Company Reports Results In-Line with Expectations, Increases
Guidance for Net Sales and Adjusted EBITDA to Reflect Acquisition
of Brown Printing Company
Second Quarter Highlights:
- Generated net sales of
$1.1 billion.
- Achieved Adjusted EBITDA of
$102 million.
- Completed the acquisition of Brown
Printing Company ("Brown Printing").
- Increases 2014 net sales guidance to a
range of $4.8 billion to $4.9 billion and Adjusted EBITDA
guidance to a range of $535 million to $560 million.
- Reaffirms 2014 guidance for Free Cash
Flow in the range of $155 million to $165 million.
- Declares quarterly dividend of $0.30
per share.
Quad/Graphics, Inc. (NYSE: QUAD) (“Quad/Graphics” or the
“Company”) today reported results for its second quarter ending
June 30, 2014. The reported results include Brown Printing
from the day of acquisition on May 30, 2014. Prior year financial
results do not include the acquisition of Brown Printing. For full
financial results, including reconciliations of non-GAAP financial
measures, please see the accompanying information.
“Our second quarter results were consistent with our
expectations and we remain on track to achieve our 2014
objectives,” said Joel Quadracci, Quad/Graphics Chairman, President
& CEO. “We are pleased with our decision to acquire Brown
Printing as it supports our ongoing strategy to create value for
our clients and shareholders. Our integration efforts are underway
and include a strong focus on serving our clients well while also
improving the efficiency and productivity of our platform and
driving future cost savings.”
For the second quarter of 2014, net sales were
$1.1 billion, down 1% compared to the same period in 2013.
Second quarter 2014 Adjusted EBITDA was $102 million as
compared to $111 million for the same period in 2013, and
Adjusted EBITDA Margin was 9.3% as compared to 10.0% in 2013. The
quarterly results reflect expected volume and pricing pressures, as
well as an $8 million decrease in Adjusted EBITDA due to
certain event-driven favorable gains in 2013 that did not repeat in
2014, such as the resolution of certain legal, environmental and
Worldcolor bankruptcy matters. These decreases were partially
offset by lower employee related costs, including labor
productivity improvements.
For the first six months of 2014, net sales were
$2.2 billion, down 2% compared to the same period in 2013.
Year-to-date Adjusted EBITDA was $209 million as compared to
$225 million for the same period in 2013, and Adjusted EBITDA
Margin was 9.5% as compared to 10.0% in 2013. The year-to-date
results reflect trends that are consistent with those highlighted
for the second quarter.
“We are increasing guidance for net sales and Adjusted EBITDA to
reflect the contribution from the Brown Printing acquisition,” said
Dave Honan, Quad/Graphics Vice President and CFO. “We currently
estimate full-year 2014 net sales to be in the range of
$4.8 billion to $4.9 billion, increased from a prior
guidance range of $4.6 billion to $4.8 billion, and
full-year 2014 Adjusted EBITDA to be in the range of
$535 million to $560 million, increased from a prior
guidance range of $520 million to $550 million. We
reiterate our annual 2014 guidance of Free Cash Flow to be between
$155 million and $165 million, which reflects the EBITDA
contribution from Brown Printing offset by the integration costs
that are front-end loaded.”
Added Honan: “As we move forward, we will continue to drive
productivity improvements and implement sustainable cost reductions
to be a low-cost producer. We will also continue to manage our debt
to maintain a strong balance sheet. The new debt capital structure
we completed in April 2014 enhances our Company’s financial
flexibility by extending and staggering our debt maturity profile,
further diversifying our capital structure, and providing more
borrowing capacity to better position us to execute on our
strategic goals.”
Quad/Graphics’ quarterly dividend of $0.30 per share will be
payable on September 19, 2014, to shareholders of record as of
September 8, 2014.
