CHICAGO, Aug. 3, 2022
/PRNewswire/ -- Donnelley Financial Solutions, Inc. (NYSE: DFIN)
(the "Company" or "DFIN") today reported financial
results for the second quarter of 2022.
|
Second-quarter
2022
|
Second-quarter
2021
|
$
Change
|
%
Change
|
Net Sales
|
$266.2
million
|
$267.5
million
|
($1.3
million)
|
(0.5 %)
|
Net Earnings
|
$46.0
million
|
$42.9
million
|
$3.1 million
|
7.2 %
|
Adjusted EBITDA
(a)
|
$82.6
million
|
$79.9
million
|
$2.7 million
|
3.4 %
|
Operating Cash
Flow
|
$45.8
million
|
$30.6
million
|
$15.2
million
|
49.7 %
|
Free Cash Flow (a)
(b)
|
$30.9
million
|
$20.9
million
|
$10.0
million
|
47.8 %
|
|
(a) Adjusted EBITDA and
Free Cash Flow are non-GAAP financial measures that exclude the
impact of certain items noted in the reconciliation tables below.
The tables below provide reconciliations to the most comparable
GAAP measures.
|
(b) Defined as
operating cash flow less capital expenditures.
|
Highlights for the second quarter of 2022:
- Total net sales of $266.2
million; compared to the second quarter of 2021, growth in
capital markets compliance, consolidated software solutions, and
investment companies' tech-enabled services net sales nearly offset
a substantial reduction in capital markets transactions activity,
lower print and distribution volume as a result of regulatory
changes, and an unfavorable impact of foreign exchange rates;
excluding the impact of foreign exchange rates, total net sales
increased 0.3% from second quarter of 2021.
- Record second-quarter software solutions net sales of
$71.6 million, an increase of 7.5%
from the second quarter of 2021; compliance software net sales
growth of 12.7% offset, in part, by flat year-over-year performance
in transactions-driven software net sales.
- Net earnings of $46.0 million, or
$1.42 per diluted share, up
$3.1 million, or $0.18 per diluted share, from the second quarter
of 2021.
- Adjusted EBITDA of $82.6 million
and Adjusted EBITDA margin of 31.0%, up 110 basis points from the
second quarter of 2021, primarily driven by higher capital markets
compliance volume, favorable sales mix within Investment Companies
- Compliance and Communications Management segment, the impact of
cost savings initiatives, and lower incentive compensation expense,
partially offset by lower capital markets transactional
volume.
- Operating cash flow of $45.8
million, an improvement of $15.2
million from the second quarter of 2021.
- Non-GAAP gross leverage of 0.8x and non-GAAP net leverage of
0.8x.
- During the second quarter, the Company repurchased 2,180,796
shares for $64.4 million at an
average price of $29.54 per share. As
of June 30, 2022, the remaining share
repurchase authorization was $58.6
million.
"We are pleased with our strong second-quarter results, which
continue the trend of improving our revenue mix toward software
solutions and tech-enabled services. This trend, coupled with
operating efficiencies and the impact of structural cost
reductions, resulted in increases in both quarterly Adjusted EBITDA
and margin, despite a challenging capital markets transactional
environment. Consistent with last quarter, our second quarter
Adjusted EBITDA margin of 31% is substantially higher than
historical quarters with similar overall and transactional
revenues, another positive proof point of our evolving sales mix
and continued cost discipline. In addition, we continued our track
record of prudent capital deployment, repurchasing nearly 2.2
million shares in the second quarter, while also increasing organic
investment in software development," said Daniel N. Leib, DFIN's president and chief
executive officer.
Leib continued, "During the second quarter, we made continued
progress toward becoming a software-centric company. Total software
sales grew nearly 8% compared to the second quarter of 2021 and
made up 26.9% of total second quarter net sales, an increase of 200
basis points from last year's second quarter sales mix. Our
software sales growth was led by the performance of our recurring
compliance products which posted 13% sales growth in the quarter,
with ActiveDisclosure sales growing 20%, including a 25% growth in
NewAD subscription revenue. Venue net sales were in line with last
year's second quarter, once again outpacing the trend in capital
markets transactional sales."
"Our second-quarter performance, including the resilience of our
top- and bottom-line results, highlights the progress we are making
in our transformation. Our strategy and focus have resulted in DFIN
being fundamentally and sustainably more profitable, as we continue
to invest to achieve a more recurring sales mix, while aggressively
managing our cost structure and being disciplined stewards of
capital. While the macroeconomic outlook remains uncertain, the
combination of our market position, cost structure, and strong
balance sheet positions us well heading into the back half of the
year," Leib concluded.
Net Sales
Net sales in the second quarter of 2022 were $266.2 million, a decrease of $1.3 million, or 0.5% (including a $2.1 million, or 0.8%, decrease due to changes in
foreign currency exchange rates), from the second quarter of 2021.
Excluding the impact of foreign exchange rates, total net sales
increased 0.3% from the second quarter of 2021. Net sales decreased
primarily due to lower capital markets transactional activity, a
decrease in print volume as a result of regulatory impacts
eliminating print requirements, and an unfavorable impact of
foreign exchange rates, partially offset by higher capital markets
compliance volume, growth in software solutions and investment
companies' tech-enabled services net sales.
Net Earnings
For the second quarter of 2022, net earnings were $46.0 million, or $1.42 per diluted share, as compared to
$42.9 million, or $1.24 per diluted share, in the second quarter of
2021. Net earnings in the second quarter of 2022 included after-tax
charges of $3.9 million, or
$0.12 per diluted share, primarily
related to share-based compensation expense. Net earnings in the
second quarter of 2021 included after-tax charges of $4.8 million, or $0.14 per diluted share, primarily related to
share-based compensation expense and restructuring impairment and
other charges, net.
Adjusted EBITDA and Non-GAAP Net Earnings
For the second quarter of 2022, Adjusted EBITDA was $82.6 million, an increase of $2.7 million as compared to the second quarter of
2021. Adjusted EBITDA margin was 31.0%, an increase of
approximately 110 basis points as compared to the second quarter of
2021. The increase in Adjusted EBITDA and Adjusted EBITDA margin
were primarily driven by growth in capital markets compliance net
sales, favorable sales mix within Investment Companies - Compliance
and Communications Management segment, the impact of cost savings
initiatives, and lower incentive compensation expense, partially
offset by lower capital markets transactional volume.
For the second quarter of 2022, non-GAAP net earnings were
$49.9 million, or $1.54 per diluted share, as compared to
$47.7 million, or $1.38 per diluted share, in the second quarter of
2021.
Reconciliations of net earnings to Adjusted EBITDA, Adjusted
EBITDA margin and non-GAAP net earnings are presented in the
attached tables.
Regulatory Impacts
The Company previously disclosed in a Current Report on Form 8-K
filed with the SEC on July 22, 2020,
that the implementation of SEC Rule 30e-3 (elimination or
reduction of print annual and semi-annual reports), Rule 498A
(elimination or reduction of print summary prospectus) and the
Company's exiting of certain printing and distribution
relationships were expected to reduce the Company's print-related
2021 net sales by approximately $130
million to $140 million, with
the associated reduction in net earnings and Adjusted EBITDA of
approximately $4 million to
$7 million and approximately $5
million to $10 million, respectively, in 2021.
In 2021, the Company realized reductions in net sales, net
earnings and Adjusted EBITDA of approximately $100 million, $2
million and $3 million,
respectively. For 2022, the Company expects an incremental
reduction in print-related net sales of approximately $30 million with a de minimis impact on net
earnings and Adjusted EBITDA.
Company Results and Conference Call
DFIN's earnings press release for the second quarter of 2022,
which is included as Exhibit 99.1 to the Company's Current Report
on Form 8-K that has been furnished to the SEC on August 3, 2022, is available on the Company's
investor relations website at investor.dfinsolutions.com. A
supplemental trending schedule of historical results, including
additional breakouts of segment-level net sales, is also available
on the Company's investor relations website.
DFIN will hold a conference call and webcast on August 3, 2022, at 9:00
a.m. Eastern time to discuss financial results for the
second quarter of 2022, provide a general business update and
respond to analyst questions.
A live webcast of the call will also be available on the
Company's investor relations website. Please visit
investor.dfinsolutions.com at least fifteen minutes prior to
the start of the event to register, download and install any
necessary audio software.
If you are unable to participate live, a replay of the webcast
will be available following the conference call on the Company's
investor relations website, along with the earnings press release,
and related financial tables.
About DFIN
DFIN is a leading global risk and compliance solutions company.
We provide domain expertise, enterprise software and data analytics
for every stage of our clients' business and investment lifecycles.
Markets fluctuate, regulations evolve, technology advances, and
through it all, DFIN delivers confidence with the right solutions
in moments that matter. Learn about DFIN's end-to-end risk and
compliance solutions online at DFINsolutions.com or you can
also follow us on Twitter @DFINSolutions or on LinkedIn.
Use of Non-GAAP Information
This news release contains certain non-GAAP financial measures,
including non-GAAP gross profit, non-GAAP selling, general, and
administrative expenses ("SG&A"), non-GAAP income from
operations, non-GAAP operating margin, Adjusted EBITDA, 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 financial 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.
The Company's non-GAAP statement of operations measures, which
include non-GAAP gross profit, non-GAAP SG&A, non-GAAP SG&A
as % of total net sales, non-GAAP income from operations, non-GAAP
operating margin, Adjusted EBITDA, 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 COVID-19 related recoveries and expenses, LSC
multiemployer pension plans obligations, non-income tax charges
(income), net, accelerated rent expense, share-based compensation
and eliminate potential differences in results of operations
between periods caused by factors such as 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 changes in
foreign currency exchange rates.
These non-GAAP financial 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 DFIN and its
expectations relating to future financial condition and
performance. Statements that are not historical facts, including
statements about DFIN 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 DFIN 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 DFIN'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 DFIN'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 DFIN periodic public filings with the
SEC, including but not limited to those discussed under "Special
Note Regarding Forward-Looking Statements" in DFIN's Annual Report
on Form 10-K for the fiscal year ended December 31, 2021, those discussed under "Special
Note Regarding Forward-Looking Statements" in DFIN's Quarterly
Reports on Form 10-Q, and in other investor communications of
DFIN's from time to time. DFIN 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. and Subsidiaries ("DFIN")
|
Condensed Consolidated
Balance Sheets
|
(UNAUDITED)
|
(in millions,
except per share data)
|
|
|
|
June 30,
2022
|
|
|
December 31,
2021
|
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
17.8
|
|
|
$
|
54.5
|
|
Receivables, less
allowances for expected losses of $15.9 in 2022 (2021 -
$12.7)
|
|
|
273.4
|
|
|
|
199.1
|
|
Prepaid expenses and
other current assets
|
|
|
27.2
|
|
|
|
23.5
|
|
Assets held for
sale
|
|
|
—
|
|
|
|
2.6
|
|
Total current
assets
|
|
|
318.4
|
|
|
|
279.7
|
|
Property, plant and
equipment, net
|
|
|
20.8
|
|
|
|
18.7
|
|
Operating lease
right-of-use assets
|
|
|
40.8
|
|
|
|
42.6
|
|
Software,
net
|
|
|
69.5
|
|
|
|
63.7
|
|
Goodwill
|
|
|
409.6
|
|
|
|
410.0
|
|
Other intangible
assets, net
|
|
|
8.2
|
|
|
|
8.7
|
|
Deferred income taxes,
net
|
|
|
32.2
|
|
|
|
31.7
|
|
Other noncurrent
assets
|
|
|
25.7
|
|
|
|
28.2
|
|
Total
assets
|
|
$
|
925.2
|
|
|
$
|
883.3
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
60.7
|
|
|
$
|
36.3
|
|
Operating lease
liabilities
|
|
|
17.6
|
|
|
|
17.9
|
|
Accrued
liabilities
|
|
|
158.1
|
|
|
|
207.2
|
|
Total current
liabilities
|
|
|
236.4
|
|
|
|
261.4
|
|
Long-term
debt
|
|
|
234.1
|
|
|
|
124.0
|
|
Deferred compensation
liabilities
|
|
|
18.7
|
|
|
|
19.8
|
|
Pension and other
postretirement benefits plan liabilities
|
|
|
37.8
|
|
|
|
40.6
|
|
Noncurrent operating
lease liabilities
|
|
|
36.0
|
|
|
|
39.4
|
|
Other noncurrent
liabilities
|
|
|
20.8
|
|
|
|
21.1
|
|
Total
liabilities
|
|
|
583.8
|
|
|
|
506.3
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Preferred stock, $0.01
par value
|
|
|
|
|
|
|
Authorized: 1.0
shares; Issued: None
|
|
|
—
|
|
|
|
—
|
|
Common stock, $0.01
par value
|
|
|
|
|
|
|
Authorized: 65.0
shares;
|
|
|
|
|
|
|
Issued and
outstanding: 36.9 shares and 30.3 shares in 2022 (2021 - 35.9
shares and 33.0 shares)
|
|
|
0.4
|
|
|
|
0.4
|
|
Treasury stock, at
cost: 6.6 shares in 2022 (2021 - 2.9 shares)
|
|
|
(175.6)
|
|
|
|
(57.1)
|
|
Additional paid-in
capital
|
|
|
270.2
|
|
|
|
260.6
|
|
Retained
earnings
|
|
|
323.8
|
|
|
|
251.4
|
|
Accumulated other
comprehensive loss
|
|
|
(77.4)
|
|
|
|
(78.3)
|
|
Total
equity
|
|
|
341.4
|
|
|
|
377.0
|
|
Total liabilities
and equity
|
|
$
|
925.2
|
|
|
$
|
883.3
|
|
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
Condensed Consolidated
Statements of Operations
|
(UNAUDITED)
|
(in millions, except
per share data)
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Tech-enabled
services
|
|
$
|
133.3
|
|
|
$
|
134.0
|
|
|
$
|
225.0
|
|
|
$
|
252.5
|
|
Software
solutions
|
|
|
71.6
|
|
|
|
66.6
|
|
|
|
141.4
|
|
|
|
126.9
|
|
Print and
distribution
|
|
|
61.3
|
|
|
|
66.9
|
|
|
|
110.8
|
|
|
|
133.4
|
|
Total net
sales
|
|
|
266.2
|
|
|
|
267.5
|
|
|
|
477.2
|
|
|
|
512.8
|
|
Cost of sales
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
Tech-enabled
services
|
|
|
40.2
|
|
|
|
42.7
|
|
|
|
77.9
|
|
|
|
83.7
|
|
Software
solutions
|
|
|
28.6
|
|
|
|
25.1
|
|
|
|
56.1
|
|
|
|
49.6
|
|
Print and
distribution
|
|
|
42.9
|
|
|
|
49.7
|
|
|
|
76.6
|
|
|
|
94.5
|
|
Total cost of
sales
|
|
|
111.7
|
|
|
|
117.5
|
|
|
|
210.6
|
|
|
|
227.8
|
|
Selling, general and
administrative expenses (a)
|
|
|
77.4
|
|
|
|
75.1
|
|
|
|
141.7
|
|
|
|
148.6
|
|
Depreciation and
amortization
|
|
|
11.2
|
|
|
|
10.1
|
|
|
|
21.9
|
|
|
|
19.9
|
|
Restructuring,
impairment and other charges, net
|
|
|
0.2
|
|
|
|
2.8
|
|
|
|
2.0
|
|
|
|
3.6
|
|
Other operating income,
net
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
—
|
|
Income from
operations
|
|
|
65.9
|
|
|
|
62.0
|
|
|
|
101.2
|
|
|
|
112.9
|
|
Interest expense,
net
|
|
|
2.1
|
|
|
|
5.9
|
|
|
|
3.6
|
|
|
|
11.2
|
|
Investment and other
income, net
|
|
|
(0.3)
|
|
|
|
(1.5)
|
|
|
|
(0.5)
|
|
|
|
(2.3)
|
|
Earnings before
income taxes
|
|
|
64.1
|
|
|
|
57.6
|
|
|
|
98.1
|
|
|
|
104.0
|
|
Income tax
expense
|
|
|
18.1
|
|
|
|
14.7
|
|
|
|
25.7
|
|
|
|
25.9
|
|
Net
earnings
|
|
$
|
46.0
|
|
|
$
|
42.9
|
|
|
$
|
72.4
|
|
|
$
|
78.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.46
|
|
|
$
|
1.27
|
|
|
$
|
2.25
|
|
|
$
|
2.32
|
|
Diluted
|
|
$
|
1.42
|
|
|
$
|
1.24
|
|
|
$
|
2.17
|
|
|
$
|
2.26
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
31.5
|
|
|
|
33.7
|
|
|
|
32.2
|
|
|
|
33.6
|
|
Diluted
|
|
|
32.4
|
|
|
|
34.5
|
|
|
|
33.4
|
|
|
|
34.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
(a)
|
|
$
|
154.5
|
|
|
$
|
150.0
|
|
|
$
|
266.6
|
|
|
$
|
285.0
|
|
Gross margin
(a)
|
|
|
58.0
|
%
|
|
|
56.1
|
%
|
|
|
55.9
|
%
|
|
|
55.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A as a % of
total net sales (a)
|
|
|
29.1
|
%
|
|
|
28.1
|
%
|
|
|
29.7
|
%
|
|
|
29.0
|
%
|
Operating
margin
|
|
|
24.8
|
%
|
|
|
23.2
|
%
|
|
|
21.2
|
%
|
|
|
22.0
|
%
|
Effective tax
rate
|
|
|
28.2
|
%
|
|
|
25.5
|
%
|
|
|
26.2
|
%
|
|
|
24.9
|
%
|
__________
(a) Exclusive of
depreciation and amortization
|
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
Reconciliation of GAAP
to Non-GAAP Measures
|
For the Three and Six
Months Ended June 30, 2022
|
(UNAUDITED)
|
(in millions, except
per share data)
|
|
|
For the Three Months
Ended June 30, 2022
|
|
|
Gross
profit
|
|
|
SG&A
|
|
|
Income (loss)
from
operations
|
|
|
Operating
margin
|
|
|
Net
earnings (loss)
|
|
|
Net
earnings (loss)
per diluted
share
|
|
GAAP basis
measures
|
$
|
154.5
|
|
|
$
|
77.4
|
|
|
$
|
65.9
|
|
|
|
24.8
|
%
|
|
$
|
46.0
|
|
|
$
|
1.42
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
0.1
|
%
|
|
|
0.1
|
|
|
|
—
|
|
Share-based
compensation expense
|
|
—
|
|
|
|
(5.9)
|
|
|
|
5.9
|
|
|
|
2.2
|
%
|
|
|
4.2
|
|
|
|
0.13
|
|
COVID-19 related
recoveries
|
|
(0.1)
|
|
|
|
0.1
|
|
|
|
(0.2)
|
|
|
|
(0.1)
|
%
|
|
|
(0.1)
|
|
|
|
—
|
|
Income related to sale
of assets
|
|
—
|
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
(0.1)
|
%
|
|
|
(0.2)
|
|
|
|
(0.01)
|
|
Non-income tax,
net
|
|
—
|
|
|
|
0.2
|
|
|
|
(0.2)
|
|
|
|
(0.1)
|
%
|
|
|
(0.1)
|
|
|
|
—
|
|
Total Non-GAAP
adjustments (a)
|
|
(0.1)
|
|
|
|
(5.6)
|
|
|
|
5.5
|
|
|
|
2.1
|
%
|
|
|
3.9
|
|
|
|
0.12
|
|
Non-GAAP measures
(a)
|
$
|
154.4
|
|
|
$
|
71.8
|
|
|
$
|
71.4
|
|
|
|
26.8
|
%
|
|
$
|
49.9
|
|
|
$
|
1.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30, 2022
|
|
|
Gross
profit
|
|
|
SG&A
|
|
|
Income (loss)
from
operations
|
|
|
Operating
margin
|
|
|
Net
earnings (loss)
|
|
|
Net
earnings (loss)
per diluted
share
|
|
GAAP basis
measures
|
$
|
266.6
|
|
|
$
|
141.7
|
|
|
$
|
101.2
|
|
|
|
21.2
|
%
|
|
$
|
72.4
|
|
|
$
|
2.17
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
—
|
|
|
|
—
|
|
|
|
2.0
|
|
|
|
0.4
|
%
|
|
|
1.4
|
|
|
|
0.04
|
|
Share-based
compensation expense
|
|
—
|
|
|
|
(9.5)
|
|
|
|
9.5
|
|
|
|
2.0
|
%
|
|
|
5.0
|
|
|
|
0.15
|
|
COVID-19 related
recoveries
|
|
(0.1)
|
|
|
|
0.1
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
—
|
|
Income related to sale
of assets
|
|
—
|
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
(0.01)
|
|
Non-income tax,
net
|
|
—
|
|
|
|
0.5
|
|
|
|
(0.5)
|
|
|
|
(0.1)
|
%
|
|
|
(0.3)
|
|
|
|
(0.01)
|
|
Total Non-GAAP
adjustments (a)
|
|
(0.1)
|
|
|
|
(8.9)
|
|
|
|
10.6
|
|
|
|
2.2
|
%
|
|
|
5.8
|
|
|
|
0.17
|
|
Non-GAAP measures
(a)
|
$
|
266.5
|
|
|
$
|
132.8
|
|
|
$
|
111.8
|
|
|
|
23.4
|
%
|
|
$
|
78.2
|
|
|
$
|
2.34
|
|
__________
(a)
Totals may not foot due to rounding.
