LSC Communications Enters into a Definitive Agreement to Divest Its European Printing Business to Walstead Group
July 19 2018 - 6:30AM
Business Wire
Increases Strategic Focus on North America Operations and
Customer Base; Provides Additional Financial Flexibility
LSC Communications (NYSE: LKSD) announced today that the company
has entered into a definitive agreement to sell LSC’s European
printing business to Walstead Group, one of the leading web offset
commercial printers in Europe. LSC’s European printing business is
headquartered in Poland and includes three web offset manufacturing
facilities, a logistics and warehousing site and one location
dedicated to premedia services. The agreement is subject to
customary completion conditions, adjustments and regulatory
approvals and is expected to close by the end of 2018.
Thomas J. Quinlan III, Chairman and Chief Executive Officer of
LSC Communications, commented, “The monetization of our European
operations is another step in our strategic plan which is focused
on pioneering services and solutions that drive long-term growth
and create the most value for our core client segments, as
evidenced by our recent completion of the acquisition of RR
Donnelley’s Print Logistics business.”
The company expects the transaction will result in debt
reduction of approximately $60 million, using a combination of sale
proceeds and repatriated cash to pay down debt under its revolving
credit facility.
On an annualized basis, the transaction is expected to decrease
LSC Communications’ revenue by approximately $250 million and
annual non-GAAP adjusted EBITDA by approximately $12 million.
LSC will report second-quarter 2018 results and host a
conference call on Thursday, August 2, 2018 where the company will
provide more details.
About LSC Communications
With a rich history of industry experience, innovative solutions
and service reliability, LSC Communications (NYSE: LKSD) is a
global leader in print and digital media solutions. The company’s
traditional and digital print-related services and office products
serve the needs of publishers, merchandisers and retailers around
the world. With advanced technology and a consultative approach,
LSC’s supply chain solutions meet the needs of each business by
getting their content into the right hands as efficiently as
possible.
Use of non-GAAP Information
This news release contains certain non-GAAP measures. The
Company believes that these non-GAAP measures, such as non-GAAP
adjusted EBITDA, non-GAAP adjusted EBITDA margin, non-GAAP net
income/loss and free cash flow, when presented in conjunction with
comparable GAAP measures, provide useful information about the
Company’s operating results and liquidity and enhance the overall
ability to assess the Company’s financial performance. The Company
uses these 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.
Non-GAAP adjusted EBITDA, non-GAAP adjusted EBITDA margin, non-GAAP
net income/loss and free cash flow allow investors to make a more
meaningful comparison between the Company’s core business operating
results over different periods of time. The Company believes that
non-GAAP adjusted EBITDA, non-GAAP adjusted EBITDA margin, non-GAAP
net income/loss and free cash flow, when viewed with the Company’s
results under GAAP and the accompanying reconciliations, provides
useful information about the Company’s business without regard to
potential distortions. By eliminating potential differences in
results of operations between periods caused by factors such as
depreciation and amortization methods, historic cost and age of
assets, financing and capital structures, taxation positions or
regimes, restructuring, impairment and other charges and gain or
loss on certain equity investments and asset sales, the Company
believes that non-GAAP adjusted EBITDA, non-GAAP adjusted EBITDA
margin and non-GAAP net income/loss can provide useful additional
basis for comparing the current performance of the underlying
operations being evaluated. By adjusting for the level of capital
investment in operations, the Company believes that free cash flow
can provide useful additional basis for understanding the Company’s
ability to generate cash after capital investment and provides a
comparison to peers with differing capital intensity.
Use of Forward-Looking Statements
This news release may contain "forward-looking statements"
within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and the U.S. Private Securities
Litigation Reform Act of 1995. Readers are cautioned not to place
undue reliance on these forward-looking statements and any such
forward-looking statements are qualified in their entirety by
reference to the following cautionary statements. All
forward-looking statements speak only as of the date of this news
release and are based on current expectations and involve a number
of assumptions, risks and uncertainties that could cause the actual
results to differ materially from such forward-looking statements,
including risks associated with the ability of LSC Communications
to perform as expected as a separate, independent entity and risks
associated with the volatility and disruption of the capital and
credit markets, and adverse changes in the global economy. Readers
are strongly encouraged to read the full cautionary statements
contained in LSC’s filings with the SEC. LSC disclaims any
obligation to update or revise any forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20180719005204/en/
LSC Communications Investor Relations Contact:Janet Halpin,
Senior Vice President, Treasurer and Investor RelationsTelephone:
773-272-9275E-mail: investor.relations@lsccom.com
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