Solid Year For Valassis | Since buying Advo, sales and profits up sharply
In the first year since buying Windsor-based Advo, Michigan-based Valassis Communications had its sales and profits rise sharply in both the fourth quarter and full fiscal year, according to a recent financial report filed.
Fourth quarter net earnings were $20.6 million, up sharply from the same period in 2006 when the company earned $6.9 million.
Full-year net earnings were $58 million, up from all of 2006 when the company earned $51.3 million.
Sales for the fourth quarter totaled $661.4 million, up 131 percent over sales of $286.3 million in the same period a year ago. And for the full year, sales were $2.24 billion, up nearly 115 percent from the full-year 2006 total in sales of $1.04 billion.
In comments accompanying the financial report, Chairman, President, and Chief Executive Officer Alan F. Schultz said the results show that the integration of Advo into the existing Valassis business is going well.
“Our exceptional performance in the second half of 2007 reflects the significant improvements we have made in the management of the shared mail business and the realization of cost synergies associated with the Advo acquisition,” Schultz said.
“The value of blended media solutions including shared mail is compelling to our clients, and we are aggressively cross-selling to drive sustainable, profitable revenue growth which we expect to begin realizing in the back half of 2008,” he said.
Peformance Boost
“Our primary focus for 2007 was delivering cost synergies associated with the Advo acquisition,” Schultz said. “Cost synergies totaled $26 million for the year, exceeding our original expectation of $18 million because they came in higher and faster than anticipated.”
Valassis on March 2, 2007 announced the completion of its acquisition of Advo for $1.2 billion, including the refinancing of roughly $125 million in existing Advo debt.
The combined company has 7,500 employees with operations in 22 states and nine countries. The Advo buyout is the largest acquisition in Valassis history, company officials said.
Schultz now leads the combined company, with Advo President Robert A. Mason continuing as head of the Advo division.
The former Advo operation in Windsor employs roughly 750 workers overall. The workers are divided between a corporate office employing about 500 and a production center with about 250 workers.
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