Technology

Quad Reports Second Quarter and Year-to-Date 2024 Results

Published

2 years ago

July 30, 2024

Company continues to drive its marketing experience strategy, launching multiple innovative service offerings

SUSSEX, Wis., July 30, 2024 /PRNewswire/ — Quad/Graphics, Inc. (NYSE: QUAD) (“Quad” or the “Company”), a global marketing experience company, today reported results for the second quarter ended June 30, 2024.

Recent Highlights

Recognized Net Sales of $634 million in the second quarter of 2024 compared to $703 million in 2023 and realized a Net Loss of $3 million or $0.06 Diluted Loss Per Share for the second quarter of 2024.Achieved Non-GAAP Adjusted EBITDA of $52 million in the second quarter of 2024, increased from $50 million in the second quarter of 2023, and delivered $0.12 Adjusted Diluted Earnings Per Share for the second quarter of 2024.Increased Adjusted EBITDA Margin by 100 basis points to 8.2% in the second quarter of 2024 compared to the same period in 2023.Introduced Betty, a creative agency that delivers best-in-class strategy and creative, backed by Quad’s global production resources for speed and scale.Launched 3D Commerce by Quad, the first commercially available automated and scalable 3D scanning solution in the North American market for creating photorealistic 3D assets.Expanded partnerships for In-Store Connect by Quad, the company’s in-store retail media network.Generated $22 million of cash proceeds from sale of minority investment in Manipal Technologies, a leading print services and end-to-end business solutions provider headquartered in India.Declared quarterly dividend of $0.05 per share.Reaffirms full-year 2024 financial guidance.

During the second quarter, Quad continued to focus on differentiating itself as a marketing experience company.

Joel Quadracci, Chairman, President and CEO of Quad, said: “During the second quarter, we continued our focus on differentiating ourselves as a marketing experience company, including investments in innovative solutions and superior talent. We joined all of our creative business lines under a single agency called Betty, pairing the strategic creative services of an Agency of Record with our global production platform to offer highly scalable content at elevated speeds without sacrificing brand consistency or quality. We further enhanced our creative capabilities with the launch of 3D Commerce by Quad, the first commercially available automated and scalable 3D scanning solution in North America for creating photorealistic 3D assets for a range of applications, including product videos and virtual try-ons. Meanwhile, we advanced our In-Store Connect retail media network, or RMN, through a partnership with Swiftly, a prominent retail technology and media company whose industry-leading platform will help us bring the best elements of digital commerce into physical store environments. We continue to build sales momentum behind In-Store Connect. The Save Mart Companies, the largest private regional grocer on the West Coast, is in the process of activating our in-store RMN solution, and Homeland Stores, a large Oklahoma grocery chain, is scheduled to debut it in October. Additionally, we are in active conversations with more than a dozen other supermarket chains.

“As always, we remain focused on enhancing Quad’s financial strength and creating shareholder value and will continue to prioritize growth while further reducing debt in 2024.”

Added Tony Staniak, Chief Financial Officer: “During the second quarter, our Adjusted EBITDA margin increased by 100 basis points primarily due to higher manufacturing productivity and cost savings from completed restructuring actions that are ultimately expected to generate $60 million of savings in 2024. We generate cash from Free Cash Flow driven by our cost discipline as well as proceeds from asset sales, including $22 million in the second quarter of 2024 from the sale of our minority investment in Manipal Technologies. Net Sales declined in the second quarter reflecting pressure from ongoing external headwinds, including significant postal rate increases and the impact of elevated interest rates on financial services clients. Despite lower Net Sales, with our margin improvement and strong cash generation we are reaffirming our full-year guidance, including approximately 1.8x debt leverage, and we will continue to invest in accelerating our competitive position as a marketing experience company while returning capital to shareholders through our quarterly dividend. We also expect to be opportunistic in terms of our future share repurchases.”

Second Quarter 2024 Financial Results

Net Sales were $634 million in the second quarter of 2024, a decrease of 10% compared to the same period in 2023 primarily due to lower print volumes, a higher mix of lower unit price gravure versus offset print in our magazine and catalog offerings from segment share wins, and lower paper and agency solutions sales, including the loss of a large grocery client.Net Loss was $3 million in the second quarter of 2024 compared to $6 million in the same period in 2023. The improvement is primarily due to benefits from increased manufacturing productivity, savings from cost reduction initiatives and a $4 million gain on the sale of the Company’s minority investment in Manipal Technologies, partially offset by the impact from lower Net Sales.Adjusted EBITDA was $52 million in the second quarter of 2024 compared to $50 million in the same period in 2023, primarily due to the same reasons as the improvement in Net Loss.Adjusted Diluted Earnings Per Share was $0.12 in the second quarter of 2024 compared to $0.02 in the same period in 2023, primarily due to higher Adjusted Net Earnings and the beneficial impact from the Company repurchasing Class A shares totaling approximately 11% of its outstanding shares since the second quarter of 2022.

