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Journal Communications Reports Fourth Quarter and Full Year 2011 Results

Fourth Quarter 2011 compared to Fourth Quarter 2010 (Continuing Operations):

  • Revenue of $95.0 million, down 8.3%
  • Television revenue up 7.9% and radio revenue up 5.5% excluding political and issue revenue
  • Operating earnings of $14.2 million, including $0.9 million non-cash impairment charge for broadcast licenses, compared to $18.8 million
  • Diluted EPS of $0.14, down from $0.20 (continuing operations)
  • Repurchased 497,495 class A shares for $2.1 million

Full Year 2011 compared to Full Year 2010 (Continuing Operations):

  • Revenue of $356.8 million, down 5.3%
  • Television revenue up 3.8% and radio revenue up 2.4% excluding political, issue and Olympic advertising revenue
  • Operating earnings of $39.8 million, including a $0.9 million non-cash impairment charge for broadcast licenses compared to $53.0 million
  • Sold Florida community newspapers and shoppers for a pre-tax gain of $0.5 million and cash proceeds of $1.3 million
  • Year end notes payable to banks of $41.3 million, down $33.3 million from year end 2010

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MILWAUKEE--(BUSINESS WIRE)--Feb. 23, 2012-- Journal Communications, Inc. (NYSE:JRN) today announced results for its fourth quarter and full year ended December 25, 2011.

“Revenue for the quarter of $95.0 million decreased 8.3% and operating earnings decreased 24.6% to $14.2 million,” said Steven Smith, Chairman of the Board and Chief Executive Officer of Journal Communications. “Excluding political and issue advertising, broadcast revenue grew 7.0% driven by the continued rebound in automotive advertising, up 11.3% in the quarter. On the Publishing side, a challenging advertising revenue environment was offset by a solid increase in commercial print and distribution revenue. We continue to see declines in key advertising categories including classifieds. However, we saw a 7.6% increase in digital revenue across our businesses.

“We ended the year with outstanding borrowings under our credit facility of $41.3 million, a reduction of $33.3 million from the end of 2010, reflecting a leverage of less than one times EBITDA. This gives us the flexibility to use our strong balance sheet to invest in our business and grow through acquisition opportunities.

“Looking ahead to 2012, our goal is to continue to build our local market brands by providing relevant and differentiated content across our television, radio, digital and newspaper platforms. We will continue to focus on building local market share of advertising revenue and plan to take advantage of political and issue advertising in key battleground states such as Wisconsin and Nevada. Our priority in publishing is to continue to provide a significant, high impact daily newspaper and leverage our new JS Everywhere brand. We will introduce our new tablet application and mobile platform later this year, opening up additional growth opportunities for our digital business. We will continue to seek in-market growth opportunities in traditional or digital media, make capital investments that drive growth and look for broadcast acquisitions.”

Fourth Quarter 2011 Results

Note that unless otherwise indicated, all comparisons are to the fourth quarter ended December 26, 2010.

For the fourth quarter, revenue of $95.0 million decreased 8.3% compared to $103.7 million. Operating earnings of $14.2 million decreased 24.6% compared to $18.8 million primarily due to lower political and issue advertising. Included in operating earnings were the following items:

  • $0.3 million and $2.0 million in 2011 and 2010, respectively, in workforce reduction related expenses;
  • $0.9 million in non-cash broadcast license impairment charges in 2011 and $1.8 million in non-cash impairment charges for a building in Omaha, Nebraska in 2010;
  • $1.1 million curtailment gain from an amendment to permanently freeze the qualified and non-qualified retirement benefit plans in 2010.

Excluding the above-mentioned items, operating earnings were $15.4 million compared to $21.5 million, a decrease of 28.4%. Earnings from discontinued operations of $3.5 million in 2010 were the result of our sale of our former printing business. Net earnings were $8.2 million compared to $14.7 million.

In the fourth quarter, basic and diluted earnings per share of class A and B common stock were $0.14. This compares to basic and diluted earnings per share of class A and B common stock from continuing operations of $0.20 in 2010. Basic and diluted earnings per share of class A and B common stock from discontinued operations were $0.06 in 2010. The aggregate impact of the above-mentioned items had a $0.02 and $0.03 negative impact on our diluted earnings per share of class A and B common stock from continuing operations in the fourth quarter of 2011 and 2010, respectively.

The operating margin was 14.9% for the fourth quarter compared to 18.1%. EBITDA (net earnings (loss) excluding the gain/loss from discontinued operations, net; total other expense, net; provision (benefit) for income taxes; depreciation; amortization; and, if any, non-cash impairment charges) was $20.9 million compared to $24.8 million, a decrease of 15.8%.

