Quad Reports Second Quarter and Year-to-Date 2025 Results | QUAD Stock News

Reaffirms Full-Year 2025 Financial GuidanceContinues Investing in Strategic Growth Areas — Data and Audience Intelligence, AI-Enabled Tools and Systems, and In-Store Retail Media Network, /PRNewswire/ -- Quad/Graphics, Inc. (NYSE: QUAD) ("Quad" or the "Company"), a marketing experience company that solves complex marketing challenges for its clients, today reported results for the second quarter ended June 30, 2025. Recent HighlightsRealized Net Sales of $572 million in the second quarter of 2025 compared to $634 million in the second quarter of 2024, representing a 10% decline in Net Sales. Net Sales declined 4% when excluding the 6% impact of the February 28, 2025, divestiture of the Company's European operations.Recognized Net Loss of $0.1 million or $0.00 Diluted Loss Per Share in the second quarter of 2025, compared to a Net Loss of $3 million or $0.06 Diluted Loss Per Share in 2024.Achieved Non-GAAP Adjusted EBITDA of $43 million in the second quarter of 2025, compared to $52 million in 2024.Reported $0.14 Adjusted Diluted Earnings Per Share in the second quarter of 2025, increased from $0.12 per share in 2024.Released Audience Builder 2.0, continuing to activate Quad's proprietary household-based data stack with clients to enhance media buying with precision at scale and to increase response rates through improved audience intelligence.Announced In-Store Connect retail media network partnership with Vallarta Supermarkets, one of California's leading Latino-owned grocery chains.Repurchased 1.4 million shares of Quad Class A common stock in 2025, bringing total repurchases to 7.3 million shares since commencing buybacks in 2022, representing approximately 13% of Quad's March 31, 2022, outstanding shares.Declared quarterly dividend of $0.075 per share.Reaffirms full-year 2025 financial guidance.Joel Quadracci, Chairman, President and Chief Executive Officer of Quad, said: "Second quarter and year-to-date results met our expectations as we continue to differentiate ourselves as a marketing experience company that simplifies the complexities of marketing for brands and marketers. This includes ongoing investments in strategic growth areas such as data and audience intelligence, AI-enabled tools and systems, and our In-Store Connect retail media network. We remain confident in Quad's vision and our ability to unlock diversified growth, improve print and marketing efficiencies, and create value for our stakeholders."Marketers increasingly rely on audience intelligence to drive stronger campaign outcomes and quantifiable ROI, and Quad's proprietary household-based data stack gives us a competitive edge. We are actively applying our AI-powered data stack to client work across all channels—digital and physical. With strategic insights on 92% of U.S. households—including demographic, transactional, attitudinal and behavioral characteristics as well as personal interests or, what we call, passions—we are able to connect the right message with the right audience at the right time and in the right channels. In the quarter, we launched Audience Builder 2.0, an AI-powered tool that enables Quad employees to easily create complex, high-propensity audiences. This represents a significant milestone in data activation."We continue to grow our In-Store Connect retail media network among mid-market grocers and CPG brands seeking deeper engagement with high-value shopper audiences. We recently signed a new partnership with Vallarta, one of California's leading Latino-owned grocery chains, and doubled our footprint with The Save Mart Companies. Campaigns leveraging In-Store Connect have been shown to drive greater brand awareness and product sales—especially when promotional offers are included—and also boost sales across entire product categories. Through our solution, we continue to help brick-and-mortar retailers adapt their marketing strategies and tactics to keep pace with an ever-evolving media landscape."Added Tony Staniak, Chief Financial Officer of Quad: "Despite ongoing uncertainties in the macroeconomic environment, we are reaffirming our 2025 guidance. We will continue to closely monitor the potential impacts of tariffs and inflationary pressures, as well as postal rate increases, on our clients while investing in innovative offerings to achieve our long-term financial goals, including net sales growth. Additionally, with our balanced capital allocation we have returned $15 million of capital to shareholders thus far in 2025 through our quarterly dividend of $0.075 per share and share repurchases. Year-to-date, we repurchased 1.4 million shares, bringing total repurchases to 7.3 million shares since commencing buybacks in 2022, representing approximately 13% of our March 31, 2022, outstanding shares. Our next quarterly dividend is payable September 5, 2025, and we expect to continue to be opportunistic in terms of future