Capital Markets

Donnelley Printing a New Balance Sheet

Printing and marketing company hires Lazard and takes steps to address "significant' debt maturities, CFO Steven Blondy says in an SEC filing.
Stephen TaubMarch 12, 2009

R.H. Donnelley said that it had hired Lazard to help it evaluate its capital structure, including balance sheet restructuring alternatives.

Steven M. Blondy, executive vice president and CFO, said in a regulatory filing the printing and marketing company has “significant” debt maturities beginning in 2010 that it is working to address. “Though we intended to refinance this debt prior to maturity, it may no longer be possible to do so, given the current state of the capital markets,” Blondy warned. The goal is to establish a more sustainable capital structure, Blondy added.

He said that the company continues to generate “robust EBITDA” and has “significant liquidity” to meet all its financial and business obligations.

Even so, Blondy said that Donnelley plans to initiate discussions with its banks and bondholders about amending, refinancing, or restructuring its debt obligations.  “Whichever path we choose to strengthen our balance sheet, R.H. Donnelley will continue to provide outstanding service and support to our customers, while also remaining committed to our employees and business partners,” he stressed. 

Donnelley borrowed $361 million from the revolving credit facilities of three of its operating subsidiaries on February 17.  The company said it borrowed the cash in order to increase liquidity and financial flexibility, citing the continuing uncertainty in the global credit markets.

As of Feb. 28, the company said it had more than $500 million of cash and cash equivalents on hand.

Donnelley also reported that fourth-quarter net revenue declined 7 percent from the comparable period a year ago. Adjusted EBITDA was $360 million, an increase of $8 million or 2 percent compared to fourth quarter 2007.  However, adjusted free cash flow was $151 million, down more than 27 percent from 208 million in the prior year period.