For more information:
Sara Leuchter Wilkins
Director of Investor Relations
414-224-2633
swilkins@jc.com
MILWAUKEE, WI – July __, 2004 – Journal Communications (NYSE:JRN) today announced financial results for its second quarter ended June 27, 2004.
For the quarter ended June 27, 2004, net earnings increased 36.8% to $20.8 million compared to $15.2 million for the quarter ended June 29, 2003. For year-over-year comparison purposes, it is important to note that in the second quarter of 2003, Journal Communications recorded a $1.5 million liability, net of tax, for employment-related taxes. Also, for comparison purposes, all results for the second quarter of 2003 have been presented on a basis that conforms to the quarterly reporting of operating results adopted effective January 1, 2004.
For the quarter ended June 27, 2004, operating revenue increased 4.3% to $208.0 million compared to $199.4 million for the quarter ended June 29, 2003.
“Journal Communications finished the first half of 2004 with another strong performance, driven in large part by the same benefits that we have been reporting for the past three quarters. Chief among them were continued gains in productivity benefits from our new newspaper production facility, broad-based advertising revenue expansion at our publishing businesses and our television and radio stations and cost controls throughout the organization,” said Steven J. Smith, chairman and chief executive officer.
“Our operating earnings this quarter were again driven by solid contributions from the publishing and broadcast groups, up 41% and 46%, respectively. For the fourth consecutive quarter we benefited from efficiencies generated by our new production facility. At the daily newspaper, we recorded gains in retail, general and classified advertising revenue as well as in our online product and shared mail. We also recorded low double-digit growth in classified advertising at the community newspapers and shoppers for the quarter. Importantly, these gains at the publishing group were accomplished while concurrently lowering costs across numerous expense categories,” Smith added.
Smith continued, “Our television stations recorded another solid quarter, as local spot advertising and political advertising were both significant contributors. We also continue to see marked improvement at our Las Vegas and Boise television stations, reflecting improving business operations. On the radio side, we were pleased with solid earnings gains at the majority of our developmental markets.
“While the wholesale side of our Norlight telecommunications business experienced continuing pricing pressure and service disconnects in the second quarter of 2004, we were encouraged by yet another quarter of nearly 11% revenue growth on the enterprise side,” Smith commented. “In the second quarter, we recorded an operating loss at IPC, our printing services company, due primarily to reduced sales volume from several computer-related customers as well as production inefficiencies on print work.”
“As we move into the second half of the year, we expect that our publishing and broadcast businesses will continue to drive earnings growth with the help of a recovering economy, new revenue initiatives, and strong political and Olympic advertising. We also continue to evaluate a number of broadcast acquisition opportunities that meet our criteria for growth,” Smith said.
Costs and Expenses
For the quarter ended June 27, 2004, costs and expenses of $173.0 million was flat with the second quarter last year.
Operating Earnings
For the quarter ended June 27, 2004, operating earnings increased 32.3% to $35.0 million compared to $26.5 million for the second quarter of 2003, primarily due to productivity benefits from our new production facility as well as increased revenues at our advertising-based businesses. For the second quarter of 2004, operating earnings margin was 16.8% compared to 13.3% for the second quarter of 2003.
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Earnings per Share
For the quarter ended June 27, 2004, basic and diluted earnings per share were $0.28 and $0.27, respectively, compared to both basic and diluted earnings per share of $0.20 for the second quarter of 2003.
EBITDA
For the quarter ended June 27, 2004, EBITDA (net earnings plus total other income and expense, provision for income taxes, depreciation and amortization) increased 21.4% to $46.7 million from $38.5 million for the second quarter of 2003. The increase was primarily due to greater publishing and broadcasting revenues and profit margins.
Operating Cash Flow
For the quarter ended June 27, 2004, operating cash flow (cash provided by operating activities) increased to $27.0 million from $16.4 million for the second quarter of 2003.
