XFRA:JOU Journal Communications, Inc. Class A Quarterly Report 10-Q Filing - 6/24/2012

Effective Date 6/24/2012

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 10-Q
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  June 24, 2012
or

o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
  For the transition period from   
to
 
 
Commission File Number:
1-31805

JOURNAL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)

Wisconsin
 
20-0020198
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
     
 
333 W. State Street, Milwaukee, Wisconsin
 
53203
(Address of principal executive offices)
 
(Zip Code)

(414) 224-2000
Registrant's telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yesx No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes x No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large Accelerated Filer o Accelerated Filer x Non-accelerated Filer o Smaller reporting company o
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x
 
Number of shares outstanding of each of the issuer’s classes of common stock as of July 27, 2012:

Class
Outstanding at July 27, 2012
Class A Common Stock
43,549,765
Class B Common Stock
  6,996,679
Class C Common Stock
3,264,000
 


 
 

 
 
JOURNAL COMMUNICATIONS, INC.


       
Page No.
         
Part I.
Financial Information
   
         
         
 
Item 1.
Financial Statements
   
         
     
2
         
     
3
         
     
4
         
     
5
         
     
6
         
     
7
         
     
8
         
 
Item 2.
 
22
         
 
Item 3.
 
37
         
 
Item 4.
 
37
         
Part II.
Other Information
   
         
 
Item 1.
 
37
         
 
Item 1A.  
 
37
         
 
Item 2.
 
38
         
 
Item 3.
 
38
         
 
Item 4.
 
38
         
 
Item 5.
 
38
         
 
Item 6.
 
39
 
 
 

 
PART I. FINANCIAL INFORMATION
 
ITEM 1.  FINANCIAL STATEMENTS

JOURNAL COMMUNICATIONS, INC.
(in thousands, except share and per share amounts)

   
June 24, 2012
   
December 25, 2011
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
  $ 2,251     $ 2,418  
Investments of variable interest entity
    500       500  
Receivables, net
    54,779       56,695  
Inventories, net
    2,836       1,766  
Prepaid expenses and other current assets
    4,653       3,877  
Syndicated programs
    2,369       2,822  
Deferred income taxes
    3,033       3,593  
TOTAL CURRENT ASSETS
    70,421       71,671  
                 
                 
Property and equipment, at cost, less accumulated depreciation of $249,172 and $239,725, respectively
    162,589       168,200  
Syndicated programs
    4,270       4,457  
Goodwill
    8,670       8,670  
Broadcast licenses
    81,547       81,547  
Other intangible assets, net
    20,451       21,400  
Deferred income taxes
    51,934       57,236  
Other assets
    4,124       4,544  
TOTAL ASSETS
  $ 404,006     $ 417,725  
                 
LIABILITIES AND EQUITY
               
Current liabilities:
               
Accounts payable
  $ 21,467     $ 20,516  
Accrued compensation
    11,505       11,888  
Accrued employee benefits
    6,634       6,217  
Deferred revenue
    15,796       14,662  
Syndicated programs
    2,799       3,436  
Accrued income taxes
    1,767       2,740  
Other current liabilities
    6,483       6,093  
Current portion of long-term liabilities
    239       382  
TOTAL CURRENT LIABILITIES
    66,690       65,934  
                 
Accrued employee benefits
    87,823       90,176  
Syndicated programs
    4,740       5,527  
Long-term notes payable to banks
    21,360       41,305  
Other long-term liabilities
    9,558       8,595  
Equity:
               
Preferred stock, $0.01 par - authorized 10,000,000 shares; no shares outstanding at June 24, 2012 and December 25, 2011
    -       -  
Common stock, $0.01 par:
               
Class C - authorized 10,000,000 shares; issued and outstanding: 3,264,000 shares at June 24, 2012 and December 25, 2011
    33       33  
Class B - authorized 120,000,000 shares; issued and outstanding: 7,147,815 shares at June 24, 2012 and 7,214,374 shares at December 25, 2011
    66       66  
Class A - authorized 170,000,000 shares; issued and outstanding: 43,375,341 shares at June 24, 2012 and 43,778,922 shares at December 25, 2011
    434       438  
Additional paid-in capital
    254,831       257,552  
Accumulated other comprehensive loss
    (52,212 )     (52,982 )
Retained earnings (deficit)
    9,519       (83 )
Total Journal Communications, Inc. shareholders' equity
    212,671       205,024  
Noncontrolling interest
    1,164       1,164  
TOTAL EQUITY
    213,835       206,188  
TOTAL LIABILITIES AND EQUITY
  $ 404,006     $ 417,725  
 
