Saga Communications, Inc. Reports 4th Quarter and Year End 2007 Results

Saga Communications, Inc. Reports 4th Quarter and Year End 2007 Results

GROSSE POINTE FARMS, Mich., Feb. 28 /PRNewswire-FirstCall/ -- Saga Communications, Inc. (NYSE:SGA) today reported net operating revenue for the year ended December 31, 2007 increased 0.8% over the comparable period in 2006 to $144.0 million. The Company reported $3.5 million of net political revenue during the year ended December 31, 2006 compared to $1.4 million for the same period in 2007. Excluding political revenue, the Company's net operating revenue increased 2.3% for the period. Station operating expense increased 1.8% to $106.3 million (station operating expense includes depreciation and amortization attributable to the stations) and operating income decreased 6.9% to $27.9 million. Net income decreased 11.6% to $11.0 million ($.55 per fully diluted share) for the year ended December 31, 2007 compared to $12.5 million ($.61 per fully diluted share) for the same period in 2006. Free cash flow increased 0.2% to $16.1 million for the year. On a same station basis for the year, net operating revenue increased 0.1% to $143.0 million, operating income decreased 8.1% to $27.7 million and station operating expense increased 1.2% to $105.4 million.

For the quarter ended December 31, 2007 net operating revenue decreased 1.9% from the comparable period in 2006 to $37.5 million. The Company reported $2.4 million of net political revenue during the quarter ended December 31, 2006 compared to $852 thousand for the same period in 2007. Excluding political revenue, the Company's net operating revenue increased 2.4% for the period. Station operating expense decreased 0.9% to $27.3 million (station operating expense includes depreciation and amortization attributable to the stations) and operating income decreased 13.9% to $7.6 million. Net income decreased 14.7% to $3.1 million ($.16 per fully diluted share) for the quarter ended December 31, 2007 compared to $3.7 million ($.18 per fully diluted share) for 2006. Free cash flow decreased 13.2% to $4.1 million for the quarter. On a same station basis for the quarter, net operating revenue decreased 2.6% to $37.2 million, operating income decreased 14.5% to $7.5 million and station operating expense decreased 1.7% to $27.1 million.

Capital expenditures in the fourth quarter of 2007 were $3.7 million with $2.0 million being spent as a result of acquisitions, $309 thousand were related to digital radio and $147 thousand related to digital television. For the 2007 fiscal year total capital expenditures were approximately $9.9 million with approximately $3.7 million being spent as a result of acquisitions, $1.7 million related to digital radio and $147 thousand related to digital television.

Subsequent to the year ended December 31, 2007, the Company announced that its Board of Directors authorized an increase in the amount committed to its Stock Buy-Back Program from $30 million to $60 million. During the year ended 2007, the Company bought back 12,821 shares of stock for a total purchase price of $126,415. From January 1, 2008 through February 26, 2008, the Company has bought back 68,324 shares for a total purchase price of $407,918.

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. For additional information, contact us at (313) 886-7070 or visit our website at www.sagacommunications.com.

Saga's fourth quarter and year end 2007 results conference call will be on Thursday, February 28, 2008 at 2:00 PM EST. The dial in number for domestic calls is 800/230-1093. 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 908881. Thereafter, a transcript of the call will be available on our 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 PM EST on February 28, 2008 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 and Twelve Months Ended
December 31, 2007 and 2006
(amounts in 000's except per share data)
(Unaudited)

Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
Operating Results
Net operating revenue $37,501 $38,219 $144,023 $142,946
Station operating expense 27,316 27,563 106,302 104,396
Corporate general and
administrative 2,606 2,165 9,800 8,870
Other operating income - (312) - (312)
Operating income 7,579 8,803 27,921 29,992
Interest expense 2,093 2,372 8,954 9,379
Other expense (income), net 131 145 273 (500)
Income before income tax 5,355 6,286 18,694 21,113
Income tax expense 2,222 2,615 7,690 8,665
Net income $3,133 $3,671 $11,004 $12,448
Earnings per share
Basic $0.16 $0.18 $0.55 $0.61
Diluted $0.16 $0.18 $0.55 $0.61
Weighted average common shares 20,118 20,227 20,091 20,442
Weighted average common shares and
common shares equivalents 20,132 20,241 20,115 20,458

