<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------
FORM 10-Q
(Mark One)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1994
OR
/ /TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________________to_________________
COMMISSION FILE NUMBER 1-9329
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PULITZER PUBLISHING COMPANY
(Exact name of registrant as specified in its charter)
----------------------------------------------------
DELAWARE 430496290
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
900 NORTH TUCKER BOULEVARD, ST. LOUIS, MISSOURI 63101
(Address of principal executive offices)
(314) 340-8000
(Registrant's telephone number, including area code)
NO CHANGES
(Former name, former address and former fiscal year, if changed since last
report)
----------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
YES /X/ NO / /
----------------------------------------------------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
CLASS OUTSTANDING 4/30/94
------------------------ ------------------------
COMMON STOCK 3,520,896
CLASS B COMMON STOCK 9,466,566
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA)
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
MARCH 31,
OPERATING REVENUES - NET: 1994 1993
--------- ---------
<S> <C> <C>
Publishing: (Unaudited)
Advertising $41,609 $38,583
Circulation 19,960 19,947
Other 10,667 9,576
Broadcasting 39,155 25,485
--------- ---------
Total operating revenues 111,391 93,591
--------- ---------
OPERATING EXPENSES:
Publishing operations 31,438 30,643
Broadcasting operations 15,259 11,187
Selling, general and administrative 42,933 38,062
St. Louis Agency adjustment 2,719 2,202
Depreciation and amortization 7,562 4,303
--------- ---------
Total operating expenses 99,911 86,397
--------- ---------
Operating income 11,480 7,194
--------- ---------
Interest income 377 298
Interest expense (3,316) (1,719)
Net other expense (248) (224)
--------- ---------
Total (3,187) (1,645)
--------- ---------
INCOME BEFORE PROVISION FOR INCOME
TAXES AND CUMULATIVE EFFECTS OF
CHANGES IN ACCOUNTING PRINCIPLES 8,293 5,549
PROVISION FOR INCOME TAXES 3,410 2,213
--------- ---------
INCOME BEFORE CUMULATIVE EFFECTS
OF CHANGES IN ACCOUNTING PRINCIPLES 4,883 3,336
CUMULATIVE EFFECTS OF CHANGES IN
ACCOUNTING PRINCIPLES, NET OF
APPLICABLE INCOME TAXES (719) 360
--------- ---------
NET INCOME $4,164 $3,696
--------- ---------
--------- ---------
</TABLE>
See notes to consolidated financial statements.
2
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PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME (CONTINUED)
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA)
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
MARCH 31,
1994 1993
-------- --------
(Unaudited)
<S> <C> <C>
EARNINGS PER SHARE OF STOCK
(COMMON AND CLASS B COMMON):
Income before cumulative effects of
changes in accounting principles $.38 $.29
Cumulative effects of changes in
accounting principles (.06) .03
-------- --------
Total $.32 $.32
-------- --------
-------- --------
WEIGHTED AVERAGE NUMBER OF SHARES
(COMMON AND CLASS B COMMON STOCK)
OUTSTANDING 12,977 11,584
-------- --------
-------- --------
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
(IN THOUSANDS)
<TABLE>
<CAPTION>
MAR. 31, DEC. 31,
1994 1993
---------- ---------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $54,440 $34,970
Trade accounts receivable (less allowance for doubtful
accounts of $2,834 and $2,575) 54,775 61,953
Inventory 4,700 5,912
Prepaid expenses and other 5,382 6,959
Program rights 9,332 11,285
---------- ---------
Total current assets 128,629 121,079
---------- ---------
PROPERTIES:
Land 12,204 12,204
Buildings 69,464 69,315
Machinery and equipment 182,859 181,939
Construction in progress 3,107 2,937
---------- ---------
Total 267,634 266,395
Less accumulated depreciation 130,202 125,497
---------- ---------
Properties - net 137,432 140,898
---------- ---------
INTANGIBLE AND OTHER ASSETS:
Intangible assets - net of applicable amortization 141,720 144,140
Receivable from The Herald Company 41,984 40,190
Program rights, long-term portion 3,464 4,305
Other 17,885 12,491
---------- ---------
Total intangible and other assets 205,053 201,126
---------- ---------
TOTAL $471,114 $463,103
---------- ---------
