Saga Communications, Inc. Reports 2nd Quarter 2016 Results

Saga Communications, Inc. Reports 2nd Quarter 2016 Results

Net Revenue increased 6.1%

GROSSE POINTE FARMS, Mich., Aug. 4, 2016 /PRNewswire/ -- Saga Communications, Inc. (NYSE MKT SGA) today reported net revenue increased 6.1% to $36.4 million for the quarter ended June 30, 2016. Free cash flow increased 15.6% to $6.5 million. Operating Income increased 12.6% to $8.4 million. Station operating expense increased 4.6% to $25.4 million (station operating expense includes depreciation and amortization attributable to the stations). Same Station net revenue increased 0.8% to $34.2 million and same station operating expense was flat at $24.0 million. Net income for the period was $4.8 million ($0.82 per fully diluted share compared to $0.77 for the same period last year).

Net Revenue increased 9.1% to $69.2 million for the six months ended June 30, 2016. Free cash flow increased 23.3% to $11.4 million. Station operating expense increased 6.4% to $50.1 million (station operating expense includes depreciation and amortization attributable to the stations). Operating income was $13.7 million. Net income for the six month period was $7.8 million ($1.33 per fully diluted share compared to $1.13 for the same period last year).

Capital expenditures were $1.5 million in the 2nd quarter compared to $1.3 million for the same period last year and $2.6 million for the six month period compared to $2.3 million last year. The Company currently expects to spend approximately $5.0 million to $5.5 million for capital expenditures during 2016.

Saga's 2016 2nd Quarter conference call will be on Thursday, August 4, 2016 at 11:00 a.m. EDT. The dial-in number for the call is (612) 234-9960. A transcript of the call will be posted to the Company's website as soon as it is available after the call.

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. EDT on August 4, 2016 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.

The attached Selected Supplemental Financial Data tables disclose "actual", "same station" and "proforma" information by segment as well as the Company's trailing 12 month consolidated EBITDA. The "actual" 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. The "proforma" amounts assume all acquisitions in 2015 and 2016 occurred as of January 1, 2015.

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 same station financial information, 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.

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.

Saga is a broadcasting company whose business is devoted to acquiring, developing and operating broadcast properties. Saga owns or operates broadcast properties in 26 markets, including 67 FM and 32 AM radio stations, 4 television stations and 5 low-power television stations. For additional information, contact us at (313) 886-7070 or visit our website at www.sagacom.com.




Saga Communications, Inc.

Selected Consolidated Financial Data

For The Three and Six Months Ended

June 30, 2016 and 2015

(amounts in 000's except per share data)

(Unaudited)


Three Months Ended Six Months Ended

June 30, June 30,

2016 2015 2016 2015
---- ---- ---- ----

Operating Results

Net operating revenue $36,438 $34,358 $69,183 $63,419

Station operating expense 25,420 24,311 50,105 47,076

Corporate general and administrative 2,620 2,583 5,337 5,065

Other operating expense 8 14 8 14

Operating income 8,390 7,450 13,733 11,264

Interest expense 189 244 378 485

Other income - (409) - (417)
--- ---- --- ----

Income before income tax expense 8,201 7,615 13,355 11,196

Income tax expense 3,390 3,141 5,520 4,591
----- ----- ----- -----

Net income $4,811 $4,474 $7,835 $6,605
====== ====== ====== ======


Earnings Per Share

Basic $0.82 $0.77 $1.34 $1.14
===== ===== =====

Diluted $0.82 $0.77 $1.33 $1.13
===== ===== =====


Weighted average common shares 5,754 5,712 5,752 5,711

Weighted average common and common

equivalent shares 5,763 5,757 5,761 5,759


Free Cash Flow

Net income $4,811 $4,474 $7,835 $6,605

Plus: Depreciation and amortization:

Station 1,738 1,529 3,405 3,050

Corporate 69 77 138 145

Deferred tax provision 915 906 1,490 1,266

Non-cash compensation 530 365 1,058 827

Other operating expense 8 14 8 14

Other income - (409) - (417)

Less: Capital expenditures (1,540) (1,304) (2,550) (2,254)

Free cash flow $6,531 $5,652 $11,384 $9,236
====== ====== ======= ======


June 30,

2016 2015
---- ----

Balance Sheet Data

Working capital $28,790 $38,173

Net fixed assets $57,816 $53,900

Net intangible assets and other assets $110,741 $93,620

Total assets $213,984 $200,299

Long-term debt (including current $36,365 $36,078

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

Stockholders' equity $129,036 $120,476










Saga Communications, Inc.