Publishing
Publishing operating revenue for the quarter ended June 27, 2004, increased 4.6% to $83.6 million from $79.9 million for the second quarter of 2003. Operating earnings from publishing for the quarter ended June 27, 2004, increased 41.0% to $12.6 million compared to $9.0 million for the second quarter of 2003. In the second quarter of 2004, publishing benefited from stronger advertising revenue, continued production efficiencies at the daily newspaper and cost reduction initiatives, despite a 12% increase in the price of newsprint.
Broadcasting
Broadcasting operating revenue for the quarter ended June 27, 2004, increased 12.2% to $42.3 million, compared to $37.7 million for the second quarter of 2003. Broadcasting operating earnings for the quarter ended June 27, 2004, increased 45.7% to $11.1 million, compared to $7.6 million for the second quarter of 2003. This growth was driven by a number of factors including strong television political advertising and an increase in local advertising at most of our television and radio markets.
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For the quarter ended June 27, 2004, operating revenue from radio stations increased 5.7% to $20.5 million from $19.4 million for the quarter ended June 29, 2003. For the quarter ended June 27, 2004, operating earnings from radio stations increased 19.0% to $5.0 million compared to $4.2 million for the second quarter of 2003.
For the quarter ended June 27, 2004, operating revenue from television stations increased 19.1% to $21.8 million compared to $18.3 million for the quarter ended June 29, 2003. For the quarter ended June 27, 2004, operating earnings from television stations increased 79.4% to $6.1 million compared to $3.4 million for the second quarter of 2003.
Telecommunications
Operating revenue from telecommunications for the quarter ended June 27, 2004, decreased 1.8% to $36.8 million from $37.5 million for the second quarter of 2003. For the second quarter of 2004, operating earnings from telecommunications decreased 4.6% to $9.1 million compared to $9.5 million for the second quarter of 2003, due to service disconnects and re-pricing in the wholesale market.
Printing Services
Operating revenue from printing services for the quarter ended June 27, 2004, decreased 15.9% to $17.4 million from $20.7 million for the second quarter of 2003, due in large part to a reduction in revenue from several computer-related customers partially offset by a gain in revenue from a number of new printing customers.
For the second quarter 2004, printing services recorded an operating loss of $0.6 million compared to operating earnings of $0.6 million in the second quarter of 2003. The loss was due primarily to reduced sales volume as well as production inefficiencies.
Other
Our other segment consists of a label printing business, a direct marketing services business and corporate. For the quarter ended June 27, 2004, other operating revenues increased 18.1% to $27.9 million from $23.6 million for the second quarter of 2003. For the second quarter of 2004, other operating earnings increased to $2.8 million from an operating loss of $0.2 million for the second quarter of 2003 when we recorded a $2.1 million pre-tax liability for employment-related taxes.
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Follow-on Equity Offering and Tender Offer
In mid June, Journal Communications completed a public offering of 6,725,000 shares of its class A common stock at $18.25 per share, including the underwriters’ over-allotment. The net proceeds from the offering of $116.0 million were used to repay outstanding indebtedness under the Company’s unsecured revolving credit facility and will be used to fund the Green Bay (Wisconsin) television acquisition and for general corporate purposes, including potential future acquisitions.
On June 15, 2004, Journal Communications completed a tender offer for its class B common stock at $18.55 per share, in which the Company purchased 8,005,203 shares, or $148.5 million worth of our class B common stock.
Following the tender offer and the follow-on equity offering, employee and former-employee shareholders own about 53 percent of the economic value of Journal Communications.
Shares Outstanding
At June 27, 2004, Journal Communications had the following shares of stock issued and outstanding: 26,926,496 shares of class A common stock; 9,741,509 shares of class B-1 common stock (not including the 4,338,352 shares held by our subsidiary, The Journal Company); 35,518,175 shares of class B-2 common stock (not including the 4,338,353 shares held by The Journal Company), and 3,264,000 shares of class C common stock. The Company’s class A shares are traded on the New York Stock Exchange. Class B shares are not traded on the NYSE, and are not convertible to class A shares until after the applicable public sale restriction periods end.
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Third Quarter 2004 Guidance
For the third quarter of 2004, Journal Communications currently anticipates operating revenue to be between $200 and $205 million and net earnings to be between $15 and $18 million.
