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What changed in Quad/Graphics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Quad/Graphics, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+370 added−380 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-22)

Top changes in Quad/Graphics, Inc.'s 2024 10-K

370 paragraphs added · 380 removed · 277 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

67 edited+67 added−73 removed42 unchanged
Biggest changeFor instance, the program partners with Quad’s Total Rewards team and external vendors to provide employees with retirement planning, financial wellness webinars and one-on-one meetings so they can strategically plan for their financial futures. ◦ QuadMed, the Company’s wholly owned health and wellness subsidiary, provides a differentiated set of benefits for Quad employees and dependents through: ▪ On-site and near-site primary and specialty healthcare, pharmacy, dental, vision and physical therapy services, and fitness centers at several large-scale employee locations. ▪ No-cost virtual primary care across nearly all 50 states that allows patients to connect regularly with the same doctor, building the level of trust and connection they’ve come to expect from in-person care. ▪ Nationwide behavioral health program with in-person and virtual counseling through licensed therapists.
Biggest changeBeyond traditional, expected benefits, the Company offers expansive health and wellness benefits, including: ◦ QuadMed, the Company’s wholly owned health and wellness subsidiary, which provides a differentiated set of benefits for Quad employees and dependents through on-site and near-site primary and specialty health centers; no-cost virtual primary care across all 50 states; and a nationwide behavioral health program with in-person and virtual counseling.
Golden served as Vice President, Global Digital Marketing for Xerox from March 2015 to June 2016; as Chief Marketing Officer of Story Worldwide from September 2011 to March 2015; as Chief Digital Officer of Grey Group from September 2010 to September 2011; as Managing Director, Digital of Havas from December 2007 to September 2010; as Group Director of Digital Marketing for NBC Universal from January 2006 to December 2007; and as Head of Digital at Young & Rubicam from November 2000 to January 2006.
Golden served as Vice President of Global Digital Marketing for Xerox from March 2015 to June 2016; as Chief Marketing Officer of Story Worldwide from September 2011 to March 2015; as Chief Digital Officer of Grey Group from September 2010 to September 2011; as Managing Director of Digital at Havas from December 2007 to September 2010; as Group Director of Digital Marketing for NBC Universal from January 2006 to December 2007; and as Head of Digital at Young & Rubicam from November 2000 to January 2006.
Joining Quad’s legal department in 2007 as Employment Counsel, she advanced to Assistant General Counsel in 2014; Deputy General Counsel and Chief Compliance Officer in 2015; Vice President, Deputy General Counsel and Chief Compliance Officer in 2016; Vice President, Deputy General Counsel and Chief Compliance and Risk Officer in 2020; Senior Vice President, Deputy General Counsel and Chief Risk & Compliance Officer in 2022.
Joining Quad’s legal department in 2007 as Employment Counsel, she advanced to Assistant General Counsel in 2014; Deputy General Counsel and Chief Compliance Officer in 2015; Vice President, Deputy General Counsel and Chief Compliance Officer in 2016; Vice President, Deputy General Counsel and Chief Compliance and Risk Officer in 2020; and Senior Vice President, Deputy General Counsel and Chief Risk & Compliance Officer in 2022.
The Company’s breadth of connected solutions and its ability to both strategically consult and execute results at scale, positions Quad in a unique space beyond that of just a manufacturer or traditional agency. This positioning expands the Company’s competitive set to include large agency holding companies, independent agencies, marketing consultants, as well as print management firms and commercial printers.
The Company’s breadth of connected solutions and its ability to both strategically consult and execute at scale, positions Quad in a unique space beyond that of just a manufacturer or traditional agency. This positioning expands the Company’s competitive set to include large agency holding companies, independent agencies and marketing consultants, as well as print management firms and commercial printers.
Honan served as Vice President, General Manager and Chief Financial Officer of Journal Community Publishing Group, a subsidiary of diversified media company Journal Communications Inc., for five years, and held executive-level roles in investor relations and corporate development at Newell Rubbermaid, a global marketer of consumer and commercial products. Prior thereto, Mr.
Honan served as Vice President, General Manager and Chief Financial Officer of Journal Community Publishing Group, a subsidiary of diversified media company Journal Communications Inc., for five years, and held executive-level roles in investor relations and corporate development at Newell Brands, a global marketer of consumer and commercial products. Prior thereto, Mr.
The four key objectives that drive the Company’s community impact from strategic investment of finances, volunteerism and in-kind services in community organizations are: • Lessen the use of natural resources and impact on the environment; • Provide academic and educational opportunities, and experiential learning for more people; • Ensure that the diversity of Quad reflects the communities where its employees live and work, as well as the clients who trust Quad with their business; and • Support programs that improve employees’ mental and physical health.
The four key objectives that guide the Company’s community impact from strategic investment of finances, volunteerism and in-kind services in community organizations are: • Lessen the use of natural resources and impact on the environment; • Provide academic and educational opportunities, and experiential learning for more people; • Ensure that Quad reflects the communities where its employees live and work, as well as the clients who trust Quad with their business; and • Support programs that improve employees’ mental and physical health.
Governance starts at the highest level of the Company with oversight by the Board of Directors, which is responsible for minimizing risk while maximizing the effectiveness of Quad’s business strategy. Key tenets of Quad’s governance strategy include: • Family Leadership: As of January 31, 2024, the Quadracci family, through the Quad/Graphics, Inc.
Governance starts at the highest level of the Company with oversight by the Board of Directors, which is responsible for minimizing risk while maximizing the effectiveness of Quad’s business strategy. Key tenets of Quad’s governance strategy include: • Family Leadership: As of January 31, 2025, the Quadracci family, through the Quad/Graphics, Inc.
Bauer held various accounting positions at Journal Communications, Inc., during her 18 years there, including Vice President and Controller from June 2000 until September 2011. 16 Table of Contents Ms. Currie has served as Executive Vice President and Chief Revenue Officer since November 2020. She previously served as Executive Consultant of FCM, LLC from 2019 to 2020. Prior thereto, Ms.
Bauer held various accounting positions at Journal Communications, Inc., during her 18 years there, including Vice President and Controller from June 2000 until September 2011. Ms. Currie has served as Executive Vice President and Chief Revenue Officer since November 2020. She previously served as Executive Consultant of FCM, LLC from 2019 to 2020. Prior thereto, Ms.
Executive officers of Quad are elected by and serve at the discretion of Quad’s Board of Directors. Other than described above, there are no family relationships between any directors or executive officers of Quad. 18 Table of Contents
Executive officers of Quad are elected by and serve at the discretion of Quad’s Board of Directors. Other than described above, there are no family relationships between any directors or executive officers of Quad. 16 Table of Contents
Ashworth is a board member of Uniting Voices Chicago (formerly Chicago Children’s Choir) and The BrandLab, a nonprofit organization that works to increase diversity in the marketing industry. Ms. Bauer has served as Vice President since January 2022 and Chief Accounting Officer since March 2017.
Ashworth is a board member of Uniting Voices Chicago (formerly Chicago Children’s Choir) and The BrandLab, a nonprofit organization that works to increase diversity in the marketing industry. 14 Table of Contents Ms. Bauer has served as Vice President since January 2022 and Chief Accounting Officer since March 2017.
The Company supports a diverse base of approximately 2,700 clients, including industry-leading blue-chip companies that serve both businesses and consumers across multiple industry verticals, with a particular focus on commerce, including retail, consumer packaged goods and direct-to-consumer; financial services; and health. Quad prides itself on its long-standing relationships, with its largest clients averaging more than 22 years in duration.
The Company supports a diverse base of approximately 2,500 clients, including industry-leading blue-chip companies that serve both businesses and consumers across multiple industry verticals, with a particular focus on commerce, including retail, consumer packaged goods and direct-to-consumer; financial services; and health. Quad prides itself on its long-standing relationships, with its largest clients averaging more than 24 years in duration.
The Company’s working capital requirements, including the impact of seasonality, are partially mitigated through the direct purchasing of paper by its clients. The Company produces the majority of ink used in its print manufacturing, allowing it to control the quality, cost and supply of key inputs.
The Company’s working capital requirements, including the impact of seasonality, are partially mitigated through the direct purchasing of paper by its clients. 13 Table of Contents The Company produces the majority of ink used in its print manufacturing, allowing it to control the quality, cost and supply of key inputs.
In 2022 (the most recent year for which data has been tabulated), nearly 80% of all the Company’s printed products and packaging were sustainably sourced from certified third-party organizations. The Company benchmarks its environmental performance regularly to evaluate the effectiveness of current environmental management programs and to identify program areas that need improvement or need to be developed.
In 2023 (the most recent year for which data has been tabulated), nearly 89% of all the Company’s printed products and packaging were sustainably sourced from certified third-party organizations. The Company benchmarks its environmental performance regularly to evaluate the effectiveness of current environmental management programs and to identify program areas that need improvement or need to be developed.
The commercial printing industry has moved toward a demand for shorter print runs, faster product turnaround and increased production efficiencies of products with lower page counts and increased complexity. This — combined with increases in postage and paper costs as well as marketers’ increasing use of online marketing and communication channels — has led to excess manufacturing capacity.
The commercial printing industry has moved toward shorter, on-demand, personalized print runs; faster product turnaround; and increased production efficiencies of products with lower page counts and increased complexity. This — combined with increases in postage and paper costs, as well as marketers’ increasing use of online marketing and communication channels — has led to excess manufacturing capacity.
In 2023, its 10 largest clients accounted for approximately 19% of consolidated sales, with none representing more than 5% individually. Quad was founded in Pewaukee, Wisconsin, as a Wisconsin corporation, in 1971 by the late Harry V. Quadracci. For many years, the Company operated as Quad/Graphics and focused on commercial printing.
In 2024, its 10 largest clients accounted for approximately 20% of consolidated sales, with none representing more than 5% individually. Quad was founded in Pewaukee, Wisconsin, as a Wisconsin corporation, in 1971 by the late Harry V. Quadracci. For many years, the Company operated as Quad/Graphics and focused on commercial printing.
He serves on the board of directors for Plexus Corp., Pixability, Inc., Road America, Inc., Children’s Hospital of Wisconsin, the National Association of Manufacturers, and the Metropolitan Milwaukee Association of Commerce. He also serves on the board of trustees for the Milwaukee Art Museum and on the advisory council of the Smithsonian National Postal Museum. Mr.
He serves on the board of directors for Plexus Corp., Pixability, Inc., Road America, Inc., the National Association of Manufacturers and the Metropolitan Milwaukee Association of Commerce. He also serves on the board of trustees for the Milwaukee Art Museum and on the advisory council of the Smithsonian National Postal Museum. Mr.
Eliezer Associates, a print consulting firm in Stamford, Conn., beginning in 1998 and was named President of the firm in 2004, the leadership role he maintained until joining Quad in 2010. 17 Table of Contents Mr. Robert Quadracci has served as Quad’s Chief Human Resources Officer since February 2023.
Eliezer Associates, a print consulting firm in Stamford, Conn., beginning in 1998 and was named President of the firm in 2004, the leadership role he maintained until joining Quad in 2010. Mr. Robert Quadracci has served as Chief Human Resources Officer since February 2023.
Integrated Marketing Platform Excellence Quad’s integrated marketing platform encompasses all the resources brands and marketers need to plan, create, deploy, measure and optimize their marketing efforts across all media channels — from household to in-store to online.
Integrated Marketing Platform Excellence Quad’s integrated marketing platform encompasses all the resources brands and marketers need to plan, create, deploy, measure and optimize their marketing efforts across any media channel — from household to in-store to online.
Commercial Printing The commercial printing industry also remains highly fragmented, with competition based on pricing; availability of materials, including paper (which may be more limited in the future as a number of mills reduce graphic paper production capacity in favor of other product lines, such as packaging); quality; distribution capabilities; customer service; access to labor, especially highly skilled labor; availability to schedule work on appropriate equipment; on-time production and delivery; and ability to maintain and adopt state-of-the-art technology to meet a client’s business objectives.
Commercial Printing The commercial printing industry also remains highly fragmented, with competition based on pricing; availability of materials, including paper (which may be more limited in the future as a number of mills reduce graphic paper production capacity in favor of other product lines, such as paperboard); quality; distribution capabilities, including the ability to reduce postage costs; customer service; access to labor, especially highly skilled labor; availability to schedule work on appropriate equipment; on-time production and delivery; ability to maintain and adopt state-of-the-art technology; and ability to offer additional marketing services to meet a client’s business objectives.
Amended and Restated Voting Trust Agreement (“Quad Voting Trust”), has voting control of approximately 73% of the Company’s outstanding shares.
Amended and Restated Voting Trust Agreement (“Quad Voting Trust”), has voting control of approximately 72% of the Company’s outstanding shares.
This code also includes anti-corruption and anti-bribery policies. 12 Table of Contents • Data Security: Quad continually updates and strengthens its information and data security program to address the fast-changing threat landscape and ensure proper oversight.
This code also includes anti-corruption and anti-bribery policies. • Data Security: Quad continually updates and strengthens its information and data security program to address the fast-changing threat landscape and ensure proper oversight.
Staniak 51 Chief Financial Officer Kelly A. Vanderboom 49 Executive Vice President and Treasurer; Head of Agency Operations and Logistics Mr. J. Joel Quadracci has been a director of Quad since 2003, its President since January 2005, its President and Chief Executive Officer since July 2006 and its Chairman, President and Chief Executive Officer since January 2010. Mr.
Staniak 52 Chief Financial Officer Kelly A. Vanderboom 50 Executive Vice President and Treasurer; Head of Agency Operations Mr. J. Joel Quadracci has been a director of Quad since 2003, its President since January 2005, its President and Chief Executive Officer since July 2006 and its Chairman, President and Chief Executive Officer since January 2010. Mr.
He previously served as Senior Vice President of Sales Administration from August 2018 to January 2022; Vice President of Sales Administration from June 2013 to August 2018; and Product Planning Manager from March 2010 to June 2013. Prior to joining Quad, Mr. McKenna worked at J.S.
McKenna has served as Executive Vice President and Chief Administrative Officer since January 2022. He previously served as Senior Vice President of Sales Administration from August 2018 to January 2022; Vice President of Sales Administration from June 2013 to August 2018; and Product Planning Manager from March 2010 to June 2013. Prior to joining Quad, Mr. McKenna worked at J.S.
Quad is not including the information contained on or available through its website as part of, or incorporating such information by reference into, this Annual Report on Form 10-K.
More information regarding Quad is available on the Company’s website at quad.com . Quad is not including the information contained on or available through its website as part of, or incorporating such information by reference into, this Annual Report on Form 10-K.
It grew rapidly and built a premier print manufacturing and distribution platform. Beginning in 2018, the Company accelerated its transformation to an MX company through strategic investments in marketing services, talent and technology, and, in 2019, evolved its brand from Quad/Graphics to Quad.
It grew rapidly and built a premier print manufacturing and distribution platform. Beginning in 2018, the Company accelerated its transformation to an MX company through strategic investments in marketing services, talent and technology, and, in 2019, evolved its brand from Quad/Graphics to Quad. Today, Quad is one of the nation’s largest marketing services providers.
Quad complements its production capabilities through its managed services offering. Leveraging its deep industry knowledge, expansive network and substantial purchasing power, Quad helps clients manage their operations the way it runs its own – with diligence, efficiency and cost-savings.
Quad complements its production capabilities through its Managed Services offering. Applying its deep industry knowledge, expansive network and substantial purchasing power, Quad helps clients manage their operations the way it runs its own – with diligence, efficiency and highly competitive costs.
Gruen 49 General Counsel, Corporate Secretary and Chief Risk & Compliance Officer David J. Honan 55 Executive Vice President and Chief Operating Officer Steven D. Jaeger 59 Vice President and Chief Information Officer Donald M. McKenna 51 Executive Vice President and Chief Administrative Officer Robert H. Quadracci 56 Chief Human Resources Officer Anthony C.
Gruen 50 General Counsel, Corporate Secretary and Chief Risk & Compliance Officer David J. Honan 56 Executive Vice President and Chief Operating Officer Steven D. Jaeger 60 Vice President and Chief Information Officer Donald M. McKenna 52 Executive Vice President and Chief Administrative Officer Robert H. Quadracci 57 Chief Human Resources Officer Anthony C.
Joel Quadracci 55 Chairman, President and Chief Executive Officer Eric N. Ashworth 58 Executive Vice President of Product and Market Strategy Anne M. Bauer 59 Vice President and Chief Accounting Officer Julie A. Currie 60 Executive Vice President and Chief Revenue Officer Joshua J. Golden 52 Chief Marketing Officer Dana B.
Name Age Position J. Joel Quadracci 56 Chairman, President and Chief Executive Officer Eric N. Ashworth 59 Executive Vice President of Product and Market Strategy Anne M. Bauer 60 Vice President and Chief Accounting Officer Julie A. Currie 61 Executive Vice President and Chief Revenue Officer Joshua J. Golden 53 Chief Marketing Officer Dana B.
Prior thereto, Mr. Jaeger served as Quad’s Vice President of Information Systems from 1998 to 2006 and worked in various other capacities since he joined the company in 1994. Prior to joining Quad, Mr. Jaeger worked for Andersen Consulting for eight years. Mr. McKenna has served as Executive Vice President and Chief Administrative Officer since January 2022.
Prior thereto, Mr. Jaeger served as Quad’s Vice President of Information Systems from 1998 to 2006 and worked in various other capacities since he joined the company in 1994. Prior to joining Quad, Mr. Jaeger worked for Andersen Consulting for eight years. 15 Table of Contents Mr.
In 2022 (the most recent year for which data has been tabulated), the Company’s U.S. manufacturing facilities recycled more than 98% of their industrial wastepaper and other solid waste. • Energy and Emissions : The Company participates in nationwide and statewide programs to enhance its efforts to reduce energy usage and carbon emissions.
In 2023 (the most recent year for which data has been tabulated), the Company’s U.S. manufacturing facilities recycled 97.7% of their industrial wastepaper and other solid waste. • Energy and Emissions : The Company participates in nationwide and statewide programs to enhance its efforts to reduce energy usage and carbon emissions. These include being a founding partner of the U.S.
These include being a founding partner of the U.S. Department of Energy’s Better Plants Program, being ISO 50001 Ready through the U.S.
Department of Energy’s Better Plants Program, being ISO 50001 Ready through the U.S.
Quad believes that its focused efforts to be the high-quality, low-cost producer generates increased Free Cash Flow and allows the Company to maintain a strong balance sheet through debt reduction. The Company’s disciplined financial approach also allows it to maintain sufficient liquidity and to reduce refinancing risk.
Quad believes that its focused efforts to be a high-quality, low-cost producer generates increased Free Cash Flow and allows the Company to maintain a strong balance sheet through debt reduction.
Within its manufacturing operations, the Company benefits from managing several very large facilities (greater than one million square feet) that produce multiple product lines under one roof, which maximizes utilization of equipment and labor resources while also driving savings in certain product lines (such as publications and catalogs) due to economies of scale.
Within its manufacturing operations, Quad benefits from managing several very large facilities (greater than one million square feet) that produce multiple product lines under one roof, which maximizes utilization of equipment and labor resources while also driving cost savings.
In its logistic operations, however, the Company is able to pass a substantial portion of any increase in fuel prices directly to its clients. 15 Table of Contents Information About Our Executive Officers The following table sets forth the names, ages (as of January 31, 2024) and positions of Quad’s executive officers. Name Age Position J.
