JOURNAL COMMUNICATIONS, INC.
|
||
(Exact name of registrant as specified in its charter)
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||
Wisconsin
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20-0020198 | |
(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.) | |
333 W. State Street, Milwaukee, Wisconsin | 53203 | |
(Address of principal executive offices) | (Zip Code) | |
(414) 224-2000
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||
Registrant's telephone number, including area code
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Large Accelerated Filer o | Accelerated Filer x | Non-accelerated Filer o | Smaller reporting company o |
Class
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Outstanding at October 28, 2011
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|
Class A Common Stock
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44,193,857
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Class B Common Stock
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7,261,004,282
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|
Class C Common Stock
|
3,264,000
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Page No.
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Part I.
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Financial Information
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Item 1.
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Financial Statements
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2
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3
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|||
4
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|||
5
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|||
6
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|||
7
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|||
Item 2.
|
23
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||
Item 3.
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39
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||
Item 4.
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39
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||
Part II.
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Other Information
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||
Item 1.
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39
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||
Item 1A.
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39
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||
Item 2.
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40
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||
Item 3.
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40
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||
Item 4.
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40
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||
Item 5.
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40
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||
Item 6.
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40
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September 25, 2011 | December 26, 2010 | |||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 1,686 | $ | 2,056 | ||||
Investments of variable interest entity
|
500 | 500 | ||||||
Receivables, net
|
51,427 | 55,309 | ||||||
Inventories, net
|
2,007 | 1,035 | ||||||
Prepaid expenses and other current assets
|
4,304 | 3,961 | ||||||
Syndicated programs
|
3,595 | 7,361 | ||||||
Deferred income taxes
|
3,516 | 4,809 | ||||||
TOTAL CURRENT ASSETS
|
67,035 | 75,031 | ||||||
Property and equipment, at cost, less accumulated depreciation of $236,730 and $228,820
|
171,171 | 179,725 | ||||||
Syndicated programs
|
4,877 | 3,083 | ||||||
Goodwill
|
8,670 | 9,098 | ||||||
Broadcast licenses
|
82,426 | 82,426 | ||||||
Other intangible assets, net
|
21,790 | 22,988 | ||||||
Deferred income taxes
|
46,128 | 54,077 | ||||||
Other assets
|
4,555 | 5,342 | ||||||
TOTAL ASSETS
|
$ | 406,652 | $ | 431,770 | ||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 18,969 | $ | 22,895 | ||||
Accrued compensation
|
9,104 | 13,703 | ||||||
Accrued employee benefits
|
5,345 | 5,087 | ||||||
Deferred revenue
|
14,487 | 13,899 | ||||||
Syndicated programs
|
5,549 | 8,685 | ||||||
Accrued income taxes
|
312 | 7,332 | ||||||
Other current liabilities
|
5,866 | 6,493 | ||||||
Current portion of long-term liabilities
|
486 | 561 | ||||||
TOTAL CURRENT LIABILITIES
|
60,118 | 78,655 | ||||||
Accrued employee benefits
|
56,205 | 58,534 | ||||||
Syndicated programs
|
6,502 | 5,114 | ||||||
Long-term notes payable to banks
|
54,999 | 74,570 | ||||||
Other long-term liabilities
|
7,325 | 5,970 | ||||||
Equity:
|
||||||||
Preferred stock, $0.01 par – authorized 10,000,000 shares; no shares outstanding at September 25, 2011 and December 26, 2010
|
-- | -- | ||||||
Common stock, $0.01 par:
|
||||||||
Class C – authorized 10,000,000 shares; issued and outstanding: 3,264,000 shares at September 25, 2011 and December 26, 2010
|
33 | 33 | ||||||
Class B – authorized 120,000,000 shares; issued and outstanding (excluding treasury stock): 7,265,573.282 shares at September 25, 2011 and 8,594,541.684 shares at December 26, 2010
|
152 | 165 | ||||||
Class A – authorized 170,000,000 shares; issued and outstanding: 44,228,213 shares at September 25, 2011 and 43,196,321 shares at December 26, 2010
|
442 | 432 | ||||||
Additional paid-in capital
|
259,792 | 260,376 | ||||||
Accumulated other comprehensive loss
|
(31,704 | ) | (32,295 | ) | ||||
Retained earnings
|
100,339 | 87,767 | ||||||
Treasury stock, at cost (8,676,705 class B shares)
|
(108,715 | ) | (108,715 | ) | ||||
Total Journal Communications, Inc. shareholders’ equity
|
220,339 | 207,763 | ||||||
Noncontrolling interest
|
1,164 | 1,164 | ||||||
TOTAL EQUITY
|
221,503 | 208,927 | ||||||
TOTAL LIABILITIES AND EQUITY
|
$ | 406,652 | $ | 431,770 |
Third Quarter Ended
|
Three Quarters Ended
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|||||||||||||||
September 25, 2011
|
September 26, 2010
|
September 25, 2011
|
September 26, 2010
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|||||||||||||
Revenue:
|
||||||||||||||||
Broadcasting
|
$ | 46,937 | $ | 48,482 | $ | 135,129 | $ | 138,099 | ||||||||
Publishing
|
40,888 | 43,439 | 126,807 | 135,377 | ||||||||||||
Corporate eliminations
|
(41 | ) | (104 | ) | (189 | ) | (403 | ) | ||||||||
Total revenue
|
87,784 | 91,817 | 261,747 | 273,073 | ||||||||||||
Operating costs and expenses:
|
||||||||||||||||
Broadcasting
|
24,383 | 24,502 | 68,387 | 68,398 | ||||||||||||
Publishing
|
27,521 | 28,802 | 82,439 | 86,670 | ||||||||||||
Corporate eliminations
|
(41 | ) | (104 | ) | (189 | ) | (403 | ) | ||||||||
Total operating costs and expenses
|
51,863 | 53,200 | 150,637 | 154,665 | ||||||||||||
Selling and administrative expenses
|
27,828 | 27,541 | 85,518 | 84,197 | ||||||||||||
Total operating costs and expenses and selling and administrative expenses
|
79,691 | 80,741 | 236,155 | 238,862 | ||||||||||||
Operating earnings
|
8,093 | 11,076 | 25,592 | 34,211 | ||||||||||||
Other income and (expense):
|
||||||||||||||||
Interest income
|
14 | 25 | 52 | 58 | ||||||||||||
Interest expense
|
(838 | ) | (996 | ) | (2,846 | ) | (2,102 | ) | ||||||||
Total other income and (expense)
|
(824 | ) | (971 | ) | (2,794 | ) | (2,044 | ) | ||||||||
Earnings from continuing operations before income taxes
|
7,269 | 10,105 | 22,798 | 32,167 | ||||||||||||
Provision for income taxes
|
2,823 | 3,782 | 9,177 | 12,660 | ||||||||||||
Earnings from continuing operations
|
4,446 | 6,323 | 13,621 | 19,507 | ||||||||||||
Earnings (loss) from discontinued operations, net of $0, $(15), $221 and $72 applicable income tax provision (benefit), respectively
|
-- | (28 | ) | 341 | 191 | |||||||||||
Net earnings
|
$ | 4,446 | $ | 6,295 | $ | 13,962 | $ | 19,698 | ||||||||
Earnings per share:
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||||||||||||||||
Basic – Class A and B common stock:
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||||||||||||||||
Continuing operations
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$ | 0.07 | $ | 0.11 | $ | 0.22 | $ | 0.33 | ||||||||
Discontinued operations
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-- | -- | 0.01 | -- | ||||||||||||
Net earnings
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$ | 0.07 | $ | 0.11 | $ | 0.23 | $ | 0.33 | ||||||||
Diluted – Class A and B common stock:
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||||||||||||||||
Continuing operations
|
$ | 0.07 | $ | 0.11 | $ | 0.22 | $ | 0.33 | ||||||||
Discontinued operations
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-- | -- | 0.01 | -- | ||||||||||||
Net earnings
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$ | 0.07 | $ | 0.11 | $ | 0.23 | $ | 0.33 | ||||||||
Basic and diluted – Class C common stock:
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||||||||||||||||
Continuing operations
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$ | 0.21 | $ | 0.25 | $ | 0.64 | $ | 0.76 | ||||||||
Discontinued operations
|
-- | -- | 0.01 | -- | ||||||||||||
Net earnings
|
$ | 0.21 | $ | 0.25 | $ | 0.65 | $ | 0.76 |
Preferred | Common Stock |
Additional
|
Accumulated Other Comprehensive |
Retained
|
Noncontrolling
|
Treasury Stock, | ||||||||||||||||||||||||||||||||||
Stock
|
Class C
|
Class B
|
Class A
|
Paid-in-Capital
|
Loss
|
Earnings
|
Interests
|
at cost
|
Total
|
|||||||||||||||||||||||||||||||
Balance at December 26, 2010
|
$ | - | $ | 33 | $ | 165 | $ | 432 | $ | 260,376 | $ | (32,295 | ) | $ | 87,767 | $ | 1,164 | $ | (108,715 | ) | $ | 208,927 | ||||||||||||||||||
Net earnings
|
3,375 | 3,375 | ||||||||||||||||||||||||||||||||||||||
Change in pension and postretirement (net of deferred tax of $127)
|
197 | 197 | ||||||||||||||||||||||||||||||||||||||
Class C dividends declared ($0.142 per share)
|
(464 | ) | (464 | ) | ||||||||||||||||||||||||||||||||||||
Issuance of shares:
|
||||||||||||||||||||||||||||||||||||||||
Conversion of class B to class A
|
(11 | ) | 11 | - | ||||||||||||||||||||||||||||||||||||
Stock grants
|
3 | 17 | 20 | |||||||||||||||||||||||||||||||||||||
Employee stock purchase plan
|
- | 181 | 181 | |||||||||||||||||||||||||||||||||||||
Shares withheld from employees for tax withholding
