Thursday, Valassis Communications Inc. (VCI), a media and marketing services company, reported an increase in profit for the first-quarter ended March 31, 2009 from the prior year quarter, on gains related to repurchases at a discount of term loans under its senior secured credit facility. Valassis said revenues declined 7.7% due primarily to the negative effect of economic slowdown on its clients' marketing budgets.
Valassis recorded net income of $13.0 million or $0.27 per share, compared to $11.0 million or $0.23 per share in the same quarter last year. First-quarter earnings include an after-tax gain of $4.5 million or $0.09 per share related to the company's repurchases at a discount of term loans under its senior secured credit facility.
Four analysts polled by Thomson Reuters expected the company to earn $0.16 per share for the quarter.
Revenue for the quarter was $551.2 million, down 7.7% from $597.1 million in the comparable quarter last year. Analysts expected the company to report revenue of $549.21 million for the first-quarter.
The company attributed the revenue declines are a direct result of the ongoing advertising recession.
Total costs and expenses for the quarter declined 6.9% to $516.8 million from $554.8 million in the prior year quarter. Total other expenses were $12.7 million, down 47.7% from $24.3 million last year.
Operating income declined to $34.4 million, down 18.6% from $42.2 million in the previous year quarter.
The company reported an 11.3% reduction in general and administrative costs during the quarter, compared to same quarter last year.
Alan Schultz, Valassis Chairman, President and Chief Executive Officer said, "While client spending is more constricted than we anticipated, we are on plan to reach our 2009 adjusted EBITDA guidance".
VCI is currently trading at $4.17, up $0.67 or 19.14%, on a volume of 0.55 million shares on the NYSE.
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