The Company mitigates its risk through natural gas hedges when appropriate. In its logistic operations, however, the Company is able to pass a substantial portion of any increase in fuel prices directly to its clients. Information About Our Executive Officers The following table sets forth the names, ages (as of January 31, 2025) and positions of Quad’s executive officers.
Human Capital Management The Company continually invests in and supports its employees and the areas in which it operates. Highly qualified, skilled and knowledgeable talent and strong community partnerships are key to Quad’s success as a marketing experience company.
Human Capital Management The Company continually invests in and supports its employees and the areas in which it operates. Building confident, skilled and knowledgeable talent and strong community partnerships are essential to Quad’s continued success.
The Company expects seasonality impacts to continue in future years. 5 Table of Contents Competitive Advantages Quad’s suite of marketing solutions is powered by three primary competitive advantages that the Company believes distinguish it from its competitors: integrated marketing platform excellence, ongoing innovation, and culture and sustainable impact.
The Company expects seasonality impacts to continue in future years. Competitive Advantages Quad’s MX Solutions Suite is powered by three primary competitive advantages that the Company believes distinguish it from its competitors: integrated marketing platform excellence, intentional innovation and a commitment to operate responsibly.
Vanderboom also serves on the board of Quad/Med and the advisory board of Rise Interactive, a Quad company, and provides executive oversight for Quad Paper Services.
Vanderboom also serves on the board of QuadMed and provides executive oversight for Quad Paper Services.
Led by an interdepartmental committee of leaders, this process focuses on solutions that either close a gap or meet an underserved need in the marketplace, or provide significant time and cost efficiencies to internal workflows.
Led by an interdepartmental committee of leaders, the Company focuses on new or expanded solutions that either close a gap, meet an underserved need in the marketplace, or provide significant time and cost efficiencies to internal workflows. Quad then strategically invests in the needed talent, technology and capabilities to activate these solutions.
Department of Energy at some of its largest manufacturing plants, and participating in the State of Wisconsin’s Focus on Energy Program. • Hazardous Waste : Quad mitigates the dangers associated with hazardous waste through comprehensive chemical and hazardous waste management processes, including safe handling practices, and finding ways to reduce the use of chemicals and solvents. • Responsible Forestry : The Company maintains chain-of-custody certifications for sourcing materials from responsibly managed forests (i.e., Forest Stewardship Council®, Sustainable Forest Initiative, and Program for the Endorsement of Forest Certification) and partners with clients to increase certified paper usage.
Department of Energy at some of its largest manufacturing plants, and participating in the State of Wisconsin’s Focus on Energy Program. 11 Table of Contents • Responsible Forestry : The Company maintains chain-of-custody certifications for sourcing materials from responsibly managed forests (i.e., Forest Stewardship Council®, Sustainable Forest Initiative, and Program for the Endorsement of Forest Certification) and partners with clients to increase certified paper usage.
The Company continually strengthens its manufacturing operations through leading-edge technologies such as digital presses that enhance targeted print products and wide-web presses that maximize labor productivity; advanced equipment and automation, including automated guided vehicles and robotic palletizers that support high-quality, low-cost production; and its own global production resources that provide around-the-clock service for tasks like page assembly, retouching, color correction and design to reduce print job turnaround times.
Additionally, the Company continually strengthens its manufacturing operations through leading-edge technologies such as digital presses that enhance targeted print products; wide-web presses that maximize labor productivity; and advanced equipment and automation, including automated guided vehicles and robotic palletizers that support high-quality, low-cost production.
Quad regularly reviews its policies and aims to ensure all Company procedures, processes and distribution of resources create equal opportunities among its employees and fair and just outcomes. 11 Table of Contents Building Strong Communities The Company believes partnering with local communities creates a catalyst for movement and change, which benefits those outside of Quad’s walls while helping the Company maintain a positive reputation as the kind of business people choose to work for, do business with, invest in and call a true neighbor.
Building Strong Communities The Company believes partnering with local communities creates a catalyst for movement and change, which benefits those outside of Quad’s walls while helping the Company maintain a positive reputation as the kind of business people choose to work for, do business with, invest in and call a true neighbor.
Multiple programs offer employees accelerated responsibility and pay, including Accelerated Career Training, which provides a fast-track for career advancement in manufacturing positions; Leading Within Quad , which focuses on best-in-class managerial behaviors; Corporate Trainee Program , which develops skills and leadership abilities through a series of agency and corporate administration rotations; and hands-on, mentor-led manufacturing apprenticeship programs.
Employees are also encouraged to take advantage of the Company’s employee growth and development programs, including: Accelerated Career Training, a fast-track for career advancement in manufacturing positions; Corporate Trainee Program , a rotation-based offering that develops skills and leadership abilities through a series of agency and corporate administration positions; hands-on, mentor-led manufacturing apprenticeships; and Leading Within Quad , which focuses on best-in-class managerial behaviors.
As a result, advertising and marketing services providers must expand their capabilities to create effective multichannel campaigns for their clients, and providers face increased client demand to offer integrated, end-to-end marketing services (i.e., from strategy and creative through execution).
Consumer media consumption habits are constantly evolving. The ongoing emergence of new marketing channels has caused audiences to become increasingly segmented. As a result, advertising and marketing services providers must expand their capabilities to create effective multichannel campaigns for their clients, and providers face increased client demand to offer integrated, end-to-end marketing services (i.e., from strategy and creative through execution).
Quad believes it will be able to maintain a leading competitive position through its consistent long-term business 2 Table of Contents strategy, which is driven by dedicated, passionate and highly skilled employees, and by providing stability and innovative solutions for clients into the future. More information regarding Quad is available on the Company’s website at quad.com .
Despite these challenges, Quad worked to mitigate impacts on its business while proactively managing client expectations. Quad believes it will be able to maintain a leading competitive position through its consistent long-term business strategy, which is driven by dedicated, passionate and highly skilled employees, and by providing stability and innovative solutions for clients into the future.
The program includes ongoing employee education to ensure the security of physical and digital workspaces, protect the privacy of valuable data, identify potential phishing and malware threats, and avoid risky behaviors.
The program includes ongoing employee education to ensure the security of physical and digital workspaces, protect the privacy of valuable data, identify potential phishing and malware threats, and avoid risky behaviors. 12 Table of Contents Financial Objectives Quad follows a disciplined approach to maintaining and enhancing financial strength to create shareholder value.
Advertising and Marketing Services The advertising and marketing services industry is highly fragmented, and competition is based on adapting quickly to new advertising platforms and technology, developing comprehensive proposals to secure client contracts, creating unique and effective multichannel marketing campaigns, demonstrating spend effectiveness by monitoring and reporting on clients’ marketing campaign results, providing favorable pricing, accessing talent and offering superior customer service.
Advertising and Marketing Services The advertising and marketing services industry is highly fragmented, with competition based on companies’ ability to adapt quickly to new advertising platforms and technology, including AI; leverage data and analytics to deliver personalized advertising experiences; develop comprehensive proposals to secure client contracts; create unique and effective multichannel marketing campaigns; demonstrate spend effectiveness by monitoring and reporting on clients’ marketing campaign results; provide favorable pricing; access talent; and offer superior customer service.
Quad tailors its solutions to its clients’ objectives, driving cost efficiencies, improving speed to market, strengthening marketing effectiveness, and delivering value on their investments. Quad’s footprint spans 14 countries, including 43 manufacturing and distribution facilities and more than 70 client dedicated teams.
Quad tailors its solutions to each client’s objectives, driving cost efficiencies, improving speed to market, strengthening marketing effectiveness and delivering value on investments. Quad’s footprint spans 14 countries, with 86 global facilities inclusive of 38 manufacturing and distribution facilities.
Ms. Gruen has served as General Counsel, Corporate Secretary and Chief Risk & Compliance Officer since February 2023.
Mr. Golden serves on the board of directors of the National Epilepsy Foundation. Ms. Gruen has served as General Counsel, Corporate Secretary and Chief Risk & Compliance Officer since February 2023.
These trends greatly influence Quad’s ongoing efforts to help brands reduce the complexities of working with multiple agency partners and vendors, increase marketing process efficiency and maximize marketing effectiveness.
These trends greatly influence Quad’s ongoing efforts to help brands reduce the complexities of working with multiple agency partners and vendors, increase marketing process efficiency and maximize marketing effectiveness. Quad believes that its deeply connected solutions address modern marketers’ most pressing issues, positioning it to compete effectively in this highly competitive industry.
Beyond Quad itself, QuadMed provides worksite healthcare solutions nationally for approximately 30 employers of all sizes and across multiple industries, including private and public sector employers.
Beyond Quad itself, QuadMed provides worksite healthcare solutions nationally for approximately 30 employers of all sizes and across multiple industries, including private and public sector employers. ◦ The Company’s QLife Wellness program, which provides educational resources, interactive webinars and regular communications around physical, emotional, financial and social well-being topics.
Further, the Company believes that its distinct corporate culture, which evolved from a core set of Values conceived by the Company’s late founder, Harry V.
Operating Responsibly The Company seeks to operate responsibly by relying on its distinct corporate culture, which evolved from a core set of Values conceived by the Company’s late founder, Harry V. Quadracci, and are focused on creating a better way forward.
Key areas of innovation that differentiate Quad from its competitors include the following: Data Powered by its extensive print manufacturing business, Quad possesses a large data stack that represents approximately 89% of U.S. households. The Company matches clients’ data files with its curated database of household addresses, ensuring that insights connect to real consumers, not just faceless email addresses.
Key areas of innovation that differentiate Quad from its competitors include the following: Proprietary Data Stack Powered by its extensive print manufacturing business, Quad possesses a proprietary, household-based data stack that represents approximately 97% of the U.S. adult population and 92% of U.S. households.
Raw Materials The primary raw materials that Quad uses in its print business are paper, ink and energy. At this time, the Company’s supply of raw materials are available from numerous vendors; however, based on market conditions, the current supply is under pressure due to supply chain shortages and higher than expected inflation.
At this time, the Company’s supply of raw materials are available from numerous vendors; however, based on previously mentioned market conditions, the current supply is under pressure due to supply chain disruptions and inflation. The Company generally buys these raw materials based upon market prices that are established with the vendor as part of the procurement process.
Seasonality Quad is subject to seasonality in its quarterly results as net sales and operating income are higher in the second half of the calendar year as compared to the first half of the calendar year.
Due to these factors, economies of scale, a strong balance sheet and access to capital markets, Quad has been able to provide a competitive offering that meets clients’ manufacturing needs. 5 Table of Contents Seasonality Quad is subject to seasonality in its quarterly results as net sales and operating income are higher in the second half of the calendar year as compared to the first half of the calendar year.
Quad provides access to such materials through its website as soon as reasonably practicable after electronically filing such material with, or furnishing it to, the SEC. Principal Capabilities The Company’s suite of flexible, scalable and connected solutions addresses the pain points brands and marketers experience most frequently when creating and deploying content and campaigns.
Quad provides access to such materials through its website as soon as reasonably practicable after electronically filing such material with, or furnishing it to, the SEC. Principal Capabilities Quad’s MX Solutions Suite provides a comprehensive range of marketing and print services, seamlessly integrating creative, production and media solutions across online and offline channels.
The Company generally buys these raw materials based upon market prices that are established with the vendor as part of the procurement process. Approximately half of the paper used in the printing process is supplied directly by the Company’s clients.
Approximately half of the paper used in the printing process is supplied directly by the Company’s clients.
Attracting, Developing and Retaining Highly Qualified Talent Given Quad’s belief that its talent stands as a major differentiator among its competition, the Company invests heavily in efforts to attract, develop and retain employees, and in tools, technologies, processes, training and education to increase engagement, and drive productivity enhancements and efficiencies across the entire organization. 9 Table of Contents As of December 31, 2023, the Company had approximately 13,150 full-time equivalent (“FTE”) employees in the following geographies: Geographic Region Number of FTE Employees North America (Includes Mexico, Central America and the Caribbean) 10,800 Europe, Middle East and Africa 1,575 South America 750 Asia 25 Quad focuses on the following key areas to attract, develop and retain highly qualified talent: • Competitive Pay and Innovative Benefits: Employees are hired into jobs with competitive wages and innovative benefits.
Attracting, Developing and Retaining Highly Qualified Talent Given Quad’s belief that its talent stands as a major differentiator among its competition, the Company invests heavily in efforts to attract, develop and retain employees, and in tools, technologies, processes, training and education to increase engagement, and drive productivity enhancements and efficiencies across the entire organization.
Quad’s on-site and near-site teams also offer seamless access to additional services and subject matter experts across the Company, removing handoffs and associated friction in the client’s marketing process. Quad’s dedicated team model simplifies marketing for clients and enables them to focus on what they do best: selling more products, services and/or content.
This team structure simplifies marketing for clients and enables them to focus on what they do best: selling more products, services and/or content.
External services include on-site, near-site and virtual health delivery of comprehensive primary and preventive care, condition management, wellness programs and coaching, physical therapy, behavioral health, pharmacy services, occupational health and more. 10 Table of Contents • Career Training and Growth: Employees are encouraged to take advantage of the Company’s focus on employee growth and development, which not only teaches critical on-the-job and leadership skills, but also helps them respond to rapid change, cultivate effective networks, and create high-quality relationships necessary for personal, professional and Company growth.
These programs not only teach critical on-the-job and leadership skills, but also help employees respond to rapid change, cultivate effective networks, and create high-quality relationships necessary for personal, professional and Company growth. 10 Table of Contents • Competitive Pay and Innovative Benefits: Employees are hired into jobs with competitive wages and innovative benefits.
These capabilities include digital as well as print – a major point of differentiation among the Company’s competitive set. The Company’s print operations feature the latest in automation and technology complemented by skilled manufacturing professionals.
This full-service offering is housed under Betty, Quad’s creative agency. 3 Table of Contents MX: Production Quad offers a wide range of production capabilities for deploying content to offline (i.e., physical) and online channels – a major point of differentiation among the Company’s competitive set. Quad’s print operations feature the latest in automation and technology complemented by skilled manufacturing professionals.
The Company’s BRGs create spaces where employees of shared backgrounds and interests can come together to support each other and share their unique perspectives and feedback with Quad leadership.
The Company’s Business Resource Groups (BRGs) are one way Quad lives out this Value, providing space for employees of shared backgrounds and interests to support one another and convey their perspectives and feedback with Company leadership.
Quad does this with a suite of marketing solutions that is flexible, scalable and connected. Supported by state-of-the-art technology and data-driven intelligence, these solutions are designed to streamline the complexities of marketing and remove friction from wherever it occurs in the marketing journey.
Item 1. Business Overview Quad is a marketing experience (MX) company that simplifies the complexities of marketing, removing friction from wherever it occurs along the marketing journey. Its results-driven approach enables stronger marketing operations that lead to real, repeatable success for clients. The Company does this through its MX Solutions Suite, which is flexible, scalable and connected.
Informed by a combination of proprietary, client and other third-party data, Quad’s in-depth research on customer trends helps clients best define, design and position their brands. Applying this strategic brand work, the Company helps clients concept, direct and produce scalable creative content that attracts attention and elicits action.
Betty prides itself on being people obsessed, applying a combination of proprietary, client and third-party data to conduct in-depth research on consumer trends to help clients best define, design and position their brands and marketing efforts.
Accordingly, the Company can guide clients through every effort intended to drive an action, from consumer awareness and trust, to brand preference and purchase. Print and Distribution Capabilities While Quad’s manufacturing operations are the most capital-intensive part of its integrated marketing platform, they constitute a key point of differentiation from consulting firms, traditional creative agencies and agency holding companies.
Accordingly, the Company can guide clients through every effort intended to drive an action, from consumer awareness and trust, to brand preference and purchase. Connected Solutions While the Company’s products and services are organized into distinct solutions suites, they are intentionally crafted to complement one another.
These teams serve as an extension of a client’s internal marketing department, fulfilling critical execution roles ranging from content creation and creative production to marketing deployment in all channels. All of this is executed to maximize production efficiencies, creating content that is adaptive across channels and easily templated and automated and, therefore, scalable.
These services extend beyond print to packaging, in-store signage, branded goods and an array of other marketing services. Quad deploys on-site and near-site client-dedicated teams that integrate directly into a client’s internal marketing and purchasing departments. These teams fulfill critical execution roles ranging from content creation and creative production to purchase execution and marketing deployment across all channels.
Several 3 Table of Contents of these studios operate directly within or near client facilities, leading to improved creative collaboration and streamlined workflows. Creative services are also backed by global production resources that provide around-the-clock service for quick-turn design and production support.
Its global network of photography and video production studios perform in-studio and on-location services – several of which operate directly within or near client facilities – and enable the agency to collaborate closely with clients to rapidly generate superior, scalable, on-brand content. Global Platform Quad’s Rise and Betty agencies are backed by global production resources that provide around-the-clock services.
Once a campaign is underway, Quad’s proprietary media optimization platform, Connex, provides real-time insights to further optimize media placement and increase marketing efficiency. Technology The Company’s client-facing technology solutions help brands connect marketing strategy, global content creation, analytics and personalized communications across offline and online channels.
MX: Tech The Company’s client-facing technology solutions help brands connect marketing strategy, global content creation, analytics and optimized media performance across offline and online channels. Quad applies a people-process-technology approach that first analyzes a client’s current-state workflow and performance, then creates tailored solutions to centralize assets, optimize processes and accelerate speed to market.
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Item 1. Business Overview Quad is a global marketing experience (MX) company that helps brands make direct consumer connections, from household to in-store to online. The Company is focused on providing a better marketing experience for its clients, so they can focus on delivering the best customer experience to theirs.
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With the strength of its Rise media agency and its Betty creative agency, Quad ranks as one of the largest agency companies in the U.S. according to Ad Age (2024). Its robust manufacturing platform also ranks it as one of the largest commercial printers in North America, according to Printing Impressions (2024).
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Today, Quad is one of the nation’s largest marketing services providers, ranked as the 14 th largest agency company in the U.S. by Ad Age (2023), and is the second-largest commercial printer in North America, according to Printing Impressions (2023). Quad’s unique engagement model complements a brand’s way of working.
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Quad’s unique engagement model complements brands’ way of working.
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Whether as a full-service marketing partner, an outsourced extension of a marketing department or as executional support in conjunction with a brand’s agency, the Company’s connected capabilities, breadth of expertise and expansive reach enables Quad’s clients to: • Target the right audience segments at the right time in the right channels based on insights from Quad’s large, proprietary data stack; • Deliver and execute against a more streamlined end-to-end marketing process for greater speed and agility, better data utilization and improved customer engagement; • Leverage Quad’s experience in offline, physical touchpoints to drive omnichannel effectiveness; • Streamline complexity at scale across the marketing supply chain with proven production and logistics capabilities; • Enable scalable, complex, cross-channel activation while offering real-time automation and optimization.
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Whether as a full-service marketing partner, an outsourced extension of a marketing department, or executional support for an agency, Quad’s depth of expertise, breadth of integrated capabilities and expansive reach empower brands to: • Unlock actionable audience insights to identify consumer passions, optimize marketing strategies and enhance campaign precision. • Deliver creative quality at scale with cohesive, impactful brand experiences across all channels. • Streamline production complexity across the marketing supply chain, reducing costs, boosting efficiency and accelerating speed-to-market. • Drive omnichannel effectiveness with cross-channel activations that engage consumers at home, in-store and online. • Maximize efficiency with cutting-edge technology , including artificial intelligence (AI), that automates workflows, enhances performance and personalizes customer experiences at scale across offline and online channels. 2 Table of Contents In 2024, the Company focused on delivering strong financial results while navigating multiple issues in the macroeconomic environment, including postage cost increases on print mailings and elevated interest rates.
