Donnelley Reports 1Q Sales Jump 17.7 Percent on New Contracts, Higher Volume

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R.R. Donnelley & Sons Company, Chicago, said yesterday that net sales for the first quarter of 2006 totaled $2.3 billion, up 17.7 percent from last year.

The increase was primarily due to acquisitions, namely the Astron Group, Asia Printers Group, Poligrafia, Spencer Press, the Charlestown, Indiana print operations of Adplex-Rhodes and Critical Mail Continuity Services, the company said in a statement. Other factors driving the increase were new customer wins and increased volume with existing customers in its Integrated Print Communications and Publishing and Retail Services Segments.

The company's first quarter net earnings from continuing operations totaled $114.2 million or $0.52 per diluted share.

Net sales for the Publishing and Retail Services segment increased 13.4 percent for a total of $1.1 billion from the first quarter of 2005 primarily due to sales increases from all businesses within the segment and several acquisitions.

First quarter net sales for the Integrated Print Communications segment increased 36.7 percent to $727.3 million, primarily due to the acquisition of the Astron Group. The company also cited growth in its financial print, short-run commercial print and direct mail and business communication services businesses.

The Forms and Labels segment experienced a 3.3 percent increase in net sales for a total of $425.9 million.

In other news, Donnelley also announced two contracts yesterday. One is a multi-year renewal by Martha Stewart Living Omnimedia Inc. for the production of Martha Stewart Living, Everyday Food and Martha Stewart Weddings. The contract adds the Holiday Special magazine as well as a new startup title, Blueprint.

The second contract was awarded to Donnelley's U.K.-based Astron division and covers print management for the Britannia Building Society. The multi-year, $26 million contract covers management, procurement, production, storage, distribution and fulfillment of marketing and operational printing and direct mail.

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