Saga Communications, Inc. Reports 4th Quarter and Year End 2008 Results
Saga Communications, Inc. Reports 4th Quarter and Year End 2008 Results
GROSSE POINTE FARMS, Mich., March 31 /PRNewswire-FirstCall/ -- Saga Communications, Inc. (NYSE Amex: SGA) today reported free cash flow increased 17.3% to $18.9 million for the year. Net operating revenue for the year ended December 31, 2008 decreased 2.8% over the comparable period in 2007 to $140.0 million. Station operating expense decreased 0.5% to $105.8 million (station operating expense includes depreciation and amortization attributable to the stations). The Company's net loss was $66.5 million ($14.05 per fully diluted share) for the year ended December 31, 2008 compared to net income of $11.0 million ($2.19 per fully diluted share) for the same period last year. Results for the full year of 2008 include a pre-tax non-cash impairment charge of $116.4 million related to the Company's review of its indefinite-lived intangible assets. There was no such charge in 2007. Without the non-cash impairment charge, the Company would have had a net income of $9.9 million ($2.08 per fully diluted share) for the year. On a same station basis for the year, net operating revenue decreased 3.5% to $138.6 million, operating income (excluding the non-cash impairment charge) decreased 12.6% to $24.3 million and station operating expense decreased 1.2% to $104.8 million.
For the quarter ended December 31, 2008 free cash flow increased 42.0% to $5.9 million for the quarter. Net operating revenue decreased 7.0% from the comparable period in 2007 to $35.0 million. Station operating expense decreased 2.8% to $26.6 million (station operating expense includes depreciation and amortization attributable to the stations). The Company's net loss was $74.0 million for the quarter ended December 31, 2008 compared to a net income of $3.1 million for the same period last year. Results for the fourth quarter of 2008 include a pre-tax non-cash impairment charge of $116.4 million related to the Company's review of its indefinite-lived intangible assets. On a same station basis for the quarter, net operating revenue decreased 7.2% to $34.7 million, operating income (excluding the non-cash impairment charge) decreased 21.0% to $6.0 million and station operating expense decreased 3.1% to $26.4 million.
Capital expenditures in the fourth quarter of 2008 were $2.0 million. For the 2008 fiscal year total capital expenditures were $7.1 million. This compares to $3.7 million and $9.9 million for the same respective periods last year. The Company currently expects to spend approximately $3.5 million for capital expenditures during 2009.
During the year ended December 31, 2008, the Company bought back 899,601 shares of stock for a total purchase price of $19.2 million. For the three month period ended December 31, 2008 the Company bought back 378,412 shares for a total purchase price of $7.4 million.
All share and per share information have been adjusted for the Company's January 28, 2009 1-for-4 reverse stock split.
The attached Selected Supplemental Financial Data table discloses "as reported," "same station" and "pro forma" information by segment. The "as reported" 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 "pro forma" amounts assume the 2008 and 2007 acquisitions and dispositions occurred as of January 1, 2007.
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 same station financial information and free cash flow. 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 and as a primary measure for incentive based compensation of executives and other members of management. 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 Financial Data Non-GAAP Disclosures tables.
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.
