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Quad/Graphics Posts Mixed Q4, 2010 Financials

March 11, 2011
SUSSEX, WI—Quad/Graphics Inc. reported results for its fourth quarter ending Dec. 31, 2010, which reflect the July 2, 2010, acquisition of Worldcolor. For the sake of comparisons, references to pro forma measures assume that the acquisition of Worldcolor was completed on Jan. 1, 2009.

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.

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.

“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.”

Quadracci noted that the company will continue its 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,” he added.

The company reports it continues to make significant progress in the integration of Worldcolor.

By year end 2010, the company had closed six North American plants and Worldcolor’s Montreal headquarters. In early 2011, it already announced or completed two additional North American plant closures. The impact of these and other restructuring actions will result in the closure of approximately 3.6 million square feet of manufacturing and warehousing space, and a gross reduction of 4,400 employees.

“Overall, the integration process is moving forward as expected, but we are not finished as this is a 24-month journey,” Quadracci stated. “We are now confident that we’ll achieve somewhat more than the $225 million in synergy savings on an annual run-rate basis within 24 months of closing the Worldcolor acquisition. We continue looking for additional cost-savings opportunities to build upon our integration synergy savings.”

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