-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LtAEn2UiDT/QlIFmSRWmtgsTQq9DtjOkOdDqXeFDMJmip9HbcYzpdbhT99K5Ingz 6bT8qXKGW24ogyAMINCzBQ== 0001157523-07-007062.txt : 20070723 0001157523-07-007062.hdr.sgml : 20070723 20070723064838 ACCESSION NUMBER: 0001157523-07-007062 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070723 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070723 DATE AS OF CHANGE: 20070723 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JOURNAL COMMUNICATIONS INC CENTRAL INDEX KEY: 0001232241 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 200020198 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31805 FILM NUMBER: 07992653 BUSINESS ADDRESS: STREET 1: 333 WEST STATE STREET CITY: MILWAUKEE STATE: WI ZIP: 83203 FORMER COMPANY: FORMER CONFORMED NAME: JOURNAL CO DATE OF NAME CHANGE: 20030512 8-K 1 a5452839.txt JOURNAL COMMUNICATIONS, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ----------------------- Date of Report (Date of earliest event reported): July 23, 2007 Journal Communications, Inc. -------------------------------------------------------- (Exact name of registrant as specified in its charter) Wisconsin 1-31805 20-0020198 - --------------- --------------- ------------ (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) 333 West State Street, Milwaukee, Wisconsin 53203 ----------------------------------------------------- (Address of principal executive offices, including zip code) (414) 224-2616 ----------------------------- (Registrant's telephone number) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. - --------- --------------------------------------------- On July 23, 2007, Journal Communications, Inc. issued a press release announcing financial results for its second quarter ended July 1, 2007. A copy of the press release is furnished as Exhibit 99 to this Current Report on Form 8-K. Item 9.01. Financial Statements and Exhibits. - --------- --------------------------------- (a) Not applicable. (b) Not applicable. (c) Not applicable. (d) Exhibits. The following exhibit is being furnished herewith: -------- (99) Press release of Journal Communications, Inc. dated July 23, 2007. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. JOURNAL COMMUNICATIONS, INC. Date: July 23, 2007 By: /s/ Paul M. Bonaiuto --------------------------------- Paul M. Bonaiuto Executive Vice President and Chief Financial Officer JOURNAL COMMUNICATIONS, INC. EXHIBIT INDEX TO FORM 8-K Report Dated July 23, 2007 Exhibit No. - ----------- (99) Press release of Journal Communications, Inc. dated July 23, 2007. EX-99 2 a5452839ex99.txt EXHIBIT 99 Exhibit 99 Journal Communications Reports SecondQuarter Results MILWAUKEE--(BUSINESS WIRE)--July 23, 2007--Journal Communications (NYSE:JRN) today announced results for its second quarter ended July 1, 2007. Note that unless otherwise indicated, all comparisons are to the second quarter ended June 25, 2006. Both quarters contained 91 days. For the second quarter 2007, revenue from continuing operations of $147.5 million decreased 4.3% compared to $154.0 million. Earnings from continuing operations were $12.7 million compared to $12.5 million, an increase of 1.5%. Net earnings were $14.2 million compared to net earnings of $15.2 million. In the second quarter 2007, Journal Communications recorded a $1.4 million gain, net of tax, from discontinued operations related to the announced divestitures of its Ohio, New England and Louisiana community publishing clusters. Basic and diluted earnings per share from continuing operations were $0.19 for both, compared to $0.18 and $0.17, respectively. Basic and diluted earnings per share from discontinued operations were $0.03 and $0.02, respectively, compared to $0.04 for both. Basic and diluted net earnings per share were $0.22 and $0.21 respectively, for both the second quarters 2007 and 2006. Note that in the second quarter 2007, Journal Communications' diluted earnings per share from continuing operations were impacted favorably by $0.01 from the gain on the sale of our Hartland, Wisconsin printing facility and that diluted earnings per share from discontinued operations were impacted favorably by $0.02 from the gain on the sale of our Ohio community publishing and printing operations. In the second quarter 