Full Year 2011 Results

Note that unless otherwise indicated, all comparisons are to the full year ended December 26, 2010.

For the full year, revenue from continuing operations of $356.8 million decreased 5.3% compared to $376.8 million. Operating earnings of $39.8 million decreased 25.0% compared to $53.0 million. Included in operating earnings were the following items:

  • $1.7 million and $2.9 million in 2011 and 2010, respectively, in workforce reduction related expenses;
  • $0.9 million in non-cash impairment charges for broadcast licenses in 2011 and $1.8 million in non-cash impairment charges for a building in Omaha, Nebraska in 2010; and,
  • $1.1 million curtailment gain from an amendment to permanently freeze the qualified and non-qualified retirement benefit plans in 2010.

Excluding the above-mentioned items, operating earnings were $42.3 million compared to $56.6 million, a decrease of 25.0%. Earnings from discontinued operations, net of tax, were $0.3 million compared to $3.7 million in 2010. Net earnings were $22.2 million compared to $34.4 million.

For the full year, basic and diluted net earnings per share of class A and B common stock were $0.37. This compares to basic and diluted net earnings per share of $0.59 in 2010. Basic and diluted earnings per share of class A and B common stock from continuing operations were $0.36 compared to $0.52 in 2010. The aggregate impact of the above-mentioned items had a $0.03 and $0.04 negative impact on our diluted earnings per share of class A and B common stock from continuing operations in 2011 and 2010, respectively. Basic and diluted earnings per share of class A and B common stock from discontinued operations were $0.01 in 2011. This compares to basic and diluted earnings per share of class A and B common stock from discontinued operations of $0.07 in 2010.

The operating margin was 11.1% for 2011 compared to 14.1%. EBITDA (net earnings (loss) excluding the gain/loss from discontinued operations, net; total other expense, net; provision (benefit) for income taxes; depreciation; amortization; and, if any, non-cash impairment charges) was $64.0 million compared to $77.7 million, a decrease of 17.6%.

Consolidated and Segment Results

The following table presents our revenue and operating earnings (loss) by segment for the fourth quarter and full year 2011 and 2010 (dollars in millions):

           
4Q 4Q % Full Year Full Year %
2011 2010 Change 2011 2010 Change
Revenue:
Broadcasting $ 50.9 $ 56.3 (9.4) $ 186.1 $ 194.4 (4.3)
Publishing 44.2 47.4 (6.9) 171.0 182.8 (6.5)
Corporate eliminations (0.1) -- -- (0.3) (0.4) 35.1
Total Revenue $ 95.0 $ 103.7 (8.3) $ 356.8 $ 376.8 (5.3)
 
Operating earnings (loss):
Broadcasting $ 9.7 $ 16.2 (40.1) $ 31.0 $ 43.6 (28.8)
Publishing 5.9 5.1 14.8 15.9 18.2 (12.7)
Corporate (1.4) (2.5) 43.8 (7.1) (8.8) 18.7
Total operating earnings $ 14.2 $ 18.8 (24.6) $ 39.8 $ 53.0 (25.0)
 
Broadcast license impairment

$ 0.9

$ --

N/A

$ 0.9

$ --

N/A

 

For the fourth quarter, total expenses of $80.8 million decreased 4.7% compared to $84.9 million. Excluding the previously mentioned items, total expenses were $79.6 million compared to $82.2 million, a reduction of 3.2%.

For the full year, total expenses of $317.0 million decreased 2.1% compared to $323.8 million. Excluding the previously mentioned items, total expenses were $314.6 million compared to $320.2 million, a reduction of 1.7%.

Broadcasting

For the fourth quarter, broadcasting revenue decreased 9.4% to $50.9 million compared to $56.3 million. Total broadcast political and issue advertising revenue was $0.8 million compared to $9.4 million. Excluding political and issue advertising revenue, broadcasting revenue increased 7.0%. Local advertising revenue increased 5.7% primarily due to an increase in automotive advertising. National revenue increased by 2.7% primarily due to an increase in the financial services advertising. Retransmission revenue was $2.4 million compared to $1.6 million. Broadcasting operating earnings of $9.7 million decreased 40.1% compared to $16.2 million primarily due to lower political and issue advertising revenue.

