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Quad/Graphics To Reduce Production Capacity

Tuesday, January 13, 2009

Press release from the issuing company

Commentary from BoSacks at Print CEO Blog regarding this announcement

SUSSEX, WI (January 12, 2009) – Quad/Graphics – the nation's third largest commercial printer – announces that it will reduce its production capacity to better match print demand, which has softened due to changes in the economy.

Specifically, the company will shut down the equivalent of one plant's worth of capacity immediately. This move will result in the elimination of approximately 550 jobs in 5 states, or approximately 5.6% of its domestic workforce.

"This is a strategic move, made from a position of financial and industry strength," said Joel Quadracci, Quad/Graphics' President and Chief Executive Officer. "Quad/Graphics continues to have industryleading profit margins, and because we have maintained our investment grade credit quality, we have plenty of access to capital markets that will ensure our strong position within the industry for a long time."

Mr. Quadracci noted that the printing industry, like every industry, is facing unprecedented challenges right now. "From consumer spending to housing and everywhere in-between, the world needs to go through a capacity reset. There is simply too much of everything chasing too little demand," he said. "The printing industry is no different. There needs to be an industry-wide reduction in capacity. While I had hoped to see some better indicators as we entered the New Year, it's clear that this economic downturn is going to be much longer and more severe than we expected, and so we are taking appropriate and prudent steps to reset our own capacity," he continued. "The unfortunate consequence of this decision is that we will have to eliminate jobs."

The company's capacity reduction will take place immediately and include equipment shutdowns at 9 printing plants nationwide. The job cuts will affect both production and administrative positions, and will be completed this week.

Mr. Quadracci emphasized that the capacity reduction would not impact the work it does for its customers, as it is removing redundant capacity throughout its network of plants. "Our clients will continue to experience the very same high level of quality, turnaround times and overall service to which they have become accustomed," he said.




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