Later on in the call, Jim will provide more insights into that acquisition, as well as our digital vision and strategies. As we continue to invest in digital and additional innovation, we also need to make sure we have the right resources focused on the right opportunities, which brings us to the second area of our plan. And that is the exit of 2 underperforming businesses that do not fit with our long-term strategic direction.
The rationale for our decision to exit the solo direct mail and newspaper polybag sampling businesses was clear cut and threefold. One, we have seen declining demand from our CPG client base, the primarily users of both of these products; two, both products were expensive to execute and are highest price products for these clients; and three, in the case of our sampling product, it takes secular decline based on its exclusive reliance on home delivered newspaper distribution.
In addition to the decision to exit these 2 businesses, we also executed a plan designed to right size our organization and focus resources and investment on our best opportunities to drive growth. We expect that exiting the solo direct mail and sampling businesses, combined with the efforts to right size our organization and reduce costs, were appropriate, will represent approximately $8.5 million in overall cost savings in the back half of 2012. Bob will be providing additional color on the financial impact associated with this initiative.
When you combine all 3 elements, increasing our investment in digital, exiting the sampling and solo direct mail product lines, as well as our efforts to reduce costs and align resources against our best opportunities, you can see how the second quarter was very much about positioning ourselves for our future.Now I'd like to discuss some Q2 highlights on our individual business segments. Beginning with our Shared Mail business, we are pleased with the 3.4% topline growth, which was driven by gains within our restaurant, grocery and telecom categories, which make up roughly 50% of our annual Shared Mail revenue. Based on current trends, we continue to be on-track to achieve 3% year-over-year growth for the Shared Mail segment. While we saw some of the projected sequential improvement in Wrap sell-through in Q2, we still have some work to do in this area, which negatively influencing both revenue and flow-through. Shared Mail profit grew almost 10% versus the prior-year quarter.Read the rest of this transcript for free on seekingalpha.com
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV