QUAD Quad/Graphics, Inc. - 10-K

Item 1A.     Risk Factors

You should carefully consider each of the risks described below, together with all of the other information contained in this Annual Report on Form 10-K, before making an investment decision with respect to Quad’s securities. If any of the following risks develop into actual events, the Company’s business, financial condition or results of operations could be materially and adversely affected, and you may lose all or part of your investment.

Risks Relating to Quad’s Business, Operations and Industry

The Company’s transformation to a marketing experience company increases the complexity of the Company’s business, and if the Company is unable to successfully adapt its marketing offerings and business processes to the requirements of new markets, the Company will be at a competitive disadvantage and its ability to grow will be adversely affected.

As the Company continues to expand its integrated marketing platform, the overall complexity of the Company’s business continues to increase and the Company continues to become subject to different market dynamics than those historically characterized by the Company’s print-focused operations. These different characteristics may include, among other things, demand volume requirements, demand seasonality, product generation development rates, client concentrations and performance and compatibility requirements. If the Company is unable to make the necessary adaptations to its business model, processes, organizational structure and talent base to address these different characteristics and market dynamics the Company’s competitive position, operating results and long-term growth prospects could be adversely affected.

Decreases in demand for printing services caused by factors outside of the Company’s control, including the substitution of printed products with digital content, prior and any future recessions and other changes in macroeconomic conditions, as well as continued downward pricing pressure, may continue to adversely affect the Company.

The Company and the overall printing industry continue to experience a reduction in demand for printed materials and overcapacity due to various factors including the sustained and increasing shift of digital substitution by marketers and advertisers (to both replace and augment campaigns that were historically focused on print), as well as macroeconomic conditions and prior recessions (which severely impacted print volumes and further accelerated the impact of media disruption). The impacts of overcapacity, as well as intense competition, have led to continued downward pricing pressures for printing services in recent years and such pricing may continue to decline from current levels. Any future increases in the supply of printing services or decreases in demand could cause prices to continue to decline, and prolonged periods of low prices, weak demand and/or excess supply could have a material adverse effect on the Company’s business growth, results of operations and liquidity.

The media landscape continues to undergo rapid change due to the impact of digital media and content on printed products. Improvements in the accessibility and quality of digital media through the online distribution and hosting of media content, mobile technologies, e-reader technologies, digital retailing and the digital distribution of documents and data has resulted and may continue to result in increased consumer substitution. Continued consumer acceptance of such digital media, as an alternative to print materials, is uncertain and difficult to predict and may decrease the demand for the Company’s printed products, result in reduced pricing for its printing services and additional excess capacity in the printing industry, and adversely affect the results of the Company’s operations.

Changes in postal rates, postal regulations and postal services may adversely impact clients’ demand for print products and services.

Postal costs are a significant component of the cost structures of many of the Company’s clients and potential clients. Postal rate changes and USPS regulations that result in higher overall costs can influence the volume that these clients will be willing to print and ultimately send through the USPS.

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Integrated distribution with the USPS is an important component of the Company’s business. Any material change in the current service levels provided by the postal service could impact the demand that clients have for print services. In 2025, the USPS significantly reduced their service standards with the first phase of changes taking effect on April 1, 2025, and the second phase taking effect on July 1, 2025. In addition to the reduced service standards, the USPS also issued reduced service performance targets for 2025. Almost all letters and flats targets were reduced, some as much as 15% lower than 2024 targets (e.g., First Class Letters three to five day on time performance target was reduced from 90% down to 80%). The USPS, however, did not meet these reduced performance standards and targets, and has kept the performance targets for 2026 essentially in line with 2025, with only a few minor adjustments.

Federal statute requires the PRC to conduct reviews of the overall rate-making structure for the USPS to ensure funding stability. As a result of those reviews, the PRC authorized a five year rate-making structure that provides the USPS with additional pricing flexibility over the Consumer Price Index (CPI) cap, which has resulted in a substantially altered rate structure for mailers. The revised rate authority that is effective as a result of the rules issued by the PRC includes a higher overall rate cap on the USPS’ ability to increase rates from year to year. This will continue to lead to price spikes for mailers and may also reduce the incentive for the USPS to continue to take out costs and instead continue to rely on postage increases in its attempt to cover its costs.

Given the significant amount of concern that has been expressed by the mailing industry, in April 2024, the PRC opened a proceeding to start the next rate system review, which includes a phased approach of proposing changes to improve rate predictability. The USPS did not implement a Market Dominant product price increase for January 2025. However, the available rate authority was rolled forward and implemented in July 2025, at a level that significantly exceeded CPI. In September 2025, the USPS announced they would not increase prices on Market Dominant products in January 2026. Further, in January 2026, the PRC issued a final rule that restricts the USPS to one price change a year from 2026 to 2030. The Company believes the continued use of all available rate authority by the USPS will continue to increase the potential volume declines as rate predictability with respect to cost is no longer known for mailers. The result may be reduced demand for printed products as clients may move more aggressively into other delivery methods, such as the many digital and mobile options now available to consumers.

The USPS launched a new Marketing Mail Catalog promotion, which offers a 10% discount on postage for any mail pieces that meet the USPS definition of a catalog. The discount went into effect on October 1, 2025 and continues until June 30, 2026. Because the discount applies to the current rate, which is based on several years of biannual rate increases, including another increase in July 2025, the impact of the discount on catalog volume and revenue may be diminished. The PRC also refined some rules around work-share discounts that will keep these discounts more closely aligned with the costs avoided and provide incentives to co-mail and place product as far down the mail-stream as possible. Discounts are earned as a result of less handling of the mail, and therefore, lower costs for the USPS. As a result, the Company has made substantial investments in co-mailing technology and equipment to ensure clients benefit from these discounts. If the incentives to co-mail are decreased by USPS regulations, the overall cost to mail printed products will increase and may result in print volumes declining.

Rapid changes in technology affecting the marketing and advertising industry, including developments in artificial intelligence, may adversely affect the Company, and if the Company is unable to adapt its market offerings to effectively compete in this technology-driven environment, the Company’s ability to grow will be adversely affected.

Technology relevant to the Company’s marketing and advertising solutions continues to evolve at a rapid pace, including advancements in automation, data analytics, and artificial intelligence. The Company may not be able to accurately predict emerging trends, identify appropriate use cases, or make the technological adaptations or investments necessary to remain competitive. In addition, clients may not be willing to pay the same prices for content or services produced or supported through AI tools, which could adversely affect the Company’s pricing, revenue mix and profitability. The increased use of AI and automation within the Company’s operations may also result in the need to restructure or reduce certain staffing levels, which could result in severance or other related costs and create operational challenges during periods of transition. As regulatory activity related to the use of artificial intelligence and data-driven tools continues to increase in the United States and internationally, compliance with such requirements may impose additional operational burdens or limit the manner in which certain tools may be deployed. If the Company is unable to develop or acquire the technology, expertise and processes necessary to address these developments, to address the

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potential expenses associated with the use of AI tools, or to comply with evolving regulatory expectations, the Company’s business, client relationships, competitive position and operating results could be adversely affected.

The Company may be adversely affected by increases in its operating costs, including the cost and availability of raw materials (such as paper, ink components and other materials), inventory, parts for equipment, labor, fuel and other energy costs and freight rates, and the ability to pass along such increases to clients, which could adversely impact margins and/or demand.

The price of raw materials used by the Company has fluctuated over time and has caused fluctuations in the Company’s net sales and cost of sales. This volatility may continue and the Company may experience increases in the costs of its raw materials in the future as prices are expected to remain beyond its control.

The primary raw materials that the Company uses in its print business are paper, ink and energy. The price and availability of paper may also be adversely affected by paper mills’ permanent or temporary closures; paper mills’ access to raw materials, conversion to produce other types of paper that are not usable by or as efficient for the Company in its operations (which a number of paper mills have done or are doing), transportation constraints; and tariffs and trade restrictions. The price and availability of ink and ink components may be adversely affected by similar factors, including the availability of component raw materials, labor and transportation, as well as tariffs and trade restrictions.

Due to the significance of paper in the Company’s print business, the Company is dependent on the availability of paper. In periods of high demand, certain paper grades have been in short supply, including grades used in the Company’s business. In addition, during periods of tight supply, many paper producers allocate shipments of paper based upon historical purchase levels of clients. The declining number of paper suppliers may cause certain paper grades to be in short supply or unavailable, and may cause paper prices to substantially increase.

Although historically the Company generally has not experienced significant difficulty in obtaining adequate quantities of paper, continued supplier consolidations, changes in United States import or trade regulations, reductions of graphic paper production capacity, or other developments in the overall paper markets could result in decreased supply and could adversely affect the Company’s revenues or profits. The Company may also be unable to resell waste paper or other by-products of printing process at favorable prices, which may adversely impact margins and profitability. Approximately half of the paper used by the Company is supplied directly by its clients. For those clients that do not directly supply their own paper, the Company generally includes price adjustment clauses in sales contracts for paper and other critical raw materials in the printing process. Although these clauses generally mitigate certain paper price risks, higher paper prices and reduced paper supplies, as well as availability and changes in the United States import or trade regulations, may have an affect on client demand for printed products.

The Company is dependent upon the vendors within its supply chain to maintain a steady supply of inventory, equipment parts and other materials. Many of the Company’s products are dependent upon a limited number of vendors, and the price and availability of inventory, parts and other materials, such as printing plates, could be adversely affected by supply-chain disruptions; labor pressures; tariffs, anti-dumping duties, and trade restrictions; distribution challenges; and macroeconomic conditions. Under current market conditions, it is possible that one or more of the Company’s vendors will be unable to fulfill their obligations due to financial hardship, liquidity issues or other operational pressures.

Labor represents a significant component of the Company’s cost structure. Increases in wages, salaries and the cost of medical, dental, workers’ compensation, pension and other post-retirement benefits have in the past impacted and may continue to impact the Company’s financial performance. Changes in interest rates, investment returns or the regulatory environment may impact the Company’s required contributions and the solvency of its pension plan. The Company may be unable to achieve labor productivity targets or retain employees, or labor may not be adequately available in locations in which the Company operates, which could negatively impact the Company’s financial performance.

Freight, fuel and energy costs may fluctuate significantly in response to global economic conditions, geopolitical tensions and supply-chain constraints, and increases in these items could adversely impact the Company’s margins and results. If the Company passes along increases in the cost of freight, fuel and energy, and the price of the

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Company’s products and services increases as a result, client demand could be adversely affected, and thereby, in turn, negatively impact the Company’s financial performance.

If the Company is unable to continue to pass along increases in the cost of paper to its clients, future increases in paper costs would adversely affect its margins and profits. Similar challenges may arise with respect to increases in ink, labor, energy, freight and other operating costs. The Company may not be able to fully pass on to clients the impact of higher supply-chain prices or higher electric and natural-gas energy prices on its manufacturing costs, and increases in these items would adversely impact the Company’s margins and financial performance. If the Company does succeed in passing along such increases, the resulting higher prices for the Company’s products and services may reduce client demand, which could also adversely affect the Company’s results of operations.

Macroeconomic conditions could have a material adverse impact on the Company’s business, financial condition, cash flows and results of operations.

Macroeconomic conditions, including elevated interest rates, postal rate increases, tariffs, trade restrictions, cost pressures and the price and availability of paper, have had, and may continue to have, a negative impact on the Company’s business, financial condition, cash flows and results of operations. For instance, throughout 2024 and 2025, the Company was negatively impacted by elevated interest rates, volatility in the price and availability of paper, and postage rate increases, along with the previously described industry challenges.

Demand for the Company’s products and services, in general, is highly related to general economic conditions in the markets the Company’s clients serve. Declines in economic conditions in the United States or in other countries in which the Company operates, including as a result of macroeconomic conditions and/or geopolitical events, may adversely impact the Company’s financial results, and these impacts may be material. Economic weakness and constrained advertising spending have resulted, and may in the future result, in decreased revenue, operating margin, earnings and growth rates and difficulty in managing inventory levels and collecting accounts receivable. The Company has experienced, and expects to experience in the future, excess capacity and lower demand due to economic factors affecting consumers’ and businesses’ spending behavior, including as a result of macroeconomic conditions, tariffs, trade restrictions and/or other geopolitical events. This, or uncertainty or disruptions in global credit and banking markets, might cause the Company to not be able to continue to have access to preferred sources of liquidity when needed or on terms the Company finds acceptable, and the Company’s borrowing costs could increase.

