ADVO Reports Fourth Quarter Earnings, Posts Fifth Straight Record Fiscal Year.Business Editors WINDSOR, Conn.--(BUSINESS WIRE)--Oct. 18, 2001 ADVO, Inc. (NYSE NYSE See: New York Stock Exchange : AD) today reported record results for the Company's fourth fiscal quarter, ended September 29, 2001. Revenue and 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 $286.1 million and $0.70, respectively, 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. was $25.2 million. These results complete the Company's fifth consecutive record fiscal year. The Company's fourth quarter contained one less fiscal week than the prior year period, unfavorably affecting both quarterly and annual year-over-year comparisons. Additionally, the fourth quarter was negatively impacted by temporary productivity-related disruptions to revenue and profit due to the September 11 tragedies. Balancing these negative factors was the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. results of tax audits completed in mid-September, which reduced the Company's tax expense by approximately $1.0 million. After adjusting for one less week, the Company showed significantly improved revenue growth for the quarter of approximately 3%. Solid improvements in sales productivity resulted in sustained growth with the Company's largest customers as well as regained momentum with its mid-sized local and regional clients. Fourth quarter pieces per package were 8.14, and compared favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to third quarter pieces per package of 8.00. The fourth quarter pieces per package 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. was off of prior year by only 1.4%, and markedly improved versus the third fiscal quarter's pieces per package decrease of 8.6%. Moreover, after adjusting for the dilutive effects Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of the Company's newly established second in-home mailings and expanded shared mail programs, pieces per package were less than prior year by only 0.6%. The Company's full-year fiscal 2001 results reached all-time highs, including revenues of $1,137.2 million, operating income of $97.0 million, and diluted E.P.S. of $2.47 ($2.53 excluding a one-time charge posted earlier in the year related to its former COO (Cell Of Origin) See mobile positioning. ). Moreover, fiscal 2001 diluted E.P.S. was achieved on top of a record prior year period, which included an extra week and posted diluted E.P.S. growth of 31.3%. 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 core business demonstrated a major turnaround in its sales momentum during the fourth quarter, and we are entering fiscal 2002 on a very positive note. We continue to be confident in our future growth prospects, and are establishing new business growth initiatives at an unprecedented pace. These include three newspaper alliances this quarter alone, two of which are in conjunction with new second in-home programs, as well as the recent expansion of our shared mail program in partnership with Wal-Mart and Pizza Hut. Additionally, we further demonstrated our confidence in the future this quarter via the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of $8.4 million of our own stock. Although we are prudently cautious about the issues affecting the economy in general, our business has demonstrated resiliency The ability to recover from a failure. The term may be applied to hardware, software or data. in economic downturns due to the fundamental importance of our services to our customers' business models. Given this, as we look forward to fiscal 2002, we continue to remain comfortable with analysts' current E.P.S. estimates for the year." 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 core ShopWise branded shared mail program is distributed nationally to approximately 60 million households weekly. Approximately 30 million additional households can be reached, on a shared mail basis, through ADVO's National Network Extension (A.N.N.E.). 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 Super Coups, 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 & Exploited Children 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 approximately one out of every seven children featured. ADVO has 21 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 Sections 21E of the Securities Exchange Act of 1934, as amended. 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. 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; the amount of shares the Company will repurchase 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.
Results of Operations (Unaudited)
Quarter and Year Ended September 29, 2001
(In thousands, except per share data)
Quarter Ended Year Ended
Sept. 29, Sept. 30, Sept. 29, Sept. 30,
2001 2000 2001 2000
Revenues $286,113 $296,795 $1,137,196 $1,129,187
Cost of sales 205,757 213,268 821,675 806,362
Selling, general
& administrative 55,203 56,599 218,499 226,538
Operating Income 25,153 26,928 97,022 96,287
Interest expense 3,857 5,068 17,282 18,583
Other expense/
Interest income,
net 31 16 437 213
Income before
income taxes 21,265 21,844 79,303 77,491
Provision for
income taxes 6,837 8,082 28,311 28,671
Net Income $14,428 $13,762 $50,992 $48,820
Earnings per
common share $0.71 $0.68 $2.53 $2.40
Diluted earnings
per common share $0.70 $0.66 $2.47 $2.35
Weighted average
common shares: 20,250 20,295 20,176 20,349
Weighted average
diluted shares: 20,615 20,969 20,625 20,778
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