RR Donnelley & Sons (RRD) 29 Apr 202020 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the RRD First Quarter 2020 Results Conference Call. My name is Jack, and I'll be your conference operator today. [Operator Instructions].

I'll now turn the call over to Johan Nystedt, RRD's Senior Vice President of Finance.

Thank you, Jack, and thank you, everyone, for joining RRD's First Quarter 2020 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 I At Dan, today's of will and the take prepared questions. conclusion Terry remarks,

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

themselves. who page the supplemental slides slides As we on results advancing from quarter follow today's call, by those numbers participants wish review first we to along will reference for the

information reviewed our the addressed quarter yesterday. filed of The be website in This was more the press copy at is will this call our information on also that during a section X-K posted detail first which on furnished Form we of rrd.com. SEC Investors to in is release, the

we our expectations. will of strategy, and refer our actual differ also financial statements, results and Therefore, to all our on including uncertainties. current this could Throughout from call, comments outlook which risks involve forward-looking materially

the on in For -- results our on other to our including a statement, included complete discussion risk and the with cautionary factors and reports please Form factors that differ SEC. the report materially, to quarterly in cause earnings refer Form release actual our XX-Q annual our could filings XX-K, of the

evaluate information section website a measures to we press discuss purposes Any non-GAAP the way are company's our the measures results We references supplementary Further, concerning release. financial financial and of as provides reconciled GAAP to are useful to our an non-GAAP believe information. provided of non-GAAP Investors comparable appropriate part the the financial only. for informational in performance. results ongoing will company's with presentation of These investors non-GAAP is the operations

to will I turn the over Dan. call now

health are we few On Great. has wellness, Thank families and a in I profound worldwide just way on you a health amidst pandemic. hope us significantly morning, crisis that a our Good you and of and the today. businesses thank which emerged your change healthy function. manner have world this live You, global and impact staying short and months, the and personal In at work joining everyone alter around behalf RRD, to dramatically safe the for Johan.

clearly navigate time uncertainty the at everyone thank threaten COVID-XX crisis. of extraordinary and for living and To are We economies. through an you and time unprecedented the continues as to individuals, efforts of this of as your challenge we pandemic health support tremendous global businesses RRD,

going quarter key of our call, implement today's the and help of steps the On I'm quickly we results to COVID-XX offset the our to protect plan first to clients we an provide are support decisively before sharing taking and members our overview while pandemic. our impact team

strong this with Through in momentum. we execution we initiatives pleased strategic despite of report COVID-XX year. the delivered successful negative entered strong the in very year that to new XXXX, start our impact China, operations quarter the a of I'm to our on

full On negative in the month being closed by due of line, impact sales the first a declined organic the our facilities quarter the for X.X%, top pandemic. China COVID-XX to in including

demand our overall our Encouragingly, impact, and returns the in now expect been operations growth in in organic sales have company, which time. performance restored, X.X% delivered China see an as organic the over Excluding to the China for represented quarter. improvements steady decline China we in we global

from delivered XX.X% adjusted million $XX.X which earnings or income year's first $XX.X quarter. operations, in an perspective. million to We last From favorable is

margin increase and point We improvement in adjusted per operating a XXX a basis earnings in $X.XX share. reported also

successfully as strategic quarter represent we planned performance tighten actions positive our reflect and favorable February, of areas, our of at year of plan spin our to earnings a impact results first we unprofitable our business well Our per number the further the results from quarter. in operations, these of best of part These Courier last our targeted in margin initiatives as all X in portfolio income sold optimize the the adjusted Chile since closed actions share, this XXXX. we were ongoing More of executed end Both we early strategic and these March. business our specifically, Logistics completed within focus. business in and operating

focus SG&A evidenced as Additionally, to million expenses on year in versus quarter. we serve, continued cost the decrease a $XX our lowering by prior our

third of strategic These million XXXX in March, early April. and XXXX sheet our our Directly in fully in were balance related and exchanges extending that our we out resulted enhance late financial improve of maturities a exchanges initiative, due flexibility, XXXX. completed to began $XXX to series to in

