CHICAGO, Nov. 2, 2022
/PRNewswire/ -- Donnelley Financial Solutions, Inc. (NYSE:
DFIN) (the "Company" or "DFIN") today reported
financial results for the third quarter of 2022.
Highlights for the third quarter of 2022:
- Record third-quarter software solutions net sales of
$69.5 million; software solutions net
sales accounted for 36.8% of total net sales, up from 28.0% in the
third quarter of 2021.
- Net earnings of $19.2 million, or
$0.62 per diluted share; Adjusted
EBITDA(a) of $45.3 million
and Adjusted EBITDA margin of 24.0%.
- Third-quarter operating cash flow of $83.3 million; third-quarter Free Cash
Flow(a) of $68.7
million.
- Non-GAAP gross leverage of 0.8x and non-GAAP net leverage of
0.8x.
- During the third quarter, the Company repurchased 959,579
shares for $32.3 million at an
average price of $33.72 per share. As
of September 30, 2022, the remaining
share repurchase authorization was $137.9
million.
(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.
|
|
"We continue to see proof points that support the success of our
software-focused strategy. We delivered record third-quarter
software solutions revenue, driven by double-digit net sales growth
from our recurring compliance software products ActiveDisclosure
and Arc Suite. Software solutions net sales made up nearly 37% of
third quarter 2022 total net sales, an increase of approximately
880 basis points from last year's third-quarter sales mix, and
positions us well to achieve our long-term target of deriving 55%
to 60% of revenue from software by 2026," said Daniel N. Leib, DFIN's president and chief
executive officer.
Leib continued, "Despite a weaker than expected capital markets
transactional environment that resulted in our transactional
revenue being nearly halved from prior year, we delivered another
quarter of strong margin performance. Adjusted EBITDA margin in the
quarter was 24.0%, which was in-line with our expectation and once
again above historical quarters with similar overall and
transactional revenue. Our third-quarter Adjusted EBITDA margin,
which benefitted from our evolving sales mix, permanent changes to
our cost structure, and continued cost discipline, further
demonstrates our ability to sustainably operate at a higher level
of profitability across a range of market conditions."
"While the outlook for capital markets transactional activity
remains uncertain, our solid financial results and strong balance
sheet provide us with the financial flexibility to continue to
invest to shift toward a more favorable recurring sales mix. We
will continue to aggressively manage our cost structure and remain
disciplined in the allocation of capital as we execute our
transformation to become the market leading provider of regulatory
and compliance solutions." Leib concluded.
Net Sales
Net sales in the third quarter of 2022 were $188.7 million, a decrease of $59.0 million, or 23.8%, from the third quarter
of 2021. Net sales decreased primarily due to lower capital markets
transactional volumes, which decreased approximately $56 million, or 49%, year over year, partially
offset by higher software solutions net sales in Arc Suite and
ActiveDisclosure.
Net Earnings
For the third quarter of 2022, net earnings were $19.2 million, or $0.62 per diluted share, as compared to
$42.2 million, or $1.22 per diluted share, in the third quarter of
2021. Net earnings in the third quarter of 2022 included after-tax
charges of $4.5 million, or
$0.15 per diluted share, primarily
related to share-based compensation expense and restructuring
impairment and other charges, net. Net earnings in the third
quarter of 2021 included after-tax charges of $4.9 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 third quarter of 2022, Adjusted EBITDA was $45.3 million, a decrease of $37.2 million as compared to the third quarter of
2021. Adjusted EBITDA margin was 24.0%, a decrease of approximately
930 basis points as compared to the third quarter of 2021. The
decrease in Adjusted EBITDA and Adjusted EBITDA margin were
primarily driven by lower sales volumes and an unfavorable sales
mix, partially offset by lower selling expense as a result of the
decrease in sales volume, lower incentive compensation expense, and
the impact of cost savings initiatives.
For the third quarter of 2022, non-GAAP net earnings were
$23.7 million, or $0.77 per diluted share, as compared to
$47.1 million, or $1.36 per diluted share, in the third 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. The Company reaffirms these estimates
at this time.
Company Results and Conference Call
DFIN's earnings press release for the third 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 November 2, 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 November 2, 2022, at 9:00
