Exhibit 99
Journal Communications Reports Second Quarter Results
MILWAUKEE--(BUSINESS WIRE)--July 20, 2005--Journal Communications
(NYSE:JRN) today announced that for its second quarter ended June 26,
2005, basic and diluted earnings per share from continuing operations
were $0.25 and $0.24, respectively, compared to basic and diluted
earnings per share from continuing operations of $0.26 and $0.25,
respectively, for the second quarter 2004. Net earnings decreased
12.9% to $18.1 million compared to net earnings of $20.8 million.
Earnings from continuing operations were $18.1 million compared to
$19.8 million, a decrease of 8.2%.
Note that unless otherwise indicated, all comparisons are to the
second quarter ended June 27, 2004. Both quarters contained 91 days.
"We experienced a solid finish to the second quarter as
advertising strengthened at our daily newspaper and in a number of our
radio markets," said Steven J. Smith, chairman and chief executive
officer. "Our television business continues to be challenged as we
face a soft advertising environment and tougher comparisons due to an
off-cycle year in political and issue advertising. As expected, we
reported reduced earnings in telecommunications. And our printing
business experienced another quarter of earnings, reflecting the
ongoing successful return to its core business. We continue to seek
new revenue and new product opportunities in all of our businesses
while being mindful of our margin and cost containment focus."
Consolidated
Revenue from continuing operations increased 1.4% to $194.7
million compared to revenue from continuing operations of $192.1
million. Operating earnings from continuing operations decreased 8.2%
to $30.5 million compared to $33.3 million. Operating earnings margin
was 15.7% compared to 17.3%. EBITDA (net earnings excluding the gain
from discontinued operations, total other expense, provision for
income taxes, depreciation and amortization) of $41.5 million
decreased 6.8% compared to $44.5 million. Operating cash flow (cash
provided by operating activities) decreased 5.7% to $57.4 million
compared to $60.9 million.
Publishing
Publishing revenue increased 2.2% to $85.4 million from $83.6
million. Operating earnings from publishing increased 13.4% to $14.3
million compared to $12.6 million. These increases reflect stronger
retail and classified advertising revenues at the daily newspaper and
growth in Journal Interactive, while maintaining tight cost controls.
Broadcasting
Broadcasting revenue increased 1.6% to $42.9 million compared to
$42.3 million. Broadcasting operating earnings decreased 19.4% to $8.9
million compared to $11.1 million. The decrease was caused by
challenging comparatives for political and issue advertising primarily
for television, as well as continued overall softness in advertising
at most of our television stations. In the second quarter 2005,
political and issue advertising revenue for television declined $1.6
million.
Revenue from radio stations increased 4.6% to $21.4 million from
$20.5 million. Operating earnings from radio stations increased 9.4%
to $5.4 million compared to $5.0 million for the second quarter 2004.
Revenue from television stations decreased 1.3% to $21.5 million
compared to $21.8 million. Operating earnings from television stations
decreased 42.8% to $3.5 million compared to $6.1 million. Excluding
the Green Bay operations acquired in October 2004, revenue decreased
12.6% and operating earnings decreased 45.5%.
Telecommunications
Revenue from telecommunications decreased 1.9% to $36.1 million
from $36.8 million. Operating earnings from telecommunications
decreased 26.8% to $6.7 million compared to $9.1 million, due to lower
wholesale revenue as well as increased operating costs associated with
the enterprise business.
Printing Services
Revenue from printing services increased 3.8% to $18.1 million
from $17.4 million. Operating earnings from printing services
increased to $0.4 million compared to a loss of $0.6 million resulting
from the ongoing successful strategic transition back to the core
printing business and a continued emphasis on strict cost control.
Other
Revenue for "Other" of $12.2 million increased 1.9% compared to
revenue of $12.0 million. For the second quarter 2005, "Other"
operating earnings decreased to $0.2 million from $1.1 million.
Stock Repurchase Program
During the second quarter 2005, the Company repurchased 1,369,664
shares of its class A common stock. Year-to-date, the Company has
repurchased 1,483,864 class A shares.
Third Quarter 2005 Guidance
For the third quarter of 2005, Journal Communications currently
anticipates revenue to be between $186 million and $191 million and
net earnings to be between $14 million and $16 million.
