What changed in this filing

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Item 1A. Risk Factors

2024-02-22 compared with 2023-02-27 · 84 added, 108 removed, 233 unchanged (45% of the section changed)

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Risks Relating to Quad’s Business, Operations and Industry

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, nationwide supply chain disruption, as well as significant downward pricing pressure, may continue to adversely affect the Company.

The Company and the overall printing industry continues 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), which was exacerbated by the COVID-19 pandemic, as well as the current macroeconomic conditions and prior recessions (which have severely impacted print volumes and further accelerated the impact of media disruption).

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

The Company and the overall printing industry continues 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 recessions (which severely impact print volumes and further accelerate the impact of media disruption).

The impacts of overcapacity, as well as intense competition, have led to the Company experiencing significant 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

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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.

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 is experiencing rapid change due to the impact of digital media and content on printed products.

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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.

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 as required by new markets and technologies, such as artificial intelligence, 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.

The new markets into which the Company is expanding, or may expand, may have different characteristics from the markets in which the Company historically competed.

These different characteristics may include, among other things, demand volume requirements, demand seasonality, product generation development rates, client concentrations and performance and compatibility requirements.

The Company’s failure to make the necessary adaptations to its business model to address these different characteristics, complexities and new market dynamics could adversely affect the Company’s operating results.

In addition, with rapid changes in technology affecting the marketing and advertising industry, including generative artificial intelligence, the Company may not accurately predict trends, identify use cases, or make the technological adaptations or investments necessary to stay competitive in these new markets.

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

Postal costs are a significant component of the cost structures of many of the Company’s clients and potential clients.

Postal rate changes and USPS regulations that result in higher overall costs can influence the volume that these clients will be willing to print and ultimately send through the USPS.

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.

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 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 will potentially continue into the future.

As a result of these financial difficulties, the USPS has continued to adjust its postal rates and service levels.

Additional price increases may result in clients reducing mail volumes and exploring 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 USPS offers “work-share” discounts that provide incentives to co-mail and place product as far down the mail-stream as possible.

Discounts are earned as a result of less handling of the mail, and therefore, lower costs for the USPS.

As a result, the Company has made substantial investments in co-mailing technology and equipment to ensure clients benefit from these discounts.

If the incentives to co-mail are decreased by USPS regulations, the overall cost to mail printed products will increase and may result in print volumes declining.

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 cap, which may result 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 and are expected to continue to do so in the future.

This has led 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 to cover the costs of an outdated postal service that does not reflect the industry’s ability or willingness to pay.

The uncertainty as to how much of the authority the USPS will use on any specific rate increase also creates 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 has committed to reviewing the 5-year structure in 2024, but resulting rate reductions may take years to finalize.

The Company may be adversely affected by increases in its operating costs, including the cost and availability of paper, ink components and other raw materials, parts for equipment, labor-related costs, fuel and other energy costs and freight rates.

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This volatility may continue and the Company may experience increases in the costs of its raw materials in the future as prices in the overall paper, ink and energy markets are expected to remain beyond its control.

The price and availability of paper may also be adversely affected by paper mills’ permanent or temporary closures, and mills’ access to raw materials, conversion to produce other types of paper, and ability to transport paper produced.

The price and availability of ink and ink components may be adversely affected by the availability of component raw materials, labor and transportation.

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Under current market conditions, it is possible that one or more of the Company’s vendors will be unable to fulfill their operating obligations due to financial hardships, liquidity issues or other reasons.

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The Company may not be able to fully pass on to clients the impact of higher electric and natural gas energy prices on its manufacturing costs, and increases in energy prices result in higher manufacturing costs for certain of its operations.

Labor represents a significant component of the cost structure of the Company.

Increases in wages, salaries and the cost of medical, dental, pension and other post-retirement benefits may impact the Company’s financial performance.

Changes in interest rates, investment returns or the regulatory environment may impact the amounts the Company will be required to contribute to the pension plans that it sponsors and may affect the solvency of these pension plans.

Increases in wages, salaries and the cost of medical, dental, pension and other post-retirement benefits have in the past and may continue to impact the Company’s financial performance.

Changes in interest rates, investment returns or the regulatory environment have and may continue to impact the amounts the Company will be required to contribute to the pension plans that it sponsors and may affect the solvency of these pension plans.

The Company may be unable to achieve labor productivity targets, to retain employees or labor may not be adequately available in locations in which the Company operates, which could negatively impact the Company’s financial performance.

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

Macroeconomic conditions, including inflation, rising interest rates and recessionary concerns, as well as ongoing supply chain challenges, labor availability and cost pressures, distribution challenges and the COVID-19 pandemic, 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, the Company was negatively impacted in 2022 by rising interest rates and the increasing cost and availability of raw materials, such as paper, ink, supplies, parts for equipment, distribution and labor.

Macroeconomic conditions, including inflation, high interest rates and recessionary concerns, cost and labor pressures, distribution challenges 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, the Company was negatively impacted in 2023 by rising interest rates and the increasing cost and availability of raw materials (such as paper, ink and supplies), distribution and labor.

In addition in 2023, the Company experienced certain distribution challenges, including, but not limited to, delivery delays at the USPS and recent volume restrictions at the United Parcel Service, Federal Express and certain local couriers, which negatively impacted the Company.

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The Company has experienced, and expects to experience in the future, excess capacity and lower demand due to economic factors affecting consumers’ and businesses’ spending behavior, including as a result of macroeconomic conditions, recessionary concerns and/or geopolitical events.

This, or uncertainty or disruptions in global credit and banking markets, might cause the Company to not be able to continue to have access to preferred sources of liquidity when needed or on terms the Company finds acceptable, and the Company’s borrowing costs could increase.

The Company expects inflationary cost pressures and certain supply chain shortages and distribution challenges to potentially continue through 2024 and the Company may not be able to fully mitigate the impact of the rising inflationary cost pressures through price increases.

Continuing or worsening inflation, recessionary concerns and/or supply chain and distribution challenges may have a material adverse impact on the Company’s business, financial condition, cash flows and/or results of operations.

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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 as required by these new markets, the Company will be at a competitive disadvantage and its ability to grow will be adversely affected.

As the Company expands its integrated marketing platform, the overall complexity of the Company’s business increases at an accelerated rate and the Company becomes subject to different market dynamics.

The new markets into which the Company is expanding, or may expand, may have different characteristics from the markets in which the Company historically competed.

Continuing or worsening inflation, recessionary concerns, supply chain and distribution challenges and/or uncertainty or disruptions in global credit and banking markets may have a material adverse impact on the Company’s business, financial condition, cash flows and/or results of operations.

The Company operates in a highly competitive environment.

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In addition, the need to reduce ongoing operating costs have and, in the future, may continue to result in significant up-front costs to reduce workforce, close or consolidate facilities, or upgrade equipment and technology.

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

Postal costs are a significant component of the cost structures of many of the Company’s clients and potential clients.

Postal rate changes and USPS regulations that result in higher overall costs can influence the volume that these clients will be willing to print and ultimately send through the USPS.

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Integrated distribution with the USPS is an important component of the Company’s business.

Any material change in the current service levels provided by the postal service could impact the demand that clients have for print services.

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 relief over the next ten years.

As a result of these financial difficulties, the USPS has continued to adjust its postal rates and service levels.

Additional price increases may result in clients reducing mail volumes and exploring the use of alternative methods for delivering a larger portion of their products, such as continued diversion to the internet and other alternative media channels, in order to ensure that they stay within their expected postage budgets.

The USPS offers “work-share” discounts that provide incentives to co-mail and place product as far down the mail-stream as possible.

Discounts are earned as a result of less handling of the mail, and therefore, lower costs for the USPS.

