Quad/Graphics (QUAD) Small-Cap Virtual Conference summary

Business overview and strategy

• Operates 44 dry bulk vessels with a diversified cargo mix, including iron ore, coal, grain, and bauxite, serving global trade routes.

• Maintains a low financial leverage (20% net loan-to-value) and high dividend payout, focusing on dividends, deleveraging, and growth.

• Paid over $300 million in dividends and reduced debt by $120 million since 2021, while expanding the fleet by $550 million.

• Variable quarterly dividend policy, with 28 consecutive payments and a recent increase to $0.80 per share in Q2 2026.

• Flexible capital allocation allows for counter-cyclical acquisitions, achieving over 30% IRR on recent Capesize purchases.

Financial performance and fleet composition

• Q2 2026 adjusted net income reached $29 million, with EBITDA at nearly $57 million; H1 2026 EBITDA surpassed full-year 2025.

• 2025 acquisitions increased the asset base by 20%, positively impacting dividends.

• Every $1,000 increase in fleet-wide TCE adds $16 million in annualized EBITDA; Capesize vessels offer higher earnings volatility.

• Cash flow break-even rate is $10,000 per vessel per day, with no mandatory debt amortization and $300 million in undrawn revolver.

• All 44 vessels are owned, with an average fleet age of 12.5 years and a useful life of 25 years.

Market conditions and industry trends

• Dry bulk market is robust, with Baltic Capesize Index at $50,000/day and Supramax at $20,000/day.

• Chinese iron ore imports up 5% YTD; Brazilian and West African exports, especially bauxite, are driving longer ton-mile trades.

• Atlantic cargoes stretch fleet utilization, boosting rates; bauxite exports from Guinea now dominate China's imports.

• El Niño may support coal demand and disrupt Panama Canal transits, increasing voyage distances.

• Order book is 14-15% of the fleet, with 12% of vessels over 20 years old, indicating replacement rather than speculative ordering.