LSC Communications has faced significant financial challenges, including a $2.5 billion debt and declining revenue. The company's struggles have been attributed to the shift in the print industry towards digital media.
In 2019, LSC Communications filed for bankruptcy and was subsequently acquired by One Equity Partners. The acquisition aimed to help the company restructure its debt and stabilize its operations.
The print industry's shift towards digital media has been a major contributor to LSC Communications' financial struggles. In 2018, the company reported a 10% decline in revenue due to reduced demand for print products.
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LSC Financial News
LSC Communications reported a net loss of $15.8 million in the second quarter of 2020.
The company's revenue decreased by 15% year-over-year to $1.1 billion in the second quarter of 2020.
LSC Communications' advertising revenue fell by 22% in the second quarter of 2020.
The company's digital revenue grew 12% year-over-year to $234 million in the second quarter of 2020.
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LSC Communications' direct mail revenue declined by 17% in the second quarter of 2020.
The company's print revenue decreased by 14% year-over-year to $844 million in the second quarter of 2020.
LSC Communications' operating expenses decreased by 12% year-over-year to $1.1 billion in the second quarter of 2020.
The company's adjusted EBITDA was $33 million in the second quarter of 2020.
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Industry Acquisitions
Quad/Graphics has made a significant acquisition in the industry by purchasing LSC Communications. The deal is valued at approximately $1.4 billion and is an all-stock transaction. This acquisition marks a "defining moment" in Quad/Graphics' 47-year history.
The combined company will have a highly efficient print platform, which will be a key component of Quad/Graphics' 3.0 transformation. This transformation aims to create value for stakeholders by leveraging a strong print foundation as part of a larger integrated marketing solutions offering.
As a result of the acquisition, Quad/Graphics will expand its board of directors to include two members from LSC Communications' existing board. The transaction is expected to close in mid-2019, subject to approval by Quad and LSC Communications shareholders, regulatory approval, and other customary closing conditions.
The combined company will have annual revenue of approximately $8 billion, making it a significant player in the industry. This acquisition will help Quad/Graphics to serve its clients more efficiently through a broader set of offerings.
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Company Bankruptcy
LSC Communications has filed for Chapter 11 bankruptcy.
The company has been struggling with a significant drop in demand for its products, particularly magazines and catalogs, which experienced an unprecedented drop last year. This was partly due to the shift to online advertising.
LSC Communications has over $972 million in debt and has secured commitments from its lenders for $100 million in debtor-in-possession financing. This will allow the company to continue operating during the bankruptcy process.
The company's financial struggles were exacerbated by the COVID-19 pandemic, which further stifled demand for its products. This caused its liquidity position to substantially worsen.
LSC Communications is closing nine manufacturing facilities, including one in Mattoon, which will result in 796 layoffs by July 1.
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LSC Facility Closures
The LSC facility in Mattoon is set to close by July, affecting over 700 jobs. This is a huge loss for the community.
Longtime employees, some with 40-50 years of experience, will be particularly hard hit as they've dedicated their entire careers to the plant. They don't have anything else to fall back on.
The facility's willingness to give prospective workers a chance, offer flexible schedules, and provide overtime hours is being appreciated by employees like VanScyoc, who's worked part-time there since 2018. He's already started looking for a new job.
VanScyoc describes the core workforce as tight-knit and industrious, and wishes them all the best as they face this challenging time. He can't stress enough how hard they work and how good a group of people they are.
Local government and civic groups are stepping up to help the dislocated workers, which is a positive step. Elizabeth Andåas, a former Mattoon resident, is glad to see this support, but acknowledges it will still be a tremendous loss for the community.
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Community Support
Community Support is alive and well in the area. Local officials are stepping up to help dislocated workers from LSC Communications Mattoon.
They're promoting retraining programs to help workers get back on their feet. These programs will provide valuable skills to increase job prospects.
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A job fair is also being organized to connect workers with potential employers. This will be a great opportunity for workers to meet with local businesses and explore new career paths.
The Charleston school district is also getting a boost from the sales tax revenue. Repair projects throughout the district will begin later this year, improving the learning environment for students.
Frequently Asked Questions
Who is the CEO of LSC Communications?
The CEO of LSC Communications is Thomas Quinlan. He leads the company's executive team, which has received a rating of "F
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