ADVO Announces Record First Quarter Fiscal Year 2000 Results.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. 20, 2000 ADVO Inc. (NYSE NYSE See: New York Stock Exchange : AD) reported record results for its first quarter, ended December December: see month. 25, 1999. Record revenues for the quarter were $274.2 million, an increase of $5.6 million, or 2.1%, versus the prior year period. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.57 versus $0.45 for the prior year period, an increase of 26.7%. Record operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $22.9 million exceeded the prior year period by $2.9 million, or 14.2%. Included in operating income is a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge of $2.2 million related to the expensing of a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. consulting agreement between the Company and Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. Kamerschen, ADVO's former Chairman and Chief Executive Officer. Excluding this charge, operating income would have been $25.1 million, up $5.1 million, or 25.2%, and E.P.S. would have been $0.64, up $0.19, or 42.2% versus the prior year period. Record first quarter gross margin as a percentage of revenue of 28.9% improved 1.3 percentage points versus 27.6% in the prior year period. SG& was $56.2 million, up $2.1 million or 3.9%. However, excluding the one-time charge related to Mr. Kamerschen's consulting agreement, SG& was essentially even with prior year. First quarter operating income of $22.9 million increased 0.9 percentage points as a percentage of revenue versus the prior year period, to an all-time first quarter high of 8.4%. Excluding the one-time charge, operating income as a percentage of revenue was 9.2%, up a robust 1.7 percentage points. While total revenues were up 2.1%, core shared mail revenues were also up versus the prior year period at +0.8%, representing a return to positive growth in shared mail for the first time in three quarters. First quarter packages distributed were 738.1 million, down 0.1% versus the prior year period. Revenue per thousand pieces was $39.25, up 3.0%, and pieces per package were 8.68, down 2.0%. In order to improve comparability of the revenue statistics, the revenue per piece statistic statistic, n a value or number that describes a series of quantitative observations or measures; a value calculated from a sample. statistic a numerical value calculated from a number of observations in order to summarize them. for the current period includes targeting revenues related to the ADVO Targeting Zone (ATZ ATZ Aerodrome Traffic Zone ATZ All Things Zombie (website) ATZ Alumina Toughened Zirconia ATZ Atypical Transformation Zone ATZ Attention Restore ATZ a to Z ) platform, and the prior year period has been restated accordingly. Gary Mulloy, ADVO's Chairman and Chief Executive Officer said, &uot;We are pleased to report our fourteenth consecutive quarter of record earnings. Importantly, revenue growth was much improved at +2.1% versus the prior year period, a growth rate differential of +4.4 percentage points versus the fourth quarter of fiscal 1999, giving us confidence that we have regained our top-line momentum. Our operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: continue to expand, as first quarter operating income as a percentage of revenue, excluding the one-time charge, was 9.2%, an all-time ADVO high for any quarter. These results have been driven by a focused effort on improving our profitability, including continued gains in pricing and productivity.&uot; Mr. Mulloy further stated, &uot;Looking forward to the final three quarters of fiscal 2000, we expect to continue to gain momentum in our revenue growth. This, in conjunction with expected continued margin improvements, makes us confident in our ability to deliver E.P.S. for the remainder of the fiscal year in line with current expectations.&uot; ADVO is the nation's largest full-service targeted direct mail marketing services company with annual revenues of over $1 billion. ADVO specializes in shared and solo direct mail services and provides Microtargeting(R) solutions at an affordable price for its clients' print advertising needs. The Company's core shared mail program is distributed nationally to approximately 60 million households weekly. An additional 28.5 million households can be reached, on a shared mail basis, through ADVO's National Network Extension (A.N.N.E.). ADVO's wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , MailCoups, Inc., produces SuperCoups, a cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. , direct mail-based advertising solution for local neighborhood businesses which utilizes an envelope format. ADVO has 20 mail processing facilities and 65 sales offices nationwide. ADVO's corporate headquarters are located at One Univac Lane, 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. The Company can be visited at its Web site at www.advo.com. The forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. in this report are based upon current information and expectations and are subject to risks and uncertainties in the Company's operations and business environment. Such risks and uncertainties include, but are not limited to, changes in customer demand and pricing, the possibility of consolidation throughout the retail sector, postal and paper prices, the efficiencies achieved with technology upgrades, the continuing success of the Company's Year 2000 program and its transition into and through the year 2000 and other general economic factors.
ADVO, Inc.
Results of Operations (Unaudited)
Quarter Ended December 25, 1999
(In thousands, except per share data)
Quarter Ended
Dec. 25, 1999 Dec. 26, 1998
Revenues $274,203 $268,649
Cost of sales 195,021 194,431
Selling, general &administrative 56,242 54,132
Operating Income 22,940 20,086
Interest expense 3,999 3,555
Other expense, net 63 10
Income before income taxes 18,878 16,521
Provision for income taxes 6,985 6,361
Net Income $ 11,893 $ 10,160
Earnings per common share $ 0.58 $ 0.46
Earnings per common share
- assuming dilution $ 0.57 $ 0.45
Weighted average common shares 20,625 22,071
Weighted average diluted shares 20,774 22,450
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