RRD Reports Q2 2013 Results; Net Sales Up from Q2 of 2012
CHICAGO—July 29, 2013—R.R. Donnelley & Sons Company reported financial results for the second quarter of 2013. "We are pleased with our results, as the revenue trend continued to improve during the second quarter," said Thomas J. Quinlan III, R.R. Donnelley's president and CEO. "The year-over-year change in organic revenue is the best we've experienced in the last seven quarters, and represents a 40 basis-point improvement from the first-quarter change. In addition, we continued to invest in the business, at the same time improving free cash flow by over $90 million from the same quarter last year. We remain on track to deliver our full-year guidance, including free cash flow in the range of $400 million to $500 million, that will allow us to migrate toward our targeted gross leverage range of 2.25x to 2.75x on a long-term sustainable basis."
Net sales in the quarter were $2.6 billion, up $43.0 million, or 1.7 percent from the second quarter of 2012 due to the impact of 2012 acquisitions and volume growth in the U.S. Print and Related Services segment. After adjusting for the impact of acquisitions, changes in foreign exchange rates and pass-through paper sales, organic sales declined 0.8 percent from the second quarter of 2012 due to price erosion in both segments and volume declines in the International segment, partially offset by volume growth in the U.S. Print and Related Services segment. Operating income in the second quarter of 2013 was $173.2 million, which was impacted by restructuring and impairment charges and acquisition-related expenses totaling $19.9 million, compared to operating income in the second quarter of 2012 of $163.9 million, which included restructuring and impairment charges and acquisition-related expenses totaling $34.5 million.
Second-quarter 2013 net earnings attributable to common shareholders was $65.4 million, or $0.36 per diluted share, compared to net earnings of $88.8 million, or $0.49 per diluted share, in the second quarter of 2012. Second-quarter 2013 net earnings attributable to common shareholders included $25.4 million in pre-tax charges for restructuring, impairment (non-cash) and acquisition-related expenses and losses on investments, while in the second quarter of 2012, net earnings attributable to common shareholders included $38.6 million in pre-tax charges for restructuring, impairment (non-cash), acquisition-related expenses and a loss on an investment, which were offset by the recognition of previously unrecognized tax benefits ($26.1 million, non-cash). Additional details regarding the nature of these and other items are included in the attached schedules.
Non-GAAP adjusted EBITDA was $304.1 million in the second quarter of 2013 compared to $319.3 million in the second quarter of 2012. Non-GAAP adjusted EBITDA margin in the second quarter of 2013 was 11.8 percent, or 80 basis points lower than in the second quarter of 2012, as price pressure, wage and other inflation, lower pension income and pass-through postage revenue from the Presort Solutions business acquired in 2012 more than offset lower benefits-related expenses, higher volume, and a favorable product mix.
Non-GAAP net earnings attributable to common shareholders totaled $82.5 million, or $0.45 per diluted share, in the second quarter of 2013 compared to $88.5 million, or $0.49 per diluted share, in the second quarter of 2012. Second-quarter non-GAAP net earnings attributable to common shareholders exclude restructuring and impairment charges, acquisition-related expenses and losses on investments in both years as well as the recognition of previously unrecognized tax benefits in the second quarter of 2012. A reconciliation of net earnings attributable to common shareholders to non-GAAP adjusted EBITDA and non-GAAP net earnings attributable to common shareholders is presented in the attached schedules.
About RR Donnelley
RR Donnelley (Nasdaq:RRD) is a global provider of integrated communications. The Company works collaboratively with more than 60,000 customers worldwide to develop custom communications solutions that reduce costs, drive top-line growth, enhance ROI and increase compliance. Drawing on a range of proprietary and commercially available digital and conventional technologies deployed across four continents, the Company employs a suite of leading Internet-based capabilities and other resources to provide premedia, printing, logistics and business process outsourcing services to clients in virtually every private and public sector.
Source: RRD.
