | | | | | | | 32.8 | |
| Additional information: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Gross margin (1)
| | |
38.3
|
%
| | | | | | |
38.3
|
%
| | |
33.7
|
%
| | | | | | |
33.7
|
%
| | |
38.2
|
%
| | | | | | |
38.2
|
%
| | |
37.1
|
%
| | | | | | |
37.1
|
%
|
|
SG&A as a % of total net sales (1)
| | |
27.4
|
%
| | | | | | |
23.7
|
%
| | |
24.0
|
%
| | | | | | |
21.2
|
%
| | |
23.2
|
%
| | | | | | |
20.8
|
%
| | |
21.3
|
%
| | | | | | |
20.6
|
%
|
|
Operating margin
| | |
4.8
|
%
| | | | | | |
8.9
|
%
| | |
2.9
|
%
| | | | | | |
6.6
|
%
| | |
9.9
|
%
| | | | | | |
12.9
|
%
| | |
10.8
|
%
| | | | | | |
12.1
|
%
|
|
Effective tax rate
| |
nm
| | | | | | | |
53.0
|
%
| |
nm
| | | | | | |
nm
| | | |
82.7
|
%
| | | | | | |
41.9
|
%
| | |
37.3
|
%
| | | | | | |
37.5
|
%
|
|
(1)
|
|
Exclusive of depreciation and amortization
|
|
(2)
| |
Beginning in the quarter ended June 30, 2017, LSC Communications,
Inc (“LSC”) no longer qualified as a related party, therefore the
2017 amounts disclosed related to LSC are presented through March
31, 2017 only. Beginning in the quarter ended September 30, 2017,
RRD no longer qualified as a related party, therefore the amounts
disclosed related to RRD are presented through June 30, 2017 only.
|
| |
|
The Company believes that certain non-GAAP measures, when presented in
conjunction with comparable GAAP measures, are useful because that
information is an appropriate measure for evaluating the Company’s
operating performance. Internally, the Company uses this non-GAAP
information as an indicator of business performance, and evaluates
management’s effectiveness with specific reference to this indicator.
These measures should be considered in addition to, not a substitute
for, or superior to, measures of financial performance prepared in
accordance with GAAP.
| | |
| |
| Donnelley Financial Solutions, Inc. |
Reconciliation of GAAP to Non-GAAP Measures
|
For the Three and Twelve Months Ended December 31, 2017 and 2016
|
(UNAUDITED) |
(in millions, except per share data) |
| | | |
|
| For the Three Months Ended December 31, 2017 | | | For the Twelve Months Ended December 31, 2017 |
|
| SG&A | |
| Income from operations |
|
| Operating margin | |
| Net earnings (loss) | |
| Net earnings (loss) per diluted share | |
| SG&A | |
| Income from operations |
|
| Operating margin | |
| Net earnings |
|
| Net earnings per diluted share |
|
GAAP basis measures
|
|
$
|
61.7
| |
|
$
|
10.9
| |
|
|
4.8
|
%
|
|
$
|
(23.7
|
)
|
|
$
|
(0.71
|
)
| |
$
|
232.9
| |
|
$
|
99.0
| |
|
|
9.9
|
%
|
|
$
|
9.7
| |
|
$
|
0.29
|
|
Non-GAAP adjustments:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Restructuring, impairment and other
charges - net
| | |
—
| | | |
0.7
| | | |
0.3
|
%
| | |
0.3
| | | |
0.01
| | | |
—
| | | |
7.1
| | | |
0.7
|
%
