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RR Donnelley & Sons (RRD)

Participants
Johan Nystedt Senior Vice President of Finance
Dan Knotts President & Chief Executive Officer
Terry Peterson Chief Financial Officer
Charles Strauzer CJS Securities
Jason Kim Goldman Sachs
Bill Mastoris Baird
Call transcript
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Operator

Ladies and gentlemen thank you for standing by. And welcome to the RRD Third Quarter 2020 Results Conference Call. My name is Amy and I will be your conference operator today. [Operator Instructions] Please note that this call is being recorded. I will now turn the call over to Johan Nystedt, RRD's Senior Vice President of Finance.

Johan Nystedt

thank Conference for Call. and Quarter RRD's Amy Results XXXX you you joining everyone Third Thank

Peterson Officer. Joining Knotts prepared questions. Chief Terry RRD's on remarks; President Chief me today's I and Executive call Dan, Terry Officer; will of the conclusion At are and Dan our today's Financial take and

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

advancing release, third today's copy detail we of reference yesterday. if This The the along the have the operations our we this review themselves. Form is supplemental information slides operations. be is Investors third participants I at posted the reflected As XXXX follow in webcast. page will was X-K of wish advancing of which our those who during the slides call for SEC addressed also discontinued on on are business I call, of that rrd.com. in by third consolidated our results logistics for presented quarter connected furnished slides will you for the reviewed more by to will quarter Alternatively numbers in to in the periods website the statements information quarter section all as we press in Beginning a filed be

on call be operations, or loss income will net continuing and logistics. to from amounts today income references share on SG&A, Our this sales, net basis per a without

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

to to the please factors included factors included discussion cause that non-GAAP complete with earnings results believe the other in discuss and release our refer the company's actual quarterly of on of risk Any matter performance. company's on to the only. with informational results non-GAAP supplementary measures investors ongoing concerning information. cautionary could financial to press the non-GAAP purposes our an our provide financial We in website appropriate For I turn statement and the materially, in the the annual Further way of filings will Form references provided is information part XX-Q of XX-K will Form SEC. presentation operations the reports results Investors for the comparable report These section GAAP and are measures non-GAAP useful our reconciled we financial to the a as Dan. call evaluate to release. are our now over

Dan Knotts

Thank you today's On you remain navigating we're us great third related quarter Great. operating to COVID-XX advance operating taken out results to we for and actions backdrop and against delivered key plan. strong I your of pandemic for Johan. behalf expect as recap global call to Good to year. execution RRD several We how the hope an of see the we performance our going to I'm going close be It's I'm update and everyone. you And on to joining. provide pandemic. with healthy strategy. our what current through and the families of morning share Thanks today. the uncertainty I'm going that the financial to On at volatility of a all safe. long-term

is resurgence While threatening the of across period. recovery been to and improving, pace of recovery the elongate the uneven the has virus geographies multiple

performance which approach intact managing we remains operational plan our to COVID-XX critical executing maintaining business in and clients our our our our entails such, and operating are these firmly employees executing for of well all As continuity effectively three protecting areas.

as to employees safety maintaining is our company priority. the a approaches. level adherence discipline protecting flu the XXXXX pandemic, cold the of safety and of and we're of outset high particularly protocols Across and the from said top we've season a As health the our

We're COVID-XX Health utilizing in world we've teams adheres company remain across for like done working just the our service XX,XXX sales, clients and produce to unprecedented cross-functional our around latest time. the supporting during to to Disease force Centers meeting with the guidelines communications locations diligently over for our connect their World Our commitment than from we the client our critical and XXX global is and Organization fully steadfast clients perspective, years. operational talented more ensure production to this customers XXX-plus are Control. the regularly task are From to a

agility on is changing requirements team creativity this commitments. are clients' deliver with needed and the and to RR the responding our Our frequently in environment volatile business

of our term. managing long RRD The these our strengthening the through performance challenges, prudently third component business for COVID-XX near-term plan while is

working aggressively are pandemic. our leverage those liquidity the portfolio being opportunities new of the preserve to capture to power and by reduce We sales including cost, created

generating our cash business During disciplined flow. on structure we improved delivered the capital quarter, cost-out more substantial with a signed new plans on our focus and

the adjusted year declined year demand, performance operations the reflecting significant sales and equal overall exceeded to made organic versus top-line, despite from the our sales softer of the income our sales We prior cost operating organic market expectations. related to organic delivered while midpoint On SG&A reductions lower significantly structures. our we in XX.X% the prior

working third points year And achieved basis capital basis increased prior through on margin operating we versus our flow adjusted XXX operating consecutive cash strong and focus the of points improvement. from our management, quarter. XXX Our quarter second the year-over-year