Webcast of Conference Call
A live webcast of the second quarter 2004 conference call will be accessible through www.jc.com and www.ccbn.com beginning at 10:00 a.m. CT this morning. An archive of the webcast will be available on these sites today through August 3. For telephone access to this morning’s conference call, dial (800) 299-9086 (domestic) or (617) 786-2903 (international) at least 10 minutes prior to the scheduled 10:00 a.m. CT start. The access code for the conference call is 54961969.Replays of the conference call will be available today through July 22. To hear the replay, dial (888) 286-8010 (domestic) or (617) 801-6888 (international). The access code for the replay is 23308609.
Forward-looking Statements
This press release contains certain forward-looking statements related to our businesses that are based on our current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties, including changes in advertising demand and other economic conditions that could cause actual results to differ materially from the expectations expressed in forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. Our written policy on forward-looking statements can be found on page 1 of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.
About Journal Communications
Journal Communications, Inc., headquartered in Milwaukee, Wisconsin, was founded in 1882. We are a diversified media and communications company with operations in publishing, radio and television broadcasting, telecommunications and printing services. We publish the Milwaukee Journal Sentinel, which serves as the only major daily newspaper for the Milwaukee metropolitan area, and more than 90 community newspapers and shoppers in eight states. We own and operate 38 radio stations and six television stations in 11 states and have signed an agreement to purchase WGBA-TV and to assume an existing local marketing agreement for WACY-TV – both located in the Green Bay/Appleton (Wisconsin) market. Through our telecommunications segment, we own and operate a regional fiber optic network in the upper Midwest, provide integrated data communications solutions for small and mid-size businesses and offer network transmission solutions for other service providers. We also provide a wide range of commercial printing services, including publications, professional journals and documentation material, as well as electronic publishing, kit assembly and fulfillment. In addition, we operate niche businesses in label printing and direct marketing services.
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Journal Communications, Inc.
Consolidated Statements of Earnings (unaudited)
(dollars in thousands, except for shares and per-share amounts)
| Second Quarter (A) | Two Quarters (B) | |||||||||||||||||||
| 2004 | 2003 | % Change | 2004 | 2003 | % Change | |||||||||||||||
| Continuing operations: | ||||||||||||||||||||
| Operating revenue: | ||||||||||||||||||||
| Publishing | $ | 83,599 | $ | 79,907 | 4.6 | $ | 160,270 | $ | 154,462 | 3.8 | ||||||||||
| Broadcasting | 42,254 | 37,657 | 12.2 | 76,889 | 69,908 | 10.0 | ||||||||||||||
| Telecommunications | 36,804 | 37,461 | (1.8 | ) | 72,361 | 74,119 | (2.4 | ) | ||||||||||||
| Printing services | 17,427 | 20,714 | (15.9 | ) | 39,191 | 43,421 | (9.7 | ) | ||||||||||||
