R.R. Donnelley & Sons Company
(NASDAQ:RRD) today reported financial results for the first quarter
of 2016.
Highlights:
- First-quarter net sales of $2.7 billion declined 3.4% from the
first quarter of 2015; organic net sales declined 3.1% from the
first quarter of 2015
- First-quarter GAAP net earnings attributable to common
shareholders of $39.8 million, or $0.19 per diluted share, compared
to GAAP net earnings attributable to common shareholders in the
first quarter of 2015 of $22.3 million, or $0.11 per diluted
share
- First-quarter non-GAAP net earnings attributable to common
shareholders of $47.2 million, or $0.22 per diluted share, compared
to non-GAAP net earnings attributable to common shareholders in the
first quarter of 2015 of $51.9 million, or $0.26 per diluted
share
- First-quarter non-GAAP adjusted EBITDA of $250.2 million, or
9.4% of net sales, compared to $259.3 million, or 9.4% of net
sales, in the first quarter of 2015
- Company reiterates full-year 2016 guidance
“We are pleased with our first-quarter results. While the
demand environment remained challenging, our disciplined cost
management allowed us to hold EBITDA margin flat compared to last
year’s first quarter. In addition, we saw a marked
improvement in the year-over-year revenue trend as the quarter
progressed,” said Thomas J. Quinlan III, RR Donnelley’s President
and Chief Executive Officer.
Quinlan continued, “Our outlook for the full year is in line
with our previous guidance, which we reiterate today. We are
focused on achieving these expectations, and at the same time, we
are making significant progress on the spin-offs of LSC
Communications and Donnelley Financial Solutions, both of which
remain on track to be completed in October.”
Net Sales Net sales in the quarter were
$2.7 billion, down $94.7 million, or 3.4%, from the first quarter
of 2015. After adjusting for the impact of acquisitions and
dispositions, as well as changes in foreign exchange rates and
pass-through paper sales, organic sales decreased 3.1% from the
first quarter of 2015, as an increase in the International segment
only partially offset declines in the Strategic Services, Variable
Print and Publishing and Retail Services segments.
GAAP EarningsFirst-quarter 2016 net earnings
attributable to common shareholders were $39.8 million, or $0.19
per diluted share, compared to net earnings attributable to common
shareholders of $22.3 million, or $0.11 per diluted share, in the
first quarter of 2015. The first-quarter net earnings
attributable to common shareholders included pre-tax charges of
$9.9 million and $60.2 million in 2016 and 2015, respectively, all
of which are excluded from the presentation of non-GAAP net
earnings attributable to common shareholders. Additional
details regarding the amount and nature of these and other items
are included in the attached schedules.
Non-GAAP EarningsNon-GAAP adjusted EBITDA in
the first quarter of 2016 was $250.2 million, compared to $259.3
million in the first quarter of 2015. Non-GAAP adjusted
EBITDA margin in the first quarter of 2016 was 9.4%, flat to the
first quarter of 2015, as productivity improvements and higher
pension income offset price pressure.
Non-GAAP net earnings attributable to common shareholders
totaled $47.2 million, or $0.22 per diluted share, in the first
quarter of 2016 compared to $51.9 million, or $0.26 per diluted
share, in the first quarter of 2015. Reconciliations of net
earnings attributable to common shareholders to non-GAAP adjusted
EBITDA and non-GAAP net earnings attributable to common
shareholders are presented in the attached schedules.
2016 GuidanceThe Company reiterates the
following full-year guidance for 2016, which remains unchanged from
previous guidance and excludes the impact of the previously
announced pending spin-off transactions:
|
|
|
Current Guidance |
Net sales |
$11.3 to $11.5 billion |
Non-GAAP adjusted EBITDA margin |
10.4% to 10.6% |
Depreciation and amortization |
$430 to $440 million |
Interest expense |
$260 to $270 million |
Non-GAAP effective tax rate |
34% to 35% |
Diluted share count |
Approximately 211 million |
Capital expenditures |
$200 to $225 million |
Free cash flow(1) |
$400 to $500 million |
(1) Defined as operating cash flow less capital
expenditures
Conference CallRR Donnelley will host a
conference call and simultaneous webcast to discuss its
first-quarter results today, Tuesday, May 3, at 10:00 a.m. Eastern
Time (9:00 a.m. Central Time). The live webcast will be
accessible on RR Donnelley’s web
site: www.rrdonnelley.com. Individuals wishing to
participate must register in advance at
http://www.meetme.net/rrd. After registering, participants
will receive dial-in numbers, a passcode, and a personal
identification number (PIN) that is used to uniquely identify their
presence and automatically join them into the audio
conference. A webcast replay will be archived on the
Company’s web site for 30 days after the call. In addition, a
telephonic replay of the call will be available for seven days at
630.652.3042, passcode 6908506#.
About RR DonnelleyRR Donnelley (Nasdaq:RRD)
helps organizations communicate more effectively by working to
create, manage, produce, distribute and process content on behalf
of our customers. The Company assists customers in developing and
executing multichannel communication strategies that engage
audiences, reduce costs, drive revenues and increase compliance. RR
Donnelley’s innovative technologies enhance digital and print
communications to deliver integrated messages across multiple media
to highly targeted audiences at optimal times for clients in
virtually every private and public sector. Strategically located
operations provide local service and responsiveness while
leveraging the economic, geographic and technological advantages of
a global organization.
For more information, and for RR Donnelley's Global Social
Responsibility Report, visit the Company's web site
at http://www.rrdonnelley.com.