were connect with models driven rethink they COVID-XX positive of pleased communicate the am successful long-standing to results way the pandemic performance I operating our is disrupt forcing the high-level we quarter customers. business to and by delivered. and companies The their global execution with the many for and serving plan Our

they and of customers. pursue industry-leading to support our ways inspire portfolio more their as We clients flexing capabilities are with our service effective to transact

enabled relationships, roster. adding business initiatives clients to a capable Our has time also and critical varying us channels to print ability a existing managing as of our and digital partner, client especially, broad scope this scale trusted new during to of serve of expand unprecedented across range while

share encourage a experience, with Health CVS notable project RRD of people ability members a of coupled of innovative season, enabling scale its and to while to including and we've critical products execution U.S.-based project, me launch support Company. recently XX-year of major our to packages component turned care their currently significant the data capabilities of RRD our because with past processes approaching sanitizer a as the will well little pharmaceutical In kitting. the a Building provide managing of You wins client to thermometer, that relationship, can of supply several light several a new many meet few every The We breadth of manage over months. and the our at execute millions self-care, manage of project manage flu Medicare a sought Aetna, device aspects kitting masks. Aetna of scale, print are we're the clients all secured examples packaging for and production partner. our ensure we turned project this all development this required because items diabetes. business the of new with our to focus production to medical to this that members manage the device with continuity hand proven chain a packaging to facing including better while challenges than completed a that help this ship and more reliability. company lead With Let care Aetna design, to rapidly called project through face home kits was We're large-scale working medical such to Caring new their fulfillment. packages our and also and their on visibility project as with and on to extensive our We're high aspects requirements. ability time. partner patients RRD of

efficiency to North consistency our to gas electricity digitization review Finally, help Energy This with and business enforce businesses. we across enhanced as chain. home expanded include expanded began of supply recently efficiencies largest their is an providers America's and Direct initiative of brand services. relationship of natural It energy-related to retail and the partnership increase Energy, all increase assets the their and of Direct one

our Energy warranty project for to opportunities Direct application large-scale supporting work to performance we broad a differentiated develop capabilities mobile customer-facing scale from delivering home from win programs are and also offering. range range are of to which leveraging communications new digital business website and agility are the in print new demonstrate we ongoing to serve. and These markets their service We new the

while masks offerings. our UPS clients, expanding mailing by needs package. their capabilities innovative longstanding the which new utilized Mailer, thickness Mailer recently converts developing also as patented a clients' for meets offering smaller the flexibility recyclable is qualify provides evolve, size impact introduced This to to savings We mail recently that packages a an to of solution guidelines Flex we AARP, cost that our notable deliver our the flat. and As to environmental automated a XX,XXX face client Flex volunteers. the reducing are

solution saving with and shipping package their while logo both interior messaging, the them Our on and enabled customize the of to the exterior also marketing costs.

Touchless which World dynamic interact tags. print, our the of packaging, mediums power and existing we platforms, smart and forms code with other and smartphone utilizes smart to direct with optimally across solutions tags Additionally, scanable easy content by these these a then mail. a experience. create of We're and that we commercial to RRD, consumer including touchless provide smartphones labels can integrating XD is engagement. Touchless World launched consumer enhanced a be enable offerings signage, of XD is QRC NFC, set any with delivered technology and Dynamic retail in the comprehensive

cash. to our advancing of and business TFI we we a priorities core, challenging also transaction received to RRD regulatory definitive and build our this our entered a strategic flexibility long-term. million While logistics approval. the financial sell drive In for performance we Worldwide our revenue for $XXX portion period, agreement has our International strengthen September, the through into This in execute navigate DLS to stronger improve plan our are operating to

signed to agreement week. international sell mail our and We a definitive also last separate business parcel

of by respective transactions conditions end two We expect customary satisfied. services of providing are to buyers both our the to through logistics businesses. these plan agreements with of after We these closing completed continue year the commercial the to clients close

and quarter through personally long-term commitment strategic execution optimizing reducing takeout as cost International With the and strengthening debt the our done of execution Mail RRD been remainder Parcel the teams DLS transactions. maintaining future groups positioning to business lower-margin and alone our generating for fantastic and a year. of business we and combined working our these our further sheet. into reinforce leadership smooth across of confident our to teams transactions, the in these portfolio, finalize that divestiture our our tremendous clients balance transactions the goes firm let actions with Worldwide strategy. like the divestiture our of I'd revenue during as ability I'm These conditions amount of are company closing simultaneous complete the our logistics well work of businesses, and A employees our job for outstanding our have to in any two involved this of and business the have by the end the thank the transactions very time. in continuity

close the call what as two would over to on we provide I turning to an the see to expect across we Before like our update Terry, segments year.

