Quad/Graphics(US:QUAD)2026-02-17 21:30Financial Performance - Net Sales for 2025 were $2.4 billion, a 9.4% decline from $2.7 billion in 2024, with a 4.8% decline when excluding the divestiture of European operations[3] - Net Earnings improved to $27 million or $0.54 Diluted Earnings Per Share in 2025, compared to a Net Loss of $51 million or $1.07 Diluted Loss Per Share in 2024[3] - Adjusted EBITDA for 2025 was $196 million, down from $224 million in 2024, primarily due to lower Net Sales and increased investments in innovative offerings[3] - Net earnings for the year ended December 31, 2025, were $27.0 million, a significant improvement from a loss of $50.9 million in 2024[40] - Adjusted diluted earnings per share for the year ended December 31, 2025, increased to $1.01 from $0.85 in 2024, while diluted earnings per share (GAAP) improved to $0.54 from a loss of $1.07[51] Cash Flow and Debt Management - Free Cash Flow was $51 million in 2025, compared to $56 million in 2024, driven by a $17 million decrease in Net Cash Provided by Operating Activities[11] - Net Debt was reduced by $42 million to $308 million in 2025, achieving a Net Debt Leverage Ratio of 1.57x[3] - Cash and cash equivalents increased to $63.3 million in 2025, up from $29.2 million in 2024, enhancing liquidity[29] - Payments of current and long-term debt decreased to $28.6 million in 2025 from $183.7 million in 2024, a reduction of about 84.4%[32] - The company reported a net cash used in financing activities of $36.1 million in 2025, down from $149.1 million in 2024, indicating a decrease of approximately 75.8%[32] Operational Efficiency - Operating income increased to $37.3 million in Q4 2025, compared to $19.7 million in Q4 2024, reflecting improved operational efficiency[25] - The company completed the integration of Enru's co-mailing capabilities, enhancing operational efficiency and client value[3] - Selling, general and administrative expenses decreased to $325.9 million in 2025 from $356.8 million in 2024, reflecting cost control measures[28] Future Outlook - For 2026, the company anticipates a Net Sales decline of 1% to 5%, with Adjusted EBITDA guidance between $175 million and $215 million[10] - The company plans to remain opportunistic regarding future share repurchases following strong cash generation in 2025[6] - The company aims to shift revenue mix towards higher-value offerings, including Targeted Print and integrated marketing services[5] Market and Segment Performance - Net sales for Q4 2025 were $630.6 million, a decrease of 11% from $708.4 million in Q4 2024[25] - The United States Print and Related Services segment generated net sales of $2,214.4 million in 2025, down from $2,329.5 million in 2024, a decrease of about 4.9%[34] Impairments and Charges - The company incurred impairment charges of $7.5 million in 2025, a significant reduction from $74.9 million in 2024[32] - Restructuring, impairment, and transaction-related charges for 2025 totaled $21.8 million, significantly lower than $101.5 million in 2024[51] - Employee termination charges in 2025 were $26.1 million, down from $30.5 million in 2024, reflecting workforce reductions[40] - The company incurred a settlement charge of $12.8 million related to the defined benefit pension plan annuitization in 2025[49] Non-GAAP Measures - Adjusted EBITDA for the three months ended December 31, 2025, was $54.8 million, compared to $62.6 million in the same period of 2024, indicating a decline of approximately 12.5%[38] - The company continues to assess its performance using non-GAAP measures, which are believed to provide additional insights into profitability and liquidity[40]