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 Saga Communications, Inc. Reports 4th Quarter and Year End 2015 Results Free Cash Flow increased 2.9% for the Year
   Tuesday, March 08, 2016 9:00:00 AM ET

Saga Communications, Inc. (NYSE MKT: SGA) today reported free cash flow increased 2.2% to $6.8 million for the quarter ended December 31, 2015. Gross revenue without political increased 2.1% for the quarter. Net revenue (including political) decreased 2.1% to $35.6 million. Station operating expense increased 1.0% to $25.9 million (station operating expense includes depreciation and amortization attributable to the stations). Operating income decreased $1.4 million primarily due to the recognition of a $1.2 million gain during the 4th Quarter of 2014 in other operating income from the sale of four of the Company’s radio networks and the non-cash impairment charge of $1.9 million during the quarter in 2014 compared to $874 thousand in 2015. Net income for the period was $3.7 million ($0.63 per fully diluted share).

Free cash flow increased 2.9% to $21.6 million for the year ended December 31, 2015. Gross revenue without political increased 0.7% for the year. Net revenue (including political) decreased 0.9% to $132.9 million. Station operating expense decreased 1.2% to $97.3 million (station operating expense includes depreciation and amortization attributable to the stations). Operating income decreased $1.9 million. Net income for the year was $13.4 million ($2.29 per fully diluted share).

Capital expenditures were down $600 thousand to $1.1 million in the 4th quarter compared to $1.7 million for the same period last year. For the year capital expenditures were approximately even with last year at $5.5 million. The Company currently expects to spend approximately $5.0 million to $5.5 million for capital expenditures during 2016.

During the 4th Quarter the Company entered into an Asset Purchase Agreement to purchase WLVQ - FM in Columbus, OH for $13.0 million as well as disposing of its last radio network, the Illinois Radio Network. The Company begin operating WLVQ - FM pursuant to a Local Marketing Agreement as of November 16, 2015. The Company closed on its purchase of WLVQ on February 3, 2016.

Saga’s 2015 4th Quarter and Year End conference call will be on Tuesday, March 8, 2016 at 11:00 a.m. EST. The dial-in number for the call is (612) 234-9960. A transcript of the call will be posted to the Company’s website.

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 March 8, 2016 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.

The attached Selected Supplemental Financial Data tables disclose "actual" and "same station" information by segment 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.

