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 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.

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 months ended March 31, 2026 and 2025, 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, 2025, and notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 18, 2026.

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 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”).

Current wording

•Results of Operations. This section contains an analysis of the Company’s results of operations by comparing the results for the three months ended March 31, 2026, to the three months ended March 31, 2025. 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 Net 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, Net Debt Leverage Ratio and Adjusted EBITDA, non-GAAP financial measures that the Company uses to assess liquidity and capital allocation and deployment.

Previous wording

To the extent any statements in this Quarterly Report on Form 10-Q contain information that is not historical, these statements are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, the objectives, goals, strategies, beliefs, intentions, plans, estimates, prospects, projections and outlook of the Company, and can generally be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “plan,” “foresee,” “believe” or “continue” or the negatives of these terms, variations on them and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.

Current wording

To the extent any statements in this Quarterly Report on Form 10-Q contain information that is not historical, these statements are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, the objectives, goals, strategies, beliefs, intentions, plans, estimates, prospects, projections and outlook of the Company, and can generally be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “plan,” “foresee,” “project,” “believe” or “continue” or the negatives of these terms, variations on them and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.

Previous wording

•The impact of increased business complexity as a result of the Company’s transformation to a marketing experience company, including adapting marketing offerings and business processes as required by new markets and technologies, such as artificial intelligence;

Current wording

•The impact of increased business complexity as a result of the Company’s transformation to a marketing experience company, including adapting marketing offerings and business processes as required by new markets;

Previous wording

•The impact of decreasing demand for printing services and significant overcapacity in a highly competitive environment creates downward pricing pressures and potential under-utilization of assets;

Current wording

•The impact of decreasing demand for printing services and significant overcapacity in a highly competitive environment creating downward pricing pressures and potential under-utilization of assets;

Previous wording

•The impact of increases in its operating costs, including the cost and availability of raw materials (such as paper, ink components and other materials), inventory, parts for equipment, labor, fuel and other energy costs and freight rates;

Current wording

•The impact of increases in its operating costs, including the cost and availability of raw materials (such as paper, ink components and other materials), inventory, parts for equipment, labor, fuel and other energy costs and freight rates, and the risk the Company is unable to pass along such increases to clients;

Previous wording

•The impact macroeconomic conditions, including inflation and elevated interest rates, as well as postal rate increases, tariffs, trade restrictions, cost pressures and the price and availability of paper, have had, and may continue to have, on the Company’s business, financial condition, cash flows and results of operations (including future uncertain impacts);

Current wording

•The impact macroeconomic conditions, including elevated interest rates, postal rate increases, tariffs, trade restrictions, cost pressures and the price and availability of paper, have had, and may continue to have, on the Company’s business, financial condition, cash flows and results of operations (including future uncertain impacts);

Previous wording

•The inability of the Company to reduce costs and improve operating efficiency rapidly enough to meet market conditions;

Current wording

•The risk the Company is unable to reduce costs and improve operating efficiency rapidly enough to meet market conditions;

Previous wording

•The failure to successfully identify, manage, complete, integrate and/or achieve the intended benefits of acquisitions, investment opportunities or other significant transactions, as well as the successful identification and execution of strategic divestitures;

Current wording

•The failure to successfully identify, manage, complete and integrate acquisitions, investment opportunities or other significant transactions, as well as the successful identification and execution of strategic divestitures;

Previous wording

•The impact of an other than temporary decline in operating results and enterprise value that could lead to non-cash impairment charges due to the impairment of property, plant and equipment and other intangible assets;

Current wording

•The impact of an other than temporary decline in operating results and enterprise value that could lead to non-cash impairment charges due to the impairment of property, plant and equipment, goodwill and other intangible assets;

Previous wording

•The impact of regulatory matters and legislative developments or changes in laws, including changes in cyber-security, privacy and environmental laws; and

Current wording

•The impact of regulatory matters and legislative developments or changes in laws, including changes in cyber-security, consumer protection, safety, privacy and environmental laws; and

Previous wording

Quad is a marketing experience, or MX, company that simplifies the complexities of marketing, removing friction from wherever it occurs along the marketing journey. Its results-driven approach enables stronger marketing operations that lead to real, repeatable success for its clients. The Company does this through its MX Solutions Suite, which is flexible, scalable and connected. Quad tailors its solutions to each client’s objectives, driving cost efficiencies, improving speed to market, strengthening marketing effectiveness, and delivering value on their investments. Quad employs approximately 11,000 people in 11 countries and serves approximately 2,100 clients, including industry-leading blue-chip companies that serve both businesses and consumers across multiple industry verticals, with a particular focus on commerce, including retail, consumer packaged goods and direct to-consumer; financial services; and health.

