EX-99.1 2 b66417scexv99w1.htm EX-99.1 PRESS RELEASE DATED AUGUST 9, 2007. exv99w1
 

Exhibit 99.1
Saga Communications, Inc.
Reports 2nd Quarter 2007 Results
Contact:
Samuel D. Bush
313/886-7070
Grosse Pointe Farms, MI — August 9, 2007 — Saga Communications, Inc. (NYSE-SGA) today reported that 2nd quarter 2007 net operating revenue increased 1.8% over the comparable period in 2006 to $38.4 million and operating income was approximately flat at $8.8 million. Net income decreased $178 thousand to $3.8 million ($.19 per fully diluted share) for the quarter ended June 30, 2007 compared to $4.0 million ($.19 per fully diluted share) for the comparable period in 2006. Free Cash Flow increased $878 thousand to $5.6 million. For the same period, station operating expense increased $647 thousand to $27.0 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the quarter, net operating revenue increased 1.5% to $38.3 million, operating income was approximately flat at $8.8 million and station operating expense increased $486 thousand to $26.9 million.
For the six month period ended June 30, 2007, net operating revenue increased 2.0% over the comparable period in 2006 to $70.3 million, operating income decreased $1.0 million to $12.4 million and net income decreased $963 thousand to $4.6 million ($.23 per fully diluted share) compared to $5.5 million ($.27 per fully diluted share) for the comparable period in 2006. Free Cash Flow decreased $135 thousand. For the same period, station operating expense increased $1.9 million to approximately $53.0 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the six months, net operating revenue increased 1.7% to $70.1 million, operating income decreased $942 thousand to $12.4 million and station operating expense increased $1.7 million to $52.8 million.
Capital expenditures in the second quarter of 2007 were $2.2 million of which $420 thousand were as a result of acquisitions and $360 thousand were related to digital radio. For the six months capital expenditures were $4.6 million of which $1.3 million were as a result of acquisitions and $520 thousand were related to digital radio. Currently we expect capital expenditures for the year to be approximately $10.5 million.

 

 

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 Company also expects to enter into an agreement to acquire an FM radio station serving the Portland, ME radio market. The closing of these transactions are subject to receiving FCC approvals. For additional information, contact us at (313) 886-7070 or visit our website at www.sagacommunications.com.
Saga’s second quarter 2007 results conference call will be on Thursday, August 9 at 2:00 PM EDT. The dial in number for domestic calls is 800/230-1059. For international callers the number is 612/332-0923. The call can be replayed for 7 days by calling domestically 800/475-6701 or internationally 320/365-3844 and referring to access code 881704. 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 Six Months Ended
June 30, 2007 and 2006
(amounts in 000’s except per share data)
(Unaudited)
                                 
    Three Months Ended   Six Months Ended
    June 30,   June 30,
    2007   2006   2007   2006
Operating Results
                                
Net operating revenue
   $ 38,421     $ 37,745     $ 70,304     $ 68,936  
Station operating expense
     27,016       26,369       53,011       51,072  
Corporate general and administrative
     2,606       2,499       4,922       4,480  
     
Operating income
     8,799       8,877       12,371       13,384  
Interest expense
     2,281       2,355       4,578       4,632  
Other expense (income), net
     47       (215 )     82       (570 )
     
Income before income tax
     6,471       6,737       7,711       9,322  
Income tax expense
     2,661       2,749       3,161       3,809  
     
Net income
   $ 3,810     $ 3,988     $ 4,550     $ 5,513  
     
Earnings per share
                                
Basic
   $ 0.19     $ 0.19     $ 0.23     $ 0.27  
     
Diluted
   $ 0.19     $ 0.19     $ 0.23     $ 0.27  
     
Weighted average common shares
     20,083       20,575       20,066       20,528  
Weighted average common shares and common shares equivalents
     20,113       20,593       20,101       20,547  
 
                                
Free Cash Flow
                                
Net income
   $ 3,810     $ 3,988     $ 4,550     $ 5,513  
Plus: Depreciation and amortization:
                                
Station
     1,939       1,950       3,834       3,881  
Corporate
     51       48       98       96  
Deferred tax provision
     1,557       1,311       1,827       1,771  
Non-cash compensation
     329       369       615       599  
Other expense (income), net
     47       (215 )     82       (570 )
Less: Capital expenditures
     (2,149 )     (2,745 )     (4,563 )     (4,712 )
     
Free cash flow
   $ 5,584     $ 4,706     $ 6,443     $ 6,578  
     
 
                                
Balance Sheet Data
                                
Working capital
                   $ 20,886     $ 21,755  
Net fixed assets
                     74,308       70,337  
Net intangible assets and other assets
                     213,427       208,203  
Total assets
                     325,668       316,783  
Long term debt (including current portion of $0 and $0, respectively)
                     129,911       136,911  
Stockholders’ equity
                     141,761       131,210  

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
June 30, 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
    June 30,   June 30,   June 30,
    2007   2006   2007   2006   2007   2006
Consolidated
                                                
Net operating revenue
   $ 38,421     $ 37,745     $ 38,300     $ 37,745     $ 38,421     $ 37,745  
Station operating expense
     27,016       26,369       26,855       26,369       27,016       26,369  
Corporate general and administrative
     2,606       2,499       2,606       2,499       2,606       2,499  
             
Operating income
     8,799       8,877     $ 8,839     $ 8,877       8,799       8,877  
Interest expense
     2,281       2,355                       2,281       2,355  
Other expense (income), net
     47       (215 )                     47       (215 )
Income tax expense
     2,661       2,749                       2,661       2,749  
                         
Net income
   $ 3,810     $ 3,988                     $ 3,810     $ 3,988  
                         
Earnings per share:
                                                
Basic
   $ 0.19     $ 0.19                     $ 0.19     $ 0.19  
                         
Diluted
   $ 0.19     $ 0.19                     $ 0.19     $ 0.19  
                         
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Three Months Ended   Three Months Ended   Three Months Ended
    June 30,   June 30,   June 30,
    2007   2006   2007   2006   2007   2006
Radio Segment
                                                
Net operating revenue
   $ 33,843     $ 33,418     $ 33,722     $ 33,418     $ 33,843     $ 33,418  
Station operating expense
     23,455       22,960       23,294       22,960       23,455       22,960  
             
Operating income
   $ 10,388     $ 10,458     $ 10,428     $ 10,458     $ 10,388     $ 10,458  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Three Months Ended   Three Months Ended   Three Months Ended
    June 30,   June 30,   June 30,
    2007   2006   2007   2006   2007   2006
Television Segment
                                                
Net operating revenue
   $ 4,578     $ 4,327     $ 4,578     $ 4,327     $ 4,578     $ 4,327  
Station operating expense
     3,561       3,409       3,561       3,409       3,561       3,409  
             
Operating income
   $ 1,017     $ 918     $ 1,017     $ 918     $ 1,017     $ 918  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Three Months Ended   Three Months Ended   Three Months Ended
    June 30,   June 30,   June 30,
    2007   2006   2007   2006   2007   2006
Depreciation and amortization by segment
                                                
Radio Segment
   $ 1,539     $ 1,536     $ 1,506     $ 1,536     $ 1,539     $ 1,536  
Television Segment
     400       414       400       414       400       414  
Corporate and Other
     51       48       51       48       51       48  
             
 
   $ 1,990     $ 1,998     $ 1,957     $ 1,998     $ 1,990     $ 1,998  
             
 
(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
For the Six Months Ended
June 30, 2007 and 2006
(amounts in 000’s except per share data)
(Unaudited)
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Six Months Ended   Six Months Ended   Six Months Ended
    June 30,   June 30,   June 30,
    2007   2006   2007   2006   2007   2006
Consolidated
                                                
Net operating revenue
   $ 70,304     $ 68,936     $ 70,114     $ 68,936     $ 70,304     $ 68,936  
Station operating expense
     53,011       51,072       52,750       51,072       53,011       51,072  
Corporate general and administrative
     4,922       4,480       4,922       4,480       4,922       4,480  
             
Operating income
     12,371       13,384     $ 12,442     $ 13,384       12,371       13,384  
Interest expense
     4,578       4,632                       4,578       4,632  
Other expense (income), net
     82       (570 )                     82       (570 )
Income tax expense
     3,161       3,809                       3,161       3,809  
                         
Net income
   $ 4,550     $ 5,513                     $ 4,550     $ 5,513  
                         
Earnings per share:
                                                
Basic
   $ 0.23     $ 0.27                     $ 0.23     $ 0.27  
                         
Diluted
   $ 0.23     $ 0.27                     $ 0.23     $ 0.27  
                         
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Six Months Ended   Six Months Ended   Six Months Ended
    June 30,   June 30,   June 30,
    2007   2006   2007   2006   2007   2006
Radio Segment
                                                
Net operating revenue
   $ 61,736     $ 60,698     $ 61,546     $ 60,698     $ 61,736     $ 60,698  
Station operating expense
     45,968       44,375       45,707       44,375       45,968       44,375  
             
Operating income
   $ 15,768     $ 16,323     $ 15,839     $ 16,323     $ 15,768     $ 16,323  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Six Months Ended   Six Months Ended   Six Months Ended
    June 30,   June 30,   June 30,
    2007   2006   2007   2006   2007   2006
Television Segment
                                                
Net operating revenue
   $ 8,568     $ 8,238     $ 8,568     $ 8,238     $ 8,568     $ 8,238  
Station operating expense
     7,043       6,697       7,043       6,697       7,043       6,697  
             
Operating income
   $ 1,525     $ 1,541     $ 1,525     $ 1,541     $ 1,525     $ 1,541  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Six Months Ended   Six Months Ended   Six Months Ended
    June 30,   June 30,   June 30,
    2007   2006   2007   2006   2007   2006
Depreciation and amortization by segment
                                                
Radio Segment
   $ 3,045     $ 3,075     $ 2,980     $ 3,075     $ 3,045     $ 3,075  
Television Segment
     789       806       789       806       789       806  
Corporate and Other
     98       96       98       96       98       96  
             
 
   $ 3,932     $ 3,977     $ 3,867     $ 3,977     $ 3,932     $ 3,977  
             
 
(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
June 30, 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     2007     2006     2006     2006  
Consolidated
                                                
Net operating revenue
   $ 31,883     $ 31,191     $ 38,421     $ 37,745     $ 35,791     $ 38,219  
Station operating expense
     25,995       24,703       27,016       26,369       25,761       27,563  
Corporate general and administrative
     2,316       1,981       2,606       2,499       2,225       2,165  
Other operating income
     —       —       —       —       —       (312 )
 
                                    
Operating income
     3,572       4,507       8,799       8,877       7,805       8,803  
Interest expense
     2,297       2,277       2,281       2,355       2,375       2,372  
Other expense (income), net
     35       (355 )     47       (215 )     (75 )     145  
Income tax expense
     500       1,060       2,661       2,749       2,241       2,615  
 
                                    
Net income
   $ 740     $ 1,525     $ 3,810     $ 3,988     $ 3,264     $ 3,671  
 
                                    
Earnings per share:
                                                
Basic
   $ 0.04     $ 0.07     $ 0.19     $ 0.19     $ 0.16     $ 0.18  
 
                                    
Diluted
   $ 0.04     $ 0.07     $ 0.19     $ 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     2007     2006     2006     2006  
Radio Segment
                                                
Net operating revenue
   $ 27,893     $ 27,280     $ 33,843     $ 33,418     $ 31,402     $ 33,174  
Station operating expense
     22,513       21,415       23,455       22,960       22,300       23,952  
Other operating income
     —       —       —       —       —       (312 )
 
                                    
Operating income
   $ 5,380     $ 5,865     $ 10,388     $ 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     2007     2006     2006     2006  
Television Segment
                                                
Net operating revenue
   $ 3,990     $ 3,911     $ 4,578     $ 4,327     $ 4,389     $ 5,045  
Station operating expense
     3,482       3,288       3,561       3,409       3,461       3,611  
 
                                    
Operating income
   $ 508     $ 623     $ 1,017     $ 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     2007     2006     2006     2006  
Depreciation and amortization by segment
                                                
Radio Segment
   $ 1,506     $ 1,539     $ 1,539     $ 1,536     $ 1,494     $ 1,719  
Television Segment
     389       392       400       414       409       458  
Corporate and Other
     47       48       51       48       48       50  
 
                                    
 
   $ 1,942     $ 1,979     $ 1,990     $ 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
June 30, 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  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2007     Period     2007     2006     Period     2006  
         
Consolidated
                                                
Net operating revenue
   $ 38,421     $ (121 )   $ 38,300     $ 37,745       —     $ 37,745  
Station operating expense
     27,016       (161 )     26,855       26,369       —       26,369  
Corporate general and administrative
     2,606       —       2,606       2,499       —       2,499  
 
                                    
Operating income
   $ 8,799     $ 40     $ 8,839     $ 8,877       —     $ 8,877  
 
                                    
                                                 
            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  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2007     Period     2007     2006     Period     2006  
         
Radio Segment
                                                
Net operating revenue
   $ 33,843     $ (121 )   $ 33,722     $ 33,418       —     $ 33,418  
Station operating expense
     23,455       (161 )     23,294       22,960       —       22,960  
 
                                    
Operating income
   $ 10,388     $ 40     $ 10,428     $ 10,458       —     $ 10,458  
 
                                    
                                                 
            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  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2007     Period     2007     2006     Period     2006  
         
Television Segment
                                                
Net operating revenue
   $ 4,578       —     $ 4,578     $ 4,327       —     $ 4,327  
Station operating expense
     3,561       —       3,561       3,409       —       3,409  
 
                                    
Operating income
   $ 1,017       —     $ 1,017     $ 918       —     $ 918  
 
                                    

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Six Months Ended
June 30, 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  
    Six Months     and Dispositions     Six Months     Six Months     and Dispositions     Six Months  
    Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2007     Period     2007     2006     Period     2006  
         
Consolidated
                                                
Net operating revenue
   $ 70,304     $ (190 )   $ 70,114     $ 68,936       —     $ 68,936  
Station operating expense
     53,011       (261 )     52,750       51,072       —       51,072  
Corporate general and administrative
     4,922       —       4,922       4,480       —       4,480  
 
                                    
Operating income
   $ 12,371     $ 71     $ 12,442     $ 13,384       —     $ 13,384  
 
                                    
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Six Months     and Dispositions     Six Months     Six Months     and Dispositions     Six Months  
    Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2007     Period     2007     2006     Period     2006  
         
Radio Segment
                                                
Net operating revenue
   $ 61,736     $  (190 )   $ 61,546     $ 60,698       —     $ 60,698  
Station operating expense
     45,968       (261 )     45,707       44,375       —       44,375  
 
                                    
Operating income
   $ 15,768     $ 71     $ 15,839     $ 16,323       —     $ 16,323  
 
                                    
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Six Months     and Dispositions     Six Months     Six Months     and Dispositions     Six Months  
    Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2007     Period     2007     2006     Period     2006  
         
Television Segment
                                                
Net operating revenue
   $ 8,568       —     $ 8,568     $ 8,238       —     $ 8,238  
Station operating expense
     7,043       —       7,043       6,697       —       6,697  
 
                                    
Operating income
   $ 1,525       —     $ 1,525     $ 1,541       —     $ 1,541