8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 7, 2003

R. R. DONNELLEY & SONS COMPANY

(Exact name of Registrant as Specified in Its Charter)

Delaware	1-4694	36-1004130
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identificaiton No.)
77 West Wacker Drive, Chicago, Illinois		60601
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (312) 326-8000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Item 7.    Financial Statements and Exhibits.

(c) Exhibits.
99.1	Press Release issued by R.R. Donnelley & Sons Company on May 7, 2003 reporting first quarter, 2003 results.

Item 9.    Regulation FD Disclosure (and Item 12. Results of Operations and Financial Condition).

The information contained in this Current Report, including the Exhibit attached hereto, is being furnished pursuant to Item 12. Results of Operations and Financial Condition of Form 8-K. Attached as Exhibit 99.1 is a press release dated May 7, 2003, reporting the Company’s results for the first quarter ended March 31, 2003.

The information shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise incorporated by reference into any filing pursuant to the Securities Act of 1933, as amended, or the Exchange Act except as otherwise expressly stated in such a filing.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

R. R. DONNELLEY & SONS COMPANY

Date: May 7, 2003

/S/    MONICA M. FOHRMAN        

By:                                                                                                           

      Monica M. Fohrman

Senior Vice President, General Counsel & Secretary

3

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release issued by R.R. Donnelley & Sons Company on May 7, 2003 reporting first quarter, 2003 results.

4

EX-99.1

EXHIBIT 99.1

RR DONNELLEY		Corporate Headquarters 77 West Wacker Drive Chicago, Illinois 60601 Telephone (312) 326-8000
Media contact:	Investor contact:
Katherine Divita	Christopher Curtis
312-326-8336	312-326-8313
katherine.divita@rrd.com	christopher.curtis@rrd.com

FOR IMMEDIATE RELEASE

RR DONNELLEY REPORTS 1ST QUARTER 2003 RESULTS; AFFIRMS 2003 GUIDANCE

CHICAGO, May 7, 2003— RR Donnelley (NYSE: DNY) today announced first quarter 2003 earnings per diluted share of 5 cents, compared to 20 cents in the year ago period. Revenues for the first quarter were $1.1 billion, down 2 percent compared to the prior year. Net income was $6 million, compared to $23 million in the first quarter of 2002.

Included in the above results for the first quarter of 2003 are restructuring and impairment charges of $3 million ($2 million after-tax, or 1 cent per diluted share). In the year-earlier period, results included restructuring and impairment charges of $27 million ($17 million after-tax, or 14 cents per diluted share), and a $30 million reversal of excess tax reserves ($30 million benefit after-tax, or 26 cents per diluted share), related to the company’s settlement with the IRS on deductibility of interest payments for corporate-owned life insurance.

“We’re on track with our full-year earnings guidance,” said William L. Davis, RR Donnelley’s chairman, president and chief executive officer. “I’m particularly pleased that we’re not only delivering results today, we’re also building sales momentum that will pay off for years to come.”

The company continued to experience a weak environment in its print businesses, as well as continued weakness in domestic capital markets activity. The company’s logistics business continued its strong revenue growth, aided by the March acquisition of Momentum Logistics. Growth in Europe and Asia also contributed to the company’s performance. The company continued to benefit from prior restructuring efforts and ongoing productivity programs, partially mitigating the company’s print revenue decline.

RR Donnelley Reports 1st-Quarter 2003 Results; Affirms 2003 Guidance

May 7, 2003

Page 2 of 6

The company also affirmed its previously issued full year earnings guidance of $1.25 to $1.40 per diluted share. This range includes six cents per diluted share for expected restructuring activity. The company’s guidance continues to incorporate the weak print demand and pricing environment, offset by continued cost reduction and productivity efforts. Capital spending is expected to be below $250 million, also unchanged from prior guidance.

RR Donnelley will hold its quarterly investor conference call at 10 a.m., central time, on Wednesday, May 7, 2003. For a link to the call, log on to www.rrdonnelley.com. Check in approximately 10 minutes in advance of the start time to set up to receive the webcast. The call also will be archived on the site for seven days.

