Quad/Graphics Inc (QUAD) 2023 Q3 法說會逐字稿

Good morning, and welcome to the Quad's third quarter conference call. (Operator Instructions)

早上好，歡迎參加四方第三季電話會議。 （操作員說明）

A slide presentation accompanies today's webcast and participants are invited to follow along, advancing the slides themselves. To access the webcast, follow instructions posted in the earnings release.

今天的網路廣播附帶幻燈片演示，邀請參與者跟隨，自行推進幻燈片。若要存取網路廣播，請按照收益發布中發布的說明進行操作。

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, that this event is being recorded.

或者，您可以在 Quad 網站投資者部分的活動和簡報連結下存取幻燈片演示。 （操作員說明）。請注意，該事件正在被記錄。

I'd like to turn the conference over to Katie Krebsbach, Quad's Investor Relation Manager. Katie, please go ahead.

我想將會議交給 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 third quarter and year-to-date 2023 financial results, followed by Q&A.

謝謝接線員，大家早安。今天與我在一起的有 Quad 董事長、總裁兼執行長 Joel Quadracci；以及 Quad 財務長 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 第三季和 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路直播，前瞻性陳述須遵守我們的季度新聞稿和今天投影片 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.

Quad 的財務表現是根據公認會計原則編製的。然而，本簡報也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。

We have included in the slide presentation reconciliations of these non-GAAP financial measures to GAAP financial measures. 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.

我們在投影片簡報中包含了這些非 GAAP 財務指標與 GAAP 財務指標的調整表。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。

J.

J。

Thank you, Katie, and good morning, everyone. Beginning on Slide 3. In the third quarter, we were pleased to deliver consistent year-over-year EBITDA margins and $27 million of free cash flow despite a challenging revenue environment. Net sales declined compared to the same period in 2022, primarily due to lower print, paper logistics sales as well as the 2022 divestiture of our Argentinian print operations.

謝謝你，凱蒂，大家早安。從幻燈片 3 開始。儘管收入環境充滿挑戰，但第三季我們很高興實現了與去年同期一致的 EBITDA 利潤率和 2700 萬美元的自由現金流。淨銷售額與 2022 年同期相比有所下降，主要是由於印刷品、紙張物流銷售額下降以及 2022 年剝離我們的阿根廷印刷業務。

We continue to pay down debt, strengthen our balance sheet and return capital to shareholders through additional share repurchases. We are on track to achieve full year 2023 guidance for adjusted EBITDA, free cash flow and debt leverage. And by the end of the year, we will have reduced debt by over $560 million or 55% since January 1, 2020.

我們繼續償還債務，強化資產負債表，並透過額外股票回購向股東返還資本。我們預計將實現 2023 年全年調整後 EBITDA、自由現金流和債務槓桿的指導。到今年年底，我們的債務將減少超過 5.6 億美元，即自 2020 年 1 月 1 日以來的 55%。

We are lowering our full year 2023 net sales guidance due to industry-wide print volume reductions in response to ongoing economic uncertainty, continued postal rate increases and the impact of rising interest rates on specific clients. At Quad, we have seen the greatest impact to categories most sensitive to rising interest rates, such as financial services, direct mail, including credit cards, insurance and loans.

由於持續的經濟不確定性、郵政費率持續上漲以及利率上升對特定客戶的影響，全行業印刷量減少，因此我們下調了 2023 年全年淨銷售額指引。在Quad，我們發現對利率上升最敏感的類別受到的影響最大，例如金融服務、直郵，包括信用卡、保險和貸款。

Tony will share more detail on our year-to-date net sales breakdown and financial guidance shortly. We are confident in our ability to manage for these near-term print volume challenges, along with long-term expected organic declines in certain product lines like retail inserts, due to our long-standing disciplined approach to managing all aspects of our business including treating all costs as variable and aligning our cost structure to revenue opportunities.

托尼將很快分享有關我們今年迄今為止的淨銷售額細分和財務指導的更多詳細資訊。我們對應對這些近期印刷量挑戰以及零售插頁等某些產品線的長期預期有機下降的能力充滿信心，因為我們長期採用嚴格的方法來管理業務的各個方面，包括處理所有成本都是可變的，並使我們的成本結構與收入機會一致。

At the same time, we continue to build momentum as a marketing experience company, and Quad is unparalleled in that we seamlessly bring together all these central resources, brands and marketers needed for frictionless, scalable marketing execution, as shown on Slide 4.

同時，我們繼續發展作為一家行銷體驗公司的動力，Quad 的無與倫比之處在於，我們無縫地匯集了無摩擦、可擴展的行銷執行所需的所有這些核心資源、品牌和行銷人員，如幻燈片4 所示。

As we continue to scale our integrated marketing offering, print remains a core component of our business and the largest portion of our revenue mix. We will continue to innovate and invest in print and other channels to ensure we can fulfill our clients at our expanding marketing needs.

隨著我們繼續擴大整合行銷服務，印刷仍然是我們業務的核心組成部分，也是我們收入組合的最大組成部分。我們將繼續創新並投資印刷和其他管道，以確保我們能夠滿足客戶不斷擴大的行銷需求。

Turning to Slide 5. I'm pleased to share that we continue to evolve our strategic leadership at the governance level with the recent appointment of Melanie Huet to Quad's Board of Directors as an independent member. Melanie has a deep background in brand development, management and transformation and understands firsthand the challenges facing our clients. Currently, she is President of Brand Management & Innovation and a member of the Executive Committee at Newell Brands, a leading consumer products company. Prior to joining Newell in February of this year, she was Executive Vice President and Chief Commerce Officer at Serta Simmons Bedding. There, she delivered 3 quarters of market share growth, transform the sales organization and built a $1.5 billion innovation pipeline.

轉向投影片 5。我很高興地告訴大家，隨著最近任命 Melanie Huet 作為獨立成員加入 Quad 董事會，我們將繼續發展治理層面的策略領導力。 Melanie 在品牌開發、管理和轉型方面擁有深厚的背景，並且直接了解客戶面臨的挑戰。目前，她擔任領先消費品公司 Newell Brands 的品牌管理與創新總裁和執行委員會成員。在今年 2 月加入 Newell 之前，她曾擔任 Serta Simmons Bedding 的執行副總裁兼商務長。在那裡，她實現了三個季度的市場份額成長，對銷售組織進行了轉型，並建立了價值 15 億美元的創新管道。

Melanie has also worked in consumer products marketing at ConAgra Foods, Unilever, Kimberly-Clark and KraftHeinz. We look forward to leveraging Melanie's expertise on our board as we expand and strengthen our offerings and drive revenue growth.

