Exhibit 99
Journal Communications Reports Third Quarter Results
MILWAUKEE--(BUSINESS WIRE)--Oct. 18, 2005--Journal Communications
(NYSE:JRN) today announced that for its third quarter ended September
25, 2005, basic and diluted earnings per share from continuing
operations were both $0.19. This compares to basic and diluted
earnings per share from continuing operations of $0.25 and $0.24,
respectively, for the third quarter 2004. Net earnings decreased 27.2%
to $14.0 million, including $0.9 million in costs from storm damage
and business interruption caused by Hurricane Katrina, compared to net
earnings of $19.2 million. Earnings from continuing operations were
$14.0 million compared to $18.5 million, a decrease of 24.2%.
Note that unless otherwise indicated, all comparisons are to the
third quarter ended September 26, 2004. Both quarters contained 91
days.
"Continued weakness in advertising, especially in television, and
the anticipated reduction in earnings at the telecommunications
business caused a challenging third quarter for Journal
Communications. Our comparables were formidable because third quarter
2004 political, issue and Olympic revenues were very strong," said
Steven J. Smith, chairman and chief executive officer. "We also faced
an unusual loss of business at our Louisiana-based publishing and
printing operations due to Hurricane Katrina in late August, which
negatively impacted our revenue and operating earnings at the
community publishing business. Our daily newspaper finished the
quarter with an upswing in earnings as it continues to improve margins
and the printing business experienced an operating earnings turnaround
of about $1.3 million for the quarter as it continues the successful
return to its core business."
Consolidated
Revenue from continuing operations decreased 2.5% to $184.6
million compared to revenue of $189.4 million. Operating earnings from
continuing operations decreased 22.6% to $24.2 million, including $1.6
million in costs from storm damage and business interruption caused by
Hurricane Katrina, compared to $31.3 million. Operating earnings
margin was 13.1% compared to 16.5%. EBITDA (net earnings excluding the
gain from discontinued operations, total other expense, provision for
income taxes, depreciation and amortization) of $35.0 million
decreased 16.3% compared to $41.8 million. Year-to-date operating cash
flow (cash provided by operating activities) decreased to $86.9
million compared to $96.0 million.
Hurricane Katrina
The Company's Journal Community Publishing Group's (JCPG)
Louisiana-based businesses were impacted by Hurricane Katrina. Due to
the storm, the Company recorded pre-tax costs of $1.6 million in the
third quarter, reflecting reserves for uncollectible receivables,
operating losses and building damages. Because the Dixie Web Printing
facility in New Orleans had been experiencing persistent weakness in
its business prior to the impacts of the hurricane and its customers
were widely dispersed after the storm, the Company decided to close
this facility. The Company estimates it will take an additional
pre-tax charge for shut-down-related costs of between $2.9 million -
$3.4 million, including a $1.8 million non-cash charge from the write
off of goodwill. It is expected that most of the shut-down-related
costs will be recorded in the fourth quarter 2005.
Publishing
Publishing revenue of $81.9 million was essentially flat compared
to $81.5 million. Operating earnings from publishing decreased 5.3% to
$10.4 million compared to $11.0 million, reflecting pre-tax
hurricane-related costs of $1.6 million at JCPG's Louisiana-based
businesses.
Broadcasting
Broadcasting revenue decreased 7.8% to $40.5 million compared to
$44.0 million. Broadcasting operating earnings decreased 39.0% to $7.2
million compared to $11.8 million. The decrease was caused by
challenging comparatives for the 2004 Summer Olympics, political and
issue advertising primarily for television and continued overall
softness in advertising, particularly at our NBC television stations.
Revenue from radio stations of $22.0 million was up 0.8% compared
to $21.8 million. Operating earnings from radio stations increased
4.9% to $6.2 million compared to $5.9 million.
Revenue from television stations decreased 16.3% to $18.5 million
compared to $22.2 million. In the third quarter 2005, political and
issue advertising revenue for television declined $3.2 million. In the
third quarter 2004, Olympics revenue totaled $2.5 million. Operating
earnings from television stations decreased 83.1% to $1.0 million
compared to $5.9 million.
Telecommunications
Revenue from telecommunications decreased 5.4% to $33.8 million
from $35.8 million due to lower prices and service disconnections.
