Quad/Graphics, Inc. (NYSE: QUAD):
Highlights:
- Generates second quarter net sales of
$934 million.
- Achieves second quarter Adjusted EBITDA
of $112 million and Adjusted EBITDA margin of 12.0%, as compared to
11.9% in 2011.
- Creates $60 million in second quarter
Recurring Free Cash Flow and $167 million year-to-date.
- Repays $42 million in debt during the
quarter and $132 million year-to-date.
- Completes integration of Worldcolor and
confirms annual synergy savings of more than $275 million,
exceeding original guidance of $225 million.
Quad/Graphics, Inc. (NYSE: QUAD) (“Quad/Graphics” or the
“Company”) today reported results for its second quarter and
year-to-date ending June 30, 2012. For full financial results,
please see the accompanying information.
“We are pleased with the continued progress we have made to
strengthen our balance sheet, maintain strong credit metrics and
generate significant cash flow during a quarter traditionally
impacted by lower seasonal volumes,” said Joel Quadracci,
Quad/Graphics Chairman, President & CEO. “This past July marked
the two-year anniversary of the Worldcolor acquisition and, with
the closing of the second quarter, we also mark the completion of a
successful integration process. In the end, we expect to exceed our
original synergy guidance by more than 20%, achieving over $275
million of annual savings. Our one-time cost to achieve these
synergies will be less than $225 million, well within the expected
range of $195 million to $240 million, resulting in a ratio of
approximately 80 cents of cost for every dollar of synergy. This
represents a significant achievement for the Company and a proud
moment for all employees who worked hard to merge these two leading
companies together during a time of significant industry
transformation and economic challenge.”
Net sales for the second quarter were $934 million versus $977
million for the same period in 2011. Second quarter 2012 Adjusted
EBITDA was $112 million compared to $116 million for the same
period in 2011, and Adjusted EBITDA margin was 12.0% as compared to
11.9% in 2011. The quarterly results reflect expected volume and
pricing pressures. Offsetting these impacts were incremental
synergy savings totaling $21 million and lower selling, general and
administrative costs.
“We are proud of the progress we continue to make in
strengthening our balance sheet through the repayment of $42
million in debt during the quarter, and $132 million in the first
half of 2012,” said John Fowler, Executive Vice President &
Chief Financial Officer. “Our leverage ratio of 2.2x remains in our
targeted range of 2.0x to 2.5x and we continue to generate
significant Recurring Free Cash Flow to support our disciplined
capital deployment strategy. Our quarterly dividend of $0.25 per
share will be payable on September 21, 2012, to shareholders
of record as of September 10, 2012.”
For the first six months of 2012, net sales were $1.92 billion
versus net sales of $2.0 billion for the same period in 2011,
reflecting expected volume and price pressures combined with
impacts from continued economic uncertainty and secular pressures.
Year-to-date Adjusted EBITDA was $238 million versus $258 million
in 2011, reflecting lower volumes partially offset by lower
selling, general and administrative costs. Recurring Free Cash Flow
was $167 million for the first six months of 2012 compared to $102
million in the first six months of 2011, continuing a track record
of solid cash flow generation.
Second Quarter Conference Call
Quad/Graphics (NYSE: QUAD) will hold a conference call at 10
a.m. ET / 9 a.m. CT on Wednesday, August 8, to discuss second
quarter 2012 results. To access the conference call, it is
recommended that you listen via computer at:
http://us.meeting-stream.com/quadgraphics_080812/.
If for any reason you are unable to stream, you can listen to
the audio via the telephone by calling:
- Toll-Free: (877) 217 - 9946
(US/Canada)
- Toll: (702) 696 - 4824
(International)
- Conference ID: 89370002
The replay will be available for 30 days following the
conference call. To access the replay via phone, please call
(855) 859-2056 or (404) 537-3406 and enter the Conference ID number
89370002. To access the replay via the internet,
please use the following link:
http://us.meeting-stream.com/quadgraphics_080812/. Registration is
required for replay.
Forward-Looking Statements
To the extent any statements in this press release contain
information that is not historical, these statements are
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements relate to, among other things, the objectives, goals,
strategies, beliefs, intentions, plans, estimates, prospects,
projections and outlook of Quad/Graphics, and can generally be
identified by the use of words such as “may,” “will,” “expect,”
“intend,” “estimate,” “anticipate,” “plan,” “foresee,” “believe” or
“continue” or the negatives of these terms, variations on them and
other similar expressions. In addition, any statements that refer
to expectations, projections or other characterizations of future
events or circumstances are forward-looking statements.
