EXHIBIT 99.1
(PULITZER INC. LETTERHEAD)
PULITZER INC. REPORTS
2003 SECOND-QUARTER EARNINGS
ST. LOUIS, July 22, 2003 - Pulitzer Inc. (NYSE:PTZ) today announced
that second-quarter 2003 net income was $11.4 million, or $0.53 per diluted
share, compared with $7.0 million, or $0.32 per diluted share, in the prior
year. Net income for the first six months of 2003 was $18.5 million, or $0.86
per diluted share, compared with $13.8 million, or $0.64 per diluted share, in
the prior year.
Results for 2003 and 2002 included investment losses related to
non-operating assets, and results for 2002 included employment termination
inducements for permanently eliminated positions, as detailed in the
"Reconciliation of Base Earnings" table presented later in this release.
Excluding these items from both the 2003 and 2002 second-quarter and six-month
periods, second-quarter 2003 base earnings per diluted share were $0.54,
compared with a similarly determined $0.47 per diluted share for the second
quarter of 2002, and base earnings per diluted share for the first six months of
2003 were $0.89 compared with $0.81 in 2002.
Second-quarter operating revenue increased 3.0 percent to $107.1
million, from $104.0 million in the prior year. Operating revenue for the first
six months of 2003 increased 0.6 percent to $205.3 million, from $204.0 million
in 2002. Second-quarter operating income increased 13.4 percent to $23.6
million, from $20.8 million in the prior year. Operating income for the first
six months of 2003 increased 7.0 percent to $40.5 million, from $37.9 million in
2002.
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Pulitzer Second-Quarter Earnings
Commenting on the results, Robert C. Woodworth, president and chief
executive officer, said, "This was a good quarter, as we combined solid revenue
growth with effective cost control to drive increases of more than 13 percent in
operating income and 15 percent in base earnings per fully diluted share. On the
revenue side, the March-to-April shift in the Easter holiday, together with our
focus on local territory retail revenue, contributed to a 7.0 percent gain in
retail revenue, including preprints, and we achieved strong growth in national
revenue. On the cost side, our tightened control over operating expenses in the
face of the uncertain economy produced clear benefits.
"To a significant extent, our revenue gains reflect our persistent
focus on growing our share of ad revenue by expanding our audience reach in each
of our markets and effectively marketing that reach to advertisers. In St.
Louis, cross-selling between the St. Louis Post-Dispatch and the Suburban
Journals contributed to a more than 13 percent increase in local retail
territory revenue. At PNI, we continued to strengthen our market presence with
the strategic acquisitions of weekly newspapers near our daily paper in Napa,
California, and, earlier this month, Rhinelander, Wisconsin," Woodworth said.
FORECAST FOR 2003 (SEE NOTES)
"As we indicated last month, we continue to expect to meet our December
2002 guidance for full-year 2003 base earnings per fully diluted share of at
least $1.95," Woodworth said. "But we are facing a stubbornly uncertain
advertising market, and achieving that base earnings level ll require
maintaining our tight focus on cost control."
RECONCILIATION OF BASE EARNINGS
<Table>
<Caption>
Second Quarter First Six Months
Jun. 29, Jun. 30, Jun. 29, Jun. 30,
2003 2002 2003 2002
-------- -------- -------- --------
DILUTED EARNINGS PER SHARE OF STOCK:
Reported income from operations $ 0.53 $ 0.32 $ 0.86 $ 0.64
Non-operating investment losses 0.01 0.14 0.03 0.16
Employment termination inducements 0.00 0.01 0.00 0.01
-------- -------- -------- --------
Base earnings from operations $ 0.54 $ 0.47 $ 0.89 $ 0.81
======== ======== ======== ========
</Table>
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Pulitzer Second-Quarter Earnings
o 2003 and 2002 second-quarter and six-month results included
pretax charges to adjust the carrying value of certain
non-operating investments. Net pretax charges were $0.3
million and $5.1 million in the second quarters of 2003 and
2002, respectively, and $1.0 million and $5.8 million in the
first six months of 2003 and 2002, respectively.
o 2002 second-quarter and six-month results included pretax
charges of $0.2 million for termination inducements for
permanently eliminated positions.
