<PAGE>
- -------------------------------------------------------------------------------
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 15, 1998.
JOURNAL REGISTER COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 1-12955 22-3498615
(State or Other (Commission File Number) (I.R.S. Employer
Jurisdiction of Identification Number)
Incorporation
State Street Square, 50 West State Street, Trenton, NJ
08608
(Address of Principal Executive Offices, Including Zip Code)
(609) 396-2200
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
- -------------------------------------------------------------------------------
<PAGE>
Item 2. Acquisition or Disposition of Assets.
Item 7. Filing of the combined consolidated financial statements of Goodson
Newspapers and pro forma financial statements pursuant to Item 7 of
the form.
ITEM 2. Acquisition or Disposition of Assets
(a) On July 15, 1998, pursuant to a Master Agreement dated May 17, 1998, the
Company completed its acquisition of 25 newspaper publications
("Goodson Newspapers") that were indirectly under the common control of
the estate of Mark Goodson and various Mark Goodson Trusts (including Mark
Goodson Enterprises, Ltd., the "Goodson Acquisition") for approximately
$300 million in cash.
Proceeds from the Company's new credit agreement with a group of lenders
led by The Chase Manhattan Bank ("Credit Agreement") were used to fund the
Goodson Acquisition.
(b) The Goodson Acquisition included five daily newspapers and 20 non-daily
publications in Pennsylvania, New York and Ohio. The Company will continue
to operate and manage the newspapers as divisions of the Company.
ITEM 7. Financial Statements and Exhibits
(a) Combined Consolidated financial statements of Goodson Newspapers
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
June 19, 1998, except as to Note 9,
which is as of July 15, 1998
To the Management
of Goodson Newspapers
In our opinion, the accompanying combined consolidated balance sheets and the
related combined consolidated statements of income, of cash flows and of
shareowners' net investment present fairly, in all material respects, the
financial position of the Goodson Newspapers (as defined in Note 1 to the
combined consolidated financial statements) at December 31, 1997 and 1996, and
the results of their operations and their cash flows, for each of the three
years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
NEW YORK, NEW YORK
<PAGE>
GOODSON NEWSPAPERS
COMBINED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1997 1996
---------- ----------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents............................................................... $ 1,681 $ 2,499
Accounts receivable, less allowance for doubtful accounts of $571 and $570,
respectively.......................................................................... 6,916 6,808
Inventories............................................................................. 802 740
Deferred income taxes................................................................... 577 592
Other current assets.................................................................... 240 490
---------- ----------
Total current assets................................................................ 10,216 11,129
---------- ----------
Property, plant and equipment
Land.................................................................................... 527 527
Building and improvements............................................................... 9,600 9,370
Machinery and equipment................................................................. 22,353 20,326
Construction in progress and deposits................................................... 1,211 894
---------- ----------
33,691 31,117
Less accumulated depreciation........................................................... (25,539) (24,035)
---------- ----------
Property, plant and equipment, net........................................................ 8,152 7,082
---------- ----------
Intangible and other assets, net.......................................................... 2,278 2,476
---------- ----------
Total assets........................................................................ $ 20,646 $ 20,687
---------- ----------
---------- ----------
LIABILITIES AND EQUITY
Current liabilities
Accounts payable........................................................................ $ 656 $ 668
Accrued salaries and vacation........................................................... 1,449 1,434
Deferred subscription revenue........................................................... 1,426 1,288
Accrued expenses........................................................................ 161 297
Other current liabilities............................................................... 582 580
---------- ----------
Total current liabilities........................................................... 4,274 4,267
---------- ----------
Accrued retiree benefits.................................................................. 680 667
Deferred income taxes..................................................................... 349 517
---------- ----------
Total liabilities................................................................... 5,303 5,451
---------- ----------
Commitments and contingencies
Shareowners' net investment............................................................... 15,343 15,236
---------- ----------
Total liabilities and shareowners' net investment................................... $ 20,646 $ 20,687
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GOODSON NEWSPAPERS
COMBINED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
<S> <C> <C> <C>
1997 1996 1995
--------- --------- ---------
Revenues:
Advertising.................................................................... $ 50,718 $ 48,172 $ 47,359
Circulation.................................................................... 16,417 16,357 15,831
--------- --------- ---------
Newspaper revenue................................................................ 67,135 64,529 63,190
Commercial printing and other.................................................... 1,874 1,909 2,091
--------- --------- ---------
69,009 66,438 65,281
--------- --------- ---------
Operating expenses:
Salaries and employee benefits................................................. 28,774 27,576 27,552
Newsprint, ink and printing charges............................................ 7,272 8,278 8,673
Selling, general and administrative............................................ 8,853 8,426 8,619
Depreciation and amortization.................................................. 1,731 1,669 1,849
Other.......................................................................... 6,577 6,351 6,298
--------- --------- ---------
53,207 52,300 52,991
--------- --------- ---------
Operating income........................................................... 15,802 14,138 12,290
Other income (expense):
Interest income................................................................ 135 68 55
Other income (expense)......................................................... 23 (646) 4
--------- --------- ---------
158 (578) 59
--------- --------- ---------
Income before provision for income taxes................................... 15,960 13,560 12,349
Provision for income taxes....................................................... 5,166 4,426 4,124
