(PULITZER INC. LOGO)
For Immediate Release
900 North Tucker Boulevard
St. Louis, Missouri 63101
Tel 314/340-8402
Fax 314/340-3125
PULITZER INC. REPORTS
2003 FIRST-QUARTER EARNINGS
ST. LOUIS, April 22, 2003 - Pulitzer Inc. (NYSE:PTZ) today announced
that first-quarter 2003 net income from continuing operations was $7.1 million,
or $0.33 per diluted share, compared with $6.8 million, or $0.32 per diluted
share, in the prior year.
First-quarter operating revenue from continuing operations decreased
1.8 percent to $98.2 million, from $100.0 million in the prior year. Operating
income from continuing operations decreased to $16.9 million from $17.1 million
in 2002.
Results for 2003 and 2002 included investment losses related to
non-operating assets, as detailed in the "Reconciliation of Base Earnings" table
presented later in this release. Excluding these items from both the 2003 and
2002 first-quarter periods, first-quarter 2003 base earnings per diluted share
were $0.35, compared with a similarly determined $0.34 per diluted share for the
first quarter of 2002.
Commenting on the results, Robert C. Woodworth, president and chief
executive officer, said, "Our first-quarter results were affected by the soft
economic environment, most obviously the advertiser caution stimulated by the
war in Iraq. But we also faced difficult year-over-year revenue comparisons from
not only the March-to-April Easter shift but also the early 2002 advertising
spending related to the St. Louis Rams appearance in the Super Bowl and the
Winter Olympics in Provo. Despite the revenue softness, Pulitzer achieved an
increase in base earnings per fully diluted share of nearly 3 percent, as tight
expense controls partially mitigated the impact of a volatile and uncertain
economy."
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Pulitzer First-Quarter Earnings
"During the quarter, we continued our strategic focus on market share
growth. At the St. Louis Post-Dispatch, we debuted a new weekly Health and
Fitness section and a significantly expanded Friday business section. Both have
received positive initial reader and advertiser response. At Pulitzer
Newspapers, Inc. ("PNI"), we now cross-sell classified and retail advertising in
eight of our 12 markets. We continue to see success where we have brought sales
pressure to bear, with local territory revenues in St. Louis and Tucson up 9.6
percent and 13.5 percent, respectively, for the quarter. In Tucson, continued
enhancement of our editorial product helped us achieve record circulation growth
for the Arizona Daily Star," Woodworth said.
FORECAST FOR 2003 (SEE NOTES)
"As we indicated earlier this month, we continue to expect that our
focus on tight cost control will enable us to meet our earlier guidance for
full-year 2003 base earnings per fully diluted share of at least $1.95,"
Woodworth said. "But we face a great deal of uncertainty related to the economic
environment."
RECONCILIATION OF BASE EARNINGS
<Table>
<Caption>
First Quarter Ended
---------------------
Mar. 30, Mar. 31,
2003 2002
-------- --------
DILUTED EARNINGS PER SHARE OF STOCK:
Reported income from continuing operations $ 0.33 $ 0.32
Non-operating investment charges 0.02 0.02
-------- --------
Base earnings from continuing operations $ 0.35 $ 0.34
======== ========
</Table>
o 2003 and 2002 first-quarter results included net pretax charges of $0.8
million to adjust the carrying value of certain non-operating investments.
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Pulitzer First-Quarter Earnings
GAAP-BASIS RESULTS
FIRST QUARTER
Operating income from continuing operations was $16.9 million, compared
with $17.1 million in the prior year. Revenue from continuing operations
decreased 1.8 percent to $98.2 million, from $100.0 million a year ago.
Operating expenses for the first quarter of 2003 decreased 2.0 percent
to $85.4 million, principally due to lower distribution costs, reduced bad debt
expense and newsprint price savings.
Total interest expense for the first quarter of 2003 decreased to $5.5
million from $5.7 million in 2002. The decrease relates principally to interest
rate swap contracts entered into in 2001 and 2002. The effective tax rate for
the quarter declined to 37.0 percent from 38.5 percent for the first quarter
last year. The Company expects its effective tax rate for 2003 will remain in
the 37 percent range.
COMPARABLE-BASIS RESULTS
DEFINITION OF COMPARABILITY
The discussion that follows focuses on "comparable" results in order to
illustrate the effects of year-to-year fluctuations for the full scope of our
operations. Comparable revenue and expense from continuing operations are
defined as reported revenue and operating expense inclusive of Pulitzer's 50
percent share of the Tucson Newspaper Agency ("TNI") operations. The following
table summarizes the effect of adding Pulitzer's 50 percent share of TNI
operations to reported revenues and operating expenses:
<Table>
<Caption>
REVENUE EXPENSE
-------------------- ----------------------
First-Quarter Ended
--------------------------------------------------
Mar. 30, Mar. 31, Mar. 30, Mar. 31,
2003 2002 2003 2002
-------- -------- -------- --------
(in millions)
Pulitzer Inc. GAAP $ 98.2 $ 100.0 $ 85.4 $ 87.2
Pulitzer 50% Share
of Tucson Newspaper
Agency 13.7 13.1 9.6 8.9
-------- -------- -------- --------
Comparable Results $ 111.9 $ 113.1 $ 95.0 $ 96.1
======== ======== ======== ========
</Table>
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Pulitzer First-Quarter Earnings
FIRST QUARTER
Operating income decreased 0.5 percent and total operating revenue was
down 1.0 percent. Advertising revenue decreased 1.0 percent, with retail
revenue, including preprints, up 0.5 percent and national revenue, including
national preprints, up 9.1 percent. First-quarter classified advertising revenue
decreased 5.3 percent from the comparable period in 2002, principally reflecting
weak automotive and help wanted advertising revenue. Automotive revenue
decreased 7.8 percent for the first quarter, while help wanted advertising
revenue decreased 10.7 percent for the quarter, compared with a decrease of 10.1
percent in the fourth quarter of 2002.
