RRD Reports Fourth Quarter and Full Year 2021 Results
R.R. Donnelley & Sons Company (RRD) reported a 4.1% increase in full-year net sales for 2021, reaching $4.96 billion. Despite operational challenges, the net income improved significantly to $163.5 million, a 51.2% rise year-over-year. However, Q4 income from operations dropped by 52.5% to $37.1 million. The company expects its merger with Chatham Asset Management to close by February 25, 2022, following regulatory approval and stockholder voting on February 23. RRD's total debt stands at $1.47 billion, the lowest since its 2016 spin-off.
- Full-year net sales increased 4.1% to $4.96 billion.
- Income from operations improved by 51.2% to $163.5 million.
- Total debt decreased to $1.47 billion, the lowest level since 2016.
- Pension plans are overfunded by $42 million, an improvement of $146 million.
- Q4 2021 income from operations fell by 52.5% to $37.1 million.
- Diluted loss per share was $0.19 compared to earnings of $0.46 in Q4 2020.
- Cash provided by operating activities dropped to $92.1 million from $149.8 million in 2020.
- Higher operational expenses, including $40.8 million related to the merger.
2021 FULL YEAR NET SALES INCREASED
TOTAL DEBT OF
REGULATORY APPROVALS FOR THE MERGER WITH
Full Year
-
GAAP net sales, including the impact of foreign exchange and a disposition in early 2020, increased
or$197 million 4.1% ; Non-GAAP organic net sales increased3.2% primarily from higher demand for many of the Company’s products and services -
GAAP income from operations was up
versus the prior year$55 million -
Non-GAAP income from operations for the year improved
despite headwinds in excess of$17 million which included one-time projects in the prior year related to COVID and the Census, unfavorable FX and valuation adjustments for certain incentive compensation awards caused by the stock price increase in 2021$80 million -
Cash provided by operating activities in 2021 was
as compared to$92.1 million in the prior year period; current year results include payments in excess of$149.8 million related to the planned merger, settlement of LSC bankruptcy related claims, repayment of half the payroll taxes deferred in 2020 and payments made to terminate certain interest rate swap agreements$100 million -
Total debt outstanding of
at$1.47 billion December 31, 2021 is down from the prior year end; Pension and OPEB plans are overfunded by$37 million at$42 million December 31, 2021 which is an improvement of from the$146 million underfunded amount at the prior year end$104 million -
Gross leverage ratio of 3.6x and net leverage ratio of 2.9x both improved 0.1x from
December 31, 2020 and represent lowest levels since 2016 spin
“We delivered a strong year of performance capped by fourth quarter results that exceeded our expectations. I am proud of the RRD team as we continue to successfully execute our strategy and navigate through the COVID-19 pandemic. Our full year 2021 adjusted income from operations and operating margin represent our third consecutive year of improved performance, while also representing our best performance in those metrics since 2016,” said
Financial highlights
The following table provides an overview of RRD’s financial performance:
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4th Quarter Results |
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Q4 2021 |
Q4 2020 |
% Change |
Net sales |
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Income from operations |
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( |
Diluted (loss) earnings per share from continuing operations |
( |
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nm |
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Adjusted income from operations - non-GAAP (1) |
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Adjusted diluted earnings per share from continuing operations - non-GAAP (1) |
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( |
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Full Year Results |
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FY 2021 |
FY 2020 |
% Change |
Net sales |
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|
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Income from operations |
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|
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Diluted earnings (loss) per share from continuing operations |
|
( |
nm |
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|
|
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Adjusted income from operations - non-GAAP (1) |
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|
|
Adjusted diluted earnings per share from continuing operations - non-GAAP (1) |
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(1) |
Refer to "Use of Non-GAAP Information" for additional information on the usage and presentation of non-GAAP financial measures, and refer to the schedules for reconciliations to the most directly comparable GAAP financial measures. |
On
Net sales in the fourth quarter were
Income from operations was
Non-GAAP adjusted income from operations of
Loss per share from continuing operations attributable to common stockholders was
Non-GAAP adjusted earnings per share from continuing operations attributable to common stockholders of
Other highlights and information (including discontinued operations in 2020)
Cash provided by operating activities during the twelve months ended
Capital expenditures in the twelve months ended
As of
At
During 2020, the Company completed the sale of its DLS Worldwide, International Logistics and Courier Logistics businesses. The Company has reflected the Logistics businesses as discontinued operations, and the financial results of these businesses have been excluded from continuing operations and segment results for all periods presented unless otherwise noted.
Conference call
RRD will host a conference call to discuss its fourth quarter results on
A slide presentation will be available on the Investors section of the RRD web site at www.rrd.com or by clicking through this link.