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 Twelve Months Ended December 31, 2008 and 2007 (amounts in 000's except per share data) (Unaudited) Three Months Twelve Months Ended Ended December 31, December 31, 2008 2007 2008 2007 Operating Results Net operating revenue $34,890 $37,501 $139,956 $144,023 Station operating expense 26,550 27,316 105,805 106,302 Corporate general and administrative 2,368 2,606 9,979 9,800 Gain on asset exchange - - (506) - Impairment of intangible assets 116,443 - 116,443 - Operating income (loss) (110,471) 7,579 (91,765) 27,921 Interest expense 1,413 2,093 7,173 8,954 Other expense, net 49 131 76 273 Income (loss) before income tax (111,933) 5,355 (99,014) 18,694 Income tax expense (benefit) (37,974) 2,222 (32,522) 7,690 Net income (loss) $(73,959) $3,133 $(66,492) $11,004 Earnings (loss) per share Basic $(17.41) $0.62 $(14.05) $2.19 Diluted $(17.41) $0.62 $(14.05) $2.19 Weighted average common shares 4,249 5,030 4,734 5,023 Weighted average common shares and common shares equivalents 4,249 5,033 4,734 5,029 Free Cash Flow Net income (loss) $(73,959) $3,133 $(66,492) $11,004 Plus: Depreciation and amortization: Station 2,348 2,135 8,739 7,982 Corporate 62 58 222 204 Deferred tax provision (37,445) 1,983 (33,879) 5,144 Non-cash compensation 374 375 1,433 1,366 Gain on asset exchange - - (506) - Impairment of intangible assets 116,443 - 116,443 - Other expense, net 49 131 76 273 Less: Capital expenditures (1,993) (3,672) (7,127) (9,852) Free cash flow $5,879 $4,143 $18,909 $16,121 Balance Sheet Data Working capital $20,438 $24,075 Net fixed assets 73,383 76,217 Net intangible assets and other assets 113,276 220,045 Total assets 221,460 337,644 Long term debt (including current portion of $1,061 and $0, respectively) 135,411 129,911 Stockholders' equity 65,097 149,076 Saga Communications, Inc. Selected Supplemental Financial Data For the Three Months Ended December 31, 2008 and 2007 (amounts in 000's except per share data) (Unaudited) As-Reported Same Station Pro Forma (1) Three Months Three Months Three Months Ended Ended Ended December 31, December 31, December 31, 2008 2007 2008 2007 2008 2007 Consolidated Net operating revenue $34,890 $37,501 $34,746 $37,429 $34,890 $37,537 Station operating expense 26,550 27,316 26,388 27,244 26,550 27,352 Corporate general and administrative 2,368 2,606 2,368 2,606 2,368 2,606 Impairment of intangible assets 116,443 - 116,443 - 116,443 - Operating income (loss) (110,471) 7,579 $(110,453) $7,579 (110,471) 7,579 Interest expense 1,413 2,093 1,413 2,093 Other expense, net 49 131 49 131 Income tax expense (benefit) (37,974) 2,222 (37,974) 2,222 Net income (loss) $(73,959) $3,133 $(73,959) $3,133 Earnings (loss) per share: Basic $(17.41) $0.62 $(17.41) $0.62 Diluted $(17.41) $0.62 $(17.41) $0.62 As-Reported Same Station Pro Forma (1) Three Months Three Months Three Months Ended Ended Ended December 31, December 31, December 31, 2008 2007 2008 2007 2008 2007 Radio Segment Net operating revenue $29,756 $32,956 $29,612 $32,884 $29,756 $32,992 Station operating expense 22,513 23,702 22,351 23,630 22,513 23,738 Impairment of intangible assets 114,979 - 114,979 - 114,979 - Operating income (loss) $(107,736) $9,254 $(107,718) $9,254 $(107,736) $9,254 As-Reported Same Station Pro Forma (1) Three Months Three Months Three Months Ended Ended Ended December 31, December 31, December 31, 2008 2007 2008 2007 2008 2007 Television Segment Net operating revenue $5,134 $4,545 $5,134 $4,545 $5,134 $4,545 Station operating expense 4,037 3,614 4,037 3,614 4,037 3,614 Impairment of intangible assets 1,464 - 1,464 - 1,464 - Operating income (loss) $(367) $931 $(367) $931 $(367) $931 As-Reported Same Station Pro Forma (1) Three Months Three Months Three Months Ended Ended Ended December 31, December 31, December 31, 2008 2007 2008 2007 2008 2007 Depreciation and amortization by segment Radio Segment $1,676 $1,710 $1,676 $1,685 $1,676 $1,723 Television Segment 672 425 672 425 672 425 Corporate and Other 62 58 62 58 62 58 $2,410 $2,193 $2,410 $2,168 $2,410 $2,206 (1) Pro Forma results assume all acquisitions and dispositions in 2007 and 2008 occurred as of