Melanie 也曾在康尼格拉食品公司、聯合利華公司、金佰利公司和卡夫亨氏公司從事消費品行銷工作。我們期待在董事會中利用 Melanie 的專業知識來擴大和加強我們的產品並推動收入成長。

I'm also pleased to share that Joshua Lowcock, has joined our company as President of Quad Media and will further energize our efforts to create a differentiated, cohesive and market-leading audience targeting and media engagement offering. Joshua joins us from UM Worldwide, part of agency holding company, IPG, where he was Global Chief Media Officer responsible for omnichannel media, strategy, predictive analytics, performance marketing, content, innovation and ad tech. He played a pivotal role in developing involving UM Worldwide's go-to-market strategy.

我還很高興地告訴大家，Joshua Lowcock 已加入我們公司，擔任 Quad Media 總裁，並將進一步激勵我們努力打造差異化、有凝聚力且市場領先的受眾定位和媒體參與產品。 Joshua 在加入我們之前任職於 UM Worldwide（代理控股公司 IPG 的一部分），擔任全球首席媒體官，負責全通路媒體、策略、預測分析、績效行銷、內容、創新和廣告技術。他在製定 UM Worldwide 的市場進入策略方面發揮了關鍵作用。

Previously, Joshua worked at Mediavest, where he led the Walmart digital team. He also served as Head of Commercial Products and Platforms at News Corp where he led the launch of the company's customer data and analytics strategy. Joshua is well known in the industry and publishes and speaks regularly on topics relating to media, innovation and transformation. We will tap his considerable experience and expertise to elevate relationships with clients and fast track growth in areas that represent significant opportunity for us.

此前，Joshua 在 Mediavest 工作，領導沃爾瑪數位團隊。他還擔任新聞集團商業產品和平台主管，領導者推出了該公司的客戶數據和分析策略。 Joshua 在業界享有盛譽，經常發表有關媒體、創新和轉型的主題並發表演講。我們將利用他豐富的經驗和專業知識來提升與客戶的關係，並在對我們來說具有重大機會的領域快速發展。

On Slide 6, we show Quad's key growth drivers, delivering integrated service excellence, accelerating market penetration in key verticals 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 complexity 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 6 中，我們展示了 Quad 的主要成長動力、提供卓越的整合服務、加速關鍵垂直領域的市場滲透以及不斷發展我們作為 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、大規模地連接行銷旅程的各個方面，提供從策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產品。因此，我們幫助企業降低與多個代理商合作夥伴和供應商合作的複雜性，提高行銷流程效率並最大限度地提高行銷工作的有效性。

Turning to Slide 7. We show how we are growing our presence with well-known brands in our target verticals of consumer packaged goods, finance and insurance, health, direct-to-consumer, retail and publishing. These reputable well-known brands include Amazon, Walmart, Conagra, American Express and Abbott Labs, and are all admired for the excellence in the loyalty they have built with consumers. We take great pride in knowing they trust us to deliver on their marketing vision.

轉向幻燈片 7。我們展示瞭如何在消費品、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與知名品牌合作，擴大我們的影響力。這些信譽良好的知名品牌包括亞馬遜、沃爾瑪、康尼格拉、美國運通和雅培實驗室，都因其與消費者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實現他們的行銷願景。

To accelerate market penetration, we are focused on growing awareness that better marketing is built on Quad. We are gaining visibility with new brands, including blue-chip companies through our participation in industry events. For example, we recently participated in the 2023 Forbes CMO Summit, Miami and Advertising Week in New York City, where we connected with brands and marketers about their marketing challenges and how Quad can solve those challenges.

為了加速市場滲透，我們致力於提高人們的意識，更好的行銷是建立在 Quad 之上的。透過參與業界活動，我們正在獲得新品牌的知名度，包括藍籌公司。例如，我們最近參加了 2023 年邁阿密福布斯首席行銷長高峰會和紐約廣告週，我們與品牌和行銷人員就他們的行銷挑戰以及 Quad 如何解決這些挑戰進行了交流。

On Slide 8, we show an example of how we're growing momentum with a premier brand, Titleist, the golf industry's leading performance equipment brand, recently engaged us for our brand design and product launch expertise. We will be updating the packaging for its flagship Pro V1 golf ball, the most played ball in PGA TOUR and the #1 golf ball brand in the world. This opportunity represents significant positive exposure for Quad as the Titleist company produces more than 350 million golf balls every year.

在投影片 8 中，我們展示瞭如何透過頂級品牌 Titleist 不斷發展的勢頭，Titleist 是高爾夫行業領先的功能裝備品牌，最近聘請我們提供品牌設計和產品發布專業知識。我們將更新其旗艦產品 Pro V1 高爾夫球的包裝，該高爾夫球是 PGA 巡迴賽中使用次數最多的球，也是世界排名第一的高爾夫球品牌。由於 Titleist 公司每年生產超過 3.5 億個高爾夫球，因此這個機會對 Quad 來說意味著重大的正面影響。

Titleist selected Quad for several reasons, including our exceptional approach to brand design in which we focus on making brands a favor through measured potential, consumer action and reaction and connections, our comprehensive creative services and expertise, which include brand positioning, design strategy, brand identity systems, adaptive design, packaging and retail environment.

Titleist 選擇Quad 的原因有很多，包括我們獨特的品牌設計方法，我們專注於透過衡量潛力、消費者行動和反應以及聯繫來讓品牌受到青睞，以及我們全面的創意服務和專業知識，其中包括品牌定位、設計策略、品牌識別系統、適應性設計、包裝和零售環境。

Our ability to leverage our own in-house consumer testing for brand package performance by our package insight team and our proven product launch expertise, which consists of our strategy, creative and connections planning to build in place attention grabbing campaigns that bolster awareness and drive sales.

我們有能力利用我們的包裝洞察團隊對品牌包裝性能進行內部消費者測試，以及我們經過驗證的產品發布專業知識，其中包括我們的策略、創意和聯繫規劃，以建立適當的吸引註意力的活動，從而提高知名度並推動銷售。

We are excited to be under a multiyear contract as Titleist trusted partner for this high-profile brand building work, which will be in market in early 2025. We successfully competed against respected sports brand agencies with deep category experience for this win. We look forward to expanding our partnership with Titleist parent company, Acushnet for other top-rated equipment for golfers.

我們很高興能夠作為Titleist 值得信賴的合作夥伴，參與這項備受矚目的品牌建設工作，該工作將於2025 年初投入市場。我們成功地與擁有豐富品類經驗的受人尊敬的運動品牌代理機構競爭，贏得了這場勝利。我們期待擴大與 Titleist 母公司 Acushnet 的合作關係，為高爾夫球手提供其他頂級裝備。

On Slide 9, we show an example of how we're helping another thriving consumer packaged goods company achieved brand growth. Cacique, the #1 producer of authentic Mexican-style cheeses, meats, sopes and other products in the U.S. is experiencing rapid growth as demand for Hispanic foods soar. Cacique chose to partner with Quad due to our reputation for delivering breakthrough creative and brand growth in CPG categories.

