☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Wisconsin | 39-1152983 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Class A Common Stock, par value $0.025 per share | QUAD | The New York Stock Exchange |
Large accelerated filer | Accelerated filer | |||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company | ☐ |
Class | Outstanding as of October | |||||||
Class A Common Stock | ||||||||
Class B Common Stock | 13,556,858 | |||||||
Class C Common Stock |
Page No. | |||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net sales | |||||||||||||||||||||||
Products | $ | 493.5 | $ | 742.5 | $ | 1,586.2 | $ | 2,247.4 | |||||||||||||||
Services | 185.8 | 201.1 | 500.1 | 606.1 | |||||||||||||||||||
Total net sales | 679.3 | 943.6 | 2,086.3 | 2,853.5 | |||||||||||||||||||
Cost of sales | |||||||||||||||||||||||
Products | 410.1 | 625.3 | 1,296.7 | 1,896.0 | |||||||||||||||||||
Services | 133.2 | 139.2 | 355.2 | 428.3 | |||||||||||||||||||
Total cost of sales | 543.3 | 764.5 | 1,651.9 | 2,324.3 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Selling, general and administrative expenses | 75.1 | 99.6 | 238.0 | 290.5 | |||||||||||||||||||
Depreciation and amortization | 44.8 | 52.2 | 138.9 | 159.3 | |||||||||||||||||||
Restructuring, impairment and transaction-related charges | 9.8 | 56.7 | 49.0 | 73.7 | |||||||||||||||||||
Total operating expenses | 673.0 | 973.0 | 2,077.8 | 2,847.8 | |||||||||||||||||||
Operating income (loss) from continuing operations | 6.3 | (29.4) | 8.5 | 5.7 | |||||||||||||||||||
Interest expense | 17.9 | 22.0 | 52.2 | 69.6 | |||||||||||||||||||
Net pension income | (2.7) | (1.5) | (8.0) | (4.5) | |||||||||||||||||||
Loss on debt extinguishment | 0 | 14.6 | 1.8 | 30.5 | |||||||||||||||||||
Loss from continuing operations before income taxes and equity in loss of unconsolidated entity | (8.9) | (64.5) | (37.5) | (89.9) | |||||||||||||||||||
Income tax benefit | (12.0) | (17.6) | (17.5) | (28.0) | |||||||||||||||||||
Earnings (loss) from continuing operations before equity in loss of unconsolidated entity | 3.1 | (46.9) | (20.0) | (61.9) | |||||||||||||||||||
Equity in loss of unconsolidated entity | 0.4 | 0.1 | 0.9 | 0.9 | |||||||||||||||||||
Net earnings (loss) from continuing operations | 2.7 | (47.0) | (20.9) | (62.8) | |||||||||||||||||||
Loss from discontinued operations, net of tax | (1.1) | (79.4) | (13.6) | (101.1) | |||||||||||||||||||
Net earnings (loss) | 1.6 | (126.4) | (34.5) | (163.9) | |||||||||||||||||||
Less: net earnings (loss) attributable to noncontrolling interests | 0 | 0.1 | (0.2) | (0.1) | |||||||||||||||||||
Net earnings (loss) attributable to Quad common shareholders | $ | 1.6 | $ | (126.5) | $ | (34.3) | $ | (163.8) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net sales | |||||||||||||||
Products | $ | 742.5 | $ | 771.1 | $ | 2,247.4 | $ | 2,280.0 | |||||||
Services | 201.1 | 202.4 | 606.1 | 580.9 | |||||||||||
Total net sales | 943.6 | 973.5 | 2,853.5 | 2,860.9 | |||||||||||
Cost of sales | |||||||||||||||
Products | 625.3 | 628.9 | 1,896.0 | 1,866.7 | |||||||||||
Services | 139.2 | 148.1 | 428.3 | 437.6 | |||||||||||
Total cost of sales | 764.5 | 777.0 | 2,324.3 | 2,304.3 | |||||||||||
Operating expenses | |||||||||||||||
Selling, general and administrative expenses | 99.6 | 89.2 | 290.5 | 268.8 | |||||||||||
Depreciation and amortization | 52.2 | 55.0 | 159.3 | 162.0 | |||||||||||
Restructuring, impairment and transaction-related charges | 56.7 | 5.3 | 73.7 | 40.6 | |||||||||||
Total operating expenses | 973.0 | 926.5 | 2,847.8 | 2,775.7 | |||||||||||
Operating income (loss) from continuing operations | (29.4 | ) | 47.0 | 5.7 | 85.2 | ||||||||||
Interest expense | 22.0 | 18.3 | 69.6 | 53.9 | |||||||||||
Net pension income | (1.5 | ) | (3.1 | ) | (4.5 | ) | (9.3 | ) | |||||||
Loss on debt extinguishment | 14.6 | — | 30.5 | — | |||||||||||
Earnings (loss) from continuing operations before income taxes and equity in (earnings) loss of unconsolidated entity | (64.5 | ) | 31.8 | (89.9 | ) | 40.6 | |||||||||
Income tax expense (benefit) | (17.6 | ) | 4.5 | (28.0 | ) | 0.2 | |||||||||
Earnings (loss) from continuing operations before equity in (earnings) loss of unconsolidated entity | (46.9 | ) | 27.3 | (61.9 | ) | 40.4 | |||||||||
Equity in (earnings) loss of unconsolidated entity | 0.1 | (0.2 | ) | 0.9 | (0.7 | ) | |||||||||
Net earnings (loss) from continuing operations | (47.0 | ) | 27.5 | (62.8 | ) | 41.1 | |||||||||
Loss from discontinued operations, net of tax | (79.4 | ) | (5.0 | ) | (101.1 | ) | (12.6 | ) | |||||||
Net earnings (loss) | (126.4 | ) | 22.5 | (163.9 | ) | 28.5 | |||||||||
Less: net earnings (loss) attributable to noncontrolling interests | 0.1 | (0.9 | ) | (0.1 | ) | (0.8 | ) | ||||||||
Net earnings (loss) attributable to Quad common shareholders | $ | (126.5 | ) | $ | 23.4 | $ | (163.8 | ) | $ | 29.3 |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
Earnings (loss) per share attributable to Quad common shareholders | Earnings (loss) per share attributable to Quad common shareholders | |||||||||||||||||||||||||||||||||||||
Basic: | Basic: | |||||||||||||||||||||||||||||||||||||
Continuing operations | $ | (0.94 | ) | $ | 0.57 | $ | (1.26 | ) | $ | 0.84 | Continuing operations | $ | 0.05 | $ | (0.94) | $ | (0.41) | $ | (1.26) | |||||||||||||||||||
Discontinued operations | (1.58 | ) | (0.10 | ) | (2.02 | ) | (0.25 | ) | Discontinued operations | (0.02) | (1.58) | (0.27) | (2.02) | |||||||||||||||||||||||||
Basic earnings (loss) per share attributable to Quad common shareholders | $ | (2.52 | ) | $ | 0.47 | $ | (3.28 | ) | $ | 0.59 | Basic earnings (loss) per share attributable to Quad common shareholders | $ | 0.03 | $ | (2.52) | $ | (0.68) | $ | (3.28) | |||||||||||||||||||
Diluted: | Diluted: | |||||||||||||||||||||||||||||||||||||
Continuing operations | $ | (0.94 | ) | $ | 0.56 | $ | (1.26 | ) | $ | 0.81 | Continuing operations | $ | 0.05 | $ | (0.94) | $ | (0.41) | $ | (1.26) | |||||||||||||||||||
Discontinued operations | (1.58 | ) | (0.10 | ) | (2.02 | ) | (0.24 | ) | Discontinued operations | (0.02) | (1.58) | (0.27) | (2.02) | |||||||||||||||||||||||||
Diluted earnings (loss) per share attributable to Quad common shareholders | $ | (2.52 | ) | $ | 0.46 | $ | (3.28 | ) | $ | 0.57 | Diluted earnings (loss) per share attributable to Quad common shareholders | $ | 0.03 | $ | (2.52) | $ | (0.68) | $ | (3.28) | |||||||||||||||||||
Weighted average number of common shares outstanding | Weighted average number of common shares outstanding | |||||||||||||||||||||||||||||||||||||
Basic | 50.1 | 49.3 | 50.0 | 50.0 | Basic | 50.7 | 50.1 | 50.6 | 50.0 | |||||||||||||||||||||||||||||
Diluted | 50.1 | 51.1 | 50.0 | 51.8 | Diluted | 51.1 | 50.1 | 50.6 | 50.0 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net earnings (loss) | $ | 1.6 | $ | (126.4) | $ | (34.5) | $ | (163.9) | |||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Translation adjustments | 4.2 | (8.2) | (9.0) | (6.4) | |||||||||||||||||||
Interest rate swap adjustments | 1.8 | (2.0) | (9.3) | (12.6) | |||||||||||||||||||
Other comprehensive income (loss), before tax | 6.0 | (10.2) | (18.3) | (19.0) | |||||||||||||||||||
Income tax impact related to items of other comprehensive income (loss) | (0.5) | 0.5 | 2.3 | 3.2 | |||||||||||||||||||
Other comprehensive income (loss), net of tax | 5.5 | (9.7) | (16.0) | (15.8) | |||||||||||||||||||
Total comprehensive income (loss) | 7.1 | (136.1) | (50.5) | (179.7) | |||||||||||||||||||
Less: comprehensive income (loss) attributable to noncontrolling interests | 0 | 0.1 | (0.2) | (0.1) | |||||||||||||||||||
Comprehensive income (loss) attributable to Quad common shareholders | $ | 7.1 | $ | (136.2) | $ | (50.3) | $ | (179.6) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net earnings (loss) | $ | (126.4 | ) | $ | 22.5 | $ | (163.9 | ) | $ | 28.5 | |||||
Other comprehensive income (loss) | |||||||||||||||
Translation adjustments | (8.2 | ) | 0.7 | (6.4 | ) | (9.3 | ) | ||||||||
Interest rate swap adjustments | (2.0 | ) | 1.0 | (12.6 | ) | 6.1 | |||||||||
Other comprehensive income (loss), before tax | (10.2 | ) | 1.7 | (19.0 | ) | (3.2 | ) | ||||||||
Income tax impact related to items of other comprehensive income (loss) | 0.5 | (0.3 | ) | 3.2 | (1.5 | ) | |||||||||
Other comprehensive income (loss), net of tax | (9.7 | ) | 1.4 | (15.8 | ) | (4.7 | ) | ||||||||
Total comprehensive income (loss) | (136.1 | ) | 23.9 | (179.7 | ) | 23.8 | |||||||||
Less: comprehensive income (loss) attributable to noncontrolling interests | 0.1 | (0.9 | ) | (0.1 | ) | (0.8 | ) | ||||||||
Comprehensive income (loss) attributable to Quad common shareholders | $ | (136.2 | ) | $ | 24.8 | $ | (179.6 | ) | $ | 24.6 |
September 30, 2020 | December 31, 2019 | ||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | 92.9 | $ | 78.7 | |||||||
Receivables, less allowance for credit losses of $33.8 million at September 30, 2020, and $25.0 million at December 31, 2019 | 370.1 | 456.1 | |||||||||
Inventories | 218.3 | 210.5 | |||||||||
Prepaid expenses and other current assets | 49.0 | 109.0 | |||||||||
Current assets of discontinued operations | 20.8 | 56.6 | |||||||||
Total current assets | 751.1 | 910.9 | |||||||||
Property, plant and equipment—net | 953.6 | 1,036.5 | |||||||||
Operating lease right-of-use assets—net | 83.5 | 97.9 | |||||||||
Goodwill | 103.0 | 103.0 | |||||||||
Other intangible assets—net | 113.3 | 137.2 | |||||||||
Equity method investment in unconsolidated entity | 1.7 | 3.6 | |||||||||
Other long-term assets | 95.2 | 127.5 | |||||||||
Long-term assets of discontinued operations | 0 | 0.5 | |||||||||
Total assets | $ | 2,101.4 | $ | 2,417.1 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Accounts payable | $ | 320.6 | $ | 416.7 | |||||||
Other current liabilities | 282.7 | 303.0 | |||||||||
Short-term debt and current portion of long-term debt | 56.8 | 40.0 | |||||||||
Current portion of finance lease obligations | 3.0 | 7.7 | |||||||||
Current portion of operating lease obligations | 27.1 | 30.2 | |||||||||
Current liabilities of discontinued operations | 5.4 | 15.8 | |||||||||
Total current liabilities | 695.6 | 813.4 | |||||||||
Long-term debt | 969.1 | 1,058.5 | |||||||||
Finance lease obligations | 2.3 | 6.0 | |||||||||
Operating lease obligations | 58.4 | 70.4 | |||||||||
Deferred income taxes | 3.7 | 2.8 | |||||||||
Other long-term liabilities | 207.2 | 221.1 | |||||||||
Long-term liabilities of discontinued operations | 0.6 | 0.6 | |||||||||
Total liabilities | 1,936.9 | 2,172.8 | |||||||||
Commitments and contingencies (Note 10) | |||||||||||
Shareholders’ equity | |||||||||||
Preferred stock | 0 | 0 | |||||||||
Common stock, Class A | 1.0 | 1.0 | |||||||||
Common stock, Class B | 0.4 | 0.4 | |||||||||
Common stock, Class C | 0 | 0 | |||||||||
Additional paid-in capital | 830.6 | 847.4 | |||||||||
Treasury stock, at cost | (13.0) | (31.5) | |||||||||
Accumulated deficit | (472.0) | (423.5) | |||||||||
Accumulated other comprehensive loss | (183.2) | (167.2) | |||||||||
Quad’s shareholders’ equity | 163.8 | 226.6 | |||||||||
Noncontrolling interests | 0.7 | 17.7 | |||||||||
Total shareholders’ equity and noncontrolling interests | 164.5 | 244.3 | |||||||||
Total liabilities and shareholders’ equity | $ | 2,101.4 | $ | 2,417.1 |
September 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 18.2 | $ | 69.5 | |||
Receivables, less allowances for doubtful accounts of $27.9 million at September 30, 2019, and $27.4 million at December 31, 2018 | 472.0 | 497.6 | |||||
Inventories | 288.6 | 279.0 | |||||
Prepaid expenses and other current assets | 46.4 | 45.2 | |||||
Current assets of discontinued operations | 39.8 | 55.3 | |||||
Total current assets | 865.0 | 946.6 | |||||
Property, plant and equipment—net | 1,079.6 | 1,149.1 | |||||
Operating lease right-of-use assets—net | 118.1 | — | |||||
Goodwill | 103.0 | 44.5 | |||||
Other intangible assets—net | 149.7 | 112.6 | |||||
Equity method investment in unconsolidated entity | 2.9 | 4.0 | |||||
Other long-term assets | 126.2 | 89.2 | |||||
Long-term assets of discontinued operations | 23.5 | 123.1 | |||||
Total assets | $ | 2,468.0 | $ | 2,469.1 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Accounts payable | $ | 416.3 | $ | 496.3 | |||
Accrued liabilities | 277.3 | 285.1 | |||||
Short-term debt and current portion of long-term debt | 66.0 | 42.9 | |||||
Current portion of finance lease obligations | 8.2 | 3.6 | |||||
Current portion of operating lease obligations | 32.6 | — | |||||
Current liabilities of discontinued operations | 18.5 | 23.4 | |||||
Total current liabilities | 818.9 | 851.3 | |||||
Long-term debt | 1,098.9 | 882.6 | |||||
Finance lease obligations | 5.1 | 6.7 | |||||
Operating lease obligations | 88.5 | — | |||||
Deferred income taxes | 5.3 | 32.1 | |||||
Other long-term liabilities | 207.2 | 231.8 | |||||
Long-term liabilities of discontinued operations | 3.1 | 4.4 | |||||
Total liabilities | 2,227.0 | 2,008.9 | |||||
Commitments and contingencies (Note 9) | |||||||
Shareholders’ equity | |||||||
Preferred stock | — | — | |||||
Common stock, Class A | 1.0 | 1.0 | |||||
Common stock, Class B | 0.4 | 0.4 | |||||
Common stock, Class C | — | — | |||||
Additional paid-in capital | 843.5 | 861.3 | |||||
Treasury stock, at cost | (30.4 | ) | (56.6 | ) | |||
Accumulated deficit | (423.1 | ) | (211.4 | ) | |||
Accumulated other comprehensive loss | (168.0 | ) | (152.2 | ) | |||
Quad’s shareholders’ equity | 223.4 | 442.5 | |||||
Noncontrolling interests | 17.6 | 17.7 | |||||
Total shareholders’ equity and noncontrolling interests | 241.0 | 460.2 | |||||
Total liabilities and shareholders’ equity | $ | 2,468.0 | $ | 2,469.1 |
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2019 | 2018 | 2020 | 2019 | |||||||||||||||
OPERATING ACTIVITIES | OPERATING ACTIVITIES | |||||||||||||||||
Net earnings (loss) | $ | (163.9 | ) | $ | 28.5 | |||||||||||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||||||||||||||||
Net loss | Net loss | $ | (34.5) | $ | (163.9) | |||||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 172.9 | 173.6 | Depreciation and amortization | 138.9 | 172.9 | |||||||||||||
Employee stock ownership plan contribution | — | 22.3 | ||||||||||||||||
Impairment charges | 94.2 | 16.0 | Impairment charges | 15.7 | 94.2 | |||||||||||||
Goodwill impairment | 10.1 | — | Goodwill impairment | 0 | 10.1 | |||||||||||||
Amortization of debt issuance costs and original issue discount | 3.0 | 2.6 | Amortization of debt issuance costs and original issue discount | 1.9 | 3.0 | |||||||||||||
Loss on debt extinguishment | 30.5 | — | Loss on debt extinguishment | 1.8 | 30.5 | |||||||||||||
Stock-based compensation | 11.6 | 12.3 | Stock-based compensation | 8.2 | 11.6 | |||||||||||||
Gain from property insurance claims | (0.8 | ) | (18.3 | ) | Gain from property insurance claims | (4.2) | (0.8) | |||||||||||
Gain on sale of business | (8.6 | ) | — | |||||||||||||||
Gain on the sale of a businesses | Gain on the sale of a businesses | (0.1) | (8.6) | |||||||||||||||
Gain on the sale or disposal of property, plant and equipment | (6.6 | ) | (10.7 | ) | Gain on the sale or disposal of property, plant and equipment | (2.3) | (6.6) | |||||||||||
Deferred income taxes | (58.3 | ) | (0.5 | ) | Deferred income taxes | 27.2 | (58.3) | |||||||||||
Equity in (earnings) loss of unconsolidated entity | 0.9 | (0.7 | ) | |||||||||||||||
Changes in operating assets and liabilities—net of acquisitions | (80.9 | ) | (178.5 | ) | ||||||||||||||
Equity in loss of unconsolidated entity | Equity in loss of unconsolidated entity | 0.9 | 0.9 | |||||||||||||||
Changes in operating assets and liabilities—net of acquisitions and divestitures | Changes in operating assets and liabilities—net of acquisitions and divestitures | (46.1) | (80.9) | |||||||||||||||
Net cash provided by operating activities | 4.1 | 46.6 | Net cash provided by operating activities | 107.4 | 4.1 | |||||||||||||
INVESTING ACTIVITIES | INVESTING ACTIVITIES | |||||||||||||||||
Purchases of property, plant and equipment | (98.5 | ) | (85.0 | ) | Purchases of property, plant and equipment | (50.7) | (98.5) | |||||||||||
Cost investment in unconsolidated entities | Cost investment in unconsolidated entities | (0.5) | 0 | |||||||||||||||
Proceeds from the sale of property, plant and equipment | 17.3 | 22.3 | Proceeds from the sale of property, plant and equipment | 6.0 | 17.3 | |||||||||||||
Proceeds from the sale of business | 11.1 | — | ||||||||||||||||
Proceeds from the sale of businesses | Proceeds from the sale of businesses | 47.1 | 11.1 | |||||||||||||||
Proceeds from property insurance claims | 0.3 | 14.5 | Proceeds from property insurance claims | 4.8 | 0.3 | |||||||||||||
Loan to an unconsolidated entity | (5.0 | ) | — | Loan to an unconsolidated entity | 0 | (5.0) | ||||||||||||
Acquisition of businesses—net of cash acquired | (121.0 | ) | (71.4 | ) | Acquisition of businesses—net of cash acquired | (2.0) | (121.0) | |||||||||||
Net cash used in investing activities | (195.8 | ) | (119.6 | ) | ||||||||||||||
Other investing activities | Other investing activities | 2.3 | 0 | |||||||||||||||
Net cash provided by (used in) investing activities | Net cash provided by (used in) investing activities | 7.0 | (195.8) | |||||||||||||||
FINANCING ACTIVITIES | FINANCING ACTIVITIES | |||||||||||||||||
Proceeds from issuance of long-term debt | 1,284.1 | 0.3 | Proceeds from issuance of long-term debt | 1.0 | 1,284.1 | |||||||||||||
Payments of long-term debt | (1,067.7 | ) | (27.8 | ) | Payments of long-term debt | (69.5) | (1,067.7) | |||||||||||
Payments of finance lease obligations | (5.8 | ) | (4.9 | ) | Payments of finance lease obligations | (6.5) | (5.8) | |||||||||||
Borrowings on revolving credit facilities | 3,171.3 | 1,830.0 | Borrowings on revolving credit facilities | 341.9 | 3,171.3 | |||||||||||||
Payments on revolving credit facilities | (3,160.1 | ) | (1,691.9 | ) | Payments on revolving credit facilities | (347.3) | (3,160.1) | |||||||||||
Payments of debt issuance costs and financing fees | (20.2 | ) | — | Payments of debt issuance costs and financing fees | (2.7) | (20.2) | ||||||||||||
Purchases of treasury stock | — | (36.7 | ) | |||||||||||||||
Proceeds from stock options exercised | — | 4.1 | ||||||||||||||||
Change in ownership of noncontrolling interests | Change in ownership of noncontrolling interests | (6.4) | 0 | |||||||||||||||
Equity awards redeemed to pay employees’ tax obligations | (6.6 | ) | (9.0 | ) | Equity awards redeemed to pay employees’ tax obligations | (1.0) | (6.6) | |||||||||||
Payment of cash dividends | (49.2 | ) | (47.5 | ) | Payment of cash dividends | (9.5) | (49.2) | |||||||||||
Contingent consideration paid for business acquired | (5.3 | ) | — | |||||||||||||||
Net cash provided by financing activities | 140.5 | 16.6 | ||||||||||||||||
Other financing activities | Other financing activities | 0.1 | (5.3) | |||||||||||||||
Net cash provided by (used in) financing activities | Net cash provided by (used in) financing activities | (99.9) | 140.5 | |||||||||||||||
Effect of exchange rates on cash and cash equivalents | (0.1 | ) | (1.7 | ) | Effect of exchange rates on cash and cash equivalents | (0.3) | (0.1) | |||||||||||
Net decrease in cash and cash equivalents | (51.3 | ) | (58.1 | ) | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | Net increase (decrease) in cash and cash equivalents | 14.2 | (51.3) | |||||||||||||||
Cash and cash equivalents at beginning of period | 69.5 | 64.4 | Cash and cash equivalents at beginning of period | 78.7 | 69.5 | |||||||||||||
Cash and cash equivalents at end of period | $ | 18.2 | $ | 6.3 | Cash and cash equivalents at end of period | $ | 92.9 | $ | 18.2 |
Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Loss | Quad’s Shareholders’ Equity | Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | 54.3 | $ | 1.4 | $ | 847.4 | (1.6) | $ | (31.5) | $ | (423.5) | $ | (167.2) | $ | 226.6 | $ | 17.7 | ||||||||||||||||||||||||||||||||||||||||||||||
Accumulated deficit transition adjustment for adoption of ASU 2016-13, net of tax | — | — | — | — | — | (6.3) | — | (6.3) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 | 54.3 | $ | 1.4 | $ | 847.4 | (1.6) | $ | (31.5) | $ | (429.8) | $ | (167.2) | $ | 220.3 | $ | 17.7 | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | (12.4) | — | (12.4) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in ownership of noncontrolling interests | — | — | — | — | — | — | — | — | 0.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (15.3) | (15.3) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swap adjustments, net of tax | — | — | — | — | — | — | (8.3) | (8.3) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($0.15 per common share) | — | — | — | — | — | (7.9) | — | (7.9) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 3.1 | — | — | — | — | 3.1 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of share-based awards, net of other activity | 0.1 | — | (19.8) | 1.1 | 19.8 | — | — | 0 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Awards redeemed to pay employees’ tax obligations | — | — | — | (0.2) | (1.0) | — | — | (1.0) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | 54.4 | $ | 1.4 | $ | 830.7 | (0.7) | $ | (12.7) | $ | (450.1) | $ | (190.8) | $ | 178.5 | $ | 17.8 | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | (23.5) | — | (23.5) | (0.2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in ownership of noncontrolling interests | — | — | (5.4) | — | — | — | — | (5.4) | (16.9) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | 2.1 | 2.1 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 2.7 | — | — | — | — | 2.7 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of share-based awards, net of other activity | — | — | 0 | — | (0.2) | — | — | (0.2) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | 54.4 | $ | 1.4 | $ | 828.0 | (0.7) | $ | (12.9) | $ | (473.6) | $ | (188.7) | $ | 154.2 | $ | 0.7 | ||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | — | 1.6 | — | 1.6 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | 4.2 | 4.2 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swap adjustments, net of tax | — | — | — | — | — | — | 1.3 | 1.3 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 2.6 | — | — | — | — | 2.6 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of share-based awards, net of other activity | — | — | 0 | — | (0.1) | — | — | (0.1) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | 54.4 | $ | 1.4 | $ | 830.6 | (0.7) | $ | (13.0) | $ | (472.0) | $ | (183.2) | $ | 163.8 | $ | 0.7 |
Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Loss | Shareholders’ Equity | Noncontrolling Interests | ||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||
Balance at January 1, 2019 | 54.3 | $ | 1.4 | $ | 861.3 | (2.7 | ) | $ | (56.6 | ) | $ | (211.4 | ) | $ | (152.2 | ) | $ | 442.5 | $ | 17.7 | ||||||||||||||
Net loss | — | — | — | — | — | (22.5 | ) | — | (22.5 | ) | (0.3 | ) | ||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (0.3 | ) | (0.3 | ) | — | |||||||||||||||||||||||
Interest rate swap adjustments, net of tax | — | — | — | — | — | — | (2.8 | ) | (2.8 | ) | — | |||||||||||||||||||||||
Cash dividends declared ($0.30 per common share) | — | — | — | — | — | (16.0 | ) | — | (16.0 | ) | — | |||||||||||||||||||||||
Stock-based compensation | — | — | 5.0 | — | — | — | — | 5.0 | — | |||||||||||||||||||||||||
Issuance of share-based awards, net of other activity | — | — | (30.1 | ) | 1.7 | 33.3 | — | — | 3.2 | — | ||||||||||||||||||||||||
Awards redeemed to pay employees’ tax obligations | — | — | — | (0.5 | ) | (6.6 | ) | — | — | (6.6 | ) | — | ||||||||||||||||||||||
Balance at March 31, 2019 | 54.3 | $ | 1.4 | $ | 836.2 | (1.5 | ) | $ | (29.9 | ) | $ | (249.9 | ) | $ | (155.3 | ) | $ | 402.5 | $ | 17.4 | ||||||||||||||
Net earnings (loss) | — | — | — | — | — | (14.8 | ) | — | (14.8 | ) | 0.1 | |||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | 2.1 | 2.1 | — | |||||||||||||||||||||||||
Interest rate swap adjustments, net of tax | — | — | — | — | — | — | (5.1 | ) | (5.1 | ) | — | |||||||||||||||||||||||
Cash dividends declared ($0.30 per common share) | — | — | — | — | — | (16.0 | ) | — | (16.0 | ) | — | |||||||||||||||||||||||
Stock-based compensation | — | — | 3.3 | — | — | — | — | 3.3 | — | |||||||||||||||||||||||||
Issuance of share-based awards, net of other activity | — | — | 0.1 | — | (0.1 | ) | — | — | — | — | ||||||||||||||||||||||||
Balance at June 30, 2019 | 54.3 | $ | 1.4 | $ | 839.6 | (1.5 | ) | $ | (30.0 | ) | $ | (280.7 | ) | $ | (158.3 | ) | $ | 372.0 | $ | 17.5 | ||||||||||||||
Net earnings (loss) | — | — | — | — | — | (126.5 | ) | — | (126.5 | ) | 0.1 | |||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (8.2 | ) | (8.2 | ) | — | |||||||||||||||||||||||
Interest rate swap adjustments, net of tax | — | — | — | — | — | — | (1.5 | ) | (1.5 | ) | — | |||||||||||||||||||||||
Cash dividends declared ($0.30 per common share) | — | — | — | — | — | (15.9 | ) | — | (15.9 | ) | — | |||||||||||||||||||||||
Stock-based compensation | — | — | 3.5 | — | — | — | — | 3.5 | — | |||||||||||||||||||||||||
Issuance of share-based awards, net of other activity | — | — | 0.4 | — | (0.4 | ) | — | — | — | — | ||||||||||||||||||||||||
Balance at September 30, 2019 | 54.3 | $ | 1.4 | $ | 843.5 | (1.5 | ) | $ | (30.4 | ) | $ | (423.1 | ) | $ | (168.0 | ) | $ | 223.4 | $ | 17.6 |
Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Loss | Quad’s Shareholders’ Equity | Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | 54.3 | $ | 1.4 | $ | 861.3 | (2.7) | $ | (56.6) | $ | (211.4) | $ | (152.2) | $ | 442.5 | $ | 17.7 | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | (22.5) | — | (22.5) | (0.3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (0.3) | (0.3) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swap adjustments, net of tax | — | — | — | — | — | — | (2.8) | (2.8) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($0.30 per common share) | — | — | — | — | — | (16.0) | — | (16.0) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 5.0 | — | — | — | — | 5.0 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of share-based awards, net of other activity | — | — | (30.1) | 1.7 | 33.3 | — | — | 3.2 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Awards redeemed to pay employees’ tax obligations | — | — | — | (0.5) | (6.6) | — | — | (6.6) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2019 | 54.3 | $ | 1.4 | $ | 836.2 | (1.5) | $ | (29.9) | $ | (249.9) | $ | (155.3) | $ | 402.5 | $ | 17.4 | ||||||||||||||||||||||||||||||||||||||||||||||
Net earnings (loss) | — | — | — | — | — | (14.8) | — | (14.8) | 0.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | 2.1 | 2.1 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swap adjustments, net of tax | — | — | — | — | — | — | (5.1) | (5.1) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($0.30 per common share) | — | — | — | — | — | (16.0) | — | (16.0) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 3.3 | — | — | — | — | 3.3 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of share-based awards, net of other activity | — | — | 0.1 | — | (0.1) | — | — | 0 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | 54.3 | $ | 1.4 | $ | 839.6 | (1.5) | $ | (30.0) | $ | (280.7) | $ | (158.3) | $ | 372.0 | $ | 17.5 | ||||||||||||||||||||||||||||||||||||||||||||||
Net earnings (loss) | — | — | — | — | — | (126.5) | — | (126.5) | 0.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (8.2) | (8.2) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swap adjustments, net of tax | — | — | — | — | — | — | (1.5) | (1.5) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($0.30 per common share) | — | — | — | — | — | (15.9) | — | (15.9) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 3.5 | — | — | — | — | 3.5 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of share-based awards, net of other activity | — | — | 0.4 | — | (0.4) | — | — | 0 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | 54.3 | $ | 1.4 | $ | 843.5 | (1.5) | $ | (30.4) | $ | (423.1) | $ | (168.0) | $ | 223.4 | $ | 17.6 |
Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Loss | Shareholders’ Equity | Noncontrolling Interests | ||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||
Balance at January 1, 2018 | 54.3 | $ | 1.4 | $ | 861.1 | (2.3 | ) | $ | (52.8 | ) | $ | (156.8 | ) | $ | (127.3 | ) | $ | 525.6 | $ | — | ||||||||||||||
Net loss | — | — | — | — | — | (3.5 | ) | — | (3.5 | ) | — | |||||||||||||||||||||||
Consolidation of Rise | — | — | — | — | — | — | — | — | 30.0 | |||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | 5.6 | 5.6 | — | |||||||||||||||||||||||||
Interest rate swap adjustments, net of tax | — | — | — | — | — | — | 2.9 | 2.9 | — | |||||||||||||||||||||||||
Cash dividends declared ($0.30 per common share) | — | — | — | — | — | (16.1 | ) | — | (16.1 | ) | — | |||||||||||||||||||||||
Stock-based compensation | — | — | 5.4 | — | — | — | — | 5.4 | — | |||||||||||||||||||||||||
Employee stock ownership plan contribution | — | — | — | 1.0 | 22.3 | — | — | 22.3 | — | |||||||||||||||||||||||||
Stock options exercised | — | — | (3.3 | ) | 0.3 | 7.3 | — | — | 4.0 | — | ||||||||||||||||||||||||
Issuance of share-based awards, net of other activity | — | — | (12.8 | ) | 0.6 | 12.8 | — | — | — | — | ||||||||||||||||||||||||
Awards redeemed to pay employees’ tax obligations | — | — | — | (0.3 | ) | (7.5 | ) | — | — | (7.5 | ) | — | ||||||||||||||||||||||
Balance at March 31, 2018 | 54.3 | $ | 1.4 | $ | 850.4 | (0.7 | ) | $ | (17.9 | ) | $ | (176.4 | ) | $ | (118.8 | ) | $ | 538.7 | $ | 30.0 | ||||||||||||||
Net earnings | — | — | — | — | — | 9.4 | — | 9.4 | 0.1 | |||||||||||||||||||||||||
Consolidation of Rise | — | — | — | — | — | — | — | — | (11.6 | ) | ||||||||||||||||||||||||
Translation adjustments | — | — | — | — | — | — | (15.6 | ) | (15.6 | ) | — | |||||||||||||||||||||||
Interest rate swap adjustments, net of tax | — | — | — | — | — | — | 1.0 | 1.0 | — | |||||||||||||||||||||||||
Cash dividends declared ($0.30 per common share) | — | — | — | — | — | (15.7 | ) | — | (15.7 | ) | — | |||||||||||||||||||||||
Stock-based compensation | — | — | 3.7 | — | — | — | — | 3.7 | — | |||||||||||||||||||||||||
Purchases of treasury stock | — | — | — | (1.9 | ) | (36.7 | ) | — | — | (36.7 | ) | — | ||||||||||||||||||||||
Issuance of share-based awards, net of other activity | — | — | 0.4 | — | (0.4 | ) | — | — | — | — | ||||||||||||||||||||||||
Balance at June 30, 2018 | 54.3 | $ | 1.4 | $ | 854.5 | (2.6 | ) | $ | (55.0 | ) | $ | (182.7 | ) | $ | (133.4 | ) | $ | 484.8 | $ | 18.5 | ||||||||||||||
Net earnings (loss) | — | — | — | — | — | 23.4 | — | 23.4 | (0.9 | ) | ||||||||||||||||||||||||
Translation adjustments | — | — | — | — | — | — | 0.7 | 0.7 | — | |||||||||||||||||||||||||
Interest rate swap adjustments, net of tax | — | — | — | — | — | — | 0.7 | 0.7 | — | |||||||||||||||||||||||||
Cash dividends declared ($0.30 per common share) | — | — | — | — | — | (15.7 | ) | — | (15.7 | ) | — | |||||||||||||||||||||||
Stock-based compensation | — | — | 3.2 | — | — | — | — | 3.2 | — | |||||||||||||||||||||||||
Stock options exercised | — | — | — | — | 0.1 | — | — | 0.1 | — | |||||||||||||||||||||||||
Issuance of share-based awards, net of other activity | — | — | 0.2 | — | (0.2 | ) | — | — | — | — | ||||||||||||||||||||||||
Awards redeemed to pay employees’ tax obligations | — | — | — | (0.1 | ) | (1.5 | ) | — | — | (1.5 | ) | — | ||||||||||||||||||||||
Balance at September 30, 2018 | 54.3 | $ | 1.4 | $ | 857.9 | (2.7 | ) | $ | (56.6 | ) | $ | (175.0 | ) | $ | (132.0 | ) | $ | 495.7 | $ | 17.6 |
United States Print and Related Services | International | Total | |||||||||||||||
Three months ended September 30, 2020 | |||||||||||||||||
Catalog, publications, retail inserts, and directories | $ | 289.8 | $ | 54.9 | $ | 344.7 | |||||||||||
Direct mail and other printed products | 134.5 | 12.6 | 147.1 | ||||||||||||||
Other | 1.3 | 0.4 | 1.7 | ||||||||||||||
Total products | 425.6 | 67.9 | 493.5 | ||||||||||||||
Logistics services | 97.9 | 4.2 | 102.1 | ||||||||||||||
Imaging, marketing services and other services | 83.7 | 0 | 83.7 | ||||||||||||||
Total services | 181.6 | 4.2 | 185.8 | ||||||||||||||
Total net sales | $ | 607.2 | $ | 72.1 | $ | 679.3 | |||||||||||
Three months ended September 30, 2019 | |||||||||||||||||
Catalog, publications, retail inserts, and directories | $ | 468.1 | $ | 73.4 | $ | 541.5 | |||||||||||
Direct mail and other printed products | 178.8 | 19.3 | 198.1 | ||||||||||||||
Other | 2.9 | 0 | 2.9 | ||||||||||||||
Total products | 649.8 | 92.7 | 742.5 | ||||||||||||||
Logistics services | 105.7 | 3.7 | 109.4 | ||||||||||||||
Imaging, marketing services and other services | 91.5 | 0.2 | 91.7 | ||||||||||||||
Total services | 197.2 | 3.9 | 201.1 | ||||||||||||||
Total net sales | $ | 847.0 | $ | 96.6 | $ | 943.6 |
United States Print and Related Services | International | Total | |||||||||
Three months ended September 30, 2019 | |||||||||||
Catalog, publications, retail inserts, and directories | $ | 468.1 | $ | 73.4 | $ | 541.5 | |||||
Direct mail and other printed products | 178.8 | 19.3 | 198.1 | ||||||||
Other | 2.9 | — | 2.9 | ||||||||
Total products | 649.8 | 92.7 | 742.5 | ||||||||
Logistics services | 105.7 | 3.7 | 109.4 | ||||||||
Imaging, marketing services and other services | 91.5 | 0.2 | 91.7 | ||||||||
Total services | 197.2 | 3.9 | 201.1 | ||||||||
Total net sales | $ | 847.0 | $ | 96.6 | $ | 943.6 | |||||
Three months ended September 30, 2018 | |||||||||||
Catalog, publications, retail inserts, and directories | $ | 514.0 | $ | 68.3 | $ | 582.3 | |||||
Direct mail and other printed products | 166.7 | 16.0 | 182.7 | ||||||||
Other | 6.0 | 0.1 | 6.1 | ||||||||
Total products | 686.7 | 84.4 | 771.1 | ||||||||
Logistics services | 106.8 | 4.4 | 111.2 | ||||||||
Imaging, marketing services and other services | 91.2 | — | 91.2 | ||||||||
Total services | 198.0 | 4.4 | 202.4 | ||||||||
Total net sales | $ | 884.7 | $ | 88.8 | $ | 973.5 |
United States Print and Related Services | International | Total | |||||||||||||||
Nine months ended September 30, 2020 | |||||||||||||||||
Catalog, publications, retail inserts, and directories | $ | 987.7 | $ | 163.8 | $ | 1,151.5 | |||||||||||
Direct mail and other printed products | 391.4 | 39.3 | 430.7 | ||||||||||||||
Other | 3.1 | 0.9 | 4.0 | ||||||||||||||
Total products | 1,382.2 | 204.0 | 1,586.2 | ||||||||||||||
Logistics services | 249.6 | 11.9 | 261.5 | ||||||||||||||
Imaging, marketing services and other services | 238.5 | 0.1 | 238.6 | ||||||||||||||
Total services | 488.1 | 12.0 | 500.1 | ||||||||||||||
Total net sales | $ | 1,870.3 | $ | 216.0 | $ | 2,086.3 | |||||||||||
Nine months ended September 30, 2019 | |||||||||||||||||
Catalog, publications, retail inserts, and directories | $ | 1,429.1 | $ | 219.1 | $ | 1,648.2 | |||||||||||
Direct mail and other printed products | 518.0 | 65.7 | 583.7 | ||||||||||||||
Other | 15.3 | 0.2 | 15.5 | ||||||||||||||
Total products | 1,962.4 | 285.0 | 2,247.4 | ||||||||||||||
Logistics services | 309.4 | 12.2 | 321.6 | ||||||||||||||
Imaging, marketing services and other services | 284.2 | 0.3 | 284.5 | ||||||||||||||
Total services | 593.6 | 12.5 | 606.1 | ||||||||||||||
Total net sales | $ | 2,556.0 | $ | 297.5 | $ | 2,853.5 |
United States Print and Related Services | International | Total | |||||||||
Nine months ended September 30, 2019 | |||||||||||
Catalog, publications, retail inserts, and directories | $ | 1,429.1 | $ | 219.1 | $ | 1,648.2 | |||||
Direct mail and other printed products | 518.0 | 65.7 | 583.7 | ||||||||
Other | 15.3 | 0.2 | 15.5 | ||||||||
Total products | 1,962.4 | 285.0 | 2,247.4 | ||||||||
Logistics services | 309.4 | 12.2 | 321.6 | ||||||||
Imaging, marketing services and other services | 284.2 | 0.3 | 284.5 | ||||||||
Total services | 593.6 | 12.5 | 606.1 | ||||||||
Total net sales | $ | 2,556.0 | $ | 297.5 | $ | 2,853.5 | |||||
Nine months ended September 30, 2018 | |||||||||||
Catalog, publications, retail inserts, and directories | $ | 1,523.2 | $ | 221.9 | $ | 1,745.1 | |||||
Direct mail and other printed products | 466.6 | 48.2 | 514.8 | ||||||||
Other | 19.7 | 0.4 | 20.1 | ||||||||
Total products | 2,009.5 | 270.5 | 2,280.0 | ||||||||
Logistics services | 308.2 | 14.0 | 322.2 | ||||||||
Imaging, marketing services and other services | 258.7 | — | 258.7 | ||||||||
Total services | 566.9 | 14.0 | 580.9 | ||||||||
Total net sales | $ | 2,576.4 | $ | 284.5 | $ | 2,860.9 |
Costs to Obtain Contracts | |||||
Balance at December 31, 2019 | $ | 12.7 | |||
Costs to obtain contracts | 0.6 | ||||
Amortization of costs to obtain contracts | (3.7) | ||||
Balance at September 30, 2020 | $ | 9.6 |
Costs to Obtain Contracts | |||
Balance at January 1, 2019 | $ | 14.6 | |
Costs to obtain contracts | 3.6 | ||
Amortization of costs to obtain contracts | (5.3 | ) | |
Balance at September 30, 2019 | $ | 12.9 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Total net sales | $ | 13.0 | $ | 57.0 | $ | 74.6 | $ | 155.5 | |||||||||||||||
Total cost of sales, excluding depreciation and amortization | 12.5 | 60.4 | 75.6 | 166.5 | |||||||||||||||||||
Selling, general and administrative expenses | 0.9 | 3.2 | 3.9 | 9.8 | |||||||||||||||||||
Depreciation and amortization | 0 | 4.3 | 0 | 13.6 | |||||||||||||||||||
Restructuring, impairment and transaction-related charges (1) | 0 | 90.6 | 12.5 | 90.6 | |||||||||||||||||||
Goodwill impairment (2) | 0 | 10.1 | 0 | 10.1 | |||||||||||||||||||
Other expenses, net | 0.1 | 0 | 0.2 | 0.1 | |||||||||||||||||||
Loss from discontinued operations before income taxes | (0.5) | (111.6) | (17.6) | (135.2) | |||||||||||||||||||
Income tax expense (benefit) | 0.6 | (32.2) | (4.0) | (34.1) | |||||||||||||||||||
Loss from discontinued operations, net of tax | $ | (1.1) | $ | (79.4) | $ | (13.6) | $ | (101.1) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Total net sales | $ | 57.0 | $ | 55.6 | $ | 155.5 | $ | 151.2 | |||||||
Total cost of sales, excluding depreciation and amortization | 60.4 | 54.7 | 166.5 | 146.5 | |||||||||||
Selling, general and administrative expenses | 3.2 | 3.2 | 9.8 | 9.7 | |||||||||||
Depreciation and amortization | 4.3 | 4.1 | 13.6 | 11.6 | |||||||||||
Restructuring, impairment and transaction-related charges (1) | 90.6 | — | 90.6 | — | |||||||||||
Goodwill impairment (2) | 10.1 | — | 10.1 | — | |||||||||||
Other expenses, net | — | — | 0.1 | 0.1 | |||||||||||
Loss from discontinued operations before income taxes | (111.6 | ) | (6.4 | ) | (135.2 | ) | (16.7 | ) | |||||||
Income tax benefit | (32.2 | ) | (1.4 | ) | (34.1 | ) | (4.1 | ) | |||||||
Loss from discontinued operations, net of tax | $ | (79.4 | ) | $ | (5.0 | ) | $ | (101.1 | ) | $ | (12.6 | ) |
QUAD/GRAPHICS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 (In millions, except share and per share data and unless otherwise indicated) |
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows used in operating activities | $ | 0 | $ | (8.7) | |||||||
Cash flows provided by (used in) investing activities | 5.4 | (15.7) |
September 30, 2020 | December 31, 2019 | ||||||||||
Receivables—net | $ | 5.2 | $ | 19.6 | |||||||
Inventories | 2.5 | 14.0 | |||||||||
Prepaid expenses and other current assets | 13.1 | 23.0 | |||||||||
Current assets of discontinued operations | 20.8 | 56.6 | |||||||||
Property, plant and equipment—net | 0 | 0 | |||||||||
Operating lease right-of-use assets—net | 0 | 0.2 | |||||||||
Other long-term assets | 0 | 0.3 | |||||||||
Long-term assets of discontinued operations | 0 | 0.5 | |||||||||
Accounts payable | 2.1 | 7.0 | |||||||||
Other current liabilities | 3.3 | 8.5 | |||||||||
Current portion of finance lease obligations | 0 | 0.1 | |||||||||
Current portion of operating lease obligations | 0 | 0.2 | |||||||||
Current liabilities of discontinued operations | 5.4 | 15.8 | |||||||||
Finance lease obligations | 0 | 0 | |||||||||
Other long-term liabilities | 0.6 | 0.6 | |||||||||
Long-term liabilities of discontinued operations | 0.6 | 0.6 |
September 30, 2019 | December 31, 2018 | ||||||
Receivables—net | $ | 23.0 | $ | 31.1 | |||
Inventories | 16.7 | 21.6 | |||||
Prepaid expenses and other current assets | 0.1 | 2.6 | |||||
Current assets of discontinued operations | 39.8 | 55.3 | |||||
Property, plant and equipment—net | 23.0 | 108.3 | |||||
Operating lease right-of-use assets—net | 0.2 | — | |||||
Goodwill | — | 10.1 | |||||
Other long-term assets | 0.3 | 4.7 | |||||
Long-term assets of discontinued operations | 23.5 | 123.1 | |||||
Accounts payable | 9.0 | 14.7 | |||||
Accrued liabilities | 7.7 | 7.2 | |||||
Current portion of finance lease obligations | 1.5 | 1.5 | |||||
Current portion of operating lease obligations | 0.3 | — | |||||
Current liabilities of discontinued operations | 18.5 | 23.4 | |||||
Finance lease obligations | 2.5 | 3.6 | |||||
Other long-term liabilities | 0.6 | 0.8 | |||||
Long-term liabilities of discontinued operations | 3.1 | 4.4 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Employee termination charges | $ | 3.3 | $ | 12.3 | $ | 25.4 | $ | 19.9 | |||||||||||||||
Impairment charges | 0 | 1.5 | 4.2 | 3.6 | |||||||||||||||||||
Transaction-related charges | 0.9 | 46.9 | 1.7 | 51.1 | |||||||||||||||||||
Integration costs | 0.2 | 0.5 | 1.3 | 2.1 | |||||||||||||||||||
Other restructuring charges (income) | 5.4 | (4.5) | 16.4 | (3.0) | |||||||||||||||||||
Total | $ | 9.8 | $ | 56.7 | $ | 49.0 | $ | 73.7 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Employee termination charges | $ | 12.3 | $ | 4.1 | $ | 19.9 | $ | 17.2 | |||||||
Impairment charges | 1.5 | 4.5 | 3.6 | 16.0 | |||||||||||
Transaction-related charges | 46.9 | 0.3 | 51.1 | 1.1 | |||||||||||
Integration costs | 0.5 | 0.5 | 2.1 | 0.7 | |||||||||||
Other restructuring charges (income) | (4.5 | ) | (4.1 | ) | (3.0 | ) | 5.6 | ||||||||
Total | $ | 56.7 | $ | 5.3 | $ | 73.7 | $ | 40.6 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Vacant facility carrying costs and lease exit charges | $ | 2.1 | $ | 2.5 | $ | 5.3 | $ | 12.9 | |||||||
Equipment and infrastructure removal costs | 0.1 | 0.3 | 0.2 | 1.3 | |||||||||||
Gains on the sale of facilities | (0.1 | ) | (7.5 | ) | (6.1 | ) | (9.7 | ) | |||||||
Other restructuring activities | (6.6 | ) | 0.6 | (2.4 | ) | 1.1 | |||||||||
Other restructuring charges (income) | $ | (4.5 | ) | $ | (4.1 | ) | $ | (3.0 | ) | $ | 5.6 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Vacant facility carrying costs and lease exit charges | $ | 2.5 | $ | 2.1 | $ | 7.6 | $ | 5.3 | |||||||||||||||
Equipment and infrastructure removal costs | 0.1 | 0.1 | 1.1 | 0.2 | |||||||||||||||||||
Gains on the sale of facilities | (0.8) | (0.1) | (1.6) | (6.1) | |||||||||||||||||||
Other restructuring activities | 3.6 | (6.6) | 9.3 | (2.4) | |||||||||||||||||||
Other restructuring charges (income) | $ | 5.4 | $ | (4.5) | $ | 16.4 | $ | (3.0) |
Employee Termination Charges | Impairment Charges | Transaction-Related Charges | Integration Costs | Other Restructuring Charges | Total | ||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | 9.9 | $ | 0 | $ | 0.8 | $ | 0.2 | $ | 13.6 | $ | 24.5 | |||||||||||||||||||||||
Expense, net | 25.4 | 4.2 | 1.7 | 1.3 | 16.4 | 49.0 | |||||||||||||||||||||||||||||
Cash payments, net | (25.4) | 0 | (1.4) | (1.5) | (9.1) | (37.4) | |||||||||||||||||||||||||||||
Non-cash adjustments/reclassifications and translation | (0.2) | (4.2) | 0 | 0 | (1.6) | (6.0) | |||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | 9.7 | $ | 0 | $ | 1.1 | $ | 0 | $ | 19.3 | $ | 30.1 |
Employee Termination Charges | Impairment Charges | Transaction-Related Charges | Integration Costs | Other Restructuring Charges (Income) | Total | ||||||||||||||||||
Balance at December 31, 2018 | $ | 9.3 | $ | — | $ | 1.2 | $ | 0.2 | $ | 17.1 | $ | 27.8 | |||||||||||
Expense, net | 19.9 | 3.6 | 51.1 | 2.1 | (3.0 | ) | 73.7 | ||||||||||||||||
Cash payments, net | (13.5 | ) | — | (51.2 | ) | (2.3 | ) | 5.6 | (61.4 | ) | |||||||||||||
Non-cash adjustments/reclassifications | (1.5 | ) | (3.6 | ) | 0.6 | — | (6.3 | ) | (10.8 | ) | |||||||||||||
Balance at September 30, 2019 | $ | 14.2 | $ | — | $ | 1.7 | $ | — | $ | 13.4 | $ | 29.3 |
United States Print and Related Services | International | Total | |||||||||||||||||||||||||||||||||
Goodwill | $ | 881.3 | $ | 30.0 | $ | 911.3 | |||||||||||||||||||||||||||||
Accumulated goodwill impairment loss | (778.3) | (30.0) | (808.3) | ||||||||||||||||||||||||||||||||
Goodwill, net of accumulated goodwill impairment loss | $ | 103.0 | $ | 0 | $ | 103.0 |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||
United States Print and Related Services | International | Total | United States Print and Related Services | International | Total | ||||||||||||||||||
Goodwill | $ | 881.3 | $ | 30.0 | $ | 911.3 | $ | 822.8 | $ | 30.0 | $ | 852.8 | |||||||||||
Accumulated goodwill impairment loss | (778.3 | ) | (30.0 | ) | (808.3 | ) | (778.3 | ) | (30.0 | ) | (808.3 | ) | |||||||||||
Goodwill, net of accumulated goodwill impairment loss | $ | 103.0 | $ | — | $ | 103.0 | $ | 44.5 | $ | — | $ | 44.5 |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average Amortization Period (Years) | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted Average Amortization Period (Years) | Gross Carrying Amount | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||||||||||||||||||||
Trademarks, patents, licenses and agreements | 6 | $ | 68.5 | $ | (40.5) | $ | 28.0 | 6 | $ | 68.6 | $ | (33.6) | $ | 35.0 | |||||||||||||||||||||||||||||||||
Capitalized software | 5 | 16.9 | (10.9) | 6.0 | 5 | 16.1 | (8.5) | 7.6 | |||||||||||||||||||||||||||||||||||||||
Acquired Technology | 5 | 2.9 | (0.4) | 2.5 | — | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||
Customer relationships | 6 | 561.5 | (484.7) | 76.8 | 6 | 562.1 | (467.5) | 94.6 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 649.8 | $ | (536.5) | $ | 113.3 | $ | 646.8 | $ | (509.6) | $ | 137.2 |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||||
Weighted Average Amortization Period (Years) | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Weighted Average Amortization Period (Years) | Gross Carrying Amount | Accumulated Amortization | Net Book Value | ||||||||||||||||||||
Trademarks, patents, licenses and agreements | 6 | $ | 68.0 | $ | (30.3 | ) | $ | 37.7 | 7 | $ | 59.8 | $ | (22.4 | ) | $ | 37.4 | |||||||||||
Capitalized software | 5 | 15.8 | (7.6 | ) | 8.2 | 5 | 15.3 | (5.1 | ) | 10.2 | |||||||||||||||||
Customer relationships | 6 | 568.7 | (464.9 | ) | 103.8 | 6 | 514.7 | (449.7 | ) | 65.0 | |||||||||||||||||
Total | $ | 652.5 | $ | (502.8 | ) | $ | 149.7 | $ | 589.8 | $ | (477.2 | ) | $ | 112.6 |
Amortization Expense | |||||
Remainder of 2020 | $ | 10.2 | |||
2021 | 31.2 | ||||
2022 | 29.2 | ||||
2023 | 25.4 | ||||
2024 | 14.7 | ||||
2025 and thereafter | 2.6 | ||||
Total | $ | 113.3 |
Amortization Expense | |||
Remainder of 2019 | $ | 10.9 | |
2020 | 39.2 | ||
2021 | 30.7 | ||
2022 | 28.2 | ||
2023 | 24.6 | ||
2024 and thereafter | 16.1 | ||
Total | $ | 149.7 |
Allowance for Credit Losses | |||||
Balance at December 31, 2019 | $ | 25.0 | |||
Transition adjustment for adoption of ASU 2016-13 | 8.4 | ||||
Balance at January 1, 2020 | 33.4 | ||||
Provisions | 5.1 | ||||
Write-offs | (4.5) | ||||
Translation and other | (0.2) | ||||
Balance at September 30, 2020 | $ | 33.8 |
September 30, 2020 | December 31, 2019 | ||||||||||
Raw materials and manufacturing supplies | $ | 110.3 | $ | 112.2 | |||||||
Work in process | 44.0 | 41.2 | |||||||||
Finished goods | 64.0 | 57.1 | |||||||||
Total | $ | 218.3 | $ | 210.5 |
September 30, 2019 | December 31, 2018 | ||||||
Raw materials and manufacturing supplies | $ | 145.1 | $ | 158.3 | |||
Work in process | 61.0 | 45.0 | |||||
Finished goods | 82.5 | 75.7 | |||||
Total | $ | 288.6 | $ | 279.0 |
September 30, 2019 | December 31, 2018 | September 30, 2020 | December 31, 2019 | |||||||||||||||
Land | $ | 103.8 | $ | 106.9 | Land | $ | 97.0 | $ | 102.5 | |||||||||
Buildings | 848.0 | 874.1 | Buildings | 843.0 | 846.1 | |||||||||||||
Machinery and equipment | 3,409.1 | 3,403.6 | Machinery and equipment | 3,327.5 | 3,337.1 | |||||||||||||
Other(1) | 176.9 | 176.4 | Other(1) | 179.6 | 175.7 | |||||||||||||
Construction in progress | 30.9 | 32.7 | Construction in progress | 30.6 | 35.0 | |||||||||||||
Property, plant and equipment—gross | $ | 4,568.7 | $ | 4,593.7 | Property, plant and equipment—gross | $ | 4,477.7 | $ | 4,496.4 | |||||||||
Less: accumulated depreciation | (3,489.1 | ) | (3,444.6 | ) | Less: accumulated depreciation | (3,524.1) | (3,459.9) | |||||||||||
Property, plant and equipment—net | $ | 1,079.6 | $ | 1,149.1 | Property, plant and equipment—net | $ | 953.6 | $ | 1,036.5 |
(1)Other consists of computer equipment, vehicles, furniture and fixtures, leasehold improvements and communication-related equipment. |
September 30, 2020 | December 31, 2019 | ||||||||||
Master note and security agreement | $ | 18.6 | $ | 70.7 | |||||||
Term Loan A | 761.5 | 768.3 | |||||||||
Revolving credit facility | 0 | 0 | |||||||||
Senior unsecured notes | 238.7 | 243.5 | |||||||||
International term loans | 11.6 | 16.5 | |||||||||
International revolving credit facilities | 0.3 | 5.7 | |||||||||
Other | 2.7 | 3.1 | |||||||||
Debt issuance costs | (7.5) | (9.3) | |||||||||
Total debt | $ | 1,025.9 | $ | 1,098.5 | |||||||
Less: short-term debt and current portion of long-term debt | (56.8) | (40.0) | |||||||||
Long-term debt | $ | 969.1 | $ | 1,058.5 |
September 30, 2019 | December 31, 2018 | ||||||
Master note and security agreement | $ | 74.5 | $ | 96.2 | |||
Term Loan A | 814.7 | 281.3 | |||||
Term Loan B | — | 279.5 | |||||
Revolving credit facility | 19.4 | — | |||||
Senior unsecured notes | 243.5 | 243.5 | |||||
International term loans | 17.3 | 17.8 | |||||
International revolving credit facilities | 3.3 | 11.8 | |||||
Other | 2.1 | 2.6 | |||||
Debt issuance costs | (9.9 | ) | (7.2 | ) | |||
Total debt | $ | 1,164.9 | $ | 925.5 | |||
Less: short-term debt and current portion of long-term debt | (66.0 | ) | (42.9 | ) | |||
Long-term debt | $ | 1,098.9 | $ | 882.6 |
Capitalized Debt Issuance Costs | |||||
Balance at December 31, 2019 | $ | 9.3 | |||
Debt issuance costs from June 29, 2020 debt financing arrangement | 2.6 | ||||
Loss on debt extinguishment from January 31, 2019 debt financing arrangement | (2.3) | ||||
Loss on debt extinguishment from Master Note and Security Tender | (0.2) | ||||
Amortization of debt issuance costs | (1.9) | ||||
Balance at September 30, 2020 | $ | 7.5 |
Capitalized Debt Issuance Costs | |||
Balance at December 31, 2018 | $ | 7.2 | |
Debt issuance costs from January 31, 2019 debt financing arrangement | 6.0 | ||
Loss on debt extinguishment from February 10, 2017 debt financing arrangement | (0.7 | ) | |
Loss on debt extinguishment from July 26, 2019 delayed draw Term Loan A funding and retirement of Term Loan B | (0.5 | ) | |
Amortization of debt issuance costs | (2.1 | ) | |
Balance at September 30, 2019 | $ | 9.9 |
Original Issue Discount | |||
Balance at December 31, 2018 | $ | 1.0 | |
Original issue discount from January 31, 2019 debt financing arrangement | 15.0 | ||
Loss on debt extinguishment from February 10, 2017 debt financing arrangement | (1.0 | ) | |
Loss on debt extinguishment from July 26, 2019 delayed draw Term Loan A funding and retirement of Term Loan B | (14.1 | ) | |
Amortization of original issue discount | (0.9 | ) | |
Balance at September 30, 2019 | $ | — |
2020 Loss on Debt Extinguishment | |||||
Debt issuance costs from January 31, 2019 debt financing arrangement | $ | 2.3 | |||
Debt issuance costs from June 29, 2020 debt financing arrangement | 0.1 | ||||
Loss on debt extinguishment from Master Note and Security Tender | 0.2 | ||||
Gain on debt extinguishment from Senior Unsecured Note Repurchases | (0.8) | ||||
Total | $ | 1.8 |
Loss on Debt Extinguishment | |||
Debt issuance costs: | |||
Debt issuance costs from February 10, 2017 debt financing arrangement | $ | 0.7 | |
Debt issuance costs from January 31, 2019 debt financing arrangement | 14.2 | ||
Debt issuance costs from July 26, 2019 delayed draw Term Loan A funding and retirement of Term Loan B | 0.5 | ||
Original issue discount: | |||
Original issue discount from February 10, 2017 debt financing arrangement | 1.0 | ||
Original issue discount from July 26, 2019 delayed draw Term Loan A funding and retirement of Term Loan B | 14.1 | ||
Total | $ | 30.5 |
2019 Loss on Debt Extinguishment | |||||
Debt issuance costs: | |||||
Debt issuance costs from February 10, 2017 debt financing arrangement | $ | 0.7 | |||
Debt issuance costs from January 31, 2019 debt financing arrangement | 14.2 | ||||
Debt issuance costs from July 26, 2019 delayed draw Term Loan A funding and retirement of Term Loan B | 0.5 | ||||
Original issue discount: | |||||
Original issue discount from February 10, 2017 debt financing arrangement | 1.0 | ||||
Original issue discount from July 26, 2019 delayed draw Term Loan A funding and retirement of Term Loan B | 14.1 | ||||
Total | $ | 30.5 |
•Maximum Total Net Leverage Ratio. On a rolling twelve-month basis, the Maximum Total Net Leverage Ratio, defined as consolidated total indebtedness, net of no more than $75.0 million of unrestricted cash, to consolidated EBITDA, shall not exceed (i) 4.25 to 1.00 for the quarters ending June 30, 2020 and September 30, 2020, (ii) 4.50 to 1.00 for the quarters ending December 31, 2020 and March 31, 2021, (iii) 4.25 to 1.00 for the quarter ending June 30, 2021, and (iv) 4.125 to 1.00 for the quarter ending September 30, 2021 (for the twelve months ended September 30, 2020, the Company’s Maximum Total Net Leverage Ratio was 3.23 to 1.00). After the Covenant Relief Period, the Company will be required to comply with the Total Leverage Ratio covenant, defined as consolidated total indebtedness to consolidated EBITDA which shall not exceed 3.75 to 1.00. • |
◦Senior Secured Leverage Ratio. On a rolling twelve-month basis, the Senior Secured Leverage Ratio, defined as consolidated senior secured net indebtedness to consolidated EBITDA, shall not exceed 3.50 to 1.00 (for the twelve months ended September 30, 2020, the Company’s Senior Secured Leverage Ratio was 2.39 to 1.00). 25 QUAD/GRAPHICS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 (In millions, except share and per share data and unless otherwise indicated) ◦Interest Coverage Ratio. On a rolling twelve-month basis, the Interest Coverage Ratio, defined as consolidated EBITDA to cash consolidated interest expense, shall not be less than 3.00 to 1.00 (for the twelve months ended September 30, 2020, the Company’s Interest Coverage Ratio was 4.88 to 1.00). |
Three Months Ended | Nine Months Ended | ||||||
September 30, 2019 | September 30, 2019 | ||||||
Lease cost | |||||||
Finance lease cost: | |||||||
Amortization of right-of-use assets | $ | 1.4 | $ | 3.4 | |||
Interest on lease liabilities | 0.2 | 0.6 | |||||
Operating lease cost | 11.9 | 33.3 | |||||
Short-term lease cost | — | 0.3 | |||||
Sublease income | (0.7 | ) | (2.0 | ) | |||
Total lease cost | $ | 12.8 | $ | 35.6 | |||
Nine Months Ended | |||||||
September 30, 2019 | |||||||
Other information | |||||||
Cash paid for amounts included in the measurement of lease liabilities | |||||||
Operating cash flows from finance leases | $ | — | |||||
Operating cash flows from operating leases | 33.6 | ||||||
Financing cash flows from finance leases | 4.5 | ||||||
Right-of-use assets obtained in exchange for new finance lease liabilities | 7.8 | ||||||
Right-of-use assets obtained in exchange for new operating lease liabilities | 17.9 | ||||||
Weighted-average remaining lease term — finance leases | 2.1 years | ||||||
Weighted-average remaining lease term — operating leases | 5.1 years | ||||||
Weighted-average discount rate — finance leases | 6.4 | % | |||||
Weighted-average discount rate — operating leases | 6.7 | % |
Future Maturities of Operating Leases | Future Maturities of Finance Leases | ||||||
Remainder of 2019 | $ | 10.9 | $ | 2.8 | |||
2020 | 38.0 | 6.9 | |||||
2021 | 26.4 | 2.8 | |||||
2022 | 19.7 | 1.5 | |||||
2023 | 15.4 | 0.2 | |||||
2024 and thereafter | 33.6 | — | |||||
Total minimum payments | 144.0 | 14.2 | |||||
Less: present value discount | (22.9 | ) | (0.9 | ) | |||
Lease liability | $ | 121.1 | $ | 13.3 |
2018 | |||
Leased equipment—gross | $ | 21.7 | |
Less: accumulated depreciation | (12.0 | ) | |
Leased equipment—net | $ | 9.7 |
Future Maturities of Finance Leases | |||
2019 | $ | 4.3 | |
2020 | 3.3 | ||
2021 | 2.5 | ||
2022 | 1.3 | ||
2023 | 0.2 | ||
2024 and thereafter | — | ||
Total minimum payments | 11.6 | ||
Less: amounts representing interest | (1.3 | ) | |
Present value of minimum payments | 10.3 | ||
Less: current portion | (3.6 | ) | |
Long-term finance lease obligations | $ | 6.7 |
Future Minimum Rental Commitments | |||
2019 | $ | 37.9 | |
2020 | 33.3 | ||
2021 | 23.9 | ||
2022 | 17.8 | ||
2023 | 13.7 | ||
2024 and thereafter | 31.1 | ||
Total | $ | 157.7 |
March 19, 2019 Interest Rate Swap | February 7, 2017 Interest Rate Swap | ||||||||||
Effective date | March 29, 2019 | February 28, 2017 | |||||||||
Termination date | March 28, 2024 | February 28, 2022 | |||||||||
Term | 5 years | 5 years | |||||||||
Notional amount | $130.0 | $250.0 | |||||||||
Fixed swap rate | 2.43% | 1.89% | |||||||||
March 19, 2019 Interest Rate Swap | February 7, 2017 Interest Rate Swap | ||
Effective date | March 29, 2019 | February 28, 2017 | |
Termination date | March 28, 2024 | February 28, 2022 | |
Term | 5 years | 5 years | |
Notional amount | $130.0 | $250.0 | |
Fixed swap rate | 2.43% | 1.89% |
Balance Sheet Location | September 30, 2020 | December 31, 2019 | |||||||||||||||
Interest rate swap assets | Prepaid expenses and other current assets | $ | 0 | $ | 0 | ||||||||||||
Interest rate swap liabilities | Other long-term liabilities | $ | (16.2) | $ | (6.4) |
Balance Sheet Location | September 30, 2019 | December 31, 2018 | |||||||
Interest rate swap assets | Prepaid expenses and other current assets | $ | — | $ | 4.3 | ||||
Interest rate swap liabilities | Other long-term liabilities | $ | (8.3 | ) | $ | — |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Cash Flow Impacts | |||||||||||||||||||||||
Net interest paid (received) | $ | 1.8 | $ | (0.2) | $ | 3.7 | $ | (1.0) | |||||||||||||||
Impacts with Swaps as Hedging Instruments | |||||||||||||||||||||||
Loss recognized in other comprehensive loss | 0 | 2.0 | 11.1 | 12.6 | |||||||||||||||||||
Impacts with Swaps as Nonhedging Instruments | |||||||||||||||||||||||
Income recognized in interest expense excluded from hedge effectiveness assessments | $ | (1.4) | $ | 0 | $ | (1.3) | $ | 0 | |||||||||||||||
Amounts reclassified out of accumulated other comprehensive loss to interest expense | 1.8 | 0 | 1.8 | 0 | |||||||||||||||||||
Net interest expense (income) | 1.8 | (0.2) | 3.7 | (1.0) | |||||||||||||||||||
Total impact of swaps to interest expense (income) | $ | 2.2 | $ | (0.2) | $ | 4.2 | $ | (1.0) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net interest paid (received) | $ | (0.2 | ) | $ | (0.1 | ) | $ | (1.0 | ) | $ | — | ||||
Gain (loss) recognized in other comprehensive income (loss) | (2.0 | ) | 1.0 | $ | (12.6 | ) | $ | 6.1 |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Other Current Liabilities | Other Long-Term Liabilities | Total | Other Current Liabilities | Other Long-Term Liabilities | Total | ||||||||||||||||||||||||||||||
Employee-related liabilities (1) | $ | 130.5 | $ | 63.5 | $ | 194.0 | $ | 129.4 | $ | 61.9 | $ | 191.3 | |||||||||||||||||||||||
Single employer pension plan obligations | 1.8 | 66.6 | 68.4 | 1.8 | 77.1 | 78.9 | |||||||||||||||||||||||||||||
Multiemployer pension plans – withdrawal liability | 3.9 | 33.1 | 37.0 | 8.4 | 35.7 | 44.1 | |||||||||||||||||||||||||||||
Tax-related liabilities | 25.7 | 4.4 | 30.1 | 24.6 | 10.7 | 35.3 | |||||||||||||||||||||||||||||
Restructuring liabilities | 22.1 | 6.7 | 28.8 | 15.8 | 7.4 | 23.2 | |||||||||||||||||||||||||||||
Interest and rent liabilities | 8.2 | 0.2 | 8.4 | 4.9 | 0.2 | 5.1 | |||||||||||||||||||||||||||||
Interest rate swap liabilities | 0 | 16.2 | 16.2 | 0 | 6.4 | 6.4 | |||||||||||||||||||||||||||||
Liabilities held for sale from continuing operations (2) | 0 | 0 | 0 | 17.9 | 0 | 17.9 | |||||||||||||||||||||||||||||
Other | 90.5 | 16.5 | 107.0 | 100.2 | 21.7 | 121.9 | |||||||||||||||||||||||||||||
Total | $ | 282.7 | $ | 207.2 | $ | 489.9 | $ | 303.0 | $ | 221.1 | $ | 524.1 |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||
Accrued Liabilities | Other Long-Term Liabilities | Total | Accrued Liabilities | Other Long-Term Liabilities | Total | ||||||||||||||||||
Employee-related liabilities (1) | $ | 116.7 | $ | 57.7 | $ | 174.4 | $ | 122.4 | $ | 62.8 | $ | 185.2 | |||||||||||
Single employer pension plan obligations | 1.7 | 72.1 | 73.8 | 1.7 | 80.9 | 82.6 | |||||||||||||||||
Multiemployer pension plans – withdrawal liability | 8.8 | 37.0 | 45.8 | 8.4 | 42.5 | 50.9 | |||||||||||||||||
Tax-related liabilities | 29.2 | 4.1 | 33.3 | 29.5 | 8.1 | 37.6 | |||||||||||||||||
Restructuring liabilities | 22.5 | 4.8 | 27.3 | 23.1 | 2.9 | 26.0 | |||||||||||||||||
Interest and rent liabilities | 9.8 | 0.3 | 10.1 | 6.0 | 1.4 | 7.4 | |||||||||||||||||
Other | 88.6 | 31.2 | 119.8 | 94.0 | 33.2 | 127.2 | |||||||||||||||||
Total | $ | 277.3 | $ | 207.2 | $ | 484.5 | $ | 285.1 | $ | 231.8 | $ | 516.9 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Interest cost | $ | (3.4) | $ | (4.4) | $ | (10.2) | $ | (13.2) | |||||||||||||||
Expected return on plan assets | 6.1 | 5.9 | 18.2 | 17.7 | |||||||||||||||||||
Net pension income | $ | 2.7 | $ | 1.5 | $ | 8.0 | $ | 4.5 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Interest cost | $ | (4.4 | ) | $ | (4.0 | ) | $ | (13.2 | ) | $ | (12.0 | ) | |||
Expected return on plan assets | 5.9 | 7.1 | 17.7 | 21.3 | |||||||||||
Net pension income | $ | 1.5 | $ | 3.1 | $ | 4.5 | $ | 9.3 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Net earnings (loss) from continuing operations | $ | 2.7 | $ | (47.0) | $ | (20.9) | $ | (62.8) | |||||||||||||||
Less: net earnings (loss) attributable to noncontrolling interests | 0 | 0.1 | (0.2) | (0.1) | |||||||||||||||||||
Net earnings (loss) from continuing operations attributable to Quad common shareholders | 2.7 | (47.1) | (20.7) | (62.7) | |||||||||||||||||||
Loss from discontinued operations, net of tax | (1.1) | (79.4) | (13.6) | (101.1) | |||||||||||||||||||
Net earnings (loss) attributable to Quad common shareholders | $ | 1.6 | $ | (126.5) | $ | (34.3) | $ | (163.8) | |||||||||||||||
Denominator | |||||||||||||||||||||||
Basic weighted average number of common shares outstanding for all classes of common shares | 50.7 | 50.1 | 50.6 | 50.0 | |||||||||||||||||||
Plus: effect of dilutive equity incentive instruments | 0.4 | 0 | 0 | 0 | |||||||||||||||||||
Diluted weighted average number of common shares outstanding for all classes of common shares | 51.1 | 50.1 | 50.6 | 50.0 | |||||||||||||||||||
Loss per share attributable to Quad common shareholders | |||||||||||||||||||||||
Basic: | |||||||||||||||||||||||
Continuing operations | $ | 0.05 | $ | (0.94) | $ | (0.41) | $ | (1.26) | |||||||||||||||
Discontinued operations | (0.02) | (1.58) | (0.27) | (2.02) | |||||||||||||||||||
Basic earnings (loss) per share attributable to Quad common shareholders | $ | 0.03 | $ | (2.52) | $ | (0.68) | $ | (3.28) | |||||||||||||||
Diluted: | |||||||||||||||||||||||
Continuing operations | $ | 0.05 | $ | (0.94) | $ | (0.41) | $ | (1.26) | |||||||||||||||
Discontinued operations | (0.02) | (1.58) | (0.27) | (2.02) | |||||||||||||||||||
Diluted earnings (loss) per share attributable to Quad common shareholders | $ | 0.03 | $ | (2.52) | $ | (0.68) | $ | (3.28) | |||||||||||||||
Cash dividends paid per common share for all classes of common shares | $ | 0 | $ | 0.30 | $ | 0.15 | $ | 0.90 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Numerator | |||||||||||||||
Net earnings (loss) from continuing operations | $ | (47.0 | ) | $ | 27.5 | $ | (62.8 | ) | $ | 41.1 | |||||
Less: net earnings (loss) attributable to noncontrolling interests | 0.1 | (0.9 | ) | (0.1 | ) | (0.8 | ) | ||||||||
Net earnings (loss) from continuing operations attributable to Quad common shareholders | (47.1 | ) | 28.4 | (62.7 | ) | 41.9 | |||||||||
Loss from discontinued operations, net of tax | (79.4 | ) | (5.0 | ) | (101.1 | ) | (12.6 | ) | |||||||
Net earnings (loss) attributable to Quad common shareholders | $ | (126.5 | ) | $ | 23.4 | $ | (163.8 | ) | $ | 29.3 | |||||
Denominator | |||||||||||||||
Basic weighted average number of common shares outstanding for all classes of common shares | 50.1 | 49.3 | 50.0 | 50.0 | |||||||||||
Plus: effect of dilutive equity incentive instruments | — | 1.8 | — | 1.8 | |||||||||||
Diluted weighted average number of common shares outstanding for all classes of common shares | 50.1 | 51.1 | 50.0 | 51.8 | |||||||||||
Earnings (loss) per share attributable to Quad common shareholders | |||||||||||||||
Basic: | |||||||||||||||
Continuing operations | $ | (0.94 | ) | $ | 0.57 | $ | (1.26 | ) | $ | 0.84 | |||||
Discontinued operations | (1.58 | ) | (0.10 | ) | (2.02 | ) | (0.25 | ) | |||||||
Basic earnings (loss) per share attributable to Quad common shareholders | $ | (2.52 | ) | $ | 0.47 | $ | (3.28 | ) | $ | 0.59 | |||||
Diluted: | |||||||||||||||
Continuing operations | $ | (0.94 | ) | $ | 0.56 | $ | (1.26 | ) | $ | 0.81 | |||||
Discontinued operations | (1.58 | ) | (0.10 | ) | (2.02 | ) | (0.24 | ) | |||||||
Diluted earnings (loss) per share attributable to Quad common shareholders | $ | (2.52 | ) | $ | 0.46 | $ | (3.28 | ) | $ | 0.57 | |||||
Cash dividends paid per common share for all classes of common shares | $ | 0.30 | $ | 0.30 | $ | 0.90 | $ | 0.90 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
RS and RSU equity awards expense | $ | 2.6 | $ | 3.5 | $ | 7.4 | $ | 10.9 | |||||||||||||||
RSU liability awards expense (income) | 0 | 0.4 | (0.2) | (0.2) | |||||||||||||||||||
DSU awards expense | 0 | — | 1.0 | 0.9 | |||||||||||||||||||
Total equity incentive compensation expense | $ | 2.6 | $ | 3.9 | $ | 8.2 | $ | 11.6 |
Shares Under Option | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (millions) | ||||||||||||||||||||
Outstanding at December 31, 2019 | 790,237 | $ | 25.27 | 1.1 | $ | 0 | |||||||||||||||||
Granted | 0 | 0 | |||||||||||||||||||||
Exercised | 0 | 0 | |||||||||||||||||||||
Canceled/forfeited/expired | (236,357) | 17.78 | |||||||||||||||||||||
Outstanding and exercisable at September 30, 2020 | 553,880 | $ | 28.46 | 0.7 | $ | 0 | |||||||||||||||||
Shares Under Option | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (millions) | |||||||||
Outstanding at December 31, 2018 | 942,315 | $ | 24.31 | 1.8 | $ | — | ||||||
Granted | — | — | ||||||||||
Exercised | — | — | ||||||||||
Canceled/forfeited/expired | (147,292 | ) | 18.64 | |||||||||
Outstanding and exercisable at September 30, 2019 | 795,023 | $ | 25.36 | 1.3 | $ | — |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2018 | 2018 | ||||||
Total intrinsic value of stock options exercised | $ | 0.1 | $ | 3.7 | |||
Proceeds from stock options exercised | 0.1 | 4.1 |
Restricted Stock | Restricted Stock Units | ||||||||||||||||||||||||||||||||||
Shares | Weighted- Average Grant Date Fair Value Per Share | Weighted- Average Remaining Contractual Term (years) | Units | Weighted- Average Grant Date Fair Value Per Share | Weighted- Average Remaining Contractual Term (years) | ||||||||||||||||||||||||||||||
Nonvested at December 31, 2019 | 2,623,971 | $ | 17.82 | 1.5 | 230,621 | $ | 14.75 | 1.9 | |||||||||||||||||||||||||||
Granted | 1,091,299 | 4.67 | 45,353 | 4.67 | |||||||||||||||||||||||||||||||
Vested | (550,516) | 26.84 | (25,228) | 26.88 | |||||||||||||||||||||||||||||||
Forfeited | (169,310) | 13.68 | (1,208) | 12.32 | |||||||||||||||||||||||||||||||
Nonvested at September 30, 2020 | 2,995,444 | $ | 11.61 | 1.6 | 249,538 | $ | 11.70 | 1.5 |
Restricted Stock | Restricted Stock Units | ||||||||||||||||
Shares | Weighted- Average Grant Date Fair Value Per Share | Weighted- Average Remaining Contractual Term (years) | Units | Weighted- Average Grant Date Fair Value Per Share | Weighted- Average Remaining Contractual Term (years) | ||||||||||||
Nonvested at December 31, 2018 | 2,335,916 | $ | 17.36 | 1.0 | 107,092 | $ | 16.70 | 0.8 | |||||||||
Granted | 1,503,344 | 12.31 | 186,807 | 12.33 | |||||||||||||
Vested | (1,118,071 | ) | 9.46 | (58,187 | ) | 9.51 | |||||||||||
Forfeited | (38,758 | ) | 22.53 | (5,091 | ) | 26.88 | |||||||||||
Nonvested at September 30, 2019 | 2,682,431 | $ | 17.75 | 1.8 | 230,621 | $ | 14.75 | 2.1 |
Deferred Stock Units | |||||||||||
Units | Weighted-Average Grant Date Fair Value Per Share | ||||||||||
Outstanding at December 31, 2019 | 314,658 | $ | 16.22 | ||||||||
Granted | 204,088 | 4.67 | |||||||||
Dividend equivalents granted | 21,145 | 3.40 | |||||||||
Settled | (38,930) | 19.81 | |||||||||
Outstanding at September 30, 2020 | 500,961 | $ | 10.69 |
Deferred Stock Units | ||||||
Units | Weighted-Average Grant Date Fair Value Per Share | |||||
Outstanding at December 31, 2018 | 236,561 | $ | 19.40 | |||
Granted | 72,464 | 12.32 | ||||
Dividend equivalents granted | 26,173 | 10.19 | ||||
Settled | (30,676 | ) | 22.53 | |||
Outstanding at September 30, 2019 | 304,522 | $ | 16.61 |
Issued Common Stock | |||||||||||||||||||||||
Authorized Shares | Outstanding | Treasury | Total Issued Shares | ||||||||||||||||||||
Class A stock ($0.025 par value) | |||||||||||||||||||||||
September 30, 2020 | 105.0 | 40.2 | 0.2 | 40.4 | |||||||||||||||||||
December 31, 2019 | 105.0 | 39.2 | 1.1 | 40.3 | |||||||||||||||||||
Class B stock ($0.025 par value) | |||||||||||||||||||||||
September 30, 2020 | 80.0 | 13.5 | 0 | 13.5 | |||||||||||||||||||
December 31, 2019 | 80.0 | 13.5 | 0 | 13.5 | |||||||||||||||||||
Class C stock ($0.025 par value) | |||||||||||||||||||||||
September 30, 2020 | 20.0 | 0 | 0.5 | 0.5 | |||||||||||||||||||
December 31, 2019 | 20.0 | 0 | 0.5 | 0.5 |
Issued Common Stock | |||||||||||
Authorized Shares | Outstanding | Treasury | Total Issued Shares | ||||||||
Class A stock ($0.025 par value) | |||||||||||
September 30, 2019 | 105.0 | 39.3 | 1.0 | 40.3 | |||||||
December 31, 2018 | 80.0 | 38.1 | 2.2 | 40.3 | |||||||
Class B stock ($0.025 par value) | |||||||||||
September 30, 2019 | 80.0 | 13.5 | — | 13.5 | |||||||
December 31, 2018 | 80.0 | 13.5 | — | 13.5 | |||||||
Class C stock ($0.025 par value) | |||||||||||
September 30, 2019 | 20.0 | — | 0.5 | 0.5 | |||||||
December 31, 2018 | 20.0 | — | 0.5 | 0.5 |
Declaration Date | Record Date | Payment Date | Dividend Amount per Share | ||||||||||||||||||||
2020 | |||||||||||||||||||||||
Q1 Dividend | February 18, 2020 | February 28, 2020 | March 9, 2020 | $ | 0.15 | ||||||||||||||||||
2019 | |||||||||||||||||||||||
Q3 Dividend | July 30, 2019 | August 19, 2019 | September 6, 2019 | 0.30 | |||||||||||||||||||
Q2 Dividend | April 30, 2019 | May 20, 2019 | June 7, 2019 | 0.30 | |||||||||||||||||||
Q1 Dividend | February 19, 2019 | February 25, 2019 | March 8, 2019 | 0.30 |
Declaration Date | Record Date | Payment Date | Dividend Amount per Share | ||||||
2019 | |||||||||
Q3 Dividend | July 30, 2019 | August 19, 2019 | September 6, 2019 | $ | 0.30 | ||||
Q2 Dividend | April 30, 2019 | May 20, 2019 | June 7, 2019 | 0.30 | |||||
Q1 Dividend | February 19, 2019 | February 25, 2019 | March 8, 2019 | 0.30 | |||||
2018 | |||||||||
Q3 Dividend | July 31, 2018 | August 20, 2018 | September 7, 2018 | $ | 0.30 | ||||
Q2 Dividend | May 1, 2018 | May 21, 2018 | June 8, 2018 | 0.30 | |||||
Q1 Dividend | February 21, 2018 | March 19, 2018 | March 30, 2018 | 0.30 |
Translation Adjustments | Interest Rate Swap Adjustments | Pension Benefit Plan Adjustments | Total | ||||||||||||||||||||
Balance at December 31, 2019 | $ | (131.0) | $ | (4.7) | $ | (31.5) | $ | (167.2) | |||||||||||||||
Other comprehensive loss before reclassifications | (9.0) | (8.3) | 0 | (17.3) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss to net loss | 0 | 1.3 | 0 | 1.3 | |||||||||||||||||||
Net other comprehensive loss | (9.0) | (7.0) | 0 | (16.0) | |||||||||||||||||||
Balance at September 30, 2020 | $ | (140.0) | $ | (11.7) | $ | (31.5) | $ | (183.2) |
Translation Adjustments | Interest Rate Swap Adjustments | Pension Benefit Plan Adjustments | Total | ||||||||||||||||||||
Balance at December 31, 2018 | $ | (130.0) | $ | 3.3 | $ | (25.5) | $ | (152.2) | |||||||||||||||
Other comprehensive loss before reclassifications | (6.4) | (9.4) | 0 | (15.8) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss to net loss | 0 | 0 | 0 | 0 | |||||||||||||||||||
Net other comprehensive loss | (6.4) | (9.4) | 0 | (15.8) | |||||||||||||||||||
Balance at September 30, 2019 | $ | (136.4) | $ | (6.1) | $ | (25.5) | $ | (168.0) |
Translation Adjustments | Interest Rate Swap Adjustments | Pension Benefit Plan Adjustments | Total | ||||||||||||
Balance at January 1, 2019 | $ | (130.0 | ) | $ | 3.3 | $ | (25.5 | ) | $ | (152.2 | ) | ||||
Other comprehensive loss before reclassifications | (6.4 | ) | (9.4 | ) | — | (15.8 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive loss to net loss | — | — | — | — | |||||||||||
Net other comprehensive loss | (6.4 | ) | (9.4 | ) | — | (15.8 | ) | ||||||||
Balance at September 30, 2019 | $ | (136.4 | ) | $ | (6.1 | ) | $ | (25.5 | ) | $ | (168.0 | ) |
Details about Accumulated Other Comprehensive Loss Components | Three Months Ended September 30, | Nine Months Ended September 30, | Consolidated Statements of Operations Presentation | ||||||||||||||||||||
2020 | 2020 | ||||||||||||||||||||||
Amortization of amounts accumulated for interest rate swaps de-designated as cash flow hedges | $ | 1.8 | $ | 1.8 | Interest expense | ||||||||||||||||||
Impact of income taxes | (0.5) | (0.5) | Income tax benefit | ||||||||||||||||||||
Amortization of amounts accumulated for interest rate swaps de-designated as cash flow hedges, net of tax | $ | 1.3 | $ | 1.3 | |||||||||||||||||||
Translation Adjustments | Interest Rate Swap Adjustments | Pension Benefit Plan Adjustments | Total | ||||||||||||
Balance at January 1, 2018 | $ | (117.0 | ) | $ | 1.6 | $ | (11.9 | ) | $ | (127.3 | ) | ||||
Other comprehensive income (loss) before reclassifications | (9.3 | ) | 4.6 | — | (4.7 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive loss to net earnings | — | — | — | — | |||||||||||
Net other comprehensive income (loss) | (9.3 | ) | 4.6 | — | (4.7 | ) | |||||||||
Balance at September 30, 2018 | $ | (126.3 | ) | $ | 6.2 | $ | (11.9 | ) | $ | (132.0 | ) |
Net Sales | Operating Income (Loss) from Continuing Operations | Restructuring, Impairment and Transaction- Related Charges | |||||||||||||||||||||||||||
Products | Services | ||||||||||||||||||||||||||||
Three months ended September 30, 2020 | |||||||||||||||||||||||||||||
United States Print and Related Services | $ | 425.6 | $ | 181.6 | $ | 20.0 | $ | 3.8 | |||||||||||||||||||||
International | 67.9 | 4.2 | (1.7) | 5.2 | |||||||||||||||||||||||||
Total operating segments | 493.5 | 185.8 | 18.3 | 9.0 | |||||||||||||||||||||||||
Corporate | 0 | 0 | (12.0) | 0.8 | |||||||||||||||||||||||||
Total | $ | 493.5 | $ | 185.8 | $ | 6.3 | $ | 9.8 | |||||||||||||||||||||
Three months ended September 30, 2019 | |||||||||||||||||||||||||||||
United States Print and Related Services | $ | 649.8 | $ | 197.2 | $ | 27.1 | $ | 7.3 | |||||||||||||||||||||
International | 92.7 | 3.9 | 2.6 | 2.5 | |||||||||||||||||||||||||
Total operating segments | 742.5 | 201.1 | 29.7 | 9.8 | |||||||||||||||||||||||||
Corporate | 0 | 0 | (59.1) | 46.9 | |||||||||||||||||||||||||
Total | $ | 742.5 | $ | 201.1 | $ | (29.4) | $ | 56.7 | |||||||||||||||||||||
Nine months ended September 30, 2020 | |||||||||||||||||||||||||||||
United States Print and Related Services | $ | 1,382.2 | $ | 488.1 | $ | 44.6 | $ | 38.0 | |||||||||||||||||||||
International | 204.0 | 12.0 | (2.1) | 9.3 | |||||||||||||||||||||||||
Total operating segments | 1,586.2 | 500.1 | 42.5 | 47.3 | |||||||||||||||||||||||||
Corporate | 0 | 0 | (34.0) | 1.7 | |||||||||||||||||||||||||
Total | $ | 1,586.2 | $ | 500.1 | $ | 8.5 | $ | 49.0 | |||||||||||||||||||||
Nine months ended September 30, 2019 | |||||||||||||||||||||||||||||
United States Print and Related Services | $ | 1,962.4 | $ | 593.6 | $ | 89.8 | $ | 15.1 | |||||||||||||||||||||
International | 285.0 | 12.5 | 4.9 | 7.5 | |||||||||||||||||||||||||
Total operating segments | 2,247.4 | 606.1 | 94.7 | 22.6 | |||||||||||||||||||||||||
Corporate | 0 | 0 | (89.0) | 51.1 | |||||||||||||||||||||||||
Total | $ | 2,247.4 | $ | 606.1 | $ | 5.7 | $ | 73.7 |
Net Sales | Operating Income (Loss) from Continuing Operations | Restructuring, Impairment and Transaction- Related Charges | |||||||||||||
Products | Services | ||||||||||||||
Three months ended September 30, 2019 | |||||||||||||||
United States Print and Related Services | $ | 649.8 | $ | 197.2 | $ | 27.1 | $ | 7.3 | |||||||
International | 92.7 | 3.9 | 2.6 | 2.5 | |||||||||||
Total operating segments | 742.5 | 201.1 | 29.7 | 9.8 | |||||||||||
Corporate | — | — | (59.1 | ) | 46.9 | ||||||||||
Total | $ | 742.5 | $ | 201.1 | $ | (29.4 | ) | $ | 56.7 | ||||||
Three months ended September 30, 2018 | |||||||||||||||
United States Print and Related Services | $ | 686.7 | $ | 198.0 | $ | 55.4 | $ | 3.2 | |||||||
International | 84.4 | 4.4 | 3.8 | 1.9 | |||||||||||
Total operating segments | 771.1 | 202.4 | 59.2 | 5.1 | |||||||||||
Corporate | — | — | (12.2 | ) | 0.2 | ||||||||||
Total | $ | 771.1 | $ | 202.4 | $ | 47.0 | $ | 5.3 | |||||||
Nine months ended September 30, 2019 | |||||||||||||||
United States Print and Related Services | $ | 1,962.4 | $ | 593.6 | $ | 89.8 | $ | 15.1 | |||||||
International | 285.0 | 12.5 | 4.9 | 7.5 | |||||||||||
Total operating segments | 2,247.4 | 606.1 | 94.7 | 22.6 | |||||||||||
Corporate | — | — | (89.0 | ) | 51.1 | ||||||||||
Total | $ | 2,247.4 | $ | 606.1 | $ | 5.7 | $ | 73.7 | |||||||
Nine months ended September 30, 2018 | |||||||||||||||
United States Print and Related Services | $ | 2,009.5 | $ | 566.9 | $ | 119.2 | $ | 31.7 | |||||||
International | 270.5 | 14.0 | 11.1 | 4.9 | |||||||||||
Total operating segments | 2,280.0 | 580.9 | 130.3 | 36.6 | |||||||||||
Corporate | — | — | (45.1 | ) | 4.0 | ||||||||||
Total | $ | 2,280.0 | $ | 580.9 | $ | 85.2 | $ | 40.6 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Operating income (loss) from continuing operations | $ | 6.3 | $ | (29.4) | $ | 8.5 | $ | 5.7 | |||||||||||||||
Less: interest expense | 17.9 | 22.0 | 52.2 | 69.6 | |||||||||||||||||||
Less: net pension income | (2.7) | (1.5) | (8.0) | (4.5) | |||||||||||||||||||
Less: loss on debt extinguishment | 0 | 14.6 | 1.8 | 30.5 | |||||||||||||||||||
Loss from continuing operations before income taxes and equity in loss of unconsolidated entity | $ | (8.9) | $ | (64.5) | $ | (37.5) | $ | (89.9) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating income (loss) from continuing operations | $ | (29.4 | ) | $ | 47.0 | $ | 5.7 | $ | 85.2 | ||||||
Less: interest expense | 22.0 | 18.3 | 69.6 | 53.9 | |||||||||||
Less: net pension income | (1.5 | ) | (3.1 | ) | (4.5 | ) | (9.3 | ) | |||||||
Less: loss on debt extinguishment | 14.6 | — | 30.5 | — | |||||||||||
Earnings (loss) from continuing operations before income taxes and equity in (earnings) loss of unconsolidated entity | $ | (64.5 | ) | $ | 31.8 | $ | (89.9 | ) | $ | 40.6 |
Quad/Graphics, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Net sales | $ | 396.9 | $ | 539.3 | $ | 118.7 | $ | (111.3 | ) | $ | 943.6 | ||||||||
Cost of sales | 323.7 | 457.8 | 91.0 | (108.0 | ) | 764.5 | |||||||||||||
Selling, general and administrative expenses | 62.6 | 25.8 | 14.5 | (3.3 | ) | 99.6 | |||||||||||||
Depreciation and amortization | 21.6 | 24.0 | 6.6 | — | 52.2 | ||||||||||||||
Restructuring, impairment and transaction-related charges | 58.0 | (3.6 | ) | 2.3 | — | 56.7 | |||||||||||||
Total operating expenses | 465.9 | 504.0 | 114.4 | (111.3 | ) | 973.0 | |||||||||||||
Operating income (loss) from continuing operations | $ | (69.0 | ) | $ | 35.3 | $ | 4.3 | $ | — | $ | (29.4 | ) | |||||||
Interest expense (income) | 20.3 | 0.5 | 1.2 | — | 22.0 | ||||||||||||||
Net pension income | — | (1.5 | ) | — | — | (1.5 | ) | ||||||||||||
Loss (gain) on debt extinguishment | 14.6 | — | — | — | 14.6 | ||||||||||||||
Earnings (loss) from continuing operations before income taxes and equity in (earnings) loss of consolidated and unconsolidated entities | (103.9 | ) | 36.3 | 3.1 | — | (64.5 | ) | ||||||||||||
Income tax expense (benefit) | (30.0 | ) | 11.6 | 0.8 | — | (17.6 | ) | ||||||||||||
Earnings (loss) from continuing operations before equity in (earnings) loss of consolidated and unconsolidated entities | (73.9 | ) | 24.7 | 2.3 | — | (46.9 | ) | ||||||||||||
Equity in (earnings) loss of consolidated entities | 52.6 | 1.1 | — | (53.7 | ) | — | |||||||||||||
Equity in (earnings) loss of unconsolidated entity | — | — | 0.1 | — | 0.1 | ||||||||||||||
Net earnings (loss) from continuing operations | (126.5 | ) | 23.6 | 2.2 | 53.7 | (47.0 | ) | ||||||||||||
Loss from discontinued operations, net of tax | — | (79.4 | ) | — | — | (79.4 | ) | ||||||||||||
Net earnings (loss) | (126.5 | ) | (55.8 | ) | 2.2 | 53.7 | (126.4 | ) | |||||||||||
Less: net earnings (loss) attributable to noncontrolling interests | — | — | 0.1 | — | 0.1 | ||||||||||||||
Net earnings (loss) attributable to Quad common shareholders | $ | (126.5 | ) | $ | (55.8 | ) | $ | 2.1 | $ | 53.7 | $ | (126.5 | ) |
Quad/Graphics, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Net earnings (loss) | $ | (126.5 | ) | $ | (55.8 | ) | $ | 2.2 | $ | 53.7 | $ | (126.4 | ) | ||||||
Other comprehensive income (loss), net of tax | (9.7 | ) | (1.6 | ) | (7.3 | ) | 8.9 | (9.7 | ) | ||||||||||
Total comprehensive income (loss) | (136.2 | ) | (57.4 | ) | (5.1 | ) | 62.6 | (136.1 | ) | ||||||||||
Less: comprehensive earnings (loss) attributable to noncontrolling interests | — | — | 0.1 | — | 0.1 | ||||||||||||||
Comprehensive income (loss) attributable to Quad common shareholders | $ | (136.2 | ) | $ | (57.4 | ) | $ | (5.2 | ) | $ | 62.6 | $ | (136.2 | ) |
Quad/Graphics, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Net sales | $ | 426.0 | $ | 571.2 | $ | 110.3 | $ | (134.0 | ) | $ | 973.5 | ||||||||
Cost of sales | 326.1 | 497.9 | 84.5 | (131.5 | ) | 777.0 | |||||||||||||
Selling, general and administrative expenses | 57.8 | 22.1 | 11.8 | (2.5 | ) | 89.2 | |||||||||||||
Depreciation and amortization | 24.7 | 22.4 | 7.9 | — | 55.0 | ||||||||||||||
Restructuring, impairment and transaction-related charges | (2.5 | ) | 5.7 | 2.1 | — | 5.3 | |||||||||||||
Total operating expenses | 406.1 | 548.1 | 106.3 | (134.0 | ) | 926.5 | |||||||||||||
Operating income (loss) from continuing operations | $ | 19.9 | $ | 23.1 | $ | 4.0 | $ | — | $ | 47.0 | |||||||||
Interest expense (income) | 16.3 | 0.7 | 1.3 | — | 18.3 | ||||||||||||||
Net pension income | — | (3.1 | ) | — | — | (3.1 | ) | ||||||||||||
Earnings (loss) from continuing operations before income taxes and equity in (earnings) loss of consolidated and unconsolidated entities | 3.6 | 25.5 | 2.7 | — | 31.8 | ||||||||||||||
Income tax expense (benefit) | 1.2 | 2.8 | 0.5 | — | 4.5 | ||||||||||||||
Earnings (loss) from continuing operations before equity in (earnings) loss of consolidated and unconsolidated entities | 2.4 | 22.7 | 2.2 | — | 27.3 | ||||||||||||||
Equity in (earnings) loss of consolidated entities | (21.0 | ) | (1.5 | ) | — | 22.5 | — | ||||||||||||
Equity in (earnings) loss of unconsolidated entity | — | — | (0.2 | ) | — | (0.2 | ) | ||||||||||||
Net earnings (loss) from continuing operations | 23.4 | 24.2 | 2.4 | (22.5 | ) | 27.5 | |||||||||||||
Loss from discontinued operations, net of tax | — | (5.0 | ) | — | — | (5.0 | ) | ||||||||||||
Net earnings (loss) | 23.4 | 19.2 | 2.4 | (22.5 | ) | 22.5 | |||||||||||||
Less: net earnings (loss) attributable to noncontrolling interests | — | — | (0.9 | ) | — | (0.9 | ) | ||||||||||||
Net earnings (loss) attributable to Quad common shareholders | $ | 23.4 | $ | 19.2 | $ | 3.3 | $ | (22.5 | ) | $ | 23.4 |
Quad/Graphics, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Net earnings (loss) | $ | 23.4 | $ | 19.2 | $ | 2.4 | $ | (22.5 | ) | $ | 22.5 | ||||||||
Other comprehensive income (loss), net of tax | 1.4 | (1.9 | ) | (0.4 | ) | 2.3 | 1.4 | ||||||||||||
Total comprehensive income (loss) | 24.8 | 17.3 | 2.0 | (20.2 | ) | 23.9 | |||||||||||||
Less: comprehensive earnings (loss) attributable to noncontrolling interests | — | — | (0.9 | ) | — | (0.9 | ) | ||||||||||||
Comprehensive income (loss) attributable to Quad common shareholders | $ | 24.8 | $ | 17.3 | $ | 2.9 | $ | (20.2 | ) | $ | 24.8 |
Quad/Graphics, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Net sales | $ | 1,180.9 | $ | 1,631.2 | $ | 363.6 | $ | (322.2 | ) | $ | 2,853.5 | ||||||||
Cost of sales | 957.3 | 1,393.1 | 286.9 | (313.0 | ) | 2,324.3 | |||||||||||||
Selling, general and administrative expenses | 184.6 | 75.1 | 40.0 | (9.2 | ) | 290.5 | |||||||||||||
Depreciation and amortization | 67.1 | 72.1 | 20.1 | — | 159.3 | ||||||||||||||
Restructuring, impairment and transaction-related charges | 61.8 | 4.4 | 7.5 | — | 73.7 | ||||||||||||||
Total operating expenses | 1,270.8 | 1,544.7 | 354.5 | (322.2 | ) | 2,847.8 | |||||||||||||
Operating income (loss) from continuing operations | $ | (89.9 | ) | $ | 86.5 | $ | 9.1 | $ | — | $ | 5.7 | ||||||||
Interest expense (income) | 64.6 | 1.3 | 3.7 | — | 69.6 | ||||||||||||||
Net pension income | — | (4.5 | ) | — | — | (4.5 | ) | ||||||||||||
Loss (gain) on debt extinguishment | 30.5 | — | — | — | 30.5 | ||||||||||||||
Earnings (loss) from continuing operations before income taxes and equity in (earnings) loss of consolidated and unconsolidated entities | (185.0 | ) | 89.7 | 5.4 | — | (89.9 | ) | ||||||||||||
Income tax expense (benefit) | (48.6 | ) | 20.3 | 0.3 | — | (28.0 | ) | ||||||||||||
Earnings (loss) from continuing operations before equity in (earnings) loss of consolidated and unconsolidated entities | (136.4 | ) | 69.4 | 5.1 | — | (61.9 | ) | ||||||||||||
Equity in (earnings) loss of consolidated entities | 27.4 | (1.0 | ) | — | (26.4 | ) | — | ||||||||||||
Equity in (earnings) loss of unconsolidated entity | — | — | 0.9 | — | 0.9 | ||||||||||||||
Net earnings (loss) from continuing operations | (163.8 | ) | 70.4 | 4.2 | 26.4 | (62.8 | ) | ||||||||||||
Loss from discontinued operations, net of tax | — | (101.1 | ) | — | — | (101.1 | ) | ||||||||||||
Net earnings (loss) | (163.8 | ) | (30.7 | ) | 4.2 | 26.4 | (163.9 | ) | |||||||||||
Less: net earnings (loss) attributable to noncontrolling interests | — | — | (0.1 | ) | — | (0.1 | ) | ||||||||||||
Net earnings (loss) attributable to Quad common shareholders | $ | (163.8 | ) | $ | (30.7 | ) | $ | 4.3 | $ | 26.4 | $ | (163.8 | ) |
Quad/Graphics, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Net earnings (loss) | $ | (163.8 | ) | $ | (30.7 | ) | $ | 4.2 | $ | 26.4 | $ | (163.9 | ) | ||||||
Other comprehensive income (loss), net of tax | (15.8 | ) | (2.2 | ) | (6.0 | ) | 8.2 | (15.8 | ) | ||||||||||
Total comprehensive income (loss) | (179.6 | ) | (32.9 | ) | (1.8 | ) | 34.6 | (179.7 | ) | ||||||||||
Less: comprehensive earnings (loss) attributable to noncontrolling interests | — | — | (0.1 | ) | — | (0.1 | ) | ||||||||||||
Comprehensive income (loss) attributable to Quad common shareholders | $ | (179.6 | ) | $ | (32.9 | ) | $ | (1.7 | ) | $ | 34.6 | $ | (179.6 | ) |
Quad/Graphics, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Net sales | $ | 1,236.8 | $ | 1,624.3 | $ | 337.2 | $ | (337.4 | ) | $ | 2,860.9 | ||||||||
Cost of sales | 966.5 | 1,406.2 | 261.5 | (329.9 | ) | 2,304.3 | |||||||||||||
Selling, general and administrative expenses | 176.6 | 65.4 | 34.3 | (7.5 | ) | 268.8 | |||||||||||||
Depreciation and amortization | 74.9 | 67.4 | 19.7 | — | 162.0 | ||||||||||||||
Restructuring, impairment and transaction-related charges | 6.8 | 29.0 | 4.8 | — | 40.6 | ||||||||||||||
Total operating expenses | 1,224.8 | 1,568.0 | 320.3 | (337.4 | ) | 2,775.7 | |||||||||||||
Operating income (loss) from continuing operations | $ | 12.0 | $ | 56.3 | $ | 16.9 | $ | — | $ | 85.2 | |||||||||
Interest expense (income) | 47.7 | 2.3 | 3.9 | — | 53.9 | ||||||||||||||
Net pension income | — | (9.3 | ) | — | — | (9.3 | ) | ||||||||||||
Earnings (loss) from continuing operations before income taxes and equity in (earnings) loss of consolidated and unconsolidated entities | (35.7 | ) | 63.3 | 13.0 | — | 40.6 | |||||||||||||
Income tax expense (benefit) | (8.7 | ) | 7.7 | 1.2 | — | 0.2 | |||||||||||||
Earnings (loss) from continuing operations before equity in (earnings) loss of consolidated and unconsolidated entities | (27.0 | ) | 55.6 | 11.8 | — | 40.4 | |||||||||||||
Equity in (earnings) loss of consolidated entities | (56.3 | ) | (4.4 | ) | — | 60.7 | — | ||||||||||||
Equity in (earnings) loss of unconsolidated entity | — | — | (0.7 | ) | — | (0.7 | ) | ||||||||||||
Net earnings (loss) from continuing operations | 29.3 | 60.0 | 12.5 | (60.7 | ) | 41.1 | |||||||||||||
Loss from discontinued operations, net of tax | — | (12.6 | ) | — | — | (12.6 | ) | ||||||||||||
Net earnings (loss) | 29.3 | 47.4 | 12.5 | (60.7 | ) | 28.5 | |||||||||||||
Less: net earnings (loss) attributable to noncontrolling interests | — | — | (0.8 | ) | — | (0.8 | ) | ||||||||||||
Net earnings (loss) attributable to Quad common shareholders | $ | 29.3 | $ | 47.4 | $ | 13.3 | $ | (60.7 | ) | $ | 29.3 |
Quad/Graphics, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Net earnings (loss) | $ | 29.3 | $ | 47.4 | $ | 12.5 | $ | (60.7 | ) | $ | 28.5 | ||||||||
Other comprehensive income (loss), net of tax | (4.7 | ) | (4.8 | ) | (9.8 | ) | 14.6 | (4.7 | ) | ||||||||||
Total comprehensive income (loss) | 24.6 | 42.6 | 2.7 | (46.1 | ) | 23.8 | |||||||||||||
Less: comprehensive earnings (loss) attributable to noncontrolling interests | — | — | (0.8 | ) | — | (0.8 | ) | ||||||||||||
Comprehensive income (loss) attributable to Quad common shareholders | $ | 24.6 | $ | 42.6 | $ | 3.5 | $ | (46.1 | ) | $ | 24.6 |
Quad/Graphics, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 6.7 | $ | 2.3 | $ | 9.2 | $ | — | $ | 18.2 | |||||||||
Receivables, less allowances for doubtful accounts | 356.6 | 32.2 | 83.2 | — | 472.0 | ||||||||||||||
Intercompany receivables | — | 191.8 | 38.9 | (230.7 | ) | — | |||||||||||||
