| NEW YORK
NEW YORK May 9 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
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
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
(Editing by Toni Reinhold)