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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 10, 2000
JOURNAL REGISTER COMPANY
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 1-12955 22-3498615
(State or Other (Commission File (I.R.S. Employee
Jurisdiction of Incorporation) Number) Identification Number)
50 WEST STATE STREET, TRENTON, NEW JERSEY 08608-1298
(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)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to an Asset Sale and Purchase Agreement (the "Agreement")
dated June 24, 2000, on August 10, 2000, Journal Register Company (the
"Company") and its wholly owned subsidiaries sold substantially all of the
assets of the Suburban Newspapers of Greater St. Louis and all of the issued and
outstanding capital stock of The Ladue News, Inc. to Pulitzer, Inc. and SLSJ LLC
for approximately $165 million in cash, plus working capital.
The Suburban Newspapers of Greater St. Louis consists of 38 free and 2
paid weekly newspapers with non-daily distribution of approximately 1.6 million
in the greater St. Louis Area. The Ladue News, Inc. publishes a weekly newspaper
serving approximately 40,000 households in the affluent west suburban area of
St. Louis.
The Agreement is attached hereto as Exhibit 2. A Press Release
announcing the consummation of the sale is attached hereto as Exhibit 99.
A portion of the proceeds will be used to pay down the Company's
outstanding debt with the remaining funds to be temporarily held in a qualified
trust, for potential future acquisitions, in accordance with Internal Revenue
Code Section 1031. Assuming no further acquisitions are initiated within the
timeframe allotted pursuant to Section 1031, these funds will be used to
reduce the Company's outstanding debt and for general corporate purposes.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information.
The following unaudited Pro Forma Condensed Consolidated Financial
Statements are filed with this report:
Pro Forma Condensed Statement of Income for the year ended
December 26, 1999
Pro Forma Condensed Statement of Income for the six months
ended June 25, 2000
Pro Forma Condensed Balance Sheet at June 25, 2000
The Pro Forma Condensed Balance Sheet of the Company at June 25, 2000
reflects the financial position of the Company after giving effect to the sale
in accordance with the Agreement and assumes the sale took place on June 25,
2000. The Pro Forma Condensed Consolidated Statement of Income for the fiscal
year ended December 26, 1999 and the six months ended June 25, 2000 assumes the
sale occurred on January 1, 1999.
The unaudited pro forma condensed financial statements have been
prepared by the Company based upon certain assumptions as disclosed in the
footnotes to those financial statements. The unaudited pro forma condensed
financial statements presented herein are shown for illustrative purposes only
and are not necessarily indicative of the future financial position or future
results of operations of the Company, or of the financial position or results of
operations of the Company that would have actually occurred had the transaction
been in effect as of the date or for the periods presented. In addition, it
should be noted that in the future the Company's financial statements will
reflect the disposition only from August 10, 2000.
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The unaudited Pro Forma Condensed Consolidated Financial Statements
should be read in conjunction with the historical financial statements and
related notes of the Company.
(c) Exhibits.
The following exhibits are filed with this Report:
2 Asset Sale and Purchase Agreement, dated June 24,
2000, among Journal Register Company, Journal
Register East, Inc., Suburban Newspapers of Greater
St. Louis, LLC, Journal Company, Inc., Pulitzer Inc.
and SLSJ LLC.
99 Press Release, dated August 10, 2000.
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JOURNAL REGISTER COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 26, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C> <C>
DISPOSITION PRO FORMA
AS REPORTED (A) ADJUSTMENTS PRO FORMA
---------------- ------------- ------------- ---------------
Revenues:
Advertising $ 348,995 $ 50,543 $ 298,452
Circulation 96,783 328 96,455
---------------- ------------- ------------- ----------------
Newspaper revenues 445,778 50,871 394,907
Commercial printing and other 23,787 86 23,701
---------------- ------------- ------------- ----------------
469,565 50,957 418,608
Operating expenses:
Salaries and employee benefits 157,110 13,785 143,325
Newsprint, ink and printing charges 48,432 9,993 38,439
Selling, general and administrative 45,318 6,834 38,484
Depreciation and amortization 28,798 1,600 27,198
Other 57,975 7,421 50,554
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337,633 39,633 298,000
Operating income 131,932 11,324 120,608
Net interest and other expense (52,347) (109) 2,191 (B) (50,047)
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Income before provision for income taxes
and equity interest 79,585 11,215 2,191 70,561
Provision for income taxes 31,694 4,486 877 (C) 28,085
--------------- ------------- -------------- ----------------
Net income before equity interest 47,891 6,729 1,314 42,476
Equity interest (226) --- (226)
--------------- ------------- -------------- ---------------
Net income $ 47,665 $ 6,729 $ 1,314 $ 42,250
=============== ============= ============== ===============
Net income per common share
(basic and diluted): $1.02 $.90
Weighted average shares outstanding:
Basic 46,820 46,820
Diluted 46,874 46,874
SEE NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION.