--------- --------- ---------
Net income................................................................. $ 10,794 $ 9,134 $ 8,225
--------- --------- ---------
--------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GOODSON NEWSPAPERS
COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
<S> <C> <C> <C>
1997 1996 1995
---------- ---------- ----------
Cash flows from operating activities:
Net income.................................................................. $ 10,794 $ 9,134 $ 8,225
Adjustments to reconcile net income to net cash provided by operating
activities
Depreciation and amortization............................................. 1,731 1,669 1,849
Provision for losses on accounts receivable, net.......................... 490 508 510
(Gain) loss on disposition of assets...................................... (23) 646 (4)
Deferred income tax provision............................................. (153) (117) (279)
Change in assets and liabilities:
Increase in accounts receivable......................................... (598) (796) (765)
(Increase) decrease in inventories...................................... (62) 205 (156)
Decrease in other assets................................................ 294 23 154
(Decrease) increase in accounts payable and accrued expenses............ (133) 216 97
Increase in deferred subscription revenue............................... 138 62 150
Increase (decrease) in other liabilities................................ 15 (433) 375
---------- ---------- ----------
Net cash provided by operating activities................................. 12,493 11,117 10,156
---------- ---------- ----------
Cash flows from investing activities:
Additions to property, plant and equipment.................................. (2,663) (980) (630)
Proceeds from sale of property, plant and equipment, and other assets....... 39 30 13
---------- ---------- ----------
Net cash used in investing activities..................................... (2,624) (950) (617)
---------- ---------- ----------
Cash flows from financing activities:
Net transactions with shareowners........................................... (10,687) (9,980) (8,363)
---------- ---------- ----------
Net cash used in financing activities..................................... (10,687) (9,980) (8,363)
---------- ---------- ----------
Net (decrease) increase in cash and cash equivalents...................... (818) 187 1,176
Cash and cash equivalents:
Beginning of period......................................................... 2,499 2,312 1,136
---------- ---------- ----------
End of period............................................................... $ 1,681 $ 2,499 $ 2,312
---------- ---------- ----------
---------- ---------- ----------
Supplemental disclosures of cash flow information, cash paid during the period
for:
Income taxes................................................................ $ 36 $ 30 $ 162
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GOODSON NEWSPAPERS
COMBINED CONSOLIDATED STATEMENTS
OF SHAREOWNERS' NET INVESTMENT
(IN THOUSANDS)
<TABLE>
<CAPTION>
TOTAL
SHAREOWNERS'
NET INVESTMENT
--------------
<S> <C>
Balance at December 31, 1994...................................................................... $ 16,220
Net income........................................................................................ 8,225
Net transactions with shareowners................................................................. (8,363)
--------------
Balance at December 31, 1995...................................................................... 16,082
Net income........................................................................................ 9,134
Net transactions with shareowners................................................................. (9,980)
--------------
Balance at December 31, 1996...................................................................... 15,236
Net income........................................................................................ 10,794
Net transactions with shareowners................................................................. (10,687)
--------------
Balance at December 31, 1997...................................................................... $ 15,343
--------------
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GOODSON NEWSPAPERS
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
NOTE 1: ORGANIZATION, OPERATIONS AND BASIS OF PRESENTATION
On May 17, 1998, the Journal Register Company agreed to acquire 25 newspaper
publications ("Goodson Newspapers") in Pennsylvania, New York and Ohio that were
indirectly under the common control of the estate of Mark Goodson and various
Mark Goodson trusts ("Management of Goodson Newspapers") (the "Acquisition").
The accompanying financial statements present the financial position,
results of operations and cash flows of Goodson Newspapers. The combined
consolidated financial statements of Goodson Newspapers have been prepared based
on the historical cost as reflected in the financial statements of Goodson
Newspaper Group, Inc. and Mark Goodson Enterprises, Ltd. (collectively,
"Goodson"). The financial information in these combined consolidated financial
statements is not necessarily indicative of results of operations, financial
position and cash flows that would have occurred if Goodson Newspapers had been
a separate stand-alone entity during the periods presented or future periods.
The combined consolidated financial statements included herein do not reflect
any changes that may occur in the financing and operations of Goodson Newspapers
as a result of the Acquisition.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF COMBINATION:
The combined consolidated financial statements include the accounts of
Goodson Newspapers and reflect the historical basis of accounting of Goodson.
Transactions between Goodson Newspapers and Goodson are included in the
shareowners' net investment since Goodson Newspapers is not a distinct legal
entity and there are no customary equity and capital accounts. All significant
intercompany accounts and transactions are eliminated.
USE OF ESTIMATES:
The preparation of the combined consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Such estimates include the allowance for
doubtful accounts and any required valuation allowance for deferred income
taxes. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS:
All highly liquid debt instruments purchased with an initial maturity of
three months or less are classified as cash equivalents.
INVENTORIES:
Inventories, consisting of newsprint, ink and supplies, are stated at the
lower of cost or market with the cost of all newsprint inventories being
determined by the last-in, first-out method and the remaining inventories
determined by the first-in, first-out method. The replacement cost of
inventories exceeded their recorded cost at December 31, 1997 and 1996 by $93
and $74, respectively.
<PAGE>
GOODSON NEWSPAPERS
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment are stated at historical cost. Maintenance and
repairs are charged to expense as incurred; costs of major additions and
betterments are capitalized. The cost of property, plant and equipment sold or
otherwise disposed of and the accumulated depreciation and amortization
applicable thereto are eliminated from the accounts and the resulting gain or
loss is reflected in earnings.