The Company may not be able to fully mitigate the negative impact of continued elevated costs, tariffs and trade restrictions through price increases. Continuing or worsening inflation and/or tariffs and trade restrictions may have a material adverse impact on the Company’s business, financial condition, cash flows and/or results of operations.

In addition, adverse weather or natural disasters, epidemics, other public health crises, conflicts, terrorist attacks, fires or other catastrophic events affecting the Company’s plants, distribution centers or other facilities, could also materially disrupt the Company’s operations and result in an adverse impact on its financial condition, results of operations and cash flows.

The Company operates in a highly competitive environment.

The advertising and marketing services industries are highly competitive and are expected to remain so. Any failure on the part of the Company to compete effectively in the markets it serves could have a material adverse effect on its results of operations, financial condition or cash flows and could require changes to the way it conducts its business or require it to reassess strategic alternatives involving its operations.

The Company operates primarily in the commercial print portion of the printing industry, which is highly fragmented and competitive in both the United States and internationally. The Company competes for business not only with large and mid-sized printers, but also with smaller regional printers and the growing forms of digital alternatives to print. In certain circumstances, due primarily to factors such as freight rates and client preference for local services, printers with better access to certain regions of a given country may be preferred by clients in such regions.

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Some of the industries that the Company services have been subject to consolidation efforts, leading to a smaller number of potential clients. Furthermore, if the smaller clients of the Company are consolidated with larger companies using other printing companies, the Company could lose its clients to competing printing companies.

The Company may not be able to reduce costs and improve its operating efficiency rapidly enough to meet market conditions.

Because the markets in which the Company competes are highly competitive, the Company will need to continue to improve its operating efficiency in order to maintain or improve its profitability. There can be no assurance that the Company’s continuing cost reduction efforts will continue to be beneficial to the extent anticipated, or that the estimated productivity, cost savings or cash flow improvements will be realized as anticipated or at all. If the Company’s efforts are not successful, it could have an adverse effect on the Company’s operations and competitive position. In addition, the need to reduce ongoing operating costs have and, in the future, may continue to result in significant up-front costs to reduce workforce, close or consolidate facilities, or upgrade equipment and technology.

The Company may suffer a data-breach of sensitive information, ransomware attack or other cyber incident. If the Company’s efforts to protect the security of information or systems are unsuccessful, any such failure may result in costly government enforcement actions and/or private litigation, and the Company’s business and reputation could suffer.

The Company and its clients are subject to various United States and foreign cybersecurity laws, which require the Company to maintain adequate protections for electronically held information. The Company may not be able to anticipate techniques used to gain access to the Company’s systems or facilities, the systems of the Company’s clients or vendors, or implement adequate prevention measures. Moreover, unauthorized parties may attempt to access the Company’s systems or facilities, or the systems of the Company’s clients or vendors, through fraud or deception. Cyber threats continue to evolve rapidly, including through the use of artificial intelligence to automate or enhance attacks, and the Company’s reliance on third-party service providers and cloud-based platforms increases its exposure to supply-chain vulnerabilities. In the event and to the extent that a data breach, ransomware attack or other cyber incident occurs, such breach could have an adverse effect on the Company’s business and results of operations. Complying with these various laws could cause the Company to incur substantial costs or require changes to the Company’s business practices in a manner adverse to the Company’s business, including through business interruption, loss or corruption of data, or damage to client relationships.

Complying with these federal, state, and international laws relating to cybersecurity may cause the Company to incur substantial costs or require changes to the Company’s business practices and information security controls in a manner adverse to the Company’s business. In addition, regulatory and client scrutiny of cybersecurity practices and incident-reporting obligations has increased, including enhanced oversight, governance and notification requirements, which may result in additional compliance requirements or expenditures, operational burdens, or penalties in the event of a cyber incident.

The fragility of and decline in overall distribution channels may adversely impact clients’ access to cost effective distribution of their advertising materials, and therefore may adversely impact the Company’s business.

The distribution channels of print products and services, including the newspaper industry, face significant competition from other sources of news, information and entertainment content delivery. If overall distribution channels, including newspaper distribution channels, continue to decline, the Company’s clients may be adversely impacted by the lack of access to cost effective distribution of their advertising materials. In turn, this decline in cost effective distribution channels may force clients to use other avenues of distribution that may be at significantly higher cost, which may decrease demand for the Company’s products and services, and thus adversely affect the Company’s financial condition, results of operations and cash flows.

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Failure to attract and retain qualified talent across the enterprise could materially adversely affect the Company’s business, competitive position, financial condition and results of operations.

The Company continues to be substantially dependent on its production personnel to print the Company’s products in a cost-effective and efficient manner that allows the Company to obtain new clients and to drive sales from the Company’s existing clients. The Company believes that there is significant competition for production personnel with the skills and technical knowledge that the Company requires. The Company’s ability to continue efficient operations, reduce production costs, and consolidate operations will depend, in large part, on the Company’s success in recruiting, training, integrating and retaining sufficient numbers of production personnel to support the Company’s production, cost savings and consolidation targets. New hires require extensive training and it may take significant time before they achieve full productivity. In addition, increases in the wages paid by competing employers, including as a result of current macroeconomic conditions, has resulted, and may continue to result, in increases in the wage rates that the Company must pay. As a result, the Company has and may continue to incur additional costs to attract, train and retain employees, including expenditures related to salaries and benefits, and the Company may lose new, as well as existing, employees to competitors or other companies before the Company realizes the benefit of its investment in recruiting and training them. If the Company is unable to hire and train sufficient numbers of personnel, the Company’s business would be adversely affected. Any shortage of available production personnel may also put a strain on the Company’s ability to accept new work from client requests, including during the Company’s seasonally higher second half of the calendar year.

The Company’s future success also depends on its continuing ability to identify, hire, develop, and retain its executive management team, including its Chief Executive Officer, and other personnel for all areas of the organization.

Approximately 1,100 of the Company’s United States and international employees are covered by an industry wide agreement, a collective bargaining agreement or through a works council or similar arrangement. While the Company believes its employee relations are good and that the Company maintains an employee-centric culture, any material disruption in operations resulting from labor disputes, a strike or other forms of labor protest affecting the Company’s United States or international plants, distribution centers or other facilities in the future could materially disrupt the Company’s operations and result in an adverse impact on its financial condition, results of operations and cash flows, which could force the Company to reassess its strategic alternatives involving certain of its operations.

The Company’s business depends substantially on client contract renewals and/or client retention. Any contract non-renewals, renewals on different terms and conditions or decline in the Company’s client retention or expansion could materially adversely affect the Company’s results of operations, financial condition and cash flows.

The Company has historically derived a significant portion of its revenue from long-term contracts with significant clients. If the Company loses significant clients (including as a result of reduced demand for a client’s products or services), is unable to renew such contracts on similar terms and conditions, or at all, or is not awarded new long-term contracts with important clients in the future, its results of operations, financial condition and cash flows may be adversely affected.

The Company is exposed to risks of loss in the event of nonperformance by its clients. Some of the Company’s clients are highly leveraged or otherwise subject to their own operating and regulatory risks. Even if the Company’s credit review and analysis mechanisms work properly, the Company may experience financial losses and loss of future business if its clients become bankrupt, insolvent or otherwise are unable to pay the Company for its work performed. Any increase in the nonpayment or nonperformance by clients could adversely affect the Company’s results of operations and financial condition.

Certain industries in which the Company’s clients operate have experienced, and in the future may experience consolidation. When client consolidation occurs, it is possible that the volume of work performed by the Company for a client after the consolidation will be less than it was before the consolidation or that the client’s work will be completely moved to competitors. In addition, new and enhanced technologies, including artificial intelligence, search, web and infrastructure computing services, digital content, and electronic devices, may affect clients. The internet facilitates

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competitive entry and comparison shopping, and the reliance on digital retailing may reduce clients’ volume. Any such reduction or loss of work could adversely affect the Company’s results of operations and financial condition.

If the Company fails to identify, manage, complete and integrate acquisitions, investment opportunities or other significant transactions, as well as identify and execute strategic divestitures, it may adversely affect the Company’s future results and ability to implement its business strategy.

The Company may pursue acquisitions of, investment opportunities in, or other significant transactions with, companies that are complementary to the Company’s business, as well as divestitures of businesses, product lines or other assets. In order to pursue this strategy successfully, the Company must identify attractive acquisition or investment opportunities, successfully complete the transaction, some of which may be large and complex, and manage post-closing issues such as integration of the acquired company or employees. The Company may not be able to identify or complete appealing acquisition or investment opportunities given the intense competition for these transactions. Even if the Company identifies and completes suitable corporate transactions, the Company may not be able to successfully address inherent risks in a timely manner, or at all. These inherent risks include, among other things: failure to achieve all or any projected synergies, performance targets or other anticipated benefits of the acquisition or investment; failure to successfully integrate the purchased operations, technologies, products or services and maintain uniform standard controls, policies and procedures; substantial unanticipated integration costs; loss of key employees, including those of an acquired business; diversion of management’s attention from other business concerns; failure to retain the clients of the acquired business; additional debt and/or assumption of known or unknown liabilities; potential dilutive issuances of equity securities; and a write-off of goodwill, client lists, other intangibles and amortization of expenses. If the Company fails to successfully integrate an acquisition, the Company may not realize all or any of the anticipated benefits of the acquisition, and the Company’s future results of operations could be adversely affected.

In addition, the Company’s transformation to a marketing experience company is partially dependent upon the Company’s continued ability to identify and execute strategic divestiture opportunities to generate cash and related benefits. There can be no assurance whether the strategic benefits and expected financial impact of any divestitures will be achieved.

Negative publicity could have an adverse impact on the Company’s business and brand reputation.

Unfavorable publicity, whether accurate or not, related to the Company or the Company’s executive management team, employees, board of directors, operations, business or prospects, or to the Quadracci family shareholders of the Company, could negatively affect the Company’s reputation, stock price, ability to attract new clients from growth vertical industries, ability to attract and retain high-quality talent, or the performance of the Company’s business.

In addition, the increased use of social media platforms, including blogs, social media websites, and other forms of internet-based and mobile communications, allows individuals access to a broad audience of consumers and other interested persons. Many social media platforms immediately publish the content their subscribers’ and participants’ post, often without filters or checks on accuracy of the content posted. Information or commentary posted on such platforms at any time may be adverse to the Company’s interests or may be inaccurate, each of which may harm the Company’s reputation, business or prospects. The harm may be immediate without affording the Company an opportunity for redress or correction.

There are additional risks associated with the Company’s operations outside of the United States, including trade restrictions, currency fluctuations, the global economy, and geopolitical events like war and terrorism.

Net sales from the Company’s wholly-owned subsidiaries outside of the United States accounted for approximately 8% and 13% of its consolidated net sales for the years ended December 31, 2025 and 2024, respectively .

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As a result, the Company is subject to the risks inherent in conducting business outside of the United States, including, but not limited to: the impact of economic and political instability; tariffs and other trade barriers, the magnitude and extent of which can be volatile and uncertain; trade restrictions and economic embargoes by the United States or other countries; foreign-currency exchange rates, devaluation and conversion restrictions; exchange control regulations and other limits on the Company’s ability to import raw materials or finished product; health concerns regarding infectious diseases; adverse weather or natural disasters; social unrest, acts of terrorism, force majeure, war or other armed conflicts; inflation and fluctuations in interest rates; language barriers; difficulties in staffing, training, employee retention and managing international operations; logistical and communications challenges; differing local business practices and cultural considerations; restrictions on the ability to repatriate funds; foreign ownership restrictions and the potential for nationalization or expropriation of property or other resources; longer accounts receivable payment cycles; potential adverse tax consequences; and being subject to different legal and regulatory regimes that may preclude or make more costly certain initiatives or the implementation of certain elements of its business strategy.

Financial Risks

The Company may be required to make capital expenditures to sustain and grow its platforms and processes, as well as make investments in the development and implementation of new systems, client technology, product technology, marketing and talent in order to keep pace with industry developments, client expectations, and to remain technologically and economically competitive. The cash or financing required for these capital expenditures and investments may not be sufficient or available on terms acceptable to the Company. In addition, these capital expenditures and investments may increase the Company’s costs, reduce its profits, disrupt its operations or adversely affect its ability to implement its business strategy.