See accompanying notes to unaudited condensed consolidated financial statements

 
2


JOURNAL COMMUNICATIONS, INC.
 (in thousands, except per share amounts)
 
   
Second Quarter Ended
   
Two Quarters Ended
 
   
June 24, 2012
   
June 26, 2011
   
June 24, 2012
   
June 26, 2011
 
Revenue:
                       
Broadcasting
  $ 54,542     $ 46,083     $ 98,916     $ 88,192  
Publishing
    41,053       44,119       79,074       85,919  
Corporate eliminations
    (88 )     (100 )     (217 )     (148 )
Total revenue
    95,507       90,102       177,773       173,963  
                                 
Operating costs and expenses:
                               
Broadcasting
    22,970       22,069       45,396       44,004  
Publishing
    26,354       27,273       52,506       54,918  
Corporate eliminations
    (88 )     (100 )     (217 )     (148 )
Total operating costs and expenses
    49,236       49,242       97,685       98,774  
                                 
Selling and administrative expenses
    32,811       29,369       60,888       57,690  
Total operating costs and expenses and selling and administrative expenses
    82,047       78,611       158,573       156,464  
                                 
Operating earnings
    13,460       11,491       19,200       17,499  
                                 
Other income and (expense):
                               
Interest income
    6       20       11       38  
Interest expense
    (684 )     (928 )     (1,417 )     (2,008 )
Total other income and (expense)
    (678 )     (908 )     (1,406 )     (1,970 )
                                 
Earnings from continuing operations before income taxes
    12,782       10,583       17,794       15,529  
                                 
Provision for income taxes
    5,171       4,442       7,264       6,354  
                                 
Earnings from continuing operations
    7,611       6,141       10,530       9,175  
                                 
Earnings from discontinued operations, net of $0, $0, $0 and $221 applicable income tax provision, respectively
    -       -       -       341  
                                 
Net earnings
  $ 7,611     $ 6,141     $ 10,530     $ 9,516  
                                 
Earnings per share:
                               
Basic - Class A and B common stock:
                               
Continuing operations
  $ 0.13     $ 0.10     $ 0.18     $ 0.15  
Discontinued operations
    -       -       -       0.01  
Net earnings
  $ 0.13     $ 0.10     $ 0.18     $ 0.16  
                                 
Diluted - Class A and B common stock:
                               
Continuing operations
  $ 0.13     $ 0.10     $ 0.18     $ 0.15  
Discontinued operations
    -       -       -       0.01  
Net earnings
  $ 0.13     $ 0.10     $ 0.18     $ 0.16  
                                 
Basic and diluted - Class C common stock:
                               
Continuing operations
  $ 0.28     $ 0.24     $ 0.46     $ 0.43  
Discontinued operations
    -       -       -       0.01  
Net earnings
  $ 0.28     $ 0.24     $ 0.46     $ 0.44  
 
See accompanying notes to unaudited condensed consolidated financial statements

 
3


JOURNAL COMMUNICATIONS, INC.
 (in thousands)

   
Second Quarter Ended
   
Two Quarters Ended
 
   
June 24, 2012
   
June 26, 2011
   
June 24, 2012
   
June 26, 2011
 
                         
Net earnings
  $ 7,611     $ 6,141     $ 10,530     $ 9,516  
                                 
Other comprehensive income, net of tax:
                               
Change in pension and postretirement, net of tax of $250, $128, $501 and $255, respectively
    386       197       770       394  
                                 
Comprehensive income
  $ 7,997     $ 6,338     $ 11,300     $ 9,910  
 
See accompanying notes to unaudited condensed consolidated financial statements

 
4


JOURNAL COMMUNICATIONS, INC.
For the Two Quarters Ended June 24, 2012
(in thousands, except per share amounts)