在投影片 9 中，我們展示了一個範例，說明我們如何幫助另一家蓬勃發展的消費品公司實現品牌成長。 Cacique 是美國正宗墨西哥風味起司、肉類、sope 和其他產品的第一大生產商，隨著西班牙食品需求的飆升，Cacique 正在經歷快速增長。 Cacique 選擇與 Quad 合作，是因為我們在 CPG 類別中提供突破性創意和品牌成長方面享有盛譽。

The company came to us by a word of mouth, recommended by another client for whom we are providing brand strategy, creative and campaign development and more. As Cacique's new creative agency of record, we are focused on building awareness and loyalty among consumers seeking authentic ingredients and high-quality products in this category. In addition to brand strategy and creative and campaign development, we are also leveraging our data-driven connections, planning expertise in support of Cacique's aggressive business goals to reach new market segments.

該公司是透過另一位客戶的口耳相傳找到我們的，我們為該客戶提供品牌策略、創意和活動開發等服務。作為 Cacique 的新創創意機構，我們致力於在尋求該類別正宗原料和高品質產品的消費者中建立意識和忠誠度。除了品牌策略、創意和活動開發之外，我們還利用我們的數據驅動聯繫和規劃專業知識來支持 Cacique 進入新細分市場的積極業務目標。

Our work with Cacique is just underway and will be in the market in 2024. Cacique is an impressive brand new to our CPG portfolio and one with tremendous revenue growth opportunity. Already, we are in discussions with this client for more opportunities to refresh its brand and packaging and provide printing services.

我們與 Cacique 的合作剛剛開始，將於 2024 年上市。Cacique 是我們 CPG 產品組合中一個令人印象深刻的新品牌，具有巨大的收入成長機會。我們已經在與該客戶討論，尋求更多更新其品牌和包裝以及提供印刷服務的機會。

Turning to Slide 10. For more than 50 years, our commitment to creating a better way has inspired creativity in how we address environmental, social and governance matters. For Quad, ESG is a business imperative as it underpins our growth strategy. We have made progress on our ESG commitments published in our inaugural 2021 report. These include maintaining our focus on diversity, equity, inclusion; prioritizing sustainable resource consumption; and investing in employee safety, health and wellness. To learn more about our commitments and how we continue to create positive, sustainable change in our company and in the communities where we live and work, please access our newly released 2023 ESG update on quad.com or scan the flowcode on Slide 10 of today's presentation.

轉向投影片 10. 50 多年來，我們致力於創造更好的方式，激發了我們解決環境、社會和治理問題的創造力。對 Quad 而言，ESG 是業務的當務之急，因為它支撐著我們的成長策略。我們在 2021 年首份報告中發布的 ESG 承諾方面取得了進展。其中包括保持我們對多元化、公平性和包容性的關注；優先考慮可持續資源消耗；投資員工的安全、健康和福祉。要詳細了解我們的承諾以及我們如何繼續在我們的公司以及我們生活和工作的社區中創造積極、可持續的變革，請訪問quad.com 上新發布的2023 年ESG 更新或掃描今天幻燈片10 上的流程程式碼推介會。

Before I turn the call over to Tony, I would like to thank our employees during our seasonally busiest time of the year for their continued hard work and daily commitment to providing the highest levels of service for our clients. As we move forward with our growth strategy, I have great confidence in our team and continue to be enthusiastic about our growth opportunities as a marketing experience company.

在將電話轉給托尼之前，我要感謝我們的員工在一年中最繁忙的季節持續努力工作並每天致力於為客戶提供最高水平的服務。隨著我們推進成長策略，我對我們的團隊充滿信心，並繼續對我們作為一家行銷體驗公司的成長機會充滿熱情。

With that, I will now turn the call over 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. On Slide 11, we show our diverse revenue mix. Net sales were $700 million in the third quarter of 2023, a 16% decline compared to the third quarter of 2022. On a year-to-date basis, net sales were $2.2 billion in 2023, a decline of 7% compared to 2022. Our net sales were impacted by industry-wide print volume reductions in response to continued economic uncertainty, postal rate increases and the impact of rising interest rates on specific clients.

謝謝喬爾，大家早安。在投影片 11 上，我們展示了我們多樣化的收入組合。 2023 年第三季淨銷售額為 7 億美元，比 2022 年第三季下降 16%。從年初至今來看，2023 年淨銷售額為 22 億美元，比 2022 年下降 7%。由於持續的經濟不確定性、郵政費率上漲以及利率上升對特定客戶的影響，我們的淨銷售額受到全行業印刷量減少的影響。

For example, on a year-to-date basis, direct mail has temporarily decreased from 14% of our total revenues to 11%. We expect direct mail growth in future years. Despite these headwinds, we have seen year-to-date increases in our net sales mix from segment share gains in magazines and catalogs, in Mexico due to increased education (technical difficulty) volumes exported to the United States and in our in-store signage product offering, continuing a multiyear trend of high revenue growth for our in-store team.

例如，今年迄今，直效郵件占我們總收入的比例已從 14% 暫時下降至 11%。我們預計未來幾年直效郵件業務將會成長。儘管存在這些不利因素，但由於出口到美國和店內標牌的教育（技術難度）量增加，我們在墨西哥的雜誌和目錄中的細分市場份額有所增加，因此我們的淨銷售額組合今年迄今有所成長產品供應，延續了我們店內團隊多年來收入高成長的趨勢。

Slide 12 provides a snapshot of our third quarter 2023 financial results. Adjusted EBITDA was $57 million in the third quarter of 2023 as compared to $69 million in the third quarter of 2022 and adjusted EBITDA margin declined slightly to 8.2% in the third quarter of 2023 compared to 8.3% in the third quarter of 2022. The decline was due to lower sales and lower pension income, partially offset by benefits from improved manufacturing productivity and savings from cost reduction initiatives. On a year-to-date basis, adjusted EBITDA was $168 million in 2023 compared to $173 million in 2022, while adjusted EBITDA margin improved from 7.4% to 7.7%.

幻燈片 12 提供了我們 2023 年第三季財務業績的快照。 2023 年第三季調整後 EBITDA 為 5,700 萬美元，而 2022 年第三季為 6,900 萬美元，2023 年第三季調整後 EBITDA 利潤率小幅下降至 8.2%，而 2022 年第三季為 8.3%。這是由於銷售額下降和退休金收入減少造成的，但部分被製造業生產力提高和成本削減措施帶來的節省所抵消。年初至今，2023 年調整後 EBITDA 為 1.68 億美元，而 2022 年為 1.73 億美元，調整後 EBITDA 利潤率從 7.4% 提高至 7.7%。

Adjusted diluted earnings per share was $0.11 in the third quarter of 2023 as compared to $0.32 in the third quarter of 2022. On a year-to-date basis, adjusted diluted earnings per share was $0.28 in 2023 compared to $0.49 in 2022. The decline was primarily due to lower adjusted net earnings and was partially offset by the positive impact from share repurchases. We are active in the market yet again this quarter, repurchasing our Class A shares. Beginning in the second quarter of 2022, we have repurchased 5.5 million shares or approximately 10% of our outstanding shares for a total purchase price of $20 million. Free cash flow was negative $18 million in the first 9 months of 2023, a $61 million improvement compared to the first 9 months of 2022 and included $27 million of free cash flow generation in the third quarter of 2023.

