Good morning, and welcome to the Quad's First Quarter Conference Call. [Operator Instructions] A slide presentation accompanies today's webcast, and participants are invited to follow along, advancing the 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 note, this event is being recorded. I would now like to turn the conference 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 today's call with a business update, and Tony will follow with a summary of Quad's first quarter 2023 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 on 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 GAAP 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 we continue to experience positive momentum in our business, achieving an eighth consecutive quarter of top line growth. Net sales increased 3% in the quarter due to higher product sales in the United States and in Mexico, and also increased agency solution sales as clients continue to embrace Quad's unique integrated marketing offering. We also grew adjusted EBITDA by $11 million, or 24%, in the quarter due to increased profitability from net sales growth, improved manufacturing productivity and savings from cost reduction initiatives. Economic uncertainty has prompted some clients to take a more conservative approach to the start of the year and, in many instances, reallocate where they invest their marketing dollars. Our integrated marketing offering easily supports these shifts in marketing spend to maximize results. We are able to offset softness in offerings such as national magazines while leaning into growth opportunities in other offerings like agency solutions, packaging and in-store. We have flexibility and agility to pivot and meet changing client needs. In the current economic environment, we continue our long-standing disciplined approach to managing all aspects of our business, including treating all costs as variable and aligning our cost structure with revenue opportunities. At the same time, we are aggressively pushing forward on our growth strategy as a marketing experience, or MX company, that services marketers' needs from end to end, solving their biggest marketing challenges. Turning to Slide 4. Our leadership as an MX company was validated once again last week through our ranking on the world's largest agency companies list compiled annually by Ad Age. This year, Quad ranks number 14, up two spots from our number 16 ranking in 2022. We are also proud to share that, once…

Thanks, Joel, and good morning, everyone. On Slide 10, we show our diverse revenue mix. During the first quarter, our net sales increased 3% from the first quarter of 2022, driven by growth in our Mexico operations, catalogs and our agency solutions offerings. These increases were partially offset by expected organic declines in large-scale print, as well as reduced sales from the December 2022 divestiture of our Argentina operations. Despite the organic decline in large-scale print, we continue to gain segment share, including winning Reader's Digest, the fourth largest circulation magazine in the United States. Slide 11 provides a snapshot of our first quarter 2023 financial results. We started the year strong with adjusted EBITDA of $60 million in the first quarter of 2023, a 24% increase as compared to $49 million in the first quarter of 2022, and adjusted EBITDA margin improved from 6.5% to 7.9%. The increase in adjusted EBITDA was due to increased profitability from net sales growth, improved manufacturing productivity, and savings from cost reduction initiatives. Adjusted diluted earnings per share increased to $0.15 in the first quarter of 2023 as compared to $0.04 in the first quarter of 2022 primarily due to higher adjusted net earnings. Earnings per share were also benefited by the company's repurchase of more than 5% of our total outstanding common stock since the second quarter of 2022 for $10.3 million. Free cash flow was negative $79 million in the first quarter of 2023, a $43 million decrease compared to 2022, primarily due to the timing of working capital and $29 million in capital expenditures to invest in our platform for further sales growth and automation efficiencies. As a reminder, the company historically generates the majority of its free cash flow in the fourth quarter of the year and expects $50…

Okay, operator, it looks like people are making it easy on us today. And so with that, this is Joel. I just want to thank everyone for joining today's call. And I want to close by reiterating my confidence in our team and our strategy and our future as a marketing experience company. Our integrated marketing offering continues to be a competitive differentiator and a key driver behind our company's overall organic growth. With that, thank you again, and have a good day. We look forward to speaking with you again next quarter.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.