#United States #Quad #Sussex #Earnings #Marketing Experience

Quad Reports First Quarter 2025 Results

On April 29, 2025, Quad/Graphics, Inc. (NYSE: QUAD) disclosed its financial outcomes for the first quarter of 2025, showcasing its ongoing transformation as a marketing experience company dedicated to resolving intricate marketing dilemmas for its clientele. Quad reported net sales of $629 million, a decrease of 4% compared to $655 million in the same quarter of the previous year. Notably, when adjusting for the divestiture of European operations on February 28, 2025, the year-on-year decline was 2% on an organic basis.

Highlights from the Report

• - Net Earnings Improvement: The company recognized net earnings amounting to $6 million or $0.11 per diluted share, a significant turnaround from a net loss of $28 million or $0.60 per diluted share recorded in Q1 2024.
• - Adjusted EBITDA Analysis: The adjusted EBITDA stood at $46 million, down from $51 million in 2024, reflecting the impact of reduced sales yet indicating resilience in operational productivity.
• - Increased Shareholder Returns: Quad's commitment to shareholders was reinforced by repurchasing 1.2 million shares of its Class A common stock year to date, totaling 7.2 million shares repurchased since initiating buybacks in 2022, which constitutes about 13% of the outstanding shares from March 31, 2022.

Quad's CEO, Joel Quadracci, commented on the results indicating they were in line with expectations and emphasized the focus on enhancing offerings through strategic investments in innovative solutions. The findings highlight the company’s robust data capabilities and commitment to connecting brands with consumers effectively, whether online, in-store, or through direct mail channels.

Key Operational Changes

• - Acquisition of Enru's Co-Mailing Assets: Quad has made strides in innovation by acquiring the co-mailing assets of Enru, a third-party co-mail and logistics solutions provider. This acquisition is expected to enhance efficiencies and bolster client offerings.
• - Expansion of Retail Media Network: In efforts to broaden its market presence, Quad has expanded its In-Store Connect retail media network by partnering with two new regional grocery chains, enhancing its ability to facilitate brand-consumer connections in physical retail environments.

Financial Overview

Despite the overall decrease in sales, Quad managed to improve net earnings, primarily driven by decreased restructuring and impairment charges as well as enhanced manufacturing productivity. The firm reported a net cash used in operating activities amounting to $89 million and free cash flow of negative $100 million for the first quarter, largely impacted by working capital dynamics and strategic stockpiling of materials in anticipation of potential tariffs.
Adapting to current market dynamics, Tony Staniak, CFO of Quad, remarked on their readiness to monitor economic indicators that may affect advertising and marketing spending, reaffirming the full-year financial guidance with expectations of an organic annual net sales change between a 2% to 6% decline.

Moving Forward

Looking ahead, Quad remains optimistic about its brand vision and the potential for growth driven by its comprehensive marketing solutions. The company is committed to leveraging its integrated marketing platform to create value for clients and shareholders alike. The quarterly dividend of $0.075 per share was also declared and will be payable on June 6, 2025.

Both the management team and investors are keenly aware of the broader economic conditions as the landscape continues to evolve, necessitating agility and continuous investment in innovative offerings to ensure sustainable growth long term.