Quad/Graphics(US:QUAD)2025-10-28 20:36Financial Performance - Net Sales for Q3 2025 were $588 million, a 13% decline from $675 million in Q3 2024, with a 7% decline when excluding the 6% impact from the divestiture of European operations[5]. - Net Earnings improved to $10 million or $0.21 Diluted Earnings Per Share in Q3 2025, compared to a Net Loss of $25 million or $0.52 Diluted Loss Per Share in Q3 2024[5]. - Adjusted EBITDA for Q3 2025 was $53 million, down from $59 million in Q3 2024, primarily due to lower Net Sales and increased investments in innovative offerings[10]. - Year-to-date, Net Sales reached $1.8 billion, a 9% decrease compared to the same period in 2024, with a 4% decline when excluding the impact of the divestiture[10]. - Adjusted Diluted Earnings Per Share for Q3 2025 increased by 19% to $0.31 from $0.26 in Q3 2024[10]. - Operating income for Q3 2025 was $26.4 million, compared to an operating loss of $4.9 million in Q3 2024[29]. - Net earnings for Q3 2025 were $10.2 million, a significant improvement from a net loss of $24.7 million in Q3 2024[29]. - For the nine months ended September 30, 2025, net sales were $1,789.3 million, down 8.8% from $1,963.8 million in the same period of 2024[31]. - Net earnings for the nine months ended September 30, 2025, were $15.9 million, a significant improvement from a loss of $55.6 million in the same period of 2024[35]. - EBITDA for the nine months ended September 30, 2025, was $118.3 million, compared to $79.5 million in 2024, reflecting an increase of 48.8%[43]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $141.4 million, down from $161.4 million in 2024, indicating a decrease of 12.8%[43]. - The EBITDA margin for the nine months ended September 30, 2025, improved to 6.6%, up from 4.0% in 2024[43]. - The company reported a basic earnings per share of $0.21 for Q3 2025, compared to a loss per share of $0.52 in Q3 2024[29]. - Earnings (loss) before income taxes for the nine months ended September 30, 2025, was $20.2 million, a significant recovery from $(49.3) million in 2024[53]. Cash Flow and Shareholder Returns - The company returned $19 million to shareholders year-to-date, consisting of $11 million in cash dividends and $8 million in share repurchases[5]. - The quarterly dividend of $0.075 per share is payable on December 5, 2025, to shareholders of record as of November 17, 2025[12]. - The company expects fourth quarter 2025 Free Cash Flow to be between $137 million and $147 million, following a negative Free Cash Flow of $87 million year-to-date[16]. - Total net cash used in operating activities for the nine months ended September 30, 2025, was $(50.0) million, compared to $(45.9) million in 2024[35]. - The company reported a net cash decrease in cash and cash equivalents of $(23.0) million for the nine months ended September 30, 2025, compared to $(40.4) million in 2024[35]. - Free Cash Flow (non-GAAP) for the nine months ended September 30, 2025, was $(86.5) million, an improvement from $(91.6) million in 2024[46]. Debt and Financial Position - Net Debt was $465 million as of September 30, 2025, an increase from $350 million at the end of 2024[16]. - As of September 30, 2025, total debt and finance lease obligations were $471.4 million, up from $379.2 million as of December 31, 2024[48]. - Net Debt (non-GAAP) increased to $465.2 million as of September 30, 2025, compared to $350.0 million at the end of 2024[48]. - The Net Debt Leverage Ratio (non-GAAP) rose to 2.28x as of September 30, 2025, from 1.56x at the end of 2024[48]. - Cash and cash equivalents at the end of the period were $6.2 million as of September 30, 2025, down from $12.5 million in 2024[35]. Operational Challenges and Strategic Initiatives - The company faced significant challenges including increased operating costs and decreased demand for printing services, impacting overall performance[22]. - The company is undergoing a transformation to adapt to new markets and technologies, including artificial intelligence, which may affect future performance[22]. - The company incurred restructuring, impairment, and transaction-related charges of $23.1 million for the nine months ended September 30, 2025, compared to $81.9 million in 2024[43]. Segment Performance - The United States Print and Related Services segment generated net sales of $1,623.1 million for the nine months ended September 30, 2025, compared to $1,702.3 million in 2024, a decrease of 4.7%[37]. - The International segment reported net sales of $166.2 million for the nine months ended September 30, 2025, down from $261.5 million in 2024, a decline of 36.5%[37].