RR Donnelley (NASDAQ: RRD) is a Fortune 500 company based in Chicago, Illinois, that provides print and related services. Corporate headquarters are located at 111 S. Wacker Drive.
R.R. Donnelley & Sons Company (RR Donnelley) is a global provider of integrated communications. The Company operates primarily in the commercial print portion of the printing industry, with related product and service offerings designed to offer customers complete solutions for communicating their messages to target audiences. The Company’s segments include U.S. Print and Related Services and International .The Company employs a suite of Internet-based capabilities and other resources to provides premedia, printing, logistics and business process outsourcing products and services to clients in private and public sector.
On December 31, 2010, the Company acquired the assets of 8touches, an online provider of tools that allow real estate associates, brokers, multiple listing service (MLS) associations and other marketers to create customized communications materials. 8touches’ operations are located in Sealy, Texas. On December 14, 2010, the Company acquired the assets of Nimblefish Technologies (Nimblefish), a provider of multi-channel marketing services to retail, technology, telecommunications, hospitality and other customers. On November 24, 2010, the Company acquired Bowne & Co., Inc. (Bowne), a provider of shareholder and marketing communication services, with operations in North America, Latin America, Europe and Asia.
U.S. Print and Related Services
U.S. Print and Related Services segment includes the Company’s United States printing operations, managed as one integrated platform, along with related logistics, premedia and print management services. This segment’s products and related service offerings include magazines, catalogs, retail inserts, books, directories, financial printing and related services, direct mail, forms, labels, office products, statement printing, premedia and logistics services. The United States Print and Related Services segment accounted for approximately 75% of the Company’s consolidated net sales during the year ended December 31, 2010.
International
The International segment includes the Company’s non-United States printing operations in Asia, Europe, Latin America and Canada. This segment’s products and related service offerings include magazine, catalogs, retail inserts, book, directories, financial printing and related services, forms, labels, premedia and logistics services. In addition, this segment includes the Company’s business process outsourcing and Global Turnkey Solutions operations. Business process outsourcing provides transactional print and outsourcing services, statement printing, direct mail and print management services through its operations in Europe, Asia and North America. Global Turnkey Solutions provides outsourcing capabilities including product configuration, customized kitting and order fulfillment for technology, medical device and other companies around the world through its operations in Europe, North America and Asia. The International segment accounted for approximately 25% of the Company’s consolidated net sales during 2010.
In the early 1980s, Donnelley increased its shift toward small press runs. It began an aggressive telemarketing campaign in which it contacted numerous small publishers, trying to change its image as a printing house for larger clients only. As a result, by 1983, Donnelley had between 600 and 700 book publishers as customers, and short-run books accounted for nearly 50 percent of unit sales.
Sales grew rapidly, reaching $2.2 billion in 1986. The following year Donnelley purchased Metromail Corp. for $282.6 million. Metromail provided lists to direct-mail marketers, and, as Donnelley already printed and distributed catalogues for direct-mail marketers, the acquisition was expected to complement Donnelley's existing business. It also moved into financial printing, opening a Wall Street financial printing center shortly before the stock market crash of October 1987.
In the late 1980s, Donnelley's expansion went into overdrive, culminating with the purchase of Meredith/Burda Printing for $570 million. Donnelley was also moving rapidly into such information services as computer documentation, with sales of $190 million by 1989 out of total sales for the year of $3.1 billion. The firm used electronic printing techniques and information from Metromail to help its clients gear advertising and editorial content toward different audiences. Furthermore, Donnelley was entering the markets for printing books for children, professional books, and quick-printing, with the purchase of 25 percent of AlphaGraphics, a high-end quick-printing chain.
The firm pushed expansion so hard because it believed ever-evolving technologies gave it an opportunity to capture large chunks of business from smaller companies that could not afford to keep up. Donnelley's moves into cutting-edge technology were not always successful, however; in 1984 it had made a premature, ill-fated attempt to move into electronic shopping.
Highs and Lows: 1990-96
With the U.S. economy in recession in 1991, the firm's net income declined about nine percent to $205 million. The following year, however, profits bounced back to $234 million and sales rose to nearly $4.2 billion. During this time, the company acquired Combined Communication Services, a trade magazine printer, and American Inline Graphics, a specialty, direct-mail printer. The firm also continued its expansion outside the United States, opening new offices and plants in the Netherlands, Scotland, Mexico, and Thailand. In addition, Donnelley increased its presence in electronic media and online services.