About RRD
RRD is a leading global provider of multichannel business communications services and marketing solutions. With 25,000 clients and 32,000 employees across 28 countries, RRD offers the industry’s most comprehensive offering of solutions designed to help companies—from
For more information, visit the Company's web site at www.rrd.com.
Use of non-GAAP information
This news release contains non-GAAP financial measures, including non-GAAP SG&A, non-GAAP income from operations, non-GAAP Adjusted EBITDA, non-GAAP interest expense, non-GAAP effective tax rate, non-GAAP net earnings (loss) attributable to common stockholders, non-GAAP diluted earnings (loss) per share, non-GAAP organic net sales and gross and net leverage ratios. The Company believes that these non-GAAP measures, when presented in conjunction with comparable GAAP measures, provide useful information about its operating results and enhance the overall ability to assess the Company’s financial performance. These measures should be considered in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. RRD uses these non-GAAP 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. Additional information relating to the adjustments for the non-GAAP SG&A, non-GAAP income from operations, non-GAAP Adjusted EBITDA, non-GAAP effective tax rate, non-GAAP net earnings (loss) attributable to common stockholders, non-GAAP diluted earnings (loss) per share, non-GAAP organic net sales and gross and net leverage ratios for RRD is set forth in the attached schedules.
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 the Company and its expectations relating to future financial condition and performance, including the anticipated merger with an affiliate of
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Consolidated Statements of Operations |
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For the Three and Twelve Months Ended |
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(UNAUDITED) |
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(in millions, except per share data) |
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For the Three Months Ended
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For the Twelve Months
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2021 |
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2020 |
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2021 |
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2020 |
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Net sales |
$ |
1,377.2 |
|
$ |
1,348.6 |
|
$ |
4,963.7 |
|
$ |
4,766.3 |
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Cost of sales (1) |
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1,104.9 |
|
|
1,059.8 |
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3,994.9 |
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|
3,789.2 |
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Gross profit (1) |
|
272.3 |
|
|
288.8 |
|
|
968.8 |
|
|
977.1 |
|
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Selling, general and administrative expenses (SG&A) (1) |
|
162.3 |
|
|
160.8 |
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600.6 |
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597.5 |
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Restructuring, impairment and other charges-net |
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13.8 |
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6.2 |
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33.3 |
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100.0 |
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Depreciation and amortization |
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31.5 |
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33.4 |
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130.5 |
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|
145.7 |
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Other operating expense |
|
27.6 |
|
|
10.3 |
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|
40.9 |
|
|
25.8 |
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Income from operations |
|
37.1 |
|
|
78.1 |
|
|
163.5 |
|
|
108.1 |
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Interest expense - net |
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29.2 |
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32.4 |
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127.6 |
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|
135.1 |
