Valassis Communications reported net earnings of $6.6 million for the third quarter, a 68.9% drop from $21.3 million for the prior-year period, due mostly to charges surrounding its failed merger attempt with Advo Inc. and fierce competition in the freestanding inserts market.
The Livonia, MI firm reported revenue of $248.9 million for the quarter ended Sept. 30, a 6.5% decrease from $266.1 million last year.
CEO Alan F. Schultz said costs related to a lawsuit to stop the proposed merger amounted to $10.1 million, net of tax. Valassis’ acquisition of Advo hit a major snag when it sued to terminate the $1.3 billion deal. Last month, Valassis filed papers in the Delaware Chancery Court to rescind its offer. Valassis is also seeking unspecified damages from Advo (Direct, Sept. 1).
Those papers allege that Advo management lied about the company’s financial health. According the papers, Advo “intentionally provided Valassis with materially false financial information and withheld material information at a time when [Advo’s] operating income was materially off forecast.”
Network