These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties and other
factors, some of which are beyond the control of the Company. These
risks, uncertainties and other factors could cause actual results
to differ materially from those expressed or implied by those
forward-looking statements. Among risks, uncertainties and other
factors that may impact Quad/Graphics are those described in Item
1A of the Company's most recent Form 10-K and the following: the
impact of significant overcapacity in the highly competitive
commercial printing industry, which creates downward pricing
pressure and fluctuating demand for printing services; the
potential inability of the Company to reduce costs and improve
operating efficiency rapidly enough to meet market conditions; the
impact of electronic media and similar technological changes; the
impact of changing future economic conditions; the potential
failure to renew long-term contracts with customers, the renewal of
those contracts under different terms, or customer nonperformance
in accordance with the terms and for the duration of long-term
contracts; significant capital expenditures may be needed to
maintain the Company's platform and processes and to remain
technologically and economically competitive; the impact of
fluctuations in costs (including labor-related costs, energy costs,
freight rates and raw materials) and the impact of fluctuations in
the availability of raw materials; the impact of regulatory matters
and legislative developments or changes in laws, including changes
in environmental and privacy laws and postal rates, regulations and
services; the impact on Quad/Graphics class A common shareholders
of a limited active market for Quad/Graphics common stock and the
inability to independently elect directors or control decisions due
to the class B common stock voting rights; an other than temporary
decline in operating results and enterprise value that could lead
to non-cash impairment charges due to the impairment of goodwill,
other intangible assets and property, plant and equipment, which,
in turn, could lead to the Company being in non-compliance with
certain of its debt facility covenants; the liabilities of
Worldcolor with respect to pension and postretirement benefits
could grow in the future and create additional costs; restrictions
imposed by various covenants in the Company's debt facilities may
affect the Company's ability to operate its business; failure to
successfully integrate the operations of Quad/Graphics and
Worldcolor; risks associated with the Company's operations outside
of the United States; and the inability to retain and attract
additional, key employees, or the adverse effects of any strikes or
other labor protests.
Quad/Graphics cautions that the foregoing list of risks,
uncertainties and other factors is not exhaustive and you should
carefully consider the other factors detailed from time to time in
Quad/Graphics' filings with the United States Securities and
Exchange Commission and other uncertainties and potential events
when reviewing the Company's forward-looking statements.
Because forward-looking statements are subject to assumptions
and uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. You are
cautioned not to place undue reliance on such statements, which
speak only as of the date of this press release. Except to the
extent required by the federal securities laws, Quad/Graphics
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
About Quad/Graphics
Quad/Graphics (NYSE: QUAD) is a global provider
of print and related multichannel solutions for consumer magazines,
special interest publications, catalogs, retail inserts/circulars,
direct mail, books, directories, and commercial and specialty
products, including in-store signage. Headquartered in Sussex, Wis.
(just west of Milwaukee), the Company has approximately 22,000
full-time equivalent employees working from more than 50
print-production facilities as well as other support locations
throughout North America, Latin America and Europe. As a printing
industry innovator, Quad/Graphics (www.QG.com) is redefining the
power of print in today's multimedia world by helping its clients
use print as the foundation of multichannel communications
strategies to drive their top-line revenues.
QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
For the Three Months Ended June 30, 2012
and 2011
(in millions, except per share data)
(UNAUDITED)
Three Months Ended June 30, 2012
2011 Net sales $ 934.2 $ 977.2 Cost of sales 740.8
756.6 Selling, general and administrative expenses 80.6 104.6
Depreciation and amortization 84.7 83.5 Restructuring, impairment
and transaction-related charges 37.7 21.6 Total
operating expenses 943.8 966.3
Operating income (loss)
from continuing operations (9.6 ) 10.9 Interest expense
20.7 29.3 Loss from continuing operations
before income taxes and equity in earnings (loss) of unconsolidated
entities (30.3 ) (18.4 ) Income tax benefit (10.3 ) (3.7 )
Loss from continuing operations before equity in earnings
(loss) of unconsolidated entities (20.0 ) (14.7 ) Equity in
earnings (loss) of unconsolidated entities (0.8 ) 0.3
Net loss from continuing operations $ (20.8 ) $ (14.4 )
Earnings from discontinued operations, net of tax (1) —
4.2
Net loss $ (20.8 ) $ (10.2 )
Net earnings attributable to noncontrolling interests — (0.1
)
Net loss attributable to Quad/Graphics common
shareholders $ (20.8 ) $ (10.3 )
Earnings (loss) per
share attributable to Quad/Graphics common shareholders: Basic
and diluted: Continuing operations $ (0.44 ) $ (0.31 ) Discontinued
operations — 0.09 Earnings (loss) per share
attributable to Quad/Graphics common shareholders $ (0.44 ) $ (0.22
)
Weighted average number of common shares
outstanding: Basic and diluted 46.8 47.3
(1) Includes the results of the Canadian operations prior to the
March 1, 2012 sale. Net loss from continuing operations and its
components exclude the Canadian operations.
QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
For the Six Months Ended June 30, 2012 and
2011
(in millions, except per share data)
(UNAUDITED)
Six Months Ended June 30, 2012
2011 Net sales $ 1,923.8 $ 1,999.6 Cost of sales
1,513.7 1,540.3 Selling, general and administrative expenses 172.6
202.5 Depreciation and amortization 169.3 170.8 Restructuring,
impairment and transaction-related charges 75.9 50.3
Total operating expenses 1,931.5 1,963.9
Operating income
(loss) from continuing operations (7.7 ) 35.7 Interest
expense 42.1 59.1 Loss from continuing
operations before income taxes and equity in earnings of
unconsolidated entities (49.8 ) (23.4 ) Income tax benefit
(44.1 ) (10.9 ) Loss from continuing operations before
equity in earnings of unconsolidated entities (5.7 ) (12.5 )
Equity in earnings of unconsolidated entities 0.3 1.1
Net loss from continuing operations $ (5.4 ) $ (11.4
) Loss from discontinued operations, net of tax (1) (3.2 )
(6.1 ) Gain on disposal of discontinued operations, net of tax 35.3
—
Net earnings (loss) $ 26.7 $ (17.5 )
Net earnings attributable to noncontrolling interests (0.1 )
(0.1 )
Net earnings (loss) attributable to Quad/Graphics
common shareholders $ 26.6 $ (17.6 )
Earnings
(loss) per share attributable to Quad/Graphics common
shareholders: Basic and diluted: Continuing operations $ (0.12
) $ (0.24 ) Discontinued operations 0.69 (0.13 ) Earnings
(loss) per share attributable to Quad/Graphics common shareholders
$ 0.57 $ (0.37 )
Weighted average number of common
shares outstanding: Basic and diluted 46.8 47.3
(1) Includes the results of the Canadian operations prior to the
March 1, 2012 sale. Net loss from continuing operations and its
components exclude the Canadian operations.
QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
For the Three Months Ended June 30, 2012
and 2011
(in millions, except per share data)
(UNAUDITED)
Three Months Ended June 30, Three Months Ended
June 30, 2012 2011 Consolidated
DiscontinuedOperations
(1)
ContinuingOperations
Consolidated
DiscontinuedOperations
(1)
ContinuingOperations
Net sales $ 934.2 $ — $ 934.2 $ 1,070.5 $ 93.3 $ 977.2
Cost of sales 740.8 — 740.8 832.0 75.4 756.6 Selling,
general and administrative expenses 80.6 — 80.6 112.0 7.4 104.6
Depreciation and amortization 84.7 — 84.7 87.7 4.2 83.5
Restructuring, impairment and transaction-related charges 37.7
— 37.7 23.4 1.8 21.6
Total operating expenses 943.8 — 943.8 1,055.1 88.8 966.3
Operating income (loss) (9.6 ) — (9.6 ) 15.4 4.5 10.9
Interest expense 20.7 — 20.7 29.5 0.2
29.3 Earnings (loss) before income taxes and
equity in earnings of unconsolidated entities (30.3 ) — (30.3 )
(14.1 ) 4.3 (18.4 ) Income tax (benefit) expense (10.3 ) —
(10.3 ) (3.6 ) 0.1 (3.7 ) Earnings (loss)
before equity in earnings of unconsolidated entities (20.0 ) —
(20.0 ) (10.5 ) 4.2 (14.7 ) Equity in earnings (loss) of
unconsolidated entities (0.8 ) — (0.8 ) 0.3 —
0.3
Net earnings (loss) $ (20.8 ) $ — $ (20.8
) $ (10.2 ) $ 4.2 $ (14.4 ) Net earnings attributable to
noncontrolling interests — — — (0.1 ) —
(0.1 )
Net earnings (loss) attributable to Quad/Graphics
common shareholders $ (20.8 ) $ — $ (20.8 ) $ (10.3 ) $
4.2 $ (14.5 )
Earnings (loss) per share
attributable to Quad/Graphics common shareholders: Basic and
diluted $ (0.44 ) $ — $ (0.44 ) $ (0.22 ) $ 0.09 $
(0.31 )
Weighted average number of common shares
outstanding: Basic and diluted 46.8 46.8 46.8
47.3 47.3 47.3
(1) The Canadian operations sold on March 1, 2012 are
presented as discontinued operations. This schedule is presented to
provide the full income statement for consolidated, discontinued
and continuing results of operations.
QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
For the Six Months Ended June 30, 2012 and
2011
(in millions, except per share data)
(UNAUDITED)
Six Months Ended June 30, Six Months Ended June
30, 2012 2011 Consolidated
DiscontinuedOperations
(1)
ContinuingOperations
Consolidated
DiscontinuedOperations
(1)
ContinuingOperations
Net sales $ 1,956.0 $ 32.2 $ 1,923.8 $ 2,172.8 $ 173.2 $
1,999.6 Cost of sales 1,544.5 30.8 1,513.7 1,685.4 145.1
1,540.3 Selling, general and administrative expenses 175.5 2.9
172.6 221.0 18.5 202.5 Depreciation and amortization 169.3 — 169.3
178.2 7.4 170.8 Restructuring, impairment and transaction-related
charges 77.6 1.7 75.9 58.2 7.9
50.3 Total operating expenses 1,966.9 35.4 1,931.5 2,142.8
178.9 1,963.9
Operating income (loss) (10.9 ) (3.2 )
(7.7 ) 30.0 (5.7 ) 35.7 Interest expense 42.1 —
42.1 59.4 0.3 59.1 Loss
before income taxes and equity in earnings of unconsolidated
entities (53.0 ) (3.2 ) (49.8 ) (29.4 ) (6.0 ) (23.4 )
Income tax (benefit) expense (44.1 ) — (44.1 ) (10.8 ) 0.1
(10.9 ) Loss before equity in earnings of
unconsolidated entities (8.9 ) (3.2 ) (5.7 ) (18.6 ) (6.1 ) (12.5 )
Equity in earnings of unconsolidated entities 0.3 — 0.3 1.1
— 1.1 Gain on disposal of discontinued operations, net of tax 35.3
35.3 — — — —
Net earnings (loss) $ 26.7 $ 32.1 $ (5.4 ) $ (17.5 ) $ (6.1
) $ (11.4 ) Net earnings attributable to noncontrolling
interests (0.1 ) — (0.1 ) (0.1 ) — (0.1 )
Net earnings (loss) attributable to Quad/Graphics common
shareholders $ 26.6 $ 32.1 $ (5.5 ) $ (17.6 ) $
(6.1 ) $ (11.5 )
Earnings (loss) per share attributable
to Quad/Graphics common shareholders: Basic and diluted $ 0.57
$ 0.69 $ (0.12 ) $ (0.37 ) $ (0.13 ) $ (0.24 )
Weighted average number of common shares outstanding: Basic
and diluted 46.8 46.8 46.8 47.3 47.3
47.3
(1) The Canadian operations sold on March 1, 2012 are
presented as discontinued operations. This schedule is presented to
provide the full income statement for consolidated, discontinued
and continuing results of operations.
QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2012 and December 31,
2011
(in millions)
(UNAUDITED)
June 30, 2012 December 31, 2011
ASSETS Cash and cash equivalents $ 17.6 $ 25.6 Receivables,
less allowances for doubtful accounts 531.9 656.1 Inventories 252.5
249.5 Prepaid expenses and other current assets 75.7 142.3 Deferred
income taxes 70.6 86.7 Short-term restricted cash 17.2 8.5 Current
assets of discontinued operations (1) — 72.6
Total current assets 965.5 1,241.3 Property,
plant and equipment—net 2,023.2 2,123.3 Goodwill 787.3 787.1 Other
intangible assets—net 262.1 295.6 Long-term restricted cash 47.3
67.4 Equity method investments in unconsolidated entities 68.2 69.4
Other long-term assets 49.0 46.2 Long-term assets of discontinued
operations (1) — 104.9 Total assets $ 4,202.6
$ 4,735.2
LIABILITIES AND SHAREHOLDERS'
EQUITY Accounts payable $ 266.2 $ 301.9 Amounts owing in
satisfaction of bankruptcy claims 10.4 19.5 Accrued liabilities
341.0 393.9 Purchase price payable on business exchange transaction
— 62.4 Short-term debt and current portion of long-term debt 98.7
82.1 Current portion of capital lease obligations 10.3 20.7 Current
liabilities of discontinued operations (1) — 48.4
Total current liabilities 726.6 928.9
Long-term debt 1,208.7 1,342.8 Unsecured notes to be issued 27.6
38.7 Capital lease obligations 20.5 24.9 Deferred income taxes
432.4 471.9 Other long-term liabilities 470.9 521.5 Long-term
liabilities of discontinued operations (1) — 99.6
Total liabilities 2,886.7 3,428.3 Redeemable equity
3.5 3.5 Quad/Graphics common stock and other equity
Preferred stock — — Common stock 1.4 1.4 Additional paid-in capital
979.4 984.2 Treasury stock, at cost (283.7 ) (295.4 ) Retained
earnings 650.6 650.2 Accumulated other comprehensive loss (36.0 )
(37.7 ) Quad/Graphics common stock and other equity 1,311.7
1,302.7 Noncontrolling interests 0.7 0.7
Total common stock and other equity and noncontrolling
interests 1,312.4 1,303.4 Total liabilities
and shareholders' equity $ 4,202.6 $ 4,735.2
(1) December 31, 2011 balance sheet includes the assets and
liabilities of the Canadian operations sold on March 1,
2012.
QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
For the Six Months Ended June 30, 2012 and
2011
(in millions)
(UNAUDITED)
Six Months Ended June 30, 2012
2011 OPERATING ACTIVITIES Net earnings (loss) $ 26.7
$ (17.5 ) Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities: Depreciation and amortization
169.3 178.2 Impairment charges 14.1 — Deferred income taxes (25.5 )
9.4 Gain on disposal of discontinued operations, net of tax (35.3 )
— Other non-cash adjustments to net earnings (loss) 9.0 10.5
Changes in operating assets and liabilities—net of acquisitions
12.2 (63.9 )
Net Cash Provided by Operating
Activities 170.5 116.7
INVESTING
ACTIVITIES Purchases of property, plant and equipment (54.2 )
(98.5 ) Investment in ManipalTech (18.1 ) — Proceeds from the sale
of property, plant and equipment 10.0 8.2 Transfers from restricted
cash 11.4 17.3 Deposit refunded related to business exchange
transaction 50.0 — Purchase price payments on business exchange
transaction (4.2 ) — Acquisition of business—net of cash acquired
(6.6 ) —
Net Cash Used in Investing Activities
(11.7 ) (73.0 )
FINANCING ACTIVITIES Payments of
long-term debt (35.9 ) (43.6 ) Payments of capital lease
obligations (15.9 ) (8.8 ) Borrowings on revolving credit
facilities 65.1 389.5 Payments on revolving credit facilities
(142.6 ) (360.9 ) Bankruptcy claim payments on unsecured notes to
be issued (11.1 ) (8.0 ) Proceeds from issuance of common stock —
1.6 Tax benefit on exercise of stock options — 0.8 Payment of cash
dividends (23.4 ) (9.4 ) Payment of tax distributions — (4.2
)
Net Cash Used in Financing Activities (163.8 )
(43.0 ) Effect of exchange rates on cash and cash
equivalents (3.0 ) (4.6 )
Net Decrease in Cash and Cash
Equivalents (8.0 ) (3.9 ) Cash and Cash Equivalents at
Beginning of Period 25.6 20.5
Cash and Cash
Equivalents at End of Period $ 17.6 $ 16.6
The condensed consolidated statements of cash flows include the
cash flows of the Canadian operations prior to the March 1, 2012
sale.
QUAD/GRAPHICS, INC.
SEGMENT FINANCIAL INFORMATION
For the Three and Six Months Ended June
30, 2012 and 2011
(in millions)
(UNAUDITED)
Net Sales
OperatingIncome/(Loss)
Restructuring,Impairment
andTransaction-RelatedCharges
Three months ended June 30, 2012 United States Print and
Related Services $ 808.6 $ 22.7 $ 18.1 International 125.6
(9.8 ) 7.6 Total operating segments 934.2 12.9 25.7 Corporate —
(22.5 ) 12.0 Total $ 934.2 $ (9.6 ) $ 37.7
Three months ended June 30, 2011 United States Print and
Related Services $ 859.5 $ 40.7 $ 9.4 International 117.7
(6.0 ) 0.9 Total operating segments 977.2 34.7 10.3 Corporate —
(23.8 ) 11.3 Total $ 977.2 $ 10.9 $ 21.6
Six months ended June 30, 2012 United States Print
and Related Services $ 1,671.9 $ 56.4 $ 32.4 International 251.9
(18.0 ) 18.1 Total operating segments 1,923.8 38.4 50.5
Corporate — (46.1 ) 25.4 Total $ 1,923.8 $ (7.7 ) $
75.9
Six months ended June 30, 2011 United States
Print and Related Services $ 1,766.7 $ 87.4 $ 30.8 International
232.9 (10.8 ) 2.4 Total operating segments 1,999.6 76.6 33.2
Corporate — (40.9 ) 17.1 Total $ 1,999.6 $ 35.7
$ 50.3
Results from the Canadian operations sold on March 1, 2012
are excluded from the segment financial information presented
above.
Restructuring, impairment and transaction-related charges are
included in Operating Income/(Loss) above.