Selected Supplemental Financial Data

For the Three Months Ended

June 30, 2016 and 2015

(amounts in 000's except per share data)

(Unaudited)


Actual Same Station (1) Pro Forma (2)

Three Months Ended Three Months Ended Three Months Ended

June 30, June 30, June 30,

2016 2015 2016 2015 2016 2015
---- ---- ---- ---- ---- ----

Consolidated

Net operating revenue $36,438 $34,358 $34,227 $33,965 $36,438 $36,746

Station operating expense 25,420 24,311 23,952 23,957 25,420 25,968

Corporate general and administrative 2,620 2,583 2,620 2,583 2,620 2,583

Other operating expense 8 14 - 18 8 14

Operating income 8,390 7,450 $7,655 $7,407 8,390 8,181

Interest expense 189 244 189 244

Other income - (409) - (409)
--- ---- --- ----

Income before income tax expense 8,201 7,615 8,201 8,346

Income tax expense 3,390 3,141 3,390 3,441

Net income $4,811 $4,474 $4,811 $4,905
====== ====== ====== ======

Earnings per share:

Basic $0.82 $0.77 $0.84 $0.86
===== ===== ===== =====

Diluted $0.82 $0.77 $0.83 $0.85
===== ===== ===== =====


Actual Same Station (1) Pro Forma (2)

Three Months Ended Three Months Ended Three Months Ended

June 30, June 30, June 30,

2016 2015 2016 2015 2016 2015
---- ---- ---- ---- ---- ----

Radio Segment

Net operating revenue $30,866 $29,017 $28,655 $28,624 $30,866 $31,405

Station operating expense 21,842 20,819 20,374 20,465 21,842 22,476

Other operating expense 8 14 - 18 8 14

Operating income $9,016 $8,184 $8,281 $8,141 $9,016 $8,915
====== ====== ====== ====== ====== ======



Actual Same Station (1) Pro Forma (2)

Three Months Ended Three Months Ended Three Months Ended

June 30, June 30, June 30,

2016 2015 2016 2015 2016 2015
---- ---- ---- ---- ---- ----

Television Segment

Net operating revenue $5,572 $5,341 $5,572 $5,341 $5,572 $5,341

Station operating expense 3,578 3,492 3,578 3,492 3,578 3,492

Operating income $1,994 $1,849 $1,994 $1,849 $1,994 $1,849
====== ====== ====== ====== ====== ======



Actual Same Station (1) Pro Forma (2)

Three Months Ended Three Months Ended Three Months Ended

June 30, June 30, June 30,

2016 2015 2016 2015 2016 2015
---- ---- ---- ---- ---- ----

Depreciation and amortization

by segment

Radio Segment $1,406 $1,207 $1,182 $1,199 $1,406 $1,416

Television Segment 332 322 332 322 332 322

Corporate and Other 69 77 69 77 69 77

$1,807 $1,606 $1,583 $1,598 $1,807 $1,815
====== ====== ====== ====== ====== ======


(1) Same station includes only the results of stations we owned and operated for the entire comparable period.

(2) Pro Forma results assume all acquisitions in 2015 and 2016 occurred as of January 1, 2015.










Saga Communications, Inc.

Selected Supplemental Financial Data

For the Six Months Ended

June 30, 2016 and 2015

(amounts in 000's except per share data)

(Unaudited)


Actual Same Station (1) Pro Forma (2)

Six Months Ended Six Months Ended Six Months Ended

June 30, June 30, June 30,

2016 2015 2016 2015 2016 2015
---- ---- ---- ---- ---- ----

Consolidated

Net operating revenue $69,183 $63,419 $65,235 $62,956 $69,183 $67,761

Station operating expense 50,105 47,076 47,172 46,508 50,120 50,425

Corporate general and administrative 5,337 5,065 5,337 5,065 5,337 5,065

Other operating expense (income), net 8 14 (2) 10 8 14

Operating income 13,733 11,264 $12,728 $11,373 13,718 12,257

Interest expense 378 485 378 485

Other income - (417) - (417)
--- ---- --- ----

Income before income tax expense 13,355 11,196 13,340 12,189

Income tax expense 5,520 4,591 5,514 4,998

Net income $7,835 $6,605 $7,826 $7,191
====== ====== ====== ======

Earnings per share:

Basic $1.34 $1.14 $1.36 $1.26
===== ===== ===== =====

Diluted $1.33 $1.13 $1.36 $1.25
===== ===== ===== =====


Actual Same Station (1) Pro Forma (2)

Six Months Ended Six Months Ended Six Months Ended

June 30, June 30, June 30,

2016 2015 2016 2015 2016 2015
---- ---- ---- ---- ---- ----

Radio Segment

Net operating revenue $58,330 $53,293 $54,382 $52,830 58,330 57,635

Station operating expense 42,982 40,241 40,049 39,673 42,997 43,590

Other operating expense (income), net 5 14 (5) 10 5 14

Operating income $15,343 $13,038 $14,338 $13,147 $15,328 $14,031
======= ======= ======= ======= ======= =======



