Exhibit 99.1
Saga Communications, Inc.
Reports 2nd Quarter 2006 Results
Contact:
Samuel D. Bush
313/886-7070
Grosse Pointe Farms, MI — August 8, 2006 — Saga Communications, Inc. (NYSE-SGA) today reported that 2nd quarter 2006 net operating revenue increased 0.5% over the comparable period in 2005 to $37.8 million and operating income increased 3.8% to $8.9 million. Net income increased $.9 million to $4.0 million ($.19 per fully diluted share) for the quarter ended June 30, 2006 compared to $3.1 million ($.15 per fully diluted share) for the comparable period in 2005. For the same period, station operating expense decreased 1.1% to $26.4 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the quarter, net operating revenue decreased 0.7% to $37.0 million, operating income increased 2.8% to $8.7 million and station operating expense decreased 2.4% to $25.8 million.
For the six month period ended June 30, 2006, net operating revenue decreased 0.7% over the comparable period in 2005 to $68.9 million, operating income decreased 3.7% to $13.4 million and net income increased to $5.5 million ($.27 per fully diluted share) compared to $5.2 million ($.25 per fully diluted share) for the comparable period in 2005. For the same period, station operating expense decreased 0.6% to approximately $51.1 million (station operating expense includes depreciation and amortization attributable to the stations). On a same station basis for the six months, net operating revenue decreased 2.2% to $67.6 million, operating income decreased 4.4% to $13.2 million and station operating expense decreased 2.5% to $49.9 million.
Capital expenditures in the second quarter of 2006 were $2.8 million of which $0.3 million were as a result of acquisitions, $0.6 million were related to digital radio and $0.5 million were related to digital television. For the six months capital expenditures were $4.7 million of which $0.7 million were as a result of acquisitions, $0.7 million were related to digital radio and $0.9 million were related to digital television. Currently, we expect capital expenditures for the year to be approximately $9.5 million.

 

 

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 2006 and 2005 acquisitions and dispositions occurred as of January 1, 2005.
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 58 FM and 30 AM radio stations, 3 state radio networks, 2 farm radio networks, 5 television stations and 4 low-power television stations. As previously disclosed, Saga has entered into an agreement to acquire an FM station serving the Asheville, NC radio market. For additional information, contact us at (313) 886-7070 or visit our website at www.sagacommunications.com.
Saga’s second quarter 2006 results conference call will be on Tuesday, August 8 at 2:00 PM. The dial in number for domestic calls is 800/230-1059. For international callers the number is 612/332-0226. The call can be replayed for 7 days by calling domestically 800/475-6701 or internationally 320/365-3844 and referring to access code 836137. Thereafter, a transcript of the call will be available on our website.
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. 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 Six Month Periods
Ended June 30, 2006 and 2005
(amounts in 000’s except per share data)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2006     2005     2006     2005  
Operating Results
                                
Net operating revenue
   $ 37,745     $ 37,554     $ 68,936     $ 69,384  
Station operating expense
     26,369       26,656       51,072       51,354  
Corporate general and administrative
     2,499       2,348       4,480       4,126  
     
Operating income
     8,877       8,550       13,384       13,904  
Interest expense
     2,355       1,806       4,632       3,429  
Other (income) expense, net
     (215 )     1,471       (570 )     1,538  
     
Income before income tax
     6,737       5,273       9,322       8,937  
Income tax expense
     2,749       2,201       3,809       3,700  
     
Net income
   $ 3,988     $ 3,072     $ 5,513     $ 5,237  
           
Earnings per share:
                                
Basic
   $ 0.19     $ 0.15     $ 0.27     $ 0.26  
           
Diluted
   $ 0.19     $ 0.15     $ 0.27     $ 0.25  
           
Weighted average common shares
     20,575       20,388       20,528       20,508  
Weighted average common shares and common share equivalents
     20,593       20,596       20,547       20,771  
 
                                
Free Cash Flow
                                
Net Income
   $ 3,988     $ 3,072     $ 5,513     $ 5,237  
Plus: Depreciation and amortization:
                                
Station
     1,950       2,138       3,881       4,233  
Corporate
     48       49       96       99  
Deferred tax provision
     1,311       1,029       1,771       1,590  
Other (income) expense, net
     (215 )     1,471       (570 )     1,538  
Non-cash compensation
     369       84       599       109  
Less: Capital expenditures
     (2,745 )     (3,121 )     (4,712 )     (7,388 )
     
Free cash flow
   $ 4,706     $ 4,722     $ 6,578     $ 5,418  
           
 
                                
Balance Sheet Data
                                
Working capital
                   $ 21,755     $ 23,673  
Net fixed assets
                     70,337       73,301  
Net intangible assets and other assets
                     208,203       205,654  
Total assets
                     316,783       317,868  
Long term debt (including current portion of $0 and $1,061, respectively)
                     136,911       155,911  
Stockholders’ equity
                     131,210       120,223  