                                 
Accumulated
                   
                           
Additional
   
Other
   
Retained
   
Non-
       
   
Preferred
   
Common Stock
   
Paid-in
   
Comprehensive
   
Earnings
   
controlling
       
   
Stock
   
Class C
   
Class B
   
Class A
   
Capital
   
Loss
   
(Deficit)
   
Interests
   
Total
 
                                                       
Balance at December 25, 2011
  $ -     $ 33     $ 66     $ 438     $ 257,552     $ (52,982 )   $ (83 )   $ 1,164     $ 206,188  
                                                                         
Net earnings
                                                    2,919               2,919  
Comprehensive income
                                            384                       384  
                                                                         
Class C dividends declared ($0.142 per share)
                                                    (464 )             (464 )
Issuance of shares:
                                                                       
Conversion of class B to class A
                    (2 )     2                                       -  
Stock grants
                    3               15                               18  
Employee stock purchase plan
                                    148                               148  
Shares purchased and retired
                            (6 )     (2,926 )                             (2,932 )
Shares withheld from employees for tax withholding
                    (1 )             (507 )                             (508 )
Stock-based compensation
                                    278                               278  
Income tax benefits from vesting of restricted stock
                                    255                               255  
                                                                         
Balance at March 25, 2012
    -       33       66       434       254,815       (52,598 )     2,372       1,164       206,286  
                                                                         
Net earnings
                                                    7,611               7,611  
Comprehensive income
                                            386                       386  
                                                                         
Class C dividends declared ($0.142 per share)
                                                    (464 )             (464 )
Issuance of shares:
                                                                       
Conversion of class B to class A
                    (1 )     1                                       -  
Stock grants
                    1               309                               310  
Shares purchased and retired
                            (1 )     (632 )                             (633 )
Shares withheld from employees for tax withholding
                                    (8 )                             (8 )
Stock-based compensation
                                    350                               350  
Income tax benefits from vesting of restricted stock
                                    (3 )                             (3 )
                                                                         
Balance at June 24, 2012
  $ -     $ 33     $ 66     $ 434     $ 254,831     $ (52,212 )   $ 9,519     $ 1,164     $ 213,835  
 
See accompanying notes to unaudited condensed consolidated financial statements

 
5


JOURNAL COMMUNICATIONS, INC.
For the Two Quarters Ended June 26, 2011
 (in thousands, except per share amounts)

                                 
Accumulated
                         
                           
Additional
   
Other
   
Retained
   
Non-
   
Treasury
       
   
Preferred
   
Common Stock
   
Paid-in
   
Comprehensive
   
Earnings
   
controlling
   
Stock,
       
   
Stock
   
Class C
   
Class B
   
Class A
   
Capital
   
Loss
   
(Deficit)
   
Interests
   
at cost
   
Total
 
                                                             
Balance at December 26, 2010
  $ -     $ 33     $ 165     $ 432     $ 260,376     $ (32,295 )   $ 87,767     $ 1,164     $ (108,715 )   $ 208,927  
                                                                                 
Net earnings
                                                    3,375                       3,375  
Comprehensive income
                                            197                               197  
                                                                                 
Class C dividends declared ($0.142 per share)
                                                    (464 )                     (464 )
Issuance of shares:
                                                                               
Conversion of class B to class A
                    (11 )     11                                               -  
Stock grants
                    3               17                                       20  
Employee stock purchase plan
                                    181                                       181  
Shares withheld from employees for tax withholding
                    (1 )             (505 )                                     (506 )
Stock-based compensation
                                    261               1                       262  
Income tax benefits from vesting of restricted stock
                                    368                                       368  
                                                                                 
Balance at March 27, 2011
    -       33       156       443       260,698       (32,098 )     90,679       1,164       (108,715 )     212,360  
                                                                                 
Net earnings
                                                    6,141                       6,141  
Comprehensive income
                                            197                               197  
Class C dividends declared ($0.142 per share)
                                                    (464 )                     (464 )
Issuance of shares:
                                                                               
Conversion of class B to class A
                    (4 )     4                                               -  
Stock grants
                    1               432                                       433  
Shares withheld from employees for tax withholding
                                    (13 )                                     (13 )
Stock-based compensation
                                    285                                       285  
                                                                                 
