R.R. Donnelley & Sons Company

and answer session by phone. To ask a question, you must be connected by phone as the webcast is a listen-only platform. If you wish to ask a question by phone, please press star 1 on your touchtone phone. 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.

Thank you, Brandi, and thank you, everyone, for joining RRG's second quarter 2021 results conference call. Joining me on today's call are Dan Notz, RRG's president and chief executive officer, and Terry Peterson, our chief financial officer. At the conclusion of today's prepared remarks, Dan, Terry, and I will take questions. As a reminder, we have prepared supplemental slides for today's call, which can be found on the investor section of our website at rrd.com. As we review our results on today's call, I will be advancing the slides if you are connected by webcast. Alternatively, we will periodically reference page numbers on the supplemental slides for those participants who wish to follow along by advancing the slides themselves. The information reviewed during this call is addressed in more detail in our second quarter press release, a copy of which is posted on the investor section of our website at RID.com. This information was also furnished to the SEC in the Form 8-K we filed yesterday. In addition, we will also refer to forward-looking statements, including comments on our financial outlook and strategy all of which involve risk and uncertainties. Therefore, our actual results could differ materially from our current expectations. For a complete discussion of the factors that could cause our actual results to differ materially, please refer to the cautionary statement including in our earnings release and the risk factors included in our annual report on Form 10-K, our quarterly reports on Form 10-Q, and other filings with the SEC. Further, we will discuss non-GAAP financial information. We believe the presentation of non-GAAP results provides investors with useful supplementary information concerning the company's ongoing operations. These non-GAAP results are provided for informational purposes only. Any references to non-GAAP financial measures or reconsult to the comparable GAAP financial measures in the investor section of our website as part of our press release. I will now turn the call over to Dan.