and and gradual of conditions and impact spend continue to is as they challenged they're constrained we marketers projects very RRD that economy premium marketing push this of traditional different how to see the their ROI their Solutions on changes placed the reliability growth. our industries to COVID-XX At in will and Solutions solutions marketing top the marketing adjust marketing Increasingly and stabilize a line will that budgets vary team of recovery recovers. as albeit restore greatly. demonstrable flexibility that is as that time, on we've What are marketing to businesses of begun critical consumer In have marketing selective programs context forward. the been well being to same economy clients' with are a marketing client Marketing need solutions of clients optimize approach of all behaviors uneven affecting The positioned believe activity clients' reopen. return share integrated and programs provide to Marketing marketing our reassess parts they're unique spend pace and means approach. the increasingly mix be overall as the For about the clients

the to Business rebound will for begin industry return will print correlate demand verticals and closely business product For quarter. a saw consumer with of the select Services, support dependent. We during occur third for spending and also services and be

However, for also for across consumer certain are packaging, and e-commerce health labels the we changes a supply industries to We're behaviors. The opportunities methods new and alternative such for acquisition longer as for seeing client travel to expect shift in and see period delivery chain, and hospitality creating our care businesses. expansion recovery.

the we plan to remainder of look on the strategy. of our while simultaneously ongoing the advancing operating focused execution As we our are COVID-XX long-term year

through successfully Our stronger teams are emerge am call executing I Terry. the and confident this that, With well a navigate RRD. we and I'll will pandemic over to turn

Terry Peterson

Thank you, entered XX focused business Despite to uncertainty within slide Please and on significant as the our my the amidst control. volatility. prepared matters Dan. the We third begin turn quarter environment, I challenging remarks. we

pandemic. needs the and of innovative On capabilities new to solutions broad meet bring created evolving our opportunities to the sales our by clients' capture front new we set leveraged

attacked and we demand. focus cost time, tightened costs continued businesses. liquidity. same management to front, the bottom agreements by aggressively executing capital impact strategic our maximize operating SG&A remaining our At logistics Further, on advance definitive minimize our to the two in our the priorities order from sell we to line we lower On working both to

our paid efforts million. performance as reported of a sales in significant off previous improvement focused our the exceeded $XXX actual Our organic over our results guidance we by as midpoint

XX.X% earnings $X.XX, we in fulfillment of reduction demand. how pandemic a contrast, categories and clients benefited work differences prior reporting the related many in are was report other compared for was Our By the Overall, greater which up our our and and XXX products categories orders to which we declined operations more reported our third third packaging sales from to cash year. million XX.X%. consecutive share prior yielded Most additional our Net diluted year-over-year categories and improved last improvement to reduce of for impacted demand. of sales as the decisions of second a from On pleased COVID-XX adjusted basis products improving a from year. experienced margin a business quarter, the Similar saw with marketing, less new point disruption second operations included services and were quarter's the $X.XX decline previous significantly rate in and flat $XX.X for saw improvement XX% GDS of continuing $XXX.X reported over services, which and commercial labels, of the reduction the what adjusted which quarter, Across per chain Chile. associated make and our showed different can cases flow direct the categories, prior organically supply to adjusted year-over-year trends and orders, income third and to each basis down disposition net in in with in year, reported quarter operations operating services operating like we print, billion the print growth from quarter. quarter. where notable XX is quick in organic million was closure very in the products quarter transactional over the digital

also Our And print, closing those was business efforts sales exit to ongoing unable pressures while differentiate there commercial believe impact COVID-XX. declines that we to certain impacted the continue impact including unprofitable categories, of to the continued our decline from are we from planned secular facilities. in product are like by

impact of reduction lapping and XXXX. third adjusted work mix this third $XXX.X initiative million $XX.X million product the ongoing SG&A in The in our of per of strategic offset period. serve. $X.XX of the of more On to increased year or earnings expense the that the execution to continuing by of XX.X% the as cost impacted was down was and operations reflecting essentially initiatives than prior from share million ongoing operations lower flat pricing. Adjusted as of quarter, third completed volume from our was the quarter $X.XX cost share year. the our versus Adjusted project in reported quarter per $XX.X combination negatively year, to also the favorable were from in compared prior sales lower XX, of our of marketing income third $X.XX the direct Our the slide Census quarter

period, $X.X tax expense year recent to changes primarily impacted from allow favorable adjusted due The million facility the greater prior benefited interest earnings that for it In due quarter addition favorably law effective of also term and current quarter was than lower the tax to to deduction by the rate interest was was a being our Interest the income in XX.X% credit lower and expenses, loan. in expense. rates on our and taxes prior expense. primarily year lower to lower

results included of the reduction $XX.X year a charges charges significantly other expense. and LSC restructuring included million, associated GAAP and with associated bankruptcy, obligations which pre-tax million GAAP pre-tax with Our $XX.X related tax the to withdrawal the estimated for Prior cost included quarter results restructuring higher of MEPP charge a our initiatives.

