Q4, 2013 Financial Results Meet With Quad's Expectations
SUSSEX, WI—Quad/Graphics Inc. reported fourth quarter and full-year 2013 results. Prior year financial results do not include the acquisition of Vertis Inc., which was acquired on Jan. 16, 2013.
Net sales for the fourth quarter 2013 were $1.3 billion versus $1.1 billion for the same period in 2012. Fourth quarter 2013 adjusted EBITDA was $198 million compared to $174 million for the same period in 2012. The increase in net sales and adjusted EBITDA was due to the Vertis acquisition. Adjusted EBITDA margin was 14.7 percent compared to 15.3 percent for the same period in 2012. The adjusted EBITDA margin variance primarily reflects ongoing industry volume and pricing pressures, as well as the dilutive impact of Vertis’ historically lower margin profile compared to Quad/Graphics’ core business.
“Our fourth quarter and full-year 2013 results met our expectations, and we were especially pleased with our continued strong cash flow generation,” said Joel Quadracci, Quad/Graphics chairman, president and CEO. “Our ability to generate significant cash flow and maintain a strong balance sheet while simultaneously reducing our pension and debt obligations has allowed us to remain flexible with how we deploy capital. We have invested in our business to strengthen and expand our offering to clients, returned cash to our shareholders through quarterly cash dividends, and taken advantage of several unique acquisition opportunities, including Vertis and the recently announced UniGraphic transaction.”
For the full-year 2013, net sales were $4.8 billion versus net sales of $4.1 billion for the previous year. Full-year 2013, adjusted EBITDA was $577 million compared to $566 million for the previous year, and adjusted EBITDA margin was 12.0 percent compared to 13.8 percent for the previous year. Recurring free cash flow was $380 million compared to $375 million for the previous year, continuing the company’s track record of solid cash flow generation. Free cash flow, including restructuring payments and excluding the favorable impact of an estimated $90 million in Vertis working capital restoration, was $202 million.