Journal Register 1Q Profits Dip

By: (AP) Profits at the Journal Register Co. fell 27% in the first quarter as costs of complying with new securities regulations soared and advertising revenues were dampened by snowy winter in the newspaper company's Northeast markets.

The Trenton-based publisher of the New Haven (Conn.) Register, the Trentonian, and 25 other daily newspapers said Tuesday that net income for the quarter ending March 27 was $7.5 million, or 18 cents per share, down from $10.2 million, or 24 cents per share in the year-ago quarter.

The results matched the 18 cents-per-share forecast of analysts surveyed by Thomson Financial.

Revenues increased 35% to $133.9 million, from $99.2 million. Advertising revenues alone were up 41%, to $102 million.

The company said advertising revenue rose 1% when compared to year-ago results excluding acquisitions.

Ad revenues would have been higher, said chief financial officer Jean Clifton, were it not for heavy snows that discouraged advertising by auto dealers, who traditionally pull back on advertising when sales are slow.

Auto advertising alone was down almost 7% for the quarter, she said, and department store advertising also declined.

The other big hit to the Journal Register's bottom line was $2.5 million in expenses related to complying with the Sarbanes-Oxley Act. Passed in the wake of accounting scandals at corporations like Enron and WorldCom, that three-year-old law requires publicly traded companies to improve the accuracy and reliability of their corporate disclosures.

Clifton said while the company will hire a compliance officer in the next few months and bring other compliance costs in-house, several consultants had to be hired earlier this year to bring all 54 Journal Register subsidiaries into compliance.

Robert Jelenic, Journal Register president and CEO, said the company's July acquisition of 21st Century Newspapers Inc., with its four dailies and 87 weeklies and shoppers, has generated healthy advertising revenue.

So have the company's foreign-language weekly and bi-weekly publications.

"This year we should do $1 million just from the six Spanish-language publications we launched," he said. Along with a Portuguese newspaper in Massachusetts, Jelenic said the Journal Register plans have about 10 such papers by year's end.

Journal Register shares were down 5 cents at $15.80 in afternoon trading on the New York Stock Exchange.


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