Pulitzer Inc. Reports 2001 First-Quarter Earnings

Apr 19, 2001, 01:00 ET from Pulitzer Inc.

    ST. LOUIS, April 19 /PRNewswire/ -- Pulitzer Inc. (NYSE:   PTZ) today
 announced that first-quarter 2001 net income was $2.2 million, or $0.10 per
 diluted share, compared with $9.9 million, or $0.45 per diluted share, in the
 first quarter of 2000.  Results for the first quarter of 2001 included an
 after-tax loss of $1.9 million, or $0.09 per diluted share, resulting from the
 sale of the Troy Daily News in Troy, Ohio and the sale of the Company's St.
 Louis Internet Access Provider (ISP).  Excluding this non-recurring loss from
 the 2001 first quarter, net income would have been $4.1 million, or $0.19 per
 diluted share.
     The decline in 2001 first-quarter net income reflected weak advertising
 demand and higher newsprint prices in the current-year quarter.  In addition,
 results were affected by dilution related to interest costs and amortization
 of intangibles from newspaper transactions that closed after the prior-year
 first quarter (Suburban Journals of Greater St. Louis and the St. Louis
 Post-Dispatch LLC).
     Commenting on the results, Robert C. Woodworth, president and chief
 executive officer, said, "As we indicated on April 2, we continue to
 experience soft advertising revenues, with comparable advertising revenues
 down 1.1 percent for the first quarter, primarily reflecting weakness in
 retail and classified, particularly help-wanted, advertising.  Advertising
 revenues were down 1.8 percent at the Post-Dispatch, in the face of tough
 comparisons with last year, when we benefited from the St. Louis Rams' Super
 Bowl victory.  We did see a slight, 0.7 percent, increase in comparable
 advertising revenues at our Pulitzer Newspaper Inc. (PNI) properties."
     On the expense side, Woodworth noted, "We are focused on controlling costs
 in the face of weak advertising demand, and, excluding increased newsprint
 costs, comparable expenses were down slightly in the quarter.  Higher
 newsprint prices, however, increased our comparable newsprint costs
 $1.3 million or 11.8 percent, resulting in an overall increase in comparable
 expenses of 1.5 percent.
     "Our year-over-year results were also affected by dilution connected with
 transactions that significantly strengthened our presence in the important St.
 Louis market," Woodworth said.  "We continue to believe these investments will
 enable us to build value for stockholders over the long term.
     "Looking to the second quarter, we currently expect earnings per share in
 the range of $0.28 to $0.38.  While the uncertain economic climate makes it
 difficult to forecast the rest of the year, it is almost certain that we will
 fall below our previous expectations of advertising revenue growth in the
 range of 5 percent to 6 percent and EPS in the range of $1.67 to $1.77 for the
 full year," Woodworth said.
     Operating cash flow (operating income plus depreciation and amortization),
 excluding the $3.9 million pretax loss on sale of properties, increased
 29.8 percent to $21.5 million for the first quarter of 2001 from $16.5 million
 in the prior year.  The current-year comparison reflects the impact of the
 Company's increased interest in the results of operations of the St. Louis
 Post-Dispatch as of May 1, 2000 and the acquisition of the Suburban Journals
 on August 10, 2000.  Excluding the impact of these transactions and recent
 Pulitzer Newspaper, Inc. ("PNI") acquisitions, operating cash flow for the
 first quarter of 2001 decreased 13.2 percent to $14.4 million.
     First-quarter 2001 revenues increased 13.7 percent to $103.3 million from
 $90.9 million a year ago.  On a comparable basis, excluding properties
 acquired, first-quarter revenues decreased 0.9 percent.  Comparable
 advertising revenues decreased 1.1 percent, reflecting weak demand in retail
 and classified, particularly help-wanted, advertising.
     Operating expenses, excluding the loss on sale of properties from the
 current year and the St. Louis Agency adjustment from the prior year,
 increased 22.4 percent to $97 million for the first quarter of 2001.  On a
 comparable basis, excluding properties acquired as well as new goodwill
 amortization in 2001 related to the Company's increased interest in the
 Post-Dispatch, first-quarter expenses increased 1.5 percent.  The higher
 expenses on a comparable basis reflected higher newsprint prices in the
 current-year quarter.  Excluding newsprint expense, all other expenses were
 down 0.3 percent for the first quarter.
 
     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 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.  Pulitzer also owns the Suburban Journals of Greater St.
 Louis, a group of 36 weekly papers and various niche publications.
     Pulitzer Inc.'s new media and interactive initiatives include STLtoday.com
 in St. Louis, StarNet in Tucson, and Web sites for a number of other
 Company-owned newspapers.  Pulitzer Inc. is the successor to the company
 originally founded by Joseph Pulitzer in St. Louis in 1878.
 
     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 statements are reasonable,
     it cannot guarantee future results, levels of activity, performance or
     achievements.
 
     SPECIAL NOTICE:
     Pulitzer Inc. will conduct a conference call for investors beginning at
     10:00 a.m. EST today.  The Web cast of the call can be accessed at
     www.vcall.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, Pulitzer Inc. at 314-340-8402.
 
 
                         PULITZER INC. AND SUBSIDIARIES
                       STATEMENTS OF CONSOLIDATED INCOME
                   (In thousands, except earnings per share)
                                  (Unaudited)
 
                                                   First Quarter Ended
                                                       March 31,
                                                    2001         2000
         OPERATING REVENUES:
          Advertising
           Retail                                 $27,788      $23,004
           National                                 6,067        5,135
           Classified                              35,009       31,909
            Total                                  68,864       60,048
           Preprints                               10,836        8,357
            Total advertising                      79,700       68,405
          Circulation                              20,565       20,220
          Other                                     3,059        2,286
              Total operating revenues            103,324       90,911
 
         OPERATING EXPENSES:
          Payroll and other personnel expenses     44,523       37,550
          Newsprint expense                        15,068       11,507
          St. Louis Agency adjustment                  --        6,845
          Loss on sale of properties                3,924           --
          Depreciation                              3,854        3,340
          Amortization                              6,674        3,169
          Other expenses                           26,848       23,678
              Total operating expenses            100,891       86,089
 
         Equity in earnings of Tucson
          newspaper partnership                     4,565        5,199
 
         Operating income                           6,998       10,021
 
         Interest income                            2,491        5,794
         Interest expense                          (6,177)          --
         Net gain on marketable securities
          and investments                             553        2,082
         Equity in losses of joint
          venture investment                         (291)        (535)
         Net other expense                           (435)        (375)
 
         INCOME BEFORE PROVISION FOR
          INCOME TAXES                              3,139       16,987
 
         PROVISION FOR INCOME TAXES                   732        7,114
 
         MINORITY INTEREST IN NET EARNINGS
          OF SUBSIDIARY                               252
 
         NET INCOME                                $2,155       $9,873
 
         BASIC EARNINGS PER SHARE OF STOCK:
 
          Earnings per share                        $0.10        $0.45
 
          Weighted average number of
           shares outstanding                      21,169       22,122
 
         DILUTED EARNINGS PER SHARE OF STOCK:
 
          Earnings per share                        $0.10        $0.45
 
         Weighted average number of
          shares outstanding                       21,378       22,162
 
     NOTES
 
     Acquisition of Suburban Journals: On August 10, 2000, the Company acquired
     the assets of the Suburban Newspapers of Greater St. Louis, LLC and the
     stock of The Ladue News, Inc. (collectively the "Suburban Journals") for
     $165 million, excluding the cost of working capital and acquisition costs.
     The Company funded the acquisition with internal cash generated from the
     sale of a portion of its marketable security investments.
 
     Investment in St. Louis Post-Dispatch LLC: On May 1, 2000, the Company and
     The Herald Company, Inc. ("Herald") completed the transfer of their
     respective interests in the assets and operations of the St. Louis
     Post-Dispatch (the "Post-Dispatch") and certain related businesses to a
     new joint venture, known as St. Louis Post-Dispatch LLC ("PD LLC").  Under
     the terms of the operating agreement governing PD LLC (the "Operating
     Agreement"), the Company holds a 95 percent interest in the results of
     operations of PD LLC and Herald holds a 5 percent interest.  Previously,
     under the terms of the St. Louis Agency Agreement, the Company and Herald
     generally shared its operating profits and losses, as well as its capital
     expenditures, on a 50-50 basis.  Also, under the terms of the Operating
     Agreement, Herald received on May 1, 2000 a cash distribution of
     $306,000,000 from PD LLC.  This distribution was financed by a
     $306,000,000 borrowing by PD LLC.
 
     Acquisition of PNI Group Properties: On January 11, 2000, the Company
     acquired The Pantagraph, a daily and Sunday newspaper that serves the
     central Illinois cities of Bloomington and Normal.  On February 1, 2001,
     the Company acquired The Lompoc Record, a daily newspaper located in
     Lompoc, California.  In addition, during the third and fourth quarters of
     2000 and first quarter of 2001, the Company acquired several weekly
     newspapers (in separate transactions) that complement several of its
     existing daily PNI Group newspapers.
 
     Loss on Sale of Properties:  In the first quarter of 2001, the Company
     recorded a pre-tax loss of $3.9 million related to the sale of its daily
     newspaper located in Troy, Ohio and the sale of its St. Louis Internet
     Access Provider (ISP) business.  This loss is included in 2001 operating
     expenses as a separate line, "Loss on sale of properties".  On an after-
     tax basis, the sale of properties reduced first-quarter 2001 net income by
     approximately $1.9 million, or $0.09 per diluted share.
 
     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.
 
 

