Good Q1 for Valassis
-- Graphic Arts Online, 5/2/2008 10:13:00 AM
Insert printer Valassis Communications, Livonia, MI, reported Q1 profit rose 10% to $12.4 million, as revenue surged 65% to $597.1 million on contributions from its acquisition of direct-mail marketer Advo. Valassis acquired Advo in March 2007.On a pro forma basis, revenue rose 2.1%, the company said.
CEO Alan Schultz says in light of difficult market conditions the company has posted exceptional results for three consecutive quarters. “This positive momentum is evidence of the strong strategic rationale behind our shared mail acquisition, our integration game plan and our outstanding execution of this plan. By focusing early on cost synergies and optimization of the shared mail business, we have significantly improved its cost structure and operating leverage,” he says.
Shared mail revenues for the Q1 were $356.3 million, up $23.8 million or 7.2% compared to pro forma Q1 2007. Growth from key national retailers, improved sell-through of its RedPlum Wrap (e-GAM 1/4/08), new client acquisition and reduced client credits all contributed to quarter’s revenue growth. Segment profit for the quarter was $30.9 million, up $25.6 million from the prior year first quarter.
Co-op free-standing insert revenues for the quarter were down 10% to $98.6 million, due to an anticipated reduction in FSI pricing of low- to mid-single digits and a decrease in market share. Unit growth in the co-op FSI industry was up 2.5%. Q1 segment profit was down 79.6% to $2 million.
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