2006, a number of unusual items -- including a litigation settlement and related expenses, offset by a pension plan curtailment gain and insurance proceeds -- had a net negative impact of $0.02 on diluted earnings per share from continuing operations. Note that second quarter 2007 financial results compared to 2006 - -- adjusted for the second quarter 2006 revenue reduction of $5.1 million due to a litigation settlement and the second quarter 2006 unfavorable impact on consolidated operating earnings from the litigation settlement, offset by positive adjustments for a pension curtailment gain and insurance proceeds of an aggregate $3.0 million ($3.6 million on publishing operating earnings) -- would have been as follows: -- Revenue from continuing operations of $147.5 million, down 7.3% -- Earnings from continuing operations of $12.7 million, down 11.2% -- Net earnings of $14.2 million, down 17.0% -- Publishing revenues of $67.6 million, down 7.4% -- Publishing operating earnings of $10.2 million, down 6.1% "We experienced a challenging second quarter," said Steven J. Smith, chairman and chief executive officer of Journal Communications. "We recorded declines in retail advertising and employment and real estate classified advertising in publishing and posted softer-than-expected auto advertising across our broadcast markets. We continue to manage costs carefully in all of our businesses while also investing for growth. "We were encouraged by the Milwaukee Journal Sentinel's continued increase in interactive revenue, which was up almost 47% to $3.4 million in the quarter. Journal Sentinel's recently announced strategic agreement with Monster(R) is another example of our commitment to driving online initiatives and pursuing new revenue streams. In the broadcast group, interactive revenue also continues its positive growth trajectory, reaching almost $700,000 in the second quarter. "In television, we were pleased with our May sweep results at a number of our stations, especially the gains in news at KGUN-TV in Tucson and KFTX-TV in Ft. Myers. In the radio group, although revenues were essentially flat and operating earnings were down, we did see double-digit increases in both revenue and operating earnings at our Knoxville, Boise and Springfield clusters. Our printing services business, IPC, also continues to deliver improved operating earnings. "The divestiture of our New England, Ohio and Louisiana publishing and printing businesses will allow us to concentrate on growing our community newspaper and shopper business in our Wisconsin and Florida markets. Consolidated For the second quarter, revenue from continuing operations of $147.5 million decreased 4.3% compared to $154.0 million. Operating earnings decreased 8.2% to $22.7 million. Operating earnings margin was 15.4% compared to 16.1%. EBITDA (net earnings excluding the gain from discontinued operations, net; total other expense, net; provision for income taxes; depreciation; and amortization) of $30.0 million decreased 5.9% compared to $31.9 million. Publishing For the second quarter, publishing revenue from continuing operations decreased 0.5% to $67.6 million compared to $67.9 million. In part, this reflected continued weakness in classified and retail advertising at both the daily newspaper and the community newspapers and shoppers, partially offset by the revenue reduction of $5.1 million from the litigation settlement in second quarter 2006. The revenue decline at our community newspapers and shoppers division largely reflects certain revenue previously reported within the division that is now reported under the daily newspaper, as well as the change to a free distribution model of our Milwaukee-area community newspapers. Total interactive advertising revenue at the daily newspaper increased 46.9% to $3.4 million compared to $2.3 million. Publishing operating earnings increased 40.3% from $7.3 million to $10.2 million, including a $0.9 million gain on the sale of the Hartland facility. In the second quarter 2006, publishing operating earnings were negatively impacted by an aggregate $3.6 million from the litigation settlement, offset by favorable adjustments for a pension curtailment gain and insurance proceeds. Broadcasting For the second quarter, broadcasting revenue decreased 