| Other | 27,938 | 23,652 | 18.1 | 51,981 | 47,351 | 9.8 | ||||||||||||||
| Total operating revenue | 208,022 | 199,391 | 4.3 | 400,692 | 389,261 | 2.9 | ||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||
| Publishing | 39,674 | 39,337 | 0.9 | 77,519 | 77,661 | (0.2 | ) | |||||||||||||
| Broadcasting | 16,384 | 15,784 | 3.8 | 31,486 | 30,868 | 2.0 | ||||||||||||||
| Telecommunications | 20,898 | 20,948 | (0.2 | ) | 41,304 | 41,089 | 0.5 | |||||||||||||
| Printing services | 15,459 | 17,545 | (11.9 | ) | 33,919 | 36,009 | (5.8 | ) | ||||||||||||
| Other | 22,842 | 19,304 | 18.3 | 42,695 | 39,161 | 9.0 | ||||||||||||||
| Total operating costs and expenses | 115,257 | 112,918 | 2.1 | 226,923 | 224,788 | 0.9 | ||||||||||||||
Selling and administrative expenses | 57,726 | 59,995 | (3.8 | ) | 112,020 | 116,778 | (4.1 | ) | ||||||||||||
| Total operating costs and expenses | ||||||||||||||||||||
| and selling and administrative | ||||||||||||||||||||
| expenses | 172,983 | 172,913 | 0.0 | 338,943 | 341,566 | (0.8 | ) | |||||||||||||
Operating earnings | 35,039 | 26,478 | 32.3 | 61,749 | 47,695 | 29.5 | ||||||||||||||
Other income and expense: | ||||||||||||||||||||
| Interest income and dividends | 70 | 55 | 137 | 137 | ||||||||||||||||
| Interest expense, net | (390 | ) | (916 | ) | (1,002 | ) | (1,451 | ) | ||||||||||||
| Total other income and expense | (320 | ) | (861 | ) | (865 | ) | (1,314 | ) | ||||||||||||
Earnings before income taxes | 34,719 | 25,617 | 35.5 | 60,884 | 46,381 | 31.3 | ||||||||||||||
Provision for income taxes | 13,888 | 10,386 | 33.7 | 24,354 | 18,692 | 30.3 | ||||||||||||||
Net earnings | $ | 20,831 | $ | 15,231 | 36.8 | $ | 36,530 | $ | 27,689 | 31.9 | ||||||||||
Weighted average number of shares: | ||||||||||||||||||||
| Basic | 73,866,381 | 77,747,211 | 73,665,309 | 77,747,211 | ||||||||||||||||
| Diluted | 78,319,839 | 77,747,211 | 78,118,888 | 77,747,211 | ||||||||||||||||
Earnings per share: | ||||||||||||||||||||
| Basic: | ||||||||||||||||||||
| Net earnings | $ | 0.28 | $ | 0.20 | 40.0 | $ | 0.48 | $ | 0.36 | 33.3 | ||||||||||
Diluted: | ||||||||||||||||||||
| Net earnings | $ | 0.27 | $ | 0.20 | 35.0 | $ | 0.47 | $ | 0.36 | 30.6 | ||||||||||
| (A) | 2004 second quarter: March 29, 2004 to June 27, 2004. 2003 second quarter: March 31, 2003 to June 29, 2003 -- presented on a basis that conforms with the second quarter of 2004. |
| (B) | 2004 two quarters: January 1, 2004 to June 27, 2004. 2003 two quarters: January 1, 2003 to June 29, 2003 -- presented on a basis that conforms with the two quarters of 2004. |
Journal Communications, Inc.
Segment Information
(dollars in thousands)
Operating revenue, Operating earnings, Depreciation and amortization and Publishing operating revenue by category are prepared in accordance with GAAP.
| Second Quarter (A) (unaudited) | Two Quarters (B) (unaudited) | |||||||||||||||||||
| 2004 | 2003 | % Change | 2004 | 2003 | % Change | |||||||||||||||
| Operating revenue | ||||||||||||||||||||
| Publishing | $ | 83,599 | $ | 79,907 | 4.6 | $ | 160,270 | $ | 154,462 | 3.8 | ||||||||||
| Broadcasting | 42,254 | 37,657 | 12.2 | 76,889 | 69,908 | 10.0 | ||||||||||||||
| Telecommunications | 36,804 | 37,461 | (1.8 | ) | 72,361 | 74,119 | (2.4 | ) | ||||||||||||
| Printing services | 17,427 | 20,714 | (15.9 | ) | 39,191 | 43,421 | (9.7 | ) | ||||||||||||