Such successes helped to partly offset losses in Donnelley's traditional markets. In early 1993 Sears ceased publication of its 97-year-old catalogue, which Donnelley had printed since its inception. Consequently, Donnelley laid off 660 employees, took a $60 million charge against earnings, and closed its historic Lakeside Press plant. A few months later, the company announced it would begin printing the National Enquirer and Star tabloids. These publications opted to use Donnelley because its advanced printing processes allowed for tighter deadlines and turnaround times of less than 40 hours.
In 1994 Donnelley scored several coups, including exclusive contracts with HarperCollins and Reader's Digest, a 51 percent stake in Editorial Lord Cochrane SA, South America's largest printing firm, as well as the development of a new state-of-the-art digital book production system first put into use in the Crawfordsville plant. Under a new program christened Donnelley Digital Architecture, the company was able to shift most printing jobs into digital form and shorten the entire publishing process, from proofing to final printing and binding. The next innovation, print-on-demand publishing, was initiated in a new 60,000-square-foot plant in Memphis, Tennessee, and accommodated print runs from mere hundreds to millions. Hoping to set a new standard for the industry, Donnelley wanted its customers to know that any print run, of any size, could be created and printed in record time.
Sales for 1994 climbed over 11 percent to just under $4.9 billion, and the following year the company acquired International Communications & Data, a direct-marketing information and list service provider; LAN Systems Inc., a systems integration company; and Corporate Software Inc., a leading reseller of business software. In the latter deal, Donnelley merged its Global Software Services division with Corporate Software, forming a new company called Stream International Inc., of which Donnelley retained an 80 percent interest.
The middle and late 1990s were also a time of concentrated international expansion, with Donnelley increasing its presence in Chile, China, India, and Poland, with operations in 21 countries. By the end of 1995 sales reached $6.5 billion, a 33 percent climb due in part to the company's global expansion. A slowdown came in the first quarter of 1996, however, when sales fell below expectations. Rather than adopt a wait-and-see posture, Donnelley announced restructuring plans which included closing its bindery in Scranton, Pennsylvania, while pouring millions into newer technologies and upgrades in other printing facilities. Despite taking some major writedowns during the year for its reorganization, Donnelley was still ranked the number one printing company in the United States by American Printer for 1996, and brought in sales of just over $5 billion.
Ending One Century, Beginning Another: 1997 to 2000
In 1997 came a major transition with the appointment of a new chairman and CEO, William L. Davis, formerly of the St. Louis-based Emerson Electric Company. Davis replaced longtime CEO John Walter, who had left to become the new head of AT & T. The year also saw the departure of the company's legal and financial services subsidiary, Donnelley Enterprise Solutions Inc., which was spun off as a public company. Over the next few years Donnelley was intent on integrating its three print management segments into a cohesive whole while investing millions in the latest digital printing innovations and business solution products. "We recognize that our customers have a growing need to communicate effectively across a broad range of media to succeed," Chairman and CEO Davis told Graphic Arts Monthly's Lisa Cross in a January 2000 article. A major step in this direction was the company's deal with Microsoft Corporation to produce and maintain an electronic bookstore, offering Internet clients hundreds of thousands of electronic book titles; while the acquisition of Omega Studios, a Texas-based desktop publishing service, was another coup for its evolving e-commerce solutions and services sector.
R.R. Donnelley & Sons had literally done it all in the printing industry, and was well prepared for the 21st century. The company offered "traditional" forms of printing, but its mounting investments in Web- and Internet-based publishing were consistently paying off with a growing roster of both domestic and international clients.
Principal Subsidiaries:AlphaGraphics; American Inline Graphics; Combined Communications Services; Meredith/Burda Printing; Metromail Corp.
Principal Competitors:Banta Corporation; Cadmus Communications Corporation; Moore Corporation Ltd.; Quad/Graphics Inc.; Quebecor Printing Inc.; World Color Press Inc.
OVERALL
Beta: 2.00
Market Cap (Mil.): $3,972.04
Shares Outstanding (Mil.): 207.53
Annual Dividend: 1.04
Yield (%): 5.43
FINANCIALS
RRD.O Industry Sector
P/E (TTM): 18.11 1.79 16.70
EPS (TTM): 878.26 -- --
ROI: 3.15 0.37 3.22
ROE: 10.17 0.42 5.81
Statistics:
Public Company
Incorporated: 1890
Employees: 34,000
Sales: $5.18 billion (1999)
Stock Exchanges: New York Pacific Chicago
Ticker Symbol: DNY
NAIC: 323117 Book Printing; 323119 Other Commercial Printing; 51121 Software Publishers; 514191 Online Information Services
Key Dates:
1864: Richard R. Donnelley establishes print shop in Chicago.
