SUSSEX, Wis. - Quad/Graphics, Inc. today reported results for its first quarter ending March 31, 2014. For full financial results, including reconciliations of non-GAAP financial measures, please see the accompanying information.

“Our first quarter results were in-line with our expectations,” said Joel Quadracci, Quad/Graphics Chairman, President & CEO. “We continue to focus on ways to grow market share and remain disciplined in our approach to improve productivity and create sustainable cost reduction initiatives; maintain a strong and flexible balance sheet; invest in our business; and pursue value-driven consolidation opportunities like Brown Printing. This acquisition is consistent with our ongoing strategy to transform Quad/Graphics and create value for our clients and shareholders. The combination ofQuad/Graphics and Brown will enhance the many ways in which we help publishers and marketers drive top-line revenues while better controlling their overall total cost of print production and distribution.”

Net sales for the first quarter 2014 were $1.1 billion, down approximately 2% quarter over quarter. First quarter 2014 Adjusted EBITDA was $107 million compared to $114 million for the same period in 2013, and first quarter 2014 Adjusted EBITDA margin was 9.7% compared to 10.1% in the first quarter of 2013. The Adjusted EBITDA decline reflects ongoing industry volume and pricing pressures as well as $3 million in favorable gains in 2013 that did not repeat in 2014 primarily related to a gain on the sale of the Company’s business in Recife, Brazil.

First quarter 2014 Free Cash Flow was negative $13 million versus positive $93 million for the same period in 2013. The variance is primarily attributable to an estimated $70 million benefit realized in the first quarter of 2013 from the restoration of normalized working capital levels following the Company’s January 2013 acquisition of Vertis, Inc., which was acquired without normalized levels of accounts payable and accrued liabilities. The remaining variance primarily reflects $18 million in higher capital expenditures in 2014 due primarily to carryover projects from 2013 as well as working capital fluctuations.

“We reiterated our 2014 guidance recently based on solid revenue and earnings trends we experienced in the first quarter and completed a new debt capital structure that enhances the Company’s financial flexibility,” said Dave Honan, Quad/Graphics Vice President and CFO. “Amending our $1.6 billion revolving credit agreement, Term Loan A and Term Loan B facilities and completing our inaugural $300 million high-yield bond offering extends and staggers the Company’s debt maturity profile, further diversifies our capital structure, and provides more borrowing capacity to better position the Company to execute on its strategic goals. This is consistent with our ongoing disciplined approach to maintain a strong, flexible balance sheet and create value for all our stakeholders.”