Achieved Eight Consecutive Quarters of
Year-Over-Year Growth as Net Sales Increased 3% in the First
Quarter of 2023
Quad/Graphics, Inc. (NYSE: QUAD) (“Quad” or the “Company”),
today reported results for the first quarter ended March 31,
2023.
Recent Highlights
- Increased Net Sales 3% in the first quarter of 2023 compared to
the first quarter of 2022, primarily due to higher print product
sales in the United States and in Mexico, and also increased Agency
Solutions sales as clients continue to embrace Quad’s unique
integrated marketing offering.
- Reported Net Loss of $25 million compared to Net Loss of $1
million in the first quarter of 2022, while growing Adjusted EBITDA
by $11 million or 24% to $60 million in the first quarter of 2023,
compared to Adjusted EBITDA of $49 million in the first quarter of
2022.
- Grew Adjusted Diluted Earnings Per Share to $0.15 in the first
quarter of 2023 compared to $0.04 in the first quarter of
2022.
- Increased capital expenditures to fortify investments in
innovations that enhance the Company’s integrated marketing
offering and drive profitable, long-term growth.
- Returned value to shareholders by repurchasing over 5% of our
total outstanding common stock since the second quarter of 2022 for
$10.3 million.
- Reaffirms full-year 2023 financial guidance.
Joel Quadracci, Chairman, President & CEO of Quad, said: “We
continue to experience positive momentum and top-line growth,
achieving a 3% increase in Net Sales in the first quarter of 2023
due to higher sales in our print product and Agency Solutions
offerings. High-profile brands and marketers continue to recognize
that better marketing is built on Quad. As a marketing experience,
or MX, company, we have uniquely scalable, cross-channel solutions
and extraordinary household reach, which power our integrated
marketing offering, improving results while reducing friction and
creating a more efficient overall marketing process. We are focused
on providing a better marketing experience for our clients, which
enables them to focus on delivering the best customer experience.
In 2023, we will continue to make significant investments in
people, products and services, processes, automation and
technology, to further expand our through-the-line marketing
offering to drive profitable growth.
“Economic uncertainty has prompted some clients to take a more
conservative approach to the start of the year and, in many
instances, reallocate where they invest their marketing dollars.
Our integrated marketing offering easily supports these shifts in
marketing spend to maximize results. We are able to offset softness
in offerings, such as national magazines, while leaning into growth
opportunities in others, like agency solutions, packaging and
instore. We have flexibility and agility to pivot, and meet
changing client needs.
“As always, we remain focused on enhancing Quad’s financial
strength and creating shareholder value and will continue to
prioritize growth while further reducing debt in 2023. We remain
committed to creating a better, more purposeful and sustainable way
forward for all our stakeholders.”
Summary Results
Results for the first quarter ended March 31, 2023, include:
- Net Sales — Net Sales were $767 million in the first quarter of
2023, an increase of 3% compared to the same period in 2022,
despite the impact from the sale of the Company’s Argentina print
operations in December 2022. Net Sales growth in the first quarter
was primarily driven by higher print product sales in the United
States and in Mexico, and also increased Agency Solutions
sales.
- Net Loss — Net Loss was $25 million in the first quarter of
2023, $24 million higher than the first quarter of 2022, which had
a Net Loss of $1 million. This was driven by higher restructuring,
impairment and transaction-related charges, higher income tax
expense, higher interest expense in this increased rate environment
and lower pension income, partially offset by increased
profitability from Net Sales growth, improved manufacturing
productivity and savings from cost reduction initiatives.
- Adjusted EBITDA — Adjusted EBITDA was $60 million in the first
quarter of 2023 as compared to $49 million in the same period in
2022. The increase was due to increased profitability from Net
Sales growth, improved manufacturing productivity and savings from
cost reduction initiatives.
- Adjusted Diluted Earnings Per Share — Adjusted Diluted Earnings
Per Share increased to $0.15 in the first quarter of 2023, as
compared to $0.04 in the first quarter of 2022, primarily due to
higher adjusted net earnings as well as the beneficial impact from
the Company’s repurchase of over 5% of total outstanding common
stock since the second quarter of 2022 for $10.3 million.