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 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 67 FM and 32 AM radio stations, 4 television stations and 5 low-power television stations. 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 Twelve Months Ended
December 31, 2015 and 2014
(amounts in 000’s except per share data)
(Unaudited)
                                                           Three Months Ended                  Twelve Months Ended
                                                           December 31,                        December 31,
                                                           2015               2014             2015               2014
Operating Results
Net operating revenue                                      $         35,606   $        36,371  $       132,856    $        133,998
Station operating expense                                  25,868             25,612           97,268             98,424
Corporate general and administrative                       2,449              2,321            10,091             8,901
Other operating expense (income), net                      94                 (1,210)          541                (1,210)
Impairment of intangible assets                            874                1,936            874                1,936
Operating income                                           6,321              7,712            24,082             25,947
Interest expense                                           174                252              888                1,064
Write-off of debt issuance costs                           -                  -                557                -
Other income                                               -                  (33)             (417)              (71)
Income tax expense                                         2,450              3,050            9,640              10,050
Net income                                                 $           3,697  $          4,443 $         13,414   $         14,904
Earnings Per Share
                   Basic                                   $             0.63 $           0.77 $             2.31 $             2.57
                   Diluted                                 $             0.63 $           0.76 $             2.29 $             2.55
Weighted average common shares                             5,732              5,709            5,706              5,700
Weighted average common and common
                   equivalent shares                       5,741              5,757            5,740              5,753
Free Cash Flow
Net income                                                 $           3,697  $          4,443 $         13,414   $         14,904
Plus: Depreciation and amortization:
                   Station                                 1,842              1,682            6,534              6,434
                   Corporate                               56                 63               290                268
                   Write-off of debt issuance costs        -                  -                557                -
Deferred tax provision                                     910                1,255            3,640              3,385
Non-cash compensation                                      455                254              1,655              826
Other operating expense (income), net                      94                 (1,210)          541                (1,210)
Impairment of intangible assets                            874                1,936            874                1,936
Other income                                               -                  (33)             (417)              (71)
Less: Capital expenditures                                 (1,116)            (1,723)          (5,543)            (5,524)
Free cash flow                                             $           6,812  $          6,667 $         21,545   $         20,948
                                                                                               December 31,
                                                                                               2015               2014
Balance Sheet Data
                   Working capital                                                             $         33,557   $         30,554
                   Net fixed assets                                                            $         58,131   $         55,187
                   Net intangible assets and other assets                                      $         98,545   $         93,270
                   Total assets                                                                $       204,571    $       192,044
                   Long-term debt                                                              $         36,365   $         36,078
                   Stockholders’ equity                                                        $       122,816    $       115,245
Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
December 31, 2015 and 2014
(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
                                      December 31,                   December 31,                   December 31,
                                      2015            2014           2015           2014            2015            2014
Consolidated
Net operating revenue                 $      35,606   $    36,371    $      34,237  $      35,644   $      36,187   $      38,638
Station operating expense             25,868          25,612         24,593         25,164          26,325          27,217
Corporate general and administrative  2,449           2,321          2,449          2,321           2,449           2,321
Other operating expense (income), net 94              (1,210)        22             -               94              (1,210)
Impairment of intangible assets       874             1,936          874            1,936           874             1,936
Operating income                      6,321           7,712          $        6,299 $        6,223  6,445           8,374
Interest expense                      174             252                                           174             252
Other income                          -               (33)                                          -               (33)
Income tax expense                    2,450           3,050                                         2,501           3,322
Net income                            $        3,697  $      4,443                                  $        3,770  $        4,833
Earnings per share:
Basic                                 $          0.63 $        0.77                                 $          0.66 $          0.85
Diluted                               $          0.63 $        0.76                                 $          0.66 $          0.84
                                      Actual                         Same Station (1)               Pro Forma (2)
                                      Three Months Ended             Three Months Ended             Three Months Ended
                                      December 31,                   December 31,                   December 31,
                                      2015            2014           2015           2014            2015            2014
Radio Segment
Net operating revenue                 $      29,963   $    30,451    $      28,594  $      29,724   $      30,544   $      32,718
Station operating expense             22,122          22,146         20,847         21,698          22,579          23,751
Other operating expense (income), net 85              (1,210)        13             -               85              (1,210)
Impairment of intangible assets       874             1,936          874            1,936           874             1,936
Operating income                      $        6,882  $      7,579   $        6,860 $        6,090  $        7,006  $        8,241
                                      Actual                         Same Station (1)               Pro Forma (2)
                                      Three Months Ended             Three Months Ended             Three Months Ended
