I'm coming to a career end and can't afford to sit on this much longer. Yesterday's purchase may work out long term, but for the next 2-3 years, single digit returns and 300 million in debt, are going to hurt the stock.
As a result, I began selling off today. Started with 4,000 at an avg of $15.93. It ended up being sold in 8 blocks of 100; a couple of 500s; and a few 300s. Yikes, talk about a thin market!
Before the TV purchase I was willing to wait and see what happens for a couple of years, but this latest purchase has changed my entire outlook.
Yes Valueguy, I�m one of those employees bitching again, but I don't think they have a clue! TV may still be a cash-cow, but I watch the younger people I work with and they don't watch TV! They watch streaming videos on the internet and cable! News, sports & entertainment, that�s where they�re flocking. They pick & choose what they want to watch, not what�s force fed to them wrapped around hyped-up promos and teases, telling you to watch at 10 for the latest! For those who say they still have to watch TV for local news�BS--the stuff they put on locally and call news is just that...CRAP. And we will continue to lose viewership to cable and the internet. It�s no different than newspapers; they�re losing the young also. The paper keeps getting dumbed down, just like TV news, but readership isn�t going up.
One question for the group�Does anyone know if any, or all, of the three stations they purchased are already broadcasting in HDTV, or, will this be another giant capital expense to bring them into compliance with the federally mandated law?
Damn, I think this was a dumb move!
One last point. Wait until next month when the flagship WTMJ-TV loses Jeopardy and Wheel of Fortune to the CBS affiliate which is going to run them between 6-7pm, against the long-dominant 6pm newscast! They are being replaced with Montel as a lead-in to the 4pm newscast and Inside Edition or something like that, following the 6pm show. More ratings angst!
OK. done venting for a few days!
Not this guy.
I have no and have never had an association to Journal Communications, Inc.
I just read their SEC Forms 10-K and 10-Q, looking for a potential investment, and the story is NOT good (from an investor's point of view).
Debt is cheap, this company is way underleveraged. More power to them.
I'm really surprised with all the p'd off employees on this board. Here's the thing (I don't know all of your personal situations but...)
1. you rely on a paycheck from JRN
2. your retirements are contingent on JRN stock's price
3. you despise JRN management and have no faith in company
4. yet you continue to work at JRN
What I know is that if my income and my retirement were dependent upon an entity where I didn't have faith in the management, than I'd be looking elsewhere for employment. Maybe you're part of the problem not part of the solution. Just something to chew on.
Time to sail. Talk you y'all Monday or Tuesday.
I don't know the Steve Smith guy from Adam, but that background, if true, is not what is gonna competently run a publicly-traded company in a highly-competitive world.
The world of media has changed so dramatically in the past 20 years, and a high degree of financial sophistication and business acumen is necessary for survival, not to mention high performance. That background doesn't really show such. (And business school won't get you there, either... you need the experience of having competed with the sharks in the big stakes games... because this is a big stakes game)
If the rest of the management team is of the same make-up, then it would be easy to say that they are in way over their heads on this one, and that would clearly explain the lousy financial performance and lack of response to the problems.
Taking on debt in and of itself is not a concern or problem. What is important is the context (e.g., Leverage / Debt to EBITDA and Coverage / Debt Service Requirement to EBITDA) as well as rationale and analysis for doing so.
Truthfully, I'd have to look at the specific transactions to accurately advise...if buying into perceived growth markets at a "cheap" price, then taking on debt to do so is not necessarily a problem...but a risk, nonetheless. However, the transactions would have to be self-sustaining, meaning capable of generating enough cash to pay down that new debt.
JRN in 2005 is experiencing a very negative behavior with EBITDA having decreased 8.8% year-over-year from 2004. For entities of JRN's size, EBITDA is a standard cash flow measure, and its lenders are not happy with these results. In other words, because EBITDA is decreasing, the quality of JRN's credit from the bank group's point of view (US Bank is the lead in the syndicate) is getting worse.
EBITDA decreasing also means that the value of the company to its shareholders is currently DECREASING (reason why the share price has performed so poorly). In the private equity markets (how this company would have been valued before the IPO), companies are valued and sold as a multiple of EBITDA (for example, 7.5 times EBITDA = the sale price of the company).
What we do know is that JRN is NOT organically growing. It is shrinking. Such is not good for long-term investors holding its equity. You're the ones absorbing the losses.
All of these issues are, by the way, the responsibility of management, which -obviously- has not felt a sense of urgency to proactively manage the problems and to make the company a better performer.
Lets review Steve�s experience:
Starts as WKTI FM salesman
Next: WKTI FM Sales manager
Then, WKTI FM General Manager.
Then, I think, Radio, VP.
Now, send him to Vegas to become GM/VP at KTNV-TV
Bring him back to become a VP of all TV
Next, and here I get a little fuzzy on memory, move him downtown to headquarters to become a VP of everything, then President and now CEO.
My point is, that all the experience, or lack of, comes from the same company. No other outside experiences to build on. Unless of course, you count the 90 days he spent at Harvard, or one of those Eastern B-schools, for a crash course in running a company. Doug came up the ranks the same way. Granted, sometimes this turns out wonderfully but I think you need mentoring from a genius along the way for it to work out, and I don�t think they received it. My timeline may not be totally accurate, I�m doing it from memory, but he never left the company after starting as a FM salesman.
is a well-managed and high-performing company. This is an apples and oranges situation.
Johnson Controls has a strong currency to do change of control transactions with... it's shares. Why? Because Johnson Controls return on equity is very, very good and shareholder wealth is GROWING.
Journal Communications' share price has gone nowhere since the IPO, so they have no currency with which to play. Nor should they be doing change of control transactions.
The problems at Journal Communications are that the current businesses are poor performers / poorly managed. The first job is to clean out the in-house problems before you can even look out-of-house.
That is THE REALITY of a public company.