1
EXHIBIT 99.1
[PULITZER INC. LETTERHEAD]
FOR IMMEDIATE RELEASE
PULITZER INC. AND THE HERALD COMPANY ANNOUNCE
JOINT VENTURE COMBINING INTERESTS IN ST. LOUIS POST-DISPATCH
Pulitzer to receive a 95 percent interest in results of joint venture:
Board authorized new stock buyback program
ST. LOUIS, May 1, 2000 - Pulitzer Inc. (NYSE:PTZ) and The Herald
Company announced today an agreement under which each will transfer its
interest in the assets and operations of the St. Louis Post-Dispatch to a new
joint venture to be managed by Pulitzer. Under the agreement, Pulitzer's
interest in the results of the operations of the Post-Dispatch will increase
from 50 percent to 95 percent.
Michael E. Pulitzer, chairman of Pulitzer, said, "This transaction
has special meaning to me, because the St. Louis Post-Dispatch was the first
newspaper owned by my grandfather, Joseph Pulitzer. I am pleased that we are
making this additional investment in the St. Louis community."
Robert C. Woodworth, president and chief executive officer of
Pulitzer, said, "The new joint venture arrangement is important because it
aligns our responsibility for operations more closely with the results we
achieve. We believe the Post-Dispatch represents a significant growth
opportunity for Pulitzer. Pulitzer will be the primary beneficiary as we work
to realize that potential."
-more-
2
Add one
Pulitzer/Herald joint venture
"Acquisitions have been a major component of our growth strategies,"
Woodworth noted. "We view this transaction as part of that effort. We are
expanding our ownership of a property that we know well and making a
substantial investment in the St. Louis market, which we believe has great
potential."
Donald E. Newhouse, president of Advance Publications, Inc., parent of
The Herald Company, said: "Our involvement with the Post-Dispatch, unlike all
our other newspaper ownership, has been one of passive investment. When our
partners at Pulitzer indicated their desire to create a joint venture which
would more appropriately reflect their continuing operating responsibility for
the paper, we agreed that these unique circumstances fully justified the new
arrangement."
On a pro forma basis, assuming the transaction occurred on January 1,
2000, it is estimated that Pulitzer's cash flow (EBITDA) would increase by
approximately $29 million based on estimated 2000 results. The transaction is
expected to be immediately accretive to earnings before goodwill amortization.
On a GAAP accounting basis, it is expected to dilute Pulitzer's reported
earnings 6 percent to 8 percent during the first 12 months, and to become
earnings neutral in the fourth year.
Under terms of the joint venture agreement, The Herald Company will
receive an initial cash distribution from the joint venture of $306 million and
will retain a 5 percent interest in the results of operations of the
Post-Dispatch. Upon termination, which will occur no later than 2015, Pulitzer
will acquire The Herald Company's remaining interest in the joint venture for a
cash payment determined in accordance with the agreement.
The initial cash distribution from the joint venture to The Herald
Company will be financed by a loan to the joint venture from a group led by
Prudential Capital Group, a division of Prudential Insurance Company of
America. The loan will be guaranteed by Pulitzer. Pulitzer, which had
approximately $400 million of cash on its balance sheet as of March 31, 2000,
will remain in a strong financial position following the transaction.
-more-
3
Add two
Pulitzer/Herald joint venture
Since 1961, the Post-Dispatch has been operating under an agency
agreement between Pulitzer and The Herald Company. Under the agency agreement,
Pulitzer manages the operations of the paper and the two companies evenly split
the operating income or loss, as well as capital expenditures.
The new joint venture is effective today, Monday, May 1, 2000. Under
accounting rules, the transaction will be treated as a purchase, and The Herald
Company's interest will be reported as a minority interest on Pulitzer's
financial statements.
Goldman, Sachs & Co. and Huntleigh Securities Corporation acted as
financial advisors to Pulitzer Inc. on the transaction.
Separately, Pulitzer announced that its Board of Directors authorized
the repurchase of up to $50 million of its common stock. The new authorization
is in addition to $28 million remaining under an earlier $50 million buy-back
program announced in July 1999. "We continue to believe that our stock is an
attractive investment," Woodworth said.
The Company said that the shares will be repurchased at management's
discretion in the open market over the next 12 to 24 months. The decision to
buy back the stock will depend upon price, availability and other corporate
developments, and no maximum or minimum purchase prices have been set.
Pulitzer Inc. is engaged in newspaper publishing and related new media
activities. The Company's newspaper operations include two major metropolitan
dailies, the St. Louis Post-Dispatch and the Arizona Daily Star in Tucson,
Arizona, and 12 other dailies: The Pantagraph, Bloomington, Ill.; The Daily
Herald Provo, Utah; the Santa Maria Times, Santa Maria, Calif.; The Napa Valley
Register, Napa, Calif,; The World, Coos Bay, Ore.; The Hanford Sentinel,
Hanford, Calif.; the Arizona Daily Sun, Flagstaff, Ariz.; the Troy Daily News,
Troy, Ohio; The Daily Chronicle, DeKalb, Ill.; The Garden Island, Lihue, Hawaii;
The Daily Journal, Park Hills, Mo.; and The Daily News, Rhinelander, Wisc.
-more-
4
Add three
Pulitzer/Herald joint venture
Through its Pulitzer Technologies subsidiary, Pulitzer Inc. also
engages in a variety of new media and interactive initiatives, including web
sites related to the newspapers in St. Louis and Tucson and a number of its
other dailies. Pulitzer Inc. is the successor to the company originally
founded by Joseph Pulitzer in St. Louis in 1878.
For further information, contact James V. Maloney, director of
shareholder relations, Pulitzer Inc. at (314) 340-8406.
NOTE:
The above statements include forward-looking statements which are based on
current management expectations of the Company. Forward-looking statements are
subject to risks, uncertainties and other factors that could cause actual
results to differ materially from those stated in such statements. Such risks,
uncertainties and other factors include, but are not limited to, industry
cyclicality, the seasonal nature of the business, changes in pricing or other
actions by competitors or suppliers (including newsprint), capital or similar
requirements, and general economic conditions, any of which may impact
advertising and circulation revenues and various types of expenses. Although
the Company believes that the expectations reflected in the forward-looking
statement are reasonable, it cannot guarantee future results, levels of
activity, performance or achievements.
SPECIAL NOTICE:
Pulitzer Inc. will conduct a conference call for investors to discuss this
transaction beginning at 10:00 a.m. EDT today. Investors wishing to listen to
the call may contact James V. Maloney, director of shareholder relations,
Pulitzer Inc. at (314) 340-8406 prior to 9:30 a.m. EDT to obtain access
information.