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Valassis Expects Strong First Quarter

Thursday, April 17, 2008

Press release from the issuing company

 LIVONIA, Mich., April 15 -- Valassis today announced that Management expects adjusted EBITDA* for the first quarter of 2008 to be within the range of $60 million to $65 million on revenue growth to nearly $600 million during such period. This represents an increase in adjusted EBITDA* of 39.5% to 51.2% from pro forma adjusted EBITDA* for the first quarter of 2007 of $43 million (which represents an agreed upon amount with the lenders under the Company's senior secured credit facility). Pro forma revenue for the first quarter of 2007 was $584.8 million and GAAP reported revenue for such period (which excludes revenue for ADVO, Inc. for the period of Jan. 1, 2007 through March 1, 2007) was $361.3 million. The Company will release its regularly scheduled first-quarter earnings results on May 1, 2008.

On April 15, 2008, the Company successfully closed on the delayed draw term loan portion of its senior secured credit facility in an aggregate principal amount of approximately $160 million. As previously disclosed, the proceeds of the delayed draw term loan will primarily be used in connection with the anticipated exercise of put rights by the holders of Valassis' Senior Secured Convertible Notes due 2033 (the "2033 Notes") on May 22, 2008. The Company noted that incremental net interest expense associated with the early close of the delayed draw term loan is estimated to be approximately $500,000.

"In order to alleviate concerns about recent financial market conditions, we felt it prudent to release certain preliminary results for the first quarter of 2008 and to close on the delayed draw term loan early. This further solidifies our strong liquidity position and ensures that the money is readily available if the holders of the 2033 Notes elect to put the Notes to the Company," said Alan F. Schultz, Valassis Chairman, President and CEO. Schultz also noted that proceeds from the term loan will be invested in cash and cash equivalents, which may include U.S. Treasuries, through the put date of May 22, 2008.

Management noted its strong cash position of approximately $94 million (prior to the addition of the delayed draw term loan in the aggregate principal amount of approximately $160 million) as of March 31, 2008. The Company also has $108.8 million available under its untapped revolving portion of its senior secured credit facility (after giving effect to $11.2 million of outstanding letters of credit).

 

 

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