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Loss on debt extinguishment |
|
0.9 |
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2.6 |
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7.1 |
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3.0 |
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Investment and other income - net |
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(4.8 |
) |
|
(3.3 |
) |
|
(19.9 |
) |
|
(14.1 |
) |
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Income (loss) from continuing operations before income taxes |
|
11.8 |
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46.4 |
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|
48.7 |
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(15.9 |
) |
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Income tax expense |
|
25.2 |
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|
13.0 |
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|
44.9 |
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|
10.0 |
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Net (loss) income from continuing operations |
|
(13.4 |
) |
|
33.4 |
|
|
3.8 |
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(25.9 |
) |
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Income from discontinued operations, net of tax |
|
— |
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|
144.4 |
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|
0.6 |
|
|
124.9 |
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|||
Net (loss) income |
|
(13.4 |
) |
|
177.8 |
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|
4.4 |
|
|
99.0 |
|
|||
Less: income attributable to noncontrolling interests |
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0.5 |
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0.2 |
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0.7 |
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0.5 |
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Net (loss) income attributable to RRD common stockholders |
$ |
(13.9 |
) |
$ |
177.6 |
|
$ |
3.7 |
|
$ |
98.5 |
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Basic net (loss) earnings per share attributable to RRD common stockholders: |
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Continuing Operations |
$ |
(0.19 |
) |
$ |
0.46 |
|
$ |
0.04 |
|
$ |
(0.37 |
) |
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Discontinued Operations |
$ |
- |
|
$ |
1.99 |
|
$ |
0.01 |
|
$ |
1.73 |
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Net (loss) earnings attributable to |
$ |
(0.19 |
) |
$ |
2.45 |
|
$ |
0.05 |
|
$ |
1.36 |
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Diluted net (loss) earnings per share attributable to RRD common stockholders: |
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Continuing Operations |
$ |
(0.19 |
) |
$ |
0.46 |
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$ |
0.04 |
|
$ |
(0.37 |
) |
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Discontinued Operations |
$ |
- |
|
$ |
1.99 |
|
$ |
0.01 |
|
$ |
1.73 |
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Net (loss) earnings attributable to |
$ |
(0.19 |
) |
$ |
2.45 |
|
$ |
0.05 |
|
$ |
1.36 |
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Weighted average common shares outstanding: |
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Basic |
|
73.6 |
|
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72.4 |
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73.2 |
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72.3 |
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Diluted |
|
73.6 |
|
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72.6 |
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74.5 |
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72.3 |
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Additional information: |
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Gross margin (1) |
|
19.8 |
% |
|
21.4 |
% |
|
19.5 |
% |
|
20.5 |
% |
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SG&A as a % of total net sales (1) |
|
11.8 |
% |
|
11.9 |
% |
|
12.1 |
% |
|
12.5 |
% |
|||
Operating margin |
|
2.7 |
% |
|
5.8 |
% |
|
3.3 |
% |
|
2.3 |
% |
|||
Effective tax rate |
|
213.6 |
% |
|
28.0 |
% |
|
92.2 |
% |
|
(62.9 |
%) |
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(1) Exclusive of depreciation and amortization. |
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Consolidated Balance Sheets |
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As of |
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(UNAUDITED) |
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(in millions, except per share data) |
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Assets |
|
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Cash and cash equivalents |
$ |
280.2 |
|
$ |
288.8 |
|
|
Receivables, less allowances for credit losses |
|
1,063.4 |
|
|
1,009.2 |
|
|
Inventories |
|
352.7 |
|
|
302.1 |
|
|
Assets held-for-sale |
|
9.2 |
|
|
23.1 |
|
|
Prepaid expenses and other current assets |
|
101.3 |
|
|
133.4 |
|
|
Total Current Assets |
|
1,806.8 |
|
|
1,756.6 |
|
|
Property, plant and equipment - net |
|
408.4 |
|
|
438.8 |
|
|
|
|
405.4 |
|
|
410.6 |
|
|
Other intangible assets - net |
|
49.8 |
|
|
68.8 |
|
|
Deferred income taxes |
|
34.6 |
|
|
78.5 |
|
|
Operating lease assets |
|
214.5 |
|
|
223.8 |
|
|
Other noncurrent assets |
|
211.9 |
|
|
153.8 |
|
|
Total Assets |
$ |
3,131.4 |
|
$ |
3,130.9 |
|
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Liabilities |
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Accounts payable |
|
895.3 |
|
|
804.5 |
|
|
Accrued liabilities and other |
|
352.9 |
|
|
351.2 |
|
|
Short-term operating lease liabilities |
|
70.8 |
|
|
73.4 |
|
|
Short-term and current portion of long-term debt |
|
- |
|
|
61.1 |
|
|
Total Current Liabilities |
|
1,319.0 |
|
|
1,290.2 |
|
|
Long-term debt |
|
1,466.3 |
|
|
1,442.0 |
|
|
Pension liabilities |
|
62.5 |
|
|
89.5 |
|
|
Other postretirement benefits plan liabilities |
|
- |
|
|
55.8 |
|
|
Long-term income tax liability |
|
60.3 |
|
|
68.3 |
|
|
Long-term operating lease liabilities |
|
149.9 |
|
|
156.9 |
|
|
Other noncurrent liabilities |
|
238.3 |
|
|
272.0 |
|
|
Total Liabilities |
$ |
3,296.3 |
|
$ |
3,374.7 |
|
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Equity |
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Common stock, |
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Authorized: 165.0 shares; |
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Issued: 89.0 shares in 2021 and 2020 |
|
0.9 |
|
|
0.9 |
|
|
|
|
|
|
|
|
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Additional paid-in capital |
|
2,686.9 |
|
|
3,263.6 |
|
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Accumulated deficit |
|
(2,237.0 |
) |
|
(2,240.7 |
) |
|
Accumulated other comprehensive loss |
|
(63.1 |
) |
|
(153.9 |
) |
|
|
|
(566.4 |
) |
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(1,127.6 |
) |
|
Total RRD stockholders' equity |
|
(178.7 |
) |
|
(257.7 |
) |
|
Noncontrolling interests |
|
13.8 |
|
|
13.9 |
|
|
Total Equity |
$ |
(164.9 |
) |
$ |
(243.8 |
) |
|
Total Liabilities and Equity |
$ |
3,131.4 |
|
$ |
3,130.9 |
|
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Condensed Consolidated Statements of Cash Flows |
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For the Twelve Months Ended |
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(UNAUDITED) |
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(in millions) |
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2021 |
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2020 |
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Net income |
$ |
4.4 |
|
$ |
99.0 |
|
|
Adjustment to reconcile net income to net cash used in operating activities |
|
129.0 |
|
|
34.7 |
|
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Changes in operating assets and liabilities |
|
(36.3 |
) |
|
25.6 |
|
|
Pension and other postretirement benefits plan contributions |
|
(5.0 |
) |
|
(9.5 |
) |
|
Net cash provided by operating activities |
$ |
92.1 |
|
$ |
149.8 |
|
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Capital expenditures |
|
(73.3 |
) |
|
(85.6 |
) |
|
All other cash provided by investing activities |
|
18.0 |
|
|
390.6 |
|
|
Net cash (used in) provided by investing activities |
$ |
(55.3 |
) |
$ |
305.0 |
|
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Net cash used in financing activities |
$ |
(75.3 |
) |
$ |
(329.3 |
) |
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Effect of exchange rate on cash, cash equivalents and restricted cash |
|
1.2 |
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8.3 |
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Net (decrease) increase in cash, cash equivalents and restricted cash |
$ |
(37.3 |
) |
$ |
133.8 |
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Cash, cash equivalents and restricted cash at beginning of year |
|
357.6 |
|
