Continues to Advance Strategy as a Marketing and Business Communications Provider
Reports Third Consecutive Quarter of Organic Sales Growth
Completes Sale of Print Logistics Business
Declares Quarterly Cash Dividend
R.R. Donnelley & Sons Company (NYSE: RRD) (“RRD”) today reported financial results for the second quarter of 2018.
• Net sales increased 3.7%, and organic sales grew 2.7% – represents third consecutive quarter of organic growth
• Income from operations includes unfavorable foreign exchange rate impact of nearly $7 million versus 2017 on both a GAAP and non-GAAP basis
• Net cash provided by operating activities of $12.3 million in the quarter increased $48.2 million versus the prior year period
• Print logistics sale completed on July 2, 2018; proceeds of $60.0 million, subject to customary working capital adjustments, were used to reduce credit facility borrowings
• Full year guidance adjusted primarily for the sale of print logistics and expected stronger organic sales performance
• Board of Directors approved a quarterly dividend of $0.03 per common share
“I am pleased with our solid performance and the progress we made during the quarter in executing our strategic growth objectives as a marketing and business communications services company,” said Dan Knotts, RRD’s President and Chief Executive Officer. “We delivered our third consecutive quarter of organic growth, which continues to be driven by our unique ability to help our clients manage the full range of interactions they have with their customers across every critical touch point – online, offline and in-store – with reduced complexity and increased efficiency. Through the powerful combination of our Marketing Solutions and Business Services capabilities, we believe we are well positioned to win new business and execute our long-term growth strategy. Excluding the negative impact of foreign exchange rates, our adjusted income from operations and EBITDA also increased year over year, largely attributable to productivity improvements and our aggressive actions to address inflationary cost headwinds. Our operating cash flow also improved significantly in the quarter in line with our expectations. As we enter our seasonally stronger back half of the year, we remain confident in our ability to execute our strategy, sustain our organic sales growth and deliver our cost reduction plans to achieve our full year guidance.”
Net sales in the quarter were $1.68 billion, up $59.5 million or 3.7% from the second quarter of 2017. On an organic basis, consolidated net sales increased 2.7% primarily driven by higher volume and fuel surcharges in the Business Services segment, partially offset by price pressure. From a products and services perspective, Packaging, Logistics and Direct Mail accounted for most of the increase while Commercial Print was lower due to ongoing secular pressure and lower specialty card sales.
Gross profit in the second quarter of 2018 was $290.6 million or 17.3% of net sales versus $302.0 million or 18.6% of net sales in the prior year quarter. The favorable impact of volume growth and cost reduction initiatives was more than offset by unfavorable changes in foreign exchange rates and modest price pressure.
Selling, general and administrative expenses (“SG&A”) of $208.0 million, or 12.4% of net sales, in the second quarter of 2018 decreased from $216.3 million, or 13.4% of net sales, in the prior year. The improvement was primarily due to cost reduction initiatives, partially offset by higher health care and performance based compensation expenses.
more detail at: https://investor.rrd.com/news-releases/2018/08-01-2018-213112330