The printing and advertising and marketing services industries are experiencing rapid change as new digital technologies are developed that offer clients an array of choices for their marketing and publication needs. In order to remain competitive, the Company will need to adapt to future changes, especially with regard to technology, such as artificial intelligence, and talent, to enhance the Company’s existing offerings and introduce new offerings to address the changing demands of clients. In order to remain technologically and economically competitive, the Company may need to make significant capital expenditures and other investments, including in its talent, as it develops and continues to maintain its platforms and processes, and to develop and integrate new technologies. In order to accomplish this effectively, the Company will need to deploy its resources efficiently, maintain effective cost controls and bear potentially significant market and raw material risks. If the Company’s revenues decline, it may impact the Company’s ability to expend the capital necessary to develop and implement new technology and be economically competitive. Debt or equity financing, or cash generated from operations, may not be available or sufficient for these requirements or for other corporate purposes or, if debt or equity financing is available, it may not be on terms favorable to the Company. In addition, even if capital is available to the Company, there is risk that the Company’s vendors will have discontinued the production of parts needed for repairs, replacements or improvements to the Company’s existing platforms, leading the Company to expend more capital than expected to perform such repairs, replacements or improvements. The Company’s business and operating results may be adversely affected if the Company is unable to keep pace with relevant technological and industry changes or if the technologies or business strategies that the Company adopts or services it promotes do not receive widespread market acceptance.

If the Company is unable to make the capital expenditures and other investments necessary to adapt to industry and technological developments, the Company may experience a decline in demand for its services, be unable to implement its business strategy and its business operating results may be adversely affected. Additionally, if the Company is unable to meet future challenges from competing technologies on a timely basis or at an acceptable cost, the Company could lose clients to competitors. In general, the development of new communication channels inside and outside the printing and media solutions industry requires the Company to anticipate and respond to the varied and continually changing demands of clients. The Company may not be able to accurately predict technological trends or the success of new services in the market.

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The Company’s debt facilities include various covenants imposing restrictions that may affect the Company’s ability to operate its business.

On April 28, 2014, and as last amended on August 20, 2025, the Company entered into a senior secured credit facility (the “Senior Secured Credit Facility,”) which currently includes two different loan facilities: a $357.7 million Term Loan A and a $339.6 million revolving credit facility. As a result of an amendment to the Senior Secured Credit Facility, the Term Loan A and revolving credit facility were both broken into two separate maturity dates. Borrowing from lenders who elected to not extend the maturity date, will mature on November 2, 2026, whereas borrowing from lenders who elected to extend the maturity date, will mature on October 18, 2029. As of December 31, 2025, the borrowings outstanding under the Senior Secured Credit Facility were $357.7 million.

The Company’s various lending arrangements include certain financial covenants. In addition to the financial covenants, the debt facilities also include certain limitations on acquisitions, indebtedness, liens, dividends and repurchases of capital stock. As of December 31, 2025, the Company was in compliance with all financial covenants in its debt agreements. While the Company currently expects to be in compliance in future periods with all of the financial covenants, there can be no assurance that these covenants will continue to be met. The Company’s failure to maintain compliance with the covenants could prevent the Company from borrowing additional amounts and could result in a default under any of the debt agreements. Such default could cause the outstanding indebtedness to become immediately due and payable, by virtue of cross-acceleration or cross-default provisions.

The Company may be adversely affected by interest rates, particularly floating interest rates, and foreign exchange rates.

A significant portion of the Company’s borrowings are subject to variable interest rates. Increases in benchmark interest rates or widening credit spreads could increase the Company’s borrowing costs and adversely affect its financial condition.

From time-to-time, the Company enters into interest rate swap, collar, or other hedging contracts to reduce the variability of cash flows associated with interest payments on a portion of its variable-rate debt. These arrangements are intended to mitigate exposure to changes in short-term interest rates; however, they may not fully offset the impact of rate fluctuations, may expose the Company to additional counterparty risk, and could result in financial losses.

Because a portion of the Company’s operations are outside of the United States, significant revenues and expenses are denominated in local currencies. Although operating in local currencies may limit the impact of currency rate fluctuations on the results of operations of the Company’s non-United States subsidiaries and business units, fluctuations in such rates may affect the translation of these results into the Company’s consolidated financial statements. To the extent revenues and expenses are not in the applicable local currency, the Company may enter into foreign exchange forward contracts to hedge the currency risk. There can be no assurance, however, that the Company’s efforts at hedging will be successful. There is always a possibility that attempts to hedge currency risks will lead to greater losses than predicted. In addition, the Company may be exposed to currency-exchange risks in connection with the repatriation of cash from its non-United States subsidiaries, and unfavorable currency movements or restrictions on the transfer of funds could adversely affect the amount of cash available for use in the United States.

The Company’s revenue, operating income and cash flows are subject to cyclical and seasonal variations.

The Company’s business is seasonal, with the Company recognizing the majority of its operating income in the second half of the calendar year, primarily as a result of the increased direct mail, catalogs and retail inserts volume from back-to-school and holiday-related advertising and promotions. The fourth quarter is typically the highest seasonal quarter for cash flows from operating activities and Free Cash Flow due to the reduction of working capital requirements that reach peak levels during the third quarter. If the Company does not successfully manage the increased workflow, necessary increases in paper and ink inventory, production capacity flows and other business elements during these high seasons of activity, this seasonality could adversely affect the Company’s cash flows and results of operations.

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An other than temporary decline in operating results and enterprise value could lead to non-cash impairment charges due to the impairment of property, plant and equipment, goodwill and other intangible assets.

The Company has a material amount of property, plant, equipment, goodwill and other intangible assets on its balance sheet, due in part to acquisitions. As of December 31, 2025, the Company had the following long-lived assets on its consolidated balance sheet included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K: (a) property, plant and equipment of $461.6 million; (b) goodwill of $107.6 million; and (c) other intangible assets, primarily representing the value of customer relationships acquired, of $13.7 million.

As of December 31, 2025, these assets represented approximately 47% of the Company’s total assets. The Company assesses impairment of property, plant and equipment, goodwill and other intangible assets based upon the expected future cash flows of the respective assets. These valuations include management’s estimates of sales, profitability, cash flow generation, capital structure, cost of debt, interest rates, capital expenditures and other assumptions. A decline in expected profitability, significant negative industry or economic trends, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in use of the assets or in entity structure, divestitures and discontinued operations may adversely impact the assumptions used in the valuations. As a result, the recoverability of these assets could be called into question, and the Company could be required to write down or write off these assets. Such an occurrence could have a material adverse effect on the Company’s results of operations and financial position.

The Company may not be able to utilize deferred tax assets to offset future taxable income.

As of December 31, 2025, the Company had deferred tax assets, net of valuation allowances, of $57.5 million. The Company expects to utilize the deferred tax assets to reduce consolidated income tax liabilities in future taxable years. However, the Company may not be able to fully utilize the deferred tax assets if its future taxable income and related income tax liability is insufficient to permit their use. In addition, in the future, the Company may be required to record a valuation allowance against the deferred tax assets if the Company believes it is unable to utilize them, which would have an adverse effect on the Company’s results of operations and financial position.

The Company has liabilities with respect to defined benefit pension plans that could cause the Company to incur additional costs.

As a result of the 2010 acquisition of World Color Press, the Company assumed frozen single employer defined benefit pension plans for certain of its employees in the United States. The majority of the plans’ assets are held in North American and global equity securities and debt securities. The asset allocation as of December 31, 2025, was approximately 22% equity securities and 78% debt securities.

As of December 31, 2025, the Company had underfunded pension liabilities of $22.6 million for single employer defined benefit plans in the United States. Under current United States pension law, pension funding deficits are generally required to be funded over a seven-year period. These pension deficits may increase or decrease depending on changes in the levels of interest rates, pension plan investment performance, pension legislation and other factors. Declines in global debt and equity markets would increase the Company’s potential pension funding obligations. Any significant increase in the Company’s required contributions could have a material adverse impact on its business, financial condition, results of operations and cash flows.

In addition to the single employer defined benefit plans described above, the Company has previously participated in multiemployer pension plans (“MEPPs”) in the United States, including the Graphic Communications International Union - Employer Retirement Fund (“GCIU”). Prior to the acquisition of World Color Press by the Company, World Color Press received notice that certain plans in which it participated were in critical status, as defined in Section 432 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). As a result, the Company could have been subject to increased contribution rates associated with these plans or other MEPPs suffering from declines in their funding levels. Due to the significantly underfunded status of the United States multiemployer plans and the potential increased contribution rates, the Company withdrew from participation in multiemployer plans and has replaced these pension benefits with a Company-sponsored “pay as you go” defined contribution plan, which is

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historically the form of retirement benefit provided to the Company’s employees. As of December 31, 2025, the Company has recorded in its financial statements a pre-tax withdrawal liability for the GCIU plan of $19.3 million in the aggregate. The Company is scheduled to make payments to the GCIU until April 2032.

Legal and Regulatory Risks

Unfavorable outcomes in legal proceedings could result in substantial costs and may harm the Company’s financial condition.

The Company’s financial condition may be affected by the outcome of pending and future litigation, claims, investigations, legal and administrative cases and proceedings, whether civil or criminal, or lawsuits by governmental agencies or private parties. Defending against any such claims, or any legal proceedings to which the Company is subject, can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on the Company’s liquidity and financial condition and/or cause significant reputational harm to the Company’s business.

The Company may incur costs or suffer reputational damage due to improper conduct of its employees, contractors or agents under anti-corruption or other laws governing business practices, including the United States Foreign Corrupt Practices Act.

The Company could be adversely affected by engaging in business practices that are in violation of United States or foreign anti-corruption laws, including the United States Foreign Corrupt Practices Act. The Company operates in parts of the world with developing economies that have experienced governmental corruption to some degree, and in certain circumstances, strict compliance with anti-corruption laws may conflict with local customs and practices. In certain countries, the Company does substantial business with government entities or instrumentalities, which creates increased risk of a violation of the Foreign Corrupt Practices Act and international laws. There can be no assurance that all of the Company’s employees, contractors or agents, including those representing the Company in countries where practices which violate anti-corruption laws may be customary, will not take actions that violate the Company’s policies and procedures. The failure to comply with the laws governing international business practices may result in substantial penalties and fines.

The Company, its offerings and its facilities are subject to various consumer protection, safety and privacy laws and regulations, and will become subject to additional laws and regulations in the future. If the Company’s efforts to comply with such laws or protect the security of information are unsuccessful, any failure may subject the Company to material liability, require it to incur material costs or otherwise adversely affect its results of operations as a result of compliance with such laws, costly enforcement actions and private litigation.

The nature of the Company’s business includes the receipt and storage of information about the Company’s clients, vendors and the end-users of the Company’s products and services. The Company and its clients are subject to various United States and foreign consumer protection, information security, data privacy and “do not mail” requirements at the federal, state, provincial and local levels. The Company is subject to many legislative and regulatory laws and regulations around the world concerning data protection and privacy. In addition, the interpretation and application of consumer and data protection laws in the United States and elsewhere are often fluid and uncertain. To the extent that the Company or its clients become subject to additional or more stringent requirements or that the Company is not successful in its efforts to comply with existing requirements or protect the security of information, demand for the Company’s services may decrease and the Company’s reputation may suffer, which could adversely affect the Company’s results of operations. In addition, such laws may be interpreted and applied in a manner inconsistent with the Company’s internal policies. If so, the Company could suffer costly enforcement actions (including an order requiring changes to the Company’s data practices) and private litigation, which could have an adverse effect on the Company’s business and results of operations. Complying with these various laws could cause the Company to incur substantial costs or require changes to the Company’s business practices in a manner adverse to the Company’s business.

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Changes in the legal and regulatory environment or reporting requirements could limit the Company’s business activities, increase its operating costs, reduce demand for its products or result in litigation.

The conduct of the Company’s businesses is subject to various laws and regulations administered by federal, state and local government agencies in the United States, as well as to foreign laws and regulations administered by government entities and agencies in markets in which the Company operates. These laws and regulations and interpretations thereof, and enforcement priorities may change, sometimes dramatically, as a result of political, economic or social events, such as the election of the new administration or changes in the makeup of legislative bodies. Such regulatory environment changes may include changes in taxation requirements, accounting and disclosure standards, immigration laws and policy, environmental laws, trade policy, and requirements of United States and foreign occupational health and safety laws. Changes in laws, regulations or governmental policy and the related interpretations may alter the environment in which the Company does business, and therefore, may impact its results or increase its costs or liabilities. In particular, several states, including California, have adopted or are in the process of implementing new climate- and emissions-related reporting obligations, which require certain companies doing business in the state to disclose greenhouse gas emissions and climate-related financial risks. Compliance with these or similar requirements may increase the Company’s reporting and data-collection burdens, and clients subject to such rules may also require additional information from the Company.