- Net Cash Used in Operating Activities and Free Cash Flow — Net
Cash Used in Operating Activities was $51 million in the first
quarter of 2023, as compared to $17 million in the first quarter of
2022. Free Cash Flow decreased $43 million from last year to
negative $79 million in the first quarter of 2023. The decline in
Free Cash Flow was primarily due to the timing of working capital
and increased capital expenditures to invest in our platform to
drive sales growth and automation efficiencies. As a reminder, the
Company historically generates the majority of its Free Cash Flow
in the fourth quarter of the year.
- Net Debt — Debt less cash and cash equivalents increased by $87
million to $632 million at March 31, 2023, as compared to $545
million at December 31, 2022, primarily due to the negative $79
million Free Cash Flow in the first quarter of 2023.
2023 Guidance
The Company’s full-year 2023 financial guidance is unchanged and
is as follows:
Financial Metric
2023 Guidance
Annual Net Sales Change
0% to 5% decline
Full-Year Adjusted EBITDA
$210 million to $250 million
Free Cash Flow
$50 million to $90 million
Capital Expenditures
$65 million to $75 million
Year-End Debt Leverage Ratio (1)
Approximately 2.0x
(1) Debt Leverage Ratio is calculated at
the midpoint of the Adjusted EBITDA guidance.
Tony Staniak, CFO of Quad, said: “We started 2023 strong,
building on the momentum from clients embracing our innovative
integrated marketing offerings combined with disciplined cost
management. This resulted in 3% Net Sales growth and 24% Adjusted
EBITDA growth in the first quarter compared to 2022. We also
returned value to shareholders during the first quarter by
continuing to repurchase shares. Our share repurchases now total
$10.3 million, or more than 5% of our total outstanding common
stock, since the second quarter of 2022. Despite continued economic
uncertainty, including lower anticipated print volumes during the
remainder of the year, we remain confident in our 2023 guidance. We
are a strong Free Cash Flow generator and will continue to
prioritize investing in growth, opportunistically repurchasing
shares and reducing debt. We are expecting to achieve the low end
of our long-term targeted debt leverage range of 2.0x-2.5x by the
end of 2023.”
Quarterly Conference Call
Quad will hold a conference call at 10 a.m. ET on Wednesday, May
3, to discuss first quarter 2023 results. As part of the conference
call, Quad will conduct a question-and-answer session.
Participants can pre-register for the webcast by navigating to
https://dpregister.com/sreg/10177357/f8e85770aa.
Participants will be given a unique PIN to gain access to the call
on May 3, bypassing the live operator. Participants may
pre-register at any time, including up to and after the call start
time.
Alternatively, participants may dial in on the day of the call
as follows:
- U.S. Toll-Free: 1-877-328-5508
- International Toll: 1-412-317-5424
An audio replay of the call will be posted on the Investors
section of Quad’s website shortly after the conference call ends.
In addition, telephone playback will also be available until June
3, 2023, accessible as follows:
- U.S. Toll-Free: 1-877-344-7529
- International Toll: 1-412-317-0088
- Replay Access Code: 1072388
Forward-Looking Statements
This press release contains certain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include statements regarding,
among other things, our current expectations about the Company’s
future results, financial condition, sales, earnings, free cash
flow, margins, objectives, goals, strategies, beliefs, intentions,
plans, estimates, prospects, projections and outlook of the Company
and can generally be identified by the use of words or phrases such
as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,”
“plan,” “foresee,” “project,” “believe,” “continue” or the
negatives of these terms, variations on them and other similar
expressions. These forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause
actual results to be materially different from those expressed in
or implied by such forward-looking statements. Forward-looking
statements are based largely on the Company’s expectations and
judgments and are subject to a number of risks and uncertainties,
many of which are unforeseeable and beyond our control.
