Quad/Graphics Inc (QUAD) 2023 Q2 法說會逐字稿

Good morning, and welcome to Quad's second quarter conference call. (Operator Instructions) A slide presentation accompanies today's webcast and participants are invited to follow along, advancing the slides themselves. To access the webcast, follow the instructions posted in the earnings release. Alternatively, you can access the slide presentation on the Investors section of Quad's website under the Events and Presentations link. (Operator Instructions) Please note, this event is being recorded.

早上好，歡迎參加 Quad 第二季度電話會議。 （操作員說明）今天的網絡廣播附帶幻燈片演示，邀請參與者跟隨，自行推進幻燈片。要訪問網絡廣播，請按照收益發布中發布的說明進行操作。或者，您可以在 Quad 網站投資者部分的活動和演示鏈接下訪問幻燈片演示。 （操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to Katie Krebsbach, Quad's Investor Relations Manager. Katie, please go ahead.

我現在想將會議交給 Quad 投資者關係經理凱蒂·克雷布斯巴赫 (Katie Krebsbach)。凱蒂，請繼續。

Thank you, operator, and good morning, everyone. With me today are Joel Quadracci, Quad's Chairman, President and Chief Executive Officer; and Tony Staniak, Quad's Chief Financial Officer. Joel will lead today's call with a business update, and Tony will follow with a summary of Quad's second quarter and year-to-date 2023 financial results, followed by Q&A.

謝謝接線員，大家早上好。今天與我在一起的有 Quad 董事長、總裁兼首席執行官 Joel Quadracci；以及 Quad 首席財務官托尼·斯坦尼亞克 (Tony Staniak)。 Joel 將主持今天的電話會議，介紹業務最新情況，Tony 將總結 Quad 第二季度和 2023 年迄今的財務業績，然後進行問答。

I would like to remind everyone that this call is being webcast and forward-looking statements are subject to safe harbor provisions as outlined in our quarterly news release and in today's slide presentation on Slide 2.

我想提醒大家，本次電話會議正在網絡直播，前瞻性陳述須遵守我們的季度新聞稿和今天幻燈片 2 中概述的安全港條款。

Quad's financial results are prepared in accordance with generally accepted accounting principles. However, this presentation also contains non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, adjusted diluted earnings per share, free cash flow, net debt and debt leverage ratio. We have included in the slide presentation reconciliations of these non-GAAP financial measures to GAAP financial measures.

Quad 的財務業績是根據公認會計原則編制的。然而，本演示文稿還包含非公認會計原則財務指標，包括調整後的 EBITDA、調整後的 EBITDA 利潤率、調整後的稀釋每股收益、自由現金流、淨債務和債務槓桿率。我們在幻燈片演示中包含了這些非 GAAP 財務指標與 GAAP 財務指標的調節表。

Finally, a replay of the call and the slide presentation will be available on the Investors section of quad.com shortly after our call concludes today.

最後，在我們今天的電話會議結束後不久，將在quad.com 的投資者部分提供電話會議的重播和幻燈片演示。

I will now hand over the call to Joel.

我現在將把電話轉交給喬爾。

Thank you, Katie, and good morning, everyone.

謝謝你，凱蒂，大家早上好。

Beginning on Slide 3, our second quarter 2023 results were in line with our expectations. Net sales were lower in the quarter compared to the same period in 2022, primarily due to lower paper and print sales as well as the 2022 divestiture of our Argentina print operations. We are pleased to have generated $34 million of free cash flow in the quarter, which we have used to further pay down debt, strengthen our balance sheet and return value to shareholders through additional share repurchases. We are reaffirming our full year 2023 financial guidance.

從幻燈片 3 開始，我們 2023 年第二季度的業績符合我們的預期。與 2022 年同期相比，本季度淨銷售額有所下降，主要是由於紙張和印刷品銷售額下降以及我們於 2022 年剝離阿根廷印刷業務。我們很高興在本季度產生了 3400 萬美元的自由現金流，我們用這些現金流進一步償還債務、加強我們的資產負債表並通過額外的股票回購向股東回報價值。我們重申 2023 年全年財務指引。

While some marketers have reduced print volumes due to economic uncertainty and postage rate increases, we continue to innovate solutions to help clients better manage costs, including our industry differentiating postage savings programs. For example, our unique merged mail solution combines multiple marketers direct mail piece production into a single run delivering postage savings while maintaining content personalization. Our door front direct solution provides an innovative alternative to the U.S. postal service delivery bypassing the mailbox and delivery -- delivering magazines, catalogs, direct mail and retail pieces directly to recipients front doors.

儘管由於經濟不確定性和郵資費率上漲，一些營銷人員減少了印刷量，但我們繼續創新解決方案，幫助客戶更好地管理成本，包括我們行業差異化的郵資節省計劃。例如，我們獨特的合併郵件解決方案將多個營銷人員的直接郵件製作合併為一次運行，從而節省郵資，同時保持內容個性化。我們的門前直接解決方案為美國郵政服務遞送提供了一種創新的替代方案，繞過郵箱和投遞——將雜誌、目錄、直郵和零售商品直接遞送到收件人前門。

Our clients always have dependent on our quality on-time performance, and we have the right platform and expanded capabilities to fulfill our clients' print media and marketing needs as we enter the seasonally busier back half of the year.

我們的客戶始終依賴我們的高質量準時表現，隨著我們進入下半年季節性繁忙的時期，我們擁有合適的平台和擴展的能力來滿足客戶的印刷媒體和營銷需求。

As always, and especially in the current economic environment, we continue our long-standing disciplined approach to managing all aspects of our business, including treating all costs variable and aligning our cost structure to revenue opportunities. At the same time, we continue to advance our unique offering as a marketing experience or MX Company that brings together all the resources brands need for frictionless execution, as shown on Slide 4. Further, our integrated marketing platform easily supports shifts in our clients' marketing spend to maximize growth and results.

