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 26, 1995
(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 53201
(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 share of Common Stock Outstanding - May 2, 1995 14,028,126
<PAGE>
FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
Quarter Ended March 26, 1995 Commission file number 0-7831
(3 Accounting Periods)
INDEX
Page No.
Part I. Financial Information
Consolidated Condensed Balance Sheets
March 26, 1995 and December 31, 1994 2
Condensed Consolidated Statements of Income
Three Periods Ended March 26, 1995
and March 27, 1994 3
Consolidated Condensed Statements of Cash Flows
Three Periods Ended March 26, 1995
and March 27, 1994 4
Notes to Consolidated Condensed
Financial Statements 5
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 6
Part II. Other Information 7
<PAGE>
FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended March 26, 1995 Commission file number 0-783l
(3 Accounting Periods)
Consolidated Condensed Balance Sheets
March 26, 1995 and March 27, 1994
(Dollars in thousands)
ASSETS 03/26/95 12/31/94
(Unaudited) (Note)
Current Assets:
Cash $ 12,087 $ 13,111
Short-term investments 25,304 38,964
Receivables 101,879 100,238
Inventories:
Paper and supplies 22,465 20,784
Work in process 9,025 7,134
Finished goods 6,024 5,366
-------- --------
37,514 33,284
Prepaid expenses 10,088 12,149
-------- --------
Total current assets 186,872 197,746
Property and equipment, less accumulated
depreciation of $266,374 and $258,507 216,567 208,147
Deferred charges and other assets 50,927 41,661
Goodwill 30,310 28,864
-------- --------
Total Assets $484,676 $476,418
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 38,098 $ 38,228
Taxes on income 4,210 133
Accrued liabilities 55,438 53,762
Current portion of long-term obligations 2,429 3,201
-------- --------
Total current liabilities 100,175 95,324
Long-term obligations 2,680 3,040
Other liabilities and deferred credits 10,625 10,625
Stockholders' equity:
Common stock - Authorized and issued
14,400,000 ($0.25 par value) 3,600 3,600
Retained earnings 377,118 373,626
Treasury stock, at cost (9,522) (9,797)
-------- --------
Total stockholders' equity 371,196 367,429
-------- --------
Total liabilities and
stockholders' equity $484,676 $476,418
======== ========
Note: The balance sheet at December 31, 1994 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 consolidated condensed financial statements.
<PAGE>
FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended March 26, 1995 Commission file number 0-7831
(3 Accounting Periods)
Consolidated Condensed Statement of Income
(Dollars in thousands except share and per share amounts)
Three Periods Ended
03/26/95 03/27/94
(Unaudited) (Unaudited)
Net Sales $ 158,681 $ 138,416
----------- ----------
Operating costs and expenses:
Cost of sales 101,092 84,876
Selling and administrative expenses 41,837 37,749
----------- ----------
Operating Earnings 15,752 15,791
Dividend and interest income 505 386
Interest expense (29) (41)
----------- ----------
Earnings before income taxes 16,228 16,136
Provision for income taxes 6,510 6,474
----------- ----------
Net income $ 9,718 $ 9,662
=========== ==========
Weighted average number of common shares
outstanding 14,111,594 14,040,546
=========== ==========
Earnings per share $ 0.69 $ 0.69
=========== ==========
Cash dividend per share $ 0.45 $ 0.45
=========== ==========
See accompanying notes to consolidated condensed financial statements.
<PAGE>
FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended March 26, 1995 Commission file number 0-7831
(3 Accounting Periods)
Condensed Consolidated Statement of Cash Flows
(Dollars in thousands)
Three Periods Ended
03/26/95 03/27/94
(Unaudited) (Unaudited)
Cash flow from operating activities:
Net earnings $ 9,718 $ 9,662
Adjustments to net earnings for
Non-cash items:
Depreciation and amortization 9,748 9,515
(Increase) decrease in accounts receivable 550 (466)
(Increase) decrease in inventories (4,230) (951)
Increase (decrease) in accounts payable (130) 483
Other current assets and liabilities 5,282 10,267
--------- --------
Net cash provided by operating activities 20,938 28,510
--------- --------
Cash flow from investing activities:
Property and equipment expenditures (15,493) (11,004)
Assets of business acquired (12,780) (6,903)
Net (increase) decrease in short-term
investments 13,660 (3,010)
--------- --------
Net cash used for investing activities (14,613) (20,917)
--------- --------
Cash flow from financing activities:
Purchase of treasury stock --- ---
Reduction in long-term obligations (1,303) (459)
Sale and distribution of treasury stock 306 382
Cash dividends (6,352) (6,320)
--------- --------
Net cash used for financing activities (7,349) (6,397)
--------- --------
Net increase (decrease) in cash (1,024) 1,196
Cash:
Beginning of year 13,111 12,794
--------- --------
End of year $ 12,087 $13,990
========= ========
See notes to condensed consolidated financial statements.