Quarterly Conference Call
Quad/Graphics (NYSE: QUAD) will hold a conference call at 10
a.m. ET / 9 a.m. CT on Wednesday, August 6, to discuss second
quarter 2014 results. To access the conference call, it is
recommended that you listen via computer at: http://engage.vevent.com/rt/quadgraphics~080614.
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: 49079092
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
49079092. To access the replay via the internet, please use the
following link: http://engage.vevent.com/rt/quadgraphics~080614.
Registration is required for replay.
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, revenue, 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 significant overcapacity in
the highly competitive commercial printing industry, which creates
downward pricing pressure and fluctuating demand for printing
services; the 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,
including digital substitution by consumers; the impact of changes
in postal rates, service levels or regulations; the impact of
changing future economic conditions; the failure to renew long-term
contracts with clients on favorable terms or at all; the failure of
clients to perform under long-term contracts due to financial or
other reasons or due to client consolidation; the failure to
successfully identify, manage, complete and integrate acquisitions
and investments; the impact of increased business complexity as a
result of the Company’s entry into additional markets; 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 privacy and environmental laws; the impact on
the holders of Quad/Graphics 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; the impact of risks associated with the
operations outside of the United States; significant capital
expenditures may be needed to maintain the Company’s platform and
processes and to remain technologically and economically
competitive; and the other risk factors identified in the Company’s
most recent Annual Report on Form 10-K, as such may be amended or
supplemented by subsequent Quarterly Reports on Form 10-Q or other
reports filed with the Securities and Exchange Commission.
Except as 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 and Free Cash Flow. Adjusted EBITDA is defined as net
earnings (loss) attributable to Quad/Graphics common shareholders
plus interest expense, income tax expense (if applicable),
depreciation and amortization, restructuring, impairment and
transaction-related charges, and loss on debt extinguishment, and
less income tax benefit (if applicable). Adjusted EBITDA Margin is
defined as Adjusted EBITDA divided by net sales. Free Cash Flow is
defined as net cash provided by operating activities less purchases
of property, plant and equipment. These measures 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 as a
measure of operating performance or to cash flows provided by
operating activities as a measure of liquidity.
About Quad/Graphics
Quad/Graphics (NYSE: QUAD), a leading global printer and media
channel integrator, is redefining print in today’s multichannel
media world by helping marketers and publishers capitalize on
print’s ability to complement and connect with other media
channels. With consultative ideas, worldwide capabilities,
leading-edge technology and single-source simplicity, Quad/Graphics
has the resources and knowledge to help its clients maximize the
revenue they derive from their marketing spend through channel
integration, and minimize their total cost of print production and
distribution through a fully integrated national distribution
network. The Company provides a diverse range of print solutions,
media solutions and logistics services from multiple locations
