Exhibit 99
Journal Communications Reports First Quarter Results
MILWAUKEE--(BUSINESS WIRE)--April 24, 2007--Journal Communications
(NYSE:JRN) today announced results for its first quarter ended April 1, 2007.
For the first quarter, revenue from continuing operations of $152.8 million
decreased 2.3% compared to $156.4 million. Earnings from continuing operations
were $8.6 million compared to $9.4 million, a decrease of 8.5%. Net earnings
were $73.3 million compared to net earnings of $12.3 million. In the first
quarter of 2007, Journal Communications recorded a $64.8 million gain, net of
tax, from discontinued operations related to the sale of Norlight
Telecommunications, Inc.
Basic and diluted earnings per share from continuing operations were $0.13
and $0.12, respectively, compared to $0.13 for both. Basic and diluted earnings
per share from discontinued operations were $0.99 and $0.93, respectively,
compared to $0.04 for both. Basic and diluted net earnings per share were $1.12
and $1.05, respectively, compared to $0.17 for both.
Note that unless otherwise indicated, all comparisons are to the first
quarter ended March 26, 2006. Both quarters contained 91 days.
"We were pleased with the performance of our Broadcast Group in the first
quarter of 2007, where growth in developmental and interactive revenue enabled
us to replace $3.3 million of revenue generated from the 2006 Winter Olympics
and to overcome a decline in automotive advertising. We also exceeded last
year's quarterly political advertising of $0.5 million through increased
political and issue advertising in Wisconsin," said Steven J. Smith, chairman
and chief executive officer of Journal Communications. "In addition, we recorded
earnings growth at six of our eight radio market clusters and four television
stations despite tough television comparables to first quarter 2006."
"We continued to face revenue challenges in a number of key areas at our
Publishing group during the first quarter. Most significantly, at the daily
newspaper, total automobile advertising declined by 15.7%. Interactive revenue,
however, increased 47.4% to $3.0 million.
"We were encouraged by revenue and operating earnings improvement at IPC,
reflecting the successful return to its core printing business.
"Cost control remains an important focus throughout our entire
organization, especially given the difficult comparisons to last year in
television and the ongoing revenue challenges in Publishing.
"On February 26, Q-Comm Corporation acquired 100% of the stock of Norlight
Telecommunications, our former telecommunications subsidiary. Proceeds to
Journal Communications, net of transaction expenses, were $175.9 million. The
sale of Norlight improves Journal's financial flexibility and allows us to focus
on our diversified media businesses. To date, we have used the proceeds to
reduce our obligations under our unsecured revolving credit facility. We also
recorded a gain from discontinued operations of $64.6 million in the first
quarter and expect to pay quarterly estimated income taxes on the gain related
to the sale throughout 2007."
Consolidated
For the first quarter, revenue from continuing operations of $152.8 million
decreased 2.3% compared to $156.4 million. Operating earnings decreased 10.2% to
$17.2 million. Operating earnings margin was 11.2% compared to 12.2%. EBITDA
(net earnings excluding the gain from discontinued operations, net; total other
expense, net; provision for income taxes; depreciation; and amortization) of
$24.9 million decreased 5.0% compared to $26.2 million.
Publishing
For the first quarter, publishing revenue decreased 4.0% to $76.1 million
compared to $79.3 million, in part reflecting continued weakness in classified
and retail advertising at both the daily newspaper and the community newspapers
and shoppers. Revenues at our community newspapers and shoppers division
decreased, in part due to a mid-week shared mail product previously reported by
that division and now reported under the daily newspaper following a business
combination of the two divisions' shared mail products. Total interactive
advertising revenue at the daily newspaper increased 47.4% to $3.0 million
compared to $2.1 million. Operating earnings from publishing decreased 27.1% to
$5.6 million from $7.7 million. This decline in large part reflects an operating
earnings loss of $0.2 million at the community newspapers and shoppers division
compared to operating earnings of $1.0 million in the first quarter of 2006 when
we recorded a number of favorable items.
Broadcasting
For the first quarter, broadcasting revenue increased slightly to $51.7
million, including $0.7 million in political and issue advertising revenue. This
compares to $51.6 million, including $3.3 million in revenue from the Winter
Olympics and $0.5 million in political and issue advertising revenue.