a.m. Eastern time to discuss financial results for the third
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, adjusted non-GAAP gross profit,
non-GAAP gross margin, adjusted non-GAAP selling, general, and
administrative expenses ("SG&A"), adjusted non-GAAP income from
operations, adjusted non-GAAP operating margin, Adjusted EBITDA,
Adjusted EBITDA margin, non-GAAP effective tax rate, adjusted
non-GAAP net earnings, adjusted 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, adjusted non-GAAP gross profit,
non-GAAP gross margin, adjusted non-GAAP SG&A, adjusted
non-GAAP income from operations, adjusted non-GAAP operating
margin, Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP effective
tax rate, adjusted non-GAAP net earnings and adjusted 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)
|
|
|
|
September 30,
2022
|
|
|
December 31,
2021
|
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
10.8
|
|
|
$
|
54.5
|
|
Receivables, less
allowances for expected losses of $17.5 in 2022 (2021 -
$12.7)
|
|
|
210.8
|
|
|
|
199.1
|
|
Prepaid expenses and
other current assets
|
|
|
27.5
|
|
|
|
23.5
|
|
Assets held for
sale
|
|
|
2.6
|
|
|
|
2.6
|
|
Total current
assets
|
|
|
251.7
|
|
|
|
279.7
|
|
Property, plant and
equipment, net
|
|
|
17.7
|
|
|
|
18.7
|
|
Operating lease
right-of-use assets
|
|
|
36.4
|
|
|
|
42.6
|
|
Software,
net
|
|
|
72.4
|
|
|
|
63.7
|
|
Goodwill
|
|
|
409.0
|
|
|
|
410.0
|
|
Other intangible
assets, net
|
|
|
8.0
|
|
|
|
8.7
|
|
Deferred income taxes,
net
|
|
|
30.5
|
|
|
|
31.7
|
|
Other noncurrent
assets
|
|
|
25.1
|
|
|
|
28.2
|
|
Total
assets
|
|
$
|
850.8
|
|
|
$
|
883.3
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
42.1
|
|
|
$
|
36.3
|
|
Operating lease
liabilities
|
|
|
16.6
|
|
|
|
17.9
|
|
Accrued
liabilities
|
|
|
163.2
|
|
|
|
207.2
|
|
Total current
liabilities
|
|
|
221.9
|
|
|
|
261.4
|
|
Long-term
debt
|
|
|
191.7
|
|
|
|
124.0
|
|
Deferred compensation
liabilities
|
|
|
18.5
|
|
|
|
19.8
|
|
Pension and other
postretirement benefits plans liabilities
|
|
|
36.2
|
|
|
|
40.6
|
|
Noncurrent operating
lease liabilities
|
|
|
31.5
|
|
|
|
39.4
|
|
Other noncurrent
liabilities
|
|
|
19.5
|
|
|
|
21.1
|
|
Total
liabilities
|
|
|
519.3
|
|
|
|
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 29.3 shares in 2022 (2021 - 35.9
shares and 33.0 shares)
|
|
|
0.4
|
|
|
|
0.4
|
|
Treasury stock, at
cost: 7.6 shares in 2022 (2021 - 2.9 shares)
|
|
|
(208.0)
|
|
|
|
(57.1)
|
|
Additional paid-in
capital
|
|
|
274.7
|
|
|
|
260.6
|
|
Retained
earnings
|
|
|
343.0
|
|
|
|
251.4
|
|
Accumulated other
comprehensive loss
|
|
|
(78.6)
|
|
|
|
(78.3)
|
|
Total
equity
|
|
|
331.5
|
|
|
|
377.0
|
|
Total liabilities
and equity
|
|
$
|
850.8
|
|
|
$
|
883.3
|
|
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
Condensed Consolidated
Statements of Operations
|
(UNAUDITED)
|
(in millions, except
per share data)
|
|
|
|
Three Months
Ended
September 30,
|
|
|
Nine Months
Ended
September 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Tech-enabled
services
|
|
$
|
87.4
|
|
|
$
|
142.1
|
|
|
$
|
312.4
|
|
|
$
|
394.6
|
|
Software
solutions
|
|
|
69.5
|
|
|
|
69.3
|
|
|
|
210.9
|
|
|
|
196.2
|
|
Print and
distribution
|
|
|
31.8
|
|
|
|
36.3
|
|
|
|
142.6
|
|
|
|
169.7
|
|
Total net
sales
|
|
|
188.7
|
|
|
|
247.7
|
|
|
|
665.9
|
|
|
|
760.5
|
|
Cost of sales
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
Tech-enabled
services
|
|
|
35.3
|
|
|
|
39.6
|
|
|
|
113.2
|
|
|
|
123.3
|
|
Software
solutions
|
|
|
29.0
|
|
|
|
26.9
|
|
|
|
85.1
|
|
|
|
76.5
|
|
Print and
distribution
|
|
|
19.6
|
|
|
|
26.6
|
|
|
|
96.2
|
|
|
|
121.1
|
|
Total cost of
sales
|
|
|
83.9
|
|
|
|
93.1
|
|
|
|
294.5
|
|
|
|
320.9
|
|
Selling, general and
administrative expenses (a)
|
|
|
63.8
|
|
|
|
77.0
|
|
|
|
205.5
|
|
|
|
225.6
|
|
Depreciation and
amortization
|
|
|
11.7
|
|
|
|
10.0
|
|
|
|
33.6
|
|
|
|
29.9
|
|
Restructuring,
impairment and other charges, net
|
|
|
2.6
|
|
|
|
3.3
|
|
|
|
4.6
|
|
|
|
6.9
|
|
Other operating income,
net
|
|
|
—
|
|
|
|
(0.7)
|
|
|
|
(0.2)
|
|
|
|
(0.7)
|
|
Income from
operations
|
|
|
26.7
|
|
|
|
65.0
|
|
|
|
127.9
|
|
|
|
177.9
|
|
Interest expense,
net
|
|
|
2.3
|
|
|
|
5.9
|
|
|
|
5.9
|
|
|
|
17.1
|
|
Investment and other
income, net
|
|
|
(2.8)
|
|
|
|
(1.7)
|
|
|
|
(3.3)
|
|
|
|
(4.0)
|
|
Earnings before
income taxes
|
|
|
27.2
|
|
|
|
60.8
|
|
|
|
125.3
|
|
|
|
164.8
|
|
Income tax
expense
|
|
|
8.0
|
|
|
|
18.6
|
|
|
|
33.7
|
|
|
|
44.5
|
|
Net
earnings
|
|
$
|
19.2
|
|
|
$
|
42.2
|
|
|
$
|
91.6
|
|
|
$
|
120.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.64
|
|
|
$
|
1.25
|
|
|
$
|
2.93
|
|
|
$
|
3.57
|
|
Diluted
|
|
$
|
0.62
|
|
|
$
|
1.22
|
|
|
$
|
2.81
|
|
|
$
|
3.48
