EXHIBIT 99.1
[HOLLINGER INTERNATIONAL INC. LOGO]
FOR IMMEDIATE RELEASE
Contact:
Paul B. Healy, Vice President Peter K. Lane, Vice President
Corporate Development and Chief Financial Officer
Investor Relations Hollinger International Inc.
Hollinger International Inc. (800) 288-1141
(212) 586-5666 (416) 363-8721
HOLLINGER INTERNATIONAL INC. ANNOUNCES
FIRST QUARTER 2003 EARNINGS OF $0.03 PER SHARE
NEW YORK, MAY 20, 2003 -- HOLLINGER INTERNATIONAL INC (NYSE: HLR) announces
net earnings for the quarter ended March 31, 2003 of $2.3 million or $0.03 per
share, an improvement of $106.3 million over a net loss of $104.0 million or a
loss of $1.08 per share for the quarter ended March 31, 2002. As disclosed in
our 2002 annual report, the net loss for the first quarter of 2002 has been
restated to include a $0.7 million after tax increase in amortization expense
relating to the reclassification of goodwill to identifiable long lived
intangible assets and to reflect a $20.1 million after tax writedown of goodwill
at the Jerusalem Post.
Revenues for the first quarter of 2003 were $260.3 million, an increase of $
13.3 million or 5.4% from $247.0 million in the first quarter of 2002. The
increase is primarily due to increases in advertising revenue at the Chicago
Group as well as the favorable impact on revenues of the strengthening of the
British pound and the Canadian dollar against the U.S. dollar offset in part by
a decline in revenue at the U.K. Newspaper Group as measured in British pounds.
Operating income in the first quarter of 2003 was $13.5 million compared to
$17.7 million in 2002, a decrease of $4.2 million. Depreciation and amortization
included in operating income totaled $12.2 million in the first quarter of 2003
and $13.0 million in 2002, a decrease of $0.8 million.
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Operating costs increased by $17.6 million to $246.9 million in the first
quarter of 2003 from $229.3 million in 2002. Increased costs were primarily
attributable to the aforementioned strengthening of the currencies of our
foreign operations against the U.S. dollar and to a lesser extent planned
increases in marketing activities at the U.K. Newspaper Group. The Company
continues to benefit from low newsprint prices with newsprint costs for the
first quarter 2003 being $37.8 million compared to $38.7 million in the prior
year quarter.
Non-operating income and expenses had a significant impact on earnings. Foreign
currency exchange gains in the quarter amounted to $44.0 million, primarily
relating to the Company's obligations with respect to its Participation Trust as
a result of the strengthening of the Canadian dollar, compared to foreign
currency exchange losses in the prior year quarter of $82.9 million primarily
relating to the substantial liquidation of the Company's investment in its
Canadian operations. The Company is benefiting from its refinancing and debt
reduction with interest expense of $13.9 million in the first quarter 2003
compared to $17.2 million in 2002. Other non-operating expenses also include
losses on the extinguishment of debt of $37.3 million in the first quarter 2003
and $34.7 million in 2002.
Revenues at the Chicago Group were $106.0 million in the first quarter of 2003
compared with 2002 first quarter revenues of $104.7 million, an increase of $1.3
million or 1.2%. Operating income at the Chicago Group increased by $2.7 million
in the quarter from $3.6 million in 2002 to $6.3 million in 2003. Contributing
to the improved operating income were an increase in advertising revenue of $1.8
million, particularly classified and retail, continuing reductions in newsprint
expense and reduced wage and salary expenses. Those gains were partially offset
by a $0.9 million reduction in circulation revenue attributable to a small
decline in circulation as well as increased employee benefit costs. The
Company's Ashland printing facility is now fully operational with consequent
additional savings in labor costs estimated at $1.5 million per year.
Revenues at the U.K. Newspaper Group were $134.6 million in the first quarter of
2003, an increase of $11.1 million over comparable period revenues of $123.5
million in 2002. The increase reflects a strengthening of the pound against the
dollar partially offset by a decrease in revenues measured in British pounds of
3.0% year over year. Advertising revenues declined by Pound Sterling 3.8 million
or 6.5%, principally display and recruitment advertising, partially offset by a
Pound Sterling 1.3 million or 5.5% increase in circulation revenue. The increase
in circulation revenue is due to price increases implemented in prior years. The
Telegraph has reduced its bulk and foreign print sales and is investing the
related cost savings in the development and marketing of the newspapers. Overall
operating income at the U.K. Newspaper Group decreased by $5.8 million from the
prior year quarter to $16.6 million largely as a result of decreases in
advertising revenue, budgeted
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increases in marketing costs, reductions in the price and volume of newsprint
and the impact of changes in foreign currency exchange rates. In local currency,
operating income was Pound Sterling 10.4 million in the first quarter of 2003
compared to Pound Sterling 15.7 million in the prior year period, a decrease of
Pound Sterling 5.3 million.
OTHER
Hollinger International Inc. is a global newspaper publisher with
English-language newspapers in the United States, Great Britain, and Israel. Its
assets include The Daily Telegraph, The Sunday Telegraph and The Spectator
magazine in Great Britain, the Chicago Sun-Times and a large number of community
newspapers in the Chicago area, The Jerusalem Post and The International
Jerusalem Post in Israel, a portfolio of new media investments and a variety of
other assets.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements made in this release are "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act").
Forward-looking statements include, without limitation, any statement that may
predict, forecast, indicate or imply future results, performance or
achievements, and may contain the words "believe", "anticipate", "expect",
"estimate", "project", "will be", "will continue", "will likely result" or
similar words or phrases. Forward-looking statements involve risks and
uncertainties, which may cause actual results to differ materially from the
forward-looking statements. The risks and uncertainties are detailed from time
to time in reports filed by Hollinger International with the Securities and
Exchange Commission, including in its Forms 10-K and 10-Q. New risk factors
emerge from time to time and it is not possible for management to predict all
such risk factors, nor can it assess the impact of all such risk factors on the
Company's business or the extent to which any factor, or combination of factors,
may cause actual results to differ materially from those contained in any
forward-looking statements. Given these risks and uncertainties, investors
should not place undue reliance on forward-looking statements as a prediction of
actual results.
FOR MORE INFORMATION ON HOLLINGER INTERNATIONAL INC.,
PLEASE VISIT OUR WEBSITE AT WWW.HOLLINGER.COM.
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