Saga Communications, Inc. Reports 3rd Quarter 2009 Results

GROSSE POINTE FARMS, Mich., Nov. 9 /PRNewswire-FirstCall/ -- Saga Communications, Inc. (NYSE Amex: SGA) today reported that 3rd quarter 2009 free cash flow increased 5.1% to $5.8 million compared to $5.5 million for the same period last year. Net operating revenue decreased 13.7% from the comparable period in 2008 to $31.3 million. Operating income was $5.8 million. Net income was $2.5 million ($.58 per fully diluted share) for the quarter ended September 30, 2009 compared to $3.1 million ($.65 per fully diluted share) for the comparable period in 2008. For the same period, station operating expense decreased $3.0 million to $23.6 million (station operating expense includes depreciation and amortization attributable to the stations). A large part of the decrease in station operating expense was a result of our cost reduction initiatives. This helped to reduce the impact that the decline in net operating revenue had on our operating results. On a same station basis for the quarter, net operating revenue decreased 14.7% to $30.9 million, operating income was $5.6 million and station operating expense decreased $3.2 million to $23.4 million. For the nine month period ended September 30, 2009, free cash flow decreased $373 thousand to $12.7 million. Net operating revenue decreased 15.3% from the comparable period in 2008 to $89.0 million and operating income was $12.1 million. Net income was $4.8 million ($1.14 per fully diluted share) compared to $7.5 million ($1.52 per fully diluted share) for the comparable period in 2008. For the same period, station operating expense decreased $8.5 million to $70.8 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the nine months, net operating revenue decreased 16.2% to $88.1 million, operating income was $11.6 million and station operating expense decreased $8.9 million to $70.3 million. All share and per share information has been adjusted for the Company's January 28, 2009 1-for-4 reverse stock split. The Company has maintained a solid balance sheet even given the current economic volatility with $16.7 million in cash balances as of September 30, 2009. Bank debt outstanding was $130.6 million. Subsequent to the end of the quarter the Company paid down $5.0 million of the outstanding bank debt. Adjusted for this pay down the companies trailing 12 month leverage ratio calculated as a multiple of EBITDA and based on actual debt outstanding was 4.6 times. Netting cash against outstanding debt the ratio would be 4.0 times. Capital expenditures in the third quarter of 2009 were $663 thousand. For the nine months, capital expenditures were $3.2 million. Currently we expect capital expenditures for the year to be approximately $4.0 - $4.2 million. The attached Selected Supplemental Financial Data table discloses "as reported" and "same station" information by segment. The "as reported" amounts reflect our historical financial results and include the results of operations for stations that we did not own for the entire comparable period. The "same station" amounts reflect only the results of operations for stations that we owned for the entire comparable period. Saga Communications utilizes certain financial measures that are not calculated in accordance with generally accepted accounting principles (GAAP) to assess its financial performance. Such non-GAAP measures include same station financial information and free cash flow. These non-GAAP measures are generally recognized by the broadcasting industry as measures of performance and are used by Saga to assess its financial performance including but not limited to evaluating individual station and market-level performance, evaluating overall operations and as a primary measure for incentive based compensation of executives and other members of management. Saga's management believes these non-GAAP measures are used by analysts who report on the industry and by investors to provide meaningful comparisons between broadcasting groups, as well as an