Use of non-GAAP InformationThis news release
contains certain non-GAAP measures. The Company believes that
these non-GAAP measures, when presented in conjunction with
comparable GAAP measures, are useful because that information is an
appropriate measure for evaluating the Company’s operating
performance. Internally, the Company uses this non-GAAP
information as an indicator of business performance, and evaluates
management’s effectiveness with specific reference to these
indicators. These measures should be considered in addition
to, not a substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP.
Use of Forward-Looking StatementsThis 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 RR Donnelley and its
expectations relating to future financial condition and
performance. These statements include all those regarding the
previously announced pending spin-off transactions and all of the
items under the column labeled “Current Guidance” in the table
included under the “2016 Guidance” section. Statements that are not
historical facts, including statements about RR Donnelley
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 RR Donnelley 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 RR Donnelley'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 RR
Donnelley'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 RR Donnelley's periodic public filings with the SEC,
including but not limited to those discussed under the "Risk
Factors" section in RR Donnelley's Form 10-K for the fiscal year
ended December 31, 2015, those discussed under the “Cautionary
Statement” and “Other Information” sections in RR Donnelley’s
quarterly Form 10-Q filings, and other filings with the SEC and in
other investor communications of RR Donnelley from time to time. RR
Donnelley 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.
|
R. R. Donnelley &
Sons Company |
Condensed Consolidated Balance Sheets |
As of March 31, 2016 and December 31, 2015 |
(UNAUDITED) |
(in millions, except per share data) |
|
|
|
|
|
|
|
|
March 31,
2016 |
December 31,
2015 |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents |
|
|
$ |
263.7 |
|
$ |
389.6 |
|
|
|
Receivables, less allowances for doubtful accounts |
|
1,948.6 |
|
|
2,000.4 |
|
|
|
Inventories |
|
|
|
|
607.3 |
|
|
592.0 |
|
|
|
Prepaid expenses and other current assets |
|
117.4 |
|
|
119.7 |
|
|
Total
Current Assets |
|
|
|
|
2,937.0 |
|
|
3,101.7 |
|
|
|
Property, plant and equipment - net |
|
|
1,412.4 |
|
|
1,448.1 |
|
|
|
Goodwill |
|
|
|
|
1,747.1 |
|
|
1,743.6 |
|
|
|
Other
intangible assets - net |
|
|
420.4 |
|
|
438.0 |
|
|
|
Deferred income taxes |
|
|
|
177.0 |
|
|
178.2 |
|
|
|
Other
noncurrent assets |
|
|
|
392.2 |
|
|
369.7 |
|
Total
Assets |
|
|
$ |
7,086.1 |
|
$ |
7,279.3 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
$ |
1,009.2 |
|
$ |
1,322.3 |
|
|
|
Accrued liabilities |
|
|
|
779.5 |
|
|
780.4 |
|
|
|
Short-term and current portion of long-term debt |
|
634.4 |
|
|
234.6 |
|
|
Total
Current Liabilities |
|
|
|
|
2,423.1 |
|
|
2,337.3 |
|
|
|
Long-term debt |
|
|
|
|
2,942.9 |
|
|
3,188.3 |
|
|
|
Pension liabilities |
|
|
|
489.6 |
|
|
514.4 |
|
|
|
Other
postretirement benefits plan liabilities |
|
169.4 |
|
|
168.8 |
|
|
|
Other
noncurrent liabilities |
|
|
363.6 |
|
|
373.9 |
|
Total Liabilities |
|
|
|
6,388.6 |
|
|
6,582.7 |
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $1.25 par value |
|
|
333.7 |
|
|
333.7 |
|
|
|
Authorized
shares: 500.0 |
|
|
|
|
Issued shares:
267.0 in 2016 and 2015 |
|
|
|
|
Additional paid-in capital |
|
|
|
3,135.2 |
|
|
3,164.3 |
|
|
|
Accumulated deficit |
|
|
|
(635.1 |
) |
|
(620.6 |
) |
|
|
Accumulated other comprehensive loss |
|
(776.1 |
) |
|
(793.2 |
) |
|
|
Treasury stock, at cost, 57.6 shares in 2016 (2015 - 58.2
shares) |
|
(1,373.9 |
) |
|
(1,401.5 |
) |
|
Total RR
Donnelley shareholders' equity |
|
|
683.8 |
|
|
682.7 |
|
|
Noncontrolling interests |
|
|
|
|
13.7 |
|
|
13.9 |
|
Total Equity |
|
|
697.5 |
|
|
696.6 |
|
Total Liabilities and
Equity |
|
$ |
7,086.1 |
|
$ |
7,279.3 |
|
|
R. R. Donnelley &
Sons Company |
|
Condensed Consolidated Statements of
Operations |
|
For the Three Months Ended March 31, 2016 and
2015 |
|
(UNAUDITED) |
|
(in millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended March 31, |