1871: Great Chicago Fire destroys Donnelley's shop and presses.
1873: Rebuilt printing shop is back in business.
1886: Company begins printing telephone directories.
1890: Business incorporates as R.R. Donnelley & Sons.
1908: Donnelley establishes Apprentice Training School.
1921: Company opens plant in Crawfordsville, Indiana.
1928: Company begins printing Time magazine.
1936: Company begins printing Life magazine.
1945: Donnelley profits big from World War II and turns to the future.
1968: Company purchases RCA Videocomp, a revolutionary new typesetter.
1972: Life folds; Donnelley picks up Esquire, Mademoiselle, Glamour, and U.S. News & World Report.
1974: Company begins focusing on short-run printing.
1987: Metromail Corp. is acquired.
1994: Donnelley goes digital with state-of-the-art computerized technology.
1996: Donnelley, with sales of $5 billion, is ranked the number one U.S. printer by American Printer.
1999: Company announces alliance with Microsoft for electronic bookstore.
2000: Company expands electronic capabilities with several new web-based programs.
Name Age Since Current Position
Wolf, Stephen 69 2005 Independent Chairman of the Board
Quinlan, Thomas 48 2007 President, Chief Executive Officer, Director
McHugh, Miles 46 2007 Chief Financial Officer, Executive Vice President
Paloian, John 52 2007 Chief Operating Officer
Bettman, Suzanne 46 2007 Executive Vice President, Chief Compliance Officer, General Counsel, Corporate Secretary
Knotts, Daniel 46 2007 Executive Vice President, Group President
Coxhead, Andrew 42 Senior Vice President, Chief Accounting Officer, Controller
Leib, Daniel 44 2010 Group Chief Financial Officer, Senior Vice President - Mergers and Acquisitions
Hamilton, Judith 66 1995 Independent Director
Sockwell, Oliver 67 1997 Independent Director
Johnson, Thomas 70 1990 Independent Director
Riordan, Michael 60 1999 Independent Director
Pope, John 62 1996 Independent Director
Chaden, Lee 69 2008 Independent Director
Ivey, Susan 52 2009 Independent Director
Address:
77 West Wacker Drive
Chicago, Illinois 60601-1696
U.S.A.
R.R. Donnelley & Sons Company (RR Donnelley) is a global provider of integrated communications. The Company operates primarily in the commercial print portion of the printing industry, with related product and service offerings designed to offer customers complete solutions for communicating their messages to target audiences. The Company’s segments include U.S. Print and Related Services and International .The Company employs a suite of Internet-based capabilities and other resources to provides premedia, printing, logistics and business process outsourcing products and services to clients in private and public sector.
On December 31, 2010, the Company acquired the assets of 8touches, an online provider of tools that allow real estate associates, brokers, multiple listing service (MLS) associations and other marketers to create customized communications materials. 8touches’ operations are located in Sealy, Texas. On December 14, 2010, the Company acquired the assets of Nimblefish Technologies (Nimblefish), a provider of multi-channel marketing services to retail, technology, telecommunications, hospitality and other customers. On November 24, 2010, the Company acquired Bowne & Co., Inc. (Bowne), a provider of shareholder and marketing communication services, with operations in North America, Latin America, Europe and Asia.
U.S. Print and Related Services
U.S. Print and Related Services segment includes the Company’s United States printing operations, managed as one integrated platform, along with related logistics, premedia and print management services. This segment’s products and related service offerings include magazines, catalogs, retail inserts, books, directories, financial printing and related services, direct mail, forms, labels, office products, statement printing, premedia and logistics services. The United States Print and Related Services segment accounted for approximately 75% of the Company’s consolidated net sales during the year ended December 31, 2010.
International
The International segment includes the Company’s non-United States printing operations in Asia, Europe, Latin America and Canada. This segment’s products and related service offerings include magazine, catalogs, retail inserts, book, directories, financial printing and related services, forms, labels, premedia and logistics services. In addition, this segment includes the Company’s business process outsourcing and Global Turnkey Solutions operations. Business process outsourcing provides transactional print and outsourcing services, statement printing, direct mail and print management services through its operations in Europe, Asia and North America. Global Turnkey Solutions provides outsourcing capabilities including product configuration, customized kitting and order fulfillment for technology, medical device and other companies around the world through its operations in Europe, North America and Asia. The International segment accounted for approximately 25% of the Company’s consolidated net sales during 2010.