The factors that could cause actual results to materially differ
include, among others: the impact of decreasing demand for printed
materials and significant overcapacity in a highly competitive
environment creates downward pricing pressures and potential
under-utilization of assets; the impact of fluctuations in costs
(including labor and labor-related costs, energy costs, freight
rates and raw materials, including paper and the materials to
manufacture ink) and the impact of fluctuations in the availability
of raw materials, including paper, parts for equipment and the
materials to manufacture ink; the impact macroeconomic conditions,
including inflation, rising interest rates and recessionary
concerns, as well as ongoing supply chain challenges, labor
availability and cost pressures, distribution challenges and the
COVID-19 pandemic, have had, and may continue to have, on the
Company’s business, financial condition, cash flows and results of
operations (including future uncertain impacts); the impact of
increased business complexity as a result of the Company’s
transformation to a marketing experience company; the inability of
the Company to reduce costs and improve operating efficiency
rapidly enough to meet market conditions; the impact of changes in
postal rates, service levels or regulations, including delivery
delays; the failure to attract and retain qualified talent across
the enterprise; the impact of a data-breach of sensitive
information, ransomware attack or other cyber incident on the
Company; the fragility and decline in overall distribution
channels; the impact of digital media and similar technological
changes, including digital substitution by consumers; the impact
negative publicity could have on our business and brand reputation;
the failure of clients to perform under contracts or to renew
contracts with clients on favorable terms or at all; the impact of
risks associated with the operations outside of the United States,
including trade restrictions, currency fluctuations, the global
economy, costs incurred or reputational damage suffered due to
improper conduct of its employees, contractors or agents, and
geopolitical events like war and terrorism; the failure to
successfully identify, manage, complete and integrate acquisitions,
investment opportunities or other significant transactions, as well
as the successful identification and execution of strategic
divestitures; significant investments may be needed to maintain the
Company’s platforms, processes, systems, client and product
technology, marketing and talent, and to remain technologically and
economically competitive; the impact of the various restrictive
covenants in the Company’s debt facilities on the Company’s ability
to operate its business, as well as the uncertain negative impacts
macroeconomic conditions may have on the Company’s ability to
continue to be in compliance with these restrictive covenants; the
impact of an other than temporary decline in operating results and
enterprise value that could lead to non-cash impairment charges due
to the impairment of property, plant and equipment and other
intangible assets; the impact of regulatory matters and legislative
developments or changes in laws, including changes in
cyber-security, privacy and environmental laws; the impact on the
holders of Quad’s class A common stock of a limited active market
for such shares and the inability to independently elect directors
or control decisions due to the voting power of the class B common
stock; and the other risk factors identified in the Company’s most
recent Annual Report on Form 10-K, which may be amended or
supplemented by subsequent Quarterly Reports on Form 10-Q or other
reports filed with the Securities and Exchange Commission.
Except to the extent required by the federal securities laws,
the Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
Non-GAAP Financial Measures
This press release contains financial measures not prepared in
accordance with generally accepted accounting principles (referred
to as non-GAAP), specifically Adjusted EBITDA, Adjusted EBITDA
Margin, Free Cash Flow, Net Debt, Debt Leverage Ratio and Adjusted
Diluted Earnings Per Share. Adjusted EBITDA is defined as net
earnings (loss) excluding interest expense, income tax expense,
depreciation and amortization and restructuring, impairment and
transaction-related charges. Adjusted EBITDA Margin is defined as
Adjusted EBITDA divided by net sales. Free Cash Flow is defined as
net cash provided by (used in) operating activities less purchases
of property, plant and equipment. Debt Leverage Ratio is defined as
total debt and finance lease obligations less cash and cash
equivalents (Net Debt) divided by the last twelve months of
Adjusted EBITDA. Adjusted Diluted Earnings Per Share is defined as
earnings (loss) before income taxes excluding restructuring,
impairment and transaction-related charges and adjusted for income
tax expense at a normalized tax rate, divided by diluted weighted
average number of common shares outstanding.
