EXHIBIT 99.1
FOR IMMEDIATE RELEASE (PULITZER LOGO)
PULITZER INC. ANNOUNCES CHANGES FROM RESULTS PRESENTED IN ITS
OCTOBER 27, 2003 EARNINGS RELEASE TO PRESENT THIRD-QUARTER
EARNINGS IN COMPLIANCE WITH FASB STAFF POSITION NO. 150-3
ST. LOUIS, November 11, 2003 - On October 27, 2003, Pulitzer Inc.
(NYSE:PTZ) ("Pulitzer" or the "Company") released its results for the third
quarter and first nine months of 2003, which included the adoption of SFAS No.
150, Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity ("SFAS No. 150"). On November 7, 2003, the FASB issued
Staff Position No. 150-3 that requires the indefinite deferral of certain
provisions of SFAS No. 150 related to mandatorily redeemable non-controlling
interests. In order to comply with the changed FASB position, Pulitzer must now
reissue its results solely to remove those items associated with the previous
adoption of SFAS No. 150. There have been no other changes in the Company's
determination of its operating results, financial position, cash flows or
prospects.
GAAP RESULTS
PREVIOUS RECOGNITION OF SFAS NO. 150
As more fully discussed in the footnotes of this press release, SFAS
No. 150 required the Company to recognize a liability associated with the
liquidation of the capital accounts of The Herald Company, Inc. ("Herald"),
reflecting Herald's minority interest in two of the Company's subsidiaries, St.
Louis Post-Dispatch LLC and STL Distribution Services LLC. FASB Staff Position
No. 150-3 indefinitely defers implementation of these provisions.
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Page Two
Pulitzer Third-Quarter Results - Updated
CURRENT RESULTS
As now determined, third-quarter 2003 net income was $9.4 million, or
$0.43 per diluted share. Net income for the first nine months of 2003 was $27.9
million, or $1.29 per diluted share. Net income for the third quarter and first
nine months of 2002 were $8.7 million, or $0.40 per diluted share, and $22.5
million, or $1.05 per diluted share, respectively.
RECONCILIATION OF NET INCOME (LOSS) FROM OCTOBER 27 PRESS RELEASE TO THIS
PRESS RELEASE
The following table presents a reconciliation of the third-quarter and
first-nine-month results for 2003 as they appeared in the October 27 release
(which reflected the adoption of SFAS No. 150), to those that Pulitzer will
incorporate in its consolidated financial statements to be filed with the
Securities and Exchange Commission for the third-quarter and first-nine-month
periods of 2003 (after removing the impact of SFAS No. 150).
<Table>
<Caption>
Third Quarter First Nine Months
------------------------ ------------------------
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
$(000) 2003 2002 2003 2002
---------- ---------- ---------- ----------
Net income (loss) after cumulative effect
of a change in accounting principle, net
of tax, in the October 27 press release
(reflects the adoption of SFAS No 150) $ (16,616) $ 8,872 $ 1,867 $ 22,468
Remove provisions of SFAS No. 150
(net of tax):
Remove cumulative effect of a change
in accounting principle 26,940 0 26,940 0
Remove interest credit recognized
under the provisions of SFAS No. 150 (562) 0 (562) 0
Include minority interest in net
earnings of subsidiaries(1) (382) 0 (382) 0
---------- ---------- ---------- ----------
Subtotal - effect of removing provisions
of SFAS No. 150 (net of tax) 25,996 0 25,996 0
---------- ---------- ---------- ----------
Net income reported in this press
release (reflects the deferral of SFAS
No. 150)(2) $ 9,380 $ 8,872 $ 27,863 $ 22,468
========== ========== ========== ==========
</Table>
(1) As a result of removing the interest credit recognized under the provisions
of SFAS No. 150, interest expense, net of interest income, for the third
quarter and first nine months of 2003 increased to $4.0 million and $12.9
million, respectively, compared to $3.4 million and $12.2 million in the
respective 2002 periods. The increase in the 2003 third-quarter and
first-nine-month periods was due, principally, to the absence, in 2003, of
capitalized interest present in 2002 and lower yields on invested funds.