Depreciation and amortization are provided for by the straight-line method
over the following estimated useful lives or term of lease:
<TABLE>
<S> <C>
Buildings and improvements.................................. 7-25 Years
Machinery and equipment..................................... 2-22 Years
Leasehold improvements...................................... Term of leases
</TABLE>
Depreciation expense and amortization of leasehold improvements totaled
$1,578, $1,516, and $1,692, for 1997, 1996, and 1995, respectively. In 1996,
construction in progress was written down by $665 to reflect its estimated net
realizable value.
INTANGIBLE AND OTHER ASSETS:
The balance of intangible assets at December 31, 1997 and 1996 was comprised
of advertisers' accounts and excess cost over the value of identifiable net
assets of companies acquired. These assets are being amortized over a period of
9 to 40 years and are amortized by the straight-line method. In accordance with
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of," the carrying values of all intangible and
other long-lived assets are periodically reviewed to determine whether
impairment exists, and adjustments to net realizable value are made as needed.
No such adjustments were required in 1997 or 1996.
INCOME TAXES:
Goodson Newspapers uses the liability method of accounting for income taxes.
Under this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax basis of assets and liabilities
and are measured using the currently enacted tax rates and laws that will be in
effect when the differences are expected to reverse.
FINANCIAL INSTRUMENTS:
The carrying value of cash and cash equivalents, accounts receivable and
payable and accrued liabilities approximates fair value due to the short-term
maturities of these assets and liabilities.
DEFERRED SUBSCRIPTION REVENUE:
Deferred subscription revenue arises from subscription payments made in
advance of newspaper delivery. Revenue is recognized in the period in which
publications are delivered.
<PAGE>
GOODSON NEWSPAPERS
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
NOTE 3: INTANGIBLE AND OTHER ASSETS
Intangible assets, net of accumulated amortization, are summarized as
follows:
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Intangible assets, net of accumulated amortization of $4,675 and $4,522 at
December 31, 1997 and 1996, respectively................................. $ 1,846 $ 2,000
Prepaid pension costs...................................................... 432 476
--------- ---------
$ 2,278 $ 2,476
--------- ---------
--------- ---------
</TABLE>
Amortization expense for 1997, 1996, and 1995 was $153, $153, and $157,
respectively.
NOTE 4: RELATED PARTY TRANSACTIONS
Goodson Newspapers participates in Goodson's centralized cash management
investment system. Cash deposits from Goodson Newspapers are transferred to
Goodson on a regular basis and Goodson invests in various short term securities.
No interest has been imputed on transactions with Goodson.
Goodson provides certain selling, general and administrative services to
Goodson Newspapers including finance, accounting, legal, employee benefits and
facilities. These expenses were allocated to Goodson Newspapers based upon
relative net revenues. Management believes such allocation is reasonable.
Expense allocations to Goodson Newspapers were $3,750, $3,376, and $3,507 for
the years ended December 31, 1997, 1996 and 1995, respectively.
The expenses allocated to Goodson Newspapers for these services are not
necessarily indicative of the expenses that would have been incurred if these
newspaper operations had been a separate, independent entity and had managed
these functions.
NOTE 5: PENSION PLANS
ADMINISTERED PLANS:
Certain subsidiaries of Goodson Newspapers have defined benefit plans
covering substantially all of their employees. The subsidiaries make annual
contributions to the plans sufficient to satisfy the minimum funding
requirements of ERISA plus an amount for the unfunded actuarial liability.
<PAGE>
GOODSON NEWSPAPERS
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
NOTE 5: PENSION PLANS (CONTINUED)
The following table sets forth the plans' funded status and the amounts
recognized in Goodson Newspapers' balance sheets as of December 31, 1997 and
1996.
<TABLE>
<CAPTION>
1997 1996
------------------------- -------------------------
<S> <C> <C> <C> <C>
OVERFUNDED UNDERFUNDED OVERFUNDED UNDERFUNDED
----------- ------------ ----------- ------------
Actuarial present value of benefit obligation:
Vested benefit obligation................................ $ 8,100 $ 1,578 $ 7,320 $ 1,460
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
Accumulated benefit obligation........................... $ 8,197 $ 1,581 $ 7,421 $ 1,467
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
Projected benefit obligation............................... (8,792) (1,581) (8,032) (1,467)
Fair value of plan assets.................................. 9,773 1,519 8,864 1,245
----------- ------------ ----------- ------------
Plan assets in excess of (less than) projected benefit
obligation............................................... 981 (62) 832 (222)
Unrecognized net transition obligation..................... 174 116 205 134
Unrecognized net (gain).................................... (870) (206) (732) (127)
Unrecognized prior service cost............................ 147 -- 171 --
----------- ------------ ----------- ------------
Prepaid (accrued) pension cost............................. $ 432 $ (152) $ 476 $ (215)
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>
Components of net pension cost for the years ended December 31 include:
<TABLE>
<CAPTION>
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Service cost........................................................................ $ 199 $ 204 $ 222
Interest cost....................................................................... 728 708 654
Actual return on plan assets........................................................ (1,552) (781) (1,198)
Net amortization and deferral....................................................... 233 35 574
Curtailment charge.................................................................. -- -- 157
--------- --------- ---------
$ (392) $ 166 $ 409
--------- --------- ---------
--------- --------- ---------
</TABLE>
Net amortization and deferral consists of amortization of net liabilities at
transition and deferral and amortization of subsequent net gains and losses. In
1995, benefits for certain employees of one subsidiary were frozen and the
employees were required to join the subsidiary's 401(k) plan. This event
resulted in a curtailment charge of $157 during 1995. In determining the
actuarial value of the projected benefit obligation as of December 31, 1997,
1996, and 1995, the discount rate used was 7.5% to 8%, 8%, and 8% respectively,
and the rate of increase in compensation levels used was 4.5% to 8%, 5.5% to 6%,
and 6%, respectively. The expected long-term rate of return on plan assets was
8% 1997, 1996, and 1995.