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223.8 |
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Cash, cash equivalents and restricted cash at end of period |
$ |
320.3 |
|
$ |
357.6 |
|
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Supplemental cash flow disclosures: |
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Operating cash flows used in discontinued operations |
$ |
- |
|
$ |
(1.4 |
) |
|
Investing cash flows provided by discontinued operations |
$ |
- |
|
$ |
239.5 |
|
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Reconciliation of GAAP to Non-GAAP Measures |
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For the Three Months Ended |
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(UNAUDITED) |
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(in millions, except per share data) |
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For the Three Months Ended |
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For the Three Months Ended |
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Cost of sales |
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SG&A (1) |
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Income from operations |
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Investment and other income - net |
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Income tax expense |
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Net (loss) income from continuing operations attributable to common stockholders |
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Net (loss) earnings from continuing operations attributable to common stockholders per diluted share |
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SG&A (1) |
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Income from operations |
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Investment and other income - net |
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Income tax (benefit) expense |
Net (loss) income from continuing operations attributable to common stockholders |
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Net (loss) earnings from continuing operations attributable to common stockholders per diluted share |
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GAAP basis measures |
$ |
1,104.9 |
|
$ |
162.3 |
|
$ |
37.1 |
|
$ |
(4.8 |
) |
$ |
25.2 |
|
$ |
(13.9 |
) |
$ |
(0.19 |
) |
$ |
160.8 |
|
$ |
78.1 |
|
$ |
(3.3 |
) |
$ |
13.0 |
$ |
33.2 |
|
$ |
0.46 |
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Non-GAAP adjustments: |
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Restructuring, impairment and other charges-net (2) |
|
— |
|
|
— |
|
|
13.8 |
|
|
— |
|
|
0.2 |
|
|
13.6 |
|
|
0.18 |
|
|
— |
|
|
6.2 |
|
|
— |
|
|
5.3 |
|
0.9 |
|
|
0.01 |
|||||||||||||
Merger-related expenses (3) |
|
(0.1 |
) |
|
(17.8 |
) |
40.8 |
|
|
— |
|
|
4.3 |
|
|
36.5 |
|
|
0.50 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
||||||||||||||
Loss on debt extinguishment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1.0 |
|
|
0.01 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|||||||||||||
All other (4) |
|
— |
|
|
(0.1 |
) |
|
4.7 |
|
|
(0.5 |
) |
|
(0.3 |
) |
|
5.7 |
|
|
0.08 |
|
|
0.1 |
|
|
10.2 |
|
|
(1.4 |
) |
|
(3.3 |
) |
|
17.6 |
|
|
0.24 |
||||||||||||
Total Non-GAAP adjustments |
|
(0.1 |
) |
|
(17.9 |
) |
|
59.3 |
|
|
(0.5 |
) |
|
4.2 |
|
|
56.8 |
|
|
0.77 |
|
|
0.1 |
|
|
16.4 |
|
|
(1.4 |
) |
|
2.0 |
|
18.5 |
|
|
0.25 |
|||||||||||||
Non-GAAP measures |
$ |
1,104.8 |
|
$ |
144.4 |
|
$ |
96.4 |
|
$ |
(5.3 |
) |
$ |
29.4 |
|
$ |
42.9 |
|
$ |
0.58 |
|
$ |
160.9 |
|
$ |
94.5 |
|
$ |
(4.7 |
) |
$ |
15.0 |
$ |
51.7 |
|
$ |
0.71 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Additional non-GAAP information: |
|
|
|
|
2021 |
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Gross margin (1) |
|
|
|
|
|
19.8 |
% |
|
21.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Adjusted SG&A as a % of total net sales (1) |
|
|
|
|
|
10.5 |
% |
|
11.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Adjusted operating margin |
|
|
|
|
|
7.0 |
% |
|
7.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Adjusted effective tax rate |
|
|
|
|
|
40.6 |
% |
|
22.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Exclusive of depreciation and amortization. |
|
(2) |
Restructuring, impairment and other-net: charges incurred in the fourth quarter of 2021 included |
|
(3) |
Merger-related expenses: includes |
|
(4) |
