Saga Communications, Inc. Reports 3rd Quarter Results

Saga Communications, Inc. Reports 3rd Quarter Results

Net Operating Revenue Increased 4.4%

GROSSE POINTE FARMS, Mich., Nov. 7, 2014 /PRNewswire/ -- Saga Communications, Inc. (NYSE MKT: SGA) today reported net operating revenue increased 4.4% to $34.4 million for the quarter ended September 30, 2014 compared to $32.9 million for the same period last year. Station operating expense was $26.4 million (station operating expense includes depreciation and amortization attributable to the stations) compared to $23.6 million for the same period last year. The $2.8 million increase was primarily due to an accrual attributable to the Company's expectations of entering into license agreements in the fourth quarter of 2014 which are currently under negotiation. Operating income from continuing operations was $5.7 million. Net income for the period was $3.3 million ($0.56 per fully diluted share) and free cash flow was $4.9 million.

Net operating revenue for the period ended September 30, 2014 increased 2.0% to $97.6 million compared to $95.7 million for the same period last year. Operating income from continuing operations was $18.2 million. Net income for the period was $10.5 million ($1.80 per fully diluted share) and free cash flow was $14.3 million. Station operating expense was $72.8 million (station operating expense includes depreciation and amortization attributable to the stations).

Capital expenditures in the 3rd quarter of 2014 were $0.9 million compared to $1.0 million for the same period last year. The Company currently expects to spend approximately $5.5 million for capital expenditures during 2014.

Saga 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 Consolidated and Supplemental Financial Data tables.

Saga is a broadcasting company whose business is devoted to acquiring, developing and operating broadcast properties. Saga owns or operates broadcast properties in 25 markets, including 62 FM and 30 AM radio stations, 3 state radio networks, 2 farm radio networks, 4 television stations and 4 low-power television stations. For additional information, contact us at (313) 886-7070 or visit our website at www.sagacom.com.

Saga's 3rd Quarter 2014 conference call will be on Friday, November 7, 2014 at 11:00 a.m. EST. The dial-in number for all calls is (612) 332-0107. A transcript of the call will be posted to the Company's 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 10:00 a.m. EST on November 7, 2014 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 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.






Selected Consolidated Financial Data

For The Three and Nine Months Ended

September 30, 2014 and 2013

(amounts in 000's except per share data)

(Unaudited)


Three Months Ended Nine Months Ended

September 30, September 30,

2014 2013 2014 2013
---- ---- ---- ----

Operating Results

Net operating revenue $34,373 $32,929 $97,627 $95,718

Station operating expense 26,366 23,598 72,812 69,179

Corporate general and administrative 2,307 2,051 6,580 5,981

Operating income from continuing operations 5,700 7,280 18,235 20,558

Interest expense 268 308 812 1,023

Other (income) expense, net 7 (144) (38) (53)
--- ---- --- ---

Income from continuing operations before income tax 5,425 7,116 17,461 19,588

Income tax expense 2,180 2,820 7,000 7,762
----- ----- ----- -----

Income from continuing operations, net of income taxes 3,245 4,296 10,461 11,826

Income from discontinued operations, net of income taxes - - - 223
--- --- --- ---

Net income $3,245 $4,296 $10,461 $12,049
====== ====== ======= =======

Basic earnings per share:

From continuing operations $0.56 $0.76 $1.82 $2.08

From discontinued operations - - - 0.04
--- --- ---

Earnings per share $0.56 $0.76 $1.82 $2.12
===== ===== =====

Diluted earnings per share:

From continuing operations $0.56 $0.75 $1.80 $2.06

From discontinued operations - - - 0.04
--- --- ---

Earnings per share $0.56 $0.75 $1.80 $2.10
===== ===== =====

Weighted average common shares 5,699 5,686 5,696 5,679

Weighted average common and common

equivalent shares 5,742 5,754 5,751 5,744


Free Cash Flow

Net income $3,245 $4,296 $10,461 $12,049

Plus: Depreciation and amortization:

Station 1,595 1,632 4,752 4,815

Corporate 77 57 205 170

Deferred tax provision 710 1,065 2,130 2,665

Non-cash compensation 193 - 572 16

Gain on disposal of television station - - - (223)

Other (income) expense, net 7 (144) (38) (53)

Less: Capital expenditures (887) (1,007) (3,801) (3,472)

Free cash flow $4,940 $5,899 $14,281 $15,967
====== ====== ======= =======


Balance Sheet Data

Working capital $35,872 $37,671

Net fixed assets $55,568 $56,406

Net intangible assets and other assets $95,211 $96,767

Total assets $204,515 $204,770

Long-term debt (including current $41,078 $51,078

portion of $0 and $1,078, respectively)

Stockholders' equity $118,921 $116,651







Saga Communications, Inc.