share repurchases."SecondQuarter 2025 Financial ResultsNet Sales were $572 million in the second quarter of 2025, a decrease of 10% compared to the same period in 2024. Excluding the 6% impact of the divestiture of the Company's European operations, Net Sales declined 4%. The decline in Net Sales was primarily due to lower paper and logistics sales.Net Loss was $0.1 million, or $0.00 Diluted Loss Per Share, in the second quarter of 2025 compared to Net Loss of $3 million, or $0.06 Diluted Loss Per Share, in the second quarter of 2024. The improvement was primarily due to lower selling, general and administrative expenses, lower depreciation and amortization, lower interest expense, benefits from increased manufacturing productivity and savings from cost reduction initiatives, partially offset by the impact from lower Net Sales, increased investments in innovative offerings to drive future revenue growth, and the divestiture of the Company's European operations.Adjusted EBITDA was $43 million in the second quarter of 2025 as compared to $52 million in the same period in 2024. The decrease was primarily due to the impact of lower sales, increased investments in innovative offerings to drive future revenue growth, and the divestiture of the Company's European operations, partially offset by lower selling, general and administrative expenses, benefits from improved manufacturing productivity and savings from cost reduction initiatives.Adjusted Diluted Earnings Per Share was $0.14 in the second quarter of 2025, as compared to $0.12 in the second quarter of 2024.Year-to-Date 2025 Financial ResultsNet Sales were $1.2 billion in the six months ended June 30, 2025, a decrease of 7% compared to the same period in 2024. Excluding the 4% impact of the divestiture of the Company's European operations, Net Sales declined 3%. The decline in Net Sales was primarily due to lower paper sales and lower logistics and agency solutions sales, including the loss of a large grocery client.Net Earnings were $6 million, or $0.11 Diluted Earnings Per Share, in the six months ended June 30, 2025, compared to Net Loss of $31 million, or $0.65 Diluted Loss Per Share, in the same period in 2024. The improvement was primarily due to lower restructuring, impairment and transaction-related charges, lower depreciation and amortization, lower selling, general and administrative expenses, lower interest expense, benefits from increased manufacturing productivity and savings from cost reduction initiatives, partially offset by the impact from lower Net Sales, increased investments in innovative offerings to drive future revenue growth, and the divestiture of the Company's European operations.Adjusted EBITDA was $89 million in the six months ended June 30, 2025, as compared to $102 million in the same period in 2024. The decrease was primarily due to the impact of lower sales, increased investments in innovative offerings to drive future revenue growth, and the divestiture of the Company's European operations, partially offset by lower selling, general and administrative expenses, benefits from improved manufacturing productivity and savings from cost reduction initiatives.Adjusted Diluted Earnings Per Share was $0.34 in the six months ended June 30, 2025, as compared to $0.22 in the same period in 2024.Net Cash Used in Operating Activities was $42 million in the six months ended June 30, 2025, compared to $48 million in the six months ended June 30, 2024. Free Cash Flow improved $16 million from last year to negative $66 million in the six months ended June 30, 2025, and included $34 million of Free Cash Flow Generation in the second quarter of 2025. The increase in Free Cash Flow was primarily due to higher cash earnings, including lower restructuring payments and lower interest payments, and a $9 million decrease in capital expenditures. As a reminder, the Company historically generates most of its Free Cash Flow in the fourth quarter of the year.Net Debt was $448 million at June 30, 2025, as compared to $350 million at December 31, 2024 and $532 million at June 30, 2024. Compared to December 31, 2024, Net Debt increased primarily due to seasonally negative $66 million of Free Cash Flow in the six months ended June 30, 2025, a $16 million payment for the Enru co-mailing asset acquisition and $15 million return of capital to shareholders through share repurchases and dividends.DividendQuad's next quarterly dividend of $0.075 per share will be payable on September 5, 2025, to shareholders of record as of August 18, 2025.2025 GuidanceThe Company's full-year 2025 financial guidance is unchanged and is as follows:Financial Metric2025 GuidanceAdjusted Annual Net Sales Change (1)2% to 6% declineFull-Year Adjusted EBITDA$180 million to $220 millionFree Cash Flow$40 million to $60 millionCapital Expenditures$65 million to $75 millionYear-End Debt Leverage Ratio (2)Approximately 1.5x(1) Adjusted Annual Net Sales Change excludes the 2025 Net Sales of $23 million and the 2024 Net Sales of $153 million from the Company's European operations, divested on February 28, 2025.