By: Joe Strupp Journal Register Company put five of its New England daily papers up for sale Monday, according to Chairman and CEO Robert Jelenic, who said the papers in Massachusetts and Rhode Island were not making an acceptable profit.
"They are a little slower growth, their margin is 20% under our overall margin -- which is close to 25%," Jelenic told E&P Monday. "Theirs is in the 22.5% range. A slow-growth market."
The Massachusetts papers being shopped around are The Herald News in Fall River and Taunton Daily Gazette in Taunton. In Rhode Island, the company is seeking to sell The Call in Woonsocket, The Times in Pawtucket, and the Kent County Daily Times in West Warwick, according to a press release.
In addition, a weekly group of papers, the Southern Rhode Island Newspaper Group in Wakefield, is for sale.
"Although we are continuing to operate our business well despite an extremely challenging period in today's complex newspaper environment, we must continuously consider how to best deploy our resources," the company said in a statement. "In that regard, we are evaluating a strategic divestiture of our New England Cluster and focusing our efforts on those operations, including our growing online operations, which generate a higher return on capital and produce a higher level of profitability and cash flow."
The properties up for sale have a combined circulation of less than 40,000, Jelenic said. They generated revenues of approximately $39.9 million and produced operating cash flow of approximately $8.9 million for the 12 months ended June 25, 2006, the company revealed.
Journal Register, which has 27 daily papers and 366 non-dailies, has contracted with Dirks, Van Essen & Murray as its financial advisor.
Jelenic said no other sales or purchases are in the planning, but added, "We are always looking at the possibility of adding to other clusters. We will use the cash [from these sales] to pay back debt and buy back shares."
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