This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Quad/Graphics Reports Third Quarter And Year-To-Date September 2012 Results

Stocks in this article: QUAD

Quad/Graphics cautions that the foregoing list of risks, uncertainties and other factors is not exhaustive and you should carefully consider the other factors detailed from time to time in Quad/Graphics' filings with the United States Securities and Exchange Commission and other uncertainties and potential events when reviewing the Company's forward-looking statements.

Because forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on such statements, which speak only as of the date of this press release. Except to the extent required by the federal securities laws, Quad/Graphics undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Quad/Graphics

Quad/Graphics (NYSE: QUAD) is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 22,000 full-time equivalent employees working from more than 50 print-production facilities as well as other support locations throughout North America, Latin America and Europe. As a printing industry innovator, Quad/Graphics ( www.QG.com) is redefining the power of print in today's multimedia world by helping its clients use print as the foundation of multichannel communications strategies to drive their top-line revenues.

 
 

QUAD/GRAPHICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2012 and 2011
(in millions, except per share data)
(UNAUDITED)
   
Three Months Ended September 30,
2012     2011
Net sales $ 1,039.7 $ 1,109.4
 
Cost of sales 798.1 840.4
Selling, general and administrative expenses 87.3 96.0
Depreciation and amortization 83.3 85.1
Restructuring, impairment and transaction-related charges 11.9   31.8  
Total operating expenses 980.6 1,053.3
 
Operating income from continuing operations 59.1 56.1
 
Interest expense 21.7 25.4
Loss on debt extinguishment   34.0  
 
Earnings (loss) from continuing operations before income taxes and equity in earnings of unconsolidated entities 37.4 (3.3 )
 
Income tax expense (benefit) (1.9 ) 2.8  
 
Earnings (loss) from continuing operations before equity in earnings of unconsolidated entities 39.3 (6.1 )
 
Equity in earnings of unconsolidated entities 0.4   0.6  
 
Net earnings (loss) from continuing operations $ 39.7 $ (5.5 )
 
Loss from discontinued operations, net of tax (1)   (16.8 )
 
Net earnings (loss) $ 39.7 $ (22.3 )
 
Net (earnings) loss attributable to noncontrolling interests 0.1   (0.1 )
 
Net earnings (loss) attributable to Quad/Graphics common shareholders $ 39.8   $ (22.4 )
 
Earnings (loss) per share attributable to Quad/Graphics common shareholders:
Basic:
Continuing operations $ 0.85 $ (0.12 )
Discontinued operations   (0.36 )
Earnings (loss) per share attributable to Quad/Graphics common shareholders $ 0.85   $ (0.48 )
 
Diluted:
Continuing operations $ 0.84 $ (0.12 )
Discontinued operations   (0.36 )
Earnings (loss) per share attributable to Quad/Graphics common shareholders $ 0.84   $ (0.48 )
 
Weighted average number of common shares outstanding:
Basic 46.8   47.1  
Diluted 47.2   47.1  
 

(1) Includes the results of the Canadian operations prior to the March 1, 2012 sale. Net earnings (loss) from continuing operations and its components exclude the Canadian operations.

 
 

QUAD/GRAPHICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2012 and 2011
(in millions, except per share data)
(UNAUDITED)
   
Nine Months Ended September 30,
2012     2011
Net sales $ 2,963.5 $ 3,109.0
 
Cost of sales 2,311.8 2,380.7
Selling, general and administrative expenses 259.9 298.5
Depreciation and amortization 252.6 255.9
Restructuring, impairment and transaction-related charges 87.8   82.1  
Total operating expenses 2,912.1 3,017.2
 
Operating income from continuing operations 51.4 91.8
 
Interest expense 63.8 84.5
Loss on debt extinguishment   34.0  
 
Loss from continuing operations before income taxes and equity in earnings of unconsolidated entities (12.4 ) (26.7 )
 
Income tax benefit (46.0 ) (8.1 )
 
Earnings (loss) from continuing operations before equity in earnings of unconsolidated entities 33.6 (18.6 )
 
Equity in earnings of unconsolidated entities 0.7   1.7  
 
Net earnings (loss) from continuing operations $ 34.3 $ (16.9 )
 
Loss from discontinued operations, net of tax (1) (3.2 ) (22.9 )
Gain on disposal of discontinued operations, net of tax 35.3    
 
Net earnings (loss) $ 66.4 $ (39.8 )
 