In addition to the above plans, Goodson Newspapers had additional expense
relating to 401(k) and similar defined contribution plans of approximately $400,
$414, and $417, in 1997, 1996, and 1995, respectively.
<PAGE>
GOODSON NEWSPAPERS
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
NOTE 5: PENSION PLANS (CONTINUED)
UNION MULTI-EMPLOYER PLANS:
Certain subsidiaries of Goodson Newspapers make contributions to
multi-employer union administered pension plans. Pension plan expense for these
plans aggregated $241, $213, and $217 for 1997, 1996, and 1995, respectively.
NOTE 6: INCOME TAXES
Certain of the combined subsidiaries file a consolidated federal income tax
return with their parent with which they have a tax-sharing arrangement. In
addition, one combined subsidiary has elected and qualified to be treated as an
S Corporation. For federal income tax purposes, income tax expense on this
subsidiary's operating results is realized at the shareowner level. Accordingly,
the income tax provisions set forth below include only state income tax
provisions on this subsidiary's operating results.
Goodson Newspapers' tax accounts have been prepared on a separate company
basis and do not necessarily reflect the actual tax position as determined on a
consolidated basis with Goodson.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
<S> <C> <C> <C>
1997 1996 1995
--------- --------- ---------
Current tax expense:
Federal............................................................................ $ 4,003 $ 3,422 $ 3,283
State.............................................................................. 1,316 1,121 1,120
--------- --------- ---------
Total current........................................................................ 5,319 4,543 4,403
--------- --------- ---------
Deferred tax expense (benefit):
Federal............................................................................ (113) (89) (182)
State.............................................................................. (40) (28) (97)
--------- --------- ---------
Total deferred....................................................................... (153) (117) (279)
--------- --------- ---------
Total provision for taxes............................................................ $ 5,166 $ 4,426 $ 4,124
--------- --------- ---------
--------- --------- ---------
</TABLE>
The reconciliation of income tax computed at the U.S. federal statutory tax
rate to income tax expense is as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
<S> <C> <C> <C>
1997 1996 1995
--------- --------- ---------
Tax at U.S. statutory rates....................................................... $ 5,587 $ 4,746 $ 4,322
State taxes, net of federal effect................................................ 844 722 679
S Corporation taxes at U.S. statutory rates....................................... (1,305) (1,085) (919)
Other............................................................................. 40 43 42
--------- --------- ---------
$ 5,166 $ 4,426 $ 4,124
--------- --------- ---------
--------- --------- ---------
</TABLE>
Deferred income taxes reflect the net effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
<PAGE>
GOODSON NEWSPAPERS
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
NOTE 6: INCOME TAXES (CONTINUED)
Significant components of the Company's deferred tax liabilities and assets as
of December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Deferred tax liabilities:
Property, plant and equipment............................................ $ 438 $ 549
--------- ---------
Deferred tax assets:
Allowance for doubtful accounts.......................................... 190 193
Retiree benefits......................................................... 73 16
Net operating loss carryforwards......................................... 4,580 16
Accrued vacation pay..................................................... 386 370
Other.................................................................... 1 29
--------- ---------
5,230 624
Valuation allowance........................................................ 4,564 --
--------- ---------
Total deferred tax assets.................................................. 666 624
--------- ---------
Net deferred tax assets.................................................... $ 228 $ 75
--------- ---------
--------- ---------
</TABLE>
At December 31, 1997, the Goodson Newspaper Group, Inc. had net operating
loss carryforwards for Federal and State income tax purposes expiring through
December 31, 2011. The parent of the Goodson Newspaper Group, Inc. will utilize
a portion of these carryforwards to offset the tax gain resulting from the
Acquisition. Journal Register Company will receive the remainder of the
carryforwards in connection with the Acquisition. Management has estimated that
after application of the carryforwards against the tax gain and upon completion
of the Acquisition, Journal Register Company will have available to it, net
operating loss carryforwards of $12.1 million and $2 million for Federal and
State income tax purposes, respectively. Since Journal Register Company
anticipates recurring losses for the Goodson Newspapers in the future, a full
valuation allowance has been provided for the deferred tax asset related to the
net operating loss carryforwards. Additionally, Internal Revenue Code Section
382 may limit the utilization of the net operating loss carryforwards.
NOTE 7: COMMITMENTS AND CONTINGENCIES
(a) Certain combined subsidiaries of Goodson Newspapers rent various
premises under noncancelable operating leases expiring at various dates through
December 2003 for which they pay minimum annual rentals plus escalation for real
estate taxes. Rent expense under non-cancelable operating leases aggregated
approximately $231, $236, and $223 for 1997, 1996, and 1995, respectively.
<PAGE>
GOODSON NEWSPAPERS
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
NOTE 7: COMMITMENTS AND CONTINGENCIES (CONTINUED)
At December 31, 1997, future minimum rental commitments under these
non-cancelable operating leases are as follows:
<TABLE>
<S> <C>
1998................................................................ $ 230
1999................................................................ 232
2000................................................................ 234
2001................................................................ 235
2002................................................................ 237
Thereafter.......................................................... 164
---------
Total Minimum Rentals............................................... $ 1,332
---------
---------
</TABLE>
(b) Goodson Newspapers is involved in disputes and litigation arising in the
normal course of business. Goodson Newspapers believes that the resolution of
these matters will not have a material impact on the Goodson Newspapers
financial statements.
