Royle Printing is passionate about giving back to their employees and the community. Every August, right before the kickoff of a new school year, Royle sponsors new backpacks and school supplies for children associated with Royle employees. The children range in age and are the daughters, sons, and grandkids of our dedicated employees. Any and all are presented with a new backpack, filled with all the necessary and costly supplies to start the new school year. Royle is pleased to announce that the 2019 event resulted in more than 100 backpacks being presented to the kids. “Royle initiated this program several years ago to help support the families and kids within our organization. Every child deserves the confidence in starting the school year with a new set of supplies and a backpack, so they can be as successful as possible. We’ll do whatever it takes to support our employees and their families,” stated Royle President and CEO Chris Carpenter.
Quad/Graphics, Inc. (NYSE: QUAD) (“Quad” or the “Company”) today reported results for its third quarter ending September 30, 2019.
Key Actions to Accelerate Transformation
• Plans to divest book business that generates annual sales of $200 million as part of ongoing portfolio optimization.
• Expands cost reduction program to $50 million in annual savings.
• Resets quarterly dividend to $0.15 per share to provide additional financial flexibility to continue to scale its Quad 3.0 strategy and maintain a strong long-term balance sheet.
“We are making bold decisions to accelerate our transformation through investments in our business that will drive long-term growth and shareholder value, and provide us with the ability to take advantage of opportunities in the rapidly changing print industry,” said Joel Quadracci, Chairman, President & CEO. “Our Quad 3.0 transformation strategy is working as evidenced by $125 million of expected organic incremental sales growth in 2019, which helps offset over three percentage points of annual print sales decline. Our Quad 3.0 strategy is centered on our unique integrated marketing solutions platform that includes customer analytics, campaign strategies, media optimization and global production. These integrated services, supported by an industry-leading manufacturing platform, help clients drive growth by reducing complexity, enhancing efficiencies and improving marketing spend effectiveness across all channels.”
Quadracci continued: “We have made the strategic decision to divest our book business, which follows our recent sale of our non-core industrial wood crating business, Transpak. We will continue to optimize our product portfolio for the long-term to advance our Quad 3.0 transformation strategy. We’ve also made the decision to further streamline costs through our $50 million cost reduction program and proactively reset the dividend to provide additional financial flexibility for growth-focused opportunities that address our clients’ evolving needs and to maintain a strong balance sheet over the long term.”
Results for the three months ended September 30, 2019, included:
• Net sales (excluding discontinued operations) were $944 million in 2019 as compared to $974 million in 2018, down 3.1%. Organic sales declined 4.3% during the quarter, after excluding sales related to the January 2019 acquisition of Periscope. The organic results benefitted from new sales generated from the Company’s Quad 3.0 transformation strategy, which were offset by the ongoing print industry volume and pricing pressures, and a negative 0.5% impact from foreign exchange.
• Net loss attributable to Quad common shareholders was $126 million in 2019, or $2.52 diluted loss per share, as compared to net earnings of $23 million in 2018, or $0.46 diluted earnings per share, and includes a $79 million loss on discontinued operations. Net loss from continuing operations was $47 million, or $0.94 diluted loss per share, as compared to net earnings from continuing operations of $27 million, or $0.56 diluted earnings per share.
• Adjusted EBITDA (excluding discontinued operations) was $80 million in 2019, as compared to $107 million in 2018, and Adjusted EBITDA margin was 8.4% in 2019, as compared to 11.0% in 2018. The variance to prior year primarily reflects $8 million of strategic investments made to increase hourly production employees’ wages, $8 million from the reduction in market price for paper byproduct recoveries, and the impact from the organic sales decline of 4.3%.
Results for the nine months ended September 30, 2019, included:
• Net Sales (excluding discontinued operations) were $2.9 billion in both 2019 and 2018. Organic sales declined 2.6% after excluding sales related to the acquisitions of Ivie and Periscope, and an investment in Rise Interactive. The organic results reflect new sales generated from the Company’s Quad 3.0 transformation strategy, offset by ongoing print industry volume and pricing pressures, and a negative 0.7% impact from foreign exchange.
• Net Loss Attributable to Quad Common Shareholders was $164 million in 2019, or $3.28 diluted loss per share, as compared to net earnings of $29 million in 2018, or $0.57 diluted earnings per share, and includes a $101 million loss from discontinued operations. Net loss from continuing operations was $63 million, or $1.26 diluted loss per share, as compared to net earnings from continuing operations of $41 million, or $0.81 diluted earnings per share.
• Adjusted EBITDA (excluding discontinued operations) was $239 million, as compared to $310 million in 2018, and Adjusted EBITDA margin was 8.4% in 2019, as compared to 10.8% in 2018. The variance to prior year primarily reflects $24 million in non-recurring benefits in 2018 that did not repeat at the same level in 2019, a $24 million impact from strategic investments made to increase hourly production employees’ wages, a $14 million impact from the reduction in market price for paper byproduct recoveries, and the impact from the organic sales decline of 2.6%.
• Net Cash Provided by Operating Activities — Net cash provided by operating activities was $4 million in 2019, as compared to $47 million in 2018, primarily due a $45 million reverse termination fee paid to LSC Communications during the third quarter 2019 and lower net earnings, partially offset by an improvement in cash provided from working capital.
• Free Cash Flow — Free Cash Flow, after excluding $60 million in LSC-related payments, was negative $35 million in 2019, as compared to negative $38 million in 2018, primarily due to an improvement in cash provided from working capital, partially offset by lower net earnings and increased capital expenditures on long-term investments in automation and productivity improvements in the manufacturing platform. As a reminder, the Company generates the majority of its Free Cash Flow in the fourth quarter of the year.
details at: http://investors.qg.com/news-releases/news-release-details/quad-reports-third-quarter-and-year-date-2019-results