<PAGE>
FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended March 26, 1995 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 26, 1995, are not necessarily indicative of the results that
may be expected for the year ended December 31, 1995. 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, 1994.
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).
<PAGE>
FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended March 26, 1995 Commission file number 0-7831
(3 Accounting Periods)
Management's Discussion and Analysis of Consolidated
Financial Condition and Results of Operations
Revenue through three periods totaled $158.7 million, up 14.6% over
the same period last year. Net earnings were $9.7 million, up slightly
over the previous year.
Journal Sentinel had revenue of $49.1 million, up slightly from a
year ago. With the merger of The Milwaukee Journal and Milwaukee Sentinel
taking place in the fourth period, we anticipated a drop in operating
earnings in the first quarter as advertisers held off until the new
product was in the marketplace. Operating earnings came in at $8.6
million, down 22.3% which still was not as big a drop as we had expected.
Despite that, we are projecting a slight increase in Journal Sentinel's
operating earnings for 1995. The merger of the newspapers will result in
a one-time before tax charge to earnings of about $17 million.
WTMJ, Inc. had a year-to-date revenue of $14.7 million, up 17.1%.
Operating earnings are up more than 80% to $3.1 million. In part that is
due to the addition of the Omaha radio stations, KKCD-FM and KEZO-AM and-
FM. But it's also due to healthy increases at all three television
stations and a substantial increase in earnings at KQRC-FM in Kansas City.
At the two web plants of Perry Printing Corp., revenue increased
almost 25% to $32.5 million. Operating earnings were nearly $2.8 million,
up substantially over the previous year. We announced in January that the
Milhous Group of Glendora, California, had signed an agreement to purchase
the business and assets of Perry Printing. That sale will be completed
later this month. We expect to have a pretax gain of about $30 million.
NorthStar Print Group had year-to-date operating earnings of
$171,000 on sales of $12.8 million. Compared to last year, sales are flat
and earnings are down. The outdoor, high graphics packaging and point-of-
purchase markets served by the Milwaukee plant have been soft in the first
quarter, but we are now beginning to see some increased activity. The
Norway/Watertown operation, although behind last year, continues to show
improvement. Label Products & Design in Green Bay had a strong first
quarter, with operating earnings nearly triple their budget.
MRC Telecommunications Inc. continues to grow. Year-to-date, sales
are $9.4 million, up 18.2%, and operating earnings are $2.6 million, up
slightly.
ADD, Inc. continues its record-setting pace. In the first quarter,
sales were $14.2 million, up 14.2%. Operating earnings were $2 million,
up nearly 40%, and we will be looking at additional opportunities for
growth during 1995. Trumbull Printing also improved revenue, up 24.1% to
$2.8 million, but operating earnings slipped 8.8% to $281,000.
IPC Software/Publishing Services had consolidated revenue of $21.9
million, up 52.6%, but earnings declined 17.3% to $796,000. Domestic
operations had revenue of $19.6 million, up 52% over last year, and
operating earnings of $1.3 million, up about $350,000. European
operations have gotten off to a slow start, and, year-to-date, have
incurred a net loss. Significant improvement is anticipated in the second
quarter.
PrimeNet DataSystems, which contributed $1.7 million in revenue
year-to-date, continues to operate at a substantial loss. New revenue
opportunities are being explored, and operating costs are being reduced.
The company's new database marketing software, PrimeLink, is now being
demonstrated to customers.
Working capital remains strong at $86.7 million, while total assets
now are $484 million. Stockholders equity is $371.2 million. During the
quarter, dividends paid per share were $0.45.
Part II. Other Information
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed
for the three accounting periods ended March 26, 1995.
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 8, 1995 /s/Robert A. Kahlor
Robert A. Kahlor, Chairman of the
Board
Date May 8, 1995 /s/Peter J. Jarzembinski
Peter P. Jarzembinski, Senior Vice
President of Finance
<PAGE>
EHIXIBIT INDEX
Exhibit No. Description
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF JOURNAL COMMUNICATIONS, INC. AS
OF AND FOR THE THREE MONTHS ENDED MARCH 26, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-26-1995
<CASH> 12,087
<SECURITIES> 25,304
<RECEIVABLES> 101,879
<ALLOWANCES> 0
<INVENTORY> 37,514
<CURRENT-ASSETS> 186,872
<PP&E> 482,941
<DEPRECIATION> 266,374
<TOTAL-ASSETS> 484,676
<CURRENT-LIABILITIES> 100,175
<BONDS> 2,680
<COMMON> 3,600
0
0
<OTHER-SE> 367,596
<TOTAL-LIABILITY-AND-EQUITY> 384,676
<SALES> 158,681
<TOTAL-REVENUES> 470,841
<CGS> 101,092
<TOTAL-COSTS> 101,092
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30
<INCOME-PRETAX> 16,228
<INCOME-TAX> 6,510
<INCOME-CONTINUING> 9,718
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,718
<EPS-PRIMARY> .69
<EPS-DILUTED> .69
</TABLE>
