Saga Communications, Inc. Reports 4th Quarter and Year End 2008 Results

Saga Communications, Inc. Reports 4th Quarter and Year End 2008 Results

GROSSE POINTE FARMS, Mich., March 31 /PRNewswire-FirstCall/ -- Saga Communications, Inc. (NYSE Amex: SGA) today reported free cash flow increased 17.3% to $18.9 million for the year. Net operating revenue for the year ended December 31, 2008 decreased 2.8% over the comparable period in 2007 to $140.0 million. Station operating expense decreased 0.5% to $105.8 million (station operating expense includes depreciation and amortization attributable to the stations). The Company's net loss was $66.5 million ($14.05 per fully diluted share) for the year ended December 31, 2008 compared to net income of $11.0 million ($2.19 per fully diluted share) for the same period last year. Results for the full year of 2008 include a pre-tax non-cash impairment charge of $116.4 million related to the Company's review of its indefinite-lived intangible assets. There was no such charge in 2007. Without the non-cash impairment charge, the Company would have had a net income of $9.9 million ($2.08 per fully diluted share) for the year. On a same station basis for the year, net operating revenue decreased 3.5% to $138.6 million, operating income (excluding the non-cash impairment charge) decreased 12.6% to $24.3 million and station operating expense decreased 1.2% to $104.8 million.

For the quarter ended December 31, 2008 free cash flow increased 42.0% to $5.9 million for the quarter. Net operating revenue decreased 7.0% from the comparable period in 2007 to $35.0 million. Station operating expense decreased 2.8% to $26.6 million (station operating expense includes depreciation and amortization attributable to the stations). The Company's net loss was $74.0 million for the quarter ended December 31, 2008 compared to a net income of $3.1 million for the same period last year. Results for the fourth quarter of 2008 include a pre-tax non-cash impairment charge of $116.4 million related to the Company's review of its indefinite-lived intangible assets. On a same station basis for the quarter, net operating revenue decreased 7.2% to $34.7 million, operating income (excluding the non-cash impairment charge) decreased 21.0% to $6.0 million and station operating expense decreased 3.1% to $26.4 million.

Capital expenditures in the fourth quarter of 2008 were $2.0 million. For the 2008 fiscal year total capital expenditures were $7.1 million. This compares to $3.7 million and $9.9 million for the same respective periods last year. The Company currently expects to spend approximately $3.5 million for capital expenditures during 2009.

During the year ended December 31, 2008, the Company bought back 899,601 shares of stock for a total purchase price of $19.2 million. For the three month period ended December 31, 2008 the Company bought back 378,412 shares for a total purchase price of $7.4 million.

All share and per share information have been adjusted for the Company's January 28, 2009 1-for-4 reverse stock split.

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.

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, 2008 and 2007
(amounts in 000's except per share data)
(Unaudited)

Three Months Twelve Months
Ended Ended
December 31, December 31,
2008 2007 2008 2007
Operating Results
Net operating revenue $34,890 $37,501 $139,956 $144,023
Station operating expense 26,550 27,316 105,805 106,302
Corporate general and
administrative 2,368 2,606 9,979 9,800
Gain on asset exchange - - (506) -
Impairment of intangible assets 116,443 - 116,443 -
Operating income (loss) (110,471) 7,579 (91,765) 27,921
Interest expense 1,413 2,093 7,173 8,954
Other expense, net 49 131 76 273
Income (loss) before income tax (111,933) 5,355 (99,014) 18,694
Income tax expense (benefit) (37,974) 2,222 (32,522) 7,690
Net income (loss) $(73,959) $3,133 $(66,492) $11,004
Earnings (loss) per share
Basic $(17.41) $0.62 $(14.05) $2.19
Diluted $(17.41) $0.62 $(14.05) $2.19
Weighted average common shares 4,249 5,030 4,734 5,023
Weighted average common shares and
common shares equivalents 4,249 5,033 4,734 5,029

Free Cash Flow
Net income (loss) $(73,959) $3,133 $(66,492) $11,004
Plus: Depreciation and amortization:
Station 2,348 2,135 8,739 7,982
Corporate 62 58 222 204
Deferred tax provision (37,445) 1,983 (33,879) 5,144
Non-cash compensation 374 375 1,433 1,366
Gain on asset exchange - - (506) -
Impairment of intangible
assets 116,443 - 116,443 -
Other expense, net 49 131 76 273
Less: Capital expenditures (1,993) (3,672) (7,127) (9,852)
Free cash flow $5,879 $4,143 $18,909 $16,121

Balance Sheet Data
Working capital $20,438 $24,075
Net fixed assets 73,383 76,217
Net intangible assets and other assets 113,276 220,045
Total assets 221,460 337,644
Long term debt (including current
portion of $1,061 and $0, respectively) 135,411 129,911
Stockholders' equity 65,097 149,076

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
December 31, 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
December 31, December 31, December 31,
2008 2007 2008 2007 2008 2007
Consolidated
Net operating
revenue $34,890 $37,501 $34,746 $37,429 $34,890 $37,537
Station
operating
expense 26,550 27,316 26,388 27,244 26,550 27,352
Corporate
general and
administrative 2,368 2,606 2,368 2,606 2,368 2,606
Impairment of
intangible
assets 116,443 - 116,443 - 116,443 -
Operating
income (loss) (110,471) 7,579 $(110,453) $7,579 (110,471) 7,579
Interest expense 1,413 2,093 1,413 2,093
Other expense, net 49 131 49 131
Income tax
expense
(benefit) (37,974) 2,222 (37,974) 2,222
Net income
(loss) $(73,959) $3,133 $(73,959) $3,133
Earnings (loss)
per share:
Basic $(17.41) $0.62 $(17.41) $0.62
Diluted $(17.41) $0.62 $(17.41) $0.62

As-Reported Same Station Pro Forma (1)
Three Months Three Months Three Months
Ended Ended Ended
December 31, December 31, December 31,
2008 2007 2008 2007 2008 2007
Radio Segment
Net operating
revenue $29,756 $32,956 $29,612 $32,884 $29,756 $32,992
Station
operating
expense 22,513 23,702 22,351 23,630 22,513 23,738
Impairment of
intangible
assets 114,979 - 114,979 - 114,979 -
Operating
income
(loss) $(107,736) $9,254 $(107,718) $9,254 $(107,736) $9,254

As-Reported Same Station Pro Forma (1)
Three Months Three Months Three Months
Ended Ended Ended
December 31, December 31, December 31,
2008 2007 2008 2007 2008 2007
Television Segment
Net operating
revenue $5,134 $4,545 $5,134 $4,545 $5,134 $4,545
Station
operating
expense 4,037 3,614 4,037 3,614 4,037 3,614
Impairment of
intangible
assets 1,464 - 1,464 - 1,464 -
Operating
income (loss) $(367) $931 $(367) $931 $(367) $931

As-Reported Same Station Pro Forma (1)
Three Months Three Months Three Months
Ended Ended Ended
December 31, December 31, December 31,
2008 2007 2008 2007 2008 2007
Depreciation and
amortization
by segment
Radio Segment $1,676 $1,710 $1,676 $1,685 $1,676 $1,723
Television Segment 672 425 672 425 672 425
Corporate and Other 62 58 62 58 62 58
$2,410 $2,193 $2,410 $2,168 $2,410 $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 Supplemental Financial Data
For the Twelve Months Ended
December 31, 2008 and 2007
(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,
2008 2007 2008 2007 2008 2007
Consolidated
Net operating
revenue $139,956 $144,023 $138,601 $143,684 $139,956 $144,982
Station
operating
expense 105,805 106,302 104,782 106,039 105,805 107,159
Corporate
general and
administrative 9,979 9,800 9,979 9,800 9,979 9,800
Gain on asset
exchange (506) - (506) - (506) -
Impairment of
intangible
assets 116,443 - 116,443 - 116,443 -
Operating
income (loss) (91,765) 27,921 $(92,097) $27,845 (91,765) 28,023
Interest
expense 7,173 8,954 7,173 8,954
Other expense,
net 76 273 76 273
Income tax
expense
(benefit) (32,522) 7,690 (32,522) 7,732
Net income
(loss) $(66,492) $11,004 $(66,492) $11,064
Earnings (loss) per share:
Basic $(14.05) $2.19 $(14.05) $2.20
Diluted $(14.05) $2.19 $(14.05) $2.20

As-Reported Same Station Pro Forma (1)
Twelve Months Twelve Months Twelve Months
Ended Ended Ended
December 31, December 31, December 31,
2008 2007 2008 2007 2008 2007
Radio Segment
Net operating
revenue $121,072 $126,596 $119,717 $126,257 $121,072 $127,555
Station
operating
expense 90,540 92,162 89,517 91,899 90,540 93,019
Impairment of
intangible
assets 114,979 - 114,979 - 114,979 -
Operating
income (loss) $(84,447) $34,434 $(84,779) $34,358 $(84,447) $34,536

As-Reported Same Station Pro Forma (1)
Twelve Months Twelve Months Twelve Months
Ended Ended Ended
December 31, December 31, December 31,
2008 2007 2008 2007 2008 2007
Television
Segment
Net operating
revenue $18,884 $17,427 $18,884 $17,427 $18,884 $17,427
Station
operating
expense 15,265 14,140 15,265 14,140 15,265 14,140
Gain on asset
exchange (506) - (506) - (506) -
Impairment of
intangible
assets 1,464 - 1,464 - 1,464 -
Operating
income $2,661 $3,287 $2,661 $3,287 $2,661 $3,287

As-Reported Same Station Pro Forma (1)
Twelve Months Twelve Months Twelve Months
Ended Ended Ended
December 31, December 31, December 31,
2008 2007 2008 2007 2008 2007
Depreciation and
amortization

Radio Segment $6,446 $6,363 $6,372 $6,299 $6,446 $6,548
Television
Segment 2,293 1,619 2,293 1,619 2,293 1,619
Corporate and
Other 222 204 222 204 222 204
$8,961 $8,186 $8,887 $8,122 $8,961 $8,371

(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
December 31, 2008 and 2007
(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,
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) -
Impairment of intangible assets - - - -
Operating income (loss) 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 (benefit) 634 509 2,403 2,686
Net income (loss) $910 $752 $3,460 $3,848
Earnings (loss) per share:
Basic $0.18 $0.15 $0.70 $0.77
Diluted $0.18 $0.15 $0.70 $0.77

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months 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
Impairment of intangible assets - -
Operating income (loss) $5,468 $5,401 $9,231 $10,451

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months 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) -
Impairment of intangible assets - - - -
Operating income (loss) $643 $508 $1,089 $1,017

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months 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 Ended Three Months Ended
September 30, December 31,
2008 2007 2008 2007
Consolidated
Net operating revenue $36,192 $36,500 $34,890 $37,537
Station operating expense 26,588 26,239 26,550 27,352
Corporate general and
administrative 2,485 2,272 2,368 2,606
Gain on asset exchange (282) - - -
Impairment of intangible
assets - - 116,443 -
Operating income (loss) 7,401 7,989 (110,471) 7,579
Interest expense 1,889 2,283 1,413 2,093
Other expense, net - 60 49 131
Income tax expense (benefit) 2,415 2,315 (37,974) 2,222
Net income (loss) $3,097 $3,331 $(73,959) $3,133
Earnings (loss) per share:
Basic $0.65 $0.66 $(17.41) $0.62
Diluted $0.65 $0.66 $(17.41) $0.62

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months Ended
September 30, December 31,
2008 2007 2008 2007
Radio Segment
Net operating revenue $31,306 $32,186 $29,756 $32,992
Station operating expense 22,717 22,756 22,513 23,738
Impairment of intangible
assets - - 114,979 -
Operating income (loss) $8,589 $9,430 $(107,736) $9,254

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months Ended
September 30, December 31,
2008 2007 2008 2007
Television Segment
Net operating revenue $4,886 $4,314 $5,134 $4,545
Station operating expense 3,871 3,483 4,037 3,614
Gain on asset exchange (282) - - -
Impairment of intangible
assets - - 1,464 -
Operating income (loss) $1,297 $831 $(367) $931

Pro Forma (1) Pro Forma (1)
Three Months Ended Three Months Ended
September 30, December 31,
2008 2007 2008 2007
Depreciation and amortization
by segment
Radio Segment $1,618 $1,660 $1,676 $1,723
Television Segment 620 405 672 425
Corporate and Other 54 48 62 58
$2,292 $2,113 $2,410 $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
December 31, 2008 and 2007
(amounts in 000's)
(Unaudited)

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

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Ended Not Included in Ended
December 31, Entire Comparable December 31,
2008 Period 2008

Consolidated
Net operating revenue $34,890 $(144) $34,746
Station operating
expense 26,550 (162) 26,388
Corporate general
and administrative 2,368 - 2,368
Impairment of
intangible assets 116,443 - 116,443
Operating income (loss) $(110,471) $18 $(110,453)

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Ended Not Included in Ended
December 31, Entire Comparable December 31,
2008 Period 2008
Radio Segment
Net operating revenue $29,756 $(144) $29,612
Station operating
expense 22,513 (162) 22,351
Impairment of
intangible assets 114,979 - 114,979
Operating income (loss) $(107,736) $18 $(107,718)

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Ended Not Included in Ended
December 31, Entire Comparable December 31,
2008 Period 2008
Television Segment
Net operating revenue $5,134 - $5,134
Station operating
expense 4,037 - 4,037
Impairment of
intangible assets 1,464 - 1,464
Operating income (loss) $(367) - $(367)

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Ended Not Included in Ended
December 31, Entire Comparable December 31,
2007 Period 2007
Consolidated
Net operating revenue $37,501 $(72) $37,429
Station operating
expense 27,316 (72) 27,244
Corporate general
and administrative 2,606 - 2,606
Impairment of
intangible assets - - -
Operating income (loss) $7,579 - $7,579

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Ended Not Included in Ended
December 31, Entire Comparable December 31,
2007 Period 2007
Radio Segment
Net operating revenue $32,956 $(72) $32,884
Station operating
expense 23,702 (72) 23,630
Impairment of
intangible assets - - -
Operating income (loss) $9,254 - $9,254

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Ended Not Included in Ended
December 31, Entire Comparable December 31,
2007 Period 2007
Television Segment
Net operating revenue $4,545 - $4,545
Station operating
expense 3,614 - 3,614
Impairment of
intangible assets - - -
Operating income (loss) $931 - $931

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Twelve Months Ended
December 31, 2008 and 2007
(amounts in 000's)
(Unaudited)

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

Adjustment For
Acquisitions
As-Reported and Dispositions Same Station
Twelve Months Not Included in Twelve Months
Ended Entire Ended
December 31, Comparable December 31,
2008 Period 2008
Consolidated
Net operating revenue $139,956 $(1,355) $138,601
Station operating expense 105,805 (1,023) 104,782
Corporate general and
administrative 9,979 - 9,979
Gain on asset exchange (506) - (506)
Impairment of intangible
assets 116,443 - 116,443
Operating income (loss) $(91,765) $(332) $(92,097)

Adjustment For
Acquisitions
As-Reported and Dispositions Same Station
Twelve Months Not Included in Twelve Months
Ended Entire Ended
December 31, Comparable December 31,
2008 Period 2008
Radio Segment
Net operating revenue $121,072 $(1,355) $119,717
Station operating expense 90,540 (1,023) 89,517
Impairment of intangible
assets 114,979 - 114,979
Operating income (loss) $(84,447) $(332) $(84,779)

Adjustment For
Acquisitions
As-Reported and Dispositions Same Station
Twelve Months Not Included in Twelve Months
Ended Entire Ended
December 31, Comparable December 31,
2008 Period 2008
Television Segment
Net operating revenue $18,884 - $18,884
Station operating expense 15,265 - 15,265
Gain on asset exchange (506) - (506)
Impairment of intangible
assets 1,464 - 1,464
Operating income $2,661 - $2,661

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

Adjustment For
Acquisitions
As-Reported and Dispositions Same Station
Twelve Months Not Included in Twelve Months
Ended Entire Ended
December 31, Comparable December 31,
2007 Period 2007
Consolidated
Net operating revenue $144,023 $(339) $143,684
Station operating expense 106,302 (263) 106,039
Corporate general and
administrative 9,800 - 9,800
Gain on asset exchange - - -
Impairment of intangible
assets - - -
Operating income (loss) $27,921 $(76) $27,845

Adjustment For
Acquisitions
As-Reported and Dispositions Same Station
Twelve Months Not Included in Twelve Months
Ended Entire Ended
December 31, Comparable December 31,
2007 Period 2007
Radio Segment
Net operating revenue $126,596 $(339) $126,257
Station operating expense 92,162 (263) 91,899
Other operating income - - -
Impairment of intangible
assets - - -
Operating income (loss) $34,434 $(76) $34,358

Adjustment For
Acquisitions
As-Reported and Dispositions Same Station
Twelve Months Not Included in Twelve Months
Ended Entire Ended
December 31, Comparable December 31,
2007 Period 2007
Television Segment
Net operating revenue $17,427 - $17,427
Station operating expense 14,140 - 14,140
Gain on asset exchange - - -
Impairment of intangible
assets - - -
Operating income $3,287 - $3,287

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Twelve Months Ended
December 31, 2008
(amounts in 000's except per share data)
(Unaudited)

Reconciliation of As-Reported Net Loss to
Net Income Excluding Impairment Charge

Twelve Months Ended
December 31, 2008

Net loss $(66,492)
Impairment of intangible assets 116,443
Income tax benefit (32,522)
Income before income tax, excluding
impairment charge 17,429
Income tax expense 7,566
Net income, excluding
impairment charge $9,863

Weighted average common shares
and common shares equivalent, diluted 4,734
Dilutive securities:
Stock options 3
Weighted average common shares
and common shares equivalent, diluted 4,737

Earnings per share: Diluted $2.08

Source: Saga Communications, Inc.

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

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

-------
Profile: intent