Net earnings attributable to noncontrolling interests   (0.2 )
 
Net earnings (loss) attributable to Quad/Graphics common shareholders $ 66.4   $ (40.0 )
 
Earnings (loss) per share attributable to Quad/Graphics common shareholders:
Basic:
Continuing operations $ 0.73 $ (0.36 )
Discontinued operations 0.69   (0.49 )
Earnings (loss) per share attributable to Quad/Graphics common shareholders $ 1.42   $ (0.85 )
 
Diluted:
Continuing operations $ 0.73 $ (0.36 )
Discontinued operations 0.68   (0.49 )
Earnings (loss) per share attributable to Quad/Graphics common shareholders $ 1.41   $ (0.85 )
 
Weighted average number of common shares outstanding:
Basic 46.8   47.2  
Diluted 47.1   47.2  
 

(1) Includes the results of the Canadian operations prior to the March 1, 2012 sale. Net earnings (loss) from continuing operations and its components exclude the Canadian operations.

 
 

QUAD/GRAPHICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2012 and 2011
(in millions, except per share data)
(UNAUDITED)
       
Three Months Ended September 30, Three Months Ended September 30,
2012 2011
Consolidated   Discontinued Operations (1)   Continuing Operations Consolidated   Discontinued Operations (1)   Continuing Operations
 
Net sales $ 1,039.7 $ $ 1,039.7 $ 1,185.7 $ 76.3 $ 1,109.4
 
Cost of sales 798.1 798.1 906.7 66.3 840.4
Selling, general and administrative expenses 87.3 87.3 105.9 9.9 96.0
Depreciation and amortization 83.3 83.3 85.4 0.3 85.1
Restructuring, impairment and transaction-related charges 11.9     11.9   48.3   16.5   31.8  
Total operating expenses 980.6 980.6 1,146.3 93.0 1,053.3
 
Operating income (loss) 59.1 59.1 39.4 (16.7 ) 56.1
 
Interest expense 21.7 21.7 25.5 0.1 25.4
Loss on debt extinguishment       34.0     34.0  
 
Earnings (loss) before income taxes and equity in earnings of unconsolidated entities 37.4 37.4 (20.1 ) (16.8 ) (3.3 )
 
Income tax expense (benefit) (1.9 )   (1.9 ) 2.8     2.8  
 
Earnings (loss) before equity in earnings of unconsolidated entities 39.3 39.3 (22.9 ) (16.8 ) (6.1 )
 
Equity in earnings of unconsolidated entities 0.4     0.4   0.6     0.6  
 
Net earnings (loss) $ 39.7 $ $ 39.7 $ (22.3 ) $ (16.8 ) $ (5.5 )
 
Net (earnings) loss attributable to noncontrolling interests 0.1     0.1   (0.1 )   (0.1 )
 
Net earnings (loss) attributable to Quad/Graphics common shareholders $ 39.8   $   $ 39.8   $ (22.4 ) $ (16.8 ) $ (5.6 )
 
Earnings (loss) per share attributable to Quad/Graphics common shareholders:
Basic $ 0.85   $   $ 0.85   $ (0.48 ) $ (0.36 ) $ (0.12 )
Diluted $ 0.84   $   $ 0.84   $ (0.48 ) $ (0.36 ) $ (0.12 )
 
Weighted average number of common shares outstanding:
Basic 46.8   46.8   46.8   47.1   47.1   47.1  
Diluted 47.2   47.2   47.2   47.1   47.1   47.1  
 

(1) The Canadian operations sold on March 1, 2012 are presented as discontinued operations. This schedule is presented to provide the full income statement for consolidated, discontinued and continuing results of operations.

       
 

QUAD/GRAPHICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2012 and 2011
(in millions, except per share data)
(UNAUDITED)
 
Nine Months Ended September 30, Nine Months Ended September 30,
2012 2011
Consolidated   Discontinued Operations (1)   Continuing Operations Consolidated   Discontinued Operations (1)   Continuing Operations
 
Net sales $ 2,995.7 $ 32.2 $ 2,963.5 $ 3,358.5 $ 249.5 $ 3,109.0
 
Cost of sales 2,342.6 30.8 2,311.8 2,592.1 211.4 2,380.7
Selling, general and administrative expenses 262.8 2.9 259.9 326.9 28.4 298.5
Depreciation and amortization 252.6 252.6 263.6 7.7 255.9
Restructuring, impairment and transaction-related charges 89.5   1.7   87.8   106.5   24.4   82.1  
Total operating expenses 2,947.5 35.4 2,912.1 3,289.1 271.9 3,017.2
 
