Contact: Mary Broaddus

Tel 734.591.7375

broaddusm@valassis.com

19975 Victor Parkway, Livonia, MI 48152

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FOR IMMEDIATE RELEASE

Valassis Announces Results for the Second Quarter Ended June 30, 2012

Livonia, Mich., July 26, 2012: Valassis (NYSE: VCI) today announced financial results for the second quarter ended June 30, 2012. Second-quarter 2012 revenues were $540.2 million, a decrease of 4.4% from $565.2 million in the prior year quarter. This decrease in revenues was due primarily to the absence of custom co-op programs within our FSI segment and continued reduced spending by consumer packaged goods (CPG) clients across our various business segments.

Second-quarter 2012 net earnings were $21.7 million, which included $10.7 million, net of tax, of non-recurring restructuring charges and asset impairments resulting from the discontinuance of the sampling and solo direct mail products, as well as other cost reductions across our remaining product lines. This represents a decrease of 28.4% from $30.3 million in the prior year quarter, which included a loss on extinguishment of debt and related charges, net of tax, of $3.4 million. Excluding these non-recurring charges, second-quarter 2012 adjusted net earnings* were $32.4 million compared to second-quarter 2011 adjusted net earnings* of $33.7 million.

Second-quarter 2012 diluted earnings per share (EPS) was $0.51, which included the negative impact of the aforementioned restructuring charges of $0.25. This represents a decrease of 15.0% from $0.60 in the prior year quarter, which included the negative impact of the aforementioned loss on extinguishment of debt of $0.07. Excluding these non-recurring charges, second-quarter 2012 adjusted diluted EPS* was $0.76, compared to second-quarter 2011 adjusted diluted EPS* of $0.67.

Second-quarter 2012 diluted cash EPS* was $1.10, an increase of 22.2% from $0.90 in the prior year quarter. Second quarter 2012 adjusted EBITDA* was $76.8 million, a decrease of 5.3% from $81.1 million in the prior year quarter.

“During the quarter, we executed a plan to improve our company’s ability to drive future growth in our core and innovation businesses,” said Rob Mason, President and Chief Executive Officer. “We increased our investment in digital media with the acquisition of Brand.net, exited our solo direct mail and newspaper sampling businesses, and right sized our organization.”

Some additional highlights include:

 

   

Selling, General and Administrative (SG&A) Costs: Second-quarter 2012 SG&A costs were $83.5 million (which included $5.9 million in restructuring and other non-recurring costs) compared to prior year quarter SG&A costs of $80.8 million.

 

   

Capital Expenditures: Capital expenditures for the second quarter and first half of 2012 were $2.5 million and $11.8 million, respectively.

 

   

Stock Repurchases: During second-quarter 2012, we repurchased $64.5 million, or 3.2 million shares, of our common stock at an average price of $19.94 per share under our stock repurchase program.

 

   

Liquidity:

 

   

We reduced total debt by $3.7 million during second-quarter 2012, and we ended the quarter with net debt (total debt less cash) of $519.8 million.

 

   

At June 30, 2012, we had $75.2 million in cash.

Outlook

Based on our plan, the recent acquisition of Brand.net and current outlook, we are updating full-year 2012 guidance as follows:

 

   

diluted EPS of $2.86 (previously $3.07) which reflects the non-recurring restructuring and other costs described above offset by a reduction in the number of shares outstanding due to the acceleration in stock repurchases (which results in adjusted diluted EPS* of $3.11 primarily due to such acceleration in stock repurchases) and

 

   

diluted cash EPS* of $4.18 (previously $3.97) due to the reduction in capital expenditures to approximately $26 million (previously approximately $32 million).

 


The following information was filed by Valassis Communications Inc (VCI) on Thursday, July 26, 2012 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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