Quad Graphics, Inc

Good morning, ladies and gentlemen, and welcome to QAD's first quarter conference call. During today's call, all participants will be in a listen-only mode. Should you need assistance at any time, please see a conference specialist by pressing the star key followed by zero. A slide presentation accompanies today's webcast. The 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 this event is being recorded, and I'd now like to turn the conference call over to Katie Kresbach, Quad's investor relations manager. Katie, please go ahead.

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 off today's call with a business update and Tony will follow with a summary of Quad's first quarter 2022 financial results 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, 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. Beginning on slide three, I am pleased to report we delivered a fourth consecutive quarter of sales growth, achieving a 9% increase in net sales when excluding divestitures. This sales growth reflects print segment share gains from new clients, net sales growth in targeted print and agency solutions, as well as increased pricing in response to inflationary cost pressures. Throughout the quarter we continue to face macro economic headwinds such as ongoing inflationary cost pressures and supply chain constraints. We work diligently to mitigate these impacts, while also making investments to prepare for our seasonally busy year second half of the year. These investments included increasing inventory levels for paper and other key manufacturing materials and hiring and training employees for our manufacturing operations far earlier than usual. As a result, our net earnings and adjusted EBITDA during the first quarter were negatively impacted. Given the pace of inflation, we implemented another across the board price increase, which will go into effect on May 15th. Slide four shows how we continue to diversify our revenue into higher value and higher margin offerings while growing net sales 9%. Each of our product and services lines within targeted print and integrated solutions grew from first quarter last year to the first quarter this year while we continue to manage for expected organic declines in large-scale print. Turning to slide five, we are proud of the company's transformation and continue to evolve how we operate and communicate our value. Quad is unique. We are a marketing experience company that helps brands reimagine their marketing to be more streamlined, impactful, flexible, and frictionless through an integrated marketing platform featuring distinct core specialties that include business strategy, insights and analytics, technology solutions, managed services, agency and studio solutions, media, print, in-store, and packaging. Our transformation was validated once again last week through our ranking as number 16 on the world's largest agency companies list. compiled annually by Ad Age. On slide six, we highlight our three competitive advantages, integrated marketing platform excellence, innovation, and culture and social purpose. We continue to strategically invest in our platform to give brands and marketers a more efficient, effective, and frictionless way to go to market and reach consumers and scale our competitive position. These investments include bringing aboard new talent, For example, we recently welcomed Rachel Weiner as our new Senior Vice President of Business Development. Rachel is a powerhouse with nearly three decades of advertising, brand, marketing, and communications experience, including head of office roles at Edelman and BuzzFeed, and brand team leader at roles at Leo Burnett, JWT, and BBDO. We also continue to invest in our creative, strategic, analytic, and production capabilities. These investments include, but are not limited to, advancements in data insights and analytics, industry-leading client technology solutions, and next-gen printing capabilities, which include high-quality, high-speed digital presses for variable print. These presses are a real game changer for our in-store group, which continues to grow by helping clients create unique shopping experiences that drive engagement and revenue. To strengthen our brand as a marketing experience company, We're making investments in how we market ourselves, including introducing Quad to new and expanded audience, as shown on slide seven. This year we participated in South by Southwest and the Consumer Electronics Show, and soon we'll be at the Cannes Lions International Festival of Creativity. Introducing Quad to other industry marketers allows us to create brand awareness, share an innovative story, build new client relationships, and further increase revenue in growing vertical industries. We also continue to host our own client events and conversations on timely and relevant topics for brands and marketers. For example, last week, Rise Interactive, our performance marketing agency, hosted Preparing for the Metaverse through Augmented Reality Advertising. The marquee event was produced in partnership with Meta, Facebook's parent company, and a visionary in the social connection space. The content gave attendees an exclusive look at the long-term Metaverse roadmap along with near-term opportunities for taking advantage of AR advertising as a real-time way for brands to connect with their customers. This week we are hosting our 22nd Postal Conference, a multi-day event related to knowledge sharing and solutioning around postage, our client's single largest print manufacturing-related expense. U.S. Postmaster General Louis DeJoy is the featured speaker on the state of the agency and priorities for the future. I invite you to watch our website for conference updates. I'm pleased to share that the Postal Service Reform Act was signed into law last month. The act saves the Postal Service approximately $50 billion over the next 10 years and forgives both the debt and the non-payment of the healthcare pre-funding. This puts the agency on a path to financial stability and reverses a crisis of confidence in the future of mail delivery. As one of the Postal Service's largest clients, We are proud to have helped advance this bill into law, the product of years of hard work, including testifying before Congress multiple times. Quad has a unique advantage point that sits at the intersection of optimization, insights, and innovation. On slide eight, we show an example of how we helped a global energy drink and media company known for creating unique experiences transform its marketing operations paving the way for us to rapidly expand our relationship into other marketing services. When we were first introduced, this brand's U.S. operations needed a point of sale marketing solution to support hundreds of field sales reps responsible for managing thousands of retail locations. Specifically, the brand needed the ability to keep all campaigns in line with global brand standards while simultaneously providing localized flexibility for events and point-of-sale partnerships. Our client technology team got to work and delivered an easy-to-use, mobile-accessible platform. Now field sales reps can manage consistent point-of-sale experiences, including hyper-localized promotional materials. Our solution also consolidates all orders to maximize production economies of scale and tracks and manages budgets nationally, regionally, and locally. Having earned this client's trust, we have since put employees on site who serve as an extension of this client's U.S. marketing team. Additionally, we have been engaged for other marketing services, including consumer research, campaign strategy, and creative for digital assets. We look forward to further expanding our relationship with this client, as well as to continue to use our client technology solutions as an entry point for conversations with other global brand marketers. Turning to slide nine, another way in which we are helping our clients reimagine the marketing experience is through their sustainability efforts. Sustainability has been a core focus at Quad since our founding more than 50 years ago and is a foundational element of our ESG strategy. Other companies seeking to advance their own sustainability efforts often engage us for our expertise on this important topic. Last month, Quad appeared on stage with our client CBS Health at SPC Impact 2022, the Sustainable Packing Coalition's flagship event. The conversation centered on how companies can get started on their sustainability journey by lifting what they do well every day and then shifting that into sustainability efforts to accelerate progress and achieve results. At Quad, we are proud of the transferable skills we've built over time to meet our clients' sustainability objectives. We have a strong ESG strategy and we will continue to grow this very relevant and profitable area of our business. On slide 10, we show how Quad has been driven by a commitment to culture and social purpose throughout our more than 50 year history. We take seriously our role in creating a better way through our approach to ESG matters. I am pleased to share that we've just released an immersive online experience on Quad.com that captures how we are driving positive, sustainable change in our business. I invite you to check out this experience, which will be expanded over time to keep all stakeholders up to date on our ESG commitments. When it comes to the environment, we continue to focus on responsible sourcing and reducing impacts, including expanding responsible forestry practices and lowering our overall carbon emissions intensity. In the social space, we continue to work 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 comprehensible and sustainable diversity equity inclusion strategy. 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. Before I turn the call over to Tony, I want to thank our employees once again for continuing to focus on performing well for our clients in the face of ongoing challenges. In particular, I want to recognize our Poland-based employees, a number of whom are native-born Ukrainians as the war persists in neighboring Ukraine. I am heartened by our employees' overwhelming show of support for displaced Ukrainians through a variety of efforts, including serving as host families. With that, I will turn the call over to Tony for a review of our financial results.