GAAP-BASIS RESULTS
SECOND QUARTER
Operating income was $23.6 million, compared with $20.8 million in the
prior year. Operating revenue increased 3.0 percent to $107.1 million, from
$104.0 million a year ago.
Operating expenses for the second quarter of 2003 decreased 0.2 percent
to $87.8 million, principally due to lower distribution costs and reduced bad
debt expense. These expense savings were partially offset by an 11.7 percent
increase in newsprint expense, principally due to a mid-single digit percent
increase in the average cost per metric tonne of newsprint.
Total interest expense for the second quarter of 2003 increased to $5.3
million from $5.1 million in 2002 due, principally, to the absence of
capitalized interest in 2003. The effective tax rate for the quarter increased
to 37.0 percent from 36.6 percent for the second quarter last year. The Company
expects its effective tax rate for 2003 will remain in the 37 percent range.
FIRST SIX MONTHS
Operating income was $40.5 million, compared with $37.9 million in the
prior year. Operating revenue increased 0.6 percent to $205.3 million, from
$204.0 million a year ago.
Operating expenses for the first six months of 2003 decreased 1.1
percent to $173.2 million, principally due to lower distribution costs, reduced
bad debt expense, partially offset by increased newsprint costs. Newsprint
expense increased approximately 2.8 percent for the first six months of 2003
compared with the comparable period in 2002 due, in part, to a 0.7 percent
increase in the average price of newsprint.
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Pulitzer Second-Quarter Earnings
Total interest expense for the first six months of 2003 decreased to
$10.7 million from $10.8 million in 2002 due to savings related to interest rate
swap contracts entered into in 2001 and 2002. These savings were partially
offset by the absence, in 2003, of capitalized interest present in 2002. The
effective tax rate for the first six months of 2003 was 37.0 percent compared
with 37.6 percent for the first six months of last year.
COMPARABLE-BASIS RESULTS (SEE NOTES)
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 operating 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 Revenue Expense
--------------------- --------------------- --------------------- ---------------------
Second Quarter Ended First Six Months
----------------------------------------------- -----------------------------------------------
(in millions) (in millions)
Jun. 29, Jun. 30, Jun. 29, Jun. 30, Jun. 29, Jun. 30, Jun. 29, Jun. 30,
2003 2002 2003 2002 2003 2002 2003 2002
-------- -------- -------- -------- -------- -------- -------- --------
Pulitzer Inc. GAAP $ 107.1 $ 104.0 $ 87.8 $ 88.0 $ 205.3 $ 204.0 $ 173.2 $ 175.2
Results
Pulitzer 50%
Share of Tucson
Newspaper Agency 13.2 12.9 8.9 8.1 26.9 26.0 18.5 16.9
-------- -------- -------- -------- -------- -------- -------- --------
Comparable Results $ 120.3 $ 116.9 $ 96.7 $ 96.1 $ 232.2 $ 230.0 $ 191.7 $ 192.1
======== ======== ======== ======== ======== ======== ======== ========
(1)
</Table>
(1) The results of acquisitions for the second quarter and six-month period
ended June 29, 2003 are not material to comparable results.
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Pulitzer Second-Quarter Earnings
SECOND QUARTER
Operating income increased 13.4 percent and operating revenue increased
2.9 percent. Advertising revenue increased 3.6 percent, with retail revenue,
including preprints, up 7.0 percent and national revenue, including national
preprints, up 36.3 percent. Second-quarter classified advertising revenue
decreased 6.6 percent from the comparable period in 2002, principally reflecting
weak help wanted and automotive advertising revenue. Help wanted revenue
decreased 13.2 percent for the second quarter, compared with a decrease of 10.7
percent in the first quarter, and automotive revenue was down 8.2 percent. Real
estate revenue increased 4.5 percent for the second quarter.
