Donnelley Financial Solutions Inc
For the period ended Jun 30, 2024. Filed Jul 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 31, 2024
DFIN$66.98-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-01.
0000950170-24-051247
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0000950170-24-088551
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 112 previous paragraphs and 140 current paragraphs.
57 unchanged; 43 reworded; 35 added; 10 removed; 2 previous and 5 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
Second Quarter Overview
Current report
Income from operations for the three months ended June 30, 2024 increased by $8.9 million, or 16.0%, to $64.5 million from $55.6 million for the three months ended June 30, 2023, primarily due to higher software solutions net sales, a favorable sales mix, cost control initiatives and lower healthcare expense, partially offset by lower compliance net sales, higher restructuring, impairment and other charges, net and higher bad debt expense.
Current report
Year-to-Date Overview
Current report
Net sales for the six months ended June 30, 2024 increased by $5.4 million, or 1.2%, to $446.1 million from $440.7 million for the six months ended June 30, 2023, including a $2.1 million, or 0.5%, decrease due to the disposition of the eBrevia business and a $0.1 million increase due to changes in foreign currency exchange rates. Net sales increased primarily due to higher Venue volumes, software price increases and higher capital markets and investment companies transactional volumes, partially offset by lower capital markets and investment companies compliance volumes.
Current report
Income from operations for the six months ended June 30, 2024 increased by $38.7 million, or 55.0%, to $109.1 million from $70.4 million for the six months ended June 30, 2023, primarily due to higher software solutions net sales, a favorable sales mix, cost control initiatives, a net gain on the sale of land and lower restructuring, impairment and other charges, net, partially offset by lower compliance net sales, higher bad debt expense, higher selling expense as a result of the increase in net sales, higher share-based compensation expense and higher depreciation and amortization expense.
Current report
Results of Operations for the Three and Six Months Ended June 30, 2024 as Compared to the Three and Six Months Ended June 30, 2023
Current report
Net sales of tech-enabled services of $102.2 million for the three months ended June 30, 2024 decreased $2.3 million, or 2.2%, as compared to the three months ended June 30, 2023. Net sales of tech-enabled services decreased primarily due to lower capital markets compliance volumes.
Current report
SG&A expenses of $76.1 million for the three months ended June 30, 2024 decreased $0.1 million, or 0.1%, as compared to the three months ended June 30, 2023. SG&A expenses decreased primarily due to lower healthcare expense, lower consulting expense and cost control initiatives, partially offset by higher bad debt expense and higher selling expense as a result of the increase in software solutions net sales. As a percentage of net sales, SG&A expenses decreased to 31.4% for the three months ended June 30, 2024 from 31.5% for the three months ended June 30, 2023, primarily due to lower healthcare expense, lower consulting expense and cost control initiatives, partially offset by higher bad debt expense and higher selling expense.
Current report
Restructuring, impairment and other charges, net of $1.3 million for the three months ended June 30, 2024 increased $3.5 million, as compared to the three months ended June 30, 2023. For the three months ended June 30, 2024, these charges included $1.2 million of employee termination costs for approximately 20 employees. The three months ended June 30, 2023, which was a credit of $2.2 million, included a reversal in estimated severance for certain previously accrued employee termination costs as a result of voluntary resignations and differences in estimated and actual severance costs.
Current report
Net sales of software solutions of $165.9 million for the six months ended June 30, 2024 increased $20.1 million, or 13.8%, as compared to the six months ended June 30, 2023. Net sales of software solutions increased primarily due to higher Venue volumes and price increases, partially offset by the disposition of the eBrevia business, which was sold in the fourth quarter of 2023, and lower ArcRegulatory volumes.
Current report
Net sales of print and distribution of $95.1 million for the six months ended June 30, 2024 decreased $16.9 million, or 15.1%, as compared to the six months ended June 30, 2023. Net sales of print and distribution decreased primarily due to lower capital markets and investment companies compliance volumes.
Current report
Depreciation and amortization of $28.2 million for the six months ended June 30, 2024 increased $1.4 million, or 5.2%, as compared to the six months ended June 30, 2023, primarily due to additional software development, partially offset by a decrease in other intangible asset amortization expense.
Current report
Income from operations of $109.1 million for the six months ended June 30, 2024 increased $38.7 million, or 55.0%, as compared to the six months ended June 30, 2023. Income from operations increased primarily due to higher software solutions net sales, a favorable sales mix, cost control initiatives, a net gain on the sale of land and lower restructuring, impairment and other charges, net, partially offset by lower compliance net sales, higher bad debt expense, higher selling expense as a result of the increase in net sales, higher share-based compensation expense and higher depreciation and amortization expense.
Current report
The effective income tax rate was 24.6% for the six months ended June 30, 2024, as compared to 23.0% for the six months ended June 30, 2023. The increase in the effective income tax rate was primarily driven by a decrease in the net favorable impact of discrete adjustments due to higher pre-tax earnings and a higher forecasted annual effective tax rate as a result of permanent adjustments.
Current report
Net sales of $57.3 million for the three months ended June 30, 2024 increased $9.6 million, or 20.1%, as compared to the three months ended June 30, 2023, primarily due to higher Venue volumes and price increases, partially offset by a $0.9 million decrease due to the disposition of the eBrevia business, which was sold in the fourth quarter of 2023.
