Quad/Graphics Reports Flat Sales, Details Plant Closures

SUSSEX, WI—Nov. 10, 2010—Quad/Graphics, Inc. reported results for its third quarter ending Sept. 30, 2010. This is the first quarter the company is reporting results that include the July 2, 2010, acquisition of World Color Press, Inc.

Summary:

• Third quarter 2010 net sales of $1.21 billion compared to pro forma net sales of $1.24 billion in third quarter 2009;

• Third quarter 2010 Adjusted EBITDA of $159.2 million compared to pro forma Adjusted EBITDA of $197.3 million in third quarter 2009;

• Third quarter 2010 Adjusted EBITDA margin of 13.2% compared to pro forma Adjusted EBITDA margin of 15.9% in third quarter 2009;

• Strong free cash flow used to pay down $44 million in debt since the Worldcolor acquisition closed; and

• Quick implementation of integration plans including the expected closure of six North American printing plants by year end, impacting approximately 2,400 positions.

“Our results in the third quarter were in line with our expectations,” said Joel Quadracci, Chairman, President & CEO of Quad/Graphics. “Revenues were down slightly vs. the pro forma $1.24 billion due to lower volumes in the legacy Worldcolor business, contractual pricing inherited from legacy Worldcolor and continued pricing pressures from industry overcapacity. This was partially offset by increased volumes in the legacy Quad/Graphics business, as well as increases in paper and byproduct revenues.

“The industry still has significant overcapacity, so Quad/Graphics will continue to remove excess capacity from its newly combined platform,” Quadracci said. “In addition, we plan to maintain our historic economic discipline that allows us to provide a return on capital greater than our cost of capital. This, in turn, allows us to continually reinvest in equipment, and industry-leading research and development and technological innovations to benefit our customers and drive value for our shareholders.”

“We are pleased that our strong free cash flow has allowed us to immediately begin reducing debt,” said John Fowler, Executive Vice President & CFO of Quad/Graphics. “In fact, even though we are seasonally in our peak need for working capital and are incurring integration-related costs, we have paid down $44 million in debt since the Worldcolor transaction closed. We expect to continue to have strong cash flow in the fourth quarter, which will result in an increased rate of debt repayment through the end of the year.”

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