Net sales for the fourth quarter 2015 were $1.3 billion, down 6% from the same period in 2014. Fourth quarter 2015 Adjusted EBITDA was $154 million compared to $183 million for the same period in 2014, and Adjusted EBITDA margin was 11.5% compared to 12.8%. The decline on the top-line and Adjusted EBITDA margin variance primarily reflects the impacts of ongoing pricing and volume pressures.
For full-year 2015, net sales were $4.7 billion versus net sales of $4.9 billion for the previous year. Full-year 2015 Adjusted EBITDA was $462 million compared to $543 million for fiscal 2014, and Adjusted EBITDA margin was 9.9% compared to 11.2% for the previous year. Full-year 2015 free cash flow was $215 million compared to $154 million for the previous year. Free cash flow increased $61 million or 40% over the prior year due to sustainable reductions in ongoing working capital needs.
“We are pleased to report that our fourth quarter 2015 results were better than we expected following our focused efforts to aggressively manage costs and improve manufacturing productivity,” said Joel Quadracci, Quad/Graphics chairman, president and CEO. “Further, as a result of our efforts, we surpassed our expectations for free cash flow, which is the foundation of our strong balance sheet and sustainable dividend.
“The global economic climate remains in flux,” Quadracci added. “Therefore, we will build on our cost control momentum with aggressive, innovative cost management and improved labor productivity in support of our goal to hold the line on Adjusted EBITDA margins, and generate strong free cash flow that supports value-creating opportunities. As always, we remain committed to being the industry’s high-quality, low-cost producer while delivering an exceptional client experience.”
“Quad/Graphics continues to be a significant free cash flow generator, which is important to maintaining a strong and flexible balance sheet that supports our disciplined capital deployment strategy,” said Dave Honan, Quad/Graphics EVP and CFO. “Our strong free cash flow in the fourth quarter enabled us to reduce debt and improve our year-end Debt Leverage Ratio to 2.92x, reduced from 3.09x at Sept. 30, 2015. In addition, the significant free cash flow allows the company to maintain an affordable and sustainable annual dividend of $1.20 per share, representing less than 30% of free cash flow.”