RR Donnelley reported net income dropped 92% from a year ago, hurt by hefty restructuring charges, higher tax rate, and slumping demand for printing services. The Chicago-based printer said Q1 net earnings were $13.9 million, down from $182.5 million, a year ago when a federal tax settlement boosted its profit. Sales for the quarter fell 18% to $2.5 billion. U.S. sales were down 14.9% to $1.9 billion, while internationally revenues dropped 27.5% to $548.2 million.
“In contrast with our strong performance in the first quarter of 2008, during the first quarter of 2009 we saw the full impact of the contraction in the global economy. This significantly reduced demand in most of the end-markets that we serve," says Thomas Quinlan III, RR Donnelley's president and CEO. On the bright side, he says, Cash flow increased by $415 million to $540 million and the company as access to $2.6 billion in funds. The company also announced it signed contracts with Medbuy Corporation, a $30-million renewal, and Air Canada.
Revenue and profit fell at Consolidated Graphics as same-store sales dropped 24.1% and election related printing demand was weak. The Houston-based company reported a Q4 net loss of $15.9 million compared to a $13.1 million gain in the prior year. Revenue was down 14% to $247.2 million.
“In the June quarter we have implemented significant wage, salary and headcount reductions throughout the business that will help alleviate the adverse impact of lower revenues on our operating margins," says CEO Joe Davis. Debut for the quarter was reduced total by $41.3 million, he says.
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