Log In | Become a Member | Contact Us


Market Intelligence for Printing and Publishing

Connect on Twitter | Facebook | LinkedIn

Featured:     M&A Trends     Production Inkjet     Installations and Placements Tracker

RR Donnelley Reports Q4 and Full-Year 2015 Results, Issues Full-Year 2016 Guidance

Thursday, February 25, 2016

Press release from the issuing company

CHICAGO - R.R. Donnelley & Sons Company (NASDAQ:RRD) today reported financial results for the fourth quarter and full year of 2015.

Highlights:

  • Fourth-quarter and full-year 2015 results favorable to or in line with previous guidance as detailed below:
  Previous Guidance 2015 Actual Results
Fourth-quarter net sales $2.9 to $3.0 billion $2.93 billion
Fourth-quarter non-GAAP adjusted EBITDA (1) $325 to $330 million $329.0 million
Fourth-quarter depreciation and amortization $115 to $120 million $112.5 million
Fourth-quarter interest expense $65 to $70 million $68.8 million
Fourth-quarter non-GAAP effective tax rate (2) 34% to 35%   31.8 %
Fourth-quarter diluted share count Approximately 211 million 210.4 million
Full-year capital expenditures Approximately $225 million $207.6 million
Full-year free cash flow(3) $400 to $500 million $444.4 million

(1) GAAP net earnings attributable to RR Donnelley common shareholders was $71.0 million; see page 14 for a reconciliation of GAAP net earnings to Non-GAAP adjusted EBITDA
(2) GAAP effective tax rate was 41.4%
(3) Defined as operating cash flow less capital expenditures, which were $652.0 million and $207.6 million, respectively

  • Fourth-quarter net sales of $2.9 billion declined 4.4% from the fourth quarter of 2014; organic net sales declined 2.8% from the fourth quarter of 2014
  • Fourth-quarter GAAP net earnings attributable to common shareholders of $71.0 million, or $0.34 per diluted share, compared to GAAP net earnings attributable to common shareholders in the fourth quarter of 2014 of $19.5 million, or $0.10 per diluted share
  • Fourth-quarter non-GAAP net earnings attributable to common shareholders of $101.0 million, or $0.48 per diluted share, compared to non-GAAP net earnings attributable to common shareholders in the fourth quarter of 2014 of $105.8 million, or $0.52 per diluted share
  • Fourth-quarter non-GAAP adjusted EBITDA of $329.0 million, or 11.2% of net sales, compared to $326.9 million, or 10.7% of net sales, in the fourth quarter of 2014 
  • Company issues full-year 2016 guidance

"Despite a challenging demand environment, our continued focus on managing costs resulted in a non-GAAP adjusted EBITDA margin of 11.2% in the quarter, a 50 basis point improvement from the same quarter last year," said Thomas J. Quinlan III, RR Donnelley's President and Chief Executive Officer. "For the full year, we achieved a non-GAAP adjusted EBITDA margin of 10.7%, flat to full-year 2014, and generated $444 million in free cash flow. These results enabled us to reduce year-end total debt by $179 million and decrease our gross leverage ratio to 2.8x, just above the top end of our targeted range of 2.25x to 2.75x."

Quinlan continued, "As we begin 2016, we remain focused on operational excellence, while also preparing for the spin offs of LSC Communications and Donnelley Financial Solutions, which we expect to complete in October."

Net Sales

Net sales in the quarter were $2.9 billion, down $134.7 million, or 4.4%, from the fourth quarter of 2014. After adjusting for the impact of acquisitions and dispositions, as well as changes in foreign exchange rates and pass-through paper, organic sales decreased 2.8% from the fourth quarter of 2014, as increases in the International and Strategic Services segments only partially offset declines in the Variable Print and Publishing and Retail Services segments.

GAAP Earnings

Fourth-quarter 2015 net earnings attributable to common shareholders was $71.0 million, or $0.34 per diluted share, compared to net earnings attributable to common shareholders of $19.5 million, or $0.10 per diluted share, in the fourth quarter of 2014. The fourth-quarter net earnings attributable to common shareholders included pre-tax charges of $27.0 million and $143.6 million in 2015 and 2014, 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 Earnings

Non-GAAP adjusted EBITDA in the fourth quarter of 2015 was $329.0 million, compared to $326.9 million in the fourth quarter of 2014. Non-GAAP adjusted EBITDA margin in the fourth quarter of 2015 was 11.2%, or 50 basis points higher than in the fourth quarter of 2014, as productivity improvements and lower variable compensation expense more than offset price pressure and volume declines. 

Non-GAAP net earnings attributable to common shareholders totaled $101.0 million, or $0.48 per diluted share, in the fourth quarter of 2015 compared to $105.8 million, or $0.52 per diluted share, in the fourth quarter of 2014. 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 Guidance

The Company provides the following full-year guidance for 2016, which excludes the impact of the previously announced pending spin-off transactions:

  2016 Guidance 2015 Actual Results
Net sales $11.3 to $11.5 billion $11.3 billion
Non-GAAP adjusted EBITDA margin 10.4% to 10.6%   10.7 %
Depreciation and amortization $430 to $440 million $454.0 million
Interest expense $260 to $270 million $276.0 million
Non-GAAP effective tax rate 34% to 35%   34.1 %
Diluted share count Approximately 211 million 206.8 million
Capital expenditures $200 to $225 million $207.6 million
Free cash flow(1) $400 to $500 million $444.4 million

(1)  Defined as operating cash flow less capital expenditures

 

Post a Comment

To post a comment Log In or Become a Member, doing so is simple and free

 

SHARE

Email Icon Email

Print Icon Print


Become a Member

Join the thousands of printing executives who are already part of the WhatTheyThink Community.

Copyright © 2018 WhatTheyThink. All Rights Reserved