ADVO Announces Second Quarter Fiscal 2002 Results.Business Editors WINDSOR, Conn.--(BUSINESS WIRE)--April 18, 2002 ADVO, Inc. (NYSE NYSE See: New York Stock Exchange : AD) reported today the Company's results for its second fiscal quarter, ended March 30, 2002. Revenues for the quarter were a record $274.4 million, an increase of $2.7 million or 1% over the prior year period. This result is much improved from the 3.6% decline shown in the Company's first quarter. 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. and 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. for the quarter were $0.42 and $17.2 million, respectively. Core shared mail revenues for the quarter increased 1.8% versus the prior year period. This was the first increase seen in this measure in four quarters. Volume and package growth also posted solid gains for the quarter as total advertising pieces were up 2.3% to 6.5 billion and packages distributed were up 5.9% to 856.3 million. As expected, pieces per package were less than prior year, at 7.63, down 3.4%, reflecting the dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of the Company's second in-home date mailing initiatives. Excluding these effects, pieces per package were 7.95, down only 0.7%. Revenue per thousand pieces was essentially flat at $38.53. On a year-to-date basis, revenue was $561.4 million, or 1.4% below the prior year six-month period. Year-to-date operating income and 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 $40.2 million and $1.01, respectively, versus the prior year six month operating income and diluted earnings per share of $47.8 million and $1.17, respectively. 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. , said, "We are pleased to report improved revenues for the second quarter. These results are consistent with our expectation of a slow but steady return to positive revenue growth as we go forward. Results for this quarter were negatively affected by on-going expenses of $1.8 million or $.05 per share for security-related improvements that were announced last quarter. These costs reflect our very serious commitment to a secure chain of custody The movement and location of physical evidence from the time it is obtained until the time it is presented in court. Judges in bench trials and jurors in jury trials are obligated to decide cases on the evidence that is presented to them in court. for our products." Mr. Mulloy continued, "Importantly, we are continuing to invest in the future - making investments in new business growth initiatives which will provide our company with even greater profit leverage as the economy continues to recover." ADVO is the nation's largest full-service targeted direct mail marketing services company with annual revenues of over $1.1 billion. The Company's shared mail advertising programs are distributed nationally to over 100 million households. This includes its core ShopWise(TM) branded programs distributed on a weekly and monthly basis as well as the reach of its ADVO National Network Extension (A.N.N.E.) programs. Additionally, the Company's consumer web site, ShopWise.com, provides targeted Internet access See how to access the Internet. to consumers. ADVO's subsidiary, MailCoups, Inc., produces SuperCoups(R), an advertising solution 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 and Exploited Children The National Center for Missing and Exploited Children (NCMEC) is a private, non-profit organization established in the United States in 1984 under United States government mandate. and 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. 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 116 children. ADVO has 22 mail processing facilities and 60 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. This report contains certain forward looking statements regarding the Company's results of operations and financial position within the meaning of Section 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 in ADVO'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; the impact of economic and political conditions on retail advertising spending and our distribution system; postal and paper prices; possible governmental regulation or legislation affecting aspects of the Company's business; the efficiencies achieved with technology upgrades; and other general economic factors.
ADVO, Inc.
Results of Operations (Unaudited)
Three and Six Months Ended March 30, 2002
(In thousands, except per share data)
Three Months Ended Six Months Ended
March 30, March 31, March 30, March 31,
2002 2001 2002 2001
Revenues $274,433 $271,783 $561,369 $569,324
Cost of sales 201,786 200,346 409,217 413,346
Selling, general &
administrative 55,432 52,118 111,947 108,181
Operating Income 17,215 19,319 40,205 47,797
Interest expense 3,349 4,538 6,864 9,177
Other expense/Interest
income, net 493 103 787 221
Income before
income taxes 13,373 14,678 32,554 38,399
Provision for
income taxes 4,948 5,431 12,045 14,208
Net Income $8,425 $9,247 $20,509 $24,191
Earnings per
common share $0.42 $0.46 $1.03 $1.20
Diluted earnings per
common share $0.42 $0.45 $1.01 $1.17
Weighted average
common shares: 19,950 20,183 19,939 20,105
Weighted average
diluted shares: 20,276 20,713 20,281 20,650
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