Good morning, ladies and gentlemen. Welcome to Quad's Fourth Quarter Conference Call. During today's call, all participants will be in a listen-only mode. [Operator Instructions] A slide presentation accompanies today's webcast and participants are invited to follow along, advancing slides themselves. To access the webcast, follow the instructions posted in the earnings release. Alternatively, you can access the slide presentation on the Investors section of Quad's website under the Events and Recent Presentations link. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Katie Krebsbach, Quad's Investor Relations Manager. Katie, please go ahead.

Thank you, operator, and good morning, everyone. With me today are Joel Quadracci, Quad's Chairman, President and Chief Executive Officer; and Tony Staniak, Quad's Chief Financial Officer. Joel will lead off today's call with a business update, and Tony will follow with a summary of Quad's fourth quarter and full year 2022 financial results, followed by Q&A. I would like to remind everyone that this call is being webcast and forward-looking statements are subject to safe harbor provisions as outlined in our quarterly news release and in today's slide presentation, Slide 2. Quad's financial results are prepared in accordance with generally accepted accounting principles. However, this presentation also contains non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, adjusted diluted earnings per share, free cash flow, net debt and debt leverage ratio. We have included in the slide presentation reconciliations of these non-GAAP financial measures to the financial measures. Finally, a replay of the call and the slide presentation will be available on the Investors section of quad.com shortly after our call concludes today. I will now hand over the call to Joel.

Thank you, Katie, and good morning, everyone. Beginning on Slide 3, I am pleased to report that we delivered strong 2022 results, meeting or exceeding our guidance across all metrics, including outperforming our top line guidance with an 11% increase in net sales when excluding divestitures. These results reflect increased sales in all our offerings, including increases in pricing to partially offset inflationary costs, print segment share gains from both new and existing clients, as well as continued growth in our agency solutions offerings and international locations. As far as earnings, we achieved adjusted EBITDA near the high end of our guidance range, ending the year with higher adjusted EBITDA than 2021 when excluding a nonrecurring $13 million property insurance gain. We also continued to pay down debt in 2022 and have reduced net debt by $489 million or 47% over the past 3 years. We ended 2022 with a debt leverage ratio of 2.16x, beating our guidance of approximately 2.25x and achieving our lowest leverage level since 2018. By the end of 2023, we expect to have paid off $564 million in debt, which would be a 55% debt reduction since January 1, 2020. Throughout 2022, our team skillfully navigated many challenges including paper and supply chain disruptions, inflationary cost pressures and labor shortages and our efforts to mitigate these impacts included price increases to partially offset inflation. The most recent of these increases went into effect on January 1, 2023. While we continue to see growth in the agency solutions part of our business, led by our digital marketing agency, Rise Interactive, economic uncertainty has prompted some clients to take a more conservative approach to the start of the year and pull back on their near-term print advertising spend. As always, we take a disciplined approach to managing…

Thanks, Joel, and good morning, everyone. Slide 11 provides a snapshot of our fourth quarter and full year 2022 financial results. We finished the year strong, delivering 4% net sales growth and 32% adjusted EBITDA growth in the fourth quarter of 2022 compared to the fourth quarter of 2021. The proactive investments we made during the first half of 2022 in hiring and training labor proved effective during our seasonal peak, driving strong operational performance. For the year, we met or exceeded all of our 2022 guidance metrics, including 11% net sales growth, excluding divestitures, beating our guidance range of 8% to 10% growth. Free cash flow generation of $94 million, beating our guidance range of $70 million to $90 million, and reduction of our debt leverage ratio to 2.16x beating our guidance of approximately 2.25x. As we look ahead to 2023, we are closely monitoring the economy and will remain disciplined with our capital allocation. Our primary focus remains debt reduction, and we estimate we will reach the low end of our long-term targeted debt leverage range of 2.0 to 2.5x by the end of 2023. We also expect to continue pursuing opportunities to invest in the growth of the business and return capital to shareholders, such as the $10 million we used in 2022 to repurchase 3.1 million shares of Class A common stock, which was more than 5% of our outstanding shares. Net sales were $885 million in the fourth quarter of 2022, up 4% from 2021. For the full year, net sales were $3.2 billion, up 9% from 2021. After excluding the 2021 Quad Express divestiture, net sales increased 11% in 2022 compared to 2021 due to sales growth in all of our offerings, including pricing increases to partially offset inflationary costs, print segment share gains…

Thank you, Tony. Because we compiled questions in advance of today's call, we will not ask for callers to enter the queue. Thank you to everyone who submitted a question. We have three top questions that were submitted. Our first question relates to client trends. It asks, how are your clients being impacted by the current macroeconomic environment and how is the macro environment affecting the trends you're seeing across the various parts of the business?

Yes. Thanks, Katie. And this one is always one I try and answer consistently in terms of where we see volumes adjust. And if I start at looking at the print products that we have because Quad comes from print, the print products is the part that has a bigger impact on our volume as we go forward. And so I'd like to kind of share with you what we're seeing there. And then I'll make some comments, though, on your question about the different types of lines and how it's impacting us. And so I always start with large-scale print. This is the area that we have expected decline. We've talked about it for years. We've seen it, and we manage for it. And so starting with retail inserts, these are the coupons and such that retailers or grocers will put in your Sunday newspaper for distribution to you. And because of all those factors, we've seen a 20% decline in 2022 in terms of volume there, which is not unexpected. The other area where we've seen decline is publications, and these are large run publications. And there in 2022 for the year, we saw about a 12% reduction, but that was heavily impacted by several large titles that closed and ceased publication. And so that's that segment. And those two together is the part of our print -- [pie] that it continues to shrink, while the other parts grow, and that is planned for. The catalog side, which, to us, is a very important media channel for driving revenue from our clients across many different segments was off about 4% for the total year but that was heavily focused in the fourth quarter as we saw some pullback in demand, but also some impact from supply chain challenges…

Thank you, Joel. That leads into our second question. It's regarding Quad as an investment. It asks, how is Quad ensuring its financial strength in the current economy and the ability to deliver value to shareholders going forward?

Well, I mean, it's sort of wrapped up in some of what I just talked about. It's managing the core business that creates the cash flow for us to invest in, the transformation we've done upstream to the place where marketers really need help. And so we've been very disciplined about that, and I'll let Tony further comment on it. But I think we're very proud -- not that I think, I know we're very proud of how we've been able to manage both sides of the coin here, deal with the product line that we have to deal with those changes and dynamics while growing into an area that people seem to be really responding to. And so with that, I think having that discipline of being able to play defense and offense in a bad economy is what our strength will be and I'm very confident that our approach and our commitment to not pulling back on the offensive part while I manage the defensive part is very much part of what we're going to do here. Tony, in terms of how we're managing the financials.

So on financial strength, I mean, we're very happy with how we've reduced debt over the past 3 years and will continue to next year. We'll be at, as we've said earlier, over $564 million of debt pay down and where we have reduced our debt in half. And that strong balance sheet is a benefit to our shareholders because it's that reduced debt, along with our ongoing strong free cash flow generation that allows us to invest in growth while seeking opportunities to provide returns to shareholders.

Thank you both. Our last question is regarding Quad's growth strategy. It asks, with Agency solutions being an important part of your strategy, what actions are being taken by Quad to continue to invest in its long-term growth?

Well, it's to continue to invest in the services side. And under that is not just the idea of helping people decide where to spend, but it's the analytics behind driving that answer. So investing in the talent there, investing in content creation talent but also in expertise of people who know how to help our customers deal with problems. Because that talent is coming from their world and is helping us guide our investment. So you'll continue to see us be very committed to driving the services side while also aggressively and appropriately managing the cash flow side that helps us invest in the whole pie together, and that's what will make us successful on into the future.

This concludes the Q&A portion of today's call. And now I would like to turn the call back to Joel for closing remarks.

Thanks, Katie, and thank you, everyone, for joining today's call. I just want to reiterate that we are committed to creating a better, more purposeful and sustainable way forward for all of our stakeholders, and we will remain nimble and adjust as necessary to the changing economy, but also be prepared to take advantage of it. With that, we'll see you next time.

The conference has now concluded. Thank you for your participation. You may now disconnect.