The Company believes that these non-GAAP measures, when
presented in conjunction with comparable GAAP measures, provide
additional information for evaluating Quad’s performance and are
important measures by which Quad’s management assesses the
profitability and liquidity of its business. These non-GAAP
measures should be considered in addition to, not as a substitute
for or superior to, net earnings (loss) as a measure of operating
performance or to cash flows provided by (used in) operating
activities as a measure of liquidity. These non-GAAP measures may
be different than non-GAAP financial measures used by other
companies. Reconciliation to the GAAP equivalent of these non-GAAP
measures are contained in tabular form on the attached unaudited
financial statements.
About Quad
Quad (NYSE: QUAD) is a global marketing experience company that
gives brands a more streamlined, impactful, flexible and
frictionless way to go to market and reach consumers. Quad’s
strategic priorities are powered by three key competitive
advantages that include integrated marketing platform excellence,
ongoing innovation, and culture and social purpose. The company’s
integrated marketing platform is powered by a set of core
specialties including strategy and consulting, data and analytics,
technology solutions, media services, creative and content
solutions, and managed services.
Serving more than 2,900 clients, Quad has approximately 15,000
people working in 14 countries around the world.
Please visit quad.com for more information.
QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
For the Three Months Ended March
31, 2023 and 2022
(in millions, except per share
data)
(UNAUDITED)
Three Months Ended March
31,
2023
2022
Net sales
$
766.5
$
744.2
Cost of sales
617.5
619.6
Selling, general and administrative
expenses
89.2
79.1
Depreciation and amortization
33.7
36.5
Restructuring, impairment and
transaction-related charges
26.0
3.6
Total operating expenses
766.4
738.8
Operating income
0.1
5.4
Interest expense
16.3
9.3
Net pension income
(0.4
)
(3.2
)
Loss before income taxes
(15.8
)
(0.7
)
Income tax expense
8.8
0.3
Net loss
$
(24.6
)
$
(1.0
)
Loss per share
Basic and diluted
$
(0.50
)
$
(0.02
)
Weighted average number of common
shares outstanding
Basic and diluted
49.2
51.5
QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
As of March 31, 2023 and December
31, 2022
(in millions)
(UNAUDITED) March
31, 2023
December 31,
2022
ASSETS
Cash and cash equivalents
$
8.7
$
25.2
Receivables, less allowance for credit
losses
348.6
372.6
Inventories
239.3
260.7
Prepaid expenses and other current
assets
45.5
46.0
Total current assets
642.1
704.5
Property, plant and equipment—net
668.8
672.1
Operating lease right-of-use
assets—net
104.7
111.1
Goodwill
86.4
86.4
Other intangible assets—net
40.2
46.9
Other long-term assets
84.7
80.8
Total assets
$
1,626.9
$
1,701.8
LIABILITIES AND SHAREHOLDERS’
EQUITY
Accounts payable
$
405.8
$
456.6
Other current liabilities
174.0
249.1
Short-term debt and current portion of
long-term debt
152.4
61.1
Current portion of finance lease
obligations
2.0
0.8
Current portion of operating lease
obligations
26.2
27.8
Total current liabilities
760.4
795.4
Long-term debt
478.9
506.7
Finance lease obligations
6.9
1.6
Operating lease obligations
82.3
87.1
Deferred income taxes
22.2
9.3
Other long-term liabilities
121.7
128.8
Total liabilities
1,472.4
1,528.9
Shareholders’ equity
Preferred stock
—
—
Common stock
1.4
1.4
Additional paid-in capital
838.5
841.8
Treasury stock, at cost
(21.2
)
(23.5
)
Accumulated deficit
(543.1
)
(518.5
)
Accumulated other comprehensive loss
(121.1
)
(128.3
)
Total shareholders’ equity
154.5
172.9
Total liabilities and shareholders’
equity
$
1,626.9