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
June 30, 2006 and 2005
(amounts in 000’s except per share data)
(Unaudited)
                                                 
    As-Reported     Same Station     Pro Forma (1)  
Consolidated   Three Months Ended     Three Months Ended     Three Months Ended  
    June 30,     June 30,     June 30,  
    2006     2005     2006     2005     2006     2005  
   
Net operating revenue
   $ 37,745     $ 37,554     $ 37,026     $ 37,286     $ 37,745     $ 38,000  
Station operating expense
     26,369       26,656       25,801       26,447       26,369       27,030  
Corporate general and administrative
     2,499       2,348       2,499       2,348       2,499       2,348  
             
Operating income
     8,877       8,550     $ 8,726     $ 8,491       8,877       8,622  
                                     
Interest expense
     2,355       1,806                       2,355       1,894  
Other (income) expense, net
     (215 )     1,471                       (215 )     1,466  
Income tax expense
     2,749       2,201                       2,749       2,196  
                         
Net income
   $ 3,988     $ 3,072                     $ 3,988     $ 3,066  
                         
Earnings per share:
                                                
Basic
   $ 0.19     $ 0.15                     $ 0.19     $ 0.15  
                         
Diluted
   $ 0.19     $ 0.15                     $ 0.19     $ 0.15  
                         
                                                 
    As-Reported     Same Station     Pro Forma (1)  
Radio Segment   Three Months Ended     Three Months Ended     Three Months Ended  
    June 30,     June 30,     June 30,  
    2006     2005     2006     2005     2006     2005  
   
Net operating revenue
   $ 33,418     $ 33,605     $ 32,699     $ 33,337     $ 33,418     $ 34,051  
Station operating expense
     22,960       23,316       22,392       23,107       22,960       23,690  
             
Operating income
   $ 10,458     $ 10,289     $ 10,307     $ 10,230     $ 10,458     $ 10,361  
             
                                                 
    As-Reported     Same Station     Pro Forma (1)  
Television Segment   Three Months Ended     Three Months Ended     Three Months Ended  
    June 30,     June 30,     June 30,  
    2006     2005     2006     2005     2006     2005  
   
Net operating revenue
   $ 4,327     $ 3,949     $ 4,327     $ 3,949     $ 4,327     $ 3,949  
Station operating expense
     3,409       3,340       3,409       3,340       3,409       3,340  
             
Operating income
   $ 918     $ 609     $ 918     $ 609     $ 918     $ 609  
             
                                                 
    As-Reported     Same Station     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended  
Depreciation and Amortization   June 30,     June 30,     June 30,  
     by Segment   2006     2005     2006     2005     2006     2005  
   
Radio Segment
   $ 1,536     $ 1,716     $ 1,426     $ 1,669     $ 1,536     $ 1,808  
Television Segment
     414       422       414       422       414       422  
Corporate and Other
     48       49       48       49       48       49  
             
 
   $ 1,998     $ 2,187     $ 1,888     $ 2,140     $ 1,998     $ 2,279  
             
 
(1)   Pro Forma results assume all acquisitions and dispositions in 2005 and 2006 occurred as of January 1, 2005.

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Six Months Ended
June 30, 2006 and 2005
(amounts in 000’s except per share data)
(Unaudited)
                                                 
    As-Reported     Same Station     Pro Forma (1)  
Consolidated   Six Months Ended     Six Months Ended     Six Months Ended  
    June 30,     June 30,     June 30,  
    2006     2005     2006     2005     2006     2005  
   
Net operating revenue
   $ 68,936     $ 69,384     $ 67,604     $ 69,116     $ 68,936     $ 70,397  
Station operating expense
     51,072       51,354       49,889       51,145       51,072       52,311  
Corporate general and administrative
     4,480       4,126       4,480       4,126       4,480       4,126  
             
Operating income
   $ 13,384     $ 13,904     $ 13,235     $ 13,845     $ 13,384     $ 13,960  
                                     
Interest expense
     4,632       3,429                       4,632       3,649  
Other (income) expense, net
     (570 )     1,538                       (570 )     1,523  
Income tax expense
     3,809       3,700                       3,809       3,643  
                         
Net income
   $ 5,513     $ 5,237                     $ 5,513     $ 5,145  
                         
Earnings per share:
                                                
Basic
   $ 0.27     $ 0.26                     $ 0.27     $ 0.25  
                         
Diluted
   $ 0.27     $ 0.25                     $ 0.27     $ 0.25  
                         
                                                 
    As-Reported     Same Station     Pro Forma (1)  
Radio Segment   Six Months Ended     Six Months Ended     Six Months Ended  
    June 30,     June 30,     June 30,  
    2006     2005     2006     2005     2006     2005  
   