All other: charges incurred in the fourth quarter of 2021 primarily included expenses related to the ongoing |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Twelve Months Ended |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
(UNAUDITED) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except per share data) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
For the Twelve Months Ended |
|
|
For the Twelve Months Ended |
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
Cost of sales |
|
SG&A (1) |
|
Income from operations |
|
Investment and other income - net |
|
Interest Expense |
|
Income tax expense |
|
Net income from continuing operations attributable to common stockholders |
|
Net earnings from continuing operations attributable to common stockholders per diluted share |
|
|
SG&A (1) |
|
Income from operations |
|
Investment and other income - net |
|
Income tax (benefit) expense |
|
Net (loss) income from continuing operations attributable to common stockholders |
|
Net (loss) earnings from continuing operations attributable to common stockholders per diluted share |
|
||||||||||||||||||||||||||
GAAP basis measures |
$ |
3,994.9 |
|
$ |
600.6 |
|
$ |
163.5 |
|
$ |
(19.9 |
) |
$ |
127.6 |
|
$ |
44.9 |
|
$ |
3.1 |
|
$ |
0.04 |
|
|
$ |
597.5 |
|
$ |
108.1 |
|
$ |
(14.1 |
) |
$ |
10.0 |
|
$ |
(26.4 |
) |
$ |
(0.37 |
) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring, impairment and other charges-net (2) |
|
— |
|
|
— |
|
|
33.3 |
|
|
— |
|
|
— |
|
|
3.4 |
|
|
29.9 |
|
|
0.40 |
|
|
|
— |
|
|
100.0 |
|
|
— |
|
|
16.5 |
|
|
83.5 |
|
|
1.15 |
|
||||||||||||
Merger-related expenses (3) |
|
(0.1 |
) |
|
(17.8 |
) |
|
40.8 |
|
|
— |
|
|
— |
|
|
4.3 |
|
|
36.5 |
|
|
0.49 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||||||||
Loss on swap terminations |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(9.2 |
) |
|
4.1 |
|
|
5.2 |
|
|
0.07 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||||||||
Loss on debt extinguishment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2.7 |
|
|
4.4 |
|
|
0.06 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
0.5 |
|
|
2.5 |
|
|
0.03 |
|
||||||||||||
All other (4) |
|
— |
|
|
(0.7 |
) |
|
18.7 |
|
|
(0.5 |
) |
|
— |
|
|
2.0 |
|
|
17.4 |
|
|
0.23 |
|
|
|
(5.9 |
) |
|
31.6 |
|
|
(1.4 |
) |
|
5.4 |
|
|
27.6 |
|
|
0.40 |
|
||||||||||||
Total Non-GAAP adjustments |
|
(0.1 |
) |
|
(18.5 |
) |
|
92.8 |
|
|
(0.5 |
) |
|
(9.2 |
) |
|
16.5 |
|
|
93.4 |
|
|
1.25 |
|
|
|
(5.9 |
) |
|
131.6 |
|
|
(1.4 |
) |
|
22.4 |
|
|
113.6 |
|
|
1.58 |
|
||||||||||||
Non-GAAP measures |
$ |
3,994.8 |
|
$ |
582.1 |
|
$ |
256.3 |
|
$ |
(20.4 |
) |
$ |
118.4 |
|
$ |
61.4 |
|
$ |
96.5 |
|
$ |
1.29 |
|
|
$ |
591.6 |
|
$ |
239.7 |
|
$ |
(15.5 |
) |
$ |
32.4 |
|
$ |
87.2 |
|
$ |
1.21 |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Additional non-GAAP information: |
|
|
|
|
2021 |
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Gross margin (1) |
|
|
|
|
|
19.5 |
% |
|
20.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Adjusted SG&A as a % of total net sales (1) |
|
|
|
|
|
11.7 |
% |
|
12.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Adjusted operating margin |
|
|
|
|
|
5.2 |
% |
|
5.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Adjusted effective tax rate |
|
|
|
|
|
38.8 |
% |
|
27.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Exclusive of depreciation and amortization. |
|
(2) |
Restructuring, impairment and other-net: charges incurred in the year ending |
|
(3) |
Merger-related expenses: includes |
|
(4) |
All other: Primarily included expenses related to the ongoing |
|
|
||||||||||||||
Segment GAAP to Non-GAAP Income (Loss) from Operations and Non-GAAP Adjusted EBITDA and Margin Reconciliation |
|
||||||||||||||
For the Three Months Ended |
|
||||||||||||||
(UNAUDITED) |
|
||||||||||||||
(in millions) |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Business Services |
|
Marketing Solutions |
|
Corporate |
|
Consolidated |
|
|||||||
For the Three Months Ended |
|
||||||||||||||
Net sales |
$ |
1,074.2 |
|
$ |
303.0 |
|
$ |
— |
|
$ |
1,377.2 |
|
|||
Income (loss) from operations |
|
99.2 |
|
|
21.6 |
|
|
(83.7 |
) |
|
37.1 |
|
|||
Operating margin % |
|
9.2 |
% |
|
7.1 |
% |
nm |
|
|
2.7 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Restructuring, impairment and other charges-net |
|
0.1 |
|
|
1.7 |
|
|
12.0 |
|
|
13.8 |
|
|||
Merger-related expenses |
|
— |
|
|
— |
|
|
40.8 |
|
|
40.8 |
|
|||
Other |
|
0.5 |
|
|
0.5 |
|
|
3.7 |
|
|
4.7 |
|
|||
Total Non-GAAP adjustments |
|
0.6 |
|
|
2.2 |
|
|
56.5 |
|
|
