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Saga Communications, Inc. Reports 2nd Quarter Results

Net Revenue Increases 2.6%

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GROSSE POINTE FARMS, Mich., Aug. 6, 2013 /PRNewswire/ -- Saga Communications, Inc. (NYSE MKT: SGA) today reported that net operating revenue increased 2.6% for the period ending June 30, 2013.  Station operating expense was $23.5 million this quarter compared to $22.0 million for the same period last year.  $851 thousand of the increase was the result of the credits received for music licensing fees during the 2nd quarter of 2012 that are not recurring in 2013.  Station operating expense increased 7.0% compared to the same period last year, but only 3.0% when adjusted for such credits.  Operating income decreased 8.0% to $8.4 million compared to $9.1 million for the same period last year.  Adjusted for the music licensing fee credits, operating income would have increased 1.5%.  Net income for the quarter decreased 6.4% to $4.8 million ($0.84 per fully diluted share) compared to net income of $5.1 million ($0.91 per fully diluted share) for the same period last year. 

Net operating revenue increased 0.8% for the six month period ending June 30, 2013.  Station operating expense increased 2.9% to $45.6 million.  Adjusted for the $851 thousand music licensing credits received in the 2nd quarter of 2012, station operating expense would have increased 0.9%. Operating income decreased 5.8% to $13.3 million compared to $14.1 million for the same period last year.  Adjusted for the music licensing fee credits, operating income would have increased 0.2%.  Net income for the six month period decreased 1.1% to $7.8 million ($1.35 per fully diluted share compared to $1.38 per fully diluted share for the same period last year). 

Capital expenditures in the 2nd quarter of 2013 and 2012 were $1.3 million.  The Company currently expects to spend approximately $5.5 million for capital expenditures during 2013. 

Saga 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 free cash flow, trailing 12 month consolidated EBITDA, and leverage ratio. 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, as a primary measure for incentive based compensation of executives and other members of management and as a measure of financial position.  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 Consolidated and Supplemental Financial Data tables.

Saga is a broadcasting company whose business is devoted to acquiring, developing and operating broadcast properties.  Saga owns or operates broadcast properties in 25 markets, including 61 FM and 30 AM radio stations, 3 state radio networks, 2 farm radio networks, 4 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.

Saga's 2nd Quarter 2013 conference call will be on Tuesday, August 6, 2013 at 2:00 p.m. EDT.  The dial-in number for all calls is (612) 234-9960.  A transcript of the call will be posted to the Company's website.  

The Company requests that all parties that have a question that they would like to submit to the Company to please email the inquiry by 1:00 p.m. EDT on August 6, 2013 to SagaIR@sagacom.com. The Company will discuss, during the limited period of the conference call, those inquiries it deems of general relevance and interest. Only inquiries made in compliance with the foregoing will be discussed during the call.

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 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 Six Months Ended

June 30, 2013 and 2012

(amounts in 000's except per share data)

(Unaudited)











 Three Months Ended  

 Six Months Ended  




 June 30, 

 June 30, 




2013

2012

2013

2012

Operating Results






Net operating revenue


$33,832

$32,986

$62,789

$62,309

Station operating expense


23,493

21,959

45,581

44,319

Corporate general and administrative


1,982

1,940

3,930

3,889

Operating income from continuing operations


8,357

9,087

13,278

14,101

Interest expense


357

458

715

986

Other expense (income), net


66

(8)

91

(10)

Income from continuing operations before income tax


7,934

8,637

12,472

13,125

Income tax expense


3,130

3,438

4,942

5,223

Income from continuing operations, net of income taxes


4,804

5,199

7,530

7,902

Income (loss) from discontinued operations, net of income taxes

-

(67)

223

(65)

Net income


$4,804

$5,132

$7,753

$7,837

Basic earnings (loss) per share:







From continuing operations


$0.85

$0.92

$1.33

$1.40


From discontinued operations


-

(0.01)

0.04

(0.01)


Earnings per share


$0.85

$0.91

$1.37

$1.39

Diluted earnings (loss) per share:







From continuing operations


$0.84

$0.92

$1.31

$1.39


From discontinued operations


-

(0.01)

0.04

(0.01)


Earnings per share


$0.84

$0.91

$1.35

$1.38

Weighted average common shares


5,683

5,661

5,677

5,658

Weighted average common and common 







equivalent shares


5,745

5,663

5,740

5,667








Free Cash Flow






Net income 


$4,804

$5,132

$7,753

$7,837

Plus:  Depreciation and amortization:







        Station


1,599

1,620

3,183

3,256


        Corporate


56

56

113

113


        Discontinued operations


-

97

-

194

          Deferred tax provision


985

1,163

1,600

1,773

          Non-cash compensation


-

25

16

82

          Gain on disposal of television station


-

-

(223)

-

          Other expense (income), net


66

(8)

91

(10)

Less: Capital expenditures


(1,288)

(1,313)

(2,465)

(2,502)

Free cash flow


$6,222

$6,772

$10,068

$10,743








Balance Sheet Data







Working capital




$30,985

$19,731


Net fixed assets




$57,656

$59,734


Net intangible assets and other assets




$95,932

$98,443


Total assets




$197,983

$191,844


Long-term debt (including current 







   portion of $1,078 and $0, respectively)




$51,078

$58,828


Stockholders' equity




$112,272

$100,815

 

Saga Communications, Inc.