|
|
|
2 0 1 6
GAAP |
ADJUSTMENTS
TO NON-GAAP |
2 0 1 6
NON-GAAP |
|
2 0 1 5
GAAP |
ADJUSTMENTS
TO NON-GAAP |
2 0 1 5
NON-GAAP |
|
|
Total net
sales |
$ |
2,651.4 |
|
$ |
- |
|
$ |
2,651.4 |
|
|
$ |
2,746.1 |
|
$ |
- |
|
$ |
2,746.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales (1) |
|
2,082.1 |
|
|
- |
|
|
2,082.1 |
|
|
|
2,166.4 |
|
|
- |
|
|
2,166.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total gross profit
(1) |
|
569.3 |
|
|
- |
|
|
569.3 |
|
|
|
579.7 |
|
|
- |
|
|
579.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general
and administrative expenses (SG&A) (1) |
|
331.6 |
|
|
(12.5 |
) |
|
319.1 |
|
|
|
330.9 |
|
|
(10.5 |
) |
|
320.4 |
|
|
|
Restructuring, impairment and other charges - net |
|
9.7 |
|
|
(9.7 |
) |
|
- |
|
|
|
19.8 |
|
|
(19.8 |
) |
|
- |
|
|
|
Depreciation and amortization |
|
107.0 |
|
|
- |
|
|
107.0 |
|
|
|
113.4 |
|
|
- |
|
|
113.4 |
|
|
|
Other operating
income |
|
(12.3 |
) |
|
12.3 |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
|
Income from
operations |
|
133.3 |
|
|
9.9 |
|
|
143.2 |
|
|
|
115.6 |
|
|
30.3 |
|
|
145.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
- net |
|
68.2 |
|
|
- |
|
|
68.2 |
|
|
|
69.0 |
|
|
- |
|
|
69.0 |
|
|
|
Investment and
other expense (income) - net |
|
- |
|
|
- |
|
|
- |
|
|
|
28.3 |
|
|
(29.9 |
) |
|
(1.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income
taxes |
|
65.1 |
|
|
9.9 |
|
|
75.0 |
|
|
|
18.3 |
|
|
60.2 |
|
|
78.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense |
|
25.0 |
|
|
2.5 |
|
|
27.5 |
|
|
|
6.4 |
|
|
20.2 |
|
|
26.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings |
|
40.1 |
|
|
7.4 |
|
|
47.5 |
|
|
|
11.9 |
|
|
40.0 |
|
|
51.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Income
(loss) attributable to noncontrolling interests |
|
0.3 |
|
|
- |
|
|
0.3 |
|
|
|
(10.4 |
) |
|
10.4 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to RR
Donnelley common
shareholders |
$ |
39.8 |
|
$ |
7.4 |
|
$ |
47.2 |
|
|
$ |
22.3 |
|
$ |
29.6 |
|
$ |
51.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share attributable
to RR Donnelley common
shareholders: |
|
|
|
|
|
|
|
|
|
|
|
Basic net earnings per share |
$ |
0.19 |
|
|
$ |
0.23 |
|
|
$ |
0.11 |
|
|
$ |
0.26 |
|
|
|
Diluted net earnings per share |
$ |
0.19 |
|
|
$ |
0.22 |
|
|
$ |
0.11 |
|
|
$ |
0.26 |
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
209.6 |
|
|
|
209.6 |
|
|
|
200.6 |
|
|
|
200.6 |
|
|
|
Diluted |
|
210.8 |
|
|
|
210.8 |
|
|
|
202.1 |
|
|
|
202.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
information: |
|
|
|
|
|
|
|
|
|
Gross margin
(1) |
|
21.5 |
% |
|
|
21.5 |
% |
|
|
21.1 |
% |
|
|
21.1 |
% |
|
|
SG&A as a %
of net sales (1) |
|
12.5 |
% |
|
|
12.0 |
% |
|
|
12.0 |
% |
|
|
11.7 |
% |
|
|
Operating
margin |
|
5.0 |
% |
|
|
5.4 |
% |
|
|
4.2 |
% |
|
|
5.3 |
% |
|
|
Effective tax
rate |
|
38.4 |
% |
|
|
36.7 |
% |
|
|
35.0 |
% |
|
|
33.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Exclusive of depreciation and amortization |
|
|
|
|
|
|
|
|
|
The Company believes that certain non-GAAP measures,
when presented in conjunction with comparable GAAP measures, are
useful because that information is an appropriate measure for
evaluating the Company’s operating performance. Internally,
the Company uses this non-GAAP information as an indicator of
business performance, and evaluates management’s effectiveness with
specific reference to this indicator. These measures should be
considered in addition to, not a substitute for, or superior to,
measures of financial performance prepared in accordance with
GAAP. |
|
|
R.R. Donnelley & Sons
Company |
|
Reconciliation of GAAP to Non-GAAP Measures |
|
For the Three Months Ended March 31, 2016 and
2015 |
|
(UNAUDITED) |
|
(in millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2016 |
|
For the Three Months Ended March 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
Net earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
Net earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
attributable to |
|
attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
|
attributable to |
|
attributable to |
|
|
|
|
|
|
|
Income from |
|
|
Operating |
|
common |
|
common shareholders |
|
|
