<PAGE>
FORM 11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) Annual Report pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1998
-----------------
or
( ) Transition Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________________ to _________________
Commission file number 1-11720
-------
ADVO, Inc. 401(k) Savings Plan
--------------------------------------------
(Full title of the plan)
ADVO, Inc.
One Univac Lane,
P.O. Box 755,
Windsor, CT 06095-0755
------------------------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan
and the address of its principal executive offices)
<PAGE>
ADVO, Inc. 401(k) Savings Plan
Annual Report
Index to Form 11-K
Year Ended December 31, 1998
Report of Independent Auditors
Financial Statements:
Statements of Assets Available for Plan Benefits as of
December 31, 1998 and 1997
Statements of Changes in Assets Available for Plan
Benefits for the years ended December 31, 1998 and 1997
Notes to Financial Statements
Supplemental Schedules:
Schedule I - Schedule of Assets Held for Investment Purposes
as of December 31, 1998
Schedule II - Schedule of Reportable Transactions for the
Year Ended December 31, 1998
Exhibit 23 - Consent of Ernst & Young LLP
Signature
<PAGE>
Report of Independent Auditors
ADVO, Inc.
Associate Savings Committee
We have audited the accompanying statements of assets available for plan
benefits of the ADVO, Inc. 401(k) Savings Plan as of December 31, 1998 and 1997,
and the related statements of changes in assets available for plan benefits for
the years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for plan benefits of the Plan at
December 31, 1998 and 1997, and the changes in its assets available for plan
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998, and reportable
transactions for the year then ended are presented for purposes of additional
analysis and are not a required part of the financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The fund information in the statement of changes in assets
available for plan benefits is presented for the purposes of additional analysis
rather than to present the changes in assets available for plan benefits of each
fund. The supplemental schedules and fund information have been subjected to
the auditing procedures applied in our audits of the financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ Ernst & Young LLP
Hartford, Connecticut
June 10, 1999
<PAGE>
ADVO, Inc.
401(k) Savings Plan
Statements of Assets Available for Plan Benefits
December 31,
------------------------
Assets
- ------
1998 1997
---- ----
Investments at Fair Value:
Collective Investment Fund:
Income Accumulation Fund for Employee
Retirement Plans $ 7,064,105 $ 6,940,321
Mutual Funds:
Templeton Foreign Fund 1,859,240 2,008,135
Money Market Fund-MasterWorks 3,200,576 2,830,268
S&P 500 Stock Fund-MasterWorks 16,436,134 11,817,008
ADVO Custom Funds:
ADVO Fidelity Asset Manager Fund 10,104,824 8,977,539
ADVO Berger 100 Fund 1,703,368 1,507,607
ADVO IDS New Dimensions Fund 13,753,959 10,520,073
ADVO Stock Fund 3,029,823 1,882,461
----------- -----------
Total Investments 57,152,029 46,483,412
Participant Loans 1,947,171 1,524,512
Receivables:
Employees' Contributions 104,240 126,566
Employer's Contributions 84,551 97,320
----------- -----------
Total Receivables 188,791 223,886
----------- -----------
Assets Available for Plan Benefits $59,287,991 $48,231,810
=========== ===========
See accompanying notes to financial statements.
- 3 -
<PAGE>
ADVO, Inc.