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In 2023, the Company focused on delivering strong financial results while navigating multiple issues in the macroeconomic environment, including an uncertain economy, postage cost increases on print mailings, inflationary cost pressures and rising interest rates. Despite these challenges, Quad worked to mitigate impacts on its business while proactively managing client expectations.
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Powered by advanced intelligence and technology, this suite empowers brands to connect with their target audiences across households, in-store and online. MX: Intelligence Quad’s MX: Intelligence solutions unlock strategic insights for its clients to help them make smarter marketing decisions.
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The Company also continued its focus on three major growth drivers: delivering integrated service excellence, accelerating market penetration and leveraging its culture as an MX company.
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The Company’s audience analytics and segmentation services leverage Quad’s proprietary, household-based data stack — representative of more than 250 million consumers — to create models driven by behavior-based “passions” of current customers and optimize prospecting for new ones so clients can reach their ideal audiences.
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Intelligence Quad’s intelligence capabilities comprise audience identification and segmentation, testing, media optimization and media mix modeling services that empower smarter decisions to maximize marketing effectiveness and generate quantifiable impact. • Audience identification and segmentation services leverage the Company’s proprietary data stack, comprised of consumer data from more than 117 million households, to identify potential consumers, matching their demographic details, behaviors and interests with other factors such as a client’s desired marketing spend, location footprint and business objectives.
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The Company believes these passions to be a true differentiator among the industry as they are based on reliable, resilient data that is proprietary to Quad. The Company offers a full suite of testing services, which can gauge the effectiveness of media across channels.
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Equipped with these data-driven insights, clients can strategically target their marketing efforts to drive engagement and spur consumer action. • Testing services , such as Quad’s proprietary Accelerated Marketing Insights platform, assist clients in identifying the most impactful marketing decisions by using a unique combination of high-level mathematics and social factors to predict the best combination of offer, messaging and imagery across channels – both offline and online. • Media optimization services include Quad’s proprietary, award-winning media optimization platform, Connex, which offers cross-channel insights, proactive intelligence and automated optimization capabilities that enable clients to make data-backed decisions in real time to drive campaign performance.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs a result, the Company is subject to the risks inherent in conducting business outside of the United States, including, but not limited to: the impact of economic and political instability; fluctuations in currency values, foreign-currency exchange rates, devaluation and conversion restrictions; exchange control regulations and other limits on the Company’s ability to import raw materials or finished product; tariffs and other trade barriers; trade restrictions and economic embargoes by the United States or other countries; health concerns regarding infectious diseases; adverse weather or natural disasters; social unrest, acts of terrorism, force majeure, war or other armed conflicts; inflation and fluctuations in interest rates; language barriers; difficulties in staffing, training, employee retention and managing international operations; logistical and communications challenges; differing local business practices and cultural considerations; restrictions on the ability to repatriate funds; foreign ownership restrictions and the potential for nationalization or expropriation of property or other resources; longer accounts receivable payment cycles; potential adverse tax consequences and being subject to different legal and regulatory regimes that may preclude or make more costly certain initiatives or the implementation of certain elements of its business strategy. 24 Table of Contents If the Company fails to identify, manage, complete and integrate acquisitions, investment opportunities or other significant transactions, as well as identify and execute strategic divestitures, it may adversely affect the Company’s future results and ability to implement its business strategy.
Biggest changeNet sales from the Company’s wholly-owned subsidiaries outside of the United States accounted for approximately 13% and 14% of its consolidated net sales for the years ended December 31, 2024 and 2023, respectively . 22 Table of Contents As a result, the Company is subject to the risks inherent in conducting business outside of the United States, including, but not limited to: the impact of economic and political instability; tariffs and other trade barriers; trade restrictions and economic embargoes by the United States or other countries; fluctuations in currency values, foreign-currency exchange rates, devaluation and conversion restrictions; exchange control regulations and other limits on the Company’s ability to import raw materials or finished product; health concerns regarding infectious diseases; adverse weather or natural disasters; social unrest, acts of terrorism, force majeure, war or other armed conflicts; inflation and fluctuations in interest rates; language barriers; difficulties in staffing, training, employee retention and managing international operations; logistical and communications challenges; differing local business practices and cultural considerations; restrictions on the ability to repatriate funds; foreign ownership restrictions and the potential for nationalization or expropriation of property or other resources; longer accounts receivable payment cycles; potential adverse tax consequences; and being subject to different legal and regulatory regimes that may preclude or make more costly certain initiatives or the implementation of certain elements of its business strategy.
In addition, the Company may not be able to resell waste paper and other by-products or the prices received for their sale may decline substantially. The Company is dependent upon the vendors within the Company’s supply chain to maintain a steady supply of inventory, parts for equipment and materials.
In addition, the Company may not be able to resell waste paper and other by-products or the prices received for their sale may decline substantially. The Company is dependent upon the vendors within the Company’s supply chain to maintain a steady supply of inventory, parts for equipment and other materials.
The Company cannot assure you that the Company’s costs in relation to these matters will not exceed its established liabilities or otherwise have an adverse effect on its results of operations. Various laws and regulations addressing climate change are being considered at the federal and state levels.
The Company cannot assure you that the Company’s costs in relation to these matters will not exceed its established liabilities or otherwise have an adverse effect on its results of operations. Various laws and regulations addressing climate change have been and/or are being considered at the federal and state levels.
In addition, new and enhanced technologies, including search, web and infrastructure computing services, digital content, and electronic devices, may affect clients. The internet facilitates competitive entry and comparison shopping, and the reliance on digital retailing may reduce clients’ volume. Any such reduction or loss of work could adversely affect the Company’s results of operations and financial condition.
In addition, new and enhanced technologies, including artificial intelligence, search, web and infrastructure computing services, digital content, and electronic devices, may affect clients. The internet facilitates competitive entry and comparison shopping, and the reliance on digital retailing may reduce clients’ volume. Any such reduction or loss of work could adversely affect the Company’s results of operations and financial condition.
Furthermore, in response to recent public focus on dual class capital structures, certain stock index providers are implementing limitations on the inclusion of dual class share structures in their indices and certain institutional shareholder advisory firms are updating their voting guidelines to generally withhold support for directors of companies with dual class voting rights.
Furthermore, in response to recent public focus on dual class capital structures, certain stock index providers have or are implementing limitations on the inclusion of dual class share structures in their indices and certain institutional shareholder advisory firms have or are updating their voting guidelines to generally withhold support for directors of companies with dual class voting rights.
The Company may be adversely affected by interest rates, particularly floating interest rates, and foreign exchange rates. As of December 31, 2023, 44% of the Company’s borrowings were subject to variable interest rates. As a result, the Company is exposed to market risks associated with fluctuations in interest rates, and increases in interest rates could adversely affect the Company.
The Company may be adversely affected by interest rates, particularly floating interest rates, and foreign exchange rates. As of December 31, 2024, 44% of the Company’s borrowings were subject to variable interest rates. As a result, the Company is exposed to market risks associated with fluctuations in interest rates, and increases in interest rates could adversely affect the Company.
Declines in economic conditions in the United States or in other countries in which the Company operates, including as a result of macroeconomic conditions, recessionary concerns and/or geopolitical events, may adversely impact the Company’s financial results, and these impacts may be material.
Declines in economic conditions in the United States or in other countries in which the Company operates, including as a result of macroeconomic conditions and/or geopolitical events, may adversely impact the Company’s financial results, and these impacts may be material.
In addition, the need to reduce ongoing operating costs have and, in the future, may continue to result in significant up-front costs to reduce workforce, close or consolidate facilities, or upgrade equipment and technology. 22 Table of Contents The Company may suffer a data-breach of sensitive information, ransomware attack or other cyber incident.
In addition, the need to reduce ongoing operating costs have and, in the future, may continue to result in significant up-front costs to reduce workforce, close or consolidate facilities, or upgrade equipment and technology. The Company may suffer a data-breach of sensitive information, ransomware attack or other cyber incident.
The Company’s failure to maintain compliance with the covenants could prevent the Company from borrowing additional amounts and could result in a default under any of the debt agreements. Such default could cause the outstanding indebtedness to become immediately due and payable, by virtue of cross-acceleration or cross-default provisions.
The Company’s failure to maintain 24 Table of Contents compliance with the covenants could prevent the Company from borrowing additional amounts and could result in a default under any of the debt agreements. Such default could cause the outstanding indebtedness to become immediately due and payable, by virtue of cross-acceleration or cross-default provisions.
The price and availability of paper may also be adversely affected by paper mills’ permanent or temporary closures, and mills’ access to raw materials, conversion to produce other types of paper (which a number of paper mills have done or are doing), and ability to transport paper produced.
The price and availability of paper may also be adversely affected by paper mills’ permanent or temporary closures; paper mills’ access to raw materials, conversion to produce other types of paper (which a number of paper mills have done or are doing), and ability to transport paper produced; and tariffs and trade restrictions.
The Company may not be able to fully pass on to clients the impact of higher electric and natural gas energy prices on its manufacturing costs, and increases in energy prices result in higher manufacturing costs for certain of its operations. Labor represents a significant component of the cost structure of the Company.
The Company may not be able to fully pass on to clients the impact of higher electric and natural gas energy prices on its manufacturing costs, and increases in energy prices result in higher manufacturing costs for certain of its operations. 18 Table of Contents Labor represents a significant component of the cost structure of the Company.
Furthermore, if the smaller clients of the Company are consolidated with larger companies using other printing companies, the Company could lose its clients to competing printing companies. The Company may not be able to reduce costs and improve its operating efficiency rapidly enough to meet market conditions.
Furthermore, if the smaller clients of the Company are consolidated with larger companies using other printing companies, the Company could lose its clients to competing printing companies. 20 Table of Contents The Company may not be able to reduce costs and improve its operating efficiency rapidly enough to meet market conditions.
If the Company is unable to continue to pass along increases in the cost of paper to its clients, future increases in paper costs would adversely affect its margins and profits. 20 Table of Contents Due to the significance of paper in the Company’s print business, it is dependent on the availability of paper.
If the Company is unable to continue to pass along increases in the cost of paper to its clients, future increases in paper costs would adversely affect its margins and profits. Due to the significance of paper in the Company’s print business, it is dependent on the availability of paper.
The purpose of entering into the contracts is to reduce the variability of cash flows from interest payments related to a portion of the Company’s variable-rate debt.
The purpose of entering into the contracts was to reduce the variability of cash flows from interest payments related to a portion of the Company’s variable-rate debt.
Complying with these various laws could cause the Company to incur substantial costs or require changes to the Company’s business practices in a manner adverse to the Company’s business. Changes in the legal and regulatory environment or reporting requirements could limit the Company’s business activities, increase its operating costs, reduce demand for its products or result in litigation.
Complying with these various laws could cause the Company to incur substantial costs or require changes to the Company’s business practices in a manner adverse to the Company’s business. 27 Table of Contents Changes in the legal and regulatory environment or reporting requirements could limit the Company’s business activities, increase its operating costs, reduce demand for its products or result in litigation.
This has led to price spikes for mailers and may also reduce the incentive for the USPS to continue to take out costs and instead continue to rely on postage to cover the costs of an outdated postal service that does not reflect the industry’s ability or willingness to pay.
This will continue to lead to price spikes for mailers and may also reduce the incentive for the USPS to continue to take out costs and instead continue to rely on postage to cover the costs of an outdated postal service that does not reflect the industry’s ability or willingness to pay.
If the Company is unable to hire and train sufficient numbers of personnel, the Company’s business would be adversely affected. The nationwide shortage of available production personnel may also put a strain on the Company’s ability to accept new work from client requests, including during the Company’s seasonally higher second half of the calendar year.
If the Company is unable to hire and train sufficient numbers of personnel, the Company’s business would be adversely affected. Any shortage of available production personnel may also put a strain on the 21 Table of Contents Company’s ability to accept new work from client requests, including during the Company’s seasonally higher second half of the calendar year.
The Company and the overall printing industry continues to experience a reduction in demand for printed materials and overcapacity due to various factors including the sustained and increasing shift of digital substitution by marketers and advertisers (to both replace and augment campaigns that were historically focused on print), as well as macroeconomic conditions and recessions (which severely impact print volumes and further accelerate the impact of media disruption).
The Company and the overall printing industry continue to experience a reduction in demand for printed materials and overcapacity due to various factors including the sustained and increasing shift of digital substitution by marketers and advertisers (to both replace and augment campaigns that were historically focused on print), as well as macroeconomic conditions and prior recessions (which severely impacted print volumes and further accelerated the impact of media disruption).
As a result of those reviews, the PRC authorized a five year rate-making structure that provides the USPS with additional pricing flexibility over the Consumer Price Index cap, which may result in a substantially altered rate structure for mailers.
As a result of those reviews, the PRC authorized a five year rate-making structure that provides the USPS with additional pricing flexibility over the Consumer Price Index (“CPI”) cap, which has resulted in a substantially altered rate structure for mailers.
The Company’s transformation to a marketing experience company increases the complexity of the Company’s business, and if the Company is unable to successfully adapt its marketing offerings and business processes as required by new markets and technologies, such as artificial intelligence, the Company will be at a competitive disadvantage and its ability to grow will be adversely affected.
Risks Relating to Quad’s Business, Operations and Industry The Company’s transformation to a marketing experience company increases the complexity of the Company’s business, and if the Company is unable to successfully adapt its marketing offerings and business processes as required by new markets and technologies, such as artificial intelligence, the Company will be at a competitive disadvantage and its ability to grow will be adversely affected.
As of January 31, 2024, the class B stock constitutes approximately 78% of the Company’s total voting power.
As of January 31, 2025, the class B stock constitutes approximately 78% of the Company’s total voting power.
In addition, with rapid changes in technology affecting the marketing and advertising industry, including generative artificial intelligence, the Company may not accurately predict trends, identify use cases, or make the technological adaptations or investments necessary to stay competitive in these new markets.
In addition, with rapid changes in technology affecting the marketing and advertising industry, including generative artificial intelligence, the Company may not accurately predict trends, identify use cases, adapt its marketing offerings and business processes, or make the technological adaptations or investments necessary to stay competitive in these new markets.
If the incentives to co-mail are decreased by USPS regulations, the overall cost to mail printed products will increase and may result in print volumes declining. Federal statute requires the Postal Regulatory Commission (“PRC”) to conduct reviews of the overall rate-making structure for the USPS to ensure funding stability.
If the incentives to co-mail are decreased by USPS regulations, the overall cost to mail printed products will increase and may result in print volumes declining. Federal statute requires the PRC to conduct reviews of the overall rate-making structure for the USPS to ensure funding stability.
In order to remain competitive, the Company will need to adapt to future changes, especially with regard to technology and talent, to enhance the Company’s existing offerings and introduce new offerings to address the changing demands of clients.
In order to remain competitive, the Company will need to adapt to future changes, especially with regard to technology, such as artificial intelligence, and talent, to enhance the Company’s existing offerings and introduce new offerings to address the changing demands of clients.
As of January 31, 2024, approximately 93% of the outstanding class B stock was held of record by the Quad Voting Trust, and that constitutes approximately 73% of the Company’s total voting power. The trustees of the Quad Voting Trust have the authority to vote the stock held by the Quad Voting Trust.
As of January 31, 2025, approximately 93% of the outstanding class B stock was held of record by the Quad Voting Trust, and that constitutes approximately 72% of the Company’s total voting power. The trustees of the Quad Voting Trust have the authority to vote the stock held by the Quad Voting Trust.
As a result of the November 2, 2021 amendment to the Senior Secured Credit Facility, the Term Loan A and revolving credit facility were both broken into two separate maturity dates.
As a result of an amendment to the Senior Secured Credit Facility, the Term Loan A and revolving credit facility were both broken into two separate maturity dates.
The price and availability of ink and ink components may be adversely affected by the availability of component raw materials, labor and transportation. Approximately half of the paper used by the Company is supplied directly by its clients.
The price and availability of ink and ink components may be adversely affected by the availability of component raw materials, labor and transportation, as well as by tariffs and trade restrictions. Approximately half of the paper used by the Company is supplied directly by its clients.
The Company has experienced, and expects to experience in the future, excess capacity and lower demand due to economic factors affecting consumers’ and businesses’ spending behavior, including as a result of macroeconomic conditions, recessionary concerns and/or geopolitical events.
The Company has experienced, and expects to experience in the future, excess capacity and lower demand due to economic factors affecting consumers’ and businesses’ spending behavior, including as a result of macroeconomic conditions, tariffs, trade restrictions and/or other geopolitical events.
However, there is still a limited active market for the class A common shares. The Company cannot predict the extent to which investor interest in the Company will lead to the development of a more active trading market for its class A common stock on the NYSE or how liquid that market will be.
The Company cannot predict the extent to which investor interest in the Company will lead to the development of a more active trading market for its class A common stock on the NYSE or how liquid that market will be.
Although historically the Company generally has not experienced significant difficulty in obtaining adequate quantities of paper, continued decline in suppliers, changes in United States import or trade regulations, or other developments in the overall paper markets could result in a decrease in the supply of paper and could adversely affect the Company’s revenues or profits.
Although historically the Company generally has not experienced significant difficulty in obtaining adequate quantities of paper, continued decline in suppliers, changes in United States import or trade regulations, paper mills’ reduction of graphic paper production capacity in favor of other product lines, or other developments in the overall paper markets could result in a decrease in the supply of paper and could adversely affect the Company’s revenues or profits.
Certain industries in which the Company’s clients operate are experiencing consolidation. When client consolidation occurs, it is possible that the volume of work performed by the Company for a client after the consolidation will be less than it was before the consolidation or that the client’s work will be completely moved to competitors.
Certain industries in which the Company’s clients operate have experienced, and in the future may experience consolidation. When client consolidation occurs, it is possible that the volume of work performed by the Company for a client after the consolidation will be less than it was before the consolidation or that the client’s work will be completely moved to competitors.
The revised rate authority that is effective as a result of the rules issued by the PRC includes a higher overall rate cap on the USPS’ ability to increase rates from year to year. The USPS has used these additional rate authorities to implement twice a year increases and are expected to continue to do so in the future.
The revised rate authority that is effective as a result of the rules issued by the PRC includes a higher overall rate cap on the USPS’ ability to increase rates from year to year. The USPS has used these additional rate authorities to implement twice a year increases.
The price of such raw materials has fluctuated over time and has caused fluctuations in the Company’s net sales and cost of sales. This volatility may continue and the Company may experience increases in the costs of its raw materials in the future as prices in the overall paper, ink and energy markets are expected to remain beyond its control.
The price of raw materials used by the Company has fluctuated over time and has caused fluctuations in the Company’s net sales and cost of sales. This volatility may continue and the Company may experience increases in the costs of its raw materials in the future as prices are expected to remain beyond its control.
The Company expects to utilize the deferred tax assets to reduce consolidated income tax liabilities in future taxable years. However, the Company may not be able to fully utilize the deferred tax assets if its future taxable income and related income tax liability is insufficient to permit their use.
However, the Company may not be able to fully utilize the deferred tax assets if its future taxable income and related income tax liability is insufficient to permit their use.
Risks Relating to Quad’s Business, Operations and Industry Decreases in demand for printing services caused by factors outside of the Company’s control, including the substitution of printed products with digital content, recessions and other macroeconomic conditions, as well as significant downward pricing pressure, may continue to adversely affect the Company.
Decreases in demand for printing services caused by factors outside of the Company’s control, including the substitution of printed products with digital content, prior and any future recessions and other macroeconomic conditions, as well as significant downward pricing pressure, may continue to adversely affect the Company.