These expense increases were partially offset by savings from the Company's
interest rate swaps.
(2) Earnings per diluted share are $0.43 and $1.29 for the third quarter and
first nine months of 2003, compared to $(0.77) and $0.09 for the third
quarter and first nine months of 2003 as reported in the October 27, 2003
press release.
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Page Three
Pulitzer Third-Quarter Results --Updated
BASE EARNINGS (SEE NOTES)
Third-quarter 2003 base earnings per diluted share were $0.44, compared
with a similarly determined $0.46 per diluted share for the third quarter of
2002. Base earnings per diluted share for the first nine months of 2003 were
$1.33, compared with $1.27 for the first nine months of 2002.
RECONCILIATION OF GAAP EARNINGS PER DILUTED SHARE TO BASE EARNINGS PER
DILUTED SHARE
AND
RECONCILIATION OF BASE EARNINGS (LOSS) PER DILUTED SHARE FROM THE OCTOBER 27
PRESS RELEASE TO THIS PRESS RELEASE (SEE NOTES)
The following table presents a reconciliation of the third-quarter and
first-nine-month base results for 2003 as they appeared in the October 27
release, which reflected the adoption of SFAS No. 150, to those that Pulitzer
now reports after removing the impact of the adoption of SFAS No. 150.
<Table>
<Caption>
Third Quarter First Nine Months
------------------------ ------------------------
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
2003 2002 2003 2002
---------- ---------- ---------- ----------
Base earnings (loss) per diluted share
after cumulative effect of a change in
accounting principle, in the October 27
press release (reflects the adoption
of SFAS No. 150) $ (0.77) $ 0.40 $ 0.09 $ 1.05
Remove provisions of SFAS No. 150:
Remove cumulative effect of a change
in accounting principle 1.25 0.00 1.25 0.00
Remove interest credit recognized
under the provisions of SFAS No. 150 (0.03) 0.00 (0.03) 0.00
Include minority interest in net
earnings of subsidiaries (0.02) 0.00 (0.02) 0.00
---------- ---------- ---------- ----------
Subtotal - effect of removing provisions
of SFAS No. 150 1.20 0.00 1.20 0.00
---------- ---------- ---------- ----------
GAAP earnings per diluted share 0.43 0.40 1.29 1.05
Losses from certain non-operating
investments 0.01 0.06 0.04 0.21
Employment termination inducements 0.00 0.00 0.00 0.01
---------- ---------- ---------- ----------
Base earnings per diluted share in this
press release (reflects the deferral of
SFAS No. 150) $ 0.44 $ 0.46 $ 1.33 $ 1.27
========== ========== ========== ==========
</Table>
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Page Four
Pulitzer Third-Quarter Results --Updated
BASE EARNINGS FORECAST FOR 2003 (SEE NOTES)
The Company reaffirms its guidance for full-year 2003 base earnings per
diluted share, initially presented in December 2002, of at least $1.95. This
forecast differs from the guidance presented in the Company's October 27 release
of at least $2.00 per diluted share only by adjusting for the elimination of
SFAS No. 150. The Company's current forecast for full-year 2003 base earnings
per diluted share of at least $1.95 does not reflect any change in its
underlying operations. However, and as stated in the October 27 press release,
continued weakness from recruitment, automotive and major retail advertisers,
and the fourth-quarter ramp-up in costs associated with implementing the
upcoming purchase of the St. Louis distribution businesses make achieving this
level of base earnings more challenging than originally anticipated. Further,
the grocery store strike in St. Louis, which was having a negative impact on
Sunday single copy sales of the St. Louis Post-Dispatch, has recently been
settled.