Operating earnings from telecommunications decreased 43.3% to $4.9
million compared to $8.7 million due to lower revenues and a change in
product mix as well as increased operating costs associated with the
enterprise business.
Printing Services
Revenue from printing services decreased 3.9% to $17.3 million
from $18.0 million. Operating earnings from printing services
increased to $0.6 million compared to a loss of $0.7 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 $11.1 million increased 8.6% compared to
revenue of $10.2 million. For the third quarter 2005, "Other"
operating earnings increased to $1.1 million from $0.5 million.
Stock Repurchase Program
During the third quarter 2005, the Company repurchased 677,431
shares of its class A common stock. Through the third quarter
year-to-date, the Company has repurchased 2,161,295 class A shares.
Fourth Quarter 2005 Guidance
For the fourth 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 $17 million, including an
estimated after-tax charge for facility shut-down-related costs due to
Hurricane Katrina of between $1.7 million - $2.0 million.
Webcast of Conference Call
A live webcast of the third quarter 2005 conference call will be
accessible through www.journalcommunications.com/investors beginning
at 10:00 a.m. CT this morning. An archive of the webcast will be
available on these sites today through November 1. To access the call,
dial 888-396-2356 (domestic) or 617-847-8709 (international) at least
10 minutes prior to the scheduled 10 a.m. CT start. The access code
for the conference call is 82451750. Replays of the conference call
will be available October 18 through October 20. To hear the replay,
dial 888-286-8010 (domestic) or 617-801-6888 (international). The
access code for the replay is 57974432.
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. We also have signed an agreement with Emmis Communications
Corporation to purchase three additional television stations located
in Omaha, Tucson and Fort Myers, Florida. 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)
Third Quarter (A)
-----------------------
2005 2004 % Change
----------- ----------- ---------
Continuing Operations:
Revenue:
Publishing $81,909 $81,502 0.5
Broadcasting 40,512 43,958 (7.8)
Telecommunications 33,826 35,766 (5.4)
Printing services 17,256 17,955 (3.9)
Other 11,085 10,206 8.6
----------- -----------
Total revenue 184,588 189,387 (2.5)
Operating costs and expenses:
Publishing 40,928 40,152 1.9
Broadcasting 18,725 17,912 4.5
Telecommunications 21,280 20,880 1.9
Printing services 14,562 15,987 (8.9)
Other 9,547 8,552 11.6
----------- -----------
Total operating costs and expenses 105,042 103,483 1.5
Selling and administrative expenses 55,358 54,635 1.3
----------- -----------
Total operating costs and expenses
and selling and administrative
expenses 160,400 158,118 1.4
----------- -----------
Operating earnings 24,188 31,269 (22.6)
Other income and expense:
Interest income and dividends 4 102
Interest expense (713) (573)
----------- -----------
Total other income and expense (709) (471)
Earnings from continuing operations
before income taxes 23,479 30,798 (23.8)
Provision for income taxes 9,486 12,334 (23.1)
----------- -----------
Earnings from continuing operations 13,993 18,464 (24.2)
Gain from discontinued operations,
net of applicable tax expense of
$1, $481, $3,062 and $1,559,
respectively 3 757
----------- -----------
Net earnings $13,996 $19,221 (27.2)
=========== ===========
Weighted average number of shares:
Basic 70,492,873 72,207,434
Diluted 74,960,980 76,661,794
Earnings per share:
Basic:
Continuing operations $0.19 $0.25 (24.0)
Discontinued operations -- 0.01
----------- -----------
Net earnings $0.19 $0.26 (26.9)
=========== ===========
Diluted:
Continuing operations $0.19 $0.24 (20.8)
Discontinued operations -- 0.01
----------- -----------
Net earnings $0.19 $0.25 (24.0)
=========== ===========
Three Quarters (B)
-----------------------
2005 2004 % Change
----------- ----------- ---------
Continuing Operations:
Revenue:
Publishing $245,231 $241,772 1.4