Current wording

Quad is a marketing experience, or MX, company that simplifies the complexities of marketing, removing friction from wherever it occurs along the marketing journey. Its results-driven approach enables stronger marketing operations that lead to real, repeatable success for its clients. The Company does this through its MX Solutions Suite, which is flexible, scalable and connected. Quad tailors its solutions to each client’s objectives, driving cost efficiencies, improving speed to market, strengthening marketing effectiveness and delivering value on their investments. Quad employs approximately 10,100 people in 10 countries and serves approximately 2,100 clients, including industry-leading blue-chip companies that serve both businesses and consumers across multiple industry verticals, with a particular focus on commerce, including retail, consumer packaged goods and direct to-consumer; financial services; and health.

Previous wording

Quad’s MX Solutions Suite provides a comprehensive range of marketing and print services, seamlessly integrating creative, production and media solutions across online and offline channels. Powered by advanced intelligence and technology, this suite empowers brands to connect with their target audiences across households, in-store and online.

Current wording

Quad’s MX Solutions Suite provides a comprehensive range of marketing and print services, seamlessly integrating creative, production and media solutions across physical and digital channels. Powered by advanced intelligence and technology, this suite empowers brands to connect with their target audiences across households, in-store and online.

Previous wording

Quad’s creative offering addresses every step of the creative process, from ideation to execution. These services are powered by the Company’s strategists, creative and art directors, photographers, videographers, premedia specialists, graphic designers, animation experts and copywriters. Quad’s brand strategy and design services include brand positioning, design strategy, naming and brand mark design, visual identity creation, retail environment support, packaging design and brand roll-out execution. Through in-depth strategic brand research, the Company takes time to truly understand each client’s unique brand voice and positioning. It then applies these findings to craft compelling creative campaigns that solve the brand’s real-time problems and lead to desired consumer actions. Quad’s global platform and advanced technology support always-on premedia and adaptive design capabilities for creative and digital execution, image and color management, and prepress/premedia tasks. The Company also has an international network of 17 studios to help brands create unique and ownable content through photography, motion, computer generated imagery (CGI), automated 3D scanning and audio recording for activation across every channel in the marketing mix. This full-service offering is housed under Betty, Quad’s creative agency.

Current wording

Quad’s MX: Creative offering addresses every step of the creative process, from ideation to execution. These services are powered by the Company’s strategists, creative and art directors, photographers, videographers, premedia specialists, graphic designers, animation experts and copywriters. Quad’s brand strategy and design services include brand positioning, design strategy, naming and brand-mark design, visual identity creation, retail environment support, packaging design and brand roll-out execution. Through in-depth strategic brand research, the Company takes time to truly understand each client’s unique brand voice and positioning. It then applies these findings to craft compelling creative campaigns that solve the brand’s problems and lead to desired consumer actions. Quad’s global platform and advanced technology support always-on premedia and adaptive design capabilities for creative and digital execution, image and color management, and prepress tasks. The Company also has an international network of 14 studios to help brands create unique and ownable content through photography, motion, computer generated imagery (CGI), automated 3D scanning and audio recording for activation across every channel. This full-service offering is housed under Betty, Quad’s creative agency.

Previous wording

Quad offers a wide range of production capabilities for deploying content to offline (i.e., physical) and online channels – a major point of differentiation among the Company’s competitive set. Quad’s print operations feature the latest in automation and technology complemented by skilled manufacturing professionals. The Company can produce large-scale print products, such as magazines, retail inserts and directories, as well as targeted print products, such as catalogs, direct mail, in-store signage and displays, and high-end packaging.