Operating income (loss) 48.2 (3.2 ) 51.4 69.4 (22.4 ) 91.8
 
Interest expense 63.8 63.8 84.9 0.4 84.5
Loss on debt extinguishment       34.0     34.0  
 
Loss before income taxes and equity in earnings of unconsolidated entities (15.6 ) (3.2 ) (12.4 ) (49.5 ) (22.8 ) (26.7 )
 
Income tax expense (benefit) (46.0 )   (46.0 ) (8.0 ) 0.1   (8.1 )
 
Earnings (loss) before equity in earnings of unconsolidated entities 30.4 (3.2 ) 33.6 (41.5 ) (22.9 ) (18.6 )
 
Equity in earnings of unconsolidated entities 0.7 0.7 1.7 1.7
Gain on disposal of discontinued operations, net of tax 35.3   35.3          
 
Net earnings (loss) $ 66.4 $ 32.1 $ 34.3 $ (39.8 ) $ (22.9 ) $ (16.9 )
 
Net earnings attributable to noncontrolling interests       (0.2 )   (0.2 )
 
Net earnings (loss) attributable to Quad/Graphics common shareholders $ 66.4   $ 32.1   $ 34.3   $ (40.0 ) $ (22.9 ) $ (17.1 )
 
Earnings (loss) per share attributable to Quad/Graphics common shareholders:
Basic $ 1.42   $ 0.69   $ 0.73   $ (0.85 ) $ (0.49 ) $ (0.36 )
Diluted $ 1.41   $ 0.68   $ 0.73   $ (0.85 ) $ (0.49 ) $ (0.36 )
 
Weighted average number of common shares outstanding:
Basic 46.8   46.8   46.8   47.2   47.2   47.2  
Diluted 47.1   47.1   47.1   47.2   47.2   47.2  
 

(1) The Canadian operations sold on March 1, 2012 are presented as discontinued operations. This schedule is presented to provide the full income statement for consolidated, discontinued and continuing results of operations.

 
 

QUAD/GRAPHICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2012 and December 31, 2011
(in millions)
(UNAUDITED)
       
September 30, 2012 December 31, 2011
ASSETS
Cash and cash equivalents $ 18.6 $ 25.6
Receivables, less allowances for doubtful accounts 581.1 656.1
Inventories 279.3 249.5
Prepaid expenses and other current assets 60.0 142.3
Deferred income taxes 56.7 86.7
Short-term restricted cash 15.7 8.5
Current assets of discontinued operations (1)   72.6  
 
Total current assets 1,011.4   1,241.3  
 
Property, plant and equipment—net 1,986.4 2,123.3
Goodwill 768.4 787.1
Other intangible assets—net 246.4 295.6
Long-term restricted cash 46.5 67.4
Equity method investments in unconsolidated entities 70.8 69.4
Other long-term assets 50.7 46.2
Long-term assets of discontinued operations (1)   104.9  
 
Total assets $ 4,180.6   $ 4,735.2  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 277.7 $ 301.9
Amounts owing in satisfaction of bankruptcy claims 9.7 19.5
Accrued liabilities 357.6 393.9
Purchase price payable on business exchange transaction 62.4
Short-term debt and current portion of long-term debt 100.9 82.1
Current portion of capital lease obligations 10.8 20.7
Current liabilities of discontinued operations (1)   48.4  
 
Total current liabilities 756.7   928.9  
 
Long-term debt 1,193.2 1,342.8
Unsecured notes to be issued 25.4 38.7
Capital lease obligations 17.9 24.9
Deferred income taxes 382.6 471.9
Other long-term liabilities 455.5 521.5
Long-term liabilities of discontinued operations (1)   99.6  
 
Total liabilities 2,831.3 3,428.3
 
Redeemable equity 3.5
 
Quad/Graphics common stock and other equity
Preferred stock
Common stock 1.4 1.4
Additional paid-in capital 978.5 984.2
Treasury stock, at cost (279.5 ) (295.4 )
Retained earnings 681.3 650.2
Accumulated other comprehensive loss (33.0 ) (37.7 )
 
Quad/Graphics common stock and other equity 1,348.7 1,302.7
 
Noncontrolling interests 0.6   0.7  
 
Total common stock and other equity and noncontrolling interests 1,349.3   1,303.4  
 
Total liabilities and shareholders' equity $ 4,180.6   $ 4,735.2  
 

(1) December 31, 2011 balance sheet includes the assets and liabilities of the Canadian operations sold on March 1, 2012.

