EX-99.1 2 b71559scexv99w1.htm EX-99.1 PRESS RELEASE, DATED AUGUST 5, 2008 exv99w1
Exhibit 99.1
Saga Communications, Inc.
Reports 2nd Quarter 2008 Results
Contact:
Samuel D. Bush
313/886-7070
Grosse Pointe Farms, MI – August 5, 2008 – Saga Communications, Inc. (NYSE-SGA) today reported that 2nd quarter 2008 free cash flow increased 5.5% to $5.9 million compared to $5.6 million for the same period last year. Net operating revenue decreased 2.8% from the comparable period in 2007 to $37.3 million and operating income decreased 12% to $7.8 million. Net income decreased $350 thousand to $3.5 million ($.17 per fully diluted share) for the quarter ended June 30, 2008 compared to $3.8 million ($.19 per fully diluted share) for the comparable period in 2007. For the same period, station operating expense increased $230 thousand to $27.3 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the quarter, net operating revenue decreased 3.8% to $37.0 million, operating income decreased 13.3% to $7.6 million and station operating expense was approximately flat with last year at $27.0 million.
For the six month period ended June 30, 2008, free cash flow increased 17.2% to $7.6 million. Net operating revenue decreased 2.0% from the comparable period in 2007 to $68.9 million and operating income decreased 8.6% to $11.3 million and net income decreased $180 thousand to $4.4 million ($.22 per fully diluted share) compared to $4.6 million ($.23 per fully diluted share) for the comparable period in 2007. For the same period, station operating expense decreased $344 thousand to approximately $52.7 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the six months, net operating revenue decreased 3.0% to $68.2 million, operating income decreased 10.1% to $11.1 million and station operating expense decreased $827 thousand to $52.2 million.
Capital expenditures in the second quarter of 2008 were $1.5 million of which $60 thousand were as a result of acquisitions. For the six months, capital expenditures were $3.5 million of which $330 thousand were as a result of acquisitions and $150 thousand were related to digital radio. Currently we expect capital expenditures for the year to be approximately $9.0 million.

 

 

During the quarter ended June 30, 2008, the Company bought back 297,249 shares of stock for a total purchase price of $1.6 million. For the 6 month period ended June 30, 2008 the Company bought back 536,362 shares for a total purchase price of $3.0 million. Since inception of the program and through July 31, 2008, the Company has bought back 2,645,235 shares of stock.
The attached Selected Supplemental Financial Data table discloses “as reported,” “same station” and “pro forma” 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. The “pro forma” amounts assume the 2008 and 2007 acquisitions and dispositions occurred as of January 1, 2007.
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 www.sagacommunications.com.
Saga’s second quarter 2008 results conference call will be on Tuesday, August 5, 2008 at 2:00 PM EDT. The dial in number for domestic calls is 877/209-0397. For international callers the number is 612/332-0923. The call can be replayed for 7 days by calling domestically 800/475-6701 or internationally 320/365-3844 and referring to access code 931199. 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 EDT on August 5, 2008 to

 

 

SagaIR@sagacom.com. 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 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 here.

 

 

Saga Communications, Inc.
Selected Consolidated Financial Data
For The Three and Six Months Ended
June 30, 2008 and 2007
(amounts in 000’s except per share data)
(Unaudited)
                                         
    Three Months Ended   Six Months Ended        
    June 30,   June 30,        
    2008   2007   2008   2007        
     
Operating Results
                                        
Net operating revenue
   $ 37,342     $ 38,421     $ 68,874     $ 70,304          
Station operating expense
     27,246       27,016       52,667       53,011          
Corporate general and administrative
     2,574       2,606       5,126       4,922          
Gain on asset exchange
     (224 )     —       (224 )     —          
     
Operating income
     7,746       8,799       11,305       12,371          
Interest expense
     1,876       2,281       3,871       4,578          
Other expense, net
     7       47       27       82          
     
Income before income tax
     5,863       6,471       7,407       7,711          
Income tax expense
     2,403       2,661       3,037       3,161          
     
Net income
   $ 3,460     $ 3,810     $ 4,370     $ 4,550          
     
Earnings per share
                                        
Basic
   $ 0.17     $ 0.19     $ 0.22     $ 0.23          
     
Diluted
   $ 0.17     $ 0.19     $ 0.22     $ 0.23          
     
Weighted average common shares
     19,800       20,083       19,931       20,066          
Weighted average common shares and common shares equivalents
     19,803       20,113       19,937       20,101          
 
                                        
Free Cash Flow
                                        
Net income
   $ 3,460     $ 3,810     $ 4,370     $ 4,550          
Plus: Depreciation and amortization:
                                        