January 1, 2007. Saga Communications, Inc. Selected Supplemental Financial Data For the Twelve Months Ended December 31, 2008 and 2007 (amounts in 000's except per share data) (Unaudited) As-Reported Same Station Pro Forma (1) Twelve Months Twelve Months Twelve Months Ended Ended Ended December 31, December 31, December 31, 2008 2007 2008 2007 2008 2007 Consolidated Net operating revenue $139,956 $144,023 $138,601 $143,684 $139,956 $144,982 Station operating expense 105,805 106,302 104,782 106,039 105,805 107,159 Corporate general and administrative 9,979 9,800 9,979 9,800 9,979 9,800 Gain on asset exchange (506) - (506) - (506) - Impairment of intangible assets 116,443 - 116,443 - 116,443 - Operating income (loss) (91,765) 27,921 $(92,097) $27,845 (91,765) 28,023 Interest expense 7,173 8,954 7,173 8,954 Other expense, net 76 273 76 273 Income tax expense (benefit) (32,522) 7,690 (32,522) 7,732 Net income (loss) $(66,492) $11,004 $(66,492) $11,064 Earnings (loss) per share: Basic $(14.05) $2.19 $(14.05) $2.20 Diluted $(14.05) $2.19 $(14.05) $2.20 As-Reported Same Station Pro Forma (1) Twelve Months Twelve Months Twelve Months Ended Ended Ended December 31, December 31, December 31, 2008 2007 2008 2007 2008 2007 Radio Segment Net operating revenue $121,072 $126,596 $119,717 $126,257 $121,072 $127,555 Station operating expense 90,540 92,162 89,517 91,899 90,540 93,019 Impairment of intangible assets 114,979 - 114,979 - 114,979 - Operating income (loss) $(84,447) $34,434 $(84,779) $34,358 $(84,447) $34,536 As-Reported Same Station Pro Forma (1) Twelve Months Twelve Months Twelve Months Ended Ended Ended December 31, December 31, December 31, 2008 2007 2008 2007 2008 2007 Television Segment Net operating revenue $18,884 $17,427 $18,884 $17,427 $18,884 $17,427 Station operating expense 15,265 14,140 15,265 14,140 15,265 14,140 Gain on asset exchange (506) - (506) - (506) - Impairment of intangible assets 1,464 - 1,464 - 1,464 - Operating income $2,661 $3,287 $2,661 $3,287 $2,661 $3,287 As-Reported Same Station Pro Forma (1) Twelve Months Twelve Months Twelve Months Ended Ended Ended December 31, December 31, December 31, 2008 2007 2008 2007 2008 2007 Depreciation and amortization Radio Segment $6,446 $6,363 $6,372 $6,299 $6,446 $6,548 Television Segment 2,293 1,619 2,293 1,619 2,293 1,619 Corporate and Other 222 204 222 204 222 204 $8,961 $8,186 $8,887 $8,122 $8,961 $8,371 (1) Pro Forma results assume all acquisitions and dispositions in 2007 and 2008 occurred as of January 1, 2007. Saga Communications, Inc. Selected Supplemental Financial Data Quarterly Proforma Information December 31, 2008 and 2007 (amounts in 000's except per share data) (Unaudited) Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended March 31, June 30, 2008 2007 2008 2007 Consolidated Net operating revenue $31,532 $32,193 $37,342 $38,752 Station operating expense 25,421 26,284 27,246 27,284 Corporate general and administrative 2,552 2,316 2,574 2,606 Gain on asset exchange - - (224) - Impairment of intangible assets - - - - Operating income (loss) 3,559 3,593 7,746 8,862 Interest expense 1,995 2,297 1,876 2,281 Other expense, net 20 35 7 47 Income tax expense (benefit) 634 509 2,403 2,686 Net income (loss) $910 $752 $3,460 $3,848 Earnings (loss) per share: Basic $0.18 $0.15 $0.70 $0.77 Diluted $0.18 $0.15 $0.70 $0.77 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended March 31, June 30, 2008 2007 2008 2007 Radio Segment Net operating revenue $27,381 $28,203 $32,629 $34,174 Station operating expense 21,913 22,802 23,398 23,723 Impairment of intangible assets - - Operating income (loss) $5,468 $5,401 $9,231 $10,451 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended March 31, June 30, 2008 2007 2008 2007 Television Segment Net operating revenue $4,151 $3,990 $4,713 $4,578 Station operating expense 3,508 3,482 3,848 3,561 Gain on asset exchange - - (224) - Impairment of intangible assets - - - - Operating income (loss) $643 $508 $1,089 $1,017 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended March 31, June 30, 2008 2007 2008 2007 Depreciation and amortization by segment Radio Segment $1,562 $1,566 $1,591 $1,599 