(2) Debt Leverage Ratio is calculated at the midpoint of the Adjusted EBITDA guidance.Conference Call and Webcast InformationQuad will hold a conference call at 8:30 a.m. ET on Wednesday, July 30, 2025, hosted by Joel Quadracci, Chairman, President and CEO of Quad, and Tony Staniak, Chief Financial Officer of Quad. The full earnings release and slide presentation will be concurrently available on the Investors section of Quad's website at http://www.quad.com/investor-relations. As part of the conference call, Quad will conduct a question-and-answer session.Participants can pre-register for the webcast by navigating to https://dpregister.com/sreg/10200660/ff66008eec. Participants will be given a unique PIN to access the call on July 30. Participants may pre-register at any time, including up to and after the call start time.Alternatively, participants may dial in on the day of the call as follows:U.S. Toll-Free: 1-877-328-5508International Toll: 1-412-317-5424An audio replay of the call will be posted on the Investors section of Quad's website shortly after the conference call ends. In addition, telephone playback will also be available until August 30, 2025, accessible as follows:U.S. Toll-Free: 1-877-344-7529International Toll: 1-412-317-0088Replay Access Code: 4343586About QuadQuad (NYSE: QUAD) is a marketing experience, or MX, company that helps brands make direct consumer connections, from household to in-store to online. The company does this through its MX Solutions Suite, a comprehensive range of marketing and print services that seamlessly integrate creative, production and media solutions across online and offline channels. Supported by state-of-the-art technology and data-driven intelligence, Quad simplifies the complexities of marketing by removing friction wherever it occurs along the marketing journey. The company tailors its uniquely flexible, scalable and connected solutions to each clients' objectives, driving cost efficiencies, improving speed-to-market, strengthening marketing effectiveness and delivering value on client investments.Quad employs approximately 11,000 people in 11 countries and serves approximately 2,100 clients including industry leading blue-chip companies that serve both businesses and consumers in multiple industry verticals, with a particular focus on commerce, including retail, consumer packaged goods, and direct-to-consumer; financial services; and health. Quad is ranked among the largest agency companies in the U.S. by Ad Age, buoyed by its full-service media agency, Rise, and creative agency, Betty. Quad is also one of the largest commercial printers in North America, according to Printing Impressions.For more information about Quad, including its commitment to operating responsibly, intentional innovation and values-driven culture, visit quad.com.Forward-Looking StatementsThis press release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding, among other things, our current expectations about the Company's future results, financial condition, sales, earnings, free cash flow, margins, objectives, goals, strategies, beliefs, intentions, plans, estimates, prospects, projections and outlook of the Company and can generally be identified by the use of words or phrases such as "may," "will," "expect," "intend," "estimate," "anticipate," "plan," "foresee," "project," "believe," "continue" or the negatives of these terms, variations on them and other similar expressions. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results to be materially different from those expressed in or implied by such forward-looking statements. Forward-looking statements are based largely on the Company's expectations and judgments and are subject to a number of risks and uncertainties, many of which are unforeseeable and beyond our control.The factors that could cause actual results to materially differ include, among others: the impact of increased business complexity as a result of the Company's transformation to a marketing experience company, including adapting marketing offerings and business processes as required by new markets and technologies, such as artificial intelligence; the impact of decreasing demand for printing services and significant overcapacity in a highly competitive environment creates downward pricing pressures and potential under-utilization of assets; the impact of increases in its operating costs, including the cost and availability of raw materials (such as paper, ink components and other materials), inventory, parts for equipment, labor, fuel and other energy costs and freight rates; the impact of changes in postal rates, service levels or regulations; the impact macroeconomic conditions, including inflation and elevated interest rates, as well as postal rate increases, tariffs, trade restrictions, cost pressures