Revenue from television stations for the fourth quarter decreased 15.4% to $31.6 million compared to $37.4 million. Television political and issue advertising revenue was $0.7 million compared to $8.8 million. Excluding political and issue advertising revenue, television revenue increased 7.9%. Operating earnings were $4.9 million, including a $0.9 million non-cash impairment charge for broadcast licenses in 2011, compared to operating earnings of $13.0 million. Television operating expenses increased 9.3% primarily due to higher employee-related expenses. Excluding the $0.9 million non-cash impairment charge for broadcast licenses, operating expenses increased by 5.7% to $25.8 million.

For the fourth quarter, revenue from radio stations increased 2.3% to $19.3 million from $18.9 million. Radio political and issue advertising revenue was $0.1 million compared to $0.7 million. Excluding political and issue advertising, radio revenue increased 5.5%. Operating earnings from radio stations were $4.7 million compared to $3.2 million. Excluding the $1.8 million non-cash impairment charge for a building in Omaha in 2010, operating earnings were $4.7 million compared to $5.0 million. Radio operating expenses decreased 7.1%. Excluding the Omaha building impairment, radio operating expenses increased 5.0% primarily due to higher employee-related expenses and audience promotion costs.

For the full year, broadcasting revenue decreased 4.3% to $186.1 million compared to $194.4 million. Total broadcast political, issue and Olympic advertising revenue was $4.9 million compared to $18.9 million. Excluding political, issue, and Olympic advertising revenue, broadcasting revenue increased 3.3%. Local advertising revenue increased 2.6%, primarily due to an increase in media and automotive advertising. National advertising declined by 1.0%, primarily due to a decrease in the automotive advertising. Retransmission revenue was $8.6 million compared to $6.5 million. Broadcasting operating earnings decreased to $31.0 million from $43.6 million primarily due to lower political and issue advertising revenue.

Revenue from television stations for the full year decreased 7.5% to $115.7 million compared to $125.1 million. Television political, issue and Olympic advertising revenue was $4.1 million compared to $17.6 million. Excluding political, issue and Olympic advertising revenue, television revenue increased 3.8%. Television automotive advertising decreased $0.3 million. Operating earnings were $15.9 million, including the $0.9 million non-cash impairment charge for broadcast licenses, compared to operating earnings of $29.0 million. Television operating expenses increased 3.9% primarily due to higher employee-related expenses.

For the full year, revenue from radio stations increased 1.6% to $70.4 million from $69.3 million. Radio political and issue advertising revenue was $0.8 million compared to $1.4 million. Excluding political and issue advertising, radio revenue increased 2.4%. Operating earnings from radio stations were $15.1 million compared to $14.5 million. Excluding the $1.8 million non-cash impairment charge for a building in Omaha in 2010, operating earnings were $15.1 million compared to $16.3 million. Radio operating expenses increased 1.0%. Excluding the Omaha building impairment in 2010, radio operating expenses increased 4.4% primarily due to higher employee-related expenses.

Publishing

For the fourth quarter, publishing revenue decreased 6.9% to $44.2 million compared to $47.4 million, largely due to continued decreases in the retail, classified and national advertising categories, partially offset by an increase in other revenue. Operating earnings from publishing were $5.9 million compared to $5.1 million, an increase of 14.8%. Excluding workforce reduction related charges of $0.3 million in 2011 and $2.0 million in 2010 and Florida community newspaper and shopper operating earnings of $0.1 million in 2010, operating earnings were $6.2 million compared to $7.0 million, a decrease of 10.7%. Total newsprint and paper expense was $4.2 million compared to $4.4 million, a 4.8% decrease, primarily due to lower consumption.

Revenue at the daily newspaper for the fourth quarter decreased 3.2% to $38.7 million compared to $39.9 million. Retail advertising revenue decreased 3.7%. Classified advertising revenue decreased 18.6% largely due to a decrease in the real estate and automotive advertising categories. Interactive advertising revenue increased 4.1% to $3.0 million compared to $2.9 million, primarily due to an increase in retail sponsorships. Circulation revenue of $12.8 million was essentially flat. Operating earnings from the daily newspaper were $5.7 million compared to $4.5 million, an increase of 25.1%. Excluding workforce reduction related charges of $0.3 million in 2011 and $1.9 million in 2010, operating earnings were $6.0 million compared to $6.5 million. Daily newspaper operating expenses decreased 6.9%. Excluding workforce reduction related charges in both years, operating expenses decreased by 2.4%. The decrease in operating expenses was due to cost savings from workforce reductions and reduced expenses related to revenue declines.

