RRD - Earnings call transcript Q4 2021

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Operator

Welcome to the RRD Fourth Quarter 2021 Results Conference Call. My name is Emma, and I will be your operator for today's call. [Operator Instructions] Please note that this call is being recorded. I will now turn the call over to Johan Nystedt, RRD's Senior Vice President of Finance.

Johan Nystedt

Thank you, Emma, and thank you, everyone, for joining RRD's Fourth Quarter and Full Year 2021 Results Conference Call.

call and Knotts, Financial Terry today's Chief President Officer. on Officer; Executive Peterson, me are RRD's Dan and Joining our Chief

call, website at As slides on have we rrd.com. Investors which today's the our a found can of prepared section be reminder, for supplemental

slides detail follow we supplemental review the during copy this Form X-K to will who call by page the in from on our is results our the periodically for slides earlier information is information be our connected those filed which themselves. we wish are rrd.com. we reviewed quarter addressed today's the call, a to reference morning. in was you release, at in section As will advancing furnished of more the website by slides participants SEC I along on advancing press the posted if webcast. this Alternatively, Investors fourth The of This numbers also

also statements, results refer from expectations. could current In actual addition, our to differ our which we all involve and Therefore, forward-looking will materially uncertainties. risks of

information. of risk results in discussion our for are report to the included information SEC. purposes is the on reports the section release. the other appropriate on the our as to GAAP with our an reconciled references company's part we These XX-K, and statement our filings website of that evaluate and our actual could complete the Investors provide presentation in measures of useful believe are Further, press financial results informational please comparable to financial cautionary ongoing company's way non-GAAP a For results provided and measures of operations discuss to in Any with release our quarterly non-GAAP the concerning only. non-GAAP earnings refer investors to supplementary performance. factors We cause financial included differ the materially, factors Form non-GAAP annual Form XX-Q the will

merger session transaction not an I'll affiliate pending Q&A Chatham we today. the to Asset our over the turn between And Dan. that, and to following remarks of due Lastly, a will Management, prepared conducting call RRD be with

Daniel Knottsv

Johan. today. and evening, you good good us for thank Good Thanks, joining Great. everyone, morning, afternoon and

I'm share quarter and that expectations. a exceeded very with First to we XXXX that pleased strong finished results foremost, fourth our

more providing Chatham year few and Before a to XXXX, I definitive comments make agreement firm. on XX, December our a regarding with investment merger Asset the color Management, Management. fourth Asset full quarter we first Chatham leading announced with agreement performance, private On merger a want

it unanimously alternatives to stockholders. opportunity will even approved, our for best soon a the vote the an Directors first XXXX. Board the for this the February we review agreement. since RRD merger a for have closes, as will expeditiously, expect possibly to On closing X time If proposed that stockholders represents is XXth. from as the XX, path February following today, the on of transaction company thorough transaction value take our Once private become Friday, transaction days of place our company our forward approved We Our to stockholders. maximize believe and

to turn Let's our now financial results.

categories. grew print, For labels we client organic the organic direct a increased in operating in an segment statements from X% fourth X.X% to year. quarter, of combination quarter growth. Marketing categories. which prior quarter IFO demand XXXX in On $XX.X product print growth pre-pandemic increase quarter, of third quarter Similar X.X% also which operations by performance. the in versus sales, achieved our organic our our of cost marks to sales Business third basis, marketing Through our margin growth ongoing commercial in exceeded a the for Solutions is and demand increase fourth due organic consecutive Services a organically, primarily results, and reported and million stronger X.X% product reported management income our efforts, the digital we quarter adjusted our in adjusted driven the