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
29.8
|
|
|
|
33.7
|
|
|
|
31.3
|
|
|
|
33.7
|
|
Diluted
|
|
|
30.9
|
|
|
|
34.7
|
|
|
|
32.6
|
|
|
|
34.6
|
|
__________
|
(a)
|
Exclusive of
depreciation and amortization
|
|
|
Three Months
Ended
September 30,
|
|
|
Nine Months
Ended
September 30,
|
|
Components of
depreciation and amortization expense:
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Cost of
sales
|
|
$
|
10.9
|
|
|
$
|
9.0
|
|
|
$
|
31.3
|
|
|
$
|
27.2
|
|
Selling, general and
administration expense
|
|
|
0.8
|
|
|
|
1.0
|
|
|
|
2.3
|
|
|
|
2.7
|
|
Total depreciation and
amortization
|
|
$
|
11.7
|
|
|
$
|
10.0
|
|
|
$
|
33.6
|
|
|
$
|
29.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
(b)
|
|
$
|
93.9
|
|
|
$
|
145.6
|
|
|
$
|
340.1
|
|
|
$
|
412.4
|
|
Exclude: Depreciation
and amortization
|
|
|
10.9
|
|
|
|
9.0
|
|
|
|
31.3
|
|
|
|
27.2
|
|
Non-GAAP gross
profit
|
|
$
|
104.8
|
|
|
$
|
154.6
|
|
|
$
|
371.4
|
|
|
$
|
439.6
|
|
Gross margin
(b)
|
|
|
49.8
|
%
|
|
|
58.8
|
%
|
|
|
51.1
|
%
|
|
|
54.2
|
%
|
Non-GAAP gross
margin
|
|
|
55.5
|
%
|
|
|
62.4
|
%
|
|
|
55.8
|
%
|
|
|
57.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A as a % of
total net sales (a)
|
|
|
33.8
|
%
|
|
|
31.1
|
%
|
|
|
30.9
|
%
|
|
|
29.7
|
%
|
Operating
margin
|
|
|
14.1
|
%
|
|
|
26.2
|
%
|
|
|
19.2
|
%
|
|
|
23.4
|
%
|
Effective tax
rate
|
|
|
29.4
|
%
|
|
|
30.6
|
%
|
|
|
26.9
|
%
|
|
|
27.0
|
%
|
__________
|
(b)
|
Inclusive of
depreciation and amortization
|
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
Reconciliation of GAAP
to Non-GAAP Measures
|
For the Three and Nine
Months Ended September 30, 2022
|
(UNAUDITED)
|
(in millions, except
per share data)
|
|
|
For the Three Months
Ended September 30, 2022
|
|
|
Gross
profit
|
|
|
SG&A
(a)
|
|
|
Income (loss)
from
operations
|
|
|
Operating
margin
|
|
|
Net
earnings
(loss)
|
|
|
Net
earnings (loss)
per diluted
share
|
|
GAAP basis
measures
|
$
|
93.9
|
|
|
$
|
63.8
|
|
|
$
|
26.7
|
|
|
|
14.1
|
%
|
|
$
|
19.2
|
|
|
$
|
0.62
|
|
Exclude: Depreciation
and amortization
|
|
10.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
measures
|
|
104.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP % of total
net sales
|
|
55.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
—
|
|
|
|
—
|
|
|
|
2.6
|
|
|
|
1.4
|
%
|
|
|
2.0
|
|
|
|
0.06
|
|
Share-based
compensation expense
|
|
—
|
|
|
|
(4.4)
|
|
|
|
4.4
|
|
|
|
2.3
|
%
|
|
|
3.1
|
|
|
|
0.10
|
|
COVID-19 related
recoveries
|
|
(0.1)
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
%
|
|
|
(0.1)
|
|
|
|
—
|
|
Accelerated rent
expense and other
|
|
0.1
|
|
|
|
(0.1)
|
|
|
|
0.2
|
|
|
|
0.1
|
%
|
|
|
0.1
|
|
|
|
—
|
|
Non-income tax,
net
|
|
—
|
|
|
|
0.2
|
|
|
|
(0.2)
|
|
|
|
(0.1)
|
%
|
|
|
(0.2)
|
|
|
|
(0.01)
|
|
Gain on equity
investment
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.4)
|
|
|
|
(0.01)
|
|
Total Non-GAAP
adjustments (b)
|
|
—
|
|
|
|
(4.3)
|
|
|
|
6.9
|
|
|
|
3.7
|
%
|
|
|
4.5
|
|
|
|
0.15
|
|
Adjusted Non-GAAP
measures (b)
|
$
|
104.8
|
|
|
$
|
59.5
|
|
|
$
|
33.6
|
|
|
|
17.8
|
%
|
|
$
|
23.7
|
|
|
$
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended September 30, 2022
|
|
|
Gross
profit
|
|
|
SG&A
(a)
|
|
|
Income (loss)
from
operations
|
|
|
Operating
margin
|
|
|
Net
earnings
(loss)
|
|
|
Net
earnings (loss)
per diluted
share
|
|
GAAP basis
measures
|
$
|
340.1
|
|
|
$
|
205.5
|
|
|
$
|
127.9
|
|
|
|
19.2
|
%
|
|
$
|
91.6
|
|
|
$
|
2.81
|
|
Exclude: Depreciation
and amortization
|
|
31.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
measures
|
|
371.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP % of total
net sales
|
|
55.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
—
|
|
|
|
—
|
|
|
|
4.6
|
|
|
|
0.7
|
%
|
|
|
3.4
|
|
|
|
0.10
|
|
Share-based
compensation expense
|
|
—
|
|
|
|
(13.9)
|
|
|
|
13.9
|
|
|
|
2.1
|
%
|
|
|
8.1
|
|
|
|
0.25
|
|
COVID-19 related
recoveries
|
|
(0.2)
|
|
|
|
0.1
|
|
|
|
(0.3)
|
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
(0.01)
|
|
Gain on sale of
long-lived assets
|
|
—
|
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
(0.01)
|
|
Accelerated rent
expense and other
|
|
0.1
|
|
|
|
(0.1)
|
|
|
|
0.2
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
—
|
|
Non-income tax,
net
|
|
—
|
|
|
|
0.7
|
|
|
|
(0.7)
|
|
|
|
(0.1)
|
%
|
|
|
(0.5)
|
|
|
|
(0.02)
|
|
Gain on equity
investment
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.4)
|
|
|
|
(0.01)
|
|
Total Non-GAAP
adjustments (b)
|
|
(0.1)
|
|
|
|
(13.2)
|
|
|
|
17.5
|
|
|
|
2.6
|
%
|
|
|
10.3
|
|
|
|
0.32
|
|
Adjusted Non-GAAP
measures (b)
|
$
|
371.3
|
|
|
$
|
192.3
|
|
|
$
|
145.4
|
|
|
|
21.8
|
%
|
|
$
|
101.9
|
|
|
$
|
3.13
|
__________
|
(a)
|
Exclusive of
depreciation and amortization.
