Quad/Graphics, Inc.

Previous wording

The following discussion of the financial condition and results of operations of Quad should be read together with (1) the condensed consolidated financial statements for the three and six months ended June 30, 2025 and 2024, including the notes thereto, included in Item 1, “Condensed Consolidated Financial Statements (Unaudited),” of this Quarterly Report on Form 10-Q; and (2) the audited consolidated annual financial statements as of and for the year ended December 31, 2024, and notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 21, 2025.

Current wording

The following discussion of the financial condition and results of operations of Quad should be read together with (1) the condensed consolidated financial statements for the three and nine months ended September 30, 2025 and 2024, including the notes thereto, included in Item 1, “Condensed Consolidated Financial Statements (Unaudited),” of this Quarterly Report on Form 10-Q; and (2) the audited consolidated annual financial statements as of and for the year ended December 31, 2024, and notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 21, 2025.

Previous wording

•Results of Operations. This section contains an analysis of the Company’s results of operations by comparing the results for (1) the three months ended June 30, 2025, to the three months ended June 30, 2024; and (2) the six months ended June 30, 2025, to the six months ended June 30, 2024. The comparability of the Company’s results of operations between periods was impacted by the divestiture of the Company's European operations, which were sold on February 28, 2025, and the acquisition of the Enru co-mail assets, which were acquired on April 1, 2025. The results of operations of the divested operations are included in the Company’s condensed consolidated results until the date of disposition and the results of operations of the acquired operations are included in the Company’s condensed consolidated results from the date of acquisition. Forward-looking statements providing a general description of recent and projected industry and Company developments that are important to understanding the Company’s results of operations are included in this section. This section also provides a discussion of EBITDA and EBITDA margin, financial measures that the Company uses to assess the performance of its business that are not prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Current wording

•Results of Operations. This section contains an analysis of the Company’s results of operations by comparing the results for (1) the three months ended September 30, 2025, to the three months ended September 30, 2024; and (2) the nine months ended September 30, 2025, to the nine months ended September 30, 2024. The comparability of the Company’s results of operations between periods was impacted by the divestiture of the Company's European operations, which were sold on February 28, 2025, and the acquisition of the Enru co-mail assets, which were acquired on April 1, 2025. The results of operations of the divested operations are included in the Company’s condensed consolidated results until the date of disposition and the results of operations of the acquired operations are included in the Company’s condensed consolidated results from the date of acquisition. Forward-looking statements providing a general description of recent and projected industry and Company developments that are important to understanding the Company’s results of operations are included in this section. This section also provides a discussion of EBITDA and EBITDA margin, financial measures that the Company uses to assess the performance of its business that are not prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Previous wording

•Liquidity and Capital Resources. This section provides an analysis of the Company’s capitalization, cash flows and a discussion of outstanding debt and commitments. Forward-looking statements important to understanding the Company’s financial condition are included in this section. This section also provides a discussion of Free Cash Flow and Debt Leverage Ratio, non-GAAP financial measures that the Company uses to assess liquidity and capital allocation and deployment.

Current wording

•Liquidity and Capital Resources. This section provides an analysis of the Company’s capitalization, cash flows and a discussion of outstanding debt and commitments. Forward-looking statements important to understanding the Company’s financial condition are included in this section. This section also provides a discussion of Free Cash Flow and Net Debt Leverage Ratio, non-GAAP financial measures that the Company uses to assess liquidity and capital allocation and deployment.

Previous wording

Quad follows a disciplined approach to maintaining and enhancing financial strength to create shareholder value. This strategy is centered on the Company’s ability to drive profitable growth and maximize net earnings, Free Cash Flow, and operating margins; maintain consistent financial policies to ensure a strong balance sheet, liquidity level and access to capital; and retain the financial flexibility needed to strategically allocate and deploy capital as circumstances change. The priorities for capital allocation and deployment are balanced according to prevailing circumstances and what the Company thinks is best for shareholder value creation at any point in time. These priorities currently include increasing growth investments as an MX company to fuel net sales growth, maintaining low debt leverage to ensure long-term financial strength, and increasing return of capital to shareholders through dividends and share buybacks.