Current wording

Quad offers a wide range of production capabilities for deploying content to physical and digital channels – a major point of differentiation among the Company’s competitive set. Quad’s print operations feature the latest in automation and technology complemented by skilled manufacturing professionals. The Company can produce targeted print products, such as catalogs, direct mail, in-store signage and displays, and high-end packaging, as well as large-scale print products, such as magazines, retail inserts and directories.

Previous wording

Quad complements its production capabilities through its Managed Services offering. Applying its deep industry knowledge, expansive network and substantial purchasing power, Quad helps clients manage their operations the way it runs its own – with diligence, efficiency and highly competitive costs.

Current wording

Quad complements its production capabilities through its Managed Services offering. Applying its deep industry knowledge and expansive network of trusted vendors, Quad helps clients manage their operations the way it runs its own – with diligence, efficiency and highly competitive costs.

Previous wording

Quad provides data-led, strategic media planning and placement services that support all traditional and digital touchpoints to foster direct consumer connections in-home, in-store and online. The Company activates on a complete suite of full-funnel brand and performance marketing solutions. Quad leverages more than $3.0 billion in the marketplace, enabling the Company to provide cost-efficient and effective options across all channels. Media services are supported by Quad’s proprietary, household-based data stack and Connections Planning, a comprehensive approach to connecting clients with consumers through deep exploration of audience behavior. This generates an experiential plan to help clients identify channels for most effectively reaching consumers with targeted messages in the moments they are most receptive and likely to engage across paid, owned and earned touchpoints to drive business outcomes. The Company’s offering includes advanced analytics and campaign measurement solutions like media mix and tactical media effectiveness models to gauge how all media across the marketing funnel are performing, providing data-backed guidance on how to incrementally optimize media spend. This full-service offering is housed under Rise, Quad’s media agency.

Current wording

Quad provides data-led, strategic media planning and placement services that support all physical and digital touchpoints to foster direct consumer connections at home, in-store and online. The Company activates on a complete suite of full-funnel brand and performance marketing solutions. Quad has more than $6.0 billion of media under management, giving the Company leverage in the marketplace to provide cost-efficient and effective options across all channels. Media services are supported by Quad’s proprietary, household-based data stack and Connections Strategy, a comprehensive approach that translates quantitative audience insights into experience-driven media plans that find the best combination of audience, messaging, channel and time to achieve a client’s desired business outcomes. The Connections Strategy process helps brands meaningfully connect with their priority audiences by humanizing quantitative data, considering the cultural forces, emotional drivers and behavioral signals that fuel consumer actions. Overlaying these factors with the audience’s media habits, the team forms recommendations for Rise’s planning and placement experts who execute across the paid, owned and earned touchpoints where consumers are most receptive to engagement. The Company’s offering includes campaign measurement and analytics solutions that provide in-the-moment reporting. This level of transparency helps clients understand how all their media across the marketing funnel is performing and enables Quad to provide data-backed guidance on how to incrementally optimize media spend. This full-service offering is housed under Rise, Quad’s media agency.

Previous wording

The Company’s client-facing technology solutions help brands connect marketing strategy, global content creation, analytics and optimized media performance across offline and online channels. Quad applies a people-process-technology approach that first analyzes a client’s current-state workflow and performance, then creates tailored solutions to centralize assets, optimize processes and accelerate speed to market. For instance, the Company’s ContentX planning and content management platform empowers clients to strategize, plan and manage campaigns, and personalize at scale across any channel. Quad’s Publishing Solutions platform optimizes magazine planning and streamlines print operations management by connecting sales, editorial and production departments for straightforward editions to complex regional and demographic versions. The Company’s At-Home Connect solution automates direct mail personalization, printing, mail sorting and in-home delivery, which simplifies and expedites marketers’ ability to create deeper, more direct connections with consumers. These automations can be triggered by activities and events such as loyalty anniversaries and lifestyle preferences, or opportunities such as winning back lapsed customers, converting abandoned shopping carts, or upselling or cross-selling items. Through its In-Store Connect retail media solution, Quad elevates the shopping experience in physical stores by helping brands deliver engaging messages and targeted promotions right at the shelf – a critical moment in the purchasing decision.

