RRD Reports Second Quarter 2020 Results

Second quarter key messages:
*GAAP net sales decreased 23.0%; non-GAAP organic net sales decreased 17.1%; June net sales performance was the strongest month in the quarter as local economies began to reopen
*GAAP (loss) income from operations was down $36.8 million versus the prior year; non-GAAP adjusted income from operations decreased $14.1 million; additional cost-out actions implemented throughout the quarter
*GAAP loss per share was $0.79; non-GAAP adjusted loss per share of $0.09 reflects the impact from COVID-19
*Operating cash flow in the quarter increased $22.5 million from the prior year period driven by working capital improvements; year-to-date improvement now at $72.9 million; capital expenditures were down $18.6 million in the quarter
*Completed three debt exchanges, repaid the 2020 Senior Notes and repurchased additional debt due in 2021 during the quarter; aggregate maturities for Senior Notes and Debentures due in 2020 to 2024 now total $394 million, down $628 million from the beginning of the year

“The second quarter was a very challenging period as we swiftly responded to the worldwide impact from the COVID-19 pandemic. We acted quickly to protect our employees and adapt our operations to meet the essential communications requirements of our more than 50,000 global clients,” said Dan Knotts, RRD President and Chief Executive Officer. “We also took significant steps to improve our financial flexibility and protect our liquidity. During the quarter, we executed three debt exchanges, repaid our 2020 notes and repurchased additional debt due in 2021. Further, our operating cash flow improved from the prior year for the second consecutive quarter.”

“While we expect continued uncertainty and volatility for the foreseeable future, our priorities remain clear,” Knotts added. “We will continue to be responsive to our clients’ evolving needs while protecting our employees, adjusting our cost structure and maintaining the necessary liquidity to run our business. Despite the challenges, I am confident that the actions we are taking will enable us to successfully navigate through short-term uncertainty and position us to be an even stronger RRD in the future.”

Net sales in the quarter were $1.16 billion, down $346.5 million or 23.0% from the second quarter of 2019. The decrease includes a $94.2 million impact from dispositions in the Business Services segment, primarily the Global Document Solutions and Logistics Courier businesses, and a $9.8 million reduction due to changes in foreign exchange rates.

On an organic basis, consolidated net sales declined 17.1%. The Business Services segment was down 23.0% on a GAAP basis and 15.7% organically while the Marketing Solutions segment was down 22.9% on a GAAP and non-GAAP organic basis from the second quarter of 2019. Both segments were negatively impacted by lower volumes resulting from the COVID-19 pandemic and modest price reductions, while the Business Services results were further impacted by lower fuel surcharges in its Logistics business.

Loss from operations was $15.9 million in the second quarter compared to income from operations of $20.9 million in the second quarter of 2019. The second quarter of 2020 included net restructuring and other charges of $28.5 million, an increase of $12.5 million from the prior year period due primarily to the Company’s aggressive actions to reduce its cost structure as a result of the pandemic. In addition, the quarter included $8.8 million of other charges primarily for the recently completed debt exchanges and ongoing investigation costs in RRD Brazil.
more detail at: https://investor.rrd.com/news/news-details/2020/RRD-Reports-Second-Quarter-2020-Results/default.aspx?_ga=2.25324925.116185190.1595939326-868732186.1587989649

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