Saga Communications, Inc. Reports 2nd Quarter 2010 Results

Saga Communications, Inc. Reports 2nd Quarter 2010 Results

Net Income per Share for the Quarter Increases 38% to $.87 per Share

GROSSE POINTE FARMS, Mich., Aug. 13 /PRNewswire-FirstCall/ -- Saga Communications, Inc. (NYSE Amex: SGA) today reported the Company's net income for the second quarter was $3.7 million ($.87 per fully diluted share) compared to $2.7 million ($0.63 per fully diluted share) for the same period last year. Net operating revenue for the quarter ended June 30, 2010 increased 4.0% to $32.9 million with operating income of $7.8 million compared to $6.2 million for the second quarter of last year. Free cash flow was $5.7 million for the quarter. Station operating expense decreased 0.6% compared to the same period last year to $23.2 million (station operating expense includes depreciation and amortization attributable to the stations). Operating expenses for the quarter were impacted by increased advertising and promotions expenditures as well as increased sales costs relative to the Company's reported revenue growth.

For the six month period ended June 30, 2010, free cash flow increased 15.7% to $8.0 million. Net operating revenue increased 5.4% from the comparable period in 2009 to $60.9 million with operating income of $11.4 million compared to $6.3 million for the same period last year. Net income was $7.0 million ($1.66 per fully diluted share) compared to $2.3 million ($.55 per fully diluted share) for the comparable period in 2009. For the same period, station operating expense decreased 3.2% to $45.7 million (station operating expense includes depreciation and amortization attributable to the stations).

The Company continues to maintain a solid balance sheet with $18.1 million in cash and certificate of deposit balances as of June 30, 2010. As of June 30, 2010, the Company's outstanding bank debt was $113.6 million. The trailing 12 month leverage ratio calculated as a multiple of EBITDA was 3.5 times. Netting cash and certificate of deposits against outstanding debt, the ratio would be 2.9 times. Subsequent to the end of the quarter the Company paid down debt by an additional $4 million. The Company intends to continue to use excess cash to pay down debt.

Capital expenditures in the second quarter of 2010 were $1.3 million compared to $1.5 million for the same period last year. For the 6 months ended June 30, 2010, capital expenditures were $2.2 million compared to $2.6 million for the comparable period last year. For the 2009 fiscal year total capital expenditures were $4.0 million. The Company currently expects to spend approximately $4.5 - $5.0 million for capital expenditures during 2010.

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 free cash flow, trailing 12 month consolidated EBITDA, and leverage ratio. 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, as a primary measure for incentive based compensation of executives and other members of management and as a measure of financial position. 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 Supplemental Financial Data table.

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 2nd Quarter 2010 conference call will be on Friday, August 13, 2010 at 2:00 p.m. EDT. The dial-in number for domestic and international calls is (612) 332-0107. The call can be replayed for 7 days by calling domestically (800) 475-6701 and referring to access code 165196. The replay can be accessed internationally by calling 320/365-3844 and using the same access code.

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 p.m. EDT on August 13, 2010 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 Six Months Ended
June 30, 2010 and 2009
(amounts in 000's except per share data)
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2010 2009 2010 2009
---- ---- ---- ----
Operating Results
Net operating revenue $32,887 $31,637 $60,874 $57,761
Station operating expense 23,157 23,295 45,717 47,235
Corporate general and
administrative 1,897 2,158 3,779 4,225
Operating income 7,833 6,184 11,378 6,301
Interest expense 1,468 1,430 2,987 2,203
Other (income) expense,
net 185 (28) (3,411) (32)
--- --- ------ ---
Income before income tax 6,180 4,782 11,802 4,130
Income tax expense 2,485 2,108 4,790 1,818
Net income $3,695 $2,674 $7,012 $2,312
====== ====== ====== ======
Earnings per share
Basic $0.87 $0.63 $1.66 $0.55
===== ===== ===== =====
Diluted $0.87 $0.63 $1.66 $0.55
===== ===== ===== =====
Weighted average common
shares 4,236 4,226 4,229 4,192
Weighted average common
shares and
common share equivalents 4,237 4,227 4,229 4,193

