• Raises Full-Year Net Sales Guidance Range to 8%-10% Growth, Driven by Strong Execution and Continued Strong Sales Momentum
• Repurchased 3.1 Million Quad Shares Year-to-Date — More Than 5% of Quad’s Total Shares Outstanding

SUSSEX, WI — Quad/Graphics, Inc. (“Quad” or the “Company”), today reported results for the third quarter ended September 30, 2022.

Recent Highlights

• Achieved sixth consecutive quarter of year-over-year growth as Net Sales increased 18% in the third quarter of 2022 compared to the third quarter of 2021 due to print segment share gains, increased pricing in response to inflationary cost pressures, and increased sales in the Company’s international locations.
• Recognized Net Earnings of $14 million in both the third quarter of 2022 and 2021, with 2021 Net Earnings including non-recurring gains of $18 million, net of tax, from a property insurance claim and a sale and leaseback of a production facility.
• Increased Adjusted EBITDA to $69 million in the third quarter of 2022 compared to Adjusted EBITDA of $55 million in the third quarter of 2021, when excluding a $13 million property insurance gain in 2021.
• Grew Adjusted Diluted Earnings Per Share to $0.32 compared to Adjusted Diluted Earnings Per Share of $0.18 in the third quarter of 2021.
• Raised net sales guidance from 3%-7% growth to 8%-10% growth; narrowed other guidance within the previously provided ranges.
• Repurchased 3.1 million shares of Quad Class A common stock for $10 million year-to-date, representing more than 5% of Quad’s outstanding shares.

Joel Quadracci, Chairman, President & CEO of Quad, said: “This quarter’s results, which include a sixth consecutive quarter of Net Sales growth, exhibit the effectiveness of our business strategy as we have transformed into a marketing experience, or MX, company. The world’s best brands increasingly recognize the unique value we provide through our holistic, multichannel, through-the-line marketing solutions. As an MX company, we guide brands through every effort intended to drive an action, from consumer awareness and trust, to brand preference and purchase. We will continue to strategically invest in our platform to give our clients a more streamlined, flexible and frictionless way to go to market and reach consumers while enhancing our competitive position to drive profitable growth.

“As a result of investments we made in the first half of the year, we are able to deliver industry-leading client service, and drive sales and profitability higher during our seasonally busier second half of the year. Additionally, our team continues to work diligently to mitigate the impacts of persisting macro-economic headwinds, such as cost inflation and supply chain constraints that impact productivity. This includes implementing inflation-offsetting price increases, the next of which will be effective January 1, 2023.

“As we close out the year, we remain focused on serving our clients effectively. We will continue to prioritize growth while improving productivity and reducing debt, consistent with our commitment to create a better, more purposeful and sustainable way forward for all our stakeholders. We will remain nimble and adapt to changes and challenges, while continuing our disciplined approach to managing all aspects of our business to enhance our financial strength and create shareholder value.”

Summary Results

Results for the three months ended September 30, 2022, include:

Net Sales — Net Sales were $830 million in the third quarter of 2022, reflecting top-line growth of 18% compared to the same period in 2021. Net Sales growth was driven by print segment share gains, increased pricing in response to inflationary cost pressures, and increased sales in the Company’s international locations.

Net Earnings — Net Earnings were $14 million in both the third quarter of 2022 and the third quarter of 2021. Net Earnings during the third quarter of 2021 included a $13 million property insurance gain ($10 million, net of tax) and an $11 million gain from sale and leaseback of a production facility ($8 million, net of tax). Net Earnings, excluding the non-recurring gains, increased primarily due to continued sales growth and proactive investments made in labor, inventory and equipment during the first half of 2022 to increase production efficiency in the second half of 2022 during the Company’s seasonally higher production period.

Adjusted EBITDA — Adjusted EBITDA was $69 million in the third quarter of 2022, an increase of $14 million from $55 million of Adjusted EBITDA in the same period last year, when excluding a $13 million property insurance gain in 2021.

Adjusted Diluted Earnings Per Share — Adjusted Diluted Earnings Per Share was $0.32 in the third quarter of 2022, a 78% increase compared to $0.18 in the third quarter of 2021. This increase was primarily due to increased recurring earnings and benefited by our recent stock repurchases.

Results for the nine months ended September 30, 2022, include:

Net Sales — Net Sales were $2.3 billion in the nine months ended September 30, 2022, up 11% from the same period in 2021, or up 14% excluding the impact of the QuadExpress divestiture. Net Sales growth was achieved due to print segment share gains, increased pricing in response to inflationary cost pressures, and increased sales in the Company’s international locations.

