Your mailbox might be filled with Quad/Graphics' handiwork. A leading US printing company, Quad/Graphics produces catalogs, magazines, books, direct mail, and other commercial materials. The company's services include production, design, photography, binding, wrapping, and distribution. Quad/Graphics has produced catalogs for Bloomingdale's, books for National Geographic, and magazines such as Time Inc.'s People. The company operates facilities in about 20 countries around the world. Quad/Graphics was founded in 1971 by the late Harry Quadracci.
Quad/Graphics serves a diverse base of about 8,000 clients from 150 facilities located in more than 20 countries throughout North America, Latin America, and Europe. The company's international segment accounted for roughly 11% of total revenue in fiscal 2013.
Sales and Marketing
Quad/Graphics' growth strategy is also focused on consistent contract wins and renewals. In 2012 the company became an exclusive printer of retail inserts for Rite Aid Corporation under a new multiyear agreement.
The company's revenue increased by 17% in fiscal 2013 compared to the prior period. It reported $4.79 billion in revenue for fiscal 2013, up from $4 billion in revenue for fiscal 2012. Even with the spike in revenue, the company's net income decreased in fiscal 2013 compared to the previous fiscal year. It reported net income of $32 million for fiscal 2013, down from the $87 million the company reported for net income in fiscal 2012. Despite the drop in net income, Quad/Graphics' cash flow increased by more than $90 million during fiscal 2013 as compared to its cash flow levels in fiscal 2012.
In a significant move that switched Quad/Graphics' North American growth trajectory from Canada to Mexico, in 2011 and 2012 the company swapped several assets with Montreal-based print company Transcontinental. As part of the exchange, Quad/Graphics acquired three of Transcontinental's facilities in Mexico and sold all but one of its eight Canadian facilities to Transcontinental (Quad/Graphics retained its Vancouver facility). Quad/Graphics decided that operations in Canada would have required a substantial capital investment, while it views Mexico has having higher growth potential. It also reported that the Canadian business had underfunded pension obligations.
Mergers and Acquisitions
Quad/Graphics acquired marketing services provider Vertis for a net purchase price of $170 million in January 2013. It is using Vertis to enhance its position as a leader in retail advertising inserts, direct marketing, and in-store marketing. The company will provide continuity, financial stability, and ongoing business investment for Vertis' clients and employees.
The family of company founder Harry Quadracci controls the firm through ownership of its high-voting Class B shares.
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