Quad/Graphics Reports $1.1B in Net Sales for Q2 2014, Increases Guidance Thanks to Brown Acquisition

SUSSEX, WI—August 6, 2014—Quad/Graphics has reported results for its second quarter ending June 30, 2014. The reported results include Brown Printing from the day of acquisition on May 30, 2014. Prior year financial results do not include the acquisition of Brown Printing.

“Our second quarter results were consistent with our expectations and we remain on track to achieve our 2014 objectives,” said Joel Quadracci, Quad/Graphics chairman, president and CEO. “We are pleased with our decision to acquire Brown Printing as it supports our ongoing strategy to create value for our clients and shareholders. Our integration efforts are underway and include a strong focus on serving our clients well while also improving the efficiency and productivity of our platform and driving future cost savings.”

For the second quarter of 2014, net sales were $1.1 billion, down 1 percent compared to the same period in 2013. Second quarter 2014 Adjusted EBITDA was $102 million as compared to $111 million for the same period in 2013, and Adjusted EBITDA Margin was 9.3 percent as compared to 10.0 percent in 2013. The quarterly results reflect expected volume and pricing pressures, as well as an $8 million decrease in Adjusted EBITDA due to certain event-driven favorable gains in 2013 that did not repeat in 2014, such as the resolution of certain legal, environmental and Worldcolor bankruptcy matters. These decreases were partially offset by lower employee related costs, including labor productivity improvements.

For the first six months of 2014, net sales were $2.2 billion, down 2 percent compared to the same period in 2013. Year-to-date Adjusted EBITDA was $209 million as compared to $225 million for the same period in 2013, and Adjusted EBITDA Margin was 9.5 percent as compared to 10.0 percent in 2013. The year-to-date results reflect trends that are consistent with those highlighted for the second quarter.

“We are increasing guidance for net sales and Adjusted EBITDA to reflect the contribution from the Brown Printing acquisition,” explained Dave Honan, Quad/Graphics vice president and CFO. “We currently estimate full-year 2014 net sales to be in the range of $4.8 billion to $4.9 billion, increased from a prior guidance range of $4.6 billion to $4.8 billion, and full-year 2014 Adjusted EBITDA to be in the range of $535 million to $560 million, increased from a prior guidance range of $520 million to $550 million. We reiterate our annual 2014 guidance of Free Cash Flow to be between $155 million and $165 million, which reflects the EBITDA contribution from Brown Printing offset by the integration costs that are front-end loaded.”

Honan added: “As we move forward, we will continue to drive productivity improvements and implement sustainable cost reductions to be a low-cost producer. We will also continue to manage our debt to maintain a strong balance sheet. The new debt capital structure we completed in April 2014 enhances our company’s financial flexibility by extending and staggering our debt maturity profile, further diversifying our capital structure, and providing more borrowing capacity to better position us to execute on our strategic goals.”

Quad/Graphics’ quarterly dividend of $0.30 per share will be payable on September 19, 2014, to shareholders of record as of September 8, 2014.

About Quad/Graphics
Quad/Graphics (NYSE: QUAD), a leading global printer and media channel integrator, is redefining print in today’s multichannel media world by helping marketers and publishers capitalize on print’s ability to complement and connect with other media channels. With consultative ideas, worldwide capabilities, leading-edge technology and single-source simplicity, Quad/Graphics has the resources and knowledge to help its clients maximize the revenue they derive from their marketing spend through channel integration, and minimize their total cost of print production and distribution through a fully integrated national distribution network. The company provides a diverse range of print solutions, media solutions and logistics services from multiple locations throughout North America, Latin America and Europe.

Source: Quad/Graphics.