Statements of Changes in Assets Available for Plan Benefits
Year Ended December 31, 1998
<TABLE>
<CAPTION>
Fund Information
----------------------------------------------------------------------------------------------------
Income
Accumulation
Fund for Templeton Money S&P 500 ADVO ADVO ADVO IDS New
Employee Retire- Foreign Market Fund Stock Fund Fidelity Asset Berger 100 Dimensions
ment Plans Fund MasterWorks MasterWorks Manager Fund Fund Fund
---------- ---- ----------- ----------- ------------ ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Addition to assets attributed to:
Investment income:
Net realized and unrealized
(depreciation)appreciation
in fair value of investments ($287,589) 2,525,496 $ 1,373,062 $ 228,531 $2,941,541
Interest $396,012
Dividends 201,301 $ 155,432 945,063
Contributions:
Employee 437,903 229,024 230,580 860,620 523,032 194,121 666,082
Employer 357,155 169,989 191,883 659,110 415,778 157,550 512,852
Participant rollover 27,366 15,795 21,528 421,829 100,105 16,510 86,565
----------- ---------- ----------- ------------ ------------ ----------- ------------
Total additions 1,218,436 328,520 599,423 5,412,118 2,411,977 596,712 4,207,040
----------- ---------- ----------- ------------ ------------ ----------- ------------
Benefit payments 885,873 197,531 498,908 912,590 862,347 295,767 1,000,157
Interfund transfers (235,534) (284,490) 266,929 123,237 (427,277) (106,073) 22,630
----------- ---------- ----------- ------------ ------------ ----------- ------------
Net increase (decrease) in
assets available for plan
benefits: 97,029 (153,501) 367,444 4,622,765 1,122,353 194,872 3,229,513
Assets available for plan
benefits:
Beginning of the year 6,986,394 2,023,299 2,846,043 11,866,685 9,011,213 1,519,128 10,564,161
----------- ---------- ----------- ------------ ------------ ----------- ------------
End of year $ 7,083,423 $1,869,798 $ 3,213,487 $ 16,489,450 $ 10,133,566 $ 1,714,000 $ 13,793,674
=========== ========== =========== ============ ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
Fund Information
------------------
ADVO
Stock Loan
Fund Fund TOTAL
---- ---- -----
<S> <C> <C> <C>
Addition to assets attributed to:
Investment income:
Net realized and unrealized
(depreciation)appreciation
in fair value of investments $693,853 $7,474,894
Interest $168,933 564,945
Dividends 1,301,796
Contributions:
Employee 230,175 3,371,537
Employer 179,067 2,643,384
Participant rollover 46,671 736,369
----------- ---------- -----------
Total additions 1,149,766 168,933 16,092,925
----------- ---------- -----------
Benefit payments 139,622 243,949 5,036,744
Interfund transfers 142,902 497,676 --
----------- ---------- -----------
Net increase (decrease) in
assets available for plan 1,153,046 422,660 11,056,181
benefits:
Assets available for plan
benefits:
Beginning of the year 1,890,376 1,524,511 48,231,810
----------- ---------- -----------
End of year $ 3,043,422 $1,947,171 $59,287,991
=========== ========== ===========
</TABLE>
See accompanying notes to financial statements
-4-
<PAGE>
ADVO, Inc.
Statements of Changes in Assets Available for Plan Benefits
Year Ended December 31, 1998
<TABLE>
<CAPTION>
Fund Information
----------------------------------------------------------------------------------------------------
Income
Accumulation
Fund for Templeton Money S&P 500 ADVO ADVO ADVO IDS New
Employee Retire- Foreign Market Fund Stock Fund Fidelity Asset Berger 100 Dimensions
ment Plans Fund MasterWorks MasterWorks Manager Fund Fund Fund
---------- ---- ----------- ----------- ------------ ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Addition to assets attributed to
Investment income:
Net realized and unrealized
(depreciation)appreciation
in fair value of investments $ (115,766) $ 2,378,665 $ 1,554,787 $ 158,786 $ 1,987,067
Interest $387,925
Dividends 223,567 $ 151,472 409,712
Contributions:
Employee 418,670 236,173 236,045 743,133 530,708 172,290 690,416
Employer 347,176 173,976 195,642 569,450 420,623 134,913 530,302
Participant rollover 70,943 47,643 68 22,976 57,255 8,410 54,416
----------- ---------- ----------- ------------ ----------- ----------- ------------
Total additions 1,224,714 565,593 583,227 4,123,936 2,563,373 474,399 3,262,201
----------- ---------- ----------- ------------ ----------- ----------- ------------
Benefit payments 950,875 92,352 420,302 744,785 754,934 98,811 735,878
Interfund transfers 388,029 59,399 (396,164) 318,377 (160,330) (201,318) (168,675)
----------- ---------- ----------- ------------ ----------- ----------- ------------
Net increase (decrease) in