Turning slide now the balance XX. and flow cash on to sheet

XXXX, on by $XX.X of $XXX outstanding. and which payroll the the to Census of million as deferral investments project, taxes XXXX to we capital $XX.X of CARES quarter expenditures DLS operating million of to than in quarter $XX.X during lower period Both for were And and the at the before due activities of in our quarter. important cash We Capital significant allowed lower and under the million the end to our as total of as million, million XX, the end million payments. and employer-paid business million million plan proceeds against in Act made improvements, lower sell working XXXX second Remaining on to agreement hand in last was preserve portfolio. two of business logistics Worldwide spend the the the facility available As Net to close provided $XX.X had as new portion including we further interest week, improved toward steps compared $XXX debt cash of our book liquidity, outstanding year $XXX optimizing debt $XXX September credit facility. quarter total continue was related China availability cash volatile September. $XXX the at in $XX credit we an we billion, divestitures XXXX strategic are million period. we higher of on drawn hand, facility definitive end including well million the was total sell $X.XX the we the of the to Recently, net a International a agreement amount. our business transactions expected for gain, definitive this to took liquidity use to due the the signed signed XXXX reduce a for to Logistics from and undisclosed

with completion the the fully buyers logistics slide the sale government expect to of printing the pending approvals transaction to can facility through obtain continues the commercial closes, to our these transactions, will our in with our to complete a Shenzhen, these China regards necessary In the With businesses. logistics on gain so record of Once have we'll businesses, the we the of divested to sale. agreements but XX, on we clients' continue the buyer work sale. we support significant requirements

scheduled collect deposit of one XXXX. To scheduled to the million the collected date, During third we in another $XX have additional deposits, million $XXX.X in deposit of we million from are and buyer. collected we quarter, $XX.X

from of maturities through and year, debt the the liquidated the XX total at XXXX, by reduced these the or $XXX contract retain our purchase September amounts RRD outstanding XX beginning is of billion with the if $XXX XX. pay any XX% in agreement Slide even approval the aggregate, further XXXX of year. to our maturities comply delayed. of the the beginning maturing we entitled terms requires December million. over successfully have fails installment $X the and damages. government's the due to is of for which buyer million, various on notes senior as them the the is Since debentures, in reason, Our terminates down buyer price final of If shows In the now with to

the XXXX, we opportunistically of we accrued date. quarter, $XX.X to March our and we is reduced the of due on of remaining ultimately million the $XX with to expect aggregate to to interest notes make-whole terms will this amount will cash plan equal predicted million senior that amount in $XX.X senior the redeem a redemption redemption million due results we principal them in in notes, the this third to XXX% which the Yesterday of maturities time. the indenture notes and repurchased business, The to position financial XXXX. After price the complete, XX, and December remaining calculated we XXXX the X. repay and of or During of remaining is sum accordance holders notified X.XXX% our and outstanding principal XXXX senior cannot due using be the existing related estimated The unpaid expect be impact pandemic liquidity. of operations, extent at the flows fully redemption of

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

our expect by of of impact XX% approximately pandemic and million the into XX% a this factors. from the will Organically Census range Chile. Based to demand $XXX takes have and including into assessment, we other current $XXX unfavorable net million, million this services year products forecast, ongoing a from not be We period our GDS the fourth among work taking reduction the year on to sales down that prior recent and $XX net projections sales updated represents dispositions of repeat. consideration for in to prior to quarter and consideration the

much be cash is from our related predict and COVID-XX. difficult quarter but to lower While reported the in than improvements adjusted XXXX. pandemic lower of will one-time in how to of quarter to also achieved in XXXX expected and additional as XXXX, fourth reported is specifically than Operating the will to working XXXX. fourth with services, of amount. operations for earlier demand quarter been certainty, capital quarter cost is may Interest expense than the is expected that it products fourth orders from income possible Fourth third have predict quarter the it amounts benefit to lower amount the our results third reductions, including be the flow quarter the significantly impact be difficult

We hand the also additional expect operating negatively facility. between logistics DLS Once $XXX due our cash our outstanding the to year-end, and the on impacted reduce we lower gross net to to that be third of borrowings flow will our divestitures outstanding of Worldwide the expect million closes, quarter. use end the expect By of we under credit to business sale debt $XXX amount at businesses. our plus cash cash be proceeds, million than

consists cash our revolving on availability hand. mentioned, liquidity previously of of facility the XX, RRD and million. I had On on As September liquidity credit total $XXX

to until sale. we to as Worldwide our operations, believe credit well facility cash in our debt our outstanding is DLS and higher upcoming sufficient the maturities XXXX. expect close amounts We on We balances fund liquidity maintain as

sales In monetize investments including opportunities addition, continue real estate businesses. to certain to non-core we assets, and pursue and of

are open line covenants reduces our up debt let's our questions. And financing in subject we maintenance which now financial currently Lastly, to risk. not operator, agreements, the for

Operator

you. Thank

first Your question-and-answer CJS Strauzer session. proceed now question. question from with of line comes begin Instructions] with [Operator today the will the Securities. your Charles We Please

Charles Strauzer

Good Hi. morning.

Dan Knotts

Charlie. morning, Good

Terry Peterson

Charlie. Hi,

Charles Strauzer

Hey.

clarification. of point a Just

release? and that the in those discontinued at schedule logistics are DLS reported the both reported you of the sale ops back being of businesses, as international the the With press

Terry Peterson

back The and business for of restated back to pull back international as, to the DLS impact sold out the Yes. beginning everything that the of -- if as year, we've Worldwide March. the courier you well we in go

XXXX adjusted three numbers release. those as tables that well pulled businesses very presented we've at the back are the out those in logistics of have earlier when of numbers those the the all numbers, as XXXX So been press

Charles Strauzer

seeing of of And you. of a just then, the Thank kind some the the clients pickup? of marketing business. any your But know, you business And print? where you some I amount of looking direct the general to into color in going you as QX, declines perhaps helpful. workings of in specifically all fair at into you That's in different at are commercial Great. the pieces seeing tone general, gave some and there? Are talk what's the pickup

Dan Knotts

Dan. Hey, Charlie, it's

those are on a Just from to and return to we a stream, categories desire good a the that seeing respond represents thing a resurgence and economy a is timing they're of good there the very Direct and and they're most a spend effectively of sure that to businesses. Solutions is as challenge the the of virus Marketing that, sign bit which Marketing facing making cetera question back clients standpoint, have a is strong going and obviously The forward. product that utilizing that across touch marketing number appropriate. Within et mail

say, From we a would recovery a rebound like what we continue it resurging to slower – economies elongate Commercial marketing virus that's seeing But direct we that with the Print the to close it's and than and bit. is standpoint, going continuing the a bit recovery happening the more. that that businesses cautiously about I'd caveat rebound, occur. optimistic remain albeit So to are to down

to Strong relative chain et product that supply driven product the in spending, we cetera. platform up by mentioned but closed We business facilities exited e-commerce, of picked as have facility standpoint and the that orders consolidation general pickup from result online quarter in rationalization on front. a heading number of pickup a right a in for trend direction in packaging the things labels that, – improving

traffic foot signage going-forward I on based so elongated recovery, about to a in we and be ongoing product all dynamics strength the nicely. a market in those categories. And bit on continue should that's well, as recovered store there that's the and of slower the Think that recipient too retail those So QX the of recovery expect to about retail, be happen, going we think basis. as

So organic cautiously all-in-all will optimistic QX we represented general trends – the – continue. upward remain remain to those improvement by trend that and organic as significant from QX

Charles Strauzer

of out in new related that assume is I the the plant And growth say? it. that to packaging to fair coming is work Got the China

Dan Knotts

I would a as it's China, in say, is packaging say the in activity more as of well combination fair side. activity to what's U.S.

that very Our performing demand teams in increased there, are are platform. seeing and well we

related So U.S. just to well. not China to it's related position the as

Charles Strauzer

and the play? then debt, and doing cash reduce cash very use other cash the job of the priority balance for at the of And just at your obviously there the good is really are sheet that to here things a Excellent. looking or you're deploying main flows

Terry Peterson

making sure uncertainties Charlie, the is as receive – large of liquidity and for that we reduction well that why at we're created which debt be infusion these and But the well, priority pandemic close down transactions the preserving amount will those objectives quarter. of logistics as of throughout we and on liquidity right upcoming as for paying is sales more those fourth cash the feel comfortable from with both like feeling can still unknowns the top is we the repayment top satisfying fairly handle accomplish that the we have liquidity by Certainly, Well, debt all especially Terry, this by but continues as again. the maturities unknowns priority. is debt to to the and our sufficient is