Community newspapers and shoppers revenue for the fourth quarter decreased 26.3% to $5.5 million compared to $7.5 million. The decrease was primarily due to the sale of Florida community newspaper and shopper operations earlier in 2011 and declines in automotive, retail and real estate advertising revenue. Operating earnings from community newspapers and shoppers were $0.2 million compared to $0.6 million, a decrease of 66.1% primarily due to lower revenue and the sale of our Florida operations. Operating expenses were down 23.0%, primarily due to the sale of Florida operations.

The following table provides additional information on the impact that the sale of Florida operations and workforce adjustments had on Q4 community newspapers and shoppers comparisons (dollars in millions):

 
Adjusted Community Newspapers and Shoppers Results Compared to GAAP Results
  4Q   4Q  
2011 2010 % Change
 
Revenue $5.5 $7.5 (26.3 )
Less Florida Operations --   (1.4 ) n/a
Adjusted community newspaper
and shopper revenue $5.5   $6.1   (9.5 )
 
Operating Expenses $5.3 $6.9 (23.0 )
Less Florida Operations -- (1.3 ) n/a
Less workforce reductions (0.1 ) (0.1 ) --
Adjusted community newspaper
and shopper expenses $5.2   $5.6   (5.8 )
 
Operating Earnings $0.2 $0.6 (66.1 )
Less Florida Operations -- (0.1 ) n/a
Add workforce reductions 0.1   0.1   --
Adjusted community newspaper
and shopper operating earnings $0.3   $0.6   (47.4 )
 

For the full year, publishing revenue decreased 6.5% to $171.0 million compared to $182.8 million, largely due to continued decreases in the retail, classified and national advertising categories, partially offset by an increase in other revenue (commercial delivery). Operating earnings from publishing were $15.9 million compared to $18.2 million, a decrease of 12.7%. Excluding workforce reduction related charges of $1.7 million in 2011 and $2.5 million in 2010, and Florida operating earnings of $0.6 million in both years (including a $0.5 million gain on the sale of Florida operations in 2011), operating earnings were $17.1 million compared to $20.1 million, a decrease of 15.4%. Total newsprint and paper expense of $16.8 million decreased 2.5% primarily due to a decrease in consumption.

Revenue at the daily newspaper for the full year decreased 4.6% to $145.4 million compared to $152.4 million. Retail advertising revenue decreased 5.5%. Classified advertising revenue decreased 15.7% largely due to a decrease in the real estate advertising category. Interactive advertising revenue increased 4.2% to $11.3 million compared to $10.8 million, primarily due to an increase in retail sponsorships. Circulation revenue of $49.9 million decreased $0.2 million compared to $50.1 million. Operating earnings from the daily newspaper were $14.3 million compared to $15.9 million, a decrease of 10.3%. Excluding workforce reduction related charges of $1.6 million in 2011 and $2.4 million in 2010, operating earnings were $15.9 million compared to $18.2 million, a decrease of 13.3%. Daily newspaper operating expenses decreased 3.9%. Excluding workforce reduction related charges in both years, operating expenses decreased by 4.0% primarily due to cost savings from workforce reductions and reduced expenses related to revenue declines.

Community newspapers and shoppers revenue for the full year decreased 16.0% to $25.6 million compared to $30.4 million. The decrease was primarily due to declines in retail and classified advertising revenue and the sale of Florida operations. Operating earnings from community newspapers and shoppers were $1.6 million compared to $2.3 million, a decrease of 29.4%. Operating expenses were down 14.9%, primarily due to the sale of Florida operations, cost savings from previous workforce reductions and reduced expenses related to revenue declines.

The following table provides additional information on the impact that the sale of Florida operations and workforce adjustments had on full year community newspapers and shoppers comparisons:

 
Adjusted Community Newspapers and Shoppers Results Compared to GAAP Results
  2011   2010   %
YTD YTD Change
Revenue $ 25.6 $ 30.4 (16.0 )
Less Florida Operations   (2.8 )   (5.3 ) n/a  
Adjusted community newspaper
and shopper revenue $ 22.8   $ 25.1   (9.4 )
 
Operating Expenses $ 23.9 $ 28.1 (14.9 )
Less Florida expenses (including
2011 $0.5 gain on sale) (2.2 ) (4.7 ) (66.1 )
Less workforce reductions:   (0.1 )   (0.1 ) --  
Adjusted community newspaper
and shopper expenses $ 21.6   $ 23.3   (7.3 )
 
Operating Earnings $ 1.7 $ 2.3 (29.4 )
Less Florida Operations (0.6 ) (0.6 ) --
Add workforce reductions   0.1     0.1   --  
Adjusted community newspaper
and shopper operating earnings $ 1.2   $ 1.8   (36.3 )
 

Corporate

The operating loss for the fourth quarter was $1.4 million compared to $2.5 million. The reduction in the operating loss was due to lower costs associated with our former direct mail and printing businesses and a reduction in executive incentive compensation costs in 2011.