|
Donnelley
Financial Solutions, Inc. and Subsidiaries ("DFIN")
|
Reconciliation of GAAP
to Non-GAAP Measures
|
For the Three and Six
Months Ended June 30, 2021
|
(UNAUDITED)
|
(in millions, except
per share data)
|
|
|
For the Three Months
Ended June 30, 2021
|
|
|
Gross
profit
|
|
|
SG&A
|
|
|
Income (loss)
from
operations
|
|
|
Operating
margin
|
|
|
Net
earnings (loss)
|
|
|
Net earnings
(loss)
per diluted
share
|
|
GAAP basis
measures
|
$
|
150.0
|
|
|
$
|
75.1
|
|
|
$
|
62.0
|
|
|
|
23.2
|
%
|
|
$
|
42.9
|
|
|
$
|
1.24
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
—
|
|
|
|
—
|
|
|
|
2.8
|
|
|
|
1.0
|
%
|
|
|
2.0
|
|
|
|
0.06
|
|
Share-based
compensation expense
|
|
—
|
|
|
|
(5.9)
|
|
|
|
5.9
|
|
|
|
2.2
|
%
|
|
|
3.3
|
|
|
|
0.10
|
|
LSC multiemployer
pension plan obligation
|
|
—
|
|
|
|
(0.2)
|
|
|
|
0.2
|
|
|
|
0.1
|
%
|
|
|
0.3
|
|
|
|
0.01
|
|
Non-income tax,
net
|
|
—
|
|
|
|
1.0
|
|
|
|
(1.0)
|
|
|
|
(0.4)
|
%
|
|
|
(0.8)
|
|
|
|
(0.02)
|
|
COVID-19 related
recoveries
|
|
(0.1)
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total Non-GAAP
adjustments (a)
|
|
(0.1)
|
|
|
|
(5.1)
|
|
|
|
7.8
|
|
|
|
2.9
|
%
|
|
|
4.8
|
|
|
|
0.14
|
|
Non-GAAP measures
(a)
|
$
|
149.9
|
|
|
$
|
70.0
|
|
|
$
|
69.8
|
|
|
|
26.1
|
%
|
|
$
|
47.7
|
|
|
$
|
1.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30, 2021
|
|
|
Gross
profit
|
|
|
SG&A
|
|
|
Income (loss)
from
operations
|
|
|
Operating
margin
|
|
|
Net
earnings (loss)
|
|
|
Net
earnings (loss)
per diluted
share
|
|
GAAP basis
measures
|
$
|
285.0
|
|
|
$
|
148.6
|
|
|
$
|
112.9
|
|
|
|
22.0
|
%
|
|
$
|
78.1
|
|
|
$
|
2.26
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
—
|
|
|
|
—
|
|
|
|
3.6
|
|
|
|
0.7
|
%
|
|
|
2.6
|
|
|
|
0.08
|
|
Share-based
compensation expense
|
|
—
|
|
|
|
(9.0)
|
|
|
|
9.0
|
|
|
|
1.8
|
%
|
|
|
2.6
|
|
|
|
0.08
|
|
LSC multiemployer
pension plans obligations
|
|
—
|
|
|
|
(7.5)
|
|
|
|
7.5
|
|
|
|
1.5
|
%
|
|
|
5.5
|
|
|
|
0.16
|
|
Non-income tax,
net
|
|
—
|
|
|
|
0.9
|
|
|
|
(0.9)
|
|
|
|
(0.2)
|
%
|
|
|
(0.7)
|
|
|
|
(0.02)
|
|
COVID-19 related
recoveries
|
|
(1.0)
|
|
|
|
—
|
|
|
|
(1.0)
|
|
|
|
(0.2)
|
%
|
|
|
(0.7)
|
|
|
|
(0.02)
|
|
Loss on equity
investment
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
—
|
|
Total Non-GAAP
adjustments (a)
|
|
(1.0)
|
|
|
|
(15.6)
|
|
|
|
18.2
|
|
|
|
3.5
|
%
|
|
|
9.4
|
|
|
|
0.27
|
|
Non-GAAP measures
(a)
|
$
|
284.0
|
|
|
$
|
133.0
|
|
|
$
|
131.1
|
|
|
|
25.6
|
%
|
|
$
|
87.5
|
|
|
$
|
2.54
|
|
__________
(a)
Totals may not foot due to rounding.
|
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
Segment GAAP to
Non-GAAP Reconciliation and Supplementary Information
|
For the Three Months
Ended June 30, 2022 and 2021
|
(UNAUDITED)
|
(in
millions)
|
|
|
|
Capital
Markets -
Software
Solutions
|
|
|
Capital Markets
-
Compliance and
Communications
Management
|
|
|
Investment
Companies -
Software
Solutions
|
|
|
Investment
Companies -
Compliance and
Communications
Management
|
|
|
Corporate
|
|
|
Consolidated
|
|
For the Three Months
Ended June 30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
46.3
|
|
|
$
|
150.0
|
|
|
$
|
25.3
|
|
|
$
|
44.6
|
|
|
$
|
—
|
|
|
$
|
266.2
|
|
Income (loss) from
operations
|
|
|
3.1
|
|
|
|
60.5
|
|
|
|
5.9
|
|
|
|
13.7
|
|
|
|
(17.3)
|
|
|
|
65.9
|
|
Operating margin
%
|
|
|
6.7
|
%
|
|
|
40.3
|
%
|
|
|
23.3
|
%
|
|
|
30.7
|
%
|
|
nm
|
|
|
|
24.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
|
0.2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
0.2
|
|
|
|
0.2
|
|
Share-based
compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5.9
|
|
|
|
5.9
|
|
COVID-19 related
recoveries
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.2)
|
|
Income related to sale
of assets
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
(0.2)
|
|
Non-income tax,
net
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.2)
|
|
Total Non-GAAP
adjustments
|
|
|
0.1
|
|
|
|
(0.4)
|
|
|
|
(0.1)
|
|
|
|
(0.2)
|
|
|
|
6.1
|
|
|
|
5.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss)
from operations
|
|
$
|
3.2
|
|
|
$
|
60.1
|
|
|
$
|
5.8
|
|
|
$
|
13.5
|
|
|
$
|
(11.2)
|
|
|
$
|
71.4
|
|
Non-GAAP operating
margin %
|
|
|
6.9
|
%
|
|
|
40.1
|
%
|
|
|
22.9
|
%
|
|
|
30.3
|
%
|
|
nm
|
|
|
|
26.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
5.6
|
|
|
|
1.7
|
|
|
|
2.8
|
|
|
|
1.1
|
|
|
|
—
|
|
|
|
11.2
|
|
Adjusted
EBITDA
|
|
$
|
8.8
|
|
|
$
|
61.8
|
|
|
$
|
8.6
|
|
|
$
|
14.6
|
|
|
$
|
(11.2)
|
|
|
$
|
82.6
|
|
Adjusted EBITDA margin
%
|
|
|
19.0
|
%
|
|
|
41.2
|
%
|
|
|
34.0
|
%
|
|
|
32.7
|
%
|
|
nm
|
|
|
|
31.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
7.5
|
|
|
$
|
2.0
|
|
|
$
|
4.2
|
|
|
$
|
0.7
|
|
|
$
|
0.5
|
|
|
$
|
14.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
43.8
|
|
|
$
|
153.1
|
|
|
$
|
22.8
|
|
|
$
|
47.8
|
|
|
$
|
—
|
|
|
$
|
267.5
|
|
Income (loss) from
operations
|
|
|
9.3
|
|
|
|
64.6
|
|
|
|
3.5
|
|
|
|
2.1
|
|
|
|
(17.5)
|
|
|
|
62.0
|
|
Operating margin
%
|
|
|
21.2
|
%
|
|
|
42.2
|
%
|
|
|
15.4
|
%
|
|
|
4.4
|
%
|
|
nm
|
|
|
|
23.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
|
0.1
|
|
|
|
0.6
|
|
|
|
0.1
|
|
|
|
1.9
|
|
|
|
0.1
|
|
|
|
2.8
|
|
Share-based
compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5.9
|
|
|
|
5.9
|
|
LSC multiemployer
pension plans obligations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
0.2
|
|
Non-income tax,
net
|
|
|
(0.8)
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.0)
|
|
COVID-19 related
recoveries
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.1)
|
|
Total Non-GAAP
adjustments
|
|
|
(0.7)
|
|
|
|
0.4
|
|
|
|
—
|
|
|
|
1.9
|
|
|
|
6.2
|
|
|
|
7.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss)
from operations
|
|
$
|
8.6
|
|
|
$
|
65.0
|
|
|
$
|
3.5
|
|
|
$
|
4.0
|
|
|
$
|
(11.3)
|
|
|
$
|
69.8
|
|
Non-GAAP operating
margin %
|
|
|
19.6
|
%
|
|
|
42.5
|
%
|
|
|
15.4
|
%
|
|
|
8.4
|
%
|
|
nm
|
|
|
|
26.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
4.1
|
|
|
|
1.5
|
|
|
|
3.2
|
|
|
|
1.2
|
|
|
|
0.1
|
|
|
|
10.1
|
|
Adjusted
EBITDA
|
|
$
|
12.7
|
|
|
$
|
66.5
|
|
|
$
|
6.7
|
|
|
$
|
5.2
|
|
|
$
|
(11.2)
|
|
|
$
|
79.9
|
|
Adjusted EBITDA margin
%
|
|
|
29.0
|
%
|
|
|
43.4
|
%
|
|
|
29.4
|
%
|
|
|
10.9
|
%
|
|
nm
|
|
|
|
29.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
4.5
|
|
|
$
|
0.7
|
|
|
$
|
2.7
|
|
|
$
|
0.8
|
|
|
$
|
1.0
|
|
|
$
|
9.7
|
|
__________
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
Segment GAAP to
Non-GAAP Reconciliation and Supplementary Information
|
For the Six Months
Ended June 30, 2022 and 2021
|
(UNAUDITED)
|
(in
millions)
|
|
|
|
Capital
Markets -
Software
Solutions
|
|
|
Capital Markets
-
Compliance and
Communications
Management
|
|
|
Investment
Companies -
Software
Solutions
|
|
|
Investment
Companies -
Compliance and
Communications
Management
|
|
|
Corporate
|
|
|
Consolidated
|
|
For the Six Months
Ended June 30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
91.0
|
|
|
$
|
253.6
|
|
|
$
|
50.4
|
|
|
$
|
82.2
|
|
|
$
|
—
|
|
|
$
|
477.2
|
|
Income (loss) from
operations
|
|
|
7.4
|
|
|
|
89.4
|
|
|
|
12.1
|
|
|
|
21.8
|
|
|
|
(29.5)
|
|
|
|
101.2
|
|
Operating margin
%
|
|
|
8.1
|
%
|
|
|
35.3
|
%
|
|
|
24.0
|
%
|
|
|
26.5
|
%
|
|
nm
|
|
|
|
21.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
|
1.0
|
|
|
|
0.4
|
|
|
|
0.1
|
|
|
|
0.2
|
|
|
|
0.3
|
|
|
|
2.0
|
|
Share-based
compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9.5
|
|
|
|
9.5
|
|
COVID-19 related
recoveries
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.2)
|
|
Income related to sale
of assets
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.2)
|
|
Non-income tax,
net
|
|
|