59.3 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Non-GAAP income (loss) from operations |
$ |
99.8 |
|
$ |
23.8 |
|
$ |
(27.2 |
) |
$ |
96.4 |
|
|||
Non-GAAP operating margin % |
|
9.3 |
% |
|
7.9 |
% |
nm |
|
|
7.0 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
21.8 |
|
|
7.4 |
|
|
2.3 |
|
|
31.5 |
|
|||
Investment and other income-net (1) |
|
1.3 |
|
|
- |
|
|
4.0 |
|
|
5.3 |
|
|||
Non-GAAP Adjusted EBITDA |
$ |
122.9 |
|
$ |
31.2 |
|
$ |
(20.9 |
) |
$ |
133.2 |
|
|||
Non-GAAP Adjusted EBITDA margin % |
|
11.4 |
% |
|
10.3 |
% |
nm |
|
|
9.7 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
For the Three Months Ended |
|
||||||||||||||
Net sales |
$ |
1,059.8 |
|
$ |
288.8 |
|
$ |
- |
|
$ |
1,348.6 |
|
|||
Income (loss) from operations |
|
104.0 |
|
|
22.9 |
|
|
(48.8 |
) |
|
78.1 |
|
|||
Operating margin % |
|
9.8 |
% |
|
7.9 |
% |
nm |
|
|
5.8 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Restructuring, impairment and other charges-net |
|
(0.9 |
) |
|
2.4 |
|
|
4.7 |
|
|
6.2 |
|
|||
Other |
|
— |
|
|
— |
|
|
10.2 |
|
|
10.2 |
|
|||
Total Non-GAAP adjustments |
|
(0.9 |
) |
|
2.4 |
|
|
14.9 |
|
|
16.4 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Non-GAAP income (loss) from operations |
$ |
103.1 |
|
$ |
25.3 |
|
$ |
(33.9 |
) |
$ |
94.5 |
|
|||
Non-GAAP operating margin % |
|
9.7 |
% |
|
8.8 |
% |
nm |
|
|
7.0 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
23.4 |
|
|
9.6 |
|
|
0.4 |
|
|
33.4 |
|
|||
Investment and other income-net (1) |
|
0.9 |
|
|
— |
|
|
3.8 |
|
|
4.7 |
|
|||
Non-GAAP Adjusted EBITDA |
$ |
127.4 |
|
$ |
34.9 |
|
$ |
(29.7 |
) |
$ |
132.6 |
|
|||
Non-GAAP Adjusted EBITDA margin % |
|
12.0 |
% |
|
12.1 |
% |
nm |
|
|
9.8 |
% |
(1) |
Represents amounts in investment and other income-net that are not non-GAAP adjustments, and primarily includes pension and postretirement benefits interest cost, expected return on plan assets and net amortization. |
|
|
||||||||||||||
Segment GAAP to Non-GAAP Income (Loss) from Operations and Non-GAAP Adjusted EBITDA and Margin Reconciliation |
|
||||||||||||||
For the Twelve Months Ended |
|
||||||||||||||
(UNAUDITED) |
|
||||||||||||||
(in millions) |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Business Services |
|
Marketing Solutions |
|
Corporate |
|
Consolidated |
|
|||||||
For the Twelve Months Ended |
|
||||||||||||||
Net sales |
$ |
3,909.5 |
|
$ |
1,054.2 |
|
$ |
— |
|
$ |
4,963.7 |
|
|||
Income (loss) from operations |
|
292.4 |
|
|
61.5 |
|
|
(190.4 |
) |
|
163.5 |
|
|||
Operating margin % |
|
7.5 |
% |
|
5.8 |
% |
nm |
|
|
3.3 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Restructuring, impairment and other charges-net |
|
7.0 |
|
|
7.5 |
|
|
18.8 |
|
|
33.3 |
|
|||
Merger-related expenses |
|
— |
|
|
— |
|
|
40.8 |
|
|
40.8 |
|
|||
Other |
|
0.5 |
|
|
0.5 |
|
|
17.7 |
|
|
18.7 |
|
|||
Total Non-GAAP adjustments |
|
7.5 |
|
|
8.0 |
|
|
77.3 |
|
|
92.8 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Non-GAAP income (loss) from operations |
$ |
299.9 |
|
$ |
69.5 |
|
$ |
(113.1 |
) |
$ |
256.3 |
|
|||
Non-GAAP operating margin % |
|
7.7 |
% |
|
6.6 |
% |
nm |
|
|
5.2 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
89.2 |
|
|
31.3 |
|
|
10.0 |
|
|
130.5 |
|
|||
Investment and other income-net (1) |
|
4.6 |
|
|
— |
|
|
15.8 |
|
|
20.4 |
|
|||
Non-GAAP Adjusted EBITDA |
$ |
393.7 |
|
$ |
100.8 |
|
$ |
(87.3 |
) |
$ |
407.2 |
|
|||
Non-GAAP Adjusted EBITDA margin % |
|
10.1 |
% |
|
9.6 |
% |
nm |
|
|
8.2 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
For the Twelve Months Ended |
|
||||||||||||||
Net sales |
$ |
3,685.2 |
|
$ |
1,081.1 |
|
$ |
— |
|
$ |
4,766.3 |
|
|||
Income (loss) from operations |
|
227.9 |
|
|
56.3 |
|
|
(176.1 |
) |
|
108.1 |
|
|||
Operating margin % |
|
6.2 |
% |
|
5.2 |
% |
nm |
|
|
2.3 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Restructuring, impairment and other-net |
|
21.4 |
|
|
9.9 |
|
|
68.7 |
|
|
100.0 |
|
|||
Other |
|
0.2 |
|
|
0.1 |
|
|
31.3 |
|
|
31.6 |
|
|||
Total Non-GAAP adjustments |
|
21.6 |
|
|
10.0 |
|
|
100.0 |
|
|
131.6 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Non-GAAP income (loss) from operations |
$ |
249.5 |
|
$ |
66.3 |
|
$ |
(76.1 |
) |
$ |
239.7 |
|
|||
Non-GAAP operating margin % |
|
6.8 |
% |
|
6.1 |
% |
nm |
|
|
5.0 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
95.1 |
|
|
47.2 |
|
|
3.4 |
|
|
145.7 |
|
|||
Investment and other income-net (1) |
|
3.3 |
|
|
— |
|
|
12.2 |
|
|
15.5 |
|
|||
Non-GAAP Adjusted EBITDA |
$ |
347.9 |
|
$ |
113.5 |
|
$ |
(60.5 |
) |
$ |
400.9 |
|
|||