and the price and availability of paper, have had, and may continue to have, on the Company's business, financial condition, cash flows and results of operations (including future uncertain impacts); the inability of the Company to reduce costs and improve operating efficiency rapidly enough to meet market conditions; the impact of a data-breach of sensitive information, ransomware attack or other cyber incident on the Company; the fragility and decline in overall distribution channels; the failure to attract and retain qualified talent across the enterprise; the impact of digital media and similar technological changes, including digital substitution by consumers; the failure of clients to perform under contracts or to renew contracts with clients on favorable terms or at all; the impact of risks associated with the operations outside of the United States ("U.S."), including trade restrictions, currency fluctuations, the global economy, costs incurred or reputational damage suffered due to improper conduct of its employees, contractors or agents, and geopolitical events like war and terrorism; the impact negative publicity could have on our business and brand reputation; the failure to successfully identify, manage, complete, integrate and/or achieve the intended benefits of acquisitions, investment opportunities or other significant transactions, as well as the successful identification and execution of strategic divestitures; the impact of significant capital expenditures and investments that may be needed to sustain and grow the Company's platforms, processes, systems, client and product technology, marketing and talent, to remain technologically and economically competitive, and to adapt to future changes, such as artificial intelligence; the impact of the various restrictive covenants in the Company's debt facilities on the Company's ability to operate its business, as well as the uncertain negative impacts macroeconomic conditions may have on the Company's ability to continue to be in compliance with these restrictive covenants; the impact of an other than temporary decline in operating results and enterprise value that could lead to non-cash impairment charges due to the impairment of property, plant and equipment and other intangible assets; the impact of regulatory matters and legislative developments or changes in laws, including changes in cyber-security, privacy and environmental laws; and the impact on the holders of Quad's class A common stock of a limited active market for such shares and the inability to independently elect directors or control decisions due to the voting power of the class B common stock; and the other risk factors identified in the Company's most recent Annual Report on Form 10-K, which may be amended or supplemented by subsequent Quarterly Reports on Form 10-Q or other reports filed with the Securities and Exchange Commission.Except to the extent required by the federal securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.Non-GAAP Financial Measures This press release contains financial measures not prepared in accordance with generally accepted accounting principles (referred to as non-GAAP), specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Net Debt, Debt Leverage Ratio and Adjusted Diluted Earnings Per Share. Adjusted EBITDA is defined as net earnings (loss) excluding interest expense, income tax expense, depreciation and amortization (EBITDA) and restructuring, impairment and transaction-related charges, net. EBITDA Margin and Adjusted EBITDA Margin are defined as either EBITDA or Adjusted EBITDA divided by net sales. Free Cash Flow is defined as net cash used in operating activities less purchases of property, plant and equipment. Debt Leverage Ratio is defined as total debt and finance lease obligations less cash and cash equivalents (Net Debt) divided by the last twelve months of Adjusted EBITDA. Adjusted Diluted Earnings Per Share is defined as earnings (loss) before income taxes excluding restructuring, impairment and transaction-related charges, net, and adjusted for income tax expense at a normalized tax rate, divided by diluted weighted average number of common shares outstanding.The Company believes that these non-GAAP measures, when presented in conjunction with comparable GAAP measures, provide additional information for evaluating Quad's performance and are important measures by which Quad's management assesses the profitability and liquidity of its business. These non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net earnings (loss) as a measure of operating performance or to cash flows used in operating activities as a measure of liquidity. These non-GAAP measures may be different than non-GAAP financial measures used by other companies. Reconciliations to the GAAP equivalent of these non-GAAP measures are contained in tabular form on the attached unaudited financial statements.Investor Relations ContactDon PontesExecutive