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, 2012
and 2011
(in millions)
(UNAUDITED)
Three Months Ended June 30, 2012
2011 Net loss attributable to Quad/Graphics common
shareholders $ (20.8 ) $ (10.3 ) Interest expense 20.7 29.3
Income tax benefit (10.3 ) (3.7 ) Depreciation and amortization
84.7 83.5 EBITDA (Non-GAAP) $ 74.3 $ 98.8
EBITDA Margin (Non-GAAP) 8.0 % 10.1 % Restructuring,
impairment and transaction-related charges (1) 37.7 21.6 Loss from
discontinued operations, net of tax — (4.2 )
Adjusted EBITDA from continuing operations (Non-GAAP)
$ 112.0 $ 116.2
Adjusted EBITDA Margin from continuing operations (Non-GAAP)
12.0 % 11.9 % Adjusted EBITDA
from discontinued operations (Non-GAAP) (2) $ — $ 10.5
Adjusted EBITDA Margin from discontinued operations
(Non-GAAP) (2) — % 11.3 %
Adjusted EBITDA - consolidated
(Non-GAAP) $ 112.0 $ 126.7
Adjusted EBITDA Margin - consolidated (Non-GAAP)
12.0 % 11.8 %
__________________________________
(1) Operating results from continuing operations for the three
months ended June 30, 2012 and 2011 were affected by the
following restructuring, impairment and transaction-related
charges:
Three Months Ended June 30, 2012
2011 Employee termination charges (a) $ 10.2 $ 4.8
Impairment charges (b) 5.7 — Transaction-related charges (c) 0.8
1.0 Integration costs (d) 11.2 8.9 Other restructuring charges (e)
9.8 6.9 Restructuring, impairment and transaction-related
charges from continuing operations $ 37.7 $ 21.6
__________________________________
(a) Employee termination charges were related
to workforce reductions through facility consolidations and
involuntary separation programs.
(b) Impairment charges incurred in the three
months ended June 30, 2012 were for certain buildings and
equipment no longer being utilized in production as a result of
facility consolidations, primarily related to the Company's
Stillwater, Oklahoma and Pila, Poland facilities.
(c) Transaction-related charges incurred in
the three months ended June 30, 2012 consisted of professional
service fees related to business acquisition and divestiture
activities.
(d) Integration costs were primarily related
to preparing existing facilities to meet new production
requirements resulting from work transferring from closed plants,
as well as other costs related to the integration of the acquired
companies.
(e) Other restructuring charges were
primarily from costs to maintain and exit closed facilities, as
well as lease exit charges.
(2) Includes the Adjusted EBITDA and Adjusted EBITDA Margin for
the Canadian operations sold on March 1, 2012, calculated in a
consistent manner with the calculation above for Adjusted EBITDA
and Adjusted EBITDA Margin from continuing operations.
In addition to financial measures prepared in accordance with
generally accepted accounting principles (GAAP), this earnings
announcement also contains non-GAAP financial measures,
specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted
EBITDA Margin, Recurring Free Cash Flow and Adjusted Diluted
Earnings Per Share. They are presented to provide additional
information regarding Quad/Graphics' performance and because they
are important measures by which Quad/Graphics assesses the
profitability and liquidity of its business. These measures should
not be considered alternatives to net earnings (loss) as a measure
of operating performance or to cash flows provided by operating
activities as a measure of liquidity.
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, 2012 and
2011
(in millions)
(UNAUDITED)
Six Months Ended June 30, 2012
2011 Net earnings (loss) attributable to Quad/Graphics
common shareholders $ 26.6 $ (17.6 ) Interest expense 42.1
59.1 Income tax benefit (44.1 ) (10.9 ) Depreciation and
amortization 169.3 170.8 EBITDA (Non-GAAP) $
193.9 $ 201.4 EBITDA Margin (Non-GAAP) 10.1 % 10.1 %
Restructuring, impairment and transaction-related charges (1) 75.9
50.3 Loss from discontinued operations, net of tax 3.2 6.1 Gain on
disposal of discontinued operations, net of tax (35.3 ) —
Adjusted EBITDA from continuing operations (Non-GAAP)
$ 237.7 $ 257.8
Adjusted EBITDA Margin from continuing operations (Non-GAAP)
12.4 % 12.9 % Adjusted EBITDA
from discontinued operations (Non-GAAP) (2) $ (1.5 ) $ 9.6
Adjusted EBITDA Margin from discontinued operations (Non-GAAP) (2)
(4.7 )% 5.5 %
Adjusted EBITDA - consolidated
(Non-GAAP) $ 236.2 $ 267.4
Adjusted EBITDA Margin - consolidated (Non-GAAP)
12.1 % 12.3 %
__________________________________
(1) Operating results from continuing operations for the six
months ended June 30, 2012 and 2011 were affected by the
following restructuring, impairment and transaction-related
charges:
Six Months Ended June 30, 2012
2011 Employee termination charges (a) $ 20.6 $ 15.8
Impairment charges (b) 14.1 — Transaction-related charges (c) 2.3
1.0 Integration costs (d) 23.1 22.4 Gain on collection of note
receivable (e) (2.4 ) (7.1 ) Other restructuring charges (f) 18.2
18.2 Restructuring, impairment and
transaction-related charges from continuing operations $ 75.9
$ 50.3
__________________________________
(a) Employee termination charges were related
to workforce reductions through facility consolidations and
involuntary separation programs.