2023 年第三季調整後稀釋每股收益為 0.11 美元，而 2022 年第三季為 0.32 美元。年初至今，2023 年調整後稀釋每股收益為 0.28 美元，而 2022 年為 0.49 美元。主要是由於由於調整後淨利下降，並被股票回購的正面影響部分抵銷。本季我們再次活躍在市場上，回購了我們的 A 類股票。從 2022 年第二季開始，我們回購了 550 萬股股票，約佔已發行股票的 10%，總購買價為 2,000 萬美元。 2023 年前 9 個月的自由現金流為負 1,800 萬美元，比 2022 年前 9 個月減少了 6,100 萬美元，其中包括 2023 年第三季產生的 2,700 萬美元的自由現金流。

We have now generated positive free cash flow during both the second and third quarters of 2023, which are typically negative free cash flow quarters due to seasonality. The increase in free cash flow was primarily attributable to lower inventory yields as supply chain challenges improved, and we experienced strong receivables collections. This improvement was achieved despite a $10 million increase in capital expenditures as we continue to invest in our automation initiatives. As a reminder, the company historically generates the majority of its free cash flow in the fourth quarter of the year.

目前，我們在 2023 年第二季和第三季均產生了正的自由現金流，而由於季節性原因，這兩個季度通常是負的自由現金流季度。自由現金流的增加主要歸因於隨著供應鏈挑戰的改善以及我們的應收帳款催收強勁，庫存收益率下降。儘管隨著我們繼續投資於自動化計劃，資本支出增加了 1000 萬美元，但仍實現了這項改進。提醒一下，該公司歷來在今年第四季產生大部分自由現金流。

Slide 13 includes a summary of our debt capital structure. We are pleased to have reduced debt by $132 million over the last 12 months with strong free cash flow. However, due to the working capital build during our peak production season, on a year-to-date basis, net debt increased by $39 million to $584 million at September 30, 2023, and the debt leverage ratio increased 20 basis points to 2.36x at the end of the third quarter 2023. The increase in net debt and the debt leverage ratio was primarily due to the negative $18 million of free cash flow and $10 million of Quad share buybacks in the first 9 months of 2023. We expect debt to decrease to under $470 million in the fourth quarter with seasonal reduction of inventory and collections of receivables, and we remain on track to achieve the low end of our long-term targeted debt leverage range of 2 to 2.5x by the end of this year.

投影片 13 總結了我們的債務資本結構。我們很高興在過去 12 個月內減少了 1.32 億美元的債務，並擁有強勁的自由現金流。然而，由於我們在生產旺季期間增加了營運資金，截至2023年9月30日，截至2023年9月30日，淨債務增加了3900萬美元，達到5.84億美元，債務槓桿率增加了20個基點，達到2.36倍。截至2023 年第三季末。淨債務和債務槓桿率的增加主要是由於2023 年前9 個月自由現金流為負1,800 萬美元以及Quad 股票回購為1,000 萬美元。我們預計債務將隨著庫存和應收帳款回收的季節性減少，第四季度債務槓桿率降至 4.7 億美元以下，而且我們仍有望在今年年底前實現 2 至 2.5 倍長期目標債務槓桿範圍的下限。

As of September 30, our blended interest rate was 7.1%, which is up from 5.7% 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 50% floating and 50% fixed. Our liquidity includes up to $331 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 our revolving credit agreement and cash on hand. The majority of the debt maturities are not due until November 2026.

截至 9 月 30 日，我們的混合利率為 7.1%，高於一年前的 5.7%。為了減輕利率上升環境的影響，我們簽訂了 2 份利率上下限協議，於 2023 年 2 月 1 日生效。包括利率掉期在內，我們的債務為 50% 浮動和 50% 固定。我們的流動性包括循環信貸協議下高達 3.31 億美元的可用資金以及 1,100 萬美元的手頭現金。我們最近的重大債務到期日為 8,800 萬美元，發生時間為 2024 年 1 月，我們將透過循環信貸協議和手頭現金為其提供資金。大部分債務要到 2026 年 11 月才會到期。

We have updated our 2023 guidance as shown on Slide 14. Annual net sales are now expected to decline 7% to 9% compared to previous guidance of annual net sales remaining flat to declining 5%. Although we plan for organic print decline in our original guidance, print volumes fell further than our projections due to continued economic uncertainty and higher postage rates in addition to the impact on specific clients of rising interest rates, as we previously discussed. Despite the net sales decline, our flexible model and focus on disciplined cost management and labor productivity is enabling us to increase our expected adjusted EBITDA margin by 50 basis points at the midpoints of our updated guidance ranges.

我們更新了 2023 年指導，如投影片 14 所示。與先前的年度淨銷售額保持持平至下降 5% 的指導相比，目前預計年度淨銷售額將下降 7% 至 9%。儘管我們在最初的指導中計劃有機印刷量下降，但正如我們之前所討論的，由於持續的經濟不確定性和更高的郵資費率以及利率上升對特定客戶的影響，印刷量下降幅度比我們的預測還要大。儘管淨銷售額下降，但我們靈活的模式以及對嚴格成本管理和勞動生產力的關注使我們能夠將預期調整後 EBITDA 利潤率在更新指導範圍的中點上提高 50 個基點。

That profitability performance, combined with reduced working capital requirements from improved supply chain is driving strong free cash flow and we reaffirm the midpoint of our free cash flow guidance to be $70 million in 2023, which includes at least $70 million of investment in capital expenditures to further automate our unparalleled integrated marketing platform. And finally, we continue to expect debt leverage to be approximately 2.0x by the end of 2023.

這種獲利能力，加上供應鏈改善帶來的營運資金需求減少，正在推動強勁的自由現金流，我們重申2023 年自由現金流指導的中點為7000 萬美元，其中包括至少7000 萬美元的資本支出投資進一步自動化我們無與倫比的整合行銷平台。最後，我們仍預期到 2023 年底債務槓桿率將達到約 2.0 倍。

Slide 15 includes our key investment highlights as we continue to build on our 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 with 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.

投影片 15 包括我們繼續鞏固作為行銷體驗公司的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，我們將繼續專注於透過不斷實現客戶收入多元化來增加淨銷售額並提高獲利能力。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。

As part of a multiyear debt reduction strategy, by the end of this year, we expect to reduce debt by over $560 million from over $1 billion on January 1, 2020, representing the low end of our current long-term target debt leverage range of 2.0x. We intend to further reduce debt in 2024 with our strong free cash flow generation, augmented with proceeds from selling noncore assets.

作為多年債務削減策略的一部分，到今年年底，我們預計到 2020 年 1 月 1 日，債務將從超過 10 億美元減少超過 5.6 億美元，這是我們當前長期目標債務槓桿範圍的下限2.0 倍。我們打算透過強大的自由現金流產生以及出售非核心資產的收益，在 2024 年進一步減少債務。

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, and further automating our print offerings for greater production efficiencies, while returning capital to shareholders.

