Saga Communications, Inc. Reports 3rd Quarter 2009 Results

Saga Communications, Inc. Reports 3rd Quarter 2009 Results

GROSSE POINTE FARMS, Mich., Nov. 9 /PRNewswire-FirstCall/ -- Saga Communications, Inc. (NYSE Amex: SGA) today reported that 3rd quarter 2009 free cash flow increased 5.1% to $5.8 million compared to $5.5 million for the same period last year. Net operating revenue decreased 13.7% from the comparable period in 2008 to $31.3 million. Operating income was $5.8 million. Net income was $2.5 million ($.58 per fully diluted share) for the quarter ended September 30, 2009 compared to $3.1 million ($.65 per fully diluted share) for the comparable period in 2008. For the same period, station operating expense decreased $3.0 million to $23.6 million (station operating expense includes depreciation and amortization attributable to the stations). A large part of the decrease in station operating expense was a result of our cost reduction initiatives. This helped to reduce the impact that the decline in net operating revenue had on our operating results. On a same station basis for the quarter, net operating revenue decreased 14.7% to $30.9 million, operating income was $5.6 million and station operating expense decreased $3.2 million to $23.4 million.

For the nine month period ended September 30, 2009, free cash flow decreased $373 thousand to $12.7 million. Net operating revenue decreased 15.3% from the comparable period in 2008 to $89.0 million and operating income was $12.1 million. Net income was $4.8 million ($1.14 per fully diluted share) compared to $7.5 million ($1.52 per fully diluted share) for the comparable period in 2008. For the same period, station operating expense decreased $8.5 million to $70.8 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 16.2% to $88.1 million, operating income was $11.6 million and station operating expense decreased $8.9 million to $70.3 million.

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

The Company has maintained a solid balance sheet even given the current economic volatility with $16.7 million in cash balances as of September 30, 2009. Bank debt outstanding was $130.6 million. Subsequent to the end of the quarter the Company paid down $5.0 million of the outstanding bank debt. Adjusted for this pay down the companies trailing 12 month leverage ratio calculated as a multiple of EBITDA and based on actual debt outstanding was 4.6 times. Netting cash against outstanding debt the ratio would be 4.0 times.

Capital expenditures in the third quarter of 2009 were $663 thousand. For the nine months, capital expenditures were $3.2 million. Currently we expect capital expenditures for the year to be approximately $4.0 - $4.2 million.

The attached Selected Supplemental Financial Data table discloses "as reported" and "same station" 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.

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 2009 results conference call will be on Monday, November 9, 2009 at 2:00 PM EST. The dial in number for domestic and international calls is 612/234-9960. The call can be replayed for 7 days by calling domestically 800/475-6701 or internationally 320/365-3844 and referring to access code 115331. 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 9, 2009 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 the volatility of the global economy, Saga's debt outstanding, debt service requirements and debt covenants along 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 herein.

Saga Communications, Inc.
Selected Consolidated Financial Data
For The Three and Nine Months Ended
September 30, 2009 and 2008
(amounts in 000's except per share data)
(Unaudited)

Three Months Nine Months
Ended Ended
September 30, September 30,
--------------- ---------------
2009 2008 2009 2008
---- ---- ---- ----
Operating Results
Net operating revenue $31,253 $36,192 $89,014 $105,066
Station operating expense 23,556 26,588 70,791 79,255
Corporate general and administrative 1,906 2,485 6,131 7,611
Gain on asset exchange - (282) - (506)
Operating income 5,791 7,401 12,092 18,706
Interest expense 1,386 1,889 3,589 5,760
Other expense (income), net 43 - 11 27
--- --- --- ---
Income before income tax 4,362 5,512 8,492 12,919
Income tax expense 1,892 2,415 3,710 5,452
----- ----- ----- -----
Net income $2,470 $3,097 $4,782 $7,467
====== ====== ====== ======
Earnings per share
Basic $0.58 $0.65 $1.14 $1.52
===== ===== ===== =====
Diluted $0.58 $0.65 $1.14 $1.52
===== ===== ===== =====
Weighted average common shares 4,227 4,735 4,202 4,898
Weighted average common shares and
common shares equivalents 4,227 4,738 4,203 4,902

Free Cash Flow
Net income $2,470 $3,097 $4,782 $7,467
Plus: Depreciation and amortization:
Station 1,974 2,238 6,351 6,391
Corporate 57 54 166 160
Deferred tax provision 1,528 1,640 3,566 3,566
Non-cash compensation 348 338 1,018 1,059
Gain on asset exchange - (282) - (506)
Other expense (income), net 43 - 11 27
Less: Capital expenditures (663) (1,609) (3,237) (5,134)
---- ------ ------ ------
Free cash flow $5,757 $5,476 $12,657 $13,030
====== ====== ======= =======

Balance Sheet Data
Working capital $7,428 $19,311
Net fixed assets 70,204 73,889
Net intangible assets and other assets 113,635 230,484
Total assets 224,740 339,815
Long-term debt (including current
portion of $20,578 and $1,061, respectively) 130,578 134,411
Stockholders' equity 71,107 146,066

