05.01.24
Quad/Graphics, Inc. reported results for the first quarter ended March 31, 2024.
Net sales were $655 million in the first quarter of 2024, a decrease of 15% compared to the same period in 2023 primarily due to lower paper, print and agency solutions sales, including the loss of a large grocery client.
Net loss was $28 million in the first quarter of 2024 compared to net loss of $25 million in the first quarter of 2023. The decrease is primarily due to lower sales and higher restructuring and impairment charges, partially offset by benefits from improved manufacturing productivity, savings from cost reduction initiatives and lower income tax expense.
Quad achieved non-GAAP adjusted EBITDA of $51 million in the first quarter of 2024 compared to $60 million in the first quarter of 2023, and reported $0.10 adjusted diluted earnings per share for the first quarter of 2024. Quad completed restructuring actions that are expected to generate $60 million of cost savings in 2024.
Net debt increased by $74 million to $544 million at March 31, 2024, as compared to $470 million at Dec. 31, 2023, primarily due to the negative $70 million free cash flow in the first quarter of 2024.
“Our first quarter results were in-line with our expectations, and we remain confident in our ability to achieve our full-year 2024 financial guidance,” said Joel Quadracci, chairman, president and CEO of Quad. “We continue to focus on growing our offerings, including strategic investments in innovative solutions and superior talent, while proactively managing ongoing revenue challenges that include external factors such as significant postal rate increases and continued economic uncertainty that negatively impact print volumes.
“During Q1, we announced our entry into the next big advertising channel – retail media networks or RMNs,” added Quadracci. “EMARKETER predicts ad spend in omnichannel RMNs will grow to over $100 billion by 2027. Our solution, called Quad In-Store Connect, advances the in-store shopping experience by taking the best elements of digital commerce and bringing it into physical retail environments. Retailers and consumer packaged goods companies now have the ability to deliver engaging brand messages and promotions right at the store shelf – the most critical moment in the purchasing decision.
“Also during Q1, we unveiled Household Fusion, a first-of-its-kind postal optimization program we proactively created to offset continued U.S. Postal Service rate hikes,” he noted. “This solution combines various marketing mail from different brands or, separately, various magazines from different publishers into a single package delivered to one address, creating significant postage savings. Clients like PWX Solutions, a direct marketing and production partnership formed between Hearst and Condé Nast, are enthusiastic about this solution, which reduces costs from one of a marketer’s biggest budget lines.”
“We reaffirm our full-year guidance and remain focused on delivering for our clients while enhancing our financial position, such as through our recent restructuring actions, including plant capacity and labor reduction initiatives, that we anticipate will generate $60 million in cost savings in 2024,” said CFO Tony Staniak. “We continue to expect strong cash generation, which we will use to further reduce net debt and achieve 1.8x net debt leverage by the end of the year.”
Net sales were $655 million in the first quarter of 2024, a decrease of 15% compared to the same period in 2023 primarily due to lower paper, print and agency solutions sales, including the loss of a large grocery client.
Net loss was $28 million in the first quarter of 2024 compared to net loss of $25 million in the first quarter of 2023. The decrease is primarily due to lower sales and higher restructuring and impairment charges, partially offset by benefits from improved manufacturing productivity, savings from cost reduction initiatives and lower income tax expense.
Quad achieved non-GAAP adjusted EBITDA of $51 million in the first quarter of 2024 compared to $60 million in the first quarter of 2023, and reported $0.10 adjusted diluted earnings per share for the first quarter of 2024. Quad completed restructuring actions that are expected to generate $60 million of cost savings in 2024.
Net debt increased by $74 million to $544 million at March 31, 2024, as compared to $470 million at Dec. 31, 2023, primarily due to the negative $70 million free cash flow in the first quarter of 2024.
“Our first quarter results were in-line with our expectations, and we remain confident in our ability to achieve our full-year 2024 financial guidance,” said Joel Quadracci, chairman, president and CEO of Quad. “We continue to focus on growing our offerings, including strategic investments in innovative solutions and superior talent, while proactively managing ongoing revenue challenges that include external factors such as significant postal rate increases and continued economic uncertainty that negatively impact print volumes.
“During Q1, we announced our entry into the next big advertising channel – retail media networks or RMNs,” added Quadracci. “EMARKETER predicts ad spend in omnichannel RMNs will grow to over $100 billion by 2027. Our solution, called Quad In-Store Connect, advances the in-store shopping experience by taking the best elements of digital commerce and bringing it into physical retail environments. Retailers and consumer packaged goods companies now have the ability to deliver engaging brand messages and promotions right at the store shelf – the most critical moment in the purchasing decision.
“Also during Q1, we unveiled Household Fusion, a first-of-its-kind postal optimization program we proactively created to offset continued U.S. Postal Service rate hikes,” he noted. “This solution combines various marketing mail from different brands or, separately, various magazines from different publishers into a single package delivered to one address, creating significant postage savings. Clients like PWX Solutions, a direct marketing and production partnership formed between Hearst and Condé Nast, are enthusiastic about this solution, which reduces costs from one of a marketer’s biggest budget lines.”
“We reaffirm our full-year guidance and remain focused on delivering for our clients while enhancing our financial position, such as through our recent restructuring actions, including plant capacity and labor reduction initiatives, that we anticipate will generate $60 million in cost savings in 2024,” said CFO Tony Staniak. “We continue to expect strong cash generation, which we will use to further reduce net debt and achieve 1.8x net debt leverage by the end of the year.”