Free Cash Flow
Net income $3,133 $3,671 $11,004 $12,448
Plus: Depreciation and amortization:
Station 2,135 2,177 7,982 7,961
Corporate 58 50 204 194
Deferred tax provision 1,983 2,073 5,144 5,183
Non-cash compensation 375 326 1,366 1,310
Other expense (income), net 131 145 273 (500)
Less: Capital expenditures (3,672) (3,668) (9,852) (10,504)
Free cash flow $4,143 $4,774 $16,121 $16,092

Balance Sheet Data
Working capital $24,075 $21,617
Net fixed assets 76,217 73,658
Net intangible assets and
other assets 220,045 210,044
Total assets 337,644 322,641
Long term debt (including current
portion of $0 and $0, respectively) 129,911 133,911
Stockholders' equity 149,076 136,236

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
December 31, 2007 and 2006
(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,
2007 2006 2007 2006 2007 2006
Consolidated
Net operating
revenue $37,501 $38,219 $37,225 $38,219 $37,537 $38,582
Station operating
expense 27,316 27,563 27,091 27,563 27,352 27,864
Corporate general
and
administrative 2,606 2,165 2,606 2,165 2,606 2,165
Other operating
income - (312) - (312) - (312)
Operating income 7,579 8,803 $7,528 $8,803 7,579 8,865
Interest expense 2,093 2,372 2,093 2,372
Other expense
(income), net 131 145 131 145
Income tax expense 2,222 2,615 2,222 2,641
Net income $3,133 $3,671 $3,133 $3,707
Earnings per
share:
Basic $0.16 $0.18 $0.16 $0.18
Diluted $0.16 $0.18 $0.16 $0.18

As-Reported Same Station Pro Forma (1)
Three Months Ended Three Months Ended Three Months Ended
December 31, December 31, December 31,
2007 2006 2007 2006 2007 2006
Radio Segment
Net operating
revenue $32,956 $33,174 $32,680 $33,174 $32,992 $33,537
Station operating
expense 23,702 23,952 23,477 23,952 23,738 24,253
Other operating
income - (312) - (312) - (312)
Operating income $9,254 $9,534 $9,203 $9,534 $9,254 $9,596

As-Reported Same Station Pro Forma (1)
Three Months Ended Three Months Ended Three Months Ended
December 31, December 31, December 31,
2007 2006 2007 2006 2007 2006
Television Segment
Net operating
revenue $4,545 $5,045 $4,545 $5,045 $4,545 $5,045
Station operating
expense 3,614 3,611 3,614 3,611 3,614 3,611
Operating income $931 $1,434 $931 $1,434 $931 $1,434

As-Reported Same Station Pro Forma (1)
Three Months Ended Three Months Ended Three Months Ended
December 31, December 31, December 31,
2007 2006 2007 2006 2007 2006
Depreciation and
amortization
by segment
Radio Segment $1,710 $1,719 $1,653 $1,719 $1,723 $1,770
Television Segment 425 458 425 458 425 458
Corporate and Other 58 50 58 50 58 50
$2,193 $2,227 $2,136 $2,227 $2,206 $2,278

(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 Twelve Months Ended
December 31, 2007 and 2006
(amounts in 000's except per share data)
(Unaudited)

As-Reported Same Station Pro Forma (1)
Twelve Months Twelve Months Twelve Months
Ended Ended Ended
December 31, December 31, December 31,
2007 2006 2007 2006 2007 2006
Consolidated
Net
operating
revenue $144,023 $142,946 $142,948 $142,867 $144,982 $144,446
Station operating
expense 106,302 104,396 105,409 104,129 107,159 105,626
Corporate general
and
administrative 9,800 8,870 9,800 8,870 9,800 8,870
Other operating
income - (312) - (312) - (312)
Operating income 27,921 29,992 $27,739 $30,180 28,023 30,262
Interest expense 8,954 9,379 8,954 9,379
Other expense
(income), net 273 (500) 273 (500)
Income tax expense 7,690 8,665 7,732 8,776
Net income $11,004 $12,448 $11,064 $12,607
Earnings per share:
Basic $0.55 $0.61 $0.55 $0.62
Diluted $0.55 $0.61 $0.55 $0.62

As-Reported Same Station Pro Forma (1)
Twelve Months Twelve Months Twelve Months
Ended Ended Ended
December 31, December 31, December 31,
2007 2006 2007 2006 2007 2006
Radio Segment
Net operating
revenue $126,596 $125,274 $125,521 $125,195 $127,555 $126,774
Station operating
expense 92,162 90,627 91,269 90,360 93,019 91,857
Other operating
income - (312) - (312) - (312)
Operating income $34,434 $34,959 $34,252 $35,147 $34,536 $35,229

As-Reported Same Station Pro Forma (1)
Twelve Months Twelve Months Twelve Months
Ended Ended Ended
December 31, December 31, December 31,
2007 2006 2007 2006 2007 2006
Television Segment
Net operating
revenue $17,427 $17,672 $17,427 $17,672 $17,427 $17,672
Station operating
expense 14,140 13,769 14,140 13,769 14,140 13,769
Operating income $3,287 $3,903 $3,287 $3,903 $3,287 $3,903

As-Reported Same Station Pro Forma (1)
Twelve Months Twelve Months Twelve Months
Ended Ended Ended
December 31, December 31, December 31,
2007 2006 2007 2006 2007 2006
Depreciation and
amortization
by segment
Radio Segment $6,363 $6,288 $6,153 $6,231 $6,548 $6,519
Television Segment 1,619 1,673 1,619 1,673 1,619 1,673
Corporate and Other 204 194 204 194 204 194
$8,186 $8,155 $7,976 $8,098 $8,371 $8,386

(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
December 31, 2007 and 2006
(amounts in 000's except per share data)
(Unaudited)

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months Ended
March 31, June 30,
2007 2006 2007 2006
Consolidated
Net operating revenue $32,193 $31,543 $38,752 $38,131
Station operating expense 26,284 25,020 27,284 26,674
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 Ended Three Months Ended
March 31, June 30,
2007 2006 2007 2006
Radio Segment
Net operating revenue $28,203 $27,632 $34,174 $33,804
Station operating expense 22,802 21,732 23,723 23,265
Other operating income - - - -
Operating income $5,401 $5,900 $10,451 $10,539

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months 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 Ended Three Months Ended
March 31, June 30,
2007 2006 2007 2006
Depreciation and amortization
by segment
Radio Segment $1,566 $1,599 $1,599 $1,596
Television Segment 389 392 400 414
Corporate and Other 47 48 51 48
$2,002 $2,039 $2,050 $2,058

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months Ended
September 30, December 31,
2007 2006 2007 2006
Consolidated
Net operating revenue $36,500 $36,190 $37,537 $38,582
Station operating expense 26,239 26,068 27,352 27,864
Corporate general and
administrative 2,272 2,225 2,606 2,165
Other operating income - - - (312)
Operating income 7,989 7,897 7,579 8,865
Interest expense 2,283 2,375 2,093 2,372
Other expense (income), net 60 (75) 131 145
Income tax expense 2,315 2,278 2,222 2,641
Net income $3,331 $3,319 $3,133 $3,707
Earnings per share:
Basic $0.17 $0.16 $0.16 $0.18
Diluted $0.17 $0.16 $0.16 $0.18

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months Ended
September 30, December 31,
2007 2006 2007 2006
Radio Segment
Net operating revenue $32,186 $31,801 $32,992 $33,537
Station operating expense 22,756 22,607 23,738 24,253
Other operating income - - - (312)
Operating income $9,430 $9,194 $9,254 $9,596

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months Ended
September 30, December 31,
2007 2006 2007 2006
Television Segment
Net operating revenue $4,314 $4,389 $4,545 $5,045
Station operating expense 3,483 3,461 3,614 3,611
Operating income $831 $928 $931 $1,434

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months Ended
September 30, December 31,
2007 2006 2007 2006
Depreciation and amortization
by segment
Radio Segment $1,660 $1,554 $1,723 $1,770
Television Segment 405 409 425 458
Corporate and Other 48 48 58 50
$2,113 $2,011 $2,206 $2,278

(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
December 31, 2007 and 2006
(amounts in 000's)
(Unaudited)

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

Adjustment Adjustment
For For
As- Acquisitions Same As- Acquisitions Same
Reported and Station Reported and Station
Three Dispositions Three Three Dispositions Three
Months Not Included Months Months Not Included Months
Ended in Entire Ended Ended in Entire Ended
Dec. 31, Comparable Dec. 31, Dec. 31, Comparable Dec. 31,
2007 Period 2007 2006 Period 2006
Consolidated
Net
operating
revenue $37,501 $(276) $37,225 $38,219 - $38,219
Station
operating
expense 27,316 (225) 27,091 27,563 - 27,563
Corporate
general
and
administrat-
ive 2,606 - 2,606 2,165 - 2,165
Other
operating
income - - - (312) - (312)
Operating
income $7,579 $(51) $7,528 $8,803 - $8,803

Adjustment Adjustment
For For
As- Acquisitions Same As- Acquisitions Same
Reported and Station Reported and Station
Three Dispositions Three Three Dispositions Three
Months Not Included Months Months Not Included Months
Ended in Entire Ended Ended in Entire Ended
Dec. 31, Comparable Dec. 31, Dec. 31, Comparable Dec. 31,
2007 Period 2007 2006 Period 2006
Radio
Segment
Net
operating
revenue $32,956 $(276) $32,680 $33,174 - $33,174
Station
operating
expense 23,702 (225) 23,477 23,952 - 23,952
Other
operating
income - - - (312) - (312)
Operating
income $9,254 $(51) $9,203 $9,534 - $9,534

Adjustment Adjustment
For For
As- Acquisitions Same As- Acquisitions Same
Reported and Station Reported and Station
Three Dispositions Three Three Dispositions Three
Months Not Included Months Months Not Included Months
Ended in Entire Ended Ended in Entire Ended
Dec. 31, Comparable Dec. 31, Dec. 31, Comparable Dec. 31,
2007 Period 2007 2006 Period 2006
Television
Segment
Net
operating
revenue $4,545 - $4,545 $5,045 - $5,045
Station
operating
expense 3,614 - 3,614 3,611 - 3,611
Operating
income $931 - $931 $1,434 - $1,434

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Twelve Months Ended
December 31, 2007 and 2006
(amounts in 000's)
(Unaudited)

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

Adjustment Adjustment
For For
As- Acquisitions Same As- Acquisitions Same
Reported and Station Reported and Station
Twelve Dispositions Twelve Twelve Dispositions Twelve
Months Not Included Months Months Not Included Months
Ended in Entire Ended Ended in Entire Ended
Dec. 31, Comparable Dec. 31, Dec. 31, Comparable Dec. 31,
2007 Period 2007 2006 Period 2006
Consolidated
Net
operating
revenue $144,023 $(1,075) $142,948 $142,946 $(79) $142,867
Station
operating
expense 106,302 (893) 105,409 104,396 (267) 104,129
Corporate
general
and
administrat-
ive 9,800 - 9,800 8,870 - 8,870
Other
operating
income - - - (312) - (312)
Operating
income $27,921 $(182) $27,739 $29,992 $188 $30,180

Adjustment Adjustment
For For
As- Acquisitions Same As- Acquisitions Same
Reported and Station Reported and Station
Twelve Dispositions Twelve Twelve Dispositions Twelve
Months Not Included Months Months Not Included Months
Ended in Entire Ended Ended in Entire Ended
Dec. 31, Comparable Dec. 31, Dec. 31, Comparable Dec. 31,
2007 Period 2007 2006 Period 2006
Radio Segment
Net
operating
revenue $126,596 $(1,075) $125,521 $125,274 $(79) $125,195
Station
operating
expense 92,162 (893) 91,269 90,627 (267) 90,360
Other
operating
income - - - (312) - (312)
Operating
income $34,434 $(182) $34,252 $34,959 $188 $35,147

Adjustment Adjustment
For For
As- Acquisitions Same As- Acquisitions Same
Reported and Station Reported and Station
Twelve Dispositions Twelve Twelve Dispositions Twelve
Months Not Included Months Months Not Included Months
Ended in Entire Ended Ended in Entire Ended
Dec. 31, Comparable Dec. 31, Dec. 31, Comparable Dec. 31,
2007 Period 2007 2006 Period 2006
Television
Segment
Net
operating
revenue $17,427 - $17,427 $17,672 - $17,672
Station
operating
expense 14,140 - 14,140 13,769 - 13,769
Operating
income $3,287 - $3,287 $3,903 - $3,903

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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