assets available for plan
benefits: 661,868 532,640 (233,239) 3,697,528 1,648,109 174,270 2,357,648
Assets available for plan
benefits:
Beginning of the year 6,324,526 1,490,659 3,079,282 8,169,157 7,363,104 1,344,858 8,206,513
----------- ---------- ----------- ------------ ----------- ----------- ------------
End of year $ 6,986,394 $2,023,299 $ 2,846,043 $ 11,866,685 $ 9,011,213 $ 1,519,128 $ 10,564,161
=========== ========== =========== ============ =========== =========== ============
<CAPTION>
Fund Information
-----------------
ADVO
Stock Loan
Fund Fund TOTAL
---- ---- -----
<S> <C> <C> <C>
Addition to assets attributed to
Investment income:
Net realized and unrealized
(depreciation)appreciation
in fair value of investments $ 499,245 $ 6,462,784
Interest $ 139,857 527,782
Dividends 784,751
Contributions:
Employee 144,238 3,171,673
Employer 115,396 2,487,478
Participant rollover 36,620 298,331
---------- ---------- -----------
Total additions 795,499 139,857 13,732,799
---------- ---------- -----------
Benefit payments 214,657 253,130 4,265,724
Interfund transfers 15,027 145,655 --
---------- ---------- -----------
Net increase (decrease) in
assets available for plan
benefits: 595,869 32,382 9,467,075
Assets available for plan
benefits:
Beginning of the year 1,294,507 1,492,129 38,764,735
---------- ---------- -----------
End of year $1,890,376 $1,524,511 $48,231,810
========== ========== ===========
</TABLE>
See accompanying notes to financial statements
-5-
<PAGE>
ADVO, Inc.
401(k) Savings Plan
Notes to Financial Statements
December 31, 1998
A. Description of the Plan
-----------------------
The following description of the ADVO, Inc. (the "Company") 401(k) Savings
Plan ("Plan") provides only general information. Participants should refer
to the Plan agreement for a more complete description of the Plan's
provisions.
General
-------
The Plan is a defined contribution plan covering all full-time exempt and
non-exempt salaried employees ("participants") of the Company who have
completed one year of service. It is subject to the provisions of the
Employee Retirement Income Security Act of 1974, (ERISA).
Contributions
-------------
The Company matched a participant's pay deferral contributions in accordance
with the following schedule during 1998 and 1997:
Employee Company matching
percentage of contribution
compensation as a percentage of
deferred compensation
------------------ ------------------
1% 1%
2% 2%
3% 3%
4% 4%
5% 5%
6% - 10% 6%
Participants may contribute up to 10 percent of their annual compensation on
a pretax basis.
Participant Accounts
--------------------
Each participant's account is credited with the participant's contribution,
the Company's matching contribution, and the Plan earnings. The benefit to
which a participant is entitled is the benefit that can be provided from the
participant's account.
Vesting
-------
Participants are immediately vested in their voluntary contributions and
related employer matching contributions plus actual earnings thereon.
Investment options
------------------
Upon enrollment in the Plan, a participant may direct both the participant's
and Company's matching contributions in several investment vehicles. The
various investment vehicles a participant may elect as of December 31, 1998
are:
. The Income Accumulation Fund for Employee Retirement Plans (" Income
Accumulation Fund") is a collective investment fund which invests in
guaranteed investment contracts, short-term fixed income securities and
money market instruments.
. The Templeton Foreign Fund is a registered mutual fund which invests in
stocks and debt obligations of companies and governments outside the
United States.
-6-
<PAGE>
ADVO, Inc.
401(k) Savings Plan
Notes to Financial Statements
December 31, 1998
A. Description of Plan (cont.)
--------------------------
. The Money Market Fund-MasterWorks is a registered mutual fund comprised of
instruments with maturities of less than one year, including commercial
paper, corporate notes and other high quality short-term instruments.
. The S&P 500 Stock Fund-MasterWorks is a registered mutual fund comprised of
stock in S&P 500 companies.
. The ADVO Fidelity Asset Manager Fund allocates its assets across domestic
and foreign stocks, bonds, and short-term instruments and also includes
money market instruments which serve as overnight sweep investments.
. The ADVO Berger 100 Fund invests primarily in domestic and foreign stocks
of established companies and also includes money market instruments which
serve as overnight sweep investments.
