'Milwaukee Journal Sentinel' Parent Eliminates Dividend

By: Mark Fitzgerald In February, Journal Communications reduced its quarterly dividend to 2 cents a share from 8 cents. Today, the Milwaukee Journal Sentinel parent eliminated even that nominal dividend.

"While we regret having to make this difficult decision, we believe this is the prudent choice in order to maintain financial flexibility," Chairman Steven J. Smith said in a statement. "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."

With about $200 million in long-term debt and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in 2008 of about $108 million, Journal Communications, has a light debt burden compared to many of its newspaper peers.

But it has suffered the same fall-off in revenue at both its daily newspaper and its broadcast operations. Last week, it reported a first-quarter operating loss of $900,000 on sliding ad revenues, including a 23% drop at the Journal Sentinel.

Numerous publicly traded newspaper publishers have suspended their dividends in recent months, including The New York Times Co., Lee Enterprises, The McClatchy Co., and GateHouse Media Inc.