08.04.21
Quad/Graphics, Inc. reported results for the second quarter of 2021.
Net sales were $694 million in the second quarter of 2021, up 19% from the same period in 2020. Net sales increased in print, logistics and agency solutions primarily driven by organic growth, which rebounded compared to the pandemic-impacted period in 2020, as well as print segment share gains from new clients.
The company increased net earnings from continuing operations by $49 million to $34 million for the second quarter of 2021, compared to a net loss from continuing operations of $15 million for the second quarter of 2020.
Quad achieved $60 million in adjusted EBITDA during the second quarter of 2021, flat with the prior year, despite a year-over-year non-recurring benefit in 2020 of approximately $30 million in temporary cost reductions.
Quad increased cash provided by operating activities to $89 million and free cash flow to $62 million during the first six months of 2021, increases of $22 million and $33 million, respectively, and reduced net debt by $120 million year-to-date, improving the company’s debt leverage ratio to 3.0x at June 30, 2021, from 3.35x at Dec. 31, 2020.
“Thanks to strong operating and financial performance, our team delivered second quarter results that exceeded our expectations,” said Joel Quadracci, chairman, president and CEO of Quad. “Our net sales grew 19% as compared to the same period last year, driven by organic growth and new business wins. This positive trend reflects the hard work of our employees and the success our integrated marketing offering is having in the marketplace.
“We also divested our 3PL brokered freight business, QuadExpress, for a total consideration of $40 million, at the end of June. This divestiture, which represented a small portion of our global logistics business, was in line with our established strategy to optimize our product and service portfolio and invest in those parts of our business that can accelerate our growth and position as a marketing solutions partner. We are pleased to have found a great home for the QuadExpress team.
Results for the six months ended June 30, 2021, include net sales of $1.4 billion in the six months ended June 30, 2021, down 1% from the same period in 2020, primarily due to the impacts from the COVID-19 pandemic in the first quarter, nearly offset by year-over-year increases in print, logistics and agency solutions sales in the second quarter.
Net earnings from continuing operations were $45 million or $0.85 diluted earnings per share from continuing operations in the six months ended June 30, 2021, an increase of $69 million compared to the same period in 2020, which recorded a net loss of $24 million or $0.46 diluted loss per share.
Adjusted EBITDA was $126 million in the six months ended June 30, 2021, as compared to $135 million in the same period in 2020. Net cash provided by operating activities increased by $22 million to $89 million for the six months ended June 30, 2021, as compared to $67 million in the same period in 2020, primarily due to improvements in working capital.
Free cash flow increased by $33 million to $62 million for the six months ended June 30, 2021, as compared to $29 million for the same period in 2020, primarily due to higher net cash provided by operating activities as described above, and an $11 million decrease in capital expenditures.
Debt less cash and cash equivalents decreased by $120 million to $753 million as of June 30, 2021, as compared to $873 million at Dec. 31, 2020. Over the past 12 months, net debt decreased $225 million, representing a 23% reduction in net debt. The debt leverage ratio improved 35 basis points to 3.0x at June 30, 2021, from 3.35x at Dec. 31, 2020.
“Our performance in the first half of the year and, in particular, the second quarter, surpassed our expectations,” Dave Honan, EVP and CFO, concluded. “Our performance in the first half of the year and, in particular, the second quarter. We have strong sales momentum heading into the second half of 2021, providing the foundation for our improved and expanded financial outlook for fiscal 2021. Our full-year outlook increases our net sales outlook to a 1% to 3% increase compared to 2020, and we expect further significant reductions in debt in the second half of the year to end 2021 with a debt leverage ratio of approximately 2.75x.”
Net sales were $694 million in the second quarter of 2021, up 19% from the same period in 2020. Net sales increased in print, logistics and agency solutions primarily driven by organic growth, which rebounded compared to the pandemic-impacted period in 2020, as well as print segment share gains from new clients.
The company increased net earnings from continuing operations by $49 million to $34 million for the second quarter of 2021, compared to a net loss from continuing operations of $15 million for the second quarter of 2020.
Quad achieved $60 million in adjusted EBITDA during the second quarter of 2021, flat with the prior year, despite a year-over-year non-recurring benefit in 2020 of approximately $30 million in temporary cost reductions.
Quad increased cash provided by operating activities to $89 million and free cash flow to $62 million during the first six months of 2021, increases of $22 million and $33 million, respectively, and reduced net debt by $120 million year-to-date, improving the company’s debt leverage ratio to 3.0x at June 30, 2021, from 3.35x at Dec. 31, 2020.
“Thanks to strong operating and financial performance, our team delivered second quarter results that exceeded our expectations,” said Joel Quadracci, chairman, president and CEO of Quad. “Our net sales grew 19% as compared to the same period last year, driven by organic growth and new business wins. This positive trend reflects the hard work of our employees and the success our integrated marketing offering is having in the marketplace.
“We also divested our 3PL brokered freight business, QuadExpress, for a total consideration of $40 million, at the end of June. This divestiture, which represented a small portion of our global logistics business, was in line with our established strategy to optimize our product and service portfolio and invest in those parts of our business that can accelerate our growth and position as a marketing solutions partner. We are pleased to have found a great home for the QuadExpress team.
Results for the six months ended June 30, 2021, include net sales of $1.4 billion in the six months ended June 30, 2021, down 1% from the same period in 2020, primarily due to the impacts from the COVID-19 pandemic in the first quarter, nearly offset by year-over-year increases in print, logistics and agency solutions sales in the second quarter.
Net earnings from continuing operations were $45 million or $0.85 diluted earnings per share from continuing operations in the six months ended June 30, 2021, an increase of $69 million compared to the same period in 2020, which recorded a net loss of $24 million or $0.46 diluted loss per share.
Adjusted EBITDA was $126 million in the six months ended June 30, 2021, as compared to $135 million in the same period in 2020. Net cash provided by operating activities increased by $22 million to $89 million for the six months ended June 30, 2021, as compared to $67 million in the same period in 2020, primarily due to improvements in working capital.
Free cash flow increased by $33 million to $62 million for the six months ended June 30, 2021, as compared to $29 million for the same period in 2020, primarily due to higher net cash provided by operating activities as described above, and an $11 million decrease in capital expenditures.
Debt less cash and cash equivalents decreased by $120 million to $753 million as of June 30, 2021, as compared to $873 million at Dec. 31, 2020. Over the past 12 months, net debt decreased $225 million, representing a 23% reduction in net debt. The debt leverage ratio improved 35 basis points to 3.0x at June 30, 2021, from 3.35x at Dec. 31, 2020.
“Our performance in the first half of the year and, in particular, the second quarter, surpassed our expectations,” Dave Honan, EVP and CFO, concluded. “Our performance in the first half of the year and, in particular, the second quarter. We have strong sales momentum heading into the second half of 2021, providing the foundation for our improved and expanded financial outlook for fiscal 2021. Our full-year outlook increases our net sales outlook to a 1% to 3% increase compared to 2020, and we expect further significant reductions in debt in the second half of the year to end 2021 with a debt leverage ratio of approximately 2.75x.”