Charles Strauzer

me. for lastly just then And Great.

update Just in the looking facility that? at any extending amending or XXXX coming due there on that's potentially

Terry Peterson

just Yeah. At That haven't is announced that. anything still we credit two years maturing. away facility on point this from under

current. aim will certainly doing that So facility doing addressing for before we generally on that that work and that we begin to will becomes

tackling in be part that XXXX. the early expect, So I we of would will

Charles Strauzer

you Great. Thank much. very

Dan Knotts

a I part Charlie, to back use of it's cash want the the standpoint. of to come other Dan. – from Hey,

invest While our back – we we is lower, are business. have absolutely continuing our spending capital to while into

and supports expand expand our of that investing in capacity grow around categories. and higher – revenue growth our strategic value, higher is priorities to and One grow centers driving

capital standpoint, prioritizing So remain labels, is are focused down, example. back investing we packaging but business from in an it and the marketing, as investments a on we in direct growth

positioning growth as So and markets us required do capacity taking ball that for the the to there eye got economy to not the the off provide. our clients the and looking recover; we've ourselves are support

Charles Strauzer

you, Dan. Thank Excellent.

Dan Knotts

Charlie. Thanks,

Operator

proceed from today Kim with question next Sachs. the Goldman question. your your of And comes Jason with Please line

Jason Kim

to to so love impressive that face have on in protect would been morning Good which far to bottom the your is the thoughts environment. seen of you the durability cost you much think get as how much permanent? the in top future? your recover savings line want reinvest you. I top your line of savings and line And you do business of the you see has margin thank expansion How of the in difficult

Dan Knotts

I'll which timeframe And through team Early saw a our on China the you that pandemic impact last moving bit February think one. continues managing said of back that take on saw to China call in take the originally Dan. and this hit so. a I did it's that. that job to experience the do as in I it's through our of when hit phenomenal we important we and of Jason

adjust that. structure cost the like is aggressively to this talk we is approaches the U.S. or and virus are adjusting And it majority to experience the of vast that will about that figure that look scenarios reduction. in we to two when reduce level. looks looks pandemic not cost and impact. as time. a is if at going it contemplated. So permanent the I that ran spread approach operate we scenarios point reductions our there's other we as various we saw The One structure, And out And had to that like that we the temporary we at go how really new what-if

the we to reduce think taken had and make long for decisions for about headcount I'm facility we XX% be about lower permanent infrastructure consolidations, what make a on that meant cost reductions platform that's done the difficult need exactly to at And headcount activity to the doing we're talked So organic fixed decline serve. actions and when needs And that, our term. our we to a decline the adjust basis. ability very team look line cost offset impact if our being to able and deliver But that from structure market working revenues. to the overall consistently were the a XX.X% those tribute be you rationalization facing to currently accomplishment closures sales of the our proud fact prior XX% dramatically that drop managing on we're to -- year business winning business demand and to are a our if organic a our teams improve still from essentially look tremendous QX, hard that's operations at and a you COVID. to tremendous top with was adjusted manage our to equal to income new cost effectively sales our

So facility permanent model to are closures. the particularly and relates short those answer business it to your to question is costs the our majority as reductions of

for those you for is, part the there's market And the because to here. or take that want balance particularly in offline that, some the balance think opportunity specific basis, because the related recover last recover product market we we of offline a is and said important took to don't is having And other about in that skillsets see to believe costs the I is to everybody offline. a we remains the participate this understand flexible permanent to have there and capacity adjusting what that Now on ability thing offerings. aspect do the

rebounds where aggressive very a said we've and to thoughtful where a as from been very and continue and the growth from to aggressive come Having to approach, want not that, we permanently for coming clients. taken our those we've positioned also the clients be our to be strategic have they're posture return So to needs structure. the to as cost those market reductions satisfy able of yet cost very about reducing

those and Debt of strategically our part from back in a of standpoint. well. savings on that top priority themselves the and business reduction remains of as the use of remains of liquidity a planning we're touched investing at priority cost terms looking In use remains funds component a what Terry cash critical as top a

Terry Peterson

cost to are up especially Jason and I continually and behind pandemic say when to we efficient. add on we like us structure largely is more that ourselves that to every as swing And we times as cost a too. make quarter we And forward actions and folks to to increases Yes. the travel all like that. some what and challenge costs we travel reintroduce -- start to challenging offset into reinstate we're practices things be is identify of of structure to maybe some our able would our employee, the that as -- and able at savings look take to just cost our more of to other open be implementing again start those to cost to living demonstrate incur

some though because by that effects come goal some they are to back of funded is reductions saving offset cost and plan not by will and eventually those actions. be the temporary will So or even other in, there see our increases