---------- ---------
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
MAR. 31, DEC. 31,
1994 1993
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Trade accounts payable $17,160 $13,292
Current portion of long-term debt 14,322 14,320
Salaries, wages and commissions 9,791 10,314
Income taxes payable 4,553 4,272
Program contracts payable 9,041 10,899
Interest payable 3,725 4,751
Pension obligations 693 588
Other 5,624 3,440
------- -------
Total current liabilities 64,909 61,876
------- -------
LONG-TERM DEBT 161,901 161,920
------- -------
PROGRAM CONTRACTS PAYABLE 3,295 4,234
------- -------
PENSION OBLIGATIONS 24,550 23,377
------- -------
POSTRETIREMENT BENEFIT OBLIGATION 87,310 85,928
------- -------
OTHER LONG-TERM LIABILITIES 6,230 3,625
------- -------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 25,000,000 shares
authorized; issued and outstanding - none
Common stock, $.01 par value; 100,000,000 shares authorized;
issued - 3,528,241 in 1994 and 3,510,850 in 1993 35 35
Class B common stock, convertible, $.01 par value; 50,000,000
shares authorized; issued - 15,849,848 in 1994 and 1993 158 158
Additional paid-in capital 121,284 120,908
Retained earnings 189,065 188,665
------- -------
Total 310,542 309,766
Treasury stock - at cost; 8,345 shares of common stock
and 6,382,282 shares of Class B common stock in
1994 and 1993 (187,623) (187,623)
------- -------
Total stockholders' equity 122,919 122,143
------- -------
TOTAL $471,114 $463,103
------- -------
------- -------
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
MARCH 31,
----------------------
1994 1993
-------- --------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $4,164 $3,696
Adjustments to reconcile net income to net cash provided by
operating activities:
Non-cash items:
Cumulative effects of changes in accounting principles, net of
applicable income taxes 719 (360)
Depreciation 5,091 3,239
Amortization of intangibles 2,471 1,064
Incremental increase in postretirement benefit obligation 769 674
Changes in assets and liabilities which provided (used) cash:
Trade accounts receivable 7,178 8,035
Inventory 1,212 (549)
Other assets 1,622 (1,706)
Trade accounts payable and other liabilities 142 (1,489)
Income taxes payable 281 1,900
Program rights - net of contracts payable (3) (29)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 23,646 14,475
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,645) (2,621)
Investment in joint venture (1,000)
(Increase) decrease in notes receivable (9) 125
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (2,654) (2,496)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on long-term debt (17) (15)
Dividends paid (1,881) (1,563)
Proceeds from exercise of stock options 376 549
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (1,522) (1,029)
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 19,470 10,950
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 34,970 29,914
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $54,440 $40,864
-------- --------
-------- --------
</TABLE>
See notes to consolidated financial statements.
6
<PAGE> 7
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ACCOUNTING POLICIES
Interim Adjustments - In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments, consisting only of
normal recurring adjustments except for the cumulative effect adjustments
discussed in Notes 3 and 4, necessary to present fairly Pulitzer Publishing
Company's financial position as of March 31, 1994 and the results of
operations and cash flows for the three month periods ended March 31, 1994
and 1993. Results of operations for interim periods are not necessarily
indicative of the results to be expected for the full year.
Fiscal Year and Fiscal Quarters - The Company's fiscal year and first fiscal
quarter end on the Sunday coincident with or prior to December 31 and March
31, respectively. For ease of presentation, the Company has used December 31
as the year end and March 31 as the first quarter end.
Earnings Per Share of Stock - Earnings per share of stock have been computed
using the weighted average number of common and Class B common shares
outstanding during the applicable period. On July 9, 1993, the Company issued
1.35 million shares of common stock in a public offering.
2. DIVIDENDS
In the first quarter of 1993, two dividends of $.135 per share were declared,
payable on February 1, 1993 and May 3, 1993. In the second quarter of 1993, a
dividend of $.135 per share was declared, payable on August 2, 1993. In the
third quarter of 1993, a dividend of $.135 per share was declared, payable on
November 1, 1993. In the first quarter of 1994, two dividends of $.145 per
share were declared, payable on February 1, 1994 and May 2, 1994.
In addition, a 10% stock dividend on the Company's common and Class B common
stock was declared, payable on January 22, 1993.
3. POSTEMPLOYMENT BENEFITS
Effective January 1, 1994, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 112, Employers' Accounting for
Postemployment Benefits ("SFAS 112"), to account for certain disability
benefits at the St. Louis Post-Dispatch. SFAS 112 requires that the cost of
these benefits provided to former employees prior to retirement be recognized
on the accrual basis of accounting. Previously, the Company recognized its
postemployment benefit costs when paid. The cumulative effect of adopting
SFAS 112 was a reduction of 1994 first quarter net income by approximately
$719,000 or $.06 per share. After recording the cumulative effect adjustment,
the Company's on-going expense under the new standard will not differ
significantly from the prior pay-as-you-go basis.
7
<PAGE> 8
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Under SFAS 112, the Company accrues the disability benefits when it becomes
probable that such benefits will be paid and when sufficient information exits
to make reasonable estimates of the amounts to be paid. As required by the
standard, prior year financial statements have not been restated to reflect the
change in accounting method.
4. INCOME TAXES
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes. The first quarter
of 1993 included a positive adjustment to income of $360,000, or $0.03 per
share, reflecting the recalculation of certain deferred income taxes at the
current federal statutory rate as opposed to the higher tax rates in effect
when certain of the deferred income taxes originated.
5. ACQUISITION OF PROPERTIES
The 1994 first quarter included the operations of television stations
WESH (Daytona Beach/Orlando, Florida), acquired on June 30, 1993, and KCCI (Des
Moines, Iowa), acquired on September 9, 1993. After deducting
acquisition-related depreciation and amortization ($3.5 million) and interest
charges ($2 million) from operating cash flow (defined as operating income plus
depreciation and amortization), the negative after-tax effect on earnings for
the 1994 first quarter was approximately $1 million.
6. BUSINESS SEGMENTS
The Company's operations are divided into two business segments, publishing and
broadcasting. The following is a summary of operating data by segment (in
thousands):
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
MARCH 31,
-----------------------
1994 1993
--------- -------
<S> <C> <C>
Operating revenues: (Unaudited)
Publishing $72,236 $68,106
Broadcasting (a) 39,155 25,485
--------- -------
Total $111,391 $93,591
--------- -------
--------- -------
Operating income (loss):
Publishing $5,688 $4,554
Broadcasting (a) 6,739 3,561
Corporate (947) (921)
--------- -------
Total $11,480 $7,194
--------- -------
--------- -------
</TABLE>
8
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PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
MARCH 31,
1994 1993
------- -------
(Unaudited)
<S> <C> <C>
Depreciation and amortization:
Publishing $1,527 $1,710
Broadcasting (a) 6,035 2,593
------- -------
Total $7,562 $4,303
------- -------
------- -------
Operating margins
(Operating income to revenues):
Publishing (b) 11.6% 9.9%
Broadcasting 17.2% 14.0%
</TABLE>
(a) First quarter of 1994 broadcasting operations included the results of
WESH and KCCI.
(b) Operating margins for publishing stated with St. Louis Agency
adjustment added back to publishing operating income.
