Saga Communications, Inc. Reports 3rd Quarter 2017 Results – iCrowdNewswire
 
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Nov 7, 2017 1:40 PM ET

Saga Communications, Inc. Reports 3rd Quarter 2017 Results

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iCrowdNewswire - Nov 7, 2017

GROSSE POINTE FARMS, Mich. — Saga Communications, Inc. (NYSE American: SGA) today reported net revenue increased 1.3% to $30.3 million for the three months ended September 30, 2017.  Station operating expense was flat with the same period last year at $21.8 million and operating income was $5.5 millioncompared to $6.8 million for the same period last year with the reduction primarily due to a gain of $1.4 millionrecognized from the sale of one of the Company’s towers in Norfolk, VA during the third quarter last year.  Gross political revenue from radio for the quarter was $0.3 million compared to $0.5 million for the same period last year.

 

On a same station basis net revenue declined 1.1% to $29.6 million.  Station operating expense was down 2.8% at $21.2 million and operating income was $5.4 million

The Company’s net revenue for the nine months ended September 30, 2017 was $86.7 million compared to $88.2 million for the same period last year. Station operating expense decreased to $64.5 million for the nine month period compared to $64.8 million last year and operating income was $13.4 million for the nine month period compared to $16.8 million last year.  Gross political revenue from radio was $0.6 million for the nine month period this year compared to $1.9 million for the comparable period last year.

On a same station basis net revenue for the nine months was $85.8 million compared to $88.2 million for the same period last year.  Station operating expense was $63.8 million   and operating income was $13.2 million for the nine months ended September 30, 2017. 

Net Income for the quarter was $33.4 million ($5.66 per fully diluted share) compared to $5.4 million ($0.92 per fully diluted share) for the same period last year and $39.9 million ($6.76 per fully diluted share) for the nine months ended September 30, 2017 compared to $13.2 million ($2.25 per fully diluted share) last year.  During the quarter the Company realized a gain of $29.9 million net of tax on the sale of its television assets.

Capital expenditures were $1.4 million in the third quarter compared to $1.6 million for the same period last year.  The Company expects to spend approximately $6.5 million for capital expenditures during 2017 including approximately $750 thousand relating to our recent acquisitions in Charleston and Hilton Head, SC.

On September 1, 2017 the Company closed on the sale of its television stations for approximately $66.6 million and on the purchase of radio stations in Charleston and Hilton Head, SC for approximately $23.0 million.  At the end of the quarter the Company had approximately $81.0 million of cash on its balance sheet.  As of this week we have approximately $72.0 million of cash with $25.0 million in outstanding debt.  Approximately $22.0 million of our cash will be used to pay taxes later this year based on the gain on the sale of our television assets.  In addition to taxes the Company intends to utilize the cash for prospective future acquisitions, regular quarterly cash dividends as declared by the Board of Directors, and to consider its use for special cash dividends and stock buybacks.

Saga’s 2017 Third Quarter call will be on Tuesday, November 7, 2017 at 11:00 a.m. EST.  The dial-in number for the call is (612) 234-9959.  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. EST on November 7, 2017 to [email protected]. 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”, “proforma”, and discontinued operations information 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 2016 and 2017 occurred as of January 1, 2016.

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 consolidated net 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 75 FM and 33 AM radio stations and 64 metro signals. 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 Nine Months Ended

September 30, 2017 and 2016

(amounts in 000’s except per share data)

(Unaudited)

       
   

 Three Months Ended  

 Nine Months Ended  

   

 September 30, 

 September 30, 

   

2017

2016

2017

2016

Operating Results

     

Net operating revenue

 

$         30,269

$        29,878

$         86,685

$         88,208

Station operating expense

 

21,755

21,775

64,521

64,757

Corporate general and administrative

 

3,132

2,728

8,875

8,065

Other operating (income) expense, net

 

(127)

(1,393)

(69)

(1,388)

Operating income

 

5,509

6,768

13,358

16,774

Interest expense

 

254

187

691

548

Income from continuing operations, before tax

 

5,255

6,581

12,667

16,226

Income tax expense

 

2,290

2,678

5,280

6,665

Income from continuing operations, net of tax

 

2,965

3,903

7,387

9,561

Income from discontinued operations, net of tax

 

30,451

1,511

32,501

3,688

Net income

 

$         33,416

$          5,414

$         39,888

$         13,249

       

Basic Earnings per share:

     
 

From continuing operations

 

$             0.50

$           0.66

$             1.25

$             1.63

 

From discontinued operations

 

5.16

0.26

$             5.51

$             0.63

 

Basic earnings per share

 

$             5.66

$           0.92

$             6.76

$             2.26

       

Diluted Earnings per share:

     
 

From continuing operations

 

$             0.50

$           0.66

$             1.25

$             1.62

 

From discontinued operations

 

5.16

0.26

$             5.51

$             0.63

 

Diluted earnings per share

 

$             5.66

$           0.92

$             6.76

$             2.25

       

Weighted average common shares

 

5,807

5,755

5,800

5,753

Weighted average common and common 

     
 

equivalent shares

 

5,807

5,764

5,804

5,762

       

Free Cash Flow

     

Net income 

 

$         33,416

$          5,414

$         39,888

$         13,249

Plus: Depreciation and amortization:

     
 

        Station

 

1,483

1,363

4,213

4,115

 

        Corporate

 

71

69

214

207

 

        Discontinued operations

 

370

445

1,023

         Deferred tax provision

 

340

675

2,020

2,165

         Non-cash compensation

 

629

536

1,761

1,594

         Other operating expense from continuing operations

 

(127)

(1,393)

(69)

(1,388)

         Other operating expense from discontinued operations

 

31

3

         Gain on the disposal of discontinued operations, net of tax

(29,902)

(29,902)

Less: Capital expenditures from continuing operations

 

(1,410)

(1,463)

(4,725)

(3,432)

 

    Capital expenditures from discontinued operations

 

(15)

(136)

(125)

(717)

Free cash flow

 

$           4,485

$          5,435

$         13,751

$         16,819

       
     

 September 30, 

     

2017

2016

Balance Sheet Data

     
 

Working capital

   

$         56,294

$         32,840

 

Net fixed assets

   

$         56,345

$         57,627

 

Net intangible assets and other assets

   

$       117,947

$        110,847

 

Total assets

   

$       277,954

$        216,631

 

Long-term debt including $10,287 of current portion of long term debt 

   
 

     at September 30, 2017.

 

$         35,287

$         36,365

 

Stockholders’ equity

   

$       171,555

$        133,223

 

 

Saga Communications, Inc.

 

Selected Supplemental Financial Data

 

For The Three and Nine Months Ended

 

September 30, 2017 and 2016

 

(amounts in 000’s except per share data)

 

(Unaudited)

       
    
   

 Three Months Ended  

 Nine Months Ended  

   

 September 30, 

 September 30, 

   

2017 (1)

2016

2017(1)

2016

Results of Discontinued Operations

     

Net operating revenue

 

$     3,296

$        6,241

$     14,238

$     17,094

Station operating expense 

 

2,372

3,684

9,727

10,807

Other operating expense

 

31

3

Operating income

 

924

2,557

4,480

6,284

Interest expense 

 

5

9

21

26

Income before income taxes

 

919

2,548

4,459

6,258

Pretax gain on the disposal of discontinued operations

 

50,842

50,842

Total pretax gain on discontinued operations

 

51,761

2,548

55,301

6,258

Income tax expense 

 

21,310

1,037

22,800

2,570

Income from discontinued operations, net of tax

 

$   30,451

$        1,511

$     32,501

$       3,688

       

 

(1)

Results of operations for the Television stations are reflected through August 31, 2017.  The effective date of the sale was September 1, 2017.  

 

 

Saga Communications, Inc.

Selected Supplemental Financial Data

For the Three Months Ended

September 30, 2017 and 2016

(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

  

September 30,

 

September 30,

 

September 30,

  

2017

2016

 

2017

2016

 

2017

2016

Consolidated

        

Net operating revenue

$      30,269

$    29,878

 

$      29,552

$      29,878

 

$      31,546

$      31,888

Station operating expense

21,755

21,775

 

21,174

21,775

 

23,000

23,478

Corporate general and administrative

3,132

2,728

 

3,132

2,728

 

3,132

2,728

Other operating (income) expense, net

(127)

(1,393)

 

(127)

(1,393)

 

(127)

(1,393)

Operating income

5,509

6,768

 

5,373

6,768

 

5,541

7,075

Interest expense

254

187

    

254

187

Income from continuing operations, before tax

5,255

6,581

    

5,287

6,888

Income tax expense

2,290

2,678

    

2,430

2,804

Income from continuing operations, net of tax

2,965

3,903

    

2,857

4,084

Income from discontinued operations, net of tax

30,451

1,511

    

30,451

1,511

Net income 

$      33,416

$      5,414

    

$      33,308

$        5,595

          

Basic Earnings per share:

        
 

From continuing operations

$          0.50

$        0.66

    

$          0.47

$          0.70

 

From discontinued operations

5.16

0.26

    

5.16

0.26

 

Basic earnings per share

$          5.66

$        0.92

    

$          5.63

$          0.96

          

Diluted Earnings per share:

        
 

From continuing operations

$          0.50

$        0.66

    

$          0.47

$          0.70

 

From discontinued operations

5.16

0.26

    

5.16

0.26

 

Diluted earnings per share

$          5.66

$        0.92

    

$          5.63

$          0.96

          
  

Actual

 

Same Station (1)

 

Pro Forma (2)

  

Three Months Ended

 

Three Months Ended

 

Three Months Ended

  

September 30,

 

September 30,

 

September 30,

  

2017

2016

 

2017

2016

 

2017

2016

Depreciation and amortization

        
 

by segment

        

Radio Stations

$        1,483

$      1,363

 

$        1,397

$        1,363

 

$        1,647

$        1,609

Discontinued Operations

370

 

 

Corporate and Other

71

69

 

71

69

 

71

69

  

$        1,554

$      1,802

 

$        1,468

$        1,432

 

$        1,718

$        1,678

          

(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 2016 and 2017 occurred as of January 1, 2016.

   

 

Saga Communications, Inc.

Selected Supplemental Financial Data

For the Nine Months Ended

September 30, 2017 and 2016

(amounts in 000’s except per share data)

(Unaudited)

          
  

Actual

 

Same Station (1)

 

Pro Forma (2)

  

Nine Months Ended

 

Nine Months Ended

 

Nine Months Ended

  

September 30,

 

September 30,

 

September 30,

  

2017

2016

 

2017

2016

 

2017

2016

Consolidated

        

Net operating revenue

$      86,685

$      88,208

 

$      85,811

$      88,208

 

$      92,187

$      93,993

Station operating expense

64,521

64,757

 

63,825

64,757

 

69,325

69,874

Corporate general and administrative

8,875

8,065

 

8,875

8,065

 

8,875

8,065

Other operating (income) expense, net

(69)

(1,388)

 

(69)

(1,388)

 

(69)

(1,388)

Operating income

13,358

16,774

 

13,180

16,774

 

14,056

17,442

Interest expense

691

548

    

691

548

Income from continuing operations, before tax

12,667

16,226

    

13,365

16,894

Income tax expense

5,280

6,665

    

5,566

6,939

Income from continuing operations, net of tax

7,387

9,561

    

7,799

9,955

Income from discontinued operations, net of tax

32,501

3,688

    

32,501

3,688

Net income 

$      39,888

$      13,249

    

$      40,300

$      13,643

          

Basic Earnings per share:

        
 

From continuing operations

$          1.25

$          1.63

    

$          1.32

$          1.70

 

From discontinued operations

5.51

0.63

    

5.51

0.63

 

Basic earnings per share

$          6.76

$          2.26

    

$          6.83

$          2.33

          

Diluted Earnings per share:

        
 

From continuing operations

$          1.25

$          1.62

    

$          1.32

$          1.70

 

From discontinued operations

5.51

0.63

    

5.51

0.63

 

Diluted earnings per share

$          6.76

$          2.25

    

$          6.83

$          2.33

          
  

Actual

 

Same Station (1)

 

Pro Forma (2)

  

Nine Months Ended

 

Nine Months Ended

 

Nine Months Ended

  

September 30,

 

September 30,

 

September 30,

  

2017

2016

 

2017

2016

 

2017

2016

Depreciation and amortization

        
 

by segment

        

Radio Stations

$        4,213

$        4,115

 

$        4,125

$        4,115

 

$        4,867

$        4,851

Discontinued Operations

445

1,023

 

 

Corporate and Other

214

207

 

214

207

 

214

207

  

$        4,872

$        5,345

 

$        4,339

$        4,322

 

$        5,081

$        5,058

          

(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 2016 and 2017 occurred as of January 1, 2016.

   

 

SOURCE Saga Communications, Inc.

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http://www.sagacommunications.com

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Saga Communications, Inc.

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