As a result, the Company has made substantial investments in co-mailing technology and equipment to ensure clients benefit from these discounts.

As the USPS reacts to its financial difficulties, it often revises design standards for mail entering its system.

These design standards often increase costs for clients and, in turn, decrease the value of the cost reductions that the Company’s co-mailing services provide.

If the incentives to co-mail are decreased by USPS regulations, the overall cost to mail printed products will increase and may result in print volumes declining.

Federal statute requires the Postal Regulatory Commission (“PRC”) to conduct reviews of the overall rate-making structure for the USPS to ensure funding stability.

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 is expected to use these additional rate authorities to implement twice a year increases in the future.

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.

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

The Company continues to be substantially dependent on its production personnel to print the Company’s products in a cost-effective and efficient manner that allows the Company to obtain new clients and to drive sales from the Company’s existing clients.

The Company believes that there is significant competition for production personnel with the skills and technical knowledge that the Company requires, especially in light of the labor shortages which initially resulted from the COVID-19 pandemic.

The Company’s ability to continue efficient operations, reduce production costs, and consolidate operations will depend, in large part, on the Company’s success in recruiting, training, integrating and retaining sufficient numbers of production personnel to support the Company’s production, cost savings and consolidation targets.

New hires require extensive training and it may take significant time before they achieve full productivity.

In addition, increases in the wages paid by competing employers, including as a result of current macroeconomic conditions, has resulted, and may continue to result, in increases in the wage rates that the Company must pay.

As a result, the Company has and may continue to incur additional costs to attract, train and retain employees, including expenditures related to salaries and benefits, and the Company may lose new, as well as existing, employees to competitors or other companies before the Company realizes the benefit of its investment in recruiting and training them.

If the Company is unable to hire and train sufficient numbers of personnel, the Company’s business would be adversely affected.

The nationwide shortage of available production personnel may also put a strain on the Company’s ability to accept new work from client requests, including during the Company’s seasonally higher third and fourth quarters.

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

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Approximately 1,400 of the Company’s United States and international employees are covered by an industry wide agreement, a collective bargaining agreement or through a works council or similar arrangement.

While the Company believes its employee relations are good and that the Company maintains an employee-centric culture, and there has not been any material disruption in operations resulting from labor disputes, a strike or other forms of labor protest affecting the Company’s United States or international plants, distribution centers or other facilities in the future could materially disrupt the Company’s operations and result in an adverse impact on its financial condition, results of operations and cash flows, which could force the Company to reassess its strategic alternatives involving certain of its operations.

The Company may suffer a data-breach of sensitive information, ransomware attack or other cyber incident.

If the Company’s efforts to protect the security of information or systems are unsuccessful, any such failure may result in costly government enforcement actions and/or private litigation, and the Company’s business and reputation could suffer.

The Company and its clients are subject to various United States and foreign cyber-security laws, which require the Company to maintain adequate protections for electronically held information.

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.

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In turn, this decline in cost effective distribution channels may force clients to use other avenues of distribution that may be at significantly higher cost, which may decrease demand for the Company’s products and services, and thus adversely affect the Company’s financial condition, results of operations and cash flows.

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

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

In addition, there has been a substantial increase in the use of social media platforms, including blogs, social media websites, and other forms of internet-based and mobile communications, which allow individuals access to a broad audience of consumers and other interested persons.

Many social media platforms immediately publish the content their subscribers’ and participants’ post, often without filters or checks on accuracy of the content posted.

Information or commentary posted on such platforms at any time may be adverse to the Company’s interests or may be inaccurate, each of which may harm the Company’s reputation, business or prospects.

The harm may be immediate without affording the Company an opportunity for redress or correction.

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

The Company believes that there is significant competition for production personnel with the skills and technical knowledge that the Company requires, especially in light of continuing labor shortages.

New hires require extensive training and it may take significant time before they achieve full productivity.

If the Company is unable to hire and train sufficient numbers of personnel, the Company’s business would be adversely affected.

