Valassis
Tel 734.591.4900 or 734.591.7375
 recchiab@valassis.com or broaddusm@valassis.com 
19975 Victor Parkway, Livonia, MI 48152
Earnings Release
 
FOR IMMEDIATE RELEASE
 
 Valassis Announces Financial Results for the Fourth Quarter and Full Year Ended Dec. 31, 2007
Exceeds Analyst Expectations
 
Livonia, Mich., Feb. 21, 2008: Valassis (NYSE: VCI)
today announced financial results for the fourth quarter and year ended Dec. 31, 2007. The Company reported quarterly revenues of $661.5 million, up 131.0% from the fourth quarter of 2006, due primarily to the acquisition of ADVO, Inc. (ADVO) that closed on March 2, 2007. Fourth quarter net earnings were $20.6 million, up 197.3% from $6.9 million in the fourth quarter of 2006. Fourth quarter earnings per share (EPS) was $0.43 up from $0.14 in the fourth quarter of 2006. Fourth quarter adjusted EBITDA* was $78.5 million, up 6.4% from pro forma adjusted EBITDA* for the fourth quarter of 2006. Full-year revenues were up 114.9% to $2,242.2 million. Full-year net earnings were $58.0 million, up 13.1% from 2006, resulting in full-year EPS of $1.21. For the full-year ended Dec. 31, 2007, adjusted EBITDA* was $252.8 million.

“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,” said Alan F. Schultz, Valassis Chairman, President and CEO. “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.”

Some additional integration and recent financial highlights include:

·
Cost Synergies: Our primary focus for 2007 was delivering cost synergies associated with the ADVO acquisition. Cost synergies totaled $26 million for the year, exceeding our original expectation of $18 million because they came in higher and faster than anticipated.

·
Business Optimization: We continue to make substantial improvements in the management of the shared mail (formerly ADVO) business. Our optimization initiative, designed to reduce over-supply and deliver more profitable packages, has increased the profitability of the shared mail business and contributed significantly to our third-and fourth-quarter performance for 2007. These efforts resulted in a 3.4% reduction of package distribution in the fourth quarter of 2007.

·
Debt Repayment: In February 2008, we made a fourth voluntary $25.0 million payment on the term loan B portion of our senior secured credit facility. In the 11 months since the closing of the ADVO acquisition, we have made $104.4 million in debt repayments, of which $100 million was voluntary.

·
Reduction of Capital Expenditures: Capital expenditures during 2007 were $38.3 million, consistent with our most recent guidance of $40 million or less.

·
Launch of RedPlumTM Consumer Brand: We launched our consumer brand, RedPlum, on Jan. 3, 2008 and as part of this consumer branding initiative, we also launched redplum.com. Our RedPlum media products unify our portfolio under a single consumer brand that resonates with our clients’ target audience and is unique in our competitive space. In addition, we retired the ADVO name on Dec. 31, 2007 and are now unified under one business-to-business name, Valassis.
 
Outlook
Management reiterates the financial guidance for 2008 as outlined in the Dec. 18, 2007 guidance release, expecting increased adjusted EBITDA* of between $260 and $280 million. We expect low-to mid-single digit pro forma revenue growth compared to the full-year 2007 pro forma revenue of $2,465.6 million, which includes January and February 2007 revenue from ADVO of $223.4 million. Revenue growth is expected to accelerate in the second half of 2008. In 2008, capital expenditures are expected to be $35 million, and we expect adjusted cash EPS* of between $2.14 and $2.39.
 

The following information was filed by Valassis Communications Inc (VCI) on Thursday, February 21, 2008 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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