. The ADVO IDS New Dimensions Fund is a growth fund comprised primarily of
common stocks in U.S. and foreign companies showing potential for
significant growth and also includes money market instruments which serve
as overnight sweep investments.
. The ADVO Stock Fund, consists primarily of ADVO, Inc common stock and also
includes money market instruments which serve as overnight sweep
investments.
Payment of Benefits
- -------------------
On termination of service, a participant may elect to receive a lump-sum amount
equal to the value of his or her account.
Loans
- -----
Participants may borrow funds subject to certain restrictions and the consent of
the Associate Savings Committee.
Expenses of the Plan
- --------------------
All costs and expenses of operation and administration of the Plan are paid by
the Company.
ADVO Custom Funds
- -----------------
Employer custom funds include the following: ADVO Fidelity Asset Manager Fund,
ADVO Berger 100 Fund, ADVO IDS New Dimensions Fund and ADVO Stock Fund. Custom
funds are unregistered custom separate accounts maintained by the Trustee and
established by the Company for the benefit of the Plan and any other qualified
plan of the Company. During 1998, the Company created a new plan for one of its
subsidiaries which also has the ability to invest in these custom funds.
Ownership is represented by each plans' proportionate units of participation.
Although the performance of the custom fund is based on the performance of the
underlying mutual fund or company common stock, the value of a fund unit is
different from the net asset value of the mutual fund or the price of one share
of common stock. Changes in the unit value of the fund will be affected by price
changes in the underlying mutual fund or common stock, earnings, dividends,
interest and applicable fees and expenses of the fund. Additionally, the funds
maintain highly liquid money market instruments which may contribute towards
differences in performance between the fund units and net asset value of the
underlying mutual funds or common stock.
- 7 -
<PAGE>
ADVO, Inc
401(k) Savings Plan
Notes to Financial Statements
December 31, 1998
B. Summary of Accounting Policies
------------------------------
Valuation of Investments
- ------------------------
The fair value of investments in Mutual Funds is based on the quoted market
prices of the shares held in these funds at year-end.
The fair value of investments in the Collective Investment Fund and the ADVO
Custom Funds is based on the net asset value ("NAV") of participation units held
by the Plan at year-end. These NAV's are calculated based on the current market
value of the underlying securities and the current number of units held by
participants in these funds.
Participant loans receivable are stated at net realizable value which
approximates fair value.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires plan management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. While management believes that the estimates and related assumptions in
the preparation of these financial statements are appropriate, actual results
could differ from those estimates.
C. Investments
-----------
The Plan's investments are primarily held by bank-administered trust funds. The
following table presents the fair value of investments. Investments that
represent 5% or more of the Plan's assets are separately identified by the
following "*".
December 31,
-----------------------------
1998 1997
---- ----
Collective Investment Fund:
--------------------------
Income Accumulation Fund $ 7,064,105* $ 6,940,321*
Mutual Funds
------------
Templeton Foreign Fund 1,859,240 2,008,135
Money Market Fund-MasterWorks 3,200,576* 2,830,268*
S&P 500 Stock Fund-MasterWorks 16,436,134* 11,817,008*
ADVO Custom Funds:
------------------
ADVO Fidelity Asset Manager Fund 10,104,824* 8,977,539*
ADVO Berger 100 Fund 1,703,368 1,507,607
ADVO IDS New Dimensions Fund 13,753,959* 10,520,073*
ADVO Stock Fund 3,029,823* 1,882,461
----------- -----------
TOTAL $57,152,029 $46,483,412
=========== ===========
- 8 -
<PAGE>
ADVO, Inc
401(k) Savings Plan
Notes to Financial Statements
December 31, 1998
D. Differences Between Financial Statements and Form 5500
------------------------------------------------------
The following is a reconciliation of assets available for plan benefits per the
financial statements to the Plan's Form 5500:
December 31,
--------------------------
1998 1997
---- ----
Assets available for plan benefits
per the financial statements $ 59,287,991 $ 48,231,810
Amounts allocated to withdrawn
participants (775,722) (95,083)
------------ ------------
Assets available for plan benefits
per the Form 5500 $ 58,512,269 $ 48,136,727
============ ============
The following is a reconciliation of benefit payments per the financial
statements to the Plan's Form 5500:
Year Ended December 31,
-----------------------------
1998 1997
---- ----
Benefit payments per
the financial statements $ 5,036,744 $ 4,265,724
Add: Current year amounts allocated
to withdrawn participants 775,722 95,083
Less: Prior year amounts allocated
to withdrawn participants (95,083) (212,566)
----------- -----------
Benefits paid to participants per
the Form 5500 $ 5,717,383 $ 4,148,241
=========== ===========
Amounts allocated to withdrawn participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to year
end but not yet paid.