Free Cash Flow
Net income $3,695 $2,674 $7,012 $2,312
Plus: Depreciation and
amortization:
Station 1,853 2,180 3,698 4,377
Corporate 54 48 106 109
Deferred tax provision 1,015 2,253 2,195 2,038
Non-cash compensation 230 343 528 670
Other (income) expense,
net 185 (28) (3,411) (32)
Less: Capital expenditures (1,301) (1,509) (2,146) (2,574)
Free cash flow $5,731 $5,961 $7,982 $6,900
====== ====== ====== ======

Balance Sheet Data
Working capital $10,694 $11,682
Net fixed assets $67,330 $71,508
Net intangible assets and
other assets $96,954 $113,687
Total assets $206,405 $223,982
Long term debt (including
current
portion of $17,278 and
$13,428, respectively) $113,578 $133,428
Stockholders' equity $71,555 $68,275

Saga Communications, Inc.
Selected Supplemental Financial Data
For The Three and Six Months Ended
June 30, 2010 and 2009
(amounts in 000's)
(Unaudited)

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Three Months Ended
June 30, 2010:
Net operating revenue $28,661 $4,226 $- $32,887
Station operating
expense 19,827 3,330 - 23,157
Corporate G&A - - 1,897 1,897
Operating income $8,834 $896 $(1,897) $7,833
====== ==== ======= ======
Depreciation and
amortization $1,444 $409 $54 $1,907
====== ==== === ======

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Three Months Ended
June 30, 2009:
Net operating revenue $27,530 $4,107 $- $31,637
Station operating
expense 19,694 3,601 - 23,295
Corporate G&A - - 2,158 2,158
Operating income $7,836 $506 $(2,158) $6,184
====== ==== ======= ======
Depreciation and
amortization $1,516 $664 $48 $2,228
====== ==== === ======

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Six Months Ended June
30, 2010:
Net operating revenue $52,805 $8,069 $- $60,874
Station operating
expense 39,050 6,667 - 45,717
Corporate G&A - - 3,779 3,779
Operating income $13,755 $1,402 $(3,779) $11,378
======= ====== ======= =======
Depreciation and
amortization $2,865 $833 $106 $3,804
====== ==== ==== ======

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Six Months Ended June
30, 2009:
Net operating revenue $50,227 $7,534 $- $57,761
Station operating
expense 40,011 7,224 - 47,235
Corporate G&A - - 4,225 4,225
Operating income $10,216 $310 $(4,225) $6,301
======= ==== ======= ======
Depreciation and
amortization $3,047 $1,330 $109 $4,486
====== ====== ==== ======

Saga Communications, Inc.
Selected Supplemental Financial Data
June 30, 2010
(amounts in 000's except ratios)
(Unaudited)

Less: Plus: Trailing
12 Mos 6 Mos 12 Mos
Ended 6 Mos Ended Ended Ended
December
31, June 30, June 30, June 30,
2009 2009 2010 2010
---- ---- ---- ----
Trailing 12 Month
Consolidated EBITDA
Net income (loss) $(2,581) $2,312 $7,012 $2,119
Less: Loss on sale of
assets (210) (2) (336) (544)
Gain on exchange of
assets 495 - - 495
Impairment of intangible
assets (17,286) - - (17,286)
Gain on license downgrade - - 3,561 3,561
Other 196 259 159 96
--- --- --- ---
Total exclusions (16,805) 257 3,384 (13,678)
------- --- ----- -------

Consolidated Adjusted Net
Income 14,224 2,055 3,628 15,797
Plus: Interest expense 4,948 2,203 2,987 5,732
Income tax expense
(benefit) (1,161) 1,818 4,790 1,811
Depreciation &
amortization expense 8,629 4,486 3,806 7,949
Amortization of
television syndicated
programming contracts 706 355 361 712
Non-cash stock based
compensation expense 1,366 670 528 1,224
Less: Cash television
programming payments (725) (360) (366) (731)
Trailing twelve month
consolidated EBITDA $27,987 $11,227 $15,734 $32,494
======= ======= ======= =======

Total long-term debt,
including current
maturities $113,578
Divided by trailing
twelve month
consolidated EBITDA 32,494
Leverage ratio 3.5
===

Total long-term debt,
including current
maturities $113,578
Less: Cash, cash
equivalents and
certificates of deposit
as of June 30, 2010 (18,052)
-------
Long-term debt,
including current
maturities less cash,
cash equivalents
and certificates of
deposit as of June 30,
2010 95,526
Divided by trailing
twelve month
consolidated EBITDA 32,494
------
Adjusted leverage ratio 2.9
===

Source: Saga Communications

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

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

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