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Acquisitions and Dispositions | 9 Months Ended
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Sep. 30, 2024
Acquisitions and Dispositions |
Acquisitions and Dispositions | 7. Acquisitions and Dispositions We actively seek and explore opportunities for expansion through the acquisition of additional broadcast properties. The consolidated statements of income include the operating results of the acquired stations from their respective dates of acquisition. All acquisitions were accounted for as purchases and, accordingly, the total purchase consideration was allocated to the acquired assets and assumed liabilities based on their estimated fair values as of the acquisition dates. The excess of the consideration paid over the estimated fair value of net assets acquired have been recorded as goodwill. The Company accounts for acquisitions under the provisions of FASB ASC Topic 805, Business Combinations. Management utilizes an independent appraisal in assigning fair values to the acquired property and equipment through a combination of cost and market approaches based upon each specific asset’s replacement cost, with a provision for depreciation, and to the acquired intangibles, primarily an FCC license, based on the Greenfield valuation methodology, a discounted cash flow (or income) approach and a market approach when appropriate. The key assumptions used in the value of FCC licenses are revenue growth rates, market revenue shares at maturity, operating income margins at maturity and discount rate. Goodwill fair value is the amount of the purchase price exceeding the values allocated to the tangible and identifiable intangible assets and includes the value of the assembled workforce. . ​ ​ ​ 2024 Acquisitions and Dispositions ​ On February 13, 2024, we entered into an agreement to purchase the assets of WKOA (FM), WKHY (FM), WASK (FM), WXXB (FM), WASK (AM) and W269DJ from Neuhoff Communications, Inc. serving the Greater Lafayette, Indiana radio market for $5.3 million, subject to certain purchase price adjustments. The Company closed on this transaction on May 31, 2024, using funds from operations and borrowings under our credit agreement, of $5,832,000, which included the purchase price of $5,300,000, the purchase of $499,000 in accounts receivable and transactional costs of approximately $121,000 offset by $88,000 in certain closing adjustments. Management attributes the goodwill recognized in the acquisition to the power of the existing brands in Lafayette, Indiana as well as synergies and growth opportunities expected through the combination with the Company’s existing stations. The $0.9 million allocated to goodwill is deductible for tax purposes. ​ On May 31, 2024, we closed on an agreement to sell WNDN-FM located in our Ocala-Gainesville, Florida market to Suncoast Radio, Inc. for $150,000. We recorded a $20,000 loss on the sale in our other operating (income) expense, net line on our Condensed Consolidated Statement of Operations. On March 29, 2024, we closed on an agreement to sell WYSE-AM, W275CP translator and W248CM translator located in our Asheville, North Carolina market to EZ Radio LLC for $10,000. We recorded a $147,000 loss on the sale in our other operating (income) expense, net line item on our Condensed Consolidated Statement of Operations. On March 22, 2024, we submitted a request to the FCC to cancel our FCC license for KBAI-AM located in our Bellingham, Washington market. We recorded an $800,000 loss on the disposal in our other operating (income) expense, net line item on our Condensed Consolidated Statement of Operations. 2023 Dispositions On February 28, 2023, we closed on an agreement to sell WPVQ-AM located in our Greenfield, Massachusetts market to Hampden Communications Corp for $2,000. We recorded a $43,000 loss on the sale in our other operating (income) expense, net line item on our Condensed Consolidated Statement of Operations. On March 20, 2023, we submitted a request to the FCC to cancel our FCC license for WHMQ-AM located in our Greenfield, Massachusetts market. We recorded a $22,000 loss on the disposal in our other operating (income) expense, net line item on our Condensed Consolidated Statement of Operations. ​ Condensed Consolidated Balance Sheet of 2024 and 2023 Acquisitions: The following unaudited condensed balance sheets represent the estimated fair value assigned to the related assets and liabilities of the 2024 and 2023 acquisitions. The allocation of the purchase price for the 2024 acquisition is preliminary at September 30, 2024 as management is awaiting information to finalize the fair values of assets acquired and liabilities assumed. Saga Communications, Inc. Condensed Consolidated Balance Sheet of 2024 and 2023 Acquisitions ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Acquisitions in
​ |  | 2024 |  | 2023
​ | ​ | (In thousands)
Assets Acquired: | ​ | ​ | ​ | ​ | ​ | ​
Current assets | ​ | $ | 533 |  | $ | —
Property and equipment | ​ | ​ | 2,035 |  | ​ | —
Other assets: | ​ | ​ | ​ | ​ | ​ | ​
Broadcast licenses | ​ |  | 1,346 |  | ​ | —
Goodwill | ​ |  | 891 |  | ​ | —
Other intangibles, deferred costs and investments | ​ |  | 1,034 |  | ​ | —
Total other assets | ​ |  | 3,271 |  | ​ | —
Total assets acquired | ​ |  | 5,839 |  | ​ | —
Liabilities Assumed: | ​ | ​ | ​ | ​ | ​ | ​
Current liabilities | ​ |  | 128 |  | ​ | —
Total liabilities assumed | ​ |  | 128 |  | ​ | —
Net assets acquired | ​ | $ | 5,711 | ​ | $ | —
​ ​ ​ ​ Pro Forma Results of Operations for Acquisitions (Unaudited) ​ The following unaudited pro forma results of our operations for three and nine months ended September 30, 2024 and 2023 assume the 2024 acquisitions occurred as of January 1, 2023. The pro forma results give effect to certain adjustments, including depreciation, amortization of intangible assets, increased interest expense on acquisition debt and related income tax effects. The pro forma results have been prepared for comparative purposes only and do not purport to indicate the results of operations that would actually have occurred had the combinations been in effect on the dates indicated or which may occur in the future. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | ​ | Nine Months Ended
​ | ​ | September 30, |  | ​ | September 30,
​ |  | 2024 |  | 2023 |  | ​ | 2024 |  | 2023
​ | ​ | (In thousands, except per share data)
Pro forma Consolidated Results of Operations | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net operating revenue | ​ | $ | 28,118 | ​ | $ | 29,986 | ​ | ​ | $ | 82,692 | ​ | $ | 85,973
Station operating expense | ​ |  | 23,458 | ​ |  | 23,474 | ​ | ​ |  | 71,127 | ​ |  | 68,956
Corporate general and administrative | ​ |  | 2,966 | ​ |  | 2,852 | ​ | ​ |  | 9,144 | ​ |  | 7,940
Other operating expense, net | ​ |  | 49 | ​ |  | 45 | ​ | ​ |  | 1,026 | ​ |  | 125
Operating income | ​ |  | 1,645 | ​ |  | 3,615 | ​ | ​ |  | 1,395 | ​ |  | 8,952
Interest expense | ​ |  | 121 | ​ |  | 122 | ​ | ​ |  | 366 | ​ |  | 366
Interest income | ​ |  | (255) | ​ |  | (391) | ​ | ​ |  | (809) | ​ |  | (1,027)
Other income, net | ​ |  | (78) | ​ |  | — | ​ | ​ |  | (1,211) | ​ |  | (119)
Income before income tax expense | ​ |  | 1,857 | ​ |  | 3,884 | ​ | ​ |  | 3,049 | ​ |  | 9,732
Income tax provision | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current | ​ | ​ | 415 | ​ | ​ | 845 | ​ | ​ | ​ | 690 | ​ | ​ | 2,025
Deferred | ​ |  | 175 | ​ |  | 277 | ​ | ​ |  | 246 | ​ |  | 691
​ | ​ | ​ | 590 | ​ | ​ | 1,122 | ​ | ​ | ​ | 936 | ​ | ​ | 2,716
Net income | ​ | $ | 1,267 | ​ | $ | 2,762 | ​ | ​ | $ | 2,113 | ​ | $ | 7,016
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Earnings per share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic | ​ | $ | 0.20 | ​ | $ | 0.45 | ​ | ​ | $ | 0.34 | ​ | $ | 1.15
Diluted | ​ | $ | 0.20 | ​ | $ | 0.45 | ​ | ​ | $ | 0.34 | ​ | $ | 1.15
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
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