For our full in performance, improved margin by increase in a a operations increase in adjusted year additional operating operations X.X% on we context financial To operational improvement provide margin. income and XXXX adjusted of from and earnings highlighted adjusted full very performance. basis operating sales, organic and strong our a our year, performance, the from year X.X% delivered income point consecutive marked XX third

performance Additionally, XXXX. metrics those since they annual also represent for our best

to X.Xx debt On are their the XXXX. $X.XX the of prior of total of levels net all metrics lowest year, billion, favorable the and balance sheet, each at since leverage spin were of outstanding our those and leverage in gross X.Xx also

to XXXX performance strategic drive is flexibility. of team's to core, strengthen RRD's and direct improve the growth priorities, testament our financial revenue execution a continued Our our

improved Our sales and wins are client client new expanding and connections, marketing generating to teams delivering client customer relationships. existing

continually while work operating improving our satisfaction improve Our providing our across products are client services drive to assessing to efficiencies all and of teams processes businesses. our and and clients superior

operating the of and through of proud also mitigated as intrusion. is cyberattack a Importantly, aggressively we our I'm ransomware is chain-related managing safety results result of systems continued supply a for our of well success teams and XXXX, challenges going At XXXX year a positioned disruptions end given facing. And these are delivered forward. stellar RRD we performance. the especially team the another also ongoing pandemic

for from to swiftly this minimize and and all worked We cyberattack are restored disruption. employees and to making due as have our extend RRD the steady their my who progress event. of business we I manage appreciation incredible patience systems investigated of to the to want in sincerest tirelessly unprecedented clients support efforts the employees recovering to

and especially have acknowledging potential. full have the recognitions quarters, reach they where some of the workplace feel has And we our those awards a every past many the highlighted of as Over RRD to each our of few one belong we're and team received. employees opportunity their proud and

provide Campaign the over Equality call Index, we a culture, to like and foremost equality. benchmarking XXX the fourth nation's Terry, corporate received inclusive Terry and workplace on survey score Foundation's policies that, of turn our Human to financial Corporate practices to you. more of related out our the With to LGBTQ+ testament for a report to results measuring over XXXX XX quarter. detail the As to Rights on I'd

Terry Peterson

Thank you, Dan.

to adjusted still Slide adjusted growth X. operations headwinds improved We organic to Turning significant sales we had finish to challenging XXXX margins. a as and remarkable deliver from and the income and operating overcame year a throughout managed

we net our in sales reduction adjusted peak XXXX since from despite In than our more fact, in XXXX, million in since income delivered highest $XXX operations a XXXX.

from make difficult supply in years had the with XXXX the last to our reflect to few unfavorable chain results inflation, business. many exchange also over Our and labor the availability decisions continue we've many to rates. foreign from order improve disruptions, us lastly, of benefits presented challenges, health

systems days our for our up large X.X% results while the growth of Our over team benefited to which organic down even recent deliver head continuing for we per last share to operations X the issues year $X.XX, last serve of stockholders. tackle clients is earnings projects, prior the and to COVID-related results quarter, shut year. We from though on production intrusion. due continuing December full was the domestic are and diluted fourth for from resilient in onetime Overall, delivered year's the very pleased our to was these report adjusted

as and through improved chain Our taking continue our income manage of challenges supply we out more operating also to inflation infrastructure. adjusted aggressively while costs

X. let beginning to With sales Our significant the were marking level up which that, quarter strong with foreign sales organic payments since operating Slide the exchange. growth. a more despite review finished spin. Net up lowest sales in were on net X.X% X.X% ended included and or organically, its due with cash the total results, my of of quarter, million third million detailed flow me $X $X.XX quarter's benefit at of Net transaction-related we quarter, fourth our billion debt consecutive begin $XX.X of in

the clients, material Within increases management challenged higher XXXX. to produced the The us pre-pandemic from alternatives prices. the quarter the prior our to expense to the inflation impact to wage XXXX. of higher COVID-related increase was and On solutions X, children's well in consecutive adjusted due trading expect from in third creative results actions as was product it continue $XX.X printed taken making operations XXXX, projects The materials. category, sales our offset depreciation cost year. of where aggressive IFO and commercial partially the material, in into products we and than reduce to including and structure print adjusted cards and other religious growth income exceeded has China, decline offer company's strong in wages in books by due as domestic and and principally quarter supply and fourth we chain higher see sales million A to million $X.X energy onetime primarily large XXXX to the Slide lower was of amortization inflation, find those continue our combination we

all price nearly and We increases have increases experienced expect continue into of well. XXXX our as XXXX, to we suppliers from pricing in

strategic cost ensure We and products RRD inventory focused those that volatile combat our results ongoing to clients inflationary have increases. year, strategy $XX.X taken matters also on Adjusted or minimize again, for SG&A product of time. $XXX.X many within recover reflecting numerous has lower and in expense services the to alternatives, our uncertain execution is adjusted changes of format serve. increased control offered working million million our We've quarter help Once the forces. our prices our delivered the and to and this other demonstrate to actions from of levels impact. during XX.X% was these to down the to product have fourth prior initiative that and availability have solutions we

for $X.X merger-related operations tax prior and Adjusted $X.XX from of $X.XX to decreased period. prior to operations. earnings year of Our a higher per lower other GAAP offset in charges and by the the decrease income compared interest million. driven in year expenses partially expense earnings and were due effective for of fourth share quarter million was primarily adjusted the share by This the per results $XX fourth higher increased from quarter as down from rate income $X.XX restructuring

of adjusted expense in limitations to the and compensation rate from in increased XX.X% XX.X% effective deduction tax Our earnings, XXXX primarily XXXX mix interest to expense. nondeductible due

on now to cash X. the Turning sheet balance flow and Slide

cash the of debt total and on had the year, XX, liquidity, quarter. end XXXX, of the on million, hand at beginning As including up $XXX.X total was million $XXX of December $XXX.X hand, Availability facility outstanding was and million $X.XX total million credit the from on available we of billion. the $XXX.X cash of at

maturities there of XXXX. no XX, As prior to November debt of December XXXX, scheduled are

was planned of provided LSC Also, call Dan $XXX interest spin. in year. of a year represent of assumptions, which they $XXX XXXX the both by due the XXXX XXXX operating prior payments payroll half to at repayment related investments results slightly compared in plans and year rate the by lower of of million updated the also million improvement million, capital end our been deferred $XX.X the million lower and remarks. restructuring, for leverage closing excess and merger, and XXXX also strong as the spin claims, activities in in to net improvement higher terminate $XX At XXXX. taxes and in postretirement Full level lower million our million status status. is made of since his $XXX our by working Capital to debt improved were payments agreements. bankruptcy-related overfunded than And from the and plans have Our collectively basis. XXXX and million from net This reflect returns to plans unfunded tax leverage the is XXXX, a were end gross first discount with the turn to $XX.X cash due I other payments pension the will year. to of settlement time expenditures the of primarily the primarily million than overfunded The Both on certain asset $XX.X XXXX. underfunded of actuarial the our since that, were lowest interest in $XX.X is end swap the improved that ending the prior XXXX rates. an back

Daniel Knottsv

Terry. you, Thank

contributions, clients Johan, employees continue communications their Before we high we to over with have and through to the hard of level and We're for to performance customers hope business the and like and for RRD. XX,XXX safe instructions. engage healthy. take us moment stay their today, business the of closing future you I'm about support their excited to our marketing call, all to I'd Thanks teamwork tremendous help holds you and what a I working joining again for to today. deliver thank for conclude optimally

Johan Nystedt

Thanks, Dan.

access a release, results concludes can Call. Investors of reminder, of a is fourth joining our in fourth RRD's the at XXXX us Fourth our information quarter press on replay that you be As for XXXX to Thank quarter telephonic posted website section RRD copy of Quarter the found which a Earnings today, and rrd.com.

Johan Nystedt	SVP, Finance
Daniel Knottsv	President, CEO & Director
Terry Peterson	EVP & CFO

RR Donnelley & Sons (RRD) 18 Feb 222021 Q4 Earnings call transcript