Balance at June 26, 2011
  $ -     $ 33     $ 153     $ 447     $ 261,402     $ (31,901 )   $ 96,356     $ 1,164     $ (108,715 )   $ 218,939  
 
See accompanying notes to unaudited condensed consolidated financial statements

 
6


JOURNAL COMMUNICATIONS, INC.
(in thousands)

   
Two Quarters Ended
 
   
June 24, 2012
   
June 26, 2011
 
Cash flow from operating activities:
           
Net earnings
  $ 10,530     $ 9,516  
Less earnings from discontinued operations
    -       341  
Earnings from continuing operations
    10,530       9,175  
Adjustments for non-cash items:
               
Depreciation
    10,665       10,788  
Amortization
    949       784  
Provision for doubtful accounts
    141       411  
Deferred income taxes
    5,613       5,962  
Non-cash stock-based compensation
    956       1,000  
Net (gain) loss from disposal of assets
    16       (238 )
Net changes in operating assets and liabilities, excluding effect of sales and acquisitions:
               
Receivables
    1,291       4,121  
Inventories
    (1,070 )     (382 )
Accounts payable
    951       (2,535 )
Other assets and liabilities
    (2,828 )     (11,577 )
NET CASH PROVIDED BY OPERATING ACTIVITIES
    27,214       17,509  
                 
Cash flow from investing activities:
               
Capital expenditures for property and equipment
    (5,134 )     (5,405 )
Proceeds from sales of assets
    36       73  
Proceeds from sale of business
    484       745  
NET CASH USED FOR INVESTING ACTIVITIES
    (4,614 )     (4,587 )
                 
Cash flow from financing activities:
               
Proceeds from long-term notes payable to banks
    46,670       53,396  
Payments on long-term notes payable to banks
    (66,615 )     (67,001 )
Principal payments under capital lease obligations
    (177 )     (171 )
Proceeds from issuance of common stock, net
    134       163  
Income tax benefits from vesting of restricted stock
    289       430  
Redemption of common stock, net
    (3,068 )     -  
NET CASH USED FOR FINANCING ACTIVITIES
    (22,767 )     (13,183 )
                 
Cash flow from discontinued operations:
               
Net operating activities
    -       (223 )
Net investing activities
    -       823  
NET CASH PROVIDED BY DISCONTINUED OPERATIONS
    -       600  
                 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    (167 )     339  
                 
Cash and cash equivalents:
               
Beginning of year
    2,418       2,056  
At June 24, 2012 and June 26, 2011
  $ 2,251     $ 2,395  
 
See accompanying notes to unaudited condensed consolidated financial statements
 
 
7

 
JOURNAL COMMUNICATIONS, INC.
(in thousands, except per share amounts)
 
1
BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared by Journal Communications, Inc. and its wholly owned subsidiaries and a variable interest entity (VIE) for which we are the primary beneficiary in accordance with U.S. generally accepted accounting principles and pursuant to the rules and regulations of the Securities and Exchange Commission and reflect normal and recurring adjustments, which we believe to be necessary for a fair presentation.  As permitted by these regulations, these statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for annual financial statements.  However, we believe that the disclosures are adequate to make the information presented not misleading.  The gain on the sale of NorthStar Print Group Inc.’s (NorthStar) real estate holdings in the first quarter of 2011 has been reflected as discontinued operations in our condensed consolidated statements of operations.  The balance sheet at December 25, 2011 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  The operating results for the second quarter and two quarters ended June 24, 2012 are not necessarily indicative of the operating results that may be expected for the fiscal year ending December 30, 2012.  You should read these unaudited condensed consolidated financial statements in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 25, 2011.

2
ACCOUNTING PERIODS

We report on a 52-53 week fiscal year ending on the last Sunday of December in each year.  In addition, we have four quarterly reporting periods, each consisting of 13 weeks and ending on a Sunday, provided that once every six years, the fourth quarterly reporting period will be 14 weeks.  The fourth quarterly reporting period in our 2012 fiscal year will consist of 14 weeks.