throughout North America, Latin America and Europe.
QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
For the Three Months Ended June 30,
2014 and 2013
(in millions, except per share data)
(UNAUDITED)
Three Months Ended June 30, 2014
2013 Net sales $ 1,099.0 $ 1,110.8 Cost of sales
892.9 893.8 Selling, general and administrative expenses 100.4
105.1 Depreciation and amortization 85.3 87.9 Restructuring,
impairment and transaction-related charges 19.9 29.2
Total operating expenses 1,098.5 1,116.0
Operating income
(loss) $ 0.5 $ (5.2 )
Interest expense 23.5 21.3 Loss on debt extinguishment 6.0 —
Loss before income taxes and equity in loss of
unconsolidated entities (29.0 ) (26.5 ) Income tax benefit
(9.6 ) (0.6 ) Loss before equity in loss of unconsolidated
entities (19.4 ) (25.9 ) Equity in loss of unconsolidated
entities (3.4 ) (1.7 )
Net loss $ (22.8
) $ (27.6 ) Net loss
attributable to noncontrolling interests — 0.4
Net loss attributable to Quad/Graphics common shareholders
$ (22.8 ) $ (27.2 )
Loss per share attributable to Quad/Graphics common
shareholders: Basic and diluted $ (0.48 ) $ (0.59 )
Weighted average number of common shares outstanding: Basic
and diluted 47.5 46.9
QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
For the Six Months Ended June 30,
2014 and 2013
(in millions, except per share data)
(UNAUDITED)
Six Months Ended June 30, 2014
2013 Net sales $ 2,201.8 $ 2,240.3 Cost of sales
1,785.5 1,803.6 Selling, general and administrative expenses 203.9
211.0 Depreciation and amortization 169.1 176.7 Restructuring,
impairment and transaction-related charges 31.8 55.1
Total operating expenses 2,190.3 2,246.4
Operating income
(loss) $ 11.5 $ (6.1 )
Interest expense 44.4 43.2 Loss on debt extinguishment 6.0
— Loss before income taxes and equity in loss
of unconsolidated entities (38.9 ) (49.3 ) Income tax
benefit (10.8 ) (9.1 ) Loss before equity in loss of
unconsolidated entities (28.1 ) (40.2 ) Equity in loss of
unconsolidated entities (3.8 ) (1.5 )
Net loss
$ (31.9 ) $ (41.7 )
Net loss attributable to noncontrolling interests 0.3
0.5
Net loss attributable to Quad/Graphics common
shareholders $ (31.6 ) $
(41.2 ) Loss per share attributable to
Quad/Graphics common shareholders: Basic and diluted $ (0.67 )
$ (0.89 )
Weighted average number of common shares
outstanding: Basic and diluted 47.4 46.9
QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2014 and
December 31, 2013
(in millions)
(UNAUDITED)
June 30, December 31,
2014 2013 ASSETS Cash and cash equivalents $
17.4 $ 13.1 Receivables, less allowances for doubtful
accounts 661.1 698.9 Inventories 293.5 272.5 Prepaid expenses and
other current assets 53.8 37.2 Deferred income taxes 60.4 48.1
Short-term restricted cash 7.3 4.5 Total current
assets 1,093.5 1,074.3 Property, plant and
equipment—net 1,966.5 1,925.5 Goodwill 773.1 773.1 Other intangible
assets—net 197.3 221.8 Long-term restricted cash 41.3 51.5 Equity
method investments in unconsolidated entities 52.7 57.1 Other
long-term assets 80.3 62.4 Total assets $
4,204.7 $ 4,165.7
LIABILITIES AND
SHAREHOLDERS' EQUITY Accounts payable $ 351.5 $ 401.0 Amounts
owing in satisfaction of bankruptcy claims 1.4 2.5 Accrued
liabilities 346.5 350.7 Short-term debt and current portion of
long-term debt 134.2 127.6 Current portion of capital lease
obligations 7.6 7.0 Total current liabilities 841.2
888.8 Long-term debt 1,426.3 1,265.7 Unsecured
notes to be issued 9.6 18.0 Capital lease obligations 14.3 6.5
Deferred income taxes 392.3 395.2 Other long-term liabilities 289.9
303.9 Total liabilities 2,973.6 2,878.1
Quad/Graphics common stock and other equity Preferred stock — —
Common stock 1.4 1.4 Additional paid-in capital 962.9 983.1