For the full year, the operating loss was $7.1 million compared to $8.8 million primarily due to lower executive compensation costs in 2011 and lower costs associated with our former printing services business.

Discontinued Operations

In the fourth quarter of 2010, we recorded an after-tax gain from the discontinued operations of our former printing services business of $3.5 million. For the full year 2011, after-tax earnings from discontinued operations of $0.3 million were driven by a gain on the sale of real estate holdings in Green Bay, Wisconsin related to our former label printing business. After-tax earnings from discontinued operations in 2010 of $3.7 million were related to our former direct marketing and printing services businesses.

Non-Operating Items

For the fourth quarter, other expense, which primarily consists of interest expense, was $0.7 million compared to $1.2 million. For the full year, other expense, which primarily consists of interest expense, was $3.5 million compared to $3.3 million. The increase in interest expense reflects the increase in borrowing rates under our amended and extended credit agreement entered into on August 13, 2010 partially offset by the decrease in average borrowings.

The fourth quarter and full year effective tax rates were 38.9% and 39.8%, respectively, compared to 36.4% and 38.3%, respectively.

Notes Payable to Banks and Cash Flows

At year end, our notes payable to banks was $41.3 million. During the fourth quarter and the year, we reduced our notes payable to banks by $13.7 million and $33.3 million, respectively. Our consolidated funded debt ratio, as defined in our credit agreement, was 0.61-to-1. Cash from operating activities was $45.5 million compared to $71.8 million. The decrease was due to a decrease in cash provided by working capital, the decrease in net earnings, payments related to our executive inventive compensation plan and tax payments related to the sale of our former printing services business. Year-to-date capital expenditures were $10.7 million compared to $9.4 million.

First Quarter 2012 Outlook

For the first quarter of 2012, we anticipate that broadcasting revenues will be up compared to the prior year period. We anticipate that publishing revenues will be down compared to the prior year period 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) 543-6407 (domestic) or (617) 213-8898 (international) at least 10 minutes prior to the scheduled start of the call. The access code for the conference call is 55616976. A live webcast of the fourth 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=50179136&lan=en-US&anchor=www.journalcommunications.com%2Finvestors&index=1&md5=65614a256fed4074c4ff2251c3359d4a, also beginning at 10:00 a.m. CT this morning. An archive of the webcast will be available on this site today through March 1, 2012. Replays of the conference call will also be available through March 1, 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 19476841. 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=50179136&lan=en-US&anchor=www.journalcommunications.com%2Finvestors&index=2&md5=fcd6aed26fbb7d3bc3671a46ed7258f1.

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 in our most recent Quarterly Report on Form 10-Q, 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 33 radio stations and 13 television stations in 12 states and operate an additional television station under a local marketing agreement. We publish the Milwaukee Journal Sentinel, which serves as the only major daily newspaper for the Milwaukee metropolitan area, and several community newspapers and shoppers in Wisconsin. Our interactive media assets build on our strong publishing and broadcasting brands.

Tables Follow

 
Journal Communications, Inc.
Consolidated Statements of Operations (unaudited)
(dollars in thousands, except for shares and per-share amounts)
           
 
Fourth Quarter (A) Four Quarters (B)
2011 2010 % Change   2011 2010 % Change
 
 
Revenue:
Broadcasting $ 50,951 $ 56,266 (9.4 ) $ 186,080 $ 194,365 (4.3 )
Publishing 44,169 47,422 (6.9 ) 170,976 182,799 (6.5 )
Corporate eliminations (74 ) (2 ) U (263 ) (405 ) 35.1
Total revenue 95,046 103,686 (8.3 ) 356,793 376,759 (5.3 )
 
Operating costs and expenses:
Broadcasting 23,984 22,620 6.0 92,371 91,018 (1.5 )
Publishing 27,118 30,404 (10.8 ) 109,557 117,074 (6.4 )
Corporate eliminations (74 ) (2 ) U (263 ) (405 ) 35.1
Total operating costs and expenses 51,028 53,022 (3.8 ) 201,665 207,687 (2.9 )
 
Selling and administrative expenses 29,828   31,851   (6.4 ) 115,346   116,048   (0.6 )
Total operating costs and expenses
and selling and administrative
expenses 80,856   84,873   (4.7 ) 317,011   323,735   (2.1 )
 
