Saga Communications, Inc. Reports 3rd Quarter 2008 Results

Saga Communications, Inc. Reports 3rd Quarter 2008 Results

GROSSE POINTE FARMS, Mich., Nov. 4 /PRNewswire-FirstCall/ -- Saga Communications, Inc. (NYSE:SGA) today reported that 3rd quarter 2008 free cash flow was approximately flat at $5.5 million. Net operating revenue was also approximately flat with the comparable period in 2007 at $36.2 million and operating income decreased 7.2% to $7.4 million. Net income decreased $224 thousand to $3.1 million for the quarter ended September 30, 2008 ($.16 per fully diluted share compared to $.17 per fully diluted share for the comparable period in 2007). For the same period, station operating expense increased $613 thousand to $26.6 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the quarter, net operating revenue decreased 1.0% to $35.9 million, operating income decreased 7.8% to $7.3 million and station operating expense increased $384 thousand to $26.3 million.

For the nine month period ended September 30, 2008, free cash flow increased 8.8% to $13.0 million. Net operating revenue decreased 1.4% from the comparable period in 2007 to $105.1 million, operating income decreased 8.0% to $18.7 million and net income decreased $404 thousand to $7.5 million ($.38 per fully diluted share) compared to $7.9 million ($.39 per fully diluted share) for the comparable period in 2007. For the same period, station operating expense increased $269 thousand to approximately $79.3 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the nine months, net operating revenue decreased 2.3% to $104.1 million, operating income decreased 9.2% to $18.5 million and station operating expense decreased $452 thousand to $78.5 million.

Capital expenditures in the third quarter of 2008 were $1.6 million of which $60 thousand were as a result of acquisitions. For the nine months, capital expenditures were $5.1 million of which $390 thousand were as a result of acquisitions and $150 thousand were related to digital radio. Currently we expect capital expenditures for the year to be approximately $8.0 million (reduced from our previous estimate of $9.0 million).

During the quarter ended September 30, 2008, the Company bought back 1,548,394 shares of stock for a total purchase price of $8.8 million. For the nine month period ended September 30, 2008 the Company bought back 2,084,756 shares for a total purchase price of $11.8 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 2008 and 2007 acquisitions and dispositions occurred as of January 1, 2007.

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 third quarter 2008 results conference call will be on Tuesday, November 4, 2008 at 2:00 PM EST. The dial in number for domestic calls is 800/230-1093. For international callers the number is 612/332-0107. The call can be replayed for 7 days by calling domestically 800/475-6701 or internationally 320/365-3844 and referring to access code 960297. 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 November 4, 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 Nine Months Ended
September 30, 2008 and 2007
(amounts in 000's except per share data)
(Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
Operating Results
Net operating revenue $36,192 $36,218 $105,066 $106,522
Station operating expense 26,588 25,975 79,255 78,986
Corporate general and
administrative 2,485 2,272 7,611 7,194
Gain on asset exchange (282) - (506) -
Operating income 7,401 7,971 18,706 20,342
Interest expense 1,889 2,283 5,760 6,861
Other expense, net - 60 27 142
Income before income tax 5,512 5,628 12,919 13,339
Income tax expense 2,415 2,307 5,452 5,468
Net income $3,097 $3,321 $7,467 $7,871
Earnings per share
Basic $0.16 $0.17 $0.38 $0.39
Diluted $0.16 $0.17 $0.38 $0.39
Weighted average common shares 18,940 20,112 19,593 20,082
Weighted average common shares and
common shares equivalents 18,952 20,126 19,607 20,111

Free Cash Flow
Net income $3,097 $3,321 $7,467 $7,871
Plus: Depreciation and
amortization:
Station 2,238 2,013 6,391 5,847
Corporate 54 48 160 146
Deferred tax provision 1,640 1,334 3,566 3,161
Non-cash compensation 338 376 1,059 991
Gain on asset exchange (282) - (506) -
Other expense, net - 60 27 142
Less: Capital expenditures (1,609) (1,617) (5,134) (6,180)
Free cash flow $5,476 $5,535 $13,030 $11,978

