ADVO's First Quarter Revenue Grows 4% with Ad Volumes Up 10%.Business Editors WINDSOR Windsor, British royal family Windsor (wĭn`zər), family name of the royal house of Great Britain. The name Wettin, family name of Albert of Saxe-Coburg-Gotha, consort of Queen Victoria, was changed to Windsor by George V in 1917. , Conn.--(BUSINESS WIRE)--Jan. 23, 2004 ADVO, Inc. (NYSE NYSE See: New York Stock Exchange : AD) today reported that revenues for its fiscal first quarter ended December December: see month. 27, 2003 topped $300 million for the first time, reaching a record $302.4 million, an increase of $11.2 million or 3.8% over the prior year quarter. This was achieved despite the negative impact of the grocery strike in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, . Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. E.P.S. for the quarter were $0.37 up 2.8% over the prior year quarter as reported, and up 11.1% excluding a $0.03 write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of previously capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. financing costs as a result of the Company's debt refinancing Refinancing An extension and/or increase in amount of existing debt. completed during the quarter. The Company estimates that its results for the quarter were negatively affected by grocery strike losses of $4.9 million in revenue and $0.04 in E.P.S. due to declines in both the weight and volumes of advertising circulars distributed. These declines were a result of grocers reducing advertising budgets as short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. cost savings measures. The timing of settlements in the Southern California strike remains uncertain. However, despite the effect of the strike, total advertising piece volumes for the grocery category nationally were up 2.1% for the quarter, reflecting continued strength in the core grocery category. The Company's overall advertising piece volumes grew 10.1% versus the prior year quarter, to 7.0 billion, and pieces per package grew 6.1%, as a result of broad-based broad-based Of or relating to an index or average that provides a good representation of the overall market. The S&P 500 and NYSE Composite are generally regarded as broad-based stock indexes, while the popular Dow Jones Industrial Average is biased increases in demand. These volume gains were achieved across geographies and categories. Particularly strong demand in lighter weight products, which have lower price points, and the affect of the grocery strike caused revenue per piece to be down 5.1%. Shared packages distributed were up 3.8%, demonstrating the growing reach and frequency of the Company's in-home in-home adj. Operating in or provided at the home of the customer or patient: in-home shopping; an in-home nursing program. network in response to increasing client demand. Gary Mulloy, ADVO's Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , stated, "Our results continue to reflect the demand- driven momentum that has been building during the past few quarters. Despite the grocery strike, we are experiencing strong revenue and volume gains across virtually all areas of our business, due to the strength of our offerings and our continuing focus on growth. Although we continue to be cautious about the timing of a more robust economic recovery, as well as the end of the grocery strike, we remain comfortable with our previously issued expectations of full year fiscal 2004 E.P.S. in the range of $1.72-1.80, adjusting for the $1.4 million refinancing charge and our recent 3-for-2 stock split."
Diluted Earnings per Share: Reconciliation of
GAAP to Non-GAAP Measures
-------------------------
Year Ended
Dec 27, Dec 28, %
2003 2002 Change
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Diluted Earnings per share - As Reported $0.37 $0.36 2.8%
Write-off of Debt Issue Costs 0.03 -- --
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Diluted Earnings per share - Pro Forma $0.40 $0.36 11.1%
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The Company will hold an analyst conference call to discuss its first quarter earnings today at 1:30-2:15 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . The call in number is 1-800-478-6251, and the replay number is 888-203-1112 (access code #562773). The replay will be available until midnight February 20, 2004. The call will also be available via webcast through the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of ADVO's website at www.advo.com. This report contains certain forward looking statements regarding the Company's results of operations and financial position within the meaning of Sections 21E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . Such forward looking statements are based on current information and expectations and are subject to risks and uncertainties which could cause the Company's actual results to differ materially from those in the forward looking statements. The Company's business is promotional in nature, and ADVO serves its clients on a "just in time" basis. As a result, fluctuations in the amount, timing, pages, weight, and kinds of advertising pieces can vary significantly from week to week, depending on its customers' promotional needs, inventories, and other factors. In any particular quarter these transactional fluctuations are difficult to predict, and can materially affect the Company's revenue and profit results. The Company's business contains additional risks and uncertainties which include, but are not limited to: general changes in customer demand and pricing; the possibility of consolidation in the retail sector; the impact of economic or political conditions on advertising spending and the Company's distribution system; postal and paper prices; possible governmental regulation or legislation affecting aspects of the Company's business; the efficiencies achieved with technology upgrades; the amount of shares the Company repurchases in the future under its buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may program; fluctuations in interest rates related to the outstanding debt; and other general economic factors. ADVO, Inc. (NYSE: AD) is the largest targeted in-home print advertising company in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , with annual revenues of nearly $1.2 billion. The Company's shared mail advertising programs reach, on average, 67 million US households weekly, and 105 million households monthly. This includes its core ShopWise(TM) branded programs, and the reach of its ADVO National Network Extension (A.N.N.E.) program. Additionally, the Company's SuperCoups(R) advertising solutions provide targeted advertising for local neighborhood businesses. ADVO launched the America's Looking For Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. Its Missing Children(R) program in partnership with the National Center for Missing & Exploited Children and the United States Postal Service postal service, arrangements made by a government for the transmission of letters, packages, and periodicals, and for related services. Early courier systems for government use were organized in the Persian Empire under Cyrus, in the Roman Empire, and in medieval in 1985, and ADVO's missing child cards are responsible for safely recovering 131 children. ADVO has 23 mail processing facilities and 34 sales offices nationwide and in Canada. ADVO's corporate headquarters are located at One Targeting Centre, Windsor, Connecticut Windsor was the first English settlement in the State of Connecticut, the 5th Colony to receive Statehood in the United States of America. Windsor is a suburban community in Hartford County, adjacent to the north to Connecticut's Capital, Hartford, with a relatively diverse 06095, and the Company can be visited at its Web site at www.advo.com.
ADVO, Inc.
Results of Operations (Unaudited)
Quarter Ended December 27, 2003
(In thousands, except per share data)
Quarter Ended
--------------------------
December 27, December 28,
2003 2002
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Revenues $302,377 $291,178
Cost of sales 221,358 214,354
Selling, general & administrative 61,261 56,851
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Operating Income 19,758 19,973
Interest expense 1,384 2,898
Write-off of debt issue costs 1,401 --
Other (income) expense, net (548) (265)
--------- ---------
Income before income taxes 17,521 17,340
Provision for income taxes 6,308 6,416
--------- ---------
Net Income $11,213 $10,924
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Basic earnings per share $0.37 $0.37
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Diluted earnings per share $0.37 $0.36
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Weighted average common shares 29,939 29,682
Weighted average diluted shares 30,447 29,947
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