EX-99.1 2 b83345exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
Saga Communications, Inc.
Reports 3rd Quarter 2010 Results
Net Income per Share for the Quarter Increases 45% to $.84 per Share
Contact:
Samuel D. Bush
313/886-7070
Grosse Pointe Farms, MI — November 8, 2010 — Saga Communications, Inc. (NYSE Amex-SGA) today reported the Company’s net income for the third quarter was $3.6 million ($.84 per fully diluted share) compared to $2.5 million ($0.58 per fully diluted share) for the same period last year. Net operating revenue for the quarter ended September 30, 2010 increased 5.0% to $32.8 million with operating income of $7.4 million compared to $5.8 million for the third quarter of last year. Free cash flow was $6.0 million for the quarter, an increase of 4.5% over the third quarter of last year.
For the nine month period ended September 30, 2010, free cash flow increased 10.6% to $14.0 million. Net operating revenue increased 5.3% from the comparable period in 2009 to $93.7 million with operating income of $18.8 million compared to $12.1 million for the same period last year. Net income was $10.6 million ($2.50 per fully diluted share) compared to $4.8 million ($1.14 per fully diluted share) for the comparable period in 2009.
The Company continues to maintain a solid balance sheet with $15.5 million in cash and certificate of deposit balances as of September 30, 2010. As of September 30, 2010, the Company’s outstanding bank debt was $105.6 million with a trailing 12 month leverage ratio calculated as a multiple of EBITDA of 3.1 times. Netting cash and certificate of deposits against outstanding debt, the ratio would be 2.7 times. The Company has paid down $20 million of debt since the first of the year including a $4.5 million pay down that occurred subsequent to the end of the third quarter. With this additional pay down considered the ratio would be reduced to 3.0 times. The Company intends to continue to use excess cash to pay down debt.
Capital expenditures in the third quarter of 2010 were $1.1 million compared to $0.7 million for the same period last year. For the 9 months ended September 30, 2010,

 

 

capital expenditures were $3.3 million compared to $3.2 million for the comparable period last year. For the 2009 fiscal year total capital expenditures were $4.0 million. The Company currently expects to spend approximately $4.5 — $5.0 million for capital expenditures during 2010.
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 free cash flow, 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 Supplemental Financial Data table.
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 3rd Quarter 2010 conference call will be on Monday, November 8, 2010 at 2:00 p.m. EST. The dial-in number for domestic and international calls is (612) 234-9959.
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 November 8, 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 Nine Months Ended
September 30, 2010 and 2009
(amounts in 000’s except per share data)
(Unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
                                 
Operating Results
                                
Net operating revenue
   $ 32,810     $ 31,253     $ 93,684     $ 89,014  
Station operating expense
     23,629       23,556       69,346       70,791  
Corporate general and administrative
     1,741       1,906       5,520       6,131  
                                 
Operating income
     7,440       5,791       18,818       12,092  
Interest expense
     1,375       1,386       4,362       3,589  
Other (income) expense, net
     13       43       (3,398 )     11  
                                 
Income before income tax
     6,052       4,362       17,854       8,492  
Income tax expense
     2,495       1,892       7,285       3,710  
                                 
Net income
   $ 3,557     $ 2,470     $ 10,569     $ 4,782  
                                 
Earnings per share
                                
Basic
   $ 0.84     $ 0.58     $ 2.50     $ 1.14  
                                 
Diluted
   $ 0.84     $ 0.58     $ 2.50     $ 1.14  
                                 
Weighted average common shares
     4,236       4,227       4,230       4,202  
Weighted average common shares and common share equivalents
     4,236       4,227       4,230       4,203  
 
Free Cash Flow
                                
Net income
   $ 3,557     $ 2,470     $ 10,569     $ 4,782  
Plus: Depreciation and amortization:
                                
Station
     1,885       1,974       5,583       6,351  
Corporate
     57       57       163       166  
Deferred tax provision
     1,430       1,528       3,625       3,566  
Non-cash compensation
     187       348       715       1,018  
Other (income) expense, net
     13       43       (3,398 )     11  
Less: Capital expenditures
     (1,113 )     (663 )     (3,259 )     (3,237 )
                                 
Free cash flow
   $ 6,016     $ 5,757     $ 13,998     $ 12,657  
                                 
 
Balance Sheet Data
                                
Working capital
                   $ 15,185     $ 7,428  
Net fixed assets
                   $ 66,473     $ 70,204  
Net intangible assets and other assets
                   $ 97,117     $ 113,635  
Total assets
                   $ 202,720     $ 224,740  
Long term debt (including current portion of $11,088 and $20,578, respectively)
                   $ 105,578     $ 130,578  
Stockholders’ equity
                   $ 75,298     $ 71,107  

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For The Three and Nine Months Ended
September 30, 2010 and 2009
(amounts in 000’s)
(Unaudited)
                                 
                    Corporate        
    Radio     Television     and Other     Consolidated  
Three Months Ended September 30, 2010:
                                
Net operating revenue
   $ 28,089     $ 4,721     $ —     $ 32,810  
Station operating expense
     20,134       3,495       —       23,629  
Corporate G&A
     —       —       1,741       1,741  
 
                        
Operating income
   $ 7,955     $ 1,226     $ (1,741 )   $ 7,440  
 
                        
Depreciation and amortization
   $ 1,447     $ 438     $ 57     $ 1,942  
 
                        
                                 
                    Corporate        
    Radio     Television     and Other     Consolidated  
Three Months Ended September 30, 2009:
                                
Net operating revenue
   $ 26,992     $ 4,261     $ —     $ 31,253  
Station operating expense
     20,046       3,510       —       23,556  
Corporate G&A
     —       —       1,906       1,906  
 
                        
Operating income
   $ 6,946     $ 751     $ (1,906 )   $ 5,791  
 
                        
Depreciation and amortization
   $ 1,521     $ 453     $ 57     $ 2,031  
 
                        
                                 
                    Corporate        
    Radio     Television     and Other     Consolidated  
Nine Months Ended September 30, 2010:
                                
Net operating revenue
   $ 80,894     $ 12,790     $ —     $ 93,684  
Station operating expense
     59,184       10,162       —       69,346  
Corporate G&A
     —       —       5,520       5,520  
 
                        
Operating income
   $ 21,710     $ 2,628     $ (5,520 )   $ 18,818  
 
                        
Depreciation and amortization
   $ 4,312     $ 1,271     $ 163     $ 5,746  
 
                        
                                 
                    Corporate        
    Radio     Television     and Other     Consolidated  
Nine Months Ended September 30, 2009:
                                
Net operating revenue
   $ 77,219     $ 11,795     $ —     $ 89,014  
Station operating expense
     60,057       10,734       —       70,791  
Corporate G&A
     —       —       6,131       6,131  
 
                        
Operating income
   $ 17,162     $ 1,061     $ (6,131 )   $ 12,092  
 
                        
Depreciation and amortization
   $ 4,568     $ 1,783     $ 166     $ 6,517  
 
                        

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
September 30, 2010
(amounts in 000’s except ratios)
(Unaudited)
                                 
            Less:     Plus:     Trailing  
    12 Mos Ended     9 Mos Ended     9 Mos Ended     12 Mos Ended  
    December 31,     September 30,     September 30,     September 30,  
    2009     2009     2010     2010  
Trailing 12 Month Consolidated EBITDA
                                
Net income (loss)
   $ (2,581 )   $ 4,782     $ 10,569     $ 3,206  
Less: Loss on sale of assets
     (210 )     (47 )     (364 )     (527 )
Gain on exchange of assets
     495       —       —       495  
Impairment of intangible assets
     (17,286 )     —       —       (17,286 )
Gain on license downgrade and other gains
     —       —       3,762       3,762  
Other
     196       252       24       (32 )
 
                        
Total exclusions
     (16,805 )     205       3,422       (13,588 )
 
                        
 
                                
Consolidated Adjusted Net Income
     14,224       4,577       7,147       16,794  
Plus: Interest expense
     4,948       3,589       4,362       5,721  
Income tax expense (benefit)
     (1,161 )     3,710       7,285       2,414  
Depreciation & amortization expense
     8,629       6,517       5,746       7,858  
Amortization of television syndicated programming contracts
     706       530       541       717  
Non-cash stock based compensation expense
     1,366       1,018       715       1,063  
Less: Cash television programming payments
     (725 )     (549 )     (552 )     (728 )
 
                        
Trailing twelve month consolidated EBITDA
   $ 27,987     $ 19,392     $ 25,244     $ 33,839  
 
                        
 
                                
Total long-term debt, including current maturities
                           $ 105,578  
Divided by trailing twelve month consolidated EBITDA
                             33,839  
 
                              
Leverage ratio
                             3.1  
 
                              
 
                                
Total long-term debt, including current maturities
                           $ 105,578  
Less: Cash, cash equivalents and certificates of deposit as of September 30, 2010
                             (15,506 )
 
                              
Long-term debt, including current maturities less cash, cash equivalents and certificates of deposit as of September 30, 2010
                             90,072  
Divided by trailing twelve month consolidated EBITDA
                             33,839  
 
                              
Adjusted leverage ratio
                             2.7  
 
                              
 
                                
Total long-term debt, including current maturities
                           $ 105,578  
Less: Debt pay down in October 2010
                             (4,500 )
 
                              
Long-term debt, including current maturities adjusted
                             101,078  
Divided by trailing twelve month consolidated EBITDA
                             33,839  
 
                              
Adjusted leverage ratio
                             3.0