|Journal Communications Reports First Quarter 2012 Results|
|First Quarter 2012 compared to First Quarter 2011 (Continuing Operations): |
MILWAUKEE, Apr 26, 2012 (BUSINESS WIRE) --Journal Communications, Inc. (NYSE:JRN) today announced results for its first quarter ended March 25, 2012.
"Journal Communications reported a solid first quarter. Broadcast revenue was up 5.4% with the majority of our markets reporting revenue growth. We also had a number of other broadcast highlights in the quarter. First, we are pleased that our Milwaukee 620 AM WTMJ radio station extended its longstanding radio rights agreement with the Milwaukee Brewers. In addition, we reached a long-term agreement to originate the Green Bay Packers preseason television network.
"Publishing revenue was down for the quarter, although we posted positive operating earnings on strong cost controls. We faced tough comparisons to the first quarter 2011, during which incremental advertising and circulation revenue was driven by the Green Bay Packer Super Bowl appearance.
"In March we announced an agreement to purchase two FM radio stations in Tulsa, OK from Renda Broadcasting Corporation for $11.8 million, subject to FCC approval. We believe the addition of these stations to our existing Tulsa radio cluster will create a stronger group that will better serve our listeners, customers and the entire Tulsa community. This transaction is consistent with one of our strategic goals of creating additional scale in existing Journal Broadcast Group markets."
First Quarter 2012 Results
Note that unless otherwise indicated, all comparisons are to the first quarter ended March 27, 2011.
For the first quarter, revenue of $82.3 million decreased 1.9% compared to $83.9 million. Operating earnings of $5.7 million decreased 4.5% compared to $6.0 million. There were no earnings from discontinued operations in 2012 compared to $0.3 million. Net earnings were $2.9 million compared to $3.4 million.
In the first quarter, basic and diluted net earnings per share of class A and B common stock were $0.05. This compares to basic and diluted net earnings per share of $0.05 in 2011. There was no impact on basic and diluted earnings per share of class A and B common stock from discontinued operations in 2012 or 2011.
The operating margin was 7.0% for the first quarter compared to 7.2%. EBITDA (net earnings (loss) excluding the earnings/loss from discontinued operations, net; total other expense, net; provision (benefit) for income taxes; depreciation; amortization; and, if any, non-cash impairment charges) was $11.5 million compared to $11.8 million, a decrease of 2.5%.
Consolidated and Segment Results
The following table presents our revenue and operating earnings (loss) by segment for the first quarter of 2012 and 2011 (dollars in millions).
For the first quarter, total expenses of $76.5 million decreased 1.7% compared to $77.9 million.
For the first quarter, broadcasting revenue increased 5.4% to $44.4 million compared to $42.1 million. Total broadcast political and issue advertising revenue increased 45.8% to $1.3 million compared to $0.9 million. Core local advertising revenue, excluding political, was up 1.6%, driven by higher auto advertising. Core national advertising revenue, excluding political, increased 18.1%, due to an increase in communications advertising. Retransmission revenue was $2.3 million compared to $1.8 million. Broadcasting operating earnings of $6.7 million increased 12.3% compared to $6.0 million.
Revenue from television stations for the first quarter increased 7.5% to $29.5 million compared to $27.5 million. Television political and issue advertising revenue was $1.2 million compared to $0.8 million. Core local advertising revenue increased 2.6% primarily due to an increase in automotive advertising. Core national advertising revenue increased 18.1% primarily due to increases in communications and financial advertising. Operating earnings were $3.9 million compared to $3.8 million, an increase of 2.3%. Television operating expenses increased 8.3% primarily due to increases in employee related costs and network fees.
For the first quarter, revenue from radio stations increased 1.5% to $14.9 million from $14.7 million. Radio political and issue advertising revenue was $0.1 million in each of 2012 and 2011. Operating earnings from radio stations were $2.9 million compared to $2.2 million, an increase of 29.2%. Radio operating expenses decreased 3.4% primarily due to a charge recorded in 2011 for a sports contract that more than off-set employee related expense increases in 2012.
For the first quarter, publishing revenue decreased 9.0% to $38.0 million compared to $41.8 million, largely due to continued decreases in the retail and classified advertising categories. Operating earnings from publishing were $0.7 million compared to $1.8 million, a decrease of 59.2%. Total newsprint and paper expense in publishing was $3.7 million compared to $4.1 million, an 8.3% decrease primarily due to lower newsprint consumption.