$
1,701.8
QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
For the Three Months Ended March
31, 2023 and 2022
(in millions)
(UNAUDITED)
Three Months Ended March
31,
2023
2022
OPERATING ACTIVITIES
Net loss
$
(24.6
)
$
(1.0
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
33.7
36.5
Impairment charges
9.5
0.1
Stock-based compensation
1.0
1.9
Gain on the sale or disposal of property,
plant and equipment
(0.1
)
(0.4
)
Deferred income taxes
10.3
0.3
Other non-cash adjustments to net loss
0.5
0.7
Changes in operating assets and
liabilities—net of divestitures
(80.9
)
(55.0
)
Net cash used in operating activities
(50.6
)
(16.9
)
INVESTING ACTIVITIES
Purchases of property, plant and
equipment
(28.7
)
(19.1
)
Cost investment in unconsolidated
entities
(0.3
)
(1.9
)
Proceeds from the sale of property, plant
and equipment
7.1
0.5
Other investing activities
(4.5
)
1.8
Net cash used in investing activities
(26.4
)
(18.7
)
FINANCING ACTIVITIES
Payments of current and long-term debt
(7.4
)
(3.7
)
Payments of finance lease obligations
(0.3
)
(0.8
)
Borrowings on revolving credit
facilities
413.8
25.5
Payments on revolving credit
facilities
(343.5
)
(23.1
)
Purchases of treasury stock
(0.3
)
—
Equity awards redeemed to pay employees’
tax obligations
(1.7
)
(2.5
)
Payment of cash dividends
(0.1
)
(1.4
)
Other financing activities
(0.2
)
(0.1
)
Net cash provided by (used in) financing
activities
60.3
(6.1
)
Effect of exchange rates on cash and cash
equivalents
0.2
0.1
Net decrease in cash and cash
equivalents
(16.5
)
(41.6
)
Cash and cash equivalents at beginning of
period
25.2
179.9
Cash and cash equivalents at end of
period
$
8.7
$
138.3
QUAD/GRAPHICS, INC.
SEGMENT FINANCIAL INFORMATION
For the Three Months Ended March
31, 2023 and 2022
(in millions)
(UNAUDITED)
Net Sales
Operating Income
(Loss)
Restructuring,
Impairment and Transaction-Related Charges
(1)
Three months ended March 31,
2023
United States Print and Related
Services
$
657.6
$
7.3
$
22.5
International
108.9
7.7
2.6
Total operating segments
766.5
15.0
25.1
Corporate
—
(14.9
)
0.9
Total
$
766.5
$
0.1
$
26.0
Three months ended March 31,
2022
United States Print and Related
Services
$
651.1
$
11.8
$
1.7
International
93.1
3.7
1.6
Total operating segments
744.2
15.5
3.3
Corporate
—
(10.1
)
0.3
Total
$
744.2
$
5.4
$
3.6
______________________________
(1)
Restructuring, impairment and
transaction-related charges are included within operating income
(loss).
QUAD/GRAPHICS, INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
EBITDA, EBITDA MARGIN, ADJUSTED
EBITDA AND ADJUSTED EBITDA MARGIN
For the Three Months Ended March
31, 2023 and 2022
(in millions, except margin
data)
(UNAUDITED)
Three Months Ended March
31,
2023
2022
Net loss
$
(24.6
)
$
(1.0
)
Interest expense
16.3
9.3
Income tax expense
8.8
0.3
Depreciation and amortization
33.7
36.5
EBITDA (non-GAAP)
$
34.2
$
45.1
EBITDA Margin (non-GAAP)
4.5
%
6.1
%
Restructuring, impairment and
transaction-related charges (1)
26.0
3.6
Adjusted EBITDA (non-GAAP)
$
60.2
$
48.7
Adjusted EBITDA Margin
(non-GAAP)
7.9
%
6.5
%
______________________________
(1)
Operating results for the three months
ended March 31, 2023 and 2022, were affected by the following
restructuring, impairment and transaction-related charges:
Three Months Ended March
31,
2023
2022
Employee termination charges (a)
$
13.1
$
1.1
Impairment charges (b)
9.5
0.1
Transaction-related charges (c)
0.6
0.2
Integration costs (d)
0.5
—
Other restructuring charges (e)
2.3
2.2
Restructuring, impairment and
transaction-related charges
$
26.0
$
3.6
______________________________________
(a)
Employee termination charges were related
to workforce reductions through facility consolidations and
separation programs.
