Quad/Graphics, Inc. (QUAD) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $11.30 million, or $ 0.22 a share in the quarter, against a net loss of $552.20 million, or $11.50 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $24.20 million, or $0.48 a share compared with $9.70 million or $0.20 a share, a year ago.

Revenue during the quarter dropped 6.97 percent to $1,056.40 million from $1,135.50 million in the previous year period. Gross margin for the quarter expanded 205 basis points over the previous year period to 21.91 percent. Operating margin for the quarter period stood at positive 3.20 percent as compared to a negative 68 percent for the previous year period.

Operating income for the quarter was $33.80 million, compared with an operating loss of $772.10 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $121.60 million compared with $119.50 million in the prior year period. At the same time, adjusted EBITDA margin improved 99 basis points in the quarter to 11.51 percent from 10.52 percent in the last year period.

"We are pleased with our third quarter performance, which reflects our ongoing focus on driving sustainable cost reductions, productivity improvements and operational efficiencies across our platform," said Joel Quadracci, chairman, president and chief executive officer of Quad/Graphics. "Our solid earnings and cash flow in the quarter further strengthened our balance sheet and support our sustainable dividend policy. Because industry pressures continue to impact our top line, our team remains diligent and proactive in matching costs to revenue with the goal of being the low-cost producer while also listening to clients and innovating solutions to position the Company for long-term growth. Quad/Graphics holds a truly unique position in the industry, offering highly integrated, end-to-end print solutions as well as capabilities to improve both the efficiency and effectiveness of clients' media spend across print, digital, social, mobile and other channels. This customer-centric model gives us a distinct competitive advantage."

The company has spent $56.20 million cash to meet investing activities during the nine month period as against cash outgo of $233.80 million in the last year period. It has incurred net capital expenditure of $46.30 million on net basis during the nine month period, down 56.48 percent or $60.10 million from year ago period.

The company has spent $202.90 million cash to carry out financing activities during the nine month period as against cash inflow of $60.80 million in the last year period.

Cash and cash equivalents stood at $11.50 million as on Sep. 30, 2016, down 19.01 percent or $2.70 million from $14.20 million on Sep. 30, 2015.

Working capital drops significantly

Quad/Graphics, Inc. has witnessed a decline in the working capital over the last year. It stood at $161.10 million as at Sep. 30, 2016, down 50.35 percent or $163.40 million from $324.50 million on Sep. 30, 2015. Current ratio was at 1.20 as on Sep. 30, 2016, down from 1.41 on Sep. 30, 2015.

Cash conversion cycle (CCC) has decreased to 32 days for the quarter from 49 days for the last year period. Days sales outstanding were almost stable at 51 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 18 days for the quarter compared with 32 days for the previous year period. At the same time, days payable outstanding went up to 37 days for the quarter from 34 for the same period last year.