Net operating revenue
   $ 60,698     $ 61,977     $ 59,366     $ 61,709     $ 60,698     $ 62,990  
Station operating expense
     44,375       44,725       43,192       44,516       44,375       45,682  
             
Operating income
   $ 16,323     $ 17,252     $ 16,174     $ 17,193     $ 16,323     $ 17,308  
             
                                                 
    As-Reported     Same Station     Pro Forma (1)  
Television Segment   Six Months Ended     Six Months Ended     Six Months Ended  
    June 30,     June 30,     June 30,  
    2006     2005     2006     2005     2006     2005  
   
Net operating revenue
   $ 8,238     $ 7,407     $ 8,238     $ 7,407     $ 8,238     $ 7,407  
Station operating expense
     6,697       6,629       6,697       6,629       6,697       6,629  
             
Operating income
   $ 1,541     $ 778     $ 1,541     $ 778     $ 1,541     $ 778  
             
                                                 
    As-Reported     Same Station     Pro Forma (1)  
    Six Months Ended     Six Months Ended     Six Months Ended  
Depreciation and Amortization   June 30,     June 30,     June 30,  
     by Segment   2006     2005     2006     2005     2006     2005  
   
Radio Segment
   $ 3,075     $ 3,369     $ 2,825     $ 3,322     $ 3,075     $ 3,599  
Television Segment
     806       864       806       864       806       864  
Corporate and Other
     96       99       96       99       96       99  
             
 
   $ 3,977     $ 4,332     $ 3,727     $ 4,285     $ 3,977     $ 4,562  
             
 
(1)   Pro Forma results assume all acquisitions and dispositions in 2005 and 2006 occurred as of January 1, 2005.

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
Quarterly Proforma Information
As of June 30, 2006
(amounts in 000’s except per share data)
(Unaudited)
                                                 
    Pro Forma (1)     Pro Forma (1)     Pro Forma (1)     Pro Forma (1)  
Consolidated   Three Months Ended     Three Months Ended     Three Months Ended     Three Months Ended  
    March 31,     June 30,     September 30,     December 31,  
    2006     2005     2006     2005     2005     2005  
   
Net operating revenue
   $ 31,191     $ 32,397     $ 37,745     $ 38,000     $ 35,961     $ 35,445  
Station operating expense
     24,703       25,281       26,369       27,030       26,110       26,947  
Corporate general and administrative
     1,981       1,778       2,499       2,348       1,934       2,114  
Impairment of intangible assets
     —       —       —       —       —       1,168  
                     
Operating income
     4,507       5,338       8,877       8,622       7,917       5,216  
Interest expense
     2,277       1,755       2,355       1,894       2,082       2,075  
Other (income) expense, net
     (355 )     57       (215 )     1,466       (35 )     1,165  
Income tax expense
     1,060       1,447       2,749       2,196       2,430       87  
                     
Net income
   $ 1,525     $ 2,079     $ 3,988     $ 3,066     $ 3,440     $ 1,889  
                     
Earnings per share:
                                                
Basic
   $ 0.07     $ 0.10     $ 0.19     $ 0.15     $ 0.17     $ 0.09  
                     
Diluted
   $ 0.07     $ 0.10     $ 0.19     $ 0.15     $ 0.17     $ 0.09  
                     
                                                 
    Pro Forma (1)     Pro Forma (1)     Pro Forma (1)     Pro Forma (1)  
Radio Segment   Three Months Ended     Three Months Ended     Three Months Ended     Three Months Ended  
    March 31,     June 30,     September 30,     December 31,  
    2006     2005     2006     2005     2005     2005  
   
Net operating revenue
   $ 27,280     $ 28,939     $ 33,418     $ 34,051     $ 32,263     $ 31,357  
Station operating expense
     21,415       21,992       22,960       23,690       22,728       23,514  
Impairment of intangible assets
     —       —       —               —       890  
                     
Operating income
   $ 5,865     $ 6,947     $ 10,458     $ 10,361     $ 9,535     $ 6,953  
                     
                                                 
    Pro Forma (1)     Pro Forma (1)     Pro Forma (1)     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended     Three Months Ended  
    March 31,     June 30,     September 30,     December 31,  
Television Segment   2006     2005     2006     2005     2005     2005  
   
Net operating revenue
   $ 3,911     $ 3,458     $ 4,327     $ 3,949     $ 3,698     $ 4,088  
Station operating expense
     3,288       3,289       3,409       3,340       3,382       3,433  
Impairment of intangible assets
     —       —       —       —       —       278  
                     