E. Plan Termination
----------------
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of plan termination,
participants will remain 100 percent vested in their accounts. After payment of
expenses, distributions would be made pro rata based on the value of such
accounts.
F. Income Tax Status
-----------------
The Plan is qualified under Section 401(a) and Section 401(k) of the Internal
Revenue Code ("IRC") and is, therefore, exempt from federal income taxes based
on a favorable determination letter from the Internal Revenue Service dated
August 23, 1995.
- 9 -
<PAGE>
ADVO, Inc
401(k) Savings Plan
Notes to Financial Statements
December 31, 1998
The Plan is required to operate in conformity with the IRC to maintain its
qualification. The Associate Savings Committee is not aware of any course of
action or series of events that have occurred that might adversely affect the
Plan's qualified status.
G. Asset Value Per Fund Unit
-------------------------
The number of units, and the asset value per unit, in the Plan's investments at
December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
--------------------- ----------------------
Asset Number Asset Number
Value of Value of
Per Unit Units Per Unit Units
-------- ----- -------- -----
<S> <C> <C> <C> <C>
Income Accumulation Fund $14.81 476,889 $13.95 497,379
Templeton Foreign Fund 8.39 221,602 9.95 201,823
Money Market Fund - MasterWorks 1.00 3,200,576 1.00 2,830,268
S&P 500 Stock Fund - MasterWorks 24.61 667,864 20.39 579,549
ADVO Fidelity Asset Manager Fund 18.60 543,270 16.10 557,611
ADVO Berger 100 Fund 18.03 94,474 15.60 96,642
ADVO IDS New Dimensions Fund 29.08 472,970 22.78 461,812
ADVO Stock Fund 21.46 141,185 15.97 117,875
</TABLE>
H. Other Events
------------
Effective January 1, 1999, the following changes will be incorporated into the
Plan:
Investment Options:
The Plan will increase the number of investment options, from eight to nine,
available to participants. A new fund, Lord Abbett Developing Growth Fund, will
be added as an investment fund selection effective January 1, 1999.
In addition, two of the current investment options will be replaced by new funds
effective January 1, 1999. The Barclays Asset Allocation Fund will replace the
Fidelity Asset Manager Fund and the Barclays S&P MidCap Fund will replace the
Berger 100 Fund. Any existing balances in the current funds will be transferred
to the new funds.
Participants' Contributions:
Participants may elect to save up to 16% of eligible pay effective January 1,
1999. Previously, participants were able to save up to 10% of eligible pay.
Eligibility in the Plan:
Effective January 1, 1999, all hourly and sales associates will be eligible to
participate in the Plan after completing the Plan's service requirement.
-10-
<PAGE>
ADVO, Inc
401(k) Savings Plan
Notes to Financial Statements
December 31, 1998
I. Year 2000 (Unaudited)
---------------------
The Plan Sponsor has determined that it will be necessary to take certain steps
in order to ensure that the Plan's computer systems will function properly with
respect to dates in the Year 2000 and thereafter. The Plan Sponsor has
identified three areas of compliance which are affected by the Year 2000 issue;
information technology ("IT") systems, non-IT systems, and third parties.
The Plan Sponsor is assessing both IT and non-IT systems and has modified and/or
replaced or is in the process of modifying and/or replacing systems which are
not compliant. As part of the third party relationship assessment, the Plan
Sponsor is sending out questionnaires and surveying third parties to ensure
products, services or interfaces are in compliance or expected to be in
compliance no later than September 30, 1999.