|
|
|
Income from |
|
Operating |
|
common |
|
common shareholders |
|
|
|
SG&A |
|
operations |
|
|
margin |
|
shareholders |
|
per diluted
share |
|
SG&A |
|
operations |
|
margin |
|
shareholders |
|
per diluted
share |
|
GAAP basis
measures |
$ |
331.6 |
|
|
$ |
133.3 |
|
|
|
5.0 |
% |
|
$ |
39.8 |
|
|
$ |
0.19 |
|
|
$ |
330.9 |
|
|
$ |
115.6 |
|
|
|
4.2 |
% |
|
$ |
22.3 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges -
net (1) |
|
- |
|
|
|
9.1 |
|
|
|
0.3 |
% |
|
|
9.3 |
|
|
|
0.04 |
|
|
|
- |
|
|
|
17.8 |
|
|
|
0.7 |
% |
|
|
2.8 |
|
|
|
0.02 |
|
|
|
Impairment charges -
net (2) |
|
- |
|
|
|
(0.8 |
) |
|
|
0.0 |
% |
|
|
(0.8 |
) |
|
|
0.00 |
|
|
|
- |
|
|
|
0.7 |
|
|
|
0.0 |
% |
|
|
0.1 |
|
|
|
0.00 |
|
|
|
Other charges (3) |
|
- |
|
|
|
1.4 |
|
|
|
0.1 |
% |
|
|
1.5 |
|
|
|
0.01 |
|
|
|
- |
|
|
|
1.3 |
|
|
|
0.0 |
% |
|
|
0.2 |
|
|
|
0.00 |
|
|
|
Spinoff-related
transaction expenses (4) |
|
(11.9 |
) |
|
|
11.9 |
|
|
|
0.4 |
% |
|
|
9.1 |
|
|
|
0.04 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Acquisition-related
expenses (5) |
|
(0.6 |
) |
|
|
0.6 |
|
|
|
0.1 |
% |
|
|
0.6 |
|
|
|
0.00 |
|
|
|
(10.5 |
) |
|
|
10.5 |
|
|
|
0.4 |
% |
|
|
10.5 |
|
|
|
0.05 |
|
|
|
Gain on disposals of
businesses (6) |
|
- |
|
|
|
(12.3 |
) |
|
|
(0.5 |
%) |
|
|
(12.3 |
) |
|
|
(0.06 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Venezuela currency
remeasurement (7) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
16.0 |
|
|
|
0.08 |
|
|
|
Total
Non-GAAP adjustments |
|
(12.5 |
) |
|
|
9.9 |
|
|
|
0.4 |
% |
|
|
7.4 |
|
|
|
0.03 |
|
|
|
(10.5 |
) |
|
|
30.3 |
|
|
|
1.1 |
% |
|
|
29.6 |
|
|
|
0.15 |
|
|
Non-GAAP
measures |
$ |
319.1 |
|
|
$ |
143.2 |
|
|
|
5.4 |
% |
|
$ |
47.2 |
|
|
$ |
0.22 |
|
|
$ |
320.4 |
|
|
$ |
145.9 |
|
|
|
5.3 |
% |
|
$ |
51.9 |
|
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Restructuring charges - net: Operating
results for the three months ended March 31, 2016 and 2015 were
affected by the following pre-tax restructuring charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
Employee termination
costs (a) |
|
|
$ |
5.0 |
|
|
$ |
14.2 |
|
|
|
|
|
|
|
|
|
|
|
Other restructuring
charges (b) |
|
|
|
4.1 |
|
|
|
3.6 |
|
|
|
|
|
|
|
|
|
|
|
Total
restructuring charges - net |
|
|
$ |
9.1 |
|
|
$ |
17.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) For the three months ended March 31, 2016, employee
termination costs resulted from the announcement of two facility
closures in the International segment and the reorganization of
certain operations. For the three months ended March 31,
2015, employee termination costs resulted from one facility closure
in the International segment, one facility closure in the Variable
Print segment and the reorganization of certain
operations. |
|
|
(b) Includes lease termination and other facility costs. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Impairment charges - net: Included income
primarily related to the gains on sales of previously impaired
long-lived assets for the three months ended March 31, 2016.
For the three months ended March 31, 2015, operating results were
affected by other long-lived asset impairment charges. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Other charges: Recognition of charges
related to the Company's multi-employer pension plan withdrawal
obligations unrelated to facility closures. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Spinoff-related transaction expenses:
Included pre-tax charges of $11.9 million ($9.1 million after-tax)
related to consulting, tax advice, legal and other expenses for the
three months ended March 31, 2016 associated with the proposed
spinoff transactions. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) Acquisition-related expenses: Legal,
accounting and other expenses associated with completed or
contemplated acquisitions. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) Gain on disposals of businesses: Included
pre-tax gain on the sales of two entities in the International
segment of $12.3 million ($12.3 million after-tax) for the three
months ended March 31, 2016. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) Venezuela currency remeasurement: Currency
remeasurement in Venezuela and the related impact of the
