Quad/Graphics posts modest Q4 profit

By David Ward, San Diego, Thursday 07 March 2013

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Sussex, WI-based Quad/Graphics managed to overcome pricing pressure and a decline in sales to post a $21m Q4 net profit, reversing a $7m loss for the same period a year earlier.

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Quad/Graphics chief executive Joel Quadracci

For the full year, Quad reported net income of $87.4m, despite a 5.3% decline in 12-month revenues to $4.1bn.

During a conference call with analysts to discuss the results, Quad CEO/Chairman/President Joel Quadracci suggested the Q4 results were in line with expectations and cited the company's recurring free cash flow of $375m at year end as proof of the company's ability to manage its balance sheet.

"Additionally, we were able to take advantage of the opportunity to acquire Vertis, which strengthens and expands our offering, allows us to better serve our clients while achieving additional efficiencies, and creates value for our shareholders," he continued.

With 32 strategically located facilities in the U.S., Quadracci said Quad can now produce distinctive retail insert formats closer to their final destination point.

"In addition, through our Media Solutions offering, we can help our retail clients strategically plan and place media based on store location and market analysis, and achieve cost savings through on-site facilities management services," he continued.

"This, coupled with our expanded range of large-format and point-of-purchase products from our in-store marketing division called Tempt helps us provide marketers with a one-stop integrated solution approach to drive store traffic and ensure brand consistency."

Quadracci also told the analysts he was cautious about the overall US economy - despite the Dow Jones Industrial Average reaching an all-time high this week - but did cite a modest upturn in ad pages in early 2013 as reason for optimism.

As for the ongoing drama of whether the US Post Office will be finally ending Saturday service this August, Quadracci said: "I don't see a significant impact to us on the 5-day delivery nor our clients."

He added: "The volumes on Saturdays tend to be lower. And even if they pull Saturday away, we're really pushing for them to keep the production going on those facilities because we still have to deliver mail."


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