MILWAUKEE: Journal Communications board members are suspending the company’s dividend on Class A and B shares. Journal (NYSE:JRN) directors also suspended the payment of the cumulative dividend on its Class C shares.
The accumulated dividend must be paid to class C shareholders before any future dividend payments can be made on class A or class B shares. Any future dividends will be declared at the discretion of the board.
“While we regret having to make this difficult decision, we believe this is the prudent choice in order to maintain financial flexibility,” said Journal Chairman Steven J. Smith. “Given the continued challenging economy and business conditions, we believe that this will allow the company to continue to direct a significant portion of its cash flow to debt reduction.”
Smith recently told shareholders that revenues may never return to traditional levels, according to the Milwaukee Journal Sentinel, the company’s flagship newspaper. Journal held its annual shareholder meeting at the newspaper printing plant on Thursday. And after imposing an across-the-board 6 percent pay cut in early April, Smith said he hoped to restore pay levels in 2010.
Journal last week closed on its $6.6 million purchase of KNIN-TV in Boise, Idaho. Journal bought the station from Banks Boise Inc., last July in a deal delayed by the FCC’s duopoly rules. The company now owns 13 TV stations, including WTMJ-TV in Milwaukee, The Milwaukee Sentinel and 35 radio stations.
Journal’s multimedia operations posted a $644,000 loss on consolidated 1Q revenues of $106.8 million, down from a profit of $12.6 million on revenues of $134.3 million a year ago.
Revenues for the 12 TV stations it owned during 1Q were $26 million, down nearly 20 percent from $32.4 million posted last year. Operating earnings were down 98 percent to just $100,000, compared to $3.6 million last year. Journal imposed an across-the-board 6 percent pay cut in early April.
Long-term debt was $200.3 million, reduced by $14.8 million from the end of 2008. Cash and equivalents was around $3 million, down from $4 million Dec. 28, 2008. Shares fell from nearly $1.80 yesterday to a low of $1.40 today before leveling off at around $1.60. The dividend news may have had an impact, but the market indices followed a similar trajectory. -- Deborah D. McAdams
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