ITEM 2. PROPERTIES
Principal properties operated by the Registrant and its subsidiaries are summarized as follows:
Subsidiary Location How Held Square Footage Journal Sentinel Inc. (Publishing) Offices/Plant Milwaukee, WI Owned 464,000 Garage Milwaukee, WI Owned 67,500 Distribution Centers Milwaukee, WI Leased 166,100
ADD, Inc. (Publishing) Office/Plant WI, OH, GA, FL Owned or Leased 249,100 VT, NY, PA, LA
Hometown Publications, Inc. (Publishing) Office Trumbull, CT Leased 7,000
Auto Mart Publishing, Inc. (Publishing) Office Dayton, Columbus Leased 2,900 & Cincinnati, OH
Mega Direct, Inc. (Direct Marketing) Office Clearwater, FL Leased 39,700
Journal Broadcast Group, Inc. (Broadcasting) Office and Studios Milwaukee, WI Owned 101,500 KTNV-TV Studios Las Vegas, NV Owned 20,300 WSYM-TV Studios Lansing, MI Leased 10,300 KQRC-FM Studios Kansas City/ Leavenworth, KS Leased 3,700 KOSR-AM/KEZO-FM/ and KKCD-FM Office and Studios Omaha, NE Leased 12,200 KMXZ-FM/KKHG-FM/ and KFFN-AM Office and Studios Tucson, AZ Leased 6,600
NorthStar Print Group, Inc. (Commercial Printing) Office/Plant Brown Deer, WI Owned 127,300 Office/Plant Norway, MI Owned 101,700 Office/Plant Watertown, WI Owned 201,700
Label Products & Design Inc. (Commercial Printing) Office and Plant Green Bay, WI Owned 39,600
Trumbull Printing, Inc. (Commercial Printing) Office/Plant Trumbull, CT Owned 64,600
IPC Communication Services, Inc. (Commercial Printing) Office/Plant/Warehouse St. Joseph, MI Leased 323,500 Office/Plant Fremont, CA Leased 97,900 Office/Plant Irvine, CA Leased 124,000 Office/Plant/Warehouse San Jose, CA Leased 226,300
Norlight Telecommunica- tions, Inc. (Fiber optic & Rubicon, WI Owned 3,800 microwave transmission Skokie, IL Owned 6,100 services and long distance Afton, WI Owned 3,800 telecommunications Arden Hills, MN Owned 1,700 services) Minneapolis, MN Leased 3,400 Brookfield, WI Leased 21,600 Duluth/Bemidji, MN Leased 5,200 Green Bay, WI Leased 200
Nordoc Software Services, S.A. (Commercial Printing) Office/Plant Roncq, France Leased 80,700
PrimeNet Marketing Services, Inc. (Data Base Management) Mendota Heights, Office/Plant MN Leased 87,200
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS The Company paid damages of $5.7 million in February 1996 in final settlement of a patent infringement lawsuit. Otherwise, the Company is involved in various claims and lawsuits incidental to its business, which, in the opinion of management, will not have a material effect in the aggregate on the Company's financial position or operations.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None.
ITEM 4A. EXECUTIVE OFFICERS OF REGISTRANT The executive officers of Registrant, as of March 19, 1997, all of whom hold office until the next annual meeting of the board of directors, which will be held immediately following the annual meeting of shareholders on June 3, 1997, are:
Name Age Office Held Since Robert A. Kahlor 63 Chairman of the Board/CEO September 4, 1992 Steven J. Smith 46 President/COO September 4, 1992 Douglas G. Kiel 48 Senior Vice President June 2, 1992 Keith K. Spore 54 Senior Vice President September 6, 1995 Paul M. Bonaiuto 46 Senior Vice President/CFO March 5, 1996 Robert M. Dye 49 Vice President June 5, 1990 Stephen O. Huhta 41 Vice President June 8, 1993 Ronald G. Kurtis 49 Vice President June 8, 1993 James J. Ditter 35 Vice President September 6, 1995 William T. Lutzen 35 Vice President June 7, 1994 Daniel L. Harmsen 41 Vice President March 5, 1996 Mark J. Keefe 37 Vice President June 4, 1996 Douglas G. Hosking 40 Vice President September 4, 1996 Richard J. Gasper 53 Vice President June 4, 1996 Karen O. Trickle 40 Treasurer December 3, 1996 Paul E. Kritzer 54 Vice President June 5, 1990 & Secretary September 1, 1992 Christine A. Farnsworth 48 Assistant Secretary June 8, 1993