Webcast of Conference Call
A live webcast of the second quarter 2005 conference call will be
accessible through www.journalcommunications.com/investors 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.
To access the call, dial 800-901-5217 (domestic) or 617-786-2964
(international) at least 10 minutes prior to the scheduled 10 a.m. CT
start. The access code for the conference call is 42053569. Replays of
the conference call will be available July 20 through July 24. To hear
the replay, dial 888-286-8010 (domestic) or 617-801-6888
(international). The access code for the replay is 84846679.
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 seven television stations in 11 states and
operate an additional television station under a local marketing
agreement. 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 printing for publications, professional journals
and documentation material - as well as electronic publishing, kit
assembly and fulfillment. In addition, we operate a direct marketing
services business.
Tables Follow
Journal Communications, Inc.
Consolidated Statements of Earnings (unaudited)
(dollars in thousands, except for shares and per-share amounts)
Second Quarter (A)
----------------------------
2005 2004 % Change
---- ---- --------
Continuing Operations:
Revenue:
Publishing $85,408 $83,599 2.2
Broadcasting 42,911 42,254 1.6
Telecommunications 36,122 36,804 (1.9)
Printing services 18,082 17,427 3.8
Other 12,207 11,979 1.9
----------- -------------
Total revenue 194,730 192,063 1.4
Operating costs and expenses:
Publishing 41,652 40,358 3.2
Broadcasting 18,110 16,384 10.5
Telecommunications 21,738 20,898 4.0
Printing services 15,293 15,459 (1.1)
Other 10,327 9,993 3.3
----------- -------------
Total operating costs and
expenses 107,120 103,092 3.9
Selling and administrative
expenses 57,061 55,698 2.4
----------- -------------
Total operating costs and
expenses and selling and
administrative expenses 164,181 158,790 3.4
----------- -------------
Operating earnings 30,549 33,273 (8.2)
Other income and expense:
Interest income and
dividends 162 70
Interest expense (536) (390)
----------- -------------
Total other income and
expense (374) (320)
Earnings from continuing
operations before income
taxes 30,175 32,953 (8.4)
Provision for income taxes 12,049 13,203 (8.7)
----------- -------------
Earnings from continuing
operations 18,126 19,750 (8.2)
Gain from discontinued
operations, net of
applicable tax benefit
of $12 and tax expense
of $685, $3,061 and
$1,078, respectively 9 1,081
----------- -------------
Net earnings $18,135 $20,831 (12.9)
=========== =============
Weighted average number of
shares:
Basic 71,538,836 73,866,381
Diluted 76,003,152 78,319,839
Earnings per share:
Basic:
Continuing
operations $0.25 $0.26 (3.8)
Discontinued
operations - 0.02
----------- -------------
Net earnings $0.25 $0.28 (10.7)
=========== =============
Diluted:
Continuing
operations $0.24 $0.25 (4.0)
Discontinued
operations - 0.02
----------- -------------
Net earnings $0.24 $0.27 (11.1)
=========== =============
Two Quarters (B)
-------------------------
2005 2004 % Change
---- ---- --------
Continuing Operations:
Revenue:
Publishing $163,322 $160,270 1.9
Broadcasting 80,117 76,889 4.2
Telecommunications 73,577 72,361 1.7
Printing services 36,388 39,191 (7.2)
Other 22,754 22,443 1.4
------------ -----------
Total revenue 376,158 371,154 1.3
Operating costs and
expenses:
Publishing 82,156 78,890 4.1
Broadcasting 35,451 31,486 12.6
Telecommunications 43,881 41,304 6.2
Printing services 31,071 33,919 (8.4)
Other 19,320 18,544 4.2
------------ -----------
Total operating costs and
expenses 211,879 204,143 3.8
Selling and
administrative expenses 112,433 108,036 4.1
------------ -----------
Total operating costs and
expenses and selling and
administrative expenses 324,312 312,179 3.9
------------ -----------
Operating earnings 51,846 58,975 (12.1)
Other income and expense:
Interest income and
dividends 258 137
Interest expense (1,122) (1,002)
------------ -----------
Total other income and
expense (864) (865)
Earnings from continuing
operations before income
taxes 50,982 58,110 (12.3)
Provision for income
taxes 20,291 23,276 (12.8)
------------ -----------
Earnings from continuing
operations 30,691 34,834 (11.9)
Gain from discontinued
operations, net of
applicable tax benefit
of $12 and tax expense
of $685, $3,061 and
$1,078, respectively 4,855 1,696
------------ -----------
Net earnings $35,546 $36,530 (2.7)
============ ===========
Weighted average number of
shares:
Basic 71,890,256 73,665,309
Diluted 76,352,459 78,118,888
Earnings per share:
Basic:
Continuing
operations $0.41 $0.46 (10.9)
Discontinued
operations 0.07 0.02
------------ -----------
Net earnings $0.48 $0.48 (0.0)
============ ===========
Diluted:
Continuing
operations $0.40 $0.45 (11.1)
Discontinued
operations 0.07 0.02
------------ -----------
Net earnings $0.47 $0.47 0.0
============ ===========
(A) 2005 second quarter: March 28, 2005 to June 26, 2005.