Current wording

Quad follows a disciplined approach to maintaining and enhancing financial strength to create shareholder value. This strategy is centered on the Company’s ability to drive profitable growth and maximize net earnings, Free Cash Flow, and operating margins; maintain consistent financial policies to ensure a strong balance sheet, liquidity level and access to capital; and retain the financial flexibility needed to strategically allocate and deploy capital as circumstances change. The priorities for capital allocation and deployment are balanced according to prevailing circumstances and what the Company thinks is best for shareholder value creation at any point in time. These priorities currently include increasing growth investments as an MX company to fuel net sales growth, maintaining low net debt leverage to ensure long-term financial strength, and increasing return of capital to shareholders through dividends and share buybacks.

Previous wording

Quad applies holistic continuous improvement and lean enterprise methodologies to further streamline its processes and maximize operating margins. These same methodologies are applied to its selling, general and administrative functions. The Company continually works to lower its cost structure by consolidating manufacturing operations into its most efficient facilities, as well as realizing purchasing, mailing and logistics synergies by centralizing and consolidating print manufacturing volumes, and eliminating redundancies in its administrative and corporate operations. Quad believes that its focused efforts to be a high-quality, low-cost producer generates increased Free Cash Flow and allows the Company to maintain a strong balance sheet through debt reduction. The Company’s disciplined financial approach and strong, trusted banking relationships allows it to maintain sufficient liquidity and to reduce refinancing risk, such as with Quad’s successful 2024 refinancing of its Term Loan A and revolving credit agreement. The Company had total liquidity of $217.6 million as of June 30, 2025, which consisted of up to $210.9 million of unused capacity under its revolving credit agreement, which was net of $25.6 million of issued letters of credit, and cash and cash equivalents of $6.7 million. Total liquidity is reduced to $202.1 million under the Company’s most restrictive debt covenants.

Current wording

Quad applies holistic continuous improvement and lean enterprise methodologies to further streamline its processes and maximize operating margins. These same methodologies are applied to its selling, general and administrative functions. The Company continually works to lower its cost structure by consolidating manufacturing operations into its most efficient facilities, as well as realizing purchasing, mailing and logistics synergies by centralizing and consolidating print manufacturing volumes, and eliminating redundancies in its administrative and corporate operations. Quad believes that its focused efforts to be a high-quality, low-cost producer, will enable it to generate increased Free Cash Flow and allow the Company to maintain a strong balance sheet through debt reduction. The Company’s disciplined financial approach and strong, trusted banking relationships allows it to maintain sufficient liquidity and to reduce refinancing risk, such as with Quad’s successful 2024 refinancing of its Term Loan A and revolving credit agreement. The Company had total liquidity of $230.2 million as of September 30, 2025, which consisted of up to $224.0 million of unused capacity under its revolving credit agreement, which was net of $24.2 million of issued letters of credit, and cash and cash equivalents of $6.2 million. Total liquidity is reduced to $165.5 million under the Company’s most restrictive debt covenants.

Previous wording

•The United States Print and Related Services segment is predominantly comprised of the Company’s United States printing operations, managed as one integrated platform, and marketing and other complementary services. The printing operations include print execution and logistics for retail inserts, catalogs, long-run publications, special interest publications, journals, direct mail, directories, in-store marketing and promotion, packaging, custom print products, as well as other commercial and specialty printed products, along with global paper procurement and the manufacture of ink. Marketing and other complementary services include data intelligence and analytics, technology solutions, media planning, placement and optimization, creative strategy and content creation, as well as execution in non-print channels (e.g., digital and broadcast). This segment also includes medical services. The United States Print and Related Services segment accounted for approximately 92% and 90% of the Company’s consolidated net sales during the three and six months ended June 30, 2025, respectively.