|
(b)
|
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 Nine
Months Ended September 30, 2021
|
(UNAUDITED)
|
(in millions, except
per share data)
|
|
|
For the Three Months
Ended September 30, 2021
|
|
|
Gross
profit
|
|
|
SG&A
(a)
|
|
|
Income (loss)
from
operations
|
|
|
Operating
margin
|
|
|
Net
earnings
(loss)
|
|
|
Net
earnings (loss)
per diluted
share
|
|
GAAP basis
measures
|
$
|
145.6
|
|
|
$
|
77.0
|
|
|
$
|
65.0
|
|
|
|
26.2
|
%
|
|
$
|
42.2
|
|
|
$
|
1.22
|
|
Exclude: Depreciation
and amortization
|
|
9.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
measures
|
|
154.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP % of total
net sales
|
|
62.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
—
|
|
|
|
—
|
|
|
|
3.3
|
|
|
|
1.3
|
%
|
|
|
2.4
|
|
|
|
0.07
|
|
Share-based
compensation expense
|
|
—
|
|
|
|
(5.2)
|
|
|
|
5.2
|
|
|
|
2.1
|
%
|
|
|
3.6
|
|
|
|
0.10
|
|
LSC multiemployer
pension plan obligation
|
|
—
|
|
|
|
(0.2)
|
|
|
|
0.2
|
|
|
|
0.1
|
%
|
|
|
0.1
|
|
|
|
—
|
|
Non-income tax,
net
|
|
—
|
|
|
|
0.5
|
|
|
|
(0.5)
|
|
|
|
(0.2)
|
%
|
|
|
(0.3)
|
|
|
|
(0.01)
|
|
Gain on sale of
long-lived assets, net
|
|
—
|
|
|
|
—
|
|
|
|
(0.7)
|
|
|
|
(0.3)
|
%
|
|
|
(0.5)
|
|
|
|
(0.01)
|
|
Gain on equity
investment
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.4)
|
|
|
|
(0.01)
|
|
Total Non-GAAP
adjustments (b)
|
|
—
|
|
|
|
(4.9)
|
|
|
|
7.5
|
|
|
|
3.0
|
%
|
|
|
4.9
|
|
|
|
0.14
|
|
Adjusted Non-GAAP
measures (b)
|
$
|
154.6
|
|
|
$
|
72.1
|
|
|
$
|
72.5
|
|
|
|
29.3
|
%
|
|
$
|
47.1
|
|
|
$
|
1.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended September 30, 2021
|
|
|
Gross
profit
|
|
|
SG&A
(a)
|
|
|
Income (loss)
from
operations
|
|
|
Operating
margin
|
|
|
Net
earnings
(loss)
|
|
|
Net
earnings (loss)
per diluted
share
|
|
GAAP basis
measures
|
$
|
412.4
|
|
|
$
|
225.6
|
|
|
$
|
177.9
|
|
|
|
23.4
|
%
|
|
$
|
120.3
|
|
|
$
|
3.48
|
|
Exclude: Depreciation
and amortization
|
|
27.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
measures
|
|
439.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP % of total
net sales
|
|
57.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
—
|
|
|
|
—
|
|
|
|
6.9
|
|
|
|
0.9
|
%
|
|
|
5.0
|
|
|
|
0.14
|
|
Share-based
compensation expense
|
|
—
|
|
|
|
(14.2)
|
|
|
|
14.2
|
|
|
|
1.9
|
%
|
|
|
6.2
|
|
|
|
0.18
|
|
LSC multiemployer
pension plans obligations
|
|
—
|
|
|
|
(7.7)
|
|
|
|
7.7
|
|
|
|
1.0
|
%
|
|
|
5.6
|
|
|
|
0.16
|
|
Non-income tax,
net
|
|
—
|
|
|
|
1.4
|
|
|
|
(1.4)
|
|
|
|
(0.2)
|
%
|
|
|
(1.0)
|
|
|
|
(0.03)
|
|
COVID-19 related
recoveries
|
|
(1.0)
|
|
|
|
—
|
|
|
|
(1.0)
|
|
|
|
(0.1)
|
%
|
|
|
(0.7)
|
|
|
|
(0.02)
|
|
Gain on sale of
long-lived assets, net
|
|
—
|
|
|
|
—
|
|
|
|
(0.7)
|
|
|
|
(0.1)
|
%
|
|
|
(0.5)
|
|
|
|
(0.01)
|
|
Gain on equity
investments, net
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.3)
|
|
|
|
(0.01)
|
|
Total Non-GAAP
adjustments (b)
|
|
(1.0)
|
|
|
|
(20.5)
|
|
|
|
25.7
|
|
|
|
3.4
|
%
|
|
|
14.3
|
|
|
|
0.41
|
|
Adjusted Non-GAAP
measures (b)
|
$
|
438.6
|
|
|
$
|
205.1
|
|
|
$
|
203.6
|
|
|
|
26.8
|
%
|
|
$
|
134.6
|
|
|
$
|
3.89
|
|
__________
|
(a)
|
Exclusive of
depreciation and amortization.
|
(b)
|
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 September 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 September 30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
45.8
|
|
|
$
|
83.3
|
|
|
$
|
23.7
|
|
|
$
|
35.9
|
|
|
$
|
—
|
|
|
$
|
188.7
|
|
Income (loss) from
operations
|
|
|
4.4
|
|
|
|
22.2
|
|
|
|
3.9
|
|
|
|
10.5
|
|
|
|
(14.3)
|
|
|
|
26.7
|
|
Operating margin
%
|
|
|
9.6
|
%
|
|
|
26.7
|
%
|
|
|
16.5
|
%
|
|
|
29.2
|
%
|
|
nm
|
|
|
|
14.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
|
0.1
|
|
|
|
1.8
|
|
|
|
0.1
|
|
|
|
0.4
|
|
|
|
0.2
|
|
|
|
2.6
|
|
Share-based
compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4.4
|
|
|
|
4.4
|
|
COVID-19 related
recoveries
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.1)
|
|
Accelerated rent
expense and other
|
|
|
—
|
|
|
|
0.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
0.2
|
|
Non-income tax,
net
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.2)
|
|
Total Non-GAAP
adjustments
|
|
|
(0.1)
|
|
|
|
1.8
|
|
|
|
0.1
|
|
|
|
0.4
|
|
|
|
4.7
|
|
|
|
6.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss)
from operations
|
|
$
|
4.3
|
|
|
$
|
24.0
|
|
|
$
|
4.0
|
|
|
$
|
10.9
|
|
|
$
|
(9.6)
|
|
|
$
|
33.6
|
|
Non-GAAP operating