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，並進一步自動化我們的印刷產品以提高生產效率，同時向股東返還資本。

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生詢問問題。

(Operator Instructions) First question is from Kevin Steinke, 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 with something that really stood out to me here is the flexibility of your business model, as you noted. The midpoint of the sales guidance, as I calculate it for 2023 came down by about 6%, but you were able to maintain the midpoint of your adjusted EBITDA guidance. So you talked about cost management and labor productivity and things like that. But maybe just talk a little bit about what you're able to do to adjust to quickly to maintain the profitability outlook despite the lower sales outlook and maybe any actions that you took in the quarter on the cost side?

正如您所指出的，我想從對我來說真正突出的事情開始，那就是您的業務模式的靈活性。據我計算，2023 年銷售指引的中點下降了約 6%，但您能夠維持調整後 EBITDA 指引的中點。所以你談到了成本管理和勞動生產力等等。但也許只是談談您能夠做些什麼來快速調整以維持盈利前景，儘管銷售前景較低，也許您在本季度在成本方面採取了任何行動？

Yes, Kevin, I'll take -- this is Joel. I'll take a stab at that and then Tony can fill in. But yes, I mean I'd like to say that Quad has to be very ambidextrous. We come from a disruptive industry on the print side, and at the same time, we're building a case that could actually be a disruptor on the marketing side.

是的，凱文，我接受──這是喬爾。我會嘗試一下，然後托尼可以補充。但是，是的，我想說的是，Quad 必須非常靈巧。我們來自印刷的顛覆性產業，同時，我們正在建立一個實際上可能成為行銷方面顛覆者的案例。

And so being blessed with being in the printing industry, we've had to be very good at adjusting to things that get thrown at us. And so we do try and keep -- have a mentality that all costs are variable. And so over time, as we've seen some of the expected decline in some of the areas like retail inserts or publications, we've been able to scale down the platform by -- we've unfortunately closing plants to adjust for it, but then realizing the value of those plants by selling the real estate to help pay down debt.

因此，有幸從事印刷業，我們必須非常善於適應所遇到的事情。因此，我們確實嘗試並保持一種心態，即所有成本都是可變的。因此，隨著時間的推移，正如我們看到零售插頁或出版物等某些領域的預期下降一樣，我們已經能夠通過以下方式縮小平台規模——不幸的是，我們關閉了工廠來適應它，但隨後透過出售房地產以幫助償還債務來實現這些工廠的價值。

Furthermore, I'd say one of the big significant drivers too was the great work done by the people on the floor because Tony mentioned, productivity is quite a bit up this year. And when you think about where the world was only a year or so ago with really tough environment for getting labor, we ended up putting a holistic approach on that and really accelerating a lot of our training. And so as we saw softness come into this market this year due to a lot of what's going on in the economy, the core part of the full-time equivalents, we're much more trained up as a group than before. And so that's another way that we've done it.

此外，我想說，最重要的推動因素之一也是現場人員所做的出色工作，因為托尼提到，今年的生產力提高了很多。當你想到大約一年前，世界上獲得勞動力的環境非常艱難時，我們最終對此採取了整體方法，並真正加快了我們大量的培訓。因此，當我們看到今年由於經濟中發生的許多事情（全職工作的核心部分）而出現疲軟時，我們作為一個團隊比以前接受了更多的培訓。這是我們的另一種方式。

And you look, I guess we're a lean enterprise group, and we always have been, and we're able to adjust very quickly. And I think that we always have been focused on being able to weather storms and take advantage of those, which is why we move so quickly employee cost out. I mean when the pandemic hit, we got out of panic mode within weeks when that happened that spring, so that we could continue running the business. And that was by making really tough decisions very quick and squeezing down.

你看，我想我們是一個精實的企業集團，我們一直都是，而且我們能夠很快調整。我認為我們一直專注於能夠抵禦風暴並利用這些風暴，這就是為什麼我們如此迅速地削減員工成本。我的意思是，當大流行來襲時，我們在春季發生的幾週內就擺脫了恐慌模式，這樣我們就可以繼續經營業務。那就是快速做出非常艱難的決定並全力以赴。

And so it's kind of built in our DNA, maybe partially because of where we come from, but also because I think we've got a very disciplined group when it comes to making sure we adjust for these times. Tony, am I missing any?

所以它是根植於我們 DNA 中的，部分原因可能是因為我們來自哪裡，但也因為我認為我們有一個非常紀律嚴明的團隊來確保我們適應這些時代。托尼，我錯過了什麼嗎？

One thing I would just add, when we think about EBITDA, Kevin, is we've been focused on our pricing and making sure that we get the value that we provide to customers. So you're seeing a benefit come through the bottom line coming from in the inflationary times we've been able to focus on some price increases.

我想補充的一件事是，當我們考慮 EBITDA 時，Kevin，我們一直專注於我們的定價並確保我們獲得為客戶提供的價值。因此，您會看到在通貨膨脹時期我們能夠專注於一些價格上漲所帶來的利潤。

Well, and also, I think that as we provide multiple service products to people, we're getting paid for the value of that because any time we can do more than one thing for our client, we can actually help them pull cost out through workflow analysis. And really, the more they kind of expose to us, the more we can kind of look at content and figure out where a lot of the waste is and people are willing to pay for that because their savings is much greater than the value that they are paying us.

嗯，而且，我認為，當我們向人們提供多種服務產品時，我們會因其價值而獲得報酬，因為任何時候我們可以為客戶做不止一件事，我們實際上可以幫助他們通過以下方式降低成本：工作流程分析。事實上，他們向我們展示的內容越多，我們就越能查看內容並找出大量浪費的地方，人們願意為此付出代價，因為他們的儲蓄遠遠大於他們的價值。正在付錢給我們。

Okay. That's great commentary. So when I think about the change in the sales outlook, maybe just walk us through what's changed there? Was it primarily the direct mail piece that you highlighted? Or is it more broad-based than that? Maybe as you have in previous calls, maybe just touch on the sales trends you're seeing across the various product categories?

好的。這是很棒的評論。因此，當我想到銷售前景的變化時，也許可以向我們介紹那裡發生了什麼變化？您強調的主要是直郵嗎？或者它的基礎比這更廣泛？也許就像您在之前的電話會議中所做的那樣，也許只是談論您在不同產品類別中看到的銷售趨勢？

Sure. And I'd say that there's an overarching thing on top, which is really economic softness. We started seeing that from our client, as we got towards the summer as people are looking at fall. Even though retail numbers came out recently, those weren't adjusted for inflation. So if you look at absolute units sort of in CPG world and retail, it's actually down. So that's an overriding factor.