Operating earnings 14,190 18,813 (24.6 ) 39,782 53,024 (25.0 )
 
Other income and (expense):
Interest income 65 23 117 81
Interest expense (796 ) (1,260 ) (3,642 ) (3,362 )
Total other income and (expense) (731 ) (1,237 ) (40.9 ) (3,525 ) (3,281 ) 7.4
 
Earnings from continuing operations before income taxes 13,459 17,576 (23.4 ) 36,257 49,743 (27.1 )
 
Provision for income taxes 5,235   6,405   (18.3 ) 14,412   19,065   (24.4 )
 
Earnings from continuing operations 8,224 11,171 (26.4 ) 21,845 30,678 (28.8 )
 
Earnings from discontinued operations, net of tax -   3,512   N/A 341   3,703   (90.8 )
 
Net earnings $ 8,224   $ 14,683   (44.0 ) $ 22,186   $ 34,381   (35.5 )
 
Weighted average number of shares-Class A and B common stock:
Basic and diluted 50,592,270 50,889,957 51,088,215 50,789,029
 
Weighted average number of shares-Class C common stock 3,264,000 3,264,000 3,264,000 3,264,000
 
Earnings per share:
Basic - Class A and B common stock:
Continuing operations $ 0.14 $ 0.20 $ 0.36 $ 0.52
Discontinued operations --   0.06   0.01   0.07  
Net earnings $ 0.14   $ 0.26   $ 0.37   $ 0.59  
 
Diluted - Class A and B common stock:
Continuing operations $ 0.14 $ 0.20 $ 0.36 $ 0.52
Discontinued operations --   0.06   0.01   0.07  
Net earnings $ 0.14   $ 0.26   $ 0.37   $ 0.59  
 
Basic and diluted - Class C common stock:
Continuing operations $ 0.28 $ 0.34 $ 0.93 $ 1.09
Discontinued operations --   0.06   0.01   0.07  
Net earnings $ 0.28   $ 0.40   $ 0.94   $ 1.16  
 

(A)

 

2011 fourth quarter: September 26, 2011 to December 25, 2011

2010 fourth quarter: September 27, 2010 to December 26, 2010

(B)

2011 four quarters: December 27, 2010 to December 25, 2011

2010 four quarters: December 28, 2009 to December 26, 2010

U

Greater than 100% unfavorable variance

 

Journal Communications, Inc.
Segment Information (unaudited)
(dollars in thousands)
           
 
Fourth Quarter (A) Four Quarters (B)
2011 2010 % Change   2011 2010 % Change

Revenue

Broadcasting $ 50,951 $ 56,266 (9.4 ) $ 186,080 $ 194,365 (4.3 )
Publishing 44,169 47,422 (6.9 ) 170,976 182,799 (6.5 )
Corporate eliminations (74 ) (2 ) U (263 ) (405 ) 35.1
$ 95,046   $ 103,686   (8.3 ) $ 356,793   $ 376,759   (5.3 )
 

Operating earnings (loss)

Broadcasting 9,692 $ 16,178 (40.1 ) $ 31,001 $ 43,559 (28.8 )
Publishing 5,907 5,144 14.8 15,901 18,222 (12.7 )
Corporate (1,409 ) (2,509 ) 43.8 (7,120 ) (8,757 ) 18.7
$ 14,190   $ 18,813   (24.6 ) $ 39,782   $ 53,024   (25.0 )
 

Depreciation and amortization

Broadcasting $ 3,142 $ 3,138 0.1 $ 12,297 $ 12,747 (3.5 )
Publishing 2,540 2,757 (7.9 ) 10,412 11,382 (8.5 )
Corporate 167   133   25.6 622   500   24.4
$ 5,849   $ 6,028   (3.0 ) $ 23,331   $ 24,629   (5.3 )
 

(A)

 

2011 fourth quarter: September 26, 2011 to December 25, 2011

2010 fourth quarter: September 27, 2010 to December 26, 2010

(B)

2011 four quarters: December 27, 2010 to December 25, 2011

 

2010 four quarters: December 28, 2009 to December 26, 2010

U

Greater than 100% unfavorable variance

 

Journal Communications, Inc.
Broadcasting and Publishing Segment Information (unaudited)
(dollars in thousands)
 
  Fourth Quarter of 2011 (A)   Fourth Quarter of 2010 (B)      
       

Broadcasting:

% Change % Change % Change
Television Radio Total Television Radio Total Television Radio Total
 
