Slide 1: 4th Quarter 2020 Earnings Call
4th Quarter 2020 Earnings Call February 24, 2021
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: Our Consistent Strategic Priorities
Our Consistent Strategic Priorities Walk in the Grow the Business Strengthen Empower Enhance Financial Shoes of Clients Profitably the Core Employees Strength and Create Shareholder Value 4
Slide 5: Net Sales Breakdown
Net Sales Breakdown 2019 2020 21% 24% Integrated Integrated Solutions 8% Solutions 10% Agency Solutions 16% Agency Solutions 15% Catalogs Catalogs 11% 2% QuadMed Logistics 37% 12% Logistics 38% 12% Targeted 2% Targeted Print 13% Print $3.8 Billion $2.9 Billion Direct QuadMed 5% Europe Direct 10% Mar
Slide 6: Our Key Competitive Advantages
Our Key Competitive Advantages Strategic priorities are powered by three key competitive advantages that distinguish Quad as a Marketing Solutions Partner: 6
Slide 7: Commitment to Innovation
Commitment to Innovation QDMX Accelerated Insights Client 1 Client 2 Client 1 Client 2 Client 3 Client Client 11 Client 2 Common Carrier Merged Mail Multi Pack Proprietary Virtual Testing Platform QDMX and Accelerated Insights are designed to solve client challenges by driving revenue, lowering cost
Slide 8: Commitment to Culture & Social Purpose
Commitment to Culture & Social Purpose Expansion of Investing in the Corporate Social Employee-led Business Next Generation of Responsibility Resource Groups Creative Talent 8
Slide 9: Financial Overview
Financial Overview Fourth Quarter Full Year December 31, December 31, December 31, December 31, US $ Millions 2020 2019 2020 2019 STATEMENT OF OPERATIONS (excluding discontinued operations) Net Sales $ 843.3 $ 1,069.9 $ 2,929.6 $ 3,923.4 Cost of Sales 682.9 867.9 2,334.8 3,192.2 Selling, General and
Slide 10: Debt Capital Structure
Debt Capital Structure 30% 3.35x Floating 4.9% 70% Debt Leverage Ratio (1) Blended Interest Rate as of December 31, 2020 as of December 31, 2020 Fixed $55 million $461 million May 2022 Cash on Hand Unused Capacity under $500 Million Next Significant Debt Maturity of as of December 31, 2020 Revolver
Slide 11: Debt and Pension Obligations
Debt and Pension Obligations Single-Employer Pension and Multi-Employer Debt & Capital Leases Pension Plan Obligations (in millions) (in millions) $1,200 $160 $123.0 $1,100 $120 $30.7 $92.3 $44.1 (25%) $184.0 $1,000 $80 (17%) $35.7 $1,112.2 $900 $40 $78.9 $928.2 $56.6 $800 $0 12/31/2019 12/31/2020 1
Slide 12: 2021 Outlook
2021 Outlook Given the ongoing lack of full-year visibility due to the pandemic, we are not providing 2021 financial guidance at this time; however, • We expect to see continued sequential improvement in quarterly net sales trends in the first half of 2021 due to the improving impact of the pandemic
Slide 13: Thank You
Thank You
Slide 14: Supplemental Information
Supplemental Information
Slide 15: 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 16: Adjusted EBITDA (Fourth Quarter)
Adjusted EBITDA Fourth Quarter Three Months Ended December 31, US $ Millions 2020 2019 Net earnings (loss) attributable to Quad common shareholders $ (94.0) $ 7.5 Interest expense 16.6 20.4 Income tax expense 17.8 3.6 Depreciation and amortization 42.7 50.2 EBITDA [Non-GAAP] $ (16.9) $ 81.7 EBITDA M
Slide 17: Adjusted EBITDA (Full-Year)
Adjusted EBITDA Full-Year Year Ended December 31, US $ Millions 2020 2019 Net loss attributable to Quad common shareholders $ (128.3) $ (156.3) Interest expense 68.8 90.0 Income tax expense (benefit) 0.3 (24.4) Depreciation and amortization 181.6 209.5 EBITDA [Non-GAAP] $ 122.4 $ 118.8 EBITDA Margin
Slide 18: Free Cash Flow
Free Cash Flow Full-Year Year Ended December 31, US $ Millions 2020 2019 Net cash provided by operating activities $ 190.2 $ 155.5 Less: purchases of property, plant and equipment (61.0) (111.0) Plus: LSC-related payments(1) — 61.3 Free Cash Flow [Non-GAAP] $ 129.2 $ 105.8 (1) LSC-related payments i
Slide 19: Debt Leverage Ratio
Debt Leverage Ratio Year Ended December 31, US $ Millions 2020 2019 Total debt and finance lease obligations on the balance sheets $ 928.2 $ 1,112.2 Less: Cash and cash equivalents 55.2 78.7 Net Debt [Non-GAAP] $ 873.0 $ 1,033.5 Divided by: Adjusted EBITDA for the year ended [Non-GAAP] $ 260.4 $ 334
Slide 20: Balance Sheet
Balance Sheet US $ Millions December 31, 2020 December 31, 2019 ASSETS Cash and cash equivalents $ 55.2 $ 78.7 Receivables, less allowance for credit losses 399.1 456.1 Inventories 170.2 210.5 Prepaid expenses and other current assets 54.7 109.0 Property, plant and equipment—net 884.2 1,036.5 Operat
Slide 21: Adjusted Diluted Earnings Per Share (Fourth Quarter)
Adjusted Diluted Earnings Per Share Fourth Quarter Three Months Ended December 31, US $ Millions (Except Per Share Data) 2020 2019 Earnings (loss) from continuing operations before income taxes and equity in earnings of $ (68.6) $ 10.1 unconsolidated entity Restructuring, impairment and transaction-
Slide 22: Adjusted Diluted Earnings Per Share (Full-Year)
Adjusted Diluted Earnings Per Share Full-Year Year Ended December 31, US $ Millions (Except Per Share Data) 2020 2019 Loss from continuing operations before income taxes and equity in loss of unconsolidated entity $ (106.1) $ (79.8) Restructuring, impairment and transaction-related charges 124.1 89.