RECONCILIATION OF FORECAST FOR 2003 FULL YEAR BASE EARNINGS PER DILUTED SHARE
AND 2002 BASE EARNINGS PER DILUTED SHARE FROM THE OCTOBER 27 PRESS RELEASE TO
THIS PRESS RELEASE (SEE NOTES)
The following table presents a reconciliation of the 2003 forecast for
full-year base earnings per diluted share and the 2002 presentation of base
earnings per diluted share as they appeared in the October 27 press release to
those Pulitzer now presents:
<Table>
<Caption>
Full-year forecast / results
----------------------------------------
2003 2002
---------------- -----------------
BASE EARNINGS PER DILUTED SHARE
Forecast or reported in the October 27
press release At least $2.00 $ 1.93
Recognize minority interest in net earnings of
subsidiaries (eliminated in accordance with
SFAS No.150, now included in GAAP and Base
Earnings) (0.05) (0.05)
---------------- -----------------
Base earnings forecast and results At least $1.95 $ 1.88
================ =================
</Table>
Other than removing the impact of the adoption of SFAS No. 150, there
are no changes to the Company's 2003 full-year base earnings forecast from those
described in our October 27 press release.
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Page Five
Pulitzer Third-Quarter Results --Updated
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.
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.
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Page Six
Pulitzer Third-Quarter Earnings -- Updated
NOTES:
The Company's calculation of "Base Earnings" and "Base Earnings per Diluted
Share," including guidance contained herein for full-year 2003 base earnings per
diluted share, exclude gains and losses related to certain non-operating
investments that are not a strategic component of the Company's capital
structure or operating plans (principally, investments in new media companies
and partnerships making similar investments), and employment termination
inducements associated with positions that will not be staffed. Gains or losses
on the sale of marketable securities reflect activity in a strategic component
of the Company's capital structure and are, therefore, included in the
determination of "Base Earnings," and "Base Earnings per Diluted Share." "Base
Earnings per Diluted Share," calculated on this basis, would have increased to
$1.88 from $1.85 reported for the full year 2002 prior to Pulitzer's October 27,
2003 press release.
The Company can not currently determine full-year 2003 investment gains and
losses, if any, related to certain non-operating investments or future
employment termination inducements, if any. The Company's calculation of "Base
Earnings" and "Base Earnings per Diluted Share," including guidance contained
herein for full-year 2003 base earnings per diluted share, may not be comparable
to similarly titled measures reported by other companies. "Base Earnings" and
"Base Earnings per Diluted 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 diluted earnings
per share as a measure of performance. However, management uses "Base Earnings"
and "Base Earnings per Diluted 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.
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"), and excludes the revenues and expenses associated with 2003
acquisitions absent in 2002. "Comparable" revenues and expenses, excluding the
results of 2003 acquisitions, and 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.
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Page Seven
Pulitzer Third-Quarter Earnings -- Updated
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.
-tables attached-
Page Eight
Pulitzer Third-Quarter Earnings -- Updated
PULITZER INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share)
(Unaudited)
<Table>
<Caption>
Third Quarter Ended Nine Months Ended
---------------------- ----------------------
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
2003 2002 2003 2002
--------- --------- --------- ---------
OPERATING REVENUES:
Advertising
Retail $ 28,463 $ 29,005 $ 84,921 $ 85,857
National 6,411 6,587 20,768 18,521
Classified 32,466 33,044 93,397 98,079
--------- --------- --------- ---------
Total 67,340 68,636 199,086 202,457
Preprints 14,488 13,223 44,023 38,881
--------- --------- --------- ---------
Total advertising 81,828 81,859 243,109 241,338
Circulation 19,830 20,281 60,323 60,459
Other 1,594 1,401 5,164 5,784
--------- --------- --------- ---------
Total operating revenues 103,252 103,541 308,596 307,581
--------- --------- --------- ---------
OPERATING EXPENSES:
Payroll and other personnel expenses 44,900 45,981 134,973 135,546
Newsprint expense 11,176 10,087 32,690 31,025
Depreciation 3,677 3,176 11,061 10,627
Amortization 1,139 1,108 3,349 3,325
Other expenses 26,440 27,257 78,454 82,255
--------- --------- --------- ---------
Total operating expenses 87,332 87,609 260,527 262,778
--------- --------- --------- ---------
Equity in earnings of Tucson newspaper partnership 3,225 3,904 11,593 12,902
--------- --------- --------- ---------
Operating income 19,145 19,836 59,662 57,705
Interest income 872 1,146 2,729 3,131
Interest expense (4,877) (4,527) (15,609) (15,349)
Net gain on marketable securities 455 44 513 44
Net loss on investments (163) (1,888) (1,289) (7,853)
Other income 78 113 96 127
--------- --------- --------- ---------
INCOME BEFORE PROVISION FOR INCOME TAXES 15,510 14,724 46,102 37,805
PROVISION FOR INCOME TAXES 5,748 5,662 17,077 14,338
MINORITY INTEREST IN NET EARNINGS OF
SUBSIDIARIES 382 390 1,162 999
--------- --------- --------- ---------
NET INCOME $ 9,380 $ 8,672 $ 27,863 $ 22,468
========= ========= ========= =========
</Table>
Page Nine
Pulitzer Third-Quarter Earnings -- Updated
PULITZER INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(In thousands, except earnings per share)
(Unaudited)
<Table>
<Caption>
Third Quarter Ended Nine Months Ended
------------------------- -----------------------
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
2003 2002 2003 2002
----------- ------------ ----------- -----------
BASIC EARNINGS PER SHARE OF STOCK:
Basic earnings per share $0.44 $0.41 $1.30 $1.06
=========== ============ =========== ===========
Weighted average number of shares outstanding 21,414 21,299 21,381 21,269
=========== ============ =========== ===========
DILUTED EARNINGS PER SHARE OF STOCK:
Diluted earnings per share $0.43 $0.40 $1.29 $1.05
=========== ============ =========== ===========
Weighted average number of shares outstanding 21,670 21,415 21,571 21,454
=========== ============ =========== ===========
</Table>
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 that expires in April 2009. The Company
maintains other interest rate swap contracts that have the effect of converting
the interest cost for $150.0 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 are computed using the
weighted average number of Common and Class B Common shares outstanding during
the applicable period. Diluted earnings per share of stock are 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.
New Accounting Pronouncement: In May 2003, FASB issued SFAS No. 150, Accounting
for Certain Financial Instruments with Characteristics of both Liabilities and
Equity ("SFAS No. 150"). SFAS No. 150 sought to establish standards for how an
issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. SFAS No. 150 was effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
was effective at the beginning of the first interim period beginning after June
15, 2003.
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Page Ten
Pulitzer Third-Quarter Results -- Updated
The Company determined that SFAS No. 150, as it existed through FASB Staff
Positions 150-2, dated October 16, 2003, required the Company to recognize a
liability, at an estimated amount of $45 million (which amount would have
changed over time), associated with the liquidation in 2015 of the capital
accounts of The Herald Company, Inc. ("Herald"), reflecting Herald's minority
interest in two of the Company's subsidiaries, St. Louis Post-Dispatch LLC ("PD
LLC") and STL Distribution Services LLC ("DS LLC"). Accordingly, the Company's
press release on October 27, 2003, releasing third quarter and first nine-month
results for 2003, incorporated the adoption of SFAS No. 150.
On November 7, 2003, the FASB issued Staff Position 150-3, which deferred
indefinitely the application of those provisions of SFAS No. 150 that relate to
Herald's interests in PD LLC and DS LLC. Accordingly, the Company will file its
quarterly Report on Form 10-Q presenting its consolidated results of operations,
financial position, and cash flows absent any potential impact of SFAS No. 150.
The Company cannot predict and, accordingly, is not able to determine what the
ultimate impact to the Company's consolidated financial statements, if any,
might be from future FASB action concerning SFAS No. 150.
# # #