Television Segment 395 389 605 400 Corporate and Other 53 47 53 51 $2,010 $2,002 $2,249 $2,050 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended September 30, December 31, 2008 2007 2008 2007 Consolidated Net operating revenue $36,192 $36,500 $34,890 $37,537 Station operating expense 26,588 26,239 26,550 27,352 Corporate general and administrative 2,485 2,272 2,368 2,606 Gain on asset exchange (282) - - - Impairment of intangible assets - - 116,443 - Operating income (loss) 7,401 7,989 (110,471) 7,579 Interest expense 1,889 2,283 1,413 2,093 Other expense, net - 60 49 131 Income tax expense (benefit) 2,415 2,315 (37,974) 2,222 Net income (loss) $3,097 $3,331 $(73,959) $3,133 Earnings (loss) per share: Basic $0.65 $0.66 $(17.41) $0.62 Diluted $0.65 $0.66 $(17.41) $0.62 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended September 30, December 31, 2008 2007 2008 2007 Radio Segment Net operating revenue $31,306 $32,186 $29,756 $32,992 Station operating expense 22,717 22,756 22,513 23,738 Impairment of intangible assets - - 114,979 - Operating income (loss) $8,589 $9,430 $(107,736) $9,254 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended September 30, December 31, 2008 2007 2008 2007 Television Segment Net operating revenue $4,886 $4,314 $5,134 $4,545 Station operating expense 3,871 3,483 4,037 3,614 Gain on asset exchange (282) - - - Impairment of intangible assets - - 1,464 - Operating income (loss) $1,297 $831 $(367) $931 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended September 30, December 31, 2008 2007 2008 2007 Depreciation and amortization by segment Radio Segment $1,618 $1,660 $1,676 $1,723 Television Segment 620 405 672 425 Corporate and Other 54 48 62 58 $2,292 $2,113 $2,410 $2,206 (1) Pro Forma results assume all acquisitions and dispositions in 2007 and 2008 occurred as of January 1, 2007. Saga Communications, Inc. Selected Financial Data Non-GAAP Disclosures For the Three Months Ended December 31, 2008 and 2007 (amounts in 000's) (Unaudited) Reconciliation of As-Reported (historical) information to Same Station Operating Income (Loss) Adjustment As-Reported For Acquisitions Same Station Three Months and Dispositions Three Months Ended Not Included in Ended December 31, Entire Comparable December 31, 2008 Period 2008 Consolidated Net operating revenue $34,890 $(144) $34,746 Station operating expense 26,550 (162) 26,388 Corporate general and administrative 2,368 - 2,368 Impairment of intangible assets 116,443 - 116,443 Operating income (loss) $(110,471) $18 $(110,453) Adjustment As-Reported For Acquisitions Same Station Three Months and Dispositions Three Months Ended Not Included in Ended December 31, Entire Comparable December 31, 2008 Period 2008 Radio Segment Net operating revenue $29,756 $(144) $29,612 Station operating expense 22,513 (162) 22,351 Impairment of intangible assets 114,979 - 114,979 Operating income (loss) $(107,736) $18 $(107,718) Adjustment As-Reported For Acquisitions Same Station Three Months and Dispositions Three Months Ended Not Included in Ended December 31, Entire Comparable December 31, 2008 Period 2008 Television Segment Net operating revenue $5,134 - $5,134 Station operating expense 4,037 - 4,037 Impairment of intangible assets 1,464 - 1,464 Operating income (loss) $(367) - $(367) Adjustment As-Reported For Acquisitions Same Station Three Months and Dispositions Three Months Ended Not Included in Ended December 31, Entire Comparable December 31, 2007 Period 2007 Consolidated Net operating revenue $37,501 $(72) $37,429 Station operating expense 27,316 (72) 27,244 Corporate general and administrative 2,606 - 2,606 Impairment of intangible assets - - - Operating income (loss) $7,579 - $7,579 Adjustment As-Reported For Acquisitions Same Station Three Months and Dispositions Three Months Ended Not Included in Ended December 31, Entire Comparable December 31, 2007 Period 2007 Radio Segment Net operating revenue $32,956 $(72) $32,884 Station operating expense 23,702 (72) 23,630 Impairment of intangible assets - - - Operating income (loss) $9,254 - $9,254 Adjustment As-Reported For Acquisitions Same Station Three Months and Dispositions Three Months Ended Not Included in Ended December 31, Entire Comparable December 31, 2007 Period 2007 Television Segment Net operating revenue $4,545 - $4,545 Station operating expense 3,614 - 3,614 Impairment of intangible assets - - - Operating income (loss) $931 - $931 Saga Communications, Inc. Selected Financial Data Non-GAAP Disclosures For the Twelve Months Ended December 31, 2008 and 2007 (amounts in 000's) (Unaudited) Reconciliation of As-Reported (historical) information to Same Station Operating Income (Loss) Adjustment For Acquisitions As-Reported and Dispositions Same Station Twelve Months Not Included in Twelve Months Ended Entire Ended December 31, Comparable December 31, 2008 Period 2008 Consolidated Net operating revenue $139,956 $(1,355) $138,601 Station operating expense 105,805 (1,023) 104,782 Corporate general and administrative 9,979 - 9,979 Gain on asset exchange (506) - (506) Impairment of intangible assets 116,443 - 116,443 Operating income (loss) $(91,765) $(332) $(92,097) Adjustment For Acquisitions As-Reported and Dispositions Same Station Twelve Months Not Included in Twelve Months Ended Entire Ended December 31, Comparable December 31, 2008 Period 2008 Radio Segment Net operating revenue $121,072 $(1,355) $119,717 Station operating expense 90,540 (1,023) 89,517 Impairment of intangible assets 114,979 - 114,979 Operating income (loss) $(84,447) $(332) $(84,779) Adjustment For Acquisitions As-Reported and Dispositions Same Station Twelve Months Not Included in Twelve Months Ended Entire Ended December 31, Comparable December 31, 2008 Period 2008 Television Segment Net operating revenue $18,884 - $18,884 Station operating expense 15,265 - 15,265 Gain on asset exchange (506) - (506) Impairment of intangible assets 1,464 - 1,464 Operating income $2,661 - $2,661 Reconciliation of As-Reported (historical) information to Same Station Operating Income (Loss) Adjustment For Acquisitions As-Reported and Dispositions Same Station Twelve Months Not Included in Twelve Months Ended Entire Ended December 31, Comparable December 31, 2007 Period 2007 Consolidated Net operating revenue $144,023 $(339) $143,684 Station operating expense 106,302 (263) 106,039 Corporate general and administrative 9,800 - 9,800 Gain on asset exchange - - - Impairment of intangible assets - - - Operating income (loss) $27,921 $(76) $27,845 Adjustment For Acquisitions As-Reported and Dispositions Same Station Twelve Months Not Included in Twelve Months Ended Entire Ended December 31, Comparable December 31, 2007 Period 2007 Radio Segment Net operating revenue $126,596 $(339) $126,257 Station operating expense 92,162 (263) 91,899 Other operating income - - - Impairment of intangible assets - - - Operating income (loss) $34,434 $(76) $34,358 Adjustment For Acquisitions As-Reported and Dispositions Same Station Twelve Months Not Included in Twelve Months Ended Entire Ended December 31, Comparable December 31, 2007 Period 2007 Television Segment Net operating revenue $17,427 - $17,427 Station operating expense 14,140 - 14,140 Gain on asset exchange - - - Impairment of intangible assets - - - Operating income $3,287 - $3,287 Saga Communications, Inc. Selected Financial Data Non-GAAP Disclosures For the Twelve Months Ended December 31, 2008 (amounts in 000's except per share data) (Unaudited) Reconciliation of As-Reported Net Loss to Net Income Excluding Impairment Charge Twelve Months Ended December 31, 2008 Net loss $(66,492) Impairment of intangible assets 116,443 Income tax benefit (32,522) Income before income tax, excluding impairment charge 17,429 Income tax expense 7,566 Net income, excluding impairment charge $9,863 Weighted average common shares and common shares equivalent, diluted 4,734 Dilutive securities: Stock options 3 Weighted average common shares and common shares equivalent, diluted 4,737 Earnings per share: Diluted $2.08
First Call Analyst:
FCMN Contact: aparks@sagacom.com
Source: Saga Communications, Inc.
CONTACT: Samuel D. Bush, Saga Communications, Inc., +1-313-886-7070
Web Site: http://www.sagacommunications.com/
Profile: International Entertainment
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