EX-99.1 2 b64799erexv99w1.htm EX-99.1 PRESS RELEASE DATED MAY 9, 2007 exv99w1
 

Exhibit 99.1
Saga Communications, Inc.
Reports 1st Quarter 2007 Results
Contact:
Samuel D. Bush
313/886-7070
Grosse Pointe Farms, MI — May 9, 2007 — Saga Communications, Inc. (NYSE-SGA) today reported net operating revenue for the three month period increased 2.2% from the comparable period in 2006 to $31.9 million, operating income decreased 20.7% to $3.6 million and station operating expense increased 5.2% to $26.0 million (station operating expense includes depreciation and amortization attributable to the stations). Net income decreased 52.0% to $740 thousand ($.04 per fully diluted share) for the quarter ended March 31, 2007 compared to $1.5 million ($.07 per fully diluted share) for 2006. Free cash flow decreased to $859 thousand for the quarter from $1.9 million for the comparable period last year. On a same station basis for the year, net operating revenue increased 2.0% to $31.8 million, operating income decreased 20.0% to $3.6 million and station operating expense increased 4.8% to $25.9 million.
For the quarter, even with a $284 thousand reduction in gross political revenue, the company’s net operating revenue increased $692 thousand. Station operating expenses increased $1.3 million for the quarter, $722 thousand of which was related to our decision to continue to invest in the future of our business with additional advertising and promotion expense as well as additional sales compensation expense. In addition, $165 thousand of the increase in station operating expense was due to an increase in our health care costs. Adjusted for these specific expense increases our overall station operating expenses increased 2%.
Capital expenditures in the first quarter of 2007 were approximately $2.4 million with approximately $923 thousand being spent as a result of acquisitions and $160 thousand was as a part of our ongoing HD Radio conversions. Capital expenditures in the first quarter of 2006 were approximately $2.0 million with approximately $400 thousand being spent as a result of acquisitions. We continue to expect our 2007 annual capital expenditures to be $10.0 million compared to $10.5 million in 2006.
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 2007 and 2006 acquisitions and dispositions occurred as of January 1, 2006.
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 59 FM and 30 AM radio stations, 3 state radio networks, 2 farm radio networks, 5 television stations and 4 low-power television stations. As previously disclosed, the Company has entered into agreements to acquire an FM station serving the Asheville, NC radio market and an AM station and a FM station serving the Courtland, NY radio market. The closing of this transaction is subject to receiving FCC approval. For additional information, contact us at (313) 886-7070 or visit our website at www.sagacommunications.com.
Saga’s first quarter 2007 results conference call will be on Wednesday, May 9 at 2:00 PM. The dial in number for domestic calls is 800/762-6568. For international callers the number is 480/248-5088. The call can be replayed for 7 days by calling domestically 800/475-6701 or internationally 320/365-3844 and referring to access code 872223. 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 Months Ended
March 31, 2007 and 2006
(amounts in 000’s except per share data)
(Unaudited)
                 
    Three Months Ended
    March 31,
    2007   2006
     
Operating Results
                
Net operating revenue
   $ 31,883     $ 31,191  
Station operating expense
     25,995       24,703  
Corporate general and administrative
     2,316       1,981  
     
Operating income
     3,572       4,507  
Interest expense
     2,297       2,277  
Other expense (income), net
     35       (355 )
     
Income before income tax
     1,240       2,585  
Income tax expense
     500       1,060  
     
Net income
   $ 740     $ 1,525  
     
Earnings per share
                
Basic
   $ 0.04     $ 0.07  
     
Diluted
   $ 0.04     $ 0.07  
     
Weighted average common shares
     20,221       20,480  
Weighted average common shares and common shares equivalents
     20,242       20,503  
 
                
Free Cash Flow
                
Net income
  $ 740     $ 1,525  
Plus: Depreciation and amortization:
                
Station
     1,895       1,931  
Corporate
     47       48  
Deferred tax provision
     270       460  
Non-cash compensation
     286       230  
Other expense (income), net
     35       (355 )
Less: Capital expenditures
     (2,414 )     (1,967 )
     
Free cash flow
   $ 859     $ 1,872  
     
 
                
Balance Sheet Data
                
Working capital
   $ 18,544     $ 24,222  
Net fixed assets
     74,146       69,621  
Net intangible assets and other assets
     211,929       206,116  
Total assets
     318,564       312,061  
Long term debt (including current portion of $0 and $0, respectively)
     131,911       141,911  
Stockholders’ equity
     137,306       127,610  

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
March 31, 2007 and 2006
(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,
    2007   2006   2007   2006   2007   2006
             
Consolidated
                                                
Net operating revenue
   $ 31,883     $ 31,191     $ 31,814     $ 31,191     $ 31,883     $ 31,191  
Station operating expense
     25,995       24,703       25,894       24,703       25,995       24,703  
Corporate general and administrative
     2,316       1,981       2,316       1,981       2,316       1,981  
             
Operating income
     3,572       4,507     $ 3,604     $ 4,507       3,572       4,507  
Interest expense
     2,297       2,277                       2,297       2,277  
Other expense (income), net
     35       (355 )                     35       (355 )
Income tax expense
     500       1,060                       500       1,060  
                         
Net income
   $ 740     $ 1,525                     $ 740     $ 1,525  
                         
Earnings per share:
                                                
Basic
   $ 0.04     $ 0.07                     $ 0.04     $ 0.07  
                         
Diluted
   $ 0.04     $ 0.07                     $ 0.04     $ 0.07  
                         
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Three Months Ended   Three Months Ended   Three Months Ended
    March 31,   March 31,   March 31,
    2007   2006   2007   2006   2007   2006
             
Radio Segment
                                                
Net operating revenue
   $ 27,893     $ 27,280     $ 27,824     $ 27,280     $ 27,893     $ 27,280  
Station operating expense
     22,513       21,415       22,412       21,415       22,513       21,415  
             
Operating income
   $ 5,380     $ 5,865     $ 5,412     $ 5,865     $ 5,380     $ 5,865  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Three Months Ended   Three Months Ended   Three Months Ended
    March 31,   March 31,   March 31,
    2007   2006   2007   2006   2007   2006
             
Television Segment
                                                
Net operating revenue
   $ 3,990     $ 3,911     $ 3,990     $ 3,911     $ 3,990     $ 3,911  
Station operating expense
     3,482       3,288       3,482       3,288       3,482       3,288  
             
Operating income
   $ 508     $ 623     $ 508     $ 623     $ 508     $ 623  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Three Months Ended   Three Months Ended   Three Months Ended
    March 31,   March 31,   March 31,
    2007   2006   2007   2006   2007   2006
             
Depreciation and Amortization by Segment
                                                
Radio Segment
   $ 1,506     $ 1,539     $ 1,473     $ 1,539     $ 1,506     $ 1,539  
Television Segment
     389       392       389       392       389       392  
Corporate and Other
     47       48       47       48       47       48  
             
 
   $ 1,942     $ 1,979     $ 1,909     $ 1,979     $ 1,942     $ 1,979  
             
 
(1)   Pro Forma results assume all acquisitions and dispositions in 2006 and 2007 occurred as of January 1, 2006.

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
Quarterly Proforma Information
March 31, 2007 and 2006
(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,  
    2007     2006     2006     2006     2006  
                       
Consolidated
                                        
Net operating revenue
   $ 31,883     $ 31,191     $ 37,745     $ 35,791     $ 38,219  
Station operating expense
     25,995       24,703       26,369       25,761       27,563  
Corporate general and administrative
     2,316       1,981       2,499       2,225       2,165  
Other operating income
     —       —       —       —       (312 )
                       
Operating income
     3,572       4,507       8,877       7,805       8,803  
Interest expense
     2,297       2,277       2,355       2,375       2,372  
Other expense (income), net
     35       (355 )     (215 )     (75 )     145  
Income tax expense
     500       1,060       2,749       2,241       2,615  
                       
Net income
   $ 740     $ 1,525     $ 3,988     $ 3,264     $ 3,671  
                       
Earnings per share:
                                        
Basic
   $ 0.04     $ 0.07     $ 0.19     $ 0.16     $ 0.18  
                       
Diluted
   $ 0.04     $ 0.07     $ 0.19     $ 0.16     $ 0.18  
                       
                                         
    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,  
    2007     2006     2006     2006     2006  
                       
Radio Segment
                                        
Net operating revenue
   $ 27,893     $ 27,280     $ 33,418     $ 31,402     $ 33,174  
Station operating expense
     22,513       21,415       22,960       22,300       23,952  
Other operating income
     —       —       —       —       (312 )
                       
Operating income
   $ 5,380     $ 5,865     $ 10,458     $ 9,102     $ 9,534  
                       
                                         
    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,  
    2007     2006     2006     2006     2006  
                       
Television Segment
                                        
Net operating revenue
   $ 3,990     $ 3,911     $ 4,327     $ 4,389     $ 5,045  
Station operating expense
     3,482       3,288       3,409       3,461       3,611  
                       
Operating income
   $ 508     $ 623     $ 918     $ 928     $ 1,434  
                       
                                         
    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,  
    2007     2006     2006     2006     2006  
                       
Depreciation and Amortization by Segment
                                        
Radio Segment
   $ 1,506     $ 1,539     $ 1,536     $ 1,494     $ 1,719  
Television Segment
     389       392       414       409       458  
Corporate and Other
     47       48       48       48       50  
                       
 
   $ 1,942     $ 1,979     $ 1,998     $ 1,951     $ 2,227  
                       
 
(1)   Pro Forma results assume all acquisitions and dispositions in 2006 and 2007 occurred as of January 1, 2006.

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Three Months Ended
March 31, 2007 and 2006
(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  
    March 31,     Entire Comparable     March 31,     March 31,     Entire Comparable     March 31,  
    2007     Period     2007     2006     Period     2006  
         
Consolidated
                                                
Net operating revenue
   $ 31,883     $ (69 )   $ 31,814     $ 31,191       —     $ 31,191  
Station operating expense
     25,995       (101 )     25,894       24,703       —       24,703  
Corporate general and administrative
     2,316       —       2,316       1,981       —       1,981  
 
                                    
Operating income
   $ 3,572     $ 32     $ 3,604     $ 4,507       —     $ 4,507  
 
                                    
                                                 
            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,  
    2007     Period     2007     2006     Period     2006  
         
Radio Segment
                                                
Net operating revenue
   $ 27,893     $ (69 )   $ 27,824     $ 27,280       —     $ 27,280  
Station operating expense
     22,513       (101 )     22,412       21,415       —       21,415  
 
                                    
Operating income
   $ 5,380     $ 32     $ 5,412     $ 5,865       —     $ 5,865  
 
                                    
                                                 
            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,  
    2007     Period     2007     2006     Period     2006  
         
Television Segment
                                                
Net operating revenue
   $ 3,990       —     $ 3,990     $ 3,911       —     $ 3,911  
Station operating expense
     3,482       —       3,482       3,288       —       3,288  
 
                                    
Operating income
   $ 508       —     $ 508     $ 623       —     $ 623