QUAD 10-K & 10-Q changes, risk factors and insider trading

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 asto requiredthe byrequirements of new markets and technologies, such as artificial intelligence,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.dynamics Thethan newthose marketshistorically intocharacterized whichby the CompanyCompany’s isprint-focused expanding, or may expand, may have different characteristics from the markets in which the Company historically competed.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. TheIf Company’sthe failureCompany is unable to make the necessary adaptations to its business modelmodel, processes, organizational structure and talent base to address these different characteristics, complexitiescharacteristics and new market dynamics could adversely affect the Company’s competitive position, operating results. In addition, with rapid changes in technology affecting the marketingresults and advertisinglong-term industry,growth includingprospects generativecould artificialbe intelligence,adversely the Company may not accurately predict trends, identify use cases, adapt its marketing offerings and business processes, or make the technological adaptations or investments necessary to stay competitive in these new markets.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 significantcontinued 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 the Company experiencing significantcontinued 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 iscontinues experiencingto 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.

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 September 2024,2025, the USPS heldsignificantly areduced pre-filing conference to further reducetheir service standards.standards Thesewith the first phase of changes requiredtaking aneffect advisoryon opinionApril from1, 2025, and the Postalsecond Regulatoryphase Commissiontaking (“PRC”),effect whichon wasJuly issued1, in January 2025, urging the USPS to reconsider its plan. However, the USPS is still expected to implement the changes in 2025, regardless of the advisory opinion issued.2025. In addition to the reducereduced service standards, the USPS has 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.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. The USPS has used these additional rate authorities to implement twice a year increases. 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 theits costs of an outdated postal service that does not reflect the industry’s ability or willingness to pay. 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 is still underway. 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 PRC began reviewing the 5-year structure in 2024, which is still underway, and resulting rate reductions may take years to finalize.costs.

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

Macroeconomic conditions, including inflation and 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 in 2024 by higherelevated interest rates, volatility in the price and availability of paper, and postage rate increases, along with the previously described industry challenges.

The Company expects inflationary cost pressures, tariffs and trade restrictions, to potentially continue in 2025 and the Company may not be able to fully mitigate the negative impact of thecontinued risingelevated inflationarycosts, costtariffs pressuresand 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.

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.business, including through business interruption, loss or corruption of data, or damage to client relationships.

On April 28, 2014, and as last amended on OctoberAugust 18,20, 2024,2025, the Company entered into a senior secured credit facility (the “Senior Secured Credit Facility,”) which currently includes two different loan facilities: a $360.8$357.7 million Term Loan A and a $324.6$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 datedate, will mature on November 2, 2026, whereas borrowing from lenders who elected to extend the maturity datedate, matureswill mature on October 18, 2029. As of December 31, 2024,2025, the borrowings outstanding under the Senior Secured Credit Facility were $360.8$357.7 million.

AsA ofsignificant December 31, 2024, 44%portion of the Company’s borrowings wereare subject to variable interest rates. As a result, the Company is exposed to market risks associated with fluctuationsIncreases in interest rates, and increases inbenchmark interest rates or widening credit spreads could increase the Company’s borrowing costs and adversely affect theits Company.financial condition.

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 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.

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”) and the Graphic Communications Conference of the International Brotherhood of Teamsters National Pension Fund (“GCC”). 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 these multiemployer plans and has replaced these pension benefits with a Company-sponsored “pay as you go” defined contribution plan, which is historically the form of retirement benefit provided to the Company’s employees. As of December 31, 2024,2025, the Company has recorded in its financial statements a pre-tax withdrawal liability for allthe UnitedGCIU States MEPPsplan of $21.5$19.3 million in the aggregate. The Company is scheduled to make payments to the GCIU until April 2032 and made its final payment to the GCC in February 2024.2032.

The CompanyCompany, its offerings and its facilities are subject to various consumer protectionprotection, 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 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 thereofthereof, and enforcement priorities may change, sometimes dramatically, as a result of political, economic or social events, such as the election of the new administration.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.

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 conditioncondition, and those of theits Company’s subsidiarysubsidiary, 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.

