Penumbra Theatre has canceled two of the five plays in its 2011-12 season, it announced Tuesday. The St. Paul theater said it has a $500,000 shortfall on its $3.2 million budget.

The fiscal gap is due to lower-than-expected sponsorship income for out-of-town productions, including a tour of the musical play, "I Wish You Love," which sold out its run at Washington's Kennedy Center and is now back for a run in St. Paul.

"This is not the death knell for the theater by any stretch," said Penumbra board member Jeff Saunders, a partner at the law firm of Dorsey & Whitney. "This is about ensuring that we are able to continue to bring Penumbra's mission to a broader audience. We are finding new ways to serve our audiences beyond the main stage in a very tough economy."

The canceled plays are Kara Lee Corthron's "Julius By Design," which was slated to open Feb. 9, and Pearl Cleage's "Bourbon at the Border" (March 29-April 22). "Julius" was also postponed in a previous season as a cost-saving measure.

Cutting the two dramas saves about $350,000, said managing director Chris Widdess. The rest of the shortfall will be made up "through other cuts."

Ticket holders may donate to the theater or call the Penumbra box office at 651-224-3180 for refunds.

The onetime artistic home of Pulitzer Prize-winning playwright August Wilson, Penumbra has had a successful season at the box office, even if its 250-seat theater can only contribute so much to the bottom line.

Total earned income was $1.1 million last fiscal year, which ended June 30, up 53 percent over the previous year. Contributed income was $1.7 million, up 11 percent. Ticket revenues also increased by 35 percent to $800,000, in part because of co-productions with larger venues such as the Guthrie, where the company presented Wilson's "Ma Rainey's Black Bottom," and the Kennedy Center.

In the spring, Penumbra founder Lou Bellamy will stage James Baldwin's "The Amen Corner," starring Greta Oglesby, at the Guthrie.

"Announcing budget cuts is not something that we like to do, but we're going to make the best of it," Bellamy said.