| | |
4.2
| | | |
0.13
|
|
Spin-off related transaction expenses
| | |
(6.7
|
)
| | |
6.7
| | | |
3.0
|
%
| | |
4.4
| | | |
0.13
| | | |
(16.5
|
)
| | |
16.5
| | | |
1.6
|
%
| | |
9.9
| | | |
0.30
|
|
Share-based compensation expense
| | |
(1.6
|
)
| | |
1.6
| | | |
0.7
|
%
| | |
1.2
| | | |
0.04
| | | |
(6.8
|
)
| | |
6.8
| | | |
0.7
|
%
| | |
4.1
| | | |
0.12
|
|
Acquisition-related expenses
| | |
(0.2
|
)
| | |
0.2
| | | |
0.1
|
%
| | |
0.1
| | | |
0.00
| | | |
(0.2
|
)
| | |
0.2
| | | |
0.0
|
%
| | |
0.1
| | | |
0.00
|
|
Income tax adjustments (1) | |
|
—
| | |
|
—
| | |
|
0.0
|
%
| |
|
22.4
| | |
|
0.67
| | |
|
—
| | |
|
—
| | |
|
0.0
|
%
| |
|
22.4
| | |
|
0.67
|
|
Total Non-GAAP adjustments
| |
|
(8.5
|
)
| |
|
9.2
| | |
|
4.1
|
%
| |
|
28.4
| | |
|
0.85
| | |
|
(23.5
|
)
| |
|
30.6
| | |
|
3.0
|
%
| |
|
40.7
| | |
|
1.22
|
|
Non-GAAP measures
| |
$
|
53.2
| | |
$
|
20.1
| | |
|
8.9
|
%
| |
$
|
4.7
| | |
$
|
0.14
| | |
$
|
209.4
| | |
$
|
129.6
| | |
|
12.9
|
%
| |
$
|
50.4
| | |
$
|
1.51
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | For the Three Months Ended December 31, 2016 | | | For the Twelve Months Ended December 31, 2016 |
| | SG&A | |
| Income from operations | |
| Operating margin | |
| Net earnings (loss) | |
| Net earnings (loss) per diluted share | | | SG&A | |
| Income from operations | |
| Operating margin | |
| Net earnings | |
| Net earnings per diluted share |
|
GAAP basis measures
| |
$
|
53.0
| | |
$
|
6.5
| | | |
2.9
|
%
| |
$
|
(0.8
|
)
| |
$
|
(0.02
|
)
| |
$
|
209.8
| | |
$
|
106.0
| | | |
10.8
|
%
| |
$
|
59.1
| | |
$
|
1.80
|
|
Non-GAAP adjustments:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Restructuring, impairment and other
charges - net
| | |
—
| | | |
1.8
| | | |
0.8
|
%
| | |
1.1
| | | |
0.03
| | | |
—
| | | |
5.4
| | | |
0.5
|
%
| | |
3.3
| | | |
0.10
|
|
Spin-off related transaction expenses
| | |
(4.9
|
)
| | |
4.9
| | | |
2.2
|
%
| | |
3.0
| | | |
0.09
| | | |
(4.9
|
)
| | |
4.9
| | | |
0.5
|
%
| | |
3.0
| | | |
0.09
|
|
Share-based compensation expense
| |
|
(1.3
|
)
| |
|
1.3
| | |
|
0.7
|
%
| |
|
0.8
| | |
|
0.03
| | |
|
(2.5
|
)
| |
|
2.5
| | |
|
0.3
|
%
| |
|
1.5
| | |
|
0.05
|
|
Total Non-GAAP adjustments
| |
|
(6.2
|
)
| |
|
8.0
| | |
|
3.7
|
%
| |
|
4.9
| | |
|
0.15
| | |
|
(7.4
|
)
| |
|
12.8
| | |
|
1.3
|
%
| |
|
7.8
| | |
|
0.24
|
|
Non-GAAP measures
| |
$
|
46.8
| | |
$
|
14.5
| | |
|
6.6
|
%
| |
$
|
4.1
| | |
$
|
0.13
| | |
$
|
202.4
| | |
$
|
118.8
| | |
|
12.1
|
%
| |
$
|
66.9
| | |
$
|
2.04
|
|
(1)
|
|
For the three months and year ended December 31, 2017, income tax
adjustments relate to the impact of the U.S. Tax Cuts and Jobs Act,
including the transition tax imposed on the Company's accumulated
foreign earnings and the remeasurement of the Company's U.S net
deferred tax asset.
