Business News

Quad to Strengthen Canadian Platform Through Investments, Plant Consolidation

Tuesday 02. November 2010 - Quad/Graphics, Inc. (NYSE: QUAD) ("Quad/Graphics") announced today its plans for investing in and restructuring its Canadian operations to create a more efficient, flexible manufacturing platform that delivers enhanced value to customers.

The company intends to make an initial $23 million investment in its infrastructure and manufacturing platform within the next year; close the St.-Jean-sur-Richelieu printing plant in Quebec; and refocus the Edmonton, Alberta, plant operations on serving retail insert and directory clients exclusively.

“We are committed to Canada and are structuring our operations to deliver the best quality on the most efficient and flexible manufacturing platform coast to coast and nearest to our customers’ end users,” said Joel Quadracci, Quad/Graphics Chairman, President & CEO. “This strategic investment will improve our platform and is a big step toward strengthening our position in Canada.”

$23 Million Investment
The company’s planned multimillion-dollar investment in its Canadian manufacturing platform will be focused on upgrading equipment to further advance quality and turnaround times, as well as infrastructure improvements. The company also plans to invest in its people, providing enhanced training and education for continuous improvement. In addition, Quad/Graphics is bolstering its cross-media marketing services to help Canadian retailers, publishers and other advertisers extend a consistent brand message across multiple print communication channels, and integrate those channels with other forms of media, such as the Internet, mobile technologies and digital tablets like the iPad. The printer’s comprehensive services for the Canadian marketplace range from design concept to layout and photography, workflow tools for automating page production, extensive versioning capabilities to give advertisers the ability to precisely target messages, and creative outputs, including large-format signs and in-store / point-of-purchase (POP) materials in addition to flyers, inserts, magazines, catalogs, direct mail, books and directories.

“We are excited by how quickly the company has committed to investing in the Canadian platform, which is characterized by plants strategically located across the entire nation,” said Philippe Cloutier, President of Quad/Graphics in Canada. “We are strengtheningour capabilities today to better serve retailers and publishers for years to come.”

St. Jean Plant Closing
The St. Jean plant will begin stepping down operations immediately and the company expects to cease production by the end of this year. The plant encompasses nearly 240,000 square feet and employs approximately 270 people.Client work will be transitioned to other, more efficient plants within Quad/Graphics’ existing network of facilities.The company will proactively assist impacted employees in finding new jobs, including those available at other Quad/Graphics locations.

Following the closure, the company will have eight printing plants in Canada in Dartmouth, Nova Scotia; Montréal, St. Laurent and LaSalle, Quebec; Aurora and Concord, Ontario; Edmonton, Alberta; and Vancouver, British Columbia, as well as a fully integrated premedia facility in Toronto that offers prepress, photography and creative services.

Edmonton Plant Focus
The company will dedicate the Edmonton facility to producing retail inserts and directories, capitalizing on the plant’s superior manufacturing and distribution capabilities in these segments. Magazine and other commercial work currently produced in the Edmonton plant will be transferred to the company’s Aurora, Ontario, facility, which is well-equipped for high-quality and timely magazine production. The transition of work between the two facilities is expected to occur within the next 30 days. As a result, approximately 30 employee positions will be eliminated in Edmonton.

“While we are very focused on integrating operations and achieving synergies, we are also focused on finding ways to better serve our clients and help them grow and succeed in the Canadian marketplace,” Mr. Quadracci said. “We have more solutions than ever to help clients capitalize on the power of print as part of a multichannel communications strategy.”

Forward-looking statements
To the extent any statements made in this press release contain information that is not historical, these statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.These forward-looking statements relate to, among other things, Quad/Graphics’ objectives, goals, strategies, beliefs, intentions, plans, estimates, prospects, projections and outlook, and can generally be identified by the use of words such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe” or “continue” or the negatives of these terms, variations on them and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.

These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of Quad/Graphics. These risks, uncertainties and other factors could cause actual results to differ materially from those expressed or implied by those forward-looking statements. Such risks, uncertainties and other factors that may impact Quad/Graphics include: unexpected costs or liabilities related to the recently completed acquisition of World Color Press Inc., including the effects of purchase accounting that may be different from Quad/Graphics’ expectations; Quad/Graphics may be unable to achieve the estimated potential synergies expected from the acquisition or it may take longer or cost more than expected to achieve those synergies; failure to successfully integrate the operations of Quad/Graphics and World Color Press; changes in industry conditions, such as the competitive environment for companies in the printing industry; regulatory and litigation matters and risks; legislative developments or changes in laws; changes in macroeconomic conditions in the countries where Quad/Graphics operates, including the impact of such conditions on future volume and pricing; the impact of fluctuations in interest rates, commodity prices and foreign exchange rates; the effects of changes in political conditions and developments in the countries where Quad/Graphics operates; and the effect of accounting pronouncements issued periodically by standard-setting bodies.

Quad/Graphics cautions that the foregoing list of risks, uncertainties and other factors is not exhaustive and you should carefully consider the other factors detailed from time to time in Quad/Graphics’ filings with the United States Securities and Exchange Commission and other uncertainties and potential events when relying on the company’s forward-looking statements to make decisions with respect to Quad/Graphics.

Because forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on such statements, which speak only as of the date of this press release. Except to the extent required by the federal securities laws, Quad/Graphics undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.