Donnelley Financial Solutions(US:DFIN)2023-08-01 16:00Financial Performance - Total net sales for Q2 2023 were $242.1 million, a decrease of 9.8% compared to $266.2 million in Q2 2022[18]. - Net earnings for Q2 2023 were $37.7 million, down 18.3% from $46.0 million in Q2 2022[20]. - The company reported a basic net earnings per share of $1.28 for Q2 2023, compared to $1.46 in Q2 2022, reflecting a decline of 12.3%[18]. - The company reported comprehensive income of $38.8 million for Q2 2023, compared to $46.2 million in Q2 2022, reflecting a decline of 16.0%[20]. - Net earnings for the six months ended June 30, 2023, were $53.5 million, a decrease of 26.5% compared to $72.4 million in 2022[24]. - For the six months ended June 30, 2023, total net sales were $440.7 million, compared to $477.2 million for the same period in 2022, representing a decrease of about 7.6%[46]. - The company reported a total depreciation and amortization expense of $26.8 million for the six months ended June 30, 2023, consistent with the $21.9 million reported for the same period in 2022[86]. - The corporate segment reported a loss of $32.9 million for the six months ended June 30, 2023, compared to a loss of $29.5 million in the same period of 2022[86]. Assets and Liabilities - Total current assets increased to $296.0 million as of June 30, 2023, up from $228.4 million at the end of 2022, representing a growth of 29.6%[22]. - Long-term debt rose to $219.8 million as of June 30, 2023, compared to $169.2 million at the end of 2022, indicating a 30% increase[22]. - The company’s total assets reached $902.2 million as of June 30, 2023, up from $828.3 million at the end of 2022, marking a growth of 8.9%[22]. - Cash and cash equivalents at the end of the period were $19.4 million, an increase from $17.8 million at the end of June 2022[24]. - The balance of treasury stock increased to $(242.3) million as of June 30, 2023, from $(221.8) million at the end of 2022[29]. - The current expected credit loss (CECL) reserve balance was $17.8 million, an increase from $15.9 million at the end of 2022, with provisions charged to expense amounting to $7.7 million for the first half of 2023[36]. Cash Flow and Expenditures - Net cash used in operating activities was $(31.3) million, compared to $(6.4) million in the same period of 2022, indicating a significant increase in cash outflow[24]. - Capital expenditures for the six months ended June 30, 2023, were $(23.8) million, slightly down from $(24.8) million in 2022[24]. - The company reported a net cash provided by financing activities of $30.0 million, a turnaround from $(7.2) million in the prior year[24]. - The company repurchased 76,555 shares for $3.2 million at an average price of $41.50 per share during the six months ended June 30, 2023, with a remaining authorized amount of $121.1 million[76]. Segment Performance - The Company operates through four segments: Capital Markets – Software Solutions, Capital Markets – Compliance and Communications Management, Investment Companies – Software Solutions, and Investment Companies – Compliance and Communications Management[80]. - Capital Markets – Software Solutions segment provides various software solutions, including Venue and ActiveDisclosure, to assist clients with compliance processes[81]. - Capital Markets - Compliance and Communications Management segment generated $122.9 million in sales for Q2 2023, down from $150.0 million in Q2 2022, representing a decline of 18.1%[86]. - The Investment Companies - Software Solutions segment reported net sales of $28.0 million for Q2 2023, an increase from $25.3 million in Q2 2022, representing a growth of about 11%[86]. - The Capital Markets - Compliance and Communications Management segment reported $217.0 million in sales for the six months ended June 30, 2023, down from $253.6 million in 2022, a decline of 14.5%[86]. Expenses and Costs - The cost of sales for tech-enabled services decreased to $37.0 million in Q2 2023 from $40.2 million in Q2 2022, a reduction of 8.0%[18]. - Selling, general and administrative expenses were $76.2 million in Q2 2023, slightly down from $77.4 million in Q2 2022, a decrease of 1.5%[18]. - The company recorded restructuring charges totaling $(2.2) million for the three months ended June 30, 2023, compared to $0.2 million in 2022, indicating a shift towards cost reduction measures[60]. - Share-based compensation expense increased to $11.0 million in 2023 from $9.5 million in 2022, reflecting a rise of 15.8%[24]. Market Outlook and Strategy - The company anticipates continued challenges in the market due to economic volatility and competitive pressures, impacting future performance[13]. - The management highlighted ongoing investments in new technologies and product development to enhance client offerings and market position[13]. - The company continues to invest in technology and software solutions to enhance compliance and communication services for capital markets and investment companies[81][83].