Quad/Graphics Makes Multimillion-Dollar Investment in Mail Processing Plants

quadSUSSEX, WI, April 2, 2013 – Quad/Graphics, Inc. (NYSE: QUAD), is strengthening its direct marketing platform and solutions this year with multimillion-dollar investments in mail processing, including creating two regional commingling centers to drive greater postal savings and efficiencies for direct mail marketers; investing in a new custom web press and other equipment upgrades in its Effingham, Ill., plant; and adding print capabilities to its Westampton, N.J., plant.

“Direct mail continues to be one of the most powerful ways to drive consumer response, and we have the solutions today’s marketers need to acquire and retain customers, and grow their business,” said Steve Jaeger, President of Quad/Graphics Direct Marketing. “With these new investments, we advance our commitment to helping direct marketers maximize the revenue from their print spend while minimizing their total cost of production and distribution.”

New Regional Commingling Centers
Quad/Graphics will enhance its well-established commingling capabilities with the creation of two new regional commingling centers: A Midwest center in New Berlin, Wis., and an East Coast center at its existing direct mail production plant in Westampton, N.J.

The commingling process merges individual mail pieces together to improve presort discounts and dropship savings, reducing postal handling and delivery time. “Postage is typically our clients’ single largest production-related expense and can be as much as 60 percent of their budget,” Jaeger said. “By consolidating direct mail volume into these two new mailing centers, Quad/Graphics will help our clients qualify for greater postal discounts.”

The Midwest commingling center will start up in May in a 225,000-square-foot building in New Berlin not far from Quad/Graphics’ other Southeastern Wisconsin facilities. “In the near future, we will add copalletization capabilities to this location to further enhance postal discounts for our clients,” Jaeger said.

The East Coast commingling center will start up later this month in the Westampton plant, and will support Quad/Graphics’ nearby direct marketing production facilities, newly acquired from Vertis.

Effingham and Westampton Plant Expansions
Quad/Graphics will add print capabilities to its Westampton plant and enhance Effingham’s platform with a new custom web offset press. In addition, equipment upgrades to other Effingham presses will allow the plant to produce promotional gaming pieces, such as scratch-off products.

 

The Effingham plant’s new custom web press, scheduled to start up by the end of the summer, is a highly productive and versatile, 11-unit double-web press featuring high output and maximum flexibility for producing complex mail pieces. Unique features include duplex inkjet capability so both sides of both webs can be personalized with coupons, barcodes and highly customized messaging to drive consumer engagement and elicit response. The 11 printing units allow complex combinations of PMS colors and varnish coatings. The press is modular, providing flexibility for inline finishing such as die-cutting, gluing and UV coatings that can be set up in any order depending on the job.

Two other presses at the Effingham plant, scheduled to start up in May, will be upgraded with equipment for game piece production. Enhancements to the plant’s variable imaging and inkjet capabilities are also planned, giving direct marketers more options to drive response.

The Westampton plant is in the process of adding print capabilities to complement the plant’s existing, advanced finishing operations. Quad/Graphics will relocate several laser printers and two forms presses from other Quad/Graphics’ direct marketing facilities.

“Quad/Graphics Direct Marketing is dedicated to offering the best, most sophisticated platform and direct mail solutions,” Jaeger said. “Our goal is to continually redefine the value we bring to the marketplace and be the best one-stop resource for our clients.”

Forward-Looking Statements
This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding, among other things, our current expectations about the Company’s future results, financial condition, goals, strategies, revenue, earnings, free cash flow, margins, prospects and/or outlook and are indicated by words or phrases such as “anticipate,” “estimate,” “expect,” “project,” “believe” and similar words or phrases. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results to be materially different from those expressed in or implied by such forward-looking statements. Forward-looking statements are based largely on the Company’s expectations and judgments and are subject to a number of risks and uncertainties, many of which are unforeseeable and beyond our control.

The factors that could cause actual results to materially differ include, among others: the impact of significant overcapacity in the highly competitive commercial printing industry, which creates downward pricing pressure and fluctuating demand for printing services; the inability of the Company to reduce costs and improve operating efficiency rapidly enough to meet market conditions; the impact of electronic media and similar technological changes including digital substitution by consumers; the impact of changing future economic conditions; the failure to renew long-term contracts with clients on favorable terms or at all; the failure of clients to perform under long-term contracts due to financial or other reasons or due to client consolidation; the failure to successfully identify, manage, complete and integrate acquisitions and investments, including the integration of the operations of Vertis Holdings, Inc.; the impact of changes in postal rates, service levels or regulations; the impact of fluctuations in costs and the availability of raw materials; the impact of increased business complexity as a result of the Company’s entry into additional markets; the impact of regulatory matters and legislative developments or changes in laws, including changes in privacy and environmental laws; the ability of the Company to make the significant capital expenditures needed to remain technologically and economically competitive; the impact on Quad/Graphics class A common shareholders of a limited active market for Quad/Graphics common stock and the inability to independently elect directors or control decisions due to the class B common stock voting rights; and the other risk factors identified in the Company’s most recent Annual Report on Form 10-K, as such may be amended or supplemented by subsequent Quarterly Reports on Form 10-Q or other reports filed with the Securities and Exchange Commission.

Except as required by the federal securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Quad/Graphics
Quad/Graphics (NYSE: QUAD), a leading global printer and media channel integrator, is redefining print in today’s multichannel media world by helping marketers and publishers capitalize on print’s ability to complement and connect with other media channels. With consultative ideas, worldwide capabilities, leading-edge technology and single-source simplicity, Quad/Graphics has the resources and knowledge to help its clients maximize the revenue they derive from their marketing spend through channel integration, and minimize their total cost of production and distribution through a fully integrated national distribution network. The Company provides a diverse range of print solutions, media solutions and logistics services from multiple locations throughout North America, Latin America and Europe.