Journal Reports 2Q Radio Revenue Up 2.3 Percent

Journal Communications, Inc. today announced results for its second quarter ended June 30, 2013.

Steve J. Smith

Highlights:

• Revenue of $101.2 million, up 6.0%
• Broadcast revenue up 15.3% , up 6.1% on a same-station basis and excluding political revenue
• Political revenue of $0.3 million compared to $5.7 million
• Daily newspaper retail advertising revenue up 2.8%
• Publishing revenue down 6.5%, down 0.5% excluding northern Wisconsin community publications sold in December 2012
• Operating earnings of $13.1 million, down 2.6% primarily due to lower political revenue
• Closed on acquisition of WNOX-FM in Knoxville, Tennessee for $5.96 million in cash
• Diluted EPS of $0.13 in both years

“Journal Communications had a solid second quarter, driven by revenue gains in our broadcast group, as well as improving advertising revenue trends in publishing. Total revenue of $101.2 million was up 6% year over year,” said Steven J. Smith, Chairman and CEO of Journal Communications. “Operating earnings decreased 2.6% as lower political revenue offset operating earnings increases in broadcast, driven by NewsChannel 5 in Nashville, as well as higher earnings at our daily newspaper.”

“Within the Broadcast group, we continue to see core revenue growth. On a same-station basis and excluding political advertising, revenue was up 6%, with television up 7% and radio up 5%.”

For the second quarter, revenue from radio stations increased 2.3% to $19.9 million, or 4.7% excluding political revenue.

Radio political advertising revenue was $0.1 million, compared to $0.5 million. Local advertising revenue, excluding political, increased 5.0%, primarily due to an increase in retail advertising.

National advertising revenue, excluding political, decreased 4.9% to $1.8 million, primarily due to a decrease in media advertising.

Operating earnings from radio stations were $3.8 million compared to $4.4 million, a decrease of 13.8% or a decrease of 19.0% excluding acquisition costs in both years.

Radio operating expenses increased 7.1%, or 9.3% excluding acquisition costs in both years, primarily due to employee-related expense increases and the impact of credits received from an industry-wide music licensing fee settlement in 2012.

Note that unless otherwise indicated, all comparisons are to the second quarter ended June 24, 2012. Same-station comparisons exclude the operations of NewsChannel 5 in Nashville, Tennessee, which we purchased in December 2012.

For the second quarter, revenue of $101.2 million increased 6.0% and operating earnings of $13.1 million decreased 2.6%. Net earnings were $6.6 million, a decrease of 13.3%.

In the second quarter, basic and diluted net earnings per share of class A and B common stock were $0.13 in both years.

The operating margin was 13.0% for the second quarter compared to 14.1%. Adjusted EBITDA, as defined in Table 4, was $20.4 million, a decrease of 1.6% from $20.7 million.