Approximately 1,000 of the Company’s United States and international employees are covered by an industry wide agreement, a collective bargaining agreement or through a works council or similar arrangement.

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

The Company’s business depends substantially on client contract renewals and/or client retention.

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trade restrictions and economic embargoes by the United States or other countries;

health concerns regarding infectious diseases (such as COVID-19);

health concerns regarding infectious diseases;

adverse weather or natural disasters;

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logistical and communications challenges;

differing local business practices and cultural consideration;

differing local business practices and cultural considerations;

restrictions on the ability to repatriate funds;

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potential adverse tax consequences and being subject to different legal and regulatory regimes that may preclude or make more costly certain initiatives or the implementation of certain elements of its business strategy.

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The COVID-19 pandemic continues to negatively affect the Company’s business, financial conditions, cash flows, results of operations, supply chain and raw materials availability, as well as client demand.

Since the first quarter of 2020, there has been a worldwide impact from the COVID-19 pandemic.

Quad has significant operations in the United States and printing operations or investments in printing operations in England, France, Germany, Poland, Colombia, Mexico, Peru and India, and each of these countries has been affected by the pandemic and taken measures to try to contain the virus, such as limiting or closing business activities, transportation and person-to-person interactions, resulting in disruptions at some of the Company’s printing facilities and support operations, as well as the operations of the Company’s clients and suppliers.

In some cases, the relaxation of such trends has been followed by actual or contemplated returns to stringent restrictions on commerce or gatherings, including in parts of the United States and the rest of the world.

Global trade conditions and client trends that originated during the pandemic continue to persist and may also have a long-lasting adverse impact on the Company independently of the progress on the pandemic.

For example, the COVID-19 pandemic weakened demand for the Company’s products and services, disrupted the Company’s supply chain and resulted in rising inflationary cost and labor pressures, distribution challenges, recessionary concerns and other evolving macroeconomic conditions.

The COVID-19 pandemic has had, and could continue to have, a negative impact on the Company’s business, financial condition, cash flows, results of operations, supply chain and raw materials availability, although the full extent is still uncertain and cannot be predicted.

In addition to the COVID-19 pandemic, future natural disasters, epidemics, other public health crises, conflicts, wars, terrorist attacks, fires or other catastrophic events affecting the Company’s plants, distribution centers or other facilities, could also materially disrupt the Company’s operations and result in an adverse impact on its financial condition, results of operations and cash flows, which could force the Company to reassess its strategic alternatives involving certain of its operations.

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

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If the Company fails to successfully integrate an acquisition, the Company may not realize all or any of the anticipated benefits of the acquisition, and the Company’s future results of operations could be adversely affected.

In addition, the acceleration of the Company’s transformation to a marketing solutions partner is partially dependent upon the Company’s continued ability to identify and execute strategic divestiture opportunities to generate cash and related benefits.

In addition, the Company’s transformation to a marketing experience company is partially dependent upon the Company’s continued ability to identify and execute strategic divestiture opportunities to generate cash and related benefits.

There can be no assurance whether the strategic benefits and expected financial impact of any divestitures will be achieved.

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

Many social media platforms immediately publish the content their subscribers’ and participants’ post, often without filters or checks on accuracy of the content posted.

The harm may be immediate without affording the Company an opportunity for redress or correction.

Financial Risks

The Company may be required to make investments, including capital expenditures and in the development and implementation of new systems, client technology, product technology, marketing and talent to sustain and grow its platforms and processes, in part to keep pace with industry developments and client expectations, and to remain technologically and economically competitive, which may increase its costs, reduce its profits, disrupt its operations or adversely affect its ability to implement its business strategy.

The Company may be required to make capital expenditures to sustain and grow its platforms and processes, as well as make investments in the development and implementation of new systems, client technology, product technology, marketing and talent in order to keep pace with industry developments, client expectations, and to remain technologically and economically competitive.