March early and notes and also our late debentures XXXX due $XX repurchased in and million senior XXXX. of April We opportunistically in

As delivered in, we year. our very been result, now have to maturities All a a $XXX quarter from million $XXX XXXX reduced to start new million. the strong

of pandemic level incredible for there introduced system business no near-term navigation COVID-XX for follow road has or Now challenges as recovery. the is we significant look uncertainty map defined to which ahead, and

lockdown spread economies, industries it or all still individual too early is global, hopeful the world enacted will predict to of will businesses. COVID-XX specific have on that national or the or around full that curtail virus, measures the While duration the being we're local the magnitude continued

that time as have scenarios serves we and operating holistic and volatility. map strategic road extreme a of plan our our priorities during various modeled reinforces As developed such, this

will to adjustments Our as remain we continue and plan make fluid, will needed.

difficult been experiences core, executing strategic our times. on we've our together. executing those that preparedness and we've gained manage ongoing that focus have drive an uncertain business flexibility relentless our financial prudently performance our our priorities ability to in revenue The and actions since has been our improve enhanced and the amidst strengthen actions to Importantly, taken effort we've

have Our am focus confident to is our record on track deliver plans. clear, I our of and we in executing ability a

flexibility. which of and our will operational provide managing plan maintaining each of The core additional with health for operating of key these safety X highest and focuses details our business in financial protecting employees. continuity; elements the priority, effectively performance, the of our our X our areas, starting preserving safety and health I our employees; areas: includes

on We XX,XXX our protecting the the are focused and safety globe. health of employees around laser

and the to RRD obligation safe at to my is Our them have we everything at work. keep do can tremendous commitment to we people

utilizing of and COVID-XX Organization. invaluable are for of have China, task by guidance number force temperature world. actions established led We across travel. colleagues safety possible the are us World who leveraging level company, the health a suspension shifts, across implementing providing physical Health We've to manufacturing and facilities, all and and protective Control required We're faced of safeguard senior including support of the help key by a executives around monitoring. our the our from teams Center and the distancing policies activating the they where we work-from-home the use this year, COVID-XX in and equipment company, the the following staggered the earlier we're also of Within impact experiences implemented our provided Disease and personal

our in equipment exercised their teams PPE using protective short our have With develop to ingenuity supply, equipment. existing

Solutions face group Packaging to we for producing use Retail equipment team retail work employees shields and the our fabric using low-cost, is same our our Our mask disposable produce producing cloth employee clients, for for is use. RRD-branded

as on the during centers our has these than our XX facilities. continuity. area they extremely to focus times witness around to globe efforts collective clients of for and gratifying countries It XXX continue the unprecedented been operational maintaining second teams in deliver Our more of

and are while the employees are RRD. ethics maintaining commitments Our core client meeting safety, compliance to that

number a operations essential small of with All of facilities exception the been our have of printing Caribbean. and deemed in the distribution

they and of We from have effectively critical our XX,XXX out on employees more set than home, projects to are up carrying clients. work behalf

Additionally, reliability. we're operational minimize to our and partnerships ensure leveraging chain strong delivery supply disruption

also our on experiencing capacity managing client-specific product volumes. a of began we These align closures, better cost and both actions, we and approaches. permanent reflect Effectively with swift our have in maintaining an changes taken capacity industry, variations plant in structure number our product temporary cost to based client client With tightly demand. decisive to and base demand mid-March, industries, including and operational vast are volume that and in and category realigning continuity extensive fluctuations spans requires

At business opportunities this capabilities the leveraging are in to capture same challenging extensive time, our we environment. new client

is declines and crisis essential solutions. with communication signage providing sales by critical Our team businesses volume retail mitigate to working

we're likely from A improvement resembling When pride We're are these disposable a chains. maintain the of implementing that change directional full-service and takeout, of client restaurants dine-in coloring for displayed branded become the support and backdrops more to banners home also that client, workers providing a to policy large, procedural And signage serving their books transition. restaurant distributed consistent inside sense company, our they inform create to moving as the norm brand our webcam developed clients its quickly a consistency will solutions in brand even presentation more, -- store forward. their via move signage of portfolio to a backdrops which casual and the employees unity retailer about industry also of team restaurant sense offices. to retail of to for work-from-home has to and environment create their shelter-in-place For for from safety, changes. new the communicate fast solutions increasingly large provide Pop-N-Lock its policies, with same to nationwide meetings. From corporate needed menus providing patrons