Current report
Operating margin increased from 9.2% for the three months ended June 30, 2023 to 25.1% for the three months ended June 30, 2024, primarily due to a favorable sales mix, price increases, lower depreciation and amortization expense and cost control initiatives.
Current report
Net sales of $110.3 million for the six months ended June 30, 2024 increased $18.9 million, or 20.7%, as compared to the six months ended June 30, 2023, primarily due to higher Venue volumes and price increases, partially offset by a $2.1 million decrease due to the disposition of the eBrevia business, which was sold in the fourth quarter of 2023.
Current report
Income from operations of $23.9 million for the six months ended June 30, 2024 increased $20.1 million, as compared to the six months ended June 30, 2023, primarily due to higher sales volumes, a favorable sales mix, price increases, cost control initiatives and lower restructuring, impairment, and other charges, net.
Current report
Operating margin increased from 4.2% for the six months ended June 30, 2023 to 21.7% for the six months ended June 30, 2024, primarily due to a favorable sales mix, price increases, cost control initiatives and lower restructuring, impairment, and other charges, net.
Current report
Net sales of $113.8 million for the three months ended June 30, 2024 decreased $9.1 million, or 7.4%, as compared to the three months ended June 30, 2023, primarily due to lower compliance volumes, partially offset by price increases.
Current report
Income from operations of $43.0 million for the three months ended June 30, 2024 decreased $4.0 million, or 8.5%, as compared to the three months ended June 30, 2023, primarily due to lower net sales and higher restructuring, impairment, and other charges, net, partially offset by cost control initiatives, price increases and a favorable sales mix.
Current report
Income from operations of $81.6 million for the six months ended June 30, 2024 increased $18.0 million, or 28.3%, as compared to the six months ended June 30, 2023, primarily due to a net gain on the sale of land, cost control initiatives, a favorable sales mix, price increases and lower restructuring, impairment and other charges, net, partially offset by lower sales volumes and higher bad debt expense.
Current report
Operating margin increased from 29.3% for the six months ended June 30, 2023 to 39.8% for the six months ended June 30, 2024, primarily due to a net gain on the sale of land, which had a favorable impact on operating margin of 4.6%, cost control initiatives, a favorable sales mix, price increases and lower restructuring, impairment and other charges, net, partially offset by higher bad debt expense.
Current report
Net sales of $28.3 million for the three months ended June 30, 2024 increased $0.3 million, or 1.1%, as compared to the three months ended June 30, 2023, primarily due to Arc Suite price increases and higher ArcDigital and ArcReporting volumes, partially offset by lower ArcRegulatory volumes.
Current report
Income from operations of $6.8 million for the three months ended June 30, 2024 increased $0.1 million, or 1.5%, as compared to the three months ended June 30, 2023, primarily due to lower restructuring, impairment, and other charges, net and price increases, partially offset by higher depreciation and amortization expense.
Current report
Operating margin increased from 23.9% for the three months ended June 30, 2023 to 24.0% for the three months ended June 30, 2024, primarily due to lower restructuring, impairment, and other charges, net and price increases, partially offset by higher depreciation and amortization expense.
Current report
Income from operations of $10.6 million for the six months ended June 30, 2024 decreased $1.1 million, or 9.4%, as compared to the six months ended June 30, 2023, primarily due to higher depreciation and amortization expense, partially offset by price increases.
Current report
Net sales of $43.3 million for the three months ended June 30, 2024 decreased $0.2 million, or 0.5%, as compared to the three months ended June 30, 2023, primarily due to lower compliance volumes, partially offset by higher transactional volumes.
Current report
Income from operations of $17.0 million for the three months ended June 30, 2024 increased $0.9 million, or 5.6%, as compared to the three months ended June 30, 2023, primarily due to a favorable sales mix.
Current report
Operating margin increased from 37.0% for the three months ended June 30, 2023 to 39.3% for the three months ended June 30, 2024, primarily due to a favorable sales mix.
Current report
Net sales of $75.3 million for the six months ended June 30, 2024 decreased $2.6 million, or 3.3%, as compared to the six months ended June 30, 2023. Net sales decreased primarily due to lower compliance volumes, partially offset by higher transactional volumes.
Current report
Income from operations of $24.1 million for the six months ended June 30, 2024 decreased $0.1 million, or 0.4%, as compared to the six months ended June 30, 2023, primarily due to lower sales volumes, partially offset by a favorable sales mix.
Current report
Operating margin increased from 31.1% for the six months ended June 30, 2023 to 32.0% for the six months ended June 30, 2024, primarily due to a favorable sales mix.
Current report
Corporate operating expenses of $31.1 million for the six months ended June 30, 2024 decreased $1.8 million, or 5.5%, as compared to the six months ended June 30, 2023, primarily due to lower consulting expense, partially offset by higher share-based compensation expense.
Current report
Share-based compensation expense—Included charges of $7.4 million and $12.5 million for the three and six months ended June 30, 2024, respectively, and $6.7 million and $11.0 million for the three and six months ended June 30, 2023, respectively.