|
(1 | ) | (505 | ) | (506 | ) | ||||||||||||||||||||||||||||||||||
Stock-based compensation
|
261 | 1 | 262 | |||||||||||||||||||||||||||||||||||||
Income tax benefits from vesting of non-vested restricted stock
|
368 | 368 | ||||||||||||||||||||||||||||||||||||||
Balance at March 27, 2011
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- | 33 | 156 | 443 | 260,698 | (32,098 | ) | 90,679 | 1,164 | (108,715 | ) | 212,360 | ||||||||||||||||||||||||||||
Net earnings
|
6,141 | 6,141 | ||||||||||||||||||||||||||||||||||||||
Change in pension and postretirement (net of deferred tax of $128)
|
197 | 197 | ||||||||||||||||||||||||||||||||||||||
Class C dividends declared ($0.142 per share)
|
(464 | ) | (464 | ) | ||||||||||||||||||||||||||||||||||||
Issuance of shares:
|
||||||||||||||||||||||||||||||||||||||||
Conversion of class B to class A
|
(4 | ) | 4 | - | ||||||||||||||||||||||||||||||||||||
Stock grants
|
1 | 432 | 433 | |||||||||||||||||||||||||||||||||||||
Shares withheld from employees for tax withholding
|
(13 | ) | (13 | ) | ||||||||||||||||||||||||||||||||||||
Stock-based compensation
|
285 | 285 | ||||||||||||||||||||||||||||||||||||||
Balance at June 26, 2011
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- | 33 | 153 | 447 | 261,402 | (31,901 | ) | 96,356 | 1,164 | (108,715 | ) | 218,939 | ||||||||||||||||||||||||||||
Net earnings
|
4,446 | 4,446 | ||||||||||||||||||||||||||||||||||||||
Change in pension and postretirement (net of deferred tax of $128)
|
197 | 197 | ||||||||||||||||||||||||||||||||||||||
Class C dividends declared ($0.142 per share)
|
(463 | ) | (463 | ) | ||||||||||||||||||||||||||||||||||||
Issuance of shares:
|
||||||||||||||||||||||||||||||||||||||||
Conversion of class B to class A
|
(1 | ) | 1 | - | ||||||||||||||||||||||||||||||||||||
Stock grants
|
20 | 20 | ||||||||||||||||||||||||||||||||||||||
Employee stock purchase plan
|
147 | 147 | ||||||||||||||||||||||||||||||||||||||
Shares purchased and retired
|
(6 | ) | (2,060 | ) | (2,066 | ) | ||||||||||||||||||||||||||||||||||
Shares withheld from employees for tax withholding
|
(26 | ) | (26 | ) | ||||||||||||||||||||||||||||||||||||
Stock-based compensation
|
284 | 284 | ||||||||||||||||||||||||||||||||||||||
Income tax benefits from vesting of non-vested restricted stock
|
25 | 25 | ||||||||||||||||||||||||||||||||||||||
Balance at September 25, 2011
|
$ | - | $ | 33 | $ | 152 | $ | 442 | $ | 259,792 | $ | (31,704 | ) | $ | 100,339 | $ | 1,164 | $ | (108,715 | ) | $ | 221,503 |
Preferred | Common Stock | Additional | Accumulated Other Comprehensive | Retained | Noncontrolling | Treasury Stock, | ||||||||||||||||||||||||||||||||||
Stock
|
Class C
|
Class B
|
Class A
|
Paid-in-Capital
|
Loss
|
Earnings
|
Interests
|
at cost
|
Total
|
|||||||||||||||||||||||||||||||
Balance at December 27, 2009
|
$ | - | $ | 33 | $ | 174 | $ | 418 | $ | 258,413 | $ | (34,487 | ) | $ | 55,239 | $ | - | $ | (108,715 | ) | $ | 171,075 | ||||||||||||||||||
Net earnings
|
5,303 | 5,303 | ||||||||||||||||||||||||||||||||||||||
Change in pension and postretirement (net of deferred tax of $280)
|
441 | 441 | ||||||||||||||||||||||||||||||||||||||
Class C dividends declared ($0.142 per share)
|
(464 | ) | (464 | ) | ||||||||||||||||||||||||||||||||||||
Issuance of shares:
|
||||||||||||||||||||||||||||||||||||||||
Conversion of class B to class A
|
(4 | ) | 4 | - | ||||||||||||||||||||||||||||||||||||
Stock grants
|
2 | 30 | 32 | |||||||||||||||||||||||||||||||||||||
Employee stock purchase plan
|
1 | 162 | 163 | |||||||||||||||||||||||||||||||||||||
Shares withheld from employees for tax withholding
|
(1 | ) | (267 | ) | (268 | ) | ||||||||||||||||||||||||||||||||||
Stock-based compensation
|
294 | 294 | ||||||||||||||||||||||||||||||||||||||
Consolidation of variable interest entity
|
1,164 | 1,164 | ||||||||||||||||||||||||||||||||||||||
Income tax benefits from vesting of non-vested restricted stock
|
95 | 95 | ||||||||||||||||||||||||||||||||||||||
Balance at March 28, 2010
|
- | 33 | 172 | 422 | 258,727 | (34,046 | ) | 60,078 | 1,164 | (108,715 | ) | 177,835 | ||||||||||||||||||||||||||||
Net earnings
|
8,100 | 8,100 | ||||||||||||||||||||||||||||||||||||||
Change in pension and postretirement (net of deferred tax of $278)
|
442 | 442 | ||||||||||||||||||||||||||||||||||||||
Class C dividends declared ($0.142 per share)
|
(464 | ) | (464 | ) | ||||||||||||||||||||||||||||||||||||
Issuance of shares:
|
||||||||||||||||||||||||||||||||||||||||
Conversion of class B to class A
|
(7 | ) | 7 | - | ||||||||||||||||||||||||||||||||||||
Stock grants
|
1 | 493 | 494 | |||||||||||||||||||||||||||||||||||||
Stock-based compensation
|
302 | 302 | ||||||||||||||||||||||||||||||||||||||
Balance at June 27, 2010
|
- | 33 | 166 | 429 | 259,522 | (33,604 | ) | 67,714 | 1,164 | (108,715 | ) | 186,709 | ||||||||||||||||||||||||||||
Net earnings
|
6,295 | 6,295 | ||||||||||||||||||||||||||||||||||||||
Change in pension and postretirement (net of deferred tax of $281)
|
441 | 441 | ||||||||||||||||||||||||||||||||||||||
Class C dividends declared ($0.142 per share)
|
(463 | ) | (463 | ) | ||||||||||||||||||||||||||||||||||||
Issuance of shares:
|
||||||||||||||||||||||||||||||||||||||||
Conversion of class B to class A
|
(1 | ) | 1 | - | ||||||||||||||||||||||||||||||||||||
Stock grants
|
22 | 22 | ||||||||||||||||||||||||||||||||||||||
Employee stock purchase plan
|
- | 140 | 140 | |||||||||||||||||||||||||||||||||||||
Shares withheld from employees for tax withholding
|
(25 | ) | (25 | ) | ||||||||||||||||||||||||||||||||||||
Stock-based compensation
|
274 | 274 | ||||||||||||||||||||||||||||||||||||||
Income tax benefits from vesting of non-vested restricted stock
|
25 | 25 | ||||||||||||||||||||||||||||||||||||||
Balance at September 26, 2010
|
$ | - | $ | 33 | $ | 165 | $ | 430 | $ | 259,958 | $ | (33,163 | ) | $ | 73,546 | $ | 1,164 | $ | (108,715 | ) | $ | 193,418 |
Three Quarters Ended
|
||||||||
September 25, 2011
|
September 26, 2010
|
|||||||
Cash flow from operating activities:
|
||||||||
Net earnings
|
$ | 13,962 | $ | 19,698 | ||||
Less earnings from discontinued operations
|
341 | 191 | ||||||
Earnings from continuing operations
|
13,621 | 19,507 | ||||||
Adjustments for non-cash items:
|
||||||||
Depreciation
|
16,305 | 17,145 | ||||||
Amortization
|
1,177 | 1,456 | ||||||
Provision for doubtful accounts
|
499 | 381 | ||||||
Deferred income taxes
|
9,206 | 7,830 | ||||||
Non-cash stock-based compensation
|
1,304 | 1,364 | ||||||
Net (gain) loss from disposal of assets
|
(529 | ) | 89 | |||||
Net changes in operating assets and liabilities, excluding effect of sales and acquisitions:
|
||||||||
Receivables
|
3,052 | 4,227 | ||||||
Inventories
|
(972 | ) | 93 | |||||
Accounts payable
|
(3,926 | ) | 207 | |||||
Other assets and liabilities
|
(13,382 | ) | (6,785 | ) | ||||
Net Cash Provided By Operating Activities
|
26,355 | 45,514 | ||||||
Cash flow from investing activities:
|
||||||||
Capital expenditures for property and equipment
|
(8,095 | ) | (7,323 | ) | ||||
Proceeds from sales of businesses
|
1,558 | 25 | ||||||
Proceeds from sales of assets
|
76 | 792 | ||||||
Insurance proceeds from tower collapse and replacement
|
-- | 728 | ||||||
Net Cash Used For Investing Activities
|
(6,461 | ) | (5,778 | ) | ||||
Cash flow from financing activities:
|
||||||||
Financing costs for long-term notes payable to banks
|
-- | (3,223 | ) | |||||
Proceeds from long-term notes payable to banks
|
74,738 | 73,655 | ||||||
Payments on long-term notes payable to banks
|
(94,309 | ) | (112,605 | ) | ||||
Shares purchased and retired
|
(1,787 | ) | -- | |||||
Principal payments under capital lease obligations
|
(256 | ) | (235 | ) | ||||
Proceeds from issuance of common stock
|
295 | 272 | ||||||
Income tax benefits from vesting of non-vested restricted stock
|
455 | 120 | ||||||
Net Cash Used For Financing Activties
|
(20,864 | ) | (42,016 | ) | ||||
Cash from discontinued operations:
|
||||||||
Net operating activities of discontinued operations
|
(223 | ) | 2,322 | |||||
Net investing activities of discontinued operations
|
823 | (387 | ) | |||||
Net Cash Provided by Discontinued Operations
|
600 | 1,935 | ||||||
Net Increase (Decrease) In Cash And Cash Equivalents
|
(370 | ) | (345 | ) | ||||
Cash and cash equivalents:
|
||||||||
Beginning of year
|
2,056 | 3,369 | ||||||
At September 25, 2011 and September 26, 2010
|
$ | 1,686 | $ | 3,024 |
1
|
BASIS OF PRESENTATION
|
2
|
ACCOUNTING PERIODS
|
3
|
NEW ACCOUNTING STANDARDS
|
3
|
NEW ACCOUNTING STANDARDS continued
|
4
|
MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS
|
5
|
EARNINGS PER SHARE
|
|
a)
|
Income (loss) from continuing operations (“net earnings (loss)”) is reduced by the amount of dividends declared in the current period for each class of stock and by the contractual amount of dividends that must be paid or accrued during the current period.
|
|
b)
|
The remaining earnings, which may include earnings from discontinued operations (“undistributed earnings”), are allocated to each class of common stock to the extent that each class of stock may share in earnings if all of the earnings for the period were distributed.
|
|
c)
|
The remaining losses (“undistributed losses”) are allocated to the class A and B common stock. Undistributed losses are not allocated to the class C common stock and non-vested restricted stock because the class C common stock and the non-vested restricted stock are not contractually obligated to share in the losses. Losses from discontinued operations are allocated to class A and B shares and may be allocated to class C shares and non-vested restricted stock if there is undistributed earnings after deducting earnings distributed to class C shares from income from continuing operations.
|
|
d)
|
The total earnings (loss) allocated to each class of common stock are then divided by the number of weighted average shares outstanding of the class of common stock to which the earnings (loss) are allocated to determine the earnings (loss) per share for that class of common stock.
|
|
e)
|
Basic earnings (loss) per share data are presented for class A and B common stock in the aggregate and for class C common stock. The basic earnings (loss) per share for class A and B common stock are the same; hence, these classes are reported together.