Inventories | 141.8 | 94.9 | 51.9 | — | 288.6 | ||||||||||||||
Other current assets | 33.4 | 2.4 | 10.6 | — | 46.4 | ||||||||||||||
Current assets of discontinued operations | — | 39.8 | — | — | 39.8 | ||||||||||||||
Total current assets | 538.5 | 363.4 | 193.8 | (230.7 | ) | 865.0 | |||||||||||||
Property, plant and equipment—net | 618.2 | 321.0 | 140.4 | — | 1,079.6 | ||||||||||||||
Investment in consolidated entities | 851.9 | 20.0 | — | (871.9 | ) | — | |||||||||||||
Goodwill and intangible assets—net | 1.7 | 202.4 | 48.6 | — | 252.7 | ||||||||||||||
Intercompany loan receivable | 64.7 | — | — | (64.7 | ) | — | |||||||||||||
Other long-term assets | 54.7 | 137.3 | 55.2 | — | 247.2 | ||||||||||||||
Long-term assets of discontinued operations | — | 23.5 | — | — | 23.5 | ||||||||||||||
Total assets | $ | 2,129.7 | $ | 1,067.6 | $ | 438.0 | $ | (1,167.3 | ) | $ | 2,468.0 | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
Accounts payable | $ | 244.0 | $ | 87.8 | $ | 84.5 | $ | — | $ | 416.3 | |||||||||
Intercompany accounts payable | 230.7 | — | — | (230.7 | ) | — | |||||||||||||
Short-term debt and current portion of long-term debt and lease obligations | 63.4 | 31.5 | 11.9 | — | 106.8 | ||||||||||||||
Other current liabilities | 169.9 | 66.1 | 41.3 | — | 277.3 | ||||||||||||||
Current liabilities of discontinued operations | — | 18.5 | — | — | 18.5 | ||||||||||||||
Total current liabilities | 708.0 | 203.9 | 137.7 | (230.7 | ) | 818.9 | |||||||||||||
Long-term debt and lease obligations | 1,103.7 | 67.9 | 20.9 | — | 1,192.5 | ||||||||||||||
Intercompany loan payable | — | — | 64.7 | (64.7 | ) | — | |||||||||||||
Other long-term liabilities | 77.0 | 122.1 | 13.4 | — | 212.5 | ||||||||||||||
Long-term liabilities of discontinued operations | — | 3.1 | — | — | 3.1 | ||||||||||||||
Total liabilities | 1,888.7 | 397.0 | 236.7 | (295.4 | ) | 2,227.0 | |||||||||||||
Total shareholders’ equity and noncontrolling interests | 241.0 | 670.6 | 201.3 | (871.9 | ) | 241.0 | |||||||||||||
Total liabilities and shareholders’ equity | $ | 2,129.7 | $ | 1,067.6 | $ | 438.0 | $ | (1,167.3 | ) | $ | 2,468.0 |
Quad/Graphics, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 60.3 | $ | 2.9 | $ | 6.3 | $ | — | $ | 69.5 | |||||||||
Receivables, less allowances for doubtful accounts | 347.1 | 63.1 | 87.4 | — | 497.6 | ||||||||||||||
Intercompany receivables | — | 142.8 | 28.8 | (171.6 | ) | — | |||||||||||||
Inventories | 108.6 | 99.4 | 71.0 | — | 279.0 | ||||||||||||||
Other current assets | 34.3 | 1.7 | 9.2 | — | 45.2 | ||||||||||||||
Current assets of discontinued operations | — | 55.3 | — | — | 55.3 | ||||||||||||||
Total current assets | 550.3 | 365.2 | 202.7 | (171.6 | ) | 946.6 | |||||||||||||
Property, plant and equipment—net | 647.7 | 343.3 | 158.1 | — | 1,149.1 | ||||||||||||||
Investment in consolidated entities | 757.0 | 16.7 | — | (773.7 | ) | — | |||||||||||||
Goodwill and intangible assets—net | 1.7 | 101.2 | 54.2 | — | 157.1 | ||||||||||||||
Intercompany loan receivable | 109.7 | — | — | (109.7 | ) | — | |||||||||||||
Other long-term assets | 42.5 | 5.7 | 45.0 | — | 93.2 | ||||||||||||||
Long-term assets of discontinued operations | — | 123.1 | — | — | 123.1 | ||||||||||||||
Total assets | $ | 2,108.9 | $ | 955.2 | $ | 460.0 | $ | (1,055.0 | ) | $ | 2,469.1 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||
Accounts payable | $ | 250.8 | $ | 137.8 | $ | 107.7 | $ | — | $ | 496.3 | |||||||||
Intercompany accounts payable | 171.6 | — | — | (171.6 | ) | — | |||||||||||||
Short-term debt and current portion of long-term debt and finance lease obligations | 28.2 | 0.7 | 17.6 | — | 46.5 | ||||||||||||||
Other current liabilities | 182.6 | 57.5 | 45.0 | — | 285.1 | ||||||||||||||
Current liabilities of discontinued operations | — | 23.4 | — | — | 23.4 | ||||||||||||||
Total current liabilities | 633.2 | 219.4 | 170.3 | (171.6 | ) | 851.3 | |||||||||||||
Long-term debt and finance lease obligations | 875.2 | 1.0 | 13.1 | — | 889.3 | ||||||||||||||
Intercompany loan payable | — | 42.0 | 67.7 | (109.7 | ) | — | |||||||||||||
Other long-term liabilities | 140.3 | 114.6 | 9.0 | — | 263.9 | ||||||||||||||
Long-term liabilities of discontinued operations | — | 4.4 | — | — | 4.4 | ||||||||||||||
Total liabilities | 1,648.7 | 381.4 | 260.1 | (281.3 | ) | 2,008.9 | |||||||||||||
Total shareholders’ equity and noncontrolling interests | 460.2 | 573.8 | 199.9 | (773.7 | ) | 460.2 | |||||||||||||
Total liabilities and shareholders’ equity | $ | 2,108.9 | $ | 955.2 | $ | 460.0 | $ | (1,055.0 | ) | $ | 2,469.1 |
Quad/Graphics, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
OPERATING ACTIVITIES | |||||||||||||||||||
Net cash from (used in) operating activities | $ | (31.5 | ) | $ | 39.0 | $ | (3.4 | ) | $ | — | $ | 4.1 | |||||||
INVESTING ACTIVITIES | |||||||||||||||||||
Purchases of property, plant and equipment | (42.5 | ) | (49.7 | ) | (6.3 | ) | — | (98.5 | ) | ||||||||||
Acquisition related investing activities | — | (120.7 | ) | (0.3 | ) | — | (121.0 | ) | |||||||||||
Intercompany investing activities | (199.1 | ) | (96.6 | ) | (0.3 | ) | 296.0 | — | |||||||||||
Other investing activities | 1.2 | 20.8 | 1.7 | — | 23.7 | ||||||||||||||
Net cash from (used in) investing activities | (240.4 | ) | (246.2 | ) | (5.2 | ) | 296.0 | (195.8 | ) | ||||||||||
FINANCING ACTIVITIES | |||||||||||||||||||
Proceeds from issuance of long-term debt | 1,277.6 | — | 6.5 | — | 1,284.1 | ||||||||||||||
Payments of long-term debt and finance lease obligations | (1,062.2 | ) | (5.2 | ) | (6.1 | ) | — | (1,073.5 | ) | ||||||||||
Borrowings on revolving credit facilities | 3,157.8 | — | 13.5 | — | 3,171.3 | ||||||||||||||
Payments on revolving credit facilities | (3,138.4 | ) | — | (21.7 | ) | — | (3,160.1 | ) | |||||||||||
Payment of cash dividends | (49.2 | ) | — | — | — | (49.2 | ) | ||||||||||||
Intercompany financing activities | 64.8 | 211.8 | 19.4 | (296.0 | ) | — | |||||||||||||
Other financing activities | (32.1 | ) | — | — | — | (32.1 | ) | ||||||||||||
Net cash from (used in) financing activities | 218.3 | 206.6 | 11.6 | (296.0 | ) | 140.5 | |||||||||||||
Effect of exchange rates on cash and cash equivalents | — | — | (0.1 | ) | — | (0.1 | ) | ||||||||||||
Net increase (decrease) in cash and cash equivalents | (53.6 | ) | (0.6 | ) | 2.9 | — | (51.3 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 60.3 | 2.9 | 6.3 | — | 69.5 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 6.7 | $ | 2.3 | $ | 9.2 | $ | — | $ | 18.2 |
Quad/Graphics, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
OPERATING ACTIVITIES | |||||||||||||||||||
Net cash from (used in) operating activities | $ | 34.7 | $ | (0.7 | ) | $ | 12.6 | $ | — | $ | 46.6 | ||||||||
INVESTING ACTIVITIES | |||||||||||||||||||
Purchases of property, plant and equipment | (18.4 | ) | (41.5 | ) | (25.1 | ) | — | (85.0 | ) | ||||||||||
Acquisition related investing activities | — | (76.4 | ) | 5.0 | — | (71.4 | ) | ||||||||||||
Intercompany investing activities | (138.7 | ) | 1.8 | (0.5 | ) | 137.4 | — | ||||||||||||
Other investing activities | 22.3 | 10.0 | 4.5 | — | 36.8 | ||||||||||||||
Net cash from (used in) investing activities | (134.8 | ) | (106.1 | ) | (16.1 | ) | 137.4 | (119.6 | ) | ||||||||||
FINANCING ACTIVITIES | |||||||||||||||||||
Proceeds from issuance of long-term debt | — | — | 0.3 | — | 0.3 | ||||||||||||||
Payments of long-term debt and finance lease obligations | (26.6 | ) | (1.0 | ) | (5.1 | ) | — | (32.7 | ) | ||||||||||
Borrowings on revolving credit facilities | 1,813.9 | — | 16.1 | — | 1,830.0 | ||||||||||||||
Payments on revolving credit facilities | (1,677.8 | ) | — | (14.1 | ) | — | (1,691.9 | ) | |||||||||||
Purchases of treasury stock | (36.7 | ) | — | — | — | (36.7 | ) | ||||||||||||
Payment of cash dividends | (47.5 | ) | — | — | — | (47.5 | ) | ||||||||||||
Intercompany financing activities | 29.8 | 105.8 | 1.8 | (137.4 | ) | — | |||||||||||||
Other financing activities | (4.9 | ) | — | — | — | (4.9 | ) | ||||||||||||
Net cash from (used in) financing activities | 50.2 | 104.8 | (1.0 | ) | (137.4 | ) | 16.6 | ||||||||||||
Effect of exchange rates on cash and cash equivalents | — | — | (1.7 | ) | — | (1.7 | ) | ||||||||||||
Net increase (decrease) in cash and cash equivalents | (49.9 | ) | (2.0 | ) | (6.2 | ) | — | (58.1 | ) | ||||||||||
Cash and cash equivalents at beginning of period | 51.7 | 2.0 | 10.7 | — | 64.4 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 1.8 | $ | — | $ | 4.5 | $ | — | $ | 6.3 |
Operating Income (Loss) from Continuing Operations | Operating Margin | Net Earnings (Loss) Attributable to Quad Common Shareholders | Diluted Earnings (Loss) Per Share Attributable to Quad Common Shareholders | ||||||||||||||||||||||||||||||||||
Operating Income from Continuing Operations | Operating Margin | Net Earnings (Loss) Attributable to Quad Common Shareholders | Diluted Earnings (Loss) Per Share Attributable to Quad Common Shareholders | ||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, 2018 | $ | 47.0 | 4.8 | % | $ | 23.4 | $ | 0.46 | |||||||||||||||||||||||||||||
For the Three Months Ended September 30, 2019 | For the Three Months Ended September 30, 2019 | $ | (29.4) | (3.1) | % | $ | (126.5) | $ | (2.52) | ||||||||||||||||||||||||||||
Restructuring, impairment and transaction-related charges (1) | (51.4 | ) | (5.5 | )% | (38.6 | ) | (0.77 | ) | Restructuring, impairment and transaction-related charges (1) | 46.9 | 4.6 | % | 35.2 | 0.70 | |||||||||||||||||||||||
Interest expense (2) | N/A | N/A | (2.8 | ) | (0.06 | ) | Interest expense (2) | N/A | N/A | 3.1 | 0.07 | ||||||||||||||||||||||||||
Net pension income (3) | N/A | N/A | (1.2 | ) | (0.03 | ) | Net pension income (3) | N/A | N/A | 0.9 | 0.02 | ||||||||||||||||||||||||||
2019 loss on debt extinguishment(4) | N/A | N/A | (10.9 | ) | (0.22 | ) | 2019 loss on debt extinguishment (4) | N/A | N/A | 10.9 | 0.22 | ||||||||||||||||||||||||||
Income taxes (5) | N/A | N/A | (2.0 | ) | (0.04 | ) | Income taxes (5) | N/A | N/A | 8.3 | 0.16 | ||||||||||||||||||||||||||
Loss from discontinued operations, net of tax (6) | N/A | N/A | (74.4 | ) | (1.48 | ) | Loss from discontinued operations, net of tax (6) | N/A | N/A | 78.3 | 1.56 | ||||||||||||||||||||||||||
Investments in unconsolidated entity and noncontrolling interests, net of tax (7) | N/A | N/A | (1.3 | ) | (0.02 | ) | Investments in unconsolidated entity and noncontrolling interests, net of tax (7) | N/A | N/A | (0.2) | (0.01) | ||||||||||||||||||||||||||
Operating income from continuing operations (8) | (25.0 | ) | (2.4 | )% | (18.7 | ) | (0.36 | ) | Operating income from continuing operations (8) | (11.2) | (0.6) | % | (8.4) | (0.17) | |||||||||||||||||||||||
For the Three Months Ended September 30, 2019 | $ | (29.4 | ) | (3.1 | )% | $ | (126.5 | ) | $ | (2.52 | ) | ||||||||||||||||||||||||||
For the Three Months Ended September 30, 2020 | For the Three Months Ended September 30, 2020 | $ | 6.3 | 0.9 | % | $ | 1.6 | $ | 0.03 |
(1)Restructuring, impairment and transaction-related charges decreased $46.9 million ($35.2 million, net of tax), to $9.8 million during the three months ended September 30, 2020, and included the following: a.A $9.0 million decrease in employee termination charges from $12.3 million during the three months ended September 30, 2019, to $3.3 million during the three months ended September 30, 2020; b.A $1.5 million decrease in impairment charges from the three months ended September 30, 2019, to the three months ended September 30, 2020; c.A $46.0 million decrease in transaction-related charges from $46.9 million during the three months ended September 30, 2019, to $0.9 million during the three months ended September 30, 2020; d.A $0.3 million decrease in integration costs from $0.5 million during the three months ended September 30, 2019, to $0.2 million during the three months ended September 30, 2020; and e.An $9.9 million increase in various other restructuring charges from $4.5 million of income during the three months ended September 30, 2019, to $5.4 million of expense during the three months ended September 30, 2020. |
Three Months Ended September 30, | |||||||||||||||||
2020 | 2019 | $ Change | |||||||||||||||
Loss from continuing operations before income taxes and equity in loss of unconsolidated entity | $ | (8.9) | $ | (64.5) | $ | 55.6 | |||||||||||
Normalized tax rate | 25.0 | % | 25.0 | % | |||||||||||||
Income tax benefit at normalized tax rate | (2.2) | (16.1) | 13.9 | ||||||||||||||
Income tax benefit from the condensed consolidated statements of operations | (12.0) | (17.6) | 5.6 | ||||||||||||||
Impact of income taxes | $ | 9.8 | $ | 1.5 | $ | 8.3 |
Three Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | |||||||||
Earnings (loss) from continuing operations before income taxes and equity in (earnings) loss of unconsolidated entity | $ | (64.5 | ) | $ | 31.8 | $ | (96.3 | ) | |||
Normalized tax rate | 25.0 | % | 25.0 | % | |||||||
Income tax expense (benefit) at normalized tax rate | (16.1 | ) | 8.0 | (24.1 | ) | ||||||
Income tax expense (benefit) from the condensed consolidated statements of operations | (17.6 | ) | 4.5 | (22.1 | ) | ||||||
Impact of income taxes | $ | 1.5 | $ | 3.5 | $ | (2.0 | ) |
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||||||||||||||
Amount | % of Sales | Amount | % of Sales | $ Change | % Change | ||||||||||||||||||||||||||||||
Net sales: | |||||||||||||||||||||||||||||||||||
Products | $ | 493.5 | 72.6 | % | $ | 742.5 | 78.7 | % | $ | (249.0) | (33.5) | % | |||||||||||||||||||||||
Services | 185.8 | 27.4 | % | 201.1 | 21.3 | % | (15.3) | (7.6) | % | ||||||||||||||||||||||||||
Total net sales | 679.3 | 100.0 | % | 943.6 | 100.0 | % | (264.3) | (28.0) | % | ||||||||||||||||||||||||||
Cost of sales: | |||||||||||||||||||||||||||||||||||
Products | 410.1 | 60.4 | % | 625.3 | 66.3 | % | (215.2) | (34.4) | % | ||||||||||||||||||||||||||
Services | 133.2 | 19.6 | % | 139.2 | 14.7 | % | (6.0) | (4.3) | % | ||||||||||||||||||||||||||
Total cost of sales | 543.3 | 80.0 | % | 764.5 | 81.0 | % | (221.2) | (28.9) | % | ||||||||||||||||||||||||||
Selling, general & administrative expenses | 75.1 | 11.1 | % | 99.6 | 10.6 | % | (24.5) | (24.6) | % | ||||||||||||||||||||||||||
Depreciation and amortization | 44.8 | 6.6 | % | 52.2 | 5.5 | % | (7.4) | (14.2) | % | ||||||||||||||||||||||||||
Restructuring, impairment and transaction-related charges | 9.8 | 1.4 | % | 56.7 | 6.0 | % | (46.9) | (82.7) | % | ||||||||||||||||||||||||||
Total operating expenses | 673.0 | 99.1 | % | 973.0 | 103.1 | % | (300.0) | (30.8) | % | ||||||||||||||||||||||||||
Operating income (loss) from continuing operations | $ | 6.3 | 0.9 | % | $ | (29.4) | (3.1) | % | $ | 35.7 | (121.4) | % |
Three Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Amount | % of Sales | Amount | % of Sales | $ Change | % Change | |||||||||||||||
Net sales: | ||||||||||||||||||||
Products | $ | 742.5 | 78.7 | % | $ | 771.1 | 79.2 | % | $ | (28.6 | ) | (3.7 | )% | |||||||
Services | 201.1 | 21.3 | % | 202.4 | 20.8 | % | (1.3 | ) | (0.6 | )% | ||||||||||
Total net sales | 943.6 | 100.0 | % | 973.5 | 100.0 | % | (29.9 | ) | (3.1 | )% | ||||||||||
Cost of sales: | ||||||||||||||||||||
Products | 625.3 | 66.3 | % | 628.9 | 64.6 | % | (3.6 | ) | (0.6 | )% | ||||||||||
Services | 139.2 | 14.7 | % | 148.1 | 15.2 | % | (8.9 | ) | (6.0 | )% | ||||||||||
Total cost of sales | 764.5 | 81.0 | % | 777.0 | 79.8 | % | (12.5 | ) | (1.6 | )% | ||||||||||
Selling, general & administrative expenses | 99.6 | 10.6 | % | 89.2 | 9.2 | % | 10.4 | 11.7 | % | |||||||||||
Depreciation and amortization | 52.2 | 5.5 | % | 55.0 | 5.7 | % | (2.8 | ) | (5.1 | )% | ||||||||||
Restructuring, impairment and transaction-related charges | 56.7 | 6.0 | % | 5.3 | 0.5 | % | 51.4 | 969.8 | % | |||||||||||
Total operating expenses | 973.0 | 103.1 | % | 926.5 | 95.2 | % | 46.5 | 5.0 | % | |||||||||||
Operating income (loss) from continuing operations | $ | (29.4 | ) | (3.1 | )% | $ | 47.0 | 4.8 | % | $ | (76.4 | ) | (162.6 | )% |
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||
2019 | 2018 | $ Change | 2020 | 2019 | $ Change | |||||||||||||||||||||||||||||||||||
Employee termination charges | $ | 12.3 | $ | 4.1 | $ | 8.2 | Employee termination charges | $ | 3.3 | $ | 12.3 | $ | (9.0) | |||||||||||||||||||||||||||
Impairment charges (a) | 1.5 | 4.5 | (3.0 | ) | Impairment charges (a) | — | 1.5 | (1.5) | ||||||||||||||||||||||||||||||||
Transaction-related charges (b) | 46.9 | 0.3 | 46.6 | Transaction-related charges (b) | 0.9 | 46.9 | (46.0) | |||||||||||||||||||||||||||||||||
Integration costs | 0.5 | 0.5 | — | Integration costs | 0.2 | 0.5 | (0.3) | |||||||||||||||||||||||||||||||||
Other restructuring charges | ||||||||||||||||||||||||||||||||||||||||
Other restructuring charges (income) | Other restructuring charges (income) | |||||||||||||||||||||||||||||||||||||||
Vacant facility carrying costs and lease exit charges | 2.1 | 2.5 | (0.4 | ) | Vacant facility carrying costs and lease exit charges | 2.5 | 2.1 | 0.4 | ||||||||||||||||||||||||||||||||
Equipment and infrastructure removal costs | 0.1 | 0.3 | (0.2 | ) | Equipment and infrastructure removal costs | 0.1 | 0.1 | — | ||||||||||||||||||||||||||||||||
Gains on the sale of facilities (c) | (0.1 | ) | (7.5 | ) | 7.4 | |||||||||||||||||||||||||||||||||||
Other restructuring activities (d) | (6.6 | ) | 0.6 | (7.2 | ) | |||||||||||||||||||||||||||||||||||
Other restructuring income | (4.5 | ) | (4.1 | ) | (0.4 | ) | ||||||||||||||||||||||||||||||||||
Gains on the sale of facilities | Gains on the sale of facilities | (0.8) | (0.1) | (0.7) | ||||||||||||||||||||||||||||||||||||
Other restructuring activities (c) | Other restructuring activities (c) | 3.6 | (6.6) | 10.2 | ||||||||||||||||||||||||||||||||||||
Other restructuring charges (income) | Other restructuring charges (income) | 5.4 | (4.5) | 9.9 | ||||||||||||||||||||||||||||||||||||
Total restructuring, impairment and transaction-related charges | $ | 56.7 | $ | 5.3 | $ | 51.4 | Total restructuring, impairment and transaction-related charges | $ | 9.8 | $ | 56.7 | $ | (46.9) |