Current wording

•The United States Print and Related Services segment is predominantly comprised of the Company’s United States printing operations, managed as one integrated platform, and marketing and other complementary services. The printing operations include print execution and logistics for retail inserts, catalogs, long-run publications, special interest publications, journals, direct mail, directories, in-store marketing and promotion, packaging, custom print products, as well as other commercial and specialty printed products, along with global paper procurement and the manufacture of ink. Marketing and other complementary services include data intelligence and analytics, technology solutions, media planning, placement and optimization, creative strategy and content creation, as well as execution in non-print channels (e.g., digital and broadcast). This segment also includes medical services. The United States Print and Related Services segment accounted for approximately 93% and 91% of the Company’s consolidated net sales during the three and nine months ended September 30, 2025, respectively.

Previous wording

•The International segment consists of the Company’s printing operations in Latin America, including operations in Colombia, Mexico and Peru, as well as operations in Europe, including operations in England, France, Germany and Poland, until the European operations were sold on February 28, 2025. This segment provides printed products and marketing and other complementary services consistent with the United States Print and Related Services segment. The International segment accounted for approximately 8% and 10% of the Company’s consolidated net sales during the three and six months ended June 30, 2025, respectively.

Current wording

•The International segment consists of the Company’s printing operations in Latin America, including operations in Colombia, Mexico and Peru, as well as operations in Europe, including operations in England, France, Germany and Poland, until the European operations were sold on February 28, 2025. This segment provides printed products and marketing and other complementary services consistent with the United States Print and Related Services segment. The International segment accounted for approximately 7% and 9% of the Company’s consolidated net sales during the three and nine months ended September 30, 2025, respectively.

Previous wording

The Company’s management believes the ability to generate net sales growth, profit increases and positive cash flow, while maintaining the appropriate level of debt, are key indicators of the successful execution of the Company’s business strategy and will increase shareholder value. The Company uses period-over-period net sales growth, EBITDA, EBITDA margin, net cash provided by (used in) operating activities, Free Cash Flow and Debt Leverage Ratio as metrics to measure operating performance, financial condition and liquidity. EBITDA, EBITDA margin, Free Cash Flow and Debt Leverage Ratio are non-GAAP financial measures (see the definitions of EBITDA and EBITDA margin and the reconciliation of net earnings (loss) to EBITDA in the “Results of Operations” section below, and see the definitions of Free Cash Flow and Debt Leverage Ratio, the reconciliation of net cash used in operating activities to Free Cash Flow, and the calculation of Debt Leverage Ratio in the “Liquidity and Capital Resources” section below).

Current wording

The Company’s management believes the ability to generate net sales growth, profit increases and positive cash flow, while maintaining the appropriate level of debt, are key indicators of the successful execution of the Company’s business strategy and will increase shareholder value. The Company uses period-over-period net sales growth, EBITDA, EBITDA margin, net cash provided by (used in) operating activities, Free Cash Flow and Net Debt Leverage Ratio as metrics to measure operating performance, financial condition and liquidity. EBITDA, EBITDA margin, Free Cash Flow and Net Debt Leverage Ratio are non-GAAP financial measures (see the definitions of EBITDA and EBITDA margin and the reconciliation of net earnings (loss) to EBITDA in the “Results of Operations” section below, and see the definitions of Free Cash Flow and Net Debt Leverage Ratio, the reconciliation of net cash used in operating activities to Free Cash Flow, and the calculation of Net Debt Leverage Ratio in the “Liquidity and Capital Resources” section below).

Previous wording

Debt Leverage Ratio. The Company uses the Debt Leverage Ratio as a metric to assess liquidity and the flexibility of its balance sheet. Consistent with other liquidity metrics, the Company monitors the Debt Leverage Ratio as a measure to determine the appropriate level of debt the Company believes is optimal to operate its business, and accordingly, to quantify debt capacity available for strengthening the balance sheet (debt and pension liability reduction), for strategic capital allocation and deployment through investments in the business (capital expenditures, acquisitions and strategic investments), and for returning capital to the shareholders (dividends and share repurchases). The Company’s priorities for capital allocation and deployment will change as circumstances dictate for the business, and the Debt Leverage Ratio can be significantly impacted by the amount and timing of large expenditures requiring debt financing, as well as changes in profitability.

Current wording

Net Debt Leverage Ratio. The Company uses the Net Debt Leverage Ratio as a metric to assess liquidity and the flexibility of its balance sheet. Consistent with other liquidity metrics, the Company monitors the Net Debt Leverage Ratio as a measure to determine the appropriate level of debt the Company believes is optimal to operate its business, and accordingly, to quantify debt capacity available for strengthening the balance sheet (debt and pension liability reduction), for strategic capital allocation and deployment through investments in the business (capital expenditures, acquisitions and strategic investments), and for returning capital to the shareholders (dividends and share repurchases). The Company’s priorities for capital allocation and deployment will change as circumstances dictate for the business, and the Net Debt Leverage Ratio can be significantly impacted by the amount and timing of large expenditures requiring debt financing, as well as changes in profitability.

Previous wording

The Company remains disciplined with its debt leverage. The Company’s consolidated debt and finance lease obligations increased by $75.7 million during the six months ended June 30, 2025, primarily due to the following: (1) $41.6 million in cash used in operating activities from seasonality; (2) $24.3 million in purchases of property, plant and equipment; (3) $16.3 million in cash paid for an acquisition; (4) $11.2 million in purchases of treasury stock and equity awards redeemed to pay employees’ tax obligations; and (5) $7.4 million in cash dividends, partially offset by a $22.5 million reduction in cash and cash equivalents.

Current wording

The Company remains disciplined with its net debt leverage. The Company’s consolidated debt and finance lease obligations increased by $92.2 million during the nine months ended September 30, 2025, primarily due to the following: (1) $50.0 million in cash used in operating activities; (2) $36.5 million in purchases of property, plant and equipment; (3) $16.3 million in cash paid for an acquisition; (4) $11.4 million in purchases of treasury stock and equity awards redeemed to pay employees’ tax obligations; and (5) $10.9 million in cash dividends, partially offset by a $23.0 million reduction in cash and cash equivalents and $12.5 million in proceeds from the sale of property, plant and equipment.

Previous wording

The USPS continues to experience financial problems. The passing of the Postal Service Reform Act of 2022, signed in April 2022, gave the USPS considerable financial relief as well as significant other relief over the next ten years. While the legislative postal reform helps considerably, without decreased operational cost structures, increased efficiencies or increased volumes and revenues, these losses are expected to continue into the future. As a result of these financial difficulties, the USPS has continued to adjust its postal rates and service levels. The USPS did not implement a Market Dominant product price increase for January 2025. However, the available rate authority was rolled forward to July 2025, where approximately 8% postage increases were implemented and far exceeded Consumer Price Index (“CPI”). The USPS has confirmed it intends to continue with twice a year price increases for 2026 and 2027. The USPS launched a new Marketing Mail Catalog promotion, which will offer a 10% discount on postage for any mail pieces that meet the USPS definition of a catalog. The discount will go into effect on October 1, 2025 and continue until June 30, 2026. An increase to catalog volume and revenue is expected from the promotion. However, with postage increases that continue to exceed the CPI, combined with lower service standards, we expect that clients will continue to reduce mail volumes and explore the use of alternative methods for delivering a larger portion of their products, such as continued diversion to the internet, digital and mobile channels and other alternative media channels, in order to ensure that they stay within their expected postage budgets.

Current wording

The USPS continues to experience financial problems. The passing of the Postal Service Reform Act of 2022, signed in April 2022, gave the USPS considerable financial relief as well as significant other relief over the next ten years. While the legislative postal reform helps considerably, without decreased operational cost structures, increased efficiencies or increased volumes and revenues, these losses are expected to continue into the future. As a result of these financial difficulties, the USPS has continued to adjust its postal rates and service levels. The USPS did not implement a Market Dominant product price increase for January 2025. However, the available rate authority was rolled forward to July 2025, where approximately 8% postage increases were implemented and far exceeded Consumer Price Index (“CPI”). In September 2025, the USPS announced they would not increase prices on Market Dominant products in January 2026. The USPS launched a new Marketing Mail Catalog promotion, which will offer a 10% discount on postage for any mail pieces that meet the USPS definition of a catalog. The discount will go into effect on October 1, 2025 and continue until June 30, 2026. An increase to catalog volume and revenue is expected from the promotion. However, with postage increases that continue to exceed the CPI, combined with lower service standards, we expect that clients will continue to reduce mail volumes and explore the use of alternative methods for delivering a larger portion of their products, such as continued diversion to the internet, digital and mobile channels and other alternative media channels, in order to ensure that they stay within their expected postage budgets.