Year-to-Date 2024 Financial Results

Net Sales were $1.3 billion in the six months ended June 30, 2024, a decrease of 12% compared to the same period in 2023 primarily due to lower print volumes, a higher mix of lower unit price gravure versus offset print in our magazine and catalog offerings from segment share wins, and lower paper and agency solutions sales, including the loss of a large grocery client.Net Loss was $31 million, or $0.65 Diluted Loss Per Share, in the six months ended June 30, 2024, compared to Net Loss of $31 million, or $0.62 Diluted Loss Per Share, in the same period in 2023. The impact from lower Net Sales and higher restructuring and impairment charges from recent plant closures was offset by benefits from improved manufacturing productivity, lower depreciation and amortization, savings from cost reduction initiatives and a $4 million gain on the sale of the Company’s minority investment in Manipal Technologies.Adjusted EBITDA was $102 million in the six months ended June 30, 2024, a decrease of $8 million compared to the same period in 2023. The decrease was due to lower Net Sales, partially offset by benefits from improved manufacturing productivity, savings from cost reduction initiatives and a $4 million gain on the sale of the Company’s minority investment in Manipal Technologies.Adjusted Diluted Earnings Per Share was $0.22 in the six months ended June 30, 2024, compared to $0.17 in the same period in 2023.Net Cash Used in Operating Activities was $48 million in the six months ended June 30, 2024, compared to Net Cash Provided by Operating Activities of $0.3 million in the six months ended June 30, 2023. Free Cash Flow was negative $82 million in the six months ended June 30, 2024, compared to negative $45 million in the same period in 2023. During the six months ended June 30, 2023, the Company realized non-recurring cash flow benefits from reducing inventories enabled by an improved supply chain environment. As a reminder, the Company historically generates most of its Free Cash Flow in the fourth quarter of the year.Net Debt was $532 million at June 30, 2024, compared to $470 million at December 31, 2023, and $604 million at June 30, 2023. Compared to December 31, 2023, Net Debt increased primarily due to the negative $82 million of Free Cash Flow in the six months ended June 30, 2024, less the $22 million of proceeds from the sale of the Company’s minority investment in Manipal Technologies. Quad continues to expect to reduce Net Debt to approximately $405 million, achieving a 1.8x Debt Leverage Ratio, at the end of this year.

Dividend

Quad’s next quarterly dividend of $0.05 per share will be payable on September 6, 2024, to shareholders of record as of August 19, 2024.

2024 Guidance

The Company’s full-year 2024 financial guidance ranges are unchanged and are as follows:

Financial Metric

2024 Guidance

Annual Net Sales Change

5% to 9% decline

Full-Year Adjusted EBITDA

$205 million to $245 million

Free Cash Flow

$50 million to $70 million

Capital Expenditures

$60 million to $70 million

Year-End Debt Leverage Ratio (1)

Approximately 1.8x

(1)

Debt Leverage Ratio is calculated at the midpoint of the Adjusted EBITDA guidance.

Conference Call and Webcast Information

Quad will hold a conference call at 8:30 a.m. ET on Wednesday, July 31, to discuss second quarter and year-to-date 2024 financial results. The call will be hosted by Joel Quadracci, Quad Chairman, President and CEO, and Tony Staniak, Quad CFO. As part of the conference call, Quad will conduct a question-and-answer session.

Participants can pre-register for the webcast by navigating to https://dpregister.com/sreg/10191016/fd1a26f188. Participants will be given a unique PIN to gain access to the call, bypassing the live operator. Participants may pre-register at any time, including up to and after the call start time.

Alternatively, participants may dial in on the day of the call as follows:

U.S. Toll-Free: 1-877-328-5508International Toll: 1-412-317-5424

An audio replay of the call will be posted on the Investors section of Quad’s website shortly after the conference call ends. In addition, telephone playback will be available until August 31, 2024, accessible as follows:

U.S. Toll-Free: 1-877-344-7529International Toll: 1-412-317-0088Replay Access Code: 1737252

About Quad

Quad (NYSE: QUAD) is a global marketing experience company that helps brands make direct consumer connections, from household to in-store to online. Supported by state-of-the-art technology and data-driven intelligence, Quad uses its suite of media, creative and production solutions to streamline the complexities of marketing and remove friction from wherever it occurs in the marketing journey. Quad tailors its uniquely flexible, scalable and connected solutions to clients’ objectives, driving cost efficiencies, improving speed to market, strengthening marketing effectiveness, and delivering value on client investments.

Quad employs approximately 13,000 people in 14 countries and serves approximately 2,700 clients including industry leading blue-chip companies that serve both businesses and consumers in multiple industry verticals, with a particular focus on commerce, including retail, consumer packaged goods, and direct-to-consumer; financial services; and health. Quad is ranked among the largest agency companies in the U.S. by Ad Age, buoyed by its full-service Rise media agency and Betty creative agency. Quad is also one the largest commercial printers in North America, according to Printing Impressions.

For more information about Quad, including its commitment to ongoing innovation, culture and sustainable impact, visit quad.com.

Forward-Looking Statements

This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding, among other things, our current expectations about the Company’s future results, financial condition, sales, earnings, free cash flow, margins, objectives, goals, strategies, beliefs, intentions, plans, estimates, prospects, projections and outlook of the Company and can generally be identified by the use of words or phrases such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “plan,” “foresee,” “project,” “believe,” “continue” or the negatives of these terms, variations on them and other similar expressions. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results to be materially different from those expressed in or implied by such forward-looking statements. Forward-looking statements are based largely on the Company’s expectations and judgments and are subject to a number of risks and uncertainties, many of which are unforeseeable and beyond our control.

