Item 1. Business
Item 1. Business
Overview
Quad is a global marketing experience (MX) company that helps brands make direct consumer connections, from household to in-store to online. The Company is focused on providing a better marketing experience for its clients, so they can focus on delivering the best customer experience to theirs. Quad does this with a suite of marketing solutions that is flexible, scalable and connected. Supported by state-of-the-art technology and data-driven intelligence, these solutions are designed to streamline the complexities of marketing and remove friction from wherever it occurs in the marketing journey. Quad tailors its solutions to its clients’ objectives, driving cost efficiencies, improving speed to market, strengthening marketing effectiveness, and delivering value on their investments.
Quad’s footprint spans 14 countries, including 43 manufacturing and distribution facilities and more than 70 client dedicated teams. The Company supports a diverse base of approximately 2,700 clients, including industry-leading blue-chip companies that serve both businesses and consumers across multiple industry verticals, with a particular focus on commerce, including retail, consumer packaged goods and direct-to-consumer; financial services; and health. Quad prides itself on its long-standing relationships, with its largest clients averaging more than 22 years in duration. In 2023, its 10 largest clients accounted for approximately 19% of consolidated sales, with none representing more than 5% individually.
Quad was founded in Pewaukee, Wisconsin, as a Wisconsin corporation, in 1971 by the late Harry V. Quadracci. For many years, the Company operated as Quad/Graphics and focused on commercial printing. It grew rapidly and built a premier print manufacturing and distribution platform. Beginning in 2018, the Company accelerated its transformation to an MX company through strategic investments in marketing services, talent and technology, and, in 2019, evolved its brand from Quad/Graphics to Quad. Today, Quad is one of the nation’s largest marketing services providers, ranked as the 14 th largest agency company in the U.S. by Ad Age (2023), and is the second-largest commercial printer in North America, according to Printing Impressions (2023).
Quad’s unique engagement model complements a brand’s way of working. Whether as a full-service marketing partner, an outsourced extension of a marketing department or as executional support in conjunction with a brand’s agency, the Company’s connected capabilities, breadth of expertise and expansive reach enables Quad’s clients to:
• Target the right audience segments at the right time in the right channels based on insights from Quad’s large, proprietary data stack;
• Deliver and execute against a more streamlined end-to-end marketing process for greater speed and agility, better data utilization and improved customer engagement;
• Leverage Quad’s experience in offline, physical touchpoints to drive omnichannel effectiveness;
• Streamline complexity at scale across the marketing supply chain with proven production and logistics capabilities;
• Enable scalable, complex, cross-channel activation while offering real-time automation and optimization.
In 2023, the Company focused on delivering strong financial results while navigating multiple issues in the macroeconomic environment, including an uncertain economy, postage cost increases on print mailings, inflationary cost pressures and rising interest rates. Despite these challenges, Quad worked to mitigate impacts on its business while proactively managing client expectations. The Company also continued its focus on three major growth drivers: delivering integrated service excellence, accelerating market penetration and leveraging its culture as an MX company. Quad believes it will be able to maintain a leading competitive position through its consistent long-term business
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strategy, which is driven by dedicated, passionate and highly skilled employees, and by providing stability and innovative solutions for clients into the future.
More information regarding Quad is available on the Company’s website at quad.com . Quad is not including the information contained on or available through its website as part of, or incorporating such information by reference into, this Annual Report on Form 10-K. The Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports are made available to the public at no charge through a link appearing on the Investor Relations section of the Company’s website. Quad provides access to such materials through its website as soon as reasonably practicable after electronically filing such material with, or furnishing it to, the SEC.
Principal Capabilities
The Company’s suite of flexible, scalable and connected solutions addresses the pain points brands and marketers experience most frequently when creating and deploying content and campaigns.
Intelligence
Quad’s intelligence capabilities comprise audience identification and segmentation, testing, media optimization and media mix modeling services that empower smarter decisions to maximize marketing effectiveness and generate quantifiable impact.
• Audience identification and segmentation services leverage the Company’s proprietary data stack, comprised of consumer data from more than 117 million households, to identify potential consumers, matching their demographic details, behaviors and interests with other factors such as a client’s desired marketing spend, location footprint and business objectives. Equipped with these data-driven insights, clients can strategically target their marketing efforts to drive engagement and spur consumer action.
• Testing services , such as Quad’s proprietary Accelerated Marketing Insights platform, assist clients in identifying the most impactful marketing decisions by using a unique combination of high-level mathematics and social factors to predict the best combination of offer, messaging and imagery across channels – both offline and online.
• Media optimization services include Quad’s proprietary, award-winning media optimization platform, Connex, which offers cross-channel insights, proactive intelligence and automated optimization capabilities that enable clients to make data-backed decisions in real time to drive campaign performance. The platform takes the guesswork out of media placement, unifying and normalizing client marketing data to uncover performance trends by audience, creative, product, location and more.
• Media mix modeling services help clients understand the revenue that can be attributed to marketing spend during a given timeframe. By applying rigorous analytics to client data, Quad provides a detailed model that reflects the effectiveness of each channel in a campaign, detailing a client’s marketing return on investment and allowing them to make informed media placement decisions moving forward.
Creative
Quad’s creative services help clients increase engagement with their brands to accelerate business growth, supporting all channels through every step of the creative process, including strategy, brand design, campaign ideation, premedia, adaptive design and content creation. Informed by a combination of proprietary, client and other third-party data, Quad’s in-depth research on customer trends helps clients best define, design and position their brands. Applying this strategic brand work, the Company helps clients concept, direct and produce scalable creative content that attracts attention and elicits action. Creative services are powered by the Company’s marketing, advertising and creative talent, which includes creative directors, art directors, strategists, videographers, photographers, copywriters, computer generated imagery (CGI) artists, graphic designers and animation experts, among others. The Company’s network of 16 photography and video production studios execute content creation through in-studio and on-location services. Several
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of these studios operate directly within or near client facilities, leading to improved creative collaboration and streamlined workflows. Creative services are also backed by global production resources that provide around-the-clock service for quick-turn design and production support. For clients with their own creative content operations, the Company offers strategic process design services to identify and address process gaps, helping increase production efficiency, ensure consistent brand assets, and avoid time-consuming and costly rework.
