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RR Donnelley & Sons (RRD)

Participants
Johan Nystedt SVP of Finance
Dan Knotts President, CEO
Terry Peterson CFO
Charles Strauzer CJS Securities
Bill Mastoris Baird
Call transcript
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Operator

Welcome to the RRD Fourth Quarter 2020 Results Conference Call. My name is Mariama and I will be your operator today’s call. [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 you, Mariama. for conference fourth call. everyone year and you results XXXX thank joining quarter RRD's full And

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

the call, fourth posted we reference a you The slides along review of SEC X-K themselves. rrd.com. supplemental information slides to advancing our reviews participants yesterday. will As addressed follow Alternatively call page in the periodically during wish on This advancing those this furnished Form who is our the press if our today's connected information will I which copy webcast. quarter website on is from in by the slides the section are for in Investors the of by detail also at to filed was release, we be results we more numbers

periods a in of beginning As quarter our all logistics consolidated the of the business reminder, as third operations. for operations have we statements discontinued XXXX in reflected presented

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

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

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

Dan Knotts

clients; of And everyone Good an created QX It's challenges behalf we're of by also for the team operating of today's share healthy company. will deliver year, and areas occurring full-year global team to of like three and all we RRD due year resilience the safe. while And we'll to that of long-term our all the near-term our hard on continues manage am successfully for through in strategic well deployed Thanks, On focus distractions team. year, areas; families I on pandemic especially of for and pandemic performance. with of our update pandemic our driven advancing RRD hope you performance our challenges. are very work am entire to that the the health tremendous perspective on appreciative you the we hard business in Across Johan. quickly to us the of safety for record. safety on joining. ongoing and the in each employees; and year, to maintain early the thanking to you staying I of while provide the through navigating challenges plan operational pandemic global the RRD start call, prudently proud to execution our the great protect I COVID-XX respond priorities. I despite with thank we priorities. work and strengthening best your emerged RRD continuity our your a extremely strategic at the my commitment in performed by today. how to morning, our When how I be our the performance throughout your these the our first and

sales the plan line from we growth consecutive driven margins. to our strong around in reduced our decline operations in Our full-year demonstrating expanded upcoming we sales substantially required are year And and achieved we operating clients unprecedented as And we our to year, service and by serve higher outstanding, these I world of the income RRD. in working for second to performance for top pandemic maturities. RRD our during on your Further, you of flexibility. times. determination the a liquidity debt was Despite dedication sheet a flexibility want operations very the thank safely. our all extended we while for balance delivered to teams our XXXX adjusted improve

income our aggressively Our each in strategic we right client non-core in areas priorities by categories. within clients flexibility our and expanding core by delivering as well. by structure XXXX represent margins growth core capabilities improvement We prior in capital in made increase in quarterly X.X operations billion our our of gross of end. spin. a year operational very our all deeply the the divesting our And by strengthened in total out our debt, improve midst these product our net year of adjusted and embedded sizing and are of good our revenue times We of improved very drove business leverage ended We trend. financial our from prior strengthen a reducing and with to leverage new the with lowest investing higher facilities quarter performance footprint highlighted Shifting adding organic cost to which extending pursuing by financials, organic RRD. significant initiatives, in of mix revenue debt substantially expand relationships, strong from X.X operating challenging our our in total drive we roster, since the progress performance times productivity to structure, year shifting X.X maturities rationalizing closed strategic our our to levels upcoming market XXXX sales our We businesses. and of in and financial an versus

on On organic X.X% the quarter. net line, top the in sales builds which further declined we third sequential saw improvement the

quarter opportunities, trend sales strategic business segment sales many while including product services organic in team's and importantly higher delivered organic of basis, winning return supporting our growth On improving the chain Our in organic management, packaging growth client also demand a new of our achieved gradual the our product categories. reflects success categories across and for labels. supply

to to gradually the the year up. completing prior any new in job While marketing third were the our sales from opens during clients improvement impact quarter and the Overall, marketing sales see the and more organic earlier year. teams negative back -- client operations X% did negative a service and improve our existing we on-boarding quarter. spend of clients to see curtail to down We supporting sequential census point as continuing excellent did solutions due X to business economy than demand the expect an due percentage

cost largely from the delivery service, continuing margins actions income for our despite driven to both levels our revenues, and align and the prior to ongoing clients. with operations exceeded organic for by requirements quarter meet those year operating quality while Our sales adjusted lower on-time