(b)
Impairment charges were primarily for
certain property, plant and equipment no longer being utilized in
production as a result of facility consolidations, as well as other
capacity reduction activities.
(c)
Transaction-related charges consisted of
professional service fees related to business acquisition and
divestiture activities.
(d)
Integration costs were primarily costs
related to the integration of acquired companies.
(e)
Other restructuring charges include costs
to maintain and exit closed facilities, as well as lease exit
charges.
In addition to financial measures prepared in accordance with
accounting principles generally accepted in the United States of
America (GAAP), this earnings announcement also contains non-GAAP
financial measures, specifically EBITDA, EBITDA Margin, Adjusted
EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Net Debt, Debt
Leverage Ratio and Adjusted Diluted Earnings Per Share. The Company
believes that these non-GAAP measures, when presented in
conjunction with comparable GAAP measures, provide additional
information for evaluating Quad’s performance and are important
measures by which Quad’s management assesses the profitability and
liquidity of its business. These non-GAAP measures should be
considered in addition to, not as a substitute for or superior to,
net earnings (loss) as a measure of operating performance or to
cash flows provided by (used in) operating activities as a measure
of liquidity. These non-GAAP measures may be different than
non-GAAP financial measures used by other companies.
QUAD/GRAPHICS, INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
FREE CASH FLOW
For the Three Months Ended March
31, 2023 and 2022
(in millions)
(UNAUDITED)
Three Months Ended March
31,
2023
2022
Net cash used in operating activities
$
(50.6
)
$
(16.9
)
Less: purchases of property, plant and
equipment
28.7
19.1
Free Cash Flow (non-GAAP)
$
(79.3
)
$
(36.0
)
In addition to financial measures prepared in accordance with
accounting principles generally accepted in the United States of
America (GAAP), this earnings announcement also contains non-GAAP
financial measures, specifically EBITDA, EBITDA Margin, Adjusted
EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Net Debt, Debt
Leverage Ratio and Adjusted Diluted Earnings Per Share. The Company
believes that these non-GAAP measures, when presented in
conjunction with comparable GAAP measures, provide additional
information for evaluating Quad’s performance and are important
measures by which Quad’s management assesses the profitability and
liquidity of its business. These non-GAAP measures should be
considered in addition to, not as a substitute for or superior to,
net earnings (loss) as a measure of operating performance or to
cash flows provided by (used in) operating activities as a measure
of liquidity. These non-GAAP measures may be different than
non-GAAP financial measures used by other companies.
QUAD/GRAPHICS, INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
NET DEBT AND DEBT LEVERAGE
RATIO
As of March 31, 2023 and December
31, 2022
(in millions, except ratio)
(UNAUDITED)
March 31, 2023
December 31,
2022
Total debt and finance lease obligations
on the condensed consolidated balance sheets
$
640.2
$
570.2
Less: Cash and cash equivalents
8.7
25.2
Net Debt (non-GAAP)
$
631.5
$
545.0
Divided by: trailing twelve months
Adjusted EBITDA (non-GAAP) (1)
$
263.7
$
252.2
Debt Leverage Ratio (non-GAAP)
2.39 x
2.16 x
______________________________
(1)
The calculation of Adjusted EBITDA for the
trailing twelve months ended March 31, 2023, and December 31, 2022,
was as follows:
Add
Subtract
Trailing Twelve Months
Ended
Year Ended
Three Months Ended
December 31, 2022
(a)
March 31, 2023
March 31, 2022
March 31, 2023
Net earnings (loss)
$
9.3
$
(24.6
)
$
(1.0
)
$
(14.3
)
Interest expense
48.4
16.3
9.3
55.4
Income tax expense
8.4
8.8
0.3
16.9
Depreciation and amortization
141.3
33.7
36.5
138.5
EBITDA (non-GAAP)
$
207.4
$
34.2
$
45.1
$
196.5
Restructuring, impairment and
transaction-related charges
44.8
26.0
3.6
67.2
Adjusted EBITDA (non-GAAP)
$
252.2
$
60.2
$
48.7
$
263.7
______________________________
(a)
Financial information for the year ended
December 31, 2022, is included as reported in the Company’s 2022
Annual Report on Form 10-K filed with the SEC on February 27,
2023.