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
September 30, 2009 and 2008
(amounts in 000's except per share data)
(Unaudited)

As-Reported Same Station
Three Months Three Months
Ended Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Consolidated
Net operating revenue $31,253 $36,192 $30,865 $36,192
Station operating expense 23,556 26,588 23,403 26,588
Corporate general and
administrative 1,906 2,485 1,906 2,485
Gain on asset exchange - (282) - (282)
--- ---- --- ----
Operating income 5,791 7,401 $5,556 $7,401
Interest expense 1,386 1,889
Other expense (income), net 43 -
Income tax expense 1,892 2,415
----- -----
Net income $2,470 $3,097
====== ======
Earnings per share:
Basic $0.58 $0.65
===== =====
Diluted $0.58 $0.65
===== =====

As-Reported Same Station
Three Months Three Months
Ended Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Radio Segment
Net operating revenue $26,992 $31,306 $26,604 $31,306
Station operating expense 20,046 22,717 19,893 22,717
------ ------ ------ ------
Operating income $6,946 $8,589 $6,711 $8,589
====== ====== ====== ======

As-Reported Same Station
Three Months Three Months
Ended Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Television Segment
Net operating revenue $4,261 $4,886 $4,261 $4,886
Station operating expense 3,510 3,871 3,510 3,871
Gain on asset exchange - (282) - (282)
--- ---- --- ----
Operating income $751 $1,297 $751 $1,297
==== ====== ==== ======

As-Reported Same Station
Three Months Three Months
Ended Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Depreciation and amortization
by segment
Radio Segment $1,521 $1,618 $1,515 $1,618
Television Segment 453 620 453 620
Corporate and Other 57 54 57 54
--- --- --- ---
$2,031 $2,292 $2,025 $2,292
====== ====== ====== ======

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Nine Months Ended
September 30, 2009 and 2008
(amounts in 000's except per share data)
(Unaudited)

As-Reported Same Station
Nine Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Consolidated
Net operating revenue $89,014 $105,066 $88,054 $105,066
Station operating expense 70,791 79,255 70,317 79,255
Corporate general and
administrative 6,131 7,611 6,131 7,611
Gain on asset exchange - (506) - (506)
--- ---- --- ----
Operating income 12,092 18,706 $11,606 $18,706
Interest expense 3,589 5,760
Other expense (income), net 11 27
Income tax expense 3,710 5,452
----- -----
Net income $4,782 $7,467
====== ======
Earnings per share:
Basic $1.14 $1.52
===== =====
Diluted $1.14 $1.52
===== =====

As-Reported Same Station
Nine Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Radio Segment
Net operating revenue $77,219 $91,316 $76,259 $91,316
Station operating expense 60,057 68,028 59,583 68,028
------ ------ ------ ------
Operating income $17,162 $23,288 $16,676 $23,288
======= ======= ======= =======

As-Reported Same Station
Nine Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Television Segment
Net operating revenue $11,795 $13,750 $11,795 $13,750
Station operating expense 10,734 11,227 10,734 11,227
Gain on asset exchange - (506) - (506)
--- ---- --- ----
Operating income $1,061 $3,029 $1,061 $3,029
====== ====== ====== ======

As-Reported Same Station
Nine Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Depreciation and amortization
by segment
Radio Segment $4,568 $4,771 $4,549 $4,771
Television Segment 1,783 1,620 1,783 1,620
Corporate and Other 166 160 166 160
--- --- --- ---
$6,517 $6,551 $6,498 $6,551
====== ====== ====== ======

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Three Months Ended
September 30, 2009 and 2008
(amounts in 000's)
(Unaudited)

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

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Ended Not Included in Ended
September 30, Entire Comparable September 30,
2009 Period 2009
------------- ----------------- -------------
Consolidated
Net operating revenue $31,253 $(388) $30,865
Station operating expense 23,556 (153) 23,403
Corporate general and
administrative 1,906 - 1,906
Gain on asset exchange - - -
--- --- ---
Operating income $5,791 $(235) $5,556
====== ===== ======

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Ended Not Included in Ended
September 30, Entire Comparable September 30,
2008 Period 2008
------------- ----------------- -------------
Consolidated
Net operating revenue $36,192 - $36,192
Station operating expense 26,588 - 26,588
Corporate general and
administrative 2,485 - 2,485
Gain on asset exchange (282) - (282)
---- --- ----
Operating income $7,401 - $7,401
====== === ======

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Ended Not Included in Ended
September 30, Entire Comparable September 30,
2009 Period 2009
------------- ----------------- -------------
Radio Segment
Net operating revenue $26,992 $(388) $26,604
Station operating expense 20,046 (153) 19,893
------ ---- ------
Operating income $6,946 $(235) $6,711
====== ===== ======

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Ended Not Included in Ended
September 30, Entire Comparable September 30,
2008 Period 2008
------------- ----------------- -------------
Radio Segment
Net operating revenue $31,306 - $31,306
Station operating expense 22,717 - 22,717
------ --- ------
Operating income $8,589 - $8,589
====== === ======

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Ended Not Included in Ended
September 30, Entire Comparable September 30,
2009 Period 2009
------------- ----------------- -------------
Television Segment
Net operating revenue $4,261 - $4,261
Station operating expense 3,510 - 3,510
Gain on asset exchange - - -
---- --- ----
Operating income $751 - $751
==== === ====

Adjustment
As-Reported For Acquisitions Same Station
Three Months and Dispositions Three Months
Ended Not Included in Ended
September 30, Entire Comparable September 30,
2008 Period 2008
------------- ----------------- -------------
Television Segment
Net operating revenue $4,886 - $4,886
Station operating expense 3,871 - 3,871
Gain on asset exchange (282) - (282)
---- --- ----
Operating income $1,297 - $1,297
====== === ======

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Nine Months Ended
September 30, 2009 and 2008
(amounts in 000's)
(Unaudited)

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

Adjustment
As-Reported For Acquisitions Same Station
Nine Months and Dispositions Nine Months
Ended Not Included in Ended
September 30, Entire Comparable September 30,
2009 Period 2009
------------- ----------------- -------------
Consolidated
Net operating revenue $89,014 $(960) $88,054
Station operating expense 70,791 (474) 70,317
Corporate general and
administrative 6,131 - 6,131
Gain on asset exchange - - -
--- --- ---
Operating income $12,092 $(486) $11,606
======= ===== =======

Adjustment
As-Reported For Acquisitions Same Station
Nine Months and Dispositions Nine Months
Ended Not Included in Ended
September 30, Entire Comparable September 30,
2008 Period 2008
------------- ----------------- -------------
Consolidated
Net operating revenue $105,066 - $105,066
Station operating expense 79,255 - 79,255
Corporate general and
administrative 7,611 - 7,611
Gain on asset exchange (506) - (506)
---- --- ----
Operating income $18,706 - $18,706
======= === =======

Adjustment
As-Reported For Acquisitions Same Station
Nine Months and Dispositions Nine Months
Ended Not Included in Ended
September 30, Entire Comparable September 30,
2009 Period 2009
------------- ----------------- -------------
Radio Segment
Net operating revenue $77,219 $(960) $76,259
Station operating expense 60,057 (474) 59,583
------ ---- ------
Operating income $17,162 $(486) $16,676
======= ===== =======

Adjustment
As-Reported For Acquisitions Same Station
Nine Months and Dispositions Nine Months
Ended Not Included in Ended
September 30, Entire Comparable September 30,
2008 Period 2008
------------- ----------------- -------------
Radio Segment
Net operating revenue $91,316 - $91,316
Station operating expense 68,028 - 68,028
------ --- ------
Operating income $23,288 - $23,288
======= === =======

Adjustment
As-Reported For Acquisitions Same Station
Nine Months and Dispositions Nine Months
Ended Not Included in Ended
September 30, Entire Comparable September 30,
2009 Period 2009
------------- ----------------- -------------
Television Segment
Net operating revenue $11,795 - $11,795
Station operating expense 10,734 - 10,734
Gain on asset exchange - - -
--- --- ---
Operating income $1,061 - $1,061
====== === ======

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

Saga Communications, Inc.
Selected Supplemental Financial Data
Trailing Twelve Month Consolidated EBITDA and Leverage Ratio
As of September 30, 2009
(amounts in 000's, except ratios)
(Unaudited)

Less: Plus: Trailing
Twelve Months Nine Months Nine Months Twelve Months
Ended Ended Ended Ended
December 31, September 30, September 30, September 30,
2008 2008 2009 2009
---- ---- ---- ----
Trailing Twelve Month
Consolidated EBITDA
Net income $(66,492) $7,467 $4,782 $(69,177)
Less: Loss on
sale of assets (76) (27) (47) (96)
Gain on exchange
of assets 506 506 - -
Impairment of
intangible
assets (116,443) - - (116,443)
Interest
income 136 111 5 30
Net barter
transactions (24) 35 247 188
Total exclusions (115,901) 625 205 (116,321)
-------- --- --- --------
Consolidated
Adjusted Net
Income 49,409 6,842 4,577 47,144
Plus: Interest
expense 7,173 5,760 3,589 5,002
Income tax
(benefit)
expense (32,522) 5,452 3,710 (34,264)
Depreciation &
amortization
expense 8,963 6,551 6,517 8,929
Amortization of
television
syndicated
programming
contracts 673 488 530 715
Non-cash stock
based
compensation
expense 1,433 1,059 1,018 1,392
Less: Cash
television
programming
payments 663 482 549 730
------- ------- ------- -------
Trailing twelve
month
consolidated
EBITDA $34,466 $25,670 $19,392 $28,188
======= ======= ======= =======

September
30,
2009
----
Total long-term debt,
including current
maturities $130,578
Divided by trailing twelve
month consolidated EBITDA 28,188
------
Leverage ratio 4.6
===
Total long-term debt,
including current
maturities $130,578
Less: Cash and cash
equivalents as of September
30, 2009 (16,649)
-------
Long-term debt, including
current maturities less
cash and cash equivalents as of
September 30, 2009 113,929
Divided by trailing twelve
month consolidated EBITDA 28,188
------
Leverage ratio 4.0
===

Source: Saga Communications, Inc.

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

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

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