The factors that could cause actual results to materially differ include, among others: the impact of decreasing demand for printing services and significant overcapacity in a highly competitive environment creates downward pricing pressures and potential under-utilization of assets; the impact of increased business complexity as a result of the Company’s transformation to a marketing experience company, including adapting marketing offerings and business processes as required by new markets and technologies, such as artificial intelligence; the impact of changes in postal rates, service levels or regulations, including delivery delays; the impact of fluctuations in costs (including labor and labor-related costs, energy costs, freight rates and raw materials, including paper and the materials to manufacture ink) and the impact of fluctuations in the availability of raw materials, including paper, parts for equipment and the materials to manufacture ink; the impact macroeconomic conditions, including inflation, high interest rates and recessionary concerns, as well as cost and labor pressures, distribution challenges and the price and availability of paper, have had, and may continue to have, on the Company’s business, financial condition, cash flows and results of operations (including future uncertain impacts); the inability of the Company to reduce costs and improve operating efficiency rapidly enough to meet market conditions; the impact of a data-breach of sensitive information, ransomware attack or other cyber incident on the Company; the fragility and decline in overall distribution channels; the failure to attract and retain qualified talent across the enterprise; the impact of digital media and similar technological changes, including digital substitution by consumers; the failure of clients to perform under contracts or to renew contracts with clients on favorable terms or at all; the impact of risks associated with the operations outside of the United States (“U.S.”), including trade restrictions, currency fluctuations, the global economy, costs incurred or reputational damage suffered due to improper conduct of its employees, contractors or agents, and geopolitical events like war and terrorism; the failure to successfully identify, manage, complete and integrate acquisitions, investment opportunities or other significant transactions, as well as the successful identification and execution of strategic divestitures; the impact negative publicity could have on our business and brand reputation; significant capital expenditures and investments may be needed to sustain and grow the Company’s platforms, processes, systems, client and product technology, marketing and talent, and to remain technologically and economically competitive; the impact of the various restrictive covenants in the Company’s debt facilities on the Company’s ability to operate its business, as well as the uncertain negative impacts macroeconomic conditions may have on the Company’s ability to continue to be in compliance with these restrictive covenants; the impact of an other than temporary decline in operating results and enterprise value that could lead to non-cash impairment charges due to the impairment of property, plant and equipment and other intangible assets; the impact of regulatory matters and legislative developments or changes in laws, including changes in cybersecurity, privacy and environmental laws; the impact on the holders of Quad’s class A common stock of a limited active market for such shares and the inability to independently elect directors or control decisions due to the voting power of the class B common stock; and the other risk factors identified in the Company’s most recent Annual Report on Form 10-K, which may be amended or supplemented by subsequent Quarterly Reports on Form 10-Q or other reports filed with the Securities and Exchange Commission.

Except to the extent required by the federal securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

This press release contains financial measures not prepared in accordance with generally accepted accounting principles (referred to as non-GAAP), specifically Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Net Debt, Debt Leverage Ratio and Adjusted Diluted Earnings Per Share. Adjusted EBITDA is defined as net earnings (loss) excluding interest expense, income tax expense (benefit), depreciation and amortization and restructuring, impairment and transaction-related charges. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales. Free Cash Flow is defined as net cash provided by (used in) operating activities less purchases of property, plant and equipment. Debt Leverage Ratio is defined as total debt and finance lease obligations less cash and cash equivalents (Net Debt) divided by the last twelve months of Adjusted EBITDA. Adjusted Diluted Earnings Per Share is defined as earnings (loss) before income taxes excluding restructuring, impairment and transaction-related charges and adjusted for income tax expense at a normalized tax rate, divided by diluted weighted average number of common shares outstanding.

The Company believes that these non-GAAP measures, when presented in conjunction with comparable GAAP measures, provide additional information for evaluating Quad’s performance and are important measures by which Quad’s management assesses the profitability and liquidity of its business. These non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net earnings (loss) as a measure of operating performance or to cash flows provided by (used in) operating activities as a measure of liquidity. These non-GAAP measures may be different than non-GAAP financial measures used by other companies. Reconciliation to the GAAP equivalent of these non-GAAP measures are contained in tabular form on the attached unaudited financial statements.

Investor Relations Contact
Don Pontes
Executive Director of Investor Relations
916-532-7074
dwpontes@quad.com

Media Contact
Claire Ho
Director of Marketing Communications
414-566-2955
cho@quad.com

QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 2024 and 2023
(in millions, except per share data)
(UNAUDITED)

Three Months Ended June 30,

2024

2023

Net sales

$ 634.2

$ 703.1

Cost of sales

493.9

569.8

Selling, general and administrative expenses

88.7

83.3

Depreciation and amortization

26.4

32.0

Restructuring, impairment and transaction-related charges

10.1

9.6

Total operating expenses

619.1

694.7

Operating income

15.1

8.4

Interest expense

17.2

17.0

Net pension income

(0.2)

(0.4)

Loss before income taxes

(1.9)

(8.2)

Income tax expense (benefit)

0.9

(2.1)

Net loss

$ (2.8)

$ (6.1)

Loss per share

Basic and diluted

$ (0.06)

$ (0.12)

Weighted average number of common shares outstanding

Basic and diluted

47.7

49.3

QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 2024 and 2023
(in millions, except per share data)
(UNAUDITED)

Six Months Ended June 30,

2024

2023

Net sales

$ 1,289.0

$ 1,469.6

Cost of sales

1,015.2

1,187.3

Selling, general and administrative expenses

171.8

172.5

Depreciation and amortization

55.0

65.7

Restructuring, impairment and transaction-related charges

42.6

35.6

Total operating expenses

1,284.6

1,461.1

Operating income

4.4

8.5

Interest expense

32.4

33.3

Net pension income

(0.4)

(0.8)

Loss before income taxes

(27.6)

(24.0)

Income tax expense

3.3

6.7

Net loss

$ (30.9)

$ (30.7)

Loss per share

Basic and diluted

$ (0.65)

$ (0.62)

Weighted average number of common shares outstanding

Basic and diluted

47.4

49.2

QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2024 and December 31, 2023
(in millions)