margin %
|
|
|
9.4
|
%
|
|
|
28.8
|
%
|
|
|
16.9
|
%
|
|
|
30.4
|
%
|
|
nm
|
|
|
|
17.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
6.0
|
|
|
|
1.5
|
|
|
|
3.0
|
|
|
|
1.2
|
|
|
|
—
|
|
|
|
11.7
|
|
Adjusted
EBITDA
|
|
$
|
10.3
|
|
|
$
|
25.5
|
|
|
$
|
7.0
|
|
|
$
|
12.1
|
|
|
$
|
(9.6)
|
|
|
$
|
45.3
|
|
Adjusted EBITDA margin
%
|
|
|
22.5
|
%
|
|
|
30.6
|
%
|
|
|
29.5
|
%
|
|
|
33.7
|
%
|
|
nm
|
|
|
|
24.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
6.8
|
|
|
$
|
0.9
|
|
|
$
|
4.6
|
|
|
$
|
0.8
|
|
|
$
|
1.5
|
|
|
$
|
14.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
48.1
|
|
|
$
|
142.5
|
|
|
$
|
21.2
|
|
|
$
|
35.9
|
|
|
$
|
—
|
|
|
$
|
247.7
|
|
Income (loss) from
operations
|
|
|
7.5
|
|
|
|
67.8
|
|
|
|
1.4
|
|
|
|
2.8
|
|
|
|
(14.5)
|
|
|
|
65.0
|
|
Operating margin
%
|
|
|
15.6
|
%
|
|
|
47.6
|
%
|
|
|
6.6
|
%
|
|
|
7.8
|
%
|
|
nm
|
|
|
|
26.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
|
0.2
|
|
|
|
2.7
|
|
|
|
—
|
|
|
|
0.3
|
|
|
|
0.1
|
|
|
|
3.3
|
|
Share-based
compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5.2
|
|
|
|
5.2
|
|
LSC multiemployer
pension plans obligations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
0.2
|
|
Non-income tax,
net
|
|
|
(0.2)
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
(0.5)
|
|
Gain on sale of
long-lived assets, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.7)
|
|
|
|
—
|
|
|
|
(0.7)
|
|
Total Non-GAAP
adjustments
|
|
|
—
|
|
|
|
2.6
|
|
|
|
(0.1)
|
|
|
|
(0.5)
|
|
|
|
5.5
|
|
|
|
7.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss)
from operations
|
|
$
|
7.5
|
|
|
$
|
70.4
|
|
|
$
|
1.3
|
|
|
$
|
2.3
|
|
|
$
|
(9.0)
|
|
|
$
|
72.5
|
|
Non-GAAP operating
margin %
|
|
|
15.6
|
%
|
|
|
49.4
|
%
|
|
|
6.1
|
%
|
|
|
6.4
|
%
|
|
nm
|
|
|
|
29.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
4.2
|
|
|
|
1.5
|
|
|
|
3.0
|
|
|
|
1.2
|
|
|
|
0.1
|
|
|
|
10.0
|
|
Adjusted
EBITDA
|
|
$
|
11.7
|
|
|
$
|
71.9
|
|
|
$
|
4.3
|
|
|
$
|
3.5
|
|
|
$
|
(8.9)
|
|
|
$
|
82.5
|
|
Adjusted EBITDA margin
%
|
|
|
24.3
|
%
|
|
|
50.5
|
%
|
|
|
20.3
|
%
|
|
|
9.7
|
%
|
|
nm
|
|
|
|
33.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
4.1
|
|
|
$
|
0.8
|
|
|
$
|
4.2
|
|
|
$
|
1.0
|
|
|
$
|
0.4
|
|
|
$
|
10.5
|
|
__________
|
nm - Not
meaningful
|
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
Segment GAAP to
Non-GAAP Reconciliation and Supplementary Information
|
For the Nine Months
Ended September 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 Nine Months
Ended September 30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
136.8
|
|
|
$
|
336.9
|
|
|
$
|
74.1
|
|
|
$
|
118.1
|
|
|
$
|
—
|
|
|
$
|
665.9
|
|
Income (loss) from
operations
|
|
|
11.8
|
|
|
|
111.6
|
|
|
|
16.0
|
|
|
|
32.3
|
|
|
|
(43.8)
|
|
|
|
127.9
|
|
Operating margin
%
|
|
|
8.6
|
%
|
|
|
33.1
|
%
|
|
|
21.6
|
%
|
|
|
27.3
|
%
|
|
nm
|
|
|
|
19.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
|
1.1
|
|
|
|
2.2
|
|
|
|
0.2
|
|
|
|
0.6
|
|
|
|
0.5
|
|
|
|
4.6
|
|
Share-based
compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13.9
|
|
|
|
13.9
|
|
COVID-19 related
recoveries
|
|
|
—
|
|
|
|
(0.3)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.3)
|
|
Gain on sale of
long-lived assets
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.2)
|
|
Accelerated rent
expense and other
|
|
|
—
|
|
|
|
0.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
0.2
|
|
Non-income tax,
net
|
|
|
(0.5)
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.7)
|
|
Total Non-GAAP
adjustments
|
|
|
0.6
|
|
|
|
1.7
|
|
|
|
0.1
|
|
|
|
0.6
|
|
|
|
14.5
|
|
|
|
17.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss)
from operations
|
|
$
|
12.4
|
|
|
$
|
113.3
|
|
|
$
|
16.1
|
|
|
$
|
32.9
|
|
|
$
|
(29.3)
|
|
|
$
|
145.4
|
|
Non-GAAP operating
margin %
|
|
|
9.1
|
%
|
|
|
33.6
|
%
|
|
|
21.7
|
%
|
|
|
27.9
|
%
|
|
nm
|
|
|
|
21.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
16.7
|
|
|
|
4.7
|
|
|
|
8.7
|
|
|
|
3.4
|
|
|
|
0.1
|
|
|
|
33.6
|
|
Adjusted
EBITDA
|
|
$
|
29.1
|
|
|
$
|
118.0
|
|
|
$
|
24.8
|
|
|
$
|
36.3
|
|
|
$
|
(29.2)
|
|
|
$
|
179.0
|
|
Adjusted EBITDA margin
%
|
|
|
21.3
|
%
|
|
|
35.0
|
%
|
|
|
33.5
|
%
|
|
|
30.7
|
%
|
|
nm
|
|
|
|
26.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
19.6
|
|
|
$
|
3.6
|
|
|
$
|
11.8
|
|
|
$
|
2.1
|
|
|
$
|
2.3
|
|
|
$
|
39.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
130.4
|
|
|
$
|
434.1
|
|
|
$
|
65.8
|
|
|
$
|
130.2
|
|
|
