International Entertainment News: Saga Communications, Inc. Reports 1st Quarter 2011 Free Cash Flow Increased 42%

Saga Communications, Inc. Reports 1st Quarter 2011 Free Cash Flow Increased 42%

GROSSE POINTE FARMS, Mich., May 10, 2011 /PRNewswire/ -- Saga Communications, Inc. (NYSE Amex-SGA) today reported operating income increased 13.7% to $4 million for the quarter ended March 31, 2011. Free cash flow increased 42% to $3.2 million compared to $2.3 million for the same period in 2010. The Company's net operating revenue increased 2.6% to $28.7 million while station operating expense increased 0.8% compared to the same period last year to $22.7 million (station operating expense includes depreciation and amortization attributable to the stations). The Company's net income for the period was $0.39 per fully diluted share compared to $0.78 per fully diluted share for the same period last year. For comparison purposes the company's net income for the period ended March 31, 2010 included $3.6 million in other income that was primarily due to the one-time payment for a frequency coordination of one of its licensed facilities.

The Company continues to maintain a solid balance sheet with $13.8 million in cash and certificate of deposit balances as of March 31, 2011. As of March 31, 2011, the Company's outstanding bank debt was $92.1 million. The trailing 12 month leverage ratio calculated as a multiple of EBITDA was 2.5 times.

Capital expenditures in the first quarter of 2011 were $1.2 million compared to $845 thousand for the same period last year. The Company currently expects to spend approximately $5.0 million for capital expenditures during 2011.

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 1st Quarter 2011 conference call will be on Tuesday, May 10, 2011 at 2:00 p.m. EDT. The dial-in number for all calls is (612) 234-9959. A transcript of the call will be posted to the Company's web site.

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 May 10, 2011 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 Months Ended
March 31, 2011 and 2010
(amounts in 000's except per share data)
(Unaudited)

Three Months
Ended
March 31,
---------
2011 2010
---- ----
Operating Results
Net operating revenue $28,708 $27,987
Station operating expense 22,736 22,560
Corporate general and administrative 1,940 1,882
Operating income 4,032 3,545
Interest expense 1,157 1,519
Other (income) expense, net 68 (3,596)
--- ------
Income before income tax 2,807 5,622
Income tax expense 1,145 2,305
Net income $1,662 $3,317
====== ======
Earnings per share
Basic $0.39 $0.78
===== =====
Diluted $0.39 $0.78
===== =====
Weighted average common shares 4,237 4,228
Weighted average common and common
equivalent shares 4,243 4,229

Free Cash Flow
Net income $1,662 $3,317
Plus: Depreciation and amortization:
Station 1,751 1,845
Corporate 54 52
Deferred tax provision 655 1,180
Non-cash compensation 162 298
Other (income) expense, net 68 (3,596)
Less: Capital expenditures (1,145) (845)
Free cash flow $3,207 $2,251
====== ======

Balance Sheet Data
Working capital $18,665 $9,203
Net fixed assets $64,844 $68,152
Net intangible assets and other assets $97,420 $97,432
Total assets $197,552 $202,823
Long-term debt (including current
portion of $4,443 and $15,200,
respectively) $92,078 $116,078
Stockholders' equity $81,785 $67,630

Saga Communications, Inc.
Selected Supplemental Financial Data
March 31, 2011
(amounts in 000's except ratios)
(Unaudited)

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Three Months Ended
March 31, 2011:
Net operating revenue $24,506 $4,202 $- $28,708
Station operating
expense 19,278 3,458 - 22,736
Corporate G&A - - 1,940 1,940
Operating income
(loss) $5,228 $744 $(1,940) $4,032
====== ==== ======= ======
Depreciation and
amortization $1,339 $412 $54 $1,805
====== ==== === ======

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Three Months Ended
March 31, 2010:
Net operating revenue $24,144 $3,843 $- $27,987
Station operating
expense 19,223 3,337 - 22,560
Corporate G&A - - 1,882 1,882
Operating income
(loss) $4,921 $506 $(1,882) $3,545
====== ==== ======= ======
Depreciation and
amortization $1,421 $424 $52 $1,897
====== ==== === ======

Less: Plus: Trailing
12 Mos 3 Mos 3 Mos 12 Mos
Ended Ended Ended Ended
December March March
31, 31, March 31, 31,
2010 2010 2011 2011
---- ---- ---- ----
Trailing 12 Month
Consolidated EBITDA
(1)
Net income $15,136 $3,317 $1,662 $13,481
Less: Gain (loss) on
sale of assets (386) 35 (68) (489)
Gain on license
downgrade 3,756 3,561 - 195
Other 46 (12) 20 78
--- --- --- ---
Total exclusions 3,416 3,584 (48) (216)
----- ----- --- ----
Consolidated Adjusted
Net Income (1) 11,720 (267) 1,710 13,697
Plus: Interest
expense 5,622 1,519 1,157 5,260
Income tax expense 10,400 2,305 1,145 9,240
Depreciation &
amortization expense 7,718 1,897 1,805 7,626
Amortization of
television
syndicated
programming
contracts 732 180 189 741
Non-cash stock based
compensation expense 927 298 162 791
Less: Cash television
programming payments (744) (181) (171) (734)
Trailing twelve month
consolidated EBITDA
(1) $36,375 $5,751 $5,997 $36,621
======= ====== ====== =======