|
| |
|
|
| | |
| | |
| | |
| | |
| Donnelley Financial Solutions, Inc. |
Segment GAAP to Non-GAAP Operating Income and Non-GAAP Adjusted
EBITDA and Margin Reconciliation
|
For the Three Months Ended December 31, 2017 and 2016
|
(UNAUDITED) |
(in millions) |
| | | | | | | | | | | |
|
| | U.S. | | |
International
| | |
Corporate
| | |
Consolidated
| |
| For the Three Months Ended December 31, 2017 |
| | | | | | | | | | | | | | | |
|
Net sales
| |
$
|
189.7
| | |
$
|
35.1
| | |
$
|
—
| | |
$
|
224.8
| |
|
Income (loss) from operations
| | |
20.1
| | | |
(0.4
|
)
| | |
(8.8
|
)
| | |
10.9
| |
|
Operating margin %
| | |
10.6
|
%
| | |
(1.1
|
%)
| |
nm
| | | |
4.8
|
%
|
| | | | | | | | | | | | | | | |
|
| Non-GAAP Adjustments |
| | | | | | | | | | | | | | | |
|
Restructuring, impairment and other charges - net
| | |
(0.5
|
)
| | |
0.9
| | | |
0.3
| | | |
0.7
| |
|
Spin-off related transaction expenses
| | |
6.0
| | | |
—
| | | |
0.7
| | | |
6.7
| |
|
Share-based compensation expense
| | |
—
| | | |
—
| | | |
1.6
| | | |
1.6
| |
|
Acquisition-related expenses
| |
|
—
| | |
|
—
| | |
|
0.2
| | |
|
0.2
| |
|
Total Non-GAAP adjustments
| | |
5.5
| | | |
0.9
| | | |
2.8
| | | |
9.2
| |
| | | | | | | | | | | | | | | |
|
|
Non-GAAP income (loss) from operations
| |
$
|
25.6
| | |
$
|
0.5
| | |
$
|
(6.0
|
)
| |
$
|
20.1
| |
|
Non-GAAP operating margin %
| | |
13.5
|
%
| | |
1.4
|
%
| |
nm
| | | |
8.9
|
%
|
| | | | | | | | | | | | | | | |
|
|
Depreciation and amortization
| |
|
10.7
| | |
|
2.1
| | |
|
—
| | |
|
12.8
| |
|
Non-GAAP Adjusted EBITDA
| |
$
|
36.3
| | |
$
|
2.6
| | |
$
|
(6.0
|
)
| |
$
|
32.9
| |
|
Non-GAAP Adjusted EBITDA margin
| | |
19.1
|
%
| | |
7.4
|
%
| |
nm
| | | |
14.6
|
%
|
| | | | | | | | | | | | | | | |
|
| For the Three Months Ended December 31, 2016 |
| | | | | | | | | | | | | | | |
|
Net sales
| |
$
|
182.8
| | |
$
|
38.2
| | |
$
|
—
| | |
$
|
221.0
| |
|
Income (loss) from operations
| | |
18.4
| | | |
2.4
| | | |
(14.3
|
)
| | |
6.5
| |
|
Operating margin %
| | |
10.1
|
%
| | |
6.3
|
%
| |
nm
| | | |
2.9
|
%
|
| | | | | | | | | | | | | | | |
|
| Non-GAAP Adjustments |
| | | | | | | | | | | | | | | |
|
Restructuring, impairment and other charges - net
| | |
1.6
| | | |
0.1
| | | |
0.1
| | | |
1.8
| |
|
Spin-off related transaction expenses
| | |
0.3
| | | |
—
| | | |
4.6
| | | |
4.9
| |
|
Share-based compensation expense
| |
|
—
| | |
|
—
| | |
|
1.3
| | |
|
1.3
| |
|
Total Non-GAAP adjustments
| | |
1.9
| | | |
0.1
| | | |
6.0
| | | |
8.0
| |
| | | | | | | | | | | | | | | |
|
|
Non-GAAP income (loss) from operations
| |
$
|
20.3
| | |
$
|
2.5
| | |
$
|
(8.3
|
)
| |
$
|
14.5
| |
|
Non-GAAP operating margin %
| | |
11.1
|
%
| | |
6.5
|
%
| |
nm
| | | |
6.6
|
%
|
| | | | | | | | | | | | | | | |
|
|
Depreciation and amortization
| |
|
8.3
| | |
|
1.4
| | |
|
3.5
| | |
|
13.2
| |
|
Non-GAAP Adjusted EBITDA
| |
$
|
28.6
| | |
$
|
3.9
| | |
$
|
(4.8
|
)
| |
$
|
27.7
| |
|
Non-GAAP Adjusted EBITDA margin
| | |
15.6
|
%
| | |
10.2
|
%