$
|
—
|
|
|
$
|
760.5
|
|
Income (loss) from
operations
|
|
|
23.3
|
|
|
|
191.5
|
|
|
|
6.9
|
|
|
|
11.2
|
|
|
|
(55.0)
|
|
|
|
177.9
|
|
Operating margin
%
|
|
|
17.9
|
%
|
|
|
44.1
|
%
|
|
|
10.5
|
%
|
|
|
8.6
|
%
|
|
nm
|
|
|
|
23.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
|
0.3
|
|
|
|
3.3
|
|
|
|
0.1
|
|
|
|
2.9
|
|
|
|
0.3
|
|
|
|
6.9
|
|
Share-based
compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
14.2
|
|
|
|
14.2
|
|
LSC multiemployer
pension plans obligation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7.7
|
|
|
|
7.7
|
|
Non-income tax,
net
|
|
|
(0.9)
|
|
|
|
(0.2)
|
|
|
|
(0.2)
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
(1.4)
|
|
Gain on sale of
long-lived assets, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.7)
|
|
|
|
—
|
|
|
|
(0.7)
|
|
COVID-19 related
recoveries
|
|
|
—
|
|
|
|
(0.3)
|
|
|
|
—
|
|
|
|
(0.7)
|
|
|
|
—
|
|
|
|
(1.0)
|
|
Total Non-GAAP
adjustments
|
|
|
(0.6)
|
|
|
|
2.8
|
|
|
|
(0.1)
|
|
|
|
1.4
|
|
|
|
22.2
|
|
|
|
25.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss)
from operations
|
|
$
|
22.7
|
|
|
$
|
194.3
|
|
|
$
|
6.8
|
|
|
$
|
12.6
|
|
|
$
|
(32.8)
|
|
|
$
|
203.6
|
|
Non-GAAP operating
margin %
|
|
|
17.4
|
%
|
|
|
44.8
|
%
|
|
|
10.3
|
%
|
|
|
9.7
|
%
|
|
nm
|
|
|
|
26.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
12.0
|
|
|
|
4.5
|
|
|
|
9.8
|
|
|
|
3.4
|
|
|
|
0.2
|
|
|
|
29.9
|
|
Adjusted
EBITDA
|
|
$
|
34.7
|
|
|
$
|
198.8
|
|
|
$
|
16.6
|
|
|
$
|
16.0
|
|
|
$
|
(32.6)
|
|
|
$
|
233.5
|
|
Adjusted EBITDA margin
%
|
|
|
26.6
|
%
|
|
|
45.8
|
%
|
|
|
25.2
|
%
|
|
|
12.3
|
%
|
|
nm
|
|
|
|
30.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
12.3
|
|
|
$
|
2.1
|
|
|
$
|
8.7
|
|
|
$
|
2.3
|
|
|
$
|
2.8
|
|
|
$
|
28.2
|
|
__________
|
nm - Not
meaningful
|
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
Condensed Consolidated
Statements of Cash Flows
|
(UNAUDITED)
|
(in
millions)
|
|
|
|
For the Nine Months
Ended September 30,
|
|
|
|
2022
|
|
|
2021
|
|
Operating
Activities
|
|
|
|
|
|
|
Net earnings
|
|
$
|
91.6
|
|
|
$
|
120.3
|
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
33.6
|
|
|
|
29.9
|
|
Provision for expected
losses on accounts receivable
|
|
|
6.2
|
|
|
|
2.2
|
|
Impairment
charge
|
|
|
—
|
|
|
|
2.8
|
|
Share-based
compensation
|
|
|
13.9
|
|
|
|
14.2
|
|
Deferred income
taxes
|
|
|
0.4
|
|
|
|
6.6
|
|
Net pension plan
income
|
|
|
(0.7)
|
|
|
|
(3.2)
|
|
Amortization of
right-of-use assets
|
|
|
12.1
|
|
|
|
12.9
|
|
Other
|
|
|
0.5
|
|
|
|
0.3
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
|
(20.5)
|
|
|
|
(73.5)
|
|
Prepaid expenses and
other current assets
|
|
|
(3.3)
|
|
|
|
(11.6)
|
|
Accounts
payable
|
|
|
4.9
|
|
|
|
(7.5)
|
|
Income taxes payable
and receivable
|
|
|
(1.7)
|
|
|
|
5.3
|
|
Accrued liabilities
and other
|
|
|
(44.2)
|
|
|
|
21.2
|
|
Operating lease
liabilities
|
|
|
(14.7)
|
|
|
|
(15.7)
|
|
Pension and other
postretirement benefits plans contributions
|
|
|
(1.2)
|
|
|
|
(1.0)
|
|
Net cash provided by
operating activities
|
|
|
76.9
|
|
|
|
103.2
|
|
Investing
Activities
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(39.4)
|
|
|
|
(28.2)
|
|
Other investing
activities
|
|
|
—
|
|
|
|
0.9
|
|
Net cash used in
investing activities
|
|
|
(39.4)
|
|
|
|
(27.3)
|
|
Financing
Activities
|
|
|
|
|
|
|
Revolving facility
borrowings
|
|
|
270.0
|
|
|
|
278.0
|
|
Payments on revolving
facility borrowings
|
|
|
(202.5)
|
|
|
|
(278.0)
|
|
Debt issuance
costs
|
|
|
—
|
|
|
|
(2.8)
|
|
Treasury share
repurchases
|
|
|
(150.0)
|
|
|
|
(26.5)
|
|
Proceeds from exercise
of stock options
|
|
|
0.3
|
|
|
|
2.2
|
|
Finance lease
payments
|
|
|
(1.4)
|
|
|
|
(0.4)
|
|
Net cash used in
financing activities
|
|
|
(83.6)
|
|
|
|
(27.5)
|
|
Effect of exchange rate
on cash and cash equivalents
|
|
|
2.4
|
|
|
|
0.9
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
|
(43.7)
|
|
|
|
49.3
|
|
Cash and cash
equivalents at beginning of year
|
|
|
54.5
|
|
|
|
73.6
|
|
Cash and cash
equivalents at end of period
|
|
$
|
10.8
|
|
|
$
|
122.9
|
|
Supplemental cash
flow information
|
|
|
|
|
|
|
Income taxes paid (net
of refunds)
|
|
$
|
34.4
|
|
|
$
|
32.0
|
|
Interest
paid
|
|
$
|
4.9
|
|
|
$
|
11.0
|
|
|
|
|
|
|
|
|
Additional
Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended September 30,
|
|
|
For the Nine Months
Ended September 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Net cash provided by
operating activities
|
|