NOTE 8: SUBSEQUENT EVENTS
In March 1998 a subsidiary entered into an agreement to purchase a 55%
interest in a partnership from the estate of Mark Goodson for a purchase price
of $682. Upon closing of the purchase, the subsidiary will own a 100% interest
in the partnership.
On May 13, 1998 a subsidiary completed the sale of certain real property for
sale proceeds of $751, resulting in a pre-tax loss of $102.
NOTE 9: SUBSEQUENT EVENTS
On July 15, 1998, Journal Register Company completed its acquisition of
Goodson Newspapers. As a result of the completion of the transaction, Journal
Register Company assumed control of the management and operations of Goodson
Newspapers.
<PAGE>
GOODSON NEWSPAPERS
COMBINED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
----------- ------------
<S> <C> <C>
(UNAUDITED)
ASSETS
Current assets
Cash and cash equivalents........................................................... $ 1,953 $ 1,681
Accounts receivable, less allowance for doubtful accounts of $649 and $629,
respectively...................................................................... 6,252 6,916
Inventories......................................................................... 863 802
Deferred income taxes............................................................... 574 577
Other current assets................................................................ 354 240
----------- ------------
Total current assets............................................................ 9,996 10,216
----------- ------------
Property, plant and equipment:
Land................................................................................ 527 527
Buildings and improvements.......................................................... 9,521 9,600
Machinery and equipment............................................................. 22,689 22,353
Construction in progress and deposits............................................... 1,186 1,211
----------- ------------
33,923 33,691
Less: Accumulated depreciation...................................................... (25,943) (25,539)
----------- ------------
Property, plant and equipment, net.................................................... 7,980 8,152
Intangible and other assets, net...................................................... 2,246 2,278
----------- ------------
Total assets.................................................................... $ 20,222 $ 20,646
----------- ------------
----------- ------------
LIABILITIES AND EQUITY
Current liabilities
Accounts payable.................................................................... $ 670 $ 656
Accrued salaries and vacation....................................................... 1,693 1,449
Deferred subscription revenue....................................................... 1,483 1,426
Accrued expenses.................................................................... 181 161
Other current liabilities........................................................... 527 582
----------- ------------
Total current liabilities....................................................... 4,554 4,274
----------- ------------
Accrued retiree benefits.............................................................. 647 680
Deferred income taxes................................................................. 326 349
Total liabilities............................................................... 5,527 5,303
----------- ------------
Commitments and contingencies
Shareowners' net investment........................................................... 14,695 15,343
----------- ------------
Total liabilities and shareowners' net investment............................... $ 20,222 $ 20,646
----------- ------------
----------- ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GOODSON NEWSPAPERS
COMBINED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
<S> <C> <C>
1998 1997
--------- ---------
Revenues:
Advertising............................................................................... $ 11,544 $ 11,339
Circulation............................................................................... 4,115 4,079
--------- ---------
Newspaper revenues.......................................................................... 15,659 15,418
Commercial printing and other............................................................... 544 400
--------- ---------
16,203 15,818
--------- ---------
Operating expenses:
Salaries and employee benefits............................................................ 7,093 6,889
Newsprint, ink and printing charges....................................................... 1,928 1,552
Selling, general and administrative....................................................... 1,904 1,957
Depreciation and amortization............................................................. 496 402
Other..................................................................................... 1,663 1,560
--------- ---------
13,084 12,360
--------- ---------
Operating income...................................................................... 3,119 3,458
Other income (expense):
Interest income........................................................................... -- 4
Other expense............................................................................. (1) --
--------- ---------
Income before provision for income taxes.............................................. 3,118 3,462
Provision for income taxes.................................................................. 1,022 1,120
--------- ---------
Net income............................................................................ $ 2,096 $ 2,342
--------- ---------
--------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GOODSON NEWSPAPERS
COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
<S> <C> <C>
1998 1997
--------- ---------
Cash flows from operating activities:
Net income.............................................................................. $ 2,096 $ 2,342
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization......................................................... 496 402
Provision for losses on accounts receivable, net...................................... 133 131
Deferred income tax provision......................................................... 20 33
Change in assets and liabilities:
Decrease in accounts receivable..................................................... 531 576
Increase in inventories............................................................. (61) (34)
(Increase) decrease in other assets................................................. (114) 65
Increase in accounts payable and accrued expenses................................... 278 237
Increase in deferred subscription revenue........................................... 57 82
Decrease in other liabilities....................................................... (88) --
--------- ---------
Net cash provided by operating activities............................................. 3,348 3,834
--------- ---------
Cash flows from investing activities:
Additions to property, plant and equipment.............................................. (335) (216)
Proceeds from sale of property, plant and equipment, and other assets................... 3 19
--------- ---------
Net cash used in investing activities................................................. (332) (197)
--------- ---------
Cash flows from financing activities:
Net transactions with shareowners....................................................... (2,744) (2,320)
--------- ---------
Net cash used in financing activities................................................. (2,744) (2,320)
--------- ---------
Net increase in cash and cash equivalents............................................. 272 1,317
Cash and cash equivalents:
Beginning of period..................................................................... 1,681 2,499
--------- ---------
End of period........................................................................... $ 1,953 $ 3,816
--------- ---------
--------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GOODSON NEWSPAPERS
COMBINED CONSOLIDATED STATEMENTS OF
SHAREOWNERS' NET INVESTMENT
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
TOTAL
SHAREOWNERS'
NET INVESTMENT
-----------------
<S> <C>
Balance at December 31, 1997................................................................... $ 15,343
Net Income..................................................................................... 2,096
Net transactions with shareowners.............................................................. (2,744)
-------
Balance at March 31, 1998...................................................................... $ 14,695
-------
-------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GOODSON NEWSPAPERS
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
(UNAUDITED)
NOTE 1: ORGANIZATION, OPERATIONS AND BASIS OF PRESENTATION
On May 17, 1998, the Journal Register Company agreed to acquire 25 newspaper
publications ("Goodson Newspapers") in Pennsylvania, New York and Ohio that were
indirectly under the common control of the estate of Mark Goodson and various
Mark Goodson trusts ("Management of Goodson Newspapers") (the "Acquisition").