Director of Investor Relations916-532-7074dwpontes@quad.comMedia ContactClaire HoDirector of Corporate Communications414-566-2955cho@quad.comQUAD/GRAPHICS,INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSFor the Three Months Ended June30, 2025 and 2024(in millions, except per share data)(UNAUDITED)Three Months Ended June 30,20252024Net sales$ 571.9$ 634.2Cost of sales448.1493.9Selling, general and administrative expenses80.288.7Depreciation and amortization20.726.4Restructuring, impairment and transaction-related charges, net9.210.1Total operating expenses558.2619.1Operating income13.715.1Interest expense13.217.2Net pension expense (income)0.3(0.2)Earnings (loss) before income taxes0.2(1.9)Income tax expense0.30.9Net loss$ (0.1)$ (2.8)Loss per shareBasic and diluted$ 0.00$ (0.06)Weighted average number of common shares outstandingBasic and diluted47.647.7QUAD/GRAPHICS,INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSFor the Six Months Ended June30, 2025 and 2024(in millions, except per share data)(UNAUDITED)Six Months Ended June 30,20252024Net sales$ 1,201.3$ 1,289.0Cost of sales948.11,015.2Selling, general and administrative expenses163.7171.8Depreciation and amortization40.455.0Restructuring, impairment and transaction-related charges, net15.842.6Total operating expenses1,168.01,284.6Operating income33.34.4Interest expense25.632.4Net pension expense (income)0.7(0.4)Earnings (loss) before income taxes7.0(27.6)Income tax expense1.33.3Net earnings (loss)$ 5.7$ (30.9)Earnings (loss) per shareBasic$ 0.12$ (0.65)Diluted$ 0.11$ (0.65)Weighted average number of common shares outstandingBasic47.847.4Diluted50.147.4QUAD/GRAPHICS,INC.CONDENSED CONSOLIDATED BALANCE SHEETSAs of June30, 2025 and December31, 2024(in millions)(UNAUDITED)June 30, 2025December 31,2024ASSETSCash and cash equivalents$ 6.7$ 29.2Receivables,lessallowances for credit losses290.0273.2Inventories153.4162.4Prepaid expenses and other current assets42.769.5Total current assets492.8534.3Property, plant and equipment—net485.8499.7Operating lease right-of-use assets—net74.278.9Goodwill107.6100.3Other intangible assets—net16.47.2Other long-term assets64.078.6Total assets$ 1,240.8$ 1,299.0LIABILITIES AND SHAREHOLDERS' EQUITYAccounts payable$ 288.4$ 356.7Other current liabilities190.0289.2Short-term debt and current portion of long-term debt32.528.0Current portion of finance lease obligations0.80.8Current portion of operating lease obligations22.624.0Total current liabilities534.3698.7Long-term debt420.5349.1Finance lease obligations1.11.3Operating lease obligations57.161.4Deferred income taxes3.83.2Other long-term liabilities137.0135.4Total liabilities1,153.81,249.1Shareholders' equityPreferred stock——Common stock1.41.4Additional paid-in capital843.1842.8Treasury stock, at cost(35.5)(28.0)Accumulated deficit(637.0)(635.1)Accumulated other comprehensive loss(85.0)(131.2)Total shareholders' equity87.049.9Total liabilities and shareholders' equity$ 1,240.8$ 1,299.0QUAD/GRAPHICS,INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFor the Six Months Ended June30, 2025 and 2024(in millions)(UNAUDITED)Six Months Ended June 30,20252024OPERATING ACTIVITIESNet earnings (loss)$ 5.7$ (30.9)Adjustments to reconcile net earnings (loss) to net cash used in operating activities:Depreciation and amortization40.455.0Impairment charges4.513.7Amortization of debt issuance costs and original issue discount0.80.8Stock-based compensation3.84.4Loss on the sale of a business0.5—Gain on the sale of an investment—(4.1)Gain on the sale or disposal of property, plant and equipment, net(4.5)(1.4)Deferred income taxes0.6(0.1)Changes in operating assets and liabilities - net of acquisitions and divestitures(93.4)(85.7)Net cash used in operating activities(41.6)(48.3)INVESTING ACTIVITIESPurchases of property, plant and equipment(24.3)(33.5)Cost investment in unconsolidated entities(0.2)(0.2)Proceeds from the sale of property, plant and equipment5.34.8Proceeds from the sale of an investment—22.2Acquisition of a business(16.3)—Other investing activities(2.7)0.5Net cash used in investing activities(38.2)(6.2)FINANCING ACTIVITIESPayments of current and long-term debt(13.0)(119.3)Payments of finance lease obligations(0.7)(1.6)Borrowings on revolving credit facilities678.4776.0Payments on revolving credit facilities(590.7)(686.4)Proceeds from issuance of long-term debt—52.8Purchases of treasury stock(7.6)—Equity awards redeemed to pay employees' tax obligations(3.6)(2.1)Payment of cash dividends(7.4)(4.7)Other financing activities—(0.2)Net cash provided by financing activities55.414.5Effect of exchange rates on cash and cash equivalents0.2(0.1)Net decrease in cash and cash equivalents, including cash classified as held for sale(24.2)(40.1)Less: net decrease in cash classified as held for sale(1.7)—Net decrease in cash and cash equivalents(22.5)(40.1)Cash and cash equivalents at beginning of period29.252.9Cash and cash equivalents at end of period$ 6.7$ 