Q4 Key messages
*GAAP net sales, including the impact of dispositions and FX, decreased 5.6%; Non-GAAP organic net sales decreased 4.8%; both decline rates improved sequentially from the prior two quarters
*GAAP earnings per share from continuing operations of $0.46 and Non-GAAP adjusted earnings per share from continuing operations of $0.71 both increased significantly from the prior year
*Both GAAP and Non-GAAP income from operations roughly flat to prior year; GAAP operating margin improved 30 bps while Non-GAAP improved by 50 bps, both benefitted from cost reduction actions
*Operating cash flow of $124.6 million in the quarter is down from prior year; 2020 amount includes $47 million paid to terminate 25 deferred compensation plans and cash taxes on the gain from selling the Logistics businesses in addition to the expected impact from accelerating working capital improvements to earlier quarters in 2020
*Gross leverage ratio of 3.7x improves 1.0x from September 30, 2020 and 0.5x from December 31, 2019; net leverage ratio of 3.0x improves 0.7x from both September 30, 2020 and December 31, 2019
*Generated significant cash from non-operating activities, including $244 million primarily from the dispositions of the Logistics businesses and three building sales, and an additional $96 million from liquidating certain life insurance policies
“We delivered a strong fourth quarter to finish an extraordinary year. I am proud of the RRD team’s ongoing resilience and commitment to protect the health and safety of our global colleagues while delivering the essential marketing and business communications our clients need to propel their businesses,” said Dan Knotts, RRD President and Chief Executive Officer. “Our teams continue to deliver innovative solutions to our clients, aggressively execute our cost reduction plans, and make meaningful progress in improving our capital structure. For the second consecutive year, we achieved full year growth in adjusted income from operations and increased operating margins by lowering our cost structure, expanding client relationships, and securing new business. Additionally, we significantly reduced debt outstanding, extended upcoming maturities, and expanded our liquidity as we continue our drive to improve balance sheet flexibility. Our team is doing an incredible job in managing RRD through these unprecedented times and remains highly focused on advancing our strategic priorities into 2021.”
Net sales in the fourth quarter were $1.35 billion, down $80.6 million or 5.6% from the fourth quarter of 2019. The decrease includes a $24.5 million impact from business dispositions, primarily our European statements business which we sold in the fourth quarter of 2019, and lower sales as a result of the COVID-19 pandemic. The 2020 quarter also reflected an $11.5 million increase due to changes in foreign exchange rates.
Organic net sales declined 4.8%. The Business Services segment was up 0.4% on a GAAP basis and 1.7% on a non-GAAP organic basis while the Marketing Solutions segment was down 22.8% on a GAAP and non-GAAP organic basis from the fourth quarter of 2019. The Business Services segment experienced growth driven primarily by higher Supply Chain Services and Packaging product volumes. However, both segments were negatively impacted by lower volumes resulting from the COVID-19 pandemic and lower pricing, partially offset by new pandemic related sales. The Marketing Solutions segment was further impacted by a reduction in Census related sales as the project was successfully completed earlier in 2020.
Income from operations was $78.1 million in the fourth quarter compared to income from operations of $78.9 million in the fourth quarter of 2019.
more detail at: https://investor.rrd.com/news/news-details/2021/RRD-Reports-Fourth-Quarter-and-Full-Year-2020-Results/default.aspx