Quad looks to cut costs as sales fall

Freeman Staff

Nov. 4, 2015

SUSSEX - Quad/Graphics on Tuesday announced a $100 million cost reduction plan as net sales were down 6.5 percent for the third quarter and 2.8 percent for the first nine months of the year.

Chairman, President and CEO Joel Quadracci said the company would be “taking swift and decisive action” in response to “a greater-than-expected pullback in industry volumes and pricing pressures that accelerated in the quarter, as well as lower productivity levels in our manufacturing platform.”

The cost reduction program will include reducing excess manufacturing capacity through plant closures, increased focus on productivity, reducing costs and implementing a new streamlined organizational structure. 

“We have a long-standing commitment to being the industry’s low-cost producer and these actions are a continuation of that commitment. Quad/Graphics is focused on realizing improved efficiencies and cost-savings while contributing to an overall better client experience,” Quadracci said.

Quad’s net sales in the third quarter were $1.2 billion and $3.3 billion for the first nine months of the year. The company also lowered its full-year guidance for net sales from between $4.8 and $4.9 billion to between $4.6 and $4.7 billion.

“We will continue to find ways to reduce our cost structure while generating the strong Free Cash Flow that is the foundation of our historically strong balance sheet,” Executive Vice President and Chief Financial Officer Dave Honan said.

No indication was given on which plants would be closed as part of the cost reduction program. Quad has roughly 26,000 employees around the country and in September Quadracci said the company would add another 500 positions in Wisconsin in the next several years, but added they would be the result of consolidation at other out-of-state facilities.

“Please note: We continue to hire in our Wisconsin network of plants as we continue to manage our U.S. manufacturing platform, migrating work to facilities where we can manufacture and distribute the work most efficiently,” said Claire Ho, Quad’s director of corporate communications. “Our Wisconsin platform is among the most efficient platforms in the entire printing industry.”


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