EX-99.1 2 b53808scexv99w1.htm EX-99.1 PRESS RELEASE DATED FEBRUARY 24, 2005 exv99w1
 

Saga Communications, Inc.
Reports 4th Quarter and Year End 2004 Results

Contact:
Samuel D. Bush
313/886-7070

Grosse Pointe Farms, MI – February 24, 2005 – Saga Communications, Inc. (NYSE-SGA) today reported net income of $4.1 million ($.20 per fully diluted share) for the quarter ended December 31, 2004 compared to $4.5 million ($.21 per fully diluted share) for 2003. For the same period, net operating revenue increased 9.6% over the comparable period in 2003 to approximately $36.1 million, operating income increased 1.4% to approximately $8.7 million and station operating expense increased 9.6% to approximately $25.0 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the quarter, net operating revenue increased 4.8% to approximately $34.5 million, operating income decreased 4.1% to $8.2 million and station operating expense increased 4.8% to $23.9 million.

For the year ended December 31, 2004, net income for the twelve month period increased 14.1% to approximately $15.8 million ($.75 per fully diluted share) compared to $13.9 million ($.65 per fully diluted share) for 2003. For the same period, net operating revenue increased 11.0% over the comparable period in 2003 to approximately $134.6 million, operating income increased 9.9% to approximately $31.4 million and station operating expense increased 10.3% to approximately $94.9 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the year, net operating revenue increased 5.5% to approximately $127.1 million, operating income increased 4.9% to $30.0 million and station operating expense increased 4.2% to $88.7 million.

The company closed, effective January 1, 2005 on the acquisition of WWWV-FM, WINA-AM and WQMZ-FM serving the Charlottesville, VA radio market for a purchase price of approximately $22 million.

 

 

Capital expenditures in the fourth quarter of 2004 were approximately $2.9 million with approximately $0.8 million being spent as a result of acquisitions. For the 2004 fiscal year total capital expenditures were approximately $10.2 million net of insurance proceeds with approximately $3.6 million being spent as a result of acquisitions, $1.6 million on our Victoria television tower project, and $1.1 million on our Portland tower projects.

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 2004 and 2003 acquisitions and dispositions occurred as of January 1, 2003.

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 25 markets, including 55 FM and 27 AM radio stations, 3 state radio networks, 2 farm radio networks, 5 television stations and 3 low-power television stations. Saga has entered into an agreement to acquire an FM station serving the Asheville, NC radio market, and an agreement to acquire 2 FM stations and 2 AM stations serving the Ithaca, NY radio market. For additional information, contact us at (313) 886-7070 or visit our website at www.sagacommunications.com.

Saga’s fourth quarter and year end 2004 results conference call will be on Thursday, February 24 at 2:00PM. The dial in number for domestic calls is 800/553-0358. For international callers the number is 612/332-0802. The call can be replayed for 7 days by

 

 

calling domestically 800/475-6701 or internationally 320/365-3844 and referring to access code 768301. Thereafter, a transcript of the call will be available on our website.

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. 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 Month Periods
Ended December 31, 2004 and 2003
(amounts in 000’s except per share data)

                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2004     2003     2004     2003  
     
Operating Results
                                
Net operating revenue
   $ 36,082     $ 32,933     $ 134,644     $ 121,297  
Station operating expense
     24,990       22,802       94,914       86,083  
Corporate general and administrative
     2,405       1,565       8,343       6,649  
     
Operating income
     8,687       8,566       31,387       28,565  
Interest expense
     1,306       1,006       4,522       4,779  
Other (income) expense, net
     (251 )     281       32       1,131  
     
Income before income tax
     7,632       7,279       26,833       22,655  
Income tax expense
     3,500       2,740       10,991       8,771  
     
Net income
   $ 4,132     $ 4,539     $ 15,842     $ 13,884  
     
Earnings per share:
                                
Basic
   $ 0.20     $ 0.22     $ 0.76     $ 0.67  
     
Diluted
   $ 0.20     $ 0.21     $ 0.75     $ 0.65  
     
Weighted average common shares
     20,635       20,839       20,752       20,817  
Weighted average common shares and common equivalents
     20,983       21,293       21,167       21,301  
 
                                
Free Cash Flow
                                
Net Income
   $ 4,132     $ 4,539     $ 15,842     $ 13,884  
Plus: Depreciation and amortization:
                                
Station
     1,878       1,670       7,054       6,803  
Corporate
     50       50       198       199  
Deferred tax provision
     1,063       1,466       4,137       3,594  
Less: Capital expenditures
     (2,849 )     (1,708 )     (11,098 )     (8,118 )
     
Free cash flow
   $ 4,274     $ 6,017     $ 16,133     $ 16,362  
     
 
                                
Balance Sheet Data
                                
Working capital
                   $ 21,779     $ 25,353  
Net fixed assets
                     66,364       62,369  
Net intangible and other assets
                     176,166       161,112  
Total assets
                     280,154       262,343  
Long term debt (including current portion of $0 and $45, respectively)
                     121,161       121,205  
Stockholders’ equity
                     117,225       107,244  

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
December 31, 2004 and 2003
(amounts in 000’s except per share data)
(Unaudited)

Consolidated

                                                 
    As-Reported     Same Station     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended  
    December 31,     December 31,     December 31,  
    2004     2003     2004     2003     2004     2003  
Net operating revenue
   $ 36,082     $ 32,933     $ 34,513     $ 32,933     $ 36,082     $ 34,218  
Station operating expense
     24,990       22,802       23,894       22,802       24,990       23,954  
Corporate general and administrative
     2,405       1,565       2,405       1,565       2,405       1,565  
 
                                    
Operating income
     8,687       8,566     $ 8,214     $ 8,566       8,687       8,699  
 
                                            
Interest expense
     1,306       1,006                       1,306       1,006  
Other (income) expense, net
     (251 )     281                       (251 )     281  
Income tax expense
     3,500       2,740                       3,500       2,787  
 
                                        
Net income
   $ 4,132     $ 4,539                     $ 4,132     $ 4,625  
 
                                        
Earnings per share:
                                                
Basic
   $ 0.20     $ 0.22                     $ 0.20     $ 0.22  
 
                                        
Diluted
   $ 0.20     $ 0.21                     $ 0.20     $ 0.22  
 
                                        

Radio Segment

                                                 
    As-Reported     Same Station     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended  
    December 31,     December 31,     December 31,  
    2004     2003     2004     2003     2004     2003  
Net operating revenue
   $ 32,194     $ 29,495     $ 30,625     $ 29,495     $ 32,194     $ 30,780  
Station operating expense
     21,654       19,794       20,558       19,794       21,654       20,946  
 
                                    
Operating income
   $ 10,540     $ 9,701     $ 10,067     $ 9,701     $ 10,540     $ 9,834  
 
                                    

Television Segment

                                                 
    As-Reported     Same Station     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended  
    December 31,     December 31,     December 31,  
    2004     2003     2004     2003     2004     2003  
Net operating revenue
   $ 3,888     $ 3,438     $ 3,888     $ 3,438     $ 3,888     $ 3,438  
Station operating expense
     3,336       3,008       3,336       3,008       3,336       3,008  
 
                                    
Operating income
   $ 552     $ 430     $ 552     $ 430     $ 552     $ 430  
 
                                    

Depreciation and amortization by segment

                                                 
    As-Reported     Same Station     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended  
    December 31,     December 31,     December 31,  
    2004     2003     2004     2003     2004     2003  
Radio Segment
   $ 1,424     $ 1,232     $ 1,327     $ 1,232     $ 1,424     $ 1,257  
Television Segment
     454       438       454       438       454       438  
Corporate and Other
     50       50       50       50       50       50  
 
                                    
 
   $ 1,928     $ 1,720     $ 1,831     $ 1,720     $ 1,928     $ 1,745  
 
                                    

(1)   Pro Forma results assume all acquisitions and dispositions in 2003 and 2004 occurred as of January 1, 2003.

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Twelve Months Ended
December 31, 2004 and 2003
(amounts in 000’s except per share data)
(Unaudited)

Consolidated

                                                 
    As-Reported     Same Station     Pro Forma (1)  
    Twelve Months Ended     Twelve Months Ended     Twelve Months Ended  
    December 31,     December 31,     December 31,  
    2004     2003     2004     2003     2004     2003  
Net operating revenue
   $ 134,644     $ 121,297     $ 127,072     $ 120,450     $ 135,499     $ 128,269  
Station operating expense
     94,914       86,083       88,699       85,160       95,668       92,237  
Corporate general and administrative
     8,343       6,649       8,343       6,649       8,343       6,649  
 
                                    
Operating income
   $ 31,387     $ 28,565     $ 30,030     $ 28,641     $ 31,488     $ 29,383  
 
                                            
Interest expense
     4,522       4,779                       4,522       4,996  
Other expense, net
     32       1,131                       32       1,131  
Income tax expense
     10,991       8,771                       11,036       9,008  
 
                                        
Net income
   $ 15,842     $ 13,884                     $ 15,898     $ 14,248  
 
                                        
Earnings per share:
                                                
Basic
   $ 0.76     $ 0.67                     $ 0.77     $ 0.68  
 
                                        
Diluted
   $ 0.75     $ 0.65                     $ 0.75     $ 0.67  
 
                                        

Radio Segment

                                                 
    As-Reported     Same Station     Pro Forma (1)  
    Twelve Months Ended     Twelve Months Ended     Twelve Months Ended  
    December 31,     December 31,     December 31,  
    2004     2003     2004     2003     2004     2003  
Net operating revenue
   $ 120,191     $ 109,065     $ 113,764     $ 108,317     $ 121,046     $ 116,037  
Station operating expense
     82,053       74,914       76,830       74,330       82,807       81,068  
 
                                    
Operating income
   $ 38,138     $ 34,151     $ 36,934     $ 33,987     $ 38,239     $ 34,969  
 
                                    

Television Segment

                                                 
    As-Reported     Same Station     Pro Forma (1)  
    Twelve Months Ended     Twelve Months Ended     Twelve Months Ended  
    December 31,     December 31,     December 31,  
    2004     2003     2004     2003     2004     2003  
Net operating revenue
   $ 14,453     $ 12,232     $ 13,308     $ 12,133     $ 14,453     $ 12,232  
Station operating expense
     12,861       11,169       11,869       10,830       12,861       11,169  
 
                                    
Operating income
   $ 1,592     $ 1,063     $ 1,439     $ 1,303     $ 1,592     $ 1,063  
 
                                    

Depreciation and amortization by segment

                                                 
    As-Reported     Same Station     Pro Forma (1)  
    Twelve Months Ended     Twelve Months Ended     Twelve Months Ended  
    December 31,     December 31,     December 31,  
    2004     2003     2004     2003     2004     2003  
Radio Segment
   $ 5,337     $ 5,229     $ 4,957     $ 5,204     $ 5,466     $ 5,572  
Television Segment
     1,717       1,574       1,655       1,530       1,717       1,574  
Corporate and Other
     198       199       198       199       198       199  
 
                                    
 
   $ 7,252     $ 7,002     $ 6,810     $ 6,933     $ 7,381     $ 7,345  
 
                                    

(1)   Pro Forma results assume all acquisitions and dispositions in 2003 and 2004 occurred as of January 1, 2003.

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
Quarterly Proforma Information
December 31, 2004 and 2003
(amounts in 000’s except per share data)
(Unaudited)

Consolidated

                                                                 
    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,  
    2004     2003     2004     2003     2004     2003     2004     2003  
Net operating revenue
   $ 29,954     $ 27,811     $ 35,201     $ 34,048     $ 34,262     $ 32,192     $ 36,082     $ 34,218  
Station operating expense
     22,802       22,295       23,871       23,879       24,005       22,109       24,990       23,954  
Corporate general and administrative
     1,732       1,295       2,279       1,945       1,927       1,844       2,405       1,565  
 
                                                
Operating income
     5,420       4,221       9,051       8,224       8,330       8,239       8,687       8,699  
Interest expense
     1,095       1,607       1,085       1,229       1,036       1,154       1,306       1,006  
Other (income) expense, net
     8       (8 )     65       (357 )     210       1,215       (251 )     281  
Income tax expense
     1,691       1,044       3,080       2,807       2,765       2,370       3,500       2,787  
 
                                                
Net income
   $ 2,626     $ 1,578     $ 4,821     $ 4,545     $ 4,319     $ 3,500     $ 4,132     $ 4,625  
 
                                                
Earnings per share:
                                                                
Basic
   $ 0.13     $ 0.08     $ 0.23     $ 0.22     $ 0.21     $ 0.17     $ 0.20     $ 0.22  
 
                                                
Diluted
   $ 0.12     $ 0.07     $ 0.23     $ 0.21     $ 0.20     $ 0.16     $ 0.20     $ 0.22  
 
                                                

Radio Segment

                                                                 
    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,  
    2004     2003     2004     2003     2004     2003     2004     2003  
Net operating revenue
   $ 26,800     $ 25,195     $ 31,436     $ 30,933     $ 30,616     $ 29,129     $ 32,194     $ 30,780  
Station operating expense
     19,766       19,619       20,607       21,068       20,780       19,435       21,654       20,946  
 
                                                
Operating income
   $ 7,034     $ 5,576     $ 10,829     $ 9,865     $ 9,836     $ 9,694     $ 10,540     $ 9,834  
 
                                                

Television Segment

                                                                 
    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,  
    2004     2003     2004     2003     2004     2003     2004     2003  
Net operating revenue
   $ 3,154     $ 2,616     $ 3,765     $ 3,115     $ 3,646     $ 3,063     $ 3,888     $ 3,438  
Station operating expense
     3,036       2,676       3,264       2,811       3,225       2,674       3,336       3,008  
 
                                                
Operating income (loss)
   $ 118     $ (60 )   $ 501     $ 304     $ 421     $ 389     $ 552     $ 430  
 
                                                

Depreciation and amortization by segment

                                                                 
    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,  
    2004     2003     2004     2003     2004     2003     2004     2003  
Radio Segment
   $ 1,325     $ 1,488     $ 1,357     $ 1,475     $ 1,360     $ 1,352     $ 1,424     $ 1,257  
Television Segment
     415       392       426       391       422       353       454       438  
Corporate and Other
     49       50       50       49       49       50       50       50  
 
                                                
 
   $ 1,789     $ 1,930     $ 1,833     $ 1,915     $ 1,831     $ 1,755     $ 1,928     $ 1,745  
 
                                                

(1)   Pro Forma results assume all acquisitions and dispositions in 2003 and 2004 occurred as of January 1, 2003.

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Three Months Ended
December 31, 2004 and 2003
(amounts in 000’s except per share data)
(Unaudited)

Reconciliation of As-Reported (historical) information to Same Station Operating Income

Consolidated

                                                 
            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,  
    2004     Period     2004     2003     Period     2003  
Net operating revenue
   $ 36,082     $ (1,569 )   $ 34,513     $ 32,933       —     $ 32,933  
Station operating expense
     24,990       (1,096 )     23,894       22,802       —       22,802  
Corporate general and administrative
     2,405       —       2,405       1,565       —       1,565  
 
                                    
Operating income
   $ 8,687     $ (473 )   $ 8,214     $ 8,566       —     $ 8,566  
 
                                    

Radio Segment

                                                 
            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,  
    2004     Period     2004     2003     Period     2003  
Net operating revenue
   $ 32,194     $ (1,569 )   $ 30,625     $ 29,495       —     $ 29,495  
Station operating expense
     21,654       (1,096 )     20,558       19,794       —       19,794  
 
                                    
Operating income
   $ 10,540     $ (473 )   $ 10,067     $ 9,701       —     $ 9,701  
 
                                    

Television Segment

                                                 
            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,  
    2004     Period     2004     2003     Period     2003  
Net operating revenue
   $ 3,888       —     $ 3,888     $ 3,438       —     $ 3,438  
Station operating expense
   $ 3,336       —     $ 3,336     $ 3,008       —     $ 3,008  
 
                                    
Operating income
   $ 552       —     $ 552     $ 430       —     $ 430  
 
                                    

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Twelve Months Ended
December 31, 2004 and 2003
(amounts in 000’s except per share data)
(Unaudited)

Reconciliation of As-Reported (historical) information to Same Station Operating Income

Consolidated

                                                 
            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,  
    2004     Period     2004     2003     Period     2003  
Net operating revenue
   $ 134,644     $ (7,572 )   $ 127,072     $ 121,297     $ (847 )   $ 120,450  
Station operating expense
     94,914       (6,215 )     88,699       86,083       (923 )     85,160  
Corporate general and administrative
     8,343       —       8,343       6,649       —       6,649  
 
                                    
Operating income
   $ 31,387     $ (1,357 )   $ 30,030     $ 28,565     $ 76     $ 28,641  
 
                                    

Radio Segment

                                                 
            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,  
    2004     Period     2004     2003     Period     2003  
Net operating revenue
   $ 120,191     $ (6,427 )   $ 113,764     $ 109,065     $ (748 )   $ 108,317  
Station operating expense
     82,053       (5,223 )     76,830       74,914       (584 )     74,330  
 
                                    
Operating income
   $ 38,138     $ (1,204 )   $ 36,934     $ 34,151     $ (164 )   $ 33,987  
 
                                    

Television Segment

                                                 
            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,  
    2004     Period     2004     2003     Period     2003  
Net operating revenue
   $ 14,453     $ (1,145 )   $ 13,308     $ 12,232     $ (99 )   $ 12,133  
Station operating expense
     12,861       (992 )     11,869       11,169       (339 )     10,830  
 
                                    
Operating income
   $ 1,592     $ (153 )   $ 1,439     $ 1,063     $ 240     $ 1,303