Thanks, Johan. Good morning, everyone. It's great to be with you, and thank you for joining our call today. On behalf of everyone at RRB, I hope that you and your families continue to stay healthy and safe. On today's call, I will recap our second quarter results and provide a number of examples that demonstrate how we are delivering value for our clients in winning new business in a recovering yet challenging business environment. Before turning the call over to Terry, I will also share a number of important awards that we've received recognizing our diversity, equity, and inclusion efforts. Building on our first quarter momentum, we delivered strong second quarter results through the ongoing execution of our strategic initiatives while protecting the health and safety of our colleagues around the globe. Highlighted by double-digit organic net sales growth, a significant increase in adjusted income from operations, expanded operating margins, and our lowest second quarter outstanding debt balance since the spin in 2016, I am very pleased with our performance in the quarter. I'd like to provide a little more color on our results. Net sales of $1.15 billion were up 11.4% organically versus the prior year, representing our fourth consecutive quarter of improved sales trends. Our favorable sales performance is a direct result of our ability to support our clients' strengthening demand across our portfolio as the majority of our product and service categories delivered year-over-year sales growth in the quarter. Our sales and service teams are working closely with our clients to effectively manage their increasing volumes while also remaining laser-focused on converting our opportunity pipeline into new wins. On a segment basis, business services delivered 11.6% organic growth driven by very strong performance in our commercial print, packaging, and labels offerings. Marketing Solutions also reported double-digit organic growth of 10.3%, despite the census not repeating, with higher digital print and direct marketing volumes driving the improvement. As expected, we are seeing client marketing activity increasing as the economy recovers, and we believe that trend will continue as the year progresses. I'm also pleased to report that RRD Marketing Solutions, which was established only four years ago, is now one of the 10 largest marketing service agencies in the U.S. and among the 20 largest in the world, according to the 77th Ad Age Agency Report. We reported $41 million in adjusted income from operations, a $20 million or 96% increase compared to the prior year, despite a number of sizable headwinds, including higher variable incentive compensation, primarily due to an increase in our stock price, unfavorable foreign exchange, and the census project not repeating. We also expanded our adjusted operating margin by 150 basis points versus the prior year as a result of our strong operational execution focus in our streamlined cost structure. Notably, both our adjusted income from operations and operating margin for the quarter exceeded our pre-pandemic 2019 second quarter earnings and margin. On the balance sheet, our total debt outstanding was down nearly $500 million from the same period a year ago, which represents our lowest second quarter level since the spin in 2016. Our favorable results for both the quarter and the first half of the year are directly attributable to the sustained focus and execution of our strategic priorities. We continue to execute at a high level, strengthening our core performance by aggressively driving our productivity initiatives, improving our operating leverage, and lowering our cost to serve. We are favorably shifting our business mix through sustained sales growth in our strategic product categories, and we continue to target our investments towards expanding our capabilities, building scale, and enhancing our operational agility. While we always have more work to do, we are confident in our strategy and the actions we are taking to position R&D for future success. We're emerging from the pandemic as a stronger R&D with enhanced ability to flex our capabilities across industries, including financial, healthcare, retail, and services, some of our strongest industry verticals. We have an extensive portfolio of products and services, and we've demonstrated that we can help clients efficiently connect with their customers in times of both contraction and in times of growth. I'd like to share a few examples that highlight how we are effectively leveraging our industry-leading capabilities to support our clients' communication needs. We secured a new agreement with Ellume, an Australian digital diagnostics company, who was recently awarded a $231.8 million contract by the United States government to accelerate production of its COVID-19 home test in the U.S. The company's test is the first over-the-counter self-test authorized by the Food and Drug Administration. This rapid antigen test sold without a prescription can be performed at home with the test results conveniently delivered to your personal smartphone in just 15 minutes. Ellume selected R&D to manage its entire U.S. supply chain because of our scope and expertise in rapidly scaling diagnostic test kits. The program takes advantage of the integration of our packaging and labels capabilities coupled with our supply chain solutions and commercial print offerings. We're excited to expand our relationship with Emerus, a leading synthetic biotechnology company that owns and operates a family of fast-growing, clean beauty brands created with sustainable and natural ingredients. Our idea has provided superior printing and packaging capabilities to Emerus since 2019, and we are proud to produce the retail carton packaging for the North American launch of their new color cosmetics brand. Amherst is committed to using sustainable packaging for its products, and R&D was able to offer a customized Amstock solution that meets these objectives made from 100% post-consumer waste. R&D designed and developed a variety of carton structures and printing shades of custom mixed soy-based inks which match the colors of the cosmetics. Through our breadth and scale, R&D has been able to provide the massive scope needed to fulfill Amherst's rapidly expanding growth needs. Last, we are working with Novocare, a global oncology company, on an integrated solution extending beyond printed marketing material. Novacure conducts patient satisfaction surveys in Europe and wanted to do the same in the United States. The company leveraged our capabilities in survey design, printed mail, response capture and reporting, as well as data insights to successfully produce and mail the survey. RD compiled the results, captured responses, and leveraged our data analytics team to provide actionable insights to Novacure. Building on our current capabilities, we are developing new offerings in support of our clients' evolving needs. For our retail clients, we are launching a comprehensive suite of in-store marketing support services to seamlessly manage the design, ideation, procurement, and installation of store signage and fixture solutions. In-store communications have become increasingly important to manage rapidly changing consumer expectations and buying behaviors. On-site marketing services is part of our industry-leading capabilities designed to help retailers, including restaurants, home improvement stores, grocery and convenience stores, reimagine their physical environments and drive their growth objectives. RV's global outsourcing creative team announced this quarter a PDF remediation solution that will help companies make their documents more accessible to people with sight, cognition, and other disorders that may impact readability of web content. The solution combines R&D's proprietary technology and human expertise to help organizations achieve digital inclusivity and regulatory compliance across a variety of communication channels. Before I turn the call over to Terry, I'd like to emphasize our commitment to fostering an environment where all employees belong, are valued, and have an equal opportunity to pursue their career aspirations and reach their full potential. Because of our efforts in this area, RRD was recently named to Forbes List of America's Best Employers for Diversity 2021, recognizing our ongoing dedication to diversity, equity, and inclusion. We also were recognized as one of the best places to work for those with disabilities by DisabilityIN, a nonprofit dedicated to business disability inclusion. We're honored to receive both of these acknowledgments and will continue our strong focus on enhancing and embracing a diverse, equitable, and inclusive culture at RD. With that, I will now turn it over to Terry to review our financials for the quarter, as well as our improved full-year guidance that reflects our solid first half operating performance, the resilience and scale of our portfolio, and the strength of our brand. Terry, over to you.