May 07, 2013 (Close-Up Media via COMTEX) -- Journal Communications, Inc. announced results for its first quarter ended March 31.

"We are very pleased to report that Journal Communications experienced revenue growth in the first quarter at both our television and radio stations and improving trends at the Journal Sentinel daily newspaper," said Steven J. Smith, Chairman and CEO of Journal Communications.

"Television revenue increased over 43 percent, driven by a solid quarter at the newly acquired NewsChannel 5 in Nashville. On a same-station basis, television revenue increased almost 8 percent, driven, in part, by increased retransmission revenue. In radio, revenue grew nearly 7 percent with same-station up almost 3 percent, with revenue increases seen in most markets. Same-station revenue was up more than 6 percent across the broadcast group."

"Execution of an effective sales strategy at the Milwaukee Journal Sentinel drove year over year growth in retail ROP advertising and solid results in digital and commercial print. Excluding the divested northern Wisconsin publications, publishing revenue grew almost 2 percent."

"Our overall revenue performance drove an operating earnings increase of over 47 percent in the quarter. Earnings per share were $0.08 compared to $0.05 last year."

In a release on May 2, the Company noted first quarter 2013 results include:

Note that unless otherwise indicated, all comparisons are to the first quarter ended March 25, 2012. Same-station comparisons exclude the operations of KHTT-FM and KBEZ-FM in Tulsa, Oklahoma and NewsChannel 5 in Nashville, Tennessee which were purchased in June and December 2012, respectively.

For the first quarter, revenue of $94.7 million increased 15.1 percent and operating earnings of $8.5 million increased 47.3 percent. Net earnings were $3.8 million, an increase of 29.9 percent. First quarter results were driven by the acquisition of Nashville NewsChannel 5 - WTVF-TV in December 2012.

In the first quarter, basic and diluted net earnings per share of class A and B common stock were $0.08 compared to $0.05 in 2012.

The operating margin was 8.9 percent for the first quarter compared to 7.0 percent. Adjusted EBITDA, as defined in Table 4, was $15.4 million, an increase of 33.2 percent from $11.6 million.

Consolidated and Segment Results

For the first quarter, total expenses of $86.2 million increased 12.7 percent compared to $76.5 million, driven by acquisitions in Nashville and Tulsa.

Broadcasting

For the first quarter, broadcasting revenue increased 31.1 percent to $58.2 million or 6.0 percent on a same-station basis. Total broadcast political advertising revenue decreased 61.4 percent to $0.5 million. Local advertising revenue, excluding political, was up 25.1 percent, or 3.2 percent on a same-station basis. National advertising revenue, excluding political, increased 41.0 percent, or 7.5 percent on a same-station basis. Retransmission revenue increased 145.1 percent to $5.4 million. Broadcasting operating earnings of $9.5 million increased 41.9 percent.

Television

Revenue from television stations for the first quarter increased 43.4 percent to $42.3 million, or 7.6 percent on a same-station basis. Television political advertising revenue was $0.4 million compared to $1.2 million. Local advertising revenue, excluding political, increased 36.7 percent, or 3.2 percent on a same-station basis, primarily due to an increase in automotive advertising. National advertising revenue, excluding political, increased 50.1 percent or 9.5 percent on a same-station basis, primarily due to increases in media and restaurant advertising. Operating earnings from television stations were $7.1 million, an increase of 84.3 percent. Television operating expenses increased 37.2 percent, or 10.4 percent on a same-station basis, excluding acquisition costs, primarily due to increases in network fees and employee-related costs.

Radio

For the first quarter, revenue from radio stations increased 6.7 percent to $15.9 million, or 2.8 percent on a same-station basis. Radio political advertising revenue was $0.1 million in each of 2013 and 2012. Local advertising revenue, excluding political, increased 7.2 percent, or 3.3 percent on a same-station basis, primarily due to an increase in retail advertising. National advertising revenue, excluding political, increased 2.1 percent, but decreased 1.3 percent on a same-station basis, primarily due to a decrease in communications advertising. Operating earnings from radio stations were $2.4 million compared to $2.9 million, a decrease of 15.3 percent. Radio operating expenses increased 11.9 percent, or 8.1 percent on a same-station basis, primarily due to employee-related expense increases and a non-cash building impairment charge of $0.2 million.

Publishing

For the first quarter, publishing revenue decreased 3.8 percent to $36.6 million, largely due to the sale of the northern Wisconsin community publications in December 2012. Operating earnings from publishing were $0.9 million, an increase of 17.3 percent. Total newsprint and paper expense of $3.8 million increased 0.2 percent as commercial printing volume increases were offset by price declines.

Daily Newspaper

Revenue at the daily newspaper for the first quarter increased 0.1 percent to $33.1 million. Total advertising revenue of $16.0 million declined 0.6 percent. Retail advertising revenue increased 4.5 percent due to successful programs that have grown share with local advertisers. Classified advertising revenue decreased 10.9 percent driven by a decrease in employment and automotive advertising. Digital advertising revenue of $2.9 million increased 12.6 percent, primarily due to an increase in sponsorship revenue. Circulation revenue of $12.0 million was down 2.2 percent. Other revenue of $5.1 million increased 8.5 percent driven by higher commercial printing revenue. Operating earnings from the daily newspaper were $0.8 million, a decrease of 5.5 percent. Daily newspaper operating expenses increased 0.3 percent, primarily due to increased costs associated with higher commercial printing revenue.

Community Newspapers

Community newspapers revenue for the first quarter decreased 29.6 percent to $3.5 million primarily due to the sale of the northern Wisconsin community publications in December 2012. Excluding revenue of $2.1 million related to the northern Wisconsin community publications in 2012, revenue increased by 20.3 percent, driven by commercial print revenue from the northern Wisconsin publications that we continue to print following the sale. Operating earnings from community newspapers and shoppers were $0.1 million compared to a loss of $0.1 million. Operating expenses declined to $3.5 million compared to $5.1 million as a result of the sale of the northern Wisconsin community publications in 2012.

Corporate

The operating loss for the first quarter was $1.9 million compared to $1.7 million.

Non-Operating Items

For the first quarter, other expense, which primarily consists of interest expense, was $2.1 million compared to $0.7 million. The increase in interest expense reflects an increase in average borrowings for the quarter.

The first quarter effective tax rate was 40.0 percent compared to 41.8 percent.

Notes Payable to Banks and Cash Flows

At the end of the first quarter, total debt was $239.3 million. During the first quarter, we reduced our total debt by $6.7 million as compared to the 2012 year-end. Our consolidated funded debt ratio, as defined in our credit agreement, was 2.22-to-1. Cash from operating activities was $8.7 million compared to $8.3 million due to an increase in net earnings. First quarter capital expenditures were $2.5 million compared to $2.8 million.

Second Quarter 2013 Outlook

In the second quarter of 2013, on a same-station basis excluding political advertising revenue, we expect total broadcast revenue to be up in the mid-single digits as compared to the second quarter of 2012. In publishing, excluding the northern Wisconsin community publications, we anticipate revenue declines in the low-single digits as compared to the second quarter of 2012.

Annual Meeting of Shareholders

The company will hold its 2013 Annual Meeting of Shareholders on Tuesday, May 7, at 9 a.m. Central Time at the Imperial Ballroom of the Pfister Hotel, 424 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

Journal Communications, Inc. is a diversified media company with operations in television and radio broadcasting, publishing and digital media. The company owns and operates 15 television stations and 34 radio stations in 12 states.

More information:

www.journalcommunications.com

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