Jason Kim

year-over-year favorable you XQ? in we for the aware That's economic issues, XQ? onetime be the should quarter great. you Or markets in any be trends that conservatism XQ versus weaker as in quarter choppy in far That's organic is your guidance of little are on about the there that's versus is a it to Are getting revenue less revenue line versus thinking very you helpful. as pace of quarter. being a to fourth what your recovery terms of just And leading in softer then organic guide bit trends saw fourth how top the are like third concerned

Dan Knotts

Yes.

it's I -- think Dan.

as range some the is what we our our the fairly of predictable. look is, are fourth profile, here describe of there -- like. going we fourth mix that think the snapshot way to we giving and that components about business today you sit if think And quarter that business think best are quarter of what I are I the would our

you visibility forms a demand. and client if business business If that We inventory as have order you flow. you type commercial But more on from think statements really short-term the our about standpoint. an example client to a monthly print predictable even about Or think that's print, labels daily that's side. statements about think if digital pull is a transactional daily a very --

point So in we -- most QX Census is this range that mentioned and at to providing QX QX comparisons, is time appropriate. year not year. Census in the taking Relative think here strong. this the year-over-year was last we're of in had the Terry QX

So year-over-year a that comp change. quarter-over-quarter comp significant a is not

cetera. be in a seeing lockdowns of in We're states it's et resurgence So fourth counties We're spending of COVID. the component to uncertain. the towns this greater reading going economies the quarter very and news all well. critical and Consumer and cities as seeing is

So to very volatile uncertain this in predict environment. hard

Jason Kim

been seasonal quarter color magnitude the that the can terms you this working quarter? of of Okay. quarter That's capital capital years in in on capital managing fourth us working your very expect patterns And free has But and then big of flow past change a working in the couple and outperformance year the strong obviously strong the fair. usual given was just any from you fourth of in a component cash that. give

Terry Peterson

past, we've down into capital come season what prepared the cash the I did my the we do the in expect remarks primary we've have past is fourth levels Yes. seen In our indicate capital in less lot fourth of quarter. quarter off going that. we've for of had as That and worked driver that working in a to we collections. and that operating busy into flow be working higher turned much the than

that is still years. that been than this less our while kind in have year. and So the But to actually working than of end through fourth we've the do quarter. might seen of And certainly even more it's what actually that here. we're be have the of efficient still shooting earlier that some in I past past the believe we've otherwise at through seen we'll that seen in point we starting flow cash quarter, of been we the in have quarters some come come

that to down. the it much what that I'd also still sure saw And third It's but going expect to than will that's for how do we expect be be to higher hard down. say we quarter. be definitely in down, So

time somewhere fourth prior So quarter from amounts amount frame. a quarter between that and third the

again point. But otherwise heavy kind really some to challenges able there of expectation years. is this that been as are predict past we've able that's to as So being at reliably in with what our and visibility

Jason Kim

lastly you. then are be last And my is question have will other you company? the asset should Logistics any is for Understood. think there you DLS regarding assets And tax sale? incorporating at the the would your be sales. to that what the you then balance Thank NOL leakage business? monetize attractive into Any And

Terry Peterson

I logistics the NOLs, sale gain a on part But I'll businesses. question. the actually your have will missed -- of of the first from the we

of we be that taxes. tax for have But as some will well forwards to significant a carry gain past. of both and shelter portion that a from will books the utilization able And we of loss gain the with as on -- gain

a carry it is tax of able be leakage with past of only So that a -- tax it And loss shelter all there will sheltered be question? small I a again, part quite there result But forwards. not get of of But operating most did the tax gain but most, to be as sale. is it. we'll will that on first your

Jason Kim

worry, there And be asset any answered just other assets, don’t will but from any if yes, about I you sales, tax leakage it. your asking was

Terry Peterson

Yes.

Jason Kim

any assets attractive be you will think that And to other monetize?

