Donnelley Financial Solutions(DFIN) - 2024 Q4 - Annual Results

Financial Performance - Fourth-quarter software solutions net sales reached $81.6 million, an increase of 10.7%, or 11.6% on an organic basis, accounting for 52.2% of total fourth-quarter net sales [4] - Full-year software solutions net sales totaled $329.7 million, up 12.6%, or 13.8% on an organic basis, representing 42.2% of total full-year net sales [4] - Fourth-quarter net earnings were $6.3 million, or $0.21 per diluted share, compared to $10.6 million, or $0.35 per diluted share, in Q4 2023 [6] - Full-year net earnings increased to $92.4 million, or $3.06 per diluted share, from $82.2 million, or $2.69 per diluted share, in 2023 [4] - Total net sales for the three months ended December 31, 2024, were $156.3 million, a decrease of 11.5% compared to $176.5 million in the same period of 2023 [23] - For the twelve months ended December 31, 2024, reported net sales were $781.9 million, down 1.9% from $797.2 million in 2023 [45] Cash Flow and Liquidity - Fourth-quarter Operating Cash Flow was $56.4 million, while Free Cash Flow was $41.3 million [4] - Full-year Operating Cash Flow improved to $171.1 million, and Free Cash Flow increased to $105.2 million, up $47.1 million and $43.0 million, respectively, from 2023 [4] - Cash and cash equivalents increased significantly to $57.3 million as of December 31, 2024, from $23.1 million in 2023, marking a growth of 147.2% [21] - Total liquidity as of December 31, 2024, was $356.3 million, an increase from $322.1 million in 2023 [49] Profitability Metrics - Fourth-quarter Adjusted EBITDA was $31.7 million, with an Adjusted EBITDA margin of 20.3%, a decrease of approximately 310 basis points from Q4 2023 [7] - Full-year Adjusted EBITDA reached $217.3 million, up $9.9 million, or 4.8%, from 2023, with an Adjusted EBITDA margin of 27.8%, an increase of approximately 180 basis points [4] - The adjusted EBITDA margin for the twelve months ended December 31, 2024, was 27.8%, compared to 26.0% for the same period in 2023 [41] - The company reported a gross margin of 50.7% for the three months ended December 31, 2024, compared to 50.1% in the same period of 2023 [24] Shareholder Returns - The company repurchased 281,753 shares for $17.4 million at an average price of $61.67 per share during Q4 2024 [4] Assets and Liabilities - Total assets rose to $841.6 million as of December 31, 2024, compared to $806.9 million as of December 31, 2023, reflecting a growth of 4.3% [21] - The company’s total liabilities remained relatively stable at $405.5 million as of December 31, 2024, compared to $404.7 million in 2023 [21] - The company’s retained earnings increased to $528.5 million as of December 31, 2024, compared to $436.1 million in 2023, reflecting a growth of 21.1% [21] Tax and Expenses - The effective tax rate for the twelve months ended December 31, 2024, was 26.1%, up from 19.4% in 2023 [24] - The depreciation and amortization expense for the twelve months ended December 31, 2024, was $60.2 million, compared to $56.7 million in 2023 [40] Segment Performance - Software Solutions segment saw a year-over-year increase in net sales of 12.6% for the twelve months ended December 31, 2024, reaching $329.7 million [45] - Tech-enabled Services segment experienced a decline of 4.8% in net sales for the twelve months ended December 31, 2024, totaling $320.8 million [45] - Print and Distribution segment reported a significant decrease of 21.6% in net sales for the twelve months ended December 31, 2024, amounting to $131.4 million [45]