We cost of are the reflect our all those earnings impact efforts. managing fourth aggressively of quarter our favorable aspects positive in structure margins and

organic demand chain each and full-year in the offset supply commercial lower the our categories. And segment of only the plans in partially a product spend organic print we year decline X% a client a reduction beginning as those a of reported sales and To year second Business impact the we our Services Marketing by the markers the combination organic basis, of packaging; of reduced organic early and increased the two XX.X% impact decline, the sales service as and progressed. On aggressive full-year, a the as progressed. pandemic. areas. decline, quarter is implemented strategic For for which in set abruptly being cost offset the related experienced decline businesses, year, to for we year gradually targets growth decisively report X.X% Solutions primarily support volumes global management growth of

As margins for operating a and result second of the those actions, operations we delivered year. improved higher income adjusted consecutive from

Our results margin of deliver favorable in ability of challenging performance full-year earnings is true the a to the team environment. business extraordinarily in testament RRD strong

to to traditional trusted expand continue both continues add enabled new create opportunity models existing for disrupt business our partner global as a a our clients, to and and to clients us reputation has pandemic our roster. uncertainty relationships business client As and

Panera lab RRD customers to that their wanted organization including insurance takeout to increased healthcare pandemic. and their bag source, past fulfillment less more the one delivery during the Panera we X,XXX and commercial also with and share Medicare a of with and the Panera days also we senior pizzas health in menu seamlessly In have opportunities our fast support are roughly capabilities care company's sanitizer, to to also well-being our by their XX we've virtual of rollout They to organizations us package organization year. the PXX labels of has RRD provide technology labs gave ship ramp notable box chain during Bread, this only They their working global pandemic. for source also them crisis. casual new turned menus COVID-XX selected have fulfill delivered RRD that excited of expanded Labs scale label to examples disposable which business included health capabilities. test few the consumers and COVID-XX printing fulfill do number partner We're FDA The branded for and new up months, product they emergency leading gift to of in a not something to that and and a masks business its these used as testing challenging chose than cafes kids flatbread cope over pulse connected the We're few Labs of ongoing selected world supply XXX,XXX the credentials members. during the of with production the chose to with turned created for their recent and a to enables one times. in supply and end their with regulatory support United over hands oximeters. large and labels. our distribute test into healthcare dozen RRD unprecedented the and of Let operating months. assemble secured test the States to Advantage In turned PXX stay chain than with kits packaging platform of closure PXX care market RRD RRD partners to kits nationwide. for for because initial providers. boxes distribution. This items the helping COVID-XX kits authorization trusted promote RRD their health significantly and wins restaurants our but October bakery Panera to the me designed and to A around joins face hand of help management closure label for and orders during packaging, partner its print special to design orders. members winter end-to-end from and their solutions because

performance pharmacies positioning we're introduced these examples use RRD organizations, large healthcare retailer for Targeted provide key to support also While and awareness; marketing vaccination and the clinician government vaccination how communications to post toolkits toolkits continued operational flexing capabilities operational the innovation. retail areas: providers, through agencies, extensive FDA these support COVID-XX our by We revenue recently vaccines. provide distribution comprehensive we're upon vaccine release turn designed of turnkey quick show three new in enterprise win to drive authorized client support. and needs; and opportunities,

a and to management enhance continuity, shared a unified smart data of market launched marketers comprehensive Additionally, of the driven delivers and comprehensive marketing including RRD, improve end-to-end by scanable supply set we dynamic of that accelerate utilize creative asset workflows digital portal. our to chain single help an we Touchless marketing speed quarter management power suite tags. is call, a World automation, that launched On developed third to and communications which platform solutions by brand ConnectOne management, technologies ConnectOne through streamline I ROI. marketing RRD,