Production
Quad offers a wide range of production capabilities for deploying content to offline and online channels. These capabilities include digital as well as print – a major point of differentiation among the Company’s competitive set. The Company’s print operations feature the latest in automation and technology complemented by skilled manufacturing professionals. The Company can produce large-scale print products, such as magazines, retail inserts and directories, as well as targeted print products, such as catalogs, direct mail, in-store signage and displays, and high-end packaging.
Quad also has vertically integrated print and non-print capabilities that help improve the quality, cost and availability of key inputs in the printing and distribution processes. For example, the Company has its own prepress/premedia services, paper procurement, ink manufacturing (through its subsidiary Chemical Research/Technology), and logistics and transportation services (through its in-house Quad Transportation Services division and Duplainville Transport trucking division), which it leverages to lower costs and enhance customer service for its clients while providing Quad with substantial control over critical links in the overall print supply chain.
Quad complements its production capabilities through its managed services offering. Leveraging its deep industry knowledge, expansive network and substantial purchasing power, Quad helps clients manage their operations the way it runs its own – with diligence, efficiency and cost-savings. The Company streamlines the marketing process for clients through its network of in-house experts and capabilities for marketing and production outsourcing, sourcing and procurement of goods and services, and print and paper management. As a result, Quad’s clients can focus on other critical aspects of their business.
Media
Quad believes that every consumer touch point is a brand experience and that every experience has the potential to drive measurable business outcomes. Quad’s media services activate this philosophy by providing strategic omnichannel media planning and placement for a variety of industry-leading clients, managing hundreds of millions of dollars of media billings annually. All media solutions prioritize transparency and neutrality, so clients can feel confident that their media spend is supported by the best data, platform and partners for their unique needs to generate measurable impact. Quad’s Connections Planning identifies the audiences, messaging and channel placement best suited to drive business results. The service is rooted in a deep exploration of audience behavior, crafting an experience plan that helps clients choose the channels that will most effectively reach consumers with targeted messages in the moments they are most receptive and likely to engage. Each media plan includes a measurement framework that specifies how brands can best identify each channel’s success. Once a campaign is underway, Quad’s proprietary media optimization platform, Connex, provides real-time insights to further optimize media placement and increase marketing efficiency.
Technology
The Company’s client-facing technology solutions help brands connect marketing strategy, global content creation, analytics and personalized communications across offline and online channels. These tailored solutions rely on a people-process-technology approach that first analyzes a client’s current-state workflow and performance, with a particular focus on increasing accuracy, reducing waste and improving efficiencies. Once potential improvements have been identified, a dedicated team implements the tool(s) that will best streamline campaign cycle efforts and remove friction. These solutions work together with Quad’s creative and media offerings so that clients’ marketing efforts are scalable and relevant, driving optimal return on marketing spend across an ever-growing number of media channels.
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Industry and Competition
Because of its one-of-a-kind integrated marketing platform, Quad competes in both the advertising and marketing services industry, and in the commercial printing industry. The Company’s breadth of connected solutions and its ability to both strategically consult and execute results at scale, positions Quad in a unique space beyond that of just a manufacturer or traditional agency. This positioning expands the Company’s competitive set to include large agency holding companies, independent agencies, marketing consultants, as well as print management firms and commercial printers.
Advertising and Marketing Services
The advertising and marketing services industry is highly fragmented, and competition is based on adapting quickly to new advertising platforms and technology, developing comprehensive proposals to secure client contracts, creating unique and effective multichannel marketing campaigns, demonstrating spend effectiveness by monitoring and reporting on clients’ marketing campaign results, providing favorable pricing, accessing talent and offering superior customer service.
Consumer media consumption habits are constantly evolving. The ongoing emergence of new marketing channels — including social media platforms and connected TV advertising — has caused audiences to become increasingly segmented. As a result, advertising and marketing services providers must expand their capabilities to create effective multichannel campaigns for their clients, and providers face increased client demand to offer integrated, end-to-end marketing services (i.e., from strategy and creative through execution). These trends greatly influence Quad’s ongoing efforts to help brands reduce the complexities of working with multiple agency partners and vendors, increase marketing process efficiency and maximize marketing effectiveness.
Commercial Printing
The commercial printing industry also remains highly fragmented, with competition based on pricing; availability of materials, including paper (which may be more limited in the future as a number of mills reduce graphic paper production capacity in favor of other product lines, such as packaging); quality; distribution capabilities; customer service; access to labor, especially highly skilled labor; availability to schedule work on appropriate equipment; on-time production and delivery; and ability to maintain and adopt state-of-the-art technology to meet a client’s business objectives.
The commercial printing industry has moved toward a demand for shorter print runs, faster product turnaround and increased production efficiencies of products with lower page counts and increased complexity. This — combined with increases in postage and paper costs as well as marketers’ increasing use of online marketing and communication channels — has led to excess manufacturing capacity. This excess capacity has allowed certain larger competitors like Quad, with economies of scale, strong balance sheets and access to capital markets, the ability to invest in automation and more efficient equipment; take advantage of consolidating acquisition opportunities to remove excess, inefficient and/or underutilized capacity; and reduce overall costs.
Seasonality
Quad is subject to seasonality in its quarterly results as net sales and operating income are higher in the second half of the calendar year as compared to the first half of the calendar year. 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. Seasonality is driven by increased catalogs and retail inserts primarily due to back-to-school and holiday-related advertising and promotions. The Company expects seasonality impacts to continue in future years.
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Competitive Advantages
Quad’s suite of marketing solutions is powered by three primary competitive advantages that the Company believes distinguish it from its competitors: integrated marketing platform excellence, ongoing innovation, and culture and sustainable impact.
Integrated Marketing Platform Excellence
Quad’s integrated marketing platform encompasses all the resources brands and marketers need to plan, create, deploy, measure and optimize their marketing efforts across all media channels — from household to in-store to online. Accordingly, the Company can guide clients through every effort intended to drive an action, from consumer awareness and trust, to brand preference and purchase.
