FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Quarter Ending March 27, 1994
(3 Accounting Periods)
Commission file number 0-783l
JOURNAL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
WISCONSIN 39-0382060
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Journal Square, P.O. Box 661, 333 W. State St., Milwaukee, Wisconsin 5320l
(Address of principal executive offices) (Zip Code)
414-224-2728
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13
or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter
period that the registrant was required to file such
reports, and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
Number of shares of Common Stock Outstanding - May 2, 1994 13,991,861
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FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
Quarter Ended March 27, 1994 Commission file number 0-7831
(3 Accounting Periods)
INDEX
Page No.
Part I. Financial Information (unaudited)
Condensed Consolidated Balance Sheets
March 27, 1994 and December 31, 1993 2
Condensed Consolidated Statements of Income
Three Periods Ended March 27, 1994 and
March 28, 1993 3
Condensed Consolidated Statements of Cash Flows
Three Periods Ended March 27, 1994
and March 28, 1993 4
Notes to Condensed Consolidated
Financial Statements 5
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 6
Part II. Other Information 7
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FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended March 27, 1994 Commission file number 0-783l
(3 Accounting Periods)
Condensed Consolidated Balance Sheets
March 27, 1994 and December 31, 1993
(Dollars in thousands)
ASSETS 3/27/94 12/31/93
(Unaudited) (Note)
Current Assets:
Cash $ 13,990 $ 12,794
Short-term investments 53,176 50,166
Receivables 80,548 76,564
Inventories:
Paper and supplies 16,221 16,995
Work in process 7,385 5,538
Finished goods 3,577 3,410
-------- --------
27,183 25,943
Prepaid expenses 19,774 21,122
-------- --------
Total current assets 194,671 186,589
Property and equipment, less accumulated
depreciation of $250,490 and $240,730 193,952 189,146
Deferred charges and other assets 39,281 39,534
Goodwill 27,896 22,160
-------- --------
Total Assets $455,800 $437,429
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 25,793 $ 24,184
Taxes on income 5,817 58
Accrued liabilities 54,546 47,795
Current portion of long-term obligations 3,735 3,543
-------- --------
Total current liabilities 89,891 75,580
Long-term obligations 3,996 3,679
Other liabilities and deferred credits 10,718 10,723
Stockholders' equity:
Common stock - Authorized and issued
14,400,000 ($0.25 par value) 3,600 3,600
Retained earnings 359,278 355,879
Treasury stock, at cost (11,683) (12,032)
-------- --------
Total stockholders' equity 351,195 347,447
-------- --------
Total liabilities and
stockholders' equity $455,800 $437,429
======== ========
Note: The balance sheet at December 31, 1993 has been derived from the
audited financial statements at that date but does not include all the
information and foot notes required by generally accepted accounting
principles for complete financial statements.
See accompanying notes to condensed consolidated financial statements.
<PAGE>
FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended March 27, 1994 Commission file number 0-7831
(3 Accounting Periods)
Condensed Consolidated Statement of Income
(Dollars in thousands except share and per share amounts)
Three Periods Ended
3/27/94 3/28/93
(Unaudited) (Unaudited)
Net Sales $ 138,416 $ 127,189
---------- ----------
Operating costs and expenses:
Cost of sales 84,876 78,413
Selling and administrative expenses 37,749 32,588
---------- ----------
122,625 111,001
---------- ----------
Operating Earnings 15,791 16,188
Dividend and interest income 386 463
Interest expense (41) (7)
---------- ----------
Earnings before income taxes 16,136 16,644
Provision for income taxes 6,474 6,632
---------- ----------
Net income $ 9,662 $ 10,012
========== ==========
Weighted average number of common shares
outstanding 14,040,546 14,003,955
========== ==========
Earnings per share $ 0.69 $ 0.71
========== ==========
Cash dividend per share $ 0.45 $ 0.45
========== ==========
See accompanying notes to condensed consolidated financial statements.
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FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended March 27, 1994 Commission file number 0-7831
(3 Accounting Periods)
Condensed Consolidated Statement of Cash Flows
(Dollars in thousands)
Three Periods Ended
3/27/94 3/28/93
(Unaudited) (Unaudited)
Cash flow from operating activities:
Net earnings $ 9,662 $ 10,012
Adjustments to net earnings for
Non-cash items:
Depreciation and amortization 9,515 8,721
(Increase) decrease in accounts receivable (466) (341)
(Increase) decrease in inventories (951) (1,045)
Increase (decrease) in accounts payable 483 (1,890)
Other current assets and liabilities 10,267 10,240
------- --------
Net cash provided by operating activities 28,510 25,697
------- --------
Cash flow from investing activities:
Property and equipment expenditures (11,004) (6,627)
Assets of business acquired (6,903) (947)
Net (increase) decrease in short-term
investments (3,010) (430)
------- --------
Net cash used for investing activities (20,917) (8,004)
------- --------
Cash flow from financing activities:
Purchase of treasury stock --- (2,575)
Reduction in long-term obligations (459) (542)
Sale and distribution of treasury stock 382 358
Cash dividends (6,320) (6,277)
------- --------
Net cash used for financing activities (6,397) (9,036)
------- --------
Net increase (decrease) in cash 1,196 8,657
Cash:
Beginning of year 12,794 10,987
------- --------
End of year $13,990 $19,644
------- --------
See notes to condensed consolidated financial statements.