Removed paragraphs (10)
Previous report
First Quarter Overview
Previous report
Income from operations for the three months ended March 31, 2024 increased by $29.8 million, to $44.6 million from $14.8 million for the three months ended March 31, 2023, primarily due to a net pre-tax gain on the sale of land, lower restructuring, impairment and other charges, net, higher sales volumes, a favorable sales mix and cost control initiatives, partially offset by higher depreciation and amortization expense and higher incentive compensation expense.
Previous report
Net sales of $53.0 million for the three months ended March 31, 2024 increased $9.3 million, or 21.3%, as compared to the three months ended March 31, 2023. Net sales increased primarily due to higher Venue volumes and Venue price increases, partially offset by a $1.2 million decrease due to the disposition of the eBrevia business, which was sold in the fourth quarter of 2023.
Previous report
Income from operations of $38.6 million for the three months ended March 31, 2024 increased $22.0 million, as compared to the three months ended March 31, 2023, primarily due to a net pre-tax gain on the sale of land, lower restructuring, impairment and other charges, net, a favorable sales mix and cost control initiatives, partially offset by lower sales volumes, higher incentive compensation expense and higher bad debt expense.
Previous report
Operating margin increased from 17.6% for the three months ended March 31, 2023 to 42.4% for the three months ended March 31, 2024, primarily due to a net pre-tax gain on the sale of land and lower restructuring, impairment and other charges, net, which combined had a positive impact on operating margin of 18.9%, a favorable sales mix and cost control initiatives, partially offset by higher incentive compensation expense and higher bad debt expense.
Previous report
Income from operations of $3.8 million for the three months ended March 31, 2024 decreased $1.2 million, or 24.0%, as compared to the three months ended March 31, 2023, primarily due to higher depreciation and amortization expense and higher product development costs.
Previous report
Net sales of $32.0 million for the three months ended March 31, 2024 decreased $2.4 million, or 7.0%, as compared to the three months ended March 31, 2023. Net sales decreased primarily due to lower compliance volumes.
Previous report
Income from operations of $7.1 million for the three months ended March 31, 2024 decreased $1.0 million, or 12.3%, as compared to the three months ended March 31, 2023, primarily due to lower sales volumes, partially offset by lower selling expense as a result of the decrease in sales volumes.
Previous report
Operating margin decreased from 23.5% for the three months ended March 31, 2023 to 22.2% for the three months ended March 31, 2024, primarily due to lower sales volumes, partially offset by lower selling expense as a result of the decrease in sales volumes.
Previous report
Share-based compensation expense—Included charges of $5.1 million and $4.3 million for the three months ended March 31, 2024 and 2023, respectively. Refer to Note 10, Share-based Compensation, to the Unaudited Condensed Consolidated Financial Statements for additional information.
Reworded paragraphs (43)
Previous wording
On October 26, 2022, the SEC announced that it adopted the Tailored Shareholder Reports (“TSR”) for Mutual Funds and Exchange-Traded Funds rule, which requires certain investment companies to complete a new concise and visually engaging annual and semi-annual TSR that highlights key information that is particularly important for retail investors to assess and monitor their investments. The TSR, which can be printed and mailed or delivered electronically upon request of the investor, replaces SEC Rule 30e-3 “Optional Internet Availability of Investment Company Shareholder Reports” for open-ended funds and ETFs registered under N-1A and will require iXBRL tagging. The rule went into effect on January 24, 2023 and compliance is required by July 24, 2024. As a result, the Company is expecting an increase in net sales from Arc Suite, tech-enabled services and print beginning in the second half of 2024.
Current wording
On October 26, 2022, the SEC announced that it adopted the Tailored Shareholder Reports (“TSR”) for Mutual Funds and Exchange-Traded Funds rule, which requires certain investment companies to complete a new concise and visually engaging annual and semi-annual TSR that highlights key information that is particularly important for retail investors to assess and monitor their investments. The TSR, which can be printed and mailed or delivered electronically upon request of the investor, replaces SEC Rule 30e-3 “Optional Internet Availability of Investment Company Shareholder Reports” for open-ended funds and ETFs registered under N-1A and will require iXBRL tagging. The rule went into effect on January 24, 2023 and compliance was required by July 24, 2024. As a result, the Company expects an increase in net sales from Arc Suite, tech-enabled services and print beginning in the second half of 2024.
Previous wording
Net sales for the three months ended March 31, 2024 increased by $4.8 million, or 2.4%, to $203.4 million from $198.6 million for the three months ended March 31, 2023, including a $1.2 million, or 0.6%, decrease due to the disposition of the eBrevia business and a $0.3 million, or 0.2%, increase due to changes in foreign currency exchange rates. Net sales increased primarily due to higher capital markets transactional volumes, higher Venue volumes and Venue price increases, partially offset by lower capital markets and investment companies compliance volumes.
Current wording
Net sales for the three months ended June 30, 2024 increased by $0.6 million, or 0.2%, to $242.7 million from $242.1 million for the three months ended June 30, 2023, including a $0.9 million, or 0.4%, decrease due to the disposition of the eBrevia business and a $0.2 million, or 0.1%, decrease due to changes in foreign currency exchange rates. Net sales increased primarily due to higher Venue volumes and Venue price increases, partially offset by lower capital markets and investment companies compliance volumes.