| Other | 27,938 | 23,652 | 18.1 | 51,981 | 47,351 | 9.8 | ||||||||||||||
| $ | 208,022 | $ | 199,391 | 4.3 | $ | 400,692 | $ | 389,261 | 2.9 | |||||||||||
Operating earnings | ||||||||||||||||||||
| Publishing | $ | 12,643 | $ | 8,964 | 41.0 | $ | 21,660 | $ | 13,041 | 66.1 | ||||||||||
| Broadcasting | 11,072 | 7,597 | 45.7 | 17,576 | 11,421 | 53.9 | ||||||||||||||
| Telecommunications | 9,103 | 9,539 | (4.6 | ) | 17,833 | 19,553 | (8.8 | ) | ||||||||||||
| Printing services | (597 | ) | 602 | (199.2 | ) | 317 | 1,793 | (82.3 | ) | |||||||||||
| Other | 2,818 | (224 | ) | 1358.0 | 4,363 | 1,887 | 131.2 | |||||||||||||
| $ | 35,039 | $ | 26,478 | 32.3 | $ | 61,749 | $ | 47,695 | 29.5 | |||||||||||
Depreciation and amortization | ||||||||||||||||||||
| Publishing | $ | 3,917 | $ | 4,173 | (6.1 | ) | $ | 7,897 | $ | 8,309 | (5.0 | ) | ||||||||
| Broadcasting | 2,159 | 2,005 | 7.7 | 4,259 | 3,889 | 9.5 | ||||||||||||||
| Telecommunications | 4,381 | 4,377 | 0.1 | 8,691 | 8,570 | 1.4 | ||||||||||||||
| Printing services | 597 | 804 | (25.7 | ) | 1,180 | 1,690 | (30.2 | ) | ||||||||||||
| Other | 638 | 658 | (3.0 | ) | 1,245 | 1,310 | (5.0 | ) | ||||||||||||
| $ | 11,692 | $ | 12,017 | (2.7 | ) | $ | 23,272 | $ | 23,768 | (2.1 | ) | |||||||||
| (A) | 2004 second quarter: March 29, 2004 to June 27, 2004. 2003 second quarter: March 31, 2003 to June 29, 2003 -- presented on a basis that conforms with the second quarter of 2004. |
| (B) | 2004 two quarters: January 1, 2004 to June 27, 2004. 2003 two quarters: January 1, 2003 to June 29, 2003 -- presented on a basis that conforms with the two quarters of 2004. |
Journal Communications, Inc.
Publishing Segment Information (unaudited)
(dollars in thousands)
Publishing operating revenue by category:
| Second Quarter of 2004 (A) | Second Quarter of 2003 (B) | ||||||||||||||||||||||
| Daily Newspaper | Community Newspapers & Shoppers | Total | Daily Newspaper | Community Newspapers & Shoppers | Total | % Change | |||||||||||||||||
| Advertising revenue: | |||||||||||||||||||||||
| Retail | $ | 20,981 | $ | 14,840 | $ | 35,821 | $ | 20,271 | $ | 14,944 | $ | 35,215 | 1.7 | ||||||||||
| Classified | 16,642 | 2,526 | 19,168 | 15,490 | 2,296 | 17,786 | 7.8 | ||||||||||||||||
| General | 2,706 | -- | 2,706 | 2,540 | -- | 2,540 | 6.5 | ||||||||||||||||
| Other | 5,273 | 444 | 5,717 | 4,839 | 525 | 5,364 | 6.6 | ||||||||||||||||
| Total advertising revenue | 45,602 | 17,810 | 63,412 | 43,140 | 17,765 | 60,905 | 4.1 | ||||||||||||||||
| Circulation revenue | 10,928 | 695 | 11,623 | 10,736 | 715 | 11,451 | 1.5 | ||||||||||||||||
| Other revenue | 868 | 7,696 | 8,564 | 656 | 6,895 | 7,551 | 13.4 | ||||||||||||||||
| Total operating revenue | $ | 57,398 | $ | 26,201 | $ | 83,599 | $ | 54,532 | $ | 25,375 | $ | 79,907 | 4.6 | ||||||||||
| Two Quarters of 2004 (C) | Two Quarters of 2003 (D) | ||||||||||||||||||||||
| Daily Newspaper | Community Newspapers & Shoppers | Total | Daily Newspaper | Community Newspapers & Shoppers | Total | % Change | |||||||||||||||||
| Advertising revenue: | |||||||||||||||||||||||
| Retail | $ | 39,304 | $ | 27,579 | $ | 66,883 | $ | 38,332 | $ | 27,890 | $ | 66,222 | 1.0 | ||||||||||
| Classified | 31,718 | 4,478 | 36,196 | 30,259 | 4,069 | 34,328 | 5.4 | ||||||||||||||||
