SUSSEX,
Wis., Dec. 11, 2024 /PRNewswire/ --
Quad/Graphics, Inc. (NYSE: QUAD) ("Quad" or the "Companxy"), a
global marketing experience company, today announced that S&P
Global Ratings ("S&P") upgraded its issuer credit rating for
Quad to 'BB-' from 'B+' with a stable outlook. S&P also raised
its issue-level rating on the Company's senior secured debt to
'BB-'.
S&P based the rating upgrade primarily on Quad's active debt
repayment and improved leverage, and strong cost management
practices amid ongoing revenue pressures.
In its research update, S&P noted: "Due to the Company's
rapid debt repayment, it now expects it will reduce its reported
net leverage to 1.5x (approximately 2.3x on an S&P Global
Ratings-adjusted basis) by the end of 2024."
S&P added: "The stable outlook reflects our expectation that
the Company's S&P Global Ratings-adjusted leverage will remain
below 3x and its free operating cash flow (FOCF) to debt will
remain above 15% over the next 12 months, primarily due to its debt
repayment (using the proceeds from its asset sales) and a modest
improvement in its EBITDA margin to the 8%-9% range in 2024."
Joel Quadracci, Quad Chairman,
President & CEO, commented: "We are pleased to see S&P
recognize Quad's ongoing commitment to operational excellence and
balance sheet strength – a reflection of our long-standing
disciplined approach to managing all strategic and
financial aspects of our business. With our strong cash
generation and deleveraged balance sheet, Quad is well-positioned
to continue making strategic investments in innovative solutions
that align with our growth priorities as well as shareholder
returns including dividends and share buybacks."
The Company shared an overview of its strategy, growth
opportunities and long-term financial goals at its 2024 Investor
Day on November 20. The full
presentation, including webcast replay, is available for viewing on
Quad's Investor Relations site. Key takeaways from Investor Day
include:
- How Quad's proprietary household-based data stack is driving
new AI-backed solutions that enable brands to create highly
personalized content at scale across multiple marketing
channels.
- The significant market opportunity in omnichannel retail media
networks (RMNs) and Quad's investment in in-store RMNs.
- How brands and marketers are leveraging Quad's MX Solutions
Suite to streamline marketing efficiencies and drive business
outcomes.
- Quad's operational focus on its variable cost structure and
efficiencies, resulting in continued margin expansion.
- Quad's long-term financial goals, including 3-year goals for
revenue growth, EBITDA margin expansion, and increased free cash
flow conversion.
About Quad
Quad (NYSE: QUAD) is a global marketing experience company that
helps brands make direct consumer connections, from household to
in-store to online. Supported by state-of-the-art technology and
data-driven intelligence, Quad uses its suite of media, creative
and production solutions to streamline the complexities of
marketing and remove friction from wherever it occurs in the
marketing journey. Quad tailors its uniquely flexible, scalable and
connected solutions to clients' objectives, driving cost
efficiencies, improving speed to market, strengthening marketing
effectiveness, and delivering value on client investments.
Quad employs approximately 13,000 people in 14 countries and
serves approximately 2,700 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 Rise media agency
and Betty creative agency. Quad is also one the largest
commercial printers in North
America, according to Printing Impressions.
For more information about Quad, including its commitment to
ongoing innovation, culture and sustainable impact, visit
quad.com.
Forward-Looking Statements
This 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 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 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
changes in postal rates, service levels or regulations, including
delivery delays; the impact of fluctuations in costs (including
labor and labor-related costs, energy costs, freight rates and raw
materials, including paper and the materials to manufacture ink)
and the impact of fluctuations in the availability of raw
materials, including paper, parts for equipment and the materials
to manufacture ink; the impact macroeconomic conditions, including
inflation, high interest rates and recessionary concerns, as well
as cost and labor pressures, distribution challenges 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 failure to
successfully identify, manage, complete and integrate acquisitions,
investment opportunities or other significant transactions, as well
as the successful identification and execution of strategic
divestitures; the impact negative publicity could have on our
business and brand reputation; significant capital expenditures and
investments may be needed to sustain and grow the Company's
platforms, processes, systems, client and product technology,
marketing and talent, and to remain technologically and
economically competitive; 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
cybersecurity, privacy and environmental laws; 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.
Investor Relations Contact
Don Pontes
Executive Director of Investor Relations
916-532-7074
dwpontes@quad.com
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