In addition, the Company and its subsidiaries are party to a variety of legal and environmental remediation obligations arising in the normal course of business, as well as environmental remediation and related indemnification proceedings in connection with certain historical activities, former facilities and contractual obligations of acquired businesses. Permits are required for the operation of certain parts of the Company’s business, and these permits are subject to renewal, modification and, in some circumstances, revocation. Due to regulatory complexities, uncertainties inherent in litigation and the risk of unidentified contaminants on current and former properties, the potential exists for remediation, liability and indemnification costs to differ materially from the costs the Company has estimated. The Company cannot assure you that the Company’s costs in relation to these matters will not exceed its established liabilities or otherwise have an adverse effect on its results of operations.

Various laws and regulations addressing climate change have been and/or are being considered at the federal and state levels. Proposals under consideration include requiring climate- and emissions-related disclosures and limitations on the amount of greenhouse gas that can be emitted together with systems of trading allowed emissions capacities. The impacts of such proposals may require the Company to implement additional processes, systems or controls, or to take other measures that could have a material adverse impact on the Company’s financial condition and results of operations.

If QuadMed, a wholly-owned subsidiary of the Company, fails to comply with applicable healthcare laws and regulations, the Company could face substantial penalties, and its business, reputation, operations, prospects and financial condition, and those of its subsidiary, could be adversely affected.

QuadMed provides employer-sponsored healthcare solutions in the United States to employers of all sizes, including the Company and other private and public-sector companies. These solutions include, but are not limited to, on-site and near-site health centers, occupational health services, telemedicine, behavioral health and counseling services, and health and wellness programs. The healthcare industry is heavily regulated, constantly evolving and subject to significant change and fluctuation. The United States federal and state healthcare laws and regulations that impact the QuadMed subsidiary business include, among others, those: (a) regarding privacy, security and transmission of individually identifiable health information; (b) prohibiting, among other things, soliciting, receiving or providing remuneration to induce the referral of an individual for an item or service or the purchasing or ordering of an item or service for which payment may be made under healthcare programs; (c) prohibiting, among other things, knowingly presenting or causing to be presented claims for payment from third-party payors that are false or fraudulent; and (d) prohibiting the corporate practice of medicine. Emerging rules addressing cyber incident reporting and data protection may materially expand QuadMed’s compliance obligations. Failure to comply with these or other healthcare requirements could result in significant penalties, investigations, service disruptions, contractual liabilities or reputational harm, any of which could adversely affect QuadMed’s results of operations.

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Risks Relating to Quad’s Common Stock

The Company is a controlled company within the meaning of the rules of the New York Stock Exchange (“ NYSE ”) and, as a result, it relies on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.

Since the Quad Voting Trust owns more than 50% of the total voting power of the Company’s stock, the Company is considered a controlled company under the corporate governance listing standards of the NYSE . As a controlled company, an exception under the NYSE listing standards exempts the Company from the obligation to comply with certain of the NYSE’s corporate governance requirements, including the requirements that (a) the Company have a corporate governance and nominating committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and (b) the Company have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

Accordingly, for so long as the Company is a controlled company, holders of class A stock may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the NYSE.

Holders of class A common stock are not able to independently elect directors of the Company or control any of the Company’s management policies or business decisions because the holders of class A common stock have substantially less voting power than the holders of the Company’s class B common stock, all of which is owned by certain members of the Quadracci family or trusts for their benefit, whose interests may be different from the holders of class A common stock.

The Company’s outstanding stock is divided into two classes of common stock: class A common stock (“class A stock”) and class B common stock (“class B stock”). The class B stock has ten votes per share on all matters and the class A stock is entitled to one vote per share. As of February 6, 2026, the class B stock constitutes approximately 78% of the Company’s total voting power. As a result, holders of class B stock are able to exercise a controlling influence over the Company’s business, have the power to elect its directors and indirectly control decisions such as whether to issue additional shares, declare and pay dividends or enter into corporate transactions. All of the class B stock is owned by certain members of the Quadracci family or trusts for their benefit, whose interests may differ from the interests of the holders of class A stock.

As of February 6, 2026, approximately 93% of the outstanding class B stock was held of record by the Quad Voting Trust, and that constitutes approximately 72% of the Company’s total voting power. The trustees of the Quad Voting Trust have the authority to vote the stock held by the Quad Voting Trust. Accordingly, the trustees of the Quad Voting Trust are able to exercise a controlling influence over the Company’s business, have the power to elect its directors and indirectly control decisions such as whether to issue additional shares, declare and pay dividends or enter into corporate transactions.

Furthermore, in response to recent public focus on dual class capital structures, certain stock index providers have or are implementing limitations on the inclusion of dual class share structures in their indices and certain institutional shareholder advisory firms have or are updating their voting guidelines to generally withhold support for directors of companies with dual class voting rights. If these restrictions increase or these guidelines are followed, they may impact who buys and holds, and liquidity of, the Company’s stock.

Currently, there is a limited active market for Quad’s class A common stock and, as a result, shareholders may be unable to sell their class A common stock without losing a significant portion of their investment.

The Company’s class A stock has been traded on the NYSE under the symbol “QUAD” since July 6, 2010. However, there is still a limited active market for the class A common shares. The Company cannot predict the extent to which investor interest in the Company will lead to the development of a more active trading market for its class A common stock on the NYSE or how liquid that market will be. If a more active trading market does not develop,

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shareholders may have difficulty selling any class A stock without negatively affecting the stock price, and thereby, losing a significant portion of their investment.

Item 7.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of the financial condition and results of operations of Quad should be read together with Quad’s audited consolidated financial statements for each of the two years in the period ended December 31, 2025, including the notes thereto, included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. This discussion contains forward-looking statements that reflect the Company’s plans, estimates and beliefs. The Company’s actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed in “Cautionary Statement Regarding Forward-Looking Statements” and Part I, Item 1A, “Risk Factors,” included earlier within this Annual Report on Form 10-K.

Management’s discussion and analysis of financial condition and results of operations is provided as a supplement to the Company’s consolidated financial statements and accompanying notes to help provide an understanding of the Company’s financial condition, the changes in the Company’s financial condition and the Company’s results of operations. This discussion and analysis is organized as follows:

• Overview. This section includes a general description of the Company’s business and segments, an overview of key performance metrics the Company’s management measures and utilizes to evaluate business performance, and an overview of trends affecting the Company, including management’s actions related to the trends.

• Results of Operations. This section contains an analysis of the Company’s results of operations by comparing the results for the year ended December 31, 2025, to the year ended December 31, 2024. The comparability of the Company’s results of operations between periods was impacted by the divestiture of the Company's European operations, which were sold on February 28, 2025, and the acquisition of the Enru co-mail assets, which were acquired on April 1, 2025. The results of operations of the divested operations are included in the Company’s consolidated results until the date of disposition and the results of operations of the acquired operations are included in the Company’s consolidated results from the date of acquisition. Forward-looking statements providing a general description of recent and projected industry and Company developments that are important to understanding the Company’s results of operations are included in this section. This section also provides a discussion of EBITDA and EBITDA margin, financial measures that the Company uses to assess the performance of its business that are not prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

• Liquidity and Capital Resources. This section provides an analysis of the Company’s capitalization, cash flows and a discussion of outstanding debt and commitments. Forward-looking statements important to understanding the Company’s financial condition are included in this section. This section also provides a discussion of Free Cash Flow and Net Debt Leverage Ratio, non-GAAP financial measures that the Company uses to assess liquidity and capital allocation and deployment.

• Critical Accounting Policies and Estimates. This section contains a discussion of the accounting policies that the Company’s management believes are important to the Company’s financial condition and results of operations, as well as allowances and reserves that require significant judgment and estimates on the part of the Company’s management. In addition, all of the Company’s significant accounting policies, including critical accounting policies, are summarized in Note 1, “Basis of Presentation and Summary of Significant Accounting Policies,” to the consolidated financial statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

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Overview

Business Overview

Quad is a marketing experience (MX) company that simplifies the complexities of marketing, removing friction from wherever it occurs along the marketing journey. Its results-driven approach enables stronger marketing operations that lead to real, repeatable success for clients. The Company does this through its MX Solutions Suite, which is flexible, scalable and connected. Quad tailors its solutions to each client’s objectives, driving cost efficiencies, improving speed to market, strengthening marketing effectiveness and delivering value on investments. The Company supports a diverse base of clients, including industry-leading blue-chip companies that serve both businesses and consumers across multiple industry verticals, with a particular focus on commerce, including retail, consumer packaged goods and direct-to-consumer; financial services; and health.

For a full description of the Company’s business, refer to Part I, Item 1, “Business,” of this Annual Report on Form 10-K.

The Company’s operating and reportable segments are aligned with how the chief operating decision maker of the Company currently manages the business. The Company’s operating and reportable segments, including their product and service offerings, and a “Corporate” category, are summarized below.

The United States Print and Related Services segment is predominantly comprised of the Company’s United States printing operations, managed as one integrated platform, and marketing and other complementary services. The printing operations include print execution and logistics for retail inserts, catalogs, long-run publications, special interest publications, journals, direct mail, directories, in-store marketing and promotion, packaging, custom print products, as well as other commercial and specialty printed products, along with global paper procurement and the manufacture of ink. Marketing and other complementary services include data intelligence and analytics, technology solutions, media planning, placement and optimization, creative strategy and content creation, as well as execution in non-print channels (e.g., digital and broadcast). This segment also includes medical services. The United States Print and Related Services segment accounted for approximately 92% and 87% of the Company’s consolidated net sales during the years ended December 31, 2025 and 2024, respectively.

The International segment consists of the Company’s printing operations in Latin America, including operations in Colombia, Mexico and Peru, as well as operations in Europe, including operations in England, France, Germany and Poland, until the European operations were sold on February 28, 2025. This segment provides printed products and marketing and other complementary services consistent with the United States Print and Related Services segment. The International segment accounted for approximately 8% and 13% of the Company’s consolidated net sales during the years ended December 31, 2025 and 2024, respectively.

Corporate consists of unallocated general and administrative activities and associated expenses including, in part, executive, legal and finance, as well as certain expenses and income from frozen employee retirement plans, such as pension benefit plans.

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Key Performance Metrics Overview

The Company’s management believes the ability to generate net sales growth, profit increases and positive cash flow, while maintaining the appropriate level of debt, are key indicators of the successful execution of the Company’s business strategy and will increase shareholder value. The Company uses period-over-period net sales growth, EBITDA, EBITDA margin, net cash provided by operating activities, Free Cash Flow and Net Debt Leverage Ratio as metrics to measure operating performance, financial condition and liquidity. EBITDA, EBITDA margin, Free Cash Flow and Net Debt Leverage Ratio are non-GAAP financial measures (see the definitions of EBITDA, EBITDA margin and the reconciliation of net earnings (loss) to EBITDA in the “Results of Operations” section below, and see the definitions of Free Cash Flow and Net Debt Leverage Ratio, the reconciliation of net cash provided by operating activities to Free Cash Flow, and the calculation of Net Debt Leverage Ratio in the “Liquidity and Capital Resources” section below).

Net sales growth. The Company uses period-over-period net sales growth as a key performance metric. The Company’s management assesses net sales growth based on the ability to generate increased net sales through increased sales to existing clients, sales to new clients, sales of new or expanded solutions to existing and new clients, and opportunities to expand sales through strategic investments, including acquisitions.

EBITDA and EBITDA margin. The Company uses EBITDA and EBITDA margin as metrics to assess operating performance. The Company’s management assesses EBITDA and EBITDA margin based on the ability to increase revenues while controlling variable expense growth.

Net cash provided by operating activities. The Company uses net cash provided by operating activities as a metric to assess liquidity. The Company’s management assesses net cash provided by operating activities based on the ability to meet recurring cash obligations while increasing available cash to fund debt service requirements, capital expenditures, cash restructuring requirements related to cost reduction activities, World Color Press single employer pension plan contributions, World Color Press MEPPs withdrawal liabilities, acquisitions and other investments in future growth, shareholder dividends and share repurchases. Net cash provided by operating activities can be significantly impacted by the timing of non-recurring or infrequent receipts or expenditures.

Free Cash Flow. The Company uses Free Cash Flow as a metric to assess liquidity and capital deployment. The Company’s management assesses Free Cash Flow as a measure to quantify cash available for strengthening the balance sheet (debt and pension liability reduction), for strategic capital allocation and deployment through investments in the business (acquisitions and strategic investments) and for returning capital to the shareholders (dividends and share repurchases). The Company’s priorities for capital allocation and deployment will change as circumstances dictate for the business, and Free Cash Flow can be significantly impacted by the Company’s restructuring activities and other unusual items.

Net Debt Leverage Ratio. The Company uses the Net Debt Leverage Ratio as a metric to assess liquidity and the flexibility of its balance sheet. Consistent with other liquidity metrics, the Company monitors the Net Debt Leverage Ratio as a measure to determine the appropriate level of debt the Company believes is optimal to operate its business, and accordingly, to quantify our ability to strengthen the balance sheet through debt and pension liability reduction, for strategic capital allocation and deployment through investments in the business (capital expenditures, acquisitions and strategic investments), and for returning capital to the shareholders (dividends and share repurchases). The Company’s priorities for capital allocation and deployment will change as circumstances dictate for the business, and the Net Debt Leverage Ratio can be significantly impacted by the amount and timing of large expenditures requiring debt financing, as well as changes in profitability.

The Company remains disciplined with its net debt leverage. The Company’s consolidated debt and finance lease obligations decreased by $8.0 million during the year ended December 31, 2025. The Company primarily used cash provided by operating activities and proceeds from the sales of property, plant and equipment to fund purchases of property, plant and equipment, the Enru co-mail asset acquisition, the return of capital to shareholders through cash dividends and share repurchases and the reduction of debt.

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Overview of Trends Affecting Quad

As consumer media consumption habits change, advertising and marketing services providers face increased demand to offer end-to-end marketing services, from strategy and creative through execution. As new marketing channels emerge, these providers must expand their capabilities to create effective multichannel campaigns for their clients, and providers face increased client demand to offer integrated, end-to-end marketing services (i.e., from strategy and creative through execution). These trends greatly influence Quad’s ongoing efforts to help brands reduce the complexities of working with multiple agency partners and vendors, increase marketing process efficiency and maximize marketing effectiveness.

Competition in the commercial printing industry remains highly fragmented, and the Company believes that there are indicators of heightened competitive pressures. The commercial printing industry has moved toward a demand for shorter print runs, faster product turnaround and increased production efficiencies of products with lower page counts and increased complexity. This — combined with increases in postage and paper costs as well as marketers’ increasing use of online marketing and communication channels — has led to excess manufacturing capacity.

For a full description of the Company’s industry and competition overview, refer to Part I, Item 1, “Business,” of this Annual Report on Form 10-K.

The Company believes that a disciplined approach for capital management and a strong balance sheet are critical to be able to invest in profitable growth opportunities and technological advances, thereby providing the highest return for shareholders. Management balances the use of cash between deleveraging the Company’s balance sheet (through reduction in debt and pension obligations), compelling investment opportunities (through capital expenditures, acquisitions and strategic investments) and returns to shareholders (through dividends and share repurchases).

The Company continues to make progress on integrating and streamlining all aspects of its business, thereby lowering its cost structure by consolidating its manufacturing platform into its most efficient facilities, as well as realizing purchasing, mailing and logistics efficiencies by centralizing and consolidating print manufacturing volumes and eliminating redundancies in its administrative and corporate operations. The Company has continued to evolve its manufacturing platform, equipping facilities to be product-line agnostic, which enables the Company to maximize equipment utilization. Quad believes that the large plant size of its key printing facilities allows the Company to drive savings in certain product lines (such as publications and catalogs) due to economies of scale and from investments in automation and technology. The Company continues to focus on proactively aligning its cost structure to the realities of the top-line pressures it faces in the printing industry through Lean Manufacturing and sustainable continuous improvement programs.

The Company believes it will continue to drive productivity improvements and sustainable cost reduction initiatives into the future through an engaged workforce and ongoing adoption of the latest manufacturing automation and technology. Through this strategy, the Company believes it can maintain the strongest, most efficient print manufacturing platform to remain a high-quality, low-cost producer.

Integrated distribution with the USPS is an important component of the Company’s business. Any material change in the current service levels provided by the postal service could impact the demand that clients have for print services. In 2025, the USPS significantly reduced their service standards with the first phase of changes taking effect on April 1, 2025, and the second phase took effect July 1, 2025. In addition to the reduced service standards, the USPS also issued reduced service performance targets for 2025. Almost all letters and flats targets were reduced, some as much as 15% lower than 2024 targets (i.e., First Class Letters three to five day on time performance target was reduced from 90% down to 80%). The USPS, however, did not meet these reduced performance standards and targets, and has kept the performance targets for 2026 essentially in line with 2025, with a few minor adjustments.

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The USPS continues to experience financial problems. The passing of the Postal Service Reform Act of 2022, signed in April 2022, gave the USPS considerable financial relief as well as significant other relief over the next ten years. While the legislative postal reform helps considerably, without decreased operational cost structures, increased efficiencies or increased volumes and revenues, these losses are expected to continue into the future. As a result of these financial difficulties, the USPS has continued to adjust its postal rates and service levels.

Federal statute requires the Postal Regulatory Commission (PRC), to conduct reviews of the overall rate-making structure for the USPS to ensure funding stability. As a result of those reviews, the PRC authorized a five year rate-making structure that provides the USPS with additional pricing flexibility over the Consumer Price Index (“CPI”) cap, which has resulted in a substantially altered rate structure for mailers. The revised rate authority that is effective as a result of the rules issued by the PRC, includes a higher overall rate cap on the USPS’ ability to increase rates from year to year. This will continue to lead to price spikes for mailers and may also reduce the incentive for the USPS to continue to take out costs and instead continue to rely on postage increases in its attempt to cover its cost.

Given the significant amount of concern that has been expressed by the mailing industry, in April 2024, the PRC opened a proceeding to start the next rate system review, which includes a phased approach of proposing changes to improve rate predictability. The USPS did not implement a Market Dominant product price increase for January 2025. However, the available rate authority was rolled forward to July 2025, where approximately 8% postage increases were implemented and significantly exceeded CPI. In September 2025, the USPS announced they would not increase prices on Market Dominant products in January 2026. On December 22, 2025, the USPS filed a petition with the PRC, requesting new rules on Market Dominate rates to either eliminate the price cap and give full rate authority to the Board of Governors, or if a price cap continues to be required, allow a rate reset with a conservative 22% banked authority for the USPS to use. This remains open and is unknown how the PRC will respond. The PRC did issue a final rule that restricts the USPS to one price change a year from 2026 to 2030. The PRC also refined some rules around work-share discounts that will keep these discounts more closely aligned with the costs avoided. The USPS launched a new Marketing Mail Catalog promotion, which offers a 10% discount on postage for any mail pieces that meet the USPS definition of a catalog. The discount went into effect on October 1, 2025 and continues until June 30, 2026. Because the discount applies to the current rate, which is based on several years of biannual rate increases, including another increase in July 2025, the impact of the discount on catalog volume and revenue may be diminished. However, the Company believes the continued use of all available rate authority by the USPS that significantly exceeds CPI, combined with lower service standards and the petition filed on December 22, 2025, clients will continue to reduce mail volumes and explore the use of alternative methods for delivering a larger portion of their products, such as continued diversion to the internet, digital and mobile channels and other alternative media channels, in order to ensure that they stay within their expected postage budgets.

The Company has invested significantly in its mail preparation and distribution capabilities to mitigate the impact of increases in postage costs, and to help clients successfully navigate the ever-changing postal environment. Through its data analytics, unique software to merge mail streams on a large scale, advanced finishing capabilities and technology, and in-house transportation and logistics operations, the Company manages the mail preparation and distribution of most of its clients’ products to maximize efficiency, to enable on-time and consistent delivery and to partially reduce these costs. The PRC decision on once a year price increases is an important part of providing the mailing industry with additional rate stability. Additionally, the new requirements for the USPS to maintain the current work-share discounts more closely to the level of avoided costs, the Company believes is a good decision as this mail optimization capability is valuable to its clients. It is imperative that the PRC ensure that rates are affordable to the mailing industry.

The Company continues to face several other industry challenges that have been, and are expected to continue to, adversely impact the Company’s results of operations. The Company is closely monitoring the potential impacts of tariffs and recessionary pressures on its clients’ businesses that could impact their marketing spend, including print volumes. The Company continues to operate in an elevated interest rate environment, which is expected to continue through 2026. Additionally, the price and availability of paper has been, and may continue to be, adversely affected by paper mills’ permanent or temporary closures; paper mills’ access to raw materials, conversion to produce other types of paper that are not usable by the Company in its operations (which a number of paper mills’ have done or are doing), and ability to transport paper produced; and tariffs and trade restrictions. Postal rate increases, along with the previously described industry challenges, have led to reduced demand for printed products and has caused clients to move more

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aggressively into other delivery methods, such as the many digital and mobile options now available to consumers. These challenges have, as needed, driven the Company to institute several cost saving measures through its restructuring program, including plant closures and headcount reductions. Through these cost saving measures and proceeds from asset sales, the Company has been able to maintain focus on its transformation into an MX company, with flexibility to invest into the growing business, as well as continuing to be advantageous in its efforts to return capital to shareholders and reduce debt. The Company is also dependent on its production personnel to print the Company’s products in a cost-effective and efficient manner that allows the Company to obtain new clients and to drive sales from existing clients. The Company is unable to predict the full future impact these challenges will have on its business, financial condition, cash flows and results of operations, but expects them to continue into 2026.

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Results of Operations for the Year Ended December 31, 2025, Compared to the Year Ended December 31, 2024

Summary Results

The Company’s operating income, operating margin, net earnings (loss) (computed using a 25% normalized tax rate for all items subject to tax) and diluted earnings (loss) per share for the year ended December 31, 2025, changed from the year ended December 31, 2024, as follows (dollars in millions, except per share data):

Operating Income

Operating Margin

Net Earnings (Loss)

Diluted Earnings (Loss) Per Share

For the year ended December 31, 2024

Restructuring, impairment and transaction-related charges, net (1)

Other operating income elements (2)

Operating Income

Interest expense (3)

Net pension (expense) income (4)

Income taxes (5)

For the year ended December 31, 2025

(1) Restructuring, impairment and transaction-related charges, net decreased $79.7 million ($59.8 million, net of tax), to $21.8 million during the year ended December 31, 2025, and included the following:

a. A $4.4 million decrease in employee termination charges from $30.5 million during the year ended December 31, 2024, to $26.1 million during the year ended December 31, 2025;

b. A $67.4 million decrease in impairment charges from $74.9 million during the year ended December 31, 2024, to $7.5 million during the year ended December 31, 2025;

c. A $4.3 million increase in acquisition adjustments and transaction-related charges, net from $0.6 million during the year ended December 31, 2024, to $4.9 million during the year ended December 31, 2025;

d. A $2.5 million increase in integration-related charges from $0.4 million during the year ended December 31, 2024, to $2.9 million during the year ended December 31, 2025; and

e. A $6.1 million increase in various other restructuring income, net from $3.7 million during the year ended December 31, 2024, to $9.8 million during the year ended December 31, 2025.

The Company expects to incur additional restructuring and integration costs in future reporting periods in connection with eliminating excess manufacturing capacity and properly aligning its cost structure in conjunction with the Company’s acquisitions and strategic investments, and other cost reduction programs.

(2) Other operating income elements increased $1.9 million ($1.4 million, net of tax) primarily due to the following: (1) a $30.9 million decrease in selling, general and administrative expenses; (2) a $23.9 million decrease in depreciation and amortization expense; (3) impacts from improved manufacturing productivity; and (4) savings from other cost reduction initiatives, partially offset by the impact from lower print volume and service net sales, and increased investments in innovation offerings to drive future net sales growth.

(3) Interest expense decreased $14.0 million ($10.5 million, net of tax) during the year ended December 31, 2025, to $50.5 million. This change was due to lower average debt levels, lower weighted average interest rate on borrowings, and a $0.5 million decrease in interest expense related to the interest rate swap during the year ended December 31, 2025, as compared to the year ended December 31, 2024.

(4) Net pension expense increased $14.8 million ($11.1 million, net of tax) during the year ended December 31, 2025, from $0.8 million of income to $14.0 million of expense. This was due to a $12.8 million settlement charge from defined benefit

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pension plan annuitization and a $3.7 million decrease from the expected long-term return on pension plan assets, partially offset by a $1.7 million decrease from interest cost on pension plan liabilities.

(5) The $20.1 million decrease in income tax expense as calculated in the following table is primarily due to the following: (1) a $15.5 million decrease from valuation allowance reserves; (2) an $8.7 million decrease from non-deductible impairments charges related to the European operations in 2024; and (3) a $3.6 million outside tax basis difference in its European operations that were sold in 2025. These decreases were partially offset by a $5.5 million increase in the Company’s liability for audit assessments and unrecognized tax benefits and a $2.1 million increase from the impact of foreign branches.