If modifications and /or replacements of IT systems associated with the data
processing of the Plan, the Plan Sponsor or its third parties (service
providers) are not completed timely, the Year 2000 issue could have a material
impact on the operations of the Plan. Currently, the Plan Sponsor is developing
formal contingency plans that address non-compliance.
The Plan Sponsor is currently proceeding on schedule in its overall Year 2000
program and is approximately 75% complete as of April 30, 1999. The project is
estimated to be completed no later than September 1999.
- 11 -
<PAGE>
S U P P L E M E N T A L S C H E D U L E S
<PAGE>
Schedule I
ADVO, Inc.
401(k) Savings Plan
Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
Description of Investment,
Identity of Issue, Borrower, Lessor Including Maturity Date, Rate of
or Similar Party Interest, Par or Maturity Value Cost Current Value
- ----------------------------------- -------------------------------- ---- -------------
<S> <C> <C> <C>
Collective Investment Fund:
Income Accumulation Fund 476,889 units $ 7,064,105 $ 7,064,105
Mutual Funds:
Templeton Foreign Fund 221,602 units 2,141,823 1,859,240
Money Market Fund-MasterWorks 3,200,576 units 3,200,576 3,200,576
S&P 500 Stock Fund-MasterWorks 667,864 units 14,050,793 16,436,134
ADVO Custom Funds:
ADVO Fidelity Asset Manager Fund 543,270 units 8,815,340 10,104,824
ADVO Berger 100 Fund 94,474 units 1,499,645 1,703,368
ADVO IDS New Dimensions Fund 472,970 units 10,934,384 13,753,959
ADVO Stock Fund 141,185 units 2,409,185 3,029,823
Participant Loans 7-10% -- 1,947,171
----------- -----------
TOTAL $50,115,851 $59,099,200
=========== ===========
</TABLE>
<PAGE>
Schedule II
ADVO, Inc.
401(k) Savings Plan
Schedule of Reportable Transactions
For the Year Ended December 31, 1998
Category (iii) -- Series Transactions in excess of 5% of plan assets
- --------------------------------------------------------------------
<TABLE>
<CAPTION>
Current
Expenses Value of
Incurred Asset on Net
Identity of Description Purchase Selling Lease with Cost of Transaction Gain
Party Involved of Assets Price Price Rental Transaction Asset Date (Loss)
- -------------- --------- ----- ----- ------ ----------- ----- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Collective Income
Investment Fund - Accumulation
Merrill Lynch Fund 1,956,554 1,956,554 1,956,554
" " " " 2,228,752 2,228,752 2,228,752
Mutual Funds - S&P 500
Merrill Lynch Stock Fund-
MasterWorks 3,983,577 3,983,577 3,983,577
" " " " 1,889,947 1,202,944 1,889,947 687,003
" " Money Market
Fund-Masterworks 1,469,114 1,469,114 1,469,114
" " " " 1,098,806 1,098,806 1,098,806
ADVO Custom ADVO Fidelity
Funds Asset Manager
Fund 1,400,543 1,400,543 1,400,543
" " " " 1,646,319 1,120,783 1,646,319 525,536
" " ADVO IDS New
Dimensions
Fund 2,036,622 2,036,622 2,036,622
" " " " 1,744,278 1,042,677 1,744,278 701,601
</TABLE>
There were no category (i), (ii) or (iv) reportable transactions during 1998.
Note: Fair value at the transaction date is equivalent to the purchase cost or
selling price.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
ADVO, Inc, Associate Savings Committee has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
ADVO, Inc.
401(k) Savings Plan
Date: June 28, 1999 By: /s/ WILLIAM E. CROWLEY
------------- ----------------------------------
William E. Crowley
Committee Secretary
ADVO, Inc. Associate Savings Committee
<PAGE>
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) Number 333-11323) pertaining to the ADVO, Inc. 401(k) Savings Plan of our
report dated June 10, 1999, with respect to the financial statements and
schedules of the ADVO, Inc. 401(k) Savings Plan included in this Annual Report
(Form 11-K) for the year ended December 31, 1998.
/s/Ernst & Young LLP
Hartford, Connecticut
June 24, 1999
