Release Date: February 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you update us on the plans for growth investments in 2025? A: Anthony Staniak, CFO: We plan to increase capital expenditures from $57 million last year to $70 million this year, focusing on technology investments such as AI and our In-Store Connect offering. Additionally, we are increasing investments in labor to scale our offerings, which will impact our EBITDA line.
Q: Could you walk us through the organic outlook for 2025, particularly the expected growth in agency solutions and targeted print? A: Anthony Staniak, CFO: We anticipate a 4% revenue decline in 2025, an improvement from the 9.7% decline in 2024. We expect growth in agency solutions, international print, and targeted print, with strong performance in Mexico and direct mail. However, large-scale print units like retail inserts will continue to face organic decline.
Q: How do you monetize At-Home Connect, and is it primarily a tool to drive more direct mail volume? A: J.Joel Quadracci, CEO: At-Home Connect is both a tool and a revenue generator. It allows us to automatically trigger personalized direct mail based on consumer signals, integrating with our data stack and driving revenue across our offerings, including direct mail.
Q: What is the potential impact of tariffs on your business, particularly regarding growth in Mexico? A: J.Joel Quadracci, CEO: The biggest tariff impact would be a 25% tax on Canadian paper, which is a pass-through cost to clients. We've mitigated short-term risks by securing Canadian paper supplies. Our exposure to Mexico is limited, and we could find U.S. solutions if needed.
Q: Are there any significant cost savings expected in 2025, following improved productivity in 2024? A: J.Joel Quadracci, CEO: We continue to focus on cost management, leveraging AI for labor reduction and content creation. Our manufacturing group remains flexible in managing labor, and we are exploring further automation and efficiency improvements.
Q: What are the expected revenue trends for the beginning of 2025, given the volatility in previous quarters? A: Anthony Staniak, CFO: We anticipate a lighter first quarter due to the loss of a large grocery client, with revenue trends improving throughout the year, particularly in the second half during our seasonal production peak.
Q: Can you provide an update on asset sales and expected cash proceeds? A: Anthony Staniak, CFO: The Saratoga Springs sale was completed in 2024. The European operations sale is expected to close in early 2025. We are actively marketing four additional facilities, with proceeds included in our 2025 guidance.
Q: Does your revenue guidance for 2025 account for potential tariff impacts, particularly from Canada? A: J.Joel Quadracci, CEO: We feel confident in our short-term mitigation strategies for potential tariffs. However, if tariffs become permanent, it could impact client demand, similar to postal rate increases.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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