2004 second quarter: March 29, 2004 to June 27, 2004.
(B) 2005 two quarters: December 27, 2004 to June 26, 2005.
2004 two quarters: January 1, 2004 to June 27, 2004.
Journal Communications, Inc.
Segment Information
(dollars in thousands)
Second Quarter (A) (unaudited)
-------------------------------
2005 2004 % Change
--------- --------- -----------
Revenue
- -------
Publishing $85,408 $83,599 2.2
Broadcasting 42,911 42,254 1.6
Telecommunications 36,122 36,804 (1.9)
Printing services 18,082 17,427 3.8
Other 12,207 11,979 1.9
--------- ---------
$194,730 $192,063 1.4
========= =========
Operating earnings
- ------------------
Publishing $14,342 $12,643 13.4
Broadcasting 8,920 11,072 (19.4)
Telecommunications 6,659 9,103 (26.8)
Printing services 389 (597) N/A
Other 239 1,052 (77.3)
--------- ---------
$30,549 $33,273 (8.2)
========= =========
Depreciation and amortization
- -----------------------------
Publishing $3,487 $3,917 (11.0)
Broadcasting 2,190 2,159 1.4
Telecommunications 4,575 4,381 4.4
Printing services 521 597 (12.7)
Other 192 219 (12.3)
--------- ---------
$10,965 $11,273 (2.7)
========= =========
Two Quarters (B) (unaudited)
-------------------------------
2005 2004 % Change
--------- --------- -----------
Revenue
- -------
Publishing $163,322 $160,270 1.9
Broadcasting 80,117 76,889 4.2
Telecommunications 73,577 72,361 1.7
Printing services 36,388 39,191 (7.2)
Other 22,754 22,443 1.4
--------- ---------
$376,158 $371,154 1.3
========= =========
Operating earnings
- ------------------
Publishing $21,822 $21,660 0.7
Broadcasting 14,304 17,576 (18.6)
Telecommunications 14,434 17,833 (19.1)
Printing services 780 317 146.1
Other 506 1,589 (68.2)
--------- ---------
$51,846 $58,975 (12.1)
========= =========
Depreciation and amortization
- -----------------------------
Publishing $7,187 $7,897 (9.0)
Broadcasting 4,376 4,259 2.7
Telecommunications 9,357 8,691 7.7
Printing services 1,100 1,180 (6.8)
Other 384 421 (8.8)
--------- ---------
$22,404 $22,448 (0.2)
========= =========
(A) 2005 second quarter: March 28, 2005 to June 26, 2005.
2004 second quarter: March 29, 2004 to June 27, 2004.
(B) 2005 two quarters: December 27, 2004 to June 26, 2005.
2004 two quarters: January 1, 2004 to June 27, 2004.
Journal Communications, Inc.