一如既往，特別是在當前的經濟環境下，我們繼續採用長期嚴格的方法來管理業務的各個方面，包括處理所有成本變量並使我們的成本結構與收入機會保持一致。與此同時，我們繼續推進我們作為營銷體驗或 MX 公司的獨特產品，匯集品牌無摩擦執行所需的所有資源，如幻燈片 4 所示。此外，我們的集成營銷平台可以輕鬆支持客戶的轉變營銷支出以最大限度地提高增長和成果。

On Slide 5, we show Quad's 3 growth drivers; delivering integrated service excellence, accelerating market penetration and evolving our culture as an MX Company. Integrated service excellence is at the core of who we are and what we do. Quad connects every facet of the marketing journey efficiently and at scale, providing innovative, data-driven offerings from strategy and consulting to data and analytics, technology solutions, media services, creative and content solutions and managed services. As a result, we help companies reduce the complexities they experience from working with multiple agency partners and vendors, increase their marketing process efficiency and maximize the effectiveness of their marketing efforts.

在幻燈片 5 中，我們展示了 Quad 的 3 個增長動力；提供卓越的綜合服務、加速市場滲透並發展我們作為 MX 公司的文化。卓越的綜合服務是我們是誰以及我們所做的事情的核心。 Quad 高效、大規模地連接營銷旅程的各個方面，提供從戰略和諮詢到數據和分析、技術解決方案、媒體服務、創意和內容解決方案以及託管服務的創新、數據驅動的產品。因此，我們幫助企業減少與多個代理合作夥伴和供應商合作的複雜性，提高營銷流程效率並最大限度地提高營銷工作的有效性。

We are continuing our partnership with Forrester Research, a leading global research advisory firm to better understand the demand for low holistic marketing solutions at a time of accelerating marketing complexity, dwindling budgets and rising customer expectations of brands. Through its survey of 355 marketing decision-makers at mid- to large-sized U.S. companies, Forrester confirmed and quantified brand's ongoing need to deliver growth with even fewer resources and greater results. While 75% of brands have started consolidating some services, their efforts are keeping pace with the expanded complexity, resulting in disconnected teams and workflows, wasted time and money and missed customer opportunities. Forrester's findings further validate our multiyear transformation to an MX Company that makes the marketers job easier through an efficient and effective platform built for integrated execution.

我們將繼續與全球領先的研究諮詢公司 Forrester Research 合作，以更好地了解在營銷複雜性加劇、預算減少和客戶對品牌期望不斷提高的情況下對低整體營銷解決方案的需求。通過對美國大中型公司 355 名營銷決策者的調查，Forrester 確認並量化了品牌以更少的資源和更好的成果實現增長的持續需求。雖然 75% 的品牌已開始整合部分服務，但他們的努力跟不上不斷擴大的複雜性，導致團隊和工作流程脫節、浪費時間和金錢並錯失客戶機會。 Forrester 的調查結果進一步驗證了我們向 MX 公司的多年轉型，通過為集成執行而構建的高效且有效的平台，使營銷人員的工作變得更加輕鬆。

Turning to Slide 6. We continue to evolve how we communicate our value. To accelerate market penetration, we launched a new brand campaign in the second quarter called Built on Quad, which is giving us wider visibility within our current client base as well as with companies in our targeted growth verticals. We debuted the campaign in June in conjunction with the Cannes Lions International Festival of Creativity, the premier gathering of the global advertising and creative communications industry. While we -- at Cannes, we shared our innovative story and strengthen relationships with marketing decision-makers from around the world who are looking for scalable solutions to help drive their brands grow.

轉向幻燈片 6。我們不斷改進傳達價值的方式。為了加速市場滲透，我們在第二季度推出了一項名為“Built on Quad”的新品牌活動，這使我們在當前的客戶群以及目標增長垂直領域的公司中獲得了更廣泛的知名度。我們於 6 月與戛納國際創意節（全球廣告和創意傳播行業的頂級盛會）一起推出了該活動。在戛納，我們分享了我們的創新故事，並加強了與來自世界各地的營銷決策者的關係，他們正在尋找可擴展的解決方案來幫助推動其品牌發展。

Our uniqueness as an MX Company resonates with brands and marketers because we provide a better marketing experience for our clients, they can focus on delivering the best customer experience.

作為一家 MX 公司，我們的獨特性引起了品牌和營銷人員的共鳴，因為我們為客戶提供更好的營銷體驗，他們可以專注於提供最佳的客戶體驗。

Turning to Slide 7. We show how we are growing our presence with well-known brands and our targeted verticals of consumer packaged goods, finance and insurance, health, direct-to-consumer, retail and publishing. These well respected and well-known brands include Red Bull, Sirius XM, Albertsons and CVS Health and are all admired for their excellence in the loyalty they have built with our customers. We take great pride in knowing they have trust us to help unlock their marketing's full potential.

轉向幻燈片 7。我們展示了我們如何通過知名品牌以及消費品、金融和保險、健康、直接面向消費者、零售和出版等目標垂直領域來擴大我們的影響力。這些備受推崇的知名品牌包括紅牛、Sirius XM、Albertsons 和 CVS Health，它們都因其與客戶建立的卓越忠誠度而受到讚賞。我們非常自豪地知道他們相信我們能夠幫助他們釋放營銷的全部潛力。

On Slide 8, we show an example of how a consumer packaged goods company, Nielsen-Massey Vanillas, is taking advantage of our integrated marketing offering. They chose to partner with Quad due to our great reputation for delivering breakthrough creative and brand growth in saturated markets, especially in CPG categories, along with our robust data, insights and media capabilities. As the creative agency of record, we are now providing brand strategy, creative and campaign development, media, social and more to build awareness and loyalty among home cooks as well as professional chefs. We're also helping the client to reach its most compatible customers by our award-winning cross-channel shopper targeting approach as well as managing media planning and buying.

