EX-99.1 2 b74541scexv99w1.htm EX-99.1 PRESS RELEASE DATED MARCH 10, 2009 exv99w1
Exhibit 99.1
Saga Communications, Inc.
Reports Preliminary 4th Quarter and Year End 2008 Results
and Intent to File Notification of Late Filing for Form 10-K
Contact:
Samuel D. Bush
313/886-7070
Grosse Pointe Farms, MI – March 10, 2009 – Saga Communications, Inc. (NYSE Alternext US-SGA) today reported free cash flow increased 17.3% to $18.9 million for the year. Net operating revenue for the year ended December 31, 2008 decreased 2.8% over the comparable period in 2007 to $140.0 million. Station operating expense decreased 0.5% to $105.8 million (station operating expense includes depreciation and amortization attributable to the stations) and operating income (excluding non-cash impairment charge) decreased 11.6% to $24.7 million. On a same station basis for the year, net operating revenue decreased 3.5% to $138.6 million, operating income (excluding non-cash impairment charge) decreased 12.6% to $24.3 million and station operating expense decreased 1.2% to $104.8 million.
For the quarter ended December 31, 2008 free cash flow increased 42.0% to $5.9 million for the quarter. Net operating revenue decreased 7.0% from the comparable period in 2007 to $35.0 million. Station operating expense decreased 2.8% to $26.6 million (station operating expense includes depreciation and amortization attributable to the stations) and operating income (excluding non-cash impairment charge) decreased 21.2% to $6.0 million. On a same station basis for the quarter, net operating revenue decreased 7.2% to $34.7 million, operating income (excluding non-cash impairment charge) decreased 21.0% to $6.0 million and station operating expense decreased 3.1% to $26.4 million.
The Company has not finalized the fourth quarter non-cash impairment charge and its related tax impact (which could be significant) and therefore is not releasing net income (loss) or earnings (loss) per basic and diluted share at this time. The Company has also not included the non-cash impairment charge and its related tax impact in the attached unaudited financial information. Based on a combination of factors, including the current economic environment, the Company’s operating results and current market valuation, the Company has concluded that it is likely that the value of certain intangible assets will

 

 

be reduced below their current carrying value. The Company is continuing to conduct their required impairment analysis to determine the amount of the non-cash impairment charge. As a result of its ongoing impairment analysis, the Company expects to be filing a Notification of Late Filing in accordance with Rule 12b-25 of the Securities Exchange Act of 1934, as amended, with the Securities and Exchange Commission (the “SEC”) for its Annual Report on Form 10-K for the fiscal year ended December 31, 2008. The Company will file its Annual Report on Form 10-K, which will include the results of finalizing the non-cash impairment charge and its related tax impact, with the SEC on March 31, 2009.
This press release supersedes the Company’s previously announced plans for issuing a press release and holding a conference call on March 11, 2009.
Capital expenditures in the fourth quarter of 2008 were $2.0 million. For the 2008 fiscal year total capital expenditures were $7.1 million. This compares to $3.7 million and $9.9 million for the same respective periods last year.
During the year ended December 31, 2008, the Company bought back 899,601 shares of stock for a total purchase price of $19.2 million. For the three month period ended December 31, 2008 the Company bought back 378,412 shares for a total purchase price of $7.4 million. The share repurchase numbers have been adjusted for the Company’s January 29, 2009 1 for 4 reverse stock split.
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 2008 and 2007 acquisitions and dispositions occurred as of January 1, 2007.
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 61 FM and 30 AM radio stations, 3 state radio networks, 2 farm radio networks, 5 television stations and 4 low-power television stations. For additional information, contact us at (313) 886-7070 or visit our website at www.sagacommunications.com.
This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as “believes,” “expects,” “anticipates,” “guidance” and similar expressions are intended to identify forward-looking statements. Key risks, including risks associated with Saga’s ability to effectively integrate the stations it acquires and the impact of federal regulation on Saga’s business, are described in the reports Saga Communications, Inc. periodically files with the U.S. Securities and Exchange Commission, including Item 1A of our annual report on form 10-K. Readers should note that these statements may be impacted by several factors, including national and local economic changes and changes in the radio and television broadcast industry in general, as well as Saga’s actual performance. Results may vary from those stated herein and Saga undertakes no obligation to update the information contained here.

 

 

Saga Communications, Inc.
Selected Consolidated Financial Data
For The Three and Twelve Months Ended
December 31, 2008 and 2007
(amounts in 000’s except per share data)
(Unaudited)
                                 
    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
    2008   2007   2008   2007
     
Operating Results
                                
Net operating revenue
   $ 34,890     $ 37,501     $ 139,956     $ 144,023  
Station operating expense
     26,550       27,316       105,805       106,302  
Corporate general and administrative
     2,368       2,606       9,979       9,800  
Gain on asset exchange
     —       —       (506 )     —  
     
Operating income before impairment charge
     5,972       7,579       24,678       27,921  
Interest expense
     1,413       2,093       7,173       8,954  
Other expense, net
     49       131       76       273  
     
Income before income tax and impairment charge
   $ 4,510     $ 5,355     $ 17,429     $ 18,694  
     
 
                                
Weighted average common shares
     4,249       5,030       4,734       5,023  
Weighted average common shares and common shares equivalents
     4,249       5,033       4,734       5,029  
 
                                
Free Cash Flow
                                
Income before income tax and impairment charge
   $ 4,510     $ 5,355     $ 17,429     $ 18,694  
Plus: Depreciation and amortization:
                                
Station
     2,348       2,135       8,739       7,982  
Corporate
     62       58       222       204  
Non-cash compensation
     374       375       1,433       1,366  
Gain on asset exchange
     —       —       (506 )     —  
Other expense, net
     49       131       76       273  
Less: Capital expenditures
     (1,993 )     (3,672 )     (7,127 )     (9,852 )
Current taxes
     529       (239 )     (1,357 )     (2,546 )
     
Free cash flow
   $ 5,879     $ 4,143     $ 18,909     $ 16,121  
     

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
December 31, 2008 and 2007
(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
    December 31,   December 31,   December 31,
    2008   2007   2008   2007   2008   2007
             
Consolidated
                                                
Net operating revenue
   $ 34,890     $ 37,501     $ 34,746     $ 37,429     $ 34,890     $ 37,537  
Station operating expense
     26,550       27,316       26,388       27,244       26,550       27,352  
Corporate general and administrative
     2,368       2,606       2,368       2,606       2,368       2,606  
             
Operating income before impairment charge
     5,972       7,579     $ 5,990     $ 7,579       5,972       7,579  
Interest expense
     1,413       2,093                       1,413       2,093  
Other expense, net
     49       131                       49       131  
                         
Income before income tax and impairment charge
   $ 4,510     $ 5,355                     $ 4,510     $ 5,355  
                         
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Three Months Ended   Three Months Ended   Three Months Ended
    December 31,   December 31,   December 31,
    2008   2007   2008   2007   2008   2007
             
Radio Segment
                                                
Net operating revenue
   $ 29,756     $ 32,956     $ 29,612     $ 32,884     $ 29,756     $ 32,992  
Station operating expense
     22,513       23,702       22,351       23,630       22,513       23,738  
             
Operating income before impairment charge
   $ 7,243     $ 9,254     $ 7,261     $ 9,254     $ 7,243     $ 9,254  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Three Months Ended   Three Months Ended   Three Months Ended
    December 31,   December 31,   December 31,
    2008   2007   2008   2007   2008   2007
             
Television Segment
                                                
Net operating revenue
   $ 5,134     $ 4,545     $ 5,134     $ 4,545     $ 5,134     $ 4,545  
Station operating expense
     4,037       3,614       4,037       3,614       4,037       3,614  
             
Operating income before impairment charge
   $ 1,097     $ 931     $ 1,097     $ 931     $ 1,097     $ 931  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Three Months Ended   Three Months Ended   Three Months Ended
    December 31,   December 31,   December 31,
    2008   2007   2008   2007   2008   2007
             
Depreciation and amortization by segment
                                                
Radio Segment
   $ 1,676     $ 1,710     $ 1,676     $ 1,685     $ 1,676     $ 1,723  
Television Segment
     672       425       672       425       672       425  
Corporate and Other
     62       58       62       58       62       58  
             
 
   $ 2,410     $ 2,193     $ 2,410     $ 2,168     $ 2,410     $ 2,206  
             
 
(1)   Pro Forma results assume all acquisitions and dispositions in 2007 and 2008 occurred as of January 1, 2007.

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Twelve Months Ended
December 31, 2008 and 2007
(amounts in 000’s except per share data)
(Unaudited)
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Twelve Months Ended   Twelve Months Ended   Twelve Months Ended
    December 31,   December 31,   December 31,
    2008   2007   2008   2007   2008   2007
             
Consolidated
                                                
Net operating revenue
   $ 139,956     $ 144,023     $ 138,601     $ 143,684     $ 139,956     $ 144,982  
Station operating expense
     105,805       106,302       104,782       106,039       105,805       107,159  
Corporate general and administrative
     9,979       9,800       9,979       9,800       9,979       9,800  
Gain on asset exchange
     (506 )     —       (506 )     —       (506 )     —  
             
Operating income before impairment charge
     24,678       27,921     $ 24,346     $ 27,845       24,678       28,023  
Interest expense
     7,173       8,954                       7,173       8,954  
Other expense, net
     76       273                       76       273  
                         
Income before income tax and impairment charge
   $ 17,429     $ 18,694                     $ 17,429     $ 18,796  
                         
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Twelve Months Ended   Twelve Months Ended   Twelve Months Ended
    December 31,   December 31,   December 31,
    2008   2007   2008   2007   2008   2007
             
Radio Segment
                                                
Net operating revenue
   $ 121,072     $ 126,596     $ 119,717     $ 126,257     $ 121,072     $ 127,555  
Station operating expense
     90,540       92,162       89,517       91,899       90,540       93,019  
             
Operating income before impairment charge
   $ 30,532     $ 34,434     $ 30,200     $ 34,358     $ 30,532     $ 34,536  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Twelve Months Ended   Twelve Months Ended   Twelve Months Ended
    December 31,   December 31,   December 31,
    2008   2007   2008   2007   2008   2007
             
Television Segment
                                                
Net operating revenue
   $ 18,884     $ 17,427     $ 18,884     $ 17,427     $ 18,884     $ 17,427  
Station operating expense
     15,265       14,140       15,265       14,140       15,265       14,140  
Gain on asset exchange
     (506 )     —       (506 )     —       (506 )     —  
             
Operating income before impairment charge
   $ 4,125     $ 3,287     $ 4,125     $ 3,287     $ 4,125     $ 3,287  
             
                                                 
    As-Reported   Same Station   Pro Forma (1)
    Twelve Months Ended   Twelve Months Ended   Twelve Months Ended
    December 31,   December 31,   December 31,
    2008   2007   2008   2007   2008   2007
             
Depreciation and amortization by segment
                                                
Radio Segment
   $ 6,446     $ 6,363     $ 6,372     $ 6,299     $ 6,446     $ 6,548  
Television Segment
     2,293       1,619       2,293       1,619       2,293       1,619  
Corporate and Other
     222       204       222       204       222       204  
             
 
   $ 8,961     $ 8,186     $ 8,887     $ 8,122     $ 8,961     $ 8,371  
             
 
(1)   Pro Forma results assume all acquisitions and dispositions in 2007 and 2008 occurred as of January 1, 2007.

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
Quarterly Proforma Information
December 31, 2008 and 2007
(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,
    2008   2007   2008   2007   2008   2007   2008   2007
                 
Consolidated
                                                                
Net operating revenue
   $ 31,532     $ 32,193     $ 37,342     $ 38,752     $ 36,192     $ 36,500     $ 34,890     $ 37,537  
Station operating expense
     25,421       26,284       27,246       27,284       26,588       26,239       26,550       27,352  
Corporate general and administrative
     2,552       2,316       2,574       2,606       2,485       2,272       2,368       2,606  
Gain on asset exchange
     —       —       (224 )     —       (282 )     —       —       —  
                 
Operating income before impairment charge
     3,559       3,593       7,746       8,862       7,401       7,989       5,972       7,579  
Interest expense
     1,995       2,297       1,876       2,281       1,889       2,283       1,413       2,093  
Other expense, net
     20       35       7       47       —       60       49       131  
                 
Income before income tax and impairment charge
   $ 1,544     $ 1,261     $ 5,863     $ 6,534     $ 5,512     $ 5,646     $ 4,510     $ 5,355  
                 
                                                                 
    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,
    2008   2007   2008   2007   2008   2007   2008   2007
                 
Radio Segment
                                                                
Net operating revenue
   $ 27,381     $ 28,203     $ 32,629     $ 34,174     $ 31,306     $ 32,186     $ 29,756     $ 32,992  
Station operating expense
     21,913       22,802       23,398       23,723       22,717       22,756       22,513       23,738  
                 
Operating income before impairment charge
   $ 5,468     $ 5,401     $ 9,231     $ 10,451     $ 8,589     $ 9,430     $ 7,243     $ 9,254  
                 
                                                                 
    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,
    2008   2007   2008   2007   2008   2007   2008   2007
                 
Television Segment
                                                                
Net operating revenue
   $ 4,151     $ 3,990     $ 4,713     $ 4,578     $ 4,886     $ 4,314     $ 5,134     $ 4,545  
Station operating expense
     3,508       3,482       3,848       3,561       3,871       3,483       4,037       3,614  
Gain on asset exchange
     —       —       (224 )     —       (282 )     —       —       —  
                 
Operating income before impairment charge
   $ 643     $ 508     $ 1,089     $ 1,017     $ 1,297     $ 831     $ 1,097     $ 931  
                 
                                                                 
    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,
    2008   2007   2008   2007   2008   2007   2008   2007
                 
Depreciation and amortization by segment
                                                                
Radio Segment
   $ 1,562     $ 1,566     $ 1,591     $ 1,599     $ 1,618     $ 1,660     $ 1,676     $ 1,723  
Television Segment
     395       389       605       400       620       405       672       425  
Corporate and Other
     53       47       53       51       54       48       62       58  
                 
 
   $ 2,010     $ 2,002     $ 2,249     $ 2,050     $ 2,292     $ 2,113     $ 2,410     $ 2,206  
                 
 
(1)   Pro Forma results assume all acquisitions and dispositions in 2007 and 2008 occurred as of January 1, 2007.

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Three Months Ended
December 31, 2008 and 2007
(amounts in 000’s)
(Unaudited)
Reconciliation of As-Reported (historical) information to Same Station Operating Income Before Impairment Charge
                                                 
            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,  
    2008     Period     2008     2007     Period     2007  
         
Consolidated
                                                
Net operating revenue
   $ 34,890     $ (144 )   $ 34,746     $ 37,501     $ (72 )   $ 37,429  
Station operating expense
     26,550       (162 )     26,388       27,316       (72 )     27,244  
Corporate general and administrative
     2,368       —       2,368       2,606       —       2,606  
 
                                    
Operating income before impairment charge
   $ 5,972     $ 18     $ 5,990     $ 7,579       —     $ 7,579  
 
                                    
                                                 
            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,  
    2008     Period     2008     2007     Period     2007  
         
Radio Segment
                                                
Net operating revenue
   $ 29,756     $ (144 )   $ 29,612     $ 32,956     $ (72 )   $ 32,884  
Station operating expense
     22,513       (162 )     22,351       23,702       (72 )     23,630  
 
                                    
Operating income before impairment charge
   $ 7,243     $ 18     $ 7,261     $ 9,254       —     $ 9,254  
 
                                    
                                                 
            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,  
    2008     Period     2008     2007     Period     2007  
         
Television Segment
                                                
Net operating revenue
   $ 5,134       —     $ 5,134     $ 4,545       —     $ 4,545  
Station operating expense
     4,037       —       4,037       3,614       —       3,614  
 
                                    
Operating income before impairment charge
   $ 1,097       —     $ 1,097     $ 931       —     $ 931  
 
                                    

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Twelve Months Ended
December 31, 2008 and 2007
(amounts in 000’s)
(Unaudited)
Reconciliation of As-Reported (historical) information to Same Station Operating Income Before Impairment Charge
                                                 
            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,  
    2008     Period     2008     2007     Period     2007  
         
Consolidated
                                                
Net operating revenue
   $ 139,956     $ (1,355 )   $ 138,601     $ 144,023     $ (339 )   $ 143,684  
Station operating expense
     105,805       (1,023 )     104,782       106,302       (263 )     106,039  
Corporate general and administrative
     9,979       —       9,979       9,800       —       9,800  
Gain on asset exchange
     (506 )     —       (506 )     —       —       —  
 
                                    
Operating income before impairment charge
   $ 24,678     $ (332 )   $ 24,346     $ 27,921     $ (76 )   $ 27,845  
 
                                    
                                                 
            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,  
    2008     Period     2008     2007     Period     2007  
         
Radio Segment
                                                
Net operating revenue
   $ 121,072     $ (1,355 )   $ 119,717     $ 126,596     $ (339 )   $ 126,257  
Station operating expense
     90,540       (1,023 )     89,517       92,162       (263 )     91,899  
 
                                    
Operating income before impairment charge
   $ 30,532     $ (332 )   $ 30,200     $ 34,434     $ (76 )   $ 34,358  
 
                                    
                                                 
            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,  
    2008     Period     2008     2007     Period     2007  
         
Television Segment
                                                
Net operating revenue
   $ 18,884       —     $ 18,884     $ 17,427       —     $ 17,427  
Station operating expense
     15,265       —       15,265       14,140       —       14,140  
Gain on asset exchange
     (506 )     —       (506 )     —       —       —  
 
                                    
Operating income before impairment charge
   $ 4,125       —     $ 4,125     $ 3,287       —     $ 3,287