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JOURNAL REGISTER COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 25, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C> <C>
DISPOSITION PRO FORMA
AS REPORTED (A) ADJUSTMENTS PRO FORMA
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Revenues:
Advertising $ 177,582 $ 25,254 $152,328
Circulation 48,845 163 48,682
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Newspaper revenues 226,427 25,417 201,010
Commercial printing and other 10,873 1 10,872
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237,300 25,418 211,882
Operating expenses:
Salaries and employee benefits 79,527 7,279 72,248
Newsprint, ink and printing charges 23,824 5,284 18,540
Selling, general and administrative 24,185 3,604 20,581
Depreciation and amortization 14,166 711 13,455
Other 30,307 3,790 26,517
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172,009 20,668 151,341
Operating income 65,291 4,750 60,541
Net interest and other expense (26,285) (51) 1,255 (24,979)
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Income before provision for income taxes
and equity interest 39,006 4,699 1,255 35,562
Provision for income taxes 15,408 1,880 502 14,030
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Net income before equity interest 23,598 2,819 753 21,532
Equity interest (841) (841)
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Net income $ 22,757 $ 2,819 $ 753 $ 20,691
=============== ============= ============= ================
Net income per common share
(basic and diluted): $.50 $ .46
Weighted average shares outstanding:
Basic 45,416 45,416
Diluted 45,431 45,431
SEE NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION.
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JOURNAL REGISTER COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 25, 2000
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C>
AS REPORTED DISPOSITION PRO FORMA PRO FORMA
(A) ADJUSTMENTS
----------- ----------- ------------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 2,884 $ --- $ 137,000 (B) $ 139,884
Accounts receivable, net 64,334 7,258 57,076
Inventories 9,383 1,088 8,295
Deferred income taxes 2,808 ---- (165) (C) 2,643
Other current assets 7,615 771 6,844
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Total current assets 87,024 9,117 136,835 214,742
Property, plant and equipment: 250,450 29,125 221,325
Less accumulated depreciation (148,127) (21,362) (126,765)
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102,323 7,763 94,560
Intangible and other assets, net 493,201 5,577 487,624
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Total assets $ 682,548 $ 22,457 $ 136,835 $ 796,926
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LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current maturities of
long-term debt $ 26,000 $ --- $ --- $ 26,000
Accounts payable 9,396 348 9,048
Income taxes payable 241 --- 5,648 (C) 5,889
Accrued interest 6,870 4 6,866
Other accrued expenses and
current liabilities 30,638 1,636 9,850 (D) 38,852
----------- --------- ---------- ---------
Total current liabilities 73,145 1,988 15,498 86,655
Senior debt, less current
maturities 688,200 (34,955) (E) 653,245
Deferred income taxes 22,616 (605) (C) 22,011
Accrued retiree benefits and
other liabilities 14,657 539 14,118
Income taxes payable 80,971 --- 51,529 (C) 132,500
Commitments and contingencies
Net stockholders' deficit (197,041) 19,930 105,368 (F) (111,603)
----------- ---------- ---------- ---------
Total liabilities and
stockholders' deficit $ 682,548 $ 22,457 $ 136,835 $ 796,926
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SEE NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION.
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JOURNAL REGISTER COMPANY
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(A) Eliminate revenue and expenses directly associated with the
operations sold.
(B) To reduce interest expense assuming a portion of proceeds were used
to pay down long term revolving debt at the beginning of the period.
(C) To record income tax expense on the assumed reduction in interest
expense at an estimated effective rate of 40%.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(A) To eliminate the assets and liabilities sold to Pulitzer Inc. which
were included in the Company's consolidated balance sheet as of June
25, 2000.
(B) To reflect the portion of proceeds that were temporarily deposited in
an intermediary trust by the Company for potential future
acquisitions.
(C) To reflect the estimated income taxes payable related to the gain on
the sale and disposition of assets at an estimated effective tax rate
of 40%.
(D) To record accrued legal, accounting and other costs associated with
the transaction.
(E) To reflect the reduction of the Company's long term revolving debt.
(F) Includes approximately $86 million gain on the sale, net of tax.
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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 24, 2000 JOURNAL REGISTER COMPANY
By: /s/ Jean B. Clifton
__________________________
Jean B. Clifton
Executive Vice President,
Chief Financial Officer
and Secretary
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
2 Asset Sale and Purchase Agreement, dated June 24, 2000, among
Journal Register Company, Journal Register East, Inc., Suburban
Newspapers of Greater St. Louis, LLC, Journal Company, Inc.,
Pulitzer Inc. and SLSJ LLC.
99 Press Release, dated August 10, 2000.
