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Journal TV Station Revenues Fall 24 Percent

MILWAUKEE: Third-quarter revenues for Journal’s 13 TV stations came in around 24 percent less than one year ago. Journal Communications television properties generated $24.5 million compared to $32.3 million in 3Q08. Political and issue advertising revenue was $500,000 compared to $3.2 million last year. Journal said operating income was “essentially breakeven” for the stations compared to a loss last year of $17 million on a $21 million impairment for TV broadcast licenses. Operating expenses for the group of stations fell 13.2 percent for the quarter ending Sept. 27, 2009.

Journal’s broadcast division--the TV stations plus its 33 radio stations--posted $42.4 million in revenues, down 21 percent from a year ago. Local ad revenues fell 13 percent; national was down 25 percent. Total political and issue ads generated $600,000 compared to $3.4 million last year. Retransmission revenue was $1.2 million compared to $400,000. Broadcasting operating earnings were $3.7 million compared to an operating loss of $29.1 million, which included a $38.8 million non-cash impairment charge for broadcast licenses.

“In the third quarter, we remained diligent about reducing costs and generating cash while operating in an ongoing difficult advertising environment,” said Steven Smith, chairman and CEO of Journal Communications (NYSE: JRN). “We made additional progress on debt reduction by paying down another $6 million in the quarter. Year-to-date, Journal Communications has reduced its debt by almost $43 million.”

“We expect to see modest improvement in advertising expenditures as we enter the fourth quarter, yet our focus on expense and debt reduction will continue,” Smith said.

Consolidated revenues for Journal’s broadcast and print properties were $105.1 million, down nearly 23 percent. The net earnings of $1.8 million compares to a net loss of $17.1 million last year.

As of the end of 3Q, Journal had debt of $172.2 million, 3.3x the trailing four quarters of EBITDA. During the first three quarters of 2009, debt was reduced by $42.9 million. Year-to-date cash from operating activities was $54 million compared to $45.9 million, an increase of $8.1 million primarily due to an $8.7 million income tax refund. Capital expenditures were $5.5 million compared to $15.1 million. There were no share repurchases in 2009 compared to $44.8 million. Dividends paid to shareholders were $1.5 million compared to $14 million.

The company said 4Q09 revenues would likely be down compared to last year, “reflecting continued challenges across its businesses.”

More on JRN:
July 27, 2009: “Gamco Buys More Stock in Journal
Gameco Investors, Gabelli Funds and Teton Advisors, collectively added 900,000 shares of Journal (NYSE: JRN) during the second quarter. Gabelli’s funds now hold more than 7.5 million JRN shares comprising 18.45 percent of the common stock, up from 17.64 percent on April 2.

July 21, 2009
: “Journal 2Q Broadcast Revenues Drop 18 Percent”
TV segment revenues totaled $26.7 million for the quarter ending May 29, 2009, compared to $32.6 million a year ago. The drop was attributed to a decrease in ad revenues--16 percent in local and 35 percent in national. Retransmission revenue totaled $1 million, up by $600,000 from a year ago.

April 3, 2009: “Journal Communications Imposes Pay Cut
The top echelon of employees at Journal Communications will have to take off 10 unpaid days this year. The furloughs amount to a 6 percent salary reduction.

April 1, 2009: “LIN Posts $830 Million Loss on $1 Billion Charge
LIN TV posted 2008 results in March that included one of the heftiest impairment charges by a TV group up to that point, writing down more than $1 billion for the year. LIN owns and/or operates 27 stations in 17 markets. By comparison, Hearst-Argyle, which has 29 TV stations, wrote down $940 million for 2008. Barrington wrote down $50 million on its 23 TV stations. Journal Communications, with 12 TV stations, wrote down nearly $78 million. Nexstar, with 50 or so TV stations, wrote off nearly $56 million for the first nine months of 2008. Sinclair, with 58 TV stations is expected to write down around $460 million. Belo wrote down $114 million on its 20 TV stations.

March 4, 2009: “Journal Posts 4Q Loss on Write-down
The 12 TV stations owned by Journal Communications generated revenues of $33.4 million for 4Q08, down 5.5 percent from 4Q07’s $35.3 million. The stations posted an operating loss of $51.9 million, reflecting a $56.9 million write-down on the value of the licenses.

July 2, 2008: “Journal Communications Agrees to Pony $8 Million for KNIN-TV
The Journal Communications (NYSE:JRN) broadcast division has agreed to buy KNIN-TV in Boise, Idaho for $8 million. The Milwaukee-based media group already owns the local ABC affiliate in the city, KIVI-TV, making for a TV duopoly.