devaluation resulted in a pre-tax loss of $29.9 million ($26.3
million after-tax) for the three months ended March 31, 2015, of
which $10.3 million was included in loss attributable to
noncontrolling interests. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. R. Donnelley & Sons
Company |
Segment GAAP to Non-GAAP Operating Income and Non-GAAP
Adjusted EBITDA and Margin Reconciliation |
For the Three Months Ended March 31, 2016 and
2015 |
(UNAUDITED) |
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Publishing and |
|
Strategic |
|
|
|
|
|
|
Retail Services |
Variable Print |
Services |
International |
Corporate |
Consolidated |
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
2016 |
|
|
|
|
|
Net sales |
|
|
$ |
596.3 |
|
$ |
901.8 |
|
$ |
634.6 |
|
$ |
518.7 |
|
$ |
- |
|
$ |
2,651.4 |
|
Income (loss) from
operations |
|
|
|
15.8 |
|
|
69.5 |
|
|
43.7 |
|
|
37.6 |
|
|
(33.3 |
) |
|
133.3 |
|
Operating margin
% |
|
|
|
2.6 |
% |
|
7.7 |
% |
|
6.9 |
% |
|
7.2 |
% |
|
nm |
|
|
5.0 |
% |
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments |
|
|
|
|
|
|
|
|
Restructuring
charges - net |
|
|
|
1.6 |
|
|
1.1 |
|
|
0.8 |
|
|
5.2 |
|
|
0.4 |
|
|
9.1 |
|
Impairment charges -
net |
|
|
|
1.0 |
|
|
(0.3 |
) |
|
- |
|
|
(2.7 |
) |
|
1.2 |
|
|
(0.8 |
) |
Other
charges |
|
|
|
0.8 |
|
|
0.4 |
|
|
0.2 |
|
|
- |
|
|
- |
|
|
1.4 |
|
Spinoff-related transaction expenses |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
11.9 |
|
|
11.9 |
|
Acquisition-related
expenses |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
0.6 |
|
|
0.6 |
|
Gain on disposals of
businesses |
|
|
|
- |
|
|
- |
|
|
- |
|
|
(12.3 |
) |
|
- |
|
|
(12.3 |
) |
Total Non-GAAP
adjustments |
|
|
3.4 |
|
|
1.2 |
|
|
1.0 |
|
|
(9.8 |
) |
|
14.1 |
|
|
9.9 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP income
(loss) from operations |
|
|
$ |
19.2 |
|
$ |
70.7 |
|
$ |
44.7 |
|
$ |
27.8 |
|
$ |
(19.2 |
) |
$ |
143.2 |
|
Non-GAAP operating
margin % |
|
|
|
3.2 |
% |
|
7.8 |
% |
|
7.0 |
% |
|
5.4 |
% |
|
nm |
|
|
5.4 |
% |
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
|
37.9 |
|
|
34.2 |
|
|
15.2 |
|
|
18.3 |
|
|
1.4 |
|
|
107.0 |
|
Non-GAAP
Adjusted EBITDA |
|
$ |
57.1 |
|
$ |
104.9 |
|
$ |
59.9 |
|
$ |
46.1 |
|
$ |
(17.8 |
) |
$ |
250.2 |
|
Non-GAAP
Adjusted EBITDA margin % |
|
9.6 |
% |
|
11.6 |
% |
|
9.4 |
% |
|
8.9 |
% |
|
nm |
|
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
Capital
expenditures |
|
|
$ |
5.9 |
|
$ |
15.5 |
|
$ |
11.3 |
|
$ |
8.9 |
|
$ |
6.5 |
|
$ |
48.1 |
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
2015 |
|
|
|
|
|
Net sales |
|
|
$ |
573.8 |
|
$ |
948.8 |
|
$ |
667.3 |
|
$ |
556.2 |
|
$ |
- |
|
$ |
2,746.1 |
|
Income (loss) from
operations |
|
|
|
11.8 |
|
|
66.2 |
|
|
55.0 |
|
|
12.1 |
|
|
(29.5 |
) |
|
115.6 |
|
Operating margin
% |
|
|
|
2.1 |
% |
|
7.0 |
% |
|
8.2 |
% |
|
2.2 |
% |
|
nm |
|
|
4.2 |
% |
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments |
|
|
|
|
|
|
|
|
Restructuring
charges - net |
|
|
|
3.9 |
|
|
3.3 |
|
|
2.1 |
|
|
7.9 |
|
|
0.6 |
|
|
17.8 |
|
Impairment charges -
net |
|
|
|
(0.4 |
) |
|
1.3 |
|
|
- |
|
|
(0.2 |
) |
|
- |
|
|
0.7 |
|
Other
charges |
|
|
|
0.8 |
|
|
0.4 |
|
|
0.1 |
|
|
- |
|
|
- |
|
|
1.3 |
|
Acquisition-related
expenses |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
10.5 |
|
|
10.5 |
|
Total Non-GAAP
adjustments |
|
|
4.3 |
|
|
5.0 |
|
|
2.2 |
|
|
7.7 |
|
|
11.1 |
|
|
30.3 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP income
(loss) from operations |
|
|
$ |
16.1 |
|
$ |
71.2 |
|
$ |
57.2 |
|
$ |
19.8 |
|
$ |
(18.4 |
) |
$ |
145.9 |
|
Non-GAAP operating
margin % |
|
|
|
2.8 |
% |
|
7.5 |
% |
|
8.6 |
% |
|
3.6 |
% |
|
nm |
|
|
5.3 |
% |
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
|
34.3 |
|
|
39.0 |
|
|
17.4 |
|
|
21.7 |
|
|
1.0 |
|
|
113.4 |
|
Non-GAAP
Adjusted EBITDA |
|
$ |
50.4 |
|
$ |
110.2 |
|
$ |
74.6 |
|
$ |
41.5 |
|
$ |
(17.4 |
) |
$ |
259.3 |
|
Non-GAAP
Adjusted EBITDA margin % |
|
8.8 |
% |
|
11.6 |
% |
|
11.2 |
% |
|
7.5 |
% |
|
nm |
|
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
Capital
expenditures |
|
|
$ |
12.5 |
|
$ |
9.5 |
|
$ |
11.9 |
|
$ |
12.2 |
|
$ |
2.4 |
|
$ |
48.5 |
|
|
|
|
|
|
|
|
|
|
nm Not meaningful |
|
|
|
|
|
|
|
|
R. R. Donnelley & Sons
Company |
|