 
Revenue $ 31,656 $ 19,295 $ 50,951 $ 37,398 $ 18,868 $ 56,266 (15.4 ) 2.3 (9.4 )
 
Operating earnings $ 4,948 $ 4,744 $ 9,692 $ 12,965 $ 3,213 $ 16,178 (61.8 ) 47.7 (40.1 )
 
 

Publishing:

Community Community
Daily Newspapers Daily Newspapers % Change % Change % Change
Newspaper & Shoppers Total Newspaper & Shoppers Total Daily CN&S Total
Advertising revenue:
Retail $ 16,244 $ 3,602 $ 19,846 $ 16,860 $ 5,380 $ 22,240 (3.7 ) (33.0 ) (10.8 )
Classified 3,742 686 4,428 4,597 948 5,545 (18.6 ) (27.6 ) (20.1 )
National 1,304 -- 1,304 1,472 -- 1,472 (11.4 ) N/A (11.4 )
Direct Marketing 26 -- 26 79 -- 79 (67.1 ) N/A (67.1 )
Total advertising revenue 21,316 4,288 25,604 23,008 6,328 29,336 (7.4 ) (32.2 ) (12.7 )
Circulation revenue 12,784 421 13,205 12,819 447 13,266 (0.3 ) (5.8 ) (0.5 )
Other revenue 4,545 815 5,360 4,097 723 4,820 10.9 12.7 11.2
Total revenue $ 38,645 $ 5,524 $ 44,169 $ 39,924 $ 7,498 $ 47,422 (3.2 ) (26.3 ) (6.9 )
 
Operating earnings $ 5,711 $ 196 $ 5,907 $ 4,565 $ 579 $ 5,144 25.1 (66.1 ) 14.8
 
 
Four Quarters of 2011 (C)   Four Quarters of 2010 (D)
 

Broadcasting:

% Change % Change % Change
Television Radio Total Television Radio Total Television Radio Total
 
 
Revenue $ 115,713 $ 70,367 $ 186,080 $ 125,082 $ 69,283 $ 194,365 (7.5 ) 1.6 (4.3 )
 
Operating earnings $ 15,947 $ 15,054 $ 31,001 $ 29,047 $ 14,512 $ 43,559 (45.1 ) 3.7 (28.8 )
 
 

Publishing:

Community Community
Daily Newspapers Daily Newspapers % Change % Change

% Change

Newspaper & Shoppers Total Newspaper & Shoppers Total Daily CN&S Total
Advertising revenue:
Retail $ 56,706 $ 17,247 $ 73,953 $ 60,016 $ 21,195 $ 81,211 (5.5 ) (18.6 ) (8.9 )
Classified 16,751 3,398 20,149 19,874 4,369 24,243 (15.7 ) (22.2 ) (16.9 )
National 4,488 -- 4,488 5,056 -- 5,056 (11.2 ) N/A (11.2 )
Direct Marketing 125 -- 125 211 -- 211 (40.8 ) N/A (40.8 )
Total advertising revenue 78,070 20,645 98,715 85,157 25,564 110,721 (8.3 ) (19.2 ) (10.8 )
Circulation revenue 49,915 1,748 51,663 50,095 1,894 51,989 (0.4 ) (7.7 ) (0.6 )
Other revenue 17,436 3,162 20,598 17,128 2,961 20,089 1.8 6.8 2.5
Total revenue $ 145,421 $ 25,555 $ 170,976 $ 152,380 $ 30,419 $ 182,799 (4.6 ) (16.0 ) (6.5 )
 
Operating earnings $ 14,250 $ 1,651 $ 15,901 $ 15,883 $ 2,339 $ 18,222 (10.3 ) (29.4 ) (12.7 )
 

(A)

 

2011 fourth quarter: September 26, 2011 to December 25, 2011

(B)

2010 fourth quarter: September 27, 2010 to December 26, 2010

(C)

2011 four quarters: December 27, 2010 to December 25, 2011

(D)

2010 four quarters: December 28, 2009 to December 26, 2010

 
NOTE:

Broadcasting and publishing segment information is provided to facilitate comparison of our broadcasting and publishing segments results with those of other broadcasting and publishing companies and is not representative of the overall business of Journal Communications or its operating results.

