Quad/Graphics, Inc. (QUAD) Q2 2023 Results Conference Call August 2, 2023 10:00 AM ET

Company Participants

Katie Krebsbach - IR Manager

Joel Quadracci - Chairman, President and CEO

Tony Staniak - CFO

Conference Call Participants

Kevin Steinke - Barrington Research Associates

Operator

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.

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

Katie Krebsbach

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.

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.

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 Investors section of quad.com shortly after our call concludes today.

I will now hand over the call to Joel.

Joel Quadracci

Thank you, Katie, and good morning, everyone.

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.