Broadcasting operating earnings of $10.0 million were down 13.7% compared to
$11.6 million.
For the first quarter, revenue from television stations decreased 1.6% to
$33.5 million compared to $34.1 million. Operating earnings from television
stations decreased 21.1% to $6.2 million compared to $7.8 million.
For the first quarter, revenue from radio stations of $18.2 million was up
3.4% compared to $17.5 million. Operating earnings from radio stations of $3.8
million was flat.
Printing Services
For the first quarter, revenue from printing services increased 3.5% to
$16.9 million from $16.3 million, largely due to new print business. Operating
earnings from printing services increased 103.0% to $1.0 million compared to
$0.5 million.
Other
For the first quarter, revenue for "Other" of $8.2 million decreased 10.7%
compared to revenue of $9.1 million. "Other" operating earnings were $0.6
million compared to a loss of $0.6 million, primarily due to reduced corporate
expenses.
Discontinued Operations
The operating results of Norlight are classified as discontinued
operations. For the first quarter, the gain from discontinued operations was
$64.8 million, which included a gain on the sale of the subsidiary of $62.0
million and the after-tax impact of first quarter 2007 operating results of $2.8
million. This compares to a gain of $2.9 million.
Non-Operating Items
For the first quarter, other expense, which primarily consists of interest
expense, decreased $0.6 million to $3.0 million compared to $3.6 million. The
decrease is attributable in large part to a decrease in debt outstanding, which
was reduced with the proceeds from the sale of Norlight.
Stock Repurchase Program
During the first quarter 2007, the Company repurchased 2,155,400 of its
class A shares. Through April 20, 2007, the Company had repurchased a total of
8,949,100 class A shares.
Second Quarter 2007 Outlook
For the second quarter of 2007, Journal Communications currently
anticipates that its publishing revenues will be up modestly compared to the
prior year, reflecting a favorable comparison to a litigation settlement at the
daily newspaper partially offset by ongoing weakness in automotive advertising.
Radio revenue should be flat to up slightly, reflecting continued growth in the
developmental category partially offset by the sale of KBBX-FM in the fall of
2006 and KOMJ-AM in early 2007. Television revenue should be flat despite having
to replace $1.4 million in political and issue advertising generated in the
second quarter of 2006.
Webcast of Conference Call
A live webcast of the first quarter 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 this site today through
May 8. To access the call, dial (866) 713-8567 (domestic) or (617) 597-5326
(international) at least 10 minutes prior to the scheduled 10:00 a.m. CT start.
The access code for the conference call is 31166409. Replays of the conference
call will be available April 24 through April 26. To hear the replay, dial (888)
286-8010 (domestic) or (617) 801-6888 (international) at least one hour after
the completion of the call. The access code for the replay is 39072039.
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 as 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 company with operations in
publishing, radio and television broadcasting, interactive media and printing
services. We publish the Milwaukee Journal Sentinel, which serves as the only
major daily newspaper for the Milwaukee metropolitan area, and 75 community
newspapers and shoppers in eight states. We own and operate 35 radio stations
and ten television stations in 12 states and operate one television station
under a local marketing agreement. Our interactive media assets include more
than 75 online enterprises that are associated with our daily and community
newspapers, television and radio stations. We also provide a wide range of
commercial printing services -- including printing of publications, professional
journals and documentation material -- and 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)
First Quarter (A)
-----------------------
2007 2006 % Change
----------- ----------- ---------
Continuing Operations:
Revenue:
Publishing $76,095 $79,285 (4.0)
Broadcasting 51,696 51,638 0.1
Printing services 16,874 16,310 3.5
Other 8,166 9,143 (10.7)
----------- -----------
Total revenue 152,831 156,376 (2.3)
Operating costs and expenses:
Publishing 42,828 42,848 (0.0)
Broadcasting 22,395 21,819 2.6
Printing services 14,165 13,788 2.7
Other 6,924 7,695 (10.0)
----------- -----------
Total operating costs and expenses 86,312 86,150 0.2
Selling and administrative expenses 49,346 51,103 (3.4)
----------- -----------
Total operating costs and expenses
and selling and administrative
expenses 135,658 137,253 (1.2)
----------- -----------
Operating earnings 17,173 19,123 (10.2)
Other income and (expense):
Interest income 2 18
Interest expense (2,997) (3,650)
----------- -----------
Total other income and (expense) (2,995) (3,632)
Earnings from continuing operations
before income taxes 14,178 15,491 (8.5)
Provision for income taxes 5,606 6,126 (8.5)
----------- -----------
Earnings from continuing operations 8,572 9,365 (8.5)
Gain from discontinued operations,
net of tax 64,759 2,908 2,126.9
----------- -----------
Net earnings $73,331 $12,273 497.5
=========== ===========
Weighted average number of shares:
Basic 65,256,968 68,364,281
Diluted 69,778,936 72,859,331
Earnings per share:
Basic:
Continuing operations $0.13 $0.13
Discontinued operations 0.99 0.04
----------- -----------
Net earnings $1.12 $0.17
=========== ===========
Diluted:
Continuing operations $0.12 $0.13
Discontinued operations 0.93 0.04
----------- -----------
Net earnings $1.05 $0.17
=========== ===========
(A) 2007 first quarter: January 1, 2007 to April 1, 2007.