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with instructions to Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the three months ended March 31, 1998 are not necessarily indicative
of the results that may be expected for the year ended December 31, 1998. For
further information, refer to the financial statements and footnotes thereto
included in this Offering Memorandum.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF COMBINATION:
The combined consolidated financial statements include the accounts of
Goodson Newspapers. All significant intercompany accounts and transactions are
eliminated.
NOTE 3: RELATED PARTY TRANSACTIONS
Goodson Newspapers participates in Goodson's centralized cash management
investment system. Cash deposits from Goodson Newspapers are transferred to
Goodson on a regular basis and Goodson invests in various short term securities.
No interest has been imputed on transactions with Goodson.
Goodson provides certain selling, general and administrative services to
Goodson Newspapers including finance, accounting, legal, employee benefits and
facilities. These expenses were allocated to Goodson Newspapers based upon
relative net revenues. Management believes such allocation is reasonable.
Expense allocations to Goodson Newspapers were $784 and $796 for the three
months ended March 31, 1998 and 1997, respectively.
The expenses allocated to Goodson Newspapers for these services are not
necessarily indicative of the expenses that would have been incurred if these
newspaper operations had been a separate, independent entity and had managed
these functions.
NOTE 4: SUBSEQUENT EVENTS
On July 15, 1998, Journal Register completed its acquisition of Goodson
Newspapers. As a result of the completion of the transaction, Journal Register
assumed control of management and operations of Goodson Newspapers.
<PAGE>
b). Pro forma consolidated financial statements
JOURNAL REGISTER COMPANY
PRO FORMA CONSOLIDATED BALANCE SHEET AND
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
On July 15, 1998, Journal Register Company ( "Journal Register" or the
"Company") completed the Goodson acquisition which included 25 newspaper
publications ("Goodson Newspapers") in Pennsylvania, New York and Ohio that
were indirectly under the common control of the estate of Mark Goodson and
various Mark Goodson trusts ("Management of Goodson Newspapers") (the
"Acquisition").
The purchase price of approximately $300 million for the Acquisition was
paid for from the Company's new credit agreement (the "Credit Agreement").
The purchase price has been allocated to the net assets acquired based on
information currently available with regard to the value of such assets.
Property, plant and equipment for the acquired companies have been recorded
at their net book values which are estimated to approximate fair market
values. These values may be revised at a later date as additional information
becomes available upon completion of the valuation; however, management does
not believe that any such revisions will have a material effect on the
following pro forma consolidated balance sheet and pro forma statements
of income.
The Company entered into the Credit Agreement which increased its
available borrowings to $900 million. The proceeds from the Credit Agreement
were used to repay outstanding debt under a prior credit agreement and for
the purchase of the Goodson Newspapers.
The accompanying unaudited pro forma consolidated balance sheet of the
Company as of March 31, 1998 gives effect to the Acquisition and the Credit
Agreement as if all such transactions had occurred on March 31, 1998.
The accompanying unaudited pro forma consolidated statements of income of
the Company for the year ended December 31, 1997 and three months ended March
31, 1998 gives effect to the Acquisition and the Credit Agreement, as if all
such transactions had occurred on January 1, 1997 and 1998, respectively.
The pro forma consolidated financial statements are based upon certain
assumptions and estimates which are subject to change. These statements are not
necessarily indicative of the actual results of operations that might have
occurred, nor are they necessarily indicative of expected results in the future.
The pro forma consolidated financial statements should be read in
conjunction with the Company's historical Consolidated Financial Statements and
related notes and Goodson Newspapers' Combined Consolidated Financial
Statements and related notes included herein.