7. STOCKHOLDERS' EQUITY
On March 15, 1994, the Board of Directors of the Company adopted,
subject to stockholder approval at the Company's Annual Meeting of
Stockholders on May 11, 1994, the Pulitzer Publishing Company 1994 Key
Employees' Restricted Stock Purchase Plan (the "Stock Plan"). If the
Stock Plan is approved by the Company's stockholders, it will replace the
Pulitzer Publishing Company 1986 Key Employees' Restricted Stock Purchase
Plan, which otherwise will terminate in March 1996.
On March 15, 1994, the Board of Directors of the Company adopted,
subject to stockholder approval at the Company's Annual Meeting of
Stockholders on May 11, 1994, the Pulitzer Publishing Company 1994 Stock
Option Plan (the "Plan"). If the Plan is approved by the Company's
stockholders, it will replace the Pulitzer Publishing Company 1986
Employee Stock Option Plan, which otherwise will terminate in April 1996.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company's operating revenues are significantly influenced by a
number of factors, including overall advertising expenditures, the appeal of
newspapers, television and radio in comparison to other forms of advertising,
the performance of the Company in comparison to its competitors in specific
markets, the strength of the national economy and general economic conditions
and population growth in the markets served by the Company.
The Company's business tends to be seasonal, with peak revenues and
profits generally occurring in the fourth and, to a lesser extent, second
quarters of each year as a result of increased advertising activity during the
Christmas and spring holiday periods. The first quarter is historically the
weakest quarter for revenues and profits.
CONSOLIDATED
Operating revenues for the first quarter of 1994 increased 19%, to
$111.4 million from $93.6 million for the first quarter of 1993. Revenue
comparisons were affected by the acquisitions of television stations WESH and
KCCI on June 30, 1993 and September 9, 1993, respectively. The first quarter
of 1994 included the results of WESH and KCCI's operations while no amounts for
the two stations were included in the first quarter of 1993. Excluding WESH and
KCCI's 1994 first quarter revenues from the comparison, consolidated revenues
would have increased 8.1%. The increase reflected gains in both broadcasting
and publishing revenues.
Operating expenses, excluding the St. Louis Agency adjustment, for the
1994 first quarter increased 15.4%, to $97.2 million from $84.2 million in the
first quarter of 1993. Excluding WESH and KCCI's 1994 expenses, consolidated
operating expenses would have increased $3 million or 3.6%. This 3.6%
10
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increase was primarily attributable to increased overall personnel costs of
$1.8 million, increased circulation delivery expense of $431,000 and
one-time termination inducements of $416,000 at the St. Louis Post-Dispatch
(the "Post-Dispatch").
Operating income in the 1994 first quarter increased 59.6%, to $11.5
million from $7.2 million in the first quarter of 1993. Excluding the effects
of WESH and KCCI from 1994, operating income would have increased 55.9% for the
1994 first quarter. The 1994 increase reflected improvements in operating
income in both the publishing and broadcasting segments, primarily as a result
of increased revenues.
Interest expense increased to $3.3 million in the 1994 first quarter
from $1.7 million in the first quarter of 1993 due to higher debt levels.
Interest expense on new long-term borrowings related to the WESH and KCCI
acquisitions amounted to $2 million in the first quarter of 1994. The
Company's average debt level for the 1994 first quarter increased to $176.2
million from $72 million in the first quarter of 1993. Lower rates on the new
long-term borrowings reduced the Company's average interest rate for the first
quarter of 1994 to 7.4% from 8.9% in the 1993 first quarter. Interest expense
also included a declining interest factor related to annual payments
(1990-1994) under a non-competition agreement entered into in connection with
the 1989 acquisition of television station WDSU in New Orleans. Interest
income increased $79,000, due primarily to a higher average balance of invested
funds.
The effective income tax rate for the first quarter of 1994 increased
to 41.1% from 39.9% for the 1993 first quarter. The higher rate in 1994
resulted from the Revenue Reconciliation Act of 1993 which increased the
federal ccorporate tax rate by 1%. The effective tax rate in the first
quarters of 1994 and 1993 reflected the effect of approximately $127,000 and
$125,000, respectively, of non-deductible goodwill amortization expense. It is
expected that, on an annual basis, the effective tax rate for 1994 will be
approximately 41%. For the full year 1993, the effective tax rate was 39.9%.