Balance Sheet Data
Working capital $19,311 $22,560
Net fixed assets 73,889 74,286
Net intangible assets and other
assets 230,484 217,711
Total assets 339,815 330,935
Long term debt (including current
portion of $1,061 and $0,
respectively) 134,411 129,911
Stockholders' equity 146,066 145,543

Saga Communications, Inc.
Selected Supplemental Financial Data
For The Three Months Ended
September 30, 2008 and 2007
(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,
2008 2007 2008 2007 2008 2007
Consolidated
Net operating
revenue $36,192 $36,218 $35,855 $36,156 $36,192 $36,500
Station operating
expense 26,588 25,975 26,320 25,936 26,588 26,239
Corporate general
and administrative 2,485 2,272 2,485 2,272 2,485 2,272
Gain on asset
exchange (282) - (282) - (282) -
Operating income 7,401 7,971 $7,332 $7,948 7,401 7,989
Interest expense 1,889 2,283 1,889 2,283
Other expense, net - 60 - 60
Income tax expense 2,415 2,307 2,415 2,315
Net income $3,097 $3,321 $3,097 $3,331
Earnings per share:
Basic $0.16 $0.17 $0.16 $0.17
Diluted $0.16 $0.17 $0.16 $0.17

As-Reported Same Station Pro Forma (1)
Three Months Three Months Three Months
Ended Ended Ended
September 30, September 30, September 30,
2008 2007 2008 2007 2008 2007
Radio Segment
Net operating
revenue $31,306 $31,904 $30,969 $31,842 $31,306 $32,186
Station operating
expense 22,717 22,492 22,449 22,453 22,717 22,756
Operating income $8,589 $9,412 $8,520 $9,389 $8,589 $9,430

As-Reported Same Station Pro Forma (1)
Three Months Three Months Three Months
Ended Ended Ended
September 30, September 30, September 30,
2008 2007 2008 2007 2008 2007
Television Segment
Net operating
revenue $4,886 $4,314 $4,886 $4,314 $4,886 $4,314
Station operating
expense 3,871 3,483 3,871 3,483 3,871 3,483
Gain on asset
exchange (282) - (282) - (282) -
Operating income $1,297 $831 $1,297 $831 $1,297 $831

As-Reported Same Station Pro Forma (1)
Three Months Three Months Three Months
Ended Ended Ended
September 30, September 30, September 30,
2008 2007 2008 2007 2008 2007
Depreciation and
amortization
by segment
Radio Segment $1,618 $1,608 $1,589 $1,600 $1,618 $1,660
Television Segment 620 405 620 405 620 405
Corporate and Other 54 48 54 48 54 48
$2,292 $2,061 $2,263 $2,053 $2,292 $2,113

(1) Pro Forma results assume all acquisitions and dispositions in 2007
and 2008 occurred as of January 1, 2007.

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Nine Months Ended
September 30, 2008 and 2007
(amounts in 000's except per share data)
(Unaudited)

As-Reported Same Station
Nine Months Nine Months
Ended Ended
September 30, September 30,
2008 2007 2008 2007
Consolidated
Net operating revenue $105,066 $106,522 $104,049 $106,460
Station operating expense 79,255 78,986 78,496 78,948
Corporate general and
administrative 7,611 7,194 7,611 7,194
Gain on asset exchange (506) - (506) -
Operating income 18,706 20,342 $18,448 $20,318
Interest expense 5,760 6,861
Other expense, net 27 142
Income tax expense 5,452 5,468
Net income $7,467 $7,871
Earnings per share:
Basic $0.38 $0.39
Diluted $0.38 $0.39

Pro Forma (1)
Nine Months Ended
September 30,
2008 2007
Consolidated
Net operating revenue $105,066 $107,445
Station operating expense 79,255 79,807
Corporate general and administrative 7,611 7,194
Gain on asset exchange (506) -
Operating income 18,706 20,444
Interest expense 5,760 6,861
Other expense, net 27 142
Income tax expense 5,452 5,510
Net income $7,467 $7,931
Earnings per share:
Basic $0.38 $0.39
Diluted $0.38 $0.39

As-Reported Same Station Pro Forma (1)
Nine Months Nine Months Nine Months
Ended Ended Ended
September 30, September 30, September 30,
2008 2007 2008 2007 2008 2007
Radio Segment
Net operating
revenue $91,316 $93,640 $90,299 $93,578 $91,316 $94,563
Station operating
expense 68,028 68,460 67,269 68,422 68,028 69,281
Operating income $23,288 $25,180 $23,030 $25,156 $23,288 $25,282