(b) Impairment charges incurred in the six
months ended June 30, 2012 were for certain buildings and
equipment no longer being utilized in production as a result of
facility consolidations, primarily related to the Company's
Stillwater, Oklahoma and Pila, Poland facilities.
(c) Transaction-related charges incurred in
the six months ended June 30, 2012 consisted of professional
service fees related to business acquisition and divestiture
activities.
(d) Integration costs were primarily related
to preparing existing facilities to meet new production
requirements resulting from work transferring from closed plants,
as well as other costs related to the integration of the acquired
companies.
(e) Gain on the collection of a note
receivable in the six months ended June 30, 2012 was related
to a settlement of a disputed pre-acquisition Worldcolor note
receivable. Gain on the collection of a note receivable in the six
months ended June 30, 2011 was related to the June 2008
sale of Worldcolor's European operations. These non-recurring gains
were excluded from the calculation of Adjusted EBITDA.
(f) Other restructuring charges were
primarily from costs to maintain and exit closed facilities, as
well as lease exit charges.
(2) Includes the Adjusted EBITDA and Adjusted EBITDA Margin for
the Canadian operations sold on March 1, 2012, calculated in a
consistent manner with the calculation above for Adjusted EBITDA
and Adjusted EBITDA Margin from continuing operations.
In addition to financial measures prepared in accordance with
generally accepted accounting principles (GAAP), this earnings
announcement also contains non-GAAP financial measures,
specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted
EBITDA Margin, Recurring Free Cash Flow and Adjusted Diluted
Earnings Per Share. They are presented to provide additional
information regarding Quad/Graphics' performance and because they
are important measures by which Quad/Graphics assesses the
profitability and liquidity of its business. These measures should
not be considered alternatives to net earnings (loss) as a measure
of operating performance or to cash flows provided by operating
activities as a measure of liquidity.
QUAD/GRAPHICS, INC.
RECONCILIATION OF GAAP TO NON-GAAP
MEASURES
Recurring Free Cash Flow
For the Six Months Ended June 30, 2012 and
2011
(in millions)
(UNAUDITED)
Six Months Ended June 30, 2012
2011 Net cash provided by operating activities $ 170.5 $
116.7 Add back non-recurring payments: Restructuring
payments, net (1) 43.1 77.9 Worldcolor bankruptcy payments 7.9
5.7 Recurring cash flows provided by operating
activities 221.5 200.3 Less: purchases of property, plant
and equipment (54.2 ) (98.5 )
Recurring Free Cash
Flow $ 167.3 $ 101.8
(1) Restructuring payments are shown net of cash receipts
related to non-recurring restructuring transactions. For the six
months ended June 30, 2012, restructuring payments were
$57.8 million (consisting of $56.9 million in payments
for continuing operations and $0.9 million for Canadian
discontinued operations) and were reduced for a $14.7 million
non-recurring collection of a disputed pre-acquisition Worldcolor
note receivable. For the six months ended June 30, 2011,
restructuring payments are shown net of a $7.1 million gain on
the collection of a note receivable for the June 2008 sale of
Worldcolor's European operations.
Recurring Free Cash Flow includes the cash flows of the Canadian
operations prior to the March 1, 2012 sale.
In addition to financial measures prepared in accordance with
generally accepted accounting principles (GAAP), this earnings
announcement also contains non-GAAP financial measures,
specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted
EBITDA Margin, Recurring Free Cash Flow and Adjusted Diluted
Earnings Per Share. They are presented to provide additional
information regarding Quad/Graphics' performance and because they
are important measures by which Quad/Graphics assesses the
profitability and liquidity of its business. These measures should
not be considered alternatives to net earnings (loss) as a measure
of operating performance or to cash flows provided by operating
activities as a measure of liquidity.
QUAD/GRAPHICS, INC.
