“We delivered solid financial results that were in line with our expectations, marking our second consecutive quarter of earnings improvement. We also successfully launched our accelerated cash repatriation strategy to further reduce debt outstanding in 2019,” said Dan Knotts, RRD’s president and CEO.
“For the quarter, we continued to see benefits from cost reduction initiatives and exiting unprofitable business,” Knotts added. “In addition, we completed the relocation of our printing facility in Shenzhen, China on schedule and we achieved all critical milestones to begin producing the 2020 Census, which started in July.”
Net sales in the quarter were $1.51 billion, down $170.8 million or 10.2% from the second quarter of 2018, including a $110.9 million impact from business dispositions, primarily the July 2018 disposition of the Print Logistics business, and a $17.5 million reduction due to changes in foreign exchange rates.
On an organic basis, consolidated net sales decreased 2.5%, driven by lower volume in the Business Services segment, which includes reductions in Commercial Print products due to the continued exit of unprofitable business, as well as a decline in the remaining non-print logistics business, partially offset by volume growth in Packaging. The Marketing Solutions segment grew 2.6% organically driven by higher volume in the Digital Print and Fulfillment and Direct Marketing products.
Income from operations was $20.9 million in the second quarter compared to $25.5 million in the second quarter of 2018. Loss per share attributable to common stockholders was ($0.10) in the second quarter of 2019 compared to diluted loss per share of ($0.18) in the second quarter of 2018.
Cash provided by operating activities of $12.9 million in the second quarter of 2019 increased $0.6 million versus the prior year period amount.
The company finalized strategies to accelerate the repatriation of cash from foreign jurisdictions to the US. During the six months ended June 30, 2019, the company transferred $122 million of international cash to the US, which was used to reduce debt outstanding. Based on current regulations and process requirements in foreign countries, the company expects to transfer between $200 and $250 million to the US during 2019, including amounts transferred during the first half of the year, and further reduce debt outstanding by Dec. 31.
As of June 30, 2019, total debt outstanding was $2.12 billion, which is down $134 million from June 30, 2018.