                                      December 31,                   December 31,                   December 31,
                                      2015            2014           2015           2014            2015            2014
Television Segment
Net operating revenue                 $        5,643  $      5,920   $        5,643 $        5,920  $        5,643  $        5,920
Station operating expense             3,746           3,466          3,746          3,466           3,746           3,466
Other operating expense (income), net (1)             -              (1)            -               (1)             -
Operating income                      $        1,898  $      2,454   $        1,898 $        2,454  $        1,898  $        2,454
                                      Actual                         Same Station (1)               Pro Forma (2)
                                      Three Months Ended             Three Months Ended             Three Months Ended
                                      December 31,                   December 31,                   December 31,
                                      2015            2014           2015           2014            2015            2014
Depreciation and amortization
                   by segment
Radio Segment                         $        1,459  $      1,312   $        1,265 $        1,316  $        1,459  $        1,459
Television Segment                    383             370            383            370             383             370
Corporate and Other                   56              63             56             63              56              63
                                      $        1,898  $      1,745   $        1,704 $        1,749  $        1,898  $        1,892
(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 2015 occurred as of January 1, 2014.
Saga Communications, Inc.
Selected Supplemental Financial Data
For the Twelve Months Ended
December 31, 2015 and 2014
(amounts in 000’s except per share data)
(Unaudited)
                                      Actual                           Same Station (1)               Pro Forma (2)
                                      Twelve Months Ended              Twelve Months Ended            Twelve Months Ended
                                      December 31,                     December 31,                   December 31,
                                      2015            2014             2015           2014            2015            2014
Consolidated
Net operating revenue                 $    132,856    $    133,998     $    130,916   $    131,582    $    139,458    $    143,238
Station operating expense             97,268          98,424           95,484         96,145          102,226         104,912
Corporate general and administrative  10,091          8,901            10,091         8,901           10,091          8,901
Other operating expense (income), net 541             (1,210)          69             -               541             (1,210)
Impairment of intangible assets       874             1,936            874            1,936           874             1,936
Operating income                      24,082          25,947           $      24,398  $      24,600   25,726          28,699
Interest expense                      888             1,064                                           888             1,064
Write-off of debt issuance costs      557             -                                               557             -
Other income                          (417)           (71)                                            (417)           (71)
Income tax expense                    9,640           10,050                                          10,314          11,179
Net income                            $      13,414   $      14,904                                   $      14,384   $      16,527
Earnings per share:
Basic                                 $          2.31 $          2.57                                 $          2.52 $          2.90
Diluted                               $          2.29 $          2.55                                 $          2.51 $          2.87
                                      Actual                           Same Station (1)               Pro Forma (2)
                                      Twelve Months Ended              Twelve Months Ended            Twelve Months Ended
                                      December 31,                     December 31,                   December 31,
                                      2015            2014             2015           2014            2015            2014
Radio Segment
Net operating revenue                 $    111,792    $    113,627     $    109,852   $    111,211    118,394         122,867
Station operating expense             83,188          85,167           81,404         82,888          88,146          91,655
Other operating expense (income), net 499             (1,210)          27             -               499             (1,210)
Impairment of intangible assets       874             1,936            874            1,936           874             1,936
Operating income                      $      27,231   $      27,734    $      27,547  $      26,387   $      28,875   $      30,486
                                      Actual                           Same Station (1)               Pro Forma (2)
                                      Twelve Months Ended              Twelve Months Ended            Twelve Months Ended
                                      December 31,                     December 31,                   December 31,
                                      2015            2014             2015           2014            2015            2014
Television Segment
Net operating revenue                 $      21,064   $      20,371    $      21,064  $      20,371   21,064          20,371
Station operating expense             14,080          13,257           14,080         13,257          14,080          13,257
Other operating expense (income), net 32              -                32             -               32              -
Operating income                      $        6,952  $        7,114   $        6,952 $        7,114  $        6,952  $        7,114
                                      Actual                           Same Station (1)               Pro Forma (2)
                                      Twelve Months Ended              Twelve Months Ended            Twelve Months Ended
                                      December 31,                     December 31,                   December 31,
                                      2015            2014             2015           2014            2015            2014
Depreciation and amortization
                   by segment
Radio Segment                         $        5,135  $        5,023   $        4,846 $        4,962  $        5,530  $        5,662
Television Segment                    1,399           1,411            1,399          1,411           1,399           1,411
Corporate and Other                   290             268              290            268             290             268
                                      $        6,824  $        6,702   $        6,535 $        6,641  $        7,219  $        7,341
(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 2015 occurred as of January 1, 2014.
Saga Communications, Inc.
Selected Supplemental Financial Data
December 31, 2015
(amounts in 000’s except ratios)
(Unaudited)
                                                                                         Twelve Months                                Trailing
                                                                                         Ended                          Add:          Twelve Months Ended
                                                                                         December 31,                   Proforma      December 31,
                                                                                         2015                           Acquisitions  2015     2014 (2)
Trailing 12 Month Consolidated Earnings Before Interest
