R.R. Donnelley & Sons (RRD)
Q2 2010 Earnings Call
August 04, 2010 10:00 am ET
Miles McHugh - Chief Financial Officer and Executive Vice President
Thomas Quinlan - Chief Executive Officer, President and Director
Dave Gardella -
Daniel Leben - Robert W. Baird & Co. Incorporated
Charles Strauzer - CJS Securities, Inc.
Craig Huber -
Sachin Shah - ICAP
Eugene Fox - Cardinal Capital Management
Edward Atorino - The Benchmark Company, LLC
Previous Statements by RRD
» R.R. Donnelley & Sons Q1 2010 Earnings Call Transcript
» R.R. Donnelley and Sons Company Q4 2009 Earnings Call Transcript
» R.R. Donnelley and Sons Co. Q3 2009 Earnings Conference Call
Good morning. My name is Jeff, and I will be your conference operator today. At this time, I'd would like to welcome everyone to the RR Donnelley Second Quarter 2010 Results Conference Call. [Operator Instructions] Thank you. Mr. Gardella, you may begin your conference.
Thank you, Jeff. Good morning, everyone, and thank you for joining us for RR Donnelley's Second Quarter 2010 Results Conference Call. Earlier this morning, we released our earnings report, a copy of which can be found in the Investors section of our website at rrdonnelley.com.
During this call, we'll refer to forward-looking statements that are subject to uncertainty. For a complete discussion, please refer to the cautionary statement included in our earnings release and further detailed in our annual report on Form 10-K and other filings with the SEC.
Further, we will discuss non-GAAP and pro forma financial information. We believe the presentation of non-GAAP and pro forma results provides you with useful supplementary information concerning the company's ongoing operations and are an appropriate way for you to evaluate the company's performance. They are, however, provided for informational purposes only. Please refer to the press release and related footnotes for GAAP information and a reconciliation of GAAP to non-GAAP information. We also posted to our website in the Investors section a description as well as reconciliations of non-GAAP measures to which we'll refer on this call.
We are joined this morning by Tom Quinlan, Miles McHugh, and Drew Coxhead. I will now turn the call over to Tom.
Thank you, Dave, and good morning, everyone. One of the themes that we have consistently communicated is the importance of a disciplined approach to taking cost out of our business, particularly during times of economic uncertainty. We told you that we were working very deliberately to strike the right balance between reducing cost and ensuring that we would be ready to benefit immediately when general economic conditions improved.
The importance of maintaining this discipline was illustrated during 2009, when we responded to the fast-changing economic environment by taking out significant costs particularly during the first half of the year. We did not, however, compromise our ability to take advantage of fresh revenue opportunities that emerged in 2010.
The effectiveness of this approach is reflected by our Q2 results. Q2 revenues were up 2.2% versus the same quarter a year ago. However, GAAP EPS of $0.42 more than tripled from the same quarter in 2009, and non-GAAP earnings per diluted share of $0.47 were up more than 27% from Q2 last year. Miles will walk you through the numbers in more detail in a few moments but before he does, I will briefly address three topics.
First, I'll discuss benefits that we are seeing from our One RR Donnelley strategy; second, I'll point out some examples of initiatives that are creating new revenue opportunities; and third, I'll highlight some important achievements during the quarter that reflect our employees' continuing commitment to excellence.
Let's begin with our One RR Donnelley strategy, which we see as having three important dimensions. The first dimension refers to the way that we approach our customers. During the second quarter, we were awarded customer contracts whose aggregate value approached $2 billion. These long-term agreements won on four continents reflect the unique breadth, depth and geographic reach of our product and service offering. Many of these agreements are for multiple product and service lines that draw on several RR Donnelley capabilities. In essence, the One RR Donnelley strategy means that we, as the leading global provider of integrated communications solutions, are uniquely able to provide differentiated services to our customers. Let me share a few examples.
We have an extensive pre-media offering which grew out of our traditional relationships with catalogers and publishers. However, as One RR Donnelley, we are applying our unique pre-media technologies to traditional segments that we serve. ShareStream is our online workflow management system used as designers and others create and collaborate on materials that can be both printed and published on the Internet. We recently won all of a major healthcare institution's extensive forms and labels products because we applied ShareStream to the complex task of managing the hospital's documents, which number in the thousands. The before and after solution for the document review and approval workflow that our sales team created is striking. We did not earn this business just by bidding against other printers. We earned it by providing an expanded service offering that saves our customers remarkable amounts of expensive cycle time. The key is that this value-added service is not confined to a traditional silo or niche. It's expanding into applications across our platform.
Another example, we are a leader in using digital imaging to help our customers talk to their customers in a one-to-one voice. You most frequently see this kind of personalization in direct response and TransPromo communications. But we're expanding our offering by bringing it into the catalogers' world. In short, this digital imaging solution lets a cataloger tailor offers based on their customers' prior purchases. Now when you receive a catalog, choose what to buy and place your order, that information can wind up shaking a unique offer you'll receive when your next catalog arrives. In the past, the number of options for personalizing catalogs was less extensive than those available for conventional direct mail. One RR Donnelley is narrowing that gap.