(UNAUDITED)
June 30, 2024

December 31,
2023

ASSETS

Cash and cash equivalents

$ 12.8

$ 52.9

Receivables, less allowances for credit losses

294.2

316.2

Inventories

174.5

178.8

Prepaid expenses and other current assets

37.2

39.8

Total current assets

518.7

587.7

Property, plant and equipment—net

586.5

620.6

Operating lease right-of-use assets—net

88.6

96.6

Goodwill

100.3

103.0

Other intangible assets—net

14.0

21.8

Other long-term assets

59.8

80.0

Total assets

$ 1,367.9

$ 1,509.7

LIABILITIES AND SHAREHOLDERS’ EQUITY

Accounts payable

$ 333.2

$ 373.6

Other current liabilities

170.3

237.6

Short-term debt and current portion of long-term debt

82.1

151.7

Current portion of finance lease obligations

2.2

2.5

Current portion of operating lease obligations

24.0

25.4

Total current liabilities

611.8

790.8

Long-term debt

455.5

362.5

Finance lease obligations

5.4

6.0

Operating lease obligations

71.2

77.2

Deferred income taxes

5.1

Other long-term liabilities

139.8

148.6

Total liabilities

1,288.8

1,390.2

Shareholders’ equity

Preferred stock

—

Common stock

1.4

Additional paid-in capital

839.6

842.7

Treasury stock, at cost

(27.7)

(33.1)

Accumulated deficit

(610.0)

(573.9)

Accumulated other comprehensive loss

(124.2)

(117.6)

Total shareholders’ equity

79.1

119.5

Total liabilities and shareholders’ equity

$ 1,367.9

$ 1,509.7

QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2024 and 2023
(in millions)
(UNAUDITED)

Six Months Ended June 30,

2024

2023

OPERATING ACTIVITIES

Net loss

$ (30.9)

$ (30.7)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

55.0

65.7

Impairment charges

13.7

10.6

Amortization of debt issuance costs and original issue discount

0.8

1.0

Stock-based compensation

4.4

3.3

Gain on the sale of an investment

(4.1)

—

Gain on the sale or disposal of property, plant and equipment, net

(1.4)

(0.3)

Deferred income taxes

(0.1)

2.7

Changes in operating assets and liabilities

(85.7)

(52.0)

Net cash provided by (used in) operating activities

(48.3)

0.3

INVESTING ACTIVITIES

Purchases of property, plant and equipment

(33.5)

(45.2)

Cost investment in unconsolidated entities

(0.2)

(0.5)

Proceeds from the sale of property, plant and equipment

4.8

7.5

Proceeds from the sale of an investment

22.2

—

Other investing activities

0.5

(4.5)

Net cash used in investing activities

(6.2)

(42.7)

FINANCING ACTIVITIES

Proceeds from issuance of long-term debt

52.8

0.6

Payments of current and long-term debt

(119.3)

(24.2)

Payments of finance lease obligations

(1.6)

(1.0)

Borrowings on revolving credit facilities

776.0

771.4

Payments on revolving credit facilities

(686.4)

(711.4)

Purchases of treasury stock

—

(5.0)

Equity awards redeemed to pay employees’ tax obligations

(2.1)

(1.7)

Payment of cash dividends

(4.7)

(0.1)

Other financing activities

(0.2)

(0.3)

Net cash provided by financing activities

14.5

28.3

Effect of exchange rates on cash and cash equivalents

(0.1)

0.2

Net decrease in cash and cash equivalents

(40.1)

(13.9)

Cash and cash equivalents at beginning of period

52.9

25.2

Cash and cash equivalents at end of period

$ 12.8

$ 11.3

QUAD/GRAPHICS, INC.
SEGMENT FINANCIAL INFORMATION
For the Three and Six Months Ended June 30, 2024 and 2023
(in millions)
(UNAUDITED)

Net Sales

Operating

Income (Loss)

Restructuring,

Impairment and

Transaction-Related

Charges (1)

Three months ended June 30, 2024

United States Print and Related Services

$ 544.3

$ 25.4

$ 9.3

International

89.9

2.3

0.8

Total operating segments

634.2

27.7

10.1

Corporate

—

(12.6)

—

Total

$ 634.2

$ 15.1

$ 10.1

Three months ended June 30, 2023

United States Print and Related Services

$ 588.5

$ 11.8

$ 8.6

International

114.6

8.3

1.0

Total operating segments

703.1

20.1

9.6

Corporate

—

(11.7)

—

Total

$ 703.1

$ 8.4

$ 9.6

Six months ended June 30, 2024

United States Print and Related Services

$ 1,123.2

$ 24.1

$ 40.9

International

165.8

5.7

1.6

Total operating segments

1,289.0

29.8

42.5

Corporate

—

(25.4)

0.1

Total

$ 1,289.0

$ 4.4

$ 42.6

Six months ended June 30, 2023

United States Print and Related Services

$ 1,246.1

$ 19.1

$ 31.1

International

223.5

16.0

3.6

Total operating segments

1,469.6

35.1

34.7

Corporate

—

(26.6)

0.9

Total

$ 1,469.6

$ 8.5

$ 35.6

______________________________

(1)

Restructuring, impairment and transaction-related charges are included within operating income (loss).

QUAD/GRAPHICS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
EBITDA, EBITDA MARGIN, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
For the Three Months Ended June 30, 2024 and 2023
(in millions, except margin data)
(UNAUDITED)

Three Months Ended June 30,

2024

2023

Net loss

$ (2.8)

$ (6.1)

Interest expense

17.2

17.0

Income tax expense (benefit)

0.9

(2.1)

Depreciation and amortization

26.4

32.0

EBITDA (non-GAAP)

$ 41.7

$ 40.8

EBITDA Margin (non-GAAP)

6.6 %

5.8 %

Restructuring, impairment and transaction-related charges (1)

10.1

9.6

Adjusted EBITDA (non-GAAP)

$ 51.8

$ 50.4

Adjusted EBITDA Margin (non-GAAP)

8.2 %

7.2 %

______________________________

(1)

Operating results for the three months ended June 30, 2024 and 2023, were affected by the following restructuring, impairment and transaction-related charges:

Three Months Ended June 30,

2024

2023

Employee termination charges (a)

$ 3.2

$ 1.9

Impairment charges (b)

1.1

Transaction-related charges (c)

0.4

—

Integration costs (d)

0.1

0.5

Other restructuring charges (e)

5.3

6.1

Restructuring, impairment and transaction-related charges

$ 10.1

$ 9.6

______________________________

(a)

Employee termination charges were related to workforce reductions through facility consolidations and separation programs.