在幻燈片 8 中，我們展示了消費品公司 Nielsen-Massey Vanillas 如何利用我們的整合營銷產品的示例。他們選擇與 Quad 合作，是因為我們在飽和市場（尤其是 CPG 類別）中提供突破性創意和品牌增長方面享有盛譽，並且擁有強大的數據、洞察力和媒體能力。作為記錄在案的創意機構，我們現在提供品牌戰略、創意和活動開發、媒體、社交等服務，以提高家庭廚師和專業廚師的知名度和忠誠度。我們還通過屢獲殊榮的跨渠道購物者定位方法以及管理媒體規劃和購買來幫助客戶吸引最合適的客戶。

Work for Nielsen-Massey Vanillas is underway and will be launched in the fourth quarter of this year. This is yet another example of how we are creating a better way for our clients through a reimagined marketing experience that is more streamlined, impactful, flexible and frictionless.

Nielsen-Massey Vanillas 的工作正在進行中，將於今年第四季度啟動。這是我們如何通過重新設計的營銷體驗為客戶創造更好的方式的又一個例子，這種體驗更加精簡、有影響力、靈活且無摩擦。

On Slide 9, we show another example of how we help clients build better marketing, in this instance, how we created a consumer brand from inception, including a product launch at select Costco Warehouse stores this summer. Our client created an innovative freeze-dried raw super food for dogs. We not only helped our client position and name its brand Heckova!, but use the power of integrated solutions offering to deliver eye-catching packaging and promotion. We draw on our deep expertise in consumer research, design strategy, packaging, experiential and adaptive design, content services and retail environments.

在幻燈片9 中，我們展示了另一個示例，說明我們如何幫助客戶建立更好的營銷，在本例中，我們如何從一開始就創建了一個消費品牌，包括今年夏天在精選的Costco 倉庫商店推出產品。我們的客戶為狗創造了一種創新的凍乾生超級食品。我們不僅幫助客戶定位並命名其品牌 Heckova!，而且利用集成解決方案的力量提供引人注目的包裝和促銷。我們利用在消費者研究、設計策略、包裝、體驗和適應性設計、內容服務和零售環境方面的深厚專業知識。

We also seamlessly incorporated the services of our own photo studios, including digital creative, designed and printed the packaging and the in-store look for the product, stood up an appealing an interactive website and provided comprehensive marketing services, including promotional campaigns for digital and social channels and engaging social media influencers. The client is thrilled with our efforts and the speed and ease with which we help them launch a brand. In fact, our client told us numerous times that they never could have gotten the product launched set on store shelves and promoted in the span of 10 months had they not worked with Quad.

我們還無縫整合了我們自己的攝影工作室的服務，包括數字創意、設計和印刷包裝以及產品的店內外觀、建立了一個有吸引力的互動網站並提供全面的營銷服務，包括數字和廣告宣傳活動。社交渠道和吸引社交媒體影響者。客戶對我們的努力以及我們幫助他們推出品牌的速度和輕鬆感到興奮。事實上，我們的客戶多次告訴我們，如果他們不與 Quad 合作，他們永遠不可能在 10 個月內將產品擺上商店貨架並進行推廣。

We continue to be a trusted partner to Heckova!, supporting our efforts to launch additional super foods and providing campaign work as they expand the retail footprint and begin direct-to-consumer sales this fall. The client also will engage our package insight team for brand package performance research using the latest of biometric technology such as Mobile Eye Tracking.

我們仍然是 Heckova! 值得信賴的合作夥伴，支持我們推出更多超級食品的努力，並在他們擴大零售足跡並於今年秋天開始直接面向消費者的銷售時提供宣傳工作。客戶還將與我們的包裝洞察團隊合作，利用最新的生物識別技術（例如移動眼動追踪）進行品牌包裝績效研究。

Turning to Slide 10. Even as we expanded to growing areas of the marketing experience, printing continues to be a core part of our business and a clear and competitive differentiator from traditional agencies. Our reputation for quality, on-time production, ongoing investments in automation and equipment and well-trained skilled workforce enables us to continue to gain segment share across all categories of print. Recently, we expanded our print relationship with AARP, the organization that delivers information -- the advocacy and service to people age 50 and over.

轉向幻燈片 10。即使我們擴展到不斷增長的營銷經驗領域，印刷仍然是我們業務的核心部分，也是與傳統代理機構的明顯競爭優勢。我們在質量、按時生產、對自動化和設備的持續投資以及訓練有素的熟練勞動力方面享有盛譽，使我們能夠繼續在所有印刷類別中獲得細分市場份額。最近，我們擴大了與美國退休人員協會（AARP）的印刷關係，該組織為 50 歲及以上的人群提供信息——宣傳和服務。

Under a new multiyear contract, we are now the exclusive printer of the AARP Bulletin and AARP Magazine to one of the largest circulation publications in the United States. For years, AARP has trusted Quad for production of its truck mail advocacy program, along with our posted saving, co-mingling services and logistics expertise. We will begin production on these 2 publications in August and September, respectively.