RECONCILIATION OF GAAP TO NON-GAAP
MEASURES
Adjusted Diluted Earnings Per Share
For the Three Months Ended June 30, 2012
and 2011
(in millions, except per share data)
(UNAUDITED)
Three Months Ended June 30, 2012
2011 Loss from continuing operations before income taxes and
equity in earnings (loss) of unconsolidated entities $ (30.3 ) $
(18.4 ) Restructuring, impairment and transaction-related
charges 37.7 21.6 7.4 3.2 Income tax expense
at 40% normalized tax rate 3.0 1.3 4.4 1.9
Equity in earnings (loss) of unconsolidated entities (0.8 ) 0.3 Net
earnings attributable to noncontrolling interests — (0.1 )
Adjusted net earnings from continuing operations (Non-GAAP)
$ 3.6 $ 2.1 Basic weighted average number of
common shares outstanding 46.8 47.3 Plus: effect of dilutive equity
incentive instruments (Non-GAAP) 0.1 1.3 Diluted
weighted average number of common shares outstanding (Non-GAAP)
46.9 48.6
Adjusted Diluted Earnings Per
Share From Continuing Operations (Non-GAAP) $
0.08 $ 0.04
Diluted Earnings Per Share From Continuing Operations (GAAP) $
(0.44 ) $ (0.31 ) Restructuring, impairment and transaction-related
charges per share 0.80 0.44 Income tax benefit from condensed
consolidated statement of operations per share (0.22 ) (0.08 )
Income tax expense at 40% normalized tax rate per share (0.06 )
(0.03 ) GAAP to Non-GAAP diluted impact per share — 0.02
Adjusted Diluted Earnings Per Share From Continuing
Operations (Non-GAAP) $ 0.08 $
0.04
Adjusted Diluted Earnings Per Share excludes: (i) the results of
the Canadian discontinued operations, (ii) the gain on disposal of
the Canadian discontinued operations, (iii) restructuring,
impairment and transaction-related charges and (iv) discrete income
tax items.
In addition to financial measures prepared in accordance with
generally accepted accounting principles (GAAP), this earnings
announcement also contains non-GAAP financial measures,
specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted
EBITDA Margin, Recurring Free Cash Flow and Adjusted Diluted
Earnings Per Share. They are presented to provide additional
information regarding Quad/Graphics' performance and because they
are important measures by which Quad/Graphics assesses the
profitability and liquidity of its business. These measures should
not be considered alternatives to net earnings (loss) as a measure
of operating performance or to cash flows provided by operating
activities as a measure of liquidity.
QUAD/GRAPHICS, INC.
RECONCILIATION OF GAAP TO NON-GAAP
MEASURES
Adjusted Diluted Earnings Per Share
For the Six Months Ended June 30, 2012 and
2011
(in millions, except per share data)
(UNAUDITED)
Six Months Ended June 30, 2012
2011 Loss from continuing operations before income taxes and
equity in earnings of unconsolidated entities $ (49.8 ) $ (23.4 )
Restructuring, impairment and transaction-related charges
75.9 50.3 26.1 26.9 Income tax expense at 40%
normalized tax rate 10.4 10.8 15.7 16.1 Equity
in earnings of unconsolidated entities 0.3 1.1 Net earnings
attributable to noncontrolling interests (0.1 ) (0.1 )
Adjusted net earnings from continuing operations (Non-GAAP) $ 15.9
$ 17.1 Basic weighted average number of common
shares outstanding 46.8 47.3 Plus: effect of dilutive equity
incentive instruments (Non-GAAP) 0.2 1.3 Diluted
weighted average number of common shares outstanding (Non-GAAP)
47.0 48.6
Adjusted Diluted Earnings Per
Share From Continuing Operations (Non-GAAP) $
0.34 $ 0.35
Diluted Earnings Per Share From Continuing Operations (GAAP) $
(0.12 ) $ (0.24 ) Restructuring, impairment and transaction-related
charges per share 1.61 1.03 Income tax benefit from condensed
consolidated statement of operations per share (0.94 ) (0.22 )
Income tax expense at 40% normalized tax rate per share (0.22 )
(0.22 ) GAAP to Non-GAAP diluted impact per share 0.01 —
Adjusted Diluted Earnings Per Share From Continuing
Operations (Non-GAAP) $ 0.34 $
0.35
Adjusted Diluted Earnings Per Share excludes: (i) the results of
the Canadian discontinued operations, (ii) the gain on disposal of
the Canadian discontinued operations, (iii) restructuring,
impairment and transaction-related charges and (iv) discrete income
tax items.
In addition to financial measures prepared in accordance with
generally accepted accounting principles (GAAP), this earnings
announcement also contains non-GAAP financial measures,
specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted
EBITDA Margin, Recurring Free Cash Flow and Adjusted Diluted
Earnings Per Share. They are presented to provide additional
information regarding Quad/Graphics' performance and because they
are important measures by which Quad/Graphics assesses the
profitability and liquidity of its business. These measures should
not be considered alternatives to net earnings (loss) as a measure
of operating performance or to cash flows provided by operating
activities as a measure of liquidity.
Quad Graphics (NYSE:QUAD)
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Quad Graphics (NYSE:QUAD)
過去 株価チャート
から 7 2023 まで 7 2024