3
ACCOUNTING REVISIONS

Certain prior quarter amounts have been revised to conform to the proper presentation.  These are primarily related to the allocation of employee benefit related expenses for our broadcasting business.  These costs were previously reported in operating costs and expenses and are now correctly allocated between operating costs and expenses and selling and administrative expenses.

The following table sets forth operating costs and expenses and selling and administrative expenses for the first quarter of 2012 as previously reported and revised to conform to the proper presentation:
 
   
March 25, 2012
As Revised
   
March 25, 2012
As Previously
Reported
 
Operating costs and expenses:
           
Broadcasting
  $ 22,426     $ 23,033  
Publishing
    26,152       26,152  
Corporate eliminations
    (129 )     (129 )
Total operating costs and expenses
  $ 48,449     $ 49,056  
                 
Selling and administrative expenses
  $ 28,077     $ 27,470  
 
NEW ACCOUNTING STANDARDS

In September 2011, the Financial Accounting Standards Board (FASB) issued amended guidance for goodwill impairment.  The guidance simplifies how entities test goodwill for impairment.  The new guidance allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test.  Under these amendments, an entity will be required to perform the two-step impairment test only if it concludes that the fair value of a reporting unit is more likely than not, less than its carrying value.  This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted.  We adopted this guidance in the first quarter of 2012.  There is not expected to be an impact on our consolidated financial statements.

In June 2011, the FASB issued amended guidance for comprehensive income.  The guidance requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.  The new guidance eliminates the option to present the components of other comprehensive income as part of the statement of shareholders’ equity.  Subsequently, in December 2011, the FASB issued its final standard to defer the new requirement to present components of reclassifications of other comprehensive income on the face of the income statement.  The other requirements contained in the new standard on comprehensive income must still be adopted by the FASB. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. We adopted this guidance in the first quarter of 2012 and opted to present the total of comprehensive income in two separate but consecutive statements.
 
 
8

 
JOURNAL COMMUNICATIONS, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
(in thousands, except per share amounts)
 
NEW ACCOUNTING STANDARDS continued
 
In May 2011, the FASB issued amended guidance for fair value measurement and disclosure requirements between U.S. generally accepted accounting principles and International Financial Reporting Standards (IFRS).  The new guidance includes amendments to clarify the definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. generally accepted accounting principles and IFRS.  The guidance also changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements.  This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.  We adopted this guidance in the first quarter of 2012.  There has been no material impact on our consolidated financial statements.

EARNINGS PER SHARE

Basic

We apply the two-class method for calculating and presenting our basic earnings per share.  As noted in the FASB’s guidance for earnings per share, the two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared (or accumulated) and participation rights in undistributed earnings.  Under that method:

 
a)
Income (loss) from continuing operations (“net earnings (loss)”) is reduced by the amount of dividends declared in the current period for each class of stock and by the contractual amount of dividends that must be paid or accrued during the current period.

 
b)
The remaining earnings, which may include earnings from discontinued operations (“undistributed earnings”), are allocated to each class of common stock to the extent that each class of stock may share in earnings if all of the earnings for the period were distributed.

 
c)
The remaining losses (“undistributed losses”) are allocated to the class A and B common stock.  Undistributed losses are not allocated to the class C common stock and non-vested restricted stock because the class C common stock and the non-vested restricted stock are not contractually obligated to share in the losses.  Losses from discontinued operations are allocated to class A and B shares and may be allocated to class C shares and non-vested restricted stock if there is undistributed earnings after deducting earnings distributed to class C shares from income from continuing operations.

 
d)
The total earnings (loss) allocated to each class of common stock are then divided by the number of weighted average shares outstanding of the class of common stock to which the earnings (loss) are allocated to determine the earnings (loss) per share for that class of common stock.

 
e)
Basic earnings (loss) per share data are presented for class A and B common stock in the aggregate and for class C common stock.  The basic earnings (loss) per share for class A and B common stock are the same; hence, these classes are reported together.

In applying the two-class method, we have determined that undistributed earnings should be allocated equally on a per share basis among each class of common stock due to the lack of any contractual participation rights of any class to those undistributed earnings.  Undistributed losses are allocated to only the class A and B common stock for the reason stated above.
 