Broadcasting 120,629 120,847 (0.2)
Telecommunications 107,403 108,127 (0.7)
Printing services 53,644 57,146 (6.1)
Other 33,839 32,649 3.6
----------- -----------
Total revenue 560,746 560,541 0.0
Operating costs and expenses:
Publishing 123,084 119,042 3.4
Broadcasting 54,176 49,398 9.7
Telecommunications 65,161 62,184 4.8
Printing services 45,633 49,906 (8.6)
Other 28,867 27,096 6.5
----------- -----------
Total operating costs and expenses 316,921 307,626 3.0
Selling and administrative expenses 167,791 162,671 3.1
----------- -----------
Total operating costs and expenses
and selling and administrative
expenses 484,712 470,297 3.1
----------- -----------
Operating earnings 76,034 90,244 (15.7)
Other income and expense:
Interest income and dividends 262 239
Interest expense (1,835) (1,575)
----------- -----------
Total other income and expense (1,573) (1,336)
Earnings from continuing operations
before income taxes 74,461 88,908 (16.2)
Provision for income taxes 29,777 35,610 (16.4)
----------- -----------
Earnings from continuing operations 44,684 53,298 (16.2)
Gain from discontinued operations,
net of applicable tax expense of
$1, $481, $3,062 and $1,559,
respectively 4,858 2,453
----------- -----------
Net earnings $49,542 $55,751 (11.1)
=========== ===========
Weighted average number of shares:
Basic 71,424,811 73,173,951
Diluted 75,892,074 77,629,351
Earnings per share:
Basic:
Continuing operations $0.60 $0.71 (15.5)
Discontinued operations 0.07 0.03
----------- -----------
Net earnings $0.67 $0.74 (9.5)
=========== ===========
Diluted:
Continuing operations $0.59 $0.69 (14.5)
Discontinued operations 0.06 0.03
----------- -----------
Net earnings $0.65 $0.72 (9.7)
=========== ===========
(A) 2005 third quarter: June 27, 2005 to September 25, 2005.
2004 third quarter: June 28, 2004 to September 26, 2004.
(B) 2005 three quarters: December 27, 2004 to September 25, 2005.
2004 three quarters: January 1, 2004 to September 26, 2004.
Journal Communications, Inc.
Segment Information
(dollars in thousands)
Third Quarter (A)
(unaudited)
-----------------------
2005 2004 % Change
----------- ----------- ---------
Revenue
- -------
Publishing $81,909 $81,502 0.5
Broadcasting 40,512 43,958 (7.8)
Telecommunications 33,826 35,766 (5.4)
Printing services 17,256 17,955 (3.9)
Other 11,085 10,206 8.6
----------- -----------
$184,588 $189,387 (2.5)
=========== ===========
Operating earnings
- ------------------
Publishing $10,407 $10,991 (5.3)
Broadcasting 7,221 11,842 (39.0)
Telecommunications 4,909 8,653 (43.3)
Printing services 584 (672) N/A
Other 1,067 455 134.5
----------- -----------
$24,188 $31,269 (22.6)
=========== ===========
Depreciation and amortization
- -----------------------------
Publishing $3,618 $3,678 (1.6)
Broadcasting 2,178 1,793 21.5
Telecommunications 4,340 4,302 0.9
Printing services 482 573 (15.9)
Other 194 215 (9.8)
----------- -----------
$10,812 $10,561 2.4
=========== ===========
Three Quarters (B)
(unaudited)
-----------------------
2005 2004 % Change
----------- ----------- ---------
Revenue
- -------
Publishing $245,231 $241,772 1.4
Broadcasting 120,629 120,847 (0.2)
Telecommunications 107,403 108,127 (0.7)
Printing services 53,644 57,146 (6.1)
Other 33,839 32,649 3.6
----------- -----------
$560,746 $560,541 0.0
=========== ===========
Operating earnings
- ------------------
Publishing $32,229 $32,651 (1.3)
Broadcasting 21,525 29,418 (26.8)
Telecommunications 19,343 26,486 (27.0)
Printing services 1,364 (355) N/A
Other 1,573 2,044 (23.0)
----------- -----------
$76,034 $90,244 (15.7)
=========== ===========
Depreciation and amortization
- -----------------------------
Publishing $10,805 $11,575 (6.7)
Broadcasting 6,554 6,052 8.3
Telecommunications 13,697 12,993 5.4
Printing services 1,582 1,753 (9.8)
Other 578 636 (9.1)
----------- -----------
$33,216 $33,009 0.6
=========== ===========
(A) 2005 third quarter: June 27, 2005 to September 25, 2005.
2004 third quarter: June 28, 2004 to September 26, 2004.
(B) 2005 three quarters: December 27, 2004 to September 25, 2005.