<PAGE>
JOURNAL REGISTER COMPANY
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
JRC GOODSON ADJUSTMENTS CONSOLIDATED
--------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
(NOTE A)
ASSETS
Current assets:
Cash and cash equivalents.................................. $ 11,076 $ 1,953 $ 310,000(1) $ 18,808
(304,221)(2)
Accounts receivable, net................................... 47,379 6,252 53,631
Inventories................................................ 11,066 863 93(3) 12,022
Deferred income taxes...................................... 5,821 574 (574)(4) 6,238
417(4)
Other current assets....................................... 4,668 354 5,022
--------- --------- --------- ---------
Total current assets......................................... 80,010 9,996 5,715 95,721
--------- --------- --------- ---------
Property, plant and equipment
Land....................................................... 7,567 527 8,094
Buildings and improvements................................. 60,989 9,521 (7,615)(6) 62,895
Machinery and equipment.................................... 150,165 22,689 (18,328)(6) 154,526
Construction in progress and deposits...................... -- 1,186 (1,186)(7) --
--------- --------- --------- ---------
218,721 33,923 (27,129) 225,515
Less: Accumulated depreciation........................... (126,219) (25,943) 25,943(6) (126,219)
--------- --------- --------- ---------
Property, plant and equipment, net........................... 92,502 7,980 (1,186) 99,296
Intangible and other assets, net............................. 193,615 2,246 (7,400)(10) 193,319
1,186(7)
5,000(1)
(1,814)(8)
486(5)
New goodwill................................................. -- -- 296,767(9) 296,767
--------- --------- --------- ---------
Total assets................................................. $ 366,127 $ 20,222 $ 298,754 $ 685,103
--------- --------- --------- ----------
--------- --------- --------- ----------
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current maturities of long-term debt....................... $ 59,228 $ -- $ (59,228)(12) $ --
Accounts payable........................................... 12,172 670 5,000(2) 17,842
Income taxes payable....................................... 574 -- (2,738)(10) (2,164)
Accrued interest........................................... 4,913 -- 4,913
Deferred subscription revenue.............................. 7,044 1,483 8,527
Other accrued expenses and current liabilities............. 21,996 2,401 24,397
--------- ---------- ---------- ----------
Total current liabilities.................................... 105,927 4,554 (56,966) 53,515
--------- ---------- ---------- ----------
Senior debt, less current maturities......................... 453,398 -- 315,000(1) 827,626
59,228(12)
Deferred income taxes........................................ 8,536 326 (326)(4) 9,863
1,327(4)
Accrued retiree benefits and other liabilities............... 16,661 647 (152)(5) 17,156
Income taxes payable......................................... 39,286 -- 39,286
Commitments and contingencies
--------- ---------- ---------- ----------
Total liabilities............................................ 623,808 5,527 318,111 947,446
--------- ---------- ---------- ----------
Stockholders' deficit
Common stock, $.01 par value, 300,000,000 shares authorized
and 48,437,500 issued and outstanding.................... 484 -- 484
Additional paid-in-capital................................. 358,234 -- 358,234
Accumulated deficit........................................ (616,399) 14,695 (14,695)(11) (621,061)
(4,662)(10)
--------- --------- --------- ----------
Net stockholders' deficit.................................... (257,681) 14,695 (19,357) (262,343)
--------- --------- --------- ----------
Total liabilities and stockholders' deficit.................. $ 366,127 $ 20,222 $ 298,754 $ 685,103
--------- --------- --------- ----------
--------- --------- --------- ----------
</TABLE>
See accompanying notes.
<PAGE>
JOURNAL REGISTER COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
JRC GOODSON ADJUSTMENTS CONSOLIDATED
------------ --------- ----------- ------------
<S> <C> <C> <C> <C>
(NOTE B)
REVENUES:
Advertising............................................. $ 63,940 $ 11,544 $ 75,484
Circulation............................................. 20,134 4,115 24,249
------------ --------- ------------
Newspaper revenues........................................ 84,074 15,659 99,733
Commercial printing and other............................. 5,587 544 6,131
------------ --------- ------------
89,661 16,203 105,864
OPERATING EXPENSES:
Salaries and employee benefits.......................... 30,912 7,093 38,005
Newsprint, ink and printing charges..................... 11,896 1,928 13,824
Selling, general and administrative..................... 8,158 1,904 $ (784)(a) 9,278
Depreciation and amortization........................... 4,939 496 (31)(b) 7,311
2,082(c)
156(d)
(331)(e)
Other................................................... 11,454 1,663 13,117
------------ --------- ----------- ------------
67,359 13,084 1,092 81,535
------------ --------- ----------- ------------
Operating income.......................................... 22,302 3,119 (1,092) 24,329
OTHER INCOME (EXPENSE):
Interest expense........................................ (8,691) -- (6,628)(f) (15,319)
Interest income......................................... 18 -- 18
Other................................................... (25) (1) (26)
------------ --------- ----------- ------------
Income before provision for income taxes.................. 13,604 3,118 (7,720) 9,002
Provision for income taxes................................ 5,041 1,022 (2,347)(g) 3,716
------------ --------- ----------- ------------
Net income................................................ $ 8,563 $ 2,096 $ (5,373) $ 5,286
------------ --------- ----------- ------------
------------ --------- ----------- ------------
Net income per share (Note C)
Basic................................................... $ .18 $ .11
Diluted................................................. $ .18 $ .11
Weighted average number of shares for basic earnings per
share................................................... 48,437,500 48,437,500
Weighted average number of shares for diluted earnings per
share................................................... 48,706,338 48,706,338
</TABLE>
See accompanying notes.