Selected Supplemental Financial Data

For the Three and Six Months Ended

June 30, 2013 and 2012

(amounts in 000's)

(Unaudited)
















Corporate





Radio


Television


and Other


Consolidated

Three Months Ended June 30, 2013:








Net operating revenue

$28,674


$5,158


$          -


$33,832

Station operating expense

20,215


3,278


-


23,493

Corporate G&A

-


-


1,982


1,982

Operating income (loss) from continuing operations

$8,459


$1,880


$(1,982)


$8,357

Depreciation and amortization

$1,249


$350


$56


$1,655
















Corporate





Radio


Television


and Other


Consolidated

Three Months Ended June 30, 2012:








Net operating revenue

$28,482


$4,504


$          -


$32,986

Station operating expense

18,921


3,038


-


21,959

Corporate G&A

-


-


1,940


1,940

Operating income (loss) from continuing operations

$9,561


$1,466


$(1,940)


$9,087

Depreciation and amortization

$1,274


$346


$56


$1,676
















Corporate





Radio


Television


and Other


Consolidated

Six Months Ended June 30, 2013:








Net operating revenue

$53,136


$9,653


$          -


$62,789

Station operating expense

39,222


6,359


-


45,581

Corporate G&A

-


-


3,930


3,930

Operating income (loss) from continuing operations

$13,914


$3,294


$(3,930)


$13,278

Depreciation and amortization

$2,491


$692


$113


$3,296
















Corporate





Radio


Television


and Other


Consolidated

Six Months Ended June 30, 2012:








Net operating revenue

$53,682


$8,627


$          -


$62,309

Station operating expense

38,276


6,043


-


44,319

Corporate G&A

-


-


3,889


3,889

Operating income (loss) from continuing operations

$15,406


$2,584


$(3,889)


$14,101

Depreciation and amortization

$2,571


$685


$113


$3,369










 

Saga Communications, Inc.

Selected Supplemental Financial Data

June 30, 2013

(amounts in 000's except ratios)

(Unaudited)
































Less:


Plus:


Trailing



12 Mos Ended


6 Mos Ended


6 Mos Ended


12 Mos Ended



December 31,


June 30,


June 30,


June 30,



2012


2012


2013


2013

Trailing 12 Month Consolidated Earnings Before Interest








  Taxes, Depreciation and Amortization ("EBITDA") (1)








Net income

$17,925


$7,837


$7,753


$17,841

Exclusions:









(Loss) gain on sale of assets

(213)


15


(15)


(243)


Gain on sale of television station

-


-


223


223


Other

302


188


(37)


77

Total exclusions

89


203


171


57










Consolidated adjusted net income (1)

17,836


7,634


7,582


17,784

Plus:

Interest expense

1,733


986


715


1,462


Income tax expense

11,850


5,180


4,942


11,612


Depreciation & amortization expense

7,051


3,563


3,296


6,784


Amortization of television syndicated programming contracts

700


344


320


676


Non-cash stock based compensation expense

132


82


16


66

Less: Cash television programming payments

(712)


(353)


(317)


(676)

Trailing twelve month consolidated EBITDA (1)

$38,590


$17,436


$16,554


$37,708










Total long-term debt, including current maturities







$51,078

Divided by trailing twelve month consolidated EBITDA (1)







37,708

Leverage ratio







1.35



















(1)

As defined in the Company's credit facility.

















 

Saga Communications, Inc.

Selected Supplemental Financial Data

For the Three and Six Months Ended

June 30, 2013 and 2012

(amounts in 000's)

(Unaudited)










Reconciliation of Station Operating Expense and Operating Income











$ Increase


% Increase



2013


2012


(Decrease)


(Decrease)

Three Months Ended June 30, 2013:








Station operating expense

$23,493


$21,959


$1,534


7.0%


Add: Music licensing fee credits received in the quarter

-


851


(851)


-100.0%


Station operating expense before licensing credits

$23,493


$22,810


$683


3.0%










Operating income

$8,357


$9,087


$(730)


-8.0%


Less: Music licensing fee credits received in the quarter

-


(851)


851


-100.0%


Operating income before licensing credits

$8,357


$8,236


$121


1.5%

























$ Increase


% Increase



2013


2012


(Decrease)


(Decrease)

Six Months Ended June 30, 2013:








Station operating expense

$45,581


$44,319


$1,262


2.8%


Add: Music licensing fee credits received for the six months

-


851


(851)


-100.0%


Station operating expense before licensing credits

$45,581


$45,170


$411


0.9%










Operating income

$13,278


$14,101


$(823)


-5.8%


Less: Music licensing fee credits received for the six months

-


(851)


851


-100.0%


Operating income before licensing credits

$13,278


$13,250


$28


0.2%



















 

SOURCE Saga Communications, Inc.



RELATED LINKS
http://www.sagacommunications.com

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