2004 three quarters: January 1, 2004 to September 26, 2004.
Journal Communications, Inc.
Publishing Segment Information (unaudited)
(dollars in thousands)
Publishing revenue by category:
- -------------------------------
Third Quarter of 2005 (A)
----------------------------------------
Community
Daily Newspapers
Newspaper & Shoppers Total
------------ ------------ ------------
Advertising revenue:
Retail $19,801 $13,627 $33,428
Classified 17,310 2,841 20,151
General 2,318 -- 2,318
Other 6,265 353 6,618
------------ ------------ ------------
Total advertising revenue 45,694 16,821 62,515
Circulation revenue 10,553 711 11,264
Other revenue 1,206 6,924 8,130
------------ ------------ ------------
Total revenue $57,453 $24,456 $81,909
============ ============ ============
Third Quarter of 2004 (B)
----------------------------------------
Community
Daily Newspapers
Newspaper & Shoppers Total
------------ ------------ ------------
Advertising revenue:
Retail $19,769 $13,865 $33,634
Classified 17,104 2,428 19,532
General 2,525 -- 2,525
Other 5,482 416 5,898
------------ ------------ ------------
Total advertising revenue 44,880 16,709 61,589
Circulation revenue 10,893 771 11,664
Other revenue 982 7,267 8,249
------------ ------------ ------------
Total revenue $56,755 $24,747 $81,502
============ ============ ============
% Change % Change % Change
Daily CN&S Total
------------ ------------ ------------
Advertising revenue:
Retail 0.2 (1.7) (0.6)
Classified 1.2 17.0 3.2
General (8.2) -- (8.2)
Other 14.3 (15.1) 12.2
Total advertising revenue 1.8 0.7 1.5
Circulation revenue (3.1) (7.8) (3.4)
Other revenue 22.8 (4.7) (1.4)
Total revenue 1.2 (1.2) 0.5
Three Quarters of 2005 (C)
----------------------------------------
Community
Daily Newspapers
Newspaper & Shoppers Total
------------ ------------ ------------
Advertising revenue:
Retail $59,477 $41,277 $100,754
Classified 50,167 7,427 57,594
General 7,931 -- 7,931
Other 17,694 1,395 19,089
------------ ------------ ------------
Total advertising revenue 135,269 50,099 185,368
Circulation revenue 31,423 2,165 33,588
Other revenue 4,823 21,452 26,275
------------ ------------ ------------
Total revenue $171,515 $73,716 $245,231
============ ============ ============
Three Quarters of 2004 (D)
----------------------------------------
Community
Daily Newspapers
Newspaper & Shoppers Total
------------ ------------ ------------
Advertising revenue:
Retail $59,073 $41,444 $100,517
Classified 48,822 6,906 55,728
General 8,503 -- 8,503
Other 14,999 1,480 16,479
------------ ------------ ------------
Total advertising revenue 131,397 49,830 181,227
Circulation revenue 32,330 2,169 34,499
Other revenue 4,305 21,741 26,046
------------ ------------ ------------
Total revenue $168,032 $73,740 $241,772
============ ============ ============
% Change % Change % Change
Daily CN&S Total
------------ ------------ ------------
Advertising revenue:
Retail 0.7 (0.4) 0.2
Classified 2.8 7.5 3.3
General (6.7) -- (6.7)
Other 18.0 (5.7) 15.8
Total advertising revenue 2.9 0.5 2.3
Circulation revenue (2.8) (0.2) (2.6)
Other revenue 12.0 (1.3) 0.9
Total revenue 2.1 (0.0) 1.4
(A) 2005 third quarter: June 27, 2005 to September 25, 2005.
(B) 2004 third quarter: June 28, 2004 to September 26, 2004.
(C) 2005 three quarters: December 27, 2004 to September 25, 2005.