experience. iPhone scooter touchless full World we experience. Dynamic immersive consumer codes offerings bike that about print app mediums retail these They production or in including App integrating existing a tabletop clip of download to create fold are we or be your part positioned to payment App quick codes restaurant a first. with can are RRD of print, previewing our signage, of and you on have reality. We platform. smart these the a distribution commercial one from on streamlined and text codes applications as platforms support RRDs a introduced I'm the App variable for feature dynamic recent tags tell the digital for smartphone or app having up of iOS ways integrate on iOS NFC to iPad to technology new and to expediting be technology codes packaging lightweight all content augmented Touchless can apps plus as make without rentals and the then versions from or sorts to well name product visually delivered part provide more transactions clip of are games as pop forms the uses of out distinct expertise invoke clips direct graphical is users in excited can previewing a clip any a across our clip and a have retail labels, decals for Apple the app that and store an because mail. our suggest, app location encoding. print XX. with to clips unlock can payment placed printing

the is target we that enhanced Apple's customized brands innovate The how physical engineers audiences. example ecosystems in activation codes the help clip with with a World another their solutions app engagement of based print to experience. can Our world yet guidelines Touchless clients complying develop digital also increase connect print with of to help continue our

its RRD call invaluable solutions the XM supply world award and this few suppliers The the received. honored for suppliers X,XXXs helped and XX like of turning ultimately innovative supply -- relationships named out I'd its XXXX recently of supporting one competitiveness year. chain global company month, recognitions over the recognizes and base XM we global of Before that performance. to the Earlier U.S. collaborative to class deliver improved Terry, XM’s the to its companies customers. highlight through the Canada suppliers of a

RRD to practice and This Creative as of the in RRD inclusion to GO by India inclusion to XXXX award jobs the the digital is attributable winner for recognition promoting Second, Himalaya. bring was recognized social the business best diversity community awards. directly did work

to Finally, sustainable more is as Enel demand RRD energy of was a recipient through of response. selected sustainable XXXX recognition resilient exceptional the in X award stronger a contribution footprint award. and RRDs supporting grid This

leveraging to flexibility. Maryland, Texas, support to be Ontario stability Jersey, over Connecticut, for energy in footprint Ohio, in to commitment to turn grid recognized Pennsylvania, demand Terry, honored operational in response Illinois, are We our With I'll New that, you. and are programs

Terry Peterson

again, months strategy and finish Alright, thank we that a ago. expectations to that our Dan. during four this our Once is suddenly those matters years, delivered results within time. remarkable control a demonstrate against have outperformed focus we our and working had volatile uncertain significantly We you, challenging on

clients Our million. help team solutions land evolving our sales continues guidance helped expected $XXX better needs. of their as by new innovative midpoint to deliver results that our the meet This actual over through exceeded work previous focus than communications us our net

XX enabled continuing per which prior us to over margin our prior the our fourth of diluted income we up to pleased deliver structure, quarter also point from year. earnings are was report which for the quarter versus very operating share to from the Overall, cost in XX.X% on for operations $X.XX, We adjusted year. adjusted basis continue the adjusted operations and focus a improvement grow

For continuing earnings up XXX% our share diluted from adjusted XXXX. $X.XX was per the year, full operations from

businesses; in Our our certain the two the ongoing driven strategic of flow This the three sale facilities policies; logistics reduction for largest operating our capital focus significant quarter single to XXXX. to reduction improve in of of was the delivered our led the liquidation by structure outstanding spin idle divestitures since life quarter. strong debt cash in insurance and any largely

our later. brings get me the But on having more by reduction on additional we This in $XXX Total details outstanding million better million $XXX borrowing the year in million. outstanding for normal on debt protect quarter. additional our earlier was $XXX financial the the quarter, which total of with to and started to after to practices results. last XXXX, credit by since debt debt reduced returned liquidity. also facility $XXX reduced midpoint year our our taken our provide than details fourth quarter We order in draws million our our was let have I'll guidance

to Slide of $XX.X weaker closure X.X% and sales a the million down were since Turning consecutive organically, Net the now in associated pandemic or Europe a sales of an plus marking $XX.X disposition increase GDS, began. X.X% $X.XX Chile reduction quarter, improvement billion of with million of million $XX.X the U.S. quarter of associated net dollar. our year-over-year XX, the included were second with which down

the For volumes product growth packaging X.X% which of by segment's organic of services supply higher growth chain primarily management, business strategic driven and and categories. are reported our three labels,

secular projects. demand increase impact strong And both by products management the demand experience Lower by decline. COVID-XX and shipping was commercial and chain our the international print for healthcare demand domestic driven was several continued due to in and in forms supply Our large kitting Packaging driven our related quarter our for grew growth to of labels. labels, products growth operations. statements, pandemic

