RRD Reports 1Q 2020 Results

R.R. Donnelley & Sons Company (RRD) reported financial results for the first quarter of 2020.

First quarter GAAP net sales of $1.41 billion decreased 7.4%. Non-GAAP organic net sales decreased 1.3%, which included a 2.9 percentage point reduction due to the COVID-19 impact in China.

Net sales in the quarter were $1.41 billion, down $112.4 million or 7.4% from the first quarter of 2019. The decrease includes an $87.7 million impact from dispositions in the Business Services segment, primarily the GDS business, and a $6.6 million reduction due to changes in foreign exchange rates.

“2020 started very strong with our best first quarter adjusted income from operations and adjusted earnings per share since the spin in 2016,” said Dan Knotts, RRD president and CEO. “Looking ahead, we remain steadfast in our commitment to protect the health and safety of our teams around the world as we navigate these uncertain times. We are highly focused on the execution of our strategic initiatives and are taking decisive actions to mitigate the challenges created by this global pandemic.”

Income from operations was $8.8 million in the first quarter compared to income from operations of $23.3 million in the first quarter of 2019. The first quarter of 2020 included a non-cash charge of $20.6 million to recognize the impairment of goodwill in the logistics reporting unit.

Non-GAAP adjusted income from operations of $55.1 million increased $18.7 million from the prior year period driven by a $21.4 million reduction in adjusted SG&A expense. Op-erating cash flow improved $50.4 million from the prior year.