|
Third Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
September 25, 2011
|
September 26, 2010
|
September 25, 2011
|
September 26, 2010
|
|||||||||||||
Numerator for basic earnings from continuing operations for each class of common stock and non-vested restricted stock:
|
||||||||||||||||
Earnings from continuing operations
|
||||||||||||||||
Less dividends declared or accrued:
|
$ | 4,446 | $ | 6,323 | $ | 13,621 | $ | 19,507 | ||||||||
Class A and B
|
-- | -- | -- | -- | ||||||||||||
Class C
|
463 | 463 | 1,391 | 1,391 | ||||||||||||
Non-vested restricted stock
|
-- | -- | -- | -- | ||||||||||||
Total undistributed earnings from continuing operations
|
$ | 3,983 | $ | 5,860 | $ | 12,230 | $ | 18,116 |
5
|
EARNINGS PER SHARE continued
|
Third Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
September 25, 2011
|
September 26, 2010
|
September 25, 2011
|
September 26, 2010
|
|||||||||||||
Class A and B undistributed earnings from continuing operations
|
$ | 3,697 | $ | 5,416 | $ | 11,347 | $ | 16,736 | ||||||||
Class C undistributed earnings from continuing operations
|
236 | 348 | 723 | 1,076 | ||||||||||||
Non-vested restricted stock undistributed earnings from continuing operations
|
50 | 96 | 160 | 304 | ||||||||||||
Total undistributed earnings from continuing operations
|
$ | 3,983 | $ | 5,860 | $ | 12,230 | $ | 18,116 | ||||||||
Numerator for basic earnings from continuing operations per class A and B common stock:
|
||||||||||||||||
Dividends on class A and B
|
$ | -- | $ | -- | $ | -- | $ | -- | ||||||||
Class A and B undistributed earnings
|
3,697 | 5,416 | 11,347 | 16,736 | ||||||||||||
Numerator for basic earnings from continuing operations per class A and B common stock
|
$ | 3,697 | $ | 5,416 | $ | 11,347 | $ | 16,736 | ||||||||
Numerator for basic earnings from continuing operations per class C common stock:
|
||||||||||||||||
Dividends accrued on class C
|
$ | 463 | $ | 463 | $ | 1,391 | $ | 1,391 | ||||||||
Class C undistributed earnings
|
236 | 348 | 723 | 1,076 | ||||||||||||
Numerator for basic earnings from continuing operations per class C common stock
|
$ | 699 | $ | 811 | $ | 2,114 | $ | 2,467 | ||||||||
Denominator for basic earnings from continuing operations for each class of common stock:
|
||||||||||||||||
Weighted average shares outstanding –
|
||||||||||||||||
Class A and B
|
51,316 | 50,866 | 51,254 | 50,755 | ||||||||||||
Class C
|
3,264 | 3,264 | 3,264 | 3,264 | ||||||||||||
Basic earnings per share from continuing operations:
|
||||||||||||||||
Class A and B
|
$ | 0.07 | $ | 0.11 | $ | 0.22 | $ | 0.33 | ||||||||
Class C
|
$ | 0.21 | $ | 0.25 | $ | 0.64 | $ | 0.76 | ||||||||
Numerator for basic earnings from discontinued operations for each class of common stock and non-vested restricted stock:
|
||||||||||||||||
Total undistributed earnings (loss) from discontinued operations
|
$ | -- | $ | (28 | ) | $ | 341 | $ | 191 | |||||||
Undistributed earnings (loss) from discontinued operations:
|
||||||||||||||||
Class A and B
|
$ | -- | $ | (26 | ) | $ | 316 | $ | 177 | |||||||
Class C
|
-- | (2 | ) | 20 | 12 | |||||||||||
Non-vested restricted stock
|
-- | -- | 5 | 2 | ||||||||||||
Total undistributed earnings (loss) from discontinued operations
|
$ | -- | $ | (28 | ) | $ | 341 | $ | 191 |
5
|
EARNINGS PER SHARE continued
|
Third Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
September 25, 2011
|
September 26, 2010
|
September 25, 2011
|
September 26, 2010
|
|||||||||||||
Denominator for basic earnings from discontinued operations for each class of common stock:
|
||||||||||||||||
Weighted average shares outstanding –
|
||||||||||||||||
Class A and B
|
51,316 | 50,866 | 51,254 | 50,755 | ||||||||||||
Class C
|
3,264 | 3,264 | 3,264 | 3,264 | ||||||||||||
Basic earnings per share from discontinued operations:
|
||||||||||||||||
Class A and B
|
$ | -- | $ | -- | $ | 0.01 | $ | -- | ||||||||
Class C
|
$ | -- | $ | -- | $ | 0.01 | $ | -- | ||||||||
Numerator for basic net earnings for each class of common stock:
|
||||||||||||||||
Net earnings
|
$ | 4,446 | $ | 6,295 | $ | 13,962 | $ | 19,698 | ||||||||
Less dividends declared or accrued
|
||||||||||||||||
Class A and B
|
-- | -- | -- | -- | ||||||||||||
Class C
|
463 | 463 | 1,391 | 1,391 | ||||||||||||
Non-vested restricted stock
|
-- | -- | -- | -- | ||||||||||||
Total undistributed net earnings
|
$ | 3,983 | $ | 5,832 | $ | 12,571 | $ | 18,307 | ||||||||
Undistributed net earnings:
|
||||||||||||||||
Class A and B
|
$ | 3,697 | $ | 5,390 | $ | 11,663 | $ | 16,913 | ||||||||
Class C
|
236 | 346 | 743 | 1,088 | ||||||||||||
Non-vested restricted stock
|
50 | 96 | 165 | 306 | ||||||||||||
Total undistributed net earnings
|
$ | 3,983 | $ | 5,832 | $ | 12,571 | $ | 18,307 | ||||||||
Numerator for basic net earnings per class A and Bcommon stock:
|
||||||||||||||||
Dividends declared on class A and B
|
$ | -- | $ | -- | $ | -- | $ | -- | ||||||||
Class A and B undistributed net earnings
|
3,697 | 5,390 | 11,663 | 16,913 | ||||||||||||
Numerator for basic net earnings per class A and B common stock
|
$ | 3,697 | $ | 5,390 | $ | 11,663 | $ | 16,913 | ||||||||
Numerator for basic net earnings per class C common stock:
|
||||||||||||||||
Dividends accrued on class C
|
$ | 463 | $ | 463 | $ | 1,391 | $ | 1,391 | ||||||||
Class C undistributed net earning
|
236 | 346 | 743 | 1,088 | ||||||||||||
Numerator for basic net earnings per class C common stock
|
$ | 699 | $ | 809 | $ | 2,134 | $ | 2,479 | ||||||||
Denominator for basic net earnings for each class of common stock:
|
||||||||||||||||
Weighted average shares outstanding –
|
||||||||||||||||
Class A and B
|
51,316 | 50,866 | 51,254 | 50,755 | ||||||||||||
Class C
|
3,264 | 3,264 | 3,264 | 3,264 | ||||||||||||
Basic net earnings per share:
|
||||||||||||||||
Class A and B
|
$ | 0.07 | $ | 0.11 | $ | 0.23 | $ | 0.33 | ||||||||
Class C
|
$ | 0.21 | $ | 0.25 | $ | 0.65 | $ | 0.76 |
5
|
EARNINGS PER SHARE continued
|
Third Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
September 25, 2011
|
September 26, 2010
|
September 25, 2011
|
September 26, 2010
|
|||||||||||||
Numerator for diluted net earnings per share:
|
||||||||||||||||
Dividends on class A and B common stock
|
$ | -- | $ | -- | $ | -- | $ | -- | ||||||||
Total undistributed earnings from continuing operations
|
3,697 | 5,416 | 11,347 | 16,736 | ||||||||||||
Total undistributed earnings (loss) from discontinued operations
|
-- | (26 | ) | 316 | 177 | |||||||||||
Net earnings
|
$ | 3,697 | $ | 5,390 | $ | 11,663 | $ | 16,913 | ||||||||
Denominator for diluted net earnings per share:
|
||||||||||||||||
Weighted average shares outstanding - class A and B
|
51,316 | 50,866 | 51,254 | 50,755 | ||||||||||||
Diluted earnings per share:
|
||||||||||||||||
Continuing operations
|
$ | 0.07 | $ | 0.11 | $ | 0.22 | $ | 0.33 | ||||||||
Discontinued operations
|
-- | -- | 0.01 | -- | ||||||||||||
Net earnings
|
$ | 0.07 | $ | 0.11 | $ | 0.23 | $ | 0.33 |
Third Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
September 25, 2011
|
September 26, 2010
|
September 25, 2011
|
September 26, 2010
|
|||||||||||||
|
||||||||||||||||
Net earnings
|
$ | 4,446 | $ | 6,295 | $ | 13,962 | $ | 19,698 | ||||||||
Change in pension and post-retirement (net of tax of $128, $281, $383 and $839, respectively)
|
197 | 441 | 591 | 1,324 | ||||||||||||
Comprehensive income
|
$ | 4,643 | $ | 6,736 | $ | 14,553 | $ | 21,022 |
September 25, 2011
|
December 26, 2010 | |||||||
Paper and supplies
|
$ | 2,010 | $ | 1,043 | ||||
Work in process
|
40 | 36 | ||||||
Less obsolescence reserve
|
(43 | ) | (44 | ) | ||||
Inventories, net
|
$ | 2,007 | $ | 1,035 |
Gross
|
Net
|
|||||||||||
Carrying
|
Accumulated
|
Carrying
|
||||||||||
Amount
|
Amortization
|
Amount
|
||||||||||
September 25, 2011 | ||||||||||||
Network affiliation agreements
|
$ | 26,930 | $ | (7,862 | ) | $ | 19,068 | |||||
Customer lists
|
5,952 | (4,781 | ) | 1,171 | ||||||||
Non-compete agreements
|
10,120 | (10,091 | ) | 29 | ||||||||
Other
|
3,824 | (2,302 | ) | 1,522 | ||||||||
Total
|
$ | 46,826 | $ | (25,036 | ) | $ | 21,790 | |||||
December 26, 2010 | ||||||||||||
Network affiliation agreements
|
$ | 26,930 | $ | (7,062 | ) | $ | 19,868 | |||||
Customer lists
|
6,794 | (5,353 | ) | 1,441 | ||||||||
Non-compete agreements
|
10,435 | (10,392 | ) | 43 | ||||||||
Other
|
3,896 | (2,260 | ) | 1,636 | ||||||||
Total
|
$ | 48,055 | $ | (25,067 | ) | $ | 22,988 |
Charge for
|
Payments for
|
|||||||||||||||
Balance as of
|
Separation
|
Separation
|
Balance as of
|
|||||||||||||
December 26, 2010 |
Benefits
|
Benefits
|
September 25, 2011
|
|||||||||||||
Daily newspaper
|
$ | 1,365 | $ | 1,295 | $ | (674 | ) | $ | 1,986 | |||||||
Community newspapers and shoppers
|
72 | 27 | (93 | ) | 6 | |||||||||||
Total
|
$ | 1,437 | $ | 1,322 | $ | (767 | ) | $ | 1,992 |
|
The components of our net periodic benefit costs for our defined benefit and non-qualified pension plans and our postretirement health benefit plan are as follows:
|
Third Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
September 25, 2011
|
September 26, 2010
|
September 25, 2011
|
September 26, 2010
|
|||||||||||||
Service cost
|
$ | -- | $ | -- | $ | -- | $ | -- | ||||||||
Interest cost
|
1,962 | 2,085 | 5,887 | 6,255 | ||||||||||||
Expected return on plan assets
|
(2,398 | ) | (2,572 | ) | (7,195 | ) | (7,714 | ) | ||||||||
Amortization of:
|
||||||||||||||||
Unrecognized prior service cost
|
(2 | ) | (40 | ) | (7 | ) | (122 | ) | ||||||||
Unrecognized net loss
|
244 | 679 | 734 | 2,039 | ||||||||||||
Net periodic benefit (income) cost included in total operating costs and expenses and selling and administrative expenses
|
$ | (194 | ) | $ | 152 | $ | (581 | ) | $ | 458 |
Third Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
September 25, 2011
|
September 26, 2010
|
September 25, 2011
|
September 26, 2010
|
|||||||||||||
Service cost
|
$ | 13 | $ | 21 | $ | 40 | $ | 63 | ||||||||
Interest cost
|
207 | 238 | 620 | 714 | ||||||||||||
Amortization of:
|
||||||||||||||||
Unrecognized prior service cost
|
(54 | ) | (55 | ) | (164 | ) | (165 | ) | ||||||||
Unrecognized net transition obligation
|
137 | 137 | 412 | 411 | ||||||||||||
Net periodic benefit cost included in total operating costs and expenses and selling and administrative expenses
|
$ | 303 | $ | 341 | $ | 908 | $ | 1,023 |
15
|
NOTES PAYABLE TO BANKS
|
|
·
|
A consolidated funded debt ratio of not greater than 3.50-to-1, as determined for the four fiscal quarter period preceding the date of determination. This ratio compares, for any period, our funded debt to our consolidated EBITDA, defined in the secured credit agreement as earnings before interest, taxes, depreciation, amortization, restructuring charges, gains/losses on asset disposals and non-cash charges.