Revenue at the daily newspaper for the first quarter decreased 6.6% to $33.0 million compared to $35.4 million. Retail advertising revenue decreased 9.0%. Classified advertising revenue decreased 17.1% driven primarily by a decrease in automotive advertising. Interactive advertising revenue of $2.6 million decreased 1.6%, primarily due to a decline in classified advertising revenue that more than off-set increases in sponsorship and other online revenue. Circulation revenue of $12.3 million was down 2.0% compared to $12.5 million. Operating earnings from the daily newspaper were $0.9 million compared to $2.0 million, a decrease of 56.1%. Daily newspaper operating expenses decreased 3.7%, primarily due to a decrease in newsprint expense and lower operating costs associated with lower revenue.
Community newspapers and shoppers revenue for the first quarter decreased 22.2% to $5.0 million compared to $6.4 million. Excluding revenue of $1.2 million related to Florida operations sold in 2011, revenue decreased by 4.4%. The operating loss from community newspapers and shoppers was $0.1 million compared to a loss of $0.2 million. Operating expenses were down 22.1%, or 6.1% lower excluding Florida related expenses of $1.1 million, primarily due to employee expense savings from previous workforce reductions and lower operating costs associated with lower revenue.
The operating loss for the first quarter was $1.7 million compared to $1.8 million.
There were no earnings from discontinued operations in 2012 compared to $0.3 million. Earnings from discontinued operations in 2011 were primarily due to a gain on the sale of real estate holdings in Green Bay, Wisconsin related to our former label printing business.
For the first quarter, other expense, which primarily consists of interest expense, was $0.7 million compared to $1.1 million. The decrease in interest expense reflects a decrease in average borrowing levels for the quarter.
The first quarter effective tax rate was 41.8% compared to 38.7%.
Notes Payable to Banks and Cash Flows
At the end of the first quarter, our notes payable to banks were $37.7 million. During the first quarter, we reduced our notes payable to banks by $3.6 million as compared to the 2011 year-end. Our consolidated funded debt ratio, as defined in our credit agreement, was 0.56-to-1. Cash from operating activities was $8.3 million compared to $3.5 million due to lower income tax and incentive compensation payments in 2012. First quarter capital expenditures were $2.8 million compared to $2.7 million.
Second Quarter 2012 Outlook
For the second quarter, we anticipate high-single digit broadcast revenue increases, compared to prior year, driven by an improving economy and higher political advertising revenue in key states. We anticipate publishing revenue to decline in the mid-single digits, compared to the prior year, excluding revenue from the Florida community newspaper operations sold in 2011, reflecting continued challenges with publishing advertising revenue.
Conference Call and Webcast
The company will hold an earnings conference call today at 10:00 a.m. Central Time (11:00 a.m. ET, 8:00 a.m. PT). To access the call, dial (866) 783-2145 (domestic) or (857) 350-1604 (international) at least 10 minutes prior to the scheduled start of the call. The access code for the conference call is 90880744. A live webcast of the first quarter conference call will be accessible through the Journal Communications' website at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.journalcommunications.com%2Finvestors&esheet=50253729&lan=en-US&anchor=www.journalcommunications.com%2Finvestors&index=1&md5=95b2f829515948a1438c8f6ddfb8319f, also beginning at 10:00 a.m. CT this morning. An archive of the webcast will be available on this site today through May 3, 2012. Replays of the conference call will also be available through May 3, 2012. 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 23566108. Pre-registration for the conference call is now available at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.journalcommunications.com%2Finvestors&esheet=50253729&lan=en-US&anchor=www.journalcommunications.com%2Finvestors&index=2&md5=26df341f5b7d2f6c7bb7872a1d99093b.
Annual Meeting of Shareholders
The company will hold its 2012 Annual Meeting of Shareholders on Tuesday, May 8, 2012 at 9:00 a.m. Central Time at the Hilton Omaha, 1001 Cass Street, Omaha, Nebraska 68102.
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 in 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 radio and television broadcasting, publishing and interactive media. We own and operate or provide programming and sales services to 35 radio stations and 14 television stations in 12 states. We publish the Milwaukee Journal Sentinel, which serves as the only major daily newspaper for the Milwaukee metropolitan area, and community newspapers and shoppers in Wisconsin. Our interactive media assets build on our strong publishing and broadcast brands.
SOURCE: Journal Communications, Inc.
Journal Communications, Inc.