EX-99.1 2 b79903exv99w1.htm EX-99.1 PRESS RELEASE DATED MARCH 4, 2010 exv99w1
Exhibit 99.1
Saga Communications, Inc.
Reports 4th Quarter and Year End 2009 Results
Contact:
Samuel D. Bush
313/886-7070
Grosse Pointe Farms, MI – March 4, 2010 – Saga Communications, Inc. (NYSE Amex-SGA) today reported free cash flow increased 1.7% to $19.2 million for the year. Net operating revenue for the year ended December 31, 2009 decreased 13.7% over the comparable period in 2008 to $120.8 million. Station operating expense decreased 10.6% to $94.7 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. The Company’s net loss was $2.6 million (-$.61 per fully diluted share) for the year ended December 31, 2009 compared to a net loss of $66.5 million (-$14.05 per fully diluted share) for the same period last year. Results for the full year of 2009 include a pre-tax non-cash impairment charge of $17.3 million related to the Company’s annual impairment test of its indefinite-lived intangible assets. The charge in 2008 was $116.4 million. Without the non-cash impairment charge, the Company would have had a net income of $7.9 million ($1.88 per fully diluted share) for the year compared to $9.9 million for the same period last year ($2.08 per fully diluted share).
For the quarter ended December 31, 2009 free cash flow increased 11.8% to $6.6 million. Net operating revenue decreased 8.9% from the comparable period in 2008 to $31.8 million. Station operating expense decreased 10.2% to $23.9 million (station operating expense includes depreciation and amortization attributable to the stations). The Company’s net loss was $7.4 million for the quarter ended December 31, 2009 compared to a net loss of $74.0 million for the same period last year. Results for the fourth quarter of 2009 include a pre-tax non-cash impairment charge of $17.3 million related to the Company’s review of its indefinite-lived intangible assets. The charge for the quarter in 2008 was $116.4 million.

 

 

The Company has maintained a solid balance sheet given the current economic volatility, with $12.9 million in cash balances as of December 31, 2009. As of December 31, 2009, the Company’s trailing 12 month leverage ratio calculated as a multiple of EBITDA was 4.3 times. Netting cash against outstanding debt, the ratio would be 3.9 times. Subsequent to the end of the year, the Company reduced its total debt outstanding to $116 million.
Capital expenditures in the fourth quarter of 2009 were $0.8 million. For the 2009 fiscal year total capital expenditures were $4.0 million. This compares to $2.0 million and $7.1 million for the same respective periods last year. The Company currently expects to spend approximately $4.5 – $5.0 million for capital expenditures during 2010.
All share and per share information reflects the Company’s January 28, 2009 1-for-4 reverse stock split.
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, free cash flow, net income excluding impairment charge, trailing 12 month consolidated EBITDA, and leverage ratio. 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, as a primary measure for incentive based compensation of executives and other members of management and as a measure of financial position. 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 4th Quarter and Year End 2009 conference call will be on Thursday, March 4, 2010 at 2:00 p.m. EST. The dial-in number for domestic calls is (612) 288-0337. The call can be replayed for 7 days by calling domestically (800) 475-6701 and referring to access code 143180.
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 p.m. EST on March 4, 2010 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 Twelve Months Ended
December 31, 2009 and 2008
(amounts in 000’s except per share data)
(Unaudited)
                                 
    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
    2009   2008   2009   2008
             
Operating Results
                                
Net operating revenue
   $ 31,784     $ 34,890     $ 120,798     $ 139,956  
Station operating expense
     23,856       26,550       94,647       105,805  
Corporate general and administrative
     1,813       2,368       7,944       9,979  
Gain on asset exchange
     (495 )     —       (495 )     (506 )
Impairment of intangible assets
     17,286       116,443       17,286       116,443  
             
Operating income (loss)
     (10,676 )     (110,471 )     1,416       (91,765 )
Interest expense
     1,359       1,413       4,948       7,173  
Other expense, net
     199       49       210       76  
             
Loss before income tax
     (12,234 )     (111,933 )     (3,742 )     (99,014 )
Income tax benefit
     (4,871 )     (37,974 )     (1,161 )     (32,522 )
             
Net loss
   $ (7,363 )   $ (73,959 )   $ (2,581 )   $ (66,492 )
             
Loss per share
                                
Basic
   $ (1.74 )   $ (17.41 )   $ (0.61 )   $ (14.05 )
             
Diluted
   $ (1.74 )   $ (17.41 )   $ (0.61 )   $ (14.05 )
             
Weighted average common shares
     4,227       4,249       4,207       4,734  
Weighted average common shares and common shares equivalents
     4,227       4,249       4,207       4,734  
 
                                
Free Cash Flow
                                
Net loss
   $ (7,363 )   $ (73,959 )   $ (2,581 )   $ (66,492 )
Plus: Depreciation and amortization:
                                
Station
     2,057       2,348       8,408       8,739  
Corporate
     55       62       221       222  
Deferred tax benefit
     (4,711 )     (37,445 )     (1,145 )     (33,879 )
Non-cash compensation
     348       374       1,366       1,433  
Gain on asset exchange
     (495 )     —       (495 )     (506 )
Impairment of intangible assets
     17,286       116,443       17,286       116,443  
Other expense, net
     199       49       210       76  
Less: Capital expenditures
     (804 )     (1,993 )     (4,041 )     (7,127 )
             
Free cash flow
   $ 6,572     $ 5,879     $ 19,229     $ 18,909  
             
 
                                
Balance Sheet Data
                                
Working capital
                   $ 7,753     $ 20,438  
Net fixed assets
                     69,216       73,383  
Net intangible assets and other assets
                     96,241       113,276  
Total assets
                     202,351       221,460  
Long-term debt (including current portion of $17,078 and $1,061, respectively)
                     121,078       135,411  
Stockholders’ equity
                     64,093       65,097  

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
December 31, 2009 and 2008
(amounts in 000’s except per share data)
(Unaudited)
                                 
    As-Reported   Same Station
    Three Months Ended   Three Months Ended
    December 31,   December 31,
    2009   2008   2009   2008
             
Consolidated
                                
Net operating revenue
   $ 31,784     $ 34,890     $ 31,394     $ 34,883  
Station operating expense
     23,856       26,550       23,690       26,527  
Corporate general and administrative
     1,813       2,368       1,813       2,368  
Gain on asset exchange
     (495 )     —       (495 )     —  
Impairment of intangible assets
     17,286       116,443       17,286       116,443  
             
Operating loss
     (10,676 )     (110,471 )   $ (10,900 )   $ (110,455 )
Interest expense
     1,359       1,413                  
Other expense, net
     199       49                  
Income tax benefit
     (4,871 )     (37,974 )                
                     
Net loss
   $ (7,363 )   $ (73,959 )                
                       
Loss per share:
                                
Basic
   $ (1.74 )   $ (17.41 )                
                       
Diluted
   $ (1.74 )   $ (17.41 )                
                       
                                 
    As-Reported   Same Station
    Three Months Ended   Three Months Ended
    December 31,   December 31,
    2009   2008   2009   2008
             
Radio Segment
                                
Net operating revenue
   $ 27,382     $ 29,756     $ 26,992     $ 29,749  
Station operating expense
     20,325       22,513       20,159       22,490  
Impairment of intangible assets
     16,206       114,979       16,206       114,979  
             
Operating loss
   $ (9,149 )   $ (107,736 )   $ (9,373 )   $ (107,720 )
             
                                 
    As-Reported   Same Station
    Three Months Ended   Three Months Ended
    December 31,   December 31,
    2009   2008   2009   2008
             
Television Segment
                                
Net operating revenue
   $ 4,402     $ 5,134     $ 4,402     $ 5,134  
Station operating expense
     3,531       4,037       3,531       4,037  
Gain on asset exchange
     (495 )     —       (495 )     —  
Impairment of intangible assets
     1,080       1,464       1,080       1,464  
             
Operating income (loss)
   $ 286     $ (367 )   $ 286     $ (367 )
             
                                 
    As-Reported   Same Station
    Three Months Ended   Three Months Ended
    December 31,   December 31,
    2009   2008   2009   2008
             
Depreciation and amortization by segment
                                
Radio Segment
   $ 1,598     $ 1,676     $ 1,598     $ 1,676  
Television Segment
     459       672       459       672  
Corporate and Other
     55       62       55       62  
             
 
   $ 2,112     $ 2,410     $ 2,112     $ 2,410  
             

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Twelve Months Ended
December 31, 2009 and 2008
(amounts in 000’s except per share data)
(Unaudited)
                                 
    As-Reported   Same Station
    Twelve Months Ended   Twelve Months Ended
    December 31,   December 31,
    2009   2008   2009   2008
         
Consolidated
                                
Net operating revenue
   $ 120,798     $ 139,956     $ 119,360     $ 139,934  
Station operating expense
     94,647       105,805       93,950       105,724  
Corporate general and administrative
     7,944       9,979       7,944       9,979  
Gain on asset exchange
     (495 )     (506 )     (495 )     (506 )
Impairment of intangible assets
     17,286       116,443       17,286       116,443  
         
Operating income (loss)
     1,416       (91,765 )   $ 675     $ (91,706 )
Interest expense
     4,948       7,173                  
Other expense, net
     210       76                  
Income tax benefit
     (1,161 )     (32,522 )                
                     
Net loss
   $ (2,581 )   $ (66,492 )                
                     
Loss per share:
                                
Basic
   $ (0.61 )   $ (14.05 )                
                     
Diluted
   $ (0.61 )   $ (14.05 )                
                     
                                 
    As-Reported   Same Station
    Twelve Months Ended   Twelve Months Ended
    December 31,   December 31,
    2009   2008   2009   2008
         
Radio Segment
                                
Net operating revenue
   $ 104,601     $ 121,072     $ 103,163     $ 121,050  
Station operating expense
     80,382       90,540       79,685       90,459  
Impairment of intangible assets
     16,206       114,979       16,206       114,979  
         
Operating income (loss)
   $ 8,013     $ (84,447 )   $ 7,272     $ (84,388 )
         
                                 
    As-Reported   Same Station
    Twelve Months Ended   Twelve Months Ended
    December 31,   December 31,
    2009   2008   2009   2008
         
Television Segment
                                
Net operating revenue
   $ 16,197     $ 18,884     $ 16,197     $ 18,884  
Station operating expense
     14,265       15,265       14,265       15,265  
Gain on asset exchange
     (495 )     (506 )     (495 )     (506 )
Impairment of intangible assets
     1,080       1,464       1,080       1,464  
         
Operating income
   $ 1,347     $ 2,661     $ 1,347     $ 2,661  
         
                                 
    As-Reported   Same Station
    Twelve Months Ended   Twelve Months Ended
    December 31,   December 31,
    2009   2008   2009   2008
         
Depreciation and amortization by segment                        
Radio Segment
   $ 6,166     $ 6,446     $ 6,143     $ 6,446  
Television Segment
     2,242       2,293       2,242       2,293  
Corporate and Other
     221       222       221       222  
         
 
   $ 8,629     $ 8,961     $ 8,606     $ 8,961  
         -

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Three Months Ended
December 31, 2009 and 2008
(amounts in 000’s)
(Unaudited)
Reconciliation of As-Reported (historical) information to Same Station Operating Income (Loss)
                                                 
            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  
    December 31,     Entire Comparable     December 31,     December 31,     Entire Comparable     December 31,  
    2009     Period     2009     2008     Period     2008  
Consolidated        
Net operating revenue
   $ 31,784     $ (390 )   $ 31,394     $ 34,890     $ (7 )   $ 34,883  
Station operating expense
     23,856       (166 )     23,690       26,550       (23 )     26,527  
Corporate general and administrative
     1,813       —       1,813       2,368       —       2,368  
Gain on asset exchange
     (495 )     —       (495 )     —       —       —  
Impairment of intangible assets
     17,286       —       17,286       116,443       —       116,443  
 
                                    
Operating loss
   $ (10,676 )   $ (224 )   $ (10,900 )   $ (110,471 )   $ 16     $ (110,455 )
 
                                    
                                                 
            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  
    December 31,     Entire Comparable     December 31,     December 31,     Entire Comparable     December 31,  
    2009     Period     2009     2008     Period     2008  
         
Radio Segment
                                                
Net operating revenue
   $ 27,382     $ (390 )   $ 26,992     $ 29,756     $ (7 )   $ 29,749  
Station operating expense
     20,325       (166 )     20,159       22,513       (23 )     22,490  
Impairment of intangible assets
     16,206       —       16,206       114,979       —       114,979  
 
                                    
Operating loss
   $ (9,149 )   $ (224 )   $ (9,373 )   $ (107,736 )   $ 16     $ (107,720 )
 
                                    
                                                 
            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  
    December 31,     Entire Comparable     December 31,     December 31,     Entire Comparable     December 31,  
    2009     Period     2009     2008     Period     2008  
         
Television Segment
                                                
Net operating revenue
   $ 4,402       —     $ 4,402     $ 5,134       —     $ 5,134  
Station operating expense
     3,531       —       3,531       4,037       —       4,037  
Gain on asset exchange
     (495 )     —       (495 )     —       —       —  
Impairment of intangible assets
     1,080       —       1,080       1,464       —       1,464  
 
                                    
Operating income (loss)
   $ 286       —     $ 286     $ (367 )     —     $ (367 )
 
                                    

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Twelve Months Ended
December 31, 2009 and 2008
(amounts in 000’s)
(Unaudited)
Reconciliation of As-Reported (historical) information to Same Station Operating Income (Loss)
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Twelve Months     and Dispositions     Twelve Months     Twelve Months     and Dispositions     Twelve Months  
    Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    December 31,     Entire Comparable     December 31,     December 31,     Entire Comparable     December 31,  
    2009     Period     2009     2008     Period     2008  
         
Consolidated
                                                
Net operating revenue
   $ 120,798     $ (1,438 )   $ 119,360     $ 139,956     $ (22 )   $ 139,934  
Station operating expense
     94,647       (697 )     93,950       105,805       (81 )     105,724  
Corporate general and administrative
     7,944       —       7,944       9,979       —       9,979  
Gain on asset exchange
     (495 )     —       (495 )     (506 )     —       (506 )
Impairment of intangible assets
     17,286       —       17,286       116,443       —       116,443  
 
                                    
Operating income (loss)
   $ 1,416     $ (741 )   $ 675     $ (91,765 )   $ 59     $ (91,706 )
 
                                    
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Twelve Months     and Dispositions     Twelve Months     Twelve Months     and Dispositions     Twelve Months  
    Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    December 31,     Entire Comparable     December 31,     December 31,     Entire Comparable     December 31,  
    2009     Period     2009     2008     Period     2008  
         
Radio Segment
                                                
Net operating revenue
   $ 104,601     $ (1,438 )   $ 103,163     $ 121,072     $ (22 )   $ 121,050  
Station operating expense
     80,382       (697 )     79,685       90,540       (81 )     90,459  
Impairment of intangible assets
     16,206       —       16,206       114,979       —       114,979  
 
                                    
Operating income (loss)
   $ 8,013     $ (741 )   $ 7,272     $ (84,447 )   $ 59     $ (84,388 )
 
                                    
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Twelve Months     and Dispositions     Twelve Months     Twelve Months     and Dispositions     Twelve Months  
    Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    December 31,     Entire Comparable     December 31,     December 31,     Entire Comparable     December 31,  
    2009     Period     2009     2008     Period     2008  
         
Television Segment
                                                
Net operating revenue
   $ 16,197       —     $ 16,197     $ 18,884       —     $ 18,884  
Station operating expense
     14,265       —       14,265       15,265       —       15,265  
Gain on asset exchange
     (495 )     —       (495 )     (506 )     —       (506 )
Impairment of intangible assets
     1,080       —       1,080       1,464       —       1,464  
 
                                    
Operating income
   $ 1,347       —     $ 1,347     $ 2,661       —     $ 2,661  
 
                                    

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Three and Twelve Months Ended
December 31, 2009 and 2008
(amounts in 000’s except per share data)
(Unaudited)
Reconciliation of As-Reported Net Loss to Net Income Excluding Impairment Charge
                                 
    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
    2009   2008   2009   2008
         
Net loss
   $ (7,363 )   $ (73,959 )   $ (2,581 )   $ (66,492 )
Impairment of intangible assets
     17,286       116,443       17,286       116,443  
         
Operating income, excluding impairment charge
     9,923       42,484       14,705       49,951  
Income tax benefit
     (4,871 )     (37,974 )     (1,161 )     (32,522 )
         
Income before income tax, excluding impairment charge
     5,052       4,510       13,544       17,429  
Income tax expense
     1,913       2,114       5,623       7,566  
         
Net income, excluding impairment charge
   $ 3,139     $ 2,396     $ 7,921     $ 9,863  
         
 
Weighted average common shares and common shares equivalent, diluted
     4,227       4,249       4,207       4,734  
Dilutive securities: Stock options
     —       —       1       3  
         
Weighted average common shares and common shares equivalent, diluted
     4,227       4,249       4,208       4,737  
         
 
Earnings per share: Diluted
   $ 0.74     $ 0.56     $ 1.88     $ 2.08  
         

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
Trailing Twelve Month Consolidated EBITDA and Leverage Ratio
As of December 31, 2009
(amounts in 000’s, except ratios)
(Unaudited)
         
    Trailing  
    Twelve Months  
    Ended  
    December 31,  
    2009  
Trailing Twelve Month Consolidated EBITDA
        
Net income
   $ (2,581 )
Less: Loss on sale of assets
     (210 )
Gain on exchange of assets
     495  
Impairment of intangible assets
     (17,286 )
Interest income
     9  
Net barter transactions
     187  
 
      
Total exclusions
     (16,805 )
 
      
Consolidated Adjusted Net Income
     14,224  
Plus: Interest expense
     4,948  
Income tax benefit
     (1,161 )
Depreciation & amortization expense
     8,629  
Amortization of television syndicated programming contracts
     706  
Non-cash stock based compensation expense
     1,366  
Less: Cash television programming payments
     (725 )
 
 
      
Trailing twelve month consolidated EBITDA
   $ 27,987  
 
      
         
    December 31,  
    2009  
Total long-term debt, including current maturities
   $ 121,078  
Divided by trailing twelve month consolidated EBITDA
     27,987  
 
      
Leverage ratio
     4.3  
 
      
 
Total long-term debt, including current maturities
   $ 121,078  
Less: Cash and cash equivalents as of December 31, 2009
     (12,899 )
 
      
Long-term debt, including current maturities less cash and
        
cash equivalents as of December 31, 2009
     108,179  
Divided by trailing twelve month consolidated EBITDA
     27,987  
 
      
Leverage ratio
     3.9