<PAGE>
FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended March 27, 1994 Commission file number 0-7831
(3 Accounting Periods)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with
the instructions to Form 10-Q and Article 10 of Regulations 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 accruals) considered
necessary for a fair presentation have been included. Operating
results for the three periods ended March 27, 1994, are not
necessarily indicative of the results that may be expected for the
year ended December 31, 1994. For further information, refer to
the consolidated financial statements and footnotes thereto
included in the Journal Communications, Inc. annual report on Form
10-K for the year ended December 31, 1993.
2. The Registrant divides its calendar year into thirteen four-week
accounting periods, except that the first and thirteenth periods
may be longer or shorter to the extent necessary to make each
accounting year end on December 31. Registrant follows a practice
of publishing its financial statement at the end of the third
accounting period (its first quarter) and at the end of the sixth
accounting period (its second quarter), and at the end of the tenth
accounting period (its third quarter).
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FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended March 27, 1994 Commission file number 0-7831
(3 Accounting Periods)
Management's Discussion and Analysis of Consolidated
Financial Condition and Results of Operations
Operating results for the first quarter of 1994 show revenue at
$138,416,000, up 8.8% over a year ago. However, net earnings are down
3.5% to $9,662,000 due to lower operating margins at Perry Printing
Corp.'s Web Division and at Imperial Printing Co. (IPC).
At Journal/Sentinel Inc., revenue is ahead of last year by $2.8
million with the majority of the increase coming from classified
advertising, which is up 11.3%. Journal/Sentinel operating earnings are
up 16.3%.
At WTMJ Inc., revenue rose $1.2 million, primarily from the
Milwaukee and Las Vegas television stations. KQRC-FM in Kansas City also
has increased revenue. WTMJ-AM has increased sports revenue, but spot
revenue is behind budget and earnings are down due to increased sports
expenses related to the Packers post-season play and the Wisconsin Badgers
trip to a Rose Bowl victory. WSYM-TV's earnings improved, although
revenue is lower. Revenue and earnings are down at WKTI-FM, while
WSAU/WIFC in Wausau failed to improve earnings on flat revenue.
Perry Printing shows a 4.4% increase in revenue. However, at the
Web Division's Waterloo and Baraboo plants, operating earnings are off
49%, with decreased revenue, costs associated with the break-in of a new
press at Baraboo and the loss of the Sullivan Marketing business. The
Milwaukee plant reports a strong turnaround in earnings, while the
Norway/Watertown operation continues to be ahead of last year in revenue
and earnings. Label Products and Design in Green Bay has earnings
significantly ahead of last year.
MRC Telecommunications Inc. continues its growth in revenue, while
operating earnings are 9% over the prior year. ADD Inc. revenue increased
$1.5 million and earnings are up sharply. Operating earnings show a 40%
increase in Ohio. IPC revenue and earnings are behind last year.
Management is working on a program to control costs and increase profit
margins. However, some of the increased costs are necessary to prepare
IPC for its next wave of growth. PrimeNet DataSystems, which was acquired
Jan. 11, 1994, contributed $1.9 million in revenue during the first
quarter. PrimeNet is positioning itself through development of its
proprietary software products for future growth.
Working capital remained strong at $104.8 million, while total
assets now are $456 million. During the quarter, dividends paid per share
were $0.45. There are no significant variations in the Company's
financial position during the first quarter of 1994. There are no major
outstanding commitments other than normal operating costs for ongoing
operations, which would require utilization of the company's capital
resources.
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FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended March 27, 1994 Commission file number 0-7831
(3 Accounting Periods)
Part II. Other Information
Item 6 - Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K. There were no reports on Form 8-K filed
for the three accounting periods ended March 27, 1994.
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 thereunto duly authorized.
JOURNAL COMMUNICATIONS, INC.
Registrant
Date May 5, 1994 ROBERT A. KAHLOR
Robert A. Kahlor,
Chairman of the Board
Date May 5, 1994 PETER P. JARZEMBINSKI
Peter P. Jarzembinski,
Senior Vice President of Finance