2006 first quarter: December 26, 2005 to March 26, 2006.
Journal Communications, Inc.
Segment Information (unaudited)
(dollars in thousands)
First Quarter (A)
(unaudited)
-----------------------
2007 2006 % Change
----------- ----------- ---------
Revenue
- -------------------------------------
Publishing $76,095 $79,285 (4.0)
Broadcasting 51,696 51,638 0.1
Printing services 16,874 16,310 3.5
Other 8,166 9,143 (10.7)
----------- -----------
$152,831 $156,376 (2.3)
=========== ===========
Operating earnings
- -------------------------------------
Publishing $5,589 $7,665 (27.1)
Broadcasting 9,995 11,586 (13.7)
Printing services 999 492 103.0
Other 590 (620) N/A
----------- -----------
$17,173 $19,123 (10.2)
=========== ===========
Depreciation and amortization
- -------------------------------------
Publishing $3,816 $3,381 12.9
Broadcasting 3,148 2,999 5.0
Printing services 489 471 3.8
Other 261 213 22.5
----------- -----------
$7,714 $7,064 9.2
=========== ===========
(A) 2007 first quarter: January 1, 2007 to April 1, 2007.
2006 first quarter: December 26, 2005 to March 26, 2006.
Journal Communications, Inc.
Publishing Segment Information (unaudited)
(dollars in thousands)
Publishing revenue by category:
- -------------------------------
First Quarter of 2007 (A)
-------------------------------
Community
Daily Newspapers
Newspaper & Shoppers Total
---------- ---------- ---------
Advertising revenue:
Retail $20,765 $11,139 $31,904
Classified 15,559 2,058 17,617
National 2,428 -- 2,428
Direct Marketing 1,088 -- 1,088
Other -- 279 279
---------- ---------- ---------
Total advertising revenue 39,840 13,476 53,316
Circulation revenue 12,694 477 13,171
Other revenue 3,902 5,706 9,608
---------- ---------- ---------
Total revenue $56,436 $19,659 $76,095
========== ========== =========
First Quarter of 2006 (B)
-------------------------------
Community
Daily Newspapers
Newspaper & Shoppers Total
---------- ---------- ---------
Advertising revenue:
Retail $21,358 $12,265 $33,623
Classified 16,417 2,432 18,849
National 2,484 -- 2,484
Direct Marketing 1,392 -- 1,392
Other -- 352 352
---------- ---------- ---------
Total advertising revenue 41,651 15,049 56,700
Circulation revenue 12,953 744 13,697
Other revenue 3,234 5,654 8,888
---------- ---------- ---------
Total revenue $57,838 $21,447 $79,285
========== ========== =========
% Change % Change % Change
Daily CN&S Total
---------- ---------- ---------
Advertising revenue:
Retail (2.8) (9.2) (5.1)
Classified (5.2) (15.4) (6.5)
National (2.3) N/A (2.3)
Direct Marketing (21.8) N/A (21.8)
Other N/A (20.7) (20.7)
Total advertising revenue (4.3) (10.5) (6.0)
Circulation revenue (2.0) (35.9) (3.8)
Other revenue 20.7 0.9 8.1
Total revenue (2.4) (8.3) (4.0)
(A) 2007 first quarter: January 1, 2007 to April 1, 2007.
