Last updated on November 10th, 2020 at 10:30 am
Sussex-based Quad/Graphics Inc. has reduced its employee headcount by 1,100 and closed four plants this year as it deals with the impact of the coronavirus pandemic on an already challenged printing industry.
Quad’s net sales dropped 28% in the third quarter to $679 million. For the first nine months of the year, revenues are down more than $767 million to slightly less than $2.1 billion, a 27% decline. The company reported net earnings of $1.6 million for the quarter compared to more than $126 million last year. For all of 2020, Quad is reporting a $34.3 million loss, which is an improvement from a $163.8 million loss over the same period last year.
“Client volumes remain significantly below last year – a trend we anticipate will continue through year end,” said Joel Quadracci, chairman, president and chief executive officer of Quad. “We are a nimble organization that can adjust our priorities to maintain good financial health, grow segment share and support our ongoing transformation, while continuing to keep our employees safe and serving our clients well.”
Following its second quarter, Quad said it had temporarily reduced costs by $325 million on an annualized basis.
During its third quarter earnings call, executives said 40% of those cost reductions had been converted into permanent savings.
Dave Honan, chief financial officer of Quad, specifically pointed to a headcount reduction of 1,100 as of the end of September and the closure of four facilities.
“That helps us kind of over the longer-term to right-size our costs to match volumes,” Honan said, adding the company would continue to use temporary savings to address short-term changes in demand.
Quad is no stranger to plant closures. The company has announced 47 of them since 2010 as it worked to eliminate excess printing capacity in an industry battered by changing media and advertising trends.
Those closures include announced closures of facilities in Charlotte, North Carolina, Portland, Oregon and Riverside, California in the first quarter of this year and the Taunton, Massachusetts retail facility in the second quarter.
Work from the Charlotte, Portland and Taunton facilities was consolidated into other locations while the Jurupa Avenue facility in Riverside was consolidated to the company’s Riverside-Box Springs location.
All four of the facilities specialized in producing retail and grocery advertising inserts.
The company has also recorded $25.4 million in employee termination charges this year, up from $19.9 million last year.