What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-02-24 compared with 2020-02-19 · 15 added, 78 removed, 27 unchanged (78% of the section changed)

11 unchanged sentences

There is no public trading market for the class B stock.

The Company has paid quarterly dividends for each class of common stock then outstanding during the years ended December 31, 2019 , 2018 and 2017 .

The Company paid quarterly dividends for each class of common stock then outstanding during the year ended December 31, 2019, and during the first quarter of 2020.

Due to uncertainty in client demand as a result of the COVID-19 pandemic, the Company’s Board of Directors proactively suspended the Company’s quarterly dividends beginning in the second quarter of 2020.

Pursuant to the Company’s Articles of Incorporation, each outstanding class of common stock has equal rights with respect to cash dividends.

2 unchanged sentences

If the Total Net Leverage Ratio is less than 2.75 to 1.00, there are no such restrictions.

As the Company’s Total Net Leverage ratio as of December 31, 2019 , was 3.01 to 1.00, the limitations described above are currently applicable.

In addition to the foregoing, the Company completed the fourth amendment to its April 28, 2014 Senior Secured Credit Facility on June 29, 2020 (see Note 12.

“Debt,” for more details on the amendment), which, among other things, prohibits the Company from repurchasing capital stock and paying cash dividends during the period starting June 29, 2020 and ending September 30, 2021 (the “Covenant Relief Period”), As the Company is in the Covenant Relief Period, and the Company’s Total Net Leverage ratio as of December 31, 2020, was 3.30 to 1.00, the limitations described above are currently applicable.

Securities Authorized For Issuance Under Equity Compensation Plans

See Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters,” of this Annual Report on Form 10-K for certain information regarding the Company’s equity compensation plans.

Issuer Purchases of Equity Securities

Information about the Company’s repurchases of its class A stock during the three months ended December 31, 2019 , were as follows:

See Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” of this Annual Report on Form 10-K for certain information regarding the Company’s equity compensation plans.

Information about the Company’s repurchases of its class A common stock during the three months ended December 31, 2020, was as follows:

Issuer Purchases of Equity Securities

Total Number of Shares Purchased (1)

Average Price Paid Per Share

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)

Period Total Number of Shares Purchased (1)

Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)

Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)

October 1, 2020 to October 31, 2020 — — — $ 100,000,000

2 unchanged sentences

— — 100,000,000

Represents shares of the Company’s class A stock .

On September 6, 2011 , the Company’s Board of Directors authorized a share repurchase program of up to $100.0 million of the Company’s outstanding class A stock .

On July 30, 2018 , the Company’s Board of Directors discontinued the remainder of the September 6, 2011 share repurchase program and authorized a new share repurchase program of up to $100.0 million of the Company’s outstanding class A stock .

______________________________

(1) Represents shares of the Company’s class A common stock.

(2) 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.

1 unchanged sentence

The program may be suspended or discontinued at any time.

There were no shares of the Company’s class A stock repurchased during the year ended December 31, 2019 .

During the year ended December 31, 2018 , the Company repurchased 1,871,631 shares of its class A stock at a weighted average price of $19.59 per share for a total purchase price of $36.7 million .

During the year ended December 31, 2017 , the Company repurchased 200,605 shares of its class A stock at a weighted average price of $18.89 per share for a total purchase price of $3.8 million .

The Company is currently prohibited from repurchasing capital stock through the Covenant Relief Period, in accordance with the fourth amendment to the April 28, 2014 Senior Secured Credit Facility, completed on June 29, 2020.

There were no shares of the Company’s class A stock repurchased during the years December 31, 2020 and 2019 .

As of December 31, 2020, there were $100.0 million of authorized repurchases remaining under the program.

Stock Performance Information

The following graph compares cumulative shareholder return on Quad’s class A stock since December 31, 2014 , as compared to the Standard & Poor’s (“ S&P ”) MidCap 400 Index, the S&P SmallCap 600 Index and a selected peer group of companies over the same period.

Due to the diversity of its product and service offerings, the Company does not believe that any single published industry index is appropriate for comparing stockholder return.

As such, the Company has compiled a peer group to use in the below performance graph, incorporating companies from different industries, including commercial printing, marketing services and publishing.

The stock performance graph has been updated to include the S&P SmallCap 600 Index, which will replace the S&P MidCap 400 Index next year, to better reflect the Company’s current market capitalization.

The graph assumes a $100.00 investment and that all dividends are reinvested.

The returns of each peer group company have been weighted to reflect their relative market capitalizations.

The comparison in the graph below is based upon historical stock performance and should not be considered indicative of future stockholder returns.

Indexed Returns

Quad/Graphics, Inc.

S&P MidCap 400 Index

S&P SmallCap 600 Index

Peer Group (1)

______________________________

The following companies were included in the Peer Group:

LiveRamp Holdings Inc.

InnerWorkings, Inc.

Alliance Data Systems Corp.

LSC Communications, Inc.

The McClatchy Co.

Meredith Corp.

Donnelley & Sons Co.

Scholastic Corp.

Gannett Co., Inc.

John Wiley & Sons, Inc.

Harte Hanks, Inc.

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Included through September 7, 2018, when Cenveo ceased trading due to bankruptcy.

Adjusted for reverse split and spin offs of LSC Communications, Inc.

and Donnelley Financial Solutions, Inc.

Included from June 23, 2015, when Gannett Co., Inc.

spun off from its parent company

Included from October 1, 2016, when LSC Communications, Inc.

spun off from R.R.

Donnelley & Sons Co.

Selected Financial Data

The selected consolidated statements of operations data for the years ended December 31, 2019 , 2018 and 2017 , and the selected consolidated balance sheets data at December 31, 2019 and 2018 , are derived from the audited consolidated financial statements of the Company included in Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

The selected financial data includes the results of operations of acquired businesses prospectively from their respective acquisition dates.

For additional information related to the Company’s acquisition activity, see Note 3 , “ Acquisitions and Strategic Investments ,” to the consolidated financial statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

The selected consolidated statements of operations data for the years ended December 31, 2016 and 2015 , and the consolidated balance sheets data at December 31, 2017 , 2016 and 2015 , are derived from audited consolidated financial statements not included herein.

The results of operations of the Company’s United States Book business (“ Book business ”) have been reported as discontinued operations for the years ended December 31, 2019 , 2018 , and 2017 , in accordance with Accounting Standards Codification (“ ASC ”) 205-20 — Discontinued Operations.

The effects of the results of operations and balance sheet information for discontinued operations of the Book business have not been reflected in the selected financial data for the years ended December 31, 2016 and 2015 .

As a result of this, comparability in the Selected Financial Data table below may be limited.

SELECTED FINANCIAL DATA

(In millions, except per share data)

Consolidated Statements of Operations Data:

Operating income (loss) from continuing operations (1)

Net earnings (loss):

From continuing operations

From discontinued operations

Net earnings (loss) (1)

Earnings (loss) per diluted share attributable to Quad common shareholders:

From continuing operations

From discontinued operations

Earnings (loss) per diluted share attributable to Quad common shareholders

Consolidated Balance Sheets Data:

Long-term debt and finance lease obligations (excluding current portion)

Other Financial Data:

Dividends per share of common stock

______________________________

Includes restructuring, impairment and transaction-related charges of $89.4 million , $103.3 million , $59.9 million , $73.6 million and $164.9 million for the years ended December 31, 2019 , 2018 , 2017 , 2016 and 2015 , respectively.

Includes goodwill impairment charges of $808.3 million ($542.4 million, net of tax) for the year ended December 31, 2015.

Includes a $28.8 million net income tax benefit recorded during the year ended December 31, 2017, as a result of the 2017 Tax Cuts and Jobs Act (the “ Tax Act ”).

See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 14 , “ Income Taxes ,” to the Company’s consolidated financial statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K for further discussion.

As a smaller reporting company, the Company is not required to provide the information required by this Item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity