UPDATE 1-Journal Register says risks default by July
NEW YORK May 9 (Reuters) - U.S. newspaper publisher Journal Register Co JRCO.PK said on Friday it may risk defaulting on its debt by this July unless there is significant improvement in its operating results.
The publisher of the New Haven Register said it may violate its debt covenant by July 23, barring better second-quarter performance or an amendment to its credit agreement.
"There can be no assurance that the company will see significant improvements in its operating results or that the lenders will agree to any such amendment," the company wrote in a filing with the U.S. Securities and Exchange Commission.
Journal Register reported a net loss of $72.2 million, or $1.84 a share, for the first quarter, compared with net profit of $29.1 million, or 74 cents a share, in the first quarter a year ago.
The loss includes a charge of $1.78 a share for write-downs related to its New York and Michigan papers. Excluding special items this year and last, the company's loss was 6 cents a share compared with a profit of 4 cents a share last year.
Revenue fell 10.3 percent to $102.4 million.
Ad revenue fell 12.1 percent to $75.9 million, while online revenue climbed 22.8 percent and now represents 6.4 percent of Journal Register's total revenue.
The Yardley, Pennsylvania-based company was delisted from the New York Stock Exchange after its stock fell well below minimum compliance standards. Journal Register also has hired Lazard Freres to review its options, which include filing for bankruptcy.
Journal Register is the leftover company from the former newspaper publishing empire owned by Ralph Ingersoll II in the 1980s. The company nearly went bankrupt late in that decade after bingeing on junk bonds to finance acquisitions and then being unable to pay its debt.
In the late 1980s it embarked on an ill-fated effort to start a rival daily paper to Missouri's St. Louis Post-Dispatch, which was then owned by Pulitzer Inc and now is part of Lee Enterprises Inc (LEE.N). The paper folded in less than a year.
Journal Register embarked on another ambitious plan in 2004, buying a cluster of newspapers in Michigan for $415 million, just before newspaper ad sales started tanking and automakers' problems started dragging down the local economy.
The company's shares rose 2 cents to close at 30 cents on Friday. (Editing by Toni Reinhold)
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