$
|
83.3
|
|
|
$
|
110.9
|
|
|
$
|
76.9
|
|
|
$
|
103.2
|
|
Less: capital
expenditures
|
|
|
14.6
|
|
|
|
10.5
|
|
|
|
39.4
|
|
|
|
28.2
|
|
Free Cash
Flow
|
|
$
|
68.7
|
|
|
$
|
100.4
|
|
|
$
|
37.5
|
|
|
$
|
75.0
|
|
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 September 30, 2022
|
|
$
|
45.8
|
|
|
$
|
83.3
|
|
|
$
|
23.7
|
|
|
$
|
35.9
|
|
|
$
|
188.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended September 30, 2021
|
|
$
|
48.1
|
|
|
$
|
142.5
|
|
|
$
|
21.2
|
|
|
$
|
35.9
|
|
|
$
|
247.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
change
|
|
|
(4.8)
|
%
|
|
|
(41.5)
|
%
|
|
|
11.8
|
%
|
|
|
—
|
|
|
|
(23.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
non-GAAP information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year impact
of changes in foreign exchange (FX) rates
|
|
|
(1.0)
|
%
|
|
|
(0.6)
|
%
|
|
|
(2.4)
|
%
|
|
|
(0.3)
|
%
|
|
|
(0.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net organic sales
change
|
|
|
(3.8)
|
%
|
|
|
(40.9)
|
%
|
|
|
14.2
|
%
|
|
|
0.3
|
%
|
|
|
(23.0)
|
%
|
|
|
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 Nine Months
Ended September 30, 2022
|
|
$
|
136.8
|
|
|
$
|
336.9
|
|
|
$
|
74.1
|
|
|
$
|
118.1
|
|
|
$
|
665.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended September 30, 2021
|
|
$
|
130.4
|
|
|
$
|
434.1
|
|
|
$
|
65.8
|
|
|
$
|
130.2
|
|
|
$
|
760.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
change
|
|
|
4.9
|
%
|
|
|
(22.4)
|
%
|
|
|
12.6
|
%
|
|
|
(9.3)
|
%
|
|
|
(12.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
non-GAAP information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year impact
of changes in foreign exchange (FX) rates
|
|
|
(0.8)
|
%
|
|
|
(0.5)
|
%
|
|
|
(1.7)
|
%
|
|
|
(0.1)
|
%
|
|
|
(0.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net organic sales
change
|
|
|
5.7
|
%
|
|
|
(21.9)
|
%
|
|
|
14.3
|
%
|
|
|
(9.2)
|
%
|
|
|
(11.8)
|
%
|
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
|
|
|
|
September 30,
2022
|
|
|
September 30,
2022
|
|
|
June 30,
2022
|
|
|
March 31,
2022
|
|
|
December 31,
2021
|
|
Net
earnings
|
|
$
|
117.2
|
|
|
$
|
19.2
|
|
|
$
|
46.0
|
|
|
$
|
26.4
|
|
|
$
|
25.6
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
|
11.3
|
|
|
|
2.6
|
|
|
|
0.2
|
|
|
|
1.8
|
|
|
|
6.7
|
|
Share-based
compensation expense
|
|
|
19.2
|
|
|
|
4.4
|
|
|
|
5.9
|
|
|
|
3.6
|
|
|
|
5.3
|
|
LSC multiemployer
pension plans obligations
|
|
|
(2.3)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2.3)
|
|
Non-income tax,
net
|
|
|
(0.9)
|
|
|
|
(0.2)
|
|
|
|
(0.2)
|
|
|
|
(0.3)
|
|
|
|
(0.2)
|
|
COVID-19 related
recoveries
|
|
|
(0.3)
|
|
|
|
(0.1)
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
—
|
|
Gain on sale of
long-lived assets
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
—
|
|
Gain on equity
investment
|
|
|
(0.5)
|
|
|
|
(0.5)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Accelerated rent
expense and other
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Depreciation and
amortization
|
|
|
44.0
|
|
|
|
11.7
|
|
|
|
11.2
|
|
|
|
10.7
|
|
|
|
10.4
|
|
Interest expense,
net
|
|
|
15.4
|
|
|
|
2.3
|
|
|
|
2.1
|
|
|
|
1.5
|
|
|
|
9.5
|
|
Pension income and
other income, net
|
|
|
(3.9)
|
|
|
|
(2.3)
|
|
|
|
(0.3)
|
|
|
|
(0.2)
|
|
|
|
(1.1)
|
|
Income tax
expense
|
|
|
41.1
|
|
|
|
8.0
|
|
|
|
18.1
|
|
|
|
7.6
|
|
|
|
7.4
|
|
Total Non-GAAP
adjustments
|
|
|
123.1
|
|
|
|
26.1
|
|
|
|
36.6
|
|
|
|
24.7
|
|
|
|
35.7
|
|
Adjusted
EBITDA
|
|
$
|
240.3
|
|
|
$
|
45.3
|
|
|
$
|
82.6
|
|
|
$
|
51.1
|
|
|
$
|
61.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tech-enabled
services
|
|
$
|
437.3
|
|
|
$
|
87.4
|
|
|
$
|
133.3
|
|
|
$
|
91.7
|
|
|
$
|
124.9
|
|
Software
solutions
|
|
|
284.7
|
|
|
$
|
69.5
|
|
|
|
71.6
|
|
|
|
69.8
|
|
|
|
73.8
|
|
Print and
distribution
|
|
|
176.7
|
|
|
|
31.8
|
|
|
|
61.3
|
|
|
|
49.5
|
|
|
|
34.1
|
|
Total net
sales
|
|
$
|
898.7
|
|
|
$
|
188.7
|
|
|
$
|
266.2
|
|
|
$
|
211.0
|
|
|
$
|
232.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
%
|
|
|
26.7
|
%
|
|
|
24.0
|
%
|
|
|
31.0
|
%
|
|
|
24.2
|
%
|
|
|
26.3
|
%
|
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
|
|
|
|
September 30,
2021
|
|
|
September 30,
2021
|
|
|
June 30,
2021
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Net earnings
(loss)
|
|
$
|
84.5
|
|
|
$
|
42.2
|
|
|
$
|
42.9
|
|
|
$
|
35.2
|
|
|
$
|
(35.8)
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges, net
|
|
