Net sales in the quarter were $1.68 billion, up $59.5 million or 3.7% from the second quarter of 2017. On an organic basis, consolidated net sales increased 2.7% primarily driven by higher volume and fuel surcharges in the Business Services segment, partially offset by price pressure. From a products and services perspective, Packaging, Logistics and Direct Mail accounted for most of the increase while Commercial Print was lower due to ongoing secular pressure and lower specialty card sales.
Gross profit in the second quarter of 2018 was $290.6 million or 17.3% of net sales versus $302.0 million or 18.6% of net sales in the prior year quarter. The favorable impact of volume growth and cost reduction initiatives was more than offset by unfavorable changes in foreign exchange rates and modest price pressure.
“I am pleased with our solid performance and the progress we made during the quarter in executing our strategic growth objectives as a marketing and business communications services company,” said Dan Knotts, RRD’s president and CEO. “We delivered our third consecutive quarter of organic growth, which continues to be driven by our unique ability to help our clients manage the full range of interactions they have with their customers across every critical touch point – online, offline and in-store – with reduced complexity and increased efficiency. Our operating cash flow also improved significantly in the quarter in line with our expectations.”
Income from operations was $25.5 million in the second quarter compared to $34.4 million in the 2017 quarter. Net loss attributable to common stockholders of $13.0 million in the second quarter compared to net earnings of $76.5 million in the second quarter of 2017.
As of June 30, 2018, cash on hand was $257.0 million and total debt outstanding was $2.26 billion, including $322.0 million drawn against the credit facility. The company has entered into an agreement to sell a property in an international location for gross proceeds of approximately $250 million. This transaction is subject to receiving governmental approval, and the company expects the transaction to close in 2020.
On July 2, 2018, the company completed the previously announced sale of its print logistics business for $60 million. Proceeds from the sale were used to reduce borrowings outstanding under the credit facility.