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 June 15, 1997
(6 Accounting Periods)
Commission file number 0-7831
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.)
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 shares of Common Stock Outstanding
- June 15, 1997 13,552,273
<PAGE>
FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
Quarter Ended June 15, 1997 Commission file number 0-7831
(6 Accounting Periods)
INDEX
Page No.
Part I. Financial Information
Consolidated Condensed Balance Sheets
June 15, 1997 and December 31, 1996 2
Consolidated Condensed Statements of Income
Six Periods Ended June 15, 1997
and June 16, 1996 3
Consolidated Condensed Statements of Cash Flows
Six Periods Ended June 15, 1997
and June 16, 1996 4
Notes to Consolidated Condensed
Financial Statements 5
Management's Discussion and Analysis of
Consolidated Financial Condition and Results of
Operations 6
Part II. Other Information 7
<PAGE>
FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended June 15, 1997 Commission file number 0-7831
(6 Accounting Periods)
Consolidated Condensed Balance Sheets
June 15, 1997 and December 31, 1996
(Dollars in thousands)
ASSETS 6/15/97 12/31/96
(Unaudited)
Current Assets:
Cash $ 3,411 $ 12,383
Short-term investments 81,744 52,900
Receivables 95,944 93,915
Inventories:
Paper and supplies 11,597 16,596
Work in process 5,122 4,754
Finished goods 5,573 6,328
----------- ----------
22,292 27,678
Prepaid expenses 10,720 10,301
Deferred income Taxes 3,787 3,813
----------- ----------
Total current assets 217,898 200,990
Property and equipment, less accumulated
depreciation of $240,184 and $229,060 167,979 163,693
Deferred charges and other assets 72,027 70,978
Deferred income taxes 1,807 1,756
Goodwill 36,923 36,147
----------- ----------
Total Assets $496,634 $473,564
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $41,368 $38,685
Taxes on income 2,678 3,558
Accrued liabilities 67,019 66,430
Current portion of long-term
obligations 1,496 2,337
----------- ----------
Total current liabilities 112,561 111,010
Long-term obligations 1,296 1,524
Stockholders' equity:
Common stock - Authorized and issued
14,400,000 ($0.25 par value) 3,600 3,600
Retained earnings 411,671 402,301
Treasury stock, at cost (32,494) (44,871)
----------- ----------
Total stockholders' equity 382,777 361,030
----------- ----------
Total liabilities and
stockholders' equity $496,634 $473,564
=========== ==========
Note: The balance sheet at December 31, 1996 has been derived from the
audited financial statements at that date but does not include all the
information and footnotes 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 June 15, 1997 Commission file number 0-7831
(6 Accounting Periods)
Consolidated Condensed Statements of Income
(Dollars in thousands except share and per share amounts)
Three Periods Ended Six Periods Ended
06/15/97 06/16/96 06/15/97 06/16/96
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net Sales $152,634 $141,989 $296,344 $273,678
Operating costs and
expenses:
Cost of sales 82,714 82,715 161,981 161,779
Selling/administrative
expenses 49,027 44,397 95,718 87,108
--------- --------- --------- ----------
131,741 127,112 257,699 248,887
--------- --------- --------- ---------
Operating Earnings 20,893 14,877 38,645 24,791
Dividend and interest
income 1,415 809 2,746 1,863
Interest expenses (84) (36) (101) (49)
--------- ---------- --------- ---------
Earnings before income
taxes 22,224 15,650 41,290 26,605
--------- --------- --------- ---------
Provision for income
taxes 9,541 6,501 17,435 10,949
--------- --------- --------- ---------
Net Income $ 12,683 $ 9,149 $ 23,855 $ 15 ,656
========= ========= ========= =========
Weighted average number
of common shares
outstanding 13,558,300 13,157,823 13,411,862 13,373,057
========== ========== ========== ==========
Earnings per share $0.93 $0.68 $1.78 $1.17
========== ========== ========== ==========
Cash dividend per share $0.55 $0.55 $ 1.10 $1.10
========== ========== ========== ==========
See accompanying notes to consolidated condensed financial statements.
<PAGE>
FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended June 15, 1997 Commission file number 0-7831
(6 Accounting Periods)
Consolidated Condensed Statements of Cash Flows
(Dollars in thousands)
Six Periods Ended
06/15/97 06/16/96
(Unaudited) (Unaudited)
Cash flow from operating activities:
Earnings from continuing operations $23,855 $15,656
Adjustments to net earnings for
non-cash items:
Depreciation and amortization 18,506 16,524
Net (gain) loss from sale of
assets (1,942) 3
Change in:
Accounts receivable (2,719) 4,314
Inventories 5,169 2,496
Accounts payable 2,914 6,848
Other current assets and
liabilities (1,012) 5,749
---------- ---------
Net cash provided by operating
activities $ 44,771 $57,590
---------- ---------
Cash flow from investing activities:
Proceeds from sale of assets 3,118 96
Property and equipment
expenditures (19,220) (15,089)
Assets of business acquired (5,281) (16,154)
Net (increase) decrease in
short-term investments (29,405) 28,101
Other-net (561) (11,710)
--------- ---------
Net cash used for investing
activities (50,788) (14,756)
--------- ---------
Cash flow from financing
activities:
Purchase of treasury stock (34,760) (29,715)
Reduction in long-term
obligations (1,243) (1,773)
Sale and distribution of
treasury stock 48,134 8,129
Cash dividends (15,086) (14,415)
---------- ---------
Net cash used for financing
activities (2,955) (37,774)
---------- ---------
Net decrease in cash (8,972) (940)
Cash:
Beginning of year 12,383 10,133
---------- ---------
June 15, 1997 $ 3,411 $ 9,193
========== =========
See accompanying notes to consolidated condensed financial statements.