根據一項新的多年期合同，我們現在是美國最大發行量出版物之一《美國退休人員協會公報》和《美國退休人員協會雜誌》的獨家印刷商。多年來，AARP 一直信任 Quad 來製作其卡車郵件宣傳計劃，以及我們的郵政儲蓄、混合服務和物流專業知識。我們將分別在八月和九月開始製作這兩份出版物。

Additionally, AARP has engaged us for our pre-press services, including page processing and proofing, image retouching and archiving, ad traffic management, mailing list management and distribution to U.S. coastal service processing facilities for expedited in-home delivery. AARP also will leverage 2 of our proprietary Software-as-a-Service workflow solutions, Publisher's Studio for issue mapping and AdShuttle for streamlining the planning received and execution of advertising. Our excellent track record with this client's direct marketing campaigns, combined with our commitment to continuous innovation and our industry standing as a strong stable provider cemented this client expansion win.

此外，美國退休人員協會還聘請我們提供印前服務，包括頁面處理和校對、圖像修飾和存檔、廣告流量管理、郵件列表管理以及分發到美國沿海服務處理設施以加快送貨上門。 AARP 還將利用我們專有的 2 個軟件即服務工作流程解決方案，即用於問題映射的 Publisher's Studio 和用於簡化廣告接收規劃和執行的 AdShuttle。我們在該客戶的直接營銷活動中擁有出色的記錄，加上我們對持續創新的承諾以及我們作為強大穩定的供應商的行業地位，鞏固了這一客戶擴張的勝利。

Before I turn the call over to Tony, I would like to thank our employees for their continued hard work and daily commitment to providing the highest levels of service for our clients while we proactively manage all aspects of our business for long-term strength and stability. I regularly receive feedback from clients who share their deep appreciation for our team of innovators and problem solvers. As we move forward with our growth strategy, I have great confidence in our team. We will continue to capitalize on all aspects of our distinctive maker culture to differentiate Quad as the workplace for the marketing industry's best talent.

在將電話轉給托尼之前，我要感謝我們的員工持續的辛勤工作和日常承諾，為我們的客戶提供最高水平的服務，同時我們積極管理業務的各個方面，以實現長期的實力和穩定。我經常收到客戶的反饋，他們對我們的創新者和問題解決者團隊深表讚賞。隨著我們推進增長戰略，我對我們的團隊充滿信心。我們將繼續充分利用我們獨特的創客文化的各個方面，使 Quad 成為營銷行業最優秀人才的工作場所。

We also will continue to innovate the ways we attract talent. For example, last month, we unveiled a new recruiting and training hub in Milwaukee Central City as shown on Slide 11. This hub known as Quad MKE is focused on removing barriers to family sustaining careers by providing the tools, training and transportation necessary to track individuals looking to improve their employment situation. Quad MKE is an important way to tangibly show our commitment to the community and is consistent with our values, especially that of believing in people.

我們還將繼續創新吸引人才的方式。例如，上個月，我們在密爾沃基市中心推出了一個新的招聘和培訓中心，如幻燈片11 所示。這個中心稱為Quad MKE，致力於通過提供跟踪所需的工具、培訓和交通來消除家庭維持職業生涯的障礙。希望改善就業狀況的個人。 Quad MKE 是切實展現我們對社區承諾的重要方式，並且符合我們的價值觀，尤其是相信人的價值觀。

With that, I will now turn over the call to Tony for the financial review.

現在，我將把電話轉給托尼進行財務審查。

Thanks, Joel, and good morning, everyone.

謝謝喬爾，大家早上好。

On Slide 12, we show a diverse revenue mix. Net sales were $703 million in the second quarter of 2023, a 7% decline [compared] to the second quarter of 2022. For the first half of 2023, net sales were $1.5 billion, a decline of 2% compared to the first half of 2022, well within our financial guidance with sales growth in our Mexico operations and in our catalog, packaging and in-store offerings more than offset by lower print and paper sales, primarily in direct mail, as well as reduced sales from the December 2022 divestiture of our Argentina operations.

在幻燈片 12 上，我們展示了多樣化的收入組合。 2023 年第二季度淨銷售額為 7.03 億美元，較 2022 年第二季度下降 7%。2023 年上半年淨銷售額為 15 億美元，較 2022 年上半年下降 2% 2022 年，完全符合我們的財務指引，墨西哥業務以及產品目錄、包裝和店內產品的銷售增長，被印刷品和紙張銷售（主要是直郵）的下降以及2022 年12 月資產剝離帶來的銷售額減少所抵消我們的阿根廷業務。

Slide 13 provides a snapshot of our second quarter 2023 financial results. Adjusted EBITDA was $50 million in the second quarter of 2023 as compared to $56 million in the second quarter of 2022 and adjusted EBITDA margin declined slightly to 7.2% in the second quarter of 2023 compared to 7.4% in the second quarter of 2022. The decline was due to lower sales, partially offset by benefits from improved manufacturing productivity and savings from cost reduction initiatives. In the first half of 2023, adjusted EBITDA was $111 million compared to $105 million in the first half of 2022 and adjusted EBITDA margin improved from 7.0% to 7.5%, consistent with our long-term focus on increasing profitability.

幻燈片 13 提供了我們 2023 年第二季度財務業績的快照。 2023 年第二季度調整後 EBITDA 為 5,000 萬美元，而 2022 年第二季度為 5,600 萬美元，2023 年第二季度調整後 EBITDA 利潤率小幅下降至 7.2%，而 2022 年第二季度為 7.4%。這是由於銷售額下降造成的，但部分被製造生產率提高帶來的效益和成本削減舉措帶來的節省所抵消。 2023 年上半年，調整後 EBITDA 為 1.11 億美元，而 2022 年上半年為 1.05 億美元，調整後 EBITDA 利潤率從 7.0% 提高至 7.5%，這與我們對提高盈利能力的長期關註一致。

Adjusted diluted earnings per share was $0.02 in the second quarter of 2023 as compared to $0.13 in the second quarter of 2022. Year-to-date, adjusted diluted earnings per share was consistent at $0.17. The decline in the second quarter was primarily due to lower adjusted net earnings, it was partially offset by the positive impact from share repurchases.