The majority of the plans’ assets are held in North American and global equity securities and debt securities. The asset allocation as of December 31, 2023, was approximately 21% equity securities and 79% debt securities. As of December 31, 2023, the Company had underfunded pension liabilities of $39.4 million for single employer defined benefit plans in the United States.
The majority of the plans’ assets are held in North American and global equity securities and debt securities. The asset allocation as of December 31, 2024, was approximately 22% equity securities and 78% debt securities. As of December 31, 2024, the Company had underfunded pension liabilities of $34.1 million for single employer defined benefit plans in the United States.
The Company’s business is seasonal, with the Company recognizing the majority of its operating income in the second half of the calendar year, primarily as a result of the increased magazine advertising page counts and retail inserts and catalogs from back-to-school and holiday-related advertising and promotions.
The Company’s revenue, operating income and cash flows are subject to cyclical and seasonal variations. The Company’s business is seasonal, with the Company recognizing the majority of its operating income in the second half of the calendar year, primarily as a result of the increased catalogs and retail inserts from back-to-school and holiday-related advertising and promotions.
There can be no assurance that all of the Company’s employees, contractors or agents, including those representing the Company in countries where practices which violate anti-corruption laws may be customary, will not take actions that violate the Company’s policies and procedures.
There can be no assurance that all of the Company’s employees, contractors or agents, including those representing the Company in countries where practices which violate anti-corruption laws may be customary, will not take actions that violate the Company’s policies and procedures. The failure to comply with the laws governing international business practices may result in substantial penalties and fines.
As of December 31, 2023, the Company was in compliance with all financial covenants in its debt agreements. While the Company currently expects to be in compliance in future periods with all of the financial covenants, there can be no assurance that these covenants will continue to be met.
While the Company currently expects to be in compliance in future periods with all of the financial covenants, there can be no assurance that these covenants will continue to be met.
Legal and Regulatory Risks Unfavorable outcomes in legal proceedings could result in substantial costs and may harm the Company’s financial condition. The Company’s financial condition may be affected by the outcome of pending and future litigation, claims, investigations, legal and administrative cases and proceedings, whether civil or criminal, or lawsuits by governmental agencies or private parties.
The Company’s financial condition may be affected by the outcome of pending and future litigation, claims, investigations, legal and administrative cases and proceedings, whether civil or criminal, or lawsuits by governmental agencies or private parties.
The impacts of such proposals could have a material adverse impact on the Company’s financial condition and results of operations. 30 Table of Contents If QuadMed, a wholly-owned subsidiary of the Company, fails to comply with applicable healthcare laws and regulations, the Company could face substantial penalties, and its business, reputation, operations, prospects and financial condition of the Company’s subsidiary could be adversely affected.
If QuadMed, a wholly-owned subsidiary of the Company, fails to comply with applicable healthcare laws and regulations, the Company could face substantial penalties, and its business, reputation, operations, prospects and financial condition of the Company’s subsidiary could be adversely affected.
The Company continues to be substantially dependent on its production personnel to print the Company’s products in a cost-effective and efficient manner that allows the Company to obtain new clients and to drive sales from the Company’s existing clients.
The Company continues to be substantially dependent on its production personnel to print the Company’s products in a cost-effective and efficient manner that allows the Company to obtain new clients and to drive sales from the Company’s existing clients. The Company believes that there is significant competition for production personnel with the skills and technical knowledge that the Company requires.
QuadMed provides employer-sponsored healthcare solutions in the United States to employers of all sizes, including the Company and other private and public-sector companies. These solutions include, but are not limited to, on-site and near-site healthcare clinics, occupational health services, telemedicine, and health and wellness programs. The healthcare industry is heavily regulated, constantly evolving and subject to significant change and fluctuation.
QuadMed provides employer-sponsored healthcare solutions in the United States to employers of all sizes, including the Company and other private and public-sector companies. These solutions include, but are not limited to, on-site and near-site health centers, occupational health services, telemedicine, behavioral health and counseling services, and health and wellness programs.
In addition, in the future, the Company may be required to record a valuation allowance against the deferred tax assets if the Company believes it is unable to utilize them, which would have an adverse effect on the Company’s results of operations and financial position.
In addition, in the future, the Company may be required to record a valuation allowance against the deferred tax assets if the Company believes it is unable to utilize them, which would have an adverse effect on the Company’s results of operations and financial position. 26 Table of Contents Legal and Regulatory Risks Unfavorable outcomes in legal proceedings could result in substantial costs and may harm the Company’s financial condition.
Macroeconomic conditions, including inflation, high interest rates and recessionary concerns, cost and labor pressures, distribution challenges and the price and availability of paper, have had, and may continue to have, a negative impact on the Company’s business, financial condition, cash flows and results of operations.
Macroeconomic conditions, including inflation and elevated interest rates, postal rate increases, tariffs, trade restrictions, cost pressures and the price and availability of paper, have had, and may continue to have, a negative impact on the Company’s business, financial condition, cash flows and results of operations.
As of December 31, 2023, the Company had the following long-lived assets on its consolidated balance sheet included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K: (a) property, plant and equipment of $620.6 million; (b) goodwill of $103.0 million; and (c) other intangible assets, primarily representing the value of customer relationships acquired, of $21.8 million.
As of December 31, 2024, the Company had the following long-lived assets on its consolidated balance sheet included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K: (a) property, plant and equipment of $499.7 million; (b) goodwill of $100.3 million; and (c) other intangible assets, primarily representing the value of customer relationships acquired, of $7.2 million. 25 Table of Contents As of December 31, 2024, these assets represented approximately 47% of the Company’s total assets.
On April 28, 2014, and as last amended on January 4, 2024, the Company entered into a senior secured credit facility (the “Senior Secured Credit Facility,”) which includes two different loan facilities: a $825.0 million Term Loan A and a $432.5 million revolving credit facility.
On April 28, 2014, and as last amended on October 18, 2024, the Company entered into a senior secured credit facility (the “Senior Secured Credit Facility,”) which currently includes two different loan facilities: a $360.8 million Term Loan A and a $324.6 million revolving credit facility.
If these restrictions increase or these guidelines are followed, they may impact who buys and holds the Company’s stock. 31 Table of Contents The Company is a controlled company within the meaning of the rules of the New York Stock Exchange (“ NYSE ”) and, as a result, it relies on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.
The Company is a controlled company within the meaning of the rules of the New York Stock Exchange (“ NYSE ”) and, as a result, it relies on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.
Under current market conditions, it is possible that one or more of the Company’s vendors will be unable to fulfill their operating obligations due to financial hardships, liquidity issues or other reasons.
The Company may not be able to fully pass on to clients the impact of higher supply chain prices on its manufacturing costs. Under current market conditions, it is possible that one or more of the Company’s vendors will be unable to fulfill their operating obligations due to financial hardships, liquidity issues or other reasons.
In addition, the Company’s transformation to a marketing experience company is partially dependent upon the Company’s continued ability to identify and execute strategic divestiture opportunities to generate cash and related benefits. There can be no assurance whether the strategic benefits and expected financial impact of any divestitures will be achieved.
In addition, the Company’s transformation to a marketing experience company is partially dependent upon the Company’s continued ability to identify and execute strategic divestiture opportunities to generate cash and related benefits.
The Company expects inflationary cost pressures and certain supply chain shortages and distribution challenges to potentially continue through 2024 and the Company may not be able to fully mitigate the impact of the rising inflationary cost pressures through price increases.
The Company expects inflationary cost pressures, tariffs and trade restrictions, to potentially continue in 2025 and the Company may not be able to fully mitigate the impact of the rising inflationary cost pressures through price increases.
The harm may be immediate without affording the Company an opportunity for redress or correction. 25 Table of Contents Financial Risks The Company may be required to make capital expenditures to sustain and grow its platforms and processes, as well as make investments in the development and implementation of new systems, client technology, product technology, marketing and talent in order to keep pace with industry developments, client expectations, and to remain technologically and economically competitive.
There can be no assurance whether the strategic benefits and expected financial impact of any divestitures will be achieved. 23 Table of Contents Financial Risks The Company may be required to make capital expenditures to sustain and grow its platforms and processes, as well as make investments in the development and implementation of new systems, client technology, product technology, marketing and talent in order to keep pace with industry developments, client expectations, and to remain technologically and economically competitive.
The result may be reduced demand for printed products as clients may move more aggressively into other delivery methods, such as the many digital and mobile options now available to consumers. The PRC has committed to reviewing the 5-year structure in 2024, but resulting rate reductions may take years to finalize.
The result may be reduced demand for printed products as clients may move more aggressively into other delivery methods, such as the many digital and mobile options now available to consumers.
The Company has a material amount of property, plant, equipment, goodwill and other intangible assets on its balance sheet, due in part to acquisitions.
An other than temporary decline in operating results and enterprise value could lead to non-cash impairment charges due to the impairment of property, plant and equipment, goodwill and other intangible assets. The Company has a material amount of property, plant, equipment, goodwill and other intangible assets on its balance sheet, due in part to acquisitions.
Postal rate changes and USPS regulations that result in higher overall costs can influence the volume that these clients will be willing to print and ultimately send through the USPS. 19 Table of Contents Integrated distribution with the USPS is an important component of the Company’s business.
Postal costs are a significant component of the cost structures of many of the Company’s clients and potential clients. Postal rate changes and USPS regulations that result in higher overall costs can influence the volume that these clients will be willing to print and ultimately send through the USPS.
Proposals under consideration include requiring climate- and emissions-related disclosures and limitations on the amount of greenhouse gas that can be emitted (so-called “caps”) together with systems of trading allowed emissions capacities.
Proposals under consideration include requiring climate- and emissions-related disclosures and limitations on the amount of greenhouse gas that can be emitted together with systems of trading allowed emissions capacities. The impacts of such proposals could have a material adverse impact on the Company’s financial condition and results of operations.
If the Company does not successfully manage the increased workflow, necessary increases in paper and ink inventory, production capacity flows and other business elements during these high seasons of activity, this seasonality could adversely affect the Company’s cash flows and results of operations. 27 Table of Contents An other than temporary decline in operating results and enterprise value could lead to non-cash impairment charges due to the impairment of property, plant and equipment, goodwill and other intangible assets.
If the Company does not successfully manage the increased workflow, necessary increases in paper and ink inventory, production capacity flows and other business elements during these high seasons of activity, this seasonality could adversely affect the Company’s cash flows and results of operations.
The United States federal and state healthcare laws and regulations that impact the QuadMed subsidiary business include, among others, those: (a) regarding privacy, security and transmission of individually identifiable health information; (b) prohibiting, among other things, soliciting, receiving or providing remuneration to induce the referral of an individual for an item or service or the purchasing or ordering of an item or service for which payment may be made under healthcare programs; (c) prohibiting, among other things, knowingly presenting or causing to be presented claims for payment from third-party payors that are false or fraudulent; and (d) prohibiting the corporate practice of medicine.
The United States federal and state healthcare laws and regulations that impact the QuadMed subsidiary business include, among others, those: (a) regarding privacy, security and transmission of individually identifiable health information; (b) prohibiting, among other things, soliciting, receiving or providing remuneration to induce the referral of an individual for an item or service or the purchasing or ordering of an item or service for which payment may be made under healthcare programs; (c) prohibiting, among other things, knowingly presenting or causing to be presented claims for payment from third-party payors that are false or fraudulent; and (d) prohibiting the corporate practice of medicine. 28 Table of Contents Risks Relating to Quad’s Common Stock Holders of class A common stock are not able to independently elect directors of the Company or control any of the Company’s management policies or business decisions because the holders of class A common stock have substantially less voting power than the holders of the Company’s class B common stock, all of which is owned by certain members of the Quadracci family or trusts for their benefit, whose interests may be different from the holders of class A common stock.
For those clients that do not directly supply their own paper, the Company generally includes price adjustment clauses in sales contracts for paper and other critical raw materials in the printing process. Although these clauses generally mitigate paper price risk, higher paper prices and tight paper supplies may have an impact on client demand for printed products.
For those clients that do not directly supply their own paper, the Company generally includes price adjustment clauses in sales contracts for paper and other critical raw materials in the printing process.
If the Company passes along increases in the cost of freight and fuel and the price of the Company’s products and services increases as a result, client demand could be adversely affected, and thereby, negatively impact the Company’s financial performance. Macroeconomic conditions could have a material adverse impact on the Company’s business, financial conditions, cash flows and results of operations.
If the Company passes along increases in the cost of freight and fuel and the price of the Company’s products and services increases as a result, client demand could be adversely affected, and thereby, negatively impact the Company’s financial performance. Changes in postal rates, postal regulations and postal services may adversely impact clients’ demand for print products and services.
Continued consumer acceptance of such digital media, as an alternative to print materials, is uncertain and difficult to predict and may decrease the demand for the Company’s printed products, result in reduced pricing for its printing services and additional excess capacity in the printing industry, and adversely affect the results of the Company’s operations.
Continued consumer acceptance of such digital media, as an alternative to print materials, is uncertain and difficult to predict and may decrease the demand for the Company’s printed products, result in reduced pricing for its printing services and additional excess capacity in the printing industry, and adversely affect the results of the Company’s operations. 17 Table of Contents The Company may be adversely affected by 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 uncertainty as to how much of the authority the USPS will use on any specific rate increase also creates potential volume declines as rate predictability with respect to cost is no longer known for mailers.
The Company believes the continued use of all available rate authority by the USPS will continue to increase the potential volume declines as rate predictability with respect to cost is no longer known for mailers.
Accordingly, for so long as the Company is a controlled company, holders of class A stock may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the NYSE.
Accordingly, for so long as the Company is a controlled company, holders of class A stock may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the NYSE. 29 Table of Contents Currently, there is a limited active market for Quad’s class A common stock and, as a result, shareholders may be unable to sell their class A common stock without losing a significant portion of their investment.
These valuations include management’s estimates of sales, profitability, cash flow generation, capital structure, cost of debt, interest rates, capital expenditures and other assumptions.
The Company assesses impairment of property, plant and equipment, goodwill and other intangible assets based upon the expected future cash flows of the respective assets. These valuations include management’s estimates of sales, profitability, cash flow generation, capital structure, cost of debt, interest rates, capital expenditures and other assumptions.
The failure to comply with the laws governing international business practices may result in substantial penalties and fines. 29 Table of Contents The Company and its facilities are subject to various consumer protection and privacy laws and regulations, and will become subject to additional laws and regulations in the future.
The Company and its facilities are subject to various consumer protection and privacy laws and regulations, and will become subject to additional laws and regulations in the future.
As of December 31, 2023, the Company has recorded in its financial statements a pre-tax withdrawal liability for all United States MEPPs of $24.0 million in the aggregate.
As of December 31, 2024, the Company has recorded in its financial statements a pre-tax withdrawal liability for all United States MEPPs of $21.5 million in the aggregate. The Company is scheduled to make payments to the GCIU until April 2032 and made its final payment to the GCC in February 2024.
Currently, there is a limited active market for Quad’s class A common stock and, as a result, shareholders may be unable to sell their class A common stock without losing a significant portion of their investment. The Company’s class A stock has been traded on the NYSE under the symbol “QUAD” since July 6, 2010.
The Company’s class A stock has been traded on the NYSE under the symbol “QUAD” since July 6, 2010. However, there is still a limited active market for the class A common shares.
Many social media platforms immediately publish the content their subscribers’ and participants’ post, often without filters or checks on accuracy of the content posted. Information or commentary posted on such platforms at any time may be adverse to the Company’s interests or may be inaccurate, each of which may harm the Company’s reputation, business or prospects.
Information or commentary posted on such platforms at any time may be adverse to the Company’s interests or may be inaccurate, each of which may harm the Company’s reputation, business or prospects. The harm may be immediate without affording the Company an opportunity for redress or correction.
The Company’s future success also depends on its continuing ability to identify, hire, develop, and retain its executive management team, including its Chief Executive Officer, and other personnel for all areas of the organization. 23 Table of Contents Approximately 1,000 of the Company’s United States and international employees are covered by an industry wide agreement, a collective bargaining agreement or through a works council or similar arrangement.
The Company’s future success also depends on its continuing ability to identify, hire, develop, and retain its executive management team, including its Chief Executive Officer, and other personnel for all areas of the organization.
In addition, there has been a substantial increase in the use of social media platforms, including blogs, social media websites, and other forms of internet-based and mobile communications, which allow individuals access to a broad audience of consumers and other interested persons.
In addition, the increased use of social media platforms, including blogs, social media websites, and other forms of internet-based and mobile communications, allows individuals access to a broad audience of consumers and other interested persons. Many social media platforms immediately publish the content their subscribers’ and participants’ post, often without filters or checks on accuracy of the content posted.
Continuing or worsening inflation, recessionary concerns, supply chain and distribution challenges and/or uncertainty or disruptions in global credit and banking markets may have a material adverse impact on the Company’s business, financial condition, cash flows and/or results of operations. The Company operates in a highly competitive environment.
Continuing or worsening inflation and/or tariffs and trade restrictions may have a material adverse impact on the Company’s business, financial condition, cash flows and/or results of operations.
The Company is scheduled to make payments to the GCIU and GCC until April 2032 and February 2024, respectively. 28 Table of Contents The Company may not be able to utilize deferred tax assets to offset future taxable income. As of December 31, 2023, the Company had deferred tax assets, net of valuation allowances, of $86.6 million.
The Company may not be able to utilize deferred tax assets to offset future taxable income. As of December 31, 2024, the Company had deferred tax assets, net of valuation allowances, of $66.9 million. The Company expects to utilize the deferred tax assets to reduce consolidated income tax liabilities in future taxable years.
As of December 31, 2023, the borrowings outstanding under the Senior Secured Credit Facility were $511.1 million. 26 Table of Contents The Company’s various lending arrangements include certain financial covenants. In addition to the financial covenants, the debt facilities also include certain limitations on acquisitions, indebtedness, liens, dividends and repurchases of capital stock.
In addition to the financial covenants, the debt facilities also include certain limitations on acquisitions, indebtedness, liens, dividends and repurchases of capital stock. As of December 31, 2024, the Company was in compliance with all financial covenants in its debt agreements.
Many of the Company’s products are dependent upon a limited number of vendors, and significant disruptions could adversely affect operations (including labor pressures, distribution challenges, recessionary concerns and other macroeconomic conditions).
Many of the Company’s products are dependent upon a limited number of vendors, and the price and availability of inventory, parts and other materials, such as printing plates, could be adversely affected by supply chain disruptions, such as from labor pressures; tariffs, anti-dumping duties, and trade restrictions; distribution challenges; and macroeconomic conditions.
The Company may be adversely affected by increases in its operating costs, including the cost and availability of paper, ink components and other raw materials, parts for equipment, labor-related costs, fuel and other energy costs and freight rates. The primary raw materials that the Company uses in its print business are paper, ink and energy.
The primary raw materials that the Company uses in its print business are paper, ink and energy.
Borrowing from lenders who elected to not extend the maturity date matured on January 31, 2024, whereas borrowing from lenders who elected to extend the maturity date matures on November 2, 2026.
Borrowing from lenders who elected to not extend the maturity date will mature on November 2, 2026, whereas borrowing from lenders who elected to extend the maturity date matures on October 18, 2029. As of December 31, 2024, the borrowings outstanding under the Senior Secured Credit Facility were $360.8 million. The Company’s various lending arrangements include certain financial covenants.
