Saga Communications, Inc. Reports 3rd Quarter 2007 Results

Saga Communications, Inc. Reports 3rd Quarter 2007 Results

GROSSE POINTE FARMS, Mich., Nov. 5 /PRNewswire-FirstCall/ -- Saga Communications, Inc. (NYSE:SGA) today reported that 3rd quarter 2007 net operating revenue increased 1.2% over the comparable period in 2006 to $36.2 million and operating income increased 2.1% to $8.0 million. Free Cash Flow increased $795 thousand to $5.5 million. Net income was approximately flat at $3.3 million ($.17 per fully diluted share) for the quarter ended September 30, 2007 compared to $3.3 million ($.16 per fully diluted share) for the comparable period in 2006. For the same period, station operating expense increased $214 thousand to $26.0 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the quarter, net operating revenue was approximately flat at $35.9 million and operating income was approximately flat at $7.9 million.

For the nine month period ended September 30, 2007, net operating revenue increased 1.7% over the comparable period in 2006 to $106.5 million and operating income decreased $847 thousand to $20.3 million. Free Cash Flow increased $660 thousand to $12.0 million. Net income decreased $906 thousand to $7.9 million ($.39 per fully diluted share) compared to $8.8 million ($.43 per fully diluted share) for the comparable period in 2006. For the same period, station operating expense increased 2.8% to approximately $79.0 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the nine months, net operating revenue increased 1.3% to $106.0 million, operating income decreased $971 thousand to $20.3 million and station operating expense increased 2.3% to $78.5 million.

Capital expenditures in the third quarter of 2007 were $1.6 million of which $357 thousand were as a result of acquisitions and $472 thousand were related to digital radio. For the nine months capital expenditures were $6.2 million of which $1.7 million were as a result of acquisitions and $992 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 61 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. 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 http://www.sagacommunications.com/.

Saga's third quarter 2007 results conference call will be on Monday, November 5 at 11:00 AM EDT. The dial in number for domestic calls is 877/777-1972. 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 890134. 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 Nine Months Ended
September 30, 2007 and 2006
(amounts in 000's except per share data)
(Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Operating Results
Net operating revenue $36,218 $35,791 $106,522 $104,727
Station operating expense 25,975 25,761 78,986 76,833
Corporate general and
administrative 2,272 2,225 7,194 6,705
Operating income 7,971 7,805 20,342 21,189
Interest expense 2,283 2,375 6,861 7,007
Other expense (income), net 60 (75) 142 (645)
Income before income tax 5,628 5,505 13,339 14,827
Income tax expense 2,307 2,241 5,468 6,050
Net income $3,321 $3,264 $7,871 $8,777
Earnings per share
Basic $0.17 $0.16 $0.39 $0.43
Diluted $0.17 $0.16 $0.39 $0.43
Weighted average common shares 20,112 20,488 20,082 20,515
Weighted average common shares and
common shares equivalents 20,126 20,502 20,111 20,532

Free Cash Flow
Net income $3,321 $3,264 $7,871 $8,777
Plus: Depreciation and
amortization:
Station 2,013 1,903 5,847 5,784
Corporate 48 48 146 144
Deferred tax provision 1,334 1,339 3,161 3,110
Non-cash compensation 376 385 991 984
Other expense (income), net 60 (75) 142 (645)
Less: Capital expenditures (1,617) (2,124) (6,180) (6,836)
Free cash flow $5,535 $4,740 $11,978 $11,318

Balance Sheet Data
Working capital $22,560 $21,774
Net fixed assets 74,286 70,542
Net intangible assets and other
assets 217,711 211,745
Total assets 330,935 320,148
Long term debt (including current
portion of $0 and $0, respectively) 129,911 136,911
Stockholders' equity 145,543 133,564

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
September 30, 2007 and 2006
(amounts in 000's except per share data)
(Unaudited)

As-Reported Same Station Pro Forma (1)
Three Months Three Months Three Months
Ended Ended Ended
September 30, September 30, September 30,
2007 2006 2007 2006 2007 2006
Consolidated
Net operating
revenue $36,218 $35,791 $35,903 $35,778 $36,392 $36,082
Station operating
expense 25,975 25,761 25,766 25,658 26,226 25,960
Corporate general and
administrative 2,272 2,225 2,272 2,225 2,272 2,225
Operating income 7,971 7,805 $7,865 $7,895 7,894 7,897
Interest expense 2,283 2,375 2,283 2,375
Other expense
(income), net 60 (75) 60 (75)
Income tax expense 2,307 2,241 2,297 2,278
Net income $3,321 $3,264 $3,254 $3,319
Earnings per share:
Basic $0.17 $0.16 $0.16 $0.16
Diluted $0.17 $0.16 $0.16 $0.16

As-Reported Same Station Pro Forma (1)
Three Months Three Months Three Months
Ended Ended Ended
September 30, September 30, September 30,
2007 2006 2007 2006 2007 2006
Radio Segment
Net operating
revenue $31,904 $31,402 $31,589 $31,389 $32,078 $31,693
Station operating
expense 22,492 22,300 22,283 22,197 22,743 22,499
Operating income $9,412 $9,102 $9,306 $9,192 $9,335 $9,194

As-Reported Same Station Pro Forma (1)
Three Months Three Months Three Months
Ended Ended Ended
September 30, September 30, September 30,
2007 2006 2007 2006 2007 2006
Television Segment
Net operating
revenue $4,314 $4,389 $4,314 $4,389 $4,314 $4,389
Station operating
expense 3,483 3,461 3,483 3,461 3,483 3,461
Operating income $831 $928 $831 $928 $831 $928

As-Reported Same Station Pro Forma (1)
Three Months Three Months Three Months
Ended Ended Ended
September 30, September 30, September 30,
2007 2006 2007 2006 2007 2006
Depreciation and
amortization
by segment
Radio Segment $1,608 $1,494 $1,567 $1,494 $1,623 $1,517
Television Segment 405 409 405 409 405 409
Corporate and Other 48 48 48 48 48 48
$2,061 $1,951 $2,020 $1,951 $2,076 $1,974

(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 Nine Months Ended
September 30, 2007 and 2006
(amounts in 000's except per share data)
(Unaudited)

As-Reported Same Station Pro Forma (1)
Nine Months Nine Months Nine Months
Ended Ended Ended
September 30, September 30, September 30,
2007 2006 2007 2006 2007 2006
Consolidated
Net operating
revenue $106,522 $104,727 $106,018 $104,714 $107,121 $105,540
Station
operating
expense 78,986 76,833 78,516 76,730 79,578 77,438
Corporate
general and
administrative 7,194 6,705 7,194 6,705 7,194 6,705
Operating income 20,342 21,189 $20,308 $21,279 20,349 21,397
Interest expense 6,861 7,007 6,861 7,007
Other expense
(income), net 142 (645) 142 (645)
Income tax
expense 5,468 6,050 5,492 6,135
Net income $7,871 $8,777 $7,854 $8,900
Earnings per
share:
Basic $0.39 $0.43 $0.39 $0.43
Diluted $0.39 $0.43 $0.39 $0.43

As-Reported Same Station Pro Forma (1)
Nine Months Nine Months Nine Months
Ended Ended Ended
September 30, September 30, September 30,
2007 2006 2007 2006 2007 2006
Radio Segment
Net operating
revenue $93,640 $92,100 $93,136 $92,087 $94,239 $92,913
Station operating
expense 68,460 66,675 67,990 66,572 69,052 67,280
Operating income $25,180 $25,425 $25,146 $25,515 $25,187 $25,633

As-Reported Same Station Pro Forma (1)
Nine Months Nine Months Nine Months
Ended Ended Ended
September 30, September 30, September 30,
2007 2006 2007 2006 2007 2006
Television Segment
Net operating
revenue $12,882 $12,627 $12,882 $12,627 $12,882 $12,627
Station operating
expense 10,526 10,158 10,526 10,158 10,526 10,158
Operating income $2,356 $2,469 $2,356 $2,469 $2,356 $2,469

As-Reported Same Station Pro Forma (1)
Nine Months Nine Months Nine Months
Ended Ended Ended
September 30, September 30, September 30,
2007 2006 2007 2006 2007 2006
Depreciation and
amortization
by segment
Radio Segment $4,653 $4,569 $4,547 $4,569 $4,713 $4,637
Television
Segment 1,194 1,215 1,194 1,215 1,194 1,215
Corporate and
Other 146 144 146 144 146 144
$5,993 $5,928 $5,887 $5,928 $6,053 $5,996

(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
September 30, 2007 and 2006
(amounts in 000's except per share data)
(Unaudited)

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
March 31, June 30,
2007 2006 2007 2006
Consolidated
Net operating revenue $32,085 $31,435 $38,644 $38,023
Station operating expense 26,176 24,912 27,176 26,566
Corporate general and
administrative 2,316 1,981 2,606 2,499
Other operating income - - - -
Operating income 3,593 4,542 8,862 8,958
Interest expense 2,297 2,277 2,281 2,355
Other expense (income), net 35 (355) 47 (215)
Income tax expense 509 1,074 2,686 2,783
Net income $752 $1,546 $3,848 $4,035
Earnings per share:
Basic $0.04 $0.08 $0.19 $0.20
Diluted $0.04 $0.08 $0.19 $0.20

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
March 31, June 30,
2007 2006 2007 2006
Radio Segment
Net operating revenue $28,095 $27,524 $34,066 $33,696
Station operating expense 22,694 21,624 23,615 23,157
Other operating income - - - -
Operating income $5,401 $5,900 $10,451 $10,539

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
March 31, June 30,
2007 2006 2007 2006
Television Segment
Net operating revenue $3,990 $3,911 $4,578 $4,327
Station operating expense 3,482 3,288 3,561 3,409
Operating income $508 $623 $1,017 $918

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
March 31, June 30,
2007 2006 2007 2006
Depreciation and amortization
by segment
Radio Segment $1,529 $1,562 $1,561 $1,558
Television Segment 389 392 400 414
Corporate and Other 47 48 51 48
$1,965 $2,002 $2,012 $2,020

(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
September 30, 2007 and 2006
(amounts in 000's except per share data)
(Unaudited)

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
September 30, December 31,
2007 2006 2006
Consolidated
Net operating revenue $36,392 $36,082 $38,474
Station operating expense 26,226 25,960 27,756
Corporate general and
administrative 2,272 2,225 2,165
Other operating income - - (312)
Operating income 7,894 7,897 8,865
Interest expense 2,283 2,375 2,372
Other expense (income), net 60 (75) 145
Income tax expense 2,297 2,278 2,641
Net income $3,254 $3,319 $3,707
Earnings per share:
Basic $0.16 $0.16 $0.18
Diluted $0.16 $0.16 $0.18

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
September 30, December 31,
2007 2006 2006
Radio Segment
Net operating revenue $32,078 $31,693 $33,429
Station operating expense 22,743 22,499 24,145
Other operating income - - (312)
Operating income $9,335 $9,194 $9,596

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
September 30, December 31,
2007 2006 2006
Television Segment
Net operating revenue $4,314 $4,389 $5,045
Station operating expense 3,483 3,461 3,611
Operating income $831 $928 $1,434

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
September 30, December 31,
2007 2006 2006
Depreciation and amortization
by segment
Radio Segment $1,623 $1,517 $1,732
Television Segment 405 409 458
Corporate and Other 48 48 50
$2,076 $1,974 $2,240

(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
September 30, 2007 and 2006
(amounts in 000's)
(Unaudited)

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

Adjustment Adjustment
For Acquisitions For Acquisitions
and and
As- Dispositions Same As- Dispositions Same
Reported Not Station Reported Not Station
Three Included Three Three Included Three
Months in Months Months in Months
Ended Entire Ended Ended Entire Ended
Sept. 30, Comparable Sept. 30, Sept. 30, Comparable Sept. 30,
2007 Period 2007 2006 Period 2006
Consolidated
Net operating
revenue $36,218 ($315) $35,903 $35,791 ($13) $35,778
Station
operating
expense 25,975 (209) 25,766 25,761 (103) 25,658
Corporate
general and
administrative 2,272 - 2,272 2,225 - 2,225
Operating
income $7,971 ($106) $7,865 $7,805 $90 $7,895

Adjustment Adjustment
For Acquisitions For Acquisitions
and and
As- Dispositions Same As- Dispositions Same
Reported Not Station Reported Not Station
Three Included Three Three Included Three
Months in Months Months in Months
Ended Entire Ended Ended Entire Ended
Sept. 30, Comparable Sept. 30, Sept. 30, Comparable Sept. 30,
2007 Period 2007 2006 Period 2006
Radio Segment
Net operating
revenue $31,904 ($315) $31,589 $31,402 ($13) $31,389
Station
operating
expense 22,492 (209) 22,283 22,300 (103) 22,197
Operating
income $9,412 ($106) $9,306 $9,102 $90 $9,192

Adjustment Adjustment
For Acquisitions For Acquisitions
and and
As- Dispositions Same As- Dispositions Same
Reported Not Station Reported Not Station
Three Included Three Three Included Three
Months in Months Months in Months
Ended Entire Ended Ended Entire Ended
Sept. 30, Comparable Sept. 30, Sept. 30, Comparable Sept. 30,
2007 Period 2007 2006 Period 2006
Television
Segment
Net operating
revenue $4,314 - $4,314 $4,389 - $4,389
Station
operating
expense 3,483 - 3,483 3,461 - 3,461
Operating
income $831 - $831 $928 - $928

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Nine Months Ended
September 30, 2007 and 2006
(amounts in 000's)
(Unaudited)

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

Adjustment Adjustment
For Acquisitions For Acquisitions
and and
As- Dispositions Same As- Dispositions Same
Reported Not Station Reported Not Station
Nine Included Nine Nine Included Nine
Months in Months Months in Months
Ended Entire Ended Ended Entire Ended
Sept. 30, Comparable Sept. 30, Sept. 30, Comparable Sept. 30,
2007 Period 2007 2006 Period 2006
Consolidated
Net operating
revenue $106,522 ($504) $106,018 $104,727 ($13) $104,714
Station
operating
expense 78,986 (470) 78,516 76,833 (103) 76,730
Corporate
general and
administrative 7,194 - 7,194 6,705 - 6,705
Operating
income $20,342 ($34) $20,308 $21,189 $90 $21,279

Adjustment Adjustment
For Acquisitions For Acquisitions
and and
As- Dispositions Same As- Dispositions Same
Reported Not Station Reported Not Station
Nine Included Nine Nine Included Nine
Months in Months Months in Months
Ended Entire Ended Ended Entire Ended
Sept. 30, Comparable Sept. 30, Sept. 30, Comparable Sept. 30,
2007 Period 2007 2006 Period 2006
Radio Segment
Net operating
revenue $93,640 ($504) $93,136 $92,100 ($13) $92,087
Station
operating
expense 68,460 (470) 67,990 66,675 (103) 66,572
Operating
income $25,180 ($34) $25,146 $25,425 $90 $25,515

Adjustment Adjustment
For Acquisitions For Acquisitions
and and
As- Dispositions Same As- Dispositions Same
Reported Not Station Reported Not Station
Nine Included Nine Nine Included Nine
Months in Months Months in Months
Ended Entire Ended Ended Entire Ended
Sept. 30, Comparable Sept. 30, Sept. 30, Comparable Sept. 30,
2007 Period 2007 2006 Period 2006
Television
Segment
Net operating
revenue $12,882 - $12,882 $12,627 - $12,627
Station
operating
expense 10,526 - 10,526 10,158 - 10,158
Operating
income $2,356 - $2,356 $2,469 - $2,469

First Call Analyst:
FCMN Contact: aparks@sagacom.com

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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