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Donnelley will pay down more debt after $49.5 million reduction in Q4
By Devika Patel
Knoxville, Tenn., Feb. 28 – Donnelley Financial Solutions Inc. plans to pay down more debt with the $68 million cash payment that is due on April 1 from former parent company R.R. Donnelley & Sons Co.
The quarter just completed was Donnelley’s first quarter reporting as a standalone company after its spinoff from R.R. Donnelley.
Since the separation it has already managed to pay down nearly $50 million of debt.
“We exited the spin with $336.5 million of debt,” chief financial officer David A. Gardella said on the company’s fourth quarter earnings conference call on Tuesday.
“And we have reduced our outstanding debt by $49.5 million since that time.
“In addition, we have $68 million cash payment due from R.R. Donnelley on April 1, 2017 that will be used for further debt repayment upon its receipt,” Gardella said.
“Our focus continues to be on serving our customers and targeting areas for profitable growth, while at the same time aggressively managing our costs,” chief executive officer, president and director Daniel N. Leib said in a press release.
“This focus will allow us to invest in adjacent offerings and accelerate growth, while migrating toward our targeted gross leverage range of 2.25x to 2.75x.
“In the first three months as a standalone company, [we] reduced our outstanding debt by nearly $50 million,” Leib said in the release.
Donnelley ended the year with $587 million of total debt and $36.2 million of cash.
For the year, the Chicago-based financial communications services company’s free cash flow was $79.8 million, $14 million lower than 2015.
As of Dec. 31, 2016, Donnelley’s gross leverage was 3.6x.
The company exited 2016 with $189.9 million of net available liquidity and had nothing drawn on its $300 million revolving credit facility.
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