(a)Includes $1.2 million of impairment charges for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction restructuring activities during the three months ended September 30, 2019, and $0.3 million of land and building impairment charges during the three months ended September 30, 2019. |
Three Months Ended September 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
Amount | % of Net Sales | Amount | % of Net Sales | ||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
EBITDA and EBITDA margin (non-GAAP) | $ | 52.3 | 7.7 | % | $ | (69.9) | (7.4) | % |
Three Months Ended September 30, | |||||||||||||
2019 | 2018 | ||||||||||||
Amount | % of Net Sales | Amount | % of Net Sales | ||||||||||
(dollars in millions) | |||||||||||||
EBITDA and EBITDA margin (non-GAAP) | $ | (69.9 | ) | (7.4 | )% | $ | 101.2 | 10.4 | % |
Three Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
(dollars in millions) | |||||||||||
Net earnings (loss) attributable to Quad common shareholders (1) | $ | 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) |
Three Months Ended September 30, | |||||||
2019 | 2018 | ||||||
(dollars in millions) | |||||||
Net earnings (loss) attributable to Quad common shareholders (1) | $ | (126.5 | ) | $ | 23.4 | ||
Interest expense | 22.0 | 18.3 | |||||
Income tax expense (benefit) | (17.6 | ) | 4.5 | ||||
Depreciation and amortization | 52.2 | 55.0 | |||||
EBITDA (non-GAAP) | $ | (69.9 | ) | $ | 101.2 |
Three Months Ended September 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
Amount | Amount | $ Change | % Change | ||||||||||||||||||||
Net sales: | |||||||||||||||||||||||
Products | $ | 425.6 | $ | 649.8 | $ | (224.2) | (34.5) | % | |||||||||||||||
Services | 181.6 | 197.2 | (15.6) | (7.9) | % | ||||||||||||||||||
Operating income from continuing operations (including restructuring, impairment and transaction-related charges) | 20.0 | 27.1 | (7.1) | (26.2) | % | ||||||||||||||||||
Operating margin | 3.3 | % | 3.2 | % | N/A | N/A | |||||||||||||||||
Restructuring, impairment and transaction-related charges | $ | 3.8 | $ | 7.3 | $ | (3.5) | (47.9) | % |
Three Months Ended September 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
(dollars in millions) | ||||||||||||||
Amount | Amount | $ Change | % Change | |||||||||||
Net sales: | ||||||||||||||
Products | $ | 649.8 | $ | 686.7 | $ | (36.9 | ) | (5.4 | )% | |||||
Services | 197.2 | 198.0 | (0.8 | ) | (0.4 | )% | ||||||||
Operating income from continuing operations (including restructuring, impairment and transaction-related charges) | 27.1 | 55.4 | (28.3 | ) | (51.1 | )% | ||||||||
Operating margin | 3.2 | % | 6.3 | % | N/A | N/A | ||||||||
Restructuring, impairment and transaction-related charges | $ | 7.3 | $ | 3.2 | $ | 4.1 | 128.1 | % |
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||
2019 | 2018 | $ Change | 2020 | 2019 | $ Change | |||||||||||||||||||||||||||||||||||
Employee termination charges | $ | 12.1 | $ | 3.5 | $ | 8.6 | Employee termination charges | $ | 1.5 | $ | 12.1 | $ | (10.6) | |||||||||||||||||||||||||||
Impairment charges (a) | 1.1 | 4.5 | (3.4 | ) | Impairment charges (a) | — | 1.1 | (1.1) | ||||||||||||||||||||||||||||||||
Transaction-related charges | — | 0.1 | (0.1 | ) | Transaction-related charges | 0.1 | — | 0.1 | ||||||||||||||||||||||||||||||||
Integration costs | 0.5 | 0.5 | — | Integration costs | 0.2 | 0.5 | (0.3) | |||||||||||||||||||||||||||||||||
Other restructuring income (b) | (6.4 | ) | (5.4 | ) | (1.0 | ) | ||||||||||||||||||||||||||||||||||
Other restructuring charges (income) (b) | Other restructuring charges (income) (b) | 2.0 | (6.4) | 8.4 | ||||||||||||||||||||||||||||||||||||
Total restructuring, impairment and transaction-related charges | $ | 7.3 | $ | 3.2 | $ | 4.1 | Total restructuring, impairment and transaction-related charges | $ | 3.8 | $ | 7.3 | $ | (3.5) |
(a)Includes $1.1 million of impairment charges for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction restructuring activities during the three months ended September 30, 2019. |
Three Months Ended September 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
Amount | Amount | $ Change | % Change | ||||||||||||||||||||
Net sales: | |||||||||||||||||||||||
Products | $ | 67.9 | $ | 92.7 | $ | (24.8) | (26.8) | % | |||||||||||||||
Services | 4.2 | 3.9 | 0.3 | 7.7 | % | ||||||||||||||||||
Operating income (loss) from continuing operations (including restructuring, impairment and transaction-related charges) | (1.7) | 2.6 | (4.3) | nm | |||||||||||||||||||
Operating margin | (2.4) | % | 2.7 | % | N/A | N/A | |||||||||||||||||
Restructuring, impairment and transaction-related charges | $ | 5.2 | $ | 2.5 | $ | 2.7 | 108.0 | % | |||||||||||||||
Equity in loss of unconsolidated entity | 0.4 | 0.1 | 0.3 | 300.0 | % |
Three Months Ended September 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
(dollars in millions) | ||||||||||||||
Amount | Amount | $ Change | % Change | |||||||||||
Net sales: | ||||||||||||||
Products | $ | 92.7 | $ | 84.4 | $ | 8.3 | 9.8 | % | ||||||
Services | 3.9 | 4.4 | (0.5 | ) | (11.4 | )% | ||||||||
Operating income from continuing operations (including restructuring, impairment and transaction-related charges) | 2.6 | 3.8 | (1.2 | ) | (31.6 | )% | ||||||||
Operating margin | 2.7 | % | 4.3 | % | N/A | N/A | ||||||||
Restructuring, impairment and transaction-related charges | $ | 2.5 | $ | 1.9 | $ | 0.6 | 31.6 | % | ||||||
Equity in (earnings) loss of unconsolidated entity | 0.1 | (0.2 | ) | (0.3 | ) | nm |
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||
2019 | 2018 | $ Change | 2020 | 2019 | $ Change | |||||||||||||||||||||||||||||||||||
Employee termination charges | $ | 0.2 | $ | 0.6 | $ | (0.4 | ) | Employee termination charges | $ | 1.8 | $ | 0.2 | $ | 1.6 | ||||||||||||||||||||||||||
Impairment charges (a) | 0.4 | — | 0.4 | Impairment charges (a) | — | 0.4 | (0.4) | |||||||||||||||||||||||||||||||||
Other restructuring charges | 1.9 | 1.3 | 0.6 | |||||||||||||||||||||||||||||||||||||
Other restructuring charges (b) | Other restructuring charges (b) | 3.4 | 1.9 | 1.5 | ||||||||||||||||||||||||||||||||||||
Total restructuring, impairment and transaction-related charges | $ | 2.5 | $ | 1.9 | $ | 0.6 | Total restructuring, impairment and transaction-related charges | $ | 5.2 | $ | 2.5 | $ | 2.7 |
(a)Includes $0.3 million of land and building impairment charges and $0.1 million of impairment charges for machinery and equipment no longer being utilized in production as a result of facility consolidations as well as other capacity reduction restructuring activities during the three months ended September 30, 2019. (b)Includes $3.0 million in charges from foreign currency losses as a result of the economy in Argentina being classified as highly inflationary during the three months ended September 30, 2020. The Company has considered the economy in Argentina to be highly inflationary since June 30, 2018. |
Three Months Ended September 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
Amount | Amount | $ Change | % Change | ||||||||||||||||||||
Operating expenses (including restructuring, impairment and transaction-related charges) | $ | 12.0 | $ | 59.1 | $ | (47.1) | (79.7) | % | |||||||||||||||
Restructuring, impairment and transaction-related charges | 0.8 | 46.9 | (46.1) | (98.3) | % |
Three Months Ended September 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
(dollars in millions) | ||||||||||||||
Amount | Amount | $ Change | % Change | |||||||||||
Operating expenses (including restructuring, impairment and transaction-related charges) | $ | 59.1 | $ | 12.2 | $ | 46.9 | 384.4 | % | ||||||
Restructuring, impairment and transaction-related charges | 46.9 | 0.2 | 46.7 | nm |
Operating Income from Continuing Operations | Operating Margin | Net Loss Attributable to Quad Common Shareholders | Diluted Loss Per Share Attributable to Quad Common Shareholders | ||||||||||||||||||||||||||||||||||
Operating Income from Continuing Operations | Operating Margin | Net Earnings (Loss) Attributable to Quad Common Shareholders | Diluted Earnings (Loss) Per Share Attributable to Quad Common Shareholders | ||||||||||||||||||||||||||||||||||
For the nine months ended September 30, 2018 | $ | 85.2 | 3.0 | % | $ | 29.3 | $ | 0.57 | |||||||||||||||||||||||||||||
For the nine months ended September 30, 2019 | For the nine months ended September 30, 2019 | $ | 5.7 | 0.2 | % | $ | (163.8) | $ | (3.28) | ||||||||||||||||||||||||||||
Restructuring, impairment and transaction-related charges (1) | (33.1 | ) | (1.2 | )% | (24.8 | ) | (0.52 | ) | Restructuring, impairment and transaction-related charges (1) | 24.7 | 0.3 | % | 18.5 | 0.38 | |||||||||||||||||||||||
Interest expense (2) | N/A | N/A | (11.7 | ) | (0.25 | ) | Interest expense (2) | N/A | N/A | 13.1 | 0.27 | ||||||||||||||||||||||||||
Net pension income (3) | N/A | N/A | (3.6 | ) | (0.07 | ) | Net pension income (3) | N/A | N/A | 2.6 | 0.05 | ||||||||||||||||||||||||||
2020 gain on debt extinguishment (4) | 2020 gain on debt extinguishment (4) | N/A | N/A | (1.4) | (0.03) | ||||||||||||||||||||||||||||||||
2019 loss on debt extinguishment (4) | N/A | N/A | (22.9 | ) | (0.46 | ) | 2019 loss on debt extinguishment (4) | N/A | N/A | 22.9 | 0.46 | ||||||||||||||||||||||||||
Income taxes (5) | N/A | N/A | (4.5 | ) | (0.09 | ) | Income taxes (5) | N/A | N/A | 2.6 | 0.05 | ||||||||||||||||||||||||||
Loss from discontinued operations, net of tax (6) | N/A | N/A | (88.5 | ) | (1.78 | ) | Loss from discontinued operations, net of tax (6) | N/A | N/A | 87.5 | 1.75 | ||||||||||||||||||||||||||
Investments in unconsolidated entity and noncontrolling interests, net of tax (7) | N/A | N/A | (2.3 | ) | (0.05 | ) | Investments in unconsolidated entity and noncontrolling interests, net of tax (7) | N/A | N/A | 0.1 | 0.01 | ||||||||||||||||||||||||||
Operating income from continuing operations (8) | (46.4 | ) | (1.6 | )% | (34.8 | ) | (0.63 | ) | Operating income from continuing operations (8) | (21.9) | (0.1) | % | (16.4) | (0.34) | |||||||||||||||||||||||
For the nine months ended September 30, 2019 | $ | 5.7 | 0.2 | % | $ | (163.8 | ) | $ | (3.28 | ) | |||||||||||||||||||||||||||
For the nine months ended September 30, 2020 | For the nine months ended September 30, 2020 | $ | 8.5 | 0.4 | % | $ | (34.3) | $ | (0.68) |
(1)Restructuring, impairment and transaction-related charges decreased $24.7 million ($18.5 million, net of tax), to $49.0 million during the nine months ended September 30, 2020, and included the following: a.A $5.5 million increase in employee termination charges from $19.9 million during the nine months ended September 30, 2019, to $25.4 million during the nine months ended September 30, 2020; b.A $0.6 million increase in impairment charges from $3.6 million during the nine months ended September 30, 2019, to $4.2 million during the nine months ended September 30, 2020; c.A $49.4 million decrease in transaction-related charges from $51.1 million during the nine months ended September 30, 2019, to $1.7 million during the nine months ended September 30, 2020; d.A $0.8 million decrease in integration costs from $2.1 million during the nine months ended September 30, 2019, to $1.3 million during the nine months ended September 30, 2020; and e.A $19.4 million increase in various other restructuring charges from $3.0 million of income during the nine months ended September 30, 2019, to $16.4 million of expense during the nine months ended September 30, 2020. |
(4)The $1.8 million loss on debt extinguishment ($1.4 million, net of tax) recognized during the nine months ended September 30, 2020, relates to a $2.4 million loss on debt extinguishment from the fourth amendment to the Company’s April 28, 2014 Senior Secured Credit Facility, completed on June 29, 2020, partially offset by a $0.6 million gain on debt extinguishment recorded during the first quarter of 2020, primarily related to the repurchase of the Company’s unsecured 7.0% senior notes due May 1, 2022. A $30.5 million loss on debt extinguishment ($22.9 million, net of tax) was recognized during the nine months ended September 30, 2019, and includes $15.9 million relating to the third amendment to the Company’s April 28, 2014 Senior Secured Credit Facility, completed on January 31, 2019; and $14.6 million relating to the retirement of the Term Loan B, completed on July 26, 2019. (5)The $2.6 million increase in income tax benefit on continuing operations as calculated in the following table is primarily due to a $14.7 million income tax benefit related to the CARES Act net operating loss carry back provisions. This increase was partially offset by the following: (1) a $5.5 million decreased income tax benefit from equity award activity; (2) a $3.1 million decrease in income tax benefit from a decrease in the Company’s liability for unrecognized tax benefits in 2019 that did not repeat in 2020; (3) a $1.6 million decrease in income tax benefit related to the deductibility of acquisition-related transaction costs in 2019 that did not repeat in 2020; and (4) a $1.4 million decrease in income tax benefit for preliminary 2019 return-to-provision adjustments:
(6)The decrease in loss from discontinued operations, net of tax, of $87.5 million during the nine months ended September 30, 2020, was primarily due to the following: (1) a $78.1 million decrease in restructuring, impairment and transaction-related charges; (2) an increase in the operating margin due to productivity improvements and cost reduction activities; (3) a $13.6 million decrease in depreciation and amortization expense; (4) a $10.1 million goodwill impairment charge recorded in 2019 that did not repeat in 2020. The decrease in the loss was partially offset by a $30.1 million decrease in income tax benefit. (7)The increase in investments in unconsolidated entity and noncontrolling interests, net of tax, of $0.1 million during the nine months ended September 30, 2020, was due to an increase in loss attributed to noncontrolling interests in the Company’s condensed consolidated statements of operations related to the Company’s majority ownership of Rise. (8)Operating income from continuing operations, excluding restructuring, impairment and transaction-related charges, decreased $21.9 million ($16.4 million, net of tax impact) during the nine months ended September 30, 2020, primarily due to the following: (1) lower print volume, pricing and print service sales; (2) a $12.8 million decrease in paper byproduct recoveries; and (3) a $10.8 million increase in production hourly wages in our most competitive labor markets. These decreases were partially offset by the following: (1) a $52.5 million decrease in selling, general and administrative expenses, including a $3.4 million net benefit in 2020 in gains from property insurance claims and the receipt of a $2.2 million COVID-19 related government subsidy in Poland; (2) a $9.4 million net benefit from a change in the hourly production employee vacation policy; (3) a $6.0 million net reduction in the cost of worker’s compensation claims from improved production safety procedures; and (4) savings from other cost reduction initiatives. |
Nine Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | |||||||||
Earnings (loss) from continuing operations before income taxes and equity in (earnings) loss of unconsolidated entity | $ | (89.9 | ) | $ | 40.6 | $ | (130.5 | ) | |||
Normalized tax rate | 25.0 | % | 25.0 | % | |||||||
Income tax expense (benefit) at normalized tax rate | (22.5 | ) | 10.2 | (32.7 | ) | ||||||
Income tax expense (benefit) from the condensed consolidated statements of operations | (28.0 | ) | 0.2 | (28.2 | ) | ||||||
Impact of income taxes | $ | 5.5 | $ | 10.0 | $ | (4.5 | ) |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||||||||||||||
Amount | % of Sales | Amount | % of Sales | $ Change | % Change | ||||||||||||||||||||||||||||||
Net sales: | |||||||||||||||||||||||||||||||||||
Products | $ | 1,586.2 | 76.0 | % | $ | 2,247.4 | 78.8 | % | $ | (661.2) | (29.4) | % | |||||||||||||||||||||||
Services | 500.1 | 24.0 | % | 606.1 | 21.2 | % | (106.0) | (17.5) | % | ||||||||||||||||||||||||||
Total net sales | 2,086.3 | 100.0 | % | 2,853.5 | 100.0 | % | (767.2) | (26.9) | % | ||||||||||||||||||||||||||
Cost of sales: | |||||||||||||||||||||||||||||||||||
Products | 1,296.7 | 62.2 | % | 1,896.0 | 66.4 | % | (599.3) | (31.6) | % | ||||||||||||||||||||||||||
Services | 355.2 | 17.0 | % | 428.3 | 15.0 | % | (73.1) | (17.1) | % | ||||||||||||||||||||||||||
Total cost of sales | 1,651.9 | 79.2 | % | 2,324.3 | 81.4 | % | (672.4) | (28.9) | % | ||||||||||||||||||||||||||
Selling, general & administrative expenses | 238.0 | 11.4 | % | 290.5 | 10.2 | % | (52.5) | (18.1) | % | ||||||||||||||||||||||||||
Depreciation and amortization | 138.9 | 6.7 | % | 159.3 | 5.6 | % | (20.4) | (12.8) | % | ||||||||||||||||||||||||||
Restructuring, impairment and transaction-related charges | 49.0 | 2.3 | % | 73.7 | 2.6 | % | (24.7) | (33.5) | % | ||||||||||||||||||||||||||
Total operating expenses | 2,077.8 | 99.6 | % | 2,847.8 | 99.8 | % | (770.0) | (27.0) | % | ||||||||||||||||||||||||||
Operating income from continuing operations | $ | 8.5 | 0.4 | % | $ | 5.7 | 0.2 | % | $ | 2.8 | 49.1 | % |
Nine Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Amount | % of Sales | Amount | % of Sales | $ Change | % Change | |||||||||||||||
Net sales: | ||||||||||||||||||||
Products | $ | 2,247.4 | 78.8 | % | $ | 2,280.0 | 79.7 | % | $ | (32.6 | ) | (1.4 | )% | |||||||
Services | 606.1 | 21.2 | % | 580.9 | 20.3 | % | 25.2 | 4.3 | % | |||||||||||
Total net sales | 2,853.5 | 100.0 | % | 2,860.9 | 100.0 | % | (7.4 | ) | (0.3 | )% | ||||||||||
Cost of sales: | ||||||||||||||||||||
Products | 1,896.0 | 66.4 | % | 1,866.7 | 65.2 | % | 29.3 | 1.6 | % | |||||||||||
Services | 428.3 | 15.0 | % | 437.6 | 15.3 | % | (9.3 | ) | (2.1 | )% | ||||||||||
Total cost of sales | 2,324.3 | 81.4 | % | 2,304.3 | 80.5 | % | 20.0 | 0.9 | % | |||||||||||
Selling, general & administrative expenses | 290.5 | 10.2 | % | 268.8 | 9.4 | % | 21.7 | 8.1 | % | |||||||||||
Depreciation and amortization | 159.3 | 5.6 | % | 162.0 | 5.7 | % | (2.7 | ) | (1.7 | )% | ||||||||||
Restructuring, impairment and transaction-related charges | 73.7 | 2.6 | % | 40.6 | 1.4 | % | 33.1 | 81.5 | % | |||||||||||
Total operating expenses | 2,847.8 | 99.8 | % | 2,775.7 | 97.0 | % | 72.1 | 2.6 | % | |||||||||||
Operating income from continuing operations | $ | 5.7 | 0.2 | % | $ | 85.2 | 3.0 | % | $ | (79.5 | ) | (93.3 | )% |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2020 | 2019 | $ Change | |||||||||||||||||||||||||||
Employee termination charges | $ | 25.4 | $ | 19.9 | $ | 5.5 | |||||||||||||||||||||||
Impairment charges (a) | 4.2 | 3.6 | 0.6 | ||||||||||||||||||||||||||
Transaction-related charges | 1.7 | 51.1 | (49.4) | ||||||||||||||||||||||||||
Integration costs | 1.3 | 2.1 | (0.8) | ||||||||||||||||||||||||||
Other restructuring charges (income) | |||||||||||||||||||||||||||||
Vacant facility carrying costs and lease exit charges | 7.6 | 5.3 | 2.3 | ||||||||||||||||||||||||||
Equipment and infrastructure removal costs | 1.1 | 0.2 | 0.9 | ||||||||||||||||||||||||||
Gains on the sale of facilities (b) | (1.6) | (6.1) | 4.5 | ||||||||||||||||||||||||||
Other restructuring activities (c) | 9.3 | (2.4) | 11.7 | ||||||||||||||||||||||||||
Other restructuring charges (income) | 16.4 | (3.0) | 19.4 | ||||||||||||||||||||||||||
Total restructuring, impairment and transaction-related charges | $ | 49.0 | $ | 73.7 | $ | (24.7) |
Nine Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | |||||||||
Employee termination charges | $ | 19.9 | $ | 17.2 | $ | 2.7 | |||||
Impairment charges (a) | 3.6 | 16.0 | (12.4 | ) | |||||||
Transaction-related charges (b) | 51.1 | 1.1 | 50.0 | ||||||||
Integration costs | 2.1 | 0.7 | 1.4 | ||||||||
Other restructuring charges | |||||||||||
Vacant facility carrying costs and lease exit charges | 5.3 | 12.9 | (7.6 | ) | |||||||
Equipment and infrastructure removal costs | 0.2 | 1.3 | (1.1 | ) | |||||||
Gains on the sale of facilities (c) | (6.1 | ) | (9.7 | ) | 3.6 | ||||||
Other restructuring activities (d) | (2.4 | ) | (0.3 | ) | (2.1 | ) | |||||
Other restructuring charges | (3.0 | ) | 5.6 | (8.6 | ) | ||||||
Total restructuring, impairment and transaction-related charges | $ | 73.7 | $ | 40.6 | $ | 33.1 |
Nine Months Ended September 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
Amount | % of Net Sales | Amount | % of Net Sales | ||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
EBITDA and EBITDA margin (non-GAAP) | $ | 139.3 | 6.7 | % | $ | 37.1 | 1.3 | % |
Nine Months Ended September 30, | |||||||||||||
2019 | 2018 | ||||||||||||
Amount | % of Net Sales | Amount | % of Net Sales | ||||||||||
(dollars in millions) | |||||||||||||
EBITDA and EBITDA margin (non-GAAP) | $ | 37.1 | 1.3 | % | $ | 245.4 | 8.6 | % |
Nine Months Ended September 30, | ||||||||||||||||||
Nine Months Ended September 30, | 2020 | 2019 | ||||||||||||||||
2019 | 2018 | (dollars in millions) | ||||||||||||||||
(dollars in millions) | ||||||||||||||||||
Net earnings (loss) attributable to Quad common shareholders (1) | $ | (163.8 | ) | $ | 29.3 | |||||||||||||
Net loss attributable to Quad common shareholders (1) | Net loss attributable to Quad common shareholders (1) | $ | (34.3) | $ | (163.8) | |||||||||||||
Interest expense | 69.6 | 53.9 | Interest expense | 52.2 | 69.6 | |||||||||||||
Income tax expense (benefit) | (28.0 | ) | 0.2 | |||||||||||||||
Income tax benefit | Income tax benefit | (17.5) | (28.0) | |||||||||||||||
Depreciation and amortization | 159.3 | 162.0 | Depreciation and amortization | 138.9 | 159.3 | |||||||||||||
EBITDA (non-GAAP) | $ | 37.1 | $ | 245.4 | EBITDA (non-GAAP) | $ | 139.3 | $ | 37.1 |
(1)Net loss attributable to Quad common shareholders included the following: |
Nine Months Ended September 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
Amount | Amount | $ Change | % Change | ||||||||||||||||||||
Net sales: | |||||||||||||||||||||||
Products | $ | 1,382.2 | $ | 1,962.4 | $ | (580.2) | (29.6) | % | |||||||||||||||
Services | 488.1 | 593.6 | (105.5) | (17.8) | % | ||||||||||||||||||
Operating income from continuing operations (including restructuring, impairment and transaction-related charges) | 44.6 | 89.8 | (45.2) | (50.3) | % | ||||||||||||||||||
Operating margin | 2.4 | % | 3.5 | % | N/A | N/A | |||||||||||||||||
Restructuring, impairment and transaction-related charges | $ | 38.0 | $ | 15.1 | $ | 22.9 | 151.7 | % |
Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
(dollars in millions) | ||||||||||||||
Amount | Amount | $ Change | % Change | |||||||||||
Net sales: | ||||||||||||||
Products | $ | 1,962.4 | $ | 2,009.5 | $ | (47.1 | ) | (2.3 | )% | |||||
Services | 593.6 | 566.9 | 26.7 | 4.7 | % | |||||||||
Operating income (including restructuring, impairment and transaction-related charges) | 89.8 | 119.2 | (29.4 | ) | (24.7 | )% | ||||||||
Operating margin | 3.5 | % | 4.6 | % | N/A | N/A | ||||||||
Restructuring, impairment and transaction-related charges | $ | 15.1 | $ | 31.7 | $ | (16.6 | ) | (52.4 | )% |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2020 | 2019 | $ Change | |||||||||||||||||||||||||||
Employee termination charges | $ | 21.9 | $ | 18.8 | $ | 3.1 | |||||||||||||||||||||||
Impairment charges (a) | 4.2 | 3.2 | 1.0 | ||||||||||||||||||||||||||
Transaction-related charges | 0.2 | — | 0.2 | ||||||||||||||||||||||||||
Integration costs | 1.3 | 2.1 | (0.8) | ||||||||||||||||||||||||||
Other restructuring charges (income) (b) | 10.4 | (9.0) | 19.4 | ||||||||||||||||||||||||||
Total restructuring, impairment and transaction-related charges | $ | 38.0 | $ | 15.1 | $ | 22.9 |
Nine Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | |||||||||
Employee termination charges | $ | 18.8 | $ | 11.7 | $ | 7.1 | |||||
Impairment charges (a) | 3.2 | 13.6 | (10.4 | ) | |||||||
Transaction-related charges | — | 0.1 | (0.1 | ) | |||||||
Integration costs | 2.1 | 0.7 | 1.4 | ||||||||
Other restructuring charges (income) (b) | (9.0 | ) | 5.6 | (14.6 | ) | ||||||
Total restructuring, impairment and transaction-related charges | $ | 15.1 | $ | 31.7 | $ | (16.6 | ) |
Nine Months Ended September 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
Amount | Amount | $ Change | % Change | ||||||||||||||||||||
Net sales: | |||||||||||||||||||||||
Products | $ | 204.0 | $ | 285.0 | $ | (81.0) | (28.4) | % | |||||||||||||||
Services | 12.0 | 12.5 | (0.5) | (4.0) | % | ||||||||||||||||||
Operating income (loss) from continuing operations (including restructuring, impairment and transaction-related charges) | (2.1) | 4.9 | (7.0) | nm | |||||||||||||||||||
Operating margin | (1.0) | % | 1.6 | % | N/A | N/A | |||||||||||||||||
Restructuring, impairment and transaction-related charges | $ | 9.3 | $ | 7.5 | $ | 1.8 | 24.0 | % | |||||||||||||||
Equity in loss of unconsolidated entity | 0.9 | 0.9 | — | — | % |
Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
(dollars in millions) | ||||||||||||||
Amount | Amount | $ Change | % Change | |||||||||||
Net sales: | ||||||||||||||
Products | $ | 285.0 | $ | 270.5 | $ | 14.5 | 5.4 | % | ||||||
Services | 12.5 | 14.0 | (1.5 | ) | (10.7 | )% | ||||||||
Operating income (including restructuring, impairment and transaction-related charges) | 4.9 | 11.1 | (6.2 | ) | (55.9 | )% | ||||||||
Operating margin | 1.6 | % | 3.9 | % | N/A | N/A | ||||||||
Restructuring, impairment and transaction-related charges | $ | 7.5 | $ | 4.9 | $ | 2.6 | 53.1 | % | ||||||
Equity in (earnings) loss of unconsolidated entity | 0.9 | (0.7 | ) | (1.6 | ) | nm |
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||
2019 | 2018 | $ Change | 2020 | 2019 | $ Change | |||||||||||||||||||||||||||||||||||
Employee termination charges | $ | 1.2 | $ | 2.4 | $ | (1.2 | ) | Employee termination charges | $ | 3.3 | $ | 1.2 | $ | 2.1 | ||||||||||||||||||||||||||
Impairment charges (a) | 0.4 | 2.4 | (2.0 | ) | Impairment charges (a) | — | 0.4 | (0.4) | ||||||||||||||||||||||||||||||||
Other restructuring charges (b) | 5.9 | 0.1 | 5.8 | Other restructuring charges (b) | 6.0 | 5.9 | 0.1 | |||||||||||||||||||||||||||||||||
Total restructuring, impairment and transaction-related charges | $ | 7.5 | $ | 4.9 | $ | 2.6 | Total restructuring, impairment and transaction-related charges | $ | 9.3 | $ | 7.5 | $ | 1.8 |
(a)Includes $0.3 million of land and building impairment charges and $0.1 million of impairment charges for machinery and equipment no longer being utilized in production as a result of facility consolidations as well as other capacity reduction restructuring activities during the nine months ended September 30, 2019. |
Nine Months Ended September 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
Amount | Amount | $ Change | % Change | ||||||||||||||||||||
Operating expenses (including restructuring, impairment and transaction-related charges) | $ | 34.0 | $ | 89.0 | $ | (55.0) | (61.8) | % | |||||||||||||||
Restructuring, impairment and transaction-related charges | 1.7 | 51.1 | (49.4) | (96.7) | % |
Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
(dollars in millions) | ||||||||||||||
Amount | Amount | $ Change | % Change | |||||||||||
Operating expenses (including restructuring, impairment and transaction-related charges) | $ | 89.0 | $ | 45.1 | $ | 43.9 | 97.3 | % | ||||||
Restructuring, impairment and transaction-related charges | 51.1 | 4.0 | 47.1 | 1,177.5 | % |
Nine Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | |||||||||
Employee termination charges | $ | (0.1 | ) | $ | 3.1 | $ | (3.2 | ) | |||
Transaction-related charges (a) | 51.1 | 1.0 | 50.1 | ||||||||
Other restructuring charges (income) | 0.1 | (0.1 | ) | 0.2 | |||||||
Total restructuring, impairment and transaction-related charges | $ | 51.1 | $ | 4.0 | $ | 47.1 |
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2019 | 2018 | 2020 | 2019 | |||||||||||||||
(dollars in millions) | (dollars in millions) | |||||||||||||||||
Net cash provided by operating activities | $ | 4.1 | $ | 46.6 | Net cash provided by operating activities | $ | 107.4 | $ | 4.1 | |||||||||
Less: purchases of property, plant and equipment | (98.5 | ) | (85.0 | ) | Less: purchases of property, plant and equipment | (50.7) | (98.5) | |||||||||||
Plus: LSC-related payments (1) | 59.8 | — | Plus: LSC-related payments (1) | — | 59.8 | |||||||||||||
Free Cash Flow (non-GAAP) | $ | (34.6 | ) | $ | (38.4 | ) | ||||||||||||
Free Cash Flow (Non-GAAP) | Free Cash Flow (Non-GAAP) | $ | 56.7 | $ | (34.6) |
(1)LSC-related payments include transaction-related costs associated with the proposed, but now terminated, acquisition of LSC, including the $45 million reverse termination fee and incremental interest payments associated with the 2019 amended debt refinancing. |
September 30, 2019 | December 31, 2018 | ||||||
(dollars in millions) | |||||||
Total debt and finance lease obligations on the condensed consolidated balance sheets (1) | $ | 1,178.2 | $ | 935.8 | |||
Divided by: | |||||||
Trailing twelve months Adjusted EBITDA for Quad (non-GAAP) | $ | 356.8 | $ | 427.8 | |||
Pro forma Adjusted EBITDA for acquired companies (non-GAAP) (2) | 3.9 | 2.9 | |||||
Trailing twelve months Adjusted EBITDA (non-GAAP) | $ | 360.7 | $ | 430.7 | |||
Debt Leverage Ratio (non-GAAP) | 3.27 | x | 2.17 | x | |||
Debt Leverage Ratio—net of excess cash (non-GAAP) (3) | 3.24 | x | 2.03 | x |
September 30, 2020 | December 31, 2019 | ||||||||||
(dollars in millions) | |||||||||||
Total debt and finance lease obligations on the condensed consolidated balance sheets | $ | 1,031.2 | $ | 1,112.2 | |||||||
Divided by: trailing twelve months Adjusted EBITDA (Non-GAAP) | $ | 291.8 | $ | 334.9 | |||||||
Debt Leverage Ratio (Non-GAAP) | 3.53 | x | 3.32 | x | |||||||
Debt Leverage Ratio—Net Debt (Non-GAAP) (1) | 3.22 | x | 3.09 | x |
(1)The Company had $92.9 million and $78.7 million in cash and cash equivalents at September 30, 2020, and December 31, 2019, respectively. If all cash had been used to pay down debt, the Net Debt would have been $938.3 million and $1,033.5 million at September 30, 2020, and December 31, 2019, respectively, and the Debt Leverage Ratio would have been 3.22x and 3.09x at September 30, 2020, and December 31, |
Add | Subtract | Trailing Twelve Months Ended | ||||||||||||||||||||||||||||||||||||
Add | Subtract | Trailing Twelve Months Ended | Year Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
Year Ended | Nine Months Ended | December 31, 2019 (1) | September 30, 2020 | September 30, 2019 | September 30, 2020 | |||||||||||||||||||||||||||||||||
December 31, 2018 (1) | September 30, 2019 | September 30, 2018 | September 30, 2019 | |||||||||||||||||||||||||||||||||||
Net earnings (loss) attributable to Quad common shareholders | $ | 8.5 | $ | (163.8 | ) | $ | 29.3 | $ | (184.6 | ) | ||||||||||||||||||||||||||||
Net loss attributable to Quad common shareholders | Net loss attributable to Quad common shareholders | $ | (156.3) | $ | (34.3) | $ | (163.8) | $ | (26.8) | |||||||||||||||||||||||||||||
Interest expense | 73.2 | 69.6 | 53.9 | 88.9 | Interest expense | 90.0 | 52.2 | 69.6 | 72.6 | |||||||||||||||||||||||||||||
Income tax expense (benefit) | (2.4 | ) | (28.0 | ) | 0.2 | (30.6 | ) | |||||||||||||||||||||||||||||||
Income tax benefit | Income tax benefit | (24.4) | (17.5) | (28.0) | (13.9) | |||||||||||||||||||||||||||||||||
Depreciation and amortization | 214.9 | 159.3 | 162.0 | 212.2 | Depreciation and amortization | 209.5 | 138.9 | 159.3 | 189.1 | |||||||||||||||||||||||||||||
EBITDA (non-GAAP) | $ | 294.2 | $ | 37.1 | $ | 245.4 | $ | 85.9 | ||||||||||||||||||||||||||||||
EBITDA (Non-GAAP) | EBITDA (Non-GAAP) | $ | 118.8 | $ | 139.3 | $ | 37.1 | $ | 221.0 | |||||||||||||||||||||||||||||
Restructuring, impairment and transaction-related charges | 103.3 | 73.7 | 40.6 | 136.4 | Restructuring, impairment and transaction-related charges | 89.4 | 49.0 | 73.7 | 64.7 | |||||||||||||||||||||||||||||
Loss from discontinued operations, net of tax | 22.0 | 101.1 | 12.6 | 110.5 | Loss from discontinued operations, net of tax | 100.6 | 13.6 | 101.1 | 13.1 | |||||||||||||||||||||||||||||
Net pension income | (12.4 | ) | (4.5 | ) | (9.3 | ) | (7.6 | ) | Net pension income | (6.0) | (8.0) | (4.5) | (9.5) | |||||||||||||||||||||||||
Employee stock ownership plan contribution | 22.3 | — | 22.3 | — | ||||||||||||||||||||||||||||||||||
Loss on debt extinguishment | — | 30.5 | — | 30.5 | Loss on debt extinguishment | 30.5 | 1.8 | 30.5 | 1.8 | |||||||||||||||||||||||||||||
Other (2) | (1.6 | ) | 1.2 | (1.5 | ) | 1.1 | Other (2) | 1.6 | 0.3 | 1.2 | 0.7 | |||||||||||||||||||||||||||
Adjusted EBITDA (non-GAAP) | $ | 427.8 | $ | 239.1 | $ | 310.1 | $ | 356.8 | ||||||||||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP) | Adjusted EBITDA (Non-GAAP) | $ | 334.9 | $ | 196.0 | $ | 239.1 | $ | 291.8 |
(1)Financial information for the year ended December 31, 2019, is included as reported in the Company’s 2019 Annual Report on Form 10-K filed with the SEC on February 19, 2020. (2)Other is comprised of equity in (earnings) loss of unconsolidated entity, Adjusted EBITDA for unconsolidated equity method investments and net earnings (loss) attributable to noncontrolling interests. |
•Maximum Total Net Leverage Ratio. On a rolling twelve-month basis, the Maximum Total Net Leverage Ratio, defined as consolidated total indebtedness, net of no more than $75.0 million of unrestricted cash, to consolidated EBITDA, shall not exceed (i) 4.25 to 1.00 for the quarters ending June 30, 2020 and September 30, 2020, (ii) 4.50 to 1.00 for the quarters ending December 31, 2020 and March 31, 2021, (iii) 4.25 to 1.00 for the quarter ending June 30, 2021, and (iv) 4.125 to 1.00 for the quarter ending September 30, 2021 (for the twelve months ended September 30, 2020, the Company’s Maximum Total Net Leverage Ratio was 3.23 to 1.00). After the Covenant Relief Period, the Company will be required to comply with the Total Leverage Ratio covenant, defined as consolidated total indebtedness to consolidated EBITDA which shall not exceed 3.75 to 1.00. • |
Nine Months Ended | Year Ended | ||||||||||
Statement of Operations Financial Information | September 30, 2020 | December 31, 2019 | |||||||||
Net sales | $ | 1,897.2 | $ | 3,580.2 | |||||||
Cost of sales | 1,496.9 | 2,906.8 | |||||||||
Gross Profit | 400.3 | 673.4 | |||||||||
Net earnings (loss) from continuing operations | (19.0) | (62.0) | |||||||||
Loss from discontinued operations, net of tax | (13.6) | (100.6) | |||||||||
Net earnings (loss) | (32.6) | (162.6) | |||||||||
Less: net earnings (loss) attributable to noncontrolling interests | (0.2) | — | |||||||||
Net earnings (loss) attributable to Quad common shareholders | $ | (32.4) | $ | (162.6) | |||||||
Balance Sheet Financial Information | September 30, 2020 | December 31, 2019 | |||||||||
Total current assets | $ | 653.8 | $ | 794.9 | |||||||
Total long-term assets | 1,659.7 | 1,911.2 | |||||||||
Total current liabilities | 629.9 | 729.8 | |||||||||
Total long-term liabilities | 1,221.6 | 1,335.7 | |||||||||
Noncontrolling interests | 0.7 | 17.7 |
Issuer Purchases of Equity Securities | ||||||||||||||||||||||||||
Period | Total Number of Shares Purchased(1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(2) | ||||||||||||||||||||||
July 1, 2020 to July 31, 2020 | — | — | — | $ | 100,000,000 | |||||||||||||||||||||
August 1, 2020 to August 31, 2020 | — | — | — | 100,000,000 | ||||||||||||||||||||||
September 1, 2020 to September 30, 2020 | 912 | (3) | — | — | 100,000,000 | |||||||||||||||||||||
Total | 912 | — |
Exhibit Number | Exhibit Description | |||||||
(101) | Financial statements from the Quarterly Report on Form 10-Q of Quad/Graphics, Inc. for the quarter ended September 30, | |||||||
(104) | Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101). |
QUAD/GRAPHICS, INC. | ||||||||||||||
Date: | November 4, 2020 | By: | ||||||||||||
/s/ J. Joel Quadracci | ||||||||||||||
J. Joel Quadracci | ||||||||||||||
Chairman, President and Chief Executive Officer | ||||||||||||||
(Principal Executive Officer) | ||||||||||||||
Date: | By: | /s/ David J. Honan | ||||||||||||
David J. Honan | ||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||
(Principal Financial Officer) |