Previous wording

Federal statute requires the PRC to conduct reviews of the overall rate-making structure for the USPS to ensure funding stability. As a result of those reviews, the PRC authorized a five year rate-making structure that provides the USPS with additional pricing flexibility over the CPI cap, which has resulted in a substantially altered rate structure for mailers. The revised rate authority that is effective as a result of the rules issued by the PRC includes a higher overall rate cap on the USPS’ ability to increase rates from year to year. The USPS has used these additional rate authorities to implement twice a year increases. This will continue to lead to price spikes for mailers and may also reduce the incentive for the USPS to continue to take out costs and instead continue to rely on postage to cover the costs of an outdated postal service that does not reflect the industry’s ability or willingness to pay. In response to industry concerns, in April 2024, the PRC opened a proceeding to start the next rate system review, which includes a phased approach of proposing changes to improve rate predictability, such as only allowing price changes once a year and aligning workshare discounts. However, the Company believes the continued use of all available rate authority by the USPS that far exceeds CPI will continue to increase the potential volume declines.

Current wording

Federal statute requires the PRC to conduct reviews of the overall rate-making structure for the USPS to ensure funding stability. As a result of those reviews, the PRC authorized a five year rate-making structure that provides the USPS with additional pricing flexibility over the CPI cap, which has resulted in a substantially altered rate structure for mailers. The revised rate authority that is effective as a result of the rules issued by the PRC includes a higher overall rate cap on the USPS’ ability to increase rates from year to year. This will continue to lead to price spikes for mailers and may also reduce the incentive for the USPS to continue to take out costs and instead continue to rely on postage to cover the costs of an outdated postal service that does not reflect the industry’s ability or willingness to pay. In response to industry concerns, in April 2024, the PRC opened a proceeding to start the next rate system review, which includes a phased approach of proposing changes to improve rate predictability, such as only allowing price changes once a year and aligning workshare discounts. However, the Company believes the continued use of all available rate authority by the USPS that far exceeds CPI will continue to increase the potential volume declines.

Previous wording

The Company’s operating income, operating margin, net loss (computed using a 25% normalized tax rate for all items subject to tax) and diluted loss per share for the three months ended June 30, 2025, changed from the three months ended June 30, 2024, as follows (dollars in millions, except margin and per share data):

Current wording

The Company’s operating income (loss), operating margin, net earnings (loss) (computed using a 25% normalized tax rate for all items subject to tax) and diluted earnings (loss) per share for the three months ended September 30, 2025, changed from the three months ended September 30, 2024, as follows (dollars in millions, except margin and per share data):

Previous wording

(1)Restructuring, impairment and transaction-related charges, net decreased $0.9 million ($0.6 million, net of tax), to $9.2 million during the three months ended June 30, 2025, and included the following:

Current wording

(1)Restructuring, impairment and transaction-related charges, net decreased $32.0 million ($24.0 million, net of tax), to $7.3 million during the three months ended September 30, 2025, and included the following:

Previous wording

a. A $2.6 million increase in employee termination charges from $3.2 million during the three months ended June 30, 2024, to $5.8 million during the three months ended June 30, 2025;

Current wording

a. A $0.1 million increase in employee termination charges from $2.2 million during the three months ended September 30, 2024, to $2.3 million during the three months ended September 30, 2025;

Previous wording

b. A $9.2 million decrease in impairment charges from $13.7 million during the six months ended June 30, 2024, to $4.5 million during the six months ended June 30, 2025;

Current wording

b. A $51.6 million decrease in impairment charges from $52.2 million during the three months ended September 30, 2024, to $0.6 million during the three months ended September 30, 2025;

Previous wording

d. A $0.1 million increase in integration costs from $0.1 million during the three months ended June 30, 2024, to $0.2 million during the three months ended June 30, 2025; and

Current wording

d. A $1.5 million increase in integration costs from $0.1 million during the three months ended September 30, 2024, to $1.6 million during the three months ended September 30, 2025; and

Previous wording

e. A $6.7 million decrease in various other restructuring charges from $5.3 million of expense during the three months ended June 30, 2024, to $1.4 million of income during the three months ended June 30, 2025.