Operating income
   $ 623     $ 169     $ 918     $ 609     $ 316     $ 377  
                     
                                                 
    Pro Forma (1)     Pro Forma (1)     Pro Forma (1)     Pro Forma (1)  
    Three Months Ended     Three Months Ended     Three Months Ended     Three Months Ended  
Depreciation and Amortization   March 31,     June 30,     September 30,     December 31,  
     by Segment   2006     2005     2006     2005     2005     2005  
   
Radio Segment
   $ 1,539     $ 1,791     $ 1,536     $ 1,808     $ 1,812     $ 1,894  
Television Segment
     392       442       414       422       446       456  
Corporate and Other
     48       50       48       49       50       50  
                     
 
   $ 1,979     $ 2,283     $ 1,998     $ 2,279     $ 2,308     $ 2,400  
                     
 
(1)   Pro Forma results assume all acquisitions and dispositions in 2005 and 2006 occurred as of January 1, 2005.

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Three Months Ended
June 30, 2006 and 2005
(amounts in 000’s except per share data)
(Unaudited)
Reconciliation of As-Reported (historical) information to Same Station Operating Income
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Three Months     and Dispositions     Three Months     Three Months     and Dispositions     Three Months  
Consolidated   Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2006     Period     2006     2005     Period     2005  
   
Net operating revenue
   $ 37,745       ($719 )   $ 37,026     $ 37,554       ($268 )   $ 37,286  
Station operating expense
     26,369       (568 )     25,801       26,656       (209 )     26,447  
Corporate general and administrative
     2,499       —       2,499       2,348       —       2,348  
 
                                    
Operating income
   $ 8,877       ($151 )   $ 8,726     $ 8,550       ($59 )   $ 8,491  
 
                                    
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Three Months     and Dispositions     Three Months     Three Months     and Dispositions     Three Months  
Radio Segment   Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2006     Period     2006     2005     Period     2005  
   
Net operating revenue
   $ 33,418       ($719 )   $ 32,699     $ 33,605       ($268 )   $ 33,337  
Station operating expense
     22,960       (568 )     22,392       23,316       (209 )     23,107  
 
                                    
Operating income
   $ 10,458       ($151 )   $ 10,307     $ 10,289       ($59 )   $ 10,230  
 
                                    
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Three Months     and Dispositions     Three Months     Three Months     and Dispositions     Three Months  
Television Segment   Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2006     Period     2006     2005     Period     2005  
   
Net operating revenue
   $ 4,327       —     $ 4,327     $ 3,949       —     $ 3,949  
Station operating expense
   $ 3,409       —     $ 3,409     $ 3,340       —     $ 3,340  
 
                                    
Operating income
   $ 918       —     $ 918     $ 609       —     $ 609  
 
                                    

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Six Months Ended
June 30, 2006 and 2005
(amounts in 000’s except per share data)
(Unaudited)
Reconciliation of As-Reported (historical) information to Same Station Operating Income
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Six Months     and Dispositions     Six Months     Six Months     and Dispositions     Six Months  
Consolidated   Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2006     Period     2006     2005     Period     2005  
   
Net operating revenue
   $ 68,936       ($1,332 )   $ 67,604     $ 69,384       ($268 )   $ 69,116  
Station operating expense
     51,072       (1,183 )     49,889       51,354       (209 )     51,145  
Corporate general and administrative
     4,480       —       4,480       4,126       —       4,126  
 
                                    
Operating income
   $ 13,384       ($149 )   $ 13,235     $ 13,904       ($59 )   $ 13,845  
 
                                    
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Six Months     and Dispositions     Six Months     Six Months     and Dispositions     Six Months  
Radio Segment   Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2006     Period     2006     2005     Period     2005  
   
Net operating revenue
   $ 60,698       ($1,332 )   $ 59,366     $ 61,977       ($268 )   $ 61,709  
Station operating expense
     44,375       (1,183 )     43,192       44,725       (209 )     44,516  
 
                                    
Operating income
   $ 16,323       ($149 )   $ 16,174     $ 17,252       ($59 )   $ 17,193  
 
                                    
                                                 
            Adjustment                     Adjustment        
    As-Reported     For Acquisitions     Same Station     As-Reported     For Acquisitions     Same Station  
    Six Months     and Dispositions     Six Months     Six Months     and Dispositions     Six Months  
Television Segment   Ended     Not Included in     Ended     Ended     Not Included in     Ended  
    June 30,     Entire Comparable     June 30,     June 30,     Entire Comparable     June 30,  
    2006     Period     2006     2005     Period     2005  
   
Net operating revenue
   $ 8,238     $ 0     $ 8,238     $ 7,407     $ 0     $ 7,407  
Station operating expense
     6,697       0       6,697       6,629       0       6,629  
 
                                    
Operating income
   $ 1,541     $ 0     $ 1,541     $ 778     $ 0     $ 778