| |
nm
| | | |
12.5
|
%
|
| | | | | | | | | | | | | | |
|
|
| | |
| | |
| | |
| | |
| Donnelley Financial Solutions, Inc. |
Segment GAAP to Non-GAAP Operating Income and Non-GAAP Adjusted
EBITDA and Margin Reconciliation
|
For the Twelve Months Ended December 31, 2017 and 2016
|
(UNAUDITED) |
(in millions) |
| | | | | | | | | | | |
|
| | U.S. | | |
International
| | |
Corporate
| | |
Consolidated
| |
| For the Twelve Months Ended December 31, 2017 |
| | | | | | | | | | | | | | | |
|
Net sales
| |
$
|
847.9
| | |
$
|
157.0
| | |
$
|
—
| | |
$
|
1,004.9
| |
|
Income (loss) from operations
| | |
127.6
| | | |
7.2
| | | |
(35.8
|
)
| | |
99.0
| |
|
Operating margin %
| | |
15.0
|
%
| | |
4.6
|
%
| |
nm
| | | |
9.9
|
%
|
| | | | | | | | | | | | | | | |
|
| Non-GAAP Adjustments |
| | | | | | | | | | | | | | | |
|
Restructuring, impairment and other charges - net
| | |
3.9
| | | |
2.2
| | | |
1.0
| | | |
7.1
| |
|
Spin-off related transaction expenses
| | |
10.0
| | | |
—
| | | |
6.5
| | | |
16.5
| |
|
Share-based compensation expense
| | |
—
| | | |
—
| | | |
6.8
| | | |
6.8
| |
|
Acquisition-related expenses
| |
|
—
| | |
|
—
| | |
|
0.2
| | |
|
0.2
| |
|
Total Non-GAAP adjustments
| | |
13.9
| | | |
2.2
| | | |
14.5
| | | |
30.6
| |
| | | | | | | | | | | | | | | |
|
|
Non-GAAP income (loss) from operations
| |
$
|
141.5
| | |
$
|
9.4
| | |
$
|
(21.3
|
)
| |
$
|
129.6
| |
|
Non-GAAP operating margin %
| | |
16.7
|
%
| | |
6.0
|
%
| |
nm
| | | |
12.9
|
%
|
| | | | | | | | | | | | | | | |
|
|
Depreciation and amortization
| |
|
38.2
| | |
|
6.3
| | |
|
—
| | |
|
44.5
| |
|
Non-GAAP Adjusted EBITDA
| |
$
|
179.7
| | |
$
|
15.7
| | |
$
|
(21.3
|
)
| |
$
|
174.1
| |
|
Non-GAAP Adjusted EBITDA margin
| | |
21.2
|
%
| | |
10.0
|
%
| |
nm
| | | |
17.3
|
%
|
| | | | | | | | | | | | | | | |
|
| For the Twelve Months Ended December 31, 2016 |
| | | | | | | | | | | | | | | |
|
Net sales
| |
$
|
845.2
| | |
$
|
138.3
| | |
$
|
—
| | |
$
|
983.5
| |
|
Income (loss) from operations
| | |
118.4
| | | |
9.6
| | | |
(22.0
|
)
| | |
106.0
| |
|
Operating margin %
| | |
14.0
|
%
| | |
6.9
|
%
| |
nm
| | | |
10.8
|
%
|
| | | | | | | | | | | | | | | |
|
| Non-GAAP Adjustments |
| | | | | | | | | | | | | | | |
|
Restructuring, impairment and other charges - net
| | |
4.7
| | | |
0.6
| | | |
0.1
| | | |
5.4
| |
|
Spin-off related transaction expenses
| | |
0.3
| | | |
—
| | | |
4.6
| | | |
4.9
| |
|
Share-based compensation expense
| |
|
—
| | |
|
—
| | |
|
2.5
| | |
|
2.5
| |
|
Total Non-GAAP adjustments
| | |
5.0
| | | |
0.6
| | | |
7.2
| | | |
12.8
| |
| | | | | | | | | | | | | | | |
|
|
Non-GAAP income (loss) from operations
| |
$
|
123.4
| | |
$
|
10.2
| | |
$
|
(14.8
|
)
| |
$
|
118.8
| |
|
Non-GAAP operating margin %
| | |
14.6
|
%
| | |
7.4
|
%
| |
nm
| | | |
12.1
|
%
|
| | | | | | | | | | | | | | | |
|
|
Depreciation and amortization
| |
|
34.5
| | |
|
4.6
| | |
|
4.2
| | |
|
43.3
| |
|
Non-GAAP Adjusted EBITDA
| |
$
|
157.9
| | |
$
|
14.8
| | |
$
|
(10.6
|
)
| |
