SUSSEX, Wis., April 9, 2025 /PRNewswire/ -- Quad/Graphics, Inc. (NYSE: QUAD) ("Quad" or the "Company"), a global marketing experience company, announced today that it will release its first quarter 2025 financial results after the close of regular market trading on Tuesday, April 29, 2025. The Company will host a conference call at 8:30 a.m. ET on Wednesday, April 30, 2025, to discuss the aforementioned results. The call will be hosted by Joel Quadracci, Quad Chairman, President and CEO, and Tony Staniak, Q ...

Group 1 - Quad/Graphics, Inc. announced the expansion of Tim Maleeny's role to include President of Quad Agency Solutions, succeeding Eric Ashworth who will leave the company on May 1, 2025 [1][2] - Maleeny will focus on evolving the integrated data, media, creative, and marketing services businesses, enhancing how clients utilize Quad's integrated offerings [2][3] - Joel Quadracci, Chairman, President, and CEO, emphasized Maleeny's industry experience and client-first focus as key to advancing the agency's growth strategy [3][4] Group 2 - Tim Maleeny joined Quad in November 2024 from Havas North America, where he held the position of President, Chief Strategy and Innovation Officer [4] - Quad is a marketing experience company that connects brands with consumers through its MX Solutions Suite, integrating creative, production, and media solutions across various channels [5][6] - The company employs over 12,000 people across 14 countries and serves approximately 2,500 clients, focusing on sectors such as retail, consumer packaged goods, financial services, and health [6]

Core Insights - Quad/Graphics Inc. is expanding into the $26.6 billion branded solutions market, enhancing its portfolio of integrated marketing solutions [1] - The new branded solutions group aims to provide a seamless and brand-aligned approach to promotional goods, relieving marketers of the complexities of managing branded goods programs [2][4] Company Overview - Quad is a marketing experience company that connects brands with consumers through a comprehensive range of marketing and print services, integrating creative, production, and media solutions [5] - The company employs over 12,000 people across 14 countries and serves approximately 2,500 clients, including leading companies in various industries such as retail, financial services, and health [6] Market Context - 77% of marketers report facing complexity within their marketing ecosystem, indicating a significant demand for streamlined branded solutions [4] - The branded solutions market is part of a broader trend where promotional goods are seen as extensions of a brand's story, emphasizing the importance of brand consistency and quality [4]

Core Viewpoint - Quad/Graphics, Inc. has completed the sale of its European operations for €41 million (approximately $42 million) to Capmont GmbH, which will aid in reducing debt and enhancing its marketing experience (MX) offerings [1][3][4] Group 1: Transaction Details - The sale includes all employees and facilities of Quad/Graphics Europe, including print and ink-manufacturing operations in Wyszków, Poland, and the Peppermint agency in Warsaw [2] - Excluded from the sale are Quad's shared services employees in Poland who support the integrated marketing platform in The Americas [2] Group 2: Strategic Focus - The divestiture aligns with the company's strategic focus on optimizing its business portfolio for growth as a marketing experience company, particularly in North America [4] - The proceeds from the sale will be utilized to reduce debt and invest in solutions that enhance the company's MX offerings [3][4] Group 3: Company Overview - Quad is a marketing experience company that connects brands with consumers through a comprehensive range of marketing and print services [5] - The company employs over 12,000 people across 14 countries and serves approximately 2,500 clients, focusing on various industry verticals including retail and financial services [6]