Taxes, Depreciation and Amortization ("EBITDA") (1)
Net income                                                                               $13,414                        $970          $14,384  $14,904
Exclusions:
                             Gain (loss) on sale of assets                               (541)                          -             (541)    1,281
                             Gain on insurance claim                                     417                            -             417      -
                             Impairment of intangible assets                             (874)                          -             (874)    (1,936)
                             Write-off of debt issuance costs                            (557)                          -             (557)    -
                             Other                                                       119                            -             119      213
Total exclusions                                                                         (1,436)                        -             (1,436)  (442)
Consolidated adjusted net income (1)                                                     14,850                         970           15,820   15,346
Plus:  Interest expense                                                                  888                            -             888      1,064
                             Income tax expense                                          9,640                          674           10,314   10,050
                             Depreciation & amortization expense                         6,824                          395           7,219    6,702
                             Amortization of television syndicated programming contracts 637                            -             637      637
                             Non-cash stock based compensation expense                   1,655                          -             1,655    826
Less: Cash television programming payments                                               (635)                          -             (635)    (627)
Trailing twelve month consolidated EBITDA (1)                                            $33,859                        $2,039        $35,898  $33,998
Total long-term debt, including current maturities                                                                                    $36,365  $36,078
Divided by trailing twelve month consolidated EBITDA (1)                                                                              35,898   33,998
Leverage ratio                                                                                                                        1.0      1.1
(1)                          As defined in the Company’s credit facility.
(2)                          December 31, 2014 did not include any proforma acquisitions
                   Saga Communications, Inc.
                   Selected Financial Data Non-GAAP Disclosures
                   For the Three Months Ended
                   December 31, 2015 and 2014
                   (amounts in 000’s)
                   (Unaudited)
Reconciliation of Actual (historical) Information to Same Station Operating Income
                                                               Adjustment                                                                  Adjustment
                                      Actual                   For Acquisitions          Same Station             Actual                   For Acquisitions          Same Station
                                      Three Months             and Dispositions          Three Months             Three Months             and Dispositions          Three Months
                                      Ended                    Not Included in           Ended                    Ended                    Not Included in           Ended
                                      December 31,             Entire Comparable         December 31,             December 31,             Entire Comparable         December 31,
                                      2015                     Period                    2015                     2014                     Period                    2014
Consolidated
Net operating revenue                 $              35,606    $              (1,369)    $              34,237    $              36,371    $                 (727)   $              35,644
Station operating expense             25,868                   (1,275)                   24,593                   25,612                   (448)                     25,164
Corporate general and administrative  2,449                    -                         2,449                    2,321                    -                         2,321
Other operating expense (income), net 94                       (72)                      22                       (1,210)                  1,210                     -
Impairment of intangible assets       874                      -                         874                      1,936                    -                         1,936
Operating income                      $                6,321   $                   (22)  $                6,299   $                7,712   $              (1,489)    $                6,223
Depreciation and amortization         $                1,898   $                 (194)   $                1,704   $                1,745   $                      4  $                1,749
                                                               Adjustment                                                                  Adjustment
                                      Actual                   For Acquisitions          Same Station             Actual                   For Acquisitions          Same Station
                                      Three Months             and Dispositions          Three Months             Three Months             and Dispositions          Three Months
                                      Ended                    Not Included in           Ended                    Ended                    Not Included in           Ended
                                      December 31,             Entire Comparable         December 31,             December 31,             Entire Comparable         December 31,
                                      2015                     Period                    2015                     2014                     Period                    2014
Radio Segment
Net operating revenue                 $              29,963    $              (1,369)    $              28,594    $              30,451    $                 (727)   $              29,724
Station operating expense             22,122                   (1,275)                   20,847                   22,146                   (448)                     21,698
Other operating expense (income), net 85                       (72)                      13                       (1,210)                  1,210                     -
Impairment of intangible assets       874                      -                         874                      1,936                    -                         1,936
Operating income                      $                6,882   $                   (22)  $                6,860   $                7,579   $              (1,489)    $                6,090
Depreciation and amortization         $                1,459   $                 (194)   $                1,265   $                1,312   $                      4  $                1,316
                                                               Adjustment                                                                  Adjustment
                                      Actual                   For Acquisitions          Same Station             Actual                   For Acquisitions          Same Station
                                      Three Months             and Dispositions          Three Months             Three Months             and Dispositions          Three Months
                                      Ended                    Not Included in           Ended                    Ended                    Not Included in           Ended
                                      December 31,             Entire Comparable         December 31,             December 31,             Entire Comparable         December 31,
                                      2015                     Period                    2015                     2014                     Period                    2014
Television Segment
Net operating revenue                 $                5,643   $                     -   $                5,643   $                5,920   $                     -   $                5,920
Station operating expense             3,746                    -                         3,746                    3,466                    -                         3,466
Other operating expense (income), net (1)                      -                         (1)                      -                        -                         -
Operating income                      $                1,898   $                     -   $                1,898   $                2,454   $                     -   $                2,454
Depreciation and amortization         $                   383  $                     -   $                   383  $                   370  $                     -   $                   370
                   Saga Communications, Inc.
                   Selected Financial Data Non-GAAP Disclosures
                   For the Twelve Months Ended
                   December 31, 2015 and 2014
                   (amounts in 000’s)
                   (Unaudited)
Reconciliation of Actual (historical) Information to Same Station Operating Income
                                                              Adjustment                                                               Adjustment
                                      Actual                  For Acquisitions         Same Station            Actual                  For Acquisitions          Same Station
                                      Twelve Months           and Dispositions         Twelve Months           Twelve Months           and Dispositions          Twelve Months
                                      Ended                   Not Included in          Ended                   Ended                   Not Included in           Ended
                                      December 31,            Entire Comparable        December 31,            December 31,            Entire Comparable         December 31,
                                      2015                    Period                   2015                    2014                    Period                    2014
Consolidated
Net operating revenue                 $            132,856    $              (1,940)   $            130,916    $            133,998    $              (2,416)    $            131,582
Station operating expense             97,268                  (1,784)                  95,484                  98,424                  (2,279)                   96,145
Corporate general and administrative  10,091                  -                        10,091                  8,901                   -                         8,901
Other operating expense (income), net 541                     (472)                    69                      (1,210)                 1,210                     -
Impairment of intangible assets       874                     -                        874                     1,936                   -                         1,936
Operating income                      $              24,082   $                  316   $              24,398   $              25,947   $              (1,347)    $              24,600
Depreciation and amortization         $                6,824  $                 (289)  $                6,535  $                6,702  $                   (61)  $                6,641
                                                              Adjustment                                                               Adjustment
                                      Actual                  For Acquisitions         Same Station            Actual                  For Acquisitions          Same Station
                                      Twelve Months           and Dispositions         Twelve Months           Twelve Months           and Dispositions          Twelve Months
                                      Ended                   Not Included in          Ended                   Ended                   Not Included in           Ended
                                      December 31,            Entire Comparable        December 31,            December 31,            Entire Comparable         December 31,
                                      2015                    Period                   2015                    2014                    Period                    2014
Radio Segment
Net operating revenue                 $            111,792    $              (1,940)   $            109,852    $            113,627    $              (2,416)    $            111,211
Station operating expense             83,188                  (1,784)                  81,404                  85,167                  (2,279)                   82,888
Other operating expense (income), net 499                     (472)                    27                      (1,210)                 1,210                     -
Impairment of intangible assets       874                     -                        874                     1,936                   -                         1,936
Operating income                      $              27,231   $                  316   $              27,547   $              27,734   $              (1,347)    $              26,387
Depreciation and amortization         $                5,135  $                 (289)  $                4,846  $                5,023  $                   (61)  $                4,962
                                                              Adjustment                                                               Adjustment
                                      Actual                  For Acquisitions         Same Station            Actual                  For Acquisitions          Same Station
                                      Twelve Months           and Dispositions         Twelve Months           Twelve Months           and Dispositions          Twelve Months
                                      Ended                   Not Included in          Ended                   Ended                   Not Included in           Ended
                                      December 31,            Entire Comparable        December 31,            December 31,            Entire Comparable         December 31,
                                      2015                    Period                   2015                    2014                    Period                    2014
Television Segment
Net operating revenue                 $              21,064   $                     -  $              21,064   $              20,371   $                     -   $              20,371
Station operating expense             14,080                  -                        14,080                  13,257                  -                         13,257
Other operating expense (income), net 32                      -                        32                      -                       -                         -
Operating income                      $                6,952  $                     -  $                6,952  $                7,114  $                     -   $                7,114
Depreciation and amortization         $                1,399  $                     -  $                1,399  $                1,411  $                     -   $                1,411

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/saga-communications-inc-reports-4th-quarter-and-year-end-2015-results-free-cash-flow-increased-29-for-the-year-300232388.html

SOURCE Saga Communications, Inc.

http://rt.prnewswire.com/rt.gif?NewsItemId=DE40888&Transmission_Id=201603080900PR_NEWS_USPR_____DE40888&DateId=20160308



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