<PAGE>
JOURNAL REGISTER COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
JRC GOODSON ADJUSTMENTS CONSOLIDATED
------------ --------- ----------- ------------
<S> <C> <C> <C> <C>
(NOTE B)
REVENUES:
Advertising............................................. $ 266,914 $ 50,718 $ 317,632
Circulation............................................. 80,211 16,417 96,628
------------ --------- ------------
Newspaper revenues........................................ 347,125 67,135 414,260
Commercial printing and other............................. 12,282 1,874 14,156
------------ --------- ------------
359,407 69,009 428,416
OPERATING EXPENSES:
Salaries and employee benefits.......................... 114,302 28,774 143,076
Newsprint, ink and printing charges..................... 40,452 7,272 47,724
Selling, general and administrative..................... 30,450 8,853 $ (3,749)(a) 35,554
Depreciation and amortization........................... 20,480 1,731 (152)(b) 29,700
8,342(c)
625(d)
(1,326)(e)
Other................................................... 40,783 6,577 47,360
Special charge.......................................... 31,899 -- 31,899
------------ --------- ----------- ------------
278,366 53,207 3,740 335,313
------------ --------- ----------- ------------
Operating income.......................................... 81,041 15,802 (3,740) 93,103
OTHER INCOME (EXPENSE):
Interest expense........................................ (42,282) -- (28,081)(f) (70,363)
Interest income......................................... 46 135 181
Other................................................... (52) 23 (29)
------------ --------- ----------- ------------
Income before provision for income taxes.................. 38,753 15,960 (31,821) 22,892
Provision for income taxes................................ 15,784 5,166 (9,453)(g) 11,497
------------ --------- ----------- ------------
Net income................................................ $ 22,969 $ 10,794 $ (22,368) $ 11,395
------------ --------- ----------- ------------
------------ --------- ----------- ------------
Net income per share (Note C)
Basic................................................... $ .51 $ .25
Diluted................................................. $ .51 $ .25
Weighted average number of shares for basic earnings per
share................................................... 44,792,774 44,792,774
Weighted average number of shares for diluted earnings per
share................................................... 44,983,521 44,983,521
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET AND STATEMENTS OF INCOME
(UNAUDITED)
NOTE A: PRO FORMA BALANCE SHEET ADJUSTMENTS
(1) To record cash proceeds from the Credit Agreement and payment of related
financing costs.
(2) To record the purchase price of the Goodson acquisition including
transaction costs associated with the acquisition.
(3) To adjust the method of accounting for Goodson's inventory from a LIFO
method to a FIFO method.
(4) To eliminate Goodson's deferred tax asset and liability and record a
deferred tax asset and liability relating to temporary book and tax
differences calculated for Goodson acquired entities.
(5) To eliminate the Goodson prepaid pension asset and current liability and
record the current fair value of the plan's assets over the excess of the
projected benefit obligation.
(6) To reflect property, plant and equipment of the acquired companies at the
estimated net book value by eliminating accumulated depreciation.
(7) To reclass security deposits to other assets.
(8) To eliminate Goodson's intangible assets.
(9) To record the excess of the acquisition price over the estimated fair value
of the net assets acquired.
(10) To write-off deferred financing costs associated with the prior credit
agreement and record the related tax adjustment.
(11) To record the elimination of the stockholders' equity of Goodson.
(12) To reclass current portion of debt to long term to reflect the repayment
schedule per the Credit Agreement.
NOTE B: PRO FORMA STATEMENTS OF INCOME ADJUSTMENTS
(a) To record the reduction of general and administrative expenses resulting
from the elimination of redundant costs associated with the corporate
operations of a separate company such as management, accounting and
information systems support.
(b) To reverse the goodwill amortization recorded by Goodson.
(c) To record the amortization of the excess of cost over net assets acquired
using an estimated amortization period from 4 to 40 years, depending on the
nature of the intangible assets.
(d) To record the amortization of deferred financing costs (related to the
Credit Agreement) assuming an amortization period of 8 years.
(e) To reverse the amortization of deferred costs associated with the prior
credit agreement. In addition, the deferred financing costs related to the
prior credit agreement will be written off and will be treated as an
extraordinary item in the Statement of Income for the period ending
September 30, 1998 and therefore has not been reflected as a pro forma
adjustment.
(f) To record the interest expense relating to the Credit Agreement entered
into in connection with the Goodson acquisition. The interest is calculated
at an interest rate of 8.08% and 7.49% for the year ended December 31, 1997
and the three months ended March 31, 1998, respectively. A 1/8% change in
interest rate would result in a change of approximately $1.1 million and
$250,000 in interest costs for the year ended December 31, 1997 and the
three months ended March 31, 1998, respectively.
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET AND STATEMENTS OF INCOME
(UNAUDITED)
(CONTINUED)
NOTE B: PRO FORMA STATEMENTS OF INCOME ADJUSTMENTS (CONTINUED)
(g) To record the related tax effect of the above noted transactions and to
reflect an increase in taxes relating to a change in filing status of
certain Goodson properties from an S Corporation to a C Corporation and the
effect of non-deductible amortization costs.
NOTE C: EARNINGS PER COMMON SHARE
Effective December 31, 1997 the Company adopted the requirements of
Financial Accounting Standards No. 128, "Earnings Per Share." Statement 128
requires the disclosure of earnings per share on a basic and diluted basis.
Basic earnings per share excludes any dilutive effects of options, warrants and
convertible securities. Diluted earnings per share is very similar to the
previously required fully diluted earnings per share.
The pro forma net income per share for the year ended December 31, 1997 and
the three months ended March 31, 1998 reflect the effects of the Goodson
Acquisition and the Credit Agreement.
The following table sets forth the computation of weighted average shares
outstanding for calculating the pro forma basic and diluted earnings per share
for the year ended December 31, 1997 and the three months ended March 31, 1998:
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ ------------
<S> <C> <C>
Weighted-average shares for basic earnings per share............. 44,792,774 48,437,500
Effect of diluted securities:
Employee stock options......................................... 190,747 268,838
------------ ------------
Adjusted weighted-average shares for diluted earnings per
share.......................................................... 44,983,521 48,706,338
------------ ------------
------------ ------------
</TABLE>
<PAGE>
SIGNATURE
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.
Date: August 11, 1998 JOURNAL REGISTER COMPANY
By: /s/ Jean B. Clifton
--------------------
Jean B. Clifton
Executive Vice President
Chief Financial Officer & Treasurer
(signing on behalf of the registrant
and as principal financial officer)
