RR Donnelley’s Income, Sales Rise In Third Quarter

R.R. Donnelley & Sons Co., Chicago, generated third-quarter income of $175 million on sales of sales of $2.9 billion, compared to income of $164.7 million on sales of $2.3 billion during third-quarter 2006. The current quarter’s results included restructuring and impairment charges of $19.9 million , compared with restructuring charges of $6.6 million a year ago.

During 2007, R.R. Donnelley acquired Banta Corporation, Perry Judd’s and Von Hoffmann, which, according to a company statement, have historically yielded lower margins than R.R. Donnelley has been able to achieve.

The company’s sales growth was due to acquisitions, new customer wins, increased volume with existing customers and favorable foreign exchange comparisons. But its growth was hindered in part by continued price pressure.

Among its segments, net sales for U.S. Print and Related Services increased 23.8%, to $2.2 billion, due to the Banta, Perry Judd’s and Von Hoffmann acquisitions as well as sales increases the unit’s book, financial print, logistics, office products and catalog offerings. But these gains were offset in part by decreases in sales of directories, direct mail, statement printing and short-run commercial print.

Within its International segment, sales increased 33.1% to $748.3 million from the third quarter of 2006 due to the acquisition of Banta, sales growth in business process outsourcing, strong sales in export book volume from Asia and higher sales of books, forms, labels and commercial printing in Latin America as well as favorable foreign exchange comparisons.

Separately, the company promoted Miles W. McHugh to executive VP and CFO, and Andrew B Coxhead was promoted to senior vice president, controller and chief accounting officer. Both promotions are effective immediately.

McHugh had been senior vice president and corporate controller since June 2006. Before that, he had served as CFO of RR Donnelley Logistics. He began his stint with Donnelley in 2003 as assistant controller.

Coxhead has been with the company since 1995. He most recently served as vice president and assistant controller, after holding a variety of financial and operational positions.