Year Ended December 31,

$ Change

(dollars in millions)

Earnings (loss) before income taxes

Normalized tax rate

Income tax expense (benefit) at normalized tax rate

Less: Income tax expense from the consolidated statements of operations

Impact of income taxes

Operating Results

The following table sets forth certain information from the Company’s consolidated statements of operations on an absolute dollar basis and as a relative percentage of total net sales for each noted period, together with the relative percentage change in such information between the periods set forth below:

Year Ended December 31,

% of Net

Sales

% of Net

Sales

$ Change

Change

(dollars in millions)

Net sales:

Products

Services

Total net sales

Cost of sales:

Products

Services

Total cost of sales

Selling, general & administrative expenses

Depreciation and amortization

Restructuring, impairment and transaction-related charges, net

Total operating expenses

Operating income

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Net Sales

Product sales decreased $207.9 million, or 9.9%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the following: (1) a $120.5 million decrease in paper sales, of which $52.9 million is a result of the sale of the European operations on February 28, 2025; (2) an $83.9 million decrease in product sales, primarily from lower print product volumes, of which $62.3 million is a result of the sale of the European operations; and (3) $3.5 million in unfavorable foreign exchange impacts.

Service sales, which primarily consist of logistics, distribution, marketing services, imaging and medical services, decreased $44.4 million, or 7.7%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a $37.9 million decrease in logistics sales, of which $13.5 million is a result of the sale of the European operations, and a $6.5 million net decrease in marketing services and medical services, of which $2.1 million is a result of the sale of the European operations.

Cost of Sales

Cost of product sales decreased $172.7 million, or 9.9%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the following: (1) a decrease in paper costs due to the decrease in paper sales; (2) impacts from improved manufacturing productivity; and (3) other cost reduction initiatives.

Cost of service sales decreased $22.9 million, or 6.4%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the impact from decreased freight volumes and lower marketing services.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased $30.9 million, or 8.7%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to (1) $18.6 million in lower employee-related costs; (2) a $10.7 million increase in favorable foreign exchange impacts; and (3) savings from other cost reduction initiatives, partially offset by a $4.1 million gain on the sale of an investment in 2024 that did not reoccur in 2025. Selling, general and administrative expenses as a percentage of net sales increased from 13.4% for the year ended December 31, 2024, to 13.5% for the year ended December 31, 2025.

Depreciation and Amortization

Depreciation and amortization decreased $23.9 million, or 23.3%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, due to a $12.3 million decrease in amortization expense, primarily from intangible assets becoming fully amortized over the past year and a $11.6 million decrease in depreciation expense, primarily due to impacts from plant closures and from property, plant and equipment becoming fully depreciated over the past year.

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Restructuring, Impairment and Transaction-Related Charges, Net

Restructuring, impairment and transaction-related charges, net decreased $79.7 million, or 78.5%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the following:

Year Ended December 31,

$ Change

(dollars in millions)

Employee termination charges

Impairment charges (a)

Acquisition adjustments and transaction-related charges, net

Integration costs

Other restructuring charges (income)

Vacant facility carrying costs and lease exit charges

Equipment and infrastructure removal costs

Gains on the sale of facilities (b)

Loss on the sale of a business (c)

Other restructuring activities

Other restructuring income, net

Total restructuring, impairment and transaction-related charges, net

(a) Includes $7.5 million and $74.9 million of impairment charges during the years ended December 31, 2025 and 2024, respectively, which consisted of the following: (1) $57.6 million of impairment to reduce the carrying value of the majority of the European operations to fair value, including $41.6 million for foreign currency translation adjustments and $16.0 million for property, plant and equipment in 2024; (2) $3.8 million and $14.2 million during the years ended December 31, 2025 and 2024, respectively, for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction activities; (3) $3.0 million for software licensing and related implementation costs from a terminated project in 2025; (4) $0.5 million for property in 2025; and (5) $0.2 million and $3.1 million during the years ended December 31, 2025 and 2024, respectively, for operating lease right-of-use assets.

(b) Includes the following: (1) an $11.7 million gain on the sale of an ancillary building in Sussex, Wisconsin; (2) a $4.3 million gain on the sale of the West Sacramento, California facility; and (3) a $3.6 million gain on the sale of the Greenville, Michigan facility during the year ended December 31, 2025, and a $20.5 million gain on the sale of the Saratoga Springs, New York facility during the year ended December 31, 2024.

(c) Includes a $0.5 million loss on the sale of the European operations during the year ended December 31, 2025.

EBITDA and EBITDA Margin—Consolidated

EBITDA is defined as net earnings (loss), excluding (1) interest expense, (2) income tax expense and (3) depreciation and amortization. EBITDA margin represents EBITDA as a percentage of net sales. EBITDA and EBITDA margin are presented to provide additional information regarding Quad’s performance. Both are important measures by which Quad gauges the profitability and assesses the performance of its business. EBITDA and EBITDA margin are non-GAAP financial measures and should not be considered alternatives to net earnings (loss) as a measure of operating performance, or to cash flows provided by operating activities as a measure of liquidity. Quad’s calculation of EBITDA and EBITDA margin may be different from the calculations used by other companies, and therefore, comparability may be limited.

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EBITDA and EBITDA margin for the year ended December 31, 2025, compared to the year ended December 31, 2024, were as follows:

Year Ended December 31,

% of Net Sales

% of Net Sales

(dollars in millions)

EBITDA and EBITDA margin (non-GAAP)

EBITDA increased $39.1 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to $79.7 million of decreased restructuring, impairment and transaction-related charges and impacts from improved manufacturing productivity, partially offset by the impact of lower net sales and increased investments in innovation offerings to drive future net sales growth.

A reconciliation of EBITDA to net earnings (loss) for the years ended December 31, 2025 and 2024, was as follows:

Year Ended December 31,

(dollars in millions)

Net earnings (loss) (1)

Interest expense

Income tax expense

Depreciation and amortization

EBITDA (non-GAAP)

(1) Net earnings (loss) included the following:

a. Restructuring, impairment and transaction-related charges, net of $21.8 million and $101.5 million for the years ended December 31, 2025 and 2024, respectively.

b. Settlement charge from defined benefit pension plan annuitization of $12.8 million for the year ended December 31, 2025.

United States Print and Related Services

The following table summarizes net sales, operating income, operating margin and certain items impacting comparability within the United States Print and Related Services segment:

Year Ended December 31,

$ Change

% Change

(dollars in millions)

Net sales:

Products

Services

Operating income (including restructuring, impairment and transaction-related charges, net)

Operating margin

Restructuring, impairment and transaction-related charges, net

Net Sales

Product sales for the United States Print and Related Services segment decreased $86.3 million, or 4.9%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a $58.0 million decrease in paper sales and a $28.3 million decrease in product sales, primarily from lower print product volumes.

Service sales for the United States Print and Related Services segment decreased $28.8 million, or 5.2%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a $24.4 million decrease in logistics sales from lower print volumes and a $4.4 million decrease in marketing services and medical services.

Operating Income

Operating income for the United States Print and Related Services segment increased $18.9 million, or 16.8%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the following: (1) an $18.1 million decrease in depreciation and amortization expense; (2) a $17.7 million decrease in restructuring, impairment and transaction-related charges, net; and (3) impacts from improved manufacturing productivity, partially offset by the impact from decreased logistics and marketing services sales and increased investments in innovation offerings to drive future net sales growth.

The operating margin for the United States Print and Related Services segment increased to 5.9% for the year ended December 31, 2025, from 4.8% for the year ended December 31, 2024, primarily due to the reasons provided above.

Restructuring, Impairment and Transaction-Related Charges, Net

Restructuring, impairment and transaction-related charges, net for the United States Print and Related Services segment decreased $17.7 million, or 41.4%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the following:

Year Ended December 31,

$ Change

(dollars in millions)

Employee termination charges

Impairment charges (a)

Integration costs

Other restructuring charges (income)

Vacant facility carrying costs and lease exit charges

Equipment and infrastructure removal costs

Gains on the sale of facilities (b)

Other restructuring activities

Other restructuring income, net

Total restructuring, impairment and transaction-related charges, net

(a) Includes $7.5 million and $17.1 million of impairment charges during the years ended December 31, 2025 and 2024, respectively, which consisted of the following: (1) $3.8 million and $14.0 million, respectively, for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction activities; (2) $3.0 million for software licensing and related implementation costs from a terminated project in 2025; (3) $0.5 million for property in 2025; and (4) $0.2 million and $3.1 million, respectively, for operating lease right-of-use assets.

(b) Includes the following: (1) an $11.7 million gain on the sale of an ancillary building in Sussex, Wisconsin; (2) a $4.3 million gain on the sale of the West Sacramento, California facility; and (3) a $3.6 million gain on the sale of the Greenville, Michigan facility during the year ended December 31, 2025, and a $20.5 million gain on the sale of the Saratoga Springs, New York facility during the year ended December 31, 2024.

International

The following table summarizes net sales, operating income (loss), operating margin, and certain items impacting comparability within the International segment:

Year Ended December 31,

$ Change

% Change

(dollars in millions)

Net sales:

Products

Services

Operating income (loss) (including restructuring, impairment and transaction-related charges, net)

Operating margin

Restructuring, impairment and transaction-related charges, net

Net Sales

Product sales for the International segment decreased $121.6 million, or 37.5%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the following:(1) a $62.5 million decrease in paper sales, of which $52.9 million is a result of the sale of the European operations; (2) a $55.6 million decrease in product sales, which is net of a $62.3 million decrease as a result of the sale of the European operations; and (3) $3.5 million in unfavorable foreign exchange impacts, primarily in Mexico.

Service sales for the International segment decreased $15.6 million, or 84.3%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a $13.5 million decrease in logistics sales and $2.1 million decrease in marketing service sales, both as a result of the sale of the European operations.

Operating Income (Loss)

Operating income (loss) for the International segment increased $53.6 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a $58.0 million decrease in restructuring, impairment and transaction-related charges, net and a $5.9 million decrease in depreciation and amortization; partially offset by a $10.3 million decrease in operating income, primarily as a result of the sale of the European operations.

Restructuring, Impairment and Transaction-Related Charges, Net

Restructuring, impairment and transaction-related charges, net for the International segment decreased $58.0 million, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the following:

Year Ended December 31,

$ Change

(dollars in millions)

Employee termination charges

Impairment charges (a)

Acquisition adjustments and transaction-related charges, net

Other restructuring charges (b)

Total restructuring, impairment and transaction-related charges, net

(a) Includes $57.8 million of impairment charges during the year ended December 31, 2024, which consisted of $57.6 million of impairment charges to reduce the carrying value of the majority of the European operations to fair value, including $41.6 million for foreign currency translation adjustments and $16.0 million for property, plant and equipment, and $0.2 million for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction activities.

(b) Includes a $0.5 million loss on the sale of the European operations during the year ended December 31, 2025.

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Corporate

The following table summarizes unallocated operating expenses presented as Corporate:

Year Ended December 31,

$ Change

% Change

(dollars in millions)

Operating expenses (including restructuring, impairment and transaction-related charges, net)

Restructuring, impairment and transaction-related charges, net

Operating Expenses

Corporate operating expenses decreased $5.3 million, or 11.1%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a $4.0 million increase in income from restructuring, impairment and transaction-related charges, net, and a $1.9 million decrease in employee-related costs.

Restructuring, Impairment and Transaction-Related Charges, Net

Corporate restructuring, impairment and transaction-related charges, net increased $4.0 million, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the following:

Year Ended December 31,

$ Change

(dollars in millions)

Acquisition adjustments and transaction-related charges, net (a)

Total restructuring, impairment and transaction-related charges, net

(a) Includes adjustments to estimated acquisition consideration, partially offset by professional service fees related to business acquisition and divestiture activities.

Liquidity and Capital Resources

The Company utilizes cash flows from operating activities and borrowings under its credit facilities to satisfy its liquidity and capital requirements. The Company had total liquidity of $379.0 million as of December 31, 2025, which consisted of up to $315.7 million of unused capacity under its revolving credit arrangement, which was net of $23.9 million of issued letters of credit, and cash and cash equivalents of $63.3 million. Total liquidity is reduce d to $299.4 million under the Company’s most restrictive debt covenants. There were no borrowings under the $339.6 million revolving credit facility as of December 31, 2025.

