Journal Register Company Announces Fourth Quarter and Full Year 2007 Results

Journal Register Company (NYSE: JRC) today reported fourth quarter and full year 2007 results. Both periods included certain non-cash charges and non-recurring items.

For the thirteen-week fourth quarter ended December 30, 2007, the Company had a net loss of $148.4 million, or $3.78 on a per diluted share basis. The net loss for the period includes a $181.3 million, $150.9 million after-tax, or $3.84 per diluted share, non-cash charge for the impairment of assets under the methodology prescribed by Statement of Financial Accounting Standards No. 142. This charge primarily relates to a write-down of the carrying value of mastheads and goodwill for our Michigan cluster. A goodwill impairment charge of $33.7 million, or $0.85 per diluted share, was taken in the fourth quarter of 2006. Last year, the Company reported a fourth quarter net loss of $25.1 million, or $0.64 per diluted share, for the fourteen-week quarter ended December 31, 2006.

The 2007 fourth quarter also included charges of $7.2 million for the severance/separation of former executives; costs associated with the amendment of the credit facility of $2.1 million; costs of $0.7 million for termination of the Company's airplane lease; a gain of $2.6 million on the sale of the Middletown Press building in Connecticut, and a favorable state tax adjustment of $3.0 million. The total after-tax impact of these items was $1.4 million, or $0.04 per diluted share.

The non-cash impairment charges also impacted the fifty-two week year ended December 30, 2007, resulting in the Company reporting a net loss of $102.5 million, or $2.62 per diluted share, as compared to a net loss of $6.2 million, or $0.16 per diluted share, for the fifty-three week year ended December 31, 2006.

Excluding the impairment charges and the other items discussed above, 2007 net income would have been $3.9 million, or $0.10 per diluted share, for the fourth quarter and $15.3 million, or $0.39 per diluted share, for the full year 2007.

Chairman & Chief Executive Officer James W. Hall said, "Times have changed, so we are changing the Company. As a result, our 2007 financial results reflect three major items: (i) the ongoing transformation of JRC from a newspaper company to a multimedia organization; (ii) the transition to a new team, vision, culture and an entrepreneur-driven business model; and (iii) well-known industry and economic trends. Change costs time and money and approximately $16.1 million was invested in 2007 in people and software and other information technology in support of our digital/online strategy. This investment will continue in 2008. And to ensure that we have the right people in the right jobs at this important time, Scott Wright, President & Chief Operating Officer joined us in October at the corporate office and other changes at the management group level and in the field were made to improve our operations' execution capability across the Company.

"At our Annual Publishers' Conference held last month, we asked our publishers in the field to be more entrepreneurial -- to take measured risks to promote growth in running their properties, and are convinced that this model is the way to continue to improve performance going forward. We believe that this change is imperative as new forms of digital technology are being deployed, virtually on a daily basis, with the goal of taking our customers away from us. We expect 2008 will be an interesting and challenging year as we work together to produce steady development and progress."

Executive Vice President and Chief Financial Officer Julie A. Beck said, "Consistent with the rest of our industry, revenues remained weak. However, the advertising revenue trends have improved for the second straight quarter, and we plan to continue our transition to a multimedia company. In the fourth quarter, we amended our credit facility to give us added flexibility and liquidity, and took a net after-tax $150.9 million non-cash impairment charge, which does not affect in any way our cash flow, debt covenants, or liquidity. This charge reduces the value of the intangibles on our balance sheet, yet we remain optimistic about our multimedia future."

Overall Revenue

Total revenues for the Company's continuing operations for the thirteen-week quarter ended December 30, 2007 were $115.4 million, as compared to total revenues of $131.9 million for the fourteen-week fourth quarter of 2006, a 12.5 percent decrease. Total revenues for the fifty-two week full year 2007 were $463.2 million, as compared to $506.1 million for the fifty-three week full year 2006, a decrease of 8.5 percent. Absent the extra week for the 2006 fourth quarter and full year, revenue would have declined 7.2 percent and 7.1 percent, respectively.

Total Advertising Revenue

On a comparable thirteen-week basis, total advertising revenues for the fourth quarter of 2007 were $88.2 million, a decrease of 8.6 percent, compared to the fourth quarter of 2006. Total advertising revenues on a comparable fifty-two week basis for the full year 2007 were $353.0 million, as compared to $387.5 million in 2006, a decrease of 8.9 percent.