Station
     2,196       1,939       4,153       3,834          
Corporate
     53       51       106       98          
Deferred tax provision
     1,524       1,557       1,926       1,827          
Non-cash compensation
     354       329       720       615          
Gain on asset exchange
     (224 )     —       (224 )     —          
Other expense, net
     7       47       27       82          
Less: Capital expenditures
     (1,479 )     (2,149 )     (3,525 )     (4,563 )        
     
Free cash flow
   $ 5,891     $ 5,584     $ 7,553     $ 6,443          
     
 
                                        
Balance Sheet Data
                                        
Working capital
                   $ 22,936     $ 20,886          
Net fixed assets
                     75,846       74,308          
Net intangible assets and other assets
                     228,975       213,427          
Total assets
                     344,392       325,668          
Long term debt (including current portion of $1,061 and $0, respectively)
                     134,411       129,911          
Stockholders’ equity
                     151,381       141,761          

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For The Three Months Ended
June 30, 2008 and 2007
(amounts in 000’s except per share data)
(Unaudited)
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Three Months Ended   Three Months Ended   Three Months Ended
    June 30,   June 30,   June 30,
    2008   2007   2008   2007   2008   2007
             
Consolidated
                                                
Net operating revenue
   $ 37,342     $ 38,421     $ 36,969     $ 38,421     $ 37,342     $ 38,752  
Station operating expense
     27,246       27,016       26,991       27,016       27,246       27,284  
Corporate general and administrative
     2,574       2,606       2,574       2,606       2,574       2,606  
Gain on asset exchange
     (224 )     —       (224 )     —       (224 )     —  
             
Operating income
     7,746       8,799     $ 7,628     $ 8,799       7,746       8,862  
Interest expense
     1,876       2,281                       1,876       2,281  
Other expense, net
     7       47                       7       47  
Income tax expense
     2,403       2,661                       2,403       2,686  
                         
Net income
   $ 3,460     $ 3,810                     $ 3,460     $ 3,848  
                         
Earnings per share:
                                                
Basic
   $ 0.17     $ 0.19                     $ 0.17     $ 0.19  
                         
Diluted
   $ 0.17     $ 0.19                     $ 0.17     $ 0.19  
                         
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Three Months Ended   Three Months Ended   Three Months Ended
    June 30,   June 30,   June 30,
    2008   2007   2008   2007   2008   2007
             
Radio Segment
                                                
Net operating revenue
   $ 32,629     $ 33,843     $ 32,256     $ 33,843     $ 32,629     $ 34,174  
Station operating expense
     23,398       23,455       23,143       23,455       23,398       23,723  
             
Operating income
   $ 9,231     $ 10,388     $ 9,113     $ 10,388     $ 9,231     $ 10,451  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Three Months Ended   Three Months Ended   Three Months Ended
    June 30,   June 30,   June 30,
    2008   2007   2008   2007   2008   2007
             
Television Segment
                                                
Net operating revenue
   $ 4,713     $ 4,578     $ 4,713     $ 4,578     $ 4,713     $ 4,578  
Station operating expense
     3,848       3,561       3,848       3,561       3,848       3,561  
Gain on asset exchange
     (224 )     —       (224 )     —       (224 )     —  
             
Operating income
   $ 1,089     $ 1,017     $ 1,089     $ 1,017     $ 1,089     $ 1,017  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Three Months Ended   Three Months Ended   Three Months Ended
    June 30,   June 30,   June 30,
    2008   2007   2008   2007   2008   2007
             
Depreciation and amortization by segment
                                                
Radio Segment
   $ 1,591     $ 1,539     $ 1,562     $ 1,539     $ 1,591     $ 1,599  
Television Segment
     605       400       605       400       605       400  
Corporate and Other
     53       51       53       51       53       51  
             
 
   $ 2,249     $ 1,990     $ 2,220     $ 1,990     $ 2,249     $ 2,050  
             
 
(1)   Pro Forma results assume all acquisitions and dispositions in 2007 and 2008 occurred as of January 1, 2007.

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For The Six Months Ended
June 30, 2008 and 2007
(amounts in 000’s except per share data)
(Unaudited)
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Six Months Ended   Six Months Ended   Six Months Ended
    June 30,   June 30,   June 30,
    2008   2007   2008   2007   2008   2007
             
Consolidated
                                                
Net operating revenue
   $ 68,874     $ 70,304     $ 68,202     $ 70,304     $ 68,874     $ 70,945  
Station operating expense
     52,667       53,011       52,184       53,011       52,667       53,568  
Corporate general and administrative
     5,126       4,922       5,126       4,922       5,126       4,922  
Gain on asset exchange
     (224 )     —       (224 )     —       (224 )     —  
             
Operating income
     11,305       12,371     $ 11,116     $ 12,371       11,305       12,455  
Interest expense
     3,871       4,578                       3,871       4,578  
Other expense, net
     27       82                       27       82  
Income tax expense
     3,037       3,161                       3,037       3,195  
                         
Net income
   $ 4,370     $ 4,550                     $ 4,370     $ 4,600  
                         
Earnings per share:
                                                
Basic
   $ 0.22     $ 0.23                     $ 0.22     $ 0.23  
                         
Diluted
   $ 0.22     $ 0.23                     $ 0.22     $ 0.23  
                         
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Six Months Ended   Six Months Ended   Six Months Ended
    June 30,   June 30,   June 30,
    2008   2007   2008   2007   2008   2007
             
Radio Segment
                                                
Net operating revenue
   $ 60,010     $ 61,736     $ 59,338     $ 61,736     $ 60,010     $ 62,377  
Station operating expense
     45,311       45,968       44,828       45,968       45,311       46,525  
             
Operating income
   $ 14,699     $ 15,768     $ 14,510     $ 15,768     $ 14,699     $ 15,852  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Six Months Ended   Six Months Ended   Six Months Ended
    June 30,   June 30,   June 30,
    2008   2007   2008   2007   2008   2007
             
Television Segment
                                                
Net operating revenue
   $ 8,864     $ 8,568     $ 8,864     $ 8,568     $ 8,864     $ 8,568  
Station operating expense
     7,356       7,043       7,356       7,043       7,356       7,043  
Gain on asset exchange
     (224 )     —       (224 )     —       (224 )     —  
             
Operating income
   $ 1,732     $ 1,525     $ 1,732     $ 1,525     $ 1,732     $ 1,525  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Six Months Ended   Six Months Ended   Six Months Ended
    June 30,   June 30,   June 30,
    2008   2007   2008   2007   2008   2007
             
Depreciation and amortization by segment
                                                
Radio Segment
   $ 3,153     $ 3,045     $ 3,096     $ 3,045     $ 3,153     $ 3,165  
Television Segment
     1,000       789       1,000       789       1,000       789  
Corporate and Other
     106       98       106       98       106       98  
             
 
   $ 4,259     $ 3,932     $ 4,202     $ 3,932     $ 4,259     $ 4,052  
             
 
(1)   Pro Forma results assume all acquisitions and dispositions in 2007 and 2008 occurred as of January 1, 2007.

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
Quarterly Proforma Information
June 30, 2008 and 2007
(amounts in 000’s except per share data)
(Unaudited)
                                                 
    Pro Forma (1)     Pro Forma (1)     Pro Forma (1)     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended     Three Months Ended  
    March 31,     June 30,     September 30,     December 31,  
    2008     2007     2008     2007     2007     2007  
Consolidated
                                                
Net operating revenue
   $ 31,532     $ 32,193     $ 37,342     $ 38,752     $ 36,500     $ 37,537  
Station operating expense
     25,421       26,284       27,246       27,284       26,239       27,352  
Corporate general and administrative
     2,552       2,316       2,574       2,606       2,272       2,606  
Gain on asset exchange
     —       —       (224 )     —       —       —  
                     
Operating income
     3,559       3,593       7,746       8,862       7,989       7,579  
Interest expense
     1,995       2,297       1,876       2,281       2,283       2,093  
Other expense, net
     20       35       7       47       60       131  
Income tax expense
     634       509       2,403       2,686       2,315       2,222  
                     
Net income
   $ 910     $ 752     $ 3,460     $ 3,848     $ 3,331     $ 3,133  
                     
Earnings per share:
                                                
Basic
   $ 0.05     $ 0.04     $ 0.17     $ 0.19     $ 0.17     $ 0.16  
                       
Diluted
   $ 0.05     $ 0.04     $ 0.17     $ 0.19     $ 0.17     $ 0.16  
                       
                                                 
    Pro Forma (1)     Pro Forma (1)     Pro Forma (1)     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended     Three Months Ended  
    March 31,     June 30,     September 30,     December 31,  
    2008     2007     2008     2007     2007     2007  
Radio Segment
                                                
Net operating revenue
   $ 27,381     $ 28,203     $ 32,629     $ 34,174     $ 32,186     $ 32,992  
Station operating expense
     21,913       22,802       23,398       23,723       22,756       23,738  
                     
Operating income
   $ 5,468     $ 5,401     $ 9,231     $ 10,451     $ 9,430     $ 9,254  
                     
                                                 
    Pro Forma (1)     Pro Forma (1)     Pro Forma (1)     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended     Three Months Ended  
    March 31,     June 30,     September 30,     December 31,  
    2008     2007     2008     2007     2007     2007  
Television Segment
                                                
Net operating revenue
   $ 4,151     $ 3,990     $ 4,713     $ 4,578     $ 4,314     $ 4,545  
Station operating expense
     3,508       3,482       3,848       3,561       3,483       3,614  
Gain on asset exchange
     —       —       (224 )     —       —       —  
                     
Operating income
   $ 643     $ 508     $ 1,089     $ 1,017     $ 831     $ 931  
                     
                                                 
    Pro Forma (1)     Pro Forma (1)     Pro Forma (1)     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended     Three Months Ended  
    March 31,     June 30,     September 30,     December 31,  
    2008     2007     2008     2007     2007     2007  
Depreciation and amortization by segment
                                                
Radio Segment
   $ 1,562     $ 1,566     $ 1,591     $ 1,599     $ 1,660     $ 1,723  
Television Segment
     395       389       605       400       405       425  
Corporate and Other
     53       47       53       51       48       58  
                     
 
   $ 2,010     $ 2,002     $ 2,249     $ 2,050     $ 2,113     $ 2,206  
                     
 
(1)   Pro Forma results assume all acquisitions and dispositions in 2007 and 2008 occurred as of January 1, 2007.

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Three Months Ended
June 30, 2008 and 2007
(amounts in 000’s)
(Unaudited)
Reconciliation of As-Reported (historical) information to Same Station Operating Income
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Three Months     and Dispositions     Three Months     Three Months     and Dispositions     Three Months  
    Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2008     Period     2008     2007     Period     2007  
Consolidated
                                                
Net operating revenue
   $ 37,342     $ (373 )   $ 36,969     $ 38,421       —     $ 38,421  
Station operating expense
     27,246       (255 )     26,991       27,016       —       27,016  
Corporate general and administrative
    2,574       —       2,574       2,606       —       2,606  
Gain on asset exchange
     (224 )     —       (224 )     —       —       —  
 
                                    
Operating income
   $ 7,746     $ (118 )   $ 7,628     $ 8,799       —     $ 8,799  
 
                                    
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Three Months     and Dispositions     Three Months     Three Months     and Dispositions     Three Months  
    Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2008     Period     2008     2007     Period     2007  
Radio Segment
                                                
Net operating revenue
   $ 32,629     $ (373 )   $ 32,256     $ 33,843       —     $ 33,843  
Station operating expense
     23,398       (255 )     23,143       23,455       —       23,455  
 
                                    
Operating income
   $ 9,231     $ (118 )   $ 9,113     $ 10,388       —     $ 10,388  
 
                                    
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Three Months     and Dispositions     Three Months     Three Months     and Dispositions     Three Months  
    Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2008     Period     2008     2007     Period     2007  
Television Segment
                                                
Net operating revenue
   $ 4,713       —     $ 4,713     $ 4,578       —     $ 4,578  
Station operating expense
     3,848       —       3,848       3,561       —       3,561  
Gain on asset exchange
     (224 )     —       (224 )     —       —       —  
 
                                    
Operating income
   $ 1,089       —     $ 1,089     $ 1,017       —     $ 1,017  
 
                                    

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Six Months Ended
June 30, 2008 and 2007
(amounts in 000’s)
(Unaudited)
Reconciliation of As-Reported (historical) information to Same Station Operating Income
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Six Months     and Dispositions     Six Months     Six Months     and Dispositions     Six Months  
    Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2008     Period     2008     2007     Period     2007  
Consolidated
                                                
Net operating revenue
   $ 68,874     $ (672 )   $ 68,202     $ 70,304       —     $ 70,304  
Station operating expense
     52,667       (483 )     52,184       53,011       —       53,011  
Corporate general and administrative
     5,126       —       5,126       4,922       —       4,922  
Gain on asset exchange
     (224 )     —       (224 )     —       —       —  
 
                                    
Operating income
   $ 11,305     $ (189 )   $ 11,116     $ 12,371       —     $ 12,371  
 
                                    
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Six Months     and Dispositions     Six Months     Six Months     and Dispositions     Six Months  
    Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2008     Period     2008     2007     Period     2007  
Radio Segment
                                                
Net operating revenue
   $ 60,010     $ (672 )   $ 59,338     $ 61,736       —     $ 61,736  
Station operating expense
     45,311       (483 )     44,828       45,968       —       45,968  
 
                                    
Operating income
   $ 14,699     $ (189 )   $ 14,510     $ 15,768       —     $ 15,768  
 
                                    
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Six Months     and Dispositions     Six Months     Six Months     and Dispositions     Six Months  
    Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2008     Period     2008     2007     Period     2007  
Television Segment
                                                
Net operating revenue
   $ 8,864       —     $ 8,864     $ 8,568       —     $ 8,568  
Station operating expense
     7,356       —       7,356       7,043       —       7,043  
Gain on asset exchange
     (224 )     —       (224 )     —       —       —  
 
                                    
Operating income
   $ 1,732       —     $ 1,732     $ 1,525       —     $ 1,525