The following table provides detail for comparable advertising revenue
trends by operating group for comparable periods in the prior year:
<Table>
<Caption>
1ST 4th 3rd 2nd 1st 4th 3rd 2nd 1st
QTR. Mar. Feb. Jan. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr.
---- ---- ---- ---- ---- ---- ---- ---- ----- ----- ---- ----
2003 2003 2003 2003 2002 2002 2002 2002 2001 2001 2001 2001
---- ---- ---- ---- ---- ---- ---- ---- ----- ----- ---- ----
COMPARABLE ADVERTISING
Combined St. Louis Operations -1.9% -2.8% -0.1% -2.2% +4.3% +4.6% -5.9% -3.5% -7.1% -9.7% -2.8% -1.8%
Pulitzer Newspapers, Inc. -1.6% -5.4% -1.1% +1.5% +6.2% +4.6% +1.3% +1.4% -5.6% -4.2% -1.5% +0.7%
Pulitzer Inc. -1.8% -3.5% -0.4% -1.2% +4.8% +4.6% -4.0% -2.2% -6.7% -8.2% -2.4% -1.1%
Tucson Newspaper Agency (TNI) +4.8% +3.0% +4.9% +4.8% +3.1% +1.1% -5.6% -9.0% -13.7% -14.4% -9.2% -3.3%
Pulitzer Inc. (combined with -1.0% -2.8% +0.2% -0.5% +4.6% +4.2% -4.2% -3.1% -7.6% -9.0% -3.4% -1.4%
50% of TNI)
</Table>
First-quarter 2003 operating expense decreased 1.1 percent, primarily
reflecting lower distribution costs, decreased bad debt expense, and a 5.6
percent decline in newsprint costs, reflecting a similar decrease in newsprint
price. Excluding the impact of less expensive newsprint, operating expense for
the first quarter decreased 0.4 percent from 2002.
BALANCE SHEET & CASH FLOW STATEMENT HIGHLIGHTS
Pulitzer ended the quarter in a strong financial position, with cash
and marketable securities of approximately $187.7 million, compared to $194.4
million at December 29, 2002.
# # #
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Pulitzer First-Quarter Earnings
Pulitzer Inc., through various subsidiaries and affiliated entities, 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 Sentinel, Hanford, Calif.; the Arizona Daily Sun,
Flagstaff, Ariz.; The Daily Chronicle, DeKalb, Ill.; The Garden Island, Lihue,
Hawaii; the Daily Journal, Park Hills, Mo.; The Lompoc Record, Lompoc, Calif.;
and The Daily News, Rhinelander, Wisc. The Company also owns the Suburban
Journals of Greater St. Louis, a group of 37 weekly papers and various niche
publications.
The Company's new media and interactive initiatives include
STLtoday.com in St. Louis, azstarnet.com in Tucson, and Web sites for all of its
other dailies. Pulitzer Inc. is the successor to the company originally founded
by Joseph Pulitzer in St. Louis in 1878. For more information, visit our Web
site at www.pulitzerinc.com.
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Pulitzer First-Quarter Earnings
NOTES:
Statements in this press release concerning the Company's business outlook or
future economic performance, anticipated profitability, revenues, expenses or
other financial items, together with other statements that are not historical
facts, are "forward-looking statements" as that term is defined under the
Federal Securities Laws. Forward-looking statements are subject to risks,
uncertainties and other factors which 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), outcome of labor negotiations,
capital or similar requirements, and general economic conditions, any of which
may impact advertising and circulation revenues and various types of expenses,
as well as other risks detailed in the Company's filings with the Securities and
Exchange Commission. Although the Company believes that the expectations
reflected in "forward-looking statements" are reasonable, it cannot guarantee
future results, levels of activity, performance or achievements. Accordingly,
investors are cautioned not to place undue reliance on any such "forward-looking
statements," and the Company disclaims any obligation to update the information
contained herein or to publicly announce the result of any revisions to such
"forward-looking statements" to reflect future events or developments.
