Quad's Q1 Performance in Line with Expectations

SUSSEX, WI—Quad/Graphics Inc. has reported results for its first quarter ending March 31. The reported results include Vertis from the day of acquisition on Jan. 16. With the exception of certain debt ratios, prior year financial results do not include the acquisition of Vertis.

“Our first quarter results were in line with our expectations and we reaffirm our previously released 2013 annual guidance,” said Joel Quadracci, Quad/Graphics chairman, president and CEO. “In addition, we are pleased with our progress to date on the integration of Vertis. Our integration team has been focused on cost-savings initiatives and improving the overall efficiency and productivity of our platform, while also ensuring we continue to serve our clients well. Going forward, we remain focused on improving productivity; maintaining a strong and flexible balance sheet; investing in our existing business, as well as pursuing profitable investment opportunities; and creating long-term value for our shareholders.”

Net sales for the first quarter 2013 were $1.1 billion versus $990 million for the same period in 2012. First quarter 2013 adjusted EBITDA was $114 million compared to $126 million for the same period in 2012, and adjusted EBITDA margin was 10.1 percent compared to 12.7 percent for the same period in 2012. Recurring free cash flow was $120 million versus $107 million for the same period in 2012.

“As expected, our adjusted EBITDA margin was 10.1 percent. This reflects Vertis' lower margin profile; continued pressure on Vertis' margins due to pre-acquisition financial challenges, including its bankruptcy filing; the seasonality of Vertis' business, which has volumes and profitability more heavily weighted in the back half of the year; and ongoing industry pricing pressures,” said John Fowler, Quad/Graphics executive vice president and CFO.