$
|
162.1
| |
|
Non-GAAP Adjusted EBITDA margin
| | |
18.7
|
%
| | |
10.7
|
%
| |
nm
| | | |
16.5
|
%
|
| | | | | | | | | | | | | | |
|
|
| | |
| Donnelley Financial Solutions, Inc. |
Consolidated and Combined Statements of Cash Flows
|
For the Twelve Months Ended December 31, 2017 and 2016
|
(UNAUDITED) |
(in millions) |
| | |
|
| | For the Twelve Months Ended December 31, | |
| | 2017 | |
| 2016 | |
|
Net earnings
| |
$
|
9.7
| | |
$
|
59.1
| |
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
| | | | | | | | |
|
Depreciation and amortization
| | |
44.5
| | | |
43.3
| |
|
Provision for doubtful accounts receivable
| | |
3.9
| | | |
3.1
| |
|
Share-based compensation
| | |
6.8
| | | |
2.5
| |
|
Deferred income taxes
| | |
12.4
| | | |
(5.9
|
)
|
|
Changes in uncertain tax positions
| | |
(0.2
|
)
| | |
0.9
| |
|
Gain on investments and other assets - net
| | |
0.2
| | | |
0.1
| |
|
Net pension and other postretirement benefits plan income
| | |
(3.3
|
)
| | |
(1.0
|
)
|
|
Other
| | |
2.8
| | | |
1.0
| |
|
Changes in operating assets and liabilities - net of acquisitions:
| | | | | | | | |
|
Accounts receivable - net
| | |
18.0
| | | |
(43.1
|
)
|
|
Inventories
| | |
0.8
| | | |
(1.9
|
)
|
|
Prepaid expenses and other current assets
| | |
(3.5
|
)
| | |
(7.4
|
)
|
|
Accounts payable
| | |
(18.3
|
)
| | |
42.3
| |
|
Income taxes payable and receivable
| | |
5.4
| | | |
(3.6
|
)
|
|
Accrued liabilities and other
| | |
14.4
| | | |
17.7
| |
|
Pension and other postretirement benefits plan contribution
| |
|
(2.2
|
)
| |
|
(1.1
|
)
|
| Net cash provided by operating activities | | $ | 91.4 | | | $ | 106.0 | |
| | | | | | | |
|
|
Capital expenditures
| | |
(27.8
|
)
| | |
(26.2
|
)
|
|
Purchases of investments
| | |
(3.4
|
)
| | |
(3.5
|
)
|
|
Other investing activities
| |
|
0.2
| | |
|
0.4
| |
| Net cash used in investing activities | | $ | (31.0 | ) | | $ | (29.3 | ) |
| | | | | | | |
|
|
Revolving facility borrowings
| | |
298.5
| | | |
—
| |
|
Payments on revolving facility borrowings
| | |
(298.5
|
)
| | |
—
| |
|
Payments on long-term debt
| | |
(133.0
|
)
| | |
(50.0
|
)
|
|
Debt issuance costs
| | |
(2.1
|
)
| | |
(9.3
|
)
|
|
Separation-related payment from R.R. Donnelley
| | |
68.0
| | | |
—
| |
|
Proceeds from issuance of common stock
| | |
18.8
| | | |
—
| |
|
Proceeds from issuance of long-term debt
| | |
3.1
| | | |
348.2
| |
|
Net change in short-term debt
| | |
—
| | | |
(8.8
|
)
|
|
Net transfers to Parent and affiliates
| | |
—
| | | |
(340.1
|
)
|
|
Treasury stock repurchases
| | |
(0.9
|
)
| | |
—
| |
|
Other financing activities
| |
|
0.4
| | |
|
—
| |
| Net cash used in financing activities | | $ | (45.7 | ) | | $ | (60.0 | ) |
|
Effect of exchange rate on cash and cash equivalents
| |
|
1.1
| | |
|
4.4
| |
| Net increase in cash and cash equivalents | |
| 15.8 | | |
| 21.1 | |
|
Cash and cash equivalents at beginning of year
| |
|
36.2
| | |
|
15.1
| |
| Cash and cash equivalents at end of period | | $ | 52.0 | | | $ | 36.2 | |
