Quad Graphics, Inc

Good morning, and welcome to the Quad's first quarter 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. After today's presentation, there will be an opportunity to ask questions. To ask a question, please press star, then one. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Katie Krebsbach, 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 today's call with a business update, and Tony will follow with a summary of Quad's first quarter 2023 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 continue to experience positive momentum in our business, achieving an eighth consecutive quarter of top-line growth. Net sales increased 3% in the quarter due to higher print product sales in the United States and in Mexico, and also increased agency solution sales as clients continue to embrace Quad's unique integrated marketing offering. We also grew adjusted EBITDA by $11 million or 24% in the quarter due to increased profitability from net sales growth, improved manufacturing productivity and savings from cost reduction initiatives. Economic uncertainty has prompted some clients to take a more conservative approach to the start of the year and in many instances reallocate where they invest their marketing dollars. Our integrated marketing offering easily supports these shifts in marketing spend to maximize results. We are able to offset softness in offerings such as national magazines while leaning into growth opportunities and other offerings like agency solutions, packaging, and in-store. We have flexibility and agility to pivot and meet changing client needs. In the current economic environment, we continue our longstanding disciplined approach to managing all aspects of our business, including treating all costs as variable and aligning our cost structure with revenue opportunities. At the same time, we are aggressively pushing forward on our growth strategy as a marketing experience or MX company that services marketers' needs from end to end, solving their biggest marketing challenges. Turning to slide four, our leadership as an MX company was validated once again last week through our ranking on the world's largest agency companies list, compiled annually by AdAge. This year, Quad ranks number 14, up two spots from our number 16 ranking in 2022. We are also proud to share that, once again, Quad just received top tier designation as a Microsoft Elite Agency Partner, a Google Premier Partner through our digital marketing agency, Rise Interactive. On slide five, we show Quad's three key growth drivers. delivering integrated service excellence, accelerating market penetration, and evolving our culture as an Amex company. Integrated service excellence is at the core of who we are and what we do. We continue to build on our uniqueness as a marketing experience company that helps brands reimagine their marketing to be more streamlined, impactful, flexible, and frictionless. Our integrated offering provides all the resources our clients need to plan, create, deploy, measure, and optimize their marketing efforts across all media channels, offline and online. As a result, we reduce the complexities of working with multiple agency partners and vendors and increase the efficiencies of marketing processes. We do all this while maximizing the effectiveness of our clients' marketing efforts through our ability to target and reach the right audiences, scale resources efficiently, increase speed to market, and optimize media performance. Turning to slide six, to accelerate market penetration, we're focused on growing awareness that better marketing is built on Quad. We're gaining visibility with new brands and new verticals, including blue chip companies, through our participation in industry events. For example, we recently participated in Shop Talk for Retailers and SPC Impact, the Sustainable Patching Coalition Spring Event, where we connected with brands and marketers about their marketing challenges and how Quad can solve these challenges. In June, we will return to the Cannes Lions International Festival of Creativity, where we'll showcase our better marketing is built on Quad, share our innovation story, and strengthen relationships with marketing decision makers from around the world. Amid these efforts, we also continue to host events focused on specific timely topics of interest to our clients. For example, last week we hosted our 23rd postal conference with approximately 300 clients participating. The event focused on knowledge sharing and solutioning around delivering print cost effectively to the right audience. As we evolve our culture as an MX company, we are leveraging our longstanding maker culture as a distinct talent advantage. At Quad, our employees are empowered to not only envision solutions, but also create or make them in support of our work to expertly guide brands through every effort intended to drive action, from consumer awareness and trust to brand preference and purchase, as shown on slide seven. 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. Turning to slide eight, we show an example of how we're helping brands and marketers successfully solve their marketing challenges with our integrated marketing offering. Gelmar, a respected leader in the household cleaning products industry and well-known for its CLR and Tarnex brands, recently was seeking a trusted partner for brand building work. The company wanted us to review and enhance its strategy for engaging consumers, especially digital natives, as it attempted to extend the equity of its flagship cleanser to a portfolio of CLR-branded products. Our team presented comprehensive creative and media strategy for engaging audiences across channels, including linear TV, over-the-top streaming, programmatic, search, social, and CLR's website. Our work is just now getting underway to provide consumer strategy, brand identity, creative positioning, and campaign execution, as well as cross-channel media management and customer experience. A key feature of our digital media solution is our proprietary Connex technology, which will allow Jomar to not only be able to uncover performance trends by audience, creative, production, and location, but also identify specific growth opportunities and take immediate actions minute by minute to accelerate media performance. We are pleased to be supporting Jelmar's efforts to ignite its brand and drive demand as its marketing agency of record. On slide nine, we show another example of how better marketing is built on Quad. Recently, a senior care services provider invited our RISE Interactive Digital Marketing Agency to bid on three separate RFPs for media planning and placement, search engine optimization, and web development. The company was surprised and delighted to learn we could expertly address all these needs through our integrated offering and did not have to coordinate efforts with multiple vendors, something the company did not believe was possible. As we engaged with the company, we learned it also needed help with branding and creative execution, and we won that work too, along with niche services such as talent management rights. With our assistance, the client is benefiting from our ability to help rebuild enrollment, build category awareness, overcome negative misconceptions, reach qualified audiences within specific zip codes using hyper-local media strategy, and find the right message and media to connect with geographically and culturally different audiences using our proprietary connections planning tool. Our client is extremely pleased with our results, which include driving more leads than it has ever before experienced. We are glad to be a trusted partner to this client and look forward to introducing our other integrated services, including direct marketing and expanded audience targeting. As we move forward with our strategy, I have great confidence in our team and continue to be enthusiastic about our growth opportunities as an MX company that provides a better way to solve marketers' biggest challenges, which drives revenue across all of our offerings. Before I turn the call over to Tony, I'd like to thank our employees for the continued hard work and commitment to performing well for our clients while we proactively manage all aspects of our business for long-term strength and stability. I will now turn the call over to Tony for the financial review.