The Company believes its expected future cash flows from operating activities and its current liquidity and capital resources, are sufficient to fund ongoing operating requirements and service debt and pension requirements for both the next 12 months and beyond.

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Net Cash Provided by Operating Activities

Year Ended December 31, 2025, Compared to Year Ended December 31, 2024

Net cash provided by operating activities was $95.9 million for the year ended December 31, 2025, compared to $112.9 million for the year ended December 31, 2024, resulting in a $17.0 million decrease in cash provided by operating activities. The decrease was primarily due to a $24.7 million decrease in cash flows provided by changes in operating assets and liabilities, partially offset by a $7.7 million increase in cash from earnings.

Net Cash (Used in) Provided by Investing Activities

Year Ended December 31, 2025, Compared to Year Ended December 31, 2024

Net cash used in investing activities was $27.7 million for the year ended December 31, 2025, compared to net cash provided by investing activities of $12.7 million for the year ended December 31, 2024, resulting in a $40.4 million increase in cash used in investing activities. The increase was primarily due to the following: (1) a $22.2 million decrease in proceeds from the sale of an investment; (2) a $16.3 million increase in cash used as a result of the acquisition of a business in 2025; (3) a $12.3 million decrease in proceeds from the sale of property, plant and equipment; (4) a $1.5 million increase in cash used in other investing activities; and (5) a $0.1 million increase in cost investment in unconsolidated entities. These were partially offset by a $12.0 million decrease in purchases of property, plant, and equipment.

Net Cash Used in Financing Activities

Year Ended December 31, 2025, Compared to Year Ended December 31, 2024

Net cash used in financing activities was $36.1 million for the year ended December 31, 2025, compared to $149.1 million for the year ended December 31, 2024, resulting in a $113.0 million decrease in cash used in financing activities. The decrease was primarily due to the following: (1) a $123.0 million decrease in net payments of debt and lease obligations in 2025 compared to 2024; (2) a $4.3 million decrease in payments of debt issuance costs and financing fees; and (3) a $0.2 million decrease in cash used in other financing activities. These decreases were partially offset by (1) an $8.0 million increase in purchases of treasury stock; (2) a $5.0 million increase in payment of dividends; and (3) a $1.5 million increase in equity awards redeemed to pay employees’ tax obligations.

Free Cash Flow

Free Cash Flow is defined as net cash provided by operating activities less purchases of property, plant and equipment.

The Company’s management assesses Free Cash Flow as a measure to quantify cash available for (1) strengthening the balance sheet (debt and pension liability reduction), (2) strategic capital allocation and deployment through investments in the business (acquisitions and strategic investments) and (3) returning capital to the shareholders (dividends and share repurchases). The priorities for capital allocation and deployment will change as circumstances dictate for the business, and Free Cash Flow can be significantly impacted by the Company’s restructuring activities and other unusual items.

Free Cash Flow is a non-GAAP financial measure and should not be considered an alternative to cash flows provided by (used in) operating activities as a measure of liquidity. Quad’s calculation of Free Cash Flow may be different from similar calculations used by other companies, and therefore, comparability may be limited.

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Free Cash Flow for the years ended December 31, 2025 and 2024, was as follows:

Year Ended December 31,

(dollars in millions)

Net cash provided by operating activities

Less: purchases of property, plant and equipment

Free Cash Flow (non-GAAP)

Free Cash Flow decreased $5.0 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a $17.0 million decrease in net cash provided by operating activities, partially offset by a $12.0 million decrease in capital expenditures. See the “Net Cash Provided by Operating Activities” section above for further explanations of the change in operating cash flows.

Net Debt Leverage Ratio

The Net Debt Leverage Ratio is defined as total debt and finance lease obligations less cash and cash equivalents (Net Debt) divided by the trailing twelve months Adjusted EBITDA, comprised of the sum of the last twelve months of EBITDA (see the definition of EBITDA and the reconciliation of net earnings (loss) to EBITDA in the “Results of Operations” section above) and restructuring, impairment and transaction-related charges, net.

The Company uses the Net Debt Leverage Ratio as a metric to assess liquidity and the flexibility of its balance sheet. Consistent with other liquidity metrics, the Company monitors the Net Debt Leverage Ratio as a measure to determine the appropriate level of debt the Company believes is optimal to operate its business, and accordingly, to quantify debt capacity available for strengthening the balance sheet through debt and pension liability reduction, for strategic capital allocation and deployment through investments in the business, and for returning capital to the shareholders. The priorities for capital allocation and deployment will change as circumstances dictate for the business, and the Net Debt Leverage Ratio can be significantly impacted by the amount and timing of large expenditures requiring debt financing, as well as changes in profitability.

The Net Debt Leverage Ratio is a non-GAAP measure, and should not be considered an alternative to cash flows provided by (used in) operating activities as a measure of liquidity. Quad’s calculation of the Net Debt Leverage Ratio may be different from similar calculations used by other companies and, therefore, comparability may be limited.

The Net Debt Leverage Ratio calculated below differs from the Total Leverage Ratio, the Total Net Leverage Ratio and Senior Secured Leverage Ratio included in the Company’s debt covenant calculations (see “Covenants and Compliance” section below for further information on debt covenants). The Total Leverage Ratio included in the Company’s debt covenants includes interest rate derivative liabilities and letters of credit as debt, and excludes non-cash stock-based compensation expense from EBITDA. The Total Net Leverage Ratio includes and excludes the same adjustments as the Total Leverage Ratio, in addition to netting domestic unrestricted cash with debt. Similarly, the Senior Secured Leverage Ratio includes and excludes the same adjustments as the Total Leverage Ratio, in addition to netting domestic unrestricted cash with debt.

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The Net Debt Leverage Ratio as of December 31, 2025 and 2024, was as follows:

December 31, 2025

December 31, 2024

(dollars in millions)

Total debt and finance lease obligations on the consolidated balance sheets

Less: Cash and cash equivalents

Net Debt (non-GAAP)

Divided by: Adjusted EBITDA for the year ended (non-GAAP)

Net Debt Leverage Ratio (non-GAAP)

The calculation of Adjusted EBITDA for the years ended December 31, 2025 and 2024, was as follows:

Year Ended December 31,

(dollars in millions)

Net earnings (loss)

Interest expense

Income tax expense

Depreciation and amortization

EBITDA (non-GAAP)

Restructuring, impairment and transaction-related charges, net

Settlement charge from defined benefit pension plan annuitization

Adjusted EBITDA (non-GAAP)

The Net Debt Leverage Ratio, at December 31, 2025, increased 0.01x to 1.57x compared to December 31, 2024, primarily due to a $27.8 million decrease in Adjusted EBITDA, partially offset by a $42.1 million decrease in Net Debt. The Net Debt Leverage Ratio, at December 31, 2025, is within management’s desired target Net Debt Leverage Ratio range of 1.50x to 2.00x; however, the Company will operate at times above the Net Debt Leverage Ratio target range depending on the timing of compelling strategic investment opportunities, as well as seasonal working capital needs.

Description of Significant Outstanding Debt Obligations as of December 31, 2025

As of December 31, 2025, the Company utilized a combination of debt instruments to fund cash requirements, including the following:

• Senior Secured Credit Facility:

◦ $339.6 million revolving credit facility (no outstanding balance as of December 31, 2025); and

◦ $825.0 million Term Loan A ($357.7 million outstanding as of December 31, 2025);

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Senior Secured Credit Facility

On April 28, 2014, the Company entered into its Senior Secured Credit Facility, which included a revolving credit facility, Term Loan A and Term Loan B (Term Loan B was retired in July 2019). The Company completed the seventh amendment to the Senior Secured Credit Facility on January 24, 2023, which transitioned the Company’s reference rate from London Interbank Offered Rate (“LIBOR”) to Secured Overnight Financing Rate (“SOFR”) effective February 1, 2023. The Company elected the practical expedient outlined in Accounting Standards Update (“ASU”) 2020-04 and ASU 2021-01 which allowed the Company to prospectively adjust the effective interest rate after the reference rate change. The transition from LIBOR to SOFR did not have a material impact on the condensed consolidated financial statements.

The Company completed the eighth amendment to the Senior Secured Credit Facility on January 4, 2024, which added an additional $25.0 million principal value to the Term Loan A (under the Extended Maturity Date, as defined below). On January 31, 2024, the Company used liquidity available under its revolving credit facility and available cash on hand to fund the repayment on maturity of $87.7 million aggregate principal amount, outstanding at the time, of its Term Loan A.

The Company completed the ninth amendment to the Senior Secured Credit Facility (the “Ninth Amendment”) on October 18, 2024. The Senior Secured Credit Facility was amended to: (1) reduce the aggregate amount of the existing revolving credit facility from $342.5 million to $324.6 million, and extend the maturity of a portion of the revolving credit facility such that $17.7 million of borrowing capacity under the revolving credit facility would be available until the existing maturity date of November 2, 2026 (the “Existing Maturity Date”) and $306.9 million under the revolving credit facility would be available until October 18, 2029 (the “Extended Maturity Date); (2) extend the maturity of a portion of the existing Term Loan A such that $8.7 million of such term loan facility will be due on the Existing Maturity Date and $193.2 million will be due on the Extended Maturity Date; (3) make certain adjustments to pricing, including an increase of 0.50% to the interest rate margin applicable to the loans maturing on the Extended Maturity Date; and (4) modify certain financial and operational covenants retroactive to September 30, 2024, including the Senior Secured Leverage Ratio (net indebtedness to consolidated EBITDA) shall not exceed 3.00 to 1.00 for any fiscal quarter ending on or after September 30, 2024, as well as the Total Leverage Ratio (consolidated total indebtedness to consolidated EBITDA) shall not exceed 3.50 to 1.00 for any fiscal quarter ending on or after September 30, 2024.

The Company completed the tenth amendment to its Senior Secured Credit Facility on August 20, 2025, which increased the Term Loan A aggregate outstanding principal by $20.0 million to $370.7 million, and increased its revolving credit availability by $15.0 million to $339.6 million. As of December 31, 2025, the Term Loan A aggregate outstanding principal was reduced to $357.7 million from a $13.0 million repayment on maturity.

Borrowings under the revolving credit facility and Term Loan A made under the Senior Secured Credit Facility bear interest at 3.00% in excess of reserve adjusted SOFR, or 2.00% in excess of an alternate base rate with a SOFR floor of 0.75% for the tranche available through the Extended Maturity Date and bear interest at 2.50% in excess of reserve adjusted SOFR, or 1.50% in excess of an alternate base rate with a SOFR floor of 0.75% for the tranche available through the Existing Maturity Date.

At December 31, 2025, the Company had no ou tstanding borrowings on the revolving credit facility, and had $23.9 million of issue d letters of credit, leaving up t o $315.7 million of unused capacity. Total liquidity is reduce d to $299.4 million under the Company’s most restrictive debt covenants. The Senior Secured Credit Facility is secured by substantially all of the unencumbered assets of the Company. The Senior Secured Credit Facility also requires the Company to provide additional collateral to the lenders in certain limited circumstances.

Master Note and Security Agreement

On September 1, 1995, and as last amended on November 24, 2014, the Company entered into its Master Note and Security Agreement. On November 25, 2024, the Company used liquidity available under its revolving credit facility and available cash on hand to fund the repayment of the total outstanding aggregate principal balance of $1.5 million, thus terminating the Master Note and Security Agreement.

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Covenants and Compliance

The Company’s various lending arrangements include certain financial covenants (all financial terms, numbers and ratios are as defined in the Company’s debt agreements). Among these covenants, the Company was required to maintain the following as of December 31, 2025:

• Total Leverage Ratio. On a rolling twelve-month basis, the Total Leverage Ratio, defined as consolidated total indebtedness to consolidated EBITDA, shall not exceed 3.50 to 1.00 (for the twelve months ended December 31, 2025, the Company’s Total Leverage Ratio was 1.84 to 1.00).

• If there is any amount outstanding on the revolving credit facility or Term Loan A, or if any lender has any revolving credit exposure or Term Loan A credit exposure, the Company is required to maintain the following:

◦ Se nior Secured Leverage Ratio. On a rolling four-quarter basis, the Senior Secured Leverage Ratio, defined as the ratio of consolidated senior secured net indebtedness to consolidated EBITDA, shall not exceed 3.00 to 1.00 for any fiscal quarter ending on or after September 30, 2024 (for the twelve months ended December 31, 2025, the Company’s Senior Secured Leverage Ratio was 1.55  to 1.00).