2023 年第二季度調整後稀釋每股收益為 0.02 美元，而 2022 年第二季度為 0.13 美元。年初至今，調整後稀釋每股收益穩定在 0.17 美元。第二季度的下降主要是由於調整後淨利潤下降，但部分被股票回購的積極影響所抵消。

We were active in the market again this quarter, repurchasing our Class A shares. Beginning in the second quarter of 2022, we have repurchased approximately 8% of our total Class A and B outstanding common stock at a weighted average price of $3.32 per share for a total purchase price of $15 million.

本季度我們再次活躍在市場上，回購了我們的 A 類股票。從 2022 年第二季度開始，我們以每股 3.32 美元的加權平均價格回購了 A 類和 B 類已發行普通股總數的約 8%，總購買價為 1500 萬美元。

Free cash flow was negative $45 million in the first half of 2023, its $12 million improvement compared to the first half of 2022, primarily attributable to lower inventory needs as supply chain challenges improved, and we experienced strong receivables collections. This improvement was achieved despite a $12 million increase in capital expenditures as we continue to invest in our automation initiatives.

2023 年上半年的自由現金流為負 4500 萬美元，與 2022 年上半年相比減少了 1200 萬美元，這主要是由於供應鏈挑戰改善導致庫存需求下降，而且我們的應收賬款催收強勁。儘管隨著我們繼續投資於自動化計劃，資本支出增加了 1200 萬美元，但仍實現了這一改進。

As a reminder, the company historically generates the majority of its free cash flow in the fourth quarter of the year and expect $50 million and $90 million of free cash flow in 2023.

需要提醒的是，該公司歷來大部分自由現金流是在今年第四季度產生的，預計 2023 年自由現金流將分別為 5000 萬美元和 9000 萬美元。

Slide 14 includes a summary of our debt capital structure. Net debt increased by $59 million to $604 million at June 30, 2023, as compared to $545 million at December 31, 2022, and the debt leverage ratio increased 18 basis points to 2.34x at the end of the second quarter 2023. Increase in net debt and the debt leverage ratio was primarily due to the negative $45 million of free cash flow in the first half of 2023. However, we are pleased to have reduced debt by $80 million over the last 12 months that will increase in the third quarter due to higher working capital requirements as we enter our production peak from August through October and then it will decline in the fourth quarter with seasonal reduction of inventory and collections of receivables. We are on track to achieve the low end of our long-term targeted debt leverage range of 2x to 2.5x by the end of 2023.

幻燈片 14 總結了我們的債務資本結構。截至2023 年6 月30 日，淨債務增加5,900 萬美元，達到6.04 億美元，而2022 年12 月31 日為5.45 億美元，債務槓桿率在2023 年第二季度末增加18 個基點，達到2.34 倍。債務和債務槓桿率主要是由於2023 年上半年自由現金流為負4500 萬美元。不過，我們很高興在過去12 個月中減少了8000 萬美元的債務，而第三季度債務將因債務增加而增加。隨著我們從 8 月到 10 月進入生產高峰，營運資金需求將增加，然後隨著庫存和應收賬款回收的季節性減少，營運資金需求將在第四季度下降。我們有望在 2023 年底前實現 2 倍至 2.5 倍長期目標債務槓桿範圍的低端。

As of June 30, our blended interest rate was 6.7%, which is up from 3.8% a year ago. To mitigate the impact of the rising interest rate environment, we entered into 2 interest rate collar agreements effective February 1, 2023, including interest rate swaps, our debt is 52% floating and 48% fixed. We maintained our strong liquidity with up to $340 million of availability under our revolving credit agreement as well as $11 million of cash on hand. Our nearest significant debt maturity is $88 million occurring in January 2024, which we will fund with cash on hand and our revolving credit agreement. The majority of the debt maturities are not due until late 2026.

截至 6 月 30 日，我們的混合利率為 6.7%，高於一年前的 3.8%。為了減輕利率上升環境的影響，我們簽訂了2個於2023年2月1日生效的利率環協議，其中包括利率掉期，我們的債務為52%浮動和48%固定。我們保持了強勁的流動性，循環信貸協議下的可用資金高達 3.4 億美元，手頭現金為 1,100 萬美元。我們最近的重大債務到期日為 8800 萬美元，發生時間為 2024 年 1 月，我們將用手頭現金和循環信貸協議為其提供資金。大部分債務要到 2026 年末才能到期。

We have reaffirmed our 2023 guidance, as shown on Slide 15. We are progressing on our growth strategy as clients continue to embrace our innovative and integrated marketing offering. However, as we discussed last quarter, due to ongoing macroeconomic concerns and increasing postage rates, we expect to -- we continue to expect lower per volumes during the remainder of the year. As a reminder, adjusted EBITDA and free cash flow will be higher in the second half of 2023 compared to the first half of 2023 due to the seasonality of the business. Most of our capital expenditures already occurred in the first half of this year, so we can benefit from these investments in the second half of the year during our seasonal peak.

我們重申了 2023 年的指導方針，如幻燈片 15 所示。隨著客戶繼續接受我們的創新和整合營銷產品，我們正在推進我們的增長戰略。然而，正如我們上季度討論的那樣，由於持續的宏觀經濟擔憂和不斷上漲的郵資費率，我們預計今年剩餘時間內每件貨量將下降。需要提醒的是，由於業務的季節性，2023 年下半年調整後的 EBITDA 和自由現金流將高於 2023 年上半年。我們的大部分資本支出已經發生在今年上半年，因此我們可以在下半年的季節性高峰期間從這些投資中受益。

Slide 16 includes our key investment highlights as we continue to build on our growth momentum as a marketing experience company. We believe that Quad is a compelling long-term investment and we remain focused on growing net sales and driving higher profitability through continued diversification of our revenue and clients. With our expanded offerings, there is a significant addressable revenue opportunity with both our large base of existing clients as well as new clients.