|
|
·
|
A minimum interest coverage ratio of not less than 3-to-1, as determined for the four fiscal quarter period preceding the date of determination. This ratio compares, for any period, our consolidated EBITDA, defined in the secured credit agreement as earnings before interest, taxes, depreciation, amortization, restructuring charges, gains/losses on asset disposals and non-cash charges, to our interest expense.
|
Weighted
|
||||||||
Average
|
||||||||
Shares
|
Fair Value
|
|||||||
Non-vested at December 26, 2010
|
777,872 | $ | 2.69 | |||||
Granted
|
359,670 | 5.67 | ||||||
Vested
|
(425,689 | ) | 3.17 | |||||
Forfeited
|
(22,328 | ) | 4.60 | |||||
Non-vested at September 25, 2011
|
689,525 | 3.89 |
Weighted
|
||||||||||||
Average
|
||||||||||||
Weighted
|
Contractual Term
|
|||||||||||
Average
|
Remaining
|
|||||||||||
SARs
|
Exercise Price
|
(years)
|
||||||||||
Outstanding at December 26, 2010
|
1,083,207 | $ | 10.71 | 6.6 | ||||||||
Exercisable at December 26, 2010
|
909,527 | 11.21 | 6.5 | |||||||||
Outstanding and exercisable at September 25, 2011
|
1,083,207 | 10.71 | 5.9 |
Average
|
||||||||||||
Weighted
|
Contractual Term
|
|||||||||||
Weighted
|
Average
|
Remaining
|
||||||||||
Options
|
Exercise Price
|
(years)
|
||||||||||
Outstanding and exercisable at December 26, 2010
|
26,500 | $ | 18.06 | 0.3 | ||||||||
Expired
|
(26,500 | ) | 18.06 | -- | ||||||||
Outstanding and exercisable at September 25, 2011
|
-- | -- | -- |
Third Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
September 25, 2011
|
September 26, 2010
|
September 25, 2011
|
September 26, 2010
|
|||||||||||||
Revenue
|
$ | -- | $ | -- | $ | -- | $ | -- | ||||||||
Earnings before income taxes
|
$ | -- | $ | -- | $ | 562 | $ | -- |
Third Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
September 25, 2011
|
September 26, 2010
|
September 25, 2011
|
September 26, 2010
|
|||||||||||||
Revenue
|
$ | -- | $ | -- | $ | -- | $ | 2,144 | ||||||||
Loss before income taxes
|
$ | -- | $ | -- | $ | -- | $ | (1,060 | ) |
Third Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
September 25, 2011
|
September 26, 2010
|
September 25, 2011
|
September 26, 2010
|
|||||||||||||
Revenue
|
$ | -- | $ | 9,842 | $ | -- | $ | 31,589 | ||||||||
Earnings (loss) before income taxes
|
$ | -- | $ | (43 | ) | $ | -- | $ | 1,323 |
18
|
SALES OF BUSINESSES
|
JOURNAL COMMUNICATIONS, INC.
|
Third Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
September 25, 2011
|
September 26, 2010
|
September 25, 2011
|
September 26, 2010
|
|||||||||||||
Revenue
|
||||||||||||||||
Broadcasting
|
$ | 46,937 | $ | 48,482 | $ | 135,129 | $ | 138,099 | ||||||||
Publishing
|
40,888 | 43,439 | 126,807 | 135,377 | ||||||||||||
Corporate eliminations
|
(41 | ) | (104 | ) | (189 | ) | (403 | ) | ||||||||
$ | 87,784 | $ | 91,817 | $ | 261,747 | $ | 273,073 | |||||||||
Operating earnings (loss)
|
||||||||||||||||
Broadcasting
|
$ | 6,991 | $ | 9,987 | $ | 21,309 | $ | 27,381 | ||||||||
Publishing
|
2,822 | 3,066 | 9,994 | 13,078 | ||||||||||||
Corporate
|
(1,720 | ) | (1,977 | ) | (5,711 | ) | (6,248 | ) | ||||||||
$ | 8,093 | $ | 11,076 | $ | 25,592 | $ | 34,211 | |||||||||
Depreciation and amortization
|
||||||||||||||||
Broadcasting
|
$ | 3,140 | $ | 3,205 | $ | 9,155 | $ | 9,609 | ||||||||
Publishing
|
2,616 | 2,825 | 7,872 | 8,625 | ||||||||||||
Corporate
|
154 | 123 | 455 | 367 | ||||||||||||
$ | 5,910 | $ | 6,153 | $ | 17,482 | $ | 18,601 | |||||||||
Capital expenditures
|
||||||||||||||||
Broadcasting
|
$ | 1,951 | $ | 1,571 | $ | 6,521 | $ | 6,114 | ||||||||
Publishing
|
353 | 269 | 931 | 883 | ||||||||||||
Corporate
|
386 | 319 | 643 | 326 | ||||||||||||
$ | 2,690 | $ | 2,159 | $ | 8,095 | $ | 7,323 |
September 25, 2011
|
December 26, 2010 | |||||||
Identifiable total assets
|
||||||||
Broadcasting
|
$ | 264,196 | $ | 275,985 | ||||
Publishing
|
114,795 | 125,870 | ||||||
Corporate
|
27,661 | 29,915 | ||||||
$ | 406,652 | $ | 431,770 |
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
·
|
changes in advertising demand or the buying strategies of advertisers or the migration of advertising to the internet;
|
·
|
changes in newsprint prices and other costs of materials;
|
|
·
|
changes in federal or state laws and regulations or their interpretations (including changes in regulations governing the number and types of broadcast and cable system properties, newspapers and licenses that a person may control in a given market or in total or changes in spectrum allocation policies);
|
|
·
|
changes in legislation or customs relating to the collection, management and aggregation and use of consumer information through telemarketing and electronic communication efforts;
|
·
|
the availability of quality broadcast programming at competitive prices; |
·
|
changes in network affiliation agreements, including increased sharing of retransmission revenue; |
|
·
|
quality and rating of network over-the-air broadcast programs, including programs changing networks and changing competitive dynamics regarding how and when programs are made available to our viewers;
|
|
·
|
effects of the loss of commercial inventory resulting from uninterrupted television news coverage and potential advertising cancellations due to war or terrorist acts;
|
|
·
|
effects of the rapidly changing nature of the publishing, broadcasting and printing industries, including general business issues, competitive issues and the introduction of new technologies;
|
|
·
|
an other than temporary decline in operating results and enterprise value that could lead to further non-cash impairment charges due to the impairment of goodwill, broadcast licenses, other intangible assets and property, plant and equipment;
|
|
·
|
the impact of changing economic and financial market conditions and interest rates on our liquidity, on the value of our pension plan assets and on the availability of capital;
|
|
·
|
our ability to remain in compliance with the terms of our credit agreement;
|
·
|
changes in interest rates or statutory tax rates; |
·
|
the outcome of pending or future litigation; |
·
|
energy costs; |
|
·
|
the availability and effect of acquisitions, investments, dispositions and other capital expenditures including share repurchases on our results of operations, financial condition or stock price; and
|
·
|
changes in general economic conditions.
|
Percent of
|
Percent of
|
|||||||||||||||
Total
|
Total
|
|||||||||||||||
2011
|
Revenue
|
2010
|
Revenue
|
|||||||||||||
(dollars in millions)
|
||||||||||||||||
Revenue:
|
||||||||||||||||
Broadcasting
|
$ | 46.9 | 53.4 | % | $ | 48.5 | 52.8 | % | ||||||||
Publishing
|
40.9 | 46.6 | 43.4 | 47.3 | ||||||||||||
Corporate eliminations
|
-- | -- | (0.1 | ) | (0.1 | ) | ||||||||||
Total revenue
|
87.8 | 100.0 | 91.8 | 100.0 | ||||||||||||
Total operating costs and expenses
|
51.9 | 59.1 | 53.2 | 57.9 | ||||||||||||
Selling and administrative expense
|
27.8 | 31.7 | 27.5 | 30.0 | ||||||||||||
Total operating costs and expenses and selling and administrative expenses
|
79.7 | 90.8 | 80.7 | 87.9 | ||||||||||||
Total operating earnings
|
$ | 8.1 | 9.2 | % | $ | 11.1 | 12.1 | % |
2011
|
2010
|
|||||||
(dollars in millions)
|
||||||||
Broadcasting
|
$ | 7.0 | $ | 10.0 | ||||
Publishing
|
2.8 | 3.1 | ||||||
Corporate
|
(1.7 | ) | (2.0 | ) | ||||
Total operating earnings
|
$ | 8.1 | $ | 11.1 |
2011
|
2010
|
|||||||
(dollars in millions)
|
||||||||
Net earnings
|
$ | 4.4 | $ | 6.3 | ||||
Provision for income taxes
|
2.8 | 3.8 | ||||||
Total other expense, net (which is entirely comprised of interest income and expense)
|
0.8 | 1.0 | ||||||
Depreciation
|
5.6 | 5.6 | ||||||
Amortization
|
0.4 | 0.5 | ||||||
EBITDA
|
$ | 14.0 | $ | 17.2 |
2011
|
2010
|
Percent
|
||||||||||||||||||||||||||
Television
|
Radio
|
Total
|
Television
|
Radio
|
Total
|
Change
|
||||||||||||||||||||||
(dollars in millions)
|
||||||||||||||||||||||||||||
Revenue
|
$ | 27.9 | $ | 19.0 | $ | 46.9 | $ | 30.0 | $ | 18.5 | $ | 48.5 | (3.2 | ) | ||||||||||||||
Operating earnings
|
$ | 2.9 | $ | 4.1 | $ | 7.0 | $ | 5.5 | $ | 4.5 | $ | 10.0 | (30.0 | ) |
2011
|
2010
|
|||||||||||||||||||||||||||
Community
|
Community
|
|||||||||||||||||||||||||||
Daily
|
Newspapers
|
Daily
|
Newspapers
|
Percent
|
||||||||||||||||||||||||
Newspaper
|
& Shoppers
|
Total
|
Newspaper
|
& Shoppers
|
Total
|
Change
|
||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||||||
Advertising revenue:
|
||||||||||||||||||||||||||||
Retail
|
$ | 13.0 | $ | 4.1 | $ | 17.1 | $ | 13.5 | $ | 5.2 | $ | 18.7 | (8.5 | ) | ||||||||||||||
Classified
|
4.3 | 0.9 | 5.2 | 5.2 | 1.1 | 6.3 | (18.4 | ) | ||||||||||||||||||||
National
|
0.8 | -- | 0.8 | 1.3 | -- | 1.3 | (35.8 | ) | ||||||||||||||||||||
Direct marketing
|
-- | -- | -- | -- | -- | -- |
NA
|
|||||||||||||||||||||
Total advertising revenue
|
18.1 | 5.0 | 23.1 | 20.0 | 6.3 | 26.3 | (12.1 | ) | ||||||||||||||||||||
Circulation revenue
|
12.4 | 0.4 | 12.8 | 12.2 | 0.5 | 12.7 | 0.8 | |||||||||||||||||||||
Other revenue
|
4.2 | 0.8 | 5.0 | 3.7 | 0.7 | 4.4 | 11.7 | |||||||||||||||||||||
Total revenue
|
$ | 34.7 | $ | 6.2 | $ | 40.9 | $ | 35.9 | $ | 7.5 | $ | 43.4 | (5.9 | ) | ||||||||||||||
Operating earnings
|
$ | 2.3 | $ | 0.5 | $ | 2.8 | $ | 2.4 | $ | 0.7 | $ | 3.1 | (8.0 | ) |
Percent of
|
Percent of
|
|||||||||||||||
Total
|
Total
|
|||||||||||||||
2011
|
Revenue
|
2010
|
Revenue
|
|||||||||||||
(dollars in millions)
|
||||||||||||||||
Revenue:
|
||||||||||||||||
Broadcasting
|
$ | 135.1 | 51.6 | % | $ | 138.1 | 50.5 | % | ||||||||
Publishing
|
126.8 | 48.5 | 135.4 | 49.6 | ||||||||||||
Corporate eliminations
|
(0.2 | ) | (0.1 | ) | (0.4 | ) | (0.1 | ) | ||||||||
Total revenue
|
261.7 | 100.0 | 273.1 | 100.0 | ||||||||||||
Total operating costs and expenses
|
150.6 | 57.5 | 154.7 | 56.7 | ||||||||||||
Selling and administrative expense
|
85.5 | 32.7 | 84.2 | 30.8 | ||||||||||||
Total operating costs and expenses and selling and administrative expenses
|
236.1 | 90.2 | 238.9 | 87.5 | ||||||||||||
Total operating earnings
|
$ | 25.6 | 9.8 | % | $ | 34.2 | 12.5 | % |
2011
|
2010
|
|||||||
(dollars in millions)
|
||||||||
Broadcasting
|
$ | 21.3 | $ | 27.4 | ||||
Publishing
|
10.0 | 13.1 | ||||||
Corporate
|
(5.7 | ) | (6.3 | ) | ||||
Total operating earnings
|
$ | 25.6 | $ | 34.2 |
2011
|
2010
|
|||||||
(dollars in millions)
|
||||||||
Net earnings
|
$ | 14.0 | $ | 19.7 | ||||
Earnings from discontinued operations, net
|
(0.3 | ) | (0.2 | ) | ||||
Provision for income taxes
|
9.2 | 12.7 | ||||||
Total other expense, net (which is entirely comprised of interest income and expense)
|
2.8 | 2.0 | ||||||
Depreciation
|
16.3 | 17.1 | ||||||
Amortization
|
1.1 | 1.5 | ||||||
EBITDA
|
$ | 43.1 | $ | 52.8 |
2011
|
2010
|
Percent
|
||||||||||||||||||||||||||
Television
|
Radio
|
Total
|
Television
|
Radio
|
Total
|
Change
|
||||||||||||||||||||||
(dollars in millions)
|
||||||||||||||||||||||||||||
Revenue
|
$ | 84.0 | $ | 51.1 | $ | 135.1 | $ | 87.7 | $ | 50.4 | $ | 138.1 | (2.2 | ) | ||||||||||||||
Operating earnings
|
$ | 11.0 | $ | 10.3 | $ | 21.3 | $ | 16.1 | $ | 11.3 | $ | 27.4 | (22.2 | ) |
2011
|
2010
|
|||||||||||||||||||||||||||
Community
|
Community
|
|||||||||||||||||||||||||||
Daily
|
Newspapers
|
Daily
|
Newspapers
|
Percent
|
||||||||||||||||||||||||
Newspaper
|
& Shoppers
|
Total
|
Newspaper
|
& Shoppers
|
Total
|
Change
|
||||||||||||||||||||||
(dollars in millions)
|
||||||||||||||||||||||||||||
Advertising revenue:
|
||||||||||||||||||||||||||||
Retail
|
$ | 40.5 | $ | 13.6 | $ | 54.1 | $ | 43.2 | $ | 15.8 | $ | 59.0 | (8.2 | ) | ||||||||||||||
Classified
|
13.0 | 2.7 | 15.7 | 15.3 | 3.4 | 18.7 | (15.9 | ) | ||||||||||||||||||||
National
|
3.2 | -- | 3.2 | 3.6 | -- | 3.6 | (11.2 | ) | ||||||||||||||||||||
Direct marketing
|
0.1 | -- | 0.1 | 0.1 | -- | 0.1 | (25.0 | ) | ||||||||||||||||||||
Total advertising revenue
|
56.8 | 16.3 | 73.1 | 62.2 | 19.2 | 81.4 | (10.2 | ) | ||||||||||||||||||||
Circulation revenue
|
37.1 | 1.4 | 38.5 | 37.3 | 1.4 | 38.7 | (0.7 | ) | ||||||||||||||||||||
Other revenue
|
12.9 | 2.3 | 15.2 | 13.0 | 2.3 | 15.3 | (0.2 | ) | ||||||||||||||||||||
Total revenue
|
$ | 106.8 | $ | 20.0 | $ | 126.8 | $ | 112.5 | $ | 22.9 | $ | 135.4 | (6.3 | ) | ||||||||||||||
Operating earnings
|
$ | 8.5 | $ | 1.5 | $ | 10.0 | $ | 11.3 | $ | 1.8 | $ | 13.1 | (23.6 | ) |
·
|
A consolidated funded debt ratio of not greater than 3.50-to-1, as determined for the four fiscal quarter period preceding the date of determination. This ratio compares, for any period, our funded debt to our consolidated EBITDA, defined in the secured credit agreement as earnings before interest, taxes, depreciation, amortization, restructuring charges, gains/losses on asset disposals and non-cash charges. As of September 25, 2011, our consolidated funded debt ratio was 0.75-to-1. As of September 25, 2011, we are able to borrow an additional $170.0 million under our secured credit facility. Our future borrowing capacity is subject to change due to the changes in our future operating results.
|
·
|
A minimum interest coverage ratio of not less than 3-to-1, as determined for the four fiscal quarter period preceding the date of determination. This ratio compares, for any period, our consolidated EBITDA, defined in the secured credit agreement as earnings before interest, taxes, depreciation, amortization, restructuring charges, gains/losses on asset disposals and non-cash charges, to our interest expense. As of September 25, 2011, our interest coverage ratio was 17.91-to-1.
|
Charge for
|
Payments for
|
|||||||||||||||
Balance as of
|
Separation
|
Separation
|
Balance as of
|
|||||||||||||
December 26, 2010 |
Benefits
|
Benefits
|
September 25, 2011 | |||||||||||||
(dollars in millions)
|
||||||||||||||||
Daily newspaper and community newspapers and shoppers
|
$ | 1.4 | $ | 1.3 | $ | (0.7 | ) | $ | 2.0 | |||||||
Total
|
$ | 1.4 | $ | 1.3 | $ | (0.7 | ) | $ | 2.0 |
(a)
|
(b)
|
(c)
|
(d)
|
|||||||||||||
Period
|
Total Number of
Shares Purchased |
Average Price
Paid Per Share |
Total Number of
Shares Purchased as |
Dollar Value
of Shares that May |
||||||||||||
June 27 to July 24, 2011
|
5,332(1) | $ | 4.97 | -- | $ | 45,000,000 | ||||||||||
July 25 to August 21, 2011
|
-- | -- | -- | $ | 45,000,000 | |||||||||||
August 22 to September 25, 2011
|
603,200(3) | $ | 3.39 | 603,200(3) | $ | 42,952,394 |
|
(1)
|
Represents shares of class B common stock transferred from employees to us to satisfy tax withholding requirements in connection with the vesting of restricted stock under the 2007 Omnibus Incentive Plan.
|
|
(2)
|
In July 2011, our board of directors authorized a share repurchase program of up to $45.0 million of our oustanding class A common stock and/or class B common stock until the end of fiscal 2013.
|
|
(3)
|
Represents shares of our class A common stock.
|
Exhibit No.
|
Description
|
|
Certification by Steven J. Smith, Chairman and Chief Executive Officer of Journal Communications, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification by Andre J. Fernandez, Executive Vice President, Finance & Strategy and Chief Financial Officer of Journal Communications, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of Steven J. Smith, Chairman and Chief Executive Officer, and Andre J. Fernandez, Executive Vice President, Finance & Strategy and Chief Financial Officer of Journal Communications, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
(101)
|
The following materials from Journal Communications, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 25, 2011, formatted in XBRL (Extensible Business Reporting Language): (i) the Unaudited Consolidated Condensed Statements of Operations for the Third Quarter and Three Quarters Ended September 25, 2011 and September 26, 2010; (ii) the Unaudited Consolidated Condensed Statement of Equity for the Three Quarters Ended September 25, 2011; (iii) the Unaudited Consolidated Condensed Statement of Equity for the Three Quarters Ended September 26, 2010; (iv) the Unaudited Consolidated Condensed Statements of Cash Flows for the Three Quarters Ended September 25, 2011 and September 26, 2010; and (vii) Notes to the Unaudited Consolidated Condensed Consolidated Financial Statements (block tagging only), furnished herewith.
|
JOURNAL COMMUNICATIONS, INC.