12.8QUAD/GRAPHICS,INC.SEGMENT FINANCIAL INFORMATIONFor the Three and Six Months Ended June30, 2025 and 2024(in millions)(UNAUDITED)NetSalesOperatingIncome (Loss)Restructuring,ImpairmentandTransaction-RelatedCharges, Net (1)Three months endedJune 30, 2025United States Print and Related Services$ 524.5$ 22.8$ 8.6International47.43.90.2Total operating segments571.926.78.8Corporate—(13.0)0.4Total$ 571.9$ 13.7$ 9.2Three months endedJune 30, 2024United States Print and Related Services$ 544.3$ 25.4$ 9.3International89.92.30.8Total operating segments634.227.710.1Corporate—(12.6)—Total$ 634.2$ 15.1$ 10.1Six months endedJune 30, 2025United States Print and Related Services$ 1,078.3$ 54.5$ 12.1International123.04.53.0Total operating segments1,201.359.015.1Corporate—(25.7)0.7Total$ 1,201.3$ 33.3$ 15.8Six months endedJune 30, 2024United States Print and Related Services$ 1,123.2$ 24.1$ 40.9International165.85.71.6Total operating segments1,289.029.842.5Corporate—(25.4)0.1Total$ 1,289.0$ 4.4$ 42.6______________________________(1) Restructuring, impairment and transaction-related charges, net are included within operating income (loss).QUAD/GRAPHICS,INC.RECONCILIATION OF GAAP TO NON-GAAP MEASURESEBITDA, EBITDA MARGIN, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGINFor the Three Months Ended June30, 2025 and 2024(in millions, except margin data)(UNAUDITED)Three Months Ended June 30,20252024Net loss$ (0.1)$ (2.8)Interest expense13.217.2Income tax expense0.30.9Depreciation and amortization20.726.4EBITDA (non-GAAP)$ 34.1$ 41.7EBITDA Margin (non-GAAP)6.0%6.6%Restructuring, impairment and transaction-related charges, net (1)9.210.1Adjusted EBITDA (non-GAAP)$ 43.3$ 51.8Adjusted EBITDA Margin (non-GAAP)7.6%8.2%______________________________(1) Operating results for the three months ended June30, 2025 and 2024, were affected by the following restructuring, impairment and transaction-related charges, net:Three Months Ended June 30,20252024Employee termination charges (a)$ 5.8$ 3.2Impairment charges (b)4.21.1Transaction-related charges (c)0.40.4Integration costs (d)0.20.1Other restructuring charges (income) (e)(1.4)5.3Restructuring, impairment and transaction-related charges, net$ 9.2$ 10.1______________________________(a) Employee termination charges were related to workforce reductions through facility consolidations and separation programs.(b) Impairment charges were for certain property, plant and equipment no longer being utilized in production as a result of facility consolidations and other capacity reductionactivities, as well as software licensing and related implementation costs from a terminated project, and charges for operating lease right-of-use assets.(c) Transaction-related charges consisted of professional service fees related to business acquisition and divestiture activities.(d) Integration costs were primarily costs related to the integration of acquired companies.(e) Other restructuring charges (income) primarily include costs to maintain and exit closed facilities, as well as lease exit charges, and are presented net of a $4.3 million gain on the sale of the West Sacramento, California facility during the three months ended June30, 2025.In addition to financial measures prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), this earnings announcement also contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Net Debt, Debt Leverage Ratio and Adjusted Diluted Earnings Per Share. The Company believes that these non-GAAP measures, when presented in conjunction with comparable GAAP measures, provide additional information for evaluating Quad's performance and are important measures by which Quad's management assesses the profitability and liquidity of its business. These non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net earnings (loss) as a measure of operating performance or to cash flows provided by (used in) operating activities as a measure of liquidity. These non-GAAP measures may be different than non-GAAP financial measures used by other companies.QUAD/GRAPHICS,INC.RECONCILIATION OF GAAP TO NON-GAAP MEASURESEBITDA, EBITDA MARGIN, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGINFor the Six Months Ended June30, 2025 and 2024(in millions, except margin data)(UNAUDITED)Six Months Ended June 30,20252024Net earnings (loss)$ 5.7$ (30.9)Interest expense25.632.4Income tax expense1.33.3Depreciation and amortization40.455.0EBITDA (non-GAAP)$ 73.0$ 59.8EBITDA Margin (non-GAAP)6.1%4.6%Restructuring, impairment and transaction-related charges, net (1)15.842.6Adjusted EBITDA (non-GAAP)$ 88.8$ 102.4Adjusted EBITDA Margin (non-GAAP)7.4%7.9%______________________________(1) Operating results for the six months ended June30, 2025 and 2024, were affected by the following restructuring, impairment and transaction-related charges, net:Six Months Ended June 30,20252024Employee termination charges (a)$ 6.5$ 16.9Impairment charges (b)4.513.7Transaction-related charges (c)3.00.9Integration costs (d)0.20.2Other restructuring charges (e)1.610.9Restructuring, impairment and transaction-related charges, net$ 15.8$ 42.6______________________________(a) Employee termination charges were related to workforce reductions through facility consolidations and separation programs.