| General | 5,978 | -- | 5,978 | 5,381 | -- | 5,381 | 11.1 | ||||||||||||||||
| Other | 9,517 | 1,064 | 10,581 | 8,646 | 1,136 | 9,782 | 8.2 | ||||||||||||||||
| Total advertising revenue | 86,517 | 33,121 | 119,638 | 82,618 | 33,095 | 115,713 | 3.4 | ||||||||||||||||
| Circulation revenue | 21,437 | 1,398 | 22,835 | 21,236 | 1,433 | 22,669 | 0.7 | ||||||||||||||||
| Other revenue | 3,323 | 14,474 | 17,797 | 2,761 | 13,319 | 16,080 | 10.7 | ||||||||||||||||
| Total operating revenue | $ | 111,277 | $ | 48,993 | $ | 160,270 | $ | 106,615 | $ | 47,847 | $ | 154,462 | 3.8 | ||||||||||
| (A) | 2004 second quarter: March 29, 2004 to June 27, 2004. 2003 second quarter: March 31, 2003 to June 29, 2003 -- presented on a basis that conforms with the second quarter of 2004. |
| (B) | 2004 two quarters: January 1, 2004 to June 27, 2004. 2003 two quarters: January 1, 2003 to June 29, 2003 -- presented on a basis that conforms with the two quarters of 2004. |
NOTE: Publishing segment information is provided to facilitate comparison of our publishing segment results with those of other publishing companies and is not representative of the overall business of Journal Communications or its operating results.
Journal Communications, Inc.
Publishing Segment Information, continued (unaudited)
Daily newspaper's core newspaper advertising linage by category:
| Second Quarter (A) | Two Quarters (B) | |||||||||||||||||||
| 2004 | 2003 | % Change | 2004 | 2003 | % Change | |||||||||||||||
| Advertising linage (inches): | ||||||||||||||||||||
Full run | ||||||||||||||||||||
| Retail | 188,916 | 183,224 | 3.1 | 346,430 | 342,292 | 1.2 | ||||||||||||||
| Classified | 224,308 | 227,957 | (1.6 | ) | 424,895 | 430,914 | (1.4 | ) | ||||||||||||
| General | 12,438 | 12,087 | 2.9 | 28,348 | 24,010 | 18.1 | ||||||||||||||
| Total full run | 425,662 | 423,268 | 0.6 | 799,673 | 797,216 | 0.3 | ||||||||||||||
| Part run | 45,328 | 30,933 | 46.5 | 70,542 | 50,145 | 40.7 | ||||||||||||||
| Total advertising linage | 470,990 | 454,201 | 3.7 | 870,215 | 847,361 | 2.7 | ||||||||||||||
Preprint pieces (in thousands) | 187,974 | 208,414 | (9.8 | ) | 373,748 | 408,195 | (8.4 | ) | ||||||||||||
Full pages of advertising and revenue per page of our community newspapers and shoppers:
| Full pages of advertising: | ||||||||||||||||||||
| Community newspapers | 26,750 | 29,262 | (8.6 | ) | 49,370 | 54,786 | (9.9 | ) | ||||||||||||
| Shoppers | 23,445 | 25,584 | (8.4 | ) | 43,975 | 47,910 | (8.2 | ) | ||||||||||||
| Total full pages of advertising | 50,195 | 54,846 | (8.5 | ) | 93,345 | 102,696 | (9.1 | ) | ||||||||||||
Revenue per page | $ | 316.73 | $ | 287.38 | 10.2 | $ | 314.25 | $ | 284.21 | 10.6 | ||||||||||
| (A) | 2004 second quarter: March 29, 2004 to June 27, 2004. 2003 second quarter: March 31, 2003 to June 29, 2003 -- presented on a basis that conforms with the second quarter of 2004. |
| (B) | 2004 two quarters: January 1, 2004 to June 27, 2004. 2003 two quarters: January 1, 2003 to June 29, 2003 -- presented on a basis that conforms with the two quarters of 2004. |
NOTE: Publishing segment information is provided to facilitate comparison of our publishing segment results with those of other publishing companies and is not representative of the overall business of Journal Communications or its operating results.