Current wording

The Company’s client-facing technology solutions help brands connect marketing strategy, global content creation, analytics and optimized media performance across physical and digital channels. Quad applies a people-process-technology approach that first analyzes a client’s current-state workflow and performance, then creates tailored solutions to centralize assets, optimize processes and accelerate speed to market. For instance, the Company’s ContentX content management platform empowers clients to strategize, plan and manage campaigns, and personalize at scale across any channel. The Company’s suite of “Connect” technology services helps marketers deliver content wherever consumers are. For instance, Local Connect helps national brands execute localized marketing strategies while ensuring brand consistency. This streamlined order management platform automates localized marketing execution and provides a single source of truth to manage, order and distribute multichannel campaigns. At-Home Connect automates direct mail personalization, printing, mail sorting and delivery, which simplifies and expedites marketers’ ability to reach consumers through the mailbox. Through its In-Store Connect retail media solution, Quad elevates the shopping experience in brick-and-mortar stores by helping brands deliver engaging messages and targeted promotions right at the shelf – a critical moment in the purchasing decision. In addition to these solutions, Quad integrates AI-based systems across its MX Solutions Suite to generate internal cost savings and revenue opportunities for the Company.

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 net 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 repurchases.

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, 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.

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. The Company had total liquidity of $250.9 million as of March 31, 2026, which consisted of up to $243.9 million of unused capacity under its revolving credit agreement, which was net of $23.8 million of issued letters of credit, and cash and cash equivalents of $7.0 million. Total liquidity is reduced to $177.4 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 93% and 91% of the Company’s consolidated net sales during the three and nine months ended September 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 91% of the Company’s consolidated net sales during the three months ended March 31, 2026.

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 7% and 9% of the Company’s consolidated net sales during the three and nine months ended September 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 9% of the Company’s consolidated net sales during the three months ended March 31, 2026.

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 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).

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 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

Free Cash Flow. The Company uses Free Cash Flow as a metric to assess liquidity and capital deployment. The Company’s management assesses Free Cash Flow as a measure to quantify cash available for strengthening the balance sheet (debt and pension liability reduction), for strategic capital allocation and deployment through investments in the business (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 Free Cash Flow can be significantly impacted by the Company’s restructuring activities and other unusual items.

Current wording

Free Cash Flow. The Company uses Free Cash Flow as a metric to assess liquidity and capital deployment. The Company’s management assesses Free Cash Flow as a measure to quantify cash available for strengthening the balance sheet (debt and pension liability reduction), for strategic capital allocation and deployment through investments in the business (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 Free Cash Flow can be significantly impacted by the Company’s seasonality, restructuring activities and other unusual items.

Previous 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.

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 our ability to strengthen the balance sheet through 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 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.

Current wording

The Company remains disciplined with its net debt leverage. The Company’s consolidated debt and finance lease obligations increased by $63.2 million during the three months ended March 31, 2026, primarily due to the following: (1) $93.7 million in cash used in operating activities; (2) $13.3 million in purchases of property, plant and equipment; (3) $4.9 million in purchases of treasury stock and equity awards redeemed to pay employees’ tax obligations; and (4) $5.5 million in cash dividends, partially offset by a $56.3 million reduction in cash and cash equivalents.

Previous wording

The Company continues to make progress on integrating and streamlining all aspects of its business, thereby lowering its cost structure by consolidating its manufacturing platform into its most efficient facilities, as well as realizing purchasing, mailing and logistics efficiencies by centralizing and consolidating print manufacturing volumes and eliminating redundancies in its administrative and corporate operations. The Company has continued to evolve its manufacturing platform, equipping facilities to be product-line agnostic, which enables the Company to maximize equipment utilization. Quad believes that the large plant size of its key printing facilities allows the Company to drive savings in certain product lines (such as publications and catalogs) due to economies of scale and from investments in automation and technology. The Company continues to focus on proactively aligning its cost structure to the realities of the top-line pressures it faces in the printing industry through Lean Manufacturing and sustainable continuous improvement programs. The Company believes it will continue to drive productivity improvements and sustainable cost reduction initiatives into the future through an engaged workforce and ongoing adoption of the latest manufacturing automation and technology. Through this strategy, the Company believes it can maintain the strongest, most efficient print manufacturing platform to remain a high-quality, low-cost producer.