Any material change in the current service levels provided by the postal service could impact the demand that clients have for print services. The USPS continues to experience financial problems. The passing of the Postal Service Reform Act of 2022, signed in April 2022, gave the USPS considerable financial relief as well as significant relief over the next ten years.
Integrated distribution with the USPS is an important component of the Company’s business. Any material change in the current service levels provided by the postal service could impact the demand that clients have for print services. In September 2024, the USPS held a pre-filing conference to further reduce service standards.
Removed
Changes in postal rates, postal regulations and postal services may adversely impact clients’ demand for print products and services. Postal costs are a significant component of the cost structures of many of the Company’s clients and potential clients.
Added
Although these clauses generally mitigate paper price risk, higher paper prices and tight paper supplies, as well as changes in the United States import or trade regulations, may have an impact on client demand for printed products.
Removed
While the legislative postal reform helps considerably, without decreased operational cost structures, increased efficiencies or increased volumes and revenues, these losses will potentially continue into the future. As a result of these financial difficulties, the USPS has continued to adjust its postal rates and service levels.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn general, the Company seeks to address cybersecurity risks through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, security and availability of the information that the Company collects and stores by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur. 32 Table of Contents Risk Management and Strategy As one of the critical elements of the Company’s overall ERM approach, the Company’s cybersecurity program is focused on the following key areas: Overall As discussed in more detail under the heading “Governance,” the Board’s oversight of cybersecurity risk management is supported by the Audit Committee of the Board, which receives periodic updates from the Company’s ERM function, the Company’s Executive Director of Information Security & Compliance, other members of management and relevant management committees and councils.
Biggest changeRisk Management and Strategy As one of the critical elements of the Company’s overall ERM approach, the Company’s cybersecurity program is focused on the following key areas: Overall As discussed in more detail under the heading “Governance,” the Board’s oversight of cybersecurity risk management is supported by the Audit Committee of the Board, which receives periodic updates from the Company’s ERM function, the Company’s Executive Director of Information Security & Compliance, other members of management and relevant management committees and councils.
In addition, annual compliance, security awareness and acceptable use training, as well as regular phish testing, is delivered to all employees. 33 Table of Contents The Company engages in the periodic assessment and testing of the Company’s policies, standards, processes and practices that are designed to address cybersecurity threats and incidents.
In addition, annual compliance, security awareness and acceptable use training, as well as regular phish testing, is delivered to all employees. The Company engages in the periodic assessment and testing of the Company’s policies, standards, processes and practices that are designed to address cybersecurity threats and incidents.
The Be Cyber Smart campaign provides employees with tools and tips for proactive protection measures such as password management, the importance of computer restarts and software updates, security measures when working from home, recognizing and avoiding phishing and maintaining data privacy.
The Be Cyber Smart campaign provides employees with tools and tips for proactive protection measures such as password management, the importance of software updates and computer restarts, security measures when working remote, recognizing and avoiding phishing and maintaining data privacy.
Through ongoing communications with these teams, the Executive Director of Information Security & Compliance monitors the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and reports such threats and incidents to the Audit Committee and Board when appropriate.
Through ongoing communications with these teams, the Executive Director of Information Security & Compliance monitors the prevention, detection, mitigation and remediation of cybersecurity 31 Table of Contents threats and incidents in real time and reports such threats and incidents to the Audit Committee and Board when appropriate.
Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected or are not reasonably likely to affect the Company, including its business strategy, results of operations or financial condition. 34 Table of Contents
Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected or are not reasonably likely to affect the Company, including its business strategy, results of operations or financial condition.
Technical Safeguards The Company deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.
Technical Safeguards The Company deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality 30 Table of Contents and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.
Added
In general, the Company seeks to address cybersecurity risks through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, security and availability of the information that the Company collects and stores by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table lists the Company’s operating locations with manufacturing facilities totaling over 500,000 square feet as of December 31, 2023: Locations Square Feet Property Type Segment Lomira, Wisconsin, United States 2,174,000 Owned United States Print and Related Services Sussex, Wisconsin, United States 1,971,000 Owned United States Print and Related Services Martinsburg, West Virginia, United States 1,740,000 Owned United States Print and Related Services Hartford, Wisconsin, United States 1,682,000 Owned United States Print and Related Services Saratoga Springs, New York, United States (1) 1,034,000 Owned United States Print and Related Services West Allis, Wisconsin, United States 913,000 Leased United States Print and Related Services The Rock, Georgia, United States 797,000 Owned United States Print and Related Services Wyszkow, Poland 709,000 Owned International Effingham, Illinois, United States (1) 564,000 Owned United States Print and Related Services ______________________________ (1) The Effingham, Illinois facility was announced for closure on October 24, 2023, and the Saratoga Springs, New York facility was announced for closure on January 19, 2024.
Biggest changeThe following table lists the Company’s operating locations with manufacturing facilities totaling over 500,000 square feet as of December 31, 2024: Locations Square Feet Property Type Segment Lomira, Wisconsin, United States 2,174,000 Owned United States Print and Related Services Sussex, Wisconsin, United States 1,971,000 Owned United States Print and Related Services Martinsburg, West Virginia, United States 1,740,000 Owned United States Print and Related Services Hartford, Wisconsin, United States 1,682,000 Owned United States Print and Related Services West Allis, Wisconsin, United States 913,000 Leased United States Print and Related Services The Rock, Georgia, United States 797,000 Owned United States Print and Related Services Wyszkow, Poland (1) 709,000 Owned International ______________________________ (1) As of December 31, 2024, the Company has classified its European operations as held for sale.
Item 2. Properties Quad’s corporate office is located in Sussex, Wisconsin. The Company owned or leased 96 facilities located in 14 countries including manufacturing operations, warehouses and office space totaling approximately 17,580,000 square feet, of which approximately 12,610,000 is owned space and approximately 4,970,000 is leased space as of December 31, 2023.
Item 2. Properties Quad’s corporate office is located in Sussex, Wisconsin. The Company owned or leased 86 facilities located in 14 countries including manufacturing operations, warehouses and office space totaling approximately 15,969,000 square feet, of which approximately 11,461,000 is owned space and approximately 4,508,000 is leased space as of December 31, 2024.
Within the United States Print and Related Services segment, the Company operated 34 owned or leased manufacturing facilities, encompassing approximately 14,556,000 square feet as of December 31, 2023. Within the International segment, the Company operated 9 owned or leased manufacturing facilities, encompassing approximately 1,739,000 square feet as of December 31, 2023.
Within the United States Print and Related Services segment, the Company operated 32 owned or leased manufacturing facilities, encompassing approximately 13,316,000 square feet as of December 31, 2024. Within the International segment, the Company operated 6 owned or leased manufacturing facilities, encompassing approximately 1,552,000 square feet as of December 31, 2024.
Added
For more information on the European operations assets classified as held for sale, refer to Note 22, “Assets Held for Sale.”

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor additional information, see Note 9, “Commitments and Contingencies — Litigation,” to the consolidated financial statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures Not applicable. 35 Table of Contents PART II
Biggest changeFor additional information, see Note 9, “Commitments and Contingencies — Litigation,” to the consolidated financial statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures Not applicable. 32 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 35 Part II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 36 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 38 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 59 Item 8. Financial Statements and Supplementary Data 61
Biggest changeItem 4. Mine Safety Disclosures 32 Part II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 33 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 35 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 55 Item 8. Financial Statements and Supplementary Data 58

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeInformation about the Company’s repurchases of its class A common stock during the three months ended December 31, 2023, was as follows: Issuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1, 2023 to October 31, 2023 354,682 4.83 354,682 $ 78,116,172 November 1, 2023 to November 30, 2023 137,714 4.42 137,714 77,507,158 December 1, 2023 to December 31, 2023 — — — 77,507,158 Total 492,396 492,396 ______________________________ (1) Represents shares of the Company’s class A common stock. 36 Table of Contents (2) On July 30, 2018, the Company’s Board of Directors authorized a share repurchase program of up to $100.0 million of the Company’s outstanding class A common stock.
Biggest changeSecurities Authorized For Issuance Under Equity Compensation Plans See Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” of this Annual Report on Form 10-K for certain information regarding the Company’s equity compensation plans. 33 Table of Contents Information about the Company’s repurchases of its class A common stock during the three months ended December 31, 2024, was as follows: Issuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1, 2024 to October 31, 2024 — — — $ 77,507,158 November 1, 2024 to November 30, 2024 — — — 77,507,158 December 1, 2024 to December 31, 2024 — — — 77,507,158 Total — — ______________________________ (1) Represents shares of the Company’s class A common stock.
If the Company’s Total Leverage Ratio is greater than 2.75 to 1.00, as defined in the Company’s Senior Secured Credit Facility, last amended on January 4, 2024, (see Note 10.
If the Company’s Total Leverage Ratio is greater than 2.75 to 1.00, as defined in the Company’s Senior Secured Credit Facility, last amended on October 18, 2024, (see Note 10.
As of January 31, 2024, there were 2,031 record holders of the class A stock and 22 record holders of the class B stock. The Company’s class A stock is listed on the NYSE under the symbol “QUAD”. The class A stock is entitled to one vote per share.
As of January 31, 2025, there were 1,994 record holders of the class A stock and 22 record holders of the class B stock. The Company’s class A stock is listed on the NYSE under the symbol “QUAD”. The class A stock is entitled to one vote per share.
The timing, manner, price and amount of any repurchase will depend on economic and market conditions, share price, trading volume, applicable legal requirements and other factors. The program may be suspended or discontinued at any time. There were 2,852,501 and 3,093,662 shares of the Company’s class A stock repurchased during the years ended December 31, 2023 and 2022, respectively.
The timing, manner, price and amount of any repurchase will depend on economic and market conditions, share price, trading volume, applicable legal requirements and other factors. The program may be suspended or discontinued at any time. There were no shares of the Company’s class A stock repurchased during the year ended December 31, 2024.
The Company’s outstanding capital stock as of December 31, 2023, consisted of 37.4 million shares of class A stock, 13.6 million shares of class B stock and no shares of class C common stock or preferred stock.
The Company’s outstanding capital stock as of December 31, 2024, consisted of 38.8 million shares of class A stock, 13.3 million shares of class B stock and no shares of class C common stock or preferred stock.
As of December 31, 2023, there were $77.5 million of authorized repurchases remaining under the program. 37 Table of Contents
There were 2,852,501 shares repurchased during the year ended December 31, 2023. As of December 31, 2024, there were $77.5 million of authorized repurchases remaining under the program. 34 Table of Contents
Removed
Securities Authorized For Issuance Under Equity Compensation Plans See Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” of this Annual Report on Form 10-K for certain information regarding the Company’s equity compensation plans.
Added
(2) On July 30, 2018, the Company’s Board of Directors authorized a share repurchase program of up to $100.0 million of the Company’s outstanding class A common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCorporate The following table summarizes unallocated operating expenses presented as Corporate: Year Ended December 31, 2023 2022 $ Change % Change (dollars in millions) Operating expenses (including restructuring, impairment and transaction-related charges) $ 49.2 $ 50.3 $ (1.1) (2.2) % Restructuring, impairment and transaction-related charges 1.6 2.0 (0.4) (20.0) % Operating Expenses Corporate operating expenses decreased $1.1 million, or 2.2%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to lower employee-related costs and a $0.4 million decrease in restructuring, impairment and transaction-related charges.
Biggest changeCorporate The following table summarizes unallocated operating expenses presented as Corporate: Year Ended December 31, 2024 2023 $ Change % Change (dollars in millions) Operating expenses (including restructuring, impairment and transaction-related charges, net) $ 47.9 $ 49.2 $ (1.3) (2.6) % Restructuring, impairment and transaction-related charges, net (3.2) 1.6 (4.8) nm Operating Expenses Corporate operating expenses decreased $1.3 million, or 2.6%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to a $4.8 million decrease in restructuring, impairment and transaction-related charges, net, partially offset by a $4.8 million increase in employee-related costs. 45 Table of Contents Restructuring, Impairment and Transaction-Related Charges, Net Corporate restructuring, impairment and transaction-related charges, net decreased $4.8 million, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the following: Year Ended December 31, 2024 2023 $ Change (dollars in millions) Employee termination charges $ — $ 0.3 $ (0.3) Transaction-related charges (income) (a) (3.2) 1.5 (4.7) Other restructuring charges (income) — (0.2) 0.2 Total restructuring, impairment and transaction-related charges, net $ (3.2) $ 1.6 $ (4.8) ______________________________ (a) Includes professional service fees related to business acquisitions and divestiture activities, as well as adjustments to estimated acquisition consideration in 2024.
EBITDA, EBITDA margin, Free Cash Flow and Debt Leverage Ratio are non-GAAP financial measures (see the definitions of EBITDA, EBITDA margin and the reconciliation of net earnings (loss) to EBITDA in the “Results of Operations” section below, and see the definitions of Free Cash Flow and Debt Leverage Ratio, the reconciliation of net cash provided by operating activities to Free Cash Flow, and the calculation of Debt Leverage Ratio in the “Liquidity and Capital Resources” section below).
EBITDA, EBITDA margin, Free Cash Flow and Debt Leverage Ratio are non-GAAP financial measures (see the definitions of EBITDA, EBITDA margin and the reconciliation of net loss to EBITDA in the “Results of Operations” section below, and see the definitions of Free Cash Flow and Debt Leverage Ratio, the reconciliation of net cash provided by operating activities to Free Cash Flow, and the calculation of Debt Leverage Ratio in the “Liquidity and Capital Resources” section below).
Corporate consists of unallocated general and administrative activities and associated expenses including, in part, executive, legal and finance, as well as certain expenses and income from frozen employee retirement plans, such as pension benefit plans. 39 Table of Contents Key Performance Metrics Overview The Company’s management believes the ability to generate net sales growth, profit increases and positive cash flow, while maintaining the appropriate level of debt, are key indicators of the successful execution of the Company’s business strategy and will increase shareholder value.
Corporate consists of unallocated general and administrative activities and associated expenses including, in part, executive, legal and finance, as well as certain expenses and income from frozen employee retirement plans, such as pension benefit plans. 36 Table of Contents Key Performance Metrics Overview The Company’s management believes the ability to generate net sales growth, profit increases and positive cash flow, while maintaining the appropriate level of debt, are key indicators of the successful execution of the Company’s business strategy and will increase shareholder value.
This section provides an analysis of the Company’s capitalization, cash flows and a discussion and table of outstanding debt and commitments. Forward-looking statements important to understanding the Company’s financial condition are included in this section.
This section provides an analysis of the Company’s capitalization, cash flows and a discussion of outstanding debt and commitments. Forward-looking statements important to understanding the Company’s financial condition are included in this section.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion of the financial condition and results of operations of Quad should be read together with Quad’s audited consolidated financial statements for each of the two years in the period ended December 31, 2023, including the notes thereto, included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion of the financial condition and results of operations of Quad should be read together with Quad’s audited consolidated financial statements for each of the two years in the period ended December 31, 2024, including the notes thereto, included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.
If the Company’s Total Leverage Ratio is above 2.50 to 1.00 but below 2.75 to 1.00, the Company is prohibited from making greater than $100.0 million of dividend payments, capital stock repurchases and certain other payments, over the course of the agreement. If the T otal Leverage Ratio is less than 2.50 to 1.00, there are no such restrictions.
If the Company’s Total Leverage Ratio is above 2.50 to 1.00 but below 2.75 to 1.00, the Company is prohibited from making greater than $100.0 million of dividend payments, capital stock repurchases and certain other payments, over the course of the agreement. If the Total Leverage Ratio is less than 2.50 to 1.00, there are no such restrictions.
The Company continues to focus on reducing pension obligations through cash contributions to the plans, lump-sum settlements and plan design changes. 54 Table of Contents Share Repurchase Program On July 30, 2018, the Company’s Board of Directors authorized a share repurchase program of up to $100.0 million of the Company’s outstanding class A common stock.
The Company continues to focus on reducing pension obligations through cash contributions to the plans, lump-sum settlements and plan design changes. 51 Table of Contents Share Repurchase Program On July 30, 2018, the Company’s Board of Directors authorized a share repurchase program of up to $100.0 million of the Company’s outstanding class A common stock.
This section contains an analysis of the Company’s results of operations by comparing the results for the year ended December 31, 2023, to the year ended December 31, 2022. Forward-looking statements providing a general description of recent and projected industry and Company developments that are important to understanding the Company’s results of operations are included in this section.
This section contains an analysis of the Company’s results of operations by comparing the results for the year ended December 31, 2024, to the year ended December 31, 2023. Forward-looking statements providing a general description of recent and projected industry and Company developments that are important to understanding the Company’s results of operations are included in this section.
The Company’s management assesses Free Cash Flow as a measure to quantify cash available for (1) strengthening the balance sheet (debt reduction), (2) strategic capital allocation and deployment through investments in the business (acquisitions and strategic investments) and (3) returning capital to the shareholders (dividends and share repurchases).
The Company’s management assesses Free Cash Flow as a measure to quantify cash available for (1) strengthening the balance sheet (debt and pension liability reduction), (2) strategic capital allocation and deployment through investments in the business (acquisitions and strategic investments) and (3) returning capital to the shareholders (dividends and share repurchases).
The Total Leverage Ratio included in the Company’s debt covenants includes interest rate derivative liabilities, letters of credit and surety bonds as debt, and excludes non-cash stock-based compensation expense from EBITDA. The Total Net Leverage Ratio includes and excludes the same adjustments as the Total Leverage Ratio, in addition to netting domestic unrestricted cash with debt.
The Total Leverage Ratio included in the Company’s debt covenants includes interest rate derivative liabilities and letters of credit as debt, and excludes non-cash stock-based compensation expense from EBITDA. The Total Net Leverage Ratio includes and excludes the same adjustments as the Total Leverage Ratio, in addition to netting domestic unrestricted cash with debt.
Risk Management For a discussion of the Company’s exposure to market risks and management of those market risks, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of this Annual Report on Form 10-K. 55 Table of Contents Critical Accounting Policies and Estimates The Company’s consolidated financial statements are prepared in accordance with GAAP.
Risk Management For a discussion of the Company’s exposure to market risks and management of those market risks, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of this Annual Report on Form 10-K. Critical Accounting Policies and Estimates The Company’s consolidated financial statements are prepared in accordance with GAAP.
Assessing the impairment of long-lived assets requires the Company to make important estimates and assumptions, including, but not limited to, the expected future cash flows that the assets will generate, how the assets will be used based on the strategic direction of the Company, their remaining useful life and their residual value, if any.
Assessing the impairment of long-lived assets requires the Company to make important estimates and assumptions, including, but not limited to, the expected future cash flows that the assets 53 Table of Contents will generate, how the assets will be used based on the strategic direction of the Company, their remaining useful life and their residual value, if any.
The Company’s operating and reportable segments, including their product and service offerings, and a “Corporate” category, are summarized below. The United States Print and Related Services segment is predominantly comprised of the Company’s United States printing operations and is managed as one integrated platform.
The Company’s operating and reportable segments, including their product and service offerings, and a “Corporate” category, are summarized below. The United States Print and Related Services segment is predominantly comprised of the Company’s United States printing operations, managed as one integrated platform, and marketing and other complementary services.
The Company determined that the following distinct products and services represent separate performance obligations: • Pre-Press Services • Print • Other Services For Pre-Press and Other Services, the Company recognizes revenue at point-in-time upon completion of the performed service and acceptance by the customer.
The Company determined that the following distinct products and services represent separate performance obligations: • Pre-Press Services • Print • Other Services 52 Table of Contents For Pre-Press and Other Services, the Company recognizes revenue at point-in-time upon completion of the performed service and acceptance by the customer.
