DM Firms Continue to Report Positive Results

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Good news continued to abound this week in another round of quarterly earnings releases by marketing services and mailing companies.

Harte-Hanks, San Antonio, reported first quarter earnings of 21 cents a share, beating Wall Street estimates posted by Earnings by a penny and improving on its 1998 performance by 16.7 percent. Revenues grew 5.9 percent to $188.1 million.

Direct marketing revenues were up 9.2 percent to $124.9 million and operating income up 22.8 percent to $17.3 million. All three groups in its direct marketing group -- response management, marketing services and database marketing operations -- saw steady growth, especially in the retail, hi-tech, insurance and pharmaceutical markets, said president/CEO Larry Franklin.

Big Flower Holdings, New York, reported EPS of 16 cents, also beating estimates by a penny and increasing its profit performance by 78 percent. Revenue grew 9.5 percent to $420.3 million. The results of the diversified advertising, printing and marketing services company were driven in part by the 11 acquisitions made in the last year.

Big Flower's direct marketing business, which includes direct mail production, database and response management, grew its revenues by 15.8 percent to $72.7 million.

R.R. Donnelley, Chicago, made it a trio beating estimates by 1 cent with EPS of 33 cents that marked a 10 percent improvement over a year ago. Revenues for the commercial printer were flat at $1.17 billion but net sales of materials rose 5 percent.

Advo, Windsor, CT, reported EPS grew 16.7 percent to 28 cents in its second quarter while revenues were flat at $253.5 million. For the six months ended March 31, EPS was up 21.7 percent to 73 cents and revenues up 1.3 percent to $522.1 million.

Total packages mailed in the quarter dropped 0.1 percent to 771.9 million as did pieces per package, down 3.5 percent to 8.24, but revenue per thousand pieces was up 1.3 percent to $36.54. The shared mail marketer saw revenue increases in its ANNE and Advo Targeting Zone businesses.

Valassis Communications, Livonia, MI, saw its EPS grow 35.9 percent to 87 cents on revenue growth of 8 percent to $222.2 million. Robert Recchia, CFO of the producer of free standings inserts, sampling programs and a new customer relationship marketing group, expects EPS to continue to grow at a 30 percent pace for the year.

Memberworks, Stamford, CT, reported EPS grew 160 percent to a record 13 cents a share while revenue jumped 92 percent to a record $56.4 million in its fiscal third quarter. For the nine months ended March 31, EPS rose 200 percent to 30 cents before an accounting charge and revenue increased 86 percent to $151 million. The membership direct marketer has grown its customer base to nearly 5 million members.
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