Treasury stock, at cost (222.1 ) (248.8 ) Retained earnings 496.2
558.8 Accumulated other comprehensive loss (7.3 ) (5.6 )
Quad/Graphics common stock and other equity 1,231.1 1,288.9
Noncontrolling interests — (1.3 ) Total common stock
and other equity and noncontrolling interests 1,231.1
1,287.6 Total liabilities and shareholders' equity $
4,204.7 $ 4,165.7
QUAD/GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
For the Six Months Ended June 30,
2014 and 2013
(in millions)
(UNAUDITED)
Six Months Ended June 30, 2014
2013 OPERATING ACTIVITIES Net loss $ (31.9 ) $ (41.7
) Adjustments to reconcile net loss to net cash provided by
operating activities: Depreciation and amortization 169.1 176.7
Impairment charges 3.1 9.7 Loss on debt extinguishment 6.0 —
Stock-based compensation charges 8.6 9.3 Deferred income taxes
(14.9 ) (10.0 ) Dividends from unconsolidated entities — 5.0 Other
non-cash adjustments to net loss 5.9 4.1 Changes in operating
assets and liabilities—net of acquisitions (67.0 ) 63.8
Net Cash Provided by Operating Activities 78.9
216.9 INVESTING ACTIVITIES
Purchases of property, plant and equipment (83.6 ) (69.7 ) Cost
investment in unconsolidated entities (4.1 ) (2.5 ) Proceeds from
the sale of property, plant and equipment 0.4 6.2 Transfers from
restricted cash 7.4 4.3 Acquisition of Brown Printing—net of cash
acquired (96.4 ) — Acquisition of Vertis—net of cash acquired —
(235.4 ) Acquisition of other businesses—net of cash acquired (11.4
) (1.5 )
Net Cash Used in Investing Activities
(187.7 ) (298.6 ) FINANCING
ACTIVITIES Proceeds from issuance of long-term debt 1,047.0 —
Payments of long-term debt (710.0 ) (44.0 ) Payments of capital
lease obligations (4.4 ) (4.8 ) Borrowings on revolving credit
facilities 675.0 805.1 Payments on revolving credit facilities
(844.4 ) (645.7 ) Payments of debt issuance costs (14.3 ) —
Bankruptcy claim payments on unsecured notes to be issued (7.4 )
(4.3 ) Sale of stock for options exercised 1.3 1.7 Shares withheld
from employees for the tax obligation on equity grants (1.0 ) — Tax
benefit on equity award activity (0.8 ) — Payments of dividends
(29.3 ) (28.1 )
Net Cash Provided by Financing
Activities 111.7 79.9 Effect
of exchange rates on cash and cash equivalents 1.4 (3.4 )
Net Increase (Decrease) in Cash and Cash Equivalents
4.3 (5.2 ) Cash and Cash
Equivalents at Beginning of Period 13.1 16.9
Cash and Cash Equivalents at End of Period $
17.4 $ 11.7
QUAD/GRAPHICS, INC.
SEGMENT FINANCIAL INFORMATION
For the Three and Six Months Ended
June 30, 2014 and 2013
(in millions)
(UNAUDITED)
Restructuring,
Impairment and Operating Transaction-Related
Net Sales Income/(Loss) Charges Three
months ended June 30, 2014 United States Print and Related
Services $ 988.3 $ 15.1 $ 15.8 International 110.7
(0.9 ) 0.2 Total operating segments 1,099.0 14.2 16.0 Corporate —
(13.7 ) 3.9 Total $ 1,099.0 $ 0.5 $
19.9
Three months ended June 30, 2013 United States
Print and Related Services $ 1,005.9 $ 25.9 $ 14.8 International
104.9 (7.7 ) 3.9 Total operating segments 1,110.8 18.2 18.7
Corporate — (23.4 ) 10.5 Total $ 1,110.8 $
(5.2 ) $ 29.2
Six months ended June 30, 2014 United
States Print and Related Services $ 1,974.5 $ 37.4 $ 25.3
International 227.3 (0.8 ) 0.7 Total operating segments
2,201.8 36.6 26.0 Corporate — (25.1 ) 5.8 Total $
2,201.8 $ 11.5 $ 31.8
Six months ended June
30, 2013 United States Print and Related Services $ 2,015.1 $
48.0 $ 30.5 International 225.2 (7.2 ) 5.0 Total operating
segments 2,240.3 40.8 35.5 Corporate — (46.9 ) 19.6 Total $
2,240.3 $ (6.1 ) $ 55.1
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,
2014 and 2013
(in millions)
(UNAUDITED)
Three Months Ended June 30, 2014