Selected Supplemental Financial Data

For the Three and Nine Months Ended

September 30, 2014 and 2013

(amounts in 000's)

(Unaudited)


Corporate

Radio Television and Other Consolidated
----- ---------- --------- ------------

Three Months Ended September 30, 2014:

Net operating revenue $29,400 $4,973 $ - $34,373

Station operating expense 23,082 3,284 - 26,366

Corporate G&A - - 2,307 2,307

Operating income (loss) from continuing operations $6,318 $1,689 ($2,307) $5,700
====== ====== ======= ======

Depreciation and amortization $1,245 $350 $77 $1,672
====== ==== === ======


Corporate

Radio Television and Other Consolidated
----- ---------- --------- ------------

Three Months Ended September 30, 2013:

Net operating revenue $28,104 $4,825 $ - $32,929

Station operating expense 20,339 3,259 - 23,598

Corporate G&A - - 2,051 2,051

Operating income (loss) from continuing operations $7,765 $1,566 $(2,051) $7,280
====== ====== ======= ======

Depreciation and amortization $1,270 $362 $57 $1,689
====== ==== === ======


Corporate

Radio Television and Other Consolidated
----- ---------- --------- ------------

Nine Months Ended September 30, 2014:

Net operating revenue $83,176 $14,451 $ - $97,627

Station operating expense 63,021 9,791 - 72,812

Corporate G&A - - 6,580 6,580

Operating income (loss) from continuing operations $20,155 $4,660 ($6,580) $18,235
======= ====== ======= =======

Depreciation and amortization $3,711 $1,041 $205 $4,957
====== ====== ==== ======


Corporate

Radio Television and Other Consolidated
----- ---------- --------- ------------

Nine Months Ended September 30, 2013:

Net operating revenue $81,240 $14,478 $ - $95,718

Station operating expense 59,561 9,618 - 69,179

Corporate G&A - - 5,981 5,981

Operating income (loss) from continuing operations $21,679 $4,860 $(5,981) $20,558
======= ====== ======= =======

Depreciation and amortization $3,761 $1,054 $170 $4,985
====== ====== ==== ======







Saga Communications, Inc.

Selected Supplemental Financial Data

September 30, 2014

(amounts in 000's except ratios)

(Unaudited)




Less: Plus: Trailing

12 Mos Ended 9 Mos Ended 9 Mos Ended 12 Mos Ended

December 31, September 30, September 30, September 30,

2013 2013 2014 2014
---- ---- ---- ----

Trailing 12 Month Consolidated Earnings Before Interest

Taxes, Depreciation and Amortization ("EBITDA") (1)

Net income $15,273 $12,049 $10,461 $13,685

Exclusions:

(Loss) gain on sale of assets 126 127 38 37

Impairment of intangible assets (2,033) - - (2,033)

Gain on sale of television station 223 223 - -

Other (39) (6) 299 $266

Total exclusions (1,723) 344 337 (1,730)
------ --- --- ------


Consolidated adjusted net income (1) 16,996 11,705 10,124 15,415

Plus: Interest expense 1,305 1,023 812 1,094

Income tax expense 9,992 7,762 7,000 9,230

Depreciation & amortization expense 6,768 4,985 4,957 6,740

Amortization of television syndicated programming contracts 637 476 472 633

Non-cash stock based compensation expense 135 16 572 691

Less: Cash television programming payments (628) (470) (464) (622)

Trailing twelve month consolidated EBITDA (1) $35,205 $25,497 $23,473 $33,181
======= ======= ======= =======


Total long-term debt, including current maturities $41,078

Divided by trailing twelve month consolidated EBITDA (1) 33,181

Leverage ratio 1.2
===



(1) As defined in the Company's credit facility.






SOURCE Saga Communications, Inc.

Saga Communications, Inc.

CONTACT: Samuel D. Bush, 313/886-7070

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


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