| | | | | | | |
|
| Additional Information: | | | | | | | | |
| |
| 2017 | | |
| 2016 | |
| For the Twelve Months Ended December 31: | | | | | | | | |
|
Net cash provided by operating activities
| |
$
|
91.4
| | |
$
|
106.0
| |
|
Less: capital expenditures
| |
|
27.8
| | |
|
26.2
| |
|
Free cash flow
| |
$
|
63.6
| | |
$
|
79.8
| |
| | | | | | | |
|
| |
| 2017 | | |
| 2016 | |
| For the Nine Months Ended September 30: | | | | | | | | |
|
Net cash provided by operating activities
| |
$
|
33.7
| | |
$
|
56.8
| |
|
Less: capital expenditures
| |
|
20.0
| | |
|
14.0
| |
|
Free cash flow
| |
$
|
13.7
| | |
$
|
42.8
| |
| | | | | | | |
|
| |
| 2017 | | |
| 2016 | |
| For the Three Months Ended December 31: | | | | | | | | |
|
Net cash provided by operating activities
| |
$
|
57.7
| | |
$
|
49.2
| |
|
Less: capital expenditures
| |
|
7.8
| | |
|
12.2
| |
|
Free cash flow
| |
$
|
49.9
| | |
$
|
37.0
| |
| | | | | | | |
|
|
| | |
| Donnelley Financial Solutions, Inc. |
Reconciliation of Reported to Organic Net Sales
|
For the Three and Twelve Months Ended December 31, 2017 and 2016
|
(UNAUDITED) |
(in millions) |
| | |
|
|
|
Net Sales
| |
|
|
For the Three
Months Ended
| |
|
For the Twelve
Months Ended
| |
| December 31, 2017 | | | | | | | | |
|
Capital Markets
| |
$
|
105.6
| | |
$
|
455.4
| |
|
Investment Markets
| | |
69.4
| | | |
345.4
| |
|
Language Solutions and other
| |
|
14.7
| | |
|
47.1
| |
| U.S. | | |
189.7
| | | |
847.9
| |
|
International
| |
|
35.1
| | |
|
157.0
| |
|
Consolidated
| |
$
|
224.8
| | |
$
|
1,004.9
| |
| | | | | | | |
|
| December 31, 2016 | | | | | | | | |
|
Capital Markets
| |
$
|
96.6
| | |
$
|
466.1
| |
|
Investment Markets
| | |
72.4
| | | |
336.1
| |
|
Language Solutions and other
| |
|
13.8
| | |
|
43.0
| |
| U.S. | | |
182.8
| | | |
845.2
| |
|
International
| |
|
38.2
| | |
|
138.3
| |
|
Consolidated
| |
$
|
221.0
| | |
$
|
983.5
| |
| | | | | | | |
|
| Net sales change | | | | | | | | |
|
Capital Markets
| | |
9.3
|
%
| | |
(2.3
|
%)
|
|
Investment Markets
| | |
(4.1
|
%)
| | |
2.8
|
%
|
|
Language Solutions and other
| |
|
6.5
|
%
| |
|
9.5
|
%
|
| U.S. | | |
3.8
|
%
| | |
0.3
|
%
|
|
International
| | |
(8.1
|
%)
| | |
13.5
|
%
|
|
Consolidated
| | |
1.7
|
%
| | |
2.2
|
%
|
| | | | | | | |
|
| Supplementary non-GAAP information: | | | | | | | | |
| | | | | | | |
|
| Year-over-year impact of changes in foreign exchange (FX)
rates | | | | | | | | |
| U.S. | | |
—
|
%
| | |
—
|
%
|
|
International
| | |
4.2
|
%
| | |
(1.3
|
%)
|
|
Consolidated
| | |
0.7
|
%
| | |
(0.2
|
%)
|
| | | | | | | |
|
| Net organic sales change (1) | | | | | | | | |
| U.S. | | |
3.8
|
%
| | |
0.3
|
%
|
|
International
| | |
(12.3
|
%)
| | |
14.8
|
%
|
|
Consolidated
| | |
1.0
|
%
| | |
2.4
|
%
|
|
(1)
|
|
Adjusted for the impact of changes in FX rates
|
| |
|
|
| | |
| | |
| Donnelley Financial Solutions, Inc. |
Reconciliation of GAAP Net Earnings (Loss) to Non-GAAP Adjusted
EBITDA
|
For the Three and Twelve Months Ended December 31, 2017 and 2016