 

Journal Communications, Inc.
Reconciliation of consolidated net earnings to consolidated EBITDA (unaudited)
(dollars in thousands)
       
Fourth Quarter (A) Four Quarters (B)
2011 2010 2011 2010
 
Net earnings $ 8,224 $ 14,683 $ 22,186 $ 34,381
Earnings from discontinued operations, net - (3,512 ) (341 ) (3,703 )
Provision for income taxes 5,235 6,405 14,412 19,065
Total other expense, net 731 1,237 3,525 3,281
Depreciation 5,459 5,552 21,764 22,697
Amortization 390 476 1,567 1,932
Intangible Impairment 879 -   879   -  
EBITDA $ 20,918 $ 24,841   $ 63,992   $ 77,653  
 

(A)

 

2011 fourth quarter: September 26, 2011 to December 25, 2011

2010 fourth quarter: September 27, 2010 to December 26, 2010

(B)

2011 four quarters: December 27, 2010 to December 25, 2011

2010 four quarters: December 28, 2009 to December 26, 2010
 

We define EBITDA as net earnings (loss) excluding earnings/loss from discontinued operations, net, provision (benefit) for income taxes, total other expense (which is entirely comprised of interest income and expense), depreciation, amortization and, if any, non-cash impairment charges. 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.
Calculation of Diluted Earnings Per Share - Class A and B (unaudited)
(dollars and shares in thousands)
   
Fourth Quarter (A) Four Quarters (B)
2011 2010 2011 2010
 
Numerator for diluted earnings per share:
Dividends on class A and B common stock $ - * $ - * $ - * $ - *
Dividends on class C common stock 464 464 1,854 1,854
Dividends on non-vested restricted stock - - - -
Total undistributed earnings from continuing operations
Class A and B 7,198 * 9,901 * 18,546 * 26,634 *
Class C 464 635 1,186 1,712
Non-vested restricted stock 98 171 259 478
Earnings from discontinued operations
Class A and B - 3,247 316 3,422
Class C - 208 20 220
Non-vested restricted stock - 57 5 61
Net earnings $ 8,224 $ 14,683 $ 22,186 $ 34,381
 
Denominator for diluted earnings per class A and B share:
Weighted average shares outstanding - Class A and B 50,592 50,890 51,088 50,789
Impact of non-vested restricted shares - - - -
Conversion of class C shares - - - -
Adjusted weighted average shares outstanding for class A and B 50,592 * 50,890 * 51,088 * 50,789 *
 
Diluted earnings per share of class A and B:
Continuing operations $ 0.14 * $ 0.20 * $ 0.36 * $ 0.52 *
Discontinued operations - 0.06 0.01 0.07
Net earnings $ 0.14 $ 0.26 $ 0.37 $ 0.59
 
* Included in calculation of diluted earnings per share from continuing operations - class A and B
 

(A)

 

2011 fourth quarter: September 26, 2011 to December 25, 2011

2010 fourth quarter: September 27, 2010 to December 26, 2010

(B)

2011 four quarters: December 27, 2010 to December 25, 2011

2010 four quarters: December 28, 2009 to December 26, 2010
 

Journal Communications, Inc.
Consolidated Condensed Balance Sheets
(dollars in thousands)
   
December 25,
2011 December 26,
(unaudited) 2010
ASSETS
Current assets:
Cash and cash equivalents $ 2,418 $ 2,056
Investments of variable interest entity 500 500
Receivables, net 56,695 55,309
Inventories, net 1,766 1,035
Prepaid expenses and other current assets 3,877 3,961
Syndicated programs 2,822 7,361
Deferred income taxes 3,593 4,809
Total current assets 71,671 75,031
Property and equipment, net 168,200 179,725
Syndicated programs 4,457 3,083
Goodwill 8,670 9,098
Broadcast licenses 81,547 82,426
Other intangible assets, net 21,400 22,988
Deferred income taxes 57,236 54,077
Other assets 4,544 5,342
Total assets $ 417,725 $ 431,770
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,516 $ 22,895
Accrued compensation 11,888 13,703
Accrued employee benefits 6,217 5,087
Deferred revenue 14,662 13,899
Syndicated programs 3,436 8,685
Accrued income taxes 2,740 7,332
Other current liabilities 6,093 6,493
Current portion of long-term liabilities 382 561
Total current liabilities 65,934 78,655
Accrued employee benefits 90,176 58,534
Syndicated programs 5,527 5,114
Long-term notes payable to banks 41,305 74,570
Other long-term liabilities 8,595 5,970
Shareholders' equity 205,024 207,763
Noncontrolling interest 1,164 1,164
Total liabilities and equity $ 417,725 $ 431,770
 

Source: Journal Communications, Inc.

Journal Communications, Inc.
Andre Fernandez, 414-224-2884
President and Chief Financial Officer


"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Journal Communications, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.