Print and Distribution Capabilities
While Quad’s manufacturing operations are the most capital-intensive part of its integrated marketing platform, they constitute a key point of differentiation from consulting firms, traditional creative agencies and agency holding companies. Traditional agencies or agency holding companies develop creative and then outsource production while traditional consulting firms provide strategy and then outsource implementation. Quad, however, is able to strategize, create and execute all campaign elements across all channels using its own internal resources.
Within its manufacturing operations, the Company benefits from managing several very large facilities (greater than one million square feet) that produce multiple product lines under one roof, which maximizes utilization of equipment and labor resources while also driving savings in certain product lines (such as publications and catalogs) due to economies of scale. The Company continually strengthens its manufacturing operations through leading-edge technologies such as digital presses that enhance targeted print products and wide-web presses that maximize labor productivity; advanced equipment and automation, including automated guided vehicles and robotic palletizers that support high-quality, low-cost production; and its own global production resources that provide around-the-clock service for tasks like page assembly, retouching, color correction and design to reduce print job turnaround times.
In addition to the scale of its manufacturing operations and ongoing investments in technology, Quad’s ability to address postage rate increases sets the Company apart from its competition. Postage rates are a significant component of many clients’ cost structures, and Quad believes that postal costs directly influence clients’ print and mail quantities. Quad offers clients an array of postage optimization programs that lead to significant client cost savings. Several of these programs integrate directly with the United States Postal Service (“USPS”). For instance, the Company operates the print industry’s largest co-mail program (based on information published or otherwise made available from competitors), which expedites distribution by sorting and bundling multiple printed products at once in exchange for work-sharing discounts.
Client Dedicated Teams
A key aspect of the Company’s integrated marketing platform is the client dedicated on-site and near-site teams it employs. These teams serve as an extension of a client’s internal marketing department, fulfilling critical execution roles ranging from content creation and creative production to marketing deployment in all channels. All of this is executed to maximize production efficiencies, creating content that is adaptive across channels and easily templated and automated and, therefore, scalable. Quad’s on-site and near-site teams also offer seamless access to additional services and subject matter experts across the Company, removing handoffs and associated friction in the client’s marketing process. Quad’s dedicated team model simplifies marketing for clients and enables them to focus on what they do best: selling more products, services and/or content. Quad has more than 500 professionals embedded within more than 70 client dedicated on-site and near-site teams including several photography and video production studios. These teams support a range of clients, including those in grocery, sporting goods, mass merchandise and publishing.
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Ongoing Innovation
Quad’s ongoing innovation drives its purpose to create a better way for its stakeholders. While the Company challenges each of its employees to think differently through its core Value of “urgently innovate,” its disciplined approach to product development and innovation (PDI) identifies major innovation opportunities that can materially impact the Company’s revenue and margins. Led by an interdepartmental committee of leaders, this process focuses on solutions that either close a gap or meet an underserved need in the marketplace, or provide significant time and cost efficiencies to internal workflows. This organized approach to innovation ensures the Company is able to balance the short-term needs of the business with long-term growth opportunities provided by investments in new technology, capabilities and services.
Key areas of innovation that differentiate Quad from its competitors include the following:
Data
Powered by its extensive print manufacturing business, Quad possesses a large data stack that represents approximately 89% of U.S. households. The Company matches clients’ data files with its curated database of household addresses, ensuring that insights connect to real consumers, not just faceless email addresses. Quad uses these insights to derive household-level “passion scores” that highlight the interests of that household, which inform target audience identification. Over an 18-month span, Quad sent an average of 39 mail pieces on behalf of clients to each of the 117 million households it reaches (according to internal data from June 2022 to December 2023). This frequency of interaction ensures that the Company’s data stack remains relevant, providing meaningful insights to help clients make the most of their marketing budgets. As the federal government increases regulations on data privacy, and sources of data such as third-party cookies begin to disappear, Quad anticipates marketers will place a premium value on its privacy-compliant household data. Led by experts in the field, Quad is investing in several applications of its differentiated data stack to help clients enhance audience insights and segmentation to optimize their marketing spend.
In-Store Experience
Quad helps clients think differently about the in-store experience by combining in-depth research with leading-edge testing to produce strategic insights on consumer behaviors, and then designing and executing innovative signage and displays that amplify brand awareness and generate consumer engagement.
Through its proprietary InVision testing platform, Quad offers:
• Virtual concepting of in-store campaigns through digitally rendered store environments;
• Predictive analytics that calculate the probability of where consumers are most likely to focus when looking at signage or a display; and
• Display evaluation to verify the effectiveness of a client’s product messaging and creative design via feedback from a panel of shopper marketing experts.
Quad understands that in-store signage and product packaging work together to inform a consumer’s purchasing decision. Complementing the Company’s InVision testing platform is Package InSight, a solution that applies advanced biometric research capabilities to evaluate brand packaging performance, consumer attention and shelf impact. Package InSight uses the latest in biometric technology, such as mobile eye-tracking, facial coding and brain activation, to assess a packaging’s design effectiveness in an actual shopping environment. In 2024, the Company plans to expand its testing capabilities by opening a retail and brand innovation center in its West Allis, Wisconsin, manufacturing facility. The space will visually tell the story of Quad’s marketing experience offering for brick-and-mortar retailers and consumer packaged goods (CPG) companies, and will include three mock retail environments – a general testing area, a cosmetics and beauty space, and a CPG and grocery section – all customizable for client visits.
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Quad’s ability to bring a client’s most complex design concepts to life is another key differentiator for the Company. Quad’s In-Store team creates and executes on a wide range of products, such as temporary end cap displays, semi-permanent store-within-a-store setups, and outdoor permanent signage, among others, in substrates such as wood, metal, acrylic, plastic or paper board. Once a concept has been rendered, engineered and prototyped, Quad is able to either manage or manufacture the work itself, and handle deployment and distribution.
In 2023, Quad acquired DART Innovation (“DART”), a company specializing in in-store digital media solutions. The Company aims to use DART’s expertise and capabilities to establish in-store retail media networks (RMNs) for brands at mid-sized retailers. In-Store RMNs, like online RMNs, are useful to individual brands for reaching and engaging shoppers. This acquisition expands Quad’s in-store capabilities with a dynamic digital solution at the shelf.
Technology Solutions
Given artificial intelligence’s (AI) generational leap over the past year, Quad has amplified its AI focus across the Company. In 2023, the Company formed a cross-functional AI steering committee composed of Quad executives and technology experts to explore new ways to apply generative AI across its internal workflows and client-facing solutions. The group spearheaded an enhanced policy to address emerging use cases and associated business risks. The steering committee established a robust methodology to test, harden and implement AI use cases. Quad’s expanded focus on generative AI is built upon decades of leveraging AI-driven robotic process automation and cognitive insights at the Company.
Quad’s technology solutions underpin many of the capabilities that make up Quad’s integrated marketing platform. This includes supporting retail media networks, in which Quad recently invested through its acquisition of DART (as described above in “In-Store Experience”).
Internally, Quad incorporates advanced technologies in its workflows to maintain its execution excellence. For example, the Company’s manufacturing operations leverage a proprietary enterprise resource planning system (known as Smartools®) to provide real-time information flow across all facets of print production and deployment — from print sales and estimating to production planning, scheduling, manufacturing, warehousing, logistics, invoicing, reporting and customer service.
Culture and Sustainable Impact
For more than 52 years, Quad has operated as a company with a soul, believing it can do good in the world while doing well as a business. The Company’s long-standing focus on “creating a better way” reflects its “maker” culture where employees not only envision solutions, but actually create and execute them. This approach has been a hallmark of the Company’s culture since its founding and has inspired creativity in how it addresses environmental issues, social issues and corporate governance, and contributes to good corporate citizenship. The Company details its progress on driving positive, sustainable impact annually in its Environmental, Social and Governance (ESG) report*, which includes metrics, programming details and advancements on its environmental and social commitments, multiple of which were achieved in 2023. Further, the Company believes that its distinct corporate culture, which evolved from a core set of Values conceived by the Company’s late founder, Harry V. Quadracci, drives thoughtful decision making, especially around its disciplined approach to managing operations and innovating solutions for clients, better positioning the Company to succeed and grow in a dynamic marketplace.
*Quad is not including the information contained on or available through its website as part of, or incorporating such information by reference into, this Annual Report on Form 10-K.
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Environmental
Quad seeks to operate in an environmentally responsible manner that better serves the environment and reflects the values of its clients and their customers. The Company’s environmental efforts promote sustainable resource consumption, focusing on the following areas:
• Recycling : Quad applies a mentality of refuse, reduce, reuse and recycle throughout its internal processes to limit the amount of waste it creates. In 2022 (the most recent year for which data has been tabulated), the Company’s U.S. manufacturing facilities recycled more than 98% of their industrial wastepaper and other solid waste.
• Energy and Emissions : The Company participates in nationwide and statewide programs to enhance its efforts to reduce energy usage and carbon emissions. These include being a founding partner of the U.S. Department of Energy’s Better Plants Program, being ISO 50001 Ready through the U.S. Department of Energy at some of its largest manufacturing plants, and participating in the State of Wisconsin’s Focus on Energy Program.
• Hazardous Waste : Quad mitigates the dangers associated with hazardous waste through comprehensive chemical and hazardous waste management processes, including safe handling practices, and finding ways to reduce the use of chemicals and solvents.
• Responsible Forestry : The Company maintains chain-of-custody certifications for sourcing materials from responsibly managed forests (i.e., Forest Stewardship Council®, Sustainable Forest Initiative, and Program for the Endorsement of Forest Certification) and partners with clients to increase certified paper usage. In 2022 (the most recent year for which data has been tabulated), nearly 80% of all the Company’s printed products and packaging were sustainably sourced from certified third-party organizations.
The Company benchmarks its environmental performance regularly to evaluate the effectiveness of current environmental management programs and to identify program areas that need improvement or need to be developed.
As the owner, lessee or operator of various real properties and facilities, Quad is subject to various federal, state and local environmental laws and regulations, including those relating to air emissions; waste generation, handling, management and disposal; sanitary and storm water discharge; and remediation of contaminated sites. Historically, compliance with these laws and regulations has not had a material adverse effect on the Company’s results of operations, financial position or cash flows. Compliance with existing or new environmental laws and regulations may require the Company to make future expenditures.
Human Capital Management
The Company continually invests in and supports its employees and the areas in which it operates. Highly qualified, skilled and knowledgeable talent and strong community partnerships are key to Quad’s success as a marketing experience company.
Attracting, Developing and Retaining Highly Qualified Talent
Given Quad’s belief that its talent stands as a major differentiator among its competition, the Company invests heavily in efforts to attract, develop and retain employees, and in tools, technologies, processes, training and education to increase engagement, and drive productivity enhancements and efficiencies across the entire organization.
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As of December 31, 2023, the Company had approximately 13,150 full-time equivalent (“FTE”) employees in the following geographies:
Geographic Region Number of FTE Employees
North America (Includes Mexico, Central America and the Caribbean) 10,800
Europe, Middle East and Africa 1,575
South America 750
Asia 25
Quad focuses on the following key areas to attract, develop and retain highly qualified talent:
• Competitive Pay and Innovative Benefits: Employees are hired into jobs with competitive wages and innovative benefits. The Company regularly evaluates its pay practices and structures to ensure it is competitive in the markets where it operates, and equitable based on employees’ experience, job responsibilities, performance and business results. Beyond traditional, expected benefits, such as paid vacation time and holidays, a 401(k) retirement savings program with annual discretionary Company match, short- and long-term disability insurance, and employer-paid life insurance, the Company offers expansive health and wellness benefits, including:
◦ QLife Wellness, a program that provides educational resources, interactive webinars and regular communications around physical, emotional, financial and social well-being topics. For instance, the program partners with Quad’s Total Rewards team and external vendors to provide employees with retirement planning, financial wellness webinars and one-on-one meetings so they can strategically plan for their financial futures.