 
9

 
JOURNAL COMMUNICATIONS, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
(in thousands, except per share amounts)

EARNINGS PER SHARE continued

The following table sets forth the computation of basic earnings per share under the two-class method:

   
Second Quarter Ended
   
Two Quarters Ended
 
   
June 24, 2012
   
June 26, 2011
   
June 24, 2012
   
June 26, 2011
 
                         
Numerator for basic earnings from continuing operations for each class of common stock and non-vested restricted stock:
                       
Earnings form continuing operations
  $ 7,611     $ 6,141     $ 10,530     $ 9,175  
Less dividends declared:
                               
Class A and B
    -       -       -       -  
Class C
    464       464       928       928  
Non-vested restricted stock
    -       -       -       -  
                                 
Total undistributed earnings from continuing operations
  $ 7,147     $ 5,677     $ 9,602     $ 8,247  
                                 
Undistributed earnings from continuing operations:
                               
Class A and B
  $ 6,670     $ 5,269     $ 8,946     $ 7,650  
Class C
    435       335       581       487  
Non-vested restricted stock
    42       73       75       110  
Total undistributed earnings from continuing operations
  $ 7,147     $ 5,677     $ 9,602     $ 8,247  
                                 
Numerator for basic earnings from continuing operations per class A and B common stock:
                               
Dividends on class A and B
  $ -     $ -     $ -     $ -  
Class A and B undistributed earnings
    6,670       5,269       8,946       7,650  
Numerator for basic earnings from continuing operations per class A and B common stock
  $ 6,670     $ 5,269     $ 8,946     $ 7,650  
                                 
Numerator for basic earnings from continuing operations per class C common stock:
                               
Dividends on class C
  $ 464     $ 464     $ 928     $ 928  
Class C undistributed earnings
    435       335       581       487  
Numerator for basic earnings from continuing operations per class C common stock
  $ 899     $ 799     $ 1,509     $ 1,415  
                                 
Denominator for basic earnings from continuing operations for each class of common stock:
                               
Weighted average shares outstanding -
                               
Class A and B
    50,023       51,318       50,190       51,222  
Class C
    3,264       3,264       3,264       3,264  
                                 
Basic earnings per share from continuing operations:
                               
Class A and B
  $ 0.13     $ 0.10     $ 0.18     $ 0.15  
Class C
  $ 0.28     $ 0.24     $ 0.46     $ 0.43  

 
10

 
JOURNAL COMMUNICATIONS, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
(in thousands, except per share amounts)

EARNINGS PER SHARE continued

   
Second Quarter Ended
   
Two Quarters Ended
 
   
June 24, 2012
   
June 26, 2011
   
June 24, 2012
   
June 26, 2011
 
                         
Numerator for basic earnings from discontinued operations for each class of common stock and non-vested restricted stock:
                       
                         
Total undistributed earnings from discontinued operations
  $ -     $ -     $ -     $ 341  
Undistributed earnings from discontinued operations:
                               
Class A and B
  $ -     $ -     $ -     $ 316  
Class C
    -       -       -       20  
Non-vested restricted stock
    -       -       -       5  
                                 
Total undistributed earnings from discontinued operations
  $ -     $ -     $ -     $ 341  
                                 
                                 
Denominator for basic earnings from discontinued operations for each class of common stock:
                               
Weighted average shares outstanding -
                               
Class A and B
    50,023       51,318       50,190       51,222  
Class C
    3,264       3,264       3,264       3,264  
                                 
                                 
Basic earnings per share from discontinued operations:
                               
Class A and B
  $ -     $ -     $ -     $ 0.01  
Class C
  $ -     $ -     $ -     $ 0.01  
                                 
                                 
Numerator for basic net earnings for each class of common stock:
                               
Net earnings
  $ 7,611     $ 6,141     $ 10,530     $ 9,516  
Less dividends declared:
                               
Class A and B
    -       -       -       -  
Class C
    464       464       928       928  
Non-vested restricted stock
    -       -       -       -  
Total undistributed net earnings
  $ 7,147     $ 5,677     $ 9,602     $ 8,588  
                                 
Undistributed net earnings:
                               
Class A and B
  $ 6,670     $ 5,269     $ 8,946