Quad/Graphics(QUAD) - 2023 Q4 - Annual Results

Financial Performance - Net Sales for Q4 2023 were $788 million, an 11$22 million, compared to a Net Loss of $9 million in Q4 2022, driven by lower sales, increased interest expense, and lower pension income[12] - Adjusted EBITDA for Q4 2023 was$66 million, down from $79 million in Q4 2022, due to lower sales and pension income, partially offset by improved manufacturing productivity[12] - Full-year 2023 Net Sales were$3.0 billion, an 8% decline from 2022, primarily due to lower print, paper, and logistics sales, and the divestiture of Argentina operations[14] - Full-year 2023 Net Loss was $55 million, compared to Net Earnings of$9 million in 2022, driven by lower sales, higher restructuring charges, and increased interest expense[14] - Adjusted EBITDA for 2023 was $234 million, down from$252 million in 2022, primarily due to lower pension income and sales, partially offset by cost savings[14] - Net sales for Q4 2023 decreased to $787.9 million from$885.2 million in Q4 2022, representing a decline of approximately 11%[29] - Full-year net sales for 2023 were $2,957.7 million, down from$3,217.0 million in 2022, a decrease of about 8.1%[31] - Net loss for Q4 2023 was $22.0 million, compared to a net loss of$8.7 million in Q4 2022[29] - Full-year net loss for 2023 was $55.4 million, compared to net earnings of$9.3 million in 2022[31] - Net earnings (loss) for 2023 was $(55.4) million, compared to$9.3 million in 2022, indicating a significant decline in profitability[35] - Adjusted EBITDA for 2023 was $233.7 million, down from$252.2 million in 2022, with Adjusted EBITDA Margin slightly increasing to 7.9% from 7.8%[38] - Adjusted net earnings (non-GAAP) for 2023 were $26.2 million, compared to$46.9 million in 2022[50] - Adjusted diluted earnings per share (non-GAAP) for 2023 was $0.52, down from$0.89 in 2022[50] - Earnings (loss) before income taxes were $(42.6) million in 2023, compared to$17.7 million in 2022[50] - Income tax expense at 25% normalized tax rate was $8.7 million in 2023, down from$15.6 million in 2022[50] Debt and Liquidity - Net Debt decreased by $75 million to$470 million at the end of 2023, with a Debt Leverage Ratio of 2.0x, down from 2.2x in 2022[14] - Cash and cash equivalents increased to $52.9 million as of December 31, 2023, up from$25.2 million at the end of 2022[33] - Total debt decreased to $362.5 million in 2023 from$506.7 million in 2022, reflecting a reduction in long-term debt[33] - Net Debt decreased to $469.8 million in 2023 from$545.0 million in 2022, with the Debt Leverage Ratio improving to 2.01x from 2.16x[44] - Net cash provided by operating activities decreased to $147.6 million in 2023 from$154.6 million in 2022[35] - Free Cash Flow for 2023 was $76.8 million, a decrease from$94.3 million in 2022[39] Cost Management and Restructuring - The company anticipates $60 million in cost savings from plant capacity and labor reduction initiatives in response to external headwinds[8] - Restructuring, impairment, and transaction-related charges for 2023 totaled$77.5 million, up from $44.8 million in 2022, primarily due to higher employee termination and impairment charges[38] - Restructuring, impairment, and transaction-related charges increased to$77.5 million in 2023 from $44.8 million in 2022[50] Guidance and Future Outlook - 2024 guidance includes a projected 5$205 million to $245 million, with a target Debt Leverage Ratio of approximately 1.8x[15] - The company reinstated a quarterly dividend of$0.05 per share and expects to continue opportunistic share repurchases[8] Operational Metrics - The company employs approximately 13,000 people across 14 countries and serves around 2,700 clients[25] - Quad is ranked as the 14th largest agency company in the U.S. by Ad Age (2023) and the second-largest commercial printer in North America[25] - The company highlights the impact of macroeconomic conditions, including inflation and high interest rates, on its business operations and financial performance[20] Non-GAAP Financial Measures - Adjusted EBITDA margin for 2023 was not explicitly stated, but the company emphasizes its importance as a key profitability metric[22][23] - The company uses non-GAAP financial measures such as EBITDA, Adjusted EBITDA, and Free Cash Flow to assess profitability and liquidity[51] Capital Expenditures and Depreciation - Depreciation and amortization expenses decreased to $128.8 million in 2023 from$141.3 million in 2022[35] - Purchases of property, plant, and equipment increased to $70.8 million in 2023 from$60.3 million in 2022, indicating higher capital expenditures[35] Shareholder Returns - Diluted weighted average number of common shares outstanding (non-GAAP) decreased to 50.7 million in 2023 from 52.5 million in 2022[50] - Basic weighted average number of common shares outstanding decreased to 48.4 million in 2023 from 50.7 million in 2022[50]