SUSSEX, WI (News release) -- Quad/Graphics, Inc., a marketing experience company that solves complex marketing challenges for its clients, reported results for the fourth quarter and fiscal year ended December 31, 2024.

• Recognized Net Sales of $2.7 billion in 2024 compared to $3.0 billion in 2023.
• Reported a Net Loss of $51 million or $1.07 Diluted Loss Per Share in 2024 compared to a Net Loss of $55 million or $1.14 Diluted Loss Per Share in 2023.
• Achieved Non-GAAP Adjusted EBITDA of $224 million in 2024 compared to $234 million in 2023 and reported $0.85 Adjusted Diluted Earnings Per Share in 2024 compared to $0.52 in 2023.
• Increased Adjusted EBITDA Margin by 48 basis points to 8.4% in 2024 compared to 7.9% in 2023.
• Delivered $113 million of Net Cash Provided by Operating Activities and $56 million of Free Cash Flow, while also generating $71 million of cash from asset sales in 2024.
• Continued to invest in Company's proprietary, household-based data stack to drive new revenue streams through expanded audience intelligence and activation services.
• Enhanced brands' ability to connect with consumers through the launch of At-Home Connect, an intelligent, automated direct mail platform, while continuing to build sales momentum for its In-Store Connect retail media network.
• Progressed on the sale of its European operations to Capmont and expects to complete the sale in early 2025.
• Reduced Net Debt to $350 million and achieved Net Debt Leverage of 1.6x at December 31, 2024, representing a reduction of $684 million or 66% over the past five years as part of a multi-year debt reduction strategy.
• Increased the quarterly dividend by 50% from $0.05 per share to $0.075 per share.
• Introduces 2025 guidance, including using continued strong cash generation to lower Net Debt Leverage to approximately 1.5x.

Joel Quadracci, Chairman, President and Chief Executive Officer of Quad, said: "I am proud of the strategic and financial progress we made in 2024 as we continue to advance our revenue diversification strategy on our path to Net Sales growth, which we estimate in our mid-term outlook will happen between 2027 and 2028. Our full-year 2024 results reflect our disciplined operating performance, including increased profitability margins and continued strong cash generation that we used to further reduce debt despite the expected decrease in sales.

"As we communicated at our 2024 Investor Day in November, we are confident in our vision, the Quad brand and our market positioning for driving future diversified growth. Through our conversations with existing and prospective clients, we continue to win print segment share and gain distinction as a marketing experience, or MX, company with a tailored suite of solutions that is uniquely flexible, scalable and connected. Not only are we able to remove friction from wherever it occurs in the marketing journey, we also optimize media and marketing performance through integration, which improves outcomes for our clients as they move seamlessly across all our services.

"For the modern marketer, nothing matters more than audience data, and we have built a superior household-based data stack for smarter audience intelligence and activation across all online and offline media channels. Anchored in household-centric data, our stack brings unparalleled consistency and elevated insights to audience targeting that includes hundreds of proprietary identifiers related to consumer interests or passions, which help drive deeper, more meaningful consumer engagement and improved business outcomes. We will continue to invest in our industry-differentiating data capability, including AI optimization tools, to drive new revenue streams.

"Our powerful data capability is at the core of our MX Solutions Suite and is enabled by technology to help our clients connect the right message with the right audience at the right time, whether in the home, in-store or online. For example, we recently launched At-Home Connect, which modernizes the direct mail channel with an intelligent, automated platform that connects online engagement and offline impact. Our solution makes it easy for marketers to trigger personalized direct mail based on online consumer interactions or life events - and with the scale, automation and efficiency of digital marketing. Similarly, our In-Store Connect retail media network makes it easy for retailers and brands to make consumer connections where the vast majority of retail sales still happen - in brick-and-mortar stores. We continue to build sales momentum, particularly among mid-market grocery clients, and are currently onboarding our first Midwest-based grocery banner. We look forward to expanding relationships with existing and new retailers and CPG brand marketers in 2025."

Added Tony Staniak, Chief Financial Officer of Quad: "In 2024, we were pleased to reduce Net Debt Leverage to 1.6x and Net Debt to $350 million, representing a reduction of $684 million or 66% over the past five years as part of a multi-year debt reduction strategy. In addition, our flexible operating model, higher labor productivity and disciplined approach to managing all aspects of our business enabled us to increase our Adjusted EBITDA Margin by 48 basis points in 2024 compared to the prior year. We also continued to be a strong cash generator with $56 million of Free Cash Flow as well as $71 million of cash from asset sales. In 2025, we will shift our capital allocation priorities and use our strong cash generation to (1) amplify our strategic investments in innovation and accelerate our offerings to drive future diversified revenue growth, (2) increase return of capital to shareholders through a 50% higher quarterly dividend and opportunistic share repurchases, and (3) further reduce our debt leverage to approximately 1.5x, which is the low end of our long-term targeted debt leverage range."

• Net Sales were $2.7 billion in 2024, a decrease of 9.7% compared to 2023 primarily due to lower paper sales and lower print volumes, including the impact from client mix and increased gravure volume that has a lower unit price with a higher profit margin, as well as lower agency solutions sales, including the loss of a large grocery client.
• Net Loss was $51 million in 2024 compared to a Net Loss of $55 million in 2023. The improvement was primarily due to benefits from increased manufacturing productivity, savings from cost reduction initiatives, lower depreciation and amortization, and lower interest expense, partially offset by higher restructuring, impairment and transaction-related charges and the impact from lower Net Sales.
• Adjusted EBITDA was $224 million in 2024, a decrease of $10 million compared to 2023. The decrease was due to lower Net Sales and $11 million of unfavorable foreign exchange impacts in Selling, General and Administrative Expenses, partially offset by benefits from increased manufacturing productivity and savings from cost reduction initiatives.
• Adjusted Diluted Earnings Per Share was $0.85 in 2024, increased from $0.52 in 2023, primarily due to higher Adjusted Net Earnings and the beneficial impact from the Company repurchasing Class A shares. The Company repurchased approximately 11% of its outstanding shares since the second quarter of 2022.
• Net Cash Provided by Operating Activities was $113 million in 2024 compared to $148 million in 2023. Free Cash Flow was $56 million in 2024 compared to $77 million in 2023. The decline in Free Cash Flow was primarily due to a $35 million decrease in Net Cash Provided by Operating Activities mainly driven by reduced working capital benefits, partially offset by a $14 million decrease in capital expenditures.
• Net Debt was $350 million at December 31, 2024, compared to $470 million at December 31, 2023. The Debt Leverage Ratio decreased to 1.6x at December 31, 2024, from 2.0x at December 31, 2023.

Quad's Board of Directors approved an increase in the regular quarterly cash dividend from $0.05 per share, or $0.20 per share on an annualized basis, to $0.075 per share, or $0.30 per share on an annualized basis. The dividend will be payable on March 14, 2025, to shareholders of record as of February 28, 2025.

The Company's full-year 2025 financial guidance excludes the European operations to be divested and is as follows:

⁽¹⁾ Organic Annual Net Sales Change excludes the 2024 Net Sales of $153 million from the Company's European operations.
⁽²⁾ Debt Leverage Ratio is calculated at the midpoint of the Adjusted EBITDA guidance.