Quad/Graphics Revenue Drops in Q1 2012
Friday, May 11, 2012
Quad/Graphics, Inc. today reported results for its first quarter ending March 31, 2012. For full financial results, please see the accompanying information.
“Our performance during the first quarter gave us a solid start to the year,” said Joel Quadracci,Quad/Graphics Chairman, President & CEO. “Our results are in line with our expectations and we are pleased with the progress we made on our key priorities to improve productivity, reduce costs, lower our debt and meet our synergy objectives, which enabled us to generate significant Recurring Free Cash Flow and improve upon our already strong credit metrics.”
Net sales for the first quarter 2012 were $990 million versus $1,022 million for the same period in 2011. First quarter 2012 Adjusted EBITDA was $126 million versus $142 million for the same period in 2011. The results reflect expected volume and pricing pressures, which were partially offset by continued productivity improvements and incremental synergy savings totaling $25 million during the quarter and $221 million since the Worldcolor acquisition. Recurring Free Cash Flow was $107 million, demonstrating the Company's ability to generate strong, consistent cash flow.
“We are proud of the progress we continue to make in strengthening our balance sheet through the repayment of $90 million in debt during the quarter, and $415 million since the Worldcolor acquisition,” said John Fowler, Executive Vice President & Chief Financial Officer. “Correspondingly, we improved our leverage ratio to 2.2x, which remains in our targeted range of 2.0x to 2.5x, and reduced our first quarter interest expense by $8 million or 28%. 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 June 22, 2012, to shareholders of record as of June 11, 2012.”
On March 1, 2012, the Company completed the sale of its Canadian business to Transcontinental.Quad/Graphics entered into a definitive agreement with Transcontinental on July 12, 2011, to essentially exchange its Canadian assets for Transcontinental's Mexican assets. “We are pleased with our integration progress in Mexico, which we continue to believe is a promising growth market,” Quadracci said.
Additionally, during the first quarter the Company announced a strategic partnership with Manipal Technologies Ltd. (ManipalTech), one of India's largest print services and end-to-end business solutions providers. Under the agreement, Quad/Graphics purchased a minority interest in ManipalTech, expanding Quad/Graphics' geographic reach to Asia, and broadening its product and service scope. Said Quadracci: “We are enthusiastic about our new partnership with ManipalTech, a rapidly growing, forward-thinking company, and believe that together we can create value in the region's fast-growing economy.”