(0.3)
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.5)
|
|
Total Non-GAAP
adjustments
|
|
|
0.7
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
9.8
|
|
|
|
10.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss)
from operations
|
|
$
|
8.1
|
|
|
$
|
89.3
|
|
|
$
|
12.1
|
|
|
$
|
22.0
|
|
|
$
|
(19.7)
|
|
|
$
|
111.8
|
|
Non-GAAP operating
margin %
|
|
|
8.9
|
%
|
|
|
35.2
|
%
|
|
|
24.0
|
%
|
|
|
26.8
|
%
|
|
nm
|
|
|
|
23.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
10.7
|
|
|
|
3.2
|
|
|
|
5.7
|
|
|
|
2.2
|
|
|
|
0.1
|
|
|
|
21.9
|
|
Adjusted
EBITDA
|
|
$
|
18.8
|
|
|
$
|
92.5
|
|
|
$
|
17.8
|
|
|
$
|
24.2
|
|
|
$
|
(19.6)
|
|
|
$
|
133.7
|
|
Adjusted EBITDA margin
%
|
|
|
20.7
|
%
|
|
|
36.5
|
%
|
|
|
35.3
|
%
|
|
|
29.4
|
%
|
|
nm
|
|
|
|
28.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
12.8
|
|
|
$
|
2.7
|
|
|
$
|
7.2
|
|
|
$
|
1.3
|
|
|
$
|
0.8
|
|
|
$
|
24.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
82.3
|
|
|
$
|
291.6
|
|
|
$
|
44.6
|
|
|
$
|
94.3
|
|
|
$
|
—
|
|
|
$
|
512.8
|
|
Income (loss) from
operations
|
|
|
15.8
|
|
|
|
123.7
|
|
|
|
5.5
|
|
|
|
8.4
|
|
|
|
(40.5)
|
|
|
|
112.9
|
|
Operating margin
%
|
|
|
19.2
|
%
|
|
|
42.4
|
%
|
|
|
12.3
|
%
|
|
|
8.9
|
%
|
|
nm
|
|
|
|
22.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
|
0.1
|
|
|
|
0.6
|
|
|
|
0.1
|
|
|
|
2.6
|
|
|
|
0.2
|
|
|
|
3.6
|
|
Share-based
compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9.0
|
|
|
|
9.0
|
|
LSC multiemployer
pension plans obligation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7.5
|
|
|
|
7.5
|
|
Non-income tax,
net
|
|
|
(0.7)
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.9)
|
|
COVID-19 related
recoveries
|
|
|
—
|
|
|
|
(0.3)
|
|
|
|
—
|
|
|
|
(0.7)
|
|
|
|
—
|
|
|
|
(1.0)
|
|
Total Non-GAAP
adjustments
|
|
|
(0.6)
|
|
|
|
0.2
|
|
|
|
—
|
|
|
|
1.9
|
|
|
|
16.7
|
|
|
|
18.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss)
from operations
|
|
$
|
15.2
|
|
|
$
|
123.9
|
|
|
$
|
5.5
|
|
|
$
|
10.3
|
|
|
$
|
(23.8)
|
|
|
$
|
131.1
|
|
Non-GAAP operating
margin %
|
|
|
18.5
|
%
|
|
|
42.5
|
%
|
|
|
12.3
|
%
|
|
|
10.9
|
%
|
|
nm
|
|
|
|
25.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
7.8
|
|
|
|
3.0
|
|
|
|
6.8
|
|
|
|
2.2
|
|
|
|
0.1
|
|
|
|
19.9
|
|
Adjusted
EBITDA
|
|
$
|
23.0
|
|
|
$
|
126.9
|
|
|
$
|
12.3
|
|
|
$
|
12.5
|
|
|
$
|
(23.7)
|
|
|
$
|
151.0
|
|
Adjusted EBITDA margin
%
|
|
|
27.9
|
%
|
|
|
43.5
|
%
|
|
|
27.6
|
%
|
|
|
13.3
|
%
|
|
nm
|
|
|
|
29.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
8.2
|
|
|
$
|
1.3
|
|
|
$
|
4.5
|
|
|
$
|
1.3
|
|
|
$
|
2.4
|
|
|
$
|
17.7
|
|
__________
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
|
Condensed Consolidated
Statements of Cash Flows
|
|
(UNAUDITED)
|
|
(in
millions)
|
|
|
|
|
|
For the Six Months
Ended June 30,
|
|
|
|
2022
|
|
|
2021
|
|
Operating
Activities
|
|
|
|
|
|
|
Net earnings
|
|
$
|
72.4
|
|
|
$
|
78.1
|
|
Adjustments to
reconcile net earnings to net cash used in operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
21.9
|
|
|
|
19.9
|
|
Provision for expected
losses on accounts receivable
|
|
|
4.2
|
|
|
|
2.1
|
|
Share-based
compensation
|
|
|
9.5
|
|
|
|
9.0
|
|
Deferred income
taxes
|
|
|
(1.0)
|
|
|
|
5.0
|
|
Net pension plan
income
|
|
|
(0.5)
|
|
|
|
(2.1)
|
|
Amortization of
right-of-use assets
|
|
|
8.0
|
|
|
|
8.7
|
|
Other
|
|
|
0.5
|
|
|
|
1.2
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
|
(79.8)
|
|
|
|
(94.4)
|
|
Prepaid expenses and
other current assets
|
|
|
(5.9)
|
|
|
|
(4.7)
|
|
Accounts
payable
|
|
|
22.9
|
|
|
|
4.0
|
|
Income taxes payable
and receivable
|
|
|
4.1
|
|
|
|
(3.9)
|
|
Accrued liabilities
and other
|
|
|
(52.3)
|
|
|
|
(19.3)
|
|
Operating lease
liabilities
|
|
|
(9.7)
|
|
|
|
(10.6)
|
|
Pension and other
postretirement benefits plan contributions
|
|
|
(0.7)
|
|
|
|
(0.7)
|
|
Net cash used in
operating activities
|
|
|
(6.4)
|
|
|
|
(7.7)
|
|
Investing
Activities
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(24.8)
|
|
|
|
(17.7)
|
|
Net cash used in
investing activities
|
|
|
(24.8)
|
|
|
|
(17.7)
|
|
Financing
Activities
|
|
|
|
|
|
|
Revolving facility
borrowings
|
|
|
209.0
|
|
|
|
228.0
|
|
Payments on revolving
facility borrowings
|
|
|
(99.0)
|
|
|
|
(218.0)
|
|
Debt issuance
costs
|
|
|
—
|
|
|
|
(2.8)
|
|
Treasury share
repurchases
|
|
|
(116.6)
|
|
|
|
(19.1)
|
|
Proceeds from exercise
of stock options
|
|
|
0.3
|
|
|
|
2.0
|
|
Finance lease
payments
|
|
|
(0.9)
|
|
|
|
—
|
|
Net cash used in
financing activities
|
|
|
(7.2)
|
|
|
|
(9.9)
|
|
Effect of exchange rate
on cash and cash equivalents
|
|
|
1.7
|
|
|
|
1.6
|
|
Net decrease in cash
and cash equivalents
|
|
|
(36.7)
|
|
|
|
(33.7)
|
|
Cash and cash
equivalents at beginning of year
|
|
|
54.5
|
|
|
|
73.6
|
|
Cash and cash
equivalents at end of period
|
|
$
|
17.8
|
|
|
$
|
39.9
|
|
Supplemental cash
flow information
|
|
|
|
|
|
|
Income taxes paid (net
of refunds)
|
|
$
|
22.0
|
|
|
$
|
24.3
|
|
Interest
paid
|
|
$
|
2.8
|
|
|
$
|
10.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 30,
|
|
|
For the Six Months