•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, 2024,2025, to the year ended December 31, 2023.2024. 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.

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

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, newspapers, 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 87%92% and 86%87% of the Company’s consolidated net sales during the years ended December 31, 20242025 and 2023,2024, respectively.

The International segment consists of the Company’s printing operations in EuropeLatin America, including operations in Colombia, Mexico and LatinPeru, America,as well as operations in Europe, including operations in England, France, Germany,Germany and Poland, Colombia,until Mexicothe andEuropean Peru.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 13%8% and 14%13% of the Company’s consolidated net sales during the years ended December 31, 20242025 and 2023,2024, respectively.

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 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 debtour capacityability availableto for strengtheningstrengthen the balance sheet (through debt and pension liability reduction),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 $143.5$8.0 million during the year ended December 31, 2024,2025. The Company primarily due to the following: (1) $112.9 million inused cash provided by operating activities; (2) $49.1 million inand proceeds from the salesales of property, plant and equipment; (3)to $23.7 million reduction in cash and cash equivalents; and (4) $22.2 million in proceeds from the sale of an investment, partially offset by $57.2 million infund purchases of property, plant and equipmentequipment, the Enru co-mail asset acquisition, the return of capital to shareholders through cash dividends and share repurchases and the $9.4reduction millionof payment in cash dividends.debt.

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 September 2024,2025, the USPS heldsignificantly areduced pre-filing conference to further reducetheir service standards.standards Thesewith the first phase of changes requiredtaking aneffect advisoryon opinionApril from1, 2025, and the PRC,second whichphase wastook issuedeffect inJuly January1, 2025, urging the USPS to reconsider its plan. However, the USPS is still expected to implement the changes in 2025, regardless of the advisory opinion issued.2025. In addition to the reducereduced service standards, the USPS has 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.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.

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. The USPS did not implement a Market Dominant product price increase for January 2025. However, the available rate authority will roll forward to July 2025. The USPS has confirmed it intends to continue with twice a year price increases for 2026 and 2027. With postage increases that continue to exceed the CPI, 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.

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 PRCPRC, includes a higher overall rate cap on the USPS’ ability to increase rates from year to year. The USPS has used these additional rate authorities to implement twice a year increases. 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 theits costs of an outdated postal service that does not reflect the industry’s ability or willingness to pay. 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 is still underway. 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.cost.

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 operation.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 2025.2026. 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,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 aggressively into other delivery methods, such as the many digital and mobile options now available to consumers. ThisThese reducedchallenges volumehave, hasas 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 2025.2026.

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, 2024,2025, changed from the year ended December 31, 2023,2024, as follows (dollars in millions, except per share data):

(1)Restructuring, impairment and transaction-related charges, net increaseddecreased $24.0$79.7 million ($18.0$59.8 million, net of tax), to $101.5$21.8 million during the year ended December 31, 2024,2025, and included the following:

b.A $49.7$67.4 million increasedecrease in impairment charges from $25.2 million during the year ended December 31, 2023, to $74.9 million during the year ended December 31, 20242024, to $7.5 million during the year ended December 31, 2025;

c.A $4.8$4.3 million decreaseincrease in acquisition adjustments and transaction-related chargescharges, net from $4.2$0.6 million of expense during the year ended December 31, 2023,2024, to $0.6$4.9 million of income during the year ended December 31, 20242025;

d.A $0.6$2.5 million decreaseincrease in integration-related charges from $1.0 million during the year ended December 31, 2023, to $0.4 million during the year ended December 31, 2024;2024, andto e.A $15.7$2.9 million decrease in various other restructuring charges from $12.0 million of expense during the year ended December 31, 2023,2025; toand e.A $6.1 million increase in various other restructuring income, net from $3.7 million of income during the year ended December 31, 2024.2024, to $9.8 million during the year ended December 31, 2025.

(2)Other operating income elements increased $17.5$1.9 million ($13.1$1.4 million, net of tax) primarily due to the following: (1) a $26.3$30.9 million decrease in selling, general and administrative expenses; (2) a $23.9 million decrease in depreciation and amortization expense; (23) impacts from improved manufacturing productivity; and (34) savings from other cost reduction initiatives, partially offset by the impact from lower print volume decreasesand service net sales, and aincreased $12.3 million increaseinvestments in selling,innovation generalofferings andto administrativedrive expenses.future net sales growth.

(3)Interest expense decreased $5.5$14.0 million ($4.1$10.5 million, net of tax) during the year ended December 31, 2024,2025, to $64.5$50.5 million. This change was due to lower average debt levelslevels, lower weighted average interest rate on borrowings, and a $1.7$0.5 million decrease in interest expense related to the interest rate swap, partially offset by a higher weighted average interest rate on borrowingsswap during the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024.

(4)Net pension incomeexpense decreasedincreased $0.9$14.8 million ($0.7$11.1 million, net of tax) during the year ended December 31, 2024,2025, from $0.8 million of income to $0.8$14.0 million.million of expense. This was due to a $1.7$12.8 million settlement charge from defined benefit pension plan annuitization and a $3.7 million decrease from the expected long-term return on pension plan assets and a $0.4 million increase in the amortization of actuarial loss,assets, partially offset by a $1.2$1.7 million decrease from interest cost on pension plan liabilities.

Product sales decreased $234.9$207.9 million, or 10.1%,9.9%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to the following: (1) a $142.1 million decrease from paper sales; (2) a $91.4$120.5 million decrease in salespaper 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 theproduct Company’ssales, primarily from lower print product lines,volumes, mainlyof duewhich to$62.3 decreasedmillion print volumes andis a higher mixresult of lowerthe unitsale priceof gravurethe versusEuropean offset print in our magazine and catalog print offeringsoperations; and (3) $1.4$3.5 million in unfavorable foreign exchange impacts.

Service sales, which primarily consist of logistics, distribution, marketing services, imaging and medical services, decreased $50.6$44.4 million, or 8.1%,7.7%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to a $44.2$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 servicesservices, andof which $2.1 million is a $6.4result millionof decreasethe insale logisticsof salesthe fromEuropean lower print volumes.operations.

Cost of product sales decreased $248.3$172.7 million, or 12.5%,9.9%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to the following: (1) a decrease in paper costs due to the decrease in paper sales; (2) the impact from lower print volumes; (3) impacts from improved manufacturing productivity; and (43) other cost reduction initiatives.

Cost of service sales decreased $40.7$22.9 million, or 10.3%,6.4%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to the impact from decreased freight volumes and lower marketing services and decreased freight volumes.services.

Selling, general and administrative expenses increaseddecreased $12.3$30.9 million, or 3.6%,8.7%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to a(1) $10.8$18.6 million increasein fromlower unfavorableemployee-related foreigncosts; exchange impacts and(2) a $4.4$10.7 million increase in employee-relatedfavorable expenses,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 2024.2024 that did not reoccur in 2025. Selling, general and administrative expenses as a percentage of net sales increased from 11.6% for the year ended December 31, 2023, to 13.4% for the year ended December 31, 2024.2024, to 13.5% for the year ended December 31, 2025.

Depreciation and amortization decreased $26.3$23.9 million, or 20.4%,23.3%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, due to a $15.9$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, and a $10.4 million decrease in amortization expense, primarily from intangible assets becoming fully amortized over the past year.

Restructuring, impairment and transaction-related charges, net increaseddecreased $24.0$79.7 million, or 31.0%,78.5%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to the following:

(a)Includes $74.9$7.5 million and $25.2$74.9 million of impairment charges during the years ended December 31, 20242025 and 2023,2024, 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 its estimated fair value, including $41.6 million for foreign currency translation adjustments and $16.0 million for property, plant and equipment in 2024; (2) $14.2$3.8 million and $17.5$14.2 million,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) $4.1$3.0 million for software licensing and related implementation costs from a terminated project in 20232025; (4) $0.5 million for property in 2025; and (45) $0.2 million and $3.1 million during the years ended December 31, 2025 and $3.6 million,2024, respectively, for operating lease right-of-use assets.

(bc)Includes a $20.5$0.5 million gainloss on the sale of the SaratogaEuropean Springs, New York facilityoperations during the year ended December 31, 2024 and a $9.2 million gain on the sale of the Merced, California facility during the year ended December 31, 2023.2025.

EBITDA decreasedincreased $33.7$39.1 million for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to $24.0$79.7 million of increaseddecreased restructuring, impairment and transaction-related charges, netcharges and impacts from lower print volumes and marketing services sales, partially offset by impacts from improved manufacturing productivityproductivity, partially offset by the impact of lower net sales and savingsincreased frominvestments otherin costinnovation reductionofferings initiatives.to drive future net sales growth.

A reconciliation of EBITDA to net earnings (loss) for the years ended December 31, 20242025 and 2023,2024, was as follows:

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

ServiceProduct sales for the United States Print and Related Services segment decreased $50.1$86.3 million, or 8.3%,4.9%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to a $44.1$58.0 million decrease in marketingpaper services and medical servicessales and a $6.0$28.3 million decrease in logisticsproduct salessales, primarily from lower print product volumes.

Operating income for the United States Print and Related Services segment increased $56.2$18.9 million, or 99.3%,16.8%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to the following: (1) an $18.1 million decrease in depreciation and amortization expense; (2) a $23.5$17.7 million decrease in restructuring, impairment and transaction-related charges, net; (2) a $23.2 million decrease in depreciation and amortization expense; (3) impacts from improved manufacturing productivity; and (4) savings from other cost reduction initiatives;productivity, partially offset by the impact from decreased print volumeslogistics and marketing services sales.sales and increased investments in innovation offerings to drive future net sales growth.

(a)Includes $17.1$7.5 million and $23.2$17.1 million of impairment charges during the years ended December 31, 20242025 and 2023,2024, respectively, which consisted of the following: (1) $14.0$3.8 million and $15.5$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) $4.1$3.0 million for software licensing and related implementation costs from a terminated project in 20232025; (3) $0.5 million for property in 2025; and (34) $3.1$0.2 million and $3.6$3.1 million, respectively, for operating lease right-of-use assets.

Product sales for the International segment decreased $60.2$121.6 million, or 15.7%,37.5%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to the following: (1) a $41.9$62.5 million decrease in paper salessales, of which $52.9 million is a result of the sale of the European operations; (2) a $16.9$55.6 million decrease in printproduct volume,sales, primarilywhich inis Europenet andof Mexicoa $62.3 million decrease as a result of the sale of the European operations; and (3) $1.4$3.5 million in unfavorable foreign exchange impacts, primarily in Mexico.

Service sales for the International segment decreased $0.5$15.6 million, or 2.6%,84.3%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to a $0.4$13.5 million decrease in logistics sales and a $0.1$2.1 million decrease in marketing servicesservice sales.sales, both as a result of the sale of the European operations.

Operating income (loss) for the International segment decreasedincreased $64.0$53.6 million for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to a $52.3$58.0 million increasedecrease in restructuring, impairment and transaction-related charges, net and a $14.7 million decrease in operating income from decreased print product volume, primarily in Mexico, Peru and Europe, partially offset by a $3.0$5.9 million decrease in depreciation and amortization.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 for the International segment increaseddecreased $52.3$58.0 million, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to the following:

(a)Includes $57.8 million and $2.0 million of impairment charges during the yearsyear ended December 31, 2024 and 2023, respectively,2024, which consisted of $57.6 million of impairment charges to reduce the carrying value of the majority of the European operations to its estimated fair value, including $41.6 million for foreign currency translation adjustments and $16.0 million for property, plant and equipment during 2024,equipment, and $0.2 million and $2.0 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.

Corporate operating expenses decreased $1.3$5.3 million, or 2.6%,11.1%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to a $4.8$4.0 million decreaseincrease in income from restructuring, impairment and transaction-related charges, net, partially offset byand a $4.8$1.9 million increasedecrease in employee-related costs.

Corporate restructuring, impairment and transaction-related charges, net decreasedincreased $4.8$4.0 million, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, primarily due to the following:

(a)Includes adjustments to estimated acquisition consideration, partially offset by professional service fees related to business acquisitionsacquisition and divestiture activities, as well as adjustments to estimated acquisition consideration in 2024.activities.

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 $328.1$379.0 million as of December 31, 2024,2025, which consisted of up to $298.9$315.7 million of unused capacity under its revolving credit arrangement, which was net of $25.7$23.9 million of issued letters of credit, and cash and cash equivalents of $29.2$63.3 million. ThisTotal liquidity is reduced to $299.4 million under the Company’s most restrictive liquiditydebt measure currently applicable under the credit agreement.covenants. There were no borrowings under the $324.6$339.6 million revolving credit facility as of December 31, 2024.2025.

Net Cash Provided by (Used in) Provided by Investing Activities

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 wasof $12.7 million for the year ended December 31, 2024, compared to net cash used in investing activities of $46.4 million for the year ended December 31, 2023, resulting in a $59.1$40.4 million increase in cash providedused byin investing activities. The increase was primarily due to the following: (1) a $22.2 million increasedecrease in proceeds from the sale of an investment; (2) a $17.4$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; (3) a $13.6 million decrease in purchases of property, plant and equipment; (4) a $3.3$1.5 million decreaseincrease in cash used in other investing activities; and (5) a $1.5$0.1 million decrease in cash used in the acquisition of a business; (6) a $0.6 million decrease in loan to an unconsolidated entity; and (7) a $0.5 million decreaseincrease 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 was $36.1 million for the year ended December 31, 2025, compared to $149.1 million for the year ended December 31, 2024, compared to $73.6 million for the year ended December 31, 2023, resulting in a $75.5$113.0 million increasedecrease in cash used in financing activities. The increasedecrease was primarily due to the following: (1) a $74.4$123.0 million increasedecrease in net payments of debt and lease obligations in 20242025 compared to 20232024; (2) a $9.3$4.3 million increase in payment of dividends; (3) a $4.4 million increasedecrease in payments of debt issuance costs and financing fees; and (43) a $0.4$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. These increases were partially offset by a $12.6 million decrease in purchases of treasury stock and a $0.4 million decrease in cash used for other financing activities.

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.

Net Debt Leverage Ratio

The following discussion of the financial condition and results of operations of Quad should be read together with (1) the condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 and 2025, including the notes thereto, included in Item 1, “Condensed Consolidated Financial Statements (Unaudited),” of this Quarterly Report on Form 10-Q; and (2) the audited consolidated annual financial statements as of and for the year ended December 31, 2025, and notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 18, 2026.

•Results of Operations. This section contains an analysis of the Company’s results of operations by comparing the results for (1) the three months ended MarchJune 31,30, 2026, to the three months ended MarchJune 31,30, 2025; and (2) the six months ended June 30, 2026, to the six months ended June 30, 2025. 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 condensed consolidated results until the date of disposition and the results of operations of the acquired operations are included in the Company’s condensed 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”).

Quad applies holistic continuous improvement and lean enterprise methodologies to further streamline its processes and maximize operating margins. These same methodologies are applied to its selling, general and administrative functions. The Company continually works to lower its cost structure by consolidating manufacturing operations into its most efficient facilities, as well as realizing purchasing, mailing and logistics synergies by centralizing and consolidating print manufacturing volumes, and eliminating redundancies in its administrative and corporate operations. Quad believes that its focused efforts to be a high-quality, low-cost producer, will enable it to generate increased Free Cash Flow and allow the Company to maintain a strong balance sheet through debt reduction. The Company’s disciplined financial approach and strong, trusted banking relationships allows it to maintain sufficient liquidity and to reduce refinancing risk. The Company had total liquidity of $250.9$275.9 million as of MarchJune 31,30, 2026, which consisted of up to $243.9$268.5 million of unused capacity under its revolving credit agreement, which was net of $23.8$23.6 million of issued letters of credit, and cash and cash equivalents of $7.0$7.4 million. Total liquidity is reduced to $177.4$208.6 million under the Company’s most restrictive debt covenants.

•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 91% of the Company’s consolidated net sales during the three and six months ended MarchJune 31,30, 2026.

•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 9% of the Company’s consolidated net sales during the three and six months ended MarchJune 31,30, 2026.

The Company remains disciplined with its net debt leverage. The Company’s consolidated debt and finance lease obligations increased by $63.2$30.3 million during the threesix months ended MarchJune 31,30, 2026, primarily due to the following: (1) $93.7$40.9 million in cash used in operating activities; (2) $13.3$25.3 million in purchases of property, plant and equipment; (3) $4.9$10.2 million in cash dividends; and (4) $7.0 million in purchases of treasury stock and equity awards redeemed to pay employees’ tax obligations; and (4) $5.5 million in cash dividends,obligations, partially offset by a $56.3$55.9 million reduction in cash and cash equivalents.

Integrated distribution with the United States Postal Service (“USPS”) is an important component of the Company’s business. Any material change in the current postage rates or 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 withwhich thehave firstbeen phasein ofplace changesfor takinga effectfull onyear. April 1, 2025, and the second phase took effect July 1, 2025. In addition to theThe reduced service standards, the USPS hasstandards also issuedincluded reduced service performance targets for 2025.2025 Almostwhich allremain letterslargely andunchanged flatsfor targets2026. wereIn reduced,2025, somethe 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,USPS did not meet these reduced performance standards and targets, and haswhile keptminor theimprovements have occurred, consistent service performance targetscontinues forto 2026 essentially in line with 2025, withbe a few minor adjustments.challenge.

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. During March 2026, the USPS announced an 8% temporary increase on Ground Advantage and Priority Mail that started on April 26, 2026 and will continue until January 17, 2027. Additionally, the USPS proposed their once a year Market Dominant price increase inwas Aprilapproved 2026by tothe goPostal Regulatory Commission (PRC) and went into effect inon July 2026,12, which2026. willOn resultJune in30, 2026 the USPS 10% catalog insights promotions officially came to an overallend. The combination of this promotion ending combined with the USPS annual price increase is expected to have a negative impact on catalog volumes for the remainder of approximately 5%.2026.

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, including those noted above, as it attempts 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 to July 2025, where approximately 8% postage increases were implemented and significantly exceeded CPI. On January 13, 2026, the PRC issued a final rule that restricts the USPS to one price change a year on Market Dominant products from 2026 to 2030. ThisWhile this decision was welcomed by the mailing industry, it is currently being appealed by the USPS. On December 22, 2025, the USPS filed a petition with the PRC, requesting new rules on Market Dominant 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.respond, Thebut PRCa alsosecond refinedphase someof rulesrulings aroundcould work-shareoccur discounts that will keep these discounts more closely aligned within the costssecond avoided.half of 2026.

Results of Operations for the Three Months Ended MarchJune 31,30, 2026, Compared to the Three Months Ended MarchJune 31,30, 2025

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 three months ended MarchJune 31,30, 2026, changed from the three months ended MarchJune 31,30, 2025, as follows (dollars in millions, except margin and per share data):

(1)Restructuring, impairment and transaction-related charges, net increased $1.8$0.5 million ($1.4$0.4 million, net of tax), to $8.4$9.7 million during the three months ended MarchJune 31,30, 2026, and included the following:

b.Aa.A $0.1$0.9 million decreaseincrease in impairmentemployee termination charges from $0.3$5.8 million during the three months ended MarchJune 31,30, 2025, to $0.2$6.7 million during the three months ended MarchJune 31,30, 2026;

c.Ab.A $2.4$3.4 million decrease in transaction-relatedimpairment charges from $2.6$4.2 million during the three months ended MarchJune 31,30, 2025, to $0.2$0.8 million during the three months ended MarchJune 31,30, 2026;

d.A $0.4$0.1 million increase in integration costs from zero during the three months ended March 31, 2025, to $0.4$0.2 million during the three months ended MarchJune 31,30, 2025, to $0.3 million during the three months ended June 30, 2026; and e.A $0.2$2.9 million increase in various other restructuring charges from $3.0$1.4 million of income during the three months ended MarchJune 31,30, 2025, to $3.2$1.5 million of expense during the three months ended MarchJune 31,30, 2026.

(2)Other operating income elements decreasedincreased $0.1$1.7 million (zero$1.2 million, net of tax impact) during the three months ended March 31, 2026, primarily due to a $1.3$3.5 million decrease in depreciation and amortization expense and impactsa from$0.6 improvedmillion manufacturingdecrease productivity,in selling, general and administrative expenses, partially offset by the impact from increased paper sales and lower marketing services net sales.

(3)Interest expense decreased $2.4$4.3 million ($1.8$3.3 million, net of tax) during the three months ended MarchJune 31,30, 2026, to $10.0$8.9 million. This change was primarily due to lower average debt levels and a lower weighted average interest ratesrate on borrowings in the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025.

(4)Net pension (income) expense increaseddecreased $0.6$0.5 million ($0.4 million, net of tax) during the three months ended MarchJune 31,30, 2026, from $0.4$0.3 million of expense to $0.2 million of income. This was due to a $1.7 million decrease from interest cost on pension plan liabilities and a $0.2$0.1 million decrease in the amortization of actuarial loss, partially offset by a $1.3 million decrease from the expected long-term return on pension plan assets.

(5)The $0.4$0.7 million increase in income tax expense as calculated in the following table is primarily due to a $0.9$1.0 million increase in tax expense related to the Company’s liability forfrom audit assessments and unrecognized income tax benefits and a $0.6$0.7 million increase from deferred income tax on the impactinvestment ofin non-deductiblea expenses,foreign subsidiary, partially offset by a $0.9$1.1 million decrease from valuation allowance reserves.

Product sales decreasedincreased $38.6$3.8 million, or 7.8%,0.8%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to a $34.7$12.5 million decrease in sales in the Company’s print product lines, of which $10.9 million is from the impact of the sale of the European operations, and a $7.2 million decreaseincrease in paper sales,sales whichdriven is net offrom an $8.7increase millionin decreaseQuad-supplied aspaper aand result of the sale of the European operations on February 28, 2025, partially offset by $3.3$3.2 million in favorable foreign exchange impacts.impacts, partially offset by a $11.9 million decrease in net sales from lower print product volumes.

Service sales, which primarily consist of logistics, distribution, marketing services, imaging and medical services, decreasedincreased $9.8$1.8 million, or 7.3%,1.5%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to a $6.7$6.1 million increase in logistics net sales, partially offset by a $4.3 million decrease in marketing services and medical services,services ofnet which $0.3 million is a result of the sale of the European operations, and a $3.1 million decrease in logistics sales, of which $2.6 million is a result of the sale of the European operations.sales.

Cost of serviceproduct sales decreasedincreased $5.1$7.2 million, or 6.0%,2.0%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to an increase in paper costs due to the impactincrease fromin lowerpaper marketing services and decreased freight volumes.sales.

Selling, general and administrative expenses decreased $5.1$0.6 million, or 6.1%,0.7%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to $7.4the following: (1) $2.3 million in lower employee-related costs; (2) $0.2 million in lower credit loss expense; and (3) savings from other cost reduction initiatives, partially offset by a $1.1$2.3 million decrease in favorable foreign exchange impacts. Selling, general and administrative expenses as a percentage of net sales increasedwas to 13.5%13.8% for the three months ended MarchJune 31,30, 2026, compared to 13.3%14.0% for the three months ended MarchJune 31,30, 2025.

Depreciation and amortization decreased $1.3$3.5 million, or 6.6%,16.9%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, due to a $1.5$3.0 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,year partially offset byand a $0.2$0.5 million increasedecrease in amortization expense.

Restructuring, impairment and transaction-related charges, net increased $1.8$0.5 million, or 27.3%,5.4%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to the following:

(a)Includes $0.2$0.8 million and $0.3$4.2 million of impairment charges during the three months ended MarchJune 31,30, 2026 and 2025, respectively, which consisted of machinery$3.0 million of impairment for software licensing and related implementation costs from a terminated project in 2025; $0.8 million and $1.2 million, respectively, for certain property, plant and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction activities.

(cb)Includes a $0.5$4.3 million lossgain on the sale of the EuropeanWest operationsSacramento, California facility during the three months ended MarchJune 31,30, 2025.

EBITDA is defined as net earnings (loss), excluding (1) interest expense, (2) income tax expense (benefit) 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 (used in) 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.

EBITDA and EBITDA margin for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, were as follows:

EBITDA decreased $2.6$1.8 million for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to the impact offrom lower marketing services and medical services net sales and $1.8$0.5 million of increased restructuring, impairment and transaction-related charges, net, partially offset by impacts from improved manufacturing productivity.net.

A reconciliation of EBITDA to net earnings (loss) for the three months ended MarchJune 31,30, 2026 and 2025, was as follows:

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

a.Restructuring, impairment and transaction-related charges, net of $8.4$9.7 million and $6.6$9.2 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Product sales for the United States Print and Related Services segment decreased $15.9$0.3 million, or 3.8%,0.1%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to ana $18.7$12.0 million decrease in net sales infrom the Company’slower print product lines,volumes, partially offset by aan $2.8$11.7 million increase in paper sales.sales driven from an increase in Quad-supplied paper.

Service sales for the United States Print and Related Services segment decreasedincreased $6.9$1.8 million, or 5.2%,1.5%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to a $6.4$6.1 million increase in logistics net sales, partially offset by a $4.3 million decrease in marketing services and medical services and a $0.5 million decrease in logistics sales.services.

Operating income for the United States Print and Related Services segment decreasedincreased $5.6$3.9 million, or 17.7%,17.1%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to a $4.2$2.8 million increasedecrease in restructuring, impairment and transaction-related charges, net and the impact from decreased net sales, partially offset by a $1.3$2.5 million decrease in depreciation and amortizationamortization, expensepartially offset by the impact of lower marketing services and themedical impactsservices fromnet improved manufacturing productivity.sales.

The operatingOperating margin for the United States Print and Related Services segment decreasedincreased to 4.9%5.1% for the three months ended MarchJune 31,30, 2026, comparedfrom to 5.7%4.3% for the three months ended MarchJune 31,30, 2025, primarily due to the reasons provided above.

Restructuring, impairment and transaction-related charges, net for the United States Print and Related Services segment increaseddecreased $4.2$2.8 million, or 120.0%,32.6% for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to the following:

(a)Includes $0.2$0.3 million and $0.3$4.2 million of impairment charges during the three months ended MarchJune 31,30, 2026 and 2025, respectively, which consisted of machinery$3.0 million for software licensing and related implementation costs from a terminated project in 2025, $0.3 million and $1.2 million, respectively, for certain property, plant and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction activities.

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

ServiceProduct sales for the International segment decreasedincreased $2.9$4.1 million, or 100.0%,8.6%, for the three months ended MarchJune 31,30, 2026, when compared to the three months ended MarchJune 31,30, 2025, primarily due to athe $2.6following: (1) $3.2 million decreasein favorable foreign exchange impacts, primarily in logisticsMexico; (2) an $0.8 million increase in paper sales; and (3) a $0.1 million increase in net sales andfrom $0.3higher millionprint decreaseproduct in marketing service sales, both as a result of the sale of the European operations.volumes.

Operating income for the International segment increaseddecreased $3.1$2.0 millionmillion, or 51.3%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to a $2.5$3.1 million decreaseincrease in restructuring, impairment and transaction-related charges, net, andpartially offset by a $0.6$1.1 million increase in operating income, primarily in Mexico.

Restructuring, impairment and transaction-related charges, net for the International segment decreasedincreased $2.5$3.1 million, or 89.3%,million for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to the following:

Corporate operating expenses decreasedincreased $0.6$0.7 million, or 4.7%,5.4%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 20252025, primarily due to a $0.9$0.5 million decreaseincrease in employee-related costs,costs partially offset byand a $0.1$0.2 million increase in restructuring, impairment and transaction-related charges, net.

Corporate restructuring, impairment and transaction-related charges, net increased $0.1$0.2 million, or 33.3%50.0%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily due to the following: