Adjusted EBITDA Increased to $120 million and Free Cash Flow Increased to $86 million

First Quarter Highlights:

• Delivered net sales of $1.0 billion.
• Achieved Adjusted EBITDA of $120 million, representing a $17 million increase over prior year.
• Realized Adjusted EBITDA margin of 11.5% compared to 9.5% in 2015.
• Generated Free Cash Flow of $86 million, representing a $64 million increase over prior year.
• Improved Debt Leverage Ratio to 2.62x as of March 31, 2016, reduced from 2.88x as of December 31, 2015.
• Declared quarterly dividend of $0.30 per share.

SUSSEX, Wis. - Quad/Graphics, Inc. (NYSE: QUAD) ("Quad/Graphics" or the "Company") today reported results for its first quarter ending March 31, 2016.

"We are pleased with our first quarter 2016 results, which reflect our ongoing efforts focused on productivity improvement and sustainable cost reduction," said Joel Quadracci, Quad/Graphics Chairman, President & Chief Executive Officer. "We remain disciplined in how we manage all aspects of our business to minimize the impacts of ongoing industry and economic uncertainties, and to position us as the industry’s high-quality, low-cost producer. At the same time, we continue to strengthen the balance sheet by paying down debt and generating significant Free Cash Flow. As we look forward, we will continue to innovate by creating new, complementary products and marketing services that will help our clients drive improved performance. Our focus is on helping clients improve both the efficiency and effectiveness of their media spend across multiple channels."

Net sales for the first quarter 2016 were $1.0 billion, a decrease of 4% due to ongoing volume and pricing pressures. First quarter Adjusted EBITDA was $120 million compared to $103 million for the same period in 2015, and Adjusted EBITDA margin was 11.5% compared to 9.5%. The increase in Adjusted EBITDA and Adjusted EBITDA margin primarily reflect the impact of enhanced operational efficiency from ongoing improvements in manufacturing productivity and sustainable cost reductions.

First quarter 2016 Free Cash Flow was $86 million, an increase of $64 million from the same period in 2015. The increase primarily reflects the impact from ongoing improvements in working capital levels and increased cash from earnings, as well as reduced capital expenditures.

"Our strategic actions to implement sustainable operational efficiencies and improve the earnings power of the business have positioned Quad/Graphics to be a significant Free Cash Flow generator in 2016 and beyond," said Dave Honan, Quad/Graphics Executive Vice President and Chief Financial Officer. "Our Free Cash Flow supports our disciplined capital deployment strategy, which includes deleveraging the balance sheet. Since September 2015, we have reduced debt by $245 million, improving our Debt Leverage Ratio to 2.62x from 3.07x. In addition, we remain committed to maintaining our annual dividend of $1.20per share, which represents less than 30% of Free Cash Flow. As we move forward in this challenging industry environment, we remain focused on creating value for our stakeholders."

Quad/Graphics’ next quarterly dividend of $0.30 per share will be payable on June 17, 2016, to shareholders of record as of June 6, 2016.

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