Ended June 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Net cash provided by
(used in) operating activities
|
|
$
|
45.8
|
|
|
$
|
30.6
|
|
|
$
|
(6.4)
|
|
|
$
|
(7.7)
|
|
Less: capital
expenditures
|
|
|
14.9
|
|
|
|
9.7
|
|
|
|
24.8
|
|
|
|
17.7
|
|
Free Cash
Flow
|
|
$
|
30.9
|
|
|
$
|
20.9
|
|
|
$
|
(31.2)
|
|
|
$
|
(25.4)
|
|
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
Reconciliation of
Reported to Organic Net Sales
|
(UNAUDITED)
|
(in
millions)
|
|
|
|
Capital
Markets -
Software
Solutions
|
|
|
Capital Markets
-
Compliance and
Communications
Management
|
|
|
Investment
Companies -
Software
Solutions
|
|
|
Investment
Companies -
Compliance and
Communications
Management
|
|
|
Consolidated
|
|
Reported Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 30, 2022
|
|
$
|
46.3
|
|
|
$
|
150.0
|
|
|
$
|
25.3
|
|
|
$
|
44.6
|
|
|
$
|
266.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 30, 2021
|
|
$
|
43.8
|
|
|
$
|
153.1
|
|
|
$
|
22.8
|
|
|
$
|
47.8
|
|
|
$
|
267.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
change
|
|
|
5.7
|
%
|
|
|
(2.0)
|
%
|
|
|
11.0
|
%
|
|
|
(6.7)
|
%
|
|
|
(0.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
non-GAAP information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year impact
of changes in foreign exchange (FX) rates
|
|
|
(1.1)
|
%
|
|
|
(0.8)
|
%
|
|
|
(1.8)
|
%
|
|
|
—
|
|
|
|
(0.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net organic sales
change
|
|
|
6.8
|
%
|
|
|
(1.2)
|
%
|
|
|
12.8
|
%
|
|
|
(6.7)
|
%
|
|
|
0.3
|
%
|
|
|
|
|
Capital
Markets -
Software
Solutions
|
|
|
Capital Markets
-
Compliance and
Communications
Management
|
|
|
Investment
Companies -
Software
Solutions
|
|
|
Investment
Companies -
Compliance and
Communications
Management
|
|
|
Consolidated
|
|
Reported Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30, 2022
|
|
$
|
91.0
|
|
|
$
|
253.6
|
|
|
$
|
50.4
|
|
|
$
|
82.2
|
|
|
$
|
477.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30, 2021
|
|
$
|
82.3
|
|
|
$
|
291.6
|
|
|
$
|
44.6
|
|
|
$
|
94.3
|
|
|
$
|
512.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
change
|
|
|
10.6
|
%
|
|
|
(13.0
|
%)
|
|
|
13.0
|
%
|
|
|
(12.8
|
%)
|
|
|
(6.9
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
non-GAAP information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year impact
of changes in foreign exchange (FX) rates
|
|
|
(0.7
|
%)
|
|
|
(0.5
|
%)
|
|
|
(1.3
|
%)
|
|
|
—
|
|
|
|
(0.5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net organic sales
change
|
|
|
11.3
|
%
|
|
|
(12.5
|
%)
|
|
|
14.3
|
%
|
|
|
(12.8
|
%)
|
|
|
(6.4
|
%)
|
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
Reconciliation of Net
Earnings to Adjusted EBITDA
|
(UNAUDITED)
|
(in
millions)
|
|
|
|
For the Twelve
Months Ended
|
|
|
For the Three Months
Ended
|
|
|
|
June 30,
2022
|
|
|
June 30,
2022
|
|
|
March 31,
2022
|
|
|
December 31,
2021
|
|
|
September 30,
2021
|
|
Net
earnings
|
|
$
|
140.2
|
|
|
$
|
46.0
|
|
|
$
|
26.4
|
|
|
$
|
25.6
|
|
|
$
|
42.2
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
|
12.0
|
|
|
|
0.2
|
|
|
|
1.8
|
|
|
|
6.7
|
|
|
|
3.3
|
|
Share-based
compensation expense
|
|
|
20.0
|
|
|
|
5.9
|
|
|
|
3.6
|
|
|
|
5.3
|
|
|
|
5.2
|
|
LSC multiemployer
pension plans obligations
|
|
|
(2.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2.3)
|
|
|
|
0.2
|
|
Non-income tax,
net
|
|
|
(1.2)
|
|
|
|
(0.2)
|
|
|
|
(0.3)
|
|
|
|
(0.2)
|
|
|
|
(0.5)
|
|
COVID-19 related
recoveries
|
|
|
(0.2)
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Income related to sale
of assets
|
|
|
(0.2)
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Gain on sale of
long-lived assets, net
|
|
|
(0.7)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.7)
|
|
Gain on equity
investments
|
|
|
(0.6)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.6)
|
|
Depreciation and
amortization
|
|
|
42.3
|
|
|
|
11.2
|
|
|
|
10.7
|
|
|
|
10.4
|
|
|
|
10.0
|
|
Interest expense,
net
|
|
|
19.0
|
|
|
|
2.1
|
|
|
|
1.5
|
|
|
|
9.5
|
|
|
|
5.9
|
|
Pension income and
other income, net
|
|
|
(2.7)
|
|
|
|
(0.3)
|
|
|
|
(0.2)
|
|
|
|
(1.1)
|
|
|
|
(1.1)
|
|
Income tax
expense
|
|
|
51.7
|
|
|
|
18.1
|
|
|
|
7.6
|
|
|
|
7.4
|
|
|
|
18.6
|
|
Total Non-GAAP
adjustments
|
|
|
137.3
|
|
|
|
36.6
|
|
|
|
24.7
|
|
|
|
35.7
|
|
|
|
40.3
|
|
Adjusted
EBITDA
|
|
$
|
277.5
|
|
|
$
|
82.6
|
|
|
$
|
51.1
|
|
|
$
|
61.3
|
|
|
$
|
82.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tech-enabled
services
|
|
$
|
492.0
|
|
|
$
|
133.3
|
|
|
$
|
91.7
|
|
|
$
|
124.9
|
|
|
$
|
142.1
|
|
Software
solutions
|
|
|
284.5
|
|
|
$
|
71.6
|
|
|
|
69.8
|
|
|
|
73.8
|
|
|
|
69.3
|
|
Print and
distribution
|
|
|
181.2
|
|
|
|
61.3
|
|
|
|
49.5
|
|
|
|
34.1
|
|
|
|
36.3
|
|
Total net
sales
|
|
$
|
957.7
|
|
|
$
|
266.2
|
|
|
$
|
211.0
|
|
|
$
|
232.8
|
|
|
$
|
247.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
%
|
|
|
29.0
|
%
|
|
|
31.0
|
%
|
|
|
24.2
|
%
|
|
|
26.3
|
%
|
|
|
33.3
|
%
|
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
Reconciliation of Net
Earnings (Loss) to Adjusted EBITDA
|
(UNAUDITED)
|
(in
millions)
|
|
|
|
For the Twelve
Months Ended
|
|