Additionally, the price and availability of paper has been, and may continue to be, adversely affected by paper mills’ permanent or temporary closures, and mills’ access to raw materials, conversion to produce other types of paper, and ability to transport paper produced.
Additionally, the price and availability of paper has been, and may continue to be, adversely affected by paper mills’ permanent or temporary closures; paper mills’ access to raw materials, conversion to produce other types of paper, and ability to transport paper produced; and tariffs and trade restrictions.
The Company completed the eighth amendment to the Senior Secured Credit Facility on January 4, 2024, which added an additional $25.0 million principal value to the Term Loan A (under the Extended Maturity Date).
The Company completed the eighth amendment to the Senior Secured Credit Facility on January 4, 2024, which added an additional $25.0 million principal value to the Term Loan A (under the Extended Maturity Date, as defined below).
This has led to price spikes for mailers and may also reduce the incentive for the USPS to continue to take out costs and instead continue to rely on postage to cover the costs of an outdated postal service that does not reflect the industry’s ability or willingness to pay.
This will continue to lead to price spikes for mailers and may also reduce the incentive for the USPS to continue to take out costs and instead continue to rely on postage to cover the costs of an outdated postal service that does not reflect the industry’s ability or willingness to pay.
The passing of the Postal Service Reform Act of 2022, signed in April 2022, gave the USPS considerable financial relief as well as significant relief over the next ten years. While the legislative postal reform helps considerably, without decreased operational cost structures, increased efficiencies or increased volumes and revenues, these losses will potentially continue into the future.
The passing of the Postal Service Reform Act of 2022, signed in April 2022, gave the USPS considerable financial relief as well as significant other relief over the next ten years. While the legislative postal reform helps considerably, without decreased operational cost structures, increased efficiencies or increased volumes and revenues, these losses are expected to continue into the future.
As the Company’s Total Leverage Ratio as of December 31, 2023, was 2.18 t o 1.00, the limitations described above are not applicable at this time. • If the Company’s Senior Secured Leverage Ratio is greater than 3.00 to 1.00 or the Company’s Total Net Leverage Ratio which, on a rolling twelve-month basis, is defined as consolidated net indebtedness to consolidated EBITDA, is greater than 3.50 to 1.00, the Company is prohibited from voluntarily prepaying any unsecured or subordinated indebtedness, with certain exceptions (including any mandatory prepayments on the Senior Unsecured Notes or any other unsecured or subordinated debt).
As the Company’s Total Leverage Ratio as of December 31, 2024, was 1.68 to 1.00, the limitations described above are not applicable at this time. • If the Company’s Senior Secured Leverage Ratio is greater than 3.00 to 1.00 or the Company’s Total Net Leverage Ratio which, on a rolling twelve-month basis, is defined as consolidated net indebtedness to consolidated EBITDA, is greater than 3.50 to 1.00, the Company is prohibited from voluntarily prepaying any unsecured or subordinated indebtedness, with certain exceptions (including any mandatory prepayments on any unsecured or subordinated debt).
As of December 31, 2023, the Company has net reserves for workers’ compensation of $28.7 million, of which $6.7 million was recorded in other current liabilities and $31.0 million was recorded in other long-term liabilities in the consolidated balance sheets (see Note 8, “Other Current and Long-Term Liabilities”).
As of December 31, 2024, the Company has net reserves for workers’ compensation of $24.0 million, of which $5.6 million was recorded in other current liabilities and $25.7 million was recorded in other long-term liabilities in the consolidated balance sheets (see Note 8, “Other Current and Long-Term Liabilities”).
The Company continues to face several other industry challenges that have been, and are expected to continue to, adversely impact the Company’s results of operation. The Company continues to operate in a high interest rate environment, which is expected to continue through 2024.
The Company continues to face several other industry challenges that have been, and are expected to continue to, adversely impact the Company’s results of operation. The Company continues to operate in an elevated interest rate environment, which is expected to continue through 2025.
The limitations described above are currently not applicable, as the Company’s Senior Secured Leverage Ratio w as 1.99 to 1.00 and Total Net Leverage Ratio wa s 1.99 to 1.00, as of December 31, 2023 .
The limitations described above are currently not applicable, as the Company’s Senior Secured Leverage Ratio wa s 1.57 to 1.00 and Total Net Leverage Ratio wa s 1.57 to 1.00, as of December 31, 2024 .
Selling, general and administrative expenses as a percentage of net sales increased from 11.1% for the year ended December 31, 2022, to 11.6% for the year ended December 31, 2023.
Selling, general and administrative expenses as a percentage of net sales increased from 11.6% for the year ended December 31, 2023, to 13.4% for the year ended December 31, 2024.
The revised rate authority that is effective as a result of the rules issued by the PRC includes a higher overall rate cap on the USPS’ ability to increase rates from year to year. The USPS has used these additional rate authorities to implement twice a year increases and are expected to continue to do so in the future.
The revised rate authority that is effective as a result of the rules issued by the PRC includes a higher overall rate cap on the USPS’ ability to increase rates from year to year. The USPS has used these additional rate authorities to implement twice a year increases.
(2) Other operating income elements increased $4.9 million ($3.7 million, net of tax) primarily due to the following: (1) the impact from print product pricing; (2) a $14.1 million decrease in selling, general and administrative expenses; (3) a $12.5 million decrease in depreciation and amortization expense; (4) impacts from improved manufacturing productivity; and (5) savings from other cost reduction initiatives, partially offset by print volume decreases.
(2) Other operating income elements increased $17.5 million ($13.1 million, net of tax) primarily due to the following: (1) a $26.3 million decrease in depreciation and amortization expense; (2) impacts from improved manufacturing productivity; and (3) savings from other cost reduction initiatives, partially offset by print volume decreases and a $12.3 million increase in selling, general and administrative expenses.
The Company is unable to predict the full future impact these challenges will have on its business, financial condition, cash flows and results of operations, but expects them to continue into 2024. 42 Table of Contents Results of Operations for the Year Ended December 31, 2023, Compared to the Year Ended December 31, 2022 Summary Results The Company’s operating income, operating margin, net earnings (loss) (computed using a 25% normalized tax rate for all items subject to tax) and diluted earnings (loss) per share for the year ended December 31, 2023, changed from the year ended December 31, 2022, as follows (dollars in millions, except per share data): Operating Income Operating Margin Net Earnings (Loss) Diluted Earnings (Loss) Per Share For the year ended December 31, 2022 $ 53.5 1.7 % $ 9.3 $ 0.18 Restructuring, impairment and transaction-related charges (1) (32.7) (1.2) % (24.5) (0.56) Other operating income elements (2) 4.9 0.4 % 3.7 0.20 Operating Income 25.7 0.9 % (11.5) (0.18) Interest expense (3) N/A N/A (16.2) (0.40) Net pension income (4) N/A N/A (8.2) (0.15) Income taxes (5) N/A N/A (19.5) (0.41) For the year ended December 31, 2023 $ 25.7 0.9 % $ (55.4) $ (1.14) ______________________________ (1) Restructuring, impairment and transaction-related charges increased $32.7 million ($24.5 million, net of tax), to $77.5 million during the year ended December 31, 2023, and included the following: a.
The Company is unable to predict the full future impact these challenges will have on its business, financial condition, cash flows and results of operations, but expects them to continue into 2025. 39 Table of Contents Results of Operations for the Year Ended December 31, 2024, Compared to the Year Ended December 31, 2023 Summary Results The Company’s operating income, operating margin, net loss (computed using a 25% normalized tax rate for all items subject to tax) and diluted loss per share for the year ended December 31, 2024, changed from the year ended December 31, 2023, as follows (dollars in millions, except per share data): Operating Income Operating Margin Net Loss Diluted Loss Per Share For the year ended December 31, 2023 $ 25.7 0.9 % $ (55.4) $ (1.14) Restructuring, impairment and transaction-related charges, net (1) (24.0) (1.2) % (18.0) (0.40) Other operating income elements (2) 17.5 1.0 % 13.1 0.30 Operating Income 19.2 0.7 % (60.3) (1.24) Interest expense (3) N/A N/A 4.1 0.06 Net pension income (4) N/A N/A (0.7) (0.02) Income taxes (5) N/A N/A 6.0 0.13 For the year ended December 31, 2024 $ 19.2 0.7 % $ (50.9) $ (1.07) ______________________________ (1) Restructuring, impairment and transaction-related charges, net increased $24.0 million ($18.0 million, net of tax), to $101.5 million during the year ended December 31, 2024, and included the following: a.
Restructuring, Impairment and Transaction-Related Charges Restructuring, impairment and transaction-related charges for the United States Print and Related Services segment increased $54.2 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to the following: Year Ended December 31, 2023 2022 $ Change (dollars in millions) Employee termination charges $ 34.3 $ 4.1 $ 30.2 Impairment charges (a) 23.2 1.1 22.1 Other restructuring charges Vacant facility carrying costs and lease exit charges 16.6 5.4 11.2 Equipment and infrastructure removal costs 0.9 0.7 0.2 Gain on the sale of a facility (b) (9.2) — (9.2) Other restructuring activities 0.5 0.8 (0.3) Other restructuring charges 8.8 6.9 1.9 Total restructuring, impairment and transaction-related charges $ 66.3 $ 12.1 $ 54.2 ______________________________ (a) Includes $23.2 million and $1.1 million of impairment charges during the years ended December 31, 2023 and 2022, respectively, which consisted of the following: (1) $15.5 million and $1.1 million, respectively, for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction; (2) $4.1 million for software licensing and related implementation costs from a terminated project in 2023; and (3) $3.6 million for right-of-use assets in 2023.
Restructuring, Impairment and Transaction-Related Charges, Net Restructuring, impairment and transaction-related charges, net for the United States Print and Related Services segment decreased $23.5 million, or 35.4%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the following: Year Ended December 31, 2024 2023 $ Change (dollars in millions) Employee termination charges $ 29.8 $ 34.3 $ (4.5) Impairment charges (a) 17.1 23.2 (6.1) Integration costs 0.4 — 0.4 Other restructuring charges (income) Vacant facility carrying costs and lease exit charges 14.2 16.6 (2.4) Equipment and infrastructure removal costs 1.6 0.9 0.7 Gains on the sale of facilities (b) (20.5) (9.2) (11.3) Other restructuring activities 0.2 0.5 (0.3) Other restructuring charges (income) (4.5) 8.8 (13.3) Total restructuring, impairment and transaction-related charges, net $ 42.8 $ 66.3 $ (23.5) ______________________________ (a) Includes $17.1 million and $23.2 million of impairment charges during the years ended December 31, 2024 and 2023, respectively, which consisted of the following: (1) $14.0 million and $15.5 million, respectively, for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction; (2) $4.1 million for software licensing and related implementation costs from a terminated project in 2023; and (3) $3.1 million and $3.6 million, respectively, for operating lease right-of-use assets.
On January 31, 2024, the Company used liquidity available under its revolving credit facility and available cash on hand to fund the repayment on maturity of $87.7 million aggregate principal amount, outstanding at the time, of its Term Loan A.
On January 31, 2024, the Company used liquidity available under its revolving credit facility and available cash on hand to fund the repayment on maturity of $87.7 million aggregate principal amount, outstanding at the time, of its Term Loan A. The Company completed the ninth amendment to the Senior Secured Credit Facility (the “Ninth Amendment”) on October 18, 2024.
This decrease was primarily due to a $4.3 million decrease in MEPPs obligations, primarily due to payments totaling $6.2 million made to the MEPPS during the year ended December 31, 2023.
There was a $2.5 million decrease in MEPPs obligations, primarily due to payments totaling $4.3 million made to the MEPPS during the year ended December 31, 2024.
Cost of Sales Cost of product sales decreased $171.5 million, or 8.0%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to the following: (1) a decrease in paper costs; (2) the impact from lower print volumes; (3) the impact from the divestiture of the Company’s print operations in Argentina; (4) impacts from improved manufacturing productivity; and (5) savings from other cost reduction initiatives.
Cost of Sales Cost of product sales decreased $248.3 million, or 12.5%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the following: (1) a decrease in paper costs; (2) the impact from lower print volumes; (3) impacts from improved manufacturing productivity; and (4) other cost reduction initiatives.
Net Cash Provided by Operating Activities Year Ended December 31, 2023, Compared to Year Ended December 31, 2022 Net cash provided by operating activities was $147.6 million for the year ended December 31, 2023, compared to $154.6 million for the year ended December 31, 2022, resulting in a $7.0 million decrease in cash provided by operating activities.
Net Cash Provided by Operating Activities Year Ended December 31, 2024, Compared to Year Ended December 31, 2023 Net cash provided by operating activities was $112.9 million for the year ended December 31, 2024, compared to $147.6 million for the year ended December 31, 2023, resulting in a $34.7 million decrease in cash provided by operating activities.
A reconciliation of EBITDA to net earnings (loss) for the years ended December 31, 2023 and 2022, was as follows: Year Ended December 31, 2023 2022 (dollars in millions) Net earnings (loss) (1) $ (55.4) $ 9.3 Interest expense 70.0 48.4 Income tax expense 12.8 8.4 Depreciation and amortization 128.8 141.3 EBITDA (non-GAAP) $ 156.2 $ 207.4 ______________________________ (1) Net earnings (loss) included the following: a.
A reconciliation of EBITDA to net loss for the years ended December 31, 2024 and 2023, was as follows: Year Ended December 31, 2024 2023 (dollars in millions) Net loss (1) $ (50.9) $ (55.4) Interest expense 64.5 70.0 Income tax expense 6.4 12.8 Depreciation and amortization 102.5 128.8 EBITDA (non-GAAP) $ 122.5 $ 156.2 ______________________________ (1) Net loss included the following: a.
Service sales, which primarily consist of logistics, distribution, marketing services, imaging and medical services, decreased $65.1 million, or 9.5%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to a $59.2 million decrease in logistics sales from lower print volumes and a $5.9 million decrease in marketing services and medical services.
Service sales, which primarily consist of logistics, distribution, marketing services, imaging and medical services, decreased $50.6 million, or 8.1%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to a $44.2 million decrease in marketing services and medical services and a $6.4 million decrease in logistics sales from lower print volumes.
Similarly, the Senior Secured Leverage Ratio includes and excludes the same adjustments as the Total Leverage Ratio, in addition to the exclusion of the outstanding balance of the surety bonds from debt and netting domestic unrestricted cash with debt.
Similarly, the Senior Secured Leverage Ratio includes and excludes the same adjustments as the Total Leverage Ratio, in addition to netting domestic unrestricted cash with debt.
The timing, manner, price and amount of any repurchase will depend on economic and market conditions, share price, trading volume, applicable legal requirements and other factors. The program may be suspended or discontinued at any time.
The timing, manner, price and amount of any repurchase will depend on economic and market conditions, share price, trading volume, applicable legal requirements and other factors. The program may be suspended or discontinued at any time. There were no share repurchases during the year ended December 31, 2024.
Restructuring, impairment and transaction-related charges of $77.5 million and $44.8 million for the years ended December 31, 2023 and 2022, respectively.
Restructuring, impairment and transaction-related charges, net of $101.5 million and $77.5 million for the years ended December 31, 2024 and 2023, respectively.
The operating margin for the United States Print and Related Services segment decreased to 2.2% for the year ended December 31, 2023, from 3.9% for the year ended December 31, 2022, primarily due to the reasons provided above.
The operating margin for the United States Print and Related Services segment increased to 4.8% for the year ended December 31, 2024, from 2.2% for the year ended December 31, 2023, primarily due to the reasons provided above.
Debt Leverage Ratio The Debt Leverage Ratio is defined as total debt and finance lease obligations less cash and cash equivalents (Net Debt) divided by the trailing twelve months Adjusted EBITDA, comprised of the sum of the last twelve months of EBITDA (see the definition of EBITDA and the reconciliation of net earnings (loss) to EBITDA in the “Results of Operations” section above) and restructuring, impairment and transaction-related charges.
Debt Leverage Ratio The Debt Leverage Ratio is defined as total debt and finance lease obligations less cash and cash equivalents (Net Debt) divided by the trailing twelve months Adjusted EBITDA, comprised of the sum of the last twelve months of EBITDA (see the definition of EBITDA and the reconciliation of net loss to EBITDA in the “Results of Operations” section above) and restructuring, impairment and transaction-related charges, net. 47 Table of Contents The Company uses the Debt Leverage Ratio as a metric to assess liquidity and the flexibility of its balance sheet.
EBITDA and EBITDA margin for the year ended December 31, 2023, compared to the year ended December 31, 2022, were as follows: Year Ended December 31, 2023 % of Net Sales 2022 % of Net Sales (dollars in millions) EBITDA and EBITDA margin (non-GAAP) $ 156.2 5.3 % $ 207.4 6.4 % 46 Table of Contents EBITDA decreased $51.2 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to $32.7 million of increased restructuring, impairment and transaction-related charges and the impact from lower print and logistics volumes, partially offset by the following: (1) an increase in print product pricing; (2) impacts from improved manufacturing productivity; and (3) savings from other cost reduction initiatives.
EBITDA and EBITDA margin for the year ended December 31, 2024, compared to the year ended December 31, 2023, were as follows: Year Ended December 31, 2024 % of Net Sales 2023 % of Net Sales (dollars in millions) EBITDA and EBITDA margin (non-GAAP) $ 122.5 4.6 % $ 156.2 5.3 % 43 Table of Contents EBITDA decreased $33.7 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to $24.0 million of increased restructuring, impairment and transaction-related charges, net and impacts from lower print volumes and marketing services sales, partially offset by impacts from improved manufacturing productivity and savings from other cost reduction initiatives.
The decrease was primarily due to a $92.6 million decrease in cash from earnings, offset by a $85.6 million increase in cash flows provided by changes in operating assets and liabilities.
The decrease was primarily due to a $49.9 million decrease in cash flows provided by changes in operating assets and liabilities, partially offset by a $15.2 million increase in cash from earnings.
In addition to those covenants, the Senior Secured Credit Facility also includes certain limitations on acquisitions, indebtedness, liens, dividends and repurchases of capital stock. • If the Company’s Total Leverage Ratio is greater than 2.75 to 1.00, the Company is prohibited from making greater than $60.0 million of dividend payments, capital stock repurchases and certain other payments, over the course of the agreement.
Such default could cause the outstanding indebtedness to become immediately due and payable, by virtue of cross-acceleration or cross-default provisions. 50 Table of Contents In addition to those covenants, the Senior Secured Credit Facility also includes certain limitations on acquisitions, indebtedness, liens, dividends and repurchases of capital stock. • If the Company’s Total Leverage Ratio is greater than 2.75 to 1.00, the Company is prohibited from making greater than $60.0 million of dividend payments, capital stock repurchases and certain other payments, over the course of the agreement.
Operating Income Operating income for the United States Print and Related Services segment decreased $51.7 million, or 47.7%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to a $54.2 million increase in restructuring, impairment and transaction-related charges and the impact from decreased print volumes, partially offset by the following: (1) the impact from an increase in print product pricing; (2) a $11.0 million decrease in depreciation and amortization expense; (3) impacts from improved manufacturing productivity; and (4) savings from other cost reduction initiatives.
Operating Income Operating income for the United States Print and Related Services segment increased $56.2 million, or 99.3%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the following: (1) a $23.5 million decrease in restructuring, impairment and transaction-related charges, net; (2) a $23.2 million decrease in depreciation and amortization expense; (3) impacts from improved manufacturing productivity; and (4) savings from other cost reduction initiatives; partially offset by the impact from decreased print volumes and marketing services sales.