Core Insights - Quad/Graphics, Inc. has announced a strategic partnership with Adalytics to enhance digital media safety and transparency [1][2] - The collaboration aims to implement protocols that reduce ad delivery to non-human traffic and improve media investment evaluation [1][2] - This partnership positions Quad and its agency Rise as leaders in digital media protection and accountability [4][5] Company Overview - Quad is a marketing experience company that integrates creative, production, and media solutions across various channels [6] - The company employs over 12,000 people in 14 countries and serves approximately 2,500 clients, including major blue-chip companies [7][8] - Quad is recognized as one of the largest agency companies in the U.S. and a leading commercial printer in North America [8] Partnership Details - The partnership will incorporate Adalytics' tools for media-quality monitoring, brand-safety analysis, and supply-path optimization [4][5] - Quad and Rise will utilize advanced impression-level log-file analysis to provide clients with actionable insights and enhance media performance [2][5] - The collaboration represents a significant advancement in Quad's mission to set new standards for transparency and accountability in digital advertising [5] Industry Context - The partnership reflects a growing demand for data-driven advertising solutions that ensure media investments reach real audiences [4][5] - Adalytics specializes in advertising transparency and measurement, helping brands make informed media investment decisions [10] - The initiative aims to address reputational risks and optimize media performance in an evolving digital advertising landscape [5][10]

Revenue and Sales Performance - The United States Print and Related Services segment accounted for approximately 87% of the Company's consolidated net sales in 2024, down from 86% in 2023[222]. - The International segment represented about 13% of consolidated net sales in 2024, compared to 14% in 2023[223]. - The Company's total net sales decreased by $285.5 million, or 9.7%, from $2,957.7 million in 2023 to $2,672.2 million in 2024[251]. - Product sales declined by $234.9 million, or 10.1%, primarily due to a $142.1 million decrease in paper sales and a $91.4 million decrease in print product lines[252]. - Service sales decreased by $50.6 million, or 8.1%, mainly due to a $44.2 million decrease in marketing and medical services[253]. - Net sales in the United States Print and Related Services segment decreased by $224.8 million, or 9.0%, from $2,554.3 million in 2023 to $2,329.5 million in 2024[266][267]. - International segment net sales decreased by $60.2 million, or 15.7%, from $384.4 million in 2023 to $324.2 million in 2024, driven by lower paper sales and print volumes[273][274]. - Total net sales decreased to $2,672.2 million in 2024 from $2,957.7 million in 2023, a decline of approximately 9.6%[367]. Financial Performance and Income - The Company's operating income for 2024 was $19.2 million, down from $25.7 million in 2023, reflecting a decrease of 25.3%[251]. - EBITDA for the year ended December 31, 2024, was $122.5 million, a decrease of $33.7 million or 21.6% compared to $156.2 million in 2023, with an EBITDA margin of 4.6% down from 5.3%[261][263]. - Net loss for 2024 was $50.9 million, an improvement from a net loss of $55.4 million in 2023, with interest expense decreasing to $64.5 million from $70.0 million[264]. - Operating income for the United States Print and Related Services segment increased by $56.2 million, or 99.3%, to $112.8 million in 2024, primarily due to reduced restructuring charges and improved manufacturing productivity[269]. - Operating loss for the International segment was $45.7 million in 2024, a decrease of $64.0 million compared to an operating income of $18.3 million in 2023, largely due to increased restructuring charges[276]. - Total comprehensive loss increased to $(64.5) million in 2024 from $(44.7) million in 2023[370]. - Net loss improved to $(50.9) million in 2024 compared to $(55.4) million in 2023, representing a reduction of about 8.1%[370]. Debt and Liquidity - The Company's consolidated debt and finance lease obligations decreased by $143.5 million during the year ended December 31, 2024[232]. - The Company generated $112.9 million in cash provided by operating activities, contributing to the reduction in debt[232]. - Total liquidity as of December 31, 2024, was $328.1 million, consisting of $298.9 million in unused capacity under the revolving credit arrangement and $29.2 million in cash and cash equivalents[283]. - The Debt Leverage Ratio decreased from 2.01x as of December 31, 2023, to 1.56x as of December 31, 2024, due to a $119.8 million decrease in Net Debt[298]. - Total debt and finance lease obligations decreased from $522.7 million as of December 31, 2023, to $379.2 million as of December 31, 2024[296]. - The Company expects its future cash flows from operating activities to be sufficient to fund ongoing operating requirements and service debt for the next 12 months and beyond[284]. Cost Management and Expenses - The cost of product sales decreased by $248.3 million, or 12.5%, primarily due to lower paper costs and improved manufacturing productivity[254]. - Selling, general, and administrative expenses rose by $12.3 million, or 3.6%, increasing as a percentage of net sales from 11.6% in 2023 to 13.4% in 2024[256]. - Depreciation and amortization expenses decreased by $26.3 million, or 20.4%, due to plant closures and fully depreciated assets[257]. - Restructuring, impairment, and transaction-related charges increased by $24.0 million, or 31.0%, totaling $101.5 million in 2024[259]. - The Company expects to incur additional restructuring and integration costs in future periods to align its cost structure with acquisitions and strategic investments[248]. Cash Flow and Investments - Net cash provided by operating activities decreased by $34.7 million to $112.9 million for the year ended December 31, 2024, compared to $147.6 million in 2023[285]. - Net cash provided by investing activities increased by $59.1 million to $12.7 million for the year ended December 31, 2024, compared to a net cash used of $46.4 million in 2023[286]. - Net cash used in financing activities increased by $75.5 million to $149.1 million for the year ended December 31, 2024, compared to $73.6 million in 2023[287]. - Free Cash Flow decreased by $21.1 million to $55.7 million for the year ended December 31, 2024, compared to $76.8 million in 2023, primarily due to a decrease in operating cash flows[291]. Pension and Employee Obligations - The net underfunded pension obligations decreased by $7.8 million from $63.4 million at December 31, 2023, to $55.6 million at December 31, 2024, primarily due to a $5.3 million decrease in defined benefit plan obligations[309]. - The Company continues to focus on reducing pension obligations through cash contributions, lump-sum settlements, and plan design changes[310]. - The Company has established a withdrawal liability for Multiemployer Pension Plans (MEPPs) based on information from MEPP trustees, following its withdrawal from underfunded plans[416]. Risk Management and Market Conditions - The Company anticipates that industry challenges, including elevated interest rates and reduced demand for printed products, will continue to impact its operations through 2025[245]. - The USPS is expected to implement changes in service standards in 2025, which could impact demand for print services[240]. - The USPS has confirmed plans for twice a year price increases for 2026 and 2027, which may lead clients to reduce mail volumes[242]. - The Company has established a risk management strategy for energy costs, including natural gas hedges, but may not fully pass on increased energy prices to clients[342]. - An allowance for credit losses was established at $21.5 million as of December 31, 2024, reflecting the uncertainty in the global economy and client payment capabilities[337]. Shareholder Returns and Equity - Cash dividends declared were $0.20 per share, totaling $10.3 million for the year ended December 31, 2024[1]. - The Company has $77.5 million of authorized repurchases remaining under its share repurchase program as of December 31, 2024[312]. - The Company’s total equity decreased to $49.9 million by December 31, 2024, down from $172.9 million at the beginning of 2023[1]. - Stock-based compensation expenses increased to $7.3 million in 2024 from $5.6 million in 2023, reflecting higher employee compensation costs[1]. - The Company’s treasury stock purchases amounted to $12.6 million during the reporting period, indicating a strategy to manage share count[1].

