Valassis Reports Healthy Growth in Revenues, Earnings

LIVONIA, MI—Oct. 28, 2010—Valassis today announced financial results for the third quarter ended Sept. 30, 2010. Quarterly revenues were $572.4 million, an increase of 5.2 percent compared to $544.1 million for the prior year quarter. Third-quarter net earnings were $27.0 million, an increase of 95.7 percent compared to $13.8 million in the prior year quarter. Adjusted EBITDA* was $79.8 million, an increase of 24.9 percent compared to $63.9 million for the prior year quarter.

“Our strong results this quarter are consistent with our long-term plan to deliver annual mid-single-digit revenue growth and double-digit EPS growth,” said Alan F. Schultz, Valassis Chairman, President and CEO.

Business Segment Discussion

Shared Mail: Revenues for the third quarter of 2010 were $326.1 million, an increase of 2.1 percent compared to the prior year quarter due primarily to an increase in insert volumes. Segment profit for the quarter was $39.3 million, an increase of 32.8 percent compared to the prior year quarter. The growth in segment profit is due to the increase in revenues, newspaper alliances and package optimization efforts.

Neighborhood Targeted: Revenues for the third quarter of 2010 were $114.0 million, an increase of 23.9 percent compared to the prior year quarter due to an increase in client spend in the energy, telecom and specialty retail verticals. Segment profit for the quarter was $7.2 million, an increase of 84.6 percent compared to the prior year quarter due to increased volume.

Free-standing Inserts (FSI): Revenues for the third quarter of 2010 were $89.2 million, a decrease of 3.7 percent compared to the prior year quarter. The revenue decline is due to two less FSI publications compared to the prior year quarter. Segment profit for the quarter was $4.9 million, an increase of 113.0 percent compared to $2.3 million in the prior year quarter. Segment profit improvement was due primarily to an increase in average pages per book and related cost efficiencies.

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