|
|
Registrant
|
|
Date: November 4, 2011
|
/s/ Steven J. Smith |
Steven J. Smith, Chairman and Chief Executive Officer
|
|
Date: November 4, 2011 | /s/ Andre J. Fernandez |
Andre J. Fernandez, Executive Vice President, Finance & Strategy
and Chief Financial Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Journal Communications, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 4, 2011
|
|
/s/ Steven J. Smith | |
Steven J. Smith
|
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Journal Communications, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 4, 2011
|
|
/s/ Andre J. Fernandez | |
Andre J. Fernandez
|
|
Executive Vice President, Finance & Strategy and Chief Financial Officer
|
/s/ Steven J. Smith | |
Steven J. Smith, Chairman and Chief Executive Officer
|
|
Date: November 4, 2011
|
/s/ Andre J. Fernandez | |
Andre J. Fernandez, Executive Vice President, Finance & Strategy and Chief Financial Officer
|
|
Date: November 4, 2011
|
NOTES PAYABLE TO BANKS | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 25, 2011 | |||||||||
NOTES PAYABLE TO BANKS [Abstract] | |||||||||
NOTES PAYABLE TO BANKS |
On August 13, 2010, we entered into an amendment of our formerly unsecured credit facility which, among other things, provided for the pledge of certain collateral by us and our subsidiaries (as amended, the secured credit facility). In connection with this amendment, certain lenders reduced their commitments to $225,000 and extended the expiration date to December 2, 2013 (extending lenders). The maturity date for the remaining lenders, with terms and commitments that remain unchanged at $74,000, was June 2, 2011 (non-extending lenders). The secured credit facility is secured by liens on certain of our assets and the assets of our subsidiaries and contains affirmative, negative and financial covenants which are customary for financings of this type, including, among other things, limits on the creation of liens, limits on the incurrence of indebtedness, restrictions on dispositions and restrictions on dividends. At our option, the commitments under the secured credit facility may be increased from time to time to an aggregate amount of incremental commitments not to exceed $100,000. The increase option is subject to the satisfaction of certain conditions, including the identification of lenders (which may include existing lenders or new lenders) willing to provide the additional commitments. Our borrowings from extending lenders under the secured credit facility incur interest at either LIBOR plus a margin that ranges from 225.0 basis points to 350.0 basis points, depending on our leverage, or (i) the base rate, which equals the highest of the prime rate set by U.S. Bank National Association, the Federal Funds Rate plus 100.0 basis points or one-month LIBOR plus 150.0 basis points, plus (ii) a margin that ranges from 125.0 basis points to 250.0 basis points, depending on our leverage. As of September 25, 2011 and December 26, 2010, we had borrowings of $54,999 and $74,570, respectively, under our credit facility at a weighted average rate of 2.59% and 3.06%, respectively. Fees in connection with the secured credit facility of $3,338 and the unamortized deferred financing costs from the unsecured revolving credit facility of $213 are being amortized over the term of the secured credit facility using the effective interest method. Unamortized deferred financing costs related to the non-extending lenders of $39 are fully amortized. We estimate the fair value of our secured credit facility as of September 25, 2011 to be $54,933 based on discounted cash flows using an interest rate of 2.66%. We estimated the fair value of our secured revolving facility as of December 26, 2010 to be $72,547, based on discounted cash flows using an interest rate of 4.05%. These fair value measurements fall within level 3 of the fair value hierarchy. The secured credit facility contains the following financial covenants, which remain constant over the term of the agreement:
One or more of the lenders in our secured credit facility syndicate could be unable to fund future draws thereunder or take other positions adverse to us. In such an event, our liquidity could be constrained with an adverse impact on our ability to operate our businesses. |
Document And Entity Information (USD $) | 9 Months Ended | ||
---|---|---|---|
Sep. 25, 2011 | Oct. 28, 2011 | Jun. 24, 2011 | |
Entity Registrant Name | JOURNAL COMMUNICATIONS INC | ||
Entity Central Index Key | 0001232241 | ||
Current Fiscal Year End Date | --12-25 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 220,462,265 | ||
Entity Common Stock, Shares Outstanding | 54,718,861 | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q3 | ||
Document Type | 10-Q | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 25, 2011 |
SALE OF BUSINESS | 9 Months Ended | ||
---|---|---|---|
Sep. 25, 2011 | |||
SALE OF BUSINESS [Abstract] | |||
SALE OF BUSINESS |
In June, 2011, Journal Community Publishing Group, Inc., our community newspapers and shoppers business, completed the sale of Pelican Press and Pelican Press Marketplace businesses, which operated in Sarasota, Florida, for $502. We recorded a pre-tax gain on the sale, net of transaction expenses, of $245. In August 2011, Journal Community Publishing Group, Inc. completed the sale of the remaining Florida-based community newspapers and shoppers businesses for aggregate consideration of $757. The publications and web-sites included Florida Mariner, Clay Today, Clay County Leader, Ponte Vedra Recorder, St. Augustine Underground, First Coast Register and Car Connection, and were distributed in the Clay, St. John's and Duval, Florida counties. We recorded a total pre-tax gain on the sales, net of transaction expenses, of $253. These sales allow us to focus our efforts on operating our Wisconsin-based community newspapers and shoppers businesses. |
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MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS | 9 Months Ended | ||
---|---|---|---|
Sep. 25, 2011 | |||
MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS [Abstract] | |||
MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS |
Our daily newspaper sells print and online advertising in bundled arrangements, where multiple products are involved. Significant deliverables within these arrangements include advertising in the printed daily newspaper and advertising placed on various company websites, each of which are considered separate units of accounting. Our broadcast business sells airtime on television and radio stations and online advertising in bundled arrangements, where multiple products are involved. Significant deliverables within these arrangements include advertising on television and radio stations and advertising placed on various company websites, each of which are considered separate units of accounting. There were no significant changes in units of accounting, the allocation process or the pattern and timing of revenue recognition upon adoption of the amended guidance related to revenue recognition for arrangements with multiple deliverables. |
SEGMENT REPORTING | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 25, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | 19 SEGMENT REPORTING Our business segments are based on the organizational structure used by management for making operating and investment decisions and for assessing performance. Our reportable business segments are: (i) broadcasting; (ii) publishing; and (iii) corporate. Our broadcasting segment, operating in 12 states, consists of 33 radio stations and 13 television stations and the operation of a television station under a local marketing agreement. Our publishing segment consists of 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 corporate segment consists of unallocated corporate expenses and revenue eliminations. The following tables summarize revenue, operating earnings (loss), depreciation and amortization and capital expenditures for the third quarter and three quarters ended September 25, 2011 and September 26, 2010 and identifiable total assets as of September 25, 2011 and December 26, 2010:
|
DISCONTINUED OPERATIONS | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 25, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | 17 DISCONTINUED OPERATIONS NorthStar Print Group, Inc. During 2005, Multi-Color Corporation (Multi-Color) acquired substantially all of the assets and certain liabilities of NorthStar Print Group, Inc. (NorthStar), our former label printing business. Certain liabilities were excluded from the sale of NorthStar and primarily consisted of environmental site closure costs for both the Green Bay, Wisconsin real estate and real estate located in Norway, Michigan. In January 2011, upon environmental site closure in Green Bay, Wisconsin, we sold the real estate holdings to Multi-Color according to the 2005 sale agreement. The net proceeds were $822 and we recorded a pre-tax gain of $610. We continue to have environmental site closure obligations with respect to the Norway, Michigan real estate, which was sold to Multi-Color in 2005. The following table summarizes NorthStar's revenue and earnings before income taxes as reported in earnings from discontinued operations, net of applicable income taxes, in the consolidated condensed statement of operations for the third quarter and three quarters ended September 25, 2011 and September 26, 2010:
PrimeNet Marketing Services During 2010, we sold substantially all of the operating assets of PrimeNet, our former direct marketing services business, located in St. Paul, Minnesota and Clearwater, Florida in two separate transactions. We received a $700 note repayable over four years and a $147 working capital note repayable over three years for the sale of the Clearwater, Florida based operations. The following table summarizes PrimeNet's revenue and loss before income taxes as reported in earnings from the discontinued operations, net of applicable income taxes, in the consolidated condensed statement of operations for the third quarter and three quarters ended September 25, 2011 and September 26, 2010.
IPC Print Services, Inc. During 2010, we sold substantially all of the assets and certain liabilities of IPC, our former printing services business, to Walsworth Publishing Company (Walsworth). An escrow fund in the amount of $731 has been established to secure our representations and warranties pursuant to the purchase agreement for two years from the date of the sale, after which time any remaining funds will be delivered to us. The following table summarizes IPC's revenue and earnings before income taxes as reported in earnings from discontinued operations, net of applicable taxes, in the consolidated condensed statement of operations for the third quarter and three quarters ended September 25, 2011 and September 26, 2010:
Certain liabilities were excluded from the sale of IPC and were included in continuing operations in the December 26, 2010 consolidated condensed balance sheet. These liabilities included certain expenses which were incurred prior to closing, and a working capital overpayment due back to Walsworth pursuant to the sale agreement. The liabilities were paid in the third quarter of 2011. |
RECEIVABLES | 9 Months Ended |
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Sep. 25, 2011 | |
RECEIVABLES [Abstract] | |
RECEIVABLES | 9 RECEIVABLES Our non-interest bearing accounts receivable arise primarily from the sale of advertising, commercial printing, commercial distribution and the retransmission of our television programs by cable, satellite and telecommunications providers. We record accounts receivable at original invoice amounts. The accounts receivable balance is reduced by an estimated allowance for doubtful accounts. We evaluate the collectability of our accounts receivable based on a combination of factors. We specifically review historical write-off activity by market, large customer concentrations, customer creditworthiness and changes in our customer payment patterns and terms when evaluating the adequacy of the allowance for doubtful accounts. In circumstances where we are aware of a specific customer's inability to meet its financial obligations, we record a specific reserve to reduce the amounts recorded to what we believe will be collected. For all other customers, we recognize allowances for bad debts based on historical experience of bad debts as a percent of accounts receivable for each business unit. We write off uncollectible accounts against the allowance for doubtful accounts after collection efforts have been exhausted. The allowance for doubtful accounts as of September 25, 2011 and December 26, 2010 was $1,895 and $3,286, respectively. We have a $450 secured note resulting from the sale of two radio stations in Boise, Idaho in September 2009. Interest-only payments are due monthly and the principal balance of the note is due on September 25, 2014. The note receivable balance as of September 25, 2011 and December 26, 2010 was $430. This note receivable is reported in other assets in the consolidated condensed balance sheets. Management monitors the level of payment activity and, to date, all monthly interest-only payments have been received on time and in full. We believe that we will collect the amount owed to us. In consideration for the sale of the Clearwater, Florida-based operations of PrimeNet in February 2010, we received a $700 promissory note repayable over four years and a $147 working capital note repayable over three years. At the time of the sale, we recorded receivables of $587 and $129, respectively, representing the fair value of the notes discounted at 6.785% and 9.08%, respectively. As of September 25, 2011, the notes receivable balances were $426 and $65, respectively, and as of December 26, 2010, the notes receivable balances were $624 and $96, respectively. As of September 25, 2011, the current portion of the notes receivable balances was $205 and is reported in receivables, net in the consolidated condensed balance sheets. The non-current portion of the notes receivable was $286 and is reported in other assets in the consolidated condensed balance sheets. Management monitors the operating performance of the buyer by reviewing quarterly revenue performance reports and annual financial statements. Based on our monitoring, we believe that we will collect all amounts owed to us pursuant to these notes receivable. Interest income and the unamortized discount on our notes receivable are recorded using the effective interest method. |
COMPREHENSIVE INCOME | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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COMPREHENSIVE INCOME [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME | 6 COMPREHENSIVE INCOME The following table sets forth our comprehensive income:
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WORKFORCE REDUCTIONS AND BUSINESS IMPROVEMENTS | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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WORKFORCE REDUCTIONS AND BUSINESS IMPROVEMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WORKFORCE REDUCTIONS AND BUSINESS IMPROVEMENTS | 11 WORKFORCE REDUCTIONS During the third quarter and three quarters of 2011, we recorded a pre-tax charge of $1,308 and $1,322, respectively, for workforce separation benefits. These charges are recorded in operating costs and expenses and selling and administrative expenses in the consolidated statement of operations. Activity associated with the workforce separation benefits during the three quarters of 2011 was as follows:
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VARIABLE INTEREST ENTITY | 9 Months Ended |
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Sep. 25, 2011 | |
VARIABLE INTEREST ENTITY [Abstract] | |
VARIABLE INTEREST ENTITY | 7 VARIABLE INTEREST ENTITY We have an affiliation agreement with ACE TV, Inc. for the rights under a local marketing agreement for WACY-TV in Appleton, Wisconsin and to acquire certain assets of ACE TV, Inc. including the broadcast license of WACY-TV, pending FCC rule changes and approval. Under the affiliation agreement, ACE TV, Inc. provides the programming for WACY-TV and we sell advertising time, provide all other television operating activities and own the non-broadcast license assets used by WACY-TV. Based on our power to direct certain activities and our right to ultimately acquire the broadcast license, we have determined that ACE TV, Inc. is a VIE and that we are the primary beneficiary of the variable interests of WACY-TV. As a result, we have consolidated the net assets of ACE TV, Inc., aggregating $1,164, which consists primarily of a broadcast license and investments. The investments of ACE TV, Inc. can be used only to settle obligations of ACE TV, Inc. Creditors of ACE TV, Inc. have no recourse to our general credit. We have not provided financial or other support that we are not contractually required to provide. |
EARNINGS PER SHARE | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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EARNINGS PER SHARE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE |
Basic We apply the two-class method for calculating and presenting our basic earnings per share. As noted in the FASB's guidance for earnings per share, the two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared (or accumulated) and participation rights in undistributed earnings. Under that method:
In applying the two-class method, we have determined that undistributed earnings should be allocated equally on a per share basis among each class of common stock due to the lack of any contractual participation rights of any class to those undistributed earnings. Undistributed losses are allocated to only the class A and B common stock for the reason stated above. The following table sets forth the computation of basic earnings per share under the two-class method:
Diluted Diluted earnings per share is computed based upon the assumption that common shares are issued upon exercise of our non-statutory stock options or stock appreciation rights when the exercise price is less than the average market price of our common shares and common shares will be outstanding upon expiration of the vesting periods for our non-vested restricted stock. For the third quarter and three quarters of 2011, 207 and 247 non-vested restricted class B common shares, respectively, are not deemed to be outstanding upon expiration of the vesting periods because they are anti-dilutive. For the third quarter and three quarters of 2010, 449 and 445 non-vested restricted class B common shares, respectively, are not deemed to be outstanding upon expiration of the vesting periods because they are anti-dilutive. The class C shares are not converted into class A and B shares because they are anti-dilutive for all periods presented. Therefore, the class C shares are not included in the diluted weighted average shares outstanding. The following table sets forth the computation of diluted net earnings per share for class A and B common stock:
Diluted earnings per share for the class C common stock is the same as basic earnings per share for class C common stock because there are no class C common stock equivalents. Each of the 3,264,000 class C shares outstanding is convertible at any time at the option of the holder into either (i) 1.363970 class A shares (or a total of 4,451,998 class A shares) or (ii) 0.248243 class A shares (or a total of 810,265 class A shares) and 1.115727 class B shares (or a total of 3,641,733 class B shares). |
BASIS OF PRESENTATION | 9 Months Ended | ||
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Sep. 25, 2011 | |||
BASIS OF PRESENTATION [Abstract] | |||
BASIS OF PRESENTATION |
The accompanying unaudited consolidated condensed financial statements include the accounts of Journal Communications, Inc., its wholly owned subsidiaries and a variable interest entity (VIE) for which we are the primary beneficiary in accordance with U.S. generally accepted accounting principles and pursuant to the rules and regulations of the Securities and Exchange Commission and reflect normal and recurring adjustments, which we believe to be necessary for a fair presentation. As permitted by these regulations, these statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for annual financial statements. However, we believe that the disclosures are adequate to make the information presented not misleading. The gain on the sale of NorthStar Print Group Inc.'s (NorthStar) real estate holdings, the operations of PrimeNet Marketing Services (PrimeNet), our former direct marketing services business, and IPC Print Services, Inc. (IPC), our former printing services business, have been reflected as discontinued operations in our consolidated condensed statement of operations. The balance sheet as of December 26, 2010 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. The operating results for the third quarter and three quarters ended September 25, 2011 are not necessarily indicative of the operating results that may be expected for the fiscal year ending December 25, 2011. You should read these unaudited consolidated condensed financial statements in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 26, 2010. |
ACCOUNTING PERIODS | 9 Months Ended | ||
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Sep. 25, 2011 | |||
ACCOUNTING PERIODS [Abstract] | |||
ACCOUNTING PERIODS |
We report on a 52-53 week fiscal year ending on the last Sunday of December in each year. In addition, we have four quarterly reporting periods, each consisting of 13 weeks and ending on a Sunday, provided that once every six years, the fourth quarterly reporting period will be 14 weeks. The fourth quarterly reporting period in our 2012 fiscal year will consist of 14 weeks. |
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | 10 GOODWILL AND OTHER INTANGIBLE ASSETS Definite-lived Intangibles Our definite-lived intangible assets consist primarily of network affiliation agreements, customer lists, non-compete agreements and trade names. We amortize the network affiliation agreements over a period of 25 years based on our good relationships with the networks, our long history of renewing these agreements and because 25 years is deemed to be the length of time before a material modification of the underlying contract would occur. We amortize the customer lists over a period of five to 15 years, the non-compete agreements and franchise agreement fees over the terms of the contracts and the tradenames over a period of 25 years. Management determined there were no significant adverse changes in the value of these assets as of September 25, 2011. Amortization expense was $393 and $1,177 for the third quarter and three quarters ended September 25, 2011, respectively, and $477 and $1,456 for the third quarter and three quarters ended September 26, 2010. Estimated amortization expense for our next five fiscal years is $1,567 for 2011, $1,485 for 2012, $1,367 for 2013, $1,273 for 2014 and $1,263 for 2015. The gross carrying amount, accumulated amortization and net carrying amount of the major classes of definite-lived intangible assets as of September 25, 2011 and December 26, 2010 are as follows:
During 2011, our community newspapers and shoppers business reporting unit sold several businesses in Florida. As part of the transactions, we wrote-off customer lists, non-compete agreements and other intangible assets with a net carrying amount of $22. Indefinite-lived Intangibles Broadcast licenses are deemed to have indefinite useful lives because we have renewed these agreements without issue in the past and we intend to renew them indefinitely in the future. Accordingly, we expect the cash flows from our broadcast licenses to continue indefinitely. The net carrying amount of our broadcast licenses was $82,426 as of September 25, 2011 and December 26, 2010. The costs incurred to renew or extend the term of our broadcast licenses and certain customer relationships are expensed as incurred. Goodwill Goodwill recorded at our community newspapers and shoppers and broadcasting reporting units was $4,285 and $4,813, respectively, as of December 26, 2010. In 2011, our community newspapers and shoppers reporting unit sold its Florida businesses, and we disposed of $428 of goodwill allocated to those businesses. Goodwill recorded at our community newspapers and shoppers and broadcasting reporting units was $3,857 and $4,813, respectively, as of September 25, 2011. We do not believe our broadcasting reporting unit is at risk for failing the step one impairment test in accordance with the FASB's guidance for accounting for goodwill and intangible assets. Interim Impairment Test During the third quarter, we sold the remaining Florida-based businesses of our community newspapers and shoppers reporting unit. In conjunction with the sale, an interim impairment test as of September 25, 2011 was performed on the carrying value of $3,857 of goodwill associated with this reporting unit. Our interim impairment test indicated there was no goodwill impairment. The percentage by which estimated fair value exceeded carrying value was 11.8%. We will continue to monitor events and economic conditions in the markets in which our community newspapers and shoppers operate. We cannot predict at this time when, or if, we will have another triggering event which would cause us to test for impairment of our goodwill. For purposes of testing the carrying value of goodwill related to our community newspaper and shoppers reporting unit, we estimated fair value using an income and a market valuation approach. The income approach uses expected cash flows of the reporting unit. The cash flows are discounted for risk and time value. In addition, the present value of the projected residual value is estimated and added to the present value of the cash flows. The market approach is based on price multiples of publicly traded stocks of comparable companies to derive fair value. Each approach estimated a fair value exceeding carrying value. Each approach is weighted equally to determine a fair value estimate of the reporting unit. We based our fair value estimates on various assumptions about our projected operating results, including continuing declines in publishing revenues as well as an expectation that we will achieve cash flow benefits from our continuing cost cutting measures. The valuation methodology used to estimate the fair value of our reporting unit requires inputs and assumptions (i.e., market growth, operating profit margins, and discount rates) that reflect current market conditions as well as management judgment. These assumptions may change due to changes in market conditions and such changes may result in an impairment of our goodwill. |
NEW ACCOUNTING STANDARDS | 9 Months Ended | ||
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Sep. 25, 2011 | |||
NEW ACCOUNTING STANDARDS [Abstract] | |||
NEW ACCOUNTING STANDARDS |
In September 2011, the Financial Accounting Standards Board (FASB) issued amended guidance for goodwill impairment. The guidance simplifies how entities test goodwill for impairment. The new guidance allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under these amendments, an entity will be required to perform the two-step impairment test only if it concludes that the fair value of a reporting unit is more likely than not, less than its carrying value. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. We will adopt this guidance in the first quarter of 2012. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In June 2011, the FASB issued amended guidance for comprehensive income. The guidance requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new guidance eliminates the option to present the components of other comprehensive income as part of the statement of shareholders' equity. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. We will adopt this guidance in the first quarter of 2012. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In May 2011, the FASB issued amended guidance for fair value measurement and disclosure requirements between U.S. generally accepted accounting principles and International Financial Reporting Standards (IFRS). The new guidance includes amendments to clarify the definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. generally accepted accounting principles and IFRS. The guidance also changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We will adopt this guidance in the first quarter of 2012. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In December 2010, the FASB issued amended guidance for goodwill. The guidance applies to entities that have recognized goodwill and have one or more reporting units whose carrying amount for purposes of performing step one of the goodwill impairment test is zero or negative. The guidance modifies step one so that for those reporting units, an entity is required to perform step two of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that impairment may exist. The qualitative factors are consistent with existing guidance, which requires that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010, with no early adoption permitted. We adopted this guidance in the first quarter of 2011. There has been no impact on our consolidated financial statements. In December 2010, the FASB issued amended guidance for business combinations. The guidance requires a public entity that presents comparative financial statements to disclose revenue and earnings of the combined entity as though the material business combination(s) on an individual or aggregate basis that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. This guidance also expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. This guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010, with early adoption permitted. We adopted this guidance in the first quarter of 2011 for future business combinations. There has been no impact on our consolidated financial statements. In July 2010, the FASB issued amended guidance for receivables. The guidance for disclosures about activity that occurs during a period is effective for interim and annual reporting periods beginning on or after December 15, 2010. We adopted this guidance for activity that occurs for our financing receivables beginning in the first quarter of 2011. The adoption of these disclosures did not have a material impact on our consolidated financial statements. See Note 9, “Receivables,” for disclosures regarding our adoption of the FASB's amended guidance for financing receivables. In January 2010, the FASB issued amended guidance for fair value measurements and disclosures. The guidance requires new disclosures about purchases, sales, issuances, and settlements in the roll forward of activity for level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. We adopted this guidance in the first quarter of 2011. The adoption of this guidance did not have a material impact on our consolidated financial statements. In October 2009, the FASB amended the accounting standards related to revenue recognition for arrangements with multiple deliverables. This new guidance requires that arrangement consideration be allocated at the inception of the arrangement to all deliverables, based on their relative selling price. The guidance also establishes a hierarchy for determining the selling price of a deliverable which is based on vendor-specific objective evidence, third-party evidence, or management's best estimate of selling price. We adopted this guidance in the first quarter of 2011. The adoption of this guidance did not have a material impact on our consolidated financial statements. See Note 4, “Multiple-Deliverable Revenue Arrangements,” for disclosures regarding our adoption of the FASB's amended guidance for revenue recognition for arrangements with multiple deliverables. |