As-Reported Same Station Pro Forma (1)
Nine Months Nine Months Nine Months
Ended Ended Ended
September 30, September 30, September 30,
2008 2007 2008 2007 2008 2007
Television Segment
Net operating
revenue $13,750 $12,882 $13,750 $12,882 $13,750 $12,882
Station operating
expense 11,227 10,526 11,227 10,526 11,227 10,526
Gain on asset
exchange (506) - (506) - (506) -
Operating income $3,029 $2,356 $3,029 $2,356 $3,029 $2,356

As-Reported Same Station Pro Forma (1)
Nine Months Nine Months Nine Months
Ended Ended Ended
September 30, September 30, September 30,
2008 2007 2008 2007 2008 2007
Depreciation and
amortization
by segment
Radio Segment $4,771 $4,653 $4,685 $4,645 $4,771 $4,825
Television Segment 1,620 1,194 1,620 1,194 1,620 1,194
Corporate and Other 160 146 160 146 160 146
$6,551 $5,993 $6,465 $5,985 $6,551 $6,165

(1) Pro Forma results assume all acquisitions and dispositions in 2007
and 2008 occurred as of January 1, 2007.

Saga Communications, Inc.
Selected Supplemental Financial Data
Quarterly Proforma Information
September 30, 2008 and 2007
(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,
2008 2007 2008 2007
Consolidated
Net operating revenue $31,532 $32,193 $37,342 $38,752
Station operating expense 25,421 26,284 27,246 27,284
Corporate general and
administrative 2,552 2,316 2,574 2,606
Gain on asset exchange - - (224) -
Operating income 3,559 3,593 7,746 8,862
Interest expense 1,995 2,297 1,876 2,281
Other expense, net 20 35 7 47
Income tax expense 634 509 2,403 2,686
Net income $910 $752 $3,460 $3,848
Earnings per share:
Basic $0.05 $0.04 $0.17 $0.19
Diluted $0.05 $0.04 $0.17 $0.19

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
September 30, December 31,
2008 2007 2007
Consolidated
Net operating revenue $36,192 $36,500 $37,537
Station operating expense 26,588 26,239 27,352
Corporate general and
administrative 2,485 2,272 2,606
Gain on asset exchange (282) - -
Operating income 7,401 7,989 7,579
Interest expense 1,889 2,283 2,093
Other expense, net - 60 131
Income tax expense 2,415 2,315 2,222
Net income $3,097 $3,331 $3,133
Earnings per share:
Basic $0.16 $0.17 $0.16
Diluted $0.16 $0.17 $0.16

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
March 31, June 30,
2008 2007 2008 2007
Radio Segment
Net operating revenue $27,381 $28,203 $32,629 $34,174
Station operating expense 21,913 22,802 23,398 23,723
Operating income $5,468 $5,401 $9,231 $10,451

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
September 30, December 31,
2008 2007 2007
Radio Segment
Net operating revenue $31,306 $32,186 $32,992
Station operating expense 22,717 22,756 23,738
Operating income $8,589 $9,430 $9,254

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
March 31, June 30,
2008 2007 2008 2007
Television Segment
Net operating revenue $4,151 $3,990 $4,713 $4,578
Station operating expense 3,508 3,482 3,848 3,561
Gain on asset exchange - - (224) -
Operating income $643 $508 $1,089 $1,017

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
September 30, December 31,
2008 2007 2007
Television Segment
Net operating revenue $4,886 $4,314 $4,545
Station operating expense 3,871 3,483 3,614
Gain on asset exchange (282) - -
Operating income $1,297 $831 $931

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
March 31, June 30,
2008 2007 2008 2007
Depreciation and amortization
by segment
Radio Segment $1,562 $1,566 $1,591 $1,599
Television Segment 395 389 605 400
Corporate and Other 53 47 53 51
$2,010 $2,002 $2,249 $2,050

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended Ended
September 30, December 31,
2008 2007 2007
Depreciation and amortization
by segment
Radio Segment $1,618 $1,660 $1,723
Television Segment 620 405 425
Corporate and Other 54 48 58
$2,292 $2,113 $2,206

(1) Pro Forma results assume all acquisitions and dispositions in 2007 and
2008 occurred as of January 1, 2007.

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Three Months Ended
September 30, 2008 and 2007
(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
Sept.30, Comparable Sept.30, Sept.30, Comparable Sept.30,
2008 Period 2008 2007 Period 2007

Consolidated
Net operating
revenue $36,192 $(337) $35,855 $36,218 $(62) $36,156
Station operating
expense 26,588 (268) 26,320 25,975 (39) 25,936
Corporate general
and
administrative 2,485 - 2,485 2,272 - 2,272
Gain on asset
exchange (282) - (282) - - -
Operating income $7,401 $(69) $7,332 $7,971 $(23) $7,948

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
Sept.30, Comparable Sept.30, Sept.30, Comparable Sept.30,
2008 Period 2008 2007 Period 2007
Radio Segment
Net operating
revenue $31,306 $(337) $30,969 $31,904 $(62) $31,842
Station
operating
expense 22,717 (268) 22,449 22,492 (39) 22,453
Operating income $8,589 $(69) $8,520 $9,412 $(23) $9,389

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
Sept.30, Comparable Sept.30, Sept.30, Comparable Sept.30,
2008 Period 2008 2007 Period 2007
Television
Segment
Net operating
revenue $4,886 - $4,886 $4,314 - $4,314
Station operating
expense 3,871 - 3,871 3,483 - 3,483
Gain on asset
exchange (282) - (282) - - -
Operating income $1,297 - $1,297 $831 - $831

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Nine Months Ended
September 30, 2008 and 2007
(amounts in 000's)
(Unaudited)

Reconciliation of As-Reported (historical) information to Same Station
Operating Income
Adjustment
For
As- Acquisitions Same
Reported and Station
Nine Dispositions Nine
Months Not Included Months
Ended in Entire Ended
Sept. 30, Comparable Sept. 30,
2008 Period 2008

Consolidated
Net operating revenue $105,066 $(1,017) $104,049
Station operating expense 79,255 (759) 78,496
Corporate general and administrative 7,611 - 7,611
Gain on asset exchange (506) - (506)
Operating income $18,706 $(258) $18,448

Adjustment
For
As- Acquisitions Same
Reported and Station
Nine Dispositions Nine
Months Not Included Months
Ended in Entire Ended
Sept. 30, Comparable Sept. 30,
2007 Period 2007
Consolidated
Net operating revenue $106,522 $(62) $106,460
Station operating expense 78,986 (38) 78,948
Corporate general and administrative 7,194 - 7,194
Gain on asset exchange - - -
Operating income $20,342 $(24) $20,318

Adjustment Adjustment
For For
As- Acquisitions Same As- Acquisitions Same
Reported and Station Reported and Station
Nine Dispositions Nine Nine Dispositions Nine
Months Not Included Months Months Not Included Months
Ended in Entire Ended Ended in Entire Ended
Sept.30, Comparable Sept.30, Sept.30, Comparable Sept.30,
2008 Period 2008 2007 Period 2007

Radio Segment
Net operating
revenue $91,316 $(1,017) $90,299 $93,640 $(62) $93,578
Station
operating
expense 68,028 (759) 67,269 68,460 (38) 68,422
Operating
income $23,288 $(258) $23,030 $25,180 $(24) $25,156

Adjustment Adjustment
For For
As- Acquisitions Same As- Acquisitions Same
Reported and Station Reported and Station
Nine Dispositions Nine Nine Dispositions Nine
Months Not Included Months Months Not Included Months
Ended in Entire Ended Ended in Entire Ended
Sept.30, Comparable Sept.30, Sept.30, Comparable Sept.30,
2008 Period 2008 2007 Period 2007
Television
Segment
Net operating
revenue $13,750 - $13,750 $12,882 - $12,882
Station
operating
expense 11,227 - 11,227 10,526 - 10,526
Gain on asset
exchange (506) - (506) - - -
Operating
income $3,029 - $3,029 $2,356 - $2,356

Source: Saga Communications, Inc.

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

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

-------
Profile: intent