SOURCE Pulitzer Inc.
    ST. LOUIS, April 19 /PRNewswire/ -- Pulitzer Inc. (NYSE:   PTZ) today
 announced that first-quarter 2001 net income was $2.2 million, or $0.10 per
 diluted share, compared with $9.9 million, or $0.45 per diluted share, in the
 first quarter of 2000.  Results for the first quarter of 2001 included an
 after-tax loss of $1.9 million, or $0.09 per diluted share, resulting from the
 sale of the Troy Daily News in Troy, Ohio and the sale of the Company's St.
 Louis Internet Access Provider (ISP).  Excluding this non-recurring loss from
 the 2001 first quarter, net income would have been $4.1 million, or $0.19 per
 diluted share.
     The decline in 2001 first-quarter net income reflected weak advertising
 demand and higher newsprint prices in the current-year quarter.  In addition,
 results were affected by dilution related to interest costs and amortization
 of intangibles from newspaper transactions that closed after the prior-year
 first quarter (Suburban Journals of Greater St. Louis and the St. Louis
 Post-Dispatch LLC).
     Commenting on the results, Robert C. Woodworth, president and chief
 executive officer, said, "As we indicated on April 2, we continue to
 experience soft advertising revenues, with comparable advertising revenues
 down 1.1 percent for the first quarter, primarily reflecting weakness in
 retail and classified, particularly help-wanted, advertising.  Advertising
 revenues were down 1.8 percent at the Post-Dispatch, in the face of tough
 comparisons with last year, when we benefited from the St. Louis Rams' Super
 Bowl victory.  We did see a slight, 0.7 percent, increase in comparable
 advertising revenues at our Pulitzer Newspaper Inc. (PNI) properties."
     On the expense side, Woodworth noted, "We are focused on controlling costs
 in the face of weak advertising demand, and, excluding increased newsprint
 costs, comparable expenses were down slightly in the quarter.  Higher
 newsprint prices, however, increased our comparable newsprint costs
 $1.3 million or 11.8 percent, resulting in an overall increase in comparable
 expenses of 1.5 percent.
     "Our year-over-year results were also affected by dilution connected with
 transactions that significantly strengthened our presence in the important St.
 Louis market," Woodworth said.  "We continue to believe these investments will
 enable us to build value for stockholders over the long term.
     "Looking to the second quarter, we currently expect earnings per share in
 the range of $0.28 to $0.38.  While the uncertain economic climate makes it
 difficult to forecast the rest of the year, it is almost certain that we will
 fall below our previous expectations of advertising revenue growth in the
 range of 5 percent to 6 percent and EPS in the range of $1.67 to $1.77 for the
 full year," Woodworth said.
     Operating cash flow (operating income plus depreciation and amortization),
 excluding the $3.9 million pretax loss on sale of properties, increased
 29.8 percent to $21.5 million for the first quarter of 2001 from $16.5 million
 in the prior year.  The current-year comparison reflects the impact of the
 Company's increased interest in the results of operations of the St. Louis
 Post-Dispatch as of May 1, 2000 and the acquisition of the Suburban Journals
 on August 10, 2000.  Excluding the impact of these transactions and recent
 Pulitzer Newspaper, Inc. ("PNI") acquisitions, operating cash flow for the
 first quarter of 2001 decreased 13.2 percent to $14.4 million.
     First-quarter 2001 revenues increased 13.7 percent to $103.3 million from
 $90.9 million a year ago.  On a comparable basis, excluding properties
 acquired, first-quarter revenues decreased 0.9 percent.  Comparable
 advertising revenues decreased 1.1 percent, reflecting weak demand in retail
 and classified, particularly help-wanted, advertising.
     Operating expenses, excluding the loss on sale of properties from the
 current year and the St. Louis Agency adjustment from the prior year,
 increased 22.4 percent to $97 million for the first quarter of 2001.  On a
 comparable basis, excluding properties acquired as well as new goodwill
 amortization in 2001 related to the Company's increased interest in the
 Post-Dispatch, first-quarter expenses increased 1.5 percent.  The higher
 expenses on a comparable basis reflected higher newsprint prices in the
 current-year quarter.  Excluding newsprint expense, all other expenses were
 down 0.3 percent for the first quarter.
 
     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 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.  Pulitzer also owns the Suburban Journals of Greater St.
 Louis, a group of 36 weekly papers and various niche publications.
     Pulitzer Inc.'s new media and interactive initiatives include STLtoday.com
 in St. Louis, StarNet in Tucson, and Web sites for a number of other
 Company-owned newspapers.  Pulitzer Inc. is the successor to the company
 originally founded by Joseph Pulitzer in St. Louis in 1878.
 
     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 statements are reasonable,
     it cannot guarantee future results, levels of activity, performance or
     achievements.
 
     SPECIAL NOTICE:
     Pulitzer Inc. will conduct a conference call for investors beginning at
     10:00 a.m. EST today.  The Web cast of the call can be accessed at
     www.vcall.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, Pulitzer Inc. at 314-340-8402.
 
 
                         PULITZER INC. AND SUBSIDIARIES
                       STATEMENTS OF CONSOLIDATED INCOME
                   (In thousands, except earnings per share)
                                  (Unaudited)
 
                                                   First Quarter Ended
                                                       March 31,
                                                    2001         2000
         OPERATING REVENUES:
          Advertising
           Retail                                 $27,788      $23,004
           National                                 6,067        5,135
           Classified                              35,009       31,909
            Total                                  68,864       60,048
           Preprints                               10,836        8,357
            Total advertising                      79,700       68,405
          Circulation                              20,565       20,220
          Other                                     3,059        2,286
              Total operating revenues            103,324       90,911
 
         OPERATING EXPENSES:
          Payroll and other personnel expenses     44,523       37,550
          Newsprint expense                        15,068       11,507
          St. Louis Agency adjustment                  --        6,845
          Loss on sale of properties                3,924           --
          Depreciation                              3,854        3,340
          Amortization                              6,674        3,169
          Other expenses                           26,848       23,678
              Total operating expenses            100,891       86,089
 
         Equity in earnings of Tucson
          newspaper partnership                     4,565        5,199
 
         Operating income                           6,998       10,021
 
         Interest income                            2,491        5,794
         Interest expense                          (6,177)          --
         Net gain on marketable securities
          and investments                             553        2,082
         Equity in losses of joint
          venture investment                         (291)        (535)
         Net other expense                           (435)        (375)
 
         INCOME BEFORE PROVISION FOR
          INCOME TAXES                              3,139       16,987
 
         PROVISION FOR INCOME TAXES                   732        7,114
 
         MINORITY INTEREST IN NET EARNINGS
          OF SUBSIDIARY                               252
 
         NET INCOME                                $2,155       $9,873
 
         BASIC EARNINGS PER SHARE OF STOCK:
 
          Earnings per share                        $0.10        $0.45
 
          Weighted average number of
           shares outstanding                      21,169       22,122
 
         DILUTED EARNINGS PER SHARE OF STOCK:
 
          Earnings per share                        $0.10        $0.45
 
         Weighted average number of
          shares outstanding                       21,378       22,162
 
     NOTES
 
     Acquisition of Suburban Journals: On August 10, 2000, the Company acquired
     the assets of the Suburban Newspapers of Greater St. Louis, LLC and the
     stock of The Ladue News, Inc. (collectively the "Suburban Journals") for
     $165 million, excluding the cost of working capital and acquisition costs.
     The Company funded the acquisition with internal cash generated from the
     sale of a portion of its marketable security investments.
 
     Investment in St. Louis Post-Dispatch LLC: On May 1, 2000, the Company and
     The Herald Company, Inc. ("Herald") completed the transfer of their
     respective interests in the assets and operations of the St. Louis
     Post-Dispatch (the "Post-Dispatch") and certain related businesses to a
     new joint venture, known as St. Louis Post-Dispatch LLC ("PD LLC").  Under
     the terms of the operating agreement governing PD LLC (the "Operating
     Agreement"), the Company holds a 95 percent interest in the results of
     operations of PD LLC and Herald holds a 5 percent interest.  Previously,
     under the terms of the St. Louis Agency Agreement, the Company and Herald
     generally shared its operating profits and losses, as well as its capital
     expenditures, on a 50-50 basis.  Also, under the terms of the Operating
     Agreement, Herald received on May 1, 2000 a cash distribution of
     $306,000,000 from PD LLC.  This distribution was financed by a
     $306,000,000 borrowing by PD LLC.
 
     Acquisition of PNI Group Properties: On January 11, 2000, the Company
     acquired The Pantagraph, a daily and Sunday newspaper that serves the
     central Illinois cities of Bloomington and Normal.  On February 1, 2001,
     the Company acquired The Lompoc Record, a daily newspaper located in
     Lompoc, California.  In addition, during the third and fourth quarters of
     2000 and first quarter of 2001, the Company acquired several weekly
     newspapers (in separate transactions) that complement several of its
     existing daily PNI Group newspapers.
 
     Loss on Sale of Properties:  In the first quarter of 2001, the Company
     recorded a pre-tax loss of $3.9 million related to the sale of its daily
     newspaper located in Troy, Ohio and the sale of its St. Louis Internet
     Access Provider (ISP) business.  This loss is included in 2001 operating
     expenses as a separate line, "Loss on sale of properties".  On an after-
     tax basis, the sale of properties reduced first-quarter 2001 net income by
     approximately $1.9 million, or $0.09 per diluted share.
 
     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.
 
 SOURCE  Pulitzer Inc.