4.1% to $56.0 million compared to $58.5 million. Political and issue advertising revenue was $0.5 million in the second quarter 2007 and $1.7 million in the second quarter 2006. Broadcasting operating earnings of $11.3 million were down 30.1% compared to $16.2 million, in part reflecting higher payroll, syndication and other program costs and the impact from last year's favorable adjustment for the pension curtailment gain. For the second quarter, revenue from television stations decreased 6.4% to $34.0 million compared to $36.3 million. Operating earnings from television stations decreased 35.4% to $6.0 million compared to $9.4 million. For the second quarter, revenue from radio stations of $22.0 million was down 0.5% compared to $22.2 million. On a same-station basis (excluding revenue generated by KBBX-FM, which was sold in September 2006 and KOMJ-AM, which was sold earlier this year), radio revenue increased 1.6%. Operating earnings from radio stations of $5.3 million decreased 22.7%. On a same-station basis, radio operating earnings decreased 19.8%. Printing Services For the second quarter, revenue from printing services decreased 1.0% to $16.5 million from $16.7 million, largely due to the expected decline in revenue from computer-related customers. Operating earnings from printing services increased 97.9% to $1.0 million compared to $0.5 million due to production efficiencies and the change in business mix. Other For the second quarter, revenue for "Other" of $7.4 million decreased 33.0% compared to $11.0 million reflecting softness in the mailing services part of our direct marketing business. "Other" operating earnings were $0.2 million compared to $0.8 million, primarily due to the adjustment of an incentive compensation accrual in the second quarter 2006. Discontinued Operations The operating results of the New England, Ohio and Louisiana community publishing and printing clusters and Norlight (our former telecommunications subsidiary which was sold in February 2007) are classified as discontinued operations, net of tax. For the second quarter 2007, the gain from discontinued operations was $1.4 million, which included a gain on the sale of the Ohio publishing operations of $1.3 million and the impact of second quarter 2007 operating results of $0.1 million. This compares to a gain of $2.7 million. Note that the gain associated with the sales of the Louisiana and New England operations will be recorded in the quarter in which each transaction is closed. Non-Operating Items For the second quarter, other expense, which primarily consists of interest expense, decreased $1.9 million to $2.0 million compared to $3.9 million. The decrease is attributable in large part to a decrease in debt outstanding, which was reduced with the proceeds from the sale of Norlight. Stock Repurchase Program During the second quarter 2007, the Company repurchased 533,600 of its class A shares. Through July 1, 2007, the Company had repurchased a total of 8,949,100 class A shares. Third Quarter 2007 Outlook For the third quarter 2007, Journal Communications currently anticipates that its publishing revenues will be down compared to the prior year, reflecting continued advertising revenue challenges. We expect radio revenue to be down slightly, reflecting $0.4 million in political and issue advertising generated in the third quarter 2006 and the sale of KBBX-FM in the fall of 2006 and KOMJ-AM in early 2007. We also expect television revenue to be down due to challenging comparables which include $3.8 million in political and issue advertising generated in the third quarter 2006. Webcast of Conference Call A live webcast of the second quarter conference call will be accessible through www.journalcommunications.com/investors beginning at 10:00 a.m. CT this morning. An archive of the webcast will be available on this site today through August 6. To access the call, dial (800) 261-3417 (domestic) or (617) 614-3673 (international) at least 10 minutes prior to the scheduled 10:00 a.m. CT start. The access code for the conference call is 69680791. Replays of the conference call will be available July 23 through July 25. To hear the replay, dial (888) 286-8010 (domestic) or (617) 801-6888 (international) at least one hour after the completion of the call. The