當然。我想說的是，最重要的是經濟疲軟。我們開始從客戶那裡看到這一點，當我們進入夏天時，人們正在關注秋天。儘管最近公佈了零售數據，但這些數據並未根據通貨膨脹進行調整。因此，如果你看看消費品領域和零售業的絕對單位，你會發現它實際上是下降的。所以這是一個最重要的因素。

But we try and break out with large-scale print, targeted print and integrated solutions. We do that to kind of show where the expected decline is, and that's in large-scale print. And so that declined as expected. I'd say retail interest may be a little bit faster pull back just because of the economic side, but we expect that to keep declining.

但我們嘗試透過大規模印刷、定向印刷和綜合解決方案來突破。我們這樣做是為了顯示預期的下降在哪裡，並且是大尺寸印刷的。因此，這一數字正如預期的那樣下降了。我想說，由於經濟方面的原因，零售興趣可能會更快地回落，但我們預計這種情況將繼續下降。

In targeted print, this is the area that you mentioned, where catalogs, direct mail, packaging, in-store, these tend to really benefit from our MX strategy of the working experience company because when we're solving some of the brand problems upstream, they tend to want to then also engage us for engaging their consumers through these different channels. And the tough one here has been direct mail.

在有針對性的印刷中，這就是您提到的領域，目錄、直郵、包裝、店內，這些往往真正受益於我們工作體驗公司的 MX 策略，因為當我們解決上游的一些品牌問題時，他們往往也希望我們透過這些不同的管道吸引他們的消費者。其中最困難的是直郵。

And it's important to point that out because we don't look at this as one that's going to keep declining. We really focus on the highly personalized, data-driven direct mail, but we were down double-digit percent sales in that this year, and we saw that starting to materialize at the end of last year when interest rates went crazy. So things like personal lending, we were deep in financial.

指出這一點很重要，因為我們並不認為這一點會持續下降。我們確實專注於高度個人化、數據驅動的直郵，但今年我們的銷售額下降了兩位數，我們看到這種情況在去年年底利率瘋狂上漲時開始實現。所以像個人貸款這樣的事情，我們在金融領域很深入。

We had one big outfit that was exiting Consumer Banking, which was a significant player. And so I see that the blip here in sales, we certainly have some economic overhang. But in direct mail, that's all reversible as we continue to sell the value add that direct mail brings.

我們有一個大型機構正在退出消費銀行業務，它是一個重要的參與者。因此，我認為銷售方面的波動，我們肯定有一些經濟負擔。但在直郵中，這一切都是可逆的，因為我們繼續銷售直郵帶來的增值。

In-store was up 12% because that is one of our fast-growing places in packaging hung in there relatively flat. The one that other place that is hitting us on revenue would be what the post office is doing. And when I look at targeted print, catalogs is the one that's most affected by this. We have a post office who thinks that they can fix their problem by just increasing prices as opposed to pulling cost out, and they've accelerated that a bit this year with our customers getting 2 increases in 1 year.

店內成長了 12%，因為那是我們成長最快的地方之一，包裝掛在那裡相對平坦。影響我們收入的另一個地方是郵局正在做的事情。當我查看目標印刷品時，目錄是受此影響最大的一個。我們有一家郵局認為他們可以透過提高價格而不是降低成本來解決問題，今年他們加快了這一速度，我們的客戶在一年內漲價了兩次。

And so in catalogs that -- they get affected quickly because they could pull back on their prospecting of catalogs. And so we saw some pullback there. But I'd say that there is an overall economic pullback that we've seen and marketing tends to see it first. And the direct mail piece is the one that I would point to for people to understand that we see that as a manageable category that's not about -- or continue to decline.

因此，在目錄中，他們很快就會受到影響，因為他們可能會停止對目錄的探索。因此我們看到了一些回調。但我想說的是，我們已經看到了整體經濟衰退，而行銷往往首先看到它。我想指出直郵是為了讓人們明白，我們認為直郵是一個可管理的類別，不會出現或繼續下降。

Okay. That's helpful. And so when I look at the updated sales guidance, you're still -- it would still imply a nice seasonal ramp in the fourth quarter in sales. So I guess, are you expecting or seeing a fairly normal sequential ramp-up related to holidays, but just, I guess, off of a lower base?

好的。這很有幫助。因此，當我查看更新後的銷售指導時，您仍然會發現，這仍然意味著第四季度的銷售出現了良好的季節性成長。所以我想，您是否期待或看到與假期相關的相當正常的連續增長，但我猜只是在較低的基礎上？

Yes. I mean, at this point in the year, a lot of that stuff, our customers are pretty locked and loaded. There is some ebb and flow in it, and specifically, maybe between months, sometimes. But December is one that kind of sort of materializes later in the game, but we feel very good about where things are at for the rest of the year.

是的。我的意思是，在今年的這個時候，我們的客戶已經鎖定了許多這樣的東西。其中有一些潮起潮落，具體來說，有時可能是幾個月之間。但 12 月是在遊戲後期才實現的，但我們對今年剩餘時間的情況感到非常滿意。

Okay. Any thoughts -- I know you haven't given guidance for next year, but just beyond the end of this year, do you think, I guess it's dependent on the economy, but how do you think volumes might trend in the industry. I suppose interest rates will continue to be a headwind in the financial services area, but do you think there's some pent-up marketing spend that starts to come back? Or it's just going to continue to follow like what the consumer is doing or -- just I mean, any thoughts on -- from your industry experience, how you might expect volumes to trend or react in this environment?

好的。有什麼想法嗎？我知道您還沒有給出明年的指導，但就在今年年底之後，您認為這取決於經濟，但您認為該行業的銷售趨勢如何。我認為利率將繼續成為金融服務領域的阻力，但您是否認為一些被壓抑的行銷支出開始捲土重來？或者它只是繼續關註消費者正在做的事情，或者——我的意思是，任何想法——根據你的行業經驗，你預計在這種環境下銷售的趨勢或反應如何？

Well, I think, if you give me a glimpse of your economic crystal ball that I could answer it better. But yes, I think it has a lot to do with how this plays out. I mean, even like in the financial community, you have that shock of interest rates, but ultimately, they still got to market to their customers, right?

好吧，我想，如果你讓我看一下你的經濟水晶球，我就能更好地回答這個問題。但是，是的，我認為這與事情的發展有很大關係。我的意思是，即使像在金融界一樣，你也會受到利率的衝擊，但最終，他們仍然必須向客戶推銷，對吧？

So they freeze up really quickly, but ultimately, you have to get back to doing it. So I'd see probably some relative return to being out there. In terms of volumes, hard to predict at this point, just given the economic headwinds, but we're not kind of waiting around, like hope is an operating strategy. Even in direct mail, we've had a lot of strategy of how we're going to grow that in the future. And unfortunately, one of that -- and we just closed a plant, which helps with the volume shortfall now but strategically allows us to really shore up and create more opportunity for the type of direct mail we sell in the future.