indicator of their market value. These measures are not measures of liquidity or of performance in accordance with GAAP, and should be viewed as a supplement to and not as a substitute for the results of operations presented on a GAAP basis including net operating revenue, operating income, and net income. Reconciliations for all of the non-GAAP financial measures to the most directly comparable GAAP measure are attached in the Selected Financial Data Non-GAAP Disclosures tables. Saga Communications, Inc. is a broadcasting company whose business is devoted to acquiring, developing and operating broadcast properties. The Company owns or operates broadcast properties in 26 markets, including 61 FM and 30 AM radio stations, 3 state radio networks, 2 farm radio networks, 5 television stations and 4 low-power television stations. For additional information, contact us at (313) 886-7070 or visit our website at http://www.sagacommunications.com/. Saga's third quarter 2009 results conference call will be on Monday, November 9, 2009 at 2:00 PM EST. The dial in number for domestic and international calls is 612/234-9960. The call can be replayed for 7 days by calling domestically 800/475-6701 or internationally 320/365-3844 and referring to access code 115331. Thereafter, a transcript of the call will be available on our website. The Company requests that all parties that have a question that they would like to submit to the Company to please email the inquiry by 1:00 PM EST on November 9, 2009 to . The Company will discuss, during the limited period of the conference call, those inquiries it deems of general relevance and interest. Only inquiries made in compliance with the foregoing will be discussed during the call. This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as "believes," "expects," "anticipates," "guidance" and similar expressions are intended to identify forward-looking statements. Key risks, including risks associated with the volatility of the global economy, Saga's debt outstanding, debt service requirements and debt covenants along with Saga's ability to effectively integrate the stations it acquires and the impact of federal regulation on Saga's business, are described in the reports Saga Communications, Inc. periodically files with the U.S. Securities and Exchange Commission, including Item 1A of our annual report on Form 10-K. Readers should note that these statements may be impacted by several factors, including national and local economic changes and changes in the radio and television broadcast industry in general, as well as Saga's actual performance. Results may vary from those stated herein and Saga undertakes no obligation to update the information contained herein. Saga Communications, Inc. Selected Consolidated Financial Data For The Three and Nine Months Ended September 30, 2009 and 2008 (amounts in 000's except per share data) (Unaudited) Three Months Nine Months Ended Ended September 30, September 30, --------------- --------------- 2009 2008 2009 2008 ---- ---- ---- ---- Operating Results Net operating revenue $31,253 $36,192 $89,014 $105,066 Station operating expense 23,556 26,588 70,791 79,255 Corporate general and administrative 1,906 2,485 6,131 7,611 Gain on asset exchange - (282) - (506) Operating income 5,791 7,401 12,092 18,706 Interest expense 1,386 1,889 3,589 5,760 Other expense (income), net 43 - 11 27 --- --- --- --- Income before income tax 4,362 5,512 8,492 12,919 Income tax expense 1,892 2,415 3,710 5,452 ----- ----- ----- ----- Net income $2,470 $3,097 $4,782 $7,467 ====== ====== ====== ====== Earnings per share Basic $0.58 $0.65 $1.14 $1.52 ===== ===== ===== ===== Diluted $0.58 $0.65 $1.14 $1.52 ===== ===== ===== ===== Weighted average common shares 4,227 4,735 4,202 4,898 Weighted average common shares and common shares equivalents 4,227 4,738 4,203 4,902 Free Cash Flow Net income $2,470 $3,097 $4,782 $7,467 Plus: Depreciation and amortization: Station 1,974 2,238 6,351 6,391 Corporate 57 54 166 160 Deferred tax provision 1,528 1,640 