2013 Net loss attributable to Quad/Graphics common
shareholders $ (22.8 ) $ (27.2 ) Interest expense 23.5 21.3
Income tax benefit (9.6 ) (0.6 ) Depreciation and amortization 85.3
87.9 EBITDA (Non-GAAP) $ 76.4 $ 81.4 EBITDA
Margin (Non-GAAP) 7.0 % 7.3 % Restructuring, impairment and
transaction-related charges (1) 19.9 29.2 Loss on debt
extinguishment 6.0 —
Adjusted EBITDA
(Non-GAAP) $ 102.3 $ 110.6
Adjusted EBITDA Margin (Non-GAAP) 9.3 %
10.0 %
______________________________
(1) Operating results for the three months ended June 30,
2014 and 2013 were affected by the following restructuring,
impairment and transaction-related charges:
Three Months
Ended June 30, 2014 2013 Employee
termination charges (a) $ 12.7 $ 4.3 Impairment charges (b) 2.0 6.0
Transaction-related charges (c) 0.7 0.2 Integration costs (d) 1.9
9.7 Other restructuring charges (e) 2.6 9.0 Restructuring,
impairment and transaction-related charges $ 19.9 $ 29.2
______________________________
(a) Employee termination charges were related to workforce
reductions through facility consolidations and involuntary
separation programs. (b) Impairment charges were for certain
buildings and equipment no longer being utilized in production as a
result of facility consolidations. (c) Transaction-related charges
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.
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, Free Cash Flow, Debt Leverage Ratio and Adjusted
Diluted Earnings (Loss) 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,
2014 and 2013
(in millions)
(UNAUDITED)
Six Months Ended June 30, 2014
2013 Net loss attributable to Quad/Graphics common
shareholders $ (31.6 ) $ (41.2 ) Interest expense 44.4 43.2
Income tax benefit (10.8 ) (9.1 ) Depreciation and amortization
169.1 176.7 EBITDA (Non-GAAP) $ 171.1 $ 169.6
EBITDA Margin (Non-GAAP) 7.8 % 7.6 % Restructuring,
impairment and transaction-related charges (1) 31.8 55.1 Loss on
debt extinguishment 6.0 —
Adjusted EBITDA
(Non-GAAP) $ 208.9 $ 224.7
Adjusted EBITDA Margin (Non-GAAP) 9.5 %
10.0 %
______________________________
(1) Operating results for the six months ended June 30, 2014
and 2013 were affected by the following restructuring, impairment
and transaction-related charges:
Six Months Ended June
30, 2014 2013 Employee termination charges
(a) $ 18.7 $ 7.7 Impairment charges (b) 3.1 9.7 Transaction-related
charges (c) 1.3 3.2 Integration costs (d) 4.6 15.1 Other
restructuring charges (e) 4.1 19.4 Restructuring, impairment
and transaction-related charges $ 31.8 $ 55.1
______________________________
(a) Employee termination charges were related to workforce
reductions through facility consolidations and involuntary
separation programs. (b) Impairment charges were for certain
buildings and equipment no longer being utilized in production as a
result of facility consolidations. (c) Transaction-related charges
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.
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, Free Cash Flow, Debt Leverage Ratio and Adjusted
Diluted Earnings (Loss) 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
FREE CASH FLOW
For the Six Months Ended June 30,
2014 and 2013
(in millions)
(UNAUDITED)
Six Months Ended June 30, 2014
2013 Net cash provided by operating activities (1) $ 78.9 $
216.9 Less: purchases of property, plant and equipment (83.6
) (69.7 )
Free Cash Flow (Non-GAAP) $
(4.7 ) $ 147.2
______________________________
(1)
Includes an estimated $77 million benefit
realized in the six months ended June 30, 2013 from the restoration
of normalized working capital levels following the January 2013
acquisition of Vertis, which was acquired without normalized levels
of accounts payable and accrued liabilities.