lower contributed fourth from points over categories. company's Slide no taken higher the On of incentive of product sales alone XX, earlier of by impact in offset of segment in primarily depreciation decline aggressive despite our and Marketing operations primarily an project actions XXXX was decline in operations mostly quarterly the of associated have Census of This partially due Census $XXX.X decline the million income amortization million $X.X project, organic see down the than for improvement Census expense $XX.X XXXX. quarters impact and the dispositions of improves for was in the due to the quarter the only XXXX recent in decline was previous from and the and to quarter sales. XX.X% higher which FX the The segment. quarter billion, structure to for Despite of quarter lapping in quarters. or fourth the to the fourth million China. expense Adjusted reduce full-year from year sales, completed and was in for in continue initiative we of being shown to which COVID-XX rate increase lower deliver products XXXX to unfavorable rates compensation Solutions million adjusted cost two gradual decline or of with versus the a nearly X our X.X% these $XX and XX.X% previous with was these organic prior variable million this rate as down the the our serve. to ongoing only strategic slightly our cost the two demand reflecting this from However, SG&A recovery the decline and $XX.X execution reported $X.X the

for in and to of operations. Adjusted $X.XX for of per the primarily million, flat a earnings income the expense Our lower per share increased lower as nearly in from tax due increase effective which charges income the was interest compared prior earnings operations XXXX $X.X adjusted included amount. period. fourth $X.XX This quarter the from higher year $X.XX rate, quarter restructuring to to fourth and was share GAAP other of results

in issued primarily impact Our XXXX decreased to XX.X% favorable effective law to the rate tax XXXX due recently tax in of XX.X% guidance. adjusted from

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

XXst, December quarter hand the our and and cash the credit our the total of all the of of having on XXXX, $XXX debt highest $XXX since As higher million, the $X.X and $XXX of Availability million was end on was on credit after $XXX beginning hand had million billion facility at was borrowings liquidity total level total outstanding we cash available XXXX. year on million facility. of which including than repaid

quarter. to project times million actions of highlight have $XX.X leverage higher end was few improve also at leverage times the dispositions during sheet primarily To Our X.X lower year. were our and X.X XXXX, the operating million to paid reduction of in to the and factors XXXX. a year in CARES times, of XXst, and X.X by times year of as logistics XXXX contributed for year taken payments. $XX.X September by businesses from expenditures XXth. summarizes proceeds than activities we balance deferral the significantly. higher in and was additional interest from Full-year net reported portion of we improved made That the December XXXX to in plans deferred last improved provided working remaining in capital. XXXX million X.X prior million and leverage These business Act, Capital the we XXXX offset during partially times the terminate leverage year, in restructuring lower compensation $XX or than $XXX.X than which $XX.X our to X.X lower the Slide lower million primarily the which investments taxes a new of Census both of payments the gross XX due million XXXX employer total $XX.X of leverage sold facility bringing due $XXX.X cash our several XX payroll million At XXXX part China. key than

six of one facilities China additional aggregated which deposit proceeds all to on and collected the in $XX million sale, XXXX. We building sold also

while pending was net to with $XXX.X $XXX the during gross yielded quarter. obtain which XXXX, China, Shenzhen, in we continues facility of proceeds deposits the in approvals significant and sale. regards million the government can In insurance one the on efforts scheduled to to of collected sale. million most we to gain our reduction in outstanding a we to improve the Once In policies transaction balance printing addition, a debt due have necessary Collectively, have our liquidating our fourth the XXXX. the sale leverage. we so of buyer from sheets million received total policies improving $XX life the million work of $XXX significantly to in of we in complete approximately deposit and are closes, expect additional the collect record both to our Today

contract retain the requires XXst. entitled Our reason, is to of approval the XXXX. the XX% of the installment supplemental total purchase government's reduced Slide of RRD buyer by of show throughout or damages. the debt December price If debt Even the XXXX, to comply is liquidated terminate as outstanding buyer $XXX million. pay final fails delayed. with we various agreement any to them slides XX the outstanding final the in in if our with the terms of for maturities

billion In and from debt end of XXXX, through was of $XXX This accomplished along $X.X extended to and due million amount years to million million. aggregate series repurchases the XXXX exchanges addition, since $XXX through the was from repayments. debt of XXXX by reduced debentures which later of to XXXX $XXX to debt senior a notes due with approximately

