LSC Communications, Inc. (NYSE: LKSD) today reported financial results for the third quarter of 2018.
3Q 2018 Highlights:
• Net sales of $1,015 million compared to $935 million in the third quarter of 2017, an increase of $80 million, or 8.5%
• GAAP net loss of $4 million, or $0.12 per diluted share compared to a net loss of $3 million, or $0.07 per diluted share in the third quarter of 2017
• Non-GAAP net income of $25 million, or $0.74 per diluted share, compared to non-GAAP net income of $25 million, or $0.73 per diluted share in the third quarter of 2017
• Non-GAAP adjusted EBITDA of $90 million, or 8.9% of net sales, compared to $96 million, or 10.3% of net sales, in the third quarter of 2017
• Company completed the sale of its European printing business
• Company updates full-year guidance
“We continue to have success in winning new customers. During the quarter, however, we faced increasing challenges with a tight labor market and rising material costs that negatively impacted our margins. We do expect increased costs and challenging conditions to continue throughout the fourth quarter, and we are taking aggressive actions to mitigate the impact,” said Thomas J. Quinlan III, LSC Communications’ Chairman, Chief Executive Officer and President. “As separately announced today, we are taking the next major step in our evolution by combining with Quad/Graphics. As a combined company we will be better positioned in a dynamic industry environment to efficiently serve our clients through a broader set of offerings to help meet and manage their needs.”
As discussed below, beginning with the third quarter of 2018, the Company has revised its segment reporting structure. Additional details on the Company’s new segment structure are provided below.
Third quarter net sales were $1,015 million, up $80 million, or 8.5%, from the third quarter of 2017. After adjusting for acquisitions, divestitures, changes in foreign exchange rates, pass-through paper sales, and the adoption of new revenue recognition standards, organic net sales decreased 3.0% from the third quarter of 2017. The decrease in organic net sales was largely due to lower volume and price declines in Magazine, Catalogs & Logistics and lower volume in Book, Office Products and our other segments.
GAAP Net Income
Third quarter 2018 net loss was $4 million, or $0.12 per diluted share, compared to a net loss of $3 million, or $0.07 per diluted share, in the third quarter of 2017. Third quarter 2018 net loss included after-tax charges of $29 million primarily related to the write-off of a deferred tax asset associated with the disposition of our European printing business and third quarter 2017 net loss included after-tax charges of $28 million, primarily related to goodwill impairment charges. Both of these after-tax charges 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/2018/10-31-2018-100713142