Sussex-based
Quad/Graphics reported net sales of $2.96 billion for 2023, a decline of 8% from the previous year that was within the guidance the printing and marketing services company provided.
Quad also reported a net loss of $55.4 million for the year after ending 2022 with net earnings of $9.3 million. The company’s EBITDA margin for 2023 was 5.3%, down from 6.4%, although adjusted EBITDA margin, which accounts for restructuring, impairment and transaction-related charges, was up from 7.8% to 7.9%.
“We delivered solid full-year results primarily due to our strong operating performance, which was partially offset by revenue challenges created by significant postal rate increases and ongoing economic uncertainty that negatively impacted print volumes,” said
Joel Quadracci, chairman, president and chief executive officer of Quad. “Despite these challenging macro factors, we achieved our 2023 financial guidance, and were pleased with our cash generation, which we continued to use to strengthen our balance sheet through debt reduction. We ended the year having reduced net debt by $564 million or 55% since January 1, 2020.”
The continued reduction of the company’s debt prompted Quad to reinstitute its dividend, which was originally suspended at the onset of the COVID-19 pandemic. Quad’s board authorized a quarterly cash dividend of 5 cents per share last week.
Long known as a printing company, Quad has expanded its offerings in recent years to offer integrated marketing services. Those new offerings have helped the company navigate the decline of its legacy printing businesses.
In 2018, large scale printing, including magazines, retail inserts and directories, accounted for 31% of the business. In 2023, large scale print was just 24% of net sales. While large scale print revenues were down 45% from 2018, total company net sales had decreased around 29%. The shift in business mix points to a $590 million decrease in large scale printing revenue, including a $483 million decrease in retail inserts.
Targeted print, which includes catalogs, direct marketing, packaging and instore, and special interest publications, went from 35% of net sales to 42%. That shift in mix suggests a 15.4% decline in revenue, including just 6% for the packaging category.
Integrated solutions went from 19% of the business to 21%, amounting to a 22% decline in net sales for the business line. The decline was primarily driven by a 36.5% drop in logistics revenue since 2018 and a 29.5% drop in the QuadMed health care provider business. Agency solutions increased 0.8% since 2018 to $296 million.
