Quad Graphics, Inc

Good morning, ladies and gentlemen. Welcome to Quad's fourth quarter and full year 2021 conference call. During today's call, all participants will be in listen-only mode. Should you need assistance at any time, please signal a conference specialist by pressing the star key followed by zero. 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 Investor section of Quad's website under the Events and Recent Presentations link. Please note that this event is being recorded. I will now turn the conference over to Katie Krebsbotch, Quad's Investor Relations Manager. Katie, please go ahead.

Thank you, Operator, and good morning, everyone. With me today are Joel Quadracchi, Quad's Chairman, President, and Chief Executive Officer and Tony Staniak, Quad's Chief Financial Officer. Joel will lead off today's call with a business update, and Tony will follow the summary of Quad's fourth quarter and full year 2021 financial results, as well as 2022 financial guidance, followed by Q&A. 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 two. 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 from continuing operations, 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. Finally, a replay of the call and the slide presentation will be available on the investor section of Quad.com shortly after our call concludes today. I will now hand over the call to Joel.

Thank you, Katie, and good morning, everyone. I am pleased to report that our sales growth and strong execution helped us drive strong full-year 2021 results, including a 3% increase in net sales when excluding divestitures, as highlighted on slide 3. Those results were supported by higher print volumes, including print segment share gains from new clients, continued growth in agency solutions, as well as increased pricing in response to inflationary cost pressures. At the same time, we continued to pay down debt. In fact, over the past two years, we reduced net debt by $410 million, or 40%, and a return to our long-term targeted leverage range of 2 to 2.5 times. Throughout 2021, our team worked diligently to offset economic challenges that included significant paper and supply chain disruptions, inflationary cost pressures, and labor shortages. Our efforts to mitigate impacts included initiating price increases to offset inflation. On slide four, our consistent strategic priorities are powered by three key competitive advantages that distinguish us. They are integrated marketing platform excellence, innovation, and culture and social purpose. When it comes to platform excellence, we use our data-driven, integrated marketing platform to help clients strategically plan, produce, manage, and measure their content across multiple media channels rapidly, at scale, and without handoffs that compromise quality, consistency, and timeliness. Through this platform, we give brands and marketers a more efficient, effective, and frictionless way to go to market and reach consumers. Through our marketing strategy expertise, we help clients better understand and connect with a target audience using our data insights and analytics, campaign planning, and media services. Through our robots' creative solutions, we help clients produce quality content quickly at scale with our campaign development, photo and video production, adaptive design, and cross-media production services. Through our media deployment expertise, we help clients reach consumers in multiple channels, including print, broadcast, digital, in-store, out-of-home, and packaging. And through our marketing management services, including sourcing, procurement, marketing and management support, we remove the friction in the process so clients can focus on other critical aspects of their business. We will continue to strategically invest in the talent technology, products, and services required to accelerate and scale our competitive position as a marketing solutions partner. For example, one area in which we continue to invest in is solutions that help clients optimize their digital marketing strategies. We are proud to share that Rise Interactive, our tech-enabled performance marketing agency, recently earned recognition for being among the top 3% of Google partners in the US for helping brands build creative and innovative applications of Google advertising products that give them an edge over their competitors. To be named in the top 3%, we demonstrated exceptional performance in client growth and retention with expertise and results-focused strategies. Turning to slide five, you can see how we continue to make progress on our revenue diversification strategy into higher value and higher margin services. In 2021, integrated solutions and targeted print increased as a portion of total net sales and now represents 64% of net sales, a significant increase from just two years ago when they accounted for 58% of net sales. Our integrated solutions include powerful agency solutions, while targeted print comprises the high growth areas of catalog, direct mail, packaging, and in-store marketing. It's important to note that offline channels continue to be popular for brand awareness and driving response. with a number of our clients recently expanding their catalog and direct mail programs with us. Due to our commitment to platform excellence and innovation, we have the resources and knowledge to help a wide variety of clients target, more deeply engage, and grow audiences in multiple verticals. On slide six, we provide an example of our strategy in action. PEMCO Insurance engaged us to create an advertising campaign highlighting its strength in-home and auto insurance among other personal lines with the tagline we ensure ambition we developed an integrated campaign strategy that