◦ QuadMed, the Company’s wholly owned health and wellness subsidiary, provides a differentiated set of benefits for Quad employees and dependents through:
▪ On-site and near-site primary and specialty healthcare, pharmacy, dental, vision and physical therapy services, and fitness centers at several large-scale employee locations.
▪ No-cost virtual primary care across nearly all 50 states that allows patients to connect regularly with the same doctor, building the level of trust and connection they’ve come to expect from in-person care.
▪ Nationwide behavioral health program with in-person and virtual counseling through licensed therapists.
Beyond Quad itself, QuadMed provides worksite healthcare solutions nationally for approximately 30 employers of all sizes and across multiple industries, including private and public sector employers. External services include on-site, near-site and virtual health delivery of comprehensive primary and preventive care, condition management, wellness programs and coaching, physical therapy, behavioral health, pharmacy services, occupational health and more.
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• Career Training and Growth: Employees are encouraged to take advantage of the Company’s focus on employee growth and development, which not only teaches critical on-the-job and leadership skills, but also helps them respond to rapid change, cultivate effective networks, and create high-quality relationships necessary for personal, professional and Company growth. Multiple programs offer employees accelerated responsibility and pay, including Accelerated Career Training, which provides a fast-track for career advancement in manufacturing positions; Leading Within Quad , which focuses on best-in-class managerial behaviors; Corporate Trainee Program , which develops skills and leadership abilities through a series of agency and corporate administration rotations; and hands-on, mentor-led manufacturing apprenticeship programs. The Company also provides all employees with training focused on expanding cultural awareness, recognizing commonalities and differences across cultures, and adapting as appropriate – critical skills which help support employee retention, collaboration and productivity.
• Employee Recognition: Regularly acknowledging the hard work employees demonstrate every day is an important component of Quad’s culture and retention strategy. Recognition occurs through annual traditions, such as celebrating milestone years of service, especially one’s 10th year of service, during which an employee joins Quad’s Founders’ Circle – a tradition begun by the Company's founder to honor the dedicated work long-time employees do to push the Company forward every day. Various additional recognition programs aim to spur employee pride, such as the quarterly Safety Cup Award for manufacturing plants that achieve low Days Away, Restricted, or Transferred (DART) rates, low cost-per-hour rates and high safety test scoring. Manufacturing locations also participate in a quarterly engagement and retention award program that highlights plants’ initiatives to create an engaging workplace through employee and family events; and community outreach activities.
• Employee Feedback: The Company recognizes that when employees feel heard and supported, they are more likely to stay and put forth their best work. To foster an engaged workforce, the Company offers multiple avenues to provide feedback so the Company can better understand what is working well and what can be improved. Examples include:
◦ Surveys: Quad conducts an annual, U.S.-wide engagement survey in addition to “pulse surveys” to acquire feedback. Human Resources and Company leadership then meet to review and develop new and updated programs from this information.
◦ Open forums: Quarterly all-company town halls, in addition to department meetings, provide opportunities for employees to voice their thoughts and questions.
◦ Business Resource Groups (BRGs): The Company’s BRGs also help create a company culture that is empathetic and attentive to the needs of employees. The Company’s BRGs create spaces where employees of shared backgrounds and interests can come together to support each other and share their unique perspectives and feedback with Quad leadership. The Company currently has seven BRGs supporting women, military veterans and their families, differently abled employees and caregivers, the LGBTQIA+ community, Black employees, Hispanic / Latinx employees, and working parents.
• Inclusive Policy Review: Through its policies, the Company aims to create a safe and open environment where all Quad employees can bring their truest and best selves to work every day, consistent with the Company’s long-standing values. Quad regularly reviews its policies and aims to ensure all Company procedures, processes and distribution of resources create equal opportunities among its employees and fair and just outcomes.
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Building Strong Communities
The Company believes partnering with local communities creates a catalyst for movement and change, which benefits those outside of Quad’s walls while helping the Company maintain a positive reputation as the kind of business people choose to work for, do business with, invest in and call a true neighbor. Supporting community activities, initiatives and organizations also demonstrates the Company’s Values in action, which fosters pride and employee engagement.
The four key objectives that drive the Company’s community impact from strategic investment of finances, volunteerism and in-kind services in community organizations are:
• Lessen the use of natural resources and impact on the environment;
• Provide academic and educational opportunities, and experiential learning for more people;
• Ensure that the diversity of Quad reflects the communities where its employees live and work, as well as the clients who trust Quad with their business; and
• Support programs that improve employees’ mental and physical health.
Corporate Governance
Effective corporate governance has been a part of Quad since its founding and is informed by the Company’s Values, especially “do the right thing,” which strengthens partnerships, reduces risk and creates sustainable value for the Company long term. Governance starts at the highest level of the Company with oversight by the Board of Directors, which is responsible for minimizing risk while maximizing the effectiveness of Quad’s business strategy. Key tenets of Quad’s governance strategy include:
• Family Leadership: As of January 31, 2024, the Quadracci family, through the Quad/Graphics, Inc. Amended and Restated Voting Trust Agreement (“Quad Voting Trust”), has voting control of approximately 73% of the Company’s outstanding shares. The Company believes this governing structure provides continued stability and flexibility to achieve its long-term strategic vision.
• Risk Management: Led by an executive risk steering committee, Quad’s Enterprise Risk Management program strategically identifies potential risks to the business and conducts appropriate response planning. Risk management is a highly collaborative process at Quad as cross-functional teams help recognize the ripple effects a situation could have across the Company’s interconnected operations.
• Employee Compliance: Employees are required to take an active role in ethics and compliance. Each year, all employees take a suite of compliance trainings on topics that include the Code of Conduct, anti-harassment, conflict of interest, Customs-Trade Partnership Against Terrorism (C-TPAT), data privacy, Health Insurance Portability and Accountability Act of 1996 (HIPAA), information security, physical security, acceptable use policy for technology assets, and anti-bribery and anti-corruption. Employees can discreetly report violations to the Code of Conduct through multiple easy-to-use channels, including a 24/7 anonymous Ethics and Compliance Hotline.