access code for the replay is 19620185. Forward-looking Statements This press release contains certain forward-looking statements related to our businesses that are based on our current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties, including changes in advertising demand and other economic conditions that could cause actual results to differ materially from the expectations expressed in forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. Our written policy on forward-looking statements can be found on page 1 of our most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission. About Journal Communications Journal Communications, Inc., headquartered in Milwaukee, Wisconsin, was founded in 1882. We are a diversified media company with operations in publishing, radio and television broadcasting, interactive media and printing services. We publish the Milwaukee Journal Sentinel, which serves as the only major daily newspaper for the Milwaukee metropolitan area, and 61 community newspapers and shoppers in six states. Upon the completion of the sale of the New England operations, we will publish 44 community newspapers and shoppers in two states. We own and operate 35 radio stations and ten television stations in 12 states and operate one television station under a local marketing agreement. Our interactive media assets include more than 75 online enterprises that are associated with our daily and community newspapers, television and radio stations. We also provide a wide range of commercial printing services -- including printing of publications, professional journals and documentation material -- and operate a direct marketing services business. Tables Follow Journal Communications, Inc. Consolidated Statements of Earnings (unaudited) (dollars in thousands, except for shares and per-share amounts) Second Quarter (A) ------------------------- 2007 2006 % Change ------------ ------------ --------- Continuing Operations: Revenue: Publishing $ 67,556 $ 67,910 (0.5) Broadcasting 56,029 58,452 (4.1) Printing services 16,527 16,686 (1.0) Other 7,352 10,979 (33.0) ------------ ------------ Total revenue 147,464 154,027 (4.3) Operating costs and expenses: Publishing 35,476 36,430 (2.6) Broadcasting 23,735 22,397 6.0 Printing services 13,407 14,007 (4.3) Other 6,153 9,399 (34.5) ------------ ------------ Total operating costs and expenses 78,771 82,233 (4.2) Selling and administrative expenses 45,948 47,015 (2.3) ------------ ------------ Total operating costs and expenses and selling and administrative expenses 124,719 129,248 (3.5) ------------ ------------ Operating earnings 22,745 24,779 (8.2) Other income and (expense): Interest income 1 1 Interest expense (1,984) (3,877) ------------ ------------ Total other income and (expense) (1,983) (3,876) (48.8) Earnings from continuing operations before income taxes 20,762 20,903 (0.7) Provision for income taxes 8,060 8,384 (3.9) ------------ ------------ Earnings from continuing operations 12,702 12,519 1.5 Gain from discontinued operations, net of tax 1,448 2,722 (46.8) ------------ ------------ Net earnings $ 14,150 $ 15,241 (7.2) ============ ============ Weighted average number of shares: Basic 63,648,225 67,836,780 Diluted 68,172,403 72,318,319 Earnings per share: Basic: Continuing operations $ 0.19 $ 0.18 Discontinued operations 0.03 0.04 ------------ ------------ Net earnings $ 0.22 $ 0.22 ============ ============ Diluted: Continuing operations $ 0.19 $ 0.17 Discontinued operations 0.02 0.04 ------------ ------------ Net earnings $ 0.21 $ 0.21 ============ ============ Two Quarters (B) ------------------------- 2007 2006 % Change ------------ ------------ --------- Continuing Operations: Revenue: Publishing $ 134,013 $ 137,350 (2.4) Broadcasting 107,725 110,090 (2.1) Printing services 33,402 32,996 1.2 Other 15,518 20,122 (22.9) ------------ ------------ Total revenue 290,658 300,558 (3.3) Operating costs and expenses: Publishing 72,351 72,991 (0.9) Broadcasting 46,130 44,216 4.3 Printing services 27,573 27,795 (0.8) Other 13,076 17,094 (23.5) ------------ ------------ Total operating costs and expenses 159,130 162,096 (1.8) Selling and administrative expenses 92,155 95,085 (3.1) ------------ ------------ Total operating costs and expenses and selling and administrative