Saga Communications, Inc. Reports 4th Quarter and Year End 2011 Results

Saga Communications, Inc. Reports 4th Quarter and Year End 2011 Results

Free Cash Flow Increased 8.2%

GROSSE POINTE FARMS, Mich., March 13, 2012 /PRNewswire/ -- Saga Communications, Inc. (NYSE Amex: SGA) today reported free cash flow increased 8.2% to $22.9 million for the year. Net operating revenue for the year ended December 31, 2011 of $127.3 million was approximately flat with the comparable period in 2010. Station operating expense increased less than 1.0% to $93.4 million (station operating expense includes depreciation and amortization attributable to the stations). Net income for the period was $12.6 million ($2.98 per fully diluted share) compared to net income of $15.1 million ($3.58 per fully diluted share) for the same period last year. Net income in 2010 was impacted by a $3.6 million gain due to a one-time payment for a frequency coordination of one of our FM stations.

For the quarter ended December 31, 2011 free cash flow increased 3.6% to $7.4 million. Net operating revenue decreased 3.6% from the comparable period in 2010 to $32.9 million. Station operating expense of $23.5 million for the quarter was approximately equal with the comparable period in 2010 (station operating expense includes depreciation and amortization attributable to the stations). Net income for the period was $4.1 million ($0.97 per fully diluted share) compared to $4.6 million ($1.08 per fully diluted share) for the same period last year.

The Company continues to maintain a solid balance sheet with $7.0 million in cash as of December 31, 2011. As of December 31, 2011, the Company's outstanding bank debt was $69.1 million which is significantly below the $96.1 million which was outstanding on December 31, 2010. This is a trailing 12 month leverage ratio calculated as a multiple of EBITDA of 2.0 times.

Capital expenditures in the 4th quarter of 2011 were $1.4 million compared to $1.1 million for the same period last year. For the 2011 fiscal year total capital expenditures were $5.6 million compared to $4.3 million for the comparable period last year. The Company currently expects to spend approximately $5.0 million for capital expenditures during 2012.

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 4th Quarter and Year End 2011 conference call will be on Tuesday, March 13, 2012 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 March 13, 2012 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 and Twelve Months Ended
December 31, 2011 and 2010
(amounts in 000's except per share data)
(Unaudited)

Three Months Twelve Months
Ended Ended
December 31, December 31,
------------ ------------
2011 2010 2011 2010
---- ---- ---- ----
Operating Results
Net operating revenue $32,910 $34,133 $127,295 $127,817
Station operating expense 23,450 23,408 93,362 92,754
Corporate general and
administrative 1,736 1,754 7,590 7,274
Operating income 7,724 8,971 26,343 27,789
Interest expense 583 1,260 3,420 5,622
Write-off revolving
credit facility debt
issuance costs - - 1,326 -
Other (income) expense,
net 536 29 536 (3,369)
--- --- --- ------
Income before income tax 6,605 7,682 21,061 25,536
Income tax expense 2,500 3,115 8,430 10,400
Net income $4,105 $4,567 $12,631 $15,136
====== ====== ======= =======
Earnings per share
Basic $0.97 $1.08 $2.98 $3.58
===== ===== ===== =====
Diluted $0.97 $1.08 $2.98 $3.58
===== ===== ===== =====
Weighted average common
shares 4,242 4,236 4,238 4,230
Weighted average common and
common
equivalent shares 4,247 4,241 4,242 4,231

Free Cash Flow
Net income $4,105 $4,567 $12,631 $15,136
Plus: Depreciation and
amortization:
Station 1,915 1,911 7,254 7,494
Corporate 59 61 232 224
Deferred tax provision 2,150 1,455 6,100 5,080
Non-cash compensation 72 212 383 927
Debt issuance cost write-
off - - 1,326 -
Other (income) expense,
net 536 29 536 (3,369)
Less: Capital
expenditures (1,437) (1,089) (5,577) (4,348)
Free cash flow $7,400 $7,146 $22,885 $21,144
====== ====== ======= =======

Balance Sheet Data
Working capital $16,322 $18,130
Net fixed assets $63,186 $65,561
Net intangible assets and other
assets $96,188 $97,683
Total assets $190,334 $199,803
Long-term debt (including
current
portion of $3,000 and $6,121,
respectively) $69,078 $96,078
Stockholders' equity $92,975 $80,078

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three and Twelve Months Ended
December 31, 2011 and 2010
(amounts in 000's)
(Unaudited)

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Three Months Ended
December 31,
2011:
Net
operating
revenue $27,936 $4,974 $- $32,910
Station
operating
expense 19,819 3,631 - 23,450
Corporate
G&A - - 1,736 1,736
Operating
income
(loss) $8,117 $1,343 $(1,736) $7,724
====== ====== ======= ======
Depreciation
and
amortization $1,446 $469 $59 $1,974
====== ==== === ======

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Three Months Ended
December 31,
2010:
Net
operating
revenue $28,997 $5,136 $- $34,133
Station
operating
expense 19,828 3,580 - 23,408
Corporate
G&A - - 1,754 1,754
Operating
income
(loss) $9,169 $1,556 $(1,754) $8,971
====== ====== ======= ======
Depreciation
and
amortization $1,460 $451 $61 $1,972
====== ==== === ======

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Twelve Months
Ended December
31, 2011:
Net
operating
revenue $108,938 $18,357 $- $127,295
Station
operating
expense 79,130 14,232 - 93,362
Corporate
G&A - - 7,590 7,590
Operating
income
(loss) $29,808 $4,125 $(7,590) $26,343
======= ====== ======= =======
Depreciation
and
amortization $5,518 $1,736 $232 $7,486
====== ====== ==== ======

Corporate
Radio Television and Other Consolidated
----- ---------- --------- ------------
Twelve Months
Ended December
31, 2010:
Net
operating
revenue $109,891 $17,926 $- $127,817
Station
operating
expense 79,012 13,742 - 92,754
Corporate
G&A - - 7,274 7,274
Operating
income
(loss) $30,879 $4,184 $(7,274) $27,789
======= ====== ======= =======
Depreciation
and
amortization $5,772 $1,722 $224 $7,718
====== ====== ==== ======

Saga Communications, Inc.
Selected Supplemental Financial Data
December 31, 2011 and 2010
(amounts in 000's except ratios)
(Unaudited)

Trailing
Twelve Months
Ended
December 31,
2011 2010
---- ----
Trailing 12 Month Consolidated EBITDA (1)
Net income $12,631 $15,136
Less: Loss on sale of assets (643) (386)
Other gains 109 195
Gain on license downgrade - 3,561
Loss on write-off of unamortized debt
issuance costs (1,326) -
Other 239 46
--- ---
Total exclusions (1,621) 3,416
------ -----
Consolidated adjusted net income (1) 14,252 11,720
Plus: Interest expense 3,420 5,622
Income tax expense 8,430 10,400
Depreciation & amortization expense 7,486 7,718
Amortization of television syndicated
programming contracts 721 732
Non-cash stock based compensation
expense 383 927
Less: Cash television programming
payments (715) (744)
Trailing twelve month consolidated EBITDA
(1) $33,977 $36,375
======= =======

Total long-term debt, including current
maturities $69,078 $96,078
Divided by trailing twelve month
consolidated EBITDA (1) 33,977 36,375
Leverage ratio 2.0 2.6
=== ===

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

SOURCE Saga Communications, Inc.

Saga Communications, Inc.

CONTACT: Samuel D. Bush, +1-313-886-7070

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

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