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Promising Financial Gains for Donnelley, CGX

May 6, 2011
CHICAGO—RR Donnelley reported first-quarter net earnings of $33.9 million on net sales of $2.6 billion compared to $52.6 million on net sales of $2.4 billion in the first quarter of 2010. The first-quarter net earnings included pre-tax charges for restructuring ($42.7 million) and impairment ($8.1 million, non-cash) and acquisition-related costs ($0.4 million) totaling $51.2 million in 2011 compared to charges for restructuring ($14.5 million) and impairment ($1.0 million, non-cash) and acquisition-related costs ($2.0 million) totaling $17.5 million in 2010.

Non-GAAP net earnings totaled $68.6 million in the first quarter of 2011 compared to $69.5 million in the first quarter of 2010. First-quarter non-GAAP net earnings exclude restructuring and impairment charges and acquisition expenses for both years.

Net sales in the quarter were $2.6 billion, up 7.0 percent from the first quarter of 2010, including increased sales related to the acquisition of Bowne and a $15.4 million favorable impact of changes in foreign exchange rates.

The board of directors also approved a program that authorizes the repurchase of up to $1 billion of the company’s common stock through December 31, 2012. In connection with the authorization, RRD intends to enter into an accelerated share repurchase agreement with an investment bank under which it will repurchase $500 million of its common stock on terms to be negotiated, subject to adjustment.

Meanwhile, Consolidated Graphics (CGX) of Houston announced fourth-quarter financial results that included an 8.9 percent increase in revenue. Same-store sales increased 5.3 percent and adjusted operating income increased 71 percent, to $17.7 million.

CGX revenue for the March quarter totaled $258.1 million, an increase of 8.9 percent. The higher revenues resulted from a 5.3 percent improvement in same-store sales and the impact of acquisitions. Adjusted operating income increased 71 percent to $17.7 million, or 6.9 percent of revenue.
 

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