expenses 251,285 257,181 (2.3) ------------ ------------ Operating earnings 39,373 43,377 (9.2) Other income and (expense): Interest income 3 19 Interest expense (4,982) (7,526) ------------ ------------ Total other income and (expense) (4,979) (7,507) (33.7) Earnings from continuing operations before income taxes 34,394 35,870 (4.1) Provision for income taxes 13,452 14,298 (5.9) ------------ ------------ Earnings from continuing operations 20,942 21,572 (2.9) Gain from discontinued operations, net of tax 66,539 5,942 1,019.8 ------------ ------------ Net earnings $ 87,481 $ 27,514 218.0 ============ ============ Weighted average number of shares: Basic 64,455,279 68,100,531 Diluted 68,984,541 72,609,327 Earnings per share: Basic: Continuing operations $ 0.31 $ 0.30 Discontinued operations 1.03 0.09 ------------ ------------ Net earnings $ 1.34 $ 0.39 ============ ============ Diluted: Continuing operations $ 0.30 $ 0.30 Discontinued operations 0.97 0.08 ------------ ------------ Net earnings $ 1.27 $ 0.38 ============ ============ (A) 2007 second quarter: April 2, 2007 to July 1, 2007. 2006 second quarter: March 27,2006 to June 25,2006. (B) 2007 two quarters: January 1, 2007 to July 1, 2007. 2006 two quarters: December 26, 2005 to June 25, 2006. Journal Communications, Inc. Segment Information (unaudited) (dollars in thousands) Second Quarter (A) (unaudited) ------------------------------ 2007 2006 % Change ------------- ------------- -------- Revenue - ------------------------------ Publishing $ 67,556 $ 67,910 (0.5) Broadcasting 56,029 58,452 (4.1) Printing services 16,527 16,686 (1.0) Other 7,352 10,979 (33.0) ------------- ------------- $147,464 $154,027 (4.3) ============= ============= Operating earnings - ------------------------------ Publishing $ 10,189 $ 7,261 40.3 Broadcasting 11,303 16,159 (30.1) Printing services 1,049 530 97.9 Other 204 829 (75.4) ------------- ------------- $ 22,745 $ 24,779 (8.2) ============= ============= Depreciation and amortization - ------------------------------ Publishing $ 3,206 $ 3,176 0.9 Broadcasting 3,247 3,226 0.7 Printing services 535 479 11.7 Other 263 216 21.8 ------------- ------------- $ 7,251 $ 7,097 2.2 ============= ============= Two Quarters (B) (unaudited) ---------------------------- 2007 2006 % Change ----------- ------------- -------- Revenue - -------------------------------- Publishing $134,013 $137,350 (2.4) Broadcasting 107,725 110,090 (2.1) Printing services 33,402 32,996 1.2 Other 15,518 20,122 (22.9) ----------- ------------- $290,658 $300,558 (3.3) =========== ============= Operating earnings - -------------------------------- Publishing $ 15,233 $ 14,402 5.8 Broadcasting 21,298 27,745 (23.2) Printing services 2,047 1,022 100.3 Other 795 208 282.2 ----------- ------------- $ 39,373 $ 43,377 (9.2) =========== ============= Depreciation and amortization - -------------------------------- Publishing $ 6,813 $ 6,341 7.4 Broadcasting 6,395 6,225 2.7 Printing services 1,025 950 7.9 Other 523 429 21.9 ----------- ------------- $ 14,756 $ 13,945 5.8 =========== ============= (A) 2007 second quarter: April 2, 2007 to July 1, 2007. 2006 second quarter: March 27,2006 to June 25,2006. (B) 2007 two quarters: January 1, 2007 to July 1, 2007. 2006 two quarters: December 26, 2005 to June 25, 2006. Journal Communications, Inc. Publishing Segment Information (unaudited) (dollars in thousands) Publishing revenue by category: - ----------------------------------------- Second Quarter of 2007 (A) ---------------------------- Community Daily Newspapers Newspaper & Shoppers Total --------- ---------- ------- Advertising revenue: Retail $22,746 $ 7,808 $30,554 Classified 15,573 1,638 17,211 National 1,892 -- 1,892 Direct Marketing 1,080 -- 1,080 Other -- 63 63 --------- ---------- ------- Total advertising revenue 41,291 9,509 50,800 Circulation revenue 12,831 243 13,074 Other revenue 2,560 1,122 3,682 --------- ---------- ------- Total revenue $56,682 $10,874 $67,556 ========= ========== ======= Publishing revenue by category: - ----------------------------------------- Second Quarter of 2006 (B) ---------------------------- Community Daily Newspapers Newspaper & Shoppers Total --------- ---------- ------- Advertising revenue: Retail $18,539 $ 9,468 $28,007 Classified 16,794 2,264 19,058 