Publishing Segment Information (unaudited)
(dollars in thousands)
Publishing revenue by category:
- ------------------------------
Second Quarter of 2005 (A)
----------------------------------------------
Community
Daily Newspapers
Newspaper & Shoppers Total
----------- ------------- -------
Advertising revenue:
Retail $21,277 $14,886 $36,163
Classified 17,388 2,631 20,019
General 2,747 -- 2,747
Other 6,098 469 6,567
-------------- ---------- ---------
Total advertising
revenue 47,510 17,986 65,496
Circulation revenue 10,440 730 11,170
Other revenue 1,178 7,564 8,742
-------------- ---------- ---------
Total revenue $59,128 $26,280 $85,408
============== ========== =========
Second Quarter of 2004 (B)
----------------------------------------------
Community
Daily Newspapers
Newspaper & Shoppers Total
----------- ------------- -------
Advertising revenue:
Retail $20,981 $14,840 $35,821
Classified 16,642 2,526 19,168
General 2,706 -- 2,706
Other 5,273 444 5,717
--------- -------- ---------
Total advertising
revenue 45,602 17,810 63,412
Circulation revenue 10,928 695 11,623
Other revenue 868 7,696 8,564
--------- -------- ---------
Total revenue $57,398 $26,201 $83,599
========= ======== =========
% Change %Change % Change
Daily CN&S Total
-------- ------- --------
Advertising revenue:
Retail 1.4 0.3 1.0
Classified 4.5 4.2 4.4
General 1.5 - 1.5
Other 15.6 5.6 14.9
Total advertising
revenue 4.2 1.0 3.3
Circulation revenue (4.5) 5.0 (3.9)
Other revenue 35.7 (1.7) 2.1
Total revenue 3.0 0.3 2.2
Two Quarters of 2005 (C)
----------------------------------------------
Community
Daily Newspapers
Newspaper & Shoppers Total
------------- ------------- -------
Advertising revenue:
Retail $39,676 $27,650 $67,326
Classified 32,857 4,586 37,443
General 5,613 -- 5,613
Other 11,429 1,042 12,471
-------------- ---------- ---------
Total advertising
revenue 89,575 33,278 122,853
Circulation revenue 20,870 1,454 22,324
Other revenue 3,617 14,528 18,145
-------------- ---------- ---------
Total revenue $114,062 $49,260 $163,322
============== ========== =========
Two Quarters of 2004 (D)
----------------------------------------------
Community
Daily Newspapers
Newspaper & Shoppers Total
------------- ------------- -------
Advertising revenue:
Retail $39,304 $27,579 $66,883
Classified 31,718 4,478 36,196
General 5,978 -- 5,978
Other 9,517 1,064 10,581
--------- -------- ---------
Total advertising
revenue 86,517 33,121 119,638
Circulation revenue 21,437 1,398 22,835
Other revenue 3,323 14,474 17,797
--------- -------- ---------
Total revenue $111,277 $48,993 $160,270
========= ======== =========
% Change %Change % Change
Daily CN&S Total
-------- ------- ---------
Advertising revenue:
Retail 0.9 0.3 0.7
Classified 3.6 2.4 3.4
General (6.1) - (6.1)
Other 20.1 (2.1) 17.9
Total advertising
revenue 3.5 0.5 2.7
Circulation revenue (2.6) 4.0 (2.2)
Other revenue 8.8 0.4 2.0
Total revenue 2.5 0.5 1.9
(A) 2005 second quarter: March 28, 2005 to June 26, 2005.
(B) 2004 second quarter: March 29, 2004 to June 27, 2004.
(C) 2005 two quarters: December 27, 2004 to June 26, 2005.
(D) 2004 two quarters: January 1, 2004 to June 27, 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.