|
(UNAUDITED) |
(in millions) |
| | | | | |
|
| |
For the Twelve
Months Ended
| | |
For the Three Months Ended
| |
| |
December 31,
2017
| | |
December 31,
2017
| |
|
September 30,
2017
| |
|
June 30,
2017
| |
|
March 31,
2017
| |
| GAAP net earnings (loss) | | $ | 9.7 | | | $ | (23.7 | ) | | $ | 5.3 | | | $ | 18.8 | | | $ | 9.3 | |
| | | | | | | | | | | | | | | | | | | |
|
| Adjustments | | | | | | | | | | | | | | | | | | | | |
|
Income tax expense
| | |
46.5
| | | |
24.5
| | | |
2.1
| | | |
13.1
| | | |
6.8
| |
|
Interest expense-net
| | |
42.9
| | | |
10.2
| | | |
10.6
| | | |
11.0
| | | |
11.1
| |
|
Investment and other income-net
| | |
(0.1
|
)
| | |
(0.1
|
)
| | |
—
| | | |
—
| | | |
—
| |
|
Depreciation and amortization
| | |
44.5
| | | |
12.8
| | | |
10.6
| | | |
10.9
| | | |
10.2
| |
|
Restructuring, impairment and other charges-net
| | |
7.1
| | | |
0.7
| | | |
(0.6
|
)
| | |
3.2
| | | |
3.8
| |
|
Share-based compensation expense
| | |
6.8
| | | |
1.6
| | | |
1.7
| | | |
2.4
| | | |
1.1
| |
|
Spin-off related transaction expenses
| | |
16.5
| | | |
6.7
| | | |
2.6
| | | |
4.5
| | | |
2.7
| |
|
Acquisition-related expenses
| |
|
0.2
| | |
|
0.2
| | |
|
—
| | |
|
—
| | |
|
—
| |
|
Total Non-GAAP adjustments
| | |
164.4
| | | |
56.6
| | | |
27.0
| | | |
45.1
| | | |
35.7
| |
| | | | | | | | | | | | | | | | | | | |
|
| Non-GAAP adjusted EBITDA | | $ | 174.1 | | | $ | 32.9 | | | $ | 32.3 | | | $ | 63.9 | | | $ | 45.0 | |
| | | | | | | | | | | | | | | | | | | |
|
|
Net sales
| |
$
|
1,004.9
| | |
$
|
224.8
| | |
$
|
222.6
| | |
$
|
290.2
| | |
$
|
267.3
| |
|
Non-GAAP adjusted EBITDA margin %
| | |
17.3
|
%
| | |
14.6
|
%
| | |
14.5
|
%
| | |
22.0
|
%
| | |
16.8
|
%
|
| | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
|
| |
For the Twelve
Months Ended
| | |
For the Three Months Ended
| |
| |
December 31,
2016
| | |
December 31,
2016
| | |
September 30,
2016
| | |
June 30,
2016
| | |
March 31,
2016
| |
| GAAP net earnings (loss) | | $ | 59.1 | | | $ | (0.8 | ) | | $ | 10.2 | | | $ | 36.3 | | | $ | 13.4 | |
| | | | | | | | | | | | | | | | | | | |
|
| Adjustments | | | | | | | | | | | | | | | | | | | | |
|
Income tax expense (benefit)
| | |
35.2
| | | |
(4.1
|
)
| | |
7.9
| | | |
22.6
| | | |
8.8
| |
|
Interest expense (income)-net
| | |
11.7
| | | |
11.4
| | | |
(0.1
|
)
| | |
0.1
| | | |
0.3
| |
|
Depreciation and amortization
| | |
43.3
| | | |
13.2
| | | |
9.8
| | | |
10.8
| | | |
9.5
| |
|
Restructuring, impairment and other charges-net
| | |
5.4
| | | |
1.8
| | | |
1.7
| | | |
1.3
| | | |
0.6
| |
|
Share-based compensation expense
| | |
2.5
| | | |
1.3
| | | |
0.2
| | | |
0.7
| | | |
0.3
| |
|
Spin-off related transaction expenses
| |
|
4.9
| | |
|
4.9
| | |
|
—
| | |
|
—
| | |
|
—
| |
|
Total Non-GAAP adjustments
| | |
103.0
| | | |
28.5
| | | |
19.5
| | | |
35.5
| | | |
19.5
| |
| | | | | | | | | | | | | | | | | | | |
|
| Non-GAAP adjusted EBITDA | | $ | 162.1 | | | $ | 27.7 | | | $ | 29.7 | | | $ | 71.8 | | | $ | 32.9 | |