National 2,657 -- 2,657 Direct Marketing 1,478 -- 1,478 Other -- 165 165 --------- ---------- ------- Total advertising revenue 39,468 11,897 51,365 Circulation revenue 12,795 563 13,358 Other revenue 2,275 912 3,187 --------- ---------- ------- Total revenue $54,538 $13,372 $67,910 ========= ========== ======= Publishing revenue by category: - ------------------------------------------- % Change % Change % Change Daily CN&S Total -------- -------- -------- Advertising revenue: Retail 22.7 (17.5) 9.1 Classified (7.3) (27.7) (9.7) National (28.8) N/A (28.8) Direct Marketing (26.9) N/A (26.9) Other N/A (61.8) (61.8) Total advertising revenue 4.6 (20.1) (1.1) Circulation revenue 0.3 (56.8) (2.1) Other revenue 12.5 23.0 15.5 Total revenue 3.9 (18.7) (0.5) Two Quarters of 2007 (C) ----------------------------- Community Daily Newspapers Newspaper & Shoppers Total --------- ---------- -------- Advertising revenue: Retail $ 43,511 $14,934 $ 58,445 Classified 31,132 3,067 34,199 National 4,320 -- 4,320 Direct Marketing 2,168 -- 2,168 Other -- 251 251 --------- ---------- -------- Total advertising revenue 81,131 18,252 99,383 Circulation revenue 25,525 584 26,109 Other revenue 6,461 2,060 8,521 --------- ---------- -------- Total revenue $113,117 $20,896 $134,013 ========= ========== ======== Two Quarters of 2006 (D) ----------------------------- Community Daily Newspapers Newspaper & Shoppers Total --------- ---------- -------- Advertising revenue: Retail $ 39,896 $17,659 $ 57,555 Classified 33,211 4,060 37,271 National 5,141 -- 5,141 Direct Marketing 2,870 -- 2,870 Other -- 444 444 --------- ---------- -------- Total advertising revenue 81,118 22,163 103,281 Circulation revenue 25,748 1,133 26,881 Other revenue 5,532 1,656 7,188 --------- ---------- -------- Total revenue $112,398 $24,952 $137,350 ========= ========== ======== % Change % Change % Change Daily CN&S Total --------- --------- --------- Advertising revenue: Retail 9.1 (15.4) 1.5 Classified (6.3) (24.5) (8.2) National (16.0) N/A (16.0) Direct Marketing (24.5) N/A (24.5) Other N/A (43.5) (43.5) Total advertising revenue 0.0 (17.6) (3.8) Circulation revenue (0.9) (48.5) (2.9) Other revenue 16.8 24.4 18.5 Total revenue 0.6 (16.3) (2.4) (A) 2007 second quarter: April 2, 2007 to July 1, 2007. (B) 2006 second quarter: March 27, 2006 to June 25, 2006. (C) 2007 two quarters: January 1, 2007 to July 1, 2007. (D) 2006 two quarters: December 26, 2005 to June 25, 2006. NOTE: Publishing segment information is provided to facilitate comparison of our publishing segment results with those of other publishing companies and is not representative of the overall business of Journal Communications or its operating results. Daily newspaper's core newspaper advertising linage by category: - ----------------------------------------- Second Quarter (A) ------------------ 2007 2006 % Change --------- -------- --------- Advertising linage (inches): Full run Retail 161,776 172,497 (6.2) Classified 148,833 174,169 (14.5) National 9,758 14,829 (34.2) --------- -------- Total full run 320,367 361,495 (11.4) Part run 10,504 31,542 (66.7) --------- -------- Total advertising linage 330,871 393,037 (15.8) ========= ======== Preprint pieces (in thousands) 204,501 215,474 (5.1) ========= ======== Total pages and revenue per page of our community newspapers and shoppers: - ----------------------------------------- Total pages Community newspapers 12,412 19,832 (37.4) Shoppers and specialty products 13,043 15,810 (17.5) --------- -------- Total pages 25,455 35,642 (28.6) ========= ======== Revenue per page $ 336.57 $ 297.10 13.3 ========= ======== Daily newspaper's core newspaper advertising linage by category: - ----------------------------------------- Two Quarters (B) ------------------ 2007 2006 % Change --------- -------- --------- Advertising linage (inches): Full run Retail 302,188 326,371 (7.4) Classified 285,395 336,191 (15.1) National 20,329 28,834 (29.5) --------- -------- Total full run 607,912 691,396 (12.1) Part run 18,244 56,892 (67.9) --------- -------- Total advertising linage 626,156 748,288 (16.3) ========= ======== Preprint pieces (in thousands) 414,808 423,724 (2.1) ========= ======== Total pages and revenue per page of our community newspapers and shoppers: - ----------------------------------------- Full pages of advertising: Community newspapers 24,800 37,754 (34.3) Shoppers and specialty products 24,693 29,410 (16.0) --------- -------- Total full pages of advertising 49,493 67,164 (26.3) ========= ======== Revenue per page $ 329.65 $ 292.22 12.8 ========= ======== (A) 2007 second quarter: April 2, 2007 to July 1, 2007. 