Journal Register Swings To Q3 Loss, Debt Forbearance Extended

By: Mark Fitzgerald

Debt-laden Journal Register Co. Monday reported a net loss of $8.7 million, or 22 cents a share, for the third quarter. In Q3 2007, the newspaper publisher reported net income of $11.2 million, or 28 cents, a share.

Journal Register also reported certain lenders agreed to extend the forbearance agreement reached last July until Jan. 16, 2009 as it works its way out of big debts taken on chiefly to fund the acquisition of a cluster of Michigan dailies.

Yardley, Pa.-based Journal Register said its bank debt has increased. It was $646.3 million as of Sept. 28, compared to $624.8 million on Dec. 30, 2007.

Journal Register said its current assets were $85.6 million — and it current liabilities $729.7 million, the result of classifying all its bank debt as current debt. Last December, it t assets of $71.2 million and liabilities of $80.3 million.

For more details on Journal Register’s debt situation go to the Fitz & Jen blog

Except for its well above-average debt, Journal Register’s Q3 report resembled those of its peers in the newspaper industry, with revenue down, advertising down even farther — and classified down even more.

Total revenue for the quarter was $102.1 million, down 9.6% from the year-ago period.

Advertising revenues dropped 13.4 percent to $74.3 million.

Local retail ad revenue declined 6.4% on weakness in the department/discount store and building/hardware/garden store advertising revenue categories partially offset by an improvement in local advertising revenues in the financial/insurance category, Journal Register said.

Classified ad revenue fell 21.4% from the year-ago period.

Classified real estate plunged 26.5%, employment fell 31.1%, and automotive dropped 21%.

There was some good news in classified for Journal Register. Its “other” category, which includes private party, legal advertisements, and obituaries was off just 3.5% from Q3 2007. The category accounted for about 30.3% of total classified advertising revenue in the third quarter of 2008.

Online revenue increased 6.2% in the quarter, and were 6.9% of total ad revenue, up from 5.6% in the year-ago period.

Circulation revenue of $24 million was up 5.1% on price increases and savings from delivery outsourcing of its New York and Connecticut clusters, Journal Register said.

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