The following table provides detail for comparable advertising revenue
trends by operating group for comparable periods in the prior years:
<Table>
<Caption>
------------------------------------------------------------------------------------------------------
2ND 1st 4th 3rd 2nd 1st 4th 3rd 2nd 1st
QTR. Jun. May Apr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr.
2003 2003 2003 2003 2003 2002 2002 2002 2002 2001 2001 2001 2001
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
COMPARABLE ADVERTISING
Combined St. Louis Operations +5.0% +3.5% +4.6% +6.6% -1.9% +4.3% +4.6% -5.9% -3.5% -7.1% -9.7% -2.8% -1.8%
Pulitzer Newspapers, Inc. +1.0% +2.1% +1.7% -0.5% -1.6% +6.2% +4.6% +1.3% +1.4% -5.6% -4.2% -1.5% +0.7%
Pulitzer Inc. +3.9% +3.1% +3.8% +4.6% -1.8% +4.8% +4.6% -4.0% -2.2% -6.7% -8.2% -2.4% -1.1%
Tucson Newspaper Agency (TNI) +1.3% +0.7% +2.9% +0.5% +4.8% +3.1% +1.1% -5.6% -9.0% -13.7% -14.4% -9.2% -3.3%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Pulitzer Inc. (combined
with 50% of TNI) +3.6% +2.8% +3.7% +4.1% -1.0% +4.6% +4.2% -4.2% -3.1% -7.6% -9.0% -3.4% -1.4%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
</Table>
Second-quarter 2003 operating expense increased 0.7 percent, primarily
the result of higher newsprint costs, reflecting a mid-single digit percent
increase in the price per metric tonne of newsprint, partially offset by lower
circulation distribution costs and decreased bad debt expense. Excluding the
impact of newsprint, operating expense for the second quarter decreased 0.6
percent from 2002.
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Pulitzer Second-Quarter Earnings
FIRST SIX MONTHS
Operating income increased 7.0 percent and operating revenue increased
1.0 percent. Advertising revenue increased 1.3 percent, with retail revenue,
including preprints, up 3.8 percent and national revenue, including national
preprints, up 21.8 percent. Six-month classified advertising revenue decreased
6.0 percent from the comparable period in 2002, principally reflecting weak help
wanted and automotive advertising revenue. Help wanted revenue decreased 12.1
percent for the first six months, while automotive revenue decreased 7.8
percent. Real estate revenue increased 5.7 percent for the first six months of
2003.
Operating expense for the first six months of 2003 decreased 0.2
percent, primarily due to lower circulation distribution costs and decreased bad
debt expense, partially offset by increased newsprint costs. FTEs decreased by
approximately 1.0 percent. Excluding the impact of newsprint, operating expense
for the first six months of 2003 decreased 0.5 percent from 2002.
BALANCE SHEET HIGHLIGHTS
Pulitzer ended the quarter in a strong financial position, with cash
and marketable securities of approximately $201.1 million, compared with $194.4
million at December 29, 2002.
# # #
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's newspaper operations also
include the Suburban Journals of Greater St. Louis, a group of 37 weekly papers
and various niche publications.
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Pulitzer Second-Quarter Earnings
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 further information, visit our Web
site at www.pulitzerinc.com.
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, and employment termination costs associated with positions that will not
be staffed. The Company can not currently determine full-year 2003 investment
gains and losses, if any, related to non-operating assets or future employment
termination costs, if any. 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," as defined above, 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.
