Valassis Reports Earnings Growth on Lower Revenues

• Capital Expenditures: Capital expenditures for the fourth quarter and full-year 2009 were $5.6 million and $19.1 million, respectively.

• Liquidity:
* Fourth-quarter 2009 and full-year 2009 cash flows from operating activities were $60.1 million and $197.4 million, respectively. During 2009, we reduced our debt by $191.5 million and our net debt (debt less cash) position was $881.2 million as of Dec. 31, 2009.

* During the quarter, we completed three “modified Dutch” auctions in which we repurchased and retired $39.8 million of our outstanding term loan B and delayed draw term loans under our senior secured credit facility at an average discount of 2.6% to par resulting in an after-tax net gain of $0.4 million. For full-year 2009, we repurchased $133.5 million of our term loans through “modified Dutch” auctions at an average discount of 8.5% to par. Our ability to repurchase our term loans pursuant to “modified Dutch” auctions ended on Dec. 31, 2009.

* As announced in December 2009, we entered into an interest rate swap agreement effective Dec. 31, 2010 fixing $300 million of the variable rate debt under our senior secured credit facility at an effective rate of 3.76% per annum (compared to the current effective swap rate of 6.78% which expires on Dec. 31, 2010). The notional amount of $300 million amortizes by $40 million per quarter through June 30, 2012.

* As of Dec. 31, 2009 our debt covenant cushions were 48.7% for our senior secured leverage covenant and 41.1% for our interest coverage covenant. As previously stated, the full $500 million in settlement proceeds will be included in consolidated EBITDA under our senior secured credit facility for the calculation of debt covenants in 2010.

• Interest Expense: Cash interest expense for the quarter was $19.3 million compared to $22.8 million for the prior year quarter, a decrease of 15.4%.

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