Saga Communications, Inc. Reports 4th Quarter and Year End 2004 Results

Saga Communications, Inc. Reports 4th Quarter and Year End 2004 Results

GROSSE POINTE FARMS, Mich., Feb. 24 /PRNewswire-FirstCall/ -- Saga Communications, Inc. (NYSE:SGA) today reported net income of $4.1 million ($.20 per fully diluted share) for the quarter ended December 31, 2004 compared to $4.5 million ($.21 per fully diluted share) for 2003. For the same period, net operating revenue increased 9.6% over the comparable period in 2003 to approximately $36.1 million, operating income increased 1.4% to approximately $8.7 million and station operating expense increased 9.6% to approximately $25.0 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the quarter, net operating revenue increased 4.8% to approximately $34.5 million, operating income decreased 4.1% to $8.2 million and station operating expense increased 4.8% to $23.9 million.

For the year ended December 31, 2004, net income for the twelve month period increased 14.1% to approximately $15.8 million ($.75 per fully diluted share) compared to $13.9 million ($.65 per fully diluted share) for 2003. For the same period, net operating revenue increased 11.0% over the comparable period in 2003 to approximately $134.6 million, operating income increased 9.9% to approximately $31.4 million and station operating expense increased 10.3% to approximately $94.9 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the year, net operating revenue increased 5.5% to approximately $127.1 million, operating income increased 4.9% to $30.0 million and station operating expense increased 4.2% to $88.7 million.

The company closed, effective January 1, 2005 on the acquisition of WWWV-FM, WINA-AM and WQMZ-FM serving the Charlottesville, VA radio market for a purchase price of approximately $22 million.

Capital expenditures in the fourth quarter of 2004 were approximately $2.9 million with approximately $0.8 million being spent as a result of acquisitions. For the 2004 fiscal year total capital expenditures were approximately $10.2 million net of insurance proceeds with approximately $3.6 million being spent as a result of acquisitions, $1.6 million on our Victoria television tower project, and $1.1 million on our Portland tower projects.

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 2004 and 2003 acquisitions and dispositions occurred as of January 1, 2003.

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 25 markets, including 55 FM and 27 AM radio stations, 3 state radio networks, 2 farm radio networks, 5 television stations and 3 low-power television stations. Saga has entered into an agreement to acquire an FM station serving the Asheville, NC radio market, and an agreement to acquire 2 FM stations and 2 AM stations serving the Ithaca, NY radio market. For additional information, contact us at (313) 886-7070 or visit our website at http://www.sagacommunications.com/ .

Saga's fourth quarter and year end 2004 results conference call will be on Thursday, February 24 at 2:00PM. The dial in number for domestic calls is 800/553-0358. For international callers the number is 612/332-0802. The call can be replayed for 7 days by calling domestically 800/475-6701 or internationally 320/365-3844 and referring to access code 768301. 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 Twelve Month Periods
Ended December 31, 2004 and 2003
(amounts in 000's except per share data)


Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
Operating Results
Net operating revenue $ 36,082 $ 32,933 $ 134,644 $ 121,297
Station operating expense 24,990 22,802 94,914 86,083
Corporate general and
administrative 2,405 1,565 8,343 6,649
Operating income 8,687 8,566 31,387 28,565
Interest expense 1,306 1,006 4,522 4,779
Other (income) expense, net (251) 281 32 1,131
Income before income tax 7,632 7,279 26,833 22,655
Income tax expense 3,500 2,740 10,991 8,771
Net income $ 4,132 $ 4,539 $ 15,842 $ 13,884
Earnings per share:
Basic $ 0.20 $ 0.22 $ 0.76 $ 0.67
Diluted $ 0.20 $ 0.21 $ 0.75 $ 0.65
Weighted average common
shares 20,635 20,839 20,752 20,817
Weighted average common shares
and common equivalents 20,983 21,293 21,167 21,301

Free Cash Flow
Net Income $ 4,132 $ 4,539 $ 15,842 $ 13,884
Plus: Depreciation and
amortization:
Station 1,878 1,670 7,054 6,803
Corporate 50 50 198 199
Deferred tax provision 1,063 1,466 4,137 3,594
Less: Capital expenditures (2,849) (1,708) (11,098) (8,118)
Free cash flow $ 4,274 $ 6,017 $ 16,133 $ 16,362