|
50.9
|
|
|
|
3.3
|
|
|
|
2.8
|
|
|
|
0.8
|
|
|
|
44.0
|
|
Share-based
compensation expense
|
|
|
18.0
|
|
|
|
5.2
|
|
|
|
5.9
|
|
|
|
3.1
|
|
|
|
3.8
|
|
LSC multiemployer
pension plans obligations
|
|
|
8.6
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
7.3
|
|
|
|
0.9
|
|
Non-income tax,
net
|
|
|
1.1
|
|
|
|
(0.5)
|
|
|
|
(1.0)
|
|
|
|
0.1
|
|
|
|
2.5
|
|
COVID-19 related
recoveries
|
|
|
(1.4)
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
(0.9)
|
|
|
|
(0.4)
|
|
Gain on sale of
long-lived assets, net
|
|
|
(0.7)
|
|
|
|
(0.7)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Gain on equity
investments, net
|
|
|
(0.4)
|
|
|
|
(0.6)
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
—
|
|
Accelerated rent
expense
|
|
|
0.3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.3
|
|
Depreciation and
amortization
|
|
|
41.1
|
|
|
|
10.0
|
|
|
|
10.1
|
|
|
|
9.8
|
|
|
|
11.2
|
|
Interest expense,
net
|
|
|
23.1
|
|
|
|
5.9
|
|
|
|
5.9
|
|
|
|
5.3
|
|
|
|
6.0
|
|
Pension income and
other income, net
|
|
|
(4.0)
|
|
|
|
(1.1)
|
|
|
|
(1.5)
|
|
|
|
(1.0)
|
|
|
|
(0.4)
|
|
Income tax
expense
|
|
|
47.3
|
|
|
|
18.6
|
|
|
|
14.7
|
|
|
|
11.2
|
|
|
|
2.8
|
|
Total Non-GAAP
adjustments
|
|
|
183.9
|
|
|
|
40.3
|
|
|
|
37.0
|
|
|
|
35.9
|
|
|
|
70.7
|
|
Adjusted
EBITDA
|
|
$
|
268.4
|
|
|
$
|
82.5
|
|
|
$
|
79.9
|
|
|
$
|
71.1
|
|
|
$
|
34.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tech-enabled
services
|
|
$
|
502.0
|
|
|
$
|
142.1
|
|
|
$
|
134.0
|
|
|
$
|
118.5
|
|
|
$
|
107.4
|
|
Software
solutions
|
|
|
250.4
|
|
|
|
69.3
|
|
|
|
66.6
|
|
|
|
60.3
|
|
|
|
54.2
|
|
Print and
distribution
|
|
|
218.4
|
|
|
|
36.3
|
|
|
|
66.9
|
|
|
|
66.5
|
|
|
|
48.7
|
|
Total net
sales
|
|
$
|
970.8
|
|
|
$
|
247.7
|
|
|
$
|
267.5
|
|
|
$
|
245.3
|
|
|
$
|
210.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
%
|
|
|
27.6
|
%
|
|
|
33.3
|
%
|
|
|
29.9
|
%
|
|
|
29.0
|
%
|
|
|
16.6
|
%
|
Donnelley Financial
Solutions, Inc. and Subsidiaries ("DFIN")
|
Debt and Liquidity
Summary
|
(UNAUDITED)
|
(in
millions)
|
|
Total
Liquidity
|
|
September 30,
2022
|
|
|
December 31,
2021
|
|
|
September 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
|
|
|
67.5
|
|
|
|
—
|
|
|
|
—
|
|
Impact on availability
related to outstanding
letters of credit
|
|
|
—
|
|
|
|
2.2
|
|
|
|
2.3
|
|
Amount used under the
Revolving Facility
|
|
|
67.5
|
|
|
|
2.2
|
|
|
|
2.3
|
|
|
|
|
|
|
|
|
|
|
|
Availability under the
Revolving Facility
|
|
|
232.5
|
|
|
|
297.8
|
|
|
|
297.7
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
10.8
|
|
|
|
54.5
|
|
|
|
122.9
|
|
|
|
|
|
|
|
|
|
|
|
Net Available
Liquidity
|
|
$
|
243.3
|
|
|
$
|
352.3
|
|
|
$
|
420.6
|
|
|
|
|
|
|
|
|
|
|
|
Term Loan A
Facility
|
|
$
|
125.0
|
|
|
$
|
125.0
|
|
|
$
|
—
|
|
Borrowings under the
Revolving Facility
|
|
|
67.5
|
|
|
|
—
|
|
|
|
—
|
|
8.25% senior notes due
October 15, 2024
|
|
|
—
|
|
|
|
—
|
|
|
|
233.0
|
|
Unamortized debt
issuance costs
|
|
|
(0.8)
|
|
|
|
(1.0)
|
|
|
|
(2.0)
|
|
Total debt
|
|
$
|
191.7
|
|
|
$
|
124.0
|
|
|
$
|
231.0
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA for the
twelve months ended September 30, 2022 and 2021, and the year ended
December 31, 2021
|
|
$
|
240.3
|
|
|
$
|
294.8
|
|
|
$
|
268.4
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross
Leverage (defined as total debt divided by Adjusted
EBITDA)
|
|
|
0.8
|
x
|
|
|
0.4
|
x
|
|
|
0.9
|
x
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Debt
(defined as total debt less cash and cash equivalents)
|
|
|
180.9
|
|
|
|
69.5
|
|
|
|
108.1
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net
Leverage (defined as non-GAAP Net Debt divided by Adjusted
EBITDA)
|
|
|
0.8
|
x
|
|
|
0.2
|
x
|
|
|
0.4
|
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 $67.5 million of
borrowings outstanding under the Revolving Facility as of September
30, 2022, and no outstanding letters of credit that reduced the
availability under the Revolving Facility as of September 30, 2022.
Based on the Company's results of operations for the twelve months
ended September 30, 2022 and existing debt, the Company would have
had the ability to utilize the remaining $232.5 million of the
$300.0 million Revolving Facility and not have been in violation of
the terms of the Revolving Facility agreement.
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/dfin-reports-third-quarter-2022-results-301665348.html
SOURCE Donnelley Financial Solutions