Condensed Consolidated Statements of Cash Flows |
|
For the Three Months Ended March 31, 2016 and
2015 |
|
(UNAUDITED) |
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
|
|
|
|
$ |
40.1 |
|
$ |
11.9 |
|
|
|
Adjustment to
reconcile net earnings to net cash used in operating
activities |
|
83.4 |
|
|
144.8 |
|
|
|
Changes in
operating assets and liabilities |
|
|
|
|
(308.3 |
) |
|
(292.7 |
) |
|
|
Pension and other
postretirement benefits plan contributions |
|
(8.0 |
) |
|
(8.3 |
) |
|
Net cash used in
operating activities |
|
|
|
|
$ |
(192.8 |
) |
$ |
(144.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures |
|
|
|
|
|
(48.1 |
) |
|
(48.5 |
) |
|
|
All other cash
provided by investing activities |
|
|
|
|
18.6 |
|
|
2.8 |
|
|
Net cash used in
investing activities |
|
|
|
|
$ |
(29.5 |
) |
$ |
(45.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) financing activities |
|
$ |
92.0 |
|
$ |
(47.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate on cash and cash
equivalents |
|
|
|
|
4.4 |
|
|
(21.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and
cash equivalents |
|
|
|
$ |
(125.9 |
) |
$ |
(259.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents at beginning of period |
|
|
|
|
|
389.6 |
|
|
527.9 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at end of period |
|
|
|
$ |
263.7 |
|
$ |
268.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
2015 |
|
|
For
the Three Months Ended March 31: |
|
|
|
|
|
|
|
Net
cash used in operating activities |
|
|
|
|
$ |
(192.8 |
) |
$ |
(144.3 |
) |
|
Less:
capital expenditures |
|
|
|
|
|
|
48.1 |
|
|
48.5 |
|
|
Free
cash flow |
|
|
|
|
|
$ |
(240.9 |
) |
$ |
(192.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
R.R. Donnelley &
Sons Company |
Reconciliation of Reported to Pro Forma Net
Sales |
For the Three Months Ended March 31, 2016 and
2015 |
(UNAUDITED) |
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net sales |
|
Adjustments
(1) |
|
Pro forma net
sales |
|
For the Three Months Ended March 31,
2016 |
|
|
|
|
|
|
|
|
|
|
|
Publishing and
Retail Services |
|
$ |
596.3 |
|
|
$ |
- |
|
$ |
596.3 |
|
Variable
Print |
|
|
901.8 |
|
|
|
- |
|
|
901.8 |
|
Strategic
Services |
|
|
634.6 |
|
|
|
- |
|
|
634.6 |
|
International |
|
|
518.7 |
|
|
|
- |
|
|
518.7 |
|
Consolidated |
|
$ |
2,651.4 |
|
|
$ |
- |
|
$ |
2,651.4 |
|
|
|
|
|
|
For the Three Months Ended March 31,
2015 |
|
|
|
|
Publishing and
Retail Services |
|
$ |
573.8 |
|
|
$ |
49.3 |
|
$ |
623.1 |
|
Variable
Print |
|
|
948.8 |
|
|
|
- |
|
|
948.8 |
|
Strategic
Services |
|
|
667.3 |
|
|
|
7.5 |
|
|
674.8 |
|
International |
|
|
556.2 |
|
|
|
3.8 |
|
|
560.0 |
|
Consolidated |
|
$ |
2,746.1 |
|
|
$ |
60.6 |
|
$ |
2,806.7 |
|
|
|
|
|
|
Net sales change |
|
|
|
|
Publishing and Retail
Services |
|
|
3.9 |
% |
|
|
|
(4.3 |
%) |
Variable
Print |
|
|
(5.0 |
%) |
|
|
|
(5.0 |
%) |
Strategic
Services |
|
|
(4.9 |
%) |
|
|
|
(6.0 |
%) |
International |
|
|
(6.7 |
%) |
|
|
|
(7.4 |
%) |
Consolidated |
|
|
(3.4 |
%) |
|
|
|
(5.5 |
%) |
|
|
|
|
|
Supplementary non-GAAP
information: |
|
|
|
|
|
|
|
|
|
Year-over-year impact of changes in
foreign exchange (FX) rates |
|
|
|
Publishing and
Retail Services |
|
|
|
|
--- |
% |
Variable
Print |
|
|
|
|
(0.3 |
%) |
Strategic
Services |
|
|
|
|
(0.3 |
%) |
International |
|
|
|
|
(5.7 |
%) |
Consolidated |
|
|
|
|
(1.2 |
%) |
|
|
|
|
|
Approximate year-over-year impact of
changes in pass-through paper sales |
|
|
Publishing and
Retail Services |
|
|
|
|
(2.1 |
%) |
Variable
Print |
|
|
|
|
--- |
% |
Strategic
Services |
|
|
|
|
--- |
% |
International |
|
|
|
|
--- |
% |
Consolidated |
|
|
|
|
(0.5 |
%) |
|
|
|
|
|
Year-over-year impact of
dispositions (2) |
|
|
|
|
Publishing and
Retail Services |
|
|
|
|
--- |
% |
Variable
Print |
|
|
|
|
--- |
% |
Strategic
Services |
|
|
|
|
--- |
% |
International |
|
|
|
|
(3.6 |
%) |
Consolidated |
|
|
|
|
(0.7 |
%) |
|
|
|
|
|
|
Net organic sales change
(3) |
|
|
|
|
Publishing and Retail Services |
|
|
|
|
(2.2 |
%) |
Variable Print |
|
|
|
|
(4.7 |
%) |
Strategic Services |
|
|
|
|
(5.7 |
%) |
International |
|
|
|
|
1.9 |
% |
Consolidated |
|
|
|
|
(3.1 |
%) |
|
|
|
|
|
|
|
The reported results of the Company include the
results of acquired businesses from the acquisition date forward.