businesses essential surge to with a COVID-XX, delivery their we quickly comply Labels and their that the services business, Recognizing developed safety team food local of Labels evident pizza large products. to other by our help state brought labels being chains food of labels in are to food produce customers our assure utilized the and Within deliveries restrictions. about by designed critical tamper

health with shipping packages care company, are COVID-XX. care to members For a health diagnosed we major

and create, disinfecting to top hand The how others can process. include during healing soap packages cough team for Our such over-the-counter the the with quickly wipes, affected these fulfill members. a kits and items protect contain as worked and tissues information person HIPAA-compliant drops, sheet kit for antibacterial

the We're also across supporting kits production testing in are as proud test need organization to up ramp critical large of COVID-XX country. that be diagnostic they the a

labels, this kitting including are supporting product requirements We client, total and the cartons. manuals instruction of

life space, in meet to in certified experience spike trained facilities staff, demand. Our highly up us enabled with a sciences the ramp project this and to quickly

QuickLetter, to We that end-to-end leveraging mail capabilities we're existing our launched bring an helps communications customer we're to printed innovate solutions solution and new business-critical market. organizations recently continuing serve while clients, to faster. our And send also

clients at which and is uses now to than solution personalized data and generate employees information automation scale, our respond communicate their Our customers. more critical ever to communications to rapidly as need to critical and

customers months. Just brought our support From to signage to to return-to-work new start back product and and clients positioned clients navigate needs shipping and COVID-XX normal were -- there their we to the as value-added fulfillment the kitting we well they our about as fully business help as communication by and communication direct welcoming of execute packaging to prepared are mailings the recovers. added labels, coming employees, and clients pandemic, help their strategies are their targeted to our in solutions, we weeks various to return the environment other

Our manage third is preserve focus our area and financial effectively performance our business of to flexibility.

have implemented planned actions, all of across furlough including paid benefits program company. employee We medical an with the suspension merit numerous increases the and

projects, our are We of all takeout facilities We've business temporarily to delayed across discretionary facilities. that our the as and we've identified company. spend of capital production significant scale declines for improvement close leveraging the volumes initiatives. volume spending cost reduced facing to possible accelerated We've part other significantly shipped many we actions operational and nearby remaining certain

credit our increased additional have we Board an to of measure our our borrowings previously financial proactive As revolving dividend, facility. quarterly the under liquidity, flexibility suspended and our and maintain Directors

total under $XXX of As our the hand $XXX was were cash and borrowings credit XX, million, approximately March facility on million. revolving

industry. last while years, integrity leader company periods with been, upholding remained of effectively operate just committed always focus we've on the to our effectively and our navigated a mission, our as have as And we continuing we sustaining managing For a this values. are through through crises XXX and in crisis to steadfast

for one keep another circumstances. is unprecedented our Our and our these deliver united global safe in to clients workforce under conviction

stakeholders. continues this we our our of in and unfold, crisis our serving the actions to protecting impact of employees, best clients taking the decisive As are interest

are the pandemic. recovers the performance, quarter we We pleased of from as and our support to clients and are proud our COVID-XX world first ready

And with Terry. that, to over call will I the turn

Dan. you, Thank

XXXX to across board, expectations. the exceptionally start initial with performance our exceeding Our was strong

a absorbed COVID-XX-related organic due Our in sales decline closures. moderated having despite China decline $XX million to

XXXX categories. Aside from and in by grew the the organically quarter China, business in driven several Census the production other growth product

adjusted in quarter and from adjusted $XX income both adjusted We earnings $X.XX also reported first were our highest share increase for income the any million since our from nearly reported per operations, operations a spin. and our of

$XX in improved the were first expenditures operating with flow cash XXXX, down capital $XX million while a also cash quarter million. versus significantly Our flow improvement of nearly