RR Donnelley (www.rrdonnelley.com) prepares, produces and delivers integrated communications across multiple channels for content owners such as publishers, merchandisers, and telecommunications companies as well as capital markets and diversified financial services companies. As a single source supplying services up and down the communications value chain, the company excels in digital photography, content management, printing, online services, and print and package logistics. With these integrated services, RR Donnelley provides effective solutions for its customers’ targeted communications and delivery needs. Headquartered in Chicago, Ill., RR Donnelley serves a global customer market and has 30,000 employees in more than 200 locations in North America, South America, Europe and the Asia/Pacific Basin.

Certain statements, including discussions of the company’s expectations for 2003 and beyond, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause actual results to differ materially from the future results expressed or implied by these statements. Refer to Part I, Item I of the company’s annual report on Form 10-K for the year ended December 31, 2002, for a description of such factors.

RR Donnelley Reports 1st-quarter 2003 Results; Affirms 2003 Guidance

Page 3 of 6

CONDENSED CONSOLIDATED INCOME STATEMENT

(in thousands, except per-share data)

	3 mos ended March 31,						% Change
	2003			2002
Net sales	$	1,073,817		$	1,093,650		(1.8%	)
Cost of materials and transportation		455,747			462,105		(1.4%	)
Value added revenue (VAR)		618,070			631,545		(2.1%	)
Value added cost of sales		449,760			463,640		(3.0%	)
Gross profit		168,310			167,905		0.2%
Selling and administrative expenses		138,778			130,522		6.3%
Restructuring and impairment charges		2,609			26,692		(90.2%	)
Earnings from operations		26,923			10,691		151.8%
Interest expense, net		(12,707	)		(15,453	)	(17.8%	)
Other income (expense):
Other, net		(4,943	)		(6,891	)	(28.3%	)
Earnings (loss) before income taxes		9,273			(11,653	)	(179.6%	)
Provision (benefit) for income taxes		3,571			(34,312	)	(110.4%	)
Net income	$	5,702		$	22,659		(74.8%	)
Earnings Per Share
Basic	$	0.05		$	0.20		(75.0%	)
Diluted		0.05			0.20		(75.0%	)
Earnings per share include the following items:
Restructuring and impairment charges		(0.01	)		(0.14	)	(92.9%	)
Reversal of excess COLI tax reserves*		—			0.26		N/M

	3 mos ended March 31,
Share Data	2003		2002
Basic shares outstanding at March 31	113,086		112,866
Average basic shares outstanding	113,101		112,894
Effect of dilutive securities	595		1,930
Average diluted shares outstanding	113,696		114,824
Percent to Net Sales
Gross profit	15.7	%	15.4	%
Selling & administrative expense	12.9	%	11.9	%
Earnings from operations	2.5	%	1.0	%
Net income	0.5	%	2.1	%
Percent to VAR**
Gross profit	27.2	%	26.6	%
Selling & administrative expense	22.5	%	20.7	%
Earnings from operations	4.4	%	1.7	%
Net income	0.9	%	3.6	%

^* Included in tax provision (benefit) in the condensed consolidated income statement.

^** Value-added revenue (VAR) represents net sales less the cost of materials (principally paper and ink) for the company’s print-related businesses, and net sales less the cost of transportation and postage for its logistics services businesses. With respect to print, certain customers supply their own paper; customer-furnished paper is not included in the company’s financial results. By measuring VAR, the company eliminates the effect of material prices and transportation costs, as well as the impact on net sales of fluctuations in the amount of customer-furnished paper. Management, therefore, views VAR as a better performance measure of its own value-added products and services. Other companies may use a measure which is calculated in a similar manner, but which may not be comparable.

