LSC Communications Reports Fourth-Quarter and Full-Year 2016 Results and Issues Full-Year 2017 Guidance

LSC Communications, Inc. (NYSE: LKSD) today reported financial results for the fourth quarter of 2016 and guidance for the full year of 2017.

4Q 2016 Highlights:
• Net sales of $919 million compared to $1.0 billion in the fourth quarter of 2015
• GAAP net income of $9 million, or $0.26 per diluted share
• Non-GAAP net income of $15 million, or $0.48 per diluted share
• Non-GAAP adjusted EBITDA of $80 million, or 8.7% of net sales, compared to $111 million, or 11.1% of net sales, in the fourth quarter of 2015
• Net cash provided by operating activities of $95 million
• Non-GAAP free cash flow of $82 million

Full Year 2016 Highlights:
• Net sales of $3.65 billion compared to $3.74 billion for full year 2015
• GAAP net income of $106 million, or $3.23 per diluted share
• Non-GAAP net income of $121 million, or $3.69 per diluted share
• Non-GAAP adjusted EBITDA of $370 million, or 10.1% of net sales, compared to $398 million, or 10.6% of net sales for full year 2015

• Company issues full-year 2017 guidance

“In our first quarter as a standalone company, we are pleased to have delivered results in line with our guidance,” said Thomas J. Quinlan III, LSC Communications’ Chairman and Chief Executive Officer. “In 2017, we expect to continue growing our industry-leading supply chain management services offering and are excited to execute our strategy as we enter our first full year as a standalone public company.”

Fourth quarter net sales were $919 million, down $85 million, or 8.5%, from the fourth quarter of 2015. After adjusting for the December 2, 2016 acquisition of Continuum, changes in foreign exchange rates, and pass-through paper sales, organic sales decreased 6.3% from the fourth quarter of 2015. The decrease in organic net sales was due to lower volume and price pressures in the Print segment.

Fourth quarter 2016 net income was $9 million, or $0.26 per diluted share, compared to net income of $38 million, or $1.17 per diluted share, in the fourth quarter of 2015. The fourth quarter of 2016 includes $18 million of interest expense related to debt issued in connection with the October 1 separation from RR Donnelley & Sons Company, while no interest expense was allocated to LSC Communications in the fourth quarter of 2015. Also, fourth-quarter net income included after-tax charges of $6 million and $2 million in 2016 and 2015, respectively, both of which are excluded from the presentation of non-GAAP net income. Additional details regarding the amount and nature of these adjustments and other items are included in the attached schedules.
more detail at:  http://investor.lsccom.com/news-releases/2017/02-23-2017-113032769

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