(b)

Impairment charges were for certain property, plant and equipment no longer being utilized in production as a result of facility
consolidations and other capacity reduction activities, as well as operating lease right-of-use assets.

(c)

Transaction-related charges consisted of professional service fees related to business acquisition and divestiture activities.

(d)

Integration costs were primarily costs related to the integration of acquired companies.

(e)

Other restructuring charges primarily include costs to maintain and exit closed facilities, as well as lease exit charges.

In addition to financial measures prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), this earnings announcement also contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Net Debt, Debt Leverage Ratio and Adjusted Diluted Earnings Per Share. The Company believes that these non-GAAP measures, when presented in conjunction with comparable GAAP measures, provide additional information for evaluating Quad’s performance and are important measures by which Quad’s management assesses the profitability and liquidity of its business. These non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net earnings (loss) as a measure of operating performance or to cash flows provided by (used in) operating activities as a measure of liquidity. These non-GAAP measures may be different than non-GAAP financial measures used by other companies.

QUAD/GRAPHICS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
EBITDA, EBITDA MARGIN, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
For the Six Months Ended June 30, 2024 and 2023
(in millions, except margin data)
(UNAUDITED)

Six Months Ended June 30,

2024

2023

Net loss

$ (30.9)

$ (30.7)

Interest expense

32.4

33.3

Income tax expense

3.3

6.7

Depreciation and amortization

55.0

65.7

EBITDA (non-GAAP)

$ 59.8

$ 75.0

EBITDA Margin (non-GAAP)

4.6 %

5.1 %

Restructuring, impairment and transaction-related charges (1)

42.6

35.6

Adjusted EBITDA (non-GAAP)

$ 102.4

$ 110.6

Adjusted EBITDA Margin (non-GAAP)

7.9 %

7.5 %

______________________________

(1)

Operating results for the six months ended June 30, 2024 and 2023, were affected by the following restructuring, impairment and transaction-related charges:

Six Months Ended June 30,

2024

2023

Employee termination charges (a)

$ 16.9

$ 15.0

Impairment charges (b)

13.7

10.6

Transaction-related charges (c)

0.9

0.6

Integration costs (d)

0.2

1.0

Other restructuring charges (e)

10.9

8.4

Restructuring, impairment and transaction-related charges

$ 42.6

$ 35.6

______________________________

(a)

Employee termination charges were related to workforce reductions through facility consolidations and separation programs.

(b)

(c)

Transaction-related charges consisted of professional service fees related to business acquisition and divestiture activities.

(d)

Integration costs were primarily costs related to the integration of acquired companies.

(e)

Other restructuring charges primarily include costs to maintain and exit closed facilities, as well as lease exit charges.

QUAD/GRAPHICS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
FREE CASH FLOW
For the Six Months Ended June 30, 2024 and 2023
(in millions)
(UNAUDITED)

Six Months Ended June 30,

2024

2023

Net cash provided by (used in) operating activities

$ (48.3)

$ 0.3

Less: purchases of property, plant and equipment

33.5

45.2

Free Cash Flow (non-GAAP)

$ (81.8)

$ (44.9)

QUAD/GRAPHICS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
NET DEBT AND DEBT LEVERAGE RATIO
As of June 30, 2024 and December 31, 2023
(in millions, except ratio)

(UNAUDITED)
June 30, 2024

December 31,
2023

Total debt and finance lease obligations on the condensed consolidated balance sheets

$ 545.2

$ 522.7

Less: Cash and cash equivalents

12.8

52.9

Net Debt (non-GAAP)

$ 532.4

$ 469.8

Divided by: trailing twelve months Adjusted EBITDA (non-GAAP) (1)

$ 225.5

$ 233.7

Debt Leverage Ratio (non-GAAP)

2.36 x

2.01 x

______________________________

(1)

The calculation of Adjusted EBITDA for the trailing twelve months ended June 30, 2024, and December 31, 2023, was as follows:

Add

Subtract

Trailing Twelve
Months Ended

Year Ended

Six Months Ended

December 31,

2023(a)

(UNAUDITED)
June 30, 2024

(UNAUDITED)
June 30, 2023

(UNAUDITED)
June 30, 2024

Net loss

$ (55.4)

$ (30.9)

$ (30.7)

$ (55.6)

Interest expense

70.0

32.4

33.3

69.1

Income tax expense

12.8

3.3

6.7

9.4

Depreciation and amortization

128.8

55.0

65.7

118.1

EBITDA (non-GAAP)

$ 156.2

$ 59.8

$ 75.0

$ 141.0

Restructuring, impairment and transaction-related charges

77.5

42.6

35.6

84.5

Adjusted EBITDA (non-GAAP)

$ 233.7

$ 102.4

$ 110.6

$ 225.5

______________________________

(a)

Financial information for the year ended December 31, 2023, is included as reported in the Company’s 2023 Annual Report on
Form 10-K filed with the SEC on February 22, 2024.