In the early 1980s, Donnelley increased its shift toward small press runs. It began an aggressive telemarketing campaign in which it contacted numerous small publishers, trying to change its image as a printing house for larger clients only. As a result, by 1983, Donnelley had between 600 and 700 book publishers as customers, and short-run books accounted for nearly 50 percent of unit sales.
Sales grew rapidly, reaching $2.2 billion in 1986. The following year Donnelley purchased Metromail Corp. for $282.6 million. Metromail provided lists to direct-mail marketers, and, as Donnelley already printed and distributed catalogues for direct-mail marketers, the acquisition was expected to complement Donnelley's existing business. It also moved into financial printing, opening a Wall Street financial printing center shortly before the stock market crash of October 1987.
In the late 1980s, Donnelley's expansion went into overdrive, culminating with the purchase of Meredith/Burda Printing for $570 million. Donnelley was also moving rapidly into such information services as computer documentation, with sales of $190 million by 1989 out of total sales for the year of $3.1 billion. The firm used electronic printing techniques and information from Metromail to help its clients gear advertising and editorial content toward different audiences. Furthermore, Donnelley was entering the markets for printing books for children, professional books, and quick-printing, with the purchase of 25 percent of AlphaGraphics, a high-end quick-printing chain.
The firm pushed expansion so hard because it believed ever-evolving technologies gave it an opportunity to capture large chunks of business from smaller companies that could not afford to keep up. Donnelley's moves into cutting-edge technology were not always successful, however; in 1984 it had made a premature, ill-fated attempt to move into electronic shopping.
Highs and Lows: 1990-96
With the U.S. economy in recession in 1991, the firm's net income declined about nine percent to $205 million. The following year, however, profits bounced back to $234 million and sales rose to nearly $4.2 billion. During this time, the company acquired Combined Communication Services, a trade magazine printer, and American Inline Graphics, a specialty, direct-mail printer. The firm also continued its expansion outside the United States, opening new offices and plants in the Netherlands, Scotland, Mexico, and Thailand. In addition, Donnelley increased its presence in electronic media and online services.
Such successes helped to partly offset losses in Donnelley's traditional markets. In early 1993 Sears ceased publication of its 97-year-old catalogue, which Donnelley had printed since its inception. Consequently, Donnelley laid off 660 employees, took a $60 million charge against earnings, and closed its historic Lakeside Press plant. A few months later, the company announced it would begin printing the National Enquirer and Star tabloids. These publications opted to use Donnelley because its advanced printing processes allowed for tighter deadlines and turnaround times of less than 40 hours.
In 1994 Donnelley scored several coups, including exclusive contracts with HarperCollins and Reader's Digest, a 51 percent stake in Editorial Lord Cochrane SA, South America's largest printing firm, as well as the development of a new state-of-the-art digital book production system first put into use in the Crawfordsville plant. Under a new program christened Donnelley Digital Architecture, the company was able to shift most printing jobs into digital form and shorten the entire publishing process, from proofing to final printing and binding. The next innovation, print-on-demand publishing, was initiated in a new 60,000-square-foot plant in Memphis, Tennessee, and accommodated print runs from mere hundreds to millions. Hoping to set a new standard for the industry, Donnelley wanted its customers to know that any print run, of any size, could be created and printed in record time.
Sales for 1994 climbed over 11 percent to just under $4.9 billion, and the following year the company acquired International Communications & Data, a direct-marketing information and list service provider; LAN Systems Inc., a systems integration company; and Corporate Software Inc., a leading reseller of business software. In the latter deal, Donnelley merged its Global Software Services division with Corporate Software, forming a new company called Stream International Inc., of which Donnelley retained an 80 percent interest.
The middle and late 1990s were also a time of concentrated international expansion, with Donnelley increasing its presence in Chile, China, India, and Poland, with operations in 21 countries. By the end of 1995 sales reached $6.5 billion, a 33 percent climb due in part to the company's global expansion. A slowdown came in the first quarter of 1996, however, when sales fell below expectations. Rather than adopt a wait-and-see posture, Donnelley announced restructuring plans which included closing its bindery in Scranton, Pennsylvania, while pouring millions into newer technologies and upgrades in other printing facilities. Despite taking some major writedowns during the year for its reorganization, Donnelley was still ranked the number one printing company in the United States by American Printer for 1996, and brought in sales of just over $5 billion.