Actual Same Station (1) Pro Forma (2)

Six Months Ended Six Months Ended Six Months Ended

June 30, June 30, June 30,

2016 2015 2016 2015 2016 2015
---- ---- ---- ---- ---- ----

Television Segment

Net operating revenue $10,853 $10,126 $10,853 $10,126 10,853 10,126

Station operating expense 7,123 6,835 7,123 6,835 7,123 6,835

Other operating expense (income), net 3 - 3 - 3 -

Operating income $3,727 $3,291 $3,727 $3,291 $3,727 $3,291
====== ====== ====== ====== ====== ======



Actual Same Station (1) Pro Forma (2)

Six Months Ended Six Months Ended Six Months Ended

June 30, June 30, June 30,

2016 2015 2016 2015 2016 2015
---- ---- ---- ---- ---- ----

Depreciation and amortization

by segment

Radio Segment $2,752 $2,381 $2,332 $2,365 $2,767 $2,797

Television Segment 653 669 653 669 653 669

Corporate and Other 138 145 138 145 138 145

$3,543 $3,195 $3,123 $3,179 $3,558 $3,611
====== ====== ====== ====== ====== ======


(1) Same station includes only the results of stations we owned and operated for the entire comparable period.

(2) Pro Forma results assume all acquisitions in 2015 and 2016 occurred as of January 1, 2015.







Saga Communications, Inc.

Selected Supplemental Financial Data

June 30, 2016

(amounts in 000's except ratios)

(Unaudited)




Less: Plus: Trailing

12 Mos Ended 6 Mos Ended 6 Mos Ended Add: 12 Mos Ended

December 31, June 30, June 30, Proforma June 30,

2015 2015 2016 Acquisitions 2016
---- ---- ---- ------------ ----

Trailing 12 Month Consolidated Earnings Before Interest

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

Net income $13,414 $6,605 $7,835 $272 $14,916

Exclusions:

Gain (loss) on sale of assets (541) (14) (8) - (535)

Gain on insurance claim 417 417 - - -

Impairment of intangible assets (874) - - - (874)

Write-off of debt issuance costs (557) - - - (557)

Other 119 102 215 - 232

Total exclusions (1,436) 505 207 - (1,734)
------ --- --- --- ------

Consolidated adjusted net income (1) 14,850 6,100 7,628 272 16,650

Plus: Interest expense 888 485 378 - 781

Income tax expense 9,640 4,591 5,520 189 10,758

Depreciation & amortization expense 6,824 3,195 3,543 169 7,341

Amortization of television syndicated programming contracts 637 321 312 - 628

Non-cash stock based compensation expense 1,655 827 1,058 - 1,886

Less: Cash television programming payments (635) (319) (312) - (628)

Trailing twelve month consolidated EBITDA (1) $33,859 15,200 $18,127 630 37,416
======= ====== ======= === ======


Total long-term debt, including current maturities $36,365

Divided by trailing twelve month consolidated EBITDA (1) 37,416

Leverage ratio 0.97
====



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







Saga Communications, Inc.

Selected Financial Data Non-GAAP Disclosures

For the Three Months Ended

June 30, 2016 and 2015

(amounts in 000's)

(Unaudited)



Reconciliation of Actual (historical) Information to Same Station Operating Income
----------------------------------------------------------------------------------


Adjustment Adjustment

Actual For Acquisitions Same Station Actual For Acquisitions Same Station

Three Months and Dispositions Three Months Three Months and Dispositions Three Months

Ended Not Included in Ended Ended Not Included in Ended

June 30, Entire Comparable June 30, June 30, Entire Comparable June 30,

2016 Period 2016 2015 Period 2015
---- ------ ---- ---- ------ ----

Consolidated

Net operating revenue $36,438 $(2,211) $34,227 $34,358 $(393) $33,965

Station operating expense 25,420 (1,468) 23,952 24,311 (354) 23,957

Corporate general and administrative 2,620 - 2,620 2,583 - 2,583

Other operating expense 8 (8) - 14 4 18

Operating income $8,390 $(735) $7,655 $7,450 $(43) $7,407
====== ===== ====== ====== ==== ======


Depreciation and amortization $1,807 $(224) $1,583 $1,606 $(8) $1,598
====== ===== ====== ====== === ======


Adjustment Adjustment

Actual For Acquisitions Same Station Actual For Acquisitions Same Station

Three Months and Dispositions Three Months Three Months and Dispositions Three Months

Ended Not Included in Ended Ended Not Included in Ended

June 30, Entire Comparable June 30, June 30, Entire Comparable June 30,

2016 Period 2016 2015 Period 2015
---- ------ ---- ---- ------ ----

Radio Segment

Net operating revenue $30,866 $(2,211) $28,655 $29,017 $(393) $28,624

Station operating expense 21,842 (1,468) 20,374 20,819 (354) 20,465

Other operating expense 8 (8) - 14 4 18

Operating income $9,016 $(735) $8,281 $8,184 $(43) $8,141
====== ===== ====== ====== ==== ======


Depreciation and amortization $1,406 $(224) $1,182 $1,207 $(8) $1,199
====== ===== ====== ====== === ======


Adjustment Adjustment

Actual For Acquisitions Same Station Actual For Acquisitions Same Station

Three Months and Dispositions Three Months Three Months and Dispositions Three Months

Ended Not Included in Ended Ended Not Included in Ended

June 30, Entire Comparable June 30, June 30, Entire Comparable June 30,

2016 Period 2016 2015 Period 2015
---- ------ ---- ---- ------ ----

Television Segment

Net operating revenue $5,572 $ - $5,572 $5,341 $ - $5,341

Station operating expense 3,578 - 3,578 3,492 - 3,492

Operating income $1,994 $ - $1,994 $1,849 $ - $1,849
====== ======================= ====== ====== ======================= ======


Depreciation and amortization $332 $ - $332 $322 $ - $322
==== ======================= ==== ==== ======================= ====







Saga Communications, Inc.

Selected Financial Data Non-GAAP Disclosures

For the Six Months Ended

June 30, 2016 and 2015

(amounts in 000's)

(Unaudited)



Reconciliation of Actual (historical) Information to Same Station Operating Income
----------------------------------------------------------------------------------


Adjustment Adjustment

Actual For Acquisitions Same Station Actual For Acquisitions Same Station

Six Months and Dispositions Six Months Six Months and Dispositions Six Months

Ended Not Included in Ended Ended Not Included in Ended

June 30, Entire Comparable June 30, June 30, Entire Comparable June 30,

2016 Period 2016 2015 Period 2015
---- ------ ---- ---- ------ ----

Consolidated

Net operating revenue $69,183 $(3,948) $65,235 $63,419 $(463) $62,956

Station operating expense 50,105 (2,933) 47,172 47,076 (568) 46,508

Corporate general and administrative 5,337 - 5,337 5,065 - 5,065

Other operating expense (income), net 8 (10) (2) 14 (4) 10

Operating income $13,733 $(1,005) $12,728 $11,264 $109 $11,373
======= ======= ======= ======= ==== =======


Depreciation and amortization $3,543 $(420) $3,123 $3,195 $(16) $3,179
====== ===== ====== ====== ==== ======


Adjustment Adjustment

Actual For Acquisitions Same Station Actual For Acquisitions Same Station

Six Months and Dispositions Six Months Six Months and Dispositions Six Months

Ended Not Included in Ended Ended Not Included in Ended

June 30, Entire Comparable June 30, June 30, Entire Comparable June 30,

2016 Period 2016 2015 Period 2015
---- ------ ---- ---- ------ ----

Radio Segment

Net operating revenue $58,330 $(3,948) $54,382 $53,293 $(463) $52,830

Station operating expense 42,982 (2,933) 40,049 40,241 (568) 39,673

Other operating expense (income), net 5 (10) (5) 14 (4) 10

Operating income $15,343 $(1,005) $14,338 $13,038 $109 $13,147
======= ======= ======= ======= ==== =======


Depreciation and amortization $2,752 $(420) $2,332 $2,381 $(16) $2,365
====== ===== ====== ====== ==== ======


Adjustment Adjustment

Actual For Acquisitions Same Station Actual For Acquisitions Same Station

Six Months and Dispositions Six Months Six Months and Dispositions Six Months

Ended Not Included in Ended Ended Not Included in Ended

June 30, Entire Comparable June 30, June 30, Entire Comparable June 30,

2016 Period 2016 2015 Period 2015
---- ------ ---- ---- ------ ----

Television Segment

Net operating revenue $10,853 $ - $10,853 $10,126 $ - $10,126

Station operating expense 7,123 - 7,123 6,835 - 6,835

Other operating expense (income), net 3 - 3 - - -

Operating income $3,727 $ - $3,727 $3,291 $ - $3,291
====== ======================= ====== ====== ======================= ======


Depreciation and amortization $653 $ - $653 $669 $ - $669
==== ======================= ==== ==== ======================= ====






SOURCE Saga Communications, Inc.

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Saga Communications, Inc.

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

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


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