Lastly, of against successfully more and executed extended our capital transactions, about very a our maturities. reduced backdrop market transactions which remarks. conditions, of midterm my these the we later challenging in talk I'll maturities near-term prepared number

While of now strategy, execute liquidity. the having flexibility. Dan our update is our supplemental to COVID-XX my our the great what navigate protect on But shared our affirmation Page primary clients our refer first as let commitments our performance. we while our to results how deliver are X a we Please remarks. our we employees a on preserve I focus as we me review quarter I were focus presented to through begin clients, the financial are uncertainty and by started of are get our my our doing employees, first, we will and the successfully to commitments protect preserving portion with on in quarter of first to deliver slides our and success

and both were decline our business, due net and we million we Chile a our R&D which adjusted sold down of full operations closed $X the $XXX in to recent dispositions. year and Logistics the our Chile. business our basis, and for operations quarter, reported a also Logistics current the year, from recent net sales loss business, in quarter, On operations In Courier Last GDS Collectively, closed XXXX. sales we sold X.X% of in million our U.K.-based reported Brazil. X.X% and includes we in Courier an

a facility significant previous closures due impacted was the quarter organic dollar. negatively On in X.X being U.S. to due we quarter to Net from a points reported sales net which the in X.X%, a were in an China. lower of month-long million sales also $X.X by decline percentage improvement stronger despite basis, the

primarily Services Business volume impacted additional and reductions significant Print to planned segments, print supply secular year-over-year. print decline the our of negatively X% we X% reduction Commercial and and chain in business. for were packaging very commercial For reported the reflected in sales, domestic and low-margin decline Results the also Both where services be the continued rate the products, quarter pressure estimate commercial business, between organic product categories X.X%. in an by secular in our our China roughly

growth the several in our Labels, front, of growth and categories, Business On delivered including organic Logistics product we Statements, Process Outsourcing.

Marketing of contribute & Marketing due in Solutions XX.X% well as Print significantly the primarily reported production, Marketing Direct to April. organic which to expect growth due favorably Census volumes Direct XXXX Direct volumes higher we to from Fulfillment. as higher benefited through

the run the we rate for As reported work to approximately second expect of post have such, the we each X/X the previous of Census in X quarter quarters. last

of operations adjusted million of Page quarter $XX.X $XX.X first from million the XXXX. income versus higher X, On was

XXXX unprofitable in the ongoing exchange impact from a in growth outside factors positive rates. compensation business, X.X% of modest lower offsetting in of lower organic these favorable reduction from China, were margins recoveries. this operating byproducts incentive increased and initiatives, benefit in expense X.X% changes lower reductions foreign Our to and Partially pressure reflecting price volumes China, cost corresponding quarter,

to dispositions to income $X.XX taxes. business improvement to SG&A to The $X.XX year, down loss as significant and the from Adjusted per higher from of first in XX.X% expense prior was serve. interest attributable our reported is in operations, first Adjusted reduce quarter was the year in share adjusted lower quarter the compared loss lower a period. and $XX.X reflecting or million the efforts ongoing expense prior million $XXX.X diluted our cost

effective included XXXX. was adjusted million quarter tax in X.X% a interest benefit expense the Act, in to related discrete the and and CARES $X.X for Our deduction which of the rate XXXX increased

Our in million of impairment pretax which $XX.X restructuring, of GAAP $XX included other results the million reporting charge for $XX.X impairment charges goodwill included unit. quarter Logistics -- and noncash a the million,

from to the due pandemic. favorable term prior future Logistics quarter in for Although in first COVID-XX demand projections near the operations reduced were and both were the income to the sales lowered year,

In the results the other associated of Logistics disposition $X.X restructuring quarter included with addition, for for loss SEC XXXX of DOJ and the business Courier ongoing $XX.X million the charges, from investigations. expenses a and and also net million

by $XX.X as million onetime lower $XX.X expenditures the $XX.X On well Page the China was X, Census construction driven payments. million, improvement the in The facility interest net Capital the million included of capital period. million cash amount activities and which $XX.X lower of to working compared tax for operating and by used XXXX project. XXXX was our an compared favorable The was XXXX period. as as investments of were new to improvement

the Turning sheet. now balance to

had which compared the $XXX credit outstanding million XXXX, on March largely to of was of facility. due million, $XXX As revolving total amount XX, December we XX to up cash the hand higher under