As discussed in Note 3 to the interim financial statements for the
quarter ended March 31, 1994, effective January 1, 1994 the Company adopted the
provisions of Statement of Financial Accounting Standards No. 112, Employers'
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Accounting for Postemployment Benefits ("SFAS 112"), and recorded its
initial liability thereunder resulting in a one-time after-tax charge of
$719,000. After recording the one-time charge, the Company's on-going expense
under SFAS 112 will not differ significantly from the prior pay-as-you-go
basis.
Net income in the 1994 first quarter was $4.2 million, or $0.32 per
share, compared with $3.7 million, or $0.32 per share, in the first quarter of
1993. The first quarter of 1994 included the non-recurring SFAS 112 charge of
$719,000, or $0.06 per share. In the first quarter of 1993 the Company adopted
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes, resulting in a positive adjustment to income of $360,000, or $0.03 per
share. The earnings per share comparison was affected by the larger number of
shares outstanding in 1994 as a result of the public offering of 1.35 million
shares in July 1993.
Excluding the cumulative effects of accounting changes from both
years, net income for the 1994 first quarter increased 46.4% to $4.9 million,
or $0.38 per share, compared with $3.3 million, or $0.29 per share, for the
first quarter of 1993. The gain in net income, reflected improvements in
operating profits in both the publishing and broadcasting segments, primarily
as a result of increased revenues.
The increased depreciation, amortization and, to a lesser extent,
interest expense resulting from the 1993 acquisitions of WESH and KCCI had a
negative impact on the Company's 1994 first quarter net income of $0.08 per
share. It is expected that the per share dilution will be in the ten to
fifteen cent range for the full year of 1994 and minimal thereafter. The
depreciation and amortization is tax deductible, and the Company's after-tax
cash flow will be favorably impacted. After-tax cash flow is defined as net
income plus depreciation and amortization.
12
<PAGE> 13
PUBLISHING
Operating revenues from the Company's publishing segment for the first
quarter of 1994 increased 6.1%, to $72.2 million from $68.1 million in the first
quarter of 1993, primarily reflecting increased revenues from advertising,
particularly classified, at all three newspaper properties.
Newspaper advertising revenues increased $3 million (7.8%) in the first
quarter of 1994. A $3.4 million increase generated by higher advertising
volume was partially offset by the price effect, totalling $400,000, of lower
average rates. Effective January 1994, certain categories of advertising rates
were increased at all publishing properties in varying percentages ranging from
3% to 6.5%. Average rates for the first quarter were higher in Tucson and
Chicago but were more than offset by lower average rates at the Post-Dispatch
due to the mix of advertising, frequency discounts and competitive pricing
pressures.
Circulation revenues for the first quarter of 1994 were virtually
unchanged from the prior year first quarter. The benefit ($43,000) of
circulation price increases was offset by revenue declines in an approximately
equal amount due to average circulation decreases at the Post-Dispatch.
The home delivered price of the daily Post-Dispatch was increased
$0.52 per month, effective March 1, 1993. Average daily and Sunday circulation
of the Post-Dispatch for the first quarter of 1994 was 346,046 and 567,680
compared to 349,240 and 568,757 for the corresponding 1993 period, decreases of
0.9% and 0.2%, respectively.
The single copy price of the daily edition of the Arizona Daily Star
was increased to $0.50 from $0.35 as of October 4, 1993.
Operating expenses (including selling, general and administrative
expenses and depreciation and amortization) for the publishing segment,
excluding the St. Louis Agency adjustment, increased 4% to $63.8 million for
the 1994 first quarter compared to $61.4 million for the same period in the
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<PAGE> 14
prior year. The increase was principally attributable to increased overall
personnel costs of $1 million, increased circulation delivery expense of
$431,000 and one-time termination inducements of $416,000 at the Post-
Dispatch.
