Quad/Graphics Reports Slight Gains and Declares First Cash Dividend
As far as its integration activities, the company continues to make significant progress, announcing three additional plant closures since the beginning of the year.
“We are 10 months into a complex integration process that will take 24 months to complete, but already we have made a series of bold, well-planned moves to achieve cost savings and improve the overall efficiency and productivity of our platform, all while maintaining focus on serving our clients well,” Quadracci said. “We are impatient when it comes to achieving operational efficiencies and other cost savings, which is why we are moving swiftly on the integration as well as aggressively implementing Lean initiatives and deploying our own brand of ERP software tools to streamline workflow and improve visibility.”
To date, the company has announced or completed 10 North American plant closures, including three announced since the beginning of 2011: St. Laurent, Quebec; Mt. Morris, IL; and Buffalo, NY. The impact of these and other restructuring actions will result in the closure of more than five million square feet of manufacturing, warehousing and office space, and a gross reduction of 5,000 employees. Currently, the company has realized a net reduction of approximately 3,300 full-time equivalent employees.
Quadracci said the company is balancing time spent on integration and productivity efforts with pursuing growth opportunities. “With the integration firmly on track, we are looking to where we grow from here—organically and through acquisitions, both here in the United States and abroad,” he said. “We are very disciplined in our approach to growth, taking great care to seek opportunities which we believe have the greatest likelihood of creating profitable growth and increasing shareholder value.”
John Fowler, executive vice president and CFO, reiterated that the quarter’s results met company expectations. “Our sales increase was driven by increases in volumes from legacy Quad/Graphics as well as increases in paper and byproduct revenues,” he said. “Adjusted EBITDA of $140.7 million was slightly ahead of last year, and Adjusted EBITDA margin was 12.8 percent. We credit this to our ability to manage costs while also addressing declines in legacy Worldcolor volumes, lower contractual pricing inherited with the acquisition, and ongoing pricing headwinds due to overcapacity in the industry.