Financial Data and Key Metrics Changes - Net sales for Q4 2024 were $708 million, a decline of 10.1% compared to Q4 2023. For the full year, net sales were $2.7 billion, a 9.7% decline compared to 2023 [43][44] - Adjusted EBITDA for Q4 2024 was $63 million, down from $66 million in Q4 2023, but the adjusted EBITDA margin increased from 8.3% to 8.8% [45] - Full year adjusted EBITDA was $224 million in 2024, compared to $234 million in 2023, with an adjusted EBITDA margin improvement from 7.9% to 8.4% [46] Business Line Data and Key Metrics Changes - Integrated solutions and targeted print accounted for 65% of total net sales in 2024, up from 54% in 2018, indicating a shift towards higher-margin offerings [10] - The company expects integrated solutions and targeted print to represent 78% of total net sales by 2028 [11] Market Data and Key Metrics Changes - The company anticipates continued growth in Latin America, particularly in Mexico, while facing a divestiture of European operations in early 2025 [12] - The company noted that postal rate increases and elevated interest rates adversely impacted print volumes in the first half of 2024 [44] Company Strategy and Development Direction - The company is focused on a revenue diversification strategy, aiming for net sales growth between 2027 and 2028, termed the "net sales inflection point" [12] - Investments in technology, including AI and data capabilities, are prioritized to enhance service offerings and drive future revenue growth [21][64] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to net sales growth by 2027-2028, despite current challenges [12] - The company is closely monitoring postal rate increases and their impact on client demand, with ongoing efforts to mitigate risks associated with tariffs [60][89] Other Important Information - The company reduced net debt by $684 million from 2020 to 2024, achieving a 66% reduction [9][53] - A 50% increase in the quarterly dividend was announced, raising it to $0.075 per share [9][52] Q&A Session Summary Question: Update on growth investments for 2025 - The company plans to increase capital expenditures to approximately $70 million, focusing on technology and expanding offerings like In Store Connect [69] Question: Organic outlook for 2025 - The company expects a 4% to 6% decline in organic net sales for 2025, with anticipated growth in agency solutions and international print [57][73] Question: Revenue trends at the start of 2025 - The first quarter is expected to show a high single-digit decline, with improvements anticipated throughout the year [111] Question: Status of asset sales - The sale of the European operations is expected to close in early 2025, with additional asset sales planned for 2025 [114] Question: Impact of tariffs on revenue guidance - The company is prepared for potential tariffs, having bought forward Canadian paper to mitigate risks [90][120]