Previous wording
The following table shows the results of operations for the three months ended March 31, 2024 and 2023:
Current wording
The following table shows the results of operations for the three and six months ended June 30, 2024 and 2023:
Previous wording
Net sales of software solutions of $80.3 million for the three months ended March 31, 2024 increased $10.2 million, or 14.6%, as compared to the three months ended March 31, 2023. Net sales of software solutions increased primarily due to higher Venue volumes and Venue price increases, partially offset by the disposition of the eBrevia business, which was sold in the fourth quarter of 2023.
Current wording
Net sales of software solutions of $85.6 million for the three months ended June 30, 2024 increased $9.9 million, or 13.1%, as compared to the three months ended June 30, 2023. Net sales of software solutions increased primarily due to higher Venue volumes and Venue price increases, partially offset by lower ArcRegulatory volumes and the disposition of the eBrevia business, which was sold in the fourth quarter of 2023.
Previous wording
Net sales of print and distribution of $40.2 million for the three months ended March 31, 2024 decreased $9.9 million, or 19.8%, as compared to the three months ended March 31, 2023. Net sales of print and distribution decreased primarily due to lower capital markets and investment companies compliance volumes.
Current wording
Net sales of print and distribution of $54.9 million for the three months ended June 30, 2024 decreased $7.0 million, or 11.3%, as compared to the three months ended June 30, 2023. Net sales of print and distribution decreased primarily due to lower capital markets and investment companies compliance volumes.
Previous wording
Tech-enabled services cost of sales of $30.6 million for the three months ended March 31, 2024 decreased $2.7 million, or 8.1%, as compared to the three months ended March 31, 2023. Tech-enabled services cost of sales decreased primarily due to cost control initiatives and a favorable sales mix, partially offset by higher sales volumes. As a percentage of tech-enabled services net sales, tech-enabled services cost of sales decreased 5.6%, primarily driven by cost control initiatives and a favorable sales mix.
Current wording
Tech-enabled services cost of sales of $33.9 million for the three months ended June 30, 2024 decreased $3.1 million, or 8.4%, as compared to the three months ended June 30, 2023. Tech-enabled services cost of sales decreased primarily due to lower sales volumes, a favorable sales mix and cost control initiatives. As a percentage of tech-enabled services net sales, tech-enabled services cost of sales decreased 2.2%, primarily driven by a favorable sales mix and cost control initiatives.
Previous wording
Software solutions cost of sales of $27.3 million for the three months ended March 31, 2024 decreased $1.1 million, or 3.9%, as compared to the three months ended March 31, 2023. Software solutions cost of sales decreased primarily due to a favorable sales mix and cost control initiatives, partially offset by higher sales volumes. As a percentage of software solutions net sales, software solutions cost of sales decreased 6.5%, primarily driven by a favorable sales mix and cost control initiatives.
Current wording
Software solutions cost of sales of $25.4 million for the three months ended June 30, 2024 decreased $1.5 million, or 5.6%, as compared to the three months ended June 30, 2023. Software solutions cost of sales decreased primarily due to a favorable sales mix and cost control initiatives, partially offset by higher sales volumes. As a percentage of software solutions net sales, software solutions cost of sales decreased 5.8%, primarily driven by a favorable sales mix and cost control initiatives.
Previous wording
Print and distribution cost of sales of $22.2 million for the three months ended March 31, 2024 decreased $6.4 million, or 22.4%, as compared to the three months ended March 31, 2023. Print and distribution cost of sales decreased primarily due to lower sales volumes and cost control initiatives. As a percentage of print and distribution net sales, print and distribution cost of sales decreased 1.9%, primarily driven by cost control initiatives.
Current wording
Print and distribution cost of sales of $27.2 million for the three months ended June 30, 2024 decreased $7.1 million, or 20.7%, as compared to the three months ended June 30, 2023. Print and distribution cost of sales decreased primarily due to lower sales volumes and cost control initiatives. As a percentage of print and distribution net sales, print and distribution cost of sales decreased 5.9%, primarily driven by cost control initiatives.
Previous wording
Depreciation and amortization of $13.9 million for the three months ended March 31, 2024 increased $1.5 million, or 12.1%, as compared to the three months ended March 31, 2023, primarily due to additional software development.
Current wording
Depreciation and amortization of $14.3 million for the three months ended June 30, 2024 decreased $0.1 million, or 0.7%, as compared to the three months ended June 30, 2023, primarily due to a decrease in other intangible asset amortization expense, mostly offset by additional software development.
Previous wording
Income from operations of $44.6 million for the three months ended March 31, 2024 increased $29.8 million, as compared to the three months ended March 31, 2023. Income from operations increased primarily due to a net pre-tax gain on the sale of land, lower restructuring, impairment and other charges, net, higher sales volumes, a favorable sales mix and cost control initiatives, partially offset by higher depreciation and amortization expense and higher incentive compensation expense.
Current wording
Income from operations of $64.5 million for the three months ended June 30, 2024 increased $8.9 million, or 16.0%, as compared to the three months ended June 30, 2023. Income from operations increased primarily due to higher software solutions net sales, a favorable sales mix, cost control initiatives and lower healthcare expense, partially offset by lower compliance net sales, higher restructuring, impairment and other charges, net and higher bad debt expense.
Previous wording
The effective income tax rate was 19.6% for the three months ended March 31, 2024, as compared to 13.2% for the three months ended March 31, 2023. The increase in the effective income tax rate was primarily driven by higher pre-tax earnings for the three months ended March 31, 2024, which reduced the net favorable impact of discrete items.