幻燈片 16 包括我們作為營銷體驗公司繼續鞏固增長勢頭的主要投資亮點。我們相信 Quad 是一項引人注目的長期投資，我們將繼續專注於通過收入和客戶的持續多元化來增加淨銷售額並提高盈利能力。隨著我們產品範圍的擴大，我們龐大的現有客戶群和新客戶群都將獲得巨大的收入機會。

We will reduce debt with strong free cash flow generation augmented with proceeds from selling non-client assets. We expect to achieve the low end of our long-term targeted leverage range of 2x to 2.5x with net debt of approximately $470 million by the end of the year. This will represent a $564 million or 55% reduction in debt since January 1, 2020, when our debt was over $1 billion. And with the significant debt reduction, we will further strengthen what we believe is an industry-leading financial foundation that provides us the flexibility to strategically deploy capital, including scaling the growing parts of our business while returning capital to shareholders to drive shareholder value.

我們將通過強勁的自由現金流生成以及出售非客戶資產的收益來減少債務。我們預計到今年年底，我們的長期目標槓桿範圍將達到 2 倍至 2.5 倍的下限，淨債務約為 4.7 億美元。這意味著自 2020 年 1 月 1 日以來，我們的債務減少了 5.64 億美元，即 55%，當時我們的債務超過 10 億美元。隨著債務的大幅削減，我們將進一步加強我們認為行業領先的財務基礎，該基礎為我們提供了戰略性部署資本的靈活性，包括擴大我們不斷增長的業務部分，同時向股東返還資本以提高股東價值。

With that, I'd like to turn the call back to our operator for questions.

這樣，我想將電話轉回給我們的接線員詢問問題。

(Operator Instructions) The first question comes from Kevin Steinke with Barrington Research Associates.

（操作員說明）第一個問題來自 Barrington Research Associates 的 Kevin Steinke。

I wanted to start off by asking about just the seasonal pattern of sales as it relates to the second quarter and then also how you expect the second half to play out? And maybe how any segment share gains or new business wins might play into your outlook for the second half of the year?

我想首先詢問與第二季度相關的季節性銷售模式，然後詢問您預計下半年的情況如何？也許任何細分市場份額的增長或新業務的勝利可能會對您下半年的前景產生怎樣的影響？

Sure, Kevin. And I think as we put out guidance earlier in the year, we had seen as our customers put forth their budgets, there was definitely some trepidation about economic concerns. And the other thing that somewhat impacted volumes for the year was a known significant postal increase that just happened a couple of weeks ago. And so oftentimes, our clients look at that. And in the short term, we'll do a little bit of pullback. That being said, I'd say we always talk about large-scale print, which encompasses retail inserts and publications is our biggest declining area. Quite frankly, year-to-date, that was virtually flat, certainly decline in retail insurance, as we always expect and some closures in the publication side but also offset by some segment share gains and then in the targeted print, which is really catalogs, direct mail packaging and in-store, catalogs, again, impacted by some of the trepidation was about flat year-to-date with -- because of some volume pullback. -- but also some segment share wins offsetting that.

當然，凱文。我認為，當我們在今年早些時候發布指導意見時，我們已經看到，當我們的客戶提出預算時，他們肯定對經濟問題感到有些擔憂。另一件對今年的交易量產生一定影響的事情是幾週前剛剛發生的已知的郵政大幅增長。我們的客戶經常會關注這一點。短期內，我們將進行一些回調。話雖這麼說，我想說我們總是談論大規模印刷，其中包括零售插頁和出版物是我們最大的衰退領域。坦率地說，今年迄今為止，零售保險業務幾乎持平，肯定會下降，正如我們一直預期的那樣，出版方面有一些關閉，但也被一些細分市場份額的增長所抵消，然後是目標印刷品（實際上是目錄）直郵包裝和店內目錄再次受到一些擔憂的影響，今年迄今與去年同期持平——因為銷量有所下降。 ——但也有一些細分市場份額的勝利抵消了這一點。

And direct mail, I'd say, is probably the one that was the most challenged. So year-to-date, it's off about 19%. But that's strongly due to the fact that we had some significant exposure in the financial and loan vertical that was heavily impacted by the drastic increase in interest rates as well as one large client -- banking client that pulled out of the consumer banking business. We expect direct mail, though in the long term to continue to be a great growth opportunity.

我想說，直郵可能是最具挑戰性的一種。今年迄今為止，價格下跌了約 19%。但這很大程度上是因為我們在金融和貸款垂直領域擁有一些重大敞口，這些敞口受到利率大幅上漲的嚴重影響，以及一個大客戶——退出消費銀行業務的銀行客戶。我們預計直郵，但從長遠來看仍將是一個巨大的增長機會。

And then on the bright side, packaging was up 4% year-to-date in store, which is a vastly growing marketplace, continued that for us up 17% and agency relatively flat for the year, impacted by some of the economic concerns. But I think it's important to remember, to your point about seasonality, the first half is the lowest part of our year with the second quarter being -- sort of the bottom of the year with everything now starting actually this week, becoming our busy season. And we alluded to segment share gains that are happening in the future here with -- well we spoke about AARP, which is in the publication space, but we expect several other things to kick in as a result of that.

好的一面是，今年迄今為止，商店內的包裝增長了4%，這是一個巨大增長的市場，對我們來說，這一趨勢繼續增長了17%，而受一些經濟問題的影響，今年代理業務相對持平。但我認為重要的是要記住，就您關於季節性的觀點而言，上半年是今年最低的部分，第二季度是今年的底部，一切實際上從本週開始，成為我們的繁忙季節。我們在這裡提到了未來發生的細分市場份額增長——我們談到了美國退休人員協會（AARP），這是在出版領域，但我們預計其他一些事情也會因此而發生。

And so again, I think you really look at the full year and how that -- those trends will play out, and we feel good about the guidance we have given on the top line based on what we saw our clients doing.

再說一次，我認為你真的會關注全年以及這些趨勢將如何發揮作用，我們對根據我們看到的客戶所做的事情所給出的營收指導感到滿意。

Tony, am I missing anything?

托尼，我錯過了什麼嗎？

No. No. I think if I were just to expand on it for earnings a little bit, we take actions in the first half of the year, whether those be restructuring actions to get our cost structure where we want it to be, or CapEx from a cash perspective, where we do the majority in the first half of the year, that all positions us for a great second half of the year as the volumes increase, we are ready for those volumes.

不。不。我認為，如果我只是為了盈利而擴大一點，我們會在今年上半年採取行動，無論是重組行動以使我們的成本結構達到我們想要的水平，還是資本支出從現金角度來看，我們在上半年做了大部分工作，隨著銷量的增加，所有這些都為我們在今年下半年做好了準備，我們已經為這些銷量做好了準備。

Okay. Great. That's very helpful. And Tony, you mentioned there the cost actions. And can you just speak to what you've accomplished in the first half of the year here? And maybe how we should think about expenses trending in the second half of the year?

好的。偉大的。這非常有幫助。托尼，你提到了成本行動。您能簡單介紹一下今年上半年取得的成績嗎？也許我們應該如何看待下半年的支出趨勢？

I mean we did close some capacity in the first half. I think we announced 3 plant closures that we completed in the first half of the year. That puts our capacity right where we needed to be as we enter busy season to keep our on-time deliveries high and meet customer needs. We always look at the administrative side of the house to make sure that we're as efficient as we can be to remain the low-cost provider. And all of that, I think, positions us well for a second half.

我的意思是我們在上半年確實關閉了一些產能。我認為我們宣布了上半年完成的 3 家工廠關閉。當我們進入繁忙季節時，這使我們的產能達到了我們需要的水平，以保持高準時交貨並滿足客戶需求。我們始終關注公司的管理方面，以確保我們盡可能高效地保持低成本提供商的地位。我認為所有這些都為我們下半場做好了準備。

From a restructuring standpoint, the majority of the cash payments have been in the first half of the year. And so you'll see less of that as we go into the second half which will help free cash flow metric.

從重組的角度來看，大部分現金支付是在今年上半年。因此，當我們進入下半年時，你會看到更少的情況，這將有助於自由現金流指標。

And just to add to that, on the manufacturing side, which is a huge platform, the productivity that we've been able to achieve is pretty massive this year. And that's because in the previous years, when everyone is struggling to find people, we really doubled down on hiring and really double down on advanced training and really training up a significant number of people. And so as we sourced -- saw some of the economies to sort of slowdown happened while we had to do some reductions, the percentage that were much more trained than in the past has resulted in wonderful productivity. And I can't tell you how proud I am enough about how the team has performed. And that's really important because now the ramp-up is really significant in the second half, which gives us that operating leverage because you've got fully trained people versus when you're trying to bring on people and they're not trained on very complicated equipment.

除此之外，在製造方面，這是一個巨大的平台，我們今年能夠實現的生產力相當高。這是因為在前幾年，當每個人都在努力尋找人才時，我們確實加倍了招聘力度，真正加倍了高級培訓，並真正培訓了大量人員。因此，當我們發現一些經濟體出現了某種程度的放緩，而我們不得不進行一些削減時，受過更多培訓的百分比比過去更高，這帶來了出色的生產力。我無法告訴你我對球隊的表現感到多麼自豪。這非常重要，因為現在下半年的增長非常顯著，這給了我們運營槓桿，因為你擁有訓練有素的人員，而當你試圖引進人員時，他們沒有接受過非常多的培訓。複雜的設備。

Okay. Great. And you did mention there the postage rate increases as an additional factor leading to some pullback in print spend. But you also alluded to the fact that that's usually a short-term impact. So would you expect clients to adjust to that over time? And you also mentioned your solution to bypass the U.S. Postal Service. I mean is that something that can gain more traction going forward as well?

好的。偉大的。您確實提到，郵費上漲是導致印刷支出有所回落的另一個因素。但您也提到這通常是短期影響。那麼您是否希望客戶隨著時間的推移而適應這一點？您還提到了繞過美國郵政服務的解決方案。我的意思是，這是否也能在未來獲得更多的吸引力？

Yes. You remember that postage is like over 70% of the cost to get mail into the consumers' hands now. And we wish that the post office would take a different tack, but it is what it is. And it's really incumbent upon the printer to try and offset those increases through work sharing programs that the post office allows us to do. In other words, the more we skip the post office, the bigger the discount, and a lot of our references about some of the products we do has helped our clients over time, do that. In addition, we're rolling out some new concepts that will further help offset fairly significantly some of the postage costs they've increased.

是的。您還記得嗎，現在郵資占到將郵件送到消費者手中的成本的 70% 以上。我們希望郵局採取不同的策略，但事實就是如此。印刷商確實有責任嘗試通過郵局允許我們進行的工作共享計劃來抵消這些增加。換句話說，我們跳過郵局的次數越多，折扣就越大，並且我們對我們所做的一些產品的很多參考資料隨著時間的推移幫助我們的客戶做到了這一點。此外，我們正在推出一些新概念，這將進一步幫助抵消相當大的部分增加的郵費。

So while they pull back in the short term, they still have to market product. And typically, they're trying to adjust their budgets for the increased spend. But we do as much as we can on the innovation side to kick in and try and help offset that decline. And so we feel good about what we're going to be able to do for our clients. But postage increases will continue to be a concern, but that's nothing due in the last 20 years.

因此，儘管他們在短期內有所收縮，但他們仍然必須推銷產品。通常，他們會嘗試根據增加的支出調整預算。但我們在創新方面盡了最大努力，試圖幫助抵消這種下降。因此，我們對能夠為客戶做的事情感到滿意。但郵資上漲仍將是一個令人擔憂的問題，但這在過去 20 年裡並沒有發生。

Okay. Understood. Yes. Can you just speak to the progress you made in the quarter on inventory reduction and free cash flow generation? You had $34 million of free cash flow in the second quarter, which was really a significant uptick over the year ago quarter. So maybe just speak to that a little bit more, if you could.

好的。明白了。是的。您能否談談本季度在減少庫存和產生自由現金流方面取得的進展？第二季度你有 3400 萬美元的自由現金流，這確實比去年同期有顯著增長。所以如果可以的話，也許可以多談談這一點。

Yes. Thanks, Kevin. I mean we were happy with the free cash flow we produced in the second quarter and that positive $34 million you mentioned. We were able to reduce inventory levels. The supply chain environment is easier than what we saw last year. I still won't say it's completely easy, but it has eased some, and that has allowed us with a very conscious action on our part to make sure that we're having paper levels and other inventory levels at the right quantities in to realize that benefit for free cash flow. Also, we've been very focused on receivables collections and the portfolio is in great shape, and that is also coming through the free cash flow.

是的。謝謝，凱文。我的意思是，我們對第二季度產生的自由現金流以及您提到的 3400 萬美元的正現金流感到滿意。我們能夠降低庫存水平。供應鏈環境比我們去年看到的更容易。我仍然不會說這完全容易，但它已經緩解了一些，這使我們能夠採取非常有意識的行動，以確保我們的紙張水平和其他庫存水平處於正確的數量，以實現這有利於自由現金流。此外，我們一直非常關注應收賬款催收，投資組合狀況良好，這也是通過自由現金流實現的。

Okay. I'll ask one last one here and then jump back in the queue. But I just also can you speak to your priorities with capital allocation. You continue to do a good job of reducing leverage year-over-year, and you're also starting to buy back shares. So how do you think about the mix? I know you have a target of 2.0 leverage by the end of the year. Do you expect you'll continue to look for opportunities to repurchase shares as well?

好的。我會在這裡問最後一個問題，然後跳回隊列。但我也可以談談你在資本配置方面的優先事項。您在逐年降低杠桿方面繼續做得很好，並且您也開始回購股票。那麼你如何看待這種混合呢？我知道你們的目標是到年底槓桿率達到 2.0。您是否預計還會繼續尋找回購股票的機會？

Yes. I mean, look, that's been a long-term strategy of really being disciplined about how we work with our capital allocation. And clearly, the priority since 2019 was to really focus on debt paydown, which we've done massively regardless of pandemic hitting us and affecting the whole world. And so very proud of that because we did that while still investing appropriately in the platform on the print side as well as in innovation. But yes, we saw the trajectory this year, I felt very comfortable with starting stock buybacks.

是的。我的意思是，看，這是一項長期戰略，真正嚴格限制我們如何處理資本配置。顯然，自 2019 年以來的首要任務是真正關注債務償還，儘管大流行襲擊了我們並影響了整個世界，但我們已經做了大量的工作。我們對此感到非常自豪，因為我們在做到這一點的同時仍然對印刷方面的平台以及創新進行了適當的投資。但是，是的，我們看到了今年的軌跡，我對開始股票回購感到非常滿意。

And as Tony said, since last year, we bought back about 8% of the company for a pretty cheap price, in our estimation, and we'll continue to look at those opportunities. And at some point, we'd love to relook at the possibility of some sort of sustainable dividend but that's something the Board will review at year-end, which we do every year.

正如托尼所說，自去年以來，我們以相當便宜的價格回購了該公司約 8% 的股份，據我們估計，我們將繼續尋找這些機會。在某些時候，我們很想重新考慮某種可持續股息的可能性，但這是董事會將在年底審查的事情，我們每年都會這樣做。

And so I think you'll continue to see us be disciplined there. That will continue to be a good focus but also we feel that with what we're doing in the transformation of this company and the scaling of what we have, that it's a good investment to continue to look at buying back stock where the opportunity arises.

所以我想你會繼續看到我們在那裡受到紀律處分。這將繼續成為一個很好的焦點，但我們也認為，隨著我們在公司轉型和擴大現有規模方面所做的工作，繼續考慮在機會出現時回購股票是一項很好的投資。

This concludes our question-and-answer session. I would like to turn the conference back over to Joel Quadracci for any closing remarks.

我們的問答環節到此結束。我想將會議轉回喬爾·誇德拉奇 (Joel Quadracci) 發表閉幕詞。

Great. Thank you, operator, and thank you, everyone, for joining today's call.

偉大的。謝謝接線員，也謝謝大家參加今天的電話會議。

I just want to close by reiterating my confidence in the team and our strategy and our future as a marketing experience company. Our integrated marketing offering continues to be a competitive differentiator and a key driver behind our company's overall organic growth. At the same time, we'll continue to manage for the times, both financially and as well as creating shareholder value. And so with that, thank you again. Have a good day. We'll look forward to speaking to you again next quarter.

最後，我想重申我對團隊、我們的戰略以及我們作為一家營銷體驗公司的未來的信心。我們的整合營銷產品仍然是我們公司的競爭優勢和整體有機增長的關鍵驅動力。與此同時，我們將繼續在財務和創造股東價值方面與時俱進。再次感謝您。祝你有美好的一天。我們期待下季度再次與您交談。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。