The Company has provided this schedule to reconcile reported net
sales for the three months ended March 31, 2015 to pro forma net
sales as if the 2015 acquisition took place as of January 1, 2015
for the purposes of this schedule. |
|
There were no acquisitions during the three months
ended March 31, 2016. |
|
For the three months ended March 31, 2015, the
adjustment for net sales of acquired businesses reflects the net
sales of Courier Corporation ("Courier") (acquired June 8,
2015). |
|
(1) Adjusted for net sales of acquired business:
Courier |
(2) Adjusted for net sales of disposed businesses: Two
entities in the International segment and the Venezuelan operating
entity |
(3) Adjusted for net sales of acquired and disposed
businesses, the impact of changes in FX rates and pass-through
paper sales |
|
R.R. Donnelley &
Sons Company |
|
Reconciliation of GAAP Net Earnings to Non-GAAP
Adjusted EBITDA |
|
For the Three and Twelve Months Ended March 31,
2016 and 2015 |
|
(UNAUDITED) |
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve |
|
|
|
|
|
|
|
|
|
Months Ended |
|
For the Three Months Ended |
|
|
|
|
March 31, 2016 |
|
March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
June 30, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
earnings attributable to RR Donnelley common
shareholders |
|
$ |
168.6 |
|
|
$ |
39.8 |
|
$ |
71.0 |
|
$ |
14.3 |
|
$ |
43.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
|
Income (loss)
attributable to noncontrolling interests |
|
|
(2.0 |
) |
|
|
0.3 |
|
|
0.3 |
|
|
(2.7 |
) |
|
0.1 |
|
|
|
Income tax
expense |
|
|
148.0 |
|
|
|
25.0 |
|
|
50.3 |
|
|
39.7 |
|
|
33.0 |
|
|
|
Interest expense -
net |
|
|
275.2 |
|
|
|
68.2 |
|
|
68.8 |
|
|
69.0 |
|
|
69.2 |
|
|
|
Investment and other
expense - net |
|
|
15.3 |
|
|
|
- |
|
|
0.4 |
|
|
3.0 |
|
|
11.9 |
|
|
|
Depreciation and
amortization |
|
|
447.6 |
|
|
|
107.0 |
|
|
112.5 |
|
|
115.3 |
|
|
112.8 |
|
|
|
Restructuring,
impairment and other charges - net (1) |
|
|
112.5 |
|
|
|
9.7 |
|
|
17.7 |
|
|
52.9 |
|
|
32.2 |
|
|
|
Acquisition-related
expenses (2) |
|
|
4.4 |
|
|
|
0.6 |
|
|
0.2 |
|
|
0.3 |
|
|
3.3 |
|
|
|
Spinoff-related
transaction expenses (3) |
|
|
25.5 |
|
|
|
11.9 |
|
|
6.9 |
|
|
6.7 |
|
|
- |
|
|
|
Gain on disposals of
businesses (4) |
|
|
(12.3 |
) |
|
|
(12.3 |
) |
|
- |
|
|
- |
|
|
- |
|
|
|
Purchase accounting
inventory adjustments (5) |
|
|
10.8 |
|
|
|
- |
|
|
0.9 |
|
|
6.7 |
|
|
3.2 |
|
|
|
Total Non-GAAP
adjustments |
|
|
1,025.0 |
|
|
|
210.4 |
|
|
258.0 |
|
|
290.9 |
|
|
265.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjusted EBITDA |
|
$ |
1,193.6 |
|
|
$ |
250.2 |
|
$ |
329.0 |
|
$ |
305.2 |
|
$ |
309.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
11,162.1 |
|
|
$ |
2,651.4 |
|
$ |
2,934.6 |
|
$ |
2,828.0 |
|
$ |
2,748.1 |
|
|
|
Non-GAAP adjusted
EBITDA margin % |
|
|
10.7 |
% |
|
|
9.4 |
% |
|
11.2 |
% |
|
10.8 |
% |
|
11.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve |
|
|
|
|
|
|
|
|
|
Months Ended |
|
For the Three Months Ended |
|
|
|
|
March 31, 2015 |
|
March 31, 2015 |
December 31, 2014 |
September 30, 2014 |
June 30, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
earnings attributable to RR Donnelley common
shareholders |
|
$ |
168.7 |
|
|
$ |
22.3 |
|
$ |
19.5 |
|
$ |
62.2 |
|
$ |
64.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
|
Income (loss)
attributable to noncontrolling interests |
|
|
(2.8 |
) |
|
|
(10.4 |
) |
|
4.1 |
|
|
2.6 |
|
|
0.9 |
|
|
|
Income tax expense
(benefit) |
|
|
56.2 |
|
|
|
6.4 |
|
|
(25.4 |
) |
|
35.7 |
|
|
39.5 |
|
|
|
Interest expense -
net |
|
|
280.1 |
|
|
|
69.0 |
|
|
69.1 |
|
|
71.2 |
|
|
70.8 |
|
|
|
Investment and other
expense - net |
|
|
33.3 |
|
|
|
28.3 |
|
|
0.7 |
|
|
2.0 |
|
|
2.3 |
|
|
|
Depreciation and
amortization |
|
|
471.9 |
|
|
|
113.4 |
|
|
117.0 |
|
|
119.6 |
|
|
121.9 |
|
|
|
Restructuring,
impairment and other charges - net (1) |
|
|
108.3 |
|
|
|
19.8 |
|
|
45.8 |
|
|
19.9 |
|
|
22.8 |
|
|
|
Acquisition-related
expenses (2) |
|
|
11.4 |
|
|
|
10.5 |
|
|
0.4 |
|
|
- |
|
|
0.5 |
|
|
|
Pension settlement
charges (6) |
|
|
95.7 |
|
|
|
- |
|
|
95.7 |
|
|
- |
|
|
- |
|
|
|
Purchase accounting
inventory adjustment (5) |
|
|
2.2 |
|
|
|
- |
|
|
- |
|
|
- |
|
|
2.2 |
|
|
|
Total Non-GAAP
adjustments |
|
|
1,056.3 |
|
|
|
237.0 |
|
|
307.4 |
|
|
251.0 |
|
|
260.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjusted EBITDA |
|
$ |
1,225.0 |
|
|
$ |
259.3 |
|
$ |
326.9 |
|
$ |
313.2 |
|
$ |
325.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
11,675.7 |
|
|
$ |
2,746.1 |
|
$ |
3,069.3 |
|
$ |
2,957.8 |
|
$ |
2,902.5 |
|
|
|
Non-GAAP adjusted
EBITDA margin % |
|
|
10.5 |
% |
|
|
9.4 |
% |
|
10.7 |
% |
|
10.6 |
% |
|
11.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Restructuring, impairment and other charges-
net: Pre-tax charges for employee termination costs, lease
termination and other costs, including multi-employer pension plan
withdrawal obligations as a result of facility closures, and
impairment of goodwill, intangible assets and other long-lived
assets. |
|
|
|
|
|
|
|
|
|
|
|
|
(2) Acquisition-related expenses: Legal,
accounting and other expenses associated with completed or
contemplated acquisitions. |
|
|
|
|
|
|
|
|
|
|
|
|
(3) Spinoff-related transaction expenses:
Consulting, tax advice, legal and other expenses associated with
the proposed spinoff transactions. |
|
|
|
|
|
|
|
|
|
|
|
|
(4) Gain on disposals of businesses: Gain on the
sales of two entities in the International segment. |
|
|
|
|
|
|
|
|
|
|
|
|
(5) Purchase accounting inventory adjustments:
Recognition of charges as a result of inventory purchase accounting
adjustments. |
|
|
|
|
|
|
|
|
|
|
|
|
(6) Pension settlement charges: Pre-tax charges
recognized for pension lump-sum settlement payments. |
|
|
|
|
|
|
|
|
|
|
|
R.R. Donnelley &
Sons Company |
|
Debt and Liquidity Summary |
|
As of March 31, 2016 and 2015 and December 31,
2015 |
|
(UNAUDITED) |
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liquidity (1) |
|
|
March 31, 2016 |
|
December 31, 2015 |
|
March 31, 2015 |
|
Cash
(2) |
|
|
$ |
263.7 |
|
|
$ |
389.6 |
|
|
$ |
268.7 |
|
|
Amount
available under the Credit Agreement (3) |
|
|
|
1,123.2 |
|
|
|
1,155.8 |
|
|
|
991.7 |
|
|
|
|
|
|
|
1,386.9 |
|
|
|
1,545.4 |
|
|
|
1,260.4 |
|
|
|
|
|
|
|
|
|
|
|
|
Usage |
|
|
|
|
|
|
|
|
Borrowings
under Credit Agreement (3) |
|
|
|
145.0 |
|
|
|
- |
|
|
|
- |
|
|
Impact on
availability related to outstanding letters of credit |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Net
Available Liquidity |
|
|
$ |
1,241.9 |
|
|
$ |
1,545.4 |
|
|
$ |
1,260.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term and current portion of long-term
debt |
|
|
$ |
634.4 |
|
|
$ |
234.6 |
|
|
$ |
203.3 |
|
|
Long-term debt |
|
|
|
2,942.9 |
|
|
|
3,188.3 |
|
|
|
3,431.0 |
|
|
Total debt |
|
|
$ |
3,577.3 |
|
|
$ |
3,422.9 |
|
|
$ |
3,634.3 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted EBITDA for the twelve months
ended March 31, 2016 and 2015 and the year ended December 31,
2015 |
|
$ |
1,193.6 |
|
|
$ |
1,202.7 |
|
|
$ |
1,225.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Leverage
(defined as total debt divided by non-GAAP adjusted
EBITDA) |
|
3.0x |
|
|
2.8x |
|
|
3.0x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Liquidity does not include uncommitted credit
facilities, located primarily outside of the U.S. |
|
|
|
|
|
|
|
|
|
|
|
(2) Approximately 89% of cash as of March 31, 2016,
77% of cash as of December 31, 2015 and 76% of cash as of March 31,
2015 was located outside of the U.S. During 2016 and future years,
the Company’s foreign subsidiaries are expected to make
approximately $175.0 million in payments in satisfaction of
intercompany obligations. Certain other cash balances of foreign
subsidiaries may be subject to U.S. or local country taxes if
repatriated to the U.S. In addition, repatriation of some foreign
cash balances is further restricted by local laws. |
|
|
|
(3) The Company has a $1.5 billion senior secured
revolving credit agreement (the “Credit Agreement”) which expires
September 9, 2019. The Credit Agreement is subject to a
number of covenants, including a minimum Interest Coverage Ratio
and a maximum Leverage Ratio, as defined and calculated pursuant to
the Credit Agreement. There were $145.0 million in borrowings
under the Credit Agreement as of March 31, 2016. Based on the
Company’s results of operations for the twelve months ended March
31, 2016 and existing debt, the Company would have had the ability
to utilize approximately $1.0 billion of the $1.5 billion Credit
Agreement and not have been in violation of the terms of the
agreement. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2016 |
|
December 31, 2015 |
|
March 31, 2015 |
|
|
|
|
Stated amount of the
Credit Agreement |
$ |
1,500.0 |
|
|
$ |
1,500.0 |
|
|
$ |
1,500.0 |
|
|
|
|
|
Less: availability
reduction from covenants |
|
376.8 |
|
|
|
344.2 |
|
|
|
508.3 |
|
|
|
|
|
Total amount
available |
|
1,123.2 |
|
|
|
1,155.8 |
|
|
|
991.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: borrowings under
the Credit Agreement |
|
145.0 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Impact on availability
related to outstanding letters of credit |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Availability under the
Credit Agreement |
$ |
978.2 |
|
|
$ |
1,155.8 |
|
|
$ |
991.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact Information
Investors:
Dave Gardella
SVP, Investor Relations
312.326.8155
david.a.gardella@rrd.com
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