Business News

Valassis Announces Results for the First Quarter Ended March 31, 2013

Thursday 25. April 2013 - Valassis (NYSE: VCI) today announced financial results for the first quarter ended March 31, 2013. First-quarter 2013 revenues were $482.5 million, a decrease of 7.0% from $518.6 million in the prior year quarter.

This decrease was due primarily to an anticipated decline in revenues in the Neighborhood Targeted segment resulting from the change in certain client contracts to a fee-based media placement model. Increased revenues in our Free-standing Inserts (FSI) segment partially offset the decline.
First-quarter 2013 net earnings were $21.7 million, a decrease of 17.8% from $26.4 million in the prior year quarter. First-quarter 2013 diluted earnings per share (EPS) was $0.54, a decrease of 10.0% from $0.60 in the prior year quarter. First-quarter 2013 adjusted EBITDA* was $58.0 million, a decrease of 13.4% from $67.0 million in the prior year quarter.
“We are focused on improving execution, growing our share and achieving top and bottom-line growth,” said Rob Mason, Valassis President and Chief Executive Officer.”I am confident that we are taking the necessary steps to expedite our progress and expect to see positive results from our efforts in the second half of the year.”
Some additional highlights include:
— Selling, General and Administrative (SG&A) Costs: First-quarter 2013
SG&A costs were $76.3 million, down 1.7% compared to the prior year
quarter SG&A costs.
— Capital Expenditures: Capital expenditures for first-quarter 2013 were
$3.3 million.
— Stock Repurchases: During first-quarter 2013, we repurchased $21.2
million, or 725,512 shares, of our common stock at an average price of
$29.18 per share under our stock repurchase program.
— Liquidity:
— We reduced total debt by $3.8 million during first-quarter 2013, and
we ended the quarter with net debt (total debt less cash) of $486.6
million.
— At March 31, 2013, we had $97.2 million in cash.
Outlook
Based on our overall outlook, we are revising our full-year 2013 diluted earnings per share (EPS) and adjusted EBITDA(*) guidance as follows:
— diluted earnings per share (EPS) of between $3.05 and $3.20 (previously
$3.50), and
— adjusted EBITDA(*) of between $290.0 million and $300.0 million
(previously approximately $315.0 million).
We reiterate our guidance for capital expenditures of approximately $25 million.
2013 Planned Uses of Cash:
— Stock repurchase plan: We assume the use of approximately 35-40% of free
cash flow(*) for continued stock repurchases during 2013. Our stock
repurchase program does not obligate us to acquire any particular amount
of shares of common stock, and may be modified or suspended at any time
at our discretion.
— Quarterly dividend: In December 2012, the Board approved a cash dividend
policy pursuant to which Valassis intends to pay a quarterly cash
dividend to holders of its common stock. The dividend for the quarter
ended March 31, 2013 was $0.31 per share of common stock. Valassis may
modify, suspend or discontinue the dividend policy at any time at its
discretion.
Business Segment Discussion
— Shared Mail: Revenues for the first quarter of 2013 were $327.1
million, down 0.3% compared to the prior year quarter. Segment profit
for the quarter was $38.9 million, a decrease of 8.3% compared to the
prior year quarter. The decline in segment profit was driven primarily
by reduced wrap revenue and the shifting of product mix to lower margin
products.
— Free-standing Inserts (FSI): Revenues for the first quarter of 2013
were $85.7 million, an increase of 12.3% compared to the prior year
quarter. Segment profit for the quarter was $11.1 million, an increase
of 105.6% compared to the prior year quarter. Segment results for the
quarter were positively impacted by an increase in page volume, improved
gross margin and market share gains.
— Neighborhood Targeted: Revenues for the first quarter of 2013 were
$23.3 million, a decrease of 67.7% compared to the prior year quarter,
primarily due to the change in certain client contracts to a fee-based
media placement model. Segment loss for the quarter was $4.4 million
compared to segment loss in the prior year quarter of $1.6 million, due
primarily to continued margin pressure.
— International, Digital Media & Services (IDMS): Revenues for the first
quarter of 2013 were $46.4 million, an increase of 10.5% compared to the
prior year quarter, driven by growth in our in-store and digital
businesses. Segment loss for the quarter was $3.9 million, compared to
segment profit of $2.7 million in the prior year quarter, primarily due
to continued investment in our in-store and digital businesses and a
decline in coupon redemption volumes at NCH.