The cash or financing required for these capital expenditures and investments may not be sufficient or available on terms acceptable to the Company.

In addition, these capital expenditures and investments may increase the Company’s costs, reduce its profits, disrupt its operations or adversely affect its ability to implement its business strategy.

The printing and advertising and marketing services industries are experiencing rapid change as new digital technologies are developed that offer clients an array of choices for their marketing and publication needs.

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As a result of the November 2, 2021 amendment to the Senior Secured Credit Facility, the Term Loan A and revolving credit facility were both broken into two separate maturity dates.

Borrowing from lenders who elected to not extend the maturity date will mature on January 31, 2024, whereas borrowing from lenders who elected to extend the maturity date will now mature on November 2, 2026.

Borrowing from lenders who elected to not extend the maturity date matured on January 31, 2024, whereas borrowing from lenders who elected to extend the maturity date matures on November 2, 2026.

As of December 31, 2023, the borrowings outstanding under the Senior Secured Credit Facility were $511.1 million.

On May 2, 2022, the Company used liquidity available under its revolving credit facility and available cash on hand to fund the repayment on maturity of all $209.1 million aggregate principal amount, outstanding at the time, of its unsecured 7.0% senior notes due May 1, 2022 (“Senior Unsecured Notes”).

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The Company’s various lending arrangements include certain financial covenants.

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As a result, the Company is exposed to market risks associated with fluctuations in interest rates, and increases in interest rates could adversely affect the Company.

The Company currently holds one active interest rate swap contract.

Another previously held interest rate swap, effective on February 28, 2017, terminated on February 28, 2022.

The purpose of entering into these contracts was to reduce the variability of cash flows from interest payments related to a portion of the Company’s variable-rate debt.

The swaps convert the notional value of the Company’s variable rate debt based on one-month London Interbank Offered Rate (“LIBOR”) to a fixed rate, including a spread on underlying debt, and a monthly reset in the variable interest rate.

The Company has also entered into two interest rate collar contracts, both effective February 1, 2023.

The Company currently holds one interest rate swap contract.

The purpose of entering into this contract was to reduce the variability of cash flows from interest payments related to a portion of the Company’s variable-rate debt.

The swap converts the notional value of the Company’s variable rate debt based on one-month Secured Overnight Finance Rate (“SOFR”) to a fixed rate, including a spread on underlying debt, and a monthly reset in the variable interest rate.

The Company has entered into two interest rate collar contracts, both effective February 1, 2023.

The purpose of entering into the contracts is to reduce the variability of cash flows from interest payments related to a portion of the Company’s variable-rate debt.

The interest rate collars convert the notional value of the Company’s variable rate debt based on one-month term Secured Overnight Financing Rate (“SOFR”) to a fixed rate if that month’s interest rate is outside of the collars’ floor and ceiling rates, including a spread on underlying debt, and a monthly reset in the variable interest rate.

The interest rate collars convert the notional value of the Company’s variable rate debt based on one-month term SOFR to a fixed rate if that month’s interest rate is outside of the collars’ floor and ceiling rates, including a spread on underlying debt, and a monthly reset in the variable interest rate.

Because a portion of the Company’s operations are outside of the United States, significant revenues and expenses are denominated in local currencies.

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

The Company’s business is seasonal, with the Company recognizing the majority of its operating income in the third and fourth quarters of the financial year, primarily as a result of the increased magazine advertising page counts and retail inserts and catalogs from back-to-school and holiday-related advertising and promotions.

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 magazine advertising page counts and retail inserts and catalogs from back-to-school and holiday-related advertising and promotions.

The fourth quarter is typically the highest seasonal quarter for cash flows from operating activities and Free Cash Flow due to the reduction of working capital requirements that reach peak levels during the third quarter.

If the Company does not successfully manage the increased workflow, necessary increases in paper and ink inventory, production capacity flows and other business elements during these high seasons of activity, this seasonality could adversely affect the Company’s cash flows and results of operations.