3,566 3,566 Non-cash compensation 348 338 1,018 1,059 Gain on asset exchange - (282) - (506) Other expense (income), net 43 - 11 27 Less: Capital expenditures (663) (1,609) (3,237) (5,134) ---- ------ ------ ------ Free cash flow $5,757 $5,476 $12,657 $13,030 ====== ====== ======= ======= Balance Sheet Data Working capital $7,428 $19,311 Net fixed assets 70,204 73,889 Net intangible assets and other assets 113,635 230,484 Total assets 224,740 339,815 Long-term debt (including current portion of $20,578 and $1,061, respectively) 130,578 134,411 Stockholders' equity 71,107 146,066 Saga Communications, Inc. Selected Supplemental Financial Data For the Three Months Ended September 30, 2009 and 2008 (amounts in 000's except per share data) (Unaudited) As-Reported Same Station Three Months Three Months Ended Ended September 30, September 30, 2009 2008 2009 2008 ---- ---- ---- ---- Consolidated Net operating revenue $31,253 $36,192 $30,865 $36,192 Station operating expense 23,556 26,588 23,403 26,588 Corporate general and administrative 1,906 2,485 1,906 2,485 Gain on asset exchange - (282) - (282) --- ---- --- ---- Operating income 5,791 7,401 $5,556 $7,401 Interest expense 1,386 1,889 Other expense (income), net 43 - Income tax expense 1,892 2,415 ----- ----- Net income $2,470 $3,097 ====== ====== Earnings per share: Basic $0.58 $0.65 ===== ===== Diluted $0.58 $0.65 ===== ===== As-Reported Same Station Three Months Three Months Ended Ended September 30, September 30, 2009 2008 2009 2008 ---- ---- ---- ---- Radio Segment Net operating revenue $26,992 $31,306 $26,604 $31,306 Station operating expense 20,046 22,717 19,893 22,717 ------ ------ ------ ------ Operating income $6,946 $8,589 $6,711 $8,589 ====== ====== ====== ====== As-Reported Same Station Three Months Three Months Ended Ended September 30, September 30, 2009 2008 2009 2008 ---- ---- ---- ---- Television Segment Net operating revenue $4,261 $4,886 $4,261 $4,886 Station operating expense 3,510 3,871 3,510 3,871 Gain on asset exchange - (282) - (282) --- ---- --- ---- Operating income $751 $1,297 $751 $1,297 ==== ====== ==== ====== As-Reported Same Station Three Months Three Months Ended Ended September 30, September 30, 2009 2008 2009 2008 ---- ---- ---- ---- Depreciation and amortization by segment Radio Segment $1,521 $1,618 $1,515 $1,618 Television Segment 453 620 453 620 Corporate and Other 57 54 57 54 --- --- --- --- $2,031 $2,292 $2,025 $2,292 ====== ====== ====== ====== Saga Communications, Inc. Selected Supplemental Financial Data For the Nine Months Ended September 30, 2009 and 2008 (amounts in 000's except per share data) (Unaudited) As-Reported Same Station Nine Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 ---- ---- ---- ---- Consolidated Net operating revenue $89,014 $105,066 $88,054 $105,066 Station operating expense 70,791 79,255 70,317 79,255 Corporate general and administrative 6,131 7,611 6,131 7,611 Gain on asset exchange - (506) - (506) --- ---- --- ---- Operating income 12,092 18,706 $11,606 $18,706 Interest expense 3,589 5,760 Other expense (income), net 11 27 Income tax expense 3,710 5,452 ----- ----- Net income $4,782 $7,467 ====== ====== Earnings per share: Basic $1.14 $1.52 ===== ===== Diluted $1.14 $1.52 ===== ===== As-Reported Same Station Nine Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 ---- ---- ---- ---- Radio Segment Net operating revenue $77,219 $91,316 $76,259 $91,316 Station operating expense 60,057 68,028 59,583 68,028 ------ ------ ------ ------ Operating income $17,162 $23,288 $16,676 $23,288 ======= ======= ======= ======= As-Reported Same Station Nine Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 ---- ---- ---- ---- Television Segment Net operating revenue $11,795 $13,750 $11,795 $13,750 Station operating expense 10,734 11,227 10,734 11,227 Gain on asset exchange - (506) - (506) --- ---- --- ---- Operating income $1,061 $3,029 $1,061 $3,029 ====== ====== ====== ====== As-Reported Same Station Nine Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 ---- ---- ---- ---- Depreciation and amortization by segment Radio Segment $4,568 $4,771 $4,549 $4,771 Television Segment 1,783 1,620 1,783 1,620 Corporate and Other 166 160 166 160 --- --- --- --- $6,517 $6,551 $6,498 $6,551 ====== ====== ====== ====== Saga Communications, Inc. Selected Financial Data Non-GAAP Disclosures For the Three Months Ended September 30, 2009 and 2008 (amounts in 000's) (Unaudited) Reconciliation of As-Reported (historical) information to Same Station Operating Income ---------------------------------------------------------------------- Adjustment As-Reported For Acquisitions Same Station Three Months and Dispositions Three Months Ended Not Included in Ended September 30, Entire Comparable September 30, 2009 Period 2009 ------------- ----------------- ------------- Consolidated Net operating revenue $31,253 $(388) $30,865 Station operating expense 23,556 (153) 23,403 Corporate general and administrative 1,906 - 1,906 Gain on asset exchange - - - --- --- --- Operating income $5,791 $(235) $5,556 ====== ===== ====== Adjustment As-Reported For Acquisitions Same Station Three Months and Dispositions Three Months Ended Not Included in Ended September 30, Entire Comparable September 30, 2008 Period 2008 ------------- ----------------- ------------- Consolidated Net operating revenue $36,192 - $36,192 Station operating expense 26,588 - 26,588 Corporate general and administrative 2,485 - 2,485 Gain on asset exchange (282) - (282) ---- --- ---- Operating income $7,401 - $7,401 ====== === ====== Adjustment As-Reported For Acquisitions Same Station Three Months and Dispositions Three Months Ended Not Included in Ended September 30, Entire Comparable September 30, 2009 Period 2009 ------------- ----------------- ------------- Radio Segment Net operating revenue $26,992 $(388) $26,604 Station operating expense 20,046 (153) 19,893 ------ ---- ------ Operating income $6,946 $(235) $6,711 ====== ===== ====== Adjustment As-Reported For Acquisitions Same Station Three Months and Dispositions Three Months Ended Not Included in Ended September 30, Entire Comparable September 30, 2008 Period 2008 ------------- ----------------- ------------- Radio Segment Net operating revenue $31,306 - $31,306 Station operating expense 22,717 - 22,717 ------ --- ------ Operating income $8,589 - $8,589 ====== === ====== Adjustment As-Reported For Acquisitions Same Station Three Months and Dispositions Three Months Ended Not Included in Ended September 30, Entire Comparable September 30, 2009 Period 2009 ------------- ----------------- ------------- Television Segment Net operating revenue $4,261 - $4,261 Station operating expense 3,510 - 3,510 Gain on asset exchange - - - ---- --- ---- Operating income $751 - $751 ==== === ==== Adjustment As-Reported For Acquisitions Same Station Three Months and Dispositions Three Months Ended Not Included in Ended September 30, Entire Comparable September 30, 2008 Period 2008 ------------- ----------------- ------------- Television Segment Net operating revenue $4,886 - $4,886 Station operating expense 3,871 - 3,871 Gain on asset exchange (282) - (282) ---- --- ---- Operating income $1,297 - $1,297 ====== === ====== Saga Communications, Inc. Selected Financial Data Non-GAAP Disclosures For the Nine Months Ended September 30, 2009 and 2008 (amounts in 000's) (Unaudited) Reconciliation of As-Reported (historical) information to Same Station Operating Income ---------------------------------------------------------------------- Adjustment As-Reported For Acquisitions Same Station Nine Months and Dispositions Nine Months Ended Not Included in Ended September 30, Entire Comparable September 30, 2009 Period 2009 ------------- ----------------- ------------- Consolidated Net operating revenue $89,014 $(960) $88,054 Station operating expense 70,791 (474) 70,317 Corporate general and administrative 6,131 - 6,131 Gain on asset exchange - - - --- --- --- Operating income $12,092 $(486) $11,606 ======= ===== ======= Adjustment As-Reported For Acquisitions Same Station Nine Months and Dispositions Nine Months Ended Not Included in Ended September 30, Entire Comparable September 30, 2008 Period 2008 ------------- ----------------- ------------- Consolidated Net operating revenue $105,066 - $105,066 Station operating expense 79,255 - 79,255 Corporate general and administrative 7,611 - 7,611 Gain on asset exchange (506) - (506) ---- --- ---- Operating income $18,706 - $18,706 ======= === ======= Adjustment As-Reported For Acquisitions Same Station Nine Months and Dispositions Nine Months Ended Not Included in Ended September 30, Entire Comparable September 30, 2009 Period 2009 ------------- ----------------- ------------- Radio Segment Net operating revenue $77,219 $(960) $76,259 Station operating expense 60,057 (474) 59,583 ------ ---- ------ Operating income $17,162 $(486) $16,676 ======= ===== ======= Adjustment As-Reported For Acquisitions Same Station Nine Months and Dispositions Nine Months Ended Not Included in Ended September 30, Entire Comparable September 30, 2008 Period 2008 ------------- ----------------- ------------- Radio Segment Net operating revenue $91,316 - $91,316 Station operating expense 68,028 - 68,028 ------ --- ------ Operating income $23,288 - $23,288 ======= === ======= Adjustment As-Reported For Acquisitions Same Station Nine Months and Dispositions Nine Months Ended Not Included in Ended September 30, Entire Comparable September 30, 2009 Period 2009 ------------- ----------------- ------------- Television Segment Net operating revenue $11,795 - $11,795 Station operating expense 10,734 - 10,734 Gain on asset exchange - - - --- --- --- Operating income $1,061 - $1,061 ====== === ====== Adjustment As-Reported For Acquisitions Same Station Nine Months and Dispositions Nine Months Ended Not Included in Ended September 30, Entire Comparable September 30, 2008 Period 2008 ------------- ----------------- ------------- Television Segment Net operating revenue $13,750 - $13,750 Station operating expense 11,227 - 11,227 Gain on asset exchange (506) - (506) ---- --- ---- Operating income $3,029 - $3,029 ====== === ====== Saga Communications, Inc. Selected Supplemental Financial Data Trailing Twelve Month Consolidated EBITDA and Leverage Ratio As of September 30, 2009 (amounts in 000's, except ratios) (Unaudited) Less: Plus: Trailing Twelve Months Nine Months Nine Months Twelve Months Ended Ended Ended Ended December 31, September 30, September 30, September 30, 2008 2008 2009 2009 ---- ---- ---- ---- Trailing Twelve Month Consolidated EBITDA Net income $(66,492) $7,467 $4,782 $(69,177) Less: Loss on sale of assets (76) (27) (47) (96) Gain on exchange of assets 506 506 - - Impairment of intangible assets (116,443) - - (116,443) Interest income 136 111 5 30 Net barter transactions (24) 35 247 188 Total exclusions (115,901) 625 205 (116,321) -------- --- --- -------- Consolidated Adjusted Net Income 49,409 6,842 4,577 47,144 Plus: Interest expense 7,173 5,760 3,589 5,002 Income tax (benefit) expense (32,522) 5,452 3,710 (34,264) Depreciation & amortization expense 8,963 6,551 6,517 8,929 Amortization of television syndicated programming contracts 673 488 530 715 Non-cash stock based compensation expense 1,433 1,059 1,018 1,392 Less: Cash television programming payments 663 482 549 730 ------- ------- ------- ------- Trailing twelve month consolidated EBITDA $34,466 $25,670 $19,392 $28,188 ======= ======= ======= ======= September 30, 2009 ---- Total long-term debt, including current maturities $130,578 Divided by trailing twelve month consolidated EBITDA 28,188 ------ Leverage ratio 4.6 === Total long-term debt, including current maturities $130,578 Less: Cash and cash equivalents as of September 30, 2009 (16,649) ------- Long-term debt, including current maturities less cash and cash equivalents as of September 30, 2009 113,929 Divided by trailing twelve month consolidated EBITDA 28,188 ------ Leverage ratio 4.0 === DATASOURCE: Saga Communications, Inc. CONTACT: Samuel D. Bush, Saga Communications, Inc., +1-313-886-7070 Web Site: http://www.sagacommunications.com/