Slide 1: 3rd Quarter 2020 Earnings Call
3rd Quarter 2020 Earnings Call November 4, 2020
Slide 2: Call Participants & Forward-Looking Statements
Call Participants & Forward-Looking Statements Forward-Looking Statements Joel Quadracci This communication contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements include statements regarding, among other
Slide 3: Our Focused Response to the Pandemic
Our Focused Response to the Pandemic Maintain the Provide high Ensure the health and quality, on-time long-term well-being of delivery for financial health our employees our clients of the company 3
Slide 4: Key Actions to Advance our Strategic Transformation
Key Actions to Advance our Strategic Transformation 1 Optimize our product portfolio to focus the company on the greatest revenue-generating opportunities 2 Invest in talent and technology to drive new business and further expand our offerings 3 Innovate new integrated solutions that help our client
Slide 5: Recent Success Story: Northern Tool & Equipment
Recent Success Story NORTHERN TOOL & EQUIPMENT OPPORTUNITY • Expanded our content and media relationship to include additional marketing products and services QUAD SOLUTION IMPACT • Engaged Business Process Optimization services to ensure efficiency and • Won 100% of print work including speed to ma
Slide 6: Recent Success Story: Regional Grocer
Recent Success Story REGIONAL GROCER OPPORTUNITY • Expanded weekly print circular relationship to become Agency of Record • Includes content production, technology, print and digital media QUAD SOLUTION IMPACT • Conducted a media mix modeling study and recommended increased • Named Agency of Record
Slide 7: Recent Success Story: All-Natural Energy Drink Brand
Recent Success Story ALL-NATURAL ENERGY DRINK BRAND OPPORTUNITY • Quad was highly recommended to client based on the strength of our integrated and expansive marketing solutions offering QUAD SOLUTION IMPACT • Consulted and conceptualized a brand campaign in six days • Successfully launched campaign
Slide 8: Our Goal: Diversity, Equity, Inclusion
Our Goal Diversity Equity Inclusion Ensure that our Achieve a workforce Create a safe and procedures, that reflects the open environment processes and communities where where all Quad distribution of we live / work and employees can resources create the clients who bring their truest equal opportuni
Slide 9: Financial Overview
Financial Overview Third Quarter Year-to-Date September 30, September 30, September 30, September 30, US $ Millions 2020 2019 2020 2019 STATEMENT OF OPERATIONS (excluding discontinued operations) Net Sales $ 679.3 $ 943.6 $ 2,086.3 $ 2,853.5 Cost of Sales 543.3 764.5 1,651.9 2,324.3 Selling, General
Slide 10: Agile Approach to Cost Management
Agile Approach to Cost Management We temporarily We converted reduced costs by approximately $325 40% of these temporary million savings into on an annualized basis permanent savings as reported in the Second Quarter 2020 during the Third Quarter 2020 10
Slide 11: Debt Capital Structure
Debt Capital Structure 37% 3.22x Floating 4.8% 63% Debt Leverage Ratio – Net Debt(1) Blended Interest Rate as of September 30, 2020 as of September 30, 2020 Fixed $93 million $465 million May 2022 Cash on Hand Unused Capacity under $500 Million Next Significant Debt Maturity of as of September 30, 2
Slide 12: Thank You
Thank You
Slide 13: Supplemental Information
Supplemental Information
Slide 14: Non-GAAP Financial Measures
Non-GAAP Financial Measures • In addition to financial measures prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), this presentation also contains Non-GAAP financial measures, specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBIT
Slide 15: Adjusted EBITDA
Adjusted EBITDA Third Quarter Three Months Ended September 30, US $ Millions 2020 2019 Net earnings (loss) attributable to Quad common shareholders $ 1.6 $ (126.5) Interest expense 17.9 22.0 Income tax benefit (12.0) (17.6) Depreciation and amortization 44.8 52.2 EBITDA [Non-GAAP] $ 52.3 $ (69.9) EB
Slide 16: Adjusted EBITDA
Adjusted EBITDA Year-to-Date Nine Months Ended September 30, US $ Millions 2020 2019 Net loss attributable to Quad common shareholders $ (34.3) $ (163.8) Interest expense 52.2 69.6 Income tax benefit (17.5) (28.0) Depreciation and amortization 138.9 159.3 EBITDA [Non-GAAP] $ 139.3 $ 37.1 EBITDA Marg
Slide 17: Free Cash Flow
Free Cash Flow Year-to-Date Nine Months Ended September 30, US $ Millions 2020 2019 Net cash provided by operating activities $ 107.4 $ 4.1 Less: purchases of property, plant and equipment (50.7) (98.5) Plus: LSC-related payments(1) — 59.8 Free Cash Flow [Non-GAAP] $ 56.7 $ (34.6) (1) LSC-related pa
Slide 18: Debt Leverage Ratio
Debt Leverage Ratio US $ Millions September 30, 2020 December 31, 2019 Total debt and finance lease obligations on the balance sheets $ 1,031.2 $ 1,112.2 Divided by: trailing twelve months Adjusted EBITDA [Non-GAAP] (1) $ 291.8 $ 334.9 Debt Leverage Ratio [Non-GAAP] 3.53x 3.32x Debt Leverage Ratio —
Slide 19: Balance Sheet
Balance Sheet US $ Millions September 30, 2020 December 31, 2019 ASSETS Cash and cash equivalents $ 92.9 $ 78.7 Receivables, less allowance for credit losses 370.1 456.1 Inventories 218.3 210.5 Prepaid expenses and other current assets 49.0 109.0 Property, plant and equipment—net 953.6 1,036.5 Opera
Slide 20: Adjusted Diluted Earnings Per Share
Adjusted Diluted Earnings Per Share Third Quarter Three Months Ended September 30, US $ Millions (Except Per Share Data) 2020 2019 Loss from continuing operations before income taxes and equity in loss of unconsolidated entity $ (8.9) $ (64.5) Restructuring, impairment and transaction-related charge
Slide 21: Adjusted Diluted Earnings Per Share
Adjusted Diluted Earnings Per Share Year-to-Date Nine Months Ended September 30, US $ Millions (Except Per Share Data) 2020 2019 Loss from continuing operations before income taxes and equity in loss of unconsolidated entity $ (37.5) $ (89.9) Restructuring, impairment and transaction-related charges