Quad/Graphics, Inc. (NYSE: QUAD) (“Quad/Graphics” or the “Company”) today reported results for its second quarter ending June 30, 2013. The reported results include Vertis from the day of acquisition on January 16, 2013. Prior year financial results do not include the acquisition of Vertis. For full financial results, including reconciliations of non-GAAP financial measures, please see the accompanying information.
“Our second quarter results were consistent with our expectations and we remain on track to achieve our 2013 objectives,” said Joel Quadracci, Quad/Graphics Chairman, President & CEO. “We continue to be pleased with the Vertis acquisition and remain focused on integrating operations and driving future cost-savings, and improving efficiency and productivity in our platform. As always, we are committed to our priorities to maintain a strong and flexible balance sheet; invest in our business, which includes the pursuit of profitable investment opportunities; and create long-term value for our shareholders and clients.”
Net sales for the second quarter 2013 increased to $1.1 billion versus $934 million for the same period in 2012 due to the Vertis acquisition. Second quarter 2013 Adjusted EBITDA was $111 million as compared to $112 million for the same period in 2012. Recurring Free Cash Flow was $86 million versus $60 million for the same period in 2012.
For the first six months of 2013, net sales were $2.2 billion versus $1.9 billion for the same period in 2012, representing a 16% increase due to the Vertis acquisition. Year-to-date Adjusted EBITDA was $225 million versus $238 million in 2012. Recurring Free Cash Flow was $206 million for the first six months of 2013 compared to $167 million for the same period in 2012, continuing a track record of solid cash flow generation.
“Our Adjusted EBITDA and Adjusted EBITDA margin of 10.0% were in line with our expectations and reflect Vertis' lower margin profile and increased seasonality, and ongoing industry pricing and volume pressures,” said John Fowler, Quad/Graphics Executive Vice President and Chief Financial Officer. “We are pleased with our Recurring Free Cash Flow of $86 million, which was generated during a quarter that normally reflects lower volumes due to industry seasonality. Recurring Free Cash Flow is the foundation of our strong balance sheet and provides us with the flexibility and confidence to invest in our business and pursue value-added opportunities as they arise to ensure strong future cash flow.”