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

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The Company is scheduled to make payments to the GCIU and GCC until April 2032 and February 2024, respectively.

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

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The failure to comply with the laws governing international business practices may result in substantial penalties and fines.

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

The Company and its facilities are subject to various consumer protection and privacy laws and regulations, and will become subject to additional laws and regulations in the future.

If the Company’s efforts to comply with such laws or protect the security of information are unsuccessful, any failure may subject the Company to material liability, require it to incur material costs or otherwise adversely affect its results of operations as a result of compliance with such laws, costly enforcement actions and private litigation.

The nature of the Company’s business includes the receipt and storage of information about the Company’s clients, vendors and the end-users of the Company’s products and services.

The Company and its clients are subject to various United States and foreign consumer protection, information security, data privacy and “do not mail” requirements at the federal, state, provincial and local levels.

The Company is subject to many legislative and regulatory laws and regulations around the world concerning data protection and privacy.

In addition, the interpretation and application of consumer and data protection laws in the United States and elsewhere are often fluid and uncertain.

To the extent that the Company or its clients become subject to additional or more stringent requirements or that the Company is not successful in its efforts to comply with existing requirements or protect the security of information, demand for the Company’s services may decrease and the Company’s reputation may suffer, which could adversely affect the Company’s results of operations.

In addition, such laws may be interpreted and applied in a manner inconsistent with the Company’s internal policies.

If so, the Company could suffer costly enforcement actions (including an order requiring changes to the Company’s data practices) and private litigation, which could have an adverse effect on the Company’s business and results of operations.

Complying with these various laws could cause the Company to incur substantial costs or require changes to the Company’s business practices in a manner adverse to the Company’s business.

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

The conduct of the Company’s businesses is subject to various laws and regulations administered by federal, state and local government agencies in the United States, as well as to foreign laws and regulations administered by government entities and agencies in markets in which the Company operates.

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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.

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In addition, the Company and its subsidiaries are party to a variety of legal and environmental remediation obligations arising in the normal course of business, as well as environmental remediation and related indemnification proceedings in connection with certain historical activities, former facilities and contractual obligations of acquired businesses.

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Various laws and regulations addressing climate change are being considered at the federal and state levels.

Proposals under consideration include limitations on the amount of greenhouse gas that can be emitted (so-called “caps”) together with systems of trading allowed emissions capacities.

Proposals under consideration include requiring climate- and emissions-related disclosures and limitations on the amount of greenhouse gas that can be emitted (so-called “caps”) together with systems of trading allowed emissions capacities.

The impacts of such proposals could have a material adverse impact on the Company’s financial condition and results of operations.

The Company and its facilities are subject to various consumer protection and privacy laws and regulations, and will become subject to additional laws and regulations in the future.

The nature of the Company’s business includes the receipt and storage of information about the Company’s clients, vendors and the end-users of the Company’s products and services.

The Company is subject to many legislative and regulatory laws and regulations around the world concerning data protection and privacy.

In addition, the interpretation and application of consumer and data protection laws in the United States and elsewhere are often fluid and uncertain.

In addition, such laws may be interpreted and applied in a manner inconsistent with the Company’s internal policies.

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.

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

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and (d) prohibiting the corporate practice of medicine.

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Risks Relating to Quad’s Common Stock

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

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

The Company’s class A stock has been traded on the NYSE under the symbol “QUAD” since July 6, 2010.

However, there is currently a limited active market for the class A common shares.

The Company cannot predict the extent to which investor interest in the Company will lead to the development of a more active trading market for its class A common stock on the NYSE or how liquid that market will become.

However, there is still a limited active market for the class A common shares.

If a more active trading market does not develop, shareholders may have difficulty selling any class A stock without negatively affecting the stock price, and thereby, losing a significant portion of their investment.

Unresolved Staff Comments

The Company has no unresolved staff comments to report pursuant to this item.

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What changed 10-K

Item 1A. Risk Factors