RRD Reports Third Quarter 2020 Results

GAAP net sales decreased 15.9%; non-GAAP organic net sales decreased 12.1%
GAAP income from operations was down $55.1 million versus the prior year primarily due to a $56.5 million increase in restructuring and other charges; current quarter included a charge for MEPP withdrawal obligations related to the LSC Communications (“LSC”) bankruptcy
GAAP loss per share from continuing operations of $0.13 included third quarter charges of $0.52 per share for restructuring and other
Operating cash flow, including discontinued operations, increased $40.1 million from prior year period, year-to-date improvement now at $113.0 million
Entered into definitive agreement to sell its Logistics DLS Worldwide business for $225 million, expected to close by year end
Launched plan to redeem $83.3 million of principal outstanding on Senior Notes due March 15, 2021

“We delivered a strong third quarter amidst a volatile business environment. We continue to win new business, execute our cost reduction plans, and improve our capital structure with a disciplined focus on generating cash flow, all while protecting the health and well-being of our employees,” said Dan Knotts, RRD President and Chief Executive Officer. “Through the combination of better than expected net sales performance and a significant reduction in our cost structure, we delivered adjusted income from operations comparable to the prior year, improved our operating margin, and achieved our third consecutive quarter of improved operating cash flow. Despite ongoing uncertainty and volatility, we continue to advance our strategic priorities and are confident in our ability to emerge from the pandemic as a stronger RRD.”

Net sales in the quarter were $1.19 billion, down $225.9 million or 15.9% from the third quarter of 2019. The decrease includes a $62.9 million reduction from the previous dispositions of its Global Document Solutions (“GDS”) and Chile businesses.

Organic net sales declined 12.1% in the quarter. The Business Services segment was down 12.8% on a GAAP basis and 7.5% on a non-GAAP organic basis while the Marketing Solutions segment was down 25.9% on a GAAP and non-GAAP organic basis from the third quarter of 2019. 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 Services segment was further impacted by a reduction in Census related sales as the project was successfully completed during the recent quarter.

Income from operations was $15.9 million in the third quarter compared to income from operations of $71.0 million in the third quarter of 2019. The third quarter of 2020 included net restructuring and other charges of $54.2 million, an increase of $56.5 million from the prior year quarter. As part of restructuring and other charges, the 2020 quarter included a charge of $37.3 million related to MEPP withdrawal obligations, most of which was to record estimated multiemployer pension plan obligations arising from the bankruptcy of LSC, and $15.7 million of restructuring charges.

Loss per share from continuing operations attributable to common stockholders was $0.13 in the third quarter of 2020 compared to loss per share of $0.10 in the third quarter of 2019. The 2020 results were negatively impacted by the significantly higher restructuring and other charges, mostly offset by a reduction in income taxes and interest expense.
details at: https://investor.rrd.com/news/news-details/2020/RRD-Reports-Third-Quarter-2020-Results/default.aspx?_ga=2.217286166.1605389350.1603888374-574243306.1600258102

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