Balance Sheet Data
Working capital $ 21,779 $ 25,353
Net fixed assets 66,364 62,369
Net intangible and other assets 176,166 161,112
Total assets 280,154 262,343
Long term debt (including current
portion of $0 and $45, respectively) 121,161 121,205
Stockholders' equity 117,225 107,244




Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
December 31, 2004 and 2003
(amounts in 000's except per share data)
(Unaudited)

As-Reported Same Station Pro Forma (1)
Consolidated Three Months Ended Three Months Ended Three Months Ended
December 31, December 31, December 31,
2004 2003 2004 2003 2004 2003

Net operating
revenue $36,082 $32,933 $34,513 $32,933 $36,082 $34,218
Station operating
expense 24,990 22,802 23,894 22,802 24,990 23,954
Corporate general
and
administrative 2,405 1,565 2,405 1,565 2,405 1,565
Operating income 8,687 8,566 $8,214 $8,566 8,687 8,699
Interest expense 1,306 1,006 1,306 1,006
Other (income)
expense, net (251) 281 (251) 281
Income tax expense 3,500 2,740 3,500 2,787
Net income $4,132 $4,539 $4,132 $4,625
Earnings per share:
Basic $0.20 $0.22 $0.20 $0.22
Diluted $0.20 $0.21 $0.20 $0.22

As-Reported Same Station Pro Forma (1)
Radio Segment Three Months Ended Three Months Ended Three Months Ended
December 31, December 31, December 31,
2004 2003 2004 2003 2004 2003

Net operating
revenue $32,194 $29,495 $30,625 $29,495 $32,194 $30,780
Station operating
expense 21,654 19,794 20,558 19,794 21,654 20,946
Operating income $10,540 $9,701 $10,067 $9,701 $10,540 $9,834

As-Reported Same Station Pro Forma (1)
Television Three Months Ended Three Months Ended Three Months Ended
Segment December 31, December 31, December 31,
2004 2003 2004 2003 2004 2003

Net operating
revenue $3,888 $3,438 $3,888 $3,438 $3,888 $3,438
Station operating
expense 3,336 3,008 3,336 3,008 3,336 3,008
Operating income $552 $430 $552 $430 $552 $430


As-Reported Same Station Pro Forma (1)
Depreciation Three Months Ended Three Months Ended Three Months Ended
and amortization December 31, December 31, December 31,
by segment 2004 2003 2004 2003 2004 2003

Radio Segment $1,424 $1,232 $1,327 $1,232 $1,424 $1,257
Television Segment 454 438 454 438 454 438
Corporate and
Other 50 50 50 50 50 50
$1,928 $1,720 $1,831 $1,720 $1,928 $1,745


(1) Pro Forma results assume all acquisitions and dispositions in 2003
and 2004 occurred as of January 1, 2003.




Saga Communications, Inc.
Selected Supplemental Financial Data
For the Twelve Months Ended
December 31, 2004 and 2003
(amounts in 000's except per share data)
(Unaudited)

As-Reported Same Station Pro Forma (1)
Consolidated Twelve Months Ended Twelve Months Ended Twelve Months Ended
December 31, December 31, December 31,
2004 2003 2004 2003 2004 2003

Net operating
revenue $134,644 $121,297 $127,072 $120,450 $135,499 $128,269
Station operating
expense 94,914 86,083 88,699 85,160 95,668 92,237
Corporate general
and
administrative 8,343 6,649 8,343 6,649 8,343 6,649
Operating income $31,387 $28,565 $30,030 $28,641 $31,488 $29,383
Interest expense 4,522 4,779 4,522 4,996
Other expense, net 32 1,131 32 1,131
Income tax
expense 10,991 8,771 11,036 9,008
Net income $15,842 $13,884 $15,898 $14,248
Earnings per share:
Basic $0.76 $0.67 $0.77 $0.68
Diluted $0.75 $0.65 $0.75 $0.67

As-Reported Same Station Pro Forma (1)
Radio Segment Twelve Months Ended Twelve Months Ended Twelve Months Ended
December 31, December 31, December 31,
2004 2003 2004 2003 2004 2003

Net operating
revenue $120,191 $109,065 $113,764 $108,317 $121,046 $116,037
Station operating
expense 82,053 74,914 76,830 74,330 82,807 81,068
Operating income $38,138 $34,151 $36,934 $33,987 $38,239 $34,969

As-Reported Same Station Pro Forma (1)
Television Twelve Months Ended Twelve Months Ended Twelve Months Ended
Segment December 31, December 31, December 31,
2004 2003 2004 2003 2004 2003

Net operating
revenue $14,453 $12,232 $13,308 $12,133 $14,453 $12,232
Station operating
expense 12,861 11,169 11,869 10,830 12,861 11,169
Operating income $1,592 $1,063 $1,439 $1,303 $1,592 $1,063

As-Reported Same Station Pro Forma (1)
Depreciation Twelve Months Ended Twelve Months Ended Twelve Months Ended
and amortization December 31, December 31, December 31,
by segment 2004 2003 2004 2003 2004 2003

Radio Segment $5,337 $5,229 $4,957 $5,204 $5,466 $5,572
Television Segment 1,717 1,574 1,655 1,530 1,717 1,574
Corporate and Other 198 199 198 199 198 199
$7,252 $7,002 $6,810 $6,933 $7,381 $7,345


(1) Pro Forma results assume all acquisitions and dispositions in 2003
and 2004 occurred as of January 1, 2003.




Saga Communications, Inc.
Selected Supplemental Financial Data
Quarterly Proforma Information
December 31, 2004 and 2003
(amounts in 000's except per share data)
(Unaudited)


Pro Forma (1) Pro Forma (1)
Consolidated Three Months Ended Three Months Ended
March 31, June 30,
2004 2003 2004 2003

Net operating revenue $29,954 $27,811 $35,201 $34,048
Station operating expense 22,802 22,295 23,871 23,879
Corporate general and
administrative 1,732 1,295 2,279 1,945
Operating income 5,420 4,221 9,051 8,224
Interest expense 1,095 1,607 1,085 1,229
Other (income) expense, net 8 (8) 65 (357)
Income tax expense 1,691 1,044 3,080 2,807
Net income $2,626 $1,578 $4,821 $4,545
Earnings per share:
Basic $0.13 $0.08 $0.23 $0.22
Diluted $0.12 $0.07 $0.23 $0.21

Pro Forma (1) Pro Forma (1)
Consolidated Three Months Ended Three Months Ended
September 30, December 31,
2004 2003 2004 2003

Net operating revenue $34,262 $32,192 $36,082 $34,218
Station operating expense 24,005 22,109 24,990 23,954
Corporate general and
administrative 1,927 1,844 2,405 1,565
Operating income 8,330 8,239 8,687 8,699
Interest expense 1,036 1,154 1,306 1,006
Other (income) expense, net 210 1,215 (251) 281
Income tax expense 2,765 2,370 3,500 2,787
Net income $4,319 $3,500 $4,132 $4,625
Earnings per share:
Basic $0.21 $0.17 $0.20 $0.22
Diluted $0.20 $0.16 $0.20 $0.22


Pro Forma (1) Pro Forma (1)
Radio Segment Three Months Ended Three Months Ended
March 31, June 30,
2004 2003 2004 2003

Net operating revenue $26,800 $25,195 $31,436 $30,933
Station operating expense 19,766 19,619 20,607 21,068
Operating income $7,034 $5,576 $10,829 $9,865

Radio Segment Three Months Ended Three Months Ended
September 30, December 31,
2004 2003 2004 2003

Net operating revenue $30,616 $29,129 $32,194 $30,780
Station operating expense 20,780 19,435 21,654 20,946
Operating income $9,836 $9,694 $10,540 $9,834


Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months Ended
March 31, June 30,
Television Segment 2004 2003 2004 2003

Net operating revenue $3,154 $2,616 $3,765 $3,115
Station operating expense 3,036 2,676 3,264 2,811
Operating income (loss) $118 ($60) $501 $304

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months Ended
September 30, December 31,
Television Segment 2004 2003 2004 2003

Net operating revenue $3,646 $3,063 $3,888 $3,438
Station operating expense 3,225 2,674 3,336 3,008
Operating income (loss) $421 $389 $552 $430


Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months Ended
Depreciation and amortization March 31, June 30,
by segment 2004 2003 2004 2003

Radio Segment $1,325 $1,488 $1,357 $1,475
Television Segment 415 392 426 391
Corporate and Other 49 50 50 49
$1,789 $1,930 $1,833 $1,915

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months Ended
Depreciation and amortization September 30, December 31,
by segment 2004 2003 2004 2003

Radio Segment $1,360 $1,352 $1,424 $1,257
Television Segment 422 353 454 438
Corporate and Other 49 50 50 50
$1,831 $1,755 $1,928 $1,745


(1) Pro Forma results assume all acquisitions and dispositions in 2003
and 2004 occurred as of January 1, 2003.





Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Three Months Ended
December 31, 2004 and 2003
(amounts in 000's except per share data)
(Unaudited)


Reconciliation of As-Reported (historical) information to Same Station
Operating Income


Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Consolidated Ended Not Included in Ended
December 31, Entire Comparable December 31,
2004 Period 2004

Net operating revenue $36,082 ($1,569) $34,513
Station operating
expense 24,990 (1,096) 23,894
Corporate general
and administrative 2,405 - 2,405
Operating income $8,687 ($473) $8,214

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Consolidated Ended Not Included in Ended
December 31, Entire Comparable December 31,
2003 Period 2003

Net operating revenue $32,933 - $32,933
Station operating
expense 22,802 - 22,802
Corporate general
and administrative 1,565 - 1,565
Operating income $8,566 - $8,566

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Radio Segment Ended Not Included in Ended
December 31, Entire Comparable December 31,
2004 Period 2004

Net operating revenue $32,194 ($1,569) $30,625
Station operating
expense 21,654 (1,096) 20,558
Operating income $10,540 ($473) $10,067

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Radio Segment Ended Not Included in Ended
December 31, Entire Comparable December 31,
2003 Period 2003

Net operating revenue $29,495 - $29,495
Station operating
expense 19,794 - 19,794
Operating income $9,701 - $9,701

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Television Segment Ended Not Included in Ended
December 31, Entire Comparable December 31,
2004 Period 2004

Net operating revenue $3,888 - $3,888
Station operating
expense $3,336 - $3,336
Operating income $552 - $552

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Television Segment Ended Not Included in Ended
December 31, Entire Comparable December 31,
2003 Period 2003

Net operating revenue $3,438 - $3,438
Station operating
expense $3,008 - $3,008
Operating income $430 - $430






Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Twelve Months Ended
December 31, 2004 and 2003
(amounts in 000's except per share data)
(Unaudited)


Reconciliation of As-Reported (historical) information to Same
Station Operating Income


Adjustment
As-Reported For Acquisitions Same Station
Twelve Months and Dispositions Twelve Months
Consolidated Ended Not Included in Ended
December 31, Entire Comparable December 31,
2004 Period 2004

Net operating revenue $134,644 ($7,572) $127,072
Station operating
expense 94,914 (6,215) 88,699
Corporate general
and administrative 8,343 - 8,343
Operating income $31,387 ($1,357) $30,030

Adjustment
As-Reported For Acquisitions Same Station
Twelve Months and Dispositions Twelve Months
Consolidated Ended Not Included in Ended
December 31, Entire Comparable December 31,
2003 Period 2003

Net operating revenue $121,297 ($847) $120,450
Station operating
expense 86,083 (923) 85,160
Corporate general
and administrative 6,649 - 6,649
Operating income $28,565 $76 $28,641

Adjustment
As-Reported For Acquisitions Same Station
Twelve Months and Dispositions Twelve Months
Radio Segment Ended Not Included in Ended
December 31, Entire Comparable December 31,
2004 Period 2004

Net operating revenue $120,191 ($6,427) $113,764
Station operating
expense 82,053 (5,223) 76,830
Operating income $38,138 ($1,204) $36,934

Adjustment
As-Reported For Acquisitions Same Station
Twelve Months and Dispositions Twelve Months
Radio Segment Ended Not Included in Ended
December 31, Entire Comparable December 31,
2003 Period 2003

Net operating revenue $109,065 ($748) $108,317
Station operating
expense 74,914 (584) 74,330
Operating income $34,151 ($164) $33,987

Adjustment
As-Reported For Acquisitions Same Station
Twelve Months and Dispositions Twelve Months
Television Segment Ended Not Included in Ended
December 31, Entire Comparable December 31,
2004 Period 2004

Net operating revenue $14,453 ($1,145) $13,308
Station operating
expense 12,861 (992) 11,869
Operating income $1,592 ($153) $1,439

Adjustment
As-Reported For Acquisitions Same Station
Twelve Months and Dispositions Twelve Months
Television Segment Ended Not Included in Ended
December 31, Entire Comparable December 31,
2003 Period 2003

Net operating revenue $12,232 ($99) $12,133
Station operating
expense 11,169 (339) 10,830
Operating income $1,063 $240 $1,303



Source: Saga Communications, Inc.

CONTACT: Samuel D. Bush of Saga Communications, Inc., +1-313-886-7070

Web site: http://www.sagacommunications.com/


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