(b) Impairment charges were for certain property, plant and equipment no longer being utilized in production as a result of facility consolidations and other capacity reduction activities, as well as software licensing and related implementation costs from a terminated project, and charges for operating lease right-of-use assets.(c) Transaction-related charges consisted of professional service fees related to business acquisition and divestiture activities, including charges related to the sale of the European operations.(d) Integration costs were primarily costs related to the integration of acquired companies.(e) Other restructuring charges primarily include costs to maintain and exit closed facilities, as well as lease exit charges, and are presented net of a $4.3 million gain on the sale of the West Sacramento, California facility during the six months ended June30, 2025.In addition to financial measures prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), this earnings announcement also contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Net Debt, Debt Leverage Ratio and Adjusted Diluted Earnings Per Share. The Company believes that these non-GAAP measures, when presented in conjunction with comparable GAAP measures, provide additional information for evaluating Quad's performance and are important measures by which Quad's management assesses the profitability and liquidity of its business. These non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net earnings (loss) as a measure of operating performance or to cash flows provided by (used in) operating activities as a measure of liquidity. These non-GAAP measures may be different than non-GAAP financial measures used by other companies.QUAD/GRAPHICS,INC.RECONCILIATION OF GAAP TO NON-GAAP MEASURESFREE CASH FLOWFor the Six Months Ended June30, 2025 and 2024(in millions)(UNAUDITED)Six Months Ended June 30,20252024Net cash used in operating activities$ (41.6)$ (48.3)Less: purchases of property, plant and equipment24.333.5Free Cash Flow (non-GAAP)$ (65.9)$ (81.8)In addition to financial measures prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), this earnings announcement also contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Net Debt, Debt Leverage Ratio and Adjusted Diluted Earnings Per Share. The Company believes that these non-GAAP measures, when presented in conjunction with comparable GAAP measures, provide additional information for evaluating Quad's performance and are important measures by which Quad's management assesses the profitability and liquidity of its business. These non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net earnings (loss) as a measure of operating performance or to cash flows provided by (used in) operating activities as a measure of liquidity. These non-GAAP measures may be different than non-GAAP financial measures used by other companies.QUAD/GRAPHICS,INC.RECONCILIATION OF GAAP TO NON-GAAP MEASURESNET DEBT AND DEBT LEVERAGE RATIOAs of June30, 2025 and December31, 2024(in millions, except ratio)(UNAUDITED)June 30, 2025December 31,2024Total debt and finance lease obligations on the condensed consolidated balance sheets$ 454.9$ 379.2Less: Cash and cash equivalents6.729.2Net Debt (non-GAAP)$ 448.2$ 350.0Divided by: trailing twelve months Adjusted EBITDA (non-GAAP) (1)$ 210.4$ 224.0Debt Leverage Ratio (non-GAAP) 2.13 x 1.56 x______________________________(1) The calculation of Adjusted EBITDA for the trailing twelve months ended June30, 2025, and December31, 2024, was as follows:AddSubtractTrailing Twelve Months EndedYear EndedSix Months EndedDecember 31, 2024(a)(UNAUDITED)June 30, 2025(UNAUDITED)June 30, 2024(UNAUDITED)June 30, 2025Net earnings (loss)$ (50.9)$ 5.7$ (30.9)$ (14.3)Interest expense64.525.632.457.7Income tax expense6.41.33.34.4Depreciation and amortization102.540.455.087.9EBITDA (non-GAAP)$ 122.5$ 73.0$ 59.8$ 135.7Restructuring, impairment and transaction-related charges, net101.515.842.674.7Adjusted EBITDA (non-GAAP)$ 224.0$ 88.8$ 102.4$ 210.4______________________________(a) Financial information for the year ended December31, 2024, is included as reported in the Company's 2024 Annual Report on Form10-K filed with the SEC on February21, 2025.In addition to financial measures prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), this earnings announcement also contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Net Debt, Debt Leverage Ratio and Adjusted Diluted Earnings Per Share. The Company believes that these non-GAAP measures, when presented in conjunction with comparable GAAP measures, provide additional information for evaluating Quad's performance and are important measures