GUARANTEES | 9 Months Ended |
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Sep. 25, 2011 | |
GUARANTEES [Abstract] | |
GUARANTEES | 13 GUARANTEES We provided a guarantee to the landlord of our former New England community newspapers and shopper business, which was sold in 2007, with respect to tenant liabilities and obligations associated with a lease which expires in December 2016. As of September 25, 2011, our maximum potential obligation pursuant to the guarantee was $1,030 and possible late fees, interest and collection costs. As part of the sales transaction, we received a guarantee from the parent entity of the buyer of our New England business that the buyer will satisfy all the liabilities and obligations of the assigned lease. In the event that the buyer fails to satisfy its liabilities and obligations and the landlord invokes our guarantee, we have a right to indemnification from the buyer's parent entity. During the third quarter of 2011, we received notification from the landlord that the buyer of our former New England business is delinquent in its rental payments dating back to April 2011. The amount owed as of September 25, 2011 is approximately $70, including assessed late fees and interest per the lease. The landlord has not demanded payment from us. We provided a guarantee to the landlord of our former Clearwater, Florida-based operations of PrimeNet, which was sold in February 2010, with respect to tenant liabilities and obligations associated with a lease which expired in May 2011. In addition, the buyer assumed certain leases for equipment and we provided a guarantee for the remaining lease obligations. During the third quarter of 2011, we received notification from the buyer that it traded-in the equipment pursuant to the aforementioned lease for a new equipment lease commencing in September 2011. Therefore, we are no longer obligated as a guarantor for the remaining lease obligations for the equipment leases assumed by the buyer. |
Unaudited Consolidated Condensed Statements of Operations (Parenthetical) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
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Sep. 25, 2011 | Sep. 26, 2010 | Sep. 25, 2011 | Sep. 26, 2010 | |
Income Statement [Abstract] | ||||
Income tax provision (benefit) applied from discontinued operations | $ 0 | $ (15) | $ 221 | $ 72 |
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EMPLOYEE BENEFIT PLANS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | 14 EMPLOYEE BENEFIT PLANS
We fund our defined benefit pension plan at the minimum amount required by the Pension Protection Act of 2006. We do not expect to contribute to the qualified pension plan in 2011. Based on current projections, we expect to contribute approximately $4,200 to our qualified defined benefit pension plan in 2012. We expect to contribute $469 and $517 to our unfunded non-qualified pension plan in 2011 and 2012, respectively.
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STOCK-BASED COMPENSATION | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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STOCK-BASED COMPENSATION | 16 STOCK-BASED COMPENSATION 2007 Journal Communications, Inc. Omnibus Incentive Plan The purpose of the 2007 Journal Communications, Inc. Omnibus Incentive Plan (2007 Plan) is to promote our success by linking personal interests of our employees, officers and non-employee directors to those of our shareholders, and by providing participants with an incentive for outstanding performance. The 2007 Plan is also intended to enhance our ability to attract, motivate and retain the services of employees, officers, and directors upon whose judgment, interest, and special effort the successful conduct of our operation is largely dependent. Subject to adjustment as provided in the 2007 Plan, the aggregate number of shares of class A common stock or class B common stock reserved and available for issuance pursuant to awards granted under the 2007 Plan is 4,800,000 shares which may be awarded in the form of nonstatutory or incentive stock options, stock appreciation rights, restricted stock, restricted or deferred stock units, performance awards, dividend equivalents or other stock-based awards. The 2007 Plan also provides for the issuance of cash-based awards. The 2007 Plan replaced the 2003 Equity Incentive Plan (2003 Plan) and, as of May 3, 2007, all equity grants are made from the 2007 Plan. We will not grant any additional awards under the 2003 Plan. As of September 25, 2011, there are 2,673,629 shares available for issuance under the 2007 Plan. During the third quarter and three quarters ended September 25, 2011 we recognized $313 and $1,332, respectively, in stock-based compensation expense. Total income tax benefit recognized related to stock-based compensation for the third quarter and three quarters ended September 25, 2011 was $122 and $536 respectively. During the third quarter ended September 26, 2010, we recognized $298 and $1,439 respectively, in stock-based compensation expense, including $13 and $55, respectively, recorded in earnings from discontinued operations. Total income tax benefit recognized related to stock-based compensation for the third quarter and three quarters ended September 26, 2010 was $112 and $566, respectively. We recognize stock-based compensation expense on a straight-line basis over the service period based upon the fair value of the award on the grant date. As of September 25, 2011, total unrecognized compensation cost related to stock-based compensation awards (consisting of non-vested restricted stock) was $1,913 net of estimated forfeitures, which we expect to recognize over a weighted average period of 1.1 years. Stock-based compensation expense is reported in selling and administrative expenses and earnings from discontinued operations in our consolidated condensed statements of operations. Stock grants The compensation committee of our board of directors has granted class B common stock to employees and non-employee directors under our 2003 Plan and our 2007 Plan. Each stock grant may have been accompanied by restrictions, or may have been made without any restrictions, as the compensation committee of our board of directors determined. Such restrictions could have included requirements that the participant remain in our continuous employment for a specified period of time, or that we or the participant meet designated performance goals. We value non-vested restricted stock grants at the closing market prices of our class A common stock on the grant date. A summary of stock grant activity during the three quarters of 2011 is as follows:
Our non-vested restricted stock grants vest from one to four years from the grant date. The total fair value of shares vesting during the three quarters of 2011 was $1,348. There was an aggregate of 350,035 unrestricted and non-vested restricted stock grants issued to our non-employee directors (99,035 unrestricted shares) and employees (251,000 restricted shares) in the three quarters of 2010 at a weighted average fair value of $4.24 per share, of which 75,591 of the non-vested restricted shares have since vested. Employee stock purchase plan The 2003 Employee Stock Purchase Plan permits eligible employees to purchase our class B common stock at 90% of the fair market value measured as of the closing market price of our class A common stock on the day of purchase. We recognize compensation expense equal to the 10% discount of the fair market value. Subject to certain adjustments, 3,000,000 shares of our class B common stock are authorized for sale under this plan. There were 64,224 class B common shares sold to employees under this plan in the three quarters of 2011 at a weighted average fair value of $4.59. As of September 25, 2011, there are 2,263,623 shares available for sale under the plan. Stock appreciation rights A stock appreciation right, or SAR, represents the right to receive an amount equal to the excess of the fair value of a share of our class B common stock on the exercise date over the base value of the SAR, which shall not be less than the fair value of a share of our class B common stock on the grant date. Each SAR is settled only in shares of our class B common stock. The term during which any SAR may be exercised is 10 years from the grant date, or such shorter period as determined by the compensation committee of our board of directors. Our SARs vest over a three year graded vesting schedule and it is our policy to recognize compensation cost for awards with graded vesting on a straight-line basis over the vesting period for the entire award. We ensure the compensation cost recognized at any date is at least equal to the portion of the grant-date value of the award that is vested at that date. The fixed price SARs have a fixed base value equal to the closing price of our class A common stock on the date of grant. The escalating price SARs have an escalating base value that starts with the closing price of our class A common stock on the date of grant and increases by six percent per year for each year that the SARs remain outstanding, starting on the first anniversary of the grant date. A summary of SAR activity during the three quarters of 2011 is as follows:
173,680 SARs vested during the three quarters of 2011. The aggregate intrinsic value of the SARs outstanding and exercisable at the end of the third quarter of 2011 is zero because the fair market value of our class B common stock on September 25, 2011 was lower than the weighted average exercise price of the SARs. Nonstatutory stock options The compensation committee of our board of directors has granted nonstatutory stock options to employees and non-employee directors at a purchase price equal to at least the fair market value of our class B common stock on the grant date for an exercise term determined by the committee, not to exceed 10 years from the grant date. It is our policy to issue new class B common stock upon the exercise of nonstatutory stock options. In 2003 and 2004, our non-employee directors and certain of our employees were granted options to purchase class B common stock. These options were exercisable for a period of up to seven years from the grant date and are no longer outstanding. There have been no options granted since 2004. A summary of stock option activity during the three quarters of 2011 is:
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Unaudited Consolidated Statements of Equity (Parenthetical) (USD $) In Thousands, except Per Share data | 3 Months Ended | |||||
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Sep. 25, 2011 | Jun. 26, 2011 | Mar. 27, 2011 | Sep. 26, 2010 | Jun. 27, 2010 | Mar. 28, 2010 | |
Unaudited Consolidated Statements of Equity [Abstract] | ||||||
Deferred tax | $ 128 | $ 128 | $ 127 | $ 281 | $ 278 | $ 280 |
Class C [Member] | ||||||
Unaudited Consolidated Statements of Equity [Abstract] | ||||||
Dividends declared (in dollars per share) | $ 0.142 | $ 0.142 | $ 0.142 | $ 0.142 | $ 0.142 | $ 0.142 |
INVENTORIES | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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INVENTORIES | 8 INVENTORIES Inventories are stated at the lower of cost (first in, first out method) or market. Inventories as of September 25, 2011 and December 26, 2010 consist of the following:
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INCOME TAXES | 9 Months Ended |
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Sep. 25, 2011 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 12 INCOME TAXES We file tax returns in the United States federal jurisdiction, as well as approximately 16 state and local jurisdictions. The statute of limitations for assessing additional taxes is three years for federal purposes and typically between three and four years for state and local purposes, unless the statute of limitations has been previously extended. Accordingly, our 2008 through 2010 tax returns are open for federal purposes, and our 2006 through 2010 tax returns remain open for state tax purposes. Currently, we are under audit in Wisconsin for our 2004 through 2007 tax returns and Illinois for our 2006 and 2007 tax returns. As of September 25, 2011, our liability for unrecognized tax benefits was $885, which, if recognized, would have an impact on our effective tax rate. We recognize interest income/expense and penalties related to unrecognized tax benefits in our provision for income taxes. As of September 25, 2011, we had $271 accrued for interest expense and penalties. We recognized $9 in interest expense during the third quarter of 2011. As of September 25, 2011, it is possible for $276 of unrecognized tax benefits and related interest to be recognized within the next 12 months due to settlements with taxing authorities. |