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, Free Cash Flow, Debt Leverage Ratio and Adjusted
Diluted Earnings (Loss) 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
DEBT LEVERAGE RATIO
As of June 30, 2014 and
December 31, 2013
(in millions, except ratio)
(UNAUDITED)
June 30, December 31,
2014 2013 Total debt and capital lease obligations on
the condensed consolidated balance sheets $ 1,582.4 $ 1,406.8
Divided by: Trailing twelve months Adjusted EBITDA for
Quad/Graphics (Non-GAAP) (1) $ 561.3 $ 577.1 July 1, 2013 to May
29, 2014 pro forma Adjusted EBITDA for Brown Printing (Non-GAAP)
(2) 27.4 Trailing twelve months Adjusted
EBITDA (Non-GAAP) $ 588.7 $ 577.1
Debt Leverage Ratio (Non-GAAP) 2.69 x
2.44 x
______________________________
(1) The calculation of Adjusted EBITDA for Quad/Graphics for
the trailing twelve months ended June 30, 2014 and December 31,
2013, was as follows:
Add
Subtract
Trailing Twelve Months
Ended
Year Ended Six Months Ended December 31,
June 30, June 30, June 30, 2013
2014 2013 2014 Net earnings (loss)
attributable to Quad/Graphics common shareholders $ 32.5 $ (31.6 )
$ (41.2 ) $ 42.1 Interest expense 85.5 44.4 43.2 86.7 Income tax
expense (benefit) 23.3 (10.8 ) (9.1 ) 21.6 Depreciation and
amortization 340.5 169.1 176.7 332.9 EBITDA
(Non-GAAP) $ 481.8 $ 171.1 $ 169.6 $ 483.3 Restructuring,
impairment and transaction-related charges 95.3 31.8 55.1 72.0 Loss
on debt extinguishment — 6.0 — 6.0 Adjusted
EBITDA (Non-GAAP) $ 577.1 $ 208.9 $ 224.7 $
561.3 (2) As permitted by our April 28, 2014 $1.6
billion senior secured credit facility, we included certain pro
forma financial information related to the acquisition of Brown
Printing when calculating the Debt Leverage Ratio as of June 30,
2014. As the acquisition of Brown Printing was completed on May 30,
2014, the $27.4 million pro forma Adjusted EBITDA represents the
period from July 1, 2013 to May 29, 2014. Adjusted EBITDA for Brown
Printing was calculated in a consistent manner with the calculation
above for Quad/Graphics. Brown Printing's financial information for
the month of June 2014 has been included within the trailing twelve
months Adjusted EBITDA for Quad/Graphics as the results of Brown
Printing have been consolidated with Quad/Graphics' financial
results since the date of acquisition. If the eleven months of pro
forma Adjusted EBITDA for Brown Printing was not included in the
calculation, the Company's Debt Leverage Ratio would have been
2.82x.
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, Free Cash Flow, Debt Leverage Ratio and Adjusted
Diluted Earnings (Loss) 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 (LOSS) PER
SHARE
For the Three Months Ended June 30,
2014 and 2013
(in millions, except per share data)
(UNAUDITED)
Three Months Ended June 30, 2014
2013 Loss before income taxes and equity in loss of
unconsolidated entities $ (29.0 ) $ (26.5 ) Restructuring,
impairment and transaction-related charges 19.9 29.2 Loss on debt
extinguishment 6.0 — (3.1 ) 2.7 Income tax
expense (benefit) at 40% normalized tax rate (1.2 ) 1.1 (1.9
) 1.6 Equity in loss of unconsolidated entities (3.4 ) (1.7
) Net loss attributable to noncontrolling interests — 0.4
Adjusted net earnings (loss) (Non-GAAP) $ (5.3 ) $
0.3 Basic weighted average number of common shares
outstanding 47.5 46.9 Plus: effect of dilutive equity incentive
instruments (Non-GAAP) — 0.8 Diluted weighted average
number of common shares outstanding (Non-GAAP) 47.5 47.7
Adjusted Diluted Earnings (Loss) Per Share
(Non-GAAP) (1) $ (0.11 ) $
0.01 Diluted Loss Per Share (GAAP) $
(0.48 ) $ (0.59 ) Restructuring, impairment and transaction-related
charges per share 0.42 0.61 Loss on debt extinguishment per share
0.13 — Income tax benefit from condensed consolidated statement of
operations per share (0.20 ) (0.01 ) Income tax expense (benefit)
at 40% normalized tax rate per share 0.03 (0.02 ) Allocation to
participating securities per share (2) — 0.01 GAAP to Non-GAAP
diluted impact per share (0.01 ) 0.01
Adjusted Diluted
Earnings (Loss) Per Share (Non-GAAP) (1) $ (0.11
) $ 0.01
______________________________
(1) Adjusted Diluted Earnings (Loss) Per Share excludes: (i)
restructuring, impairment and transaction-related charges, (ii) the
loss on debt extinguishment and (iii) discrete income tax items.
