ADVO Applauds Postal Service’s New Expectation of Rate Stability Until 2006

Furniture World Magazine

ADVO, Inc. (NYSE: AD) applauded the announcement by the United States Postal Service that rates are now expected to be stable until 2006. This announcement extends by a full two years the previous expected timing of the next rate increase. The Postal Service indicated this rate stability is based on legislation it expects to be enacted by Congress which will provide a favorable correction to its annual expense for retirement obligations. This expense was previously based on a total retirement obligation of $32 billion, but updated actuarial analysis shows the obligation is now almost fully funded. Gary Mulloy, ADVO’s Chairman and CEO, commented, “This news has far reaching implications for the USPS. The improved financial picture is expected to allow the USPS to avoid near-term rate increases, which improves the overall competitiveness of the mail stream as an advertising medium, and sets the stage for mail volumes to recover. Furthermore, it provides the opportunity for the USPS to focus on developing reform initiatives which will strengthen their business model and financial health over the long-term.” Mr. Mulloy, who also serves as Secretary of the Mailing Industry CEO Council, continued, “On behalf of our customers and the rest of the mailing industry, we have been actively highlighting the fact that the Postal Service is consistently profitable when these retirement obligation expenses are excluded, and we have been raising these costs as a key focal point of opportunity. We applaud the USPS and the other departments of the Administration for scrutinizing these expenses closely in an effort to ensure the Postal Service and its customers are not unfairly burdened by artificially high cost allocations.” ADVO is the largest full-service targeted direct mail marketing services company in the United States, with annual revenues of over $1.1 billion. The Company’s shared mail advertising programs reach 102 million U.S. households on a weekly and monthly basis. This includes its core ShopWise™ branded programs, and the reach of its ADVO National Network Extension (A.N.N.E.) program. Additionally, the Company’s SuperCoups® advertising solutions provide targeted advertising for local neighborhood businesses. ADVO launched the America’s Looking For Its Missing Children® program in partnership with the National Center for Missing & Exploited Children and the United States Postal Service in 1985, and ADVO’s missing child cards are responsible for safely recovering 120 children. ADVO has 23 mail processing facilities and 50 sales offices nationwide. ADVO’s corporate headquarters are located at One Univac Lane, Windsor, Connecticut 06095, and the Company can be visited at its Web site at www.advo.com. This report contains certain forward looking statements regarding the Company’s results of operations and financial position within the meaning of Sections 21E of the Securities Exchange Act of 1934, as amended. Such forward looking statements are based on current information and expectations and are subject to risks and uncertainties which could cause the Company’s actual results to differ materially from those in the forward looking statements. Such risks and uncertainties include, but are not limited to: changes in customer demand and pricing; the possibility of consolidation throughout the retail sector; the impact of economic and political conditions on retail advertising spending and our distribution system; postal and paper prices; possible governmental regulation or legislation affecting aspects of the Company’s business; the efficiencies achieved with technology upgrades; the amount of shares the Company will repurchase in the future under its buyback program; fluctuations in interest rates related to the outstanding debt; and other general economic factors.