Ending One Century, Beginning Another: 1997 to 2000
In 1997 came a major transition with the appointment of a new chairman and CEO, William L. Davis, formerly of the St. Louis-based Emerson Electric Company. Davis replaced longtime CEO John Walter, who had left to become the new head of AT & T. The year also saw the departure of the company's legal and financial services subsidiary, Donnelley Enterprise Solutions Inc., which was spun off as a public company. Over the next few years Donnelley was intent on integrating its three print management segments into a cohesive whole while investing millions in the latest digital printing innovations and business solution products. "We recognize that our customers have a growing need to communicate effectively across a broad range of media to succeed," Chairman and CEO Davis told Graphic Arts Monthly's Lisa Cross in a January 2000 article. A major step in this direction was the company's deal with Microsoft Corporation to produce and maintain an electronic bookstore, offering Internet clients hundreds of thousands of electronic book titles; while the acquisition of Omega Studios, a Texas-based desktop publishing service, was another coup for its evolving e-commerce solutions and services sector.
R.R. Donnelley & Sons had literally done it all in the printing industry, and was well prepared for the 21st century. The company offered "traditional" forms of printing, but its mounting investments in Web- and Internet-based publishing were consistently paying off with a growing roster of both domestic and international clients.
Principal Subsidiaries:AlphaGraphics; American Inline Graphics; Combined Communications Services; Meredith/Burda Printing; Metromail Corp.
Principal Competitors:Banta Corporation; Cadmus Communications Corporation; Moore Corporation Ltd.; Quad/Graphics Inc.; Quebecor Printing Inc.; World Color Press Inc.
OVERALL
Beta: 2.00
Market Cap (Mil.): $3,972.04
Shares Outstanding (Mil.): 207.53
Annual Dividend: 1.04
Yield (%): 5.43
FINANCIALS
RRD.O Industry Sector
P/E (TTM): 18.11 1.79 16.70
EPS (TTM): 878.26 -- --
ROI: 3.15 0.37 3.22
ROE: 10.17 0.42 5.81
Statistics:
Public Company
Incorporated: 1890
Employees: 34,000
Sales: $5.18 billion (1999)
Stock Exchanges: New York Pacific Chicago
Ticker Symbol: DNY
NAIC: 323117 Book Printing; 323119 Other Commercial Printing; 51121 Software Publishers; 514191 Online Information Services
Key Dates:
1864: Richard R. Donnelley establishes print shop in Chicago.
1871: Great Chicago Fire destroys Donnelley's shop and presses.
1873: Rebuilt printing shop is back in business.
1886: Company begins printing telephone directories.
1890: Business incorporates as R.R. Donnelley & Sons.
1908: Donnelley establishes Apprentice Training School.
1921: Company opens plant in Crawfordsville, Indiana.
1928: Company begins printing Time magazine.
1936: Company begins printing Life magazine.
1945: Donnelley profits big from World War II and turns to the future.
1968: Company purchases RCA Videocomp, a revolutionary new typesetter.
1972: Life folds; Donnelley picks up Esquire, Mademoiselle, Glamour, and U.S. News & World Report.
1974: Company begins focusing on short-run printing.
1987: Metromail Corp. is acquired.
1994: Donnelley goes digital with state-of-the-art computerized technology.
1996: Donnelley, with sales of $5 billion, is ranked the number one U.S. printer by American Printer.
1999: Company announces alliance with Microsoft for electronic bookstore.
2000: Company expands electronic capabilities with several new web-based programs.
Name Age Since Current Position
Wolf, Stephen 69 2005 Independent Chairman of the Board
Quinlan, Thomas 48 2007 President, Chief Executive Officer, Director
McHugh, Miles 46 2007 Chief Financial Officer, Executive Vice President
Paloian, John 52 2007 Chief Operating Officer
Bettman, Suzanne 46 2007 Executive Vice President, Chief Compliance Officer, General Counsel, Corporate Secretary
Knotts, Daniel 46 2007 Executive Vice President, Group President
Coxhead, Andrew 42 Senior Vice President, Chief Accounting Officer, Controller
Leib, Daniel 44 2010 Group Chief Financial Officer, Senior Vice President - Mergers and Acquisitions
Hamilton, Judith 66 1995 Independent Director
Sockwell, Oliver 67 1997 Independent Director
Johnson, Thomas 70 1990 Independent Director
Riordan, Michael 60 1999 Independent Director
Pope, John 62 1996 Independent Director
Chaden, Lee 69 2008 Independent Director
Ivey, Susan 52 2009 Independent Director
Address:
77 West Wacker Drive
Chicago, Illinois 60601-1696
U.S.A.