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Quad/Graphics Reports Mixed Results for Quarter, Fiscal Year

March 9, 2011
SUSSEX, WI—March 09, 2011—Quad/Graphics Inc. reported results for its fourth quarter ending Dec. 31, 2010. The quarter’s results include the July 2, 2010, acquisition of World Color Press. To assist in comparisons, references to pro forma measures assume that the acquisition of Worldcolor was completed on Jan. 1, 2009.


• Integration-related closures of eight North American manufacturing facilities, Worldcolor’s Montreal headquarters and other restructuring actions have resulted in the net reduction of approximately 3,000 employees to date;

• Fourth quarter 2010 net sales increased to $1.39 billion from pro forma net sales of $1.36 billion in the fourth quarter of 2009 and $1.21 billion in the third quarter of 2010;

• Fourth quarter 2010 adjusted EBITDA of $224.2 million compared to $235.5 million in fourth quarter 2009 and $159.2 million in third quarter 2010; and

• Fourth quarter 2010 adjusted EBITDA margin of 16.2 percent compared to 17.3 percent in fourth quarter 2009 and 13.2 percent in third quarter 2010.

“We are very pleased with our results for fourth quarter 2010, which is our second quarter reporting as a combined company,” said Joel Quadracci, chairman, president and CEO. “Net sales were up slightly over pro forma 2009 despite continued pricing pressures and the downward trajectory of Worldcolor revenues.”

Given the industry’s ongoing competitive pricing environment, Quadracci noted that the company will continue its historic focus on improving operational excellence through lean manufacturing and continuous improvement initiatives as well as reinvesting in its platform.

“We are rapidly deploying lean manufacturing across our entire organization to achieve improved efficiencies, reduce waste, lower overall operating costs, enhance quality and timeliness, and create a safer work environment for our employees. As a result of our effective integration efforts and synergy achievements along with aggressive cost management, our Adjusted EBITDA of $224.2 million and Adjusted EBITDA margin of 16.2 percent marked a solid finish to our year,” Quadracci continued.

“Our cash flow during the fourth quarter was very strong and allowed us to pay down $179 million of debt and continue to strengthen our balance sheet,” added John Fowler, executive vice president and CFO. “Of the $179 million, approximately $132 million was cash generated from operating activities and $60 million was from the reduction in restricted cash and collateral at Worldcolor, offset by the assumption of $13 million of debt in the HGI acquisition.

“This debt pay down results from our efforts to deleverage our balance sheet and, over time, return to investment grade. We view cash flow generation as one of the most important measures of a printing company’s financial success and it has been a focus of how we’ve managed our business over many years.”

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