(2) Represents the impact of dividends distributed to
non-vested stock option holders in accordance with the two-class
method of calculating GAAP earnings per share.
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, Free Cash Flow, Debt Leverage Ratio and Adjusted
Diluted Earnings (Loss) 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 (LOSS) PER
SHARE
For the Six Months Ended June 30,
2014 and 2013
(in millions, except per share data)
(UNAUDITED)
Six Months Ended June 30, 2014
2013 Loss before income taxes and equity in loss of
unconsolidated entities $ (38.9 ) $ (49.3 ) Restructuring,
impairment and transaction-related charges 31.8 55.1 Loss on debt
extinguishment 6.0 — (1.1 ) 5.8 Income tax
expense (benefit) at 40% normalized tax rate (0.4 ) 2.3 (0.7
) 3.5 Equity in loss of unconsolidated entities (3.8 ) (1.5
) Net loss attributable to noncontrolling interests 0.3 0.5
Adjusted net earnings (loss) (Non-GAAP) $ (4.2 ) $
2.5 Basic weighted average number of common shares
outstanding 47.4 46.9 Plus: effect of dilutive equity incentive
instruments (Non-GAAP) — 0.8 Diluted weighted average
number of common shares outstanding (Non-GAAP) 47.4 47.7
Adjusted Diluted Earnings (Loss) Per Share
(Non-GAAP) (1) $ (0.09 ) $
0.05 Diluted Loss Per Share (GAAP) $
(0.67 ) $ (0.89 ) Restructuring, impairment and transaction-related
charges per share 0.67 1.16 Loss on debt extinguishment per share
0.13 — Income tax benefit from condensed consolidated statement of
operations per share (0.23 ) (0.19 ) Income tax expense (benefit)
at 40% normalized tax rate per share 0.01 (0.05 ) Allocation to
participating securities per share (2) 0.01 0.01 GAAP to Non-GAAP
diluted impact per share (0.01 ) 0.01
Adjusted Diluted
Earnings (Loss) Per Share (Non-GAAP) (1) $ (0.09
) $ 0.05
______________________________
(1) Adjusted Diluted Earnings (Loss) Per Share excludes: (i)
restructuring, impairment and transaction-related charges, (ii) the
loss on debt extinguishment and (iii) discrete income tax items.
(2) Represents the impact of dividends distributed to
non-vested stock option holders in accordance with the two-class
method of calculating GAAP earnings per share.
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, Free Cash Flow, Debt Leverage Ratio and Adjusted
Diluted Earnings (Loss) 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.
Investor Relations Contact:Quad/GraphicsKelly
VanderboomVice President &
Treasurer414-566-2464Kelly.Vanderboom@qg.comorMedia
Contact:Quad/GraphicsClaire HoDirector of Corporate
Communications414-566-2955Claire.Ho@qg.com
Quad Graphics (NYSE:QUAD)
過去 株価チャート
から 6 2024 まで 7 2024
Quad Graphics (NYSE:QUAD)
過去 株価チャート
から 7 2023 まで 7 2024