2006 second quarter: March 27,2006 to June 25,2006. (B) 2007 two quarters: January 1, 2007 to July 1, 2007. 2006 two quarters: December 26, 2005 to June 25, 2006. NOTE: Publishing segment information is provided to facilitate comparison of our publishing segment results with those of other publishing companies and is not representative of the overall business of Journal Communications or its operating results. All data are subject to later adjustment. Journal Communications, Inc. Reconciliation of consolidated net earnings to consolidated EBITDA (unaudited) (dollars in thousands) Second Quarter (A) Two Quarters (B) ------------------ ------------------ 2007 2006 2007 2006 --------- -------- --------- -------- Net earnings $14,150 $15,241 $ 87,481 $27,514 (Gain) from discontinued operations, net (1,448) (2,722) (66,539) (5,942) Provision for income taxes 8,060 8,384 13,452 14,298 Total other expense, net 1,983 3,876 4,979 7,507 Depreciation 6,776 6,614 13,805 12,990 Amortization 475 483 951 955 --------- -------- --------- -------- EBITDA $29,996 $31,876 $ 54,129 $57,322 ========= ======== ========= ======== (A) 2007 second quarter: April 2, 2007 to July 1, 2007. 2006 second quarter: March 27,2006 to June 25,2006. (B) 2007 two quarters: January 1, 2007 to July 1, 2007. 2006 two quarters: December 26, 2005 to June 25, 2006. We define EBITDA as net earnings excluding gain/loss from discontinued operations, net, provision for income taxes, total other expense (which is entirely comprised of interest income and expense), depreciation and amortization. Our management uses EBITDA, among other things, to evaluate our operating performance, and to value prospective acquisitions. EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States. EBITDA should not be considered in isolation of, or as a substitute for, net earnings as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. EBITDA, as we calculate it, may not be comparable to EBITDA reported by other companies. Journal Communications, Inc. Consolidated Condensed Balance Sheets (dollars in thousands) July 1, 2007 December 31, (unaudited) 2006 ----------- ------------ ASSETS Current assets: Cash and cash equivalents $ 6,446 $ 7,923 Receivables, net 85,052 87,182 Inventories, net 6,042 6,752 Prepaid expenses and other current assets 7,890 11,495 Deferred income taxes 7,222 11,017 Current assets of discontinued operations 18,788 118,589 ----------- ------------ Total current assets 131,440 242,958 Property and equipment, net 219,596 217,823 Goodwill 231,550 231,635 Broadcast licenses 223,529 196,659 Other intangible assets, net 25,876 26,826 Other assets 20,043 39,079 Non-current assets of discontinued operations 264 278 ----------- ------------ Total assets $852,298 $955,258 =========== ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 25,028 $ 31,025 Accrued compensation 17,891 18,730 Accrued employee benefits 13,094 10,456 Deferred revenue 16,180 18,505 Accrued income taxes 23,116 4,048 Other current liabilities 6,219 18,368 Current liabilities of discontinued operations 295 20,939 Current portion of long-term liabilities 4,016 4,770 ----------- ------------ Total current liabilities 105,839 126,841 Accrued employee benefits 33,583 33,749 Long-term notes payable to banks 118,355 235,000 Deferred income taxes 55,516 62,089 Other long-term liabilities 14,548 16,687 Shareholders' equity 524,457 480,892 ----------- ------------ Total liabilities and shareholders' equity $852,298 $955,258 =========== ============ NOTE: For 2006, assets and liabilities of the Community Newspapers and Shoppers in the Ohio, Louisiana and New England clusters were classified as current assets or current liabilities of discontinued operations due to their pending sales. CONTACT: Journal Communications, Inc. Sara Leuchter Wilkins Vice President of Investor Relations & Corporate Communications 414-224-2633 swilkins@journalcommunications.com -----END PRIVACY-ENHANCED MESSAGE-----