Quad/Graphics Inc (QUAD) Reports Decrease in Q3 2023 Net Sales and Earnings
Quad/Graphics Inc (NYSE:QUAD) reported a decrease in net sales from $830 million in Q3 2022 to $700 million in Q3 2023.
The company also reported a net loss of $3 million in Q3 2023, compared to net earnings of $14 million in Q3 2022.
Adjusted EBITDA was $57 million in Q3 2023, down from $69 million in Q3 2022.
Despite the challenging revenue environment, the company has reduced its net debt by $132 million over the last 12 months.
Quad/Graphics Inc (NYSE:QUAD) released its Q3 2023 earnings report on October 31, 2023. The company reported a decrease in net sales and earnings compared to the same period in the previous year. Despite these challenges, the company has maintained strong cash generation and has reduced its debt.
Financial Performance
Quad/Graphics Inc (NYSE:QUAD) reported net sales of $700 million in Q3 2023, a decrease from $830 million in Q3 2022. The company also reported a net loss of $3 million in Q3 2023, compared to net earnings of $14 million in Q3 2022. Adjusted EBITDA was $57 million in Q3 2023, down from $69 million in Q3 2022. The company attributed the decrease in sales and earnings to lower print, paper, and logistics sales, as well as the divestiture of the company's Argentina print operations in 2022.
Debt Reduction and Share Repurchase
Despite the challenging revenue environment, Quad/Graphics Inc (NYSE:QUAD) has managed to reduce its net debt by $132 million over the last 12 months, ending Q3 with a Debt Leverage Ratio of 2.36x. This is within the company's long-term targeted leverage range of 2.0x 2.5x. The company also returned capital to shareholders by repurchasing 5.5 million shares of Quad Class A common stock since commencing buybacks in 2022, including 2.4 million shares in 2023.
2023 Guidance
Quad/Graphics Inc (NYSE:QUAD) updated its full-year 2023 financial guidance, lowering the range for Net Sales while maintaining the original mid-points of guidance ranges for Adjusted EBITDA and Free Cash Flow. The company expects a 7% to 9% decline in annual net sales, compared to the previous guidance of a 0% to 5% decline. The company also reaffirmed the year-end Debt Leverage Ratio.
Company Commentary
Joel Quadracci, Chairman, President, and CEO of Quad, commented on the company's performance, stating:
Our flexible operating model and disciplined approach to managing all aspects of our business enabled us to deliver consistent, year-over-year EBITDA margins, strong Free Cash Flow and reduce debt despite a challenging revenue environment that led us to lower our annual Net Sales guidance."
Summary
In summary, Quad/Graphics Inc (NYSE:QUAD) faced a challenging Q3 2023 with a decrease in net sales and earnings. However, the company has maintained strong cash generation and has reduced its debt, demonstrating its resilience in a challenging revenue environment.
Explore the complete 8-K earnings release (here) from Quad/Graphics Inc for further details.
This article first appeared on GuruFocus.