All of the executive officers of the Registrant except Messrs. Bonaiuto, Hosking, Keefe, Ditter and Gasper and Ms. Trickle have been employed by the Company in key management positions for more than five (5) years. Mr. Bonaiuto has been Chief Financial Officer of the Registrant since January 1996 and was elected a Senior Vice President in March 1996. Previously Mr. Bonaiuto had been President of NorthStar Print Group, Inc., a subsidiary of the Registrant, from June 1994 to January 1996; Senior Vice President and Chief Financial Officer of Perry Printing Corporation, then a subsidiary of the Registrant, from July 1992 to June 1994, and Executive Vice President of The Peterson Group, Wilmington, Delaware, a private equity investment firm. Mr. Ditter was elected President of Norlight Telecommunications, Inc., a subsidiary of the Registrant, in September 1995 after serving as that company's Senior Vice President and Chief Financial Officer since August 1992. Prior to that, Mr. Ditter had been the Controller of Peck Foods Corporation, Milwaukee. Mr. Gasper has been President of NorthStar Print Group, Inc., since January 1996. Prior to that he was Vice President and General Manager of Label Products & Design, Inc., Green Bay, Wisconsin, from April 1993 to January 1996, and President and owner of Competitive Advantages, Inc., a training and consulting firm in Florence, South Carolina, from April 1992 to April 1993. Mr. Hosking joined the Registrant in April 1996 as President of IPC Communication Services, Inc. Previously he had been a Vice President for commercial development and general manager of the food fiber division of Opta Food Ingredients, Inc., for two years and Executive Vice President of Courier Corp., San Francisco, a national book printer. Mr. Keefe joined the Registrant in October 1995 as President of PrimeNet Marketing Services, Inc. Prior to that he had been a Vice President for Donnelly Marketing, Inc., St. Louis Park, Minnesota, from January 1994 to September 1995, and a Vice President of FDC, Inc. (a subsidiary of Fingerhut Corporation) in Minnetonka, Minnesota. Ms. Trickle started with Registrant in September 1996. Previously, she had been Assistant Treasurer (International) for Harnischfeger Industries, Inc., Brookfield, Wisconsin, from September 1994 to September 1996, and Assistant Treasurer for Applied Power, Inc., Butler, Wisconsin, up to September 1994.
PART II ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
There is no established public trading market for the Registrant's common stock. Units representing beneficial interest in the Registrant's common stock can be purchased only by full-time employees with ninety (90) days service and part-time employees with two consecutive years of service of one thousand (1,000) hours each year. As of March 19, 1997, the Journal Employes' Stock Trust (the "Trust") owned of record 12,960,000 shares, or 90%, of the issued common stock of the Registrant. The Trust issues units, each representing a beneficial interest in one share of the Registrant's stock, to eligible employees ("unitholders"). On March 19, 1997, 3,214 unitholders owned 11,386,628 units (representing 82.8% of Registrant's outstanding common stock) and thus were the beneficial owners of a like number of shares of the Registrant's stock held by the Trust. The balance of 1,573,372 units issued by the Trust were, on the above date, held by personal trusts and an employee benefit trust and by the Registrant, treated as treasury stock and not voted.
Prior to all meetings of shareholders of the Registrant, the trustees of the Trust ("Trustees") are required to deliver to each active employee- unitholder a proxy, with the right of substitution, for the number of the Registrant's shares represented by his or her units.
Unitholders may sell their units only through procedures, and at a formula price, dictated pursuant to the Stock Trust Agreement under which the Trust was formed. Whenever a unitholder ceases to be an employee, for any reason except retirement, corporate downsizing or divestiture, he or she must offer his or her units for resale to active employees designated by the President of the Registrant or the Registrant. Employees who retire may retain a decreasing percentage of their units for up to ten (10) years after the first anniversary of their retirement. All units held by retirees are voted by the Trustees. Units may also be held by employee benefit trusts, and unitholders may transfer units to personal trusts and to charitable, educational or religious trusts. All units held by such trusts are likewise voted by the Trustees. As of March 19, 1997, retirees, personal trusts, an employee benefit trust, and other trusts held 5,048,491 units, representing a beneficial interest in 36.7% of the Registrant's outstanding common stock.
All of the Trustees are directors of the Registrant. They have no financial interest in the Registrant's stock owned by the Trust other than through the units they own individually.