QUAD/GRAPHICS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
ADJUSTED DILUTED EARNINGS PER SHARE
For the Three Months Ended June 30, 2024 and 2023
(in millions, except per share data)
(UNAUDITED)

Three Months Ended June 30,

2024

2023

Loss before income taxes

$ (1.9)

$ (8.2)

Restructuring, impairment and transaction-related charges

10.1

9.6

Adjusted net earnings, before income taxes (non-GAAP)

8.2

1.4

Income tax expense at 25% normalized tax rate

2.1

0.4

Adjusted net earnings (non-GAAP)

$ 6.1

$ 1.0

Basic weighted average number of common shares outstanding

47.7

49.3

Plus: effect of dilutive equity incentive instruments (non-GAAP)

2.4

1.7

Diluted weighted average number of common shares outstanding (non-GAAP)

50.1

51.0

Adjusted diluted earnings per share (non-GAAP) (1)

$ 0.12

$ 0.02

Diluted loss per share (GAAP)

$ (0.06)

$ (0.12)

Restructuring, impairment and transaction-related charges per share

0.20

0.19

Income tax expense (benefit) from condensed consolidated statement of operations per share

0.02

(0.04)

Income tax expense at 25% normalized tax rate per share

(0.04)

(0.01)

Adjusted diluted earnings per share (non-GAAP) (1)

$ 0.12

$ 0.02

______________________________

(1)

Adjusted diluted earnings per share excludes the following: (i) restructuring, impairment and transaction-related charges
and (ii) discrete income tax items.

QUAD/GRAPHICS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
ADJUSTED DILUTED EARNINGS PER SHARE
For the Six Months Ended June 30, 2024 and 2023
(in millions, except per share data)
(UNAUDITED)

Six Months Ended June 30,

2024

2023

Loss before income taxes

$ (27.6)

$ (24.0)

Restructuring, impairment and transaction-related charges

42.6

35.6

Adjusted net earnings, before income taxes (non-GAAP)

15.0

11.6

Income tax expense at 25% normalized tax rate

3.8

2.9

Adjusted net earnings (non-GAAP)

$ 11.2

$ 8.7

Basic weighted average number of common shares outstanding

47.4

49.2

Plus: effect of dilutive equity incentive instruments (non-GAAP)

2.5

1.9

Diluted weighted average number of common shares outstanding (non-GAAP)

49.9

51.1

Adjusted diluted earnings per share (non-GAAP) (1)

$ 0.22

$ 0.17

Diluted loss per share (GAAP)

$ (0.65)

$ (0.62)

Restructuring, impairment and transaction-related charges per share

0.85

0.70

Income tax expense from condensed consolidated statement of operations per share

0.07

0.13

Income tax expense at 25% normalized tax rate per share

(0.08)

(0.06)

Effect of dilutive equity incentive instruments

0.03

0.02

Adjusted diluted earnings per share (non-GAAP) (1)

$ 0.22

$ 0.17

______________________________

(1)

Adjusted diluted earnings per share excludes the following: (i) restructuring, impairment and transaction-related charges
and (ii) discrete income tax items.

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SOURCE Quad

Technology

Real Life-Size Human Anatomy in Your Hands with Anatomage Replica

Published

7 minutes ago

September 3, 2026

SANTA CLARA, Calif., Sept. 3, 2026 /PRNewswire/ — Anatomage Inc., a leader in medical visualization and education technology, today announced the launch of Anatomage Replica, a new line of 3D printed physical anatomy models based on real cadaver data. Designed to complement the company’s exclusive real-human-based digital anatomy, Anatomage Replica provides access to highly accurate, durable physical anatomy models that can be explored repeatedly in the classroom, cadaver lab, and clinical training environments.

Cadaver dissection remains an important component of medical education, giving students direct experience with real human anatomy; however, dissection is inherently a destructive and finite process, and structures cannot simply be restored or kept for repeated reference. Therefore, educators have long relied on tools like dry skulls and anatomy models to provide students with anatomy they can revisit throughout their studies.

Plastinated models, a more detailed alternative, use specially preserved real human tissues to create dry, durable anatomical specimens that can be handled and studied. However, while plastination can preserve intricate anatomical details, these specimens can be fragile, expensive, and visually different from living or freshly preserved anatomy, with some specimens relying on painted or altered coloration to distinguish structures. The provenance and ethical sourcing of human specimens can also raise questions when individual anatomical parts are separated for commercial distribution.

Anatomage Replica was developed to provide a better approach. Derived from the real-human-based anatomy represented in the Anatomage Table, Replica transforms Anatomage’s highly detailed cadaver data into physical models using 3D printing technology. The Anatomage Table is well-known for delivering the most accurate and complete real human anatomy, with fully volumized digital bodies derived from real cadaver slices as well as highly accurate synthetic cadavers.

Replica models preserve the visual characteristics and anatomical relationships represented in the source anatomy. Muscles, ligaments, and bones retain the appearance of the original frozen cadavers, while vascular structures and nerves are clearly defined and colored for easy identification. Removable outer layers reveal deeper structures, allowing students to explore internal anatomy through hands-on examination.

The result is a physical representation designed to closely replicate the anatomy students encounter in Anatomage’s digital environment, providing a unified, multi-modal learning experience that connects tactile exploration with digital visualization, helping educators make complex anatomy more accessible, engaging, and memorable. Durable, safe to handle, and reusable, Anatomage Replica brings the anatomy of real human organs into physical models that students can hold and study.

The first Anatomage Replica set includes the heart, brain, hand, knee, and foot, each featuring detachable components that allow for deeper exploration of internal anatomy. Anatomists have been impressed by the cadaver-level detail and accuracy of the Replica models, which bring educators and students more of the anatomy they need into a physical format.

By connecting the physical and digital worlds, Anatomage Replica gives students a consistent anatomical reference they can return to throughout their education. It offers the detail of human anatomy, the accessibility of a physical model, and the flexibility of digital visualization, which provides educators with a practical and ethical tool for hands-on anatomy education that is substantially more economical than plastinated human specimens.

About Anatomage
Anatomage is a market leader in medical imaging and education technology, transforming traditional learning through continuous innovation. With an ecosystem of medical imaging software and hardware, the company delivers world-class anatomy and physiology content at the highest level of accuracy. Anatomage is committed to enhancing its technologies to transform standard anatomy learning, medical training, treatment planning, as well as revolutionize science education.