(b) Includes a $9.2 million gain on the sale of the Merced, California facility during the year ended December 31, 2023.
(b) Includes a $20.5 million gain on the sale of the Saratoga Springs, New York facility during the year ended December 31, 2024 and a $9.2 million gain on the sale of the Merced, California facility during the year ended December 31, 2023.
In addition, all of the Company’s significant accounting policies, including critical accounting policies, are summarized in Note 1, “Basis of Presentation and Summary of Significant Accounting Policies,” to the consolidated financial statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. 38 Table of Contents Overview Business Overview Quad is a global marketing experience (MX) company that helps brands make direct consumer connections, from household to in-store to online.
In addition, all of the Company’s significant accounting policies, including critical accounting policies, are summarized in Note 1, “Basis of Presentation and Summary of Significant Accounting Policies,” to the consolidated financial statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. 35 Table of Contents Overview Business Overview Quad is a marketing experience (MX) company that simplifies the complexities of marketing, removing friction from wherever it occurs along the marketing journey.
Depreciation and Amortization Depreciation and amortization decreased $12.5 million, or 8.8%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, due to a $9.5 million decrease in depreciation expense, primarily from property, plant and equipment becoming fully depreciated over the past year, a decrease in purchases of property, plant and equipment and a $3.0 million decrease in amortization expense. 45 Table of Contents Restructuring, Impairment and Transaction-Related Charges Restructuring, impairment and transaction-related charges increased $32.7 million, or 73.0%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to the following: Year Ended December 31, 2023 2022 $ Change (dollars in millions) Employee termination charges $ 35.1 $ 7.3 $ 27.8 Impairment charges (a) 25.2 2.2 23.0 Transaction-related charges 4.2 2.0 2.2 Integration costs 1.0 0.7 0.3 Other restructuring charges Vacant facility carrying costs and lease exit charges 16.6 5.4 11.2 Equipment and infrastructure removal costs 0.9 0.7 0.2 Gain on the sale of a facility (b) (9.2) — (9.2) Other restructuring activities (c) 3.7 26.5 (22.8) Other restructuring charges 12.0 32.6 (20.6) Total restructuring, impairment and transaction-related charges $ 77.5 $ 44.8 $ 32.7 ______________________________ (a) Includes $25.2 million and $2.2 million of impairment charges during the years ended December 31, 2023 and 2022, respectively, which consisted of the following: (1) $17.5 million and $2.2 million, respectively, for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction activities; (2) $4.1 million for software licensing and related implementation costs from a terminated project in 2023; and (3) $3.6 million for right-of-use assets in 2023.
Depreciation and Amortization Depreciation and amortization decreased $26.3 million, or 20.4%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, due to a $15.9 million decrease in depreciation expense, primarily due to impacts from plant closures and from property, plant and equipment becoming fully depreciated over the past year, and a $10.4 million decrease in amortization expense, primarily from intangible assets becoming fully amortized over the past year. 42 Table of Contents Restructuring, Impairment and Transaction-Related Charges, Net Restructuring, impairment and transaction-related charges, net increased $24.0 million, or 31.0%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the following: Year Ended December 31, 2024 2023 $ Change (dollars in millions) Employee termination charges $ 30.5 $ 35.1 $ (4.6) Impairment charges (a) 74.9 25.2 49.7 Transaction-related charges (income) (0.6) 4.2 (4.8) Integration costs 0.4 1.0 (0.6) Other restructuring charges (income) Vacant facility carrying costs and lease exit charges 14.2 16.6 (2.4) Equipment and infrastructure removal costs 1.6 0.9 0.7 Gains on the sale of facilities (b) (20.5) (9.2) (11.3) Other restructuring activities 1.0 3.7 (2.7) Other restructuring charges (income) (3.7) 12.0 (15.7) Total restructuring, impairment and transaction-related charges, net $ 101.5 $ 77.5 $ 24.0 ______________________________ (a) Includes $74.9 million and $25.2 million of impairment charges during the years ended December 31, 2024 and 2023, respectively, which consisted of the following: (1) $57.6 million of impairment to reduce the carrying value of the European operations to its estimated fair value, including $41.6 million for foreign currency translation adjustments and $16.0 million for property, plant and equipment in 2024; (2) $14.2 million and $17.5 million, respectively, for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction activities; (3) $4.1 million for software licensing and related implementation costs from a terminated project in 2023; and (4) $3.1 million and $3.6 million, respectively, for operating lease right-of-use assets.
The Debt Leverage Ratio as of December 31, 2023 and 2022, was as follows: December 31, 2023 December 31, 2022 (dollars in millions) Total debt and finance lease obligations on the consolidated balance sheets $ 522.7 $ 570.2 Less: Cash and cash equivalents 52.9 25.2 Net Debt (non-GAAP) $ 469.8 $ 545.0 Divided by: Adjusted EBITDA for the year ended (non-GAAP) $ 233.7 $ 252.2 Debt Leverage Ratio (non-GAAP) 2.01 x 2.16 x The calculation of Adjusted EBITDA for the years ended December 31, 2023 and 2022, was as follows: Year Ended December 31, 2023 2022 (dollars in millions) Net earnings (loss) $ (55.4) $ 9.3 Interest expense 70.0 48.4 Income tax expense 12.8 8.4 Depreciation and amortization 128.8 141.3 EBITDA (non-GAAP) $ 156.2 $ 207.4 Restructuring, impairment and transaction-related charges 77.5 44.8 Adjusted EBITDA (non-GAAP) $ 233.7 $ 252.2 The Debt Leverage Ratio, at December 31, 2023, decreased 0.15x to 2.01x compared to December 31, 2022, primarily due to a $75.2 million decrease in net debt, partially offset by an $18.5 million decrease in Adjusted EBITDA.
The Debt Leverage Ratio as of December 31, 2024 and 2023, was as follows: December 31, 2024 December 31, 2023 (dollars in millions) Total debt and finance lease obligations on the consolidated balance sheets $ 379.2 $ 522.7 Less: Cash and cash equivalents 29.2 52.9 Net Debt (non-GAAP) $ 350.0 $ 469.8 Divided by: Adjusted EBITDA for the year ended (non-GAAP) $ 224.0 $ 233.7 Debt Leverage Ratio (non-GAAP) 1.56 x 2.01 x The calculation of Adjusted EBITDA for the years ended December 31, 2024 and 2023, was as follows: Year Ended December 31, 2024 2023 (dollars in millions) Net loss $ (50.9) $ (55.4) Interest expense 64.5 70.0 Income tax expense 6.4 12.8 Depreciation and amortization 102.5 128.8 EBITDA (non-GAAP) $ 122.5 $ 156.2 Restructuring, impairment and transaction-related charges, net 101.5 77.5 Adjusted EBITDA (non-GAAP) $ 224.0 $ 233.7 48 Table of Contents The Debt Leverage Ratio, at December 31, 2024, decreased 0.45x to 1.56x compared to December 31, 2023, primarily due to a $119.8 million decrease in Net Debt, partially offset by a $9.7 million decrease in Adjusted EBITDA.
Service sales for the United States Print and Related Services segment decreased $63.5 million, or 9.5%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to a $56.4 million decrease in logistics sales from lower print volumes and a $7.1 million decrease in marketing services and medical services.
Service sales for the United States Print and Related Services segment decreased $50.1 million, or 8.3%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to a $44.1 million decrease in marketing services and medical services and a $6.0 million decrease in logistics sales from lower print volumes.
Under agreements with certain customers, products may be stored by the Company for future delivery and revenue is recognized upon shipment to the customer.
Under agreements with certain customers, products may be stored by the Company for future delivery and revenue is recognized upon shipment to the customer. In these situations, the Company may receive warehouse management fees for the services it provides.
Integrated distribution with the USPS is an important component of the Company’s business. Any material change in the current service levels provided by the postal service could impact the demand that clients have for print services. The USPS continues to experience financial problems.
Integrated distribution with the USPS is an important component of the Company’s business. Any material change in the current service levels provided by the postal service could impact the demand that clients have for print services. In September 2024, the USPS held a pre-filing conference to further reduce service standards.
The Company completed the sixth amendment to the Senior Secured Credit Facility on March 25, 2022, which expanded the number of currencies available for letters of credit. The Company completed the seventh amendment to the Senior Secured Credit Facility on January 24, 2023, which transitioned the Company’s reference rate from LIBOR to SOFR effective February 1, 2023.
The Company completed the seventh amendment to the Senior Secured Credit Facility on January 24, 2023, which transitioned the Company’s reference rate from LIBOR to SOFR effective February 1, 2023.
Service sales for the International segment decreased $1.6 million, or 7.8%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to a $2.8 million decrease in logistics sales, partially offset by a $1.2 million increase in marketing services sales.
Service sales for the International segment decreased $0.5 million, or 2.6%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to a $0.4 million decrease in logistics sales and a $0.1 million decrease in marketing services sales.
Free Cash Flow for the years ended December 31, 2023 and 2022, was as follows: Year Ended December 31, 2023 2022 (dollars in millions) Net cash provided by operating activities $ 147.6 $ 154.6 Less: purchases of property, plant and equipment 70.8 60.3 Free Cash Flow (non-GAAP) $ 76.8 $ 94.3 Free Cash Flow decreased $17.5 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to a $10.5 million increase in capital expenditures and a $7.0 million decrease in net cash provided by operating activities.
Free Cash Flow for the years ended December 31, 2024 and 2023, was as follows: Year Ended December 31, 2024 2023 (dollars in millions) Net cash provided by operating activities $ 112.9 $ 147.6 Less: purchases of property, plant and equipment 57.2 70.8 Free Cash Flow (non-GAAP) $ 55.7 $ 76.8 Free Cash Flow decreased $21.1 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to a $34.7 million decrease in net cash provided by operating activities, partially offset by a $13.6 million decrease in capital expenditures.
This fair value determination was categorized as Level 3 in the fair value hierarchy (see Note 13, “Financial Instruments and Fair Value Measurements,” to the consolidated financial statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K for the definition of Level 3 inputs). 57 Table of Contents The Company classifies long-lived assets to be sold as held for sale in the period in which: (i) there is an approved plan to sell the asset and the Company is committed to that plan, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
The Company classifies long-lived assets to be sold as held for sale in the period in which: (i) there is an approved plan to sell the asset and the Company is committed to that plan, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
The Company’s consolidated debt and finance lease obligations decreased by $47.5 million during the year ended December 31, 2023, primarily due to the use of cash and cash equivalents, cash provided by operating activities and proceeds from the sale of property, plant and equipment. 40 Table of Contents Overview of Trends Affecting Quad As consumer media consumption habits change, advertising and marketing services providers face increased demand to offer end-to-end marketing services, from strategy and creative through execution.
The Company’s consolidated debt and finance lease obligations decreased by $143.5 million during the year ended December 31, 2024, primarily due to the following: (1) $112.9 million in cash provided by operating activities; (2) $49.1 million in proceeds from the sale of property, plant and equipment; (3) $23.7 million reduction in cash and cash equivalents; and (4) $22.2 million in proceeds from the sale of an investment, partially offset by $57.2 million in purchases of property, plant and equipment and the $9.4 million payment in cash dividends. 37 Table of Contents Overview of Trends Affecting Quad As consumer media consumption habits change, advertising and marketing services providers face increased demand to offer end-to-end marketing services, from strategy and creative through execution.
A $2.2 million increase in transaction-related charges from $2.0 million during the year ended December 31, 2022, to $4.2 million during the year ended December 31, 2023; d. A $0.3 million increase in integration-related charges from $0.7 million during the year ended December 31, 2022, to $1.0 million during the year ended December 31, 2023; and e.
A $0.6 million decrease in integration-related charges from $1.0 million during the year ended December 31, 2023, to $0.4 million during the year ended December 31, 2024; and e.
The Debt Leverage Ratio is a non-GAAP measure, and should not be considered an alternative to cash flows provided by operating activities as a measure of liquidity.
The Debt Leverage Ratio is a non-GAAP measure, and should not be considered an alternative to cash flows provided by operating activities as a measure of liquidity. Quad’s calculation of the Debt Leverage Ratio may be different from similar calculations used by other companies and, therefore, comparability may be limited.
The Company believes its expected future cash flows from operating activities and its current liquidity and capital resources, are sufficient to fund ongoing operating requirements and service debt and pension requirements for both the next 12 months and beyond.
There were no borrowings under the $324.6 million revolving credit facility as of December 31, 2024. The Company believes its expected future cash flows from operating activities and its current liquidity and capital resources, are sufficient to fund ongoing operating requirements and service debt and pension requirements for both the next 12 months and beyond.
Year Ended December 31, 2023 2022 $ Change (dollars in millions) Earnings (loss) before income taxes $ (42.6) $ 17.7 $ (60.3) Normalized tax rate 25.0 % 25.0 % Income tax expense (benefit) at normalized tax rate (10.7) 4.4 (15.1) Less: Income tax expense from the consolidated statements of operations 12.8 8.4 4.4 Impact of income taxes $ 23.5 $ 4.0 $ 19.5 Operating Results The following table sets forth certain information from the Company’s consolidated statements of operations on an absolute dollar basis and as a relative percentage of total net sales for each noted period, together with the relative percentage change in such information between the periods set forth below: Year Ended December 31, 2023 % of Net Sales 2022 % of Net Sales $ Change % Change (dollars in millions) Net sales: Products $ 2,334.1 78.9 % $ 2,528.3 78.6 % $ (194.2) (7.7) % Services 623.6 21.1 % 688.7 21.4 % (65.1) (9.5) % Total net sales 2,957.7 100.0 % 3,217.0 100.0 % (259.3) (8.1) % Cost of sales: Products 1,984.7 67.1 % 2,156.2 67.0 % (171.5) (8.0) % Services 396.5 13.4 % 462.6 14.4 % (66.1) (14.3) % Total cost of sales 2,381.2 80.5 % 2,618.8 81.4 % (237.6) (9.1) % Selling, general & administrative expenses 344.5 11.6 % 358.6 11.1 % (14.1) (3.9) % Depreciation and amortization 128.8 4.4 % 141.3 4.4 % (12.5) (8.8) % Restructuring, impairment and transaction-related charges 77.5 2.6 % 44.8 1.4 % 32.7 73.0 % Total operating expenses 2,932.0 99.1 % 3,163.5 98.3 % (231.5) (7.3) % Operating income $ 25.7 0.9 % $ 53.5 1.7 % $ (27.8) (52.0) % 44 Table of Contents Net Sales Product sales decreased $194.2 million, or 7.7%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to the following: (1) a $117.3 million decrease from paper sales; (2) a $65.4 million decrease in sales in the Company’s print product lines, mainly due to decreased print volumes; and (3) a $26.4 million decrease in net sales (which includes $8.3 million in paper sales) due to the divestiture of the Company’s print operations in Argentina, partially offset by $14.9 million in favorable foreign exchange impacts.
Year Ended December 31, 2024 2023 $ Change (dollars in millions) Loss before income taxes $ (44.5) $ (42.6) $ (1.9) Normalized tax rate 25.0 % 25.0 % Income tax benefit at normalized tax rate (11.1) (10.7) (0.4) Less: Income tax expense from the consolidated statements of operations 6.4 12.8 (6.4) Impact of income taxes $ 17.5 $ 23.5 $ (6.0) Operating Results The following table sets forth certain information from the Company’s consolidated statements of operations on an absolute dollar basis and as a relative percentage of total net sales for each noted period, together with the relative percentage change in such information between the periods set forth below: Year Ended December 31, 2024 % of Net Sales 2023 % of Net Sales $ Change % Change (dollars in millions) Net sales: Products $ 2,099.2 78.6 % $ 2,334.1 78.9 % $ (234.9) (10.1) % Services 573.0 21.4 % 623.6 21.1 % (50.6) (8.1) % Total net sales 2,672.2 100.0 % 2,957.7 100.0 % (285.5) (9.7) % Cost of sales: Products 1,736.4 65.0 % 1,984.7 67.1 % (248.3) (12.5) % Services 355.8 13.3 % 396.5 13.4 % (40.7) (10.3) % Total cost of sales 2,092.2 78.3 % 2,381.2 80.5 % (289.0) (12.1) % Selling, general & administrative expenses 356.8 13.4 % 344.5 11.6 % 12.3 3.6 % Depreciation and amortization 102.5 3.8 % 128.8 4.4 % (26.3) (20.4) % Restructuring, impairment and transaction-related charges, net 101.5 3.8 % 77.5 2.6 % 24.0 31.0 % Total operating expenses 2,653.0 99.3 % 2,932.0 99.1 % (279.0) (9.5) % Operating income $ 19.2 0.7 % $ 25.7 0.9 % $ (6.5) (25.3) % 41 Table of Contents Net Sales Product sales decreased $234.9 million, or 10.1%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the following: (1) a $142.1 million decrease from paper sales; (2) a $91.4 million decrease in sales in the Company’s print product lines, mainly due to decreased print volumes and a higher mix of lower unit price gravure versus offset print in our magazine and catalog print offerings; and (3) $1.4 million in unfavorable foreign exchange impacts.
These decreases were partially offset by a $2.6 million increase in purchases of treasury stock. 49 Table of Contents Free Cash Flow Free Cash Flow is defined as net cash provided by operating activities less purchases of property, plant and equipment.
These increases were partially offset by a $12.6 million decrease in purchases of treasury stock and a $0.4 million decrease in cash used for other financing activities. Free Cash Flow Free Cash Flow is defined as net cash provided by operating activities less purchases of property, plant and equipment.
(b) Includes a $9.2 million gain on the sale of the Merced, California facility during the year ended December 31, 2023. 47 Table of Contents International The following table summarizes net sales, operating income (loss), operating margin, and certain items impacting comparability within the International segment: Year Ended December 31, 2023 2022 $ Change % Change (dollars in millions) Net sales: Products $ 384.4 $ 401.7 $ (17.3) (4.3) % Services 19.0 20.6 (1.6) (7.8) % Operating income (loss) (including restructuring, impairment and transaction-related charges) 18.3 (4.5) 22.8 nm Operating margin 4.5 % (1.1) % N/A N/A Restructuring, impairment and transaction-related charges $ 9.6 $ 30.7 $ (21.1) (68.7) % Net Sales Product sales for the International segment decreased $17.3 million, or 4.3%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to a $28.0 million decrease in paper sales and a $26.4 million decrease in net sales (which includes $8.3 million of paper sales) due to the divestiture of the Company’s print operations in Argentina, partially offset by a $22.2 million increase in print pricing and volume, primarily in Mexico, Peru and Colombia, and $14.9 million in favorable foreign exchange impacts, primarily in Mexico.
(b) Includes a $20.5 million gain on the sale of the Saratoga Springs, New York facility during the year ended December 31, 2024, and a $9.2 million gain on the sale of the Merced, California facility during the year ended December 31, 2023. 44 Table of Contents International The following table summarizes net sales, operating income (loss), operating margin, and certain items impacting comparability within the International segment: Year Ended December 31, 2024 2023 $ Change % Change (dollars in millions) Net sales: Products $ 324.2 $ 384.4 $ (60.2) (15.7) % Services 18.5 19.0 (0.5) (2.6) % Operating income (loss) (including restructuring, impairment and transaction-related charges, net) (45.7) 18.3 (64.0) nm Operating margin (13.3) % 4.5 % N/A N/A Restructuring, impairment and transaction-related charges, net $ 61.9 $ 9.6 $ 52.3 nm Net Sales Product sales for the International segment decreased $60.2 million, or 15.7%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the following: (1) a $41.9 million decrease in paper sales; (2) a $16.9 million decrease in print volume, primarily in Europe and Mexico; and (3) $1.4 million in unfavorable foreign exchange impacts, primarily in Mexico.
