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R.R. Donnelley & Sons (RRD)
Q2 2011 Earnings Call
August 03, 2011 10:00 am ET
Thomas Quinlan - Chief Executive Officer, President and Director
Dave Gardella - Vice President of Investor Relations
Daniel Leib - Chief Financial Officer and Executive Vice President
Charles Strauzer - CJS Securities, Inc.
Daniel Leben - Robert W. Baird & Co. Incorporated
Craig Huber -
Scott Wipperman - Goldman Sachs Group Inc.
Unknown Analyst -
Edward Atorino - The Benchmark Company, LLC
Previous Statements by RRD
» R.R. Donnelley & Sons' CEO Discusses Q1 2011 Results - Earnings Call Transcript
» R.R. Donnelley & Sons' CEO Discusses Q4 2010 Results - Earnings Call Transcript
» R.R. Donnelley & Sons CEO Discusses Q3 2010 Results - Earnings Call Transcript
Thank you, John. Good morning, everyone, and thank you for joining us for RR Donnelley second quarter 2011 results conference call. Earlier this morning, we released our earnings report, a copy of which can be found on the Investors section of our website at rrdonnelley.com.
During this call, we will 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 is 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 GAAP measures to which we will refer on this call.
We're joined this morning by Tom Quinlan, Dan Leib and Drew Coxhead. I'll now turn the call over to Tom.
Thank you, Dave, and good morning, everyone. During the quarter in the face of challenging headwinds, pro forma revenue increased by 30 basis points as compared with the same period a year ago. GAAP EPS was $0.06 and non-GAAP EPS was $0.53. We remain on track to deliver approximately $600 million of operating cash flow less CapEx for the full year.
Dan will take you through the quarter in detail shortly. But before he does and before we open it up for questions, I will briefly address 4 topics: First, the continuing progress of our global print management initiatives. Second, what we're doing to address the shifting landscape in the trade book publishing segment. Third, the introduction of our new CustomPoint Solutions Group. And fourth, additional expansion of opportunities that we see emerging out of our research and development efforts.
I'll begin with our global print management initiative. Global print management is a consultative service offering that brings a number of RR Donnelley's industry-leading competencies together in order to help customers achieve their goals for communications effectiveness and cost compression. You're seeing and hearing us use the term global print management more frequently, and you should expect that to continue. For example, we announced a couple of weeks ago a $300 million print management agreement with Meredith Corporation, the media and marketing company.
To illustrate what we mean by global print management, let me quickly walk you through another agreement we have recently been awarded, this time with an international healthcare products supplier. We will be serving this customer with a team of specialists located in 2 U.S. locations: 1 location in Latin America, 1 in Europe and another in the Pacific Rim. Working across 10 languages, this team will use our online print management system as they engage with the customer's staff to equip their sales organization with marketing collateral and other promotional materials. This team will be involved in projects early in the content creation process as specifications are being developed, providing us with an opportunity to deliver additional value to our customer and to develop a deeper and more tightly integrated relationship with their teams.
Similarly during the quarter, a leading pharmaceutical company awarded RR Donnelley another global print management agreement. This puts us in a collaborative and consultive relationship involving the management and production of marketing communications materials.
Two key points are worth noting about print management relationships like these. First, they lift RR Donnelley out of a mere bid-to-print role in a way that draws on our consultative capabilities. And second, print management involves serving customers with our own production platform as well as leveraging our considerable procurement scale when appropriate. This combination provides us with the unique ability to manage a customer's entire print procurement function, producing much of the work in our own platform and expanding the range of products that we can provide for our sourcing network without requiring additional capital expenditures.
From the customer's perspective, RR Donnelley is a trusted set of hands to manage this process. And given our many long-term relationships that cover a variety of offerings, we understand the level of service that our customers require. Our success in winning and quickly ramping up global print management relationships helped to drive an 8.5% increase in our commercial printing revenues during the quarter. And our unique ability to serve customers internationally is reflected in our double-digit revenue growth in Latin America and continued growth in Asia. Further since 2007, we have consistently increased the number of customers buying 7 or more products and services at an average annual rate of 8%. For RR Donnelley, the word global in global print management refers to both the comprehensive nature of these agreements and to our ability to serve our customers on 4 continents. We continue to pursue a significant number of other global print management deals and continued to see this service as one that differences RR Donnelley from commodity producers.