◦ Interest Coverage Ratio. On a rolling twelve-month basis, the Interest Coverage Ratio, defined as consolidated EBITDA to cash consolidated interest expense, shall not be less than 3.00 to 1.00 (for the twelve months ended December 31, 2025, the Company’s Interest Coverage Ratio was 4.75 to 1.00) .

The Company wa s in compliance with all financial covenants in its debt agreements as of December 31, 2025. While the Company currently expects to be in compliance in future periods with all of the financial covenants, there can be no assurance that these covenants will continue to be met. The Company’s failure to maintain compliance with the covenants could prevent the Company from borrowing additional amounts and could result in a default under any of the debt agreements. Such default could cause the outstanding indebtedness to become immediately due and payable, by virtue of cross-acceleration or cross-default provisions.

In addition to those covenants, the Senior Secured Credit Facility also includes certain limitations on acquisitions, indebtedness, liens, dividends and repurchases of capital stock.

• If the Company’s Total Leverage Ratio is greater than 2.75 to 1.00, the Company is prohibited from making greater than $60.0 million of dividend payments, capital stock repurchases and certain other payments, over the course of the agreement. If the Company’s Total Leverage Ratio is above 2.50 to 1.00 but below 2.75 to 1.00, the Company is prohibited from making greater than $100.0 million of dividend payments, capital stock repurchases and certain other payments, over the course of the agreement. If the Total Leverage Ratio is less than 2.50 to 1.00, there are no such restrictions. As the Company’s Total Leverage Ratio as of December 31, 2025, was 1.84 to 1.00, the limitations described above are not currently applicable.

• If the Company’s Senior Secured Leverage Ratio is greater than 3.00 to 1.00 or the Company’s Total Net Leverage Ratio which, on a rolling twelve-month basis, is defined as consolidated net indebtedness to consolidated EBITDA, is greater than 3.50 to 1.00, the Company is prohibited from voluntarily prepaying any unsecured or subordinated indebtedness, with certain exceptions (including any mandatory prepayments on any unsecured or subordinated debt). If the Senior Secured Leverage Ratio is less than 3.00 to  1.00 and the Total Net Leverage Ratio is less than 3.50 to 1.00, there are no such restrictions. The limitations described above are not currently applicable, as the Company’s Senior Secured Leverage Ratio wa s  1.55  to 1.00 and Total Net Leverage Ratio wa s 1.55  to 1.00, as of  December 31, 2025 .

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Net Pension Obligations

During 2025, the Company entered into a group annuity contract with Fidelity & Guaranty Life Insurance Company and Fidelity & Guaranty Life Insurance Company of New York (collectively “F&G”) to de-risk the defined benefit pension plan by transferring a portion of its defined benefit obligations. As a result, we settled $98.1 million of projected benefit obligations with $96.8 million in distributions from plan assets, primarily due to the annuitization with F&G. In connection with this settlement, the Company recognized a non-cash settlement charge from the annuitization of $12.8 million in accordance with ASC 715 — Compensation — Retirement Benefits.

The net underfunded pension and MEPPs obligations decreased by $13.7 million during the year ended December 31, 2025, from $55.6 million at December 31, 2024, to $41.9 million at December 31, 2025. This decrease was primarily due to a $11.5 million decrease in the underfunded defined benefit plan obligations during the year ended December 31, 2025. This $11.5 million decrease in the underfunded status was primarily due to a decrease in overall pension obligations of $110.4 million from a $98.1 million reduction in benefit obligations from the pension plan settlement, $25.5 million in benefits paid and $1.6 million from an actuarial gain, offset by a $14.8 million increase in interest cost due to a 39 basis point decrease in the pension discount rate from 5.55% at December 31, 2024, to 5.16% at December 31, 2025. The decrease in pension obligations was partially offset by an overall decrease of $98.9 million in pension plan assets from the $96.8 million asset distribution for the pension plan settlement, and $25.5 million in benefits paid, offset by an actual gain on pension plan assets of $23.1 million, or 9.84%, during the year ended December 31, 2025, which was above the expected long-term return on plan assets assumption of 5.75%, and employer contributions of $0.3 million. There was a $2.2 million decrease in MEPPs obligations, primarily due to payments totaling $3.9 million made to the MEPPs during the year ended December 31, 2025.

The Company continues to focus on reducing pension obligations through cash contributions to the plans, lump-sum settlements and plan design changes.

Share Repurchase Program

On July 30, 2018, the Company’s Board of Directors authorized a share repurchase program of up to $100.0 million of the Company’s outstanding class A common stock. Under the authorization, share repurchases may be made at the Company’s discretion, from time to time, in the open market and/or in privately negotiated transactions as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchase will depend on economic and market conditions, share price, trading volume, applicable legal requirements and other factors. The program may be suspended or discontinued at any time. There were no share repurchases during the year ended December 31, 2024. The following repurchases occurred during the year ended December 31, 2025:

December 31, 2025

Shares of Class A common stock

Weighted average price per share

Total repurchases during the period (in millions)

As of December 31, 2025, there were $69.5 million of authorized repurchases remaining under the program.

Risk Management

For a discussion of the Company’s exposure to market risks and management of those market risks, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of this Annual Report on Form 10-K.

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Critical Accounting Policies and Estimates

The Company’s consolidated financial statements are prepared in accordance with GAAP. The Company’s most critical accounting policies are those that are most important to the portrayal of its financial condition and results of operations, and which require the Company to make its most difficult and subjective estimates. Management is required to make judgments and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The Company’s management believes that such judgments and estimates are made with consistent and appropriate methods based on information available at the time, and that any reasonable deviation from those judgments and estimates would not have a material impact on the Company’s consolidated financial position or results of operations. Actual results may differ from these estimates under different assumptions or conditions. To the extent that the estimates used differ from actual results, adjustments to the consolidated statements of operations and corresponding consolidated balance sheets would be necessary. These adjustments would be made in future statements.

The Company has identified the following as its critical accounting policies and estimates.

Revenue Recognition

Performance Obligations

At contract inception, the Company assesses the products and services promised in its contracts with customers and identifies performance obligations for each promise to transfer to the customer a product or service that is distinct. To identify the performance obligations, the Company considers the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. The Company determined that the following distinct products and services represent separate performance obligations:

• Pre-Press Services

• Print

• Other Services

For Pre-Press and Other Services, the Company recognizes revenue at a point-in-time upon completion of the performed service and acceptance by the customer. The Company considers transfer of control to occur once the service is performed as the Company has right to payment and the customer has legal title and risk and reward of ownership.

The Company recognizes its Print revenues upon transfer of title and the passage of risk of loss, which is point-in-time upon shipment, and when there is a reasonable assurance as to collectability. Revenues related to the Company’s logistics operations, which includes the delivery of printed material, are included in the Print performance obligation and are also recognized at point-in-time as services are completed. Revenues related to the Company’s imaging operations, which include digital content management, photography, color services and page production, are recognized in accordance with the terms of the contract, typically upon completion of the performed service and acceptance by the customer. Under agreements with certain customers, products may be stored by the Company for future delivery and revenue is recognized upon shipment to the customer. In these situations, the Company may receive warehouse management fees for the services it provides.

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Certain revenues earned by the Company require judgment to determine if revenue should be recorded gross as principal or net of related costs as an agent. Billings for third-party shipping and handling costs, primarily in the Company’s logistics operations, and out-of-pocket expenses are recorded gross in net sales and cost of sales in the consolidated statements of operations in Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Many of the Company’s operations process materials, primarily paper, that may be supplied directly by customers or may be purchased by the Company and sold to customers. No revenue is recognized for customer-supplied paper. Revenues for the Company-supplied paper are recognized on a gross basis. In some instances, the Company will deliver print work for a customer and bill the customer for postage. In these cases, the Company is acting as an agent and billings are recorded on a net basis in net sales.

Significant Payment Terms

Payment terms and conditions for contracts with customers vary. The Company typically offers standard terms of net 30 days.  It is not the Company’s standard business practice to offer extended payment terms longer than one year. The Company may offer cash discounts or prepayment and extended terms depending on certain facts and circumstances. As such, when the timing of the Company’s delivery of products and services differs from the timing of payment, the Company will record either a contract asset or a contract liability.

Variable Consideration

When evaluating the transaction price, the Company analyzes on a contract by contract basis all applicable variable considerations and non-cash consideration and also performs a constraint analysis. The nature of the Company’s contracts give rise to variable consideration, including, volume rebates, credits, discounts, and other similar items that generally decrease the transaction price. These variable amounts generally are credited to the customer, based on achieving certain levels of sales activity, when contracts are signed, or making payments within specific terms.

Product returns are not significant because the products are customized; however, the Company accrues for the estimated amount of customer allowances at the time of sale based on historical experience and known trends.

When the transaction price requires allocation to multiple performance obligations, the Company uses the estimated stand-alone selling prices using the adjusted market assessment approach.

Impairment of Property, Plant and Equipment, Right-of-Use Assets and Finite-lived Intangible Assets

The Company performs impairment evaluations of its long-lived assets whenever business conditions, events or circumstances indicate that those assets may be impaired, including whether the estimated useful life of such long-lived assets may warrant revision or whether the remaining balance of an asset may not be recoverable. The Company’s most significant long-lived assets are property, plant and equipment, right-of-use assets and customer relationship intangible assets recorded in conjunction with an acquisition. Assessing the impairment of long-lived assets requires the Company to make important estimates and assumptions, including, but not limited to, the expected future cash flows that the assets will generate, how the assets will be used based on the strategic direction of the Company, their remaining useful life and their residual value, if any. Considerable judgment is also applied in incorporating the potential impact of the current economic climate on customer demand and selling prices, the cost of production and the limited activity on secondary markets for the assets and on the cost of capital. When the estimated future undiscounted cash flows to be generated by the assets are less than the carrying value of the long-lived assets, the assets are written down to fair value and a charge is recorded to current operations. The Company uses internal discounted cash flow estimates, quoted market prices when available and independent appraisals, as appropriate, to determine fair value. This fair value determination was categorized as Level 3 in the fair value hierarchy (see Note 13, “Financial Instruments and Fair Value Measurements,” to the consolidated financial statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K for the definition of Level 3 inputs).

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The Company classifies long-lived assets to be sold as held for sale in the period in which: (i) there is an approved plan to sell the asset and the Company is committed to that plan, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Assets held for sale are initially measured at the lower of the carrying value or the fair value less cost to sell. Losses resulting from this measurement are recognized in the period in which the held for sale criteria are met while gains are not recognized until the date of sale. Once designated as held for sale, the Company stops recording depreciation expense on the property, plant and equipment. The fair value less cost to sell of long-lived assets held for sale is assessed at each reporting period until it no longer meets this classification.

Based on the assessments completed during the years ended December 31, 2025, and 2024, the Company recognized property, plant and equipment and operating lease right-of-use assets impairment charges of $7.5 million and $33.3 million, respectively, primarily related to the reduction of the carrying value of the majority of the European operations to fair value due to the held for sale determination in 2024, facility consolidations and other capacity reduction. There were no finite-lived intangible asset impairment charges recorded during the years ended December 31, 2025 and 2024.

The Company continues to monitor groups of assets to identify any new events or changes in circumstances that could indicate that their carrying values are not recoverable, particularly in light of potential declines in profitability that may result from the highly competitive industry landscape and continued uncertainty in the global economy. In the event that there are significant and unanticipated changes in circumstances, such as significant adverse changes in business climate, adverse actions by regulators, unanticipated competition, loss of key customers and/or changes in technology or markets, or that actual results differ from management’s estimates, a provision for impairment could be required in a future period.

Workers’ Compensation

The Company is self-insured for a significant portion of its expected workers’ compensation program. Insurance is purchased for individual workers’ compensation claims that exceed $0.8 million. The Company establishes reserves for unresolved claims and for an estimate of incurred but not reported (“IBNR”) claims. These reserves and estimates of IBNR claims are based upon an actuarial study, which is performed annually as of October 31st and is adjusted by the actuarially determined losses and actual claims payments for November and December. The Company also monitors actual claim developments, including incurrence or settlement of individual large claims during the interim periods between actuarial studies as another means of estimating the adequacy of the reserves. As of December 31, 2025, the Company has net reserves for workers’ compensation of $21.9 million, of which $5.3 million was recorded in other current liabilities and $24.6 million was recorded in other long-term liabilities in the consolidated balance sheets (see Note 8, “Other Current and Long-Term Liabilities”). These reserves are net of $8.0 million recorded in other long-term assets in the consolidated balance sheets for claims covered by purchased insurance.

New Accounting Pronouncements

See Note 23, “New Accounting Pronouncements,” to the consolidated financial statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

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