 
 

QUAD/GRAPHICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2012 and 2011
(in millions)
(UNAUDITED)
   
Nine Months Ended September 30,
2012     2011
OPERATING ACTIVITIES
Net earnings (loss) $ 66.4 $ (39.8 )
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization 252.6 263.6
Impairment charges 14.5 17.9
Loss on debt extinguishment 34.0
Deferred income taxes (21.1 ) 5.7
Gain on disposal of discontinued operations, net of tax (35.3 )
Other non-cash adjustments to net earnings (loss) 2.0 16.8
Changes in operating assets and liabilities—net of acquisitions (46.9 ) (135.3 )
 
Net Cash Provided by Operating Activities 232.2   162.9  
 
INVESTING ACTIVITIES
Purchases of property, plant and equipment (85.3 ) (134.3 )
Investment in ManipalTech (18.1 )
Proceeds from the sale of property, plant and equipment 13.5 13.0
Transfers from restricted cash 13.7 22.2
Deposit refunded (paid) related to business exchange transaction 50.0 (50.8 )
Purchase price payments on business exchange transaction (4.2 )
Acquisition of business—net of cash acquired (6.6 ) (4.6 )
 
Net Cash Used in Investing Activities (37.0 ) (154.5 )
 
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 649.0
Payments of long-term debt (49.1 ) (743.9 )
Payments of capital lease obligations (18.0 ) (11.7 )
Borrowings on revolving credit facilities 95.0 875.2
Payments on revolving credit facilities (175.6 ) (712.7 )
Payment of debt issuance costs (11.5 )
Bankruptcy claim payments on unsecured notes to be issued (13.3 ) (11.6 )
Proceeds from issuance of common stock 0.1 1.6
Tax benefit on exercise of stock options 0.8
Purchase of treasury stock (5.4 )
Payment of cash dividends (35.1 ) (18.9 )
Payment of tax distributions   (4.8 )
 
Net Cash (Used in) Provided by Financing Activities (196.0 ) 6.1  
 
Effect of exchange rates on cash and cash equivalents (6.2 ) (19.2 )
 
Net Decrease in Cash and Cash Equivalents (7.0 ) (4.7 )
 
Cash and Cash Equivalents at Beginning of Period 25.6   20.5  
 
Cash and Cash Equivalents at End of Period $ 18.6   $ 15.8  
 

The condensed consolidated statements of cash flows include the cash flows of the Canadian operations prior to the March 1, 2012 sale.

 
 

QUAD/GRAPHICS, INC.

SEGMENT FINANCIAL INFORMATION
For the Three and Nine Months Ended September 30, 2012 and 2011
(in millions)
(UNAUDITED)
               
Net Sales Operating

Income/(Loss)

Restructuring,

Impairment and

Transaction-Related

Charges

Three months ended September 30, 2012
United States Print and Related Services $ 922.8 $ 84.7 $ (3.3 )
International 116.9   (4.4 ) 4.6  
Total operating segments 1,039.7 80.3 1.3
Corporate   (21.2 ) 10.6  
Total $ 1,039.7   $ 59.1   $ 11.9  
 
Three months ended September 30, 2011
United States Print and Related Services $ 986.5 $ 92.8 $ 7.2
International 122.9   (4.8 ) 2.6  
Total operating segments 1,109.4 88.0 9.8
Corporate   (31.9 ) 22.0  
Total $ 1,109.4   $ 56.1   $ 31.8  
 
Nine months ended September 30, 2012
United States Print and Related Services $ 2,594.7 $ 139.2 $ 29.1
International 368.8   (20.5 ) 22.7  
Total operating segments 2,963.5 118.7 51.8
Corporate   (67.3 ) 36.0  
Total $ 2,963.5   $ 51.4   $ 87.8  
 
Nine months ended September 30, 2011
United States Print and Related Services $ 2,753.2 $ 180.2 $ 38.0
International 355.8   (15.6 ) 5.0  
Total operating segments 3,109.0 164.6 43.0
Corporate   (72.8 ) 39.1  
Total $ 3,109.0   $ 91.8   $ 82.1  
 

Results from the Canadian operations sold on March 1, 2012 are excluded from the segment financial information presented above.

4 of 12

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs