RR Donnelley Reports Second-Quarter 2010 Results
R.R. Donnelley & Sons Company (NASDAQ: RRD) today reported second-quarter net earnings attributable to common shareholders of $88.8 million, or $0.42 per diluted share, on net sales of $2.4 billion compared to net earnings attributable to common shareholders of $25.2 million, or $0.12 per diluted share, on net sales of $2.4 billion in the second quarter of 2009. The second-quarter net earnings attributable to common shareholders included pre-tax charges for restructuring ($9.2 million) and impairment ($1.5 million) totaling $10.7 million in 2010 compared to charges for restructuring ($40.1 million) and impairment ($8.1 million) totaling $48.2 million in 2009. Substantially all of the restructuring charges in both periods were related to the reorganization of certain operations and the exiting of certain business activities. The second-quarter effective tax rate decreased to 26.5% from 64.6% in the second quarter of 2009, primarily due to the impact of higher restructuring expense in 2009 on which the tax benefit was lower than the U.S. statutory rate, and the release of a valuation allowance on deferred tax assets in the second quarter of 2010.
The Company believes that certain non-GAAP measures, when presented in conjunction with comparable GAAP (Generally Accepted Accounting Principles) measures, are useful because that information is an appropriate measure for evaluating the Company’s operating performance. Internally, the Company uses this non-GAAP information as an indicator of business performance, and evaluates management’s effectiveness with specific reference to these indicators. These measures should be considered in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
Non-GAAP net earnings attributable to common shareholders totaled $99.5 million, or $0.47 per diluted share, in the second quarter of 2010 compared to $76.3 million, or $0.37 per diluted share, in the second quarter of 2009. Second-quarter non-GAAP net earnings attributable to common shareholders exclude restructuring and impairment charges and acquisition expenses for both years. For non-GAAP comparison purposes, the effective tax rate decreased to 26.2% in the second quarter of 2010 from 37.5% in the second quarter of 2009, primarily as a result of the release of a valuation allowance on deferred tax assets. A reconciliation of GAAP net earnings attributable to common shareholders to non-GAAP net earnings attributable to common shareholders is presented in the attached tables.
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