Quad Reports Third Quarter and Year-to-Date 2021 Results

Quad/Graphics, Inc. (NYSE: QUAD) (“Quad” or the “Company”), today reported results for the third quarter of 2021.

Recent Highlights
*Increased net sales by 4%, with 7% organic growth (excluding the divestiture of the Company’s third-party logistics business), from third quarter 2020 driven by higher print volumes, including print segment share gains from new clients, as well as a continued positive trend in Agency Solutions net sales.
*Increased net earnings from continuing operations by $12 million to $14 million during the third quarter of 2021 as compared to 2020.
*Achieved a 6% increase in Adjusted EBITDA to $64 million during the third quarter of 2021 as compared to 2020.
*Reduced net debt by $140 million or 15% over the past 12 months.
*Reaffirms full-year financial outlook for 2021 Net Sales, Adjusted EBITDA and Debt Leverage.
*Amends and extends $1 billion bank debt agreement to November 2026.

Joel Quadracci, Chairman, President & CEO of Quad, said: “Our third quarter results were strong with higher print volumes, including print segment share gains from new clients, as well as a continued positive trend in Agency Solutions, all of which contributed to year-over-year organic growth of 7% in net sales. Our integrated marketing offering continues to be a competitive differentiator and a key driver behind our company’s overall organic growth. We are proud that some of the world’s most recognizable brands have chosen to partner with us for strategic marketing solutions, reflecting the strength of our offering and ability to deliver more value through reduced complexity, increased efficiencies and enhanced marketing spend effectiveness across all media channels. We continue to build out and invest in the talent, technology, products and services that will further advance our value as a marketing solutions partner.”

Quadracci continued: “Right now, businesses everywhere around the globe are experiencing disruption from unprecedented supply chain issues and mounting inflationary pressures. At Quad, we are working thoughtfully and diligently to mitigate these impacts on our business while successfully maintaining the high-quality, responsive service on which our clients have come to depend. As always, we will remain nimble and adapt to changes and challenges while continuing our disciplined approach to managing all aspects of our business to enhance our financial strength and create shareholder value.”

Results for the three months ended September 30, 2021, include:
Net Sales — Net sales were $706 million in the third quarter of 2021, up 4% from the same period in 2020. Excluding the divestiture of QuadExpress, a third-party logistics (3PL) business, organic net sales increased 7% from 2020. The net sales increase during the third quarter was due to a 10% increase in year-over-year print net sales and an 8% increase in year-over-year Agency Solutions net sales. Net sales increased in print and Agency Solutions primarily driven by net sales growth from existing clients as well as print segment share gains from new clients.
Net Earnings From Continuing Operations — Net earnings from continuing operations were $14 million or $0.27 diluted earnings per share in the third quarter of 2021, an increase of $12 million compared to the third quarter of 2020. Net earnings increased due to higher profit from increased net sales, an $11 million gain from the sale and leaseback of the West Allis, Wis. production facility in the third quarter of 2021, and a $9 million net gain from property insurance claims, partially offset by the negative impact of cost inflation and $9 million of non-recurring temporary cost savings in 2020 primarily related to salary reductions and furloughs due to the COVID-19 pandemic.

Results for the nine months ended September 30, 2021, include:
Net Sales — Net sales were $2.1 billion in the nine months ended September 30, 2021, up 1% from the same period in 2020. Excluding recent divestitures, organic net sales increased 2% compared to 2020. The net sales increase during the nine months ended September 30, 2021 was due to a 13% increase in year-over-year logistics net sales and a 9% increase in year-over-year Agency Solutions net sales, while print net sales were flat between years (which includes a 14% decrease in first quarter net sales due to year-over-year impacts from the COVID-19 pandemic). Over the past six months, after annualizing the first year of the COVID-19 pandemic’s impact on our business, organic net sales have increased 13% over 2020 primarily from net sales growth from existing clients and print segment share gains from new clients.
Net Earnings (Loss) From Continuing Operations — Net earnings from continuing operations were $59 million or $1.12 diluted earnings per share in the nine months ended September 30, 2021, an increase of $80 million compared to the same period in 2020, which recorded a net loss of $21 million or $0.41 diluted loss per share from continuing operations. Net earnings increased due to higher profit from increased net sales, a $52 million decrease in restructuring, impairment, and transaction-related charges (including a $24 million net gain from the sale of businesses) and a $25 million gain from the sale and leaseback of the Chalfont, Penn. and West Allis, Wis. production facilities. These increases were partially offset by $39 million of non-recurring temporary cost savings in 2020 primarily related to salary reductions and furloughs due to the COVID-19 pandemic, a $12 million benefit in 2020 from a change in the vacation policy, and the negative impact of cost inflation.
further detail at: https://www.quad.com/resources/news_release/quad-reports-third-quarter-and-year-to-date-2021-results/

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