Quad/Graphics’ Sales Dip, but Earnings Rebound
SUSSEX, WI—May 9, 2012—Quad/Graphics Inc. reported results for its first quarter ending March 31, 2012.
Highlights for the first quarter:
- Net sales totaled $990 million.
- Adjusted EBITDA of $126 million and Adjusted EBITDA margin of 12.7 percent.
- Repaid $90 million in debt during the quarter and $415 million since the Worldcolor acquisition, reducing leverage to 2.2x.
Quad/Graphics’ net sales for the first quarter of 2012 totaled $990 million vs. $1.02 billion for the same quarter in 2011. The company’s net earnings attributable to common shareholders totaled $47.4 million, compated to a net loss of $7.3 million in the first quarter of 2011. Its adjusted EBITDA was $126 million vs. $142 million for the same period in 2011.
The results reflect expected volume and pricing pressures, which were partially offset by continued productivity improvements and incremental synergy savings totaling $25 million during the quarter and $221 million since the Worldcolor acquisition.
“Our performance during the first quarter gave us a solid start to the year,” said Joel Quadracci, Quad/Graphics chairman, president and CEO. “Our results are in line with our expectations and we are pleased with the progress we made on our key priorities to improve productivity, reduce costs, lower our debt and meet our synergy objectives, which enabled us to generate significant Recurring Free Cash Flow and improve upon our already strong credit metrics.”
“We are proud of the progress we continue to make in strengthening our balance sheet through the repayment of $90 million in debt during the quarter, and $415 million since the Worldcolor acquisition,” added John Fowler, executive vice president and chief financial officer. “Correspondingly, we improved our leverage ratio to 2.2x, which remains in our targeted range of 2.0x to 2.5x, and reduced our first quarter interest expense by $8 million or 28 percent. Our quarterly dividend of $0.25 per share will be payable on June 22, 2012, to shareholders of record as of June 11, 2012.”
On March 1, 2012, the company completed the sale of its Canadian business to Transcontinental. Quad/Graphics entered into a definitive agreement with Transcontinental on July 12, 2011, to essentially exchange its Canadian assets for Transcontinental's Mexican assets.
“We are pleased with our integration progress in Mexico, which we continue to believe is a promising growth market,” Quadracci noted.
Additionally, during the first quarter, the company announced a strategic partnership with Manipal Technologies Ltd. (ManipalTech), one of India's largest print services and end-to-end business solutions providers. Under the agreement, Quad/Graphics purchased a minority interest in ManipalTech, expanding Quad/Graphics' geographic reach to Asia, and broadening its product and service scope.
“We are enthusiastic about our new partnership with ManipalTech, a rapidly growing, forward-thinking company, and believe that together we can create value in the region's fast-growing economy,” stated Quadracci.
Quad/Graphics (NYSE: QUAD) is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 22,000 full-time equivalent employees working from more than 50 print-production facilities as well as other support locations throughout North America, Latin America and Europe.