Current wording

e. A $18.5 million increase in various other restructuring charges from $16.1 million of income during the three months ended September 30, 2024, to $2.4 million of expense during the three months ended September 30, 2025.

Previous wording

(2)Other operating income elements decreased $2.3 million ($1.7 million, net of tax) primarily due to the impact from lower product and services net sales and increased investments in innovation offerings to drive future revenue growth, partially offset by the following: (1) a $8.5 million decrease in selling, general and administrative expenses; (2) a $5.7 million decrease in depreciation and amortization expense; (3) impacts from improved manufacturing productivity; and (4) savings from other cost reduction initiatives.

Current wording

(2)Other operating income elements decreased $0.7 million ($0.5 million, net of tax) primarily due to the impact from lower product and services net sales and increased investments in innovation offerings to drive future revenue growth, partially offset by the following: (1) a $7.5 million decrease in selling, general and administrative expenses; (2) a $5.1 million decrease in depreciation and amortization expense; and (3) impacts from improved manufacturing productivity.

Previous wording

(3)Interest expense decreased $4.0 million ($3.0 million, net of tax) during the three months ended June 30, 2025, to $13.2 million. This change was due to lower average debt levels and a lower weighted average interest rate on borrowings in the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

Current wording

(3)Interest expense decreased $4.2 million ($3.1 million, net of tax) during the three months ended September 30, 2025, to $12.8 million. This change was due to lower average debt levels and a lower weighted average interest rate on borrowings in the three months ended September 30, 2025, as compared to the three months ended September 30, 2024.

Previous wording

(4)Net pension expense increased $0.5 million ($0.4 million, net of tax) during the three months ended June 30, 2025, from $0.2 million of income to $0.3 million of expense. This was due to a $0.8 million decrease from the expected long-term return on pension plan assets, partially offset by a $0.3 million decrease from interest cost on pension plan liabilities.

Current wording

(4)Net pension expense increased $0.6 million ($0.4 million, net of tax) during the three months ended September 30, 2025, from $0.2 million of income to $0.4 million of expense. This was due to a $0.8 million decrease from the expected long-term return on pension plan assets, partially offset by a $0.2 million decrease from interest cost on pension plan liabilities.

Previous wording

(5)The $1.2 million decrease in income tax expense as calculated in the following table is primarily due to a $1.3 million decrease from valuation allowance reserves.

Current wording

(5)The $8.7 million decrease in income tax expense as calculated in the following table is primarily due to an $8.9 million decrease from the impact of non-deductible expenses and a $3.1 million decrease from valuation allowance reserves, partially offset by a $2.6 million increase from income from foreign branches.

Previous wording

Product sales decreased $49.6 million, or 10.0%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to the following: (1) a $35.8 million decrease in paper sales, of which $15.1 million is a result of the sale of the European operations on February 28, 2025; (2) an $11.6 million decrease in net sales in the Company’s print product lines, which is net of a $17.9 million decrease as a result of the sale of the European operations; and (3) $2.2 million in unfavorable foreign exchange impacts.

Current wording

Product sales decreased $70.7 million, or 13.3%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to a $41.9 million decrease in paper sales, of which $14.9 million is a result of the sale of the European operations on February 28, 2025, and a $29.6 million decrease in net sales in the Company’s print product lines, of which $19.7 million is a result of the sale of the European operations, partially offset by $0.8 million in favorable foreign exchange impacts.

Previous wording

Service sales, which primarily consist of logistics, distribution, marketing services, imaging and medical services, decreased $25.7 million, or 9.0%, for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to a $16.6 million decrease in logistics sales, of which $5.2 million is a result of the sale of the European operations, and a $9.1 million decrease in marketing services and medical services, of which $0.7 million is a result of the sale of the European operations.