Media Contact:
Dr. Jack Choi
CEO, Anatomage Inc.
Phone: 1-408-885-1474
Email: info@anatomage.com
www.anatomage.com

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SOURCE Anatomage Inc.

Technology

Sins of a Solar Empire II: Harbinger Arrives with the Deadly Eidolon Faction

Published

7 minutes ago

September 3, 2026

Expansion launches along with the free version 2.0 update which includes new units, improved graphics, updated market view, new VO and more

Harbinger Expansion Trailer: https://youtu.be/tTMjpY2LAAs

PLYMOUTH, Mich., Sept. 3, 2026 /PRNewswire/ — Stardock today released the first expansion for Sins of a Solar Empire II, Harbinger. The new DLC adds the long-awaited fourth faction to the Sins universe, giving a face to the great enemy that’s chased the Vasari for 10,000 years. The expansion is available now on Steam, Epic Games Store, and direct through Stardock with a launch discount price of $23.99. Shipping alongside Harbinger is a free version 2.0 update for every Sins of a Solar Empire II owner.

The Eidolon

Fighting for planets, trade routes, culture, or wealth is not the Eidolon way. Working behind the scenes, the Eidolon spread corruption wherever they go. Their technology shrouds entire worlds to fuel their advance, and they strike from the shadows with cloaked fleets, forcing every other empire to fight for survival on unfamiliar terms.

Expansion Features

The Eidolon rewrite the rules of galactic conquest with systems built around corruption, secrecy, and control:

Planetary Transformation: The Eidolon spread corruption across the galaxy to empower themselves and their worlds. As populations fall under the Eidolon’s influence, their planets gain corruption over time. Once a world has fully fallen, it can be shrouded, greatly expanding the upgrades that planet can support.

Unit Corruption: Corruption empowers Eidolon units in combat as well as weakens them. As an Eidolon ship gains corruption, its hull dwindles while its offensive power increases. Enemy forces can become infected by corruption, giving the Eidolon another advantage.

Null Weapons: Eidolon weapons are far more advanced than the other factions, and can negate shields and spread corruption against enemies.

Cloaked Ships: Subterfuge is one of the sharpest weapons of a great enemy, as on the Kalizaeth Profaner support capital ship. New cloaking and detection systems let the Eidolon appear and vanish at will, enabling hit-and-run tactics that reward patience and punish anyone caught off guard.

Psionic Abilities: The Eidolon possess psionic abilities that allow them to seize control of lesser beings and drive Vasari ships into madness, firing on friend and foe alike.

Phase Echoes: Sometimes the dead don’t die. Eidolon units infused with corruption may refuse to die and carry on the onslaught.

Version 2.0 Features

Quality of Life UX ImprovementsUpdated Unity quick bar system can now expand and be pinned.Weapon ranges of defense structures are now visible on mouseover and during placement.Market window has been redesigned and now uses price fluctuations with tracking and price history.Improved tooltips that give more information on why you can’t do something.Updated Mod UIRedesigned the Modding UI system to make it easier to browse collections and highlight popular mods.Users can now save playlists of mods and reload them. The game will automatically offer to download mods that aren’t installed.Added more filtering options and various safeguards during installation (e.g., low disk space, etc.).Updated Graphics SettingsNew planetary shaders provide more natural lighting and weather effects.Improved threading system helps prevent crashes or hangs on systems with low texture memory.The game now auto-detects which graphics settings are best for your system.

Sins of a Solar Empire II: Harbinger is now available to play on Steam, Epic Games Store, or direct through Stardock with a launch discount price of $23.99 through September 14 at 1:00 PM ET. The expansion is also included as part of the Premium Edition for $99.99 or as part of the Sins of a Solar Empire II: Content Pass for $59.99. The free v2.0 base-game update has also been released simultaneously to all Sins of a Solar Empire II owners on all platforms. Follow Sins II and learn more at https://www.sinsofasolarempire2.com.

About Stardock Entertainment
Stardock is a pioneer in the strategy gaming genre headquartered in Plymouth, Mich. that has been developing and publishing strategy and simulation games since 1993, starting with the original release of Galactic Civilizations. Stardock’s recent hits include Sins of a Solar Empire, Ashes of the Singularity, Elemental: Reforged, and Offworld Trading Company. Learn more at https://www.stardock.com.

Media Kit:
https://www.sinsofasolarempire2.com/press

Media Contact:
Colin Regan
Stardock_Media@zebrapartners.net
Zebra Partners

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SOURCE Stardock Entertainment

Technology

OGA 2026 OPENS WITH STRONGER FOCUS ON MARKET ACCESS, REGIONAL PROJECTS AND ENERGY OPPORTUNITIES

Published

8 minutes ago

September 3, 2026

Joint opening with MOGSEC and EIC strengthens links between Malaysian OGSE capabilities, international project pipelines and growing regional energy opportunities

KUALA LUMPUR, Malaysia, Sept. 4, 2026 /PRNewswire/ — Oil & Gas Asia (OGA) 2026 opened with a stronger focus on market access, project opportunities and cross-border business connections, bringing Malaysian and international energy companies together as the industry responds to shifting demand, supply-chain pressures, technological change and the transition towards more resilient energy systems.

The 22nd edition of OGA, taking place from 2 to 4 September 2026 at the Kuala Lumpur Convention Centre, is co-located with the Malaysian Oil, Gas & Energy Services Exhibition & Conference (MOGSEC) and EIC Connect OGA. Together, the three platforms bring Malaysian OGSE capabilities, international project opportunities, technology, investment and industry expertise into closer contact.