The Company's calculation of "Base Earnings" and "Base Earnings per Share,"
including guidance contained herein for full-year 2003 base earnings per fully
diluted share, exclude investment gains and losses related to non-operating
assets. The Company can not currently determine full-year 2003 investment gains
and losses, if any, related to non-operating assets. The Company's calculation
of "Base Earnings" and "Base Earnings per Share," including guidance contained
herein for full-year 2003 base earnings per fully diluted share, may not be
comparable to similarly titled measures reported by other companies. "Base
Earnings" and "Base Earnings per Share," which exclude investment gains and
losses related to non-operating assets, are not measures of performance under
generally accepted accounting principles ("GAAP") and should not be construed as
substitutes for consolidated net income and earnings per share as a measure of
performance. However, management uses "Base Earnings" and "Base Earnings per
Share" for comparing the Company's past, current and future performance and
believes that they provide meaningful and comparable information to investors to
aid in their analysis of the Company's performance relative to other periods and
to its peers.
SPECIAL NOTICE:
Pulitzer Inc. will conduct a conference call for investors beginning at 10
a.m. EDT today. The Web cast of the call can be accessed at
www.pulitzerinc.com. Replays of the call will also be available at the same
site. For more information, please contact James V. Maloney, Director of
Shareholder Relations at Pulitzer Inc., at (314) 340-8402.
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Pulitzer First-Quarter Earnings
PULITZER INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share)
(Unaudited)
<Table>
<Caption>
First Quarter Ended
-------------------------
Mar. 30, Mar. 31,
2003 2002
--------- ---------
OPERATING REVENUES:
Advertising
Retail $ 27,208 $ 28,751
National 6,821 6,377
Classified 28,438 30,493
--------- ---------
Total 62,467 65,621
Preprints 13,732 11,956
--------- ---------
Total advertising 76,199 77,577
Circulation 20,196 20,462
Other 1,837 2,004
--------- ---------
Total operating revenues 98,232 100,043
--------- ---------
OPERATING EXPENSES:
Payroll and other personnel expenses 45,355 44,673
Newsprint expense 10,205 10,810
Depreciation 3,682 3,733
Amortization 1,105 1,110
Other expenses 25,092 26,886
--------- ---------
Total operating expenses 85,439 87,212
--------- ---------
Equity in earnings of Tucson newspaper 4,146 4,249
partnership --------- ---------
Operating income 16,939 17,080
Interest income 935 1,001
Interest expense (5,458) (5,717)
Net loss on marketable securities and (750) (750)
investments
Other income (expense) 12 (59)
--------- ---------
INCOME BEFORE PROVISION FOR INCOME TAXES 11,678 11,555
PROVISION FOR INCOME TAXES 4,325 4,454
MINORITY INTEREST IN NET EARNINGS OF
SUBSIDIARY 297 278
--------- ---------
NET INCOME $ 7,056 $ 6,823
========= =========
</Table>
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Pulitzer First-Quarter Earnings
PULITZER INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(In thousands, except earnings per share)
(Unaudited)
<Table>
<Caption>
First Quarter Ended
------------------------
Mar. 30, Mar. 31,
2003 2002
-------- --------
BASIC EARNINGS PER SHARE OF STOCK:
Continuing operations $ 0.33 $ 0.32
Discontinued operations 0.00 0.00
-------- --------
Earnings per share $ 0.33 $ 0.32
======== ========
Weighted average number of shares 21,346 21,234
outstanding ======== ========
DILUTED EARNINGS PER SHARE OF STOCK:
Continuing operations $ 0.33 $ 0.32
Discontinued operations 0.00 0.00
-------- --------
Earnings per share $ 0.33 $ 0.32
======== ========
Weighted average number of shares 21,462 21,458
outstanding ======== ========
</Table>
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Pulitzer First-Quarter Earnings
PULITZER INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Unaudited)
FOOTNOTES
Goodwill and Other Intangible Assets: The Company adopted Statement of Financial
Accounting Standards No. 142 ("SFAS No. 142"), Goodwill and Other Intangible
Assets, effective with the start of its 2002 fiscal year on December 31, 2001.
Financing Arrangements: In 2002, the Company executed interest rate swap
contracts that have the effect of converting the interest cost for $75.0 million
of the Company's debt from fixed rate to variable rate. The swap contracts
mature with the Company's debt on April 28, 2009. The Company accounts for the
swap contracts as fair value hedges. In addition, in October 2002, the Company
terminated previously executed swap contracts totaling $75.0 million resulting
in a gain of $5.0 million. The $5.0 million net gain is being amortized ratably
over the remaining term of the original swap contract which expires in April
2009.
Earnings Per Share: Basic earnings per share of stock is computed using the
weighted average number of Common and Class B Common shares outstanding during
the applicable period. Diluted earnings per share of stock is computed using the
weighted average number of Common and Class B Common shares outstanding and
common stock equivalents.
Fiscal Year End: The Company's fiscal year ends on the last Sunday of the
calendar year. In 2002, the Company's fiscal year began on December 31, 2001 and
ended on December 29, 2002. In 2003, the Company's fiscal year began on December
30, 2002 and will end on December 28, 2003.
Reclassifications: Certain reclassifications have been made to the 2002
consolidated financial statements to conform to the 2003 presentation.
Use of Estimates: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and reported amounts of
revenues and expenses during the reporting period. Actual results may differ
from those estimates.