Journal Communications, Inc.
Reconciliation of our consolidated net earnings to consolidated EBITDA (unaudited)
(dollars in thousands)
| Second Quarter (A) | Two Quarters (B) | |||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||
| Net earnings | $ | 20,831 | $ | 15,231 | $ | 36,530 | $ | 27,689 | ||||||
| Total other (income) and expense | 320 | 861 | 865 | 1,314 | ||||||||||
| Provision for income taxes | 13,888 | 10,386 | 24,354 | 18,692 | ||||||||||
| Depreciation | 11,271 | 11,611 | 22,360 | 22,934 | ||||||||||
| Amortization | 421 | 406 | 912 | 834 | ||||||||||
| EBITDA | $ | 46,731 | $ | 38,495 | $ | 85,021 | $ | 71,463 | ||||||
| (A) | 2004 second quarter: March 29, 2004 to June 27, 2004. 2003 second quarter: March 31, 2003 to June 29, 2003 -- presented on a basis that conforms with the second quarter of 2004. |
| (B) | 2004 two quarters: January 1, 2004 to June 27, 2004. 2003 two quarters: January 1, 2003 to June 29, 2003 -- presented on a basis that conforms with the two quarters of 2004. |
We believe that EBITDA is relevant and useful because it helps improve our investors’ ability to understand our operating performance and makes it easier to compare our results with other companies that have different financing and capital structures or tax rates. We use EBITDA, among other things, to evaluate our operating performance, to value prospective acquisitions and as a component of incentive compensation targets for certain management personnel. Our lenders use EBITDA as one of the measures of our ability to service our debt. EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States. EBITDA should not be considered in isolation of, or as a substitute for, net earnings as an indicator of operating performance or cash flows measures from operating performance as a measure of liquidity. EBITDA, as we calculate it, may not be comparable to EBITDA reported by other companies. In addition, EBITDA does not represent funds available for discretionary use.
Journal Communications, Inc.
Consolidated Condensed Balance Sheet
(dollars in thousands)
| (Unaudited) June 27, 2004 | December 31, 2003 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 6,148 | $ | 8,444 | ||||
| Receivables, net | 91,787 | 96,563 | ||||||
| Inventories, net | 16,531 | 15,216 | ||||||
| Prepaid expenses | 10,287 | 13,236 | ||||||
| Deferred income taxes | 9,117 | 8,948 | ||||||
| Total current assets | $ | 133,870 | $ | 142,407 | ||||
| Property and equipment, net | 306,911 | 314,595 | ||||||
| Goodwill | 114,283 | 114,283 | ||||||
| Broadcast licenses | 129,548 | 129,548 | ||||||
| Other intangible assets, net | 9,505 | 9,900 | ||||||
| Prepaid pension costs | 26,159 | 28,421 | ||||||
| Other assets | 13,046 | 8,021 | ||||||
| Total assets | $ | 733,322 | $ | 747,175 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 41,042 | $ | 38,369 | ||||
| Accrued compensation | 19,830 | 24,704 | ||||||
| Deferred revenue | 19,522 | 22,590 | ||||||
| Accrued employee benefits | 12,073 | 9,830 | ||||||
| Other current liabilities | 14,537 | 21,567 | ||||||
| Current portion of long-term liabilities | 766 | 683 | ||||||
| Total current liabilities | $ | 107,770 | $ | 117,743 | ||||
| Accrued employee benefits | 16,484 | 16,457 | ||||||
| Long-term notes payable to banks | 76,735 | 84,000 | ||||||
| Other long term liabilities | 15,218 | 8,748 | ||||||
| Deferred income taxes | 59,988 | 56,477 | ||||||
| Shareholders' equity | 457,127 | 463,750 | ||||||
| Total liabilities and shareholders' equity | $ | 733,322 | $ | 747,175 | ||||