• Supplier Code of Conduct: The Company maintains a Supplier Code of Conduct to ensure suppliers, vendors, contractors, consultants, agents and other providers of goods and services follow the Company’s policies related to business integrity, ethical labor and human rights practices, associate health and safety, and environmental management. This code also includes anti-corruption and anti-bribery policies.
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• Data Security: Quad continually updates and strengthens its information and data security program to address the fast-changing threat landscape and ensure proper oversight. The program includes ongoing employee education to ensure the security of physical and digital workspaces, protect the privacy of valuable data, identify potential phishing and malware threats, and avoid risky behaviors.
Growth Strategy
As an MX company, Quad intends to expand its capabilities and develop its platform through executing on the three pillars of its growth strategy:
Deliver Integrated Service Excellence
Quad focuses on solving problems, and removing pain points and sources of friction wherever a client experiences them in the marketing process. Quad seeks to become an invaluable strategic marketing partner by helping its clients successfully navigate today’s constantly evolving media landscape through innovative, data-driven omnichannel solutions that are scalable and efficiently produced and deployed — from household to in-store to online. A key component of Quad’s client-facing strategy is to strengthen relationships at higher levels within a client’s organization so the Company can better understand, anticipate and satisfy the organization’s business objectives.
To serve clients’ disparate needs, Quad continues to make disciplined and compelling investments across its integrated marketing platform. These investments take many forms, including new equipment, technology and service capabilities. The Company also makes investments in its talent, such as hiring business professionals with transformation, innovation, and client-side marketing and consulting expertise to enhance its position as an MX company, as well as investments to attract new employees and increase existing employee engagement, retention and productivity.
As the Company has transformed its offering to better meet the needs of brands and marketers, it has also made strategic decisions to divest of businesses that could not be easily leveraged as part of its greater integrated marketing platform. These decisions free up cash flow for disciplined investments that the Company believes will lead to sustainable growth.
Accelerate Market Penetration
Quad’s ability to acquire new and expand existing account relationships is critical to the Company’s growth strategy. The Company has made significant strides in recent years, introducing a growing number of brands and marketers to its suite of solutions. The Company is particularly focused on expanding in key vertical industries where it believes the biggest opportunities for new business exist. These include commerce, including consumer packaged goods, direct-to-consumer and retail; financial services; and health. Key investments in 2023 to accelerate market penetration included:
• Fortifying business development efforts through strategic personnel hires in Sales, Sales Operations, Marketing and Agency Solutions to give the Company wider visibility as an MX company within its current client base, as well as with companies in its targeted growth verticals;
• Expanding awareness of Quad’s differentiated capabilities through a large-scale marketing and advertising effort centered on the campaign “Built on Quad”; and
• Providing brand visibility and thought leadership at global industry events, such as the Cannes Lions Festival of Creativity, the premier gathering of the global advertising and creative communications industry.
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Leverage Culture as an MX Company
The Company’s culture continues to be a driver for growth as Quad accelerates its competitive position as an MX company. Core aspects of its unique culture are:
• Walk in the shoes of clients: Quad delivers service excellence by encouraging all employees, regardless of job title, to prioritize listening to clients’ needs and challenges, and do what they can to make it easy to work with Quad at every touchpoint.
• Empower employees: Quad continues to position itself as the workplace for the marketing industry’s best talent, and empowers its employees to think like owners and take responsibility for how they can help propel the business forward. By embracing employees’ unique perspectives and experiences, fostering a sense of belonging through inclusion, and providing growth opportunities through skill development and career advancement, Quad believes employees are more fully engaged in their day-to-day activities, producing better results for clients while helping grow the business.
• Continuously improve: Through its foundation in manufacturing, Quad’s has built a “maker” culture that embraces attention to detail, expert execution and a commitment to continuous improvement. All employees are encouraged to identify opportunities, however small, that can improve processes and create efficiencies. It’s this long-standing commitment to continuous improvement that enables Quad to confidently identify and remove friction from clients’ workflows.
• Collaborate to innovate: The close, personal relationships employees form with one another is a foundational aspect of Quad’s culture. The Company recognizes that the more effectively teams work together across the entire organization, the better it can serve its clients. Accordingly, Quad encourages employees to connect and collaborate with others both inside and outside of their immediate department and/or business area. Integrated workflows and inter-departmental collaboration speed the Company’s ability to innovate and evolve as an MX company.
• Communicate a unified vision forward : The Company sends timely, transparent communications to all employees through a variety of channels to maintain employee engagement and connectivity, and maintain trust. These communication efforts not only detail matters of personal importance (e.g., total rewards), but also keep employees informed on business operations and the Company’s strategic direction. By articulating the role that each business area plays in the Company’s suite of interconnected solutions, Quad crafts a unified vision that everyone can rally behind. Communication channels include InsideQuad, the employee intranet; executive blogs and video logs (vlogs); executive town halls; department meetings; “lunch and learn” events; email; in-plant electronic and print signage; and in-home mailings.
Financial Objectives
Quad follows a disciplined approach to maintaining and enhancing financial strength to create shareholder value. This strategy is centered on the Company’s ability to drive profitable growth and maximize net earnings, Free Cash Flow, and operating margins; maintain consistent financial policies to ensure a strong balance sheet, liquidity level and access to capital; and retain the financial flexibility needed to strategically allocate and deploy capital as circumstances change. The priorities for capital allocation and deployment are balanced according to prevailing circumstances and what the Company thinks is best for shareholder value creation at any point in time. These priorities currently include using Free Cash Flow and cash proceeds from any asset sales to continue reducing debt while investing in scaling the business as a marketing experience company to fuel net sales growth; driving profitability through sales growth; and pursuing opportunities to return capital to shareholders through stock buybacks or dividends.
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To provide ongoing improvement in productivity and, ultimately, maximize operating margins, the Company 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 the high-quality, low-cost producer generates increased Free Cash Flow and allows the Company to maintain a strong balance sheet through debt reduction. The Company’s disciplined financial approach also allows it to maintain sufficient liquidity and to reduce refinancing risk. Quad is proud of its strong and trusted banking relationships, which provide the Company with increased financial flexibility to make strategic investments to accelerate its growth and drive profitability as a marketing experience company.
