EX-99.1 2 b54961scexv99w1.htm EX-99.1 PRESS RELEASE DATED MAY 3, 2005 exv99w1
 

Saga Communications, Inc.
Reports 1st Quarter 2005 Results

Contact:
Samuel D. Bush
313/886-7070

Grosse Pointe Farms, MI – May 3, 2005 – Saga Communications, Inc. (NYSE-SGA) today reported net operating revenue increased 9.1% over the comparable period in 2004 to approximately $31.8 million, operating income increased 1.9% to approximately $5.4 million and net income was approximately $2.2 million ($.10 per fully diluted share) for the quarter ended March 31, 2005 compared to $2.5 million ($.12 per fully diluted share) for the comparable period in 2004. For the same period, station operating expense increased 11.3% to approximately $24.7 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the quarter, net operating revenue increased 2.9% to approximately $29.8 million, operating income increased 1.5% to $5.3 million and station operating expense increased 3.3% to $22.8 million.

Capital expenditures in the first quarter of 2005 were approximately $4.3 million of which approximately $1.7 million was routine capital expenditures and $2.6 million resulted from other activities including $628 thousand as a result of acquisitions which included $428 thousand on the expansion and renovation of our Columbus, OH studio facilities due to the purchase of WJZA-FM and WJZK-FM and $200 thousand on the completion of our tower project to move WINQ-FM into the Keene, NH market where we already operate 2 AM’s and 2 FM’s. Saga’s Des Moines, IA studio site that was previously leased was purchased for $1.1 million eliminating future lease expense and our DTV and related television projects continued with approximately $907 thousand being spent during the quarter.

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 2005 and 2004 acquisitions and dispositions occurred as of January 1, 2004.

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 4 low-power television stations. As previously disclosed, 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 first quarter 2005 results conference call will be on Tuesday, May 3 at 2:00 PM. The dial in number for domestic calls is 888/273-9885. 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 728081. 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 Month Periods
Ended March 31, 2005 and 2004
(amounts in 000’s except per share data)
(Unaudited)

                 
    Three Months Ended  
    March 31,  
    2005     2004  
Operating Results
                
Net operating revenue
   $ 31,830     $ 29,173  
Station operating expense
     24,698       22,185  
Corporate general and administrative
     1,778       1,732  
     
Operating income
     5,354       5,256  
Interest expense
     1,623       1,095  
Other expense, net
     67       8  
     
Income before income tax
     3,664       4,153  
Income tax expense
     1,499       1,622  
     
Net income
     2,165     $ 2,531  
     
Earnings per share:
                
Basic
   $ .10     $ .12  
     
Diluted
   $ .10     $ .12  
     
Weighted average common shares
     20,631       20,809  
Weighted average common shares and common equivalent
     20,941       21,281  
 
                
Free Cash Flow
                
Net income
     2,165     $ 2,531  
Plus: Depreciation and amortization:
                
Station
     2,095       1,667  
Corporate
     50       49  
Deferred tax provision
     561       665  
Less: Capital expenditures
     (4,267 )     (2,531 )
     
Free cash flow
   $ 604     $ 2,381  
     
 
                
Balance Sheet Data
                
Working capital
   $ 17,141     $ 24,048  
Net fixed assets
     71,268       63,418  
Net intangible and other assets
     196,568       164,094  
Total assets
     302,243       265,835  
Long term debt (including current portion of $1,061 and $18, respectively)
     140,911       121,178  
Stockholders’ equity
     118,665       109,508  

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
March 31, 2005 and 2004
(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  
    March 31,     March 31,     March 31,  
    2005     2004     2005     2004     2005     2004  
Consolidated
                                                
Net operating revenue
   $ 31,830     $ 29,173     $ 29,844     $ 29,003     $ 31,830     $ 31,003  
Station operating expense
     24,698       22,185       22,812       22,093       24,698       23,741  
Corporate general and administrative
     1,778       1,732       1,778       1,732       1,778       1,732  
             
Operating income
     5,354       5,256       5,254       5,178       5,354       5,530  
Interest expense
     1,623       1,095                       1,623       1,296  
Other expense, net
     67       8                       67       8  
Income tax expense
     1,499       1,622                       1,499       1,656  
                         
Net income
   $ 2,165     $ 2,531                     $ 2,165     $ 2,570  
                         
Earnings per share:
                                                
Basic
   $ 0.10     $ 0.12                     $ 0.10     $ 0.12  
                         
Diluted
   $ 0.10     $ 0.12                     $ 0.10     $ 0.12  
                         
                                                 
    As-Reported     Same Station     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended  
    March 31,     March 31,     March 31,  
    2005     2004     2005     2004     2005     2004  
Radio Segment
                                                
Net operating revenue
   $ 28,372     $ 26,019     $ 26,386     $ 25,849     $ 28,372     $ 27,849  
Station operating expense
     21,409       19,149       19,523       19,057       21,409       20,705  
             
Operating income
   $ 6,963     $ 6,870     $ 6,863     $ 6,792     $ 6,963     $ 7,144  
             
                                                 
    As-Reported     Same Station     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended  
    March 31,     March 31,     March 31,  
    2005     2004     2005     2004     2005     2004  
Television Segment
                                                
Net operating revenue
   $ 3,458     $ 3,154     $ 3,458     $ 3,154     $ 3,458     $ 3,154  
Station operating expense
     3,289       3,036       3,289       3,036       3,289       3,036  
             
Operating income
   $ 169     $ 118     $ 169     $ 118     $ 169     $ 118  
             
                                                 
    As-Reported     Same Station     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended  
    March 31,     March 31,     March 31,  
    2005     2004     2005     2004     2005     2004  
Depreciation and amortization by segment
                                                
Radio Segment
   $ 1,653     $ 1,252     $ 1,310     $ 1,252     $ 1,653     $ 1,611  
Television Segment
     442       415       442       415       442       415  
Corporate and Other
     50       49       50       49       50       49  
             
 
   $ 2,145     $ 1,716     $ 1,802     $ 1,716     $ 2,145     $ 2,075  
             

(1) Pro Forma results assume all acquisitions and dispositions in 2004 and 2005 occurred as of January 1, 2004.

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
Quarterly Proforma Information
March 31, 2005 and 2004
(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,  
    2005     2004     2004     2004     2004  
Consolidated
                                        
Net operating revenue
     31,830     $ 31,003     $ 36,306     $ 35,362     $ 37,318  
Station operating expense
     24,698       23,741       24,805       24,866       25,885  
Corporate general and administrative
     1,778       1,732       2,279       1,927       2,405  
 
                          
Operating income
     5,354       5,530       9,222       8,569       9,028  
Interest expense
     1,623       1,296       1,286       1,237       1,507  
Other (income) expense, net
     67       8       65       210       (251 )
Income tax expense
     1,499       1,656       3,069       2,780       3,553  
 
                          
Net income
   $ 2,165     $ 2,570     $ 4,802     $ 4,342     $ 4,219  
 
                          
Earnings per share:
                                        
Basic
   $ 0.10     $ 0.12     $ 0.23     $ 0.21     $ 0.20  
 
                          
Diluted
   $ 0.10     $ 0.12     $ 0.23     $ 0.21     $ 0.20  
 
                          
                                         
    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,  
    2005     2004     2004     2004     2004  
Radio Segment
                                        
Net operating revenue
   $ 28,372     $ 27,849     $ 32,541     $ 31,716     $ 33,430  
Station operating expense
     21,409       20,705       21,541       21,641       22,549  
 
                          
Operating income
   $ 6,963     $ 7,144     $ 11,000     $ 10,075     $ 10,881  
 
                          
                                         
    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,  
    2005     2004     2004     2004     2004  
Television Segment
                                        
Net operating revenue
   $ 3,458     $ 3,154     $ 3,765     $ 3,646     $ 3,888  
Station operating expense
     3,289       3,036       3,264       3,225       3,336  
 
                          
Operating income
   $ 169     $ 118     $ 501     $ 421     $ 552  
 
                          
                                         
    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,  
    2005     2004     2004     2004     2004  
Depreciation and amortization by segment
                                        
Radio Segment
   $ 1,653     $ 1,611     $ 1,643     $ 1,647     $ 1,709  
Television Segment
     442       415       426       422       454  
Corporate and Other
     50       49       50       49       50  
 
                          
 
   $ 2,145     $ 2,075     $ 2,119     $ 2,118     $ 2,213  
 
                          

(1) Pro Forma results assume all acquisitions and dispositions in 2004 and 2005 occurred as of January 1, 2004.

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Three Months Ended
March 31, 2005 and 2004
(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  
    March 31,     Entire Comparable     March 31,     March 31,     Entire Comparable     March 31,  
    2005     Period     2005     2004     Period     2004  
Consolidated
                                                
Net operating revenue
   $ 31,830       ($1,986 )   $ 29,844     $ 29,173       ($170 )   $ 29,003  
Station operating expense
     24,698       (1,886 )     22,812       22,185       (92 )     22,093  
Corporate general and administrative
     1,778       —       1,778       1,732       —       1,732  
 
                                    
Operating income
   $ 5,354       ($100 )   $ 5,254     $ 5,256       ($78 )   $ 5,178  
 
                                    
                                                 
            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  
    March 31,     Entire Comparable     March 31,     March 31,     Entire Comparable     March 31,  
    2005     Period     2005     2004     Period     2004  
Radio Segment
                                                
Net operating revenue
   $ 28,372       ($1,986 )   $ 26,386     $ 26,019       ($170 )   $ 25,849  
Station operating expense
     21,409       (1,886 )     19,523       19,149       (92 )     19,057  
 
                                    
Operating income
   $ 6,963       ($100 )   $ 6,863     $ 6,870       ( $78 )   $ 6,792  
 
                                    
                                                 
            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  
    March 31,     Entire Comparable     March 31,     March 31,     Entire Comparable     March 31,  
    2005     Period     2005     2004     Period     2004  
Television Segment
                                                
Net operating revenue
   $ 3,458     $ 0     $ 3,458     $ 3,154     $ 0     $ 3,154  
Station operating expense
     3,289       0       3,289       3,036       0       3,036  
 
                                    
Operating income
   $ 169     $ 0     $ 169     $ 118     $ 0     $ 118