Current wording

Service sales, which primarily consist of logistics, distribution, marketing services, imaging and medical services, decreased $16.1 million, or 11.1%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to a $12.4 million decrease in logistics sales, of which $4.0 million is a result of the sale of the European operations, and a $3.7 million net decrease in marketing services and medical services, of which $0.7 million is a result of the sale of the European operations.

Previous wording

Cost of product sales decreased $39.5 million, or 9.7%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to the following: (1) a decrease in paper costs due to the decrease in paper sales; (2) impacts from improved manufacturing productivity; and (3) other cost reduction initiatives.

Current wording

Cost of product sales decreased $65.6 million, or 14.9%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to the following: (1) a decrease in paper costs due to the decrease in paper sales; (2) impacts from improved manufacturing productivity; and (3) other cost reduction initiatives.

Previous wording

Cost of service sales decreased $6.3 million, or 7.3%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to the impact from decreased freight volumes and lower marketing services.

Current wording

Cost of service sales decreased $7.9 million, or 8.9%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to the impact from decreased freight volumes and lower marketing services.

Previous wording

Selling, general and administrative expenses decreased $8.5 million, or 9.6%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to the following: (1) a $6.5 million decrease from favorable foreign exchange impacts; (2) $4.9 million in lower employee-related costs; and (3) savings from other cost reduction initiatives, partially offset by a $4.1 million gain on the sale of an investment in 2024 that did not reoccur in 2025. Selling, general and administrative expenses as a percentage of net sales was 14.0% for the three months ended June 30, 2025, and the three months ended June 30, 2024.

Current wording

Selling, general and administrative expenses decreased $7.5 million, or 8.5%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to the following: (1) $3.0 million in lower employee-related costs; (2) a $1.4 million decrease from unfavorable foreign exchange impacts in 2024; (3) a $1.0 million decrease in professional fees; (4) $0.3 million in lower credit loss expense; and (5) savings from other cost reduction initiatives. Selling, general and administrative expenses as a percentage of net sales was 13.8% for the three months ended September 30, 2025, compared to 13.1% for the three months ended September 30, 2024.

Previous wording

Depreciation and amortization decreased $5.7 million, or 21.6%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, due to a $2.9 million decrease in depreciation expense, primarily due to impacts from plant closures and from property, plant and equipment becoming fully depreciated over the past year, and a $2.8 million decrease in amortization expense.

Current wording

Depreciation and amortization decreased $5.1 million, or 20.9%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to a $2.7 million decrease in depreciation expense, primarily due to impacts from plant closures and from property, plant and equipment becoming fully depreciated over the past year, and a $2.4 million decrease in amortization expense.

Previous wording

EBITDA decreased $7.6 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to the impact from lower product and logistics and marketing services sales and increased investments in innovative offerings to drive future revenue growth, partially offset by impacts from improved manufacturing productivity and savings from other cost reduction initiatives and $0.9 million of decreased restructuring, impairment and transaction-related charges, net.

Current wording

EBITDA increased $25.6 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to $32.0 million of decreased restructuring, impairment and transaction-related charges, net, and improved manufacturing productivity, partially offset by the impact from lower product, logistics and marketing services sales and increased investments in innovative offerings to drive future revenue growth.

Previous wording

A reconciliation of EBITDA to net loss for the three months ended June 30, 2025 and 2024, was as follows:

Current wording

A reconciliation of EBITDA to net earnings (loss) for the three months ended September 30, 2025 and 2024, was as follows:

Previous wording

Service sales for the United States Print and Related Services segment decreased $8.5 million, or 6.4%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to a $5.5 million decrease in logistics sales and a $3.0 million decrease in marketing services and medical services.

Current wording

Service sales for the United States Print and Related Services segment decreased $11.4 million, or 8.1%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to an $8.4 million decrease in logistics sales and a $3.0 million net decrease in marketing services and medical services.