(D) 2004 three quarters: January 1, 2004 to September 26, 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:
- ----------------------------------------------------------------
Third Quarter (A)
-----------------------
2005 2004 % Change
----------- ----------- ---------
Advertising linage (inches):
Full run
Retail 172,145 178,625 (3.6)
Classified 208,167 225,015 (7.5)
General 9,303 11,793 (21.1)
----------- -----------
Total full run 389,615 415,433 (6.2)
Part run 45,778 50,929 (10.1)
----------- -----------
Total advertising linage 435,393 466,362 (6.6)
=========== ===========
Preprint pieces (in thousands) 215,526 192,895 11.7
=========== ===========
Full pages of advertising and revenue per page of our community
newspapers and shoppers:
- ---------------------------------------------------------------
Full pages of advertising:
Community newspapers 23,981 25,586 (6.3)
Shoppers and specialty products 27,354 27,949 (2.1)
----------- -----------
Total full pages of advertising 51,335 53,535 (4.1)
=========== ===========
Revenue per page $296.61 $280.98 5.6
=========== ===========
Daily newspaper's core newspaper advertising linage by category:
- ----------------------------------------------------------------
Three Quarters (B)
-----------------------
2005 2004 % Change
----------- ----------- ---------
Advertising linage (inches):
Full run
Retail 516,148 525,055 (1.7)
Classified 602,205 649,910 (7.3)
General 34,046 40,141 (15.2)
----------- -----------
Total full run 1,152,399 1,215,106 (5.2)
Part run 126,107 121,471 3.8
----------- -----------
Total advertising linage 1,278,506 1,336,577 (4.3)
=========== ===========
Preprint pieces (in thousands) 637,163 566,643 12.4
=========== ===========
Full pages of advertising and revenue per page of our community
newspapers and shoppers:
- ---------------------------------------------------------------
Full pages of advertising:
Community newspapers 68,645 74,956 (8.4)
Shoppers and specialty products 81,665 81,557 0.1
----------- -----------
Total full pages of advertising 150,310 156,513 (4.0)
=========== ===========
Revenue per page $297.57 $283.53 5.0
=========== ===========
(A) 2005 third quarter: June 27, 2005 to September 25, 2005.
2004 third quarter: June 28, 2004 to September 26, 2004.
(B) 2005 three quarters: December 27, 2004 to September 25, 2005.
2004 three quarters: January 1, 2004 to September 26, 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)
Third Quarter (A) Three Quarters (B)
--------------------- ---------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Net earnings $13,996 $19,221 $49,542 $55,751
Gain from discontinued
operations, net (3) (757) (4,858) (2,453)
Total other expenses, net 709 471 1,573 1,336
Provision for income taxes 9,486 12,334 29,777 35,610
Depreciation 10,493 10,368 32,241 31,904
Amortization 319 193 975 1,105
---------- ---------- ---------- ----------
EBITDA $35,000 $41,830 $109,250 $123,253
========== ========== ========== ==========
(A) 2005 third quarter: June 27, 2005 to September 25, 2005.
2004 third quarter: June 28, 2004 to September 26, 2004.
(B) 2005 three quarters: December 27, 2004 to September 25, 2005.
2004 three quarters: January 1, 2004 to September 26, 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)
September 25, December 26,
2005 2004
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $8,191 $6,374
Receivables, net 86,632 89,690
Inventories, net 9,548 10,450
Prepaid expenses 11,622 13,302
Deferred income taxes 8,676 8,903
Investment in preferred stock -- 4,394
Current assets of discontinued
operations -- 11,672
------------- -------------
Total current assets 124,669 144,785
Property and equipment, net 289,467 297,405
Goodwill 136,102 136,286
Broadcast licenses 140,046 140,046
Other intangible assets, net 13,731 14,753
Prepaid pension costs 19,211 23,787
Other assets 32,775 8,565
Non-current assets of discontinued
operations 314 8,892
------------- -------------
Total assets $756,315 $774,519
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $33,487 $39,239
Accrued compensation 21,183 22,364
Deferred revenue 20,028 20,255
Accrued employee benefits 11,552 10,171
Other current liabilities 14,236 12,518
Current liabilities of discontinued
operations 1,112 7,273
Current portion of long-term
liabilities 3,652 3,600
------------- -------------
Total current liabilities 105,250 115,420
Accrued employee benefits 18,863 17,839
Long-term notes payable to banks 63,655 70,310
Deferred income taxes 63,692 64,491
Other long-term liabilities 14,784 16,964
Shareholders' equity 490,071 489,495
------------- -------------
Total liabilities and shareholders'
equity $756,315 $774,519
============= =============
CONTACT: Journal Communications, Inc.
Sara Leuchter Wilkins (Investor Relations), 414-224-2633
swilkins@journalcommunications.com