Non-GAAP Adjusted EBITDA margin % |
|
9.4 |
% |
|
10.5 |
% |
nm |
|
|
8.4 |
% |
(1) |
Represents amounts in investment and other income-net that are not non-GAAP adjustments, and primarily includes pension and postretirement benefits interest cost, expected return on plan assets and net amortization. |
|
|
||||||||||
Reconciliation of Reported to Organic |
|
||||||||||
For the Three and Twelve Months Ended |
|
||||||||||
(UNAUDITED) |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|||||||||
|
Business Services |
|
|
Marketing Solutions |
|
|
Consolidated |
|
|||
Reported net sales change |
|
1.4 |
% |
|
|
4.9 |
% |
|
|
2.1 |
% |
Less: |
|
|
|
|
|
|
|
|
|
|
|
Year-over-year impact of changes in foreign currency rates |
|
0.3 |
% |
|
|
--- |
% |
|
|
0.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net organic sales change |
|
1.1 |
% |
|
|
4.9 |
% |
|
|
1.9 |
% |
|
For the Twelve Months Ended |
|
|||||||||
|
Business Services |
|
|
Marketing Solutions |
|
|
Consolidated |
|
|||
Reported net sales change |
|
6.1 |
% |
|
|
(2.5 |
%) |
|
|
4.1 |
% |
Less: |
|
|
|
|
|
|
|
|
|
|
|
Year-over-year impact of changes in foreign currency rates |
|
1.4 |
% |
|
|
--- |
% |
|
|
1.1 |
% |
Year-over-year impact of dispositions (1) |
|
(0.2 |
%) |
|
|
--- |
% |
|
|
(0.2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
Net organic sales change |
|
4.9 |
% |
|
|
(2.5 |
%) |
|
|
3.2 |
% |
(1) Adjusted for net sales of RRD Chile, disposed of in the first quarter of 2020. |
|
|
||||||
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA |
|
||||||
For the Three and Twelve Months Ended |
|
||||||
(UNAUDITED) |
|
||||||
(in millions) |
|
||||||
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|||||
|
2021 |
|
|
2020 |
|
||
GAAP net (loss) income from continuing operations attributable to RRD common stockholders |
$ |
(13.9 |
) |
|
$ |
33.2 |
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
Income attributable to noncontrolling interests |
|
0.5 |
|
|
|
0.2 |
|
Income tax expense |
|
25.2 |
|
|
|
13.0 |
|
Interest expense - net |
|
29.2 |
|
|
|
32.4 |
|
Depreciation and amortization |
|
31.5 |
|
|
|
33.4 |
|
Restructuring, impairment and other charges-net |
|
13.8 |
|
|
|
6.2 |
|
Loss on debt extinguishment |
|
0.9 |
|
|
|
2.6 |
|
Merger-related expenses |
|
40.8 |
|
|
|
— |
|
Other |
|
5.2 |
|
|
|
11.6 |
|
Total Non-GAAP adjustments |
|
147.1 |
|
|
|
99.4 |
|
Non-GAAP adjusted EBITDA |
$ |
133.2 |
|
|
$ |
132.6 |
|
|
|
|
|
|
|
|
|
Net sales |
$ |
1,377.2 |
|
|
$ |
1,348.6 |
|
Non-GAAP adjusted EBITDA margin % |
|
9.7 |
% |
|
|
9.8 |
% |
|
For the Twelve Months Ended |
|
|||||
|
2021 |
|
|
2020 |
|
||
GAAP net income (loss) from continuing operations attributable to RRD common stockholders |
$ |
3.1 |
|
|
$ |
(26.4 |
) |
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
Income attributable to noncontrolling interests |
|
0.7 |
|
|
|
0.5 |
|
Income tax expense |
|
44.9 |
|
|
|
10.0 |
|
Interest expense - net |
|
127.6 |
|
|
|
135.1 |
|
Depreciation and amortization |
|
130.5 |
|
|
|
145.7 |
|
Restructuring, impairment and other charges-net |
|
33.3 |
|
|
|
100.0 |
|
Loss on debt extinguishment |
|
7.1 |
|
|
|
3.0 |
|
Merger-related expenses |
|
40.8 |
|
|
|
— |
|
Other |
|
19.2 |
|
|
|
33.0 |
|
Total Non-GAAP adjustments |
|
404.1 |
|
|
|
427.3 |
|
Non-GAAP adjusted EBITDA |
$ |
407.2 |
|
|
$ |
400.9 |
|
|
|
|
|
|
|
|
|
Net sales |
$ |
4,963.7 |
|
|
$ |
4,766.3 |
|
Non-GAAP adjusted EBITDA margin % |
|
8.2 |
% |
|
|
8.4 |
% |
|
|
||||||
Debt Leverage Ratios |
|
||||||
As of |
|
||||||
(UNAUDITED) |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|||||
|
2021 |
|
|
2020 |
|
||
Gross Leverage Ratio |
|
|
|
|
|
|
|
Total Debt |
|
1,466.3 |
|
|
|
1,503.1 |
|
|
|
|
|
|
|
|
|
Trailing 12 months adjusted EBITDA |
|
407.2 |
|
|
|
400.9 |
|
on a continuing basis |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Leverage Ratio |
3.6x |
|
|
3.7x |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Leverage Ratio |
|
|
|
|
|
|
|
Total Debt |
|
1,466.3 |
|
|
|
1,503.1 |
|
Less Cash and cash equivalents |
|
280.2 |
|
|
|
288.8 |
|
Net Debt |
|
1,186.1 |
|
|
|
1,214.3 |
|
|
|
|
|
|
|
|
|
Trailing 12 months adjusted EBITDA |
|
407.2 |
|
|
|
400.9 |
|
on a continuing basis |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Leverage Ratio |
2.9x |
|
|
3.0x |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220218005046/en/
Telephone: 630-322-7111
E-mail: investor.info@rrd.com
Source:
FAQ
What were the financial results for RRD in 2021?
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