(B) 2006 first quarter: December 26, 2005 to March 26, 2006.
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:
- ----------------------------------------------------------------------
First Quarter (A)
-------------------
2007 2006 % Change
--------- --------- ---------
Advertising linage (inches):
Full run
Retail 140,412 153,874 (8.7)
Classified 136,562 162,022 (15.7)
National 10,571 14,005 (24.5)
--------- ---------
Total full run 287,545 329,901 (12.8)
Part run 7,740 25,350 (69.5)
--------- ---------
Total advertising linage 295,285 355,251 (16.9)
========= =========
Preprint pieces (in thousands) 210,307 208,250 1.0
========= =========
Full pages of advertising and revenue per page of our community
newspapers and shoppers:
- ----------------------------------------------------------------------
Full pages of advertising:
Community newspapers 15,163 20,770 (27.0)
Shoppers and specialty products 22,737 24,283 (6.4)
--------- ---------
Total full pages of advertising 37,900 45,053 (15.9)
========= =========
Revenue per page $318.74 $297.68 7.1
========= =========
(A) 2007 first quarter: January 1, 2007 to April 1, 2007.
2006 first quarter: December 26, 2005 to March 26, 2006.
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)
First Quarter (A)
---------------------
2007 2006
---------- ----------
Net earnings $73,331 $12,273
(Gain) from discontinued operations, net (64,759) (2,908)
Provision for income taxes 5,606 6,126
Total other expenses, net 2,995 3,632
Depreciation 7,225 6,576
Amortization 489 488
---------- ----------
EBITDA $24,887 $26,187
========== ==========
(A) 2007 first quarter: January 1, 2007 to April 1, 2007.
2006 first quarter: December 26, 2005 to March 26, 2006.
We define EBITDA as net earnings excluding gain/loss from discontinued
operations, net, provision for income taxes, total other expense
(which is entirely comprised of interest income and expense),
depreciation and amortization. Our management uses EBITDA, among other
things, to evaluate our operating performance, and to value
prospective acquisitions. 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 from operating activities as a
measure of liquidity. EBITDA, as we calculate it, may not be
comparable to EBITDA reported by other companies.
Journal Communications, Inc.
Consolidated Condensed Balance Sheets
(dollars in thousands)
April 1,
2007 December 31,
(unaudited) 2006
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $5,849 $7,923
Receivables, net 85,002 92,248
Inventories, net 7,092 7,890
Prepaid expenses and other current assets 9,645 11,757
Deferred income taxes 7,602 11,017
Current assets of discontinued operations 413 91,932
------------ ------------
Total current assets 115,603 222,767
Property and equipment, net 224,262 223,844
Goodwill 245,467 245,552
Broadcast licenses 223,529 196,659
Other intangible assets, net 26,579 27,068
Other assets 22,759 39,090
Non-current assets of discontinued operations 271 278
------------ ------------
Total assets $858,470 $955,258
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $24,332 $31,025
Accrued compensation 13,145 18,730
Accrued employee benefits 11,180 10,456
Deferred revenue 17,319 18,687
Accrued income taxes 50,148 4,048
Other current liabilities 8,351 18,478
Current liabilities of discontinued
operations 182 20,647
Current portion of long-term liabilities 3,924 4,770
------------ ------------
Total current liabilities 128,581 126,841
Accrued employee benefits 33,842 33,749
Long-term notes payable to banks 105,280 235,000
Deferred income taxes 54,593 62,089
Other long-term liabilities 15,387 16,687
Shareholders' equity 520,787 480,892
------------ ------------
Total liabilities and shareholders' equity $858,470 $955,258
============ ============
NOTE:
For 2006, all assets and liabilities of Norlight Telecommunications
were classified as current assets or current liabilities of
discontinued operations due to its sale on February 26, 2007.
CONTACT: Journal Communications
Sara Leuchter Wilkins
Director of Investor Relations
414-224-2633
swilkins@journalcommunications.com