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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