Business News

Valassis Announces Results for the Third Quarter Ended Sept. 30, 2012

Friday 26. October 2012 - Valassis (NYSE: VCI) today announced financial results for the third quarter ended Sept. 30, 2012. Third-quarter 2012 revenues were $523.8 million compared to $528.4 million in the prior year quarter. Third-quarter 2012 net earnings were $36.7 million, an increase of 33.5% from $27.5 million in the prior year quarter.

This increase was primarily the result of the previously announced cost reductions and a favorable income tax adjustment resulting from the expiration of certain tax reserves. Third-quarter 2012 diluted earnings per share (EPS) was $0.90, an increase of 55.2% from $0.58 in the prior year quarter due to improved earnings coupled with a lower share base as a result of share repurchases. Third-quarter 2012 adjusted EBITDA(*) was $75.2 million, an increase of 7.7% from $69.8 million in the prior year quarter.
“This quarter, we delivered strong growth in EPS and adjusted EBITDA(*),” said Rob Mason, President and Chief Executive Officer. “Notable gains in our Free-standing Insert business, ongoing operational improvements within Shared Mail, and continued cost containment efforts were key drivers that contributed to our results.”
Some additional highlights include:
— Selling, General and Administrative (SG&A) Costs: Third-quarter 2012
SG&A costs were $73.4 million compared to prior year quarter costs of
$80.5 million. This 8.8% decrease was primarily due to restructuring and
other cost reduction measures that took place at the end of the second
quarter.
— Capital Expenditures: Capital expenditures were $4.0 million for the
third quarter of 2012 and $15.8 million year to date.
— Stock Repurchases: During third quarter 2012, we repurchased $21.2
million, or 0.8 million shares, of our common stock at an average price
of $25.34 per share. Year to date, we have repurchased $87.1 million, or
4.1 million shares of our common stock at an average price of $21.08 per
share under our stock repurchase program.
— Liquidity:
— We reduced total debt by $3.8 million during third-quarter 2012, and
we ended the quarter with net debt (total debt less cash) of $501.0
million.
— At Sept. 30, 2012, we had $90.3 million in cash.
Outlook
Based on our plan and current outlook, we are updating our full-year 2012 guidance as follows:
— diluted EPS of $2.98 (previously $2.86) which reflects a favorable
income tax adjustment of $0.12;
— excluding one-time charges, adjusted diluted EPS(*) of $3.23 (previously
$3.11) which reflects a favorable income tax adjustment of $0.12; and
— capital expenditures to be between $20 million and $22 million
(previously approximately $26 million).
The company has decided to no longer use diluted cash EPS as a financial performance measure.
Business Segment Discussion
— Shared Mail: Revenues for the third quarter of 2012 were $331.4
million, an increase of 0.3% compared to the prior year quarter. Segment
profit for the quarter was $52.3 million, an increase of 13.2% compared
to the prior year quarter. The improvement in segment profit was due to
an increase in pieces per package and effective cost management,
including package optimization efforts and SG&A reductions.
— Neighborhood Targeted: Revenues for the third quarter of 2012 were
$75.8 million, a decrease of 1.4% compared to the prior year quarter.
Segment loss for the quarter was $1.1 million compared to segment profit
in the prior year quarter of $0.4 million due to continued margin
pressure.
— Free-standing Inserts (FSI): Revenues for the third quarter of 2012
were $72.2 million, a decrease of 1.8% compared to the prior year
quarter. Segment profit for the quarter was $7.6 million, compared to a
segment loss of $0.8 million in the prior year quarter. Segment results
for the quarter were positively impacted primarily by an increase in
average pages per book, which offset the absence of approximately $14
million in custom co-op revenue.
— International, Digital Media & Services (IDMS): Revenues for the third
quarter of 2012 were $44.4 million, a decrease of 6.5% compared to the
prior year quarter. Segment revenues were negatively impacted primarily
by the reduced consumer packaged goods spend affecting in-store as well
as a decrease in coupon redemption volume impacting NCH, our coupon
clearing business. The revenue decreases in these businesses offset the
growth in our digital business. Segment profit for the quarter was $0.1
million compared to $3.2 million in the prior year quarter, primarily
due to the continued investment in our digital business.