ADVO announces FY97 first quarter results.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. 16, 1997--ADVO Inc. (NYSE NYSE See: New York Stock Exchange :AD) today announced earnings per share of 25 cents for the first quarter of its 1997 fiscal year (ended Dec. 28, 1996) versus earnings per share from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of 29 cents in the prior year. 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. increased 28% to $14.0 million. Adjusting for the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gain of $2.7 million associated with the sale of Midcoast Press in the prior year, operating income would be up 69%. Year to year earnings per share comparisons are also affected by the 10 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. effect in FY97 of interest expense arising from the company's FY96 recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. . Revenues for the quarter were $255.1 million, down $1.4 million or 0.5% versus prior year. The slight decline in revenues reflects a 9% increase in pieces per package, to 8.46, being more than offset by a 4% decline in total packages to 765.3 million and a 5% decline in revenue per piece, to $37.32. The strong growth in pieces per package was driven by the company's large Preprint pre·print n. Something printed and often distributed in partial or preliminary form in advance of official publication: a preprint of a scientific article. tr.v. customers, which represent 50% of revenues. The decline in packages was driven by the company ending its "second 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. date" programs in Texas, while the decline in revenue per piece was largely driven by the continued decline in average product weights from Preprint customers. Adjusting for these items, as well as the sale of Midcoast Press, revenues would have increased 7%. Cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold declined during the quarter to 75.4% of revenues, resulting from reductions in paper expense due to lower paper prices and postage POSTAGE. The money charged by law for carrying letters, packets and documents by mail. By act of congress of March 3, 1851, Minot's Statute at Large, U. S. 587, it is enacted as follows: 2.-Sec. 1. expense resulting from the reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. implemented in July, 1996. These were partially offset by increased production expense caused by the significant increase in Preprint pieces per package. S G & A was up slightly during the quarter to $48.8 million, as cost savings associated with the company's re-engineering efforts were offset by increases in compensation and other cost of living increases. Robert "Kam" Kamerschen, ADVO's chairman and chief executive officer, said: "We are very encouraged by our first quarter performance which represents a 28% increase in operating income. Normalized for the sale of Midcoast Press, operating income would be 69% higher. This confirms that the turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. in our unit volume growth during the end of FY96 is real and that the internal and external factors that negatively affected us last year appear to be behind us. While overall revenue growth during the quarter was hurt by Preprint weight reductions, the exit of our second in-home markets and the sale of Midcoast Press, we are quite pleased with our higher than anticipated pieces per package growth and that our costs remain under control. Looking forward to FY97, we believe that our turnaround in unit volumes will continue and that positive revenue growth combined with the previously mentioned strict cost controls and postage rates will allow continued earnings growth in line with current expectations." The company stated that its current forecasts are based on a continuing growth in unit volumes and a return to positive revenue growth, and that actual performance could vary depending on these assumptions. 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 subject to many uncertainties in the company's operations and business environment. Examples of such uncertainties include changes in customer demand, postal and paper expenditures, and the realization of the expected benefits associated with the company's re-engineering initiative. ADVO is the nation's largest full-service direct mail marketing services company with annual revenues of almost $1 billion. ADVO specializes in shared and solo direct mail services and provides customized Microtargeting(R) solutions for its clients' needs. The company's Mailbox A simulated mailbox in the computer that holds e-mail messages. Mailboxes are stored on disk as a file of messages, a database of messages or as an individual file for each message. The standard mailboxes are usually In, Out, Trash and Junk (Spam). Values(R) branded shared mail program is distributed nationally to over 61 million households weekly and can reach an additional 13 million households through ADVO's National Network Extension (ANNE). ADVO also offers limited transportation services. It has 20 mail processing facilities and 70 sales offices nationwide. ADVO's corporate headquarters are located at One Univac Lane, Windsor, CT 06095. -0-
ADVO INC.
Results of Operations (Unaudited)
Quarter Ended December 28, 1996
(in thousands, except per share data)
Quarter Ended
December 28, December 30,
1996 1995
Revenues $255,131 $256,512
Cost of sales 192,338 199,959
Selling, general & administrative 48,790 48,271
Gain on sale of business line --- (2,687)
Operating income 14,003 10,969
Interest expense 3,863 ---
Interest income/Other (expense), net (5) 409
Income before income taxes 10,135 11,378
Provision for income taxes 3,953 4,360
Income from continuing operations 6,182 7,018
Discontinued Operations:
Estimated loss on disposal of discontinued
operations, net of tax --- (981)
Net income $ 6,182 $ 6,037
Earnings per share
Earnings from continuing operations $ 0.25 $ 0.29
Estimated loss on disposal of
discontinued operations, net of tax --- (0.04)
Net earnings per share $ 0.25 $ 0.25
Cash dividends declared per share $ 0.025
Weighted average common and common
equivalent shares: 24,590 23,856
CONTACT: ADVO Inc., Windsor Donald McCombs, 860/285-6391 or Lowell W. Robinson, 860/285-6101 |
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