RR Donnelley Reports 1st-quarter 2003 Results; Affirms 2003 Guidance

Page 4 of 6

KEY INFORMATION

(dollars in thousands, except per-share data)

	2003			2002
	3 mos ended March 31,
Other Data
Capital expenditures	$	50,022		$	65,818
Acquisitions1		17,000			—
Cash and equivalents		40,483			49,230
Total debt		1,004,145			1,082,564
Return on avg invested capital2		8.4	%		3.6	%
Operating working capital (% of net sales)3		1.6	%		4.7	%

Restructuring, Impairment & Other Items Affecting Comparability	3 mos ended March 31,
	2003									2002
	Earnings (loss) before Income Taxes			Net Income			Earnings (loss) per Diluted share			Earnings (loss) before Income Taxes			Net Income			Earnings (loss) per Diluted share
Consolidated results as reported	$	9,273		$	5,702		$	0.05		$	(11,653	)	$	22,659		$	0.20
The consolidated results include the following significant items that affect comparability:
Restructuring and impairment charge	$	(2,609	)	$	(1,618	)	$	(0.01	)	$	(26,692	)	$	(16,816	)	$	(0.14	)
Other items:
Provision for doubtful accounts		(9,928	)		(6,155	)		(0.05	)		(2,959	)		(1,864	)		(0.02	)
By-product revenues		10,962			6,796			0.06			8,714			5,490			0.05
Gain on sale of assets		1,945			1,206			0.01			—			—			—
Insurance recovery related to 9/11		2,047			1,269			0.01			—			—			—
Affordable housing investment writedown*		(4,000	)		(2,480	)		(0.02	)		(2,700	)		(1,701	)		(0.01	)
Pension and post-retirement income		1,260			781			—			5,718			3,602			0.03
Reversal of excess COLI tax reserves**		—			—			—			—			30,000			0.26
COLI-related expenses upon policy surrender*		—			—			—			(4,883	)		(3,076	)		(0.03	)
Total significant items:	$	(323	)	$	(201	)	$	0.00		$	(22,802	)	$	15,635		$	0.14

* Included in other income (expense) in the condensed consolidated income statement.

** Included in tax provision in the condensed consolidated income statement.

¹ On March 5, 2003, the Company acquired certain net assets of Momentum Logistics, Inc. for approximately $17 million in cash.

² Computed on 12-month rolling net income, divided by a 13-month average of debt and equity.

³ Computed on a 13-month average of net receivables, net inventories, and prepaid expenses minus accounts payable and other accrued liabilities divided by 12-month rolling net sales.

RR Donnelley Reports 1st-quarter 2003 Results; Affirms 2003 Guidance

Page 5 of 6

KEY INFORMATION

(in thousands)

Industry Segment Data

	Donnelley Print Solutions		Logistics Services		Financial Services			Other4			Corporate5,6			Consolidated Total
First Quarter 2003
Sales	$	666,973	$	209,808	$	90,255		$	106,781		$	—		$	1,073,817
Restructuring and impairment charges		169		—		573			715			1,152			2,609
Earnings (loss) from operations		45,682		3,543		(6,362	)		(9,045	)		(6,895	)		26,923
Earnings (loss) before income taxes		45,707		3,517		(6,522	)		(10,858	)		(22,571	)		9,273
First Quarter 2002
Sales	$	714,334	$	172,079	$	102,875		$	104,362		$	—		$	1,093,650
Restructuring and impairment charges		23,122		24		21			2,387			1,138			26,692
Earnings (loss) from operations		23,978		3,043		(12,262	)		(14,494	)		10,426			10,691
Earnings (loss) before income taxes		27,109		2,981		(12,074	)		(19,397	)		(10,272	)		(11,653	)
Second Quarter 2002
Sales	$	716,404	$	176,590	$	144,592		$	111,306		$	—		$	1,148,892
Restructuring and impairment charges		14,032		98		711			913			271			16,025
Earnings (loss) from operations		47,268		2,013		12,427			(9,780	)		(10,519	)		41,409
Earnings (loss) before income taxes		51,693		2,033		12,686			(11,325	)		(18,023	)		37,064
Third Quarter 2002
Sales	$	771,291	$	192,896	$	93,482		$	119,611		$	—		$	1,177,280
Restructuring and impairment charges		6,562		286		2,866			222			12,773			22,709
Earnings (loss) from operations		106,890		2,159		(12,219	)		115			(11,698	)		85,247
Earnings (loss) before income taxes		110,131		2,160		(10,838	)		2,789			(29,541	)		74,701
Fourth Quarter 2002
Sales	$	889,371	$	242,459	$	86,503		$	116,782		$	—		$	1,335,115
Restructuring and impairment charges		10,929		1,941		6,901			2,127			1,605			23,503
Earnings (loss) from operations		126,133		3,884		(21,273	)		(3,375	)		2,245			107,614
Earnings (loss) before income taxes		126,660		3,875		(21,155	)		(5,334	)		(28,425	)		75,621