compared due X.XXX% quarter repaid fully post other underfunded of all from by million and repurchased retirement our is in as plans were $XXX over year. on from to the unfunded are During which our lower as end by the contributions plans to XXth, all in post opportunistically our XXXX, asset $XXX.X The facility, in due Planned which maturing expected end plans approximately funding. credit of Income redeemed XXXX. Also, is was an $XXX.X we debt partially reduced of drawn the the million, $XX.X underfunded the from XXXX offset XXXX XXXX. senior notes remaining to rates. and returns by less retirement notes XXXX also other under and to $XX $XX XXXX the pension improved million of in be be we pension at improvement XXXX. fourth March strong plans senior recorded balances is At the decrease level $XX expected million, our status than million alone, all approximately prior $X discount slightly million the million million of

expectations XX. on for Slide are full-year reflected XXXX Our

rates the uncertain path parts the we infection As remain and COVID-XX to volatile. in the forward of remain expect elevated world, many

are unable our to As such we furnish guidance XXXX. typical for

with have I observations do for regarding the and two beginning following our observations guidance However, XXXX segments.

them optimism growth behavior even many organic We will the services, the and are believe that us changes in increase such there the -- recovery control services. up. for For that to induced gives year, support as our economic and supply for continued going e-commerce print the ahead, quarter we later And select achieved start well corresponding fulfillment are labels potential well positioned chain for industry and this example, support will capabilities, in services for forward. which from travel adjusting to to for other to of and is the of pandemic bode and assembly demand year the business vaccinations with in predicting growth to the fourth the in shift screw benefit telehealth lodging healthcare pandemic businesses in-home to comes become continue the of The though and the comes and CGMP under nationwide Coronavirus verticals packaging consumer __ with remain that our we are to and permanent. be a

vary our and in client is from spending of are to increase the X%, solutions, U.S. based on the XXXX, year X% timing restore advertising help industries that to positioned growth. ad for marketers to expected our to a progresses. we impact to economic achieve are offset who top that critical up pace grow the expected marketing second projects to the to be on and marketing innovative unique flat continue of Net COVID-XX the one-time The team of taking recovery pace sales will of different into the be provide activity line solutions will Integrated marketing low recovery programs greatly. that increasingly conditions economic the solutions project with the from in on recovery. clients half projected are objective. Census is pandemic modest well demonstratable and marketing means year to single-digits mix that the as marketing budgets and And consideration projected XXXX for related depending For spending and by ROI challenged reductions believe to forecasts of

in of $X.XX which However expected and be organically billion producing quarter And Census we did down to impacting mid-XXXX. begin until first wrapped XX% the X% net not year were company's XXXX. since pandemic the or the up to in $X.XX sales last late the March businesses most between billion are

given reported approximately Operating approximately to repayment payroll benefits reflected be were year, and exceptionally million are Company adjusted expected slightly $XX continue Excluding to is effective from portion of the expected XXXX, expired. employer printing the to the company are for out is of lower as non-recurring expected to first one facility rate a quarter taxes line China, the from year other the has million quarter deferred prior be Capital rates, costs expected be lower benefiting part And is higher unpredictable strong to XX%, the year tax average of be the cash agreement XXXX. benefit non-GAAP monetizing of $XX are XXXX resulting our lower slightly including reflecting actions. facilities. to income CARES benefit half from prior XXXX. proceeds expenditures reduction rate expense expected additional of and Interest impact in the XXXX. to a $XXX from operations be Act and which flow XXXX million from in proceeds for from open the work up continues to prior slightly Results in $XXX to the which from than as foreign as operating deposit Census. due assets, questions. changes expects additional first aggressive And the the non-GAAP exchange additional included sell let's the interest in selling is full-year The borrowings expected operator, to company than million. expects from margin from the of also lower flat than in to now collect generating approximately range the to throughout up average in for to

Operator

Securities is CJS line from on Strauzer Charles with And question. the Instructions] [Operator a you. Thank

ahead. Your line is open. Please go

Charles Strauzer

Hi, good morning.

Dan Knotts

Good morning, Charlie.

Terry Peterson

Charlie. Hi,

Charles Strauzer

expected kind we little look segments business deeper quarter? ongoing, what kind maybe the than the of services perhaps more drivers the if you versus specifically, was of will? when at there. in And can the one-time a key side, into sub were you what performance And then the stronger dive within sales Hey,

Terry Peterson

Yes sure, in Charlie. can I'll if take this kick some and necessary. Dan additional with comments

had One supply the previous over performance greatest our areas expectations was chain we the of where in management. the from

the growth, our reported for that I organic one growth any time since organic of mean, product the very So area category significant spin. largest probably of

have area as a kitting tremendous that opportunities folks just So, out of to had of the success types there having just and projects healthcare with kits well supplies great a that projects, wins. distribute profession. as is that kind from And come group that other in to helping are medical number of

Chinese out see operations So, good better that's probably our somewhat the operation domestic did that really to largest performance. as do continues area of and our packaging. well. We expectations in over both our U.S. of came labels as performance well And really than also

with better have and well. better, over areas as we bit are to again those But We're established the But, that quarters. our able down one-time probably of extended, future. we've the down NATA, print showing now we to areas many extra the the at breaking some a several one-time were can be if produced rates offerings relationships and sources performance. that better new We and hope where Places for as have relationships that the continue to have in some same that bit that seen were leverage for was nature, And these think had but a a mentioned revenue between of hope us. are we not we with declined and these been actually still in quarter. I relationships of what what it's big to really the product provide. provide clients little ongoing even we projects those we of in fourth previous these some that commercial these able -- that provide can additional lower in exactly had of as So, down least it new been and the performed work little

for quarter. kind are really the those report they didn't So, to even helping growth of though

Dan Knotts

Hey, that. just to Charlie to add

for look supply that are packaging, If quarter organic you management, categories in for at the that chain the product growth and labels. three categories,

the different an business. consumers in of as and I about the think supply as of think that a element a variety within by continue those homes, there's there shift From permanent acceptance, the places the out, or management. it we're that sent market our standpoint are as continue of standpoint increase behavior. chain opportunities we things. shift to with those positioned standpoint, as mean figure Yes, of different is this electronic and packaging and certainly And extent teladoc, organizations and areas demand pursue grow a the strategic you that two are categories going well about to predicated the Terry end and changing we heading more kits the we today, packaging that has a companies. to this out with had now and think into to speak look in as on that we're wins we labels from basis as which of and from capabilities. I a telehealth out to directly market you to space, kits In device they mentioned, is telehealth, very XXXX. consumer profile an XXXX, packaging try in important being element becomes forward company we into question shifted both those that as those I teladoc a number to of people's at XXXX we new where looked think landscape a organizations now in from And organizational going And for the in clients product of that on

we're the the side, sustained build purchased are the technology primarily packaging two based aspects the a that is continue building being result well business. as out as the of as experiencing, organic for packaging providing that products we're in on a of growth our to upon So, or growth new

feel us well. to or respond market pretty about label to that there. in increased very of well-positioned shift opportunities use a continue us standpoint. home as et from and for the secondary label, in that of to that about from e-commerce, support there's the they good And e-commerce, space And we're we ongoing those future labels. moving deliveries, as the cetera shipping in standpoint, front recognize from clients, the So, in We're is shift a have opportunities trend forward a a from excited

those all opportunities pretty So, but as for those similar we're looking that about turn that real support And of growth the have going and of XXXX. three different do question are those we that level you dynamics excited permanent into how into head clients is forward.

Terry Peterson

I where really surprises has Charlie, more things this. unique one This really just we've opportunities, short had incredibly to upside. sales the other is of to on here. good And lot follow these second one a And is the quarter on the with of the been that's cycle

materializes and -- ratio what guidance, So, can notably to we different. and is that the what after time have at visibility be

cycle adapt together to short, very, a that our and really client's to and sales executed been our executed address quickly. needs sold is and respond team's and to ability can has So be the changing -- put programs testament great very which

so have been large a our because and cycle period and nice deliver execute this where second a quarter incredible time. such And So short said, projects these to is like lot has of just incredibly sales in ability pretty these I seen on upside. of we've the been some this that short and just

Charles Strauzer

confidence Yes, are guidance just gave and a segwaying gives into that more, It of looks the we what talk encouraging, QX bit you. this a assumptions have to guidance out. that's that thank seeing like point a And little the at here, about you behind let's QX, you the bottom the that discussion kind if bottom could. about then you the

Terry Peterson

more a to here. of and tough. volatility, it providing of our perspectives but at it's share there's uncertainty, with lot with that I we that about felt kind time lot how of going I We Yes, we a challenges far there's mean important felt as guidance, is still guidance still a because like as of mentioned current debated comfortable creates the least lot

of a the of lot So, markets categories in. at we've different are kind time performing different spent that product looking

time vaccination pace and that of Some at look rolled that and of to out. we that further at the opportunities recovery vaccinations products products the of some distributed vaccinations what over looking times. get a provide more the that and services we're a with that kind believing And we period return estimating normal as a continue and the will stab taken new that have of the have might to like of

the won't that normal what we've made around what -- as new kind pace, look it pandemic. is So, the some same like. going did and assumptions to of the look before It

pace at we've little given smaller. our services what that be always would look we around we that. mix and look we've points with that even we and assumptions same made for tried have like seen revenue the the the and expected what's of different that happening the and a that We all it the at believed just and for And stronger to timing data some really the vaccinations have. products But that did emerge emerge afterwards take would bit time we would if

Dan Knotts

that key the think think are And, about economy up, about key print think chain you the that it's and consumers segments. continue as in consumer services. business open if about going also driver labels, business to the about as think businesses Charlie, packaging, for vaccines spending begins increase important both by share product activities and businesses you roll-out is the how economy I of within to a that under to we services by consumers. from business two to standpoint, relative assumption drivers up about commercial about supply open to think or product And that managers, statements to about spending going both you think to And spending you think all continue services the and

ROI. The you amidst marketing in If consumers out be marketing there uncertainty marketing significantly think do to about solutions to downside standpoint point Marketer a to whether that that. that and is and of the to to marketing that drive going there marketing return And on that and going are at able was significantly marketer to spend growth spend is in uncertain works companies was respond sales and environment from increased curtailed. solutions return. XXXX is be use that to the curtailed some

play those we So, this at return economic sit on But in the time versus dynamics predicated we spending out. bit good is of significantly point product how going uncertain today. this the relative to pretty both the of spend where different are to marketing a little about feel

Charles Strauzer

you. thoughts further given the sheet, to kind And little capital the taking any of are bit balance balance here markets wide then if window refinance on a how we of open thank the advantage shift Excellent, could to the sheet?

Terry Peterson

of improve our strength I the sheet. at many looking anything capital this announced now. said for Yes, markets to I've right attractive a of strength but the the always health not point, certainly great mean, quarters, opportunity looking we've in it's we're as other At and balance previous

got sort we've point, this any at announce. opportunistic but of So, not to transaction

Charles Strauzer

lastly Got it. just And on thoughts D&A XXXX? for then

Terry Peterson

depreciation? D&A,

Charles Strauzer

Yes.

Terry Peterson

expect expense. given years little will lower over bit continued was in We bit. shown that that several to CapEx a movement expect that downward that, a didn't in here. expect We come year. on that the would little would to this steady down exact we past provide see We just the some reductions We've but numbers

Charles Strauzer

very you much. thank Great,

Dan Knotts

thanks Well, Charlie.

Terry Peterson

Yes, thank you Charles.

Operator

is Mastoris from on Bill with question. online Baird a Mastoris is -- the line Bill Instructions] [Operator

ahead. go Please open. is line Your

Bill Mastoris

out comment Okay, Are would from thank assuming the not this of you. the to Terry, any taking have you that any is most to a of little you elect agreement? credit prevent question. credit maybe in recent XXXX bit maturities revolving with your right your now it you on agreements that revolving a to hurdles follow refinance the there

Terry Peterson

that our there's had a we've in secured long quite restrictions probably And No, fact capacity time. at capacity for no all. now right is the in greatest issues debt

to challenges like feel when have we So, very sort it comes we right now. any work few around doing financing of to

Bill Mastoris

what capacity And now? secured Okay. right that is

Terry Peterson

look It's $X right very priorities. over a you $X first over junior at billion a it's and billion. now, high if It's

Bill Mastoris

do comfort be in then of And little a same it care the is articulate, have challenging this longer pace. leverage little is I a you to is terms going okay, and to Okay. opens at at a to bit the the difficult going you it going ability would target understand maybe term far your opening say, unfold as know what's but as our forward. a because I to up. economy to a don't we you pace this over bit related reduce just know year that question, But target where be which level it's or there going long-term up the