Daily newspaper's core newspaper advertising linage by category:
- ---------------------------------------------------------------
Second Quarter (A)
-------------------------
2005 2004 % Change
---------- --------- ---------
Advertising linage (inches):
Full run
Retail 179,538 188,916 (5.0)
Classified 212,224 224,308 (5.4)
General 11,566 12,438 (7.0)
---------- ------------
Total full run 403,328 425,662 (5.2)
Part run 46,458 45,328 2.5
---------- ------------
Total advertising linage 449,786 470,990 (4.5)
========== ============
Preprint pieces (in thousands) 216,765 187,974 15.3
========== ============
Full pages of advertising and revenue per page of our community
newspapers and shoppers:
- ---------------------------------------------------------------------
Full pages of advertising:
Community newspapers 23,752 26,750 (11.2)
Shoppers and specialty
products 28,725 28,542 0.6
---------- ------------
Total full pages of advertising 52,477 55,292 (5.1)
========== ============
Revenue per page $305.75 $287.54 6.3
========== ============
Daily newspaper's core newspaper advertising linage by category:
- ----------------------------------------------------------------
Two Quarters (B)
-------------------------
2005 2004 % Change
---------- ------------ ---------
Advertising linage (inches):
Full run
Retail 344,003 346,430 (0.7)
Classified 394,038 424,895 (7.3)
General 24,743 28,348 (12.7)
---------- ------------
Total full run 762,784 799,673 (4.6)
Part run 80,329 70,542 13.9
---------- ------------
Total advertising linage 843,113 870,215 (3.1)
========== ============
Preprint pieces (in thousands) 421,637 373,748 12.8
========== ============
Full pages of advertising and revenue per page of our community
newspapers and shoppers:
- ---------------------------------------------------------------------
Full pages of advertising:
Community newspapers 44,664 49,370 (9.5)
Shoppers and specialty
products 54,311 53,608 1.3
---------- ------------
Total full pages of advertising 98,975 102,978 (3.9)
========== ============
Revenue per page $298.07 $284.85 4.6
========== ============
(A) 2005 second quarter: March 28, 2005 to June 26, 2005.
2004 second quarter: March 29, 2004 to June 27, 2004.
(B) 2005 two quarters: December 27, 2004 to June 26, 2005.
2004 two quarters: January 1, 2004 to June 27, 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. All data are
subject to later adjustment.
Journal Communications, Inc.
Reconciliation of our consolidated net earnings to consolidated EBITDA
(unaudited)
(dollars in thousands)
Second Quarter (A) Two Quarters (B)
--------------------- ----------------------
2005 2004 2005 2004
---------- -------- ---------- ----------
Net earnings $18,135 $20,831 $35,546 $36,530
Gain from discontinued
operations, net (9) (1,081) (4,855) (1,696)
Total other expense 374 320 864 865
Provision for income
taxes 12,049 13,203 20,291 23,276
Depreciation 10,643 10,852 21,748 21,536
Amortization 322 421 656 912
---------- -------- ---------- ----------
EBITDA $41,514 $44,546 $74,250 $81,423
========== ======== ========== ==========
(A) 2005 second quarter: March 28, 2005 to June 26, 2005.
2004 second quarter: March 29, 2004 to June 27, 2004.
(B) 2005 two quarters: December 27, 2004 to June 26, 2005.
2004 two quarters: January 1, 2004 to June 27, 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 Sheets
(dollars in thousands)
(unaudited)
June 26, December 26,
2005 2004
--------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 7,000 $ 6,374
Receivables, net 90,154 89,690
Inventories, net 9,754 10,450
Prepaid expenses 11,029 13,302
Deferred income taxes 9,003 8,903
Investment in preferred stock - 4,394
Current assets of discontinued
operations - 11,672
--------------- -------------
Total current assets 126,940 144,785
Property and equipment, net 288,685 297,405
Goodwill 136,102 136,286
Broadcast licenses 140,046 140,046
Other intangible assets, net 14,078 14,753
Prepaid pension costs 20,651 23,787
Other assets 8,685 8,565
Non-current assets of discontinued
operations 321 8,892
--------------- -------------
Total assets $ 735,508 $ 774,519
=============== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 35,517 $ 39,239
Accrued compensation 17,562 22,364
Deferred revenue 18,691 20,255
Accrued employee benefits 11,123 10,171
Other current liabilities 15,791 12,518
Current liabilities of discontinued
operations 2,444 7,273
Current portion of long-term
liabilities 3,640 3,600
--------------- -------------
Total current liabilities 104,768 115,420
Accrued employee benefits 18,637 17,839
Long-term notes payable to banks 40,445 70,310
Deferred income taxes 64,791 64,491
Other long-term liabilities 15,556 16,964
Shareholders' equity 491,311 489,495
--------------- -------------
Total liabilities and shareholders'
equity $ 735,508 $ 774,519
=============== =============
CONTACT: Journal Communications
Sara Leuchter Wilkins (Investor Relations), 414-224-2633
swilkins@journalcommunications.com