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Quad/Graphics(QUAD) - 2025 Q1 - Quarterly Report

PART I — FINANCIAL INFORMATION ITEM 1. Condensed Consolidated Financial Statements (Unaudited) The unaudited condensed consolidated financial statements for Quad/Graphics, Inc. include statements of operations, comprehensive income (loss), balance sheets, cash flows, and shareholders' equity, with detailed notes Condensed Consolidated Statements of Operations (Unaudited) Presents revenues, expenses, and net earnings (loss) for the three months ended March 31, 2025 and 2024 Condensed Consolidated Statements of Operations (Unaudited) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | 2025 | 2024 | | Net sales | | | | Products | $ 494.8 | $ 507.2 | | Services | 134.6 | 147.6 | | Total net sales | 629.4 | 654.8 | | Cost of sales | | | | Products | 414.4 | 426.5 | | Services | 85.6 | 94.8 | | Total cost of sales | 500.0 | 521.3 | | Operating expenses | | | | Selling, general and administrative expenses | 83.5 | 83.1 | | Depreciation and amortization | 19.7 | 28.6 | | Restructuring, impairment and transaction-related charges, net | 6.6 | 32.5 | | Total operating expenses | 609.8 | 665.5 | | Operating income (loss) | 19.6 | (10.7) | | Interest expense | 12.4 | 15.2 | | Net pension expense (income) | 0.4 | (0.2) | | Earnings (loss) before income taxes | 6.8 | (25.7) | | Income tax expense | 1.0 | 2.4 | | Net earnings (loss) | $ 5.8 | $ (28.1) | | Earnings (loss) per share | | | | Basic | $ 0.12 | $ (0.60) | | Diluted | $ 0.11 | $ (0.60) | | Weighted average number of common shares outstanding | | | | Basic | 48.0 | 47.2 | | Diluted | 50.7 | 47.2 | Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) Details net earnings (loss) and other comprehensive income components for the three months ended March 31, 2025 and 2024 Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | 2025 | 2024 | | Net earnings (loss) | $ 5.8 | $ (28.1) | | Other comprehensive income | | | | Translation adjustments | 40.9 | (0.4) | | Interest rate derivatives adjustments | (0.4) | 1.1 | | Pension benefit plan adjustments | 0.3 | 0.3 | | Other comprehensive income, before tax | 40.8 | 1.0 | | Income tax impact related to items of other comprehensive income | — | (0.3) | | Other comprehensive income, net of tax | 40.8 | 0.7 | | Comprehensive income (loss) | $ 46.6 | $ (27.4) | Condensed Consolidated Balance Sheets (Unaudited) Provides a snapshot of assets, liabilities, and shareholders' equity at March 31, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (Unaudited) | ASSETS | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $ 8.1 | $ 29.2 | | Receivables, less allowances for credit losses | 303.9 | 273.2 | | Inventories | 161.4 | 162.4 | | Prepaid expenses and other current assets | 37.7 | 69.5 | | Total current assets | 511.1 | 534.3 | | Property, plant and equipment—net | 492.0 | 499.7 | | Operating lease right-of-use assets—net | 75.0 | 78.9 | | Goodwill | 100.3 | 100.3 | | Other intangible assets—net | 6.2 | 7.2 | | Other long-term assets | 61.9 | 78.6 | | Total assets | $ 1,246.5 | $ 1,299.0 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | Accounts payable | $ 329.6 | $ 356.7 | | Other current liabilities | 149.2 | 289.2 | | Short-term debt and current portion of long-term debt | 30.3 | 28.0 | | Current portion of finance lease obligations | 0.8 | 0.8 | | Current portion of operating lease obligations | 23.2 | 24.0 | | Total current liabilities | 533.1 | 698.7 | | Long-term debt | 438.8 | 349.1 | | Finance lease obligations | 1.1 | 1.3 | | Operating lease obligations | 57.8 | 61.4 | | Deferred income taxes | 3.7 | 3.2 | | Other long-term liabilities | 124.6 | 135.4 | | Total liabilities | 1,159.1 | 1,249.1 | | Shareholders' equity | | | | Common stock, Class A | 1.0 | 1.0 | | Common stock, Class B | 0.4 | 0.4 | | Additional paid-in capital | 840.9 | 842.8 | | Treasury stock, at cost | (31.4) | (28.0) | | Accumulated deficit | (633.1) | (635.1) | | Accumulated other comprehensive loss | (90.4) | (131.2) | | Total shareholders' equity | 87.4 | 49.9 | | Total liabilities and shareholders' equity | $ 1,246.5 | $ 1,299.0 | Condensed Consolidated Statements of Cash Flows (Unaudited) Outlines cash flows from operating, investing, and financing activities for the three months ended March 31, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (Unaudited) | OPERATING ACTIVITIES | Three Months Ended March 31, | | :--- | :--- | :--- | | | 2025 | 2024 | | Net earnings (loss) | $ 5.8 | $ (28.1) | | Adjustments to reconcile net earnings (loss) to net cash used in operating activities: | | | | Depreciation and amortization | 19.7 | 28.6 | | Impairment charges | 0.3 | 12.6 | | Amortization of debt issuance costs and original issue discount | 0.4 | 0.3 | | Stock-based compensation | 1.6 | 1.8 | | Loss on the sale of a business | 0.5 | — | | Gain on the sale or disposal of property, plant and equipment, net | — | (0.9) | | Deferred income taxes | 0.1 | 0.3 | | Changes in operating assets and liabilities - net of divestitures | (117.4) | (66.8) | | Net cash used in operating activities | (89.0) | (52.2) | | INVESTING ACTIVITIES | | | | Purchases of property, plant and equipment | (11.3) | (17.9) | | Cost investment in unconsolidated entities | (0.2) | (0.2) | | Proceeds from the sale of property, plant and equipment | 0.1 | 1.7 | | Other investing activities | (2.7) | 0.5 | | Net cash used in investing activities | (14.1) | (15.9) | | FINANCING ACTIVITIES | | | | Payments of current and long-term debt | (6.3) | (101.0) | | Payments of finance lease obligations | (0.4) | (0.8) | | Borrowings on revolving credit facilities | 398.1 | 468.3 | | Payments on revolving credit facilities | (300.6) | (389.1) | | Proceeds from issuance of long-term debt | — | 52.8 | | Purchases of treasury stock | (3.3) | — | | Equity awards redeemed to pay employees' tax obligations | (3.6) | (2.1) | | Payment of cash dividends | (3.5) | (2.4) | | Other financing activities | — | (0.2) | | Net cash provided by financing activities | 80.4 | 25.5 | | Effect of exchange rates on cash and cash equivalents | (0.1) | (0.1) | | Net decrease in cash and cash equivalents, including cash classified as held for sale | (22.8) | (42.7) | | Less: net decrease in cash classified as held for sale | (1.7) | — | | Net decrease in cash and cash equivalents | (