Patents, Trademarks and Trade Names
Quad operates research and development facilities that support the development of new equipment, process improvements, raw materials and content management, and distribution technologies to better meet client needs and improve operating efficiencies. The Company continues to innovate within the printing and print-related industry and, as a result, has developed what it believes to be one of the most powerful patent portfolios in the print industry.
Quad currently holds or has rights to commercialize a wide variety of worldwide patents and applications relating to its business. The Company intends to continue to file patent applications that it believes will help ensure the continued strength of the Company and its portfolio. Additionally, the Company markets products, services and capabilities under a number of trademarks and trade names. Quad aggressively defends its intellectual property rights and intends to continue to do so in the future.
Raw Materials
The primary raw materials that Quad uses in its print business are paper, ink and energy. At this time, the Company’s supply of raw materials are available from numerous vendors; however, based on market conditions, the current supply is under pressure due to supply chain shortages and higher than expected inflation. The Company generally buys these raw materials based upon market prices that are established with the vendor as part of the procurement process.
Approximately half of the paper used in the printing process is supplied directly by the Company’s clients. For those clients that do not directly supply their own paper, the Company makes use of its purchasing efficiencies to supply paper by negotiating with leading paper vendors, uses a wide variety of paper grades, weights and sizes, and does not rely on any one vendor. In addition, the Company generally includes price adjustment clauses in sales contracts for paper and other critical raw materials in the printing process. Although these clauses generally mitigate paper price risk, higher paper prices and tight paper supplies, as well as changes in the United States import or trade regulations, may have an impact on client demand for printed products. The Company’s working capital requirements, including the impact of seasonality, are partially mitigated through the direct purchasing of paper by its clients.
The Company produces the majority of ink used in its print manufacturing, allowing it to control the quality, cost and supply of key inputs. Raw materials for the ink manufacturing process are purchased externally from a variety of vendors.
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. The Company mitigates its risk through natural gas hedges when appropriate. In its logistic operations, however, the Company is able to pass a substantial portion of any increase in fuel prices directly to its clients.
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Information About Our Executive Officers
The following table sets forth the names, ages (as of January 31, 2024) and positions of Quad’s executive officers.
Name Age Position
J. Joel Quadracci 55 Chairman, President and Chief Executive Officer
Eric N. Ashworth 58 Executive Vice President of Product and Market Strategy
Anne M. Bauer 59 Vice President and Chief Accounting Officer
Julie A. Currie 60 Executive Vice President and Chief Revenue Officer
Joshua J. Golden 52 Chief Marketing Officer
Dana B. Gruen 49 General Counsel, Corporate Secretary and Chief Risk & Compliance Officer
David J. Honan 55 Executive Vice President and Chief Operating Officer
Steven D. Jaeger 59 Vice President and Chief Information Officer
Donald M. McKenna 51 Executive Vice President and Chief Administrative Officer
Robert H. Quadracci 56 Chief Human Resources Officer
Anthony C. Staniak 51 Chief Financial Officer
Kelly A. Vanderboom 49 Executive Vice President and Treasurer; Head of Agency Operations and Logistics
Mr. J. Joel Quadracci has been a director of Quad since 2003, its President since January 2005, its President and Chief Executive Officer since July 2006 and its Chairman, President and Chief Executive Officer since January 2010. Mr. Quadracci joined Quad in 1991 and, prior to becoming President and Chief Executive Officer, served in various capacities, including Sales Manager, Regional Sales Strategy Director, Vice President of Print Sales, Senior Vice President of Sales and Administration, and President and Chief Operating Officer. He serves on the board of directors for Plexus Corp., Pixability, Inc., Road America, Inc., Children’s Hospital of Wisconsin, the National Association of Manufacturers, and the Metropolitan Milwaukee Association of Commerce. He also serves on the board of trustees for the Milwaukee Art Museum and on the advisory council of the Smithsonian National Postal Museum. Mr. Quadracci received a B.A. in Philosophy from Skidmore College in 1991. Mr. Quadracci is the brother of Kathryn Quadracci Flores, M.D., a director of Quad and President of QuadMed, the brother-in-law of Christopher B. Harned, a director of Quad, and the first cousin of Robert Quadracci, Chief Human Resources Officer.
Mr. Ashworth has served as Executive Vice President of Product and Market Strategy since joining Quad in 2015 and as President of Quad Agency Solutions since April 2016. Prior to joining Quad, Mr. Ashworth was President of SGK, Inc. (formerly Schawk, Inc.) from July 2012 to July 2015; Chief Growth and Strategy Officer of SGK from September 2009 to July 2012; and Global Chief Growth Officer of Anthem Worldwide (a division of SGK) from November 2003 to 2010. Prior thereto, Mr. Ashworth was Co-founder and President of BlueMint Associates from June 2002 through November 2003, after serving in various marketing roles at Fitch San Francisco, Addis Interaction, Levi Strauss & Co., Clorox, Colgate-Palmolive and National Semiconductor. Mr. Ashworth is a board member of Uniting Voices Chicago (formerly Chicago Children’s Choir) and The BrandLab, a nonprofit organization that works to increase diversity in the marketing industry.
Ms. Bauer has served as Vice President since January 2022 and Chief Accounting Officer since March 2017. She previously served as Director - Corporate Controller of Quad from May 2016 until March 2017 and then as Executive Director and Chief Accounting Officer until January 2022. She joined Quad in September 2011, serving as Director of Corporate Accounting until May 2016. Prior to joining Quad, Ms. Bauer held various accounting positions at Journal Communications, Inc., during her 18 years there, including Vice President and Controller from June 2000 until September 2011.
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Ms. Currie has served as Executive Vice President and Chief Revenue Officer since November 2020. She previously served as Executive Consultant of FCM, LLC from 2019 to 2020. Prior thereto, Ms. Currie served in multiple senior leadership roles at Nielsen, a global leader in audience measurement, data and analytics, including as Senior Vice President, Global Retail Product Leadership from 2016 to 2019; as Senior Vice President, Global Loyalty Commercial Director from 2012 to 2016; as Senior Vice President, Global Business Services North America from 2008 to 2012; as Vice President, National Accounts Group Client Director from 2003 to 2007; and as Vice President, Group Client Director from 2001 to 2003. Ms. Currie serves on the board of directors of the Boys & Girls Club of Lake County, Illinois.
