Saga Communications, Inc. Reports 3rd Quarter 2010 Results

Saga Communications, Inc. Reports 3rd Quarter 2010 Results

Net Income per Share for the Quarter Increases 45% to $.84 per Share

GROSSE POINTE FARMS, Mich., Nov. 8, 2010 /PRNewswire-FirstCall/ -- Saga Communications, Inc. (NYSE Amex: SGA) today reported the Company's net income for the third quarter was $3.6 million ($.84 per fully diluted share) compared to $2.5 million ($0.58 per fully diluted share) for the same period last year. Net operating revenue for the quarter ended September 30, 2010 increased 5.0% to $32.8 million with operating income of $7.4 million compared to $5.8 million for the third quarter of last year. Free cash flow was $6.0 million for the quarter, an increase of 4.5% over the third quarter of last year.

For the nine month period ended September 30, 2010, free cash flow increased 10.6% to $14.0 million. Net operating revenue increased 5.3% from the comparable period in 2009 to $93.7 million with operating income of $18.8 million compared to $12.1 million for the same period last year. Net income was $10.6 million ($2.50 per fully diluted share) compared to $4.8 million ($1.14 per fully diluted share) for the comparable period in 2009.

The Company continues to maintain a solid balance sheet with $15.5 million in cash and certificate of deposit balances as of September 30, 2010. As of September 30, 2010, the Company's outstanding bank debt was $105.6 million with a trailing 12 month leverage ratio calculated as a multiple of EBITDA of 3.1 times. Netting cash and certificate of deposits against outstanding debt, the ratio would be 2.7 times. The Company has paid down $20 million of debt since the first of the year including a $4.5 million pay down that occurred subsequent to the end of the third quarter. With this additional pay down considered the ratio would be reduced to 3.0 times. The Company intends to continue to use excess cash to pay down debt.

Capital expenditures in the third quarter of 2010 were $1.1 million compared to $0.7 million for the same period last year. For the 9 months ended September 30, 2010, capital expenditures were $3.3 million compared to $3.2 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 3rd Quarter 2010 conference call will be on Monday, November 8, 2010 at 2:00 p.m. EST. The dial-in number for domestic and international calls is (612) 234-9959.

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. EST on November 8, 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 Nine Months Ended
September 30, 2010 and 2009
(amounts in 000's except per share data)
(Unaudited)

Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2010 2009 2010 2009
---- ---- ---- ----
Operating Results
Net operating revenue $32,810 $31,253 $93,684 $89,014
Station operating expense 23,629 23,556 69,346 70,791
Corporate general and
administrative 1,741 1,906 5,520 6,131
Operating income 7,440 5,791 18,818 12,092
Interest expense 1,375 1,386 4,362 3,589
Other (income) expense, net 13 43 (3,398) 11
--- --- ------ ---
Income before income tax 6,052 4,362 17,854 8,492
Income tax expense 2,495 1,892 7,285 3,710
Net income $3,557 $2,470 $10,569 $4,782
====== ====== ======= ======
Earnings per share
Basic $0.84 $0.58 $2.50 $1.14
===== ===== ===== =====
Diluted $0.84 $0.58 $2.50 $1.14
===== ===== ===== =====
Weighted average common shares 4,236 4,227 4,230 4,202
Weighted average common shares
and
common share equivalents 4,236 4,227 4,230 4,203

Free Cash Flow
Net income $3,557 $2,470 $10,569 $4,782
Plus: Depreciation and
amortization:
Station 1,885 1,974 5,583 6,351
Corporate 57 57 163 166
Deferred tax provision 1,430 1,528 3,625 3,566
Non-cash compensation 187 348 715 1,018
Other (income) expense, net 13 43 (3,398) 11
Less: Capital expenditures (1,113) (663) (3,259) (3,237)
Free cash flow $6,016 $5,757 $13,998 $12,657
====== ====== ======= =======

Balance Sheet Data
Working capital $15,185 $7,428
Net fixed assets $66,473 $70,204
Net intangible assets and other
assets $97,117 $113,635
Total assets $202,720 $224,740
Long term debt (including current
portion of $11,088 and $20,578,
respectively) $105,578 $130,578
Stockholders' equity $75,298 $71,107

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

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Three Months Ended
September 30, 2010:
Net operating revenue $28,089 $4,721 $- $32,810
Station operating
expense 20,134 3,495 - 23,629
Corporate G&A - - 1,741 1,741
Operating income $7,955 $1,226 $(1,741) $7,440
====== ====== ======= ======
Depreciation and
amortization $1,447 $438 $57 $1,942
====== ==== === ======

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Three Months Ended
September 30, 2009:
Net operating revenue $26,992 $4,261 $- $31,253
Station operating
expense 20,046 3,510 - 23,556
Corporate G&A - - 1,906 1,906
Operating income $6,946 $751 $(1,906) $5,791
====== ==== ======= ======
Depreciation and
amortization $1,521 $453 $57 $2,031
====== ==== === ======

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Nine Months Ended
September 30, 2010:
Net operating revenue $80,894 $12,790 $- $93,684
Station operating
expense 59,184 10,162 - 69,346
Corporate G&A - - 5,520 5,520
Operating income $21,710 $2,628 $(5,520) $18,818
======= ====== ======= =======
Depreciation and
amortization $4,312 $1,271 $163 $5,746
====== ====== ==== ======

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Nine Months Ended
September 30, 2009:
Net operating revenue $77,219 $11,795 $- $89,014
Station operating
expense 60,057 10,734 - 70,791
Corporate G&A - - 6,131 6,131
Operating income $17,162 $1,061 $(6,131) $12,092
======= ====== ======= =======
Depreciation and
amortization $4,568 $1,783 $166 $6,517
====== ====== ==== ======

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

Less: Plus: Trailing
12 Mos
Ended 9 Mos Ended 9 Mos Ended 12 Mos Ended
December September September September
31, 30, 30, 30,
2009 2009 2010 2010
---- ---- ---- ----
Trailing 12
Month
Consolidated
EBITDA
Net income
(loss) $(2,581) $4,782 $10,569 $3,206
Less: Loss on
sale of assets (210) (47) (364) (527)
Gain on
exchange of
assets 495 - - 495
Impairment of
intangible
assets (17,286) - - (17,286)
Gain on license
downgrade and
other gains - - 3,762 3,762
Other 196 252 24 (32)
--- --- --- ---
Total
exclusions (16,805) 205 3,422 (13,588)
------- --- ----- -------

Consolidated
Adjusted Net
Income 14,224 4,577 7,147 16,794
Plus: Interest
expense 4,948 3,589 4,362 5,721
Income tax
expense
(benefit) (1,161) 3,710 7,285 2,414
Depreciation &
amortization
expense 8,629 6,517 5,746 7,858
Amortization of
television
syndicated
programming
contracts 706 530 541 717
Non-cash stock
based
compensation
expense 1,366 1,018 715 1,063
Less: Cash
television
programming
payments (725) (549) (552) (728)
Trailing twelve
month
consolidated
EBITDA $27,987 $19,392 $25,244 $33,839
======= ======= ======= =======

Total long-
term debt,
including
current
maturities $105,578
Divided by
trailing
twelve month
consolidated
EBITDA 33,839
Leverage ratio 3.1
===

Total long-
term debt,
including
current
maturities $105,578
Less: Cash,
cash
equivalents
and
certificates
of deposit as
of September
30, 2010 (15,506)
-------
Long-term
debt,
including
current
maturities
less cash,
cash
equivalents
and
certificates
of deposit as
of September
30, 2010 90,072
Divided by
trailing
twelve month
consolidated
EBITDA 33,839
------
Adjusted
leverage ratio 2.7
===

Total long-
term debt,
including
current
maturities $105,578
Less: Debt pay
down in
October 2010 (4,500)
------
Long-term
debt,
including
current
maturities
adjusted 101,078
Divided by
trailing
twelve month
consolidated
EBITDA 33,839
------
Adjusted
leverage ratio 3.0
===

SOURCE Saga Communications, Inc.

Saga Communications, Inc.

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

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

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