Quad/Graphics Inc · Q3 2020 earnings

Briefing

Quad reported a solid third quarter with strong operating and cash performance, achieving net earnings gains through diligent cost management and focusing on winning segment share and driving operational improvements.

Quad/Graphics, Inc. reported a decrease in net sales by 28% to $679 million due to the economic impact from the COVID-19 pandemic and ongoing print industry volume and pricing pressures. However, net earnings increased by $50 million to $3 million, and the Adjusted EBITDA margin improved to 8.9%. The company continued to pay down debt, reducing it by $95 million year-to-date and $222 million over the past 12 months.

• Continued to align costs with current demand environment and achieved margin expansion while growing print segment share.
• Increased year-to-date cash from operating activities by $103 million and Free Cash Flow by $91 million compared to the first nine months of 2019.
• Reduced net debt by $95 million year-to-date and $222 million over the past 12 months, ending the quarter with a Debt Leverage Ratio of 3.22x.
• Maintained strong liquidity position as of September 30, 2020, including $93 million of cash on hand and up to $465 million in unused capacity under Quad’s revolving credit agreement.

Headline financials

Revenue & EPS history

Client volumes remain significantly below last year and is anticipated to continue through year end. The company is closely monitoring the pandemic and its impacts on its clients and the worldwide economy.