Consolidated Summary of Expense Trends—First Quarter

	2003		% of Sales	2002		% of Sales	% Change
Cost of materials (excluding cost of transp.)	$	296,984	27.7%	$	333,905	30.5%	(11.1%	)
Cost of transportation		158,763	14.8%		128,200	11.7%	23.8%
Cost of manufacturing7		383,552	35.7%		393,984	36.0%	(2.6%	)
Depreciation		68,236	6.4%		72,120	6.6%	(5.4%	)
Amortization8		9,038	0.8%		9,747	0.9%	(7.3%	)
Selling and administrative expense7		136,749	12.7%		127,877	11.7%	6.9%
Restructuring and impairment charges		2,609	0.2%		26,692	2.4%	(90.2%	)
Net interest expense		12,707	1.2%		15,453	1.4%	(17.8%	)

⁴ Represents other operating segments of the company including RRD Direct, International and Other.

⁵ Corporate earnings (loss) from operations consist principally of the following unallocated items: net earnings of benefit plans (excluding service costs); last-in first-out (LIFO) inventory provisions; and general corporate, management and information technology costs.

⁶ Corporate earnings (loss) before income taxes consist principally of earnings (loss) from operations, adjusted for interest expense not assessed to the operating segments, affordable housing investment writedowns and other income (expense).

⁷ Excludes depreciation and amortization, which are shown separately.

⁸ Included primarily in net sales and other income (expense).

RR Donnelley Reports 1st-quarter 2003 Results; Affirms 2003 Guidance

Page 6 of 6

KEY INFORMATION

(in thousands)

Net Sales Detail—First Quarter	2003		% of Total	2002		% of Total	% Change
Magazines, Catalogs and Retail	$	362,535	33.8%	$	386,667	35.4%	(6.2%	)
Book Publishing Services		153,066	14.3%		154,670	14.1%	(1.0%	)
Telecommunications		124,101	11.6%		143,261	13.1%	(13.4%	)
Premedia		27,271	2.5%		29,736	2.7%	(8.3%	)
Donnelley Print Solutions		666,973	62.1%		714,334	65.3%	(6.6%	)
Logistics Services		209,808	19.5%		172,079	15.7%	21.9%
Financial Services		90,255	8.4%		102,875	9.4%	(12.3%	)
RRD Direct		29,146	2.7%		33,978	3.1%	(14.2%	)
Other9		77,635	7.2%		70,384	6.4%	10.3%
Other		106,781	9.9%		104,362	9.5%	2.3%
Total Net Sales	$	1,073,817	100.0%	$	1,093,650	100.0%	(1.8%	)
Cost of materials and transportation		455,747			462,105
Value added revenue (VAR)	$	618,070		$	631,545
VAR Detail—First Quarter	2003		% of Total	2002		% of Total	% Change
Magazines, Catalogs and Retail	$	229,583	37.1%	$	241,128	38.2%	(4.8%	)
Book Publishing Services		110,861	17.9%		111,534	17.7%	(0.6%	)
Telecommunications		64,257	10.4%		64,107	10.2%	0.2%
Premedia		27,272	4.4%		29,736	4.7%	(8.3%	)
Donnelley Print Solutions		431,973	69.9%		446,505	70.7%	(3.3%	)
Logistics Services		51,556	8.3%		43,984	7.0%	17.2%
Financial Services		75,277	12.2%		86,960	13.8%	(13.4%	)
RRD Direct		17,782	2.9%		18,824	3.0%	(5.5%	)
Other9		41,482	6.7%		35,272	5.6%	17.6%
Other		59,264	9.6%		54,096	8.6%	9.6%
Total VAR	$	618,070	100.0%	$	631,545	100.0%	(2.1%	)

⁹ Includes International (Latin America, Europe and Asia) and Other.