SAGA COMMUNICATIONS INC - FORM 8-K - EX-99.1 - May 10, 2011

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Exhibit 99.1
Saga Communications, Inc.
Reports 1st Quarter 2011
Free Cash Flow Increased 42%
Contact:
Samuel D. Bush
313/886-7070
Grosse Pointe Farms, MI — May 10, 2011 — Saga Communications, Inc. (NYSE Amex-SGA) today reported operating income increased 13.7% to $4 million for the quarter ended March 31, 2011. Free cash flow increased 42% to $3.2 million compared to $2.3 million for the same period in 2010. The Company’s net operating revenue increased 2.6% to $28.7 million while station operating expense increased 0.8% compared to the same period last year to $22.7 million (station operating expense includes depreciation and amortization attributable to the stations). The Company’s net income for the period was $0.39 per fully diluted share compared to $0.78 per fully diluted share for the same period last year. For comparison purposes the company’s net income for the period ended March 31, 2010 included $3.6 million in other income that was primarily due to the one-time payment for a frequency coordination of one of its licensed facilities.
The Company continues to maintain a solid balance sheet with $13.8 million in cash and certificate of deposit balances as of March 31, 2011. As of March 31, 2011, the Company’s outstanding bank debt was $92.1 million. The trailing 12 month leverage ratio calculated as a multiple of EBITDA was 2.5 times.
Capital expenditures in the first quarter of 2011 were $1.2 million compared to $845 thousand for the same period last year. The Company currently expects to spend approximately $5.0 million for capital expenditures during 2011.
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 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 Supplemental Financial Data table.
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.
Saga’s 1st Quarter 2011 conference call will be on Tuesday, May 10, 2011 at 2:00 p.m. EDT. The dial-in number for all calls is (612) 234-9959. A transcript of the call will be posted to the Company’s web site.
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 May 10, 2011 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 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 Months Ended
March 31, 2011 and 2010
(amounts in 000’s except per share data)
(Unaudited)
                 
    Three Months Ended
    March 31,
    2011   2010
Operating Results
                
Net operating revenue
   $ 28,708     $ 27,987  
Station operating expense
     22,736       22,560  
Corporate general and administrative
     1,940       1,882  
     
Operating income
     4,032       3,545  
Interest expense
     1,157       1,519  
Other (income) expense, net
     68       (3,596 )
     
Income before income tax
     2,807       5,622  
Income tax expense
     1,145       2,305  
     
Net income
   $ 1,662     $ 3,317  
     
Earnings per share
                
Basic
   $ 0.39     $ 0.78  
     
Diluted
   $ 0.39     $ 0.78  
     
Weighted average common shares
     4,237       4,228  
Weighted average common and common equivalent shares
     4,243       4,229  
 
                
Free Cash Flow
                
Net income
   $ 1,662     $ 3,317  
Plus: Depreciation and amortization:
                
Station
     1,751       1,845  
Corporate
     54       52  
Deferred tax provision
     655       1,180  
Non-cash compensation
     162       298  
Other (income) expense, net
     68       (3,596 )
Less: Capital expenditures
     (1,145 )     (845 )
     
Free cash flow
   $ 3,207     $ 2,251  
     
 
                
Balance Sheet Data
                
Working capital
   $ 18,665     $ 9,203  
Net fixed assets
   $ 64,844     $ 68,152  
Net intangible assets and other assets
   $ 97,420     $ 97,432  
Total assets
   $ 197,552     $ 202,823  
Long-term debt (including current portion of $4,443 and $15,200, respectively)
   $ 92,078     $ 116,078  
Stockholders’ equity
   $ 81,785     $ 67,630  

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
March 31, 2011
(amounts in 000’s except ratios)
(Unaudited)
                                 
                    Corporate          
    Radio     Television     and Other     Consolidated  
Three Months Ended March 31, 2011:
                                
Net operating revenue
   $ 24,506     $ 4,202     $ —     $ 28,708  
Station operating expense
     19,278       3,458       —       22,736  
Corporate G&A
     —       —       1,940       1,940  
 
                        
Operating income (loss)
   $ 5,228     $ 744     $ (1,940 )   $ 4,032  
 
                        
Depreciation and amortization
   $ 1,339     $ 412     $ 54     $ 1,805  
 
                        
                                 
                    Corporate          
    Radio     Television     and Other     Consolidated  
Three Months Ended March 31, 2010:
                                
Net operating revenue
   $ 24,144     $ 3,843     $ —     $ 27,987  
Station operating expense
     19,223       3,337       —       22,560  
Corporate G&A
     —       —       1,882       1,882  
 
                        
Operating income (loss)
   $ 4,921     $ 506     $ (1,882 )   $ 3,545  
 
                        
Depreciation and amortization
   $ 1,421     $ 424     $ 52     $ 1,897  
 
                        
                                 
            Less:     Plus:     Trailing  
    12 Mos Ended     3 Mos Ended     3 Mos Ended     12 Mos Ended  
    December 31,     March 31,     March 31,     March 31,  
    2010     2010     2011     2011  
Trailing 12 Month Consolidated EBITDA (1)
                                
Net income
   $ 15,136     $ 3,317     $ 1,662     $ 13,481  
Less: Gain (loss) on sale of assets
     (386 )     35       (68 )     (489 )
Gain on license downgrade
     3,756       3,561       —       195  
Other
     46       (12 )     20       78  
 
                        
Total exclusions
     3,416       3,584       (48 )     (216 )
 
                        
Consolidated Adjusted Net Income (1)
     11,720       (267 )     1,710       13,697  
Plus: Interest expense
     5,622       1,519       1,157       5,260  
Income tax expense
     10,400       2,305       1,145       9,240  
Depreciation & amortization expense
     7,718       1,897       1,805       7,626  
Amortization of television syndicated programming contracts
     732       180       189       741  
Non-cash stock based compensation expense
     927       298       162       791  
Less: Cash television programming payments
     (744 )     (181 )     (171 )     (734 )
 
                        
Trailing twelve month consolidated EBITDA (1)
   $ 36,375     $ 5,751     $ 5,997     $ 36,621  
 
                        
 
                                
Total long-term debt, including current maturities
                           $ 92,078  
Divided by trailing twelve month consolidated EBITDA (1)
                             36,621  
 
                              
Leverage ratio
                             2.5  
 
                              
 
(1)   As defined in the company’s credit agreement.

 

SAGA COMMUNICATIONS INC Reports