We throughout expect to higher preserve maintain the a COVID-XX pandemic in to flexibility. financial outstanding order borrowings

$X.XX credit XX. remaining an to outstanding $XXX the our top of the with facility March is capital was would debt Throughout on billion, as priority. the was our and of priorities. update availability COVID like liquidity preserving pandemic, provide you Total million I

while month, of our such, stockholder continue Earlier our we portfolio value. to Directors to optimize As our investments we temporarily for suspended this announced are our quarterly also Board in opportunities our reducing evaluate dividend. we business that

the on deposits, that one site. our we or will In early and redevelop X, to regards which facility estimated third to cumulatively will continues work to year. the required to buyer of collect will obtained and the this continue in The we expect quarter $XX we The of at obtain we approvals their Page the record transaction gain government in the have XXXX, to be sale. printing collected pending expect a close, necessary $XX million regarding Shenzhen, significant in XXXX deposit the time the on buyer sale China, approvals the million to late plans of has from additional

Our with contract delayed. the XX% of to in liquidated terms with final installment further the pay in comply the entitled any of approval the to purchase buyer the If or retain damages. is buyer XXXX the even requires government's the for reason, RRD them is if to agreement terminates fails price

in repurchase, of Page a debt in various the maturities to outstanding effect maturities X and March exchanges of settled largest senior negotiated a in holder, senior addition proactively our midterm portion XX, series March with of previously We our a giving note series our the early as which April. a privately pro transactions forma of shows after announced addressed of to which note significant maturities.

these draw As of senior in transactions, facility. on a we of million and a notes $XX repurchased funds using XXXX at credit revolving due from in XXXX March nearly our discount part

In notes senior notes exchange agreed of April million addition, $XXX XXXX of and due unsecured million due X.X% for XXXX, we in XXXX. new senior in to $XXX XXXX

As old for in was $XXX of early March The of the remaining $XXX April. notes exchanged and senior senior of of million XXXX, million million debentures XX, $XX notes. had notes for only new $XX exchanged million been new

$XX opportunistically due principal of interest We payments. XXXX and repurchased senior future to million also and notes reduce XXXX and debentures in

April. As of million. of now $XXX was have million $XX remaining $XX completed, repurchases maturities the are million reduced in now March were to $XX been and early million these and XX, XXXX, XXXX the XXXX maturities The settled

predicted estimated operations, or ultimately to results this business, the position cannot be impact at fully will financial our time. pandemic extent cash and The of flows which

perspectives remarks through XX RRD As liquidity are my performance our on and COVID year I prepared like full said, manage our we conclude to pandemic. to that the guidance. unable as we our quarter would with provide With Page on second such, typical

us models permanent and We temporary for execute develop continue reduction and to both financial operate scenarios, guide we cost which various plans. as our

secured second products million consideration have the be updated as In business prior sales we to to orders than deferrals addition, recent year, $XXX lower factors. among quarter and parts $XX of forecast, This into that many assessment, our and quarter services, cancellations second as orders demand projections new well we have COVID-related due $XXX which an to are reduction other on producing current million net into we business. consideration takes this includes our approximate million taking our sales of in estimate dispositions. expect for Based and

XXXX, XX, liquidity credit and As company March borrowings the we measure under facility cash million flexibility. March our of hand preserve of revolving committed as increased revolving consisting of a $XXX availability to on the facility. total the under credit had proactive In of financial

structure through In collections. addition, our are receivable we aggressive cost maximizing our and liquidity accounts management of

on in is operations our June. continue upcoming maturity time We believe our as well fund liquidity to debt our as as sufficient we to pay vendors

addition of remaining April interest approximately was our As early funded in debt working payments capital liquidity in $XXX needs. the million several were April XX, total and after repurchase normal scheduled to

assets, continue noncore of opportunities including also investments well We certain as to real and as pursue monetize sales businesses. estate to

we our are maintenance not financial to in currently subject debt risk. financing reduces agreements, covenants our Lastly, which

operator, now, open let's And up for the questions. line

Charlie with Instructions]. [Operator Strauzer CJS.

I obviously, So in thank if know expecting? could. of remarks, the prepared And that a as ground the there I the that magnitude that. lot your a cuts to But spending, reducing follow-ups, just covered And you and capital CapEx. sense of you're any you're you for couple of

reductions in capital? The

Yes, CapEx that's right.

that it's but the our the current happens and we're we bit in pretty and again, But reduction, about million how $XX last something neighborhood. probably -- as continues, a to and So guided fluid well. a estimate talking quarter crisis on we've what had significant reduced long depending

if opportunities you that like terms possible? some you highlighted Dan and things talking in at that. Got the -- it. new the about bit opportunities of things some of Can in And the perhaps quantify when of the of terms a just that for kitting maybe -- little look you us, was there

focused specifically, offsetting the kind $XXX all quarter that numbers, out seeing in It's which is did we're I the We've isolated that come quantify parts up where the is areas of into the but reduction. and that these mean canceled I $XXX of we opportunities are there. we million million or it. in in netted but provide, fully that or impact of not second seeing X really the and good not to that to it's business. the orders, continue it, news X several guidance embedded see can't I is, is deferred clearly,

So continue orders. orders for a have we it onetime a But bids of in. and specifically to quantification wasn't just but those shot don't for requests kind see coming here, I

Charlie, it's Dan.

from important I outlook color lay as revenue out at statement that standpoint Labels. a think of end everything geared spending think other product about you little discretionary more we being look the a a if middle scenarios really regulatory production. a what's that's scenario, continuum, and have run, more communications more continuum to our forecast provide bit in mix like And the you opposed client the that oriented revenue on in call and then on you towards advertising different we've would provide it, kind little bit as our on different product of, of that

Curtailment advertising, Direct taking the So services think companies particularly the communications that, Print-type financial of what a in the that that, signage, are back, cetera, Marketing of going discretionary is et out. general we've given as pause retailers well. end paring are bit and the which seen is a -- of Commercial of are on in-store

the the discretionary the on end continuum. we're impact So of seeing

driven and, and the On relative Statements that that end fall into compliance are up continuum, we mainly it's because hold regulatory the other it's about driven fairly the again, of would seeing well category.

the related that's products. that's stuff middle really really question mark to the In is big because the

labels, that the to about think or yet a fulfillment to it's through. fulfillment, you about shipping has whether we're way very its these labels kits, way a work it lot product of think you we good lot its work or about yet through, feel has So of where labels, at. But and

of are across as pursuing lots that that. the because that to we're QX, curtailment of working But testing particularly being because -- win, of there as absolutely overall discretionary as are And will there's enhance they products kits know, uptick are that think in out category. discretionary we're testing about products. companies the do and all spectrum impacted There see help that to clients you the different that as Terry really we and at broad them from positioned on country. marketing-type that, we you end look the As this different of at producing particular we said, the

the of Excellent. CARES business getting near you tax there. side And in that the then, or on mentioned your Terry, term? impact bad the act good Act, Any that little pieces a benefit other could

Yes. deductibility I certainly certainly, XXXX. the quarter benefit back tax in mean, to a because was higher nice retroactive for impact the had it first

of will from effectively benefit too we So got and the participating those of so any into XXXX quarter. opportunities loan for first in programs the of That record as extend to XXXX does entire Most well, for to were benefits benefit us. the XXXX portion that or big continue create for such benefits.

notable of payments first all That's payments. We of been the revised quarter of some July. estimated are extension the -- the deadlines. the to with tax we most are our The do ones have opportunities of to some kind deferred extend kind

timing interest. of permanent has of been So thing is shuffling a timing. opportunity there's the only the deductibility only reduction that a some But the on versus payment

Baird. Bill Mastoris with

a Census the out idea is with Maybe, operating of start you could much couple you right is I'd give more could when of sometime Dan, My And I Census to middle with around contract us recollection us remind some on do What if this lot the out. -- questions. as of like impact also, does been about an decline they e-commerce. hearing on have then marketing digital having coming follow-up. you? then emphasis And type we've of that from when that run to the a shift a print year. retailers

Yes.

So Census. with let's start the

That now, right -- frame. and continue office really approach the choose that through time April-type may As Terry May relative as Census month But any fluid through May. through printing will additional that bit wind to run into mailings run Production this -- mentioned, that'll government the of we continue. or will as a remains do. little the significantly to then down

that a those you would side, closed X has imagine. impact Relative of retail from comments have on that think you significant, perspective there's I I the signage in-store on would Clearly, been give as retail to stores, the that.

of which that really as Direct they challenges that control and other spending aspect pulled they costs the to around advertising their or spend, of is open, use being The and components being et curtailment aligned is direct stores discretionary cetera. Marketing mailings the the their back look comments sales that amidst not I made with

versus The from we from we a they again. them getting side print. I for are give you, relative that open to begin the standpoint digital QX would to still but capacity retailers request available up combination the will in though, to as of of other comment retailer e-commerce back is relative have QX, And early,

return So obviously, by the to consumer fact want is e-commerce see impact behavior. campaigns leverage the And we net relative and environment signage, which how driven the that to of consumer and go extent go the offers going do is direct a again, to and that your question are go that they that will want I is, get that of think stores the in how want into to question again, be return. permanent I is is, those is The current physically to e-commerce such and out back the this, the consumers mailbox see to think there marketing to to versus significant into behavior. they and in-store of question stores, --

early, the fully that March what XXXX I is thinking thinking could I that or maturities? -- -- financial it's on but see about maybe it you in just How April? are but of we right now? are know Great. early, Okay. repurchases And terms again, see discretionary acknowledge another in how to you extension? marketplace And in debt Could subject on the about really the -- we similar and then addressing way, flexibility. is did you way

Yes.

we 'XXs, range. plans the communicated now, and midterm have our certainly, the the and all that mind, haven't would XXXX So the right in quite of the we 'XXs on explicitly that our is, which addressing the time to for that kind stuff maturities normal is of maturities, on that, be and we midterm but work 'XXs -- again, started aggressively

that now That on dependence access flows with with right so buy based what from many on that And down. holder. back the proceeds part now. on -- for -- -- building that? of be of to transactions continue COVID, depending cash come as how many sufficient back capital goes. We it maturity the and happens the XXXX the of on when think million Would the dependencies Would the availability kind to China credit again? facility long too, to credit timing retire $XXX some I sale. to so did So answer is large just markets be the that there's sufficient we actually down to the likewise, That's our question

is on the those I So what understand a we're impact that and things, it's of later, everything And but the off all just say flows timings kind and continuing there all whole information share of opportunities, going is more be. table. that those work to would to you some variety for potentially on cash we'll listed that

that that of and can that and all ahead XXXX a Terry, way it advantage high-yield you, debt make go going out would for the be question to additional just into when recovery. a of take now you right issuers have there presumably arose, opportunity one is, guess lot going they so nice see I marketplace If position that? through a to the issuing we is in there XXXX And liquidity

absolutely we're have And of would evaluate transaction here. opportunity whole addressing and the like these evaluate the certainly it. upcoming at and we would a variety fact, think consider look the pricing a executing maturities at We And as we always in for we that, it of a looking that that options we success and it. could matter and

Sachs. Kim Goldman with Jason

apologize got for the bit, So then But little impact so I 'XX a full for already. you have you you mentioned Do you XQ addressed a this the I if was all, the disconnected closure year that XXXX. Courier first facility sold, business for of well? Chile as that number and

Chile with, -- Hold about $X.X on It here. And a was as million small. a mean but couple worth. a Yes, IFO and quite to roughly it about business small was -- just IFO about $XX it's our was months' X was just slightly Chile begin was under on sales was just of the Courier I first on months quarter. of the -- do. sales in second million slightly And well. was negative and negative business I for on

terms similar your costs Census, your and of bottom been the beginning the to then quarters. then well. the line ramp for a strong days? throughout get little they past getting of of obviously, prior And better to I'm of sort a a Have XQ there Or and been impacting start-up margins margins in the been as the contributor you quarters? profitability bit the has curious top has these in versus line to take X on contract in

Yes.

year. in First almost about and profitability quarter to of quarter Census identical last fourth sales work -- of terms was

The and the stronger that we quarter third first which that a first quarter XXXX, was now. than fourth had little of quarter significant quarter production, bit was both

following then the capital... on And Understood. up

close, pretty But so... you were

And et incremental of secured more incremental we up And incur the liquidity, to to as raising avenue as then may secured attack on that $XXX some potential you thinking that source extent have The loans buffer to but then about markets. capacity of you You do want How a have more issuances you maturity of costs thinking versus how you have? million, about do an markets for capital the debt interest a the how question. just cetera? debt you just term are which profile, Donnelley? up following the for -- high-yield outstanding lot in much R.R. seen are liquidity

there's we process that, now, maturities. becomes very the are of But and all look fine right maturities, those of mean part too, you pay I that good, that are balance out we would rate the as certainly each liquidity, mean, on dealing pushing it a the favorable definitely midterm to evaluate. on I with attributes there these us Yes. incremental that at

that the quarter on the debt we now facility have is different issue. a first in because flexibility. right capacity capacity And now the small. can the that secured first-lien again, at But of how the really much first-lien table, is levels secured but question, limitations the pretty of right nothing we've terms do couple secured terms of end we secured of -- In largely at credit debt, off debt debt drawn right now, so for

secured debt. very So to there's limited opportunity more issue first-lien

other the to debt, of capacity some there you is capacity a debt at term million loan the that secured agreement. there junior to least out still were do is a As math of that, to junior issue couple hundred dollars if of

[indiscernible]. Instructions] [Operator

pension is the really The in liability. regards question to

that, to kind that $XXX my is, is would that have math what think asset I done and underfunded small, have that guys the like of the required But seen at to pension. trying kind just million bit. come pension estimate grow of expecting around fallen, where, a have of look discount and mean growing contributions and some I've in prices obviously, relatively liability so XXXX $X-or-so contributions And I the you of does impact we and I was of were the I'm kind portion underfunded amount, to pension how million RRD. of understand up be and rough that as rates go-forward guess,

of OPEB quarter, primarily we end what have of just XXXX, have as to Yes. the lock all have last that But the they what where COVID is income record that the then that discount asset that that the which and of we impact assets reassessed we we and all doesn't in and for plans based come valuations will with certainly, we No kind that and be and $XX XXXX, with with contribute there. at we on problem, that on that contributions plans rates here. in the -- XXXX. and pension happened and for down Sam. The income for out at what what's The do million crisis as will will what record valuation right I make, set said change the that impact the around be will the contributions,

So that impacted none quarter, are changed. by and provided I all last accurate not will the still XXXX stuff, the Those of numbers they this. have be those

They that Now then all of at once. are end over on if the year, through impact of you're continue asset periods should the kind hit valuations really adjustments, very the very, and time. focused you're of lower those long amortized don't isolating they of

a of that into and required. contribution ever And we've got minuses in amortizing the not levels contributions been year. recognize pluses has So for pool impact that computation seen any that we each not our on -- the are income variations you've are your significant

valuations to impacted XXXX is asset year. on the see So at XXXX rates as the this we'll how have point, based end of of discount is and unaffected, and

now at turn Dan call There over are time. no Knotts. would to I further to questions the back this like

with sincere certainly Great. around healthy and to safe. serve time your And you. to adjust to to our want clients commitment Thanks to our to of us. for And joining let's to employees quickly for I'm your appreciate RRD, everyone, this We my all Johan, you, grateful continuing during again, that, just help environment. back gratitude stay your the us this efforts and I express and unprecedented in to operating dedication closing, world. new

Thanks, Dan.

on stakeholders. would results replay reminder, highlight content our events rrd.com. that of relaunched Also, financial for first have to an website Investor Thank our access XXXX the like that be Quarter joining at RRD's and RRD XXXX website, news, us, a section quarter more Investors for and call concludes First audio streamlined found the of As we Earnings to information making you can access I our to Call.