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Pulitzer Second-Quarter Earnings
The Company's calculation of "Comparable" results includes the gross revenues
and expenses of the Company's 50 percent interest in the Tucson Newspaper Agency
("TNI"). "Comparable" revenues and expenses, including the gross revenues and
expenses of the Company's 50 percent interest in TNI, are not measures of
performance under GAAP since the Company records its interest in TNI on the
equity method, and should not be construed as substitutes for consolidated
operating revenues and consolidated operating expenses as a measure of
performance. However, management uses "Comparable" revenues and expenses for
comparing the Company's past, current and future performance and believes that
they provide meaningful information to investors regarding the gross revenues
and expenses under the management of the Company.
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 Second-Quarter Earnings
PULITZER INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share)
(Unaudited)
<Table>
<Caption>
Second Quarter Ended Six Months Ended
June 29, June 30, June 29, June 30,
2003 2002 2003 2002
--------- --------- --------- ---------
OPERATING REVENUES:
Advertising
Retail $ 30,353 $ 28,803 $ 56,913 $ 56,899
National 7,536 5,557 14,357 11,934
Classified 31,390 33,840 60,476 64,988
--------- --------- --------- ---------
Total 69,279 68,200 131,746 133,821
Preprints 15,803 13,702 29,535 25,658
--------- --------- --------- ---------
Total advertising 85,082 81,902 161,281 159,479
Circulation 20,297 19,716 40,493 40,178
Other 1,733 2,379 3,570 4,383
--------- --------- --------- ---------
Total operating revenues 107,112 103,997 205,344 204,040
--------- --------- --------- ---------
OPERATING EXPENSES:
Payroll and other personnel expenses 44,718 44,892 90,073 89,565
Newsprint expense 11,309 10,128 21,514 20,938
Depreciation 3,702 3,718 7,384 7,451
Amortization 1,105 1,107 2,210 2,217
Other expenses 26,922 28,112 52,014 54,998
--------- --------- --------- ---------
Total operating expenses 87,756 87,957 173,195 175,169
--------- --------- --------- ---------
Equity in earnings of Tucson newspaper partnership 4,222 4,749 8,368 8,998
--------- --------- --------- ---------
Operating income 23,578 20,789 40,517 37,869
Interest income 922 984 1,857 1,985
Interest expense (5,274) (5,105) (10,732) (10,822)
Net loss on marketable securities and investments (309) (5,152) (1,068) (5,965)
Other income (expense) (3) 10 18 14
--------- --------- --------- ---------
INCOME BEFORE PROVISION FOR INCOME TAXES 18,914 11,526 30,592 23,081
PROVISION FOR INCOME TAXES 7,003 4,222 11,328 8,676
MINORITY INTEREST IN NET EARNINGS OF
SUBSIDIARY 483 331 780 609
--------- --------- --------- ---------
NET INCOME $ 11,428 $ 6,973 $ 18,484 $ 13,796
========= ========= ========= =========
</Table>
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Pulitzer Second-Quarter Earnings
PULITZER INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(In thousands, except earnings per share)
(Unaudited)
<Table>
<Caption>
Second Quarter Ended Six Months Ended
June 29, June 30, June 29, June 30,
2003 2002 2003 2002
---------- ---------- ---------- ----------
BASIC EARNINGS PER SHARE OF STOCK:
Basic earnings per share $ 0.53 $ 0.33 $ 0.87 $ 0.65
========== ========== ========== ==========
Weighted average number of shares outstanding 21,382 21,274 21,364 21,254
========== ========== ========== ==========
DILUTED EARNINGS PER SHARE OF STOCK:
Diluted earnings per share $ 0.53 $ 0.32 0.86 $ 0.64
========== ========== ========== ==========
Weighted average number of shares outstanding 21,579 21,491 21,521 21,474
========== ========== ========== ==========
</Table>
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Pulitzer Second-Quarter Earnings
PULITZER INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Unaudited)
FOOTNOTES
Financing Arrangements: In October 2002, the Company terminated previously
executed swap contracts totaling $75.0 million resulting in a net 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. The Company
maintains other 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. These swap contracts mature with the Company's debt on April 28,
2009. The Company accounts for the swap contracts as fair value hedges.
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.