|
For the Three Months
Ended
|
|
|
|
June 30,
2021
|
|
|
June 30,
2021
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
|
September 30,
2020
|
|
Net earnings
(loss)
|
|
$
|
49.4
|
|
|
$
|
42.9
|
|
|
$
|
35.2
|
|
|
$
|
(35.8)
|
|
|
$
|
7.1
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
|
54.6
|
|
|
|
2.8
|
|
|
|
0.8
|
|
|
|
44.0
|
|
|
|
7.0
|
|
Share-based
compensation expense
|
|
|
17.2
|
|
|
|
5.9
|
|
|
|
3.1
|
|
|
|
3.8
|
|
|
|
4.4
|
|
LSC multiemployer
pension plans obligations
|
|
|
14.2
|
|
|
|
0.2
|
|
|
|
7.3
|
|
|
|
0.9
|
|
|
|
5.8
|
|
Non-income tax,
net
|
|
|
4.3
|
|
|
|
(1.0)
|
|
|
|
0.1
|
|
|
|
2.5
|
|
|
|
2.7
|
|
COVID-19 related
recoveries, net
|
|
|
(2.4)
|
|
|
|
(0.1)
|
|
|
|
(0.9)
|
|
|
|
(0.4)
|
|
|
|
(1.0)
|
|
Loss on equity
investment
|
|
|
0.2
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
—
|
|
|
|
—
|
|
Accelerated rent
expense
|
|
|
1.6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.3
|
|
|
|
1.3
|
|
eBrevia contingent
consideration
|
|
|
(0.4)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.4)
|
|
Depreciation and
amortization
|
|
|
43.7
|
|
|
|
10.1
|
|
|
|
9.8
|
|
|
|
11.2
|
|
|
|
12.6
|
|
Interest expense,
net
|
|
|
23.1
|
|
|
|
5.9
|
|
|
|
5.3
|
|
|
|
6.0
|
|
|
|
5.9
|
|
Pension income and
other income, net
|
|
|
(3.3)
|
|
|
|
(1.5)
|
|
|
|
(1.0)
|
|
|
|
(0.4)
|
|
|
|
(0.4)
|
|
Income tax
expense
|
|
|
31.3
|
|
|
|
14.7
|
|
|
|
11.2
|
|
|
|
2.8
|
|
|
|
2.6
|
|
Total Non-GAAP
adjustments
|
|
|
184.1
|
|
|
|
37.0
|
|
|
|
35.9
|
|
|
|
70.7
|
|
|
|
40.5
|
|
Adjusted
EBITDA
|
|
$
|
233.5
|
|
|
$
|
79.9
|
|
|
$
|
71.1
|
|
|
$
|
34.9
|
|
|
$
|
47.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tech-enabled
services
|
|
$
|
464.4
|
|
|
$
|
134.0
|
|
|
$
|
118.5
|
|
|
$
|
107.4
|
|
|
$
|
104.5
|
|
Software
solutions
|
|
|
232.2
|
|
|
|
66.6
|
|
|
|
60.3
|
|
|
|
54.2
|
|
|
|
51.1
|
|
Print and
distribution
|
|
|
236.0
|
|
|
|
66.9
|
|
|
|
66.5
|
|
|
|
48.7
|
|
|
|
53.9
|
|
Total net
sales
|
|
$
|
932.6
|
|
|
$
|
267.5
|
|
|
$
|
245.3
|
|
|
$
|
210.3
|
|
|
$
|
209.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
%
|
|
|
25.0
|
%
|
|
|
29.9
|
%
|
|
|
29.0
|
%
|
|
|
16.6
|
%
|
|
|
22.7
|
%
|
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
Debt and Liquidity
Summary
|
(UNAUDITED)
|
(in
millions)
|
|
Total
Liquidity
|
|
June 30,
2022
|
|
|
December 31,
2021
|
|
|
June 30,
2021
|
|
Availability
|
|
|
|
|
|
|
|
|
|
Stated amount of the
Revolving Facility (a)
|
|
$
|
300.0
|
|
|
$
|
300.0
|
|
|
$
|
300.0
|
|
Less: availability
reduction from covenants
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Amount available under
the Revolving Facility
|
|
|
300.0
|
|
|
|
300.0
|
|
|
|
300.0
|
|
|
|
|
|
|
|
|
|
|
|
Usage
|
|
|
|
|
|
|
|
|
|
Borrowings under the
Revolving Facility
|
|
|
110.0
|
|
|
|
—
|
|
|
|
10.0
|
|
Impact on availability
related to outstanding
letters of credit
|
|
|
—
|
|
|
|
2.2
|
|
|
|
2.3
|
|
Amount used under the
Revolving Facility
|
|
|
110.0
|
|
|
|
2.2
|
|
|
|
12.3
|
|
|
|
|
|
|
|
|
|
|
|
Availability under the
Revolving Facility
|
|
|
190.0
|
|
|
|
297.8
|
|
|
|
287.7
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
17.8
|
|
|
|
54.5
|
|
|
|
39.9
|
|
|
|
|
|
|
|
|
|
|
|
Net Available
Liquidity
|
|
$
|
207.8
|
|
|
$
|
352.3
|
|
|
$
|
327.6
|
|
|
|
|
|
|
|
|
|
|
|
Term Loan A
Facility
|
|
$
|
125.0
|
|
|
$
|
125.0
|
|
|
$
|
—
|
|
Borrowings under the
Revolving Facility
|
|
|
110.0
|
|
|
|
—
|
|
|
|
10.0
|
|
8.25% senior notes due
October 15, 2024
|
|
|
—
|
|
|
|
—
|
|
|
|
233.0
|
|
Unamortized debt
issuance costs
|
|
|
(0.9)
|
|
|
|
(1.0)
|
|
|
|
(2.1)
|
|
Total debt
|
|
$
|
234.1
|
|
|
$
|
124.0
|
|
|
$
|
240.9
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA for the
twelve months ended June 30, 2022 and 2021, and the year ended
December 31, 2021
|
|
$
|
277.5
|
|
|
$
|
294.8
|
|
|
$
|
233.5
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross
Leverage (defined as total debt divided by Adjusted
EBITDA)
|
|
|
0.8
|
x
|
|
|
0.4
|
x
|
|
|
1.0
|
x
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Debt
(defined as total debt less cash and cash equivalents)
|
|
|
216.3
|
|
|
|
69.5
|
|
|
|
201.0
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net
Leverage (defined as non-GAAP Net Debt divided by Adjusted
EBITDA)
|
|
|
0.8
|
x
|
|
|
0.2
|
x
|
|
|
0.9
|
x
|
__________
(a)
|
The Company has 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 Consolidated Net Leverage Ratio, both as defined and
calculated in the credit agreement. There was $110.0 million of
borrowings outstanding under the Revolving Facility as of June 30,
2022, and no outstanding letters of credit that reduced the
availability under the Revolving Facility as of June 30, 2022.
Based on the Company's results of operations for the twelve months
ended June 30, 2022 and existing debt, the Company would have had
the ability to utilize the remaining $190.0 million of the $300.0
million Revolving Facility and not have been in violation of the
terms of the Revolving Facility agreement.
|
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SOURCE Donnelley Financial Solutions