included a series of 30-second media spots specifically tailored to pemco's target audience in the pacific northwest to the client's delight we filmed the spots in portland oregon entirely with local talent our media planning and placement team then placed those spots for maximum visibility and impact including a regional buy during Super Bowl 56, which PEMCO proudly highlighted in social media posts before, during, and after the big game. Through this high-profile placement, our team helped PEMCO achieve its campaign objectives, including strengthening consumer brand awareness. Another client who came to understand our expertise and thought leadership in integrated media strategy, planning, and placement was recently awarded us all its paid media for broadcast, digital, and out-of-home advertising, as shown on slide seven. This regional retailer, which operates more than 200 stores, partners with Quad for our manufacturing capabilities, but then discovered our expanded marketing platform that offers expertise in hyper-local, non-print media services. We won the paid media based on our strategic insights planning and buying capabilities, and end-to-end execution. This win not only speaks to the power of our integrated marketing platform, but also helped this client achieve another one of its goals, to consolidate its agency roster to fewer, more powerful partners. Turning to slide eight, we show an example of how we continue to differentiate ourselves through advanced data and analytics capabilities to precisely target an audience using the most effective channels. A leading direct-to-consumer company was looking for a partner to improve its customer acquisition strategy using the power of data and analytics and direct marketing. Using our proprietary data set, we created and tested a prospecting model that provided important insights for strengthening this company's customer acquisition strategy. We have completed multiple campaigns for this client with response rates rising on each campaign. Our integrated platform was a real difference maker for our client, reducing marketing process complexity and inefficiencies and overall cycle time to market while increasing responsiveness. Another way in which we are differentiating ourselves as a marketing solutions partner is through helping clients with their sustainability efforts. Sustainability has been a core focus at Gwad since our founding more than 50 years ago. And we use our expertise to help other companies in the sustainability space. Currently we're engaged with two leading national retailers to advance sustainable packaging for their own or private brands as shown on slide nine. Our work for these retailers includes material reduction and replacement evaluations, packaging redesign, sustainable sourcing practices, and process for long-term packaging innovation to achieve a regenerative future. Sustainability is a main pillar of focus for our clients, and they are searching for the right partners. As an integrated marketing partner, Quad is in a unique position to offer actionable solutions. Turning to slide 10, through our more than 50 year history, Quad has been driven by commitment to culture and social purpose. We take seriously our role in creating a better way through our approach to environmental, social, and governance matters. When it comes to the environment, we have a long history of reducing our environmental impact by conserving resources, minimizing waste, and recycling and reusing materials. Across our US facilities, we have achieved a 98% recycling rate for waste paper, the primary byproduct of our manufacturing processes, and have well-established practices for recovering and recycling other key materials, including industrial plastics and hazardous waste. In the social space, We're working hard on numerous strategies to retain employees and attract new talent with diverse social identities and experiences. This includes our work to develop a more comprehensive and sustainable diversity, equity, and inclusion strategy. We want Quad to continue to be an employer of choice, a place where employees can stay and grow and become something more than they ever hoped to be. We want each and every Quad employee to feel a sense of belonging, and to know how they contribute to our company's strategy for growth and prosperity. Additionally, we have upped our commitment to employee health and wellness with a newly expanded program called QLife that provides full circle support for our employees' physical, emotional, financial, and social well-being. Our ongoing work in the social space not only benefits our employees, but also the clients who trust us with their business and the communities we call home. At year end 2021, we released a comprehensive ESG report that details how we are driving positive sustainable change in our business along with ESG commitments for the future. Next month, we will be releasing an immersive ESG experience on our website featuring highlights of our ESG report. This online experience will continue to evolve and expand with compelling content and serve as a place to keep all stakeholders up to date on our commitments. Before I turn the call over to Tony, I want to thank our employees for once again rising to the occasion and performing well for our clients during a time of prolonged disruption and challenges. I also thank them for supporting each other through these busy and unusual times. I'm proud of all we have been able to accomplish in the face of the ongoing pandemic, including managing through supply chain issues. I'm enthusiastic about 2022 and optimistic about our growth strategy as a marketing solutions partner. With that, I will turn the call over to Tony for a review of our financial results.