The Registrant's unit price and dividend history for the past decade are presented in the following table:
Employee Stock Ownership Plan
Unit Unit Unit Price Total Price Price Increase Cash Annual Year Begin End (Decrease) Dividend Return
1996 - 4th Qtr 36.27 37.15 0.88 0.55 8.6 1996 - 3rd Qtr 36.14 36.27 0.13 0.55 1996 - 2nd Qtr 36.10 36.14 0.04 0.55 1996 - 1st Qtr 36.24 36.10 (0.14) 0.55 1995 - 4th Qtr 35.95 36.24 0.29 0.55 8.3 1995 - 3rd Qtr 36.12 35.95 (0.17) 0.55 1995 - 2nd Qtr 35.62 36.12 0.50 0.55 1995 - 1st Qtr 35.40 35.62 0.22 0.45 1994 34.64 35.40 0.76 1.90 7.7 1993 33.60 34.64 1.04 1.80 8.5 1992 32.60 33.60 1.00 1.80 8.6 1991 31.48 32.60 1.12 1.80 9.3 1990 29.66 31.48 1.82 1.70 11.9 1989 26.65 29.66 3.01 1.70 17.7 1988 23.71 26.65 2.94 1.50 18.7 1987 20.94 23.71 2.77 1.38 19.8
In addition to the Journal Employees' Stock Trust, there are two (2) other record holders of stock of the Registrant. The Registrant is not aware of any recent sales of such stock.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Selected financial data of the Registrant is presented in the Registrant's Annual Report on pages 20 and 21 and is incorporated herein by reference.
ITEM 7.
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis is presented on pages 17 through 19 in Registrant's Annual Report and is incorporated herein by reference.
ITEM 8.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Registrant's Financial Statements with Report of Independent Public Auditors are presented on pages 22 through 30 of the Registrant's Annual Report and are incorporated herein by reference.
ITEM 9.
ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
PART III ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information in response to this item is incorporated herein by reference to the Company's proxy statement, which shall be filed with the Securities and Exchange Commission no later than April 30, 1997. Information about executive officers of the Company is included in Part I of this Form 10-K.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Information in response to this item is incorporated herein by reference to the Company's proxy statement, which shall be filed with the Securities and Exchange Commission no later than April 30, 1997.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following chart states the equity ownership of each Director of the Registrant:
Units Held Percent of Held Office as of March 19, Ownership Name Age Since 1997(1) *denotes <1%
Todd K. Adams 38 June 4, 1996 16,395 * Paul M. Bonaiuto 46 June 8, 1993 20,340 * James J. Ditter 35 September 6, 1995 5,000 * Robert M. Dye 49 March 6, 1990 47,800 * Christine A. Farnsworth 48 June 8, 1993 31,600 * Richard J. Gasper 53 June 4, 1996 9,090 * Rhonda G. Giebenrath 43 June 4, 1996 2,350 * David J. Hauser 42 June 4, 1996 3,295 * Thomas J. Heinen 48 June 4, 1996 11,740 * Douglas G. Hosking 40 September 4, 1996 6,420 * Stephen O. Huhta 41 June 8, 1993 32,355 * Robert A. Kahlor 63 March 6, 1973 96,435 * Mark J. Keefe 37 June 4, 1996 9,000 * Douglas G. Kiel 48 June 4, 1991 36,000 * Paul E. Kritzer 54 June 5, 1990 42,445 * Ronald G. Kurtis 49 June 8, 1993 61,000 * David G. Meissner 59 June 7, 1988 --(2) --(2) Armin J. Ott 49 June 4, 1996 2,970 * Donna M. Riehle 29 June 4, 1996 150 * Ralph P. Schumacher 53 June 4, 1996 5,500 * Steven J. Smith 46 June 2, 1987 81,870 * Keith K. Spore 54 September 6, 1995 28,500 * Christopher S. Thomas 27 June 6, 1995 940 * David M. Thomas 29 June 4, 1996 197 * James L. Forbes 64 September 4, 1996 --(3) Roger D. Peirce 59 September 4, 1996 --(3)
(1) A "Unit" is equivalent to a share of the common stock of Journal Communications, Inc.
(2) Mr. Meissner owns no Units but is an officer and director of Matex Inc., which owns 1,320,000 shares of Journal stock. Mr. Meissner's wife is also an officer and director of Matex Inc. and together with her children owns or has a beneficial interest in 33% of the outstanding common stock of Matex Inc. Mrs. Meissner also has a 33% beneficial interest in 120,000 shares of Journal Communications, Inc. common stock. Other members of Mrs. Meissner's family own or have a beneficial interest in the remaining 67% of the Matex Inc. shares and the 120,000 shares of Journal stock.
(3) Under the terms of the Trust, non-employees are not permitted to own Units.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information in response to this item is incorporated herein by reference to the Company's proxy statement, which shall be filed with the Securities and Exchange Commission no later than May 1, 1997.
PART IV ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. and 2. Financial Statements and Financial Statement Schedules The following consolidated financial statements of the Registrant are included in Item 8:
Registrant's Annual Report Page Number Consolidated Balance Sheets at December 31, 1996 and 1995 22
Consolidated Statements of Earnings for each of the three years in the period ended December 31, 1996 23
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 1996 24
Consolidated Statements of Retained Earnings for each of the three years in the period ended December 31, 1996 25
Notes to Consolidated Financial Statements 25-29
Form 10-K Page Number
Financial Statement Schedules: Consolidated schedule for each of the three years in the period ended December 31, 1996: II - Valuation and qualifying accounts 16
All other schedules are omitted since the required information is not present, or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto.
3. Exhibits The exhibits listed on the exhibit index hereto are filed as part of this annual report.
(b) Reports on Form 8-K
No report on Form 8-K was required to be filed by the Registrant during the quarter ended December 31, 1996.
JOURNAL COMMUNICATIONS, INC.
SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
Years ended December 31, 1996, 1995 and 1994
Balance at Additions Deductions Balance beginning charged to from at end of year earnings allowances of year
Allowance for doubtful receivables:
1996 $2,475,670 $4,184,527 $3,418,685 $3,241,512 ========= ========= ========= =========
1995 $2,065,012 $3,007,365 $2,596,707 $2,475,670 ========= ========= ========= =========
1994 $2,500,533 $2,952,136 $3,387,657 $2,065,012 ========= ========= ========= =========
Note:
(a) Accounts receivable written off, less recoveries, against the allowance.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.
JOURNAL COMMUNICATIONS, INC.
By:/s/ Robert A. Kahlor Robert A. Kahlor Chairman of the Board and CEO
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
/s/ Todd K. Adams March 31, 1997 Todd K. Adams, Director
/s/ Paul M. Bonaiuto March 31, 1997 Paul M. Bonaiuto, Director & Chief Financial Officer (Principal Financial Officer)
___________________________ March _____, 1997 James J. Ditter, Director
/s/ Robert M. Dye March 31, 1997 Robert M. Dye, Director
/s/ Christine A. Farnsworth March 31, 1997 Christine A. Farnsworth, Director
___________________________ March _____, 1997 James L. Forbes, Director
___________________________ March _____, 1997 Richard J. Gasper, Director
/s/ Rhonda G. Giebenrath March 31, 1997 Rhonda G. Giebenrath, Director
/s/ David J. Hauser March 31, 1997 David J. Hauser, Director
/s/ Thomas J. Heinen March 31, 1997 Thomas J. Heinen, Director
___________________________ March _____, 1997 Douglas G. Hosking, Director
___________________________ March _____, 1997 Stephen O. Huhta, Director
/s/ Robert A. Kahlor March 31, 1997 Robert A. Kahlor, Director & Chairman of the Board (Principal Executive Officer)
___________________________ March _____, 1997 Mark J. Keefe, Director
/s/ Douglas G. Kiel March 31, 1997 Douglas G. Kiel, Director
/s/ Paul E. Kritzer March 31, 1997 Paul E. Kritzer, Director
/s/ Ronald G. Kurtis March 31, 1997 Ronald G. Kurtis, Director
___________________________ March _____, 1997 David G. Meissner, Director
___________________________ March _____, 1997 Armin J. Ott, Director
___________________________ March _____, 1997 Roger D. Peirce, Director
/s/ Donna M. Riehle March 31, 1997 Donna M. Riehle, Director
/s/ Ralph P. Schumacher March 31, 1997 Ralph P. Schumacher, Director
___________________________ March _____, 1997 Steven J. Smith, Director
/s/ Keith K. Spore March 31, 1997 Keith K. Spore, Director
___________________________ March _____, 1997 Christopher S. Thomas, Director
___________________________ March _____, 1997 David M. Thomas, Director
JOURNAL COMMUNICATIONS, INC.
INDEX TO EXHIBITS (Item 14(a))
Exhibits
(3.1) Articles of Association of Journal Communications, Inc., as amended (incorporated by reference to Exhibit 3.1 to Journal Communications, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1995 (Commission File No. 0-7831)).
(3.2) By-Laws of Journal Communications, Inc. (incorporated by reference to Exhibit 3.2 to Journal Communications, Inc.'s Current Report for Form 8-K dated March 5, 1996 (Commission File No. 0-7831)).
(9.1) The Journal Employees' Stock Trust Agreement, dated May 15, 1937, as amended (incorporated by reference to Exhibit 9 of the Annual Report on Form 10-K of Journal Communications, Inc. for the fiscal year ended December 31, 1995 (Commission File No. 0-7831)).
(9.2) Further amendment to Stock Trust Agreement as approved by unitholders on October 30, 1996 (incorporated by reference to Exhibit A to the Definitive Proxy Statement of the Journal Employees' Stock Trust included in the Trust's Schedule 14A filed October 1, 1996 (Commission File No. 0-7832))
(13) Registrant Annual Report to the extent incorporated by reference herein
(21) Subsidiaries of the Registrant, filed herewith
(23) Consent of Independent Auditors, filed herewith
(27) Financial Data Schedule, filed herewith