Net Earnings and Adjusted EBITDA — Net Earnings were $18 million in the nine months ended September 30, 2022, as compared to Net Earnings of $59 million in the same period in 2021. The decrease was primarily due to non-recurring gains in 2021, including $25 million in gains from the sale and leaseback of two production facilities ($18 million, net of tax) and a $13 million property insurance gain ($10 million, net of tax). Adjusted EBITDA was $173 million in the nine months ended September 30, 2022, a decline from $201 million of Adjusted EBITDA in the same period in 2021. The decline was primarily due to cost inflation, investments made in hiring and training labor in the first half of 2022 in advance of the peak production season in the second half of the year, the negative impact of supply chain disruptions on the Company’s productivity and a $13 million property insurance gain in 2021, partially offset by increased earnings from Net Sales growth.

Adjusted Diluted Earnings Per Share — Adjusted Diluted Earnings Per Share was $0.49 in the nine months ended September 30, 2022, as compared to $0.50 in the nine months ended September 30, 2021.

Net Cash Provided by (Used in) Operating Activities and Free Cash Flow — Net Cash Used in Operating Activities was $30 million for the nine months ended September 30, 2022, compared to Net Cash Provided by Operating Activities of $22 million during the same period in 2021. Free Cash Flow for the nine months was negative $80 million, a decrease of $60 million compared to the same period last year. The decline in Free Cash Flow was primarily driven by higher working capital in 2022, including increased receivables from higher Net Sales and increased inventory levels from higher costs on commodities as well as supply chain challenges with resulting longer lead times. The decrease in Free Cash Flow also was due to higher capital expenditures. As a reminder, the Company historically generates the majority of its Free Cash Flow in the fourth quarter of the year.

Net Debt — Debt less cash and cash equivalents increased by $91 million to $715 million at September 30, 2022, as compared to $624 million at December 31, 2021, primarily due to investments in working capital, talent and equipment to enable continued sales growth. When removing the impacts of seasonality, over the past 12 months Net Debt decreased $84 million, representing a reduction of over 10% in Net Debt. The Debt Leverage Ratio increased 68 basis points to 3.07x at September 30, 2022, from 2.39x at December 31, 2021.

2022 Guidance

The Company increased its Net Sales outlook and narrowed its remaining full-year 2022 guidance as follows:

Financial Metric Previous 2022 Guidance Range Updated 2022 Guidance Range

• Annual Net Sales Change(1) 3% to 7% increase 8% to 10% increase
• Full-Year Adjusted EBITDBA $230 to $270 million $235 to $255 million
• Free Cash Flow $70 to $100 million $70 to $90 million
• Year-End Debt Leverage Ratio(2) Approximately 2.25x Approximately 2.25x

(1)Annual Net Sales Change excludes the Net Sales impact from the divestiture of QuadExpress, which was sold on June 30, 2021.
(2)Debt Leverage Ratio is calculated at the midpoint of the Adjusted EBITDA guidance.

Tony Staniak, CFO of Quad, concluded: “Our focus on reimagining the marketing experience for our clients continues to drive top-line growth, including segment share gains and new client wins, and as a result, we are raising our full-year Net Sales guidance range to 8% to 10% growth. The proactive investments we made in labor, inventory and equipment during the first half of 2022 are proving effective during our seasonally higher production period in the second half of the year, as evidenced by the year-over-year and sequential increase in quarterly Adjusted EBITDA. We are positioned to achieve higher year-over-year earnings in the fourth quarter as well, despite ongoing challenges from inflationary costs and supply chain disruptions. From a capital allocation perspective, we repurchased 3.1 million shares of our common stock for $10 million year-to-date, which is more than 5% of Quad’s total common stock. The fourth quarter is expected to generate strong Free Cash Flow and our focus will be on debt reduction to achieve our year-end debt leverage guidance of approximately 2.25x, which is in the middle of our long-term desired debt leverage range of 2.0-2.5x. We will remain dynamic in our ability to adapt to changing economic environments as necessary to continue enhancing our financial strength.”

Quarterly Conference Call

Quad will hold a conference call at 10 a.m. ET on Wednesday, November 2, to discuss third quarter and year-todate 2022 results. As part of the conference call, Quad will conduct a question-and-answer session. Investors are invited to email their questions in advance to [email protected].

Participants may pre-register for the webcast by navigating to https://dpregister.com/sreg/10170526/f41d0988a0. Participants will be given a unique PIN to gain immediate access to the call on November 2, bypassing the live operator. Participants may pre-register at any time, including up to and after the call start time.

Alternatively, participants may dial in on the day of the call as follows:

U.S. Toll-Free: 1-877-328-5508
International Toll: 1-412-317-5424

An audio replay of the call will be posted on the Investors section of Quad’s website shortly after the conference call ends. In addition, telephone playback will also be available until December 2, 2022, accessible as follows:

U.S. Toll-Free: 1-877-344-7529
International Toll: 1-412-317-0088
Replay Access Code: 1227790