Operating income from the Company's publishing activities for the
first quarter of 1994 increased 24.9% to $5.7 million from $4.6 million due to
increased revenues.
During the first quarter of 1994, newsprint prices continued a downward
trend which began in the fourth quarter of 1993. Newsprint expense for the
1994 first quarter was virtually unchanged from the 1993 first quarter as the
benefit from lower prices was offset by higher newsprint consumption. For
future periods, a material increase in the price of newsprint could have a
significant effect on the performance of the publishing segment.
BROADCASTING
Broadcasting operating revenues for the first quarter of 1994
increased 53.6%, to $39.2 million from $25.5 million in the comparable quarter
of 1993. Revenue comparisons were affected by the acquisitions of television
stations WESH and KCCI during the third quarter of 1993. Excluding the 1994
revenues of WESH and KCCI from the comparison, broadcasting revenues would have
increased 13.5% for the 1994 first quarter. Exclusive of WESH and KCCI, local
and national spot advertising increased 15.8% and 13.4%, respectively, while
network compensation declined 2.4%. Political advertising revenue increased
approximately $679,000 in the 1994 first quarter.
Broadcasting operating expenses (including selling, general and
administrative expenses and depreciation and amortization) for the first
quarter of 1994 increased 47.9%, to $32.4 million from $21.9 million in the
first quarter of the prior year. Excluding WESH and KCCI, operating expenses
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<PAGE> 15
would have increased 2.4%. This increase, on a comparable basis, was
due primarily to a $775,000 increase in overall personnel costs which was
partially offset by a $325,000 decrease in programming rights expense.
Operating income from the broadcasting segment increased 89.2%, to $6.7
million from $3.6 million, principally due to increased advertising revenues.
Excluding WESH and KCCI, broadcasting operating income would have increased
81.8% in the 1994 first quarter.
LIQUIDITY AND CAPITAL RESOURCES
Outstanding debt, inclusive of the short-term portion of long-term
debt, as of March 31, 1994, was $176.2 million, unchanged from the balance at
December 31, 1993. On April 22, 1994, the Company made a scheduled repayment
of $14.3 million under its Senior Note Agreement maturing in 1997.
As of March 31, 1994, the Company's long-term borrowings consisted of
approximately $157.3 million of fixed rate senior notes with The Prudential
Insurance Company of America and approximately $18.6 million of borrowings
under a variable rate credit agreement with Canadian Imperial Bank of Commerce
as Agent ("CIBC"). At March 31, 1994, $4 million was unused but available for
borrowing under the revolving credit portion of the CIBC credit agreement.
The Company's Senior Note Agreements and bank credit agreement require
it to maintain certain financial ratios, place restrictions on the payment of
dividends and prohibit new borrowings, except as permitted thereunder.
Commitments for capital expenditures as of March 31, 1994, were
approximately $6.9 million, principally relating to normal capital equipment
replacements. Capital expenditures to be made in fiscal 1994 are estimated to
be approximately $14 million. Commitments for film contracts and license fees
as of March 31, 1994 were approximately $9.3 million. At March 31, 1994, the
Company had working capital of $63.7 million and a current ratio of 1.98 to 1.
This compares to working capital of $59.2 million and a current ratio of 1.96
to 1 at December 31, 1993.
The Company generally expects to generate sufficient cash from
operations to cover ordinary capital expenditures, film contract and license
fees, working capital requirements, debt installments and dividend payments.
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<PAGE> 16
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- - --------------------------------------------------------------------------------
(a) Not applicable.
(b) Reports on Form 8-K. The Company did not file any reports on
Form 8-K during the quarter for which this report was filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PULITZER PUBLISHING COMPANY
(Registrant)
Date: May 9, 1994 /s/ Ronald H. Ridgway
----------------------------
(Ronald H. Ridgway)
Director; Senior Vice-President-
Finance
(on behalf of the Registrant
and as principal financial
officer)
16