Terry Peterson

the sell. the Well on constantly front estate market we But looking we've activity here we're as in got that seen that We've so Shenzhen far. own. that constantly looking at or that we property facilities to on as number the are China a the real nothing are large

business in at that seeking get front, ways we to prepared portfolio as our we remarks, more again of supports forward. continue business look to are strategy going the focused always and core the our of the monetize my kind parts in On of part

always necessarily announce completed marketplace, does but and into We're those mean looking that in evaluating the transactions. nothing opportunities to not all. there turn So at at

Dan Knotts

Yes.

talk Just our as key component to of in our -- flexibility our played terms we add a to financial driving has in strategy of portfolio that. optimization An that. role important about improving long-term financial

Chile that business, and our and a call, at of our on mentioned year, our identified map. look logistics Europe recently exiting and of additional just businesses we've back road are components the going business, all the now earlier DLS part in we sale Worldwide our announced strategic the those Mail Print our of Logistics were of that announced statement the business, the and longer-term Brazil International performance critical of GDS sale couple you R&D and our historical years, If

We But portfolio we we opportunities will remain us so. portfolio as our forward, lots don't to reasons will businesses of evaluating put make optimization So strategy. of to longer-term continue do they sense we in for as would be a area. optimization out for pursue that go component there what

Jason Kim

Thank very you Understood. much.

Dan Knotts

Thank you, Jason.

Operator

Baird. of Please question. comes with next Bill Your the your with proceed question from Mastoris line

Bill Mastoris

wondering steady I'd Dan, volumes retail that assuming would foot the had you. this for will to going traffic and sales. like industry though follow-up. seems that a like structural comments to where retail maybe have you a and traffic. back about to do be Thank are of come to be as your that is one things that about state earlier digital are kind in the question. these back? And changes going just Or plateau? I my surge So margins are And first slowdown industry and I'm throughout go the foot It own your of tremendous in this planning you've purposes,

Dan Knotts

Yes.

campaign that's retail marketing delivering to a conversations Certainly, that there's a well-rounded And going e-commerce, continue their but retailers to about retailers a they a in-store your the component reading rise right? On with predicated experience. are lot critical a saying. in in and side, of be is of and lot that what believe to consumer different question,

participate experience. to that continue foot play types do differences Having we And full about the really as we and up you it's model in completing expect extreme we and retailers those Even see that said will on not we is be having so as out from does So there of companies a also do basis. short a believe there traffic the example their between category home well, think to -- brick-and-mortar folks online and retailers. occur. we seeing if opens that, rebound answer in that open from in-store expect in there'll though there. experience we're important companies' that a in shift see very traffic come to it brick-and-mortar are up, people foot going-forward to other -- to what the get are restrictions and occur standpoint do recognize online, the work in expect economy expect may strategies And -- grocery to about back But out we what buy role as store that retail others still marketing to figure a it's a for faring recovery those believe do versus strategies. continued we that do experience that big-box retail strong

Bill Mastoris

Okay.

that from of properly April And the of make redeemed I to I Terry, the heard I I million correctly? that And is either sure ABL. to XX which the sure is next just cash are going that for X.XXX% year that or want make want Terry. and come due hear through have so out I did to sheet the $XX that balance question next you is be of

Terry Peterson

Yes, that is correct.

Bill Mastoris

all company minimum run over the several changes whatnot that your some you've in just business the with had last need I'm And new Okay. of liquidity and this the in finally, environment? years that dispositions level wondering, the what COVID-XX then is you really to the

Terry Peterson

has Yes. over But That a internationally. down little substantial saw come we bit. operations certainly again,

and for maintain seasonal we working liquidity countries as needs the and both well. pools then So in capital internationally those states support their to

uncertainty minimum for at added the now. of excess right for I'm liquidity, the continuing just to maintain -- now you're forward. with of going liquidity a if because are in comfortable of it million right But because So feel with million $XXX asking going the pandemic we $XXX that -- business to needs

Bill Mastoris

the for Great. good the luck color. quarter. you all upcoming Thank And in

Dan Knotts

Thank you, Bill.

Terry Peterson

Bill. Thanks, Yeah.

Operator

question-and-answer I for Knotts now for call our remarks. [Operator closing Instructions] the Dan And today. back will turn to session this concludes

Dan Knotts

RRD on continuing for to for your closing, are our we for many service challenging thank deliver for to summary our and call the In presentation. the thank all around world takeaways you. to sales slide this commitment key Thank of Great. clients in time. our operations and during you our challenges XX teams, tremendous In to of employees of can of our the particular, facing. A unprecedented like be teams found I'd spite our

appreciative your our are We Johan company. of back to that, dedication incredibly you. and efforts to With

Johan Nystedt

Thanks, Dan.

be the the posted press quarter Third in section found our RRD XXXX for of release, can the on access quarter a website RRD's us. you is telephonic third a third at concludes Quarter As XXXX Earnings results that rrd.com. Thank of replay Investors copy our joining Call. to reminder, And which of information

Operator

This conference Thank call. today's concludes your participation. for you

disconnect. now may You