| | | | | | | | | | | | | | | | | | | |
|
|
Net sales
| |
$
|
983.5
| | |
$
|
221.0
| | |
$
|
224.4
| | |
$
|
298.0
| | |
$
|
240.1
| |
|
Non-GAAP adjusted EBITDA margin %
| | |
16.5
|
%
| | |
12.5
|
%
| | |
13.2
|
%
| | |
24.1
|
%
| | |
13.7
|
%
|
| | | | | | | | | | | | | | | | | | | |
|
|
| | |
| | |
| Donnelley Financial Solutions, Inc. |
Debt and Liquidity Summary
|
As of December 31, 2017 and 2016
|
(UNAUDITED) |
(in millions) |
| | | | | |
|
| Total Liquidity | | December 31, 2017 | | | December 31, 2016 | |
| Availability | | | | | | | | |
|
Stated amount of the Revolving Facility
| |
$
|
300.0
| | |
$
|
300.0
| |
| | | | | | | |
|
| | | | | | | |
|
| | | | | | | |
|
|
Less: availability reduction from covenants
| |
|
—
| | |
|
145.4
| |
|
Amount available under the Revolving Facility (1) | | |
300.0
| | | |
154.6
| |
| | | | | | | |
|
| Usage | | | | | | | | |
|
Borrowings under the Revolving Facility (1) | | |
—
| | | |
—
| |
|
Impact on availability related to outstanding
letters of credit
| |
|
—
| | |
|
0.9
| |
| | |
—
| | | |
0.9
| |
| |
|
| | |
|
| |
|
Availability under the Revolving Facility
| |
|
300.0
| | |
|
153.7
| |
| | | | | | | |
|
|
Cash (2) | | |
52.0
| | | |
36.2
| |
| | | | | | | |
|
|
Net Available Liquidity
| |
$
|
352.0
| | |
$
|
189.9
| |
| | | | | | | |
|
| | | | | | | |
|
| | | | | | | |
|
|
Short-term debt
| |
$
|
—
| | |
$
|
—
| |
|
Long-term debt
| |
|
458.3
| | |
|
587.0
| |
|
Total debt
| |
$
|
458.3
| | |
$
|
587.0
| |
| | | | | | | |
|
|
Non-GAAP adjusted EBITDA for the twelve months ended December 31,
2017 and 2016
| |
$
|
174.1
| | |
$
|
162.1
| |
| | | | | | | |
|
| Non-GAAP Gross Leverage (defined as total debt divided by non-GAAP adjusted EBITDA) | | | 2.6 | x | | | 3.6 | x |
|
(1)
|
|
On September 30, 2016, the Company entered into a $300.0 million
senior secured revolving credit facility (the “Revolving Facility”).
The Revolving Facility is subject to a number of covenants,
including a minimum Interest Coverage Ratio and a maximum Leverage
Ratio, both as defined and calculated in the Credit Agreement. There
were no outstanding borrowings under the Revolving Facility as of
December 31, 2017. Based on the Company’s results of operations for
the twelve months ended December 31, 2017 and existing debt, the
Company would have had the ability to utilize $300.0 million of the
$300.0 million Revolving Facility and not have been in violation of
the terms of the agreement.
|
|
(2)
| |
Approximately 30% and 46% of cash as of December 31, 2017 and 2016,
respectively, was located outside of the U.S. Certain cash balances
of foreign subsidiaries may be subject to U.S. or local country
taxes if repatriated to the U.S. In addition, repatriation of some
foreign cash balances is further restricted by local laws.
|
| |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180228005324/en/
Investor Contact:
Sloan Bohlen
Solebury Communications
Group
investors@dfsco.com
Source: Donnelley Financial Solutions