By Mike Lewis
MARTINSBURG, W.Va. — Quad/Graphics plans to sell its U.S. book business, including a facility in Martinsburg, as the company continues to implement its transformation plan.
“In reviewing our product portfolio, we made the recent decision to divest of two businesses,” Joel Quadracci, chairman, president and CEO, said in a conference call about the earnings report. “The first was Transpak, our industrial wood crating business, which we divested in the third quarter.”
He called Transpak “a great niche business,” but said it was “non-core to Quad 3.0,” referring to the company’s transformation plan.
“Now we are divesting of our book business, which generates annual revenues of
$200 million,” he said. “Divesting this underperforming business makes sense as we look at our product portfolio through the lens of our Quad 3.0 transformation strategy. Over the years, we have made significant investments in our book platform and talent, all which will benefit the industry long-term. As we pursue this sale, we thank our employees for their continued focus on serving our clients well.”
The book business generates around $200 million in sales each year, according to a recent news release from the company. It has facilities in Verasilles, Ky.; Fairfield, Pa.; and Martinsburg, with around 1,350 full-time and part-time employees.
According to a report in Biz- Times, Quad/Graphics has two printing facilities in Martinsburg. Only the Baker Road plant would be included in the books sale.
The transformation strategy looks to shift the company into an integrated marketing solutions platform that also offers customer analytics, campaign strategies, media optimization and global production.
In the conference call, Quadracci pointed to the example of the company’s partnership with a national discount grocery chain.
“Until June, we only printed weekly retail circulars for its 1,100-plus stores. Since then, we’ve been awarded print media placement, creative and production services for the circular program, followed by hosting the chains’ digital circular. In addition, the relationship has grown to include all digital and broadcast media planning and buying,” he said.
In the same release, the company announced a 50% reduction of its dividend, to 15 cents per share, as well as $50 million in cost savings.
Quadracci said those changes will “provide additional flexibility for growth-focused opportunities that address our clients’ evolving needs and to maintain a strong balance sheet over the long-term.”