Effective September 1, 2016, Trend Offset Printing expands to a fourth printing location at 125 Richwood Rd. in Walton, Kentucky. This strategic expansion will provide additional capacity as well as distribution benefits to Trend clients. By adding a fourth location in the Midwest, Trend has created a comprehensive national distribution footprint that offers customers more effective shipping and mailing solutions. By combining strategic locations in California, Texas, Florida and Kentucky with a unique Distribute-and-Print model, Trend will effectively cover 98% of the largest U.S. cities within a one day drive of each plant, decreasing shipping costs as well as greenhouse gas emissions.
“Our third quarter performance was in-line with our expectations as we continue to help our clients create better connections with their customers through the execution of their multichannel marketing and business communications,” said Dan Knotts, RRD’s President and Chief Executive Officer. “We delivered our fourth consecutive quarter of organic sales growth, made meaningful progress in executing our plans to lower our overall cost structure and delivered improved operating cash flow. We also took an important step to reposition our balance sheet through a successful debt refinancing. As we enter our seasonally strongest quarter, we are well positioned for a solid finish to the year.”
Net sales in the quarter were $1.65 billion, down $85.4 million or 4.9% from the third quarter of 2017, which included a decline of $106.4 million related to the sale of the Print Logistics business. On an organic basis, consolidated net sales increased 1.8% primarily driven by higher volume in the Business Services segment.
Gross profit in the third quarter of 2018 was $315.4 million or 19.1% of net sales versus $323.5 million or 18.6% of net sales in the prior year quarter. The favorable impact of cost reduction initiatives was more than offset by unfavorable mix, modest price pressure and the disposition of the Company’s Print Logistics business. In addition, a favorable impact from changes in foreign exchange rates of approximately $5 million was offset by an inventory reserve benefit recorded in 2017.
Selling, general and administrative expenses (“SG&A”) of $203.8 million, or 12.4% of net sales, in the third quarter of 2018 decreased from $210.9 million, or 12.2% of net sales, in the prior year. The improvement was primarily due to cost reduction initiatives and favorable exchange rate changes of $8 million, partially offset by higher health care and variable compensation expenses and a favorable legal settlement recorded in 2017.
Income from operations was $60.9 million in the third quarter compared to $31.8 million in the third quarter of 2017. The third quarter of 2018 included pre-tax restructuring and other charges of $11.0 million and a pre-tax gain of $4.5 million related to the sale of the Print Logistics business. The prior year period included pre-tax restructuring and other charges of $33.8 million, including a $21.3 million impairment of goodwill. Non-GAAP income from operations of $67.4 million, or 4.1% of net sales, increased $1.8 million from $65.6 million, or 3.8% of net sales, reported in the prior year period.
Net earnings attributable to common stockholders of $34.3 million in the third quarter compared to net loss of $8.0 million in the third quarter of 2017. The third quarter of 2018 included favorable income tax adjustments of $19.6 million to the provisional amounts recorded at December 31, 2017 for the impact of the Tax Cuts and Jobs Act of 2017. The third quarter of 2017 included a loss on debt extinguishments primarily related to the amendment of the Company’s credit agreement and a net gain on investments resulting from a debt-for-equity exchange. Non-GAAP net earnings attributable to common stockholders was $17.7 million, a decrease of $3.4 million compared to $21.1 million in the third quarter of 2017, driven by higher income from operations and lower interest expense, which were more than offset by higher taxes.
more detail at: https://investor.rrd.com/news-releases/2018/10-30-2018-201539239