Current wording

The Company continues to make progress on integrating and streamlining all aspects of its business, thereby lowering its cost structure by consolidating its manufacturing platform into its most efficient facilities, as well as realizing purchasing, mailing and logistics efficiencies by centralizing and consolidating print manufacturing volumes and eliminating redundancies in its administrative and corporate operations. The Company has continued to evolve its manufacturing platform, equipping facilities to be product-line agnostic, which enables the Company to maximize equipment utilization. Quad believes that the large plant size of its key printing facilities allows the Company to drive savings in certain product lines (such as publications and catalogs) due to economies of scale and from investments in automation and technology. The Company continues to focus on proactively aligning its cost structure to the realities of the top-line pressures it faces in the printing industry through Lean Manufacturing and sustainable continuous improvement programs.

Previous wording

Integrated distribution with the United States Postal Service (“USPS”) is an important component of the Company’s business. Any material change in the current service levels provided by the postal service could impact the demand that clients have for print services. In September 2024, the USPS held a pre-filing conference to further reduce service standards. These changes required an advisory opinion from the Postal Regulatory Commission (“PRC”), which was issued in January 2025, urging the USPS to reconsider its plan. Disregarding the advisory opinion, the USPS implemented the first phase of changes as of April 1, 2025, and the second phase took effect July 1, 2025. In addition to the reduced service standards, the USPS has also issued reduced service performance targets for 2025. Almost all letters and flats targets were reduced, some as much as 15% lower than 2024 targets (i.e. First Class Letters three to five day on time performance target was reduced from 90% down to 80%).

Current wording

Integrated distribution with the United States Postal Service (“USPS”) is an important component of the Company’s business. Any material change in the current postage rates or service levels provided by the postal service could impact the demand that clients have for print services. In 2025, the USPS significantly reduced their service standards with the first phase of changes taking effect on April 1, 2025, and the second phase took effect July 1, 2025. In addition to the reduced service standards, the USPS has also issued reduced service performance targets for 2025. Almost all letters and flats targets were reduced, some as much as 15% lower than 2024 targets (i.e. First Class Letters three to five day on time performance target was reduced from 90% down to 80%). The USPS, however, did not meet these reduced performance standards and targets, and has kept the performance targets for 2026 essentially in line with 2025, with a few minor adjustments.

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”). 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.

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. During March 2026, the USPS announced an 8% temporary increase on Ground Advantage and Priority Mail that started on April 26, 2026 and will continue until January 17, 2027. Additionally, the USPS proposed their once a year Market Dominant price increase in April 2026 to go into effect in July 2026, which will result in an overall price increase of approximately 5%.

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. 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 Postal Regulatory Commission (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 Consumer Price Index (“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 increases, including those noted above, as it attempts to cover its costs.

Previous wording

The Company has invested significantly in its mail preparation, optimization and distribution capabilities to mitigate the impact of increases in postage costs, and to help clients successfully navigate the ever-changing postal environment. Through its data analytics, unique software to merge mail streams on a large scale, advanced finishing capabilities and technology, and in-house transportation and logistics operations, the Company manages the mail preparation, optimization and distribution of most of its clients’ products to maximize efficiency, to enable on-time and consistent delivery and to partially reduce postage costs. It is important as part of the ongoing PRC review, the USPS maintain the current work-share discounts as the Company believes this mail optimization capability is valuable to its clients.

Current wording

The Company has invested significantly in its mail optimization, preparation and distribution capabilities to mitigate the impact of increases in postage costs, and to help clients successfully navigate the ever-changing postal environment. Through its data analytics, unique software to merge mail streams on a large scale, advanced finishing capabilities and technology, and in-house transportation and logistics operations, the Company manages the mail preparation and distribution of most of its clients’ products to maximize efficiency, to enable on-time and consistent delivery and to partially reduce these costs. The PRC decision on once a year price increases is an important part of providing the mailing industry with additional rate stability. Additionally, the new requirements for the USPS to maintain the current work-share discounts more closely to the level of avoided costs, the Company believes is a good decision as this mail optimization capability is valuable to its clients. It is imperative that the PRC ensure that rates are affordable to the mailing industry.

Previous wording

The Company continues to face several other industry challenges that have, and are expected to continue to, adversely impact the Company’s results of operation. The Company is closely monitoring the potential impacts of tariffs and recessionary pressures on its clients’ businesses that could impact their marketing spend, including print volumes. The Company continues to operate in an elevated interest rate environment, which is expected to continue through 2025. Additionally, the price and availability of paper has been, and may continue to be, adversely affected by paper mills’ permanent or temporary closures; paper mills’ access to raw materials, conversion to produce other types of paper, and ability to transport paper produced; and tariffs and trade restrictions. Postal rate increases, along with the previously described industry challenges, have led to reduced demand for printed products and has caused clients to move more aggressively into other delivery methods, such as the many digital and mobile options now available to consumers. These challenges have, as needed, driven the Company to institute several cost saving measures through its restructuring program, including plant closures and headcount reductions. Through these cost saving measures and proceeds from asset sales, the Company has been able to maintain focus on its transformation into an MX company, with flexibility to invest into the growing business, as well as continuing to be advantageous in its efforts to return capital to shareholders and reduce debt. The Company is also dependent on its production personnel to print the Company’s products in a cost-effective and efficient manner that allows the Company to obtain new clients and to drive sales from existing clients. The Company is unable to predict the full future impact these challenges will have on its business, financial condition, cash flows and results of operations, but expects them to continue through 2025.

Current wording

The Company continues to face several other industry challenges that have, and are expected to continue to, adversely impact the Company’s results of operations. The Company is closely monitoring the potential impacts of tariffs and recessionary pressures on its clients’ businesses that could impact their marketing spend, including print volumes. The Company continues to operate in an elevated interest rate environment, which is expected to continue through 2026. Additionally, the price and availability of paper has been, and may continue to be, adversely affected by paper mills’ permanent or temporary closures; paper mills’ access to raw materials, conversion to produce other types of paper that are not usable by the Company in its operations (which a number of paper mills’ have done or are doing), and ability to transport paper produced; and tariffs and trade restrictions. Postal rate increases, along with the previously described industry challenges, have led to reduced demand for printed products and has caused clients to move more aggressively into other delivery methods, such as the many digital and mobile options now available to consumers. These challenges have, as needed, driven the Company to institute several cost saving measures through its restructuring program, including plant closures and headcount reductions. Through these cost saving measures and proceeds from asset sales, the Company has been able to maintain focus on its transformation into an MX company, with flexibility to invest into the growing business, as well as continuing to return capital to shareholders and reduce debt. The Company is also dependent on its production personnel to print the Company’s products in a cost-effective and efficient manner that allows the Company to obtain new clients and to drive sales from existing clients. The Company is unable to predict the full future impact these challenges will have on its business, financial condition, cash flows and results of operations, but expects them to continue through 2026.

Previous 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):

Current wording

The Company’s operating income, operating margin, net earnings (computed using a 25% normalized tax rate for all items subject to tax) and diluted earnings per share for the three months ended March 31, 2026, changed from the three months ended March 31, 2025, as follows (dollars in millions, except margin and per share data):

Previous 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:

Current wording

(1)Restructuring, impairment and transaction-related charges, net increased $1.8 million ($1.4 million, net of tax), to $8.4 million during the three months ended March 31, 2026, and included the following:

Previous 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;

Current wording

a. A $3.7 million increase in employee termination charges from $0.7 million during the three months ended March 31, 2025, to $4.4 million during the three months ended March 31, 2026;

Previous 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;

Current wording

b. A $0.1 million decrease in impairment charges from $0.3 million during the three months ended March 31, 2025, to $0.2 million during the three months ended March 31, 2026;

Previous wording

c. A $0.5 million decrease in transaction-related charges from $0.9 million for the three months ended September 30, 2024, to $0.4 million during the three months ended September 30, 2025;

Current wording

c. A $2.4 million decrease in transaction-related charges from $2.6 million during the three months ended March 31, 2025, to $0.2 million during the three months ended March 31, 2026;

Previous 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

Current wording

d. A $0.4 million increase in integration costs from zero during the three months ended March 31, 2025, to $0.4 million during the three months ended March 31, 2026; and

Previous 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.

Current wording

e. A $0.2 million increase in various other restructuring charges from $3.0 million during the three months ended March 31, 2025, to $3.2 million during the three months ended March 31, 2026.