所以它們很快就會凍結，但最終，你必須重新開始做。所以我可能會看到相對的回歸。就數量而言，鑑於經濟逆風，目前很難預測，但我們不會等待，就像希望是一種營運策略一樣。即使在直效郵件方面，我們也制定了許多未來如何發展的策略。不幸的是，其中之一 - 我們剛剛關閉了一家工廠，這有助於解決目前的銷量短缺問題，但從戰略上講，我們能夠真正支撐並為我們未來銷售的直郵類型創造更多機會。

So I think we always look at all these categories when there's a softness like that, and we don't wait to make sure that we can manage through it. But on the sales side, we've got a ramp-up of a lot of stuff that's happening on the marketing experience category. And that's why we keep trying to show these case studies because these are not bland brands. I mean Titleist is a major brand here, and we feel really good about those wins because a lot of those things we show you, our wins that are, yes, it's maybe agency of record, but ultimately, we believe, will create a lot more downstream revenue and is normally proven out that way. And remember, any time you get down into targeted print from integrated solutions, you're dealing much bigger invoices. So we've been very good at bringing in a lot of really good talent.

所以我認為，當出現這樣的疲軟狀態時，我們總是會專注於所有這些類別，並且我們不會等待以確保我們能夠克服它。但在銷售方面，我們在行銷體驗類別上發生了很多事情。這就是為什麼我們不斷嘗試展示這些案例研究，因為這些不是平淡無奇的品牌。我的意思是Titleist 是這裡的一個主要品牌，我們對這些勝利感到非常高興，因為我們向您展示了很多東西，我們的勝利是，是的，它可能是有記錄的機構，但最終，我們相信，將創造許多更多的下游收入通常被證明是這樣的。請記住，每當您透過整合解決方案進行有針對性的列印時，您都會處理更大的發票。所以我們非常善於引進很多優秀的人才。

I talked about Josh Lowcock, who's helping on the media side and the data side and analytics. But we're going to gear up very quickly to go after a lot of new brands who never knew Quad. So despite what our normal customers are seeing economically in 2024, we expect to keep feeding it with new seeds.

我談到了 Josh Lowcock，他在媒體方面、數據方面和分析方面提供幫助。但我們很快就會做好準備，去追趕許多從未了解過 Quad 的新品牌。因此，儘管我們的普通客戶在 2024 年的經濟狀況如何，我們仍希望繼續為其提供新種子。

And Kevin, I mean you've now participated in a few of our calls, you know that during uncertain economic times, we're going to continue to focus on strength of the balance sheet, debt reduction. We talked about going -- further decreases on debt reduction, getting below 2.0 leverage as we look out into 2024. So yes, as we'll continue to invest in growth as Joel has said, we're going to continue to support shareholders. We can do all that because of the strong free cash flow that we provide.

凱文，我的意思是你現在已經參加了我們的一些電話會議，你知道在經濟不確定的時期，我們將繼續專注於資產負債表的實力和債務削減。我們談到了在展望 2024 年時進一步減少債務，將槓桿率降至 2.0 以下。所以，是的，正如喬爾所說，我們將繼續投資於成長，我們將繼續支持股東。我們之所以能夠做到這一切，是因為我們提供了強勁的自由現金流。

Yes, absolutely. That's a great point, Tony. And so -- and you did mention there, and I wanted -- I was planning to ask about this, but the -- you highlighted a couple of nice new wins in your slide deck. But maybe just talk about the overall pipeline for your agency solutions and how the messaging around your unique end-to-end integrated marketing solutions is being received in the current economic environment.

是的，一點沒錯。這是一個很好的觀點，托尼。所以 - 你確實在那裡提到過，我想 - 我本來打算問這個問題，但是 - 你在幻燈片中強調了一些不錯的新勝利。但也許只是談論您的代理商解決方案的整體管道，以及在當前的經濟環境中如何接收圍繞您獨特的端到端整合行銷解決方案的訊息。

Yes, it's actually being received well. I think that it goes to the ecosystem that's out there for brands and how they market it is, it's fairly broken. Like we always say, it's not very integrated. And in one of my answers before I mentioned, the more a client allows us to look at their process, their content, how they go to market, the more we can help integrate those processes, not just in how they would interact with us in producing it versus a big holding company, but also within their own 4 walls.

是的，它實際上受到了很好的歡迎。我認為它涉及到品牌的生態系統以及他們的營銷方式，它相當破碎。就像我們常說的，它不是很整合。在我之前提到的一個答案中，客戶越多地允許我們查看他們的流程、他們的內容、他們如何進入市場，我們就越能幫助整合這些流程，而不僅僅是他們如何與我們互動與大型控股公司相比，但也在自己的四面牆內進行生產。

We're very good at helping them squeeze the cost out that, that can happen because of cost takeout. So it's been received very well. And I'd say that I always believe that never waste a soft environment because that's when a lot of our marketers are under more pressure. It's under more pressure to try and find audience, convert them to customers, but also under more pressure to find cost takeout. And so they tend to want to listen a lot quicker in a downturn, but our marketing team has done an outstanding job over the past 2 years of making us known to a whole group of clients who never knew us before.

我們非常擅長幫助他們壓縮成本，這可能是由於成本削減而發生的。所以反應非常好。我想說的是，我始終相信，永遠不要浪費軟環境，因為那時我們的許多行銷人員面臨更大的壓力。它面臨著更大的壓力來嘗試尋找受眾，將他們轉化為客戶，但也面臨更大的壓力來尋找成本外送。因此，他們往往希望在經濟低迷時期更快地傾聽，但我們的行銷團隊在過去兩年中做得非常出色，讓一群以前從未認識我們的客戶認識了我們。

And so we feel very good about the growth of the pipeline and the types of services we're being asked to do and the fact that the integration part is playing out. And so again, sometimes it takes a little while for someone to start with being an AOR, but then cascade down into us doing in-store or packaging for them. But when they do that, that's when you start to see the revenue pop from each of the accounts. So like I said -- we're very ambidextrous. Yes, I'm like a little disappointed that on the print side, we have to manage for some pullback, but I'm super excited on the marketing experience side because it's really [reign] true to what people are looking for.

因此，我們對管道的成長、我們被要求提供的服務類型以及整合部分正在發揮作用的事實感到非常滿意。再說一次，有時某人需要一段時間才能開始擔任 AOR，然後逐漸進入我們為他們做店內或包裝的工作。但當他們這樣做時，你就會開始看到每個帳戶的收入激增。就像我說的——我們非常靈巧。是的，我有點失望，在印刷方面，我們必須設法應對一些回調，但我在行銷體驗方面非常興奮，因為它確實符合人們的需求。

Okay. Great. I just ask maybe a couple more here. But -- when you talk about the increases in postage rates and how your clients have reacted to that, you specifically called out the catalog piece. Do you think that's something they eventually adjust to or you work with them to help them out on that side? I know you already do that in terms of trying to lower their postage expenses. But how do you think that situation ultimately plays out or resolves?

好的。偉大的。我只是在這裡再問幾個。但是，當您談論郵費上漲以及客戶對此的反應時，您特別提到了目錄部分。您認為他們最終會適應這一點，還是您會與他們合作以幫助他們解決這個問題？我知道你們已經這樣做了，試圖降低他們的郵資。但您認為這種情況最終會如何發展或解決？

Yes, I think it's twofold. When you get a rapid increase in your biggest cost, you get a quick reaction until you can adjust for it. So historically, when you see the post office do increases that are outsized, you see a quick pullback. And then ultimately, though, people still have to market, right? So they adjust, they get smarter about who they're mailing to. They really start to focus more on what's your response per piece and how can we make that better. That all lends to understanding your data better of audience and who you're going to and what you're sending to them.

是的，我認為這是雙重的。當你的最大成本快速增加時，你會迅速做出反應，直到你能夠適應它。因此，從歷史上看，當你看到郵局大幅增加時，你會看到快速回調。但最終，人們仍然需要行銷，對吧？因此，他們會進行調整，更明智地了解郵寄對象。他們真的開始更專注於您對每件作品的回應以及我們如何做得更好。所有這些都有助於受眾更好地了解您的數據、您的目標受眾以及您要發送給他們的內容。

And then -- which plays into all the things we're doing about helping people with analytically figuring out what's the best use of their dollar. But on the operational side, we do a lot of stuff to offset the post office over a lot of time. We significantly offset current postal costs through all the co-mailing that we do. And we're really excited because we're rolling out a whole new product right now that might -- not might, will, help our clients significantly offset more of this postal increase that's going on.

然後，這融入我們正在做的所有事情中，幫助人們分析性地找出他們的美元的最佳用途。但在營運方面，我們做了很多事情來抵消郵局在很長一段時間內的影響。透過我們所做的所有聯合郵寄，我們大大抵消了當前的郵政成本。我們真的很興奮，因為我們現在正在推出一個全新的產品，它可能——不是可能，而是——幫助我們的客戶顯著抵消正在發生的郵政增長。

It takes time to ramp up because some people need to test into it, but we're rolling it out with publications right now, and we expect to -- as fast as possible to get the catalogers on task as well. So we -- it really pushes us to be innovative. Because I think the key point is people have to remember, we do most of the post offices work. We do all the sortation, we combine the customers, and we drop it to the almost to the closest post-office to your house, and that's where the post office picks up. And so that's where we really push process innovation to help them offset it. So it's a little bit of both in terms of your question.

提升速度需要時間，因為有些人需要對其進行測試，但我們現在正在透過出版物推出它，並且我們希望盡快讓編目員完成任務。所以我們——它確實推動我們創新。因為我認為關鍵點是人們必須記住，我們承擔了大部分郵局工作。我們會進行所有分類，將客戶合併起來，然後將其投遞到離您家最近的郵局，然後郵局就會在那裡取件。因此，這就是我們真正推動流程創新以幫助他們抵消這種影響的地方。所以就你的問題而言，兩者都有一點。

Yes, and the majority of cost that someone pays to print is postal, right? So this is a big item. So all the solutions that Joel talked about and the scale that we bring, that gives us an advantage in helping businesses be the most efficient they can be in getting things delivered to end destinations.

是的，人們支付的列印費用大部分是郵寄費用，對嗎？所以這是一個大項目。因此，喬爾談到的所有解決方案以及我們帶來的規模，使我們在幫助企業最有效地將物品運送到最終目的地方面具有優勢。

All right. Yes. Understood. So just 2 more here. Anything to highlight in your international markets and what's going on there? Saw decline year-over-year. But is that seeing the same kind of headwinds as you're experiencing in the U.S., I guess?

好的。是的。明白了。所以這裡還有 2 個。您的國際市場有什麼值得強調的嗎？那裡正在發生什麼事？年比有所下降。但我想，這是否與您在美國遇到的阻力相同？

Well, quite frankly, where we see the softness would be in Europe because Europe has obviously big challenges now and ahead of it. But if you look at Mexico, that is being tremendously successful for us, and we're continuing to actually grow that organically. And so we've got into some new product lines. We've signed up a lot of new customers. We're adding a new very large press in Mexico, has to be up and running by February or our clients will be upset, but it's on schedule. But that's actually a great story. So Mexico is a very good highlight offset by some of the softnesses in Europe.

坦白說，我們認為歐洲會出現疲軟，因為歐洲現在和未來顯然面臨巨大的挑戰。但如果你看看墨西哥，你會發現這對我們來說是非常成功的，而且我們正在繼續有機地發展這一點。所以我們已經進入了一些新的產品線。我們已經簽了很多新客戶。我們正在墨西哥增加一台新的超大型印刷機，必須在二月之前啟動並運行，否則我們的客戶會感到不安，但它正在按計劃進行。但這其實是一個很棒的故事。因此，墨西哥是一個很好的亮點，抵消了歐洲的一些弱點。

Okay. And then lastly, Tony, as we think about the restructuring and impairment charge line, they were up a bit sequentially in the third quarter from the second quarter. Have you taken additional actions that would lead to a bit higher charges than you had been previously expecting here? Or just how should we think about that trending in the fourth quarter?

好的。最後，東尼，當我們考慮重組和減損費用線時，第三季的費用比第二季略有上升。您是否採取了額外的行動，導致費用比您之前預期的要高一些？或者我們應該如何看待第四季的趨勢？

Sure. So if I start with the third quarter on that, a portion of the expense that you saw come through that line was impairment related, about half of it, impairment-related noncash in nature. So third quarter was actually from a cash perspective, the lowest restructuring quarter thus far. As we look out in the fourth quarter, we are anticipating some restructuring expenses. We continue to address capacity needs in our production platform that will lead to cost there.

當然。因此，如果我從第三季開始，您看到的部分費用是與減損相關的，大約一半是與減損相關的非現金性質的費用。因此，從現金角度來看，第三季實際上是迄今為止重組最低的季度。展望第四季度，我們預計會產生一些重組費用。我們將繼續解決生產平台的產能需求，這將導致成本上升。

Operator?

操作員？

This concludes our question-and-answer session. I'd like to turn the conference back over to Mr. Joel for closing remarks.

我們的問答環節到此結束。我想將會議轉回由喬爾先生致閉幕詞。

Thank you, operator, and thank you, everyone, for joining today's call. I want to close by reiterating my confidence in our strategy and in our role as a marketing experience company. Our integrated marketing offering continues to be a competitive differentiator and a key driver behind our company's overall momentum going forward. At the same time, we remain focused on proactively managing all aspects of our business for long-term strength and stability and shareholder value creation.

謝謝接線員，也謝謝大家參加今天的電話會議。最後，我想重申我對我們的策略以及我們作為行銷體驗公司的角色的信心。我們的整合行銷產品仍然是我們公司的競爭優勢和整體發展動能的關鍵驅動力。同時，我們仍然專注於主動管理業務的各個方面，以實現長期實力和穩定性以及創造股東價值。

With that, thank you again, and have a good day. We look forward to speaking with you again next quarter.

在此，再次感謝您，祝您有美好的一天。我們期待下個季度再次與您交談。

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。您現在可以斷開連線。