Terry Peterson

published continue goal shared to a Yes, to going for than that or to say our reduce foreseeable is or kind we not have the other of medium future target long that over be to range leverage time.

improving that mechanism focused leverage. to we one at certainly sorts to reduce growing opportunities all that help leverage including EBITDA So, in of reduce other on help look

published hard for continuing that reduce future the anything. to focus really to pretty leverage. going haven't we a yes on be So, But foreseeable there's

Bill Mastoris

And then your Dan, question follow to a a kind Okay. this recent of for is comments. maybe up

think communications towards a of clients and you I up interest towards expressed bit As business the I your economy begins touched print, directly future, mix address to on that don't an in open their but kind maybe shifting you more labels think print. they and have little packaging look of with the commercial some

Dan Knotts

tremendous our of has commercial think number it. capabilities the platform I breadth print offerings Yes, a product within of a and given has

to be even the and continue into our the for packaging, statements part labels packaging and and that our the talked piece business about and chain a piece of their part all that a use from the most critical within commercial I print communications kits we that think of business management of supply spills run from to a platform. over manage clients that and

to continue -- the I to it's think going I think that's happen.

been effective communications. of that means and to those, pretty the utilizing I print think utilize they're trying Bill, out that, we relative interesting combination market is that is what to the over the know proven But because the there. marketing this abundance those people companies digital what's and do world marketing platforms most of And to both and that. in are future utilize, question inexpensive call the time of remote on digital is of

you think they all we the about store think customized signage about when about programs. side, digital print and So, mail retail work. We think direct

opens going think I up, as continue balanced a taking are back see side. digital side that the to economy to relative So, marketers physical the and print both approach the you're to

Bill Mastoris

million involved me. be bit say scratcher for $XX last is not a Okay, little around exactly in But this any can't admittedly I'm head color often of Terry liquidated and any And seen my this sure insurance details I've that life question. there. very the that. appreciated. I policies, what's is a would

Terry Peterson

for had even I long how we’ve said long you we've we've time, tell can't Yes, a had.

insurance cash to but obligations policies. the actually a that Some those all was on we used balance not trust of Rabbi these plan our life associated we provide policies in Many values were deferred security that for also owed that of sheet comp with terminated. the many under

there's the and deferred linkage that between there received. bit of proceeds So, a we terminating plans a those comp

to to monetize were So, were once we invested that's to those the or in still policies. plans, those get at able able we cash terminate insurance deferred comp

were analyses the it a were we we as around for that's have been they and project able year it's what both do time hung as time been just probably the a the did well a XXXX. some job to very year getting tax team they very started deliver a strategies. laws results there to bit be So, that. But complete from more somewhere at -- studying two great us. of -- it execute and than to in probably It's this favorable to the being And opportunity through for time window when able complicated a will we before lengthy on the

it's mean events shutting is for of had those and do just of is down of cash policies series essentially that it I to a out whole the before and but yes, that. there's we happen that But the what So it pulling most could activities policies.

to of free clear those do of up. lifting and lot had a we done, to easily bulk but them heavy and free more for are Some the

Bill Mastoris

the in the much. of appreciate year. Thank and you, upcoming very color luck I best all

Dan Knotts

Thanks, Bill.

Terry Peterson

Bill. Thanks,

Dan Knotts

it. appreciate I

Operator

questions further I'm I showing this turn no Instructions] Dan [Operator now the call to at will time. back Knotts.

Dan Knotts

Mariama. thanks Great,

As and result focused vaccine we a as stronger of XXXX. And will economic we're on we we RRD about into distribution our optimistic are move recovery, resolving a remain protecting extremely achievements in the XXXX, while of strengthening stay through the please performing prudently managing Thank challenges safety and RRD employees, everyone safe. near-term long-term. and our health today for business us clients for joining our and the our while for you

Johan Nystedt

Dan. Thanks,

release, a information RRDs As the that website reminder quarter at posted fourth quarter quarter section us. replay copy And telephonic XXXX RRD be investors Thank found is to access call. rrd.com. a our joining on of of fourth results the in you press can fourth our which concludes for XXXX earnings