Previous wording

Operating income for the United States Print and Related Services segment decreased $2.6 million, or 10.2%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to the impact from decreased logistics and marketing services sales and increased investments in innovative offerings to drive future revenue growth, partially offset by the following: (1) a $3.8 million decrease in depreciation and amortization; (2) a $0.7 million decrease in restructuring, impairment and transaction-related charges, net; (3) impacts from improved manufacturing productivity; and (4) savings from other cost reduction initiatives.

Current wording

Operating income for the United States Print and Related Services segment decreased $14.7 million, or 28.7%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to the following: (1) a $19.3 million increase in restructuring, impairment and transaction-related charges, net; (2) the impact from decreased logistics and marketing services sales; and (3) increased investments in innovative offerings to drive future revenue growth, partially offset by a $3.5 million decrease in depreciation and amortization and impacts from improved manufacturing productivity.

Previous wording

Operating margin for the United States Print and Related Services segment decreased to 4.3% for the three months ended June 30, 2025, from 4.7% for the three months ended June 30, 2024, primarily due to the reasons provided above.

Current wording

Operating margin for the United States Print and Related Services segment decreased to 6.7% for the three months ended September 30, 2025, from 8.8% for the three months ended September 30, 2024, primarily due to the reasons provided above.

Previous wording

c. Transaction-related charges of $0.4 million for the three months ended June 30, 2025 and June 30, 2024;

Current wording

(a)Includes $0.6 million and $1.2 million of impairment charges during the three months ended September 30, 2025 and 2024, respectively, which consisted of $0.4 million for property in 2025, $0.4 million for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction activities in 2024, and $0.2 million and $0.8 million, respectively, for operating lease right-of-use assets.

Previous wording

The following table summarizes net sales, operating income, operating margin and certain items impacting comparability within the International segment:

Current wording

The following table summarizes net sales, operating income (loss), operating margin and certain items impacting comparability within the International segment:

Previous wording

Product sales for the International segment decreased $38.3 million, or 44.7%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to the following: (1) a $19.0 million decrease in print product volume, which is net of a $17.9 million decrease as a result of the sale of the European operations; (2) a $17.1 million decrease in paper sales, of which $15.1 million is a result of the sale of the European operations; and (3) $2.2 million in unfavorable foreign exchange impacts, primarily in Mexico.

Current wording

Product sales for the International segment decreased $47.8 million, or 52.5%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to a $27.4 million decrease in print product volume, of which $19.7 million is a result of the sale of the European operations, and a $21.2 million decrease in paper sales, of which $14.9 million is a result of the sale of the European operations, partially offset by $0.8 million in favorable foreign exchange impacts, primarily in Mexico.

Previous wording

Service sales for the International segment decreased $4.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to a $3.5 million decrease in logistics sales and a $0.7 million decrease in marketing services, both as a result of the sale of the European operations.

Current wording

Service sales for the International segment decreased $4.7 million, or 100.0%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to a $4.0 million decrease in logistics sales and a $0.7 million decrease in marketing services, both as a result of the sale of the European operations.

Previous wording

Operating income for the International segment decreased $1.2 million, or 21.1%, for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to a $1.4 million increase in restructuring, impairment and transaction-related charges, net, partially offset by a $0.2 million increase in operating income, net as a result of the sale of the European operations.

Current wording

Operating income (loss) for the International segment increased $49.0 million, or 105.4%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to a $51.6 million decrease in restructuring, impairment and transaction-related charges, net, partially offset by a $2.6 million decrease in operating income, primarily as a result of the sale of the European operations.

Previous wording

Corporate operating expenses increased $0.3 million, or 1.2%, for the six months ended June 30, 2025, compared to the six months ended June 30, 2024 primarily due to a $0.6 million increase in restructuring, impairment and transaction-related charges, net, partially offset by a $0.2 million decrease in employee-related costs.

Current wording

Corporate operating expenses increased $3.0 million, or 31.3%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to a $2.1 million increase in employee-related costs and a $0.3 million increase in restructuring, impairment and transaction-related charges, net.

Previous wording

Corporate restructuring, impairment and transaction-related charges, net increased $0.4 million, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to the following:

Current wording

Corporate restructuring, impairment and transaction-related charges, net increased $0.3 million, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to the following: