Saga Communications, Inc. Reports Preliminary 4th Quarter and Year End 2008 Results and Intent to File Notification of Late Filing for Form 10-K

Saga Communications, Inc. Reports Preliminary 4th Quarter and Year End 2008 Results and Intent to File Notification of Late Filing for Form 10-K

GROSSE POINTE FARMS, Mich., March 10 /PRNewswire-FirstCall/ -- Saga Communications, Inc. (NYSE Alternext US: 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) and operating income (excluding non-cash impairment charge) decreased 11.6% to $24.7 million. On a same station basis for the year, net operating revenue decreased 3.5% to $138.6 million, operating income (excluding 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) and operating income (excluding non-cash impairment charge) decreased 21.2% to $6.0 million. On a same station basis for the quarter, net operating revenue decreased 7.2% to $34.7 million, operating income (excluding non-cash impairment charge) decreased 21.0% to $6.0 million and station operating expense decreased 3.1% to $26.4 million.

The Company has not finalized the fourth quarter non-cash impairment charge and its related tax impact (which could be significant) and therefore is not releasing net income (loss) or earnings (loss) per basic and diluted share at this time. The Company has also not included the non-cash impairment charge and its related tax impact in the attached unaudited financial information. Based on a combination of factors, including the current economic environment, the Company's operating results and current market valuation, the Company has concluded that it is likely that the value of certain intangible assets will be reduced below their current carrying value. The Company is continuing to conduct their required impairment analysis to determine the amount of the non-cash impairment charge. As a result of its ongoing impairment analysis, the Company expects to be filing a Notification of Late Filing in accordance with Rule 12b-25 of the Securities Exchange Act of 1934, as amended, with the Securities and Exchange Commission (the "SEC") for its Annual Report on Form 10-K for the fiscal year ended December 31, 2008. The Company will file its Annual Report on Form 10-K, which will include the results of finalizing the non-cash impairment charge and its related tax impact, with the SEC on March 31, 2009.

This press release supersedes the Company's previously announced plans for issuing a press release and holding a conference call on March 11, 2009.

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.

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. The share repurchase numbers have been adjusted for the Company's January 29, 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) -
Operating income before impairment
charge 5,972 7,579 24,678 27,921
Interest expense 1,413 2,093 7,173 8,954
Other expense, net 49 131 76 273
-- --- -- ---
Income before income tax and
impairment charge $4,510 $5,355 $17,429 $18,694
====== ====== ======= =======

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
Income before income tax and
impairment charge $4,510 $5,355 $17,429 $18,694
Plus: Depreciation and amortization:
Station 2,348 2,135 8,739 7,982
Corporate 62 58 222 204
Non-cash compensation 374 375 1,433 1,366
Gain on asset exchange - - (506) -
Other expense, net 49 131 76 273
Less: Capital expenditures (1,993) (3,672) (7,127) (9,852)
Current taxes 529 (239) (1,357) (2,546)
--- ---- ------ ------
Free cash flow $5,879 $4,143 $18,909 $16,121
====== ====== ======= =======

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
Operating income before
impairment charge 5,972 7,579 $5,990 $7,579 5,972 7,579
Interest expense 1,413 2,093 1,413 2,093
Other expense, net 49 131 49 131
-- --- -- ---
Income before income tax
and impairment charge $4,510 $5,355 $4,510 $5,355
====== ====== ====== ======

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
Operating income before
impairment charge $7,243 $9,254 $7,261 $9,254 $7,243 $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
Operating income before
impairment charge $1,097 $931 $1,097 $931 $1,097 $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) -
Operating income
before impairment
charge 24,678 27,921 $24,346 $27,845 24,678 28,023
Interest expense 7,173 8,954 7,173 8,954
Other expense, net 76 273 76 273
-- --- -- ---
Income before
income tax and
impairment charge $17,429 $18,694 $17,429 $18,796
======= ======= ======= =======

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
Operating income
before impairment
charge $30,532 $34,434 $30,200 $34,358 $30,532 $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) -
Operating income
before impairment
charge $4,125 $3,287 $4,125 $3,287 $4,125 $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 by segment
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 Pro Forma Information
December 31, 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 before
impairment charge 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 before income tax and
impairment charge $1,544 $1,261 $5,863 $6,534
====== ====== ====== ======

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 before
impairment charge $5,468 $5,401 $9,231 $10,451
====== ====== ====== =======

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 before
impairment charge $643 $508 $1,089 $1,017
==== ==== ====== ======

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 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) - - -
Operating income before
impairment charge 7,401 7,989 5,972 7,579
Interest expense 1,889 2,283 1,413 2,093
Other expense, net - 60 49 131
Income before income tax and
impairment charge $5,512 $5,646 $4,510 $5,355
====== ====== ====== ======

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended 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
Operating income before
impairment charge $8,589 $9,430 $7,243 $9,254
====== ====== ====== ======

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended 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) - - -
Operating income before
impairment charge $1,297 $831 $1,097 $931
====== ==== ====== ====

Pro Forma (1) Pro Forma (1)
Three Months Three Months
Ended 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 Before Impairment Charge
----------------------------------------------------------

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
Operating income
before impairment charge $5,972 $18 $5,990
====== === ======

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
Operating income
before impairment
charge $7,243 $18 $7,261
====== === ======

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
Operating income
before impairment
charge $1,097 - $1,097
====== = ======

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

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
Operating income
before impairment
charge $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
Operating income
before impairment
charge $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
Operating income
before impairment
charge $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 Before Impairment Charge
---------------------------------------------------------------

Adjustment
As-Reported For Acquisitions Same Station
Twelve Months and Dispositions Twelve Months
Ended Not Included in Ended
December 31, Entire 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)
Operating income
before impairment
charge $24,678 $(332) $24,346
======= ===== =======

Adjustment
As-Reported For Acquisitions Same Station
Twelve Months and Dispositions Twelve Months
Ended Not Included in Ended
December 31, Entire 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
Operating income
before impairment
charge $30,532 $(332) $30,200
======= ===== =======

Adjustment
As-Reported For Acquisitions Same Station
Twelve Months and Dispositions Twelve Months
Ended Not Included in Ended
December 31, Entire 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)
Operating income
before impairment
charge $4,125 - $4,125
====== = ======

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

Adjustment
As-Reported For Acquisitions Same Station
Twelve Months and Dispositions Twelve Months
Ended Not Included in Ended
December 31, Entire 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 - - -
Operating income
before impairment
charge $27,921 $(76) $27,845
======= ==== =======

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

Adjustment
As-Reported For Acquisitions Same Station
Twelve Months and Dispositions Twelve Months
Ended Not Included in Ended
December 31, Entire 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 - - -
Operating income
before impairment
charge $3,287 - $3,287
====== = ======

Source: Saga Communications, Inc.

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

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

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