Valassis says third-quarter profit fell on weak revenue

Share this article:

Newspaper insert distributor Valassis Communications Inc. said Oct. 26 its third quarter net income fell as a result of weak revenue and costs related to its proposed acquisition of direct mail advertising company Advo Inc. and subsequent lawsuit to rescind the agreement.

Livonia, MI-based Valassis said net earnings in the quarter ended Sept. 30 fell to $6.6 million from $21.3 million in the same quarter a year earlier. Quarterly revenue fell 6.5 percent to $248.9 million.

The company said that during the third quarter, the proposed acquisition of Windsor, CT-based Advo and the lawsuit cost the company $10.1 million.

Valassis filed a lawsuit on Aug. 30 in Delaware Chancery Court seeking to rescind its merger agreement with direct mailer Advo based on allegations of fraud and material adverse changes. A Dec. 11 court date has been set. On Sept. 8, Advo filed a lawsuit in response to Valassis' complaint.

Valassis said that while it has made important progress in some areas of its business, year-to-date, its 2006 performance has fallen short of expectations.

This material may not be published, broadcast, rewritten or redistributed in any form without prior authorization. Your use of this website constitutes acceptance of Haymarket Media's Privacy Policy and Terms & Conditions