RR Donnelley Reports Gains, Largely Due to Bowne Acquisition

CHICAGO—Nov. 2, 2011—R.R. Donnelley & Sons reported third-quarter net earnings attributable to common shareholders of $158.0 million on net sales of $2.7 billion, compared to $53.3 million on net sales of $2.5 billion in the third quarter of 2010.

Non-GAAP net earnings attributable to common shareholders totaled $98.0 million in the quarter, compared to $92.5 million in the same period of 2010.

“We continue to have success in the marketplace, winning new work and expanding customer relationships. Given the challenging global economic environment and sluggish financial markets activity, we are pleased with our results,” said Thomas J. Quinlan III, RR Donnelley’s president and CEO. “Despite these headwinds, we generated more than $300 million of operating cash flow in the quarter, an increase of over $90 million from last year’s third quarter. Our strong and stable cash flow funds our debt payments and our $1.04 per share annual dividend, while allowing us to reinvest in the business and prudently manage our capital structure.”

Quinlan continued, “In addition to expanding customer relationships, we continued to enhance the capabilities offered by our CustomPoint Solutions Group with the acquisition of Sequence Personal. The addition of these capabilities reflects our continued commitment to serve the evolving needs of our customers, particularly with innovative content creation, management and delivery solutions.”


Net sales in the quarter were $2.7 billion, up $195.2 million (or 7.8 percent), from the third quarter of 2010, including the impact of acquisitions. Pro forma for acquisitions, net sales grew by $40.7 million, or 1.5 percent, vs. the third quarter of 2010, driven by a $26.8 million increase from favorable changes in foreign exchange rates, as well as volume growth in certain product offerings.

The company’s gross margin of 23.4 percent in the third quarter of 2011 compared to 23.7 percent in the third quarter of 2010 as pricing pressure was mostly offset by productivity improvements, a higher recovery on print-related by-products and lower variable compensation expense.

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