Mr. Golden has served as Chief Marketing Officer since July 2021. Prior to joining Quad, Mr. Golden was the President & Publisher of Ad Age from 2016 to 2021. Prior thereto, Mr. Golden served as Vice President, Global Digital Marketing for Xerox from March 2015 to June 2016; as Chief Marketing Officer of Story Worldwide from September 2011 to March 2015; as Chief Digital Officer of Grey Group from September 2010 to September 2011; as Managing Director, Digital of Havas from December 2007 to September 2010; as Group Director of Digital Marketing for NBC Universal from January 2006 to December 2007; and as Head of Digital at Young & Rubicam from November 2000 to January 2006.
Ms. Gruen has served as General Counsel, Corporate Secretary and Chief Risk & Compliance Officer since February 2023. Joining Quad’s legal department in 2007 as Employment Counsel, she advanced to Assistant General Counsel in 2014; Deputy General Counsel and Chief Compliance Officer in 2015; Vice President, Deputy General Counsel and Chief Compliance Officer in 2016; Vice President, Deputy General Counsel and Chief Compliance and Risk Officer in 2020; Senior Vice President, Deputy General Counsel and Chief Risk & Compliance Officer in 2022. Prior to joining Quad, Ms. Gruen was an associate at Foley & Lardner, Sonnenschein Nath & Rosenthal (now part of Dentons), and Seyfarth Shaw.
Mr. Honan has served as Executive Vice President and Chief Operating Officer since January 2022. His previous roles at Quad were Executive Vice President and Chief Financial Officer from January 2015 to December 2021; Vice President and Chief Financial Officer from March 2014 to January 2015; Vice President and Chief Accounting Officer from July 2010 to March 2014; Vice President and Corporate Controller from December 2009 to July 2010; and Corporate Controller from when he joined Quad in May 2009 to December 2009. Currently, he serves on the advisory board of FM Global. Prior to joining Quad, Mr. Honan served as Vice President, General Manager and Chief Financial Officer of Journal Community Publishing Group, a subsidiary of diversified media company Journal Communications Inc., for five years, and held executive-level roles in investor relations and corporate development at Newell Rubbermaid, a global marketer of consumer and commercial products. Prior thereto, Mr. Honan worked at the accounting firm Arthur Andersen LLP for 11 years.
Mr. Jaeger has served as Vice President and Chief Information Officer since November 2015. He previously served as Executive Vice President, President of Direct Marketing and Chief Information Officer from November 2014 to November 2015; as Executive Vice President, President of Direct Marketing and Media Solutions and Chief Information Officer from March 2014 to November 2014; as Corporate Vice President of Information and Technology since 2013; as Vice President of Information Systems and Infrastructure from 2007 to 2012; and as President of Quad/Direct from August 2007 until 2013. Prior thereto, Mr. Jaeger served as Quad’s Vice President of Information Systems from 1998 to 2006 and worked in various other capacities since he joined the company in 1994. Prior to joining Quad, Mr. Jaeger worked for Andersen Consulting for eight years.
Mr. McKenna has served as Executive Vice President and Chief Administrative Officer since January 2022. He previously served as Senior Vice President of Sales Administration from August 2018 to January 2022; Vice President of Sales Administration from June 2013 to August 2018; and Product Planning Manager from March 2010 to June 2013. Prior to joining Quad, Mr. McKenna worked at J.S. Eliezer Associates, a print consulting firm in Stamford, Conn., beginning in 1998 and was named President of the firm in 2004, the leadership role he maintained until joining Quad in 2010.
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Mr. Robert Quadracci has served as Quad’s Chief Human Resources Officer since February 2023. Previously, he was Vice President of Human Resources - Sales, Marketing & Quad Agency Solutions from January 2022 to February 2023; Executive Director – Human Resources from 2014 to 2022; and Human Resources Director from 1999 to 2014. Prior to joining Quad, Mr. Quadracci worked at Edison International as a Project Manager, Workforce Management and Corporate Redeployment from 1992 to 1999. Mr. Quadracci is the first cousin of J. Joel Quadracci, Chairman, President and Chief Executive Officer of Quad, and Kathryn Quadracci Flores, M.D., a director of Quad and President of QuadMed.
Mr. Staniak has served as Chief Financial Officer since January 2022. Previously, he served as Vice President of Finance from March 2017 until January 2022. Joining the company in 2009 as Director of External Reporting, Mr. Staniak was subsequently named Director of Internal Audit in 2011; Executive Director – Financial Controller in 2013; Chief Accounting Officer in 2014; and Vice President and Chief Accounting Officer in 2015. Prior to joining Quad, Mr. Staniak was Chief Financial Officer of data consulting firm Sagence, Inc. He began his career at the accounting firm Arthur Andersen LLP in 1995. Mr. Staniak is a member of the Wisconsin Institute of Certified Public Accountants and is a member of the board of directors for the Zoological Society of Milwaukee and for the Volunteer Center of Washington County.
Mr. Vanderboom has served as Executive Vice President and Treasurer since 2018 and Head of Quad Agency Solutions Operations since March 2023. Mr. Vanderboom also serves on the board of Quad/Med and the advisory board of Rise Interactive, a Quad company, and provides executive oversight for Quad Paper Services. Since joining Quad in 1993, he has served in various leadership capacities, including Controller of Parcel Direct, a freight expediting subsidiary sold to FedEx in 2004; Treasurer, beginning in 2007; Vice President, beginning in 2008; Vice President of the Program Management Office (PMO) from 2012 to 2014 and 2019 to 2023; and President of Logistics from 2014 to 2023.
Executive officers of Quad are elected by and serve at the discretion of Quad’s Board of Directors. Other than described above, there are no family relationships between any directors or executive officers of Quad.
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