Current wording
The effective income tax rate was 27.9% for the three months ended June 30, 2024 as compared to 26.5% for the three months ended June 30, 2023. The increase in the effective income tax rate was primarily driven by a higher forecasted annual effective tax rate as a result of permanent adjustments and a decrease in the net favorable impact of discrete adjustments.
Previous wording
Net sales of tech-enabled services of $82.9 million for the three months ended March 31, 2024 increased $4.5 million, or 5.7%, as compared to the three months ended March 31, 2023. Net sales of tech-enabled services increased primarily due to higher capital markets transactional volumes, partially offset by lower capital markets compliance volumes.
Current wording
Net sales of tech-enabled services of $185.1 million for the six months ended June 30, 2024 increased $2.2 million, or 1.2%, as compared to the six months ended June 30, 2023. Net sales of tech-enabled services increased primarily due to higher capital markets and investment companies transactional volumes, partially offset by lower capital markets and investment companies compliance volumes.
Previous wording
SG&A expenses of $72.8 million for the three months ended March 31, 2024 increased $2.3 million, or 3.3%, as compared to the three months ended March 31, 2023. SG&A expenses increased primarily due to higher selling expense as a result of the increase in sales volumes, higher bad debt expense, higher share-based compensation expense, higher incentive compensation expense and higher healthcare expense, partially offset by lower consulting expense and cost control initiatives. As a percentage of net sales, SG&A expenses increased to 35.8% for the three months ended March 31, 2024 from 35.5% for the three months ended March 31, 2023, primarily due to higher selling expense, higher bad debt expense, higher share-based compensation expense, higher incentive compensation expense and higher healthcare expense, partially offset by lower consulting expense and cost control initiatives.
Current wording
SG&A expenses of $148.9 million for the six months ended June 30, 2024 increased $2.2 million, or 1.5%, as compared to the six months ended June 30, 2023. SG&A expenses increased primarily due to higher bad debt expense, higher selling expense as a result of the increase in net sales and higher share-based compensation expense, partially offset by lower consulting expense and cost control initiatives. As a percentage of net sales, SG&A expenses increased to 33.4% for the six months ended June 30, 2024 from 33.3% for the six months ended June 30, 2023, primarily due to higher bad debt expense, higher selling expense and higher share-based compensation expense, partially offset by lower consulting expense and cost control initiatives.
Previous wording
Restructuring, impairment and other charges, net of $1.8 million for the three months ended March 31, 2024 decreased $9.1 million, or 83.5%, as compared to the three months ended March 31, 2023. For the three months ended March 31, 2024, these charges included $1.7 million of employee termination costs for approximately 10 employees. For the three months ended March 31, 2023, these charges included $10.8 million of employee termination costs for approximately 150 employees.
Current wording
Restructuring, impairment and other charges, net of $3.1 million for the six months ended June 30, 2024 decreased $5.6 million, or 64.4%, as compared to the six months ended June 30, 2023. For the six months ended June 30, 2024, these charges included $2.9 million of employee termination costs for approximately 30 employees. For the six months ended June 30, 2023, these charges included $8.5 million of employee termination costs for approximately 150 employees.
Previous wording
Other operating income, net of $9.8 million for the three months ended March 31, 2024 included a net pre-tax gain on the sale of land.
Current wording
Other operating income, net of $9.8 million for the six months ended June 30, 2024 included a net gain of $9.8 million on the sale of land.
Previous wording
Interest expense, net of $3.6 million for the three months ended March 31, 2024 increased $0.1 million, or 2.9%, as compared to the three months ended March 31, 2023. Interest expense, net increased primarily due to a higher variable interest rate on the Company’s outstanding debt facilities, partially offset by lower average Revolving Facility (as defined below) borrowings during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Current wording
Interest expense, net of $7.3 million for the six months ended June 30, 2024 decreased $0.8 million, or 9.9%, as compared to the six months ended June 30, 2023. Interest expense, net decreased primarily due to lower average Revolving Facility (as defined below) borrowings during the six months ended June 30, 2024 compared to the six months ended June 30, 2023, partially offset by a higher variable interest rate on the Company’s outstanding debt facilities.
Previous wording
Investment and other income, net of $0.4 million for the three months ended March 31, 2024 decreased $6.5 million, or 94.2%, as compared to the three months ended March 31, 2023. Investment and other income, net decreased primarily due to a net realized gain of $6.7 million on the sale of an investment in an equity security during the three months ended March 31, 2023.
Current wording
Investment and other income, net of $0.8 million for the six months ended June 30, 2024 decreased $6.4 million, or 88.9%, as compared to the six months ended June 30, 2023. Investment and other income, net decreased primarily due to a net realized gain of $6.9 million from the sales of investments in equity securities during the six months ended June 30, 2023.
Previous wording
The following tables summarize net sales, income (loss) from operations, operating margin and certain items impacting comparability within each of the operating segments for the three months ended March 31, 2024 and 2023:
Current wording
The following tables summarize net sales, income from operations, operating margin and certain items impacting comparability within each of the operating segments for the three and six months ended June 30, 2024 and 2023:
Previous wording
Income from operations of $9.5 million for the three months ended March 31, 2024 increased $10.1 million, as compared to a loss from operations of $0.6 million for the three months ended March 31, 2023, primarily due to higher sales volumes, a favorable sales mix, price increases, lower restructuring, impairment and other charges, net and cost control initiatives.
Current wording
Income from operations of $14.4 million for the three months ended June 30, 2024 increased $10.0 million, as compared to the three months ended June 30, 2023, primarily due to higher sales volumes, a favorable sales mix, price increases, lower depreciation and amortization expense and cost control initiatives.
Previous wording
Operating margin increased from a negative margin of 1.4% for the three months ended March 31, 2023 to 17.9% for the three months ended March 31, 2024, primarily due to a favorable sales mix, price increases, lower restructuring, impairment and other charges, net, which had a positive impact on operating margin of 3.8%, and cost control initiatives.
Current wording
Operating margin decreased from 38.2% for three months ended June 30, 2023 to 37.8% for the three months ended June 30, 2024, respectively, primarily due to higher restructuring, impairment and other charges, net, which had a negative impact on operating margin of 4.2%, partially offset by cost control initiatives, price increases and a favorable sales mix.
Previous wording
Net sales of $91.1 million for the three months ended March 31, 2024 decreased $3.0 million, or 3.2%, as compared to the three months ended March 31, 2023. Net sales decreased primarily due to lower compliance volumes, partially offset by higher transactional volumes and price increases.
Current wording
Net sales of $204.9 million for the six months ended June 30, 2024 decreased $12.1 million, or 5.6%, as compared to the six months ended June 30, 2023. Net sales decreased primarily due to lower compliance volumes, partially offset by higher transactional volumes and price increases.
Previous wording
Net sales of $27.3 million for the three months ended March 31, 2024 increased $0.9 million, or 3.4%, as compared to the three months ended March 31, 2023. Net sales increased primarily due to higher ArcReporting volumes and Arc Suite price increases.
Current wording
Net sales of $55.6 million for the six months ended June 30, 2024 increased $1.2 million, or 2.2%, as compared to the six months ended June 30, 2023. Net sales increased primarily due to Arc Suite price increases and higher ArcReporting volumes, partially offset by lower ArcRegulatory volumes.
Previous wording
Operating margin decreased from 18.9% for the three months ended March 31, 2023 to 13.9% for the three months ended March 31, 2024, primarily due to higher depreciation and amortization expense and higher product development costs.
Current wording
Operating margin decreased from 21.5% for the six months ended June 30, 2023 to 19.1% for the six months ended June 30, 2024, primarily due to higher depreciation and amortization expense, partially offset by price increases.
Previous wording
The following table summarizes unallocated operating expenses and certain items impacting comparability within the activities presented as Corporate for the three months ended March 31, 2024 and 2023:
Current wording
The following table summarizes unallocated operating expenses and certain items impacting comparability within the activities presented as Corporate for the three and six months ended June 30, 2024 and 2023:
Previous wording
Corporate operating expenses of $14.4 million for the three months ended March 31, 2024 increased $0.1 million compared to the three months ended March 31, 2023, primarily due to higher healthcare expense, higher share-based compensation expense and higher restructuring, impairment and other charges, net, mostly offset by lower consulting expense.
Current wording
Corporate operating expenses of $16.7 million for the three months ended June 30, 2024 decreased $1.9 million, or 10.2%, as compared to the three months ended June 30, 2023, primarily due to lower consulting expense and lower healthcare expense, partially offset by higher share-based compensation expense.
Previous wording
The following table reconciles net earnings to Adjusted EBITDA for the three months ended March 31, 2024 and 2023:
Current wording
The following table reconciles net earnings to Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023:
Previous wording
Restructuring, impairment and other charges, net—Included employee termination costs of $1.7 million and $10.8 million for the three months ended March 31, 2024 and 2023, respectively. Refer to Note 5, Restructuring, Impairment and Other Charges, net, to the Unaudited Condensed Consolidated Financial Statements for additional information.
Current wording
Restructuring, impairment and other charges, net—The three and six months ended June 30, 2024 included employee termination costs of $1.2 million and $2.9 million, respectively. The three months ended June 30, 2023 included a net credit for employee termination costs of $2.3 million. The six months ended June 30, 2023 included employee termination costs of $8.5 million. Refer to Note 5, Restructuring, Impairment and Other Charges, net, to the Unaudited Condensed Consolidated Financial Statements for additional information.
Previous wording
Gain on sale of long-lived assets—Included a net pre-tax gain of $9.8 million for the three months ended March 31, 2024 related to the sale of land and a gain of $0.3 million for the three months ended March 31, 2023 related to non-refundable fees on the sale of land. Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies, to the Unaudited Condensed Consolidated Financial Statements for additional information.
Current wording
Gain on sale of long-lived assets—Included a net gain of $9.8 million for the six months ended June 30, 2024 related to the sale of land and a gain of $0.1 million and $0.4 million for the three and six months ended June 30, 2023, respectively, related to non-refundable fees on the sale of land. Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies, to the Unaudited Condensed Consolidated Financial Statements for additional information.
Previous wording
Non-income tax, net—Included income of $0.4 million and $0.2 million for the three months ended March 31, 2024 and 2023, respectively, related to certain estimated non-income tax exposures previously accrued by the Company.
Current wording
Non-income tax, net—Included income of $0.3 million and $0.7 million for the three and six months ended June 30, 2024, respectively, and $0.2 million and $0.4 million for the three and six months ended June 30, 2023, respectively, related to certain estimated non-income tax exposures previously accrued by the Company.
Previous wording
Gain on investments in equity securities—Included a net realized gain of $0.1 million and $6.7 million for the three months ended March 31, 2024 and 2023, respectively, related to the sales of investments in equity securities. Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies, to the Unaudited Condensed Consolidated Financial Statements for additional information.
Current wording
Gain on investments in equity securities—The three and six months ended June 30, 2024 included a gain of $0.3 million and $0.4 million, respectively. The three and six months ended June 30, 2023 included a net realized gain of $0.2 million and $6.9 million, respectively, related to the sales of investments in equity securities. Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies, to the Unaudited Condensed Consolidated Financial Statements for additional information.
Previous wording
Accelerated rent expense—Includes charges of $0.5 million for the three months ended March 31, 2023 related to the acceleration of rent expense associated with abandoned operating leases.
Current wording
Accelerated rent expense—Included charges of $0.1 million and $0.6 million for the three and six months ended June 30, 2023, respectively, related to the acceleration of rent expense associated with abandoned operating leases.
Previous wording
The Company maintains cash pooling structures that enable participating international locations to draw on the pools’ cash resources to meet local liquidity needs. Foreign cash balances may be loaned from certain cash pools to U.S. operating entities on a temporary basis in order to reduce the Company’s short-term borrowing costs or for other purposes. The Company has the ability to repatriate foreign cash, associated with foreign earnings previously subjected to U.S. tax, with minimal additional tax consequences. The Company maintains its assertion of indefinite reinvestment on all foreign earnings and other outside basis differences to indicate that the Company remains indefinitely reinvested in operations outside of the U.S., with the exception of the previously taxed foreign earnings already subject to U.S. tax. The Company repatriated excess cash at its foreign subsidiaries to the U.S. during the three months ended March 31, 2024. The Company did not repatriate excess cash at its foreign subsidiaries to the U.S. during the year ended December 31, 2023. The Company is evaluating whether to make any cash repatriations in the future.
Current wording
The Company maintains cash pooling structures that enable participating international locations to draw on the pools’ cash resources to meet local liquidity needs. Foreign cash balances may be loaned from certain cash pools to U.S. operating entities on a temporary basis in order to reduce the Company’s short-term borrowing costs or for other purposes. The Company has the ability to repatriate foreign cash, associated with foreign earnings previously subjected to U.S. tax, with minimal additional tax consequences. The Company maintains its assertion of indefinite reinvestment on all foreign earnings and other outside basis differences to indicate that the Company remains indefinitely reinvested in operations outside of the U.S., with the exception of the previously taxed foreign earnings already subject to U.S. tax. The Company repatriated excess cash at its foreign subsidiaries to the U.S. during the six months ended June 30, 2024. The Company did not repatriate excess cash at its foreign subsidiaries to the U.S. during the year ended December 31, 2023. The Company is evaluating whether to make any cash repatriations in the future.
Previous wording
The Organization for Economic Co-operation and Development’s (“OECD”) current project, widely known as Anti-Base Erosion and Profit Shifting, seeks to address tax challenges arising in the global economy by introducing a global minimum corporate tax of 15%, referred to as Pillar Two, and several mechanisms to ensure tax is paid (the “GloBE Model Rules”). Policymakers across jurisdictions have begun adopting the GloBE Model Rules to implement a global minimum corporate tax rate of 15%. The OECD continues to release administrative guidance and many countries in which the Company operates have adopted or have proposed legislation to adopt Pillar Two. Many aspects of the minimum tax directive became effective beginning in 2024, with certain additional impacts coming into effect beginning in 2025 and beyond. The Company is monitoring enacted legislation and effective dates in its jurisdictions of operations. The Pillar Two framework did not have a material impact on the Company’s Unaudited Condensed Consolidated Financial Statements for the three months ended March 31, 2024 and the Company does not expect enacted legislation to have a material impact in future periods.
Current wording
The Organization for Economic Co-operation and Development’s (“OECD”) current project, widely known as Anti-Base Erosion and Profit Shifting, seeks to address tax challenges arising in the global economy by introducing a global minimum corporate tax of 15%, referred to as Pillar Two, and several mechanisms to ensure tax is paid (the “GloBE Model Rules”). Policymakers across jurisdictions have begun adopting the GloBE Model Rules to implement a global minimum corporate tax rate of 15%. The OECD continues to release administrative guidance and many countries in which the Company operates have adopted or have proposed legislation to adopt Pillar Two. Many aspects of the minimum tax directive became effective beginning in 2024, with certain additional impacts coming into effect beginning in 2025 and beyond. The Company is monitoring enacted legislation and effective dates in its jurisdictions of operations. The Pillar Two framework did not have a material impact on the Company’s Unaudited Condensed Consolidated Financial Statements for the three and six months ended June 30, 2024 and the Company does not expect enacted legislation to have a material impact in future periods.
Previous wording
Cash and cash equivalents were $43.7 million at March 31, 2024, which included $17.1 million in the U.S. and $26.6 million at international locations.
Current wording
Cash and cash equivalents were $35.0 million at June 30, 2024, which included $9.0 million in the U.S. and $26.0 million at international locations.
Previous wording
The following table describes the Company’s cash flows for the three months ended March 31, 2024 and 2023:
Current wording
The following table describes the Company’s cash flows for the six months ended June 30, 2024 and 2023:
Previous wording
Cash Flows Provided by (Used in) Investing Activities
Current wording
Cash Flows Provided by (Used in) Operating Activities
Previous wording
Net cash used in operating activities was $27.9 million for the three months ended March 31, 2024 as compared to $51.5 million for the three months ended March 31, 2023. The decrease in cash used in operating activities was primarily due to an increase in net earnings and favorable changes to accounts payable, partially offset by an unfavorable change in accounts receivable. Accounts payable increased operating cash flows by $6.4 million for the three months ended March 31, 2024, as compared to $0.6 million for the three months ended March 31, 2023, primarily due to the timing of supplier payments. Accounts receivable decreased operating cash flows by $47.2 million for the three months ended March 31, 2023, as compared to $39.7 million for the three months ended March 31, 2023, due to timing of collections.
Current wording
Net cash provided by operating activities was $28.3 million for the six months ended June 30, 2024 as compared to $31.3 million of net cash used in operating activities for the six months ended June 30, 2023. The change in cash provided by operating activities was primarily due to an increase in net earnings, a favorable change to accrued liabilities and other and a favorable change to accounts receivable. Accrued liabilities and other decreased operating cash flows by $11.3 million for the six months ended June 30, 2024, as compared to $23.2 million for the six months ended June 30, 2023, primarily due to lower costs associated with the Company’s QTC initiative (as described below) and an increase in estimated commission payments as a result of higher 2024 software solutions net sales. Accounts receivable decreased operating cash flows by $75.6 million for the six months ended June 30, 2024, as compared to $86.7 million for the six months ended June 30, 2023, primarily due to the timing of collections.
Previous wording
Cash Flows Used in Operating Activities
Current wording
Cash Flows Used in Investing Activities
Previous wording
Net cash provided by investing activities was $0.2 million for the three months ended March 31, 2024, which primarily consisted of $12.4 million of proceeds from the sale of land, partially offset by $12.3 million of capital expenditures, substantially all related to investments in software development. The Company currently expects capital expenditures to be approximately $65 million to $70 million for the year ending December 31, 2024.
Current wording
Net cash used in investing activities was $19.1 million for the six months ended June 30, 2024, which primarily consisted of $31.7 million of capital expenditures, substantially all related to investments in software development, partially offset by $12.4 million of proceeds from the sale of land. The Company currently expects capital expenditures to be approximately $65 million to $70 million for the year ending December 31, 2024.
Previous wording
Net cash used in investing activities was $1.7 million for the three months ended March 31, 2023, which consisted of $10.6 million of capital expenditures, substantially all related to investments in software development, partially offset by $8.9 million of proceeds from the sale of an investment in an equity security.
Current wording
Net cash used in investing activities was $13.9 million for the six months ended June 30, 2023, which consisted of $23.8 million of capital expenditures, substantially all related to investments in software development, partially offset by $9.9 million of proceeds from the sales of investments in equity securities.
Showing the first 40 of 43 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Interest expense, net of $3.7 million for the three months ended June 30, 2024 decreased $0.9 million, or 19.6%, as compared to the three months ended June 30, 2023. Interest expense, net decreased primarily due to lower average Revolving Facility (as defined below) borrowings during the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Current report — wording carried from elsewhere
Investment and other income, net of $0.4 million for the three months ended June 30, 2024 increased $0.1 million, or 33.3%, as compared to the three months ended June 30, 2023.
Current report — wording carried from elsewhere
Tech-enabled services cost of sales of $64.5 million for the six months ended June 30, 2024 decreased $5.8 million, or 8.3%, as compared to the six months ended June 30, 2023. Tech-enabled services cost of sales decreased primarily due to a favorable sales mix and cost control initiatives. As a percentage of tech-enabled services net sales, tech-enabled services cost of sales decreased 3.6%, primarily driven by a favorable sales mix and cost control initiatives.
Current report — wording carried from elsewhere
Software solutions cost of sales of $52.7 million for the six months ended June 30, 2024 decreased $2.6 million, or 4.7%, as compared to the six months ended June 30, 2023. Software solutions cost of sales decreased primarily due to a favorable sales mix and cost control initiatives, partially offset by higher sales volumes. As a percentage of software solutions net sales, software solutions cost of sales decreased 6.1%, primarily driven by a favorable sales mix and cost control initiatives.
Current report — wording carried from elsewhere
Print and distribution cost of sales of $49.4 million for the six months ended June 30, 2024 decreased $13.5 million, or 21.5%, as compared to the six months ended June 30, 2023. Print and distribution cost of sales decreased primarily due to lower sales volumes and cost control initiatives. As a percentage of print and distribution net sales, print and distribution cost of sales decreased 4.3%, primarily driven by cost control initiatives.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Results of Operations for the Three Months Ended March 31, 2024 as Compared to the Three Months Ended March 31, 2023
Previous report — wording carried elsewhere
Three Months Ended March 31, 2024 compared to the Three Months Ended March 31, 2023