On a rolling four-quarter basis, the Senior Secured Leverage Ratio, defined as the ratio of consolidated senior secured net indebtedness to consolidated EBITDA, shall not exceed (a) 3.50 to 1.00 for any fiscal quarter ending prior to December 31, 2023, and (b) 3.25 to 1.00 for any fiscal quarter ending on or after December 31, 2023 (other than, in the case of this clause (b), any fiscal quarter ending September 30 of any year, each of which shall be subject to a maximum Senior Secured Leverage Ratio not to exceed 3.50 to 1.00) (for the twelve months ended December 31, 2023, the Company’s Senior Secured Leverage Ratio was 1.99 t o 1.00). ◦ Interest Coverage Ratio.
On a rolling four-quarter basis, the Senior Secured Leverage Ratio, defined as the ratio of consolidated senior secured net indebtedness to consolidated EBITDA, shall not exceed 3.00 to 1.00 for any fiscal quarter ending on or after September 30, 2024 (for the twelve months ended December 31, 2024, the Company’s Senior Secured Leverage Ratio was 1.57 to 1.00). ◦ Interest Coverage Ratio.
As a result of those reviews, the PRC authorized a five year rate-making structure that provides the USPS with additional pricing flexibility over the Consumer Price Index cap, which may result in a substantially altered rate structure for mailers.
Federal statute requires the PRC to conduct reviews of the overall rate-making structure for the USPS to ensure funding stability. As a result of those reviews, the PRC authorized a five year rate-making structure that provides the USPS with additional pricing flexibility over the CPI cap, which has resulted in a substantially altered rate structure for mailers.
The decrease was primarily due to the following: (1) a $175.6 million decrease in net payments of debt and lease obligations in 2023 compared to 2022; (2) a $1.3 million decrease in payment of accrued dividends from vested equity awards; and (3) a $0.8 million decrease in equity awards redeemed to pay employees’ tax obligations.
The increase was primarily due to the following: (1) a $74.4 million increase in net payments of debt and lease obligations in 2024 compared to 2023; (2) a $9.3 million increase in payment of dividends; (3) a $4.4 million increase in payments of debt issuance costs and financing fees; and (4) a $0.4 million increase in equity awards redeemed to pay employees’ tax obligations.
A $20.6 million decrease in various other restructuring charges from $32.6 million during the year ended December 31, 2022, to $12.0 million during the year ended December 31, 2023.
A $15.7 million decrease in various other restructuring charges from $12.0 million of expense during the year ended December 31, 2023, to $3.7 million of income during the year ended December 31, 2024.
Restructuring, Impairment and Transaction-Related Charges Restructuring, impairment and transaction-related charges for the International segment decreased $21.1 million, or 68.7%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to the following: Year Ended December 31, 2023 2022 $ Change (dollars in millions) Employee termination charges $ 0.5 $ 3.2 $ (2.7) Impairment charges (a) 2.0 1.1 0.9 Transaction-related charges 2.7 0.1 2.6 Integration costs 1.0 0.7 0.3 Other restructuring charges (b) 3.4 25.6 (22.2) Total restructuring, impairment and transaction-related charges $ 9.6 $ 30.7 $ (21.1) ______________________________ (a) Includes $2.0 million and $1.1 million of impairment charges for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction activities, during the years ended December 31, 2023 and 2022, respectively.
Restructuring, Impairment and Transaction-Related Charges, Net Restructuring, impairment and transaction-related charges, net for the International segment increased $52.3 million, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the following: Year Ended December 31, 2024 2023 $ Change (dollars in millions) Employee termination charges $ 0.7 $ 0.5 $ 0.2 Impairment charges (a) 57.8 2.0 55.8 Transaction-related charges 2.6 2.7 (0.1) Integration costs — 1.0 (1.0) Other restructuring charges 0.8 3.4 (2.6) Total restructuring, impairment and transaction-related charges, net $ 61.9 $ 9.6 $ 52.3 ______________________________ (a) Includes $57.8 million and $2.0 million of impairment charges during the years ended December 31, 2024 and 2023, respectively, which consisted of $57.6 million of impairment charges to reduce the carrying value of the European operations to its estimated fair value, including $41.6 million for foreign currency translation adjustments and $16.0 million for property, plant and equipment during 2024, and $0.2 million and $2.0 million, respectively, for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction activities.
Net Cash Used in Investing Activities Year Ended December 31, 2023, Compared to Year Ended December 31, 2022 Net cash used in investing activities was $46.4 million for the year ended December 31, 2023, compared to $60.5 million for the year ended December 31, 2022, resulting in a $14.1 million decrease in cash used in investing activities.
Net Cash Provided by (Used in) Investing Activities Year Ended December 31, 2024, Compared to Year Ended December 31, 2023 Net cash provided by investing activities was $12.7 million for the year ended December 31, 2024, compared to net cash used in investing activities of $46.4 million for the year ended December 31, 2023, resulting in a $59.1 million increase in cash provided by investing activities.
In these situations, the Company may receive warehouse management fees for the services it provides. 56 Table of Contents Certain revenues earned by the Company require judgment to determine if revenue should be recorded gross as principal or net of related costs as an agent.
Certain revenues earned by the Company require judgment to determine if revenue should be recorded gross as principal or net of related costs as an agent.
On a rolling twelve-month basis, the Interest Coverage Ratio, defined as consolidated EBITDA to cash consolidated interest expense, shall not be less than 3.00 to 1.00 (for the twelve months ended December 31, 2023, the Company’s Interest Coverage Ratio was 4.10 to 1.00). 53 Table of Contents The Company wa s in compliance with all financial covenants in its debt agreements as of December 31, 2023.
On a rolling twelve-month basis, the Interest Coverage Ratio, defined as consolidated EBITDA to cash consolidated interest expense, shall not be less than 3.00 to 1.00 (for the twelve months ended December 31, 2024, the Company’s Interest Coverage Ratio was 4.18 to 1.00) .
A $27.8 million increase in employee termination charges from $7.3 million during the year ended December 31, 2022, to $35.1 million during the year ended December 31, 2023; b. A $23.0 million increase in impairment charges from $2.2 million during the year ended December 31, 2022, to $25.2 million during the year ended December 31, 2023; c.
A $4.6 million decrease in employee termination charges from $35.1 million during the year ended December 31, 2023, to $30.5 million during the year ended December 31, 2024; b. A $49.7 million increase in impairment charges from $25.2 million during the year ended December 31, 2023, to $74.9 million during the year ended December 31, 2024; c.
This change was due to higher weighted average interest rates on borrowings and a $6.1 million increase in interest expense related to the interest rate swaps, partially offset by lower average debt levels during the year ended December 31, 2023, as compared to the year ended December 31, 2022. 43 Table of Contents (4) Net pension income decreased $10.9 million ($8.2 million, net of tax) during the year ended December 31, 2023, to $1.7 million.
This change was due to lower average debt levels and a $1.7 million decrease in interest expense related to the interest rate swap, partially offset by a higher weighted average interest rate on borrowings during the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Quad’s calculation of the Debt Leverage Ratio may be different from similar calculations used by other companies and, therefore, comparability may be limited. 50 Table of Contents The Debt Leverage Ratio calculated below differs from the Total Leverage Ratio, the Total Net Leverage Ratio and Senior Secured Leverage Ratio included in the Company’s debt covenant calculations (see “Covenants and Compliance” section below for further information on debt covenants).
The Debt Leverage Ratio calculated below differs from the Total Leverage Ratio, the Total Net Leverage Ratio and Senior Secured Leverage Ratio included in the Company’s debt covenant calculations (see “Covenants and Compliance” section below for further information on debt covenants).
United States Print and Related Services The following table summarizes net sales, operating income, operating margin and certain items impacting comparability within the United States Print and Related Services segment: Year Ended December 31, 2023 2022 $ Change % Change (dollars in millions) Net sales: Products $ 1,949.7 $ 2,126.6 $ (176.9) (8.3) % Services 604.6 668.1 (63.5) (9.5) % Operating income (including restructuring, impairment and transaction-related charges) 56.6 108.3 (51.7) (47.7) % Operating margin 2.2 % 3.9 % N/A N/A Restructuring, impairment and transaction-related charges $ 66.3 $ 12.1 $ 54.2 nm Net Sales Product sales for the United States Print and Related Services segment decreased $176.9 million, or 8.3%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to an $89.3 million decrease from paper sales and an $87.6 million decrease in sales in the Company’s print product lines, primarily due to decreased volumes.
United States Print and Related Services The following table summarizes net sales, operating income, operating margin and certain items impacting comparability within the United States Print and Related Services segment: Year Ended December 31, 2024 2023 $ Change % Change (dollars in millions) Net sales: Products $ 1,775.0 $ 1,949.7 $ (174.7) (9.0) % Services 554.5 604.6 (50.1) (8.3) % Operating income (including restructuring, impairment and transaction-related charges, net) 112.8 56.6 56.2 99.3 % Operating margin 4.8 % 2.2 % N/A N/A Restructuring, impairment and transaction-related charges, net $ 42.8 $ 66.3 $ (23.5) (35.4) % Net Sales Product sales for the United States Print and Related Services segment decreased $174.7 million, or 9.0%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to a $100.2 million decrease from paper sales and a $74.5 million decrease in sales in the Company’s print product lines, mainly due to decreased print volumes and a higher mix of lower unit price gravure versus offset print in our magazine and catalog print offerings.
The uncertainty as to how much of the authority the USPS will use on any specific rate increase also creates potential volume declines as rate predictability with respect to cost is no longer known for mailers.
The Company believes the continued use of all available rate authority by the USPS will continue to increase the potential volume declines as rate predictability with respect to cost is no longer known for mailers.
While the Company currently expects to be in compliance in future periods with all of the financial covenants, there can be no assurance that these covenants will continue to be met. The Company’s failure to maintain compliance with the covenants could prevent the Company from borrowing additional amounts and could result in a default under any of the debt agreements.
The Company’s failure to maintain compliance with the covenants could prevent the Company from borrowing additional amounts and could result in a default under any of the debt agreements.
The following repurchases occurred during the years ended December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Shares of Class A common stock 2,852,501 3,093,662 Weighted average price per share $ 4.40 $ 3.21 Total repurchases during the period (in millions) (1) $ 12.6 $ 10.0 ______________________________ (1) Excluding commissions, total repurchases were $12.6 million and $9.9 million during the years ended December 31, 2023 and 2022.
The following repurchases occurred during the year ended December 31, 2023: December 31, 2023 Shares of Class A common stock 2,852,501 Weighted average price per share $ 4.40 Total repurchases during the period (in millions) $ 12.6 As of December 31, 2024, there were $77.5 million of authorized repurchases remaining under the program.
The Company had total liquidity of $454.3 million as of December 31, 2023, which consisted of up to $401.4 million of unused capacity under its revolving credit arrangement, which was net of $31.1 million of issued letters of credit, and cash and cash equivalents of $52.9 million.
The Company had total liquidity of $328.1 million as of December 31, 2024, which consisted of up to $298.9 million of unused capacity under its revolving credit arrangement, which was net of $25.7 million of issued letters of credit, and cash and cash equivalents of $29.2 million. This is the most restrictive liquidity measure currently applicable under the credit agreement.
Borrowings under the revolving credit facility and Term Loan A made under the Senior Secured Credit Facility bear interest at 2.75% in excess of reserve adjusted SOFR, or 1.75% in excess of an alternate base rate with a SOFR floor of 0.75% for the extended tranche and bear interest at 2.50% in excess of reserve adjusted SOFR, or 1.50% in excess of an alternate base rate with a SOFR floor of 0.75% for the non-extending tranche.
Borrowings under the revolving credit facility and Term Loan A made under the Senior Secured Credit Facility bear interest at 3.00% in excess of reserve adjusted SOFR, or 2.00% in excess of an alternate base rate with a SOFR floor of 0.75% for the extended tranche and bear interest at 2.50% in excess of reserve adjusted SOFR, or 1.50% in excess of an alternate base rate with a SOFR floor of 0.75% for the non-extending tranche. 49 Table of Contents At December 31, 2024, the Company had no ou tstanding borrowings on the revolving credit facility, and had $25.7 million of issue d letters of credit, leaving up t o $298.9 million available for future borrowings.
Cost of service sales decreased $66.1 million, or 14.3%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to decreased freight volumes and other cost reduction initiatives.
Cost of service sales decreased $40.7 million, or 10.3%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the impact from lower marketing services and decreased freight volumes.
The International segment accounted for approximately 14% and 13% of the Company’s consolidated net sales during the years ended December 31, 2023 and 2022, respectively.
This segment provides printed products and marketing and other complementary services consistent with the United States Print and Related Services segment. The International segment accounted for approximately 13% and 14% of the Company’s consolidated net sales during the years ended December 31, 2024 and 2023, respectively.
Additional price increases may result in clients reducing mail volumes and exploring the use of alternative methods for delivering a larger portion of their products, such as continued diversion to the internet, digital and mobile channels and other alternative media channels, in order to ensure that they stay within their expected postage budgets. 41 Table of Contents Federal statute requires the PRC to conduct reviews of the overall rate-making structure for the USPS to ensure funding stability.
With postage increases that continue to exceed the CPI, clients will continue to reduce mail volumes and explore the use of alternative methods for delivering a larger portion of their products, such as continued diversion to the internet, digital and mobile channels and other alternative media channels, in order to ensure that they stay within their expected postage budgets.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeManagement believes a hypothetical 10% change in the price of paper and other raw materials would not have a significant direct impact on the Company’s consolidated annual results of operations or cash flows; however, significant increases in commodity pricing or tight supply could influence future client demand for printed products. 60 Table of Contents
Biggest changeTo the extent the cost of other raw materials increase and the Company is not able to increase selling prices of its products, then the Company may experience margin declines. 56 Table of Contents Management believes a hypothetical 10% change in the price of paper and other raw materials would not have a significant direct impact on the Company’s consolidated annual results of operations or cash flows; however, significant increases in commodity pricing or tight supply could influence future client demand for printed products. 57 Table of Contents
During the year ended December 31, 2023, the Company’s largest client accounted for less than 5% of the Company’s net sales. Even if the Company’s credit review and analysis mechanisms work properly, the Company may experience financial losses in its dealings with clients and other parties.
During the year ended December 31, 2024, the Company’s largest client accounted for less than 5% of the Company’s net sales. Even if the Company’s credit review and analysis mechanisms work properly, the Company may experience financial losses in its dealings with clients and other parties.
Accordingly, future results could be adversely impacted by changes in these or other factors. 59 Table of Contents Credit Risk Credit risk is the possibility of loss from a client’s failure to make payments according to contract terms.
Accordingly, future results could be adversely impacted by changes in these or other factors. 55 Table of Contents Credit Risk Credit risk is the possibility of loss from a client’s failure to make payments according to contract terms.
The price and availability of paper may also be adversely affected by paper mills’ permanent or temporary closures, and mills’ access to raw materials, conversion to produce other types of paper, and ability to transport paper produced. Approximately half of the paper used by the Company is supplied directly by its clients.
The price and availability of paper may also be adversely affected by paper mills’ permanent or temporary closures; paper mills’ access to raw materials, conversion to produce other types of paper, and ability to transport paper produced; and tariffs and trade restrictions. Approximately half of the paper used by the Company is supplied directly by its clients.
As of December 31, 2023, there was no outstanding balance on the revolving credit facility.
As of December 31, 2024, there was no outstanding balance on the revolving credit facility.
As of December 31, 2023, the Company’s foreign subsidiaries had net current assets (defined as current assets less current liabilities) subject to foreign currency translation risk of $88.7 million. The potential decrease in net current assets as of December 31, 2023, from a hypothetical 10% adverse change in quoted foreign currency exchange rates would be approximately $8.9 million.
As of December 31, 2024, the Company’s foreign subsidiaries had net current assets (defined as current assets less current liabilities) subject to foreign currency translation risk of $82.9 million. The potential decrease in net current assets as of December 31, 2024, from a hypothetical 10% adverse change in quoted foreign currency exchange rates would be approximately $8.3 million.
Interest Rate Risk The Company is exposed to interest rate risk on variable rate debt obligations and price risk on fixed rate debt and finance leases. The variable rate debt outstanding at December 31, 2023, was primarily comprised of $511.1 million outstanding on the Term Loan A.
Interest Rate Risk The Company is exposed to interest rate risk on variable rate debt obligations and price risk on fixed rate debt and finance leases. The variable rate debt outstanding at December 31, 2024, was primarily comprised of $360.8 million outstanding on the Term Loan A.
Based on those client account reviews and the continued uncertainty of the global economy, the Company has established an allowance for credit losses of $25.7 million as of December 31, 2023. The Company has a large, diverse client base and does not have a high degree of concentration with any single client account.
Based on those client account reviews and the continued uncertainty of the global economy, the Company has established an allowance for credit losses o f $21.5 million as of December 31, 2024. The Company has a large, diverse client base and does not have a high degree of concentration with any single client account.
In order to reduce the variability of cash flows from interest payments related to a portion of Quad’s variable-rate debt, the Company entered into a $130.0 million interest rate swap in March 2019, and two $75.0 million interest rate collars in February 2023, and has classified $280.0 million of the Company’s variable rate debt as fixed rate debt.
In order to reduce the variability of cash flows from interest payments related to a portion of Quad’s variable-rate debt, the Company entered into two $75.0 million interest rate collars in February 2023 and a $50.0 million interest rate swap in April 2024, and has classified $200.0 million of the Company’s variable rate debt as fixed rate debt.
Including the impact of the $280.0 million interest rate hedges of variable rate to fixed rate debt, Quad had variable rate debt outstanding of $229.9 million at a current weighted average interest rate of 7.5% and fixed rate debt and finance leases outstanding of $292.8 million at a current weighted average interest rate of 6.3% as of December 31, 2023.
Including the impact of the $200.0 million interest rate hedges of variable rate to fixed rate debt, Quad had variable rate debt outstanding of $165.4 million at a current weighted average interest rate of 7.9% and fixed rate debt and finance leases outstanding of $213.8 million at a current weighted average interest rate of 7.6% as of December 31, 2024.
A hypothetical 10% increase in the market interest rates impacting the Company’s current weighted average interest rate on variable rate debt obligations would not have a material impact on the Company’s interest expense. In addition, a hypothetical 10% change in market interest rates would change the fair value of fixed rate debt at December 31, 2023 by approximately $0.1 million.
A hypothetical 10% increase in the market interest rates impacting the Company’s current weighted average interest rate on variable rate debt obligations would change the fair value of floating rate debt at December 31, 2024 by approximately $1.4 million.
In its logistics operations, however, the Company is able to pass a substantial portion of any increase in fuel prices directly to its clients. To the extent the cost of other raw materials increase and the Company is not able to increase selling prices of its products, then the Company may experience margin declines.
In its logistics operations, however, the Company is able to pass a substantial portion of any increase in fuel prices directly to its clients.
Foreign Currency Risk and Translation Exposure The Company is exposed to the impact of foreign currency fluctuations in certain countries in which it operates.
In addition, a hypothetical 10% change in market interest rates would change the fair value of fixed rate debt at December 31, 2024 by approximately $0.2 million. Foreign Currency Risk and Translation Exposure The Company is exposed to the impact of foreign currency fluctuations in certain countries in which it operates.

Other QUAD 10-K year-over-year comparisons