The joint opening was officiated by PETRONAS President and Group Chief Executive Officer Tan Sri Tengku Muhammad Taufik, alongside Informa Markets Malaysia Chairman Tan Sri Abdul Rahman Mamat, Energy Industries Council (EIC) Regional Director, Asia Pacific Syed Saggaf Syed Ahmad, Malaysian Oil, Gas & Energy Services Council (MOGSC) President Zahris Sham Abu Musa and Malaysia Petroleum Resources Corporation (MPRC) President and Chief Executive Officer Mohd Yazid Jaafar.

For Tan Sri Abdul Rahman Mamat, Chairman of Informa Markets Malaysia, the value of OGA lies in bringing companies, capabilities and markets together at a time when the energy industry is undergoing significant change.

“OGA connects businesses with decision-makers, technology providers with potential users, investors with opportunities, and Malaysian companies with regional and international markets. And very often, a conversation that begins here can lead to a partnership, an investment or a new business opportunity,” said Tan Sri Abdul Rahman Mamat.

The commercial potential of such connections was demonstrated at OGA 2025, which attracted more than 33,000 attendees from 81 countries and 2,000 participating brands and companies, generating US$42.17 million in reported potential business for exhibitors.

OGA 2026 is expected to attract more than 30,000 trade attendees, alongside 2,000 participating brands and companies, more than 40 industry speakers and eight international pavilions from Australia, China, Germany, India, Italy, Singapore, South Korea and the United Kingdom. Notably, 35% of exhibitors are new to OGA this year, bringing a wider mix of companies and capabilities to this year’s edition.

The international profile of the event is further strengthened by a new pavilion from Western Australia, bringing additional companies, capabilities and perspectives to OGA. The event is also collaborating with Timor-Leste, strengthening links with an emerging energy market and creating another avenue for cooperation.

The participation of new and international players is supported by PETRONAS, as Corporate Sponsor, and Malaysia Petroleum Resources Corporation (MPRC), as National OGSE Development Partner. For Malaysia’s OGSE sector, stronger regional and international links are increasingly important as companies seek to build capabilities, adopt new technologies and identify new markets.

“For MPRC, being the National OGSE Development Partner at OGA 2026 gives us an opportunity to bring Government and industry closer and move forward together on an important conversation: Not just about where the oil and gas services industry is today, but about where Malaysian companies will find their next source of growth.” said Mohd Yazid Jaafar, President and CEO of MPRC.

That focus on domestic capability is reflected in MOGSEC, which returns for its eighth edition, co-organised with MOGSC. Bringing together emerging companies from Malaysia’s OGSE sector, MOGSEC puts local capabilities in the spotlight, creating opportunities for service providers to showcase their expertise and connect with regional and international stakeholders. Its SME Pavilion further provides a dedicated platform for smaller companies to build connections and pursue new business opportunities.

The international business dimension is strengthened through EIC Connect OGA, delivered in partnership with the Energy Industries Council. The platform brings international energy companies, technology providers and service organisations together to explore project pipelines, market intelligence, investment opportunities and potential partnerships, with a focus on markets including Sabah, Sarawak, Brunei and Indonesia.

Beyond the exhibition floor, OGA’s conference and knowledge programme, including the SPEAK OGA C-Suite Series, brings industry leaders, technical experts and policymakers together to examine market developments, operational efficiency, digital transformation, energy transition, talent development and emerging technologies, with a focus on how businesses are responding to a changing operating environment.

OGA Industry Plus, supported by SBM International Trading FZCO, further expands industry engagement by encouraging broader participation and peer-to-peer networking across the energy community.

Across the three days, OGA 2026 will also host a series of targeted business engagements, leadership roundtables, investment forums, talent sessions and technical dialogues, bringing together stakeholders from specific markets, sectors and communities across the wider energy ecosystem.

The event is supported by industry partners across the energy value chain, including Platinum Sponsors Velesto Energy and EPIC Berhad; Gold Sponsors Octave and ANP; Silver Sponsors Yokogawa, MHH Condition Monitoring Sdn Bhd and Vantris Energy Berhad; General Sponsors ENE Petro Services Sdn Bhd, FPT Corporation, Prometheus Group and KMIRA; and OGA Industry Plus sponsor SBM International Trading FZCO.

OGA 2026 continues at the Kuala Lumpur Convention Centre until 4 September, bringing together the regional energy community for three days of business, industry dialogue and technology showcase.

For more information and visitor registration, visit www.oilandgas-asia.com

Notes to Editors
About Oil & Gas Asia (OGA)
Oil & Gas Asia (OGA) is one of Southeast Asia’s premier platforms for the oil, gas and energy sector. Organised by Informa Markets Malaysia, the exhibition and conference convene policymakers, national and international energy companies, engineering and technology providers, investors and solution partners to explore emerging opportunities, showcase innovation and drive business growth across the energy value chain. As the industry’s leading meeting place for knowledge exchange, investment and technology advancement, OGA supports the development of a resilient, competitive and sustainable energy ecosystem by facilitating market access, strategic partnerships and industry insights that shape the future of energy in Southeast Asia. For more information, visit www.oilandgas-asia.com.

About Informa Markets
Informa Markets creates platforms for industries and specialist markets to trade, innovate, and grow. Our portfolio comprises more than 450 international B2B events and brands across markets, including Healthcare & Pharmaceuticals, Infrastructure, Construction & Real Estate, Fashion & Apparel, Hospitality, Food & Beverage, and Health & Nutrition. We provide customers and partners around the globe with opportunities to engage, experience, and do business through face-to-face exhibitions, specialist digital content, and actionable data solutions. As the world’s leading exhibition organiser, we bring a diverse range of specialist markets to life, unlocking opportunities and helping them thrive 365 days a year. For more information, please visit www.informamarkets.com.

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SOURCE Informa Markets Malaysia