by which Quad's management assesses the profitability and liquidity of its business. These non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net earnings (loss) as a measure of operating performance or to cash flows provided by (used in) operating activities as a measure of liquidity. These non-GAAP measures may be different than non-GAAP financial measures used by other companies.QUAD/GRAPHICS,INC.RECONCILIATION OF GAAP TO NON-GAAP MEASURESADJUSTED DILUTED EARNINGS PER SHAREFor the Three Months Ended June30, 2025 and 2024(in millions, except per share data)(UNAUDITED)Three Months Ended June 30,20252024Earnings (loss) before income taxes$ 0.2$ (1.9)Restructuring, impairment and transaction-related charges, net9.210.1Adjusted net earnings, before income taxes (non-GAAP)9.48.2Income tax expense at 25% normalized tax rate2.42.1Adjusted net earnings (non-GAAP)$ 7.0$ 6.1Basic weighted average number of common shares outstanding47.647.7Plus: effect of dilutive equity incentive instruments (non-GAAP)1.92.4Diluted weighted average number of common shares outstanding (non-GAAP)49.550.1Adjusted diluted earnings per share (non-GAAP) (1)$ 0.14$ 0.12Diluted loss per share (GAAP)$ 0.00$ (0.06)Restructuring, impairment and transaction-related charges, net per share0.190.20Income tax expense from condensed consolidated statement of operations per share0.010.02Income tax expense at 25% normalized tax rate per share(0.05)(0.04)Effect of dilutive equity incentive instruments(0.01)—Adjusted diluted earnings per share (non-GAAP) (1)$ 0.14$ 0.12______________________________(1) Adjusted diluted earnings per share excludes the following: (i) restructuring, impairment and transaction-related charges, net and (ii) discrete income tax items.In addition to financial measures prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), this earnings announcement also contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Net Debt, Debt Leverage Ratio and Adjusted Diluted Earnings Per Share. The Company believes that these non-GAAP measures, when presented in conjunction with comparable GAAP measures, provide additional information for evaluating Quad's performance and are important measures by which Quad's management assesses the profitability and liquidity of its business. These non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net earnings (loss) as a measure of operating performance or to cash flows provided by (used in) operating activities as a measure of liquidity. These non-GAAP measures may be different than non-GAAP financial measures used by other companies.QUAD/GRAPHICS,INC.RECONCILIATION OF GAAP TO NON-GAAP MEASURESADJUSTED DILUTED EARNINGS PER SHAREFor the Six Months Ended June30, 2025 and 2024(in millions, except per share data)(UNAUDITED)Six Months Ended June 30,20252024Earnings (loss) before income taxes$ 7.0$ (27.6)Restructuring, impairment and transaction-related charges, net15.842.6Adjusted net earnings, before income taxes (non-GAAP)22.815.0Income tax expense at 25% normalized tax rate5.73.8Adjusted net earnings (non-GAAP)$ 17.1$ 11.2Basic weighted average number of common shares outstanding47.847.4Plus: effect of dilutive equity incentive instruments (1)2.32.5Diluted weighted average number of common shares outstanding (1)50.149.9Adjusted diluted earnings per share (non-GAAP) (2)$ 0.34$ 0.22Diluted earnings (loss) per share (GAAP)$ 0.11$ (0.65)Restructuring, impairment and transaction-related charges, net per share0.320.85Income tax expense from condensed consolidated statement of operations per share0.030.07Income tax expense at 25% normalized tax rate per share(0.11)(0.08)Effect of dilutive equity incentive instruments(0.01)0.03Adjusted diluted earnings per share (non-GAAP) (2)$ 0.34$ 0.22______________________________(1) Effect of dilutive equity incentive instruments and diluted weighted average number of common shares outstanding for the six months ended June 30, 2024 are non-GAAP.(2) Adjusted diluted earnings per share excludes the following: (i) restructuring, impairment and transaction-related charges, net and (ii) discrete income tax items.In addition to financial measures prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), this earnings announcement also contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Net Debt, Debt Leverage Ratio and Adjusted Diluted Earnings Per Share. The Company believes that these non-GAAP measures, when presented in conjunction with comparable GAAP measures, provide additional information for evaluating Quad's performance and are important measures by which Quad's management assesses the profitability and liquidity of its business. These non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net earnings (loss) as a measure of operating performance or to cash flows provided by (used in) operating activities as a measure of liquidity. These non-GAAP measures may be different than non-GAAP financial measures used by other companies.SOURCE Quad