In addition to financial measures prepared in accordance with
accounting principles generally accepted in the United States of
America (GAAP), this earnings announcement also contains non-GAAP
financial measures, specifically EBITDA, EBITDA Margin, Adjusted
EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Net Debt, Debt
Leverage Ratio and Adjusted Diluted Earnings Per Share. The Company
believes that these non-GAAP measures, when presented in
conjunction with comparable GAAP measures, provide additional
information for evaluating Quad’s performance and are important
measures by which Quad’s management assesses the profitability and
liquidity of its business. These non-GAAP measures should be
considered in addition to, not as a substitute for or superior to,
net earnings (loss) as a measure of operating performance or to
cash flows provided by (used in) operating activities as a measure
of liquidity. These non-GAAP measures may be different than
non-GAAP financial measures used by other companies.
QUAD/GRAPHICS, INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
ADJUSTED DILUTED EARNINGS PER
SHARE
For the Three Months Ended March
31, 2023 and 2022
(in millions, except per share
data)
(UNAUDITED)
Three Months Ended March
31,
2023
2022
Loss before income taxes
$
(15.8
)
$
(0.7
)
Restructuring, impairment and
transaction-related charges
26.0
3.6
Adjusted net earnings, before income taxes
(non-GAAP)
10.2
2.9
Income tax expense at 25% normalized tax
rate
2.6
0.7
Adjusted net earnings (non-GAAP)
$
7.6
$
2.2
Basic weighted average number of common
shares outstanding
49.2
51.5
Plus: effect of dilutive equity incentive
instruments (non-GAAP)
2.1
2.0
Diluted weighted average number of common
shares outstanding (non-GAAP)
51.3
53.5
Adjusted diluted earnings per share
(non-GAAP) (1)
$
0.15
$
0.04
Diluted loss per share (GAAP)
$
(0.50
)
$
(0.02
)
Restructuring, impairment and
transaction-related charges per share
0.52
0.07
Income tax expense from condensed
consolidated statement of operations per share
0.18
—
Income tax expense at 25% normalized tax
rate per share
(0.05
)
(0.01
)
Adjusted diluted earnings per share
(non-GAAP) (1)
$
0.15
$
0.04
______________________________
(1)
Adjusted diluted earnings per share
excludes the following: (i) restructuring, impairment and
transaction-related charges and (ii) discrete income tax items.
In addition to financial measures prepared in accordance with
accounting principles generally accepted in the United States of
America (GAAP), this earnings announcement also contains non-GAAP
financial measures, specifically EBITDA, EBITDA Margin, Adjusted
EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Net Debt, Debt
Leverage Ratio and Adjusted Diluted Earnings Per Share. The Company
believes that these non-GAAP measures, when presented in
conjunction with comparable GAAP measures, provide additional
information for evaluating Quad’s performance and are important
measures by which Quad’s management assesses the profitability and
liquidity of its business. These non-GAAP measures should be
considered in addition to, not as a substitute for or superior to,
net earnings (loss) as a measure of operating performance or to
cash flows provided by (used in) operating activities as a measure
of liquidity. These non-GAAP measures may be different than
non-GAAP financial measures used by other companies.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230502006065/en/
Investor Relations Contact Katie Krebsbach Investor
Relations Manager, Quad 414-566-4247 kkrebsbach@quad.com
Media Contact Claire Ho Director of Marketing
Communications, Quad 414-566-2955 cho@quad.com
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