2 | Net Sales | Adjusted EBITDA(1) | | --- | --- | | Free Cash Flow(1) | Net Debt(1) Reduction since 1/1/20 | | Net Debt(1) as of 12/31/24 | Debt Leverage Ratio(1) | (1) See slide 21 for definitions of our non-GAAP measures, slide 23 for a reconciliation of Adjusted EBITDA, slide 24 for a reconciliation of Free Cash Flow and slide 25 for a reconciliation of Net Debt and Debt Leverage Ratio as non-GAAP measures Quad February 19, 2025 Chairman, President & Chief Executive Officer Chief Financial Officer This ...

Financial Performance - Recognized Net Sales of $2.7 billion in 2024, a decrease of 9.7% compared to $3.0 billion in 2023[5] - Reported a Net Loss of $51 million in 2024, an improvement from a Net Loss of $55 million in 2023[5] - Achieved Non-GAAP Adjusted EBITDA of $224 million in 2024, down from $234 million in 2023, with an Adjusted EBITDA Margin increase of 48 basis points to 8.4%[5] - Net sales for Q4 2024 were $708.4 million, a decrease of 10.1% from $787.9 million in Q4 2023[27] - The net loss for the year ended December 31, 2024, was $50.9 million, an improvement from a net loss of $55.4 million in 2023[30] - Adjusted EBITDA for the year ended December 31, 2024, was not explicitly stated but is a key non-GAAP measure used by the company to assess performance[23] - Total net sales for the three months ended December 31, 2024, were $708.4 million, a decrease of 9.4% from $787.9 million in the same period of 2023[36] - The operating income for the three months ended December 31, 2024, was $19.7 million, compared to $3.5 million in the same period of 2023, representing a significant improvement[36] - Adjusted EBITDA for the year ended December 31, 2024, was $224.0 million, slightly down from $233.7 million in 2023, with an adjusted EBITDA margin of 8.4% compared to 7.9%[42] - Free cash flow for the year ended December 31, 2024, was $55.7 million, down from $76.8 million in 2023, indicating a decrease in cash generation capabilities[44] Debt and Cash Management - Delivered $113 million of Net Cash Provided by Operating Activities and $56 million of Free Cash Flow in 2024[5] - Reduced Net Debt to $350 million and achieved Net Debt Leverage of 1.6x, a reduction of $684 million or 66% over the past five years[5] - Cash and cash equivalents decreased to $29.2 million as of December 31, 2024, from $52.9 million at the end of 2023[32] - The company reported a total debt of $349.1 million as of December 31, 2024, compared to $362.5 million in 2023[32] - Net debt as of December 31, 2024, was $350.0 million, a reduction from $469.8 million in 2023, reflecting improved financial leverage[47] - The debt leverage ratio improved to 1.56x as of December 31, 2024, down from 2.01x in the previous year, indicating better debt management[47] - Anticipates further reducing Net Debt Leverage to approximately 1.5x by the end of 2025[5] Operational Highlights - Increased quarterly dividend by 50% from $0.05 per share to $0.075 per share, effective March 14, 2025[2] - Introduced 2025 guidance with expected Organic Net Sales decline of 2% to 6% and Adjusted EBITDA guidance of $180 million to $220 million[13] - Launched At-Home Connect, an automated direct mail platform, enhancing consumer engagement[8] - Progressed on the sale of European operations to Capmont, expected to complete in early 2025[5] Expenses and Charges - Total operating expenses for Q4 2024 were $688.7 million, down from $784.4 million in Q4 2023, resulting in an operating income of $19.7 million compared to $3.5 million in Q4 2023[27] - Selling, general and administrative expenses increased to $356.8 million for the year ended December 31, 2024, from $344.5 million in 2023[30] - The company incurred restructuring, impairment, and transaction-related charges of $101.5 million for the year ended December 31, 2024, compared to $77.5 million in 2023, indicating increased costs related to restructuring efforts[42] Shareholder Information - The weighted average number of common shares outstanding increased to 47.6 million in 2024 from 48.4 million in 2023[30] - The basic weighted average number of common shares outstanding for the year 2024 was 47.6 million, down from 48.4 million in 2023[54] - Adjusted diluted earnings per share (non-GAAP) rose to $0.36 in Q4 2024, compared to $0.23 in Q4 2023, marking a 56.5% increase[51] - Adjusted diluted earnings per share (non-GAAP) for the year 2024 was $0.85, compared to $0.52 in 2023, indicating a 63.5% increase[54] Tax and Regulatory - The income tax expense at a 25% normalized tax rate for the year 2024 was $14.3 million, compared to $8.7 million in 2023[54] - The company emphasizes the importance of non-GAAP measures for evaluating performance and liquidity, which may differ from those used by other companies[55] Macroeconomic Impact - The company highlighted the impact of macroeconomic conditions, including inflation and elevated interest rates, on its business operations and financial results[21]

Core Insights - Quad/Graphics, Inc. reported a reduction in net debt leverage to 1.6x and increased its quarterly dividend by 50% from $0.05 to $0.075 per share, reflecting strong financial performance and strategic progress in 2024 [1][3][11] - The company anticipates a decline in organic annual net sales of 2% to 6% for 2025, while projecting adjusted EBITDA between $180 million and $220 million [12][8] Financial Performance - For the full year 2024, Quad reported net sales of $2.7 billion, a decrease of 9.7% from $2.96 billion in 2023, primarily due to lower paper sales and print volumes [7][29] - The net loss for 2024 was $51 million, or $1.07 diluted loss per share, an improvement from a net loss of $55 million, or $1.14 diluted loss per share in 2023 [7][29] - Adjusted EBITDA for 2024 was $224 million, down from $234 million in 2023, with an adjusted EBITDA margin increase of 48 basis points to 8.4% [7][38] Cash Flow and Debt Management - The company generated $113 million in net cash from operating activities and $56 million in free cash flow for 2024, alongside $71 million from asset sales [7][8] - Net debt was reduced to $350 million at the end of 2024, a decrease of $684 million or 66% over the past five years [7][8] Strategic Initiatives - Quad is focusing on revenue diversification and enhancing its marketing experience (MX) capabilities, including the launch of At-Home Connect and In-Store Connect solutions [4][6] - The company plans to continue investing in its household-based data stack and AI optimization tools to drive new revenue streams [5][6] 2025 Guidance - The financial guidance for 2025 excludes the European operations to be divested, with expectations for adjusted EBITDA of $180 million to $220 million and a year-end debt leverage ratio of approximately 1.5x [12][8]