<PAGE>
FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended June 15, 1997 Commission file number 0-7831
(6 Accounting Periods)
Notes to Consolidated Condensed Financial Statements
(Unaudited)
1. The accompanying unaudited consolidated condensed 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 six periods ended June 15, 1997, are not
necessarily indicative of the results that may be expected for the
year ended December 31, 1997. 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, 1996.
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 June 15, 1997 Commission file number 0-7831
(6 Accounting Periods)
Management's Discussion and Analysis of Consolidated
Financial Condition and Results of Operations
Through the first six financial periods of 1997, our consolidated
revenue was $296.3 million, up 8% from last year. Consolidated net earnings
were $23.9 million, 52% higher than 1996.
Since Jan. 1 of this year, Journal Sentinel Inc., Journal Broadcast
Group., NorthStar Print Group Inc. and Norlight Telecommunications Inc.
have enjoyed significant earnings gains. IPC Communication Services
showed improvement, and the PrimeNet Marketing Services/Mega Direct
operations continued to be behind last year.
Journal Sentinel Inc.'s year-to-date revenue was $101.3 million, up
9% from the 1996 figure of $93.3 million. Pretax earnings were $21.1
million, up 73% from last year. Strong advertising sales, lower newsprint
pricing and continued tight control of costs all contributed to the
dramatic earnings increase. There is a probability of newsprint price
increases later this year, which could impact earnings growth.
Journal Broadcast Group Inc. had year-to-date revenue up 10% to
$44.1 million. Pretax earnings were $13.5 million, up 14%. The biggest
increases were at radio stations WTMJ-AM in Milwaukee, KKCD-FM in Omaha
and KMXZ-FM in Tucson. At KTNV-TV in Las Vegas, year-to-date pretax
earnings were up 31% on a revenue increase of $1.6 million.
At NorthStar Print Group Inc., year-to-date revenue was $27.3
million, up 15%. Pretax earnings were $1.9 million, more than three times
greater than last year. The Norway/Watertown operation showed the
greatest improvement.
Norlight Telecommunications Inc., through sales and marketing
efforts, along with excellent service, brought in a revenue increase of
29% to $25.5 million. Pretax earnings increased 58% to $6.2 million. The
robust earnings growth has been principally on the carrier side of the
business.
Add Inc. year-to-date revenue was flat at $38.5 million, compared
with $38.4 million last year, but pretax earnings increased 32% to $5.4
million as a result of the sale of the Warner Robins, Ga., operations.
Without that sale, pretax earnings would have declined 10%.
IPC Communication Services reported revenue for the first half of
the year at $54.7 million, up 4%. On a pretax basis, IPC had a loss of
$1.9 million, but that was considerably better than the previous year.
IPC has added new customers as well as additional business from existing
customers totaling more than $15 million, with most of the work going to
the northern California plant. There continues to be improvement at the
European operation.
PrimeNet Marketing Services and Mega Direct had a consolidated loss
of $138,000, pretax, on revenue of $5.7 million. Growing sales will
continue to be a focus for these operations.
Working capital increased to $105.3 million from $90 million at the
end of 1996. Total assets exceed $496 million, while stockholders' equity
is $383 million.
<PAGE>
FORM 10-Q
JOURNAL COMMUNICATIONS, INC.
For Quarter Ended June 15, 1997 Commission file number 0-7831
(6 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
six accounting periods ended June 15, 1997.
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 July 30, 1997 /s/ Robert A. Kahlor
Robert A. Kahlor, Chairman of the Board
/s/ Paul M. Bonaiuto
Date July 30, 1997 Paul M. Bonaiuto, Executive Vice President
and Chief Financial Office
<PAGE>
EXHIBIT INDEX
Description
Exhibit No. 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 PERIOD ENDED JUNE 15, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER<F1>
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-15-1997
<CASH> 3,411
<SECURITIES> 81,744
<RECEIVABLES> 95,944
<ALLOWANCES> 0
<INVENTORY> 22,292
<CURRENT-ASSETS> 217,898
<PP&E> 408,163
<DEPRECIATION> 240,184
<TOTAL-ASSETS> 496,634
<CURRENT-LIABILITIES> 112,561
<BONDS> 1,296
0
0
<COMMON> 3,600
<OTHER-SE> 379,177
<TOTAL-LIABILITY-AND-EQUITY> 496,634
<SALES> 296,344
<TOTAL-REVENUES> 296,344
<CGS> 161,981
<TOTAL-COSTS> 257,699
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 101
<INCOME-PRETAX> 41,290
<INCOME-TAX> 17,435
<INCOME-CONTINUING> 23,855
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,172
<EPS-PRIMARY> 1.78
<EPS-DILUTED> 1.78
<FN>
<F1>6 Accounting Periods
</FN>
</TABLE>
