RR Donnelley Reports 3.4% Sales Drop for Q1 2016, But Maintains EBITDA Margin

CHICAGO — May 3, 2016 — RR Donnelley & Sons Company today reported financial results for the first quarter of 2016. "We are pleased with our first-quarter results. While the demand environment remained challenging, our disciplined cost management allowed us to hold EBITDA margin flat compared to last year's first quarter. In addition, we saw a marked improvement in the year-over-year revenue trend as the quarter progressed," says Thomas J. Quinlan III, RR Donnelley's president and CEO.

Quinlan continues, "Our outlook for the full year is in line with our previous guidance, which we reiterate today. We are focused on achieving these expectations, and at the same time, we are making significant progress on the spin-offs of LSC Communications and Donnelley Financial Solutions, both of which remain on track to be completed in October."

Net Sales
Net sales in the quarter were $2.7 billion, down $94.7 million, or 3.4%, from the first quarter of 2015. After adjusting for the impact of acquisitions and dispositions, as well as changes in foreign exchange rates and pass-through paper sales, organic sales decreased 3.1% from the first quarter of 2015, as an increase in the International segment only partially offset declines in the Strategic Services, Variable Print and Publishing and Retail Services segments.

GAAP Earnings
First-quarter 2016 net earnings attributable to common shareholders were $39.8 million, or $0.19 per diluted share, compared to net earnings attributable to common shareholders of $22.3 million, or $0.11 per diluted share, in the first quarter of 2015. The first-quarter net earnings attributable to common shareholders included pre-tax charges of $9.9 million and $60.2 million in 2016 and 2015, respectively, all of which are excluded from the presentation of non-GAAP net earnings attributable to common shareholders.

Non-GAAP Earnings
Non-GAAP adjusted EBITDA in the first quarter of 2016 was $250.2 million, compared to $259.3 million in the first quarter of 2015. Non-GAAP adjusted EBITDA margin in the first quarter of 2016 was 9.4%, flat to the first quarter of 2015, as productivity improvements and higher pension income offset price pressure.

Non-GAAP net earnings attributable to common shareholders totaled $47.2 million, or $0.22 per diluted share, in the first quarter of 2016 compared to $51.9 million, or $0.26 per diluted share, in the first quarter of 2015.

2016 Guidance
The Company reiterates the following full-year guidance for 2016, which remains unchanged from previous guidance and excludes the impact of the previously announced pending spin-off transactions:

About RR Donnelley
RR Donnelley (Nasdaq:RRD) helps organizations communicate more effectively by working to create, manage, produce, distribute and process content on behalf of our customers. The Company assists customers in developing and executing multichannel communication strategies that engage audiences, reduce costs, drive revenues and increase compliance. RR Donnelley's innovative technologies enhance digital and print communications to deliver integrated messages across multiple media to highly targeted audiences at optimal times for clients in virtually every private and public sector. Strategically located operations provide local service and responsiveness while leveraging the economic, geographic and technological advantages of a global organization.

Source: RRD.