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Section 1: 8-K (FORM 8-K)

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 31, 2019 

 

SAGA COMMUNICATIONS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware   1-11588   38-3042953
 (State or other jurisdiction    (Commission File Number)   (IRS Employer
of incorporation)       Identification No.)

 

73 Kercheval Avenue    
Grosse Pointe Farms, MI   48236
(Address of Principal Executive Offices)   (Zip Code)

  

Registrant’s telephone number, including area code: (313) 886-7070

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading symbol(s) Name of each exchange on whichregistered

Class A Common Stock,

par value $0.01 per share

SGA NASDAQ

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 2.02.Results of Operations and Financial Condition.

 

On March 12, 2020, Saga Communications, Inc. issued a press release announcing its financial results for the three and twelve months ended December 31, 2019. The press release, dated March 12, 2020, is attached as Exhibit 99.1 to this Form 8-K.

 

Item 9.01.Financial Statements and Exhibits.

 

(d)Exhibits.

 

99.1Press Release dated March 12, 2020.

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  SAGA COMMUNICATIONS, INC.
   
   
   
Dated: March 12, 2020 By:  /s/ Samuel D. Bush
    Samuel D. Bush
Senior Vice President and Chief
    Financial Officer

  

 

 

 

INDEX OF EXHIBITS

 

Exhibit No.Description

 

99.1Press Release dated March 12, 2020.

  

 

 

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

 

 

Saga Communications, Inc.

Reports 4th Quarter and Year End 2019 Results

 

 

Contact:

Samuel D. Bush

313/886-7070

 

Grosse Pointe Farms, MI – March 12, 2020 – Saga Communications, Inc. (Nasdaq - SGA) today reported net revenue of $31.8 million for the quarter compared to $32.9 million for the same quarter last year. Gross revenue was approximately flat with last year for the quarter at $33.7 million net of political revenue of $535 thousand this quarter and $1.6 million for the same period last year. Station operating expense decreased $711 thousand to $23.1 million and operating income decreased $575 thousand to $5.4 million. Net Income decreased $454 thousand to $3.8 million for the quarter. Diluted earnings per share were $0.64/share in the fourth quarter of 2019 compared to $0.72/share during the same period in 2018. Primarily due to a $460 thousand reduction in the Company’s deferred tax provision free cash flow was $5.4 million for the quarter ended December 31, 2019 compared to $5.9 million for the same period last year.

 

Gross Revenue was flat with last year for the twelve-month period at $131.5 million net of political revenue of $887 thousand this year and $2.9 million for the same period last year. Net revenue decreased $1.8 million to $123.1 million. Station operating expense decreased $1.0 million to $92.7 million and operating income decreased $874 thousand to $18.8 million. Net income for the twelve-month period ended December 31, 2019 was $13.3 million compared to $13.7 million for the same period last year. Diluted earnings per share were $2.23/share for the twelve-month period in 2019 compared to $2.30/share during the same period in 2018. Primarily due to a $1.2 million reduction in the Company’s deferred tax provision free cash flow was $18.1 million compared to $19.5 million for the twelve-month period ended December 31, 2019.

 

The Company had $44.0 million in cash on hand as of December 31, 2019 and $47.0 million as of March 9, 2020. The Company’s total bank debt was $10 million as of the end of the year. Including the recently announced $0.32 per share dividend which will be paid on April 10, 2020, the Company will have paid over $71 million in dividends since December 3, 2012.

 

Capital expenditures in the fourth quarter were $1.1 million compared to $1.5 million for the same period last year. For the twelve-month period capital expenditures were $5.7 million compared to $5.9 million last year. The Company expects to spend approximately $5.0 – 5.5 million for capital expenditures during 2020.

 

 

 

 

Saga’s 2019 4th Quarter conference call will be on Thursday, March 12, 2020 at 11:00 a.m. EDT. The dial-in number for the call is 973/528-0008. Enter conference code 648752. A transcript of the call will be posted to the Company’s website as soon as it is available after the call.

 

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. EDT on March 12, 2020 to [email protected] 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”, “same station”, and “proforma” information as well as the Company’s trailing twelve-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. The “proforma” amounts assume all acquisitions in 2018 and 2019 occurred as of January 1, 2018.

 

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 consolidated net 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 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 27 markets, including 79 FM radio stations, 34 AM radio stations and 77 metro signals. 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, 2019 and 2018
(amounts in 000’s except per share data)
(Unaudited)

 

   Three Months Ended   Twelve Months Ended 
   December 31,   December 31, 
   2019   2018   2019   2018 
Operating Results                    
Net operating revenue  $31,791   $32,938   $123,072   $124,829 
Station operating expense   23,050    23,761    92,692    93,727 
Corporate general and administrative   3,281    3,154    11,460    11,359 
Other operating expense   26    14    112    61 
Operating income   5,434    6,009    18,808    19,682 
Interest expense   163    229    735    946 
Interest income   (125)   (187)   (610)   (631)
Other (income) expense, net   (5)   2    (16)   (23)
Income before income tax expense   5,401    5,965    18,699    19,390 
Income tax expense   1,560    1,670    5,420    5,700 
Net income  $3,841   $4,295   $13,279   $13,690 
                     
Basic earnings per share  $0.64   $0.72   $2.23   $2.30 
Diluted earnings per share  $0.64   $0.72    2.23    2.30 
                     
                     
Weighted average common shares   5,817    5,820    5,834    5,829 
Weighted average common and common                    
equivalent shares   5,817    5,820    5,834    5,829 
                     
Free Cash Flow                    
Net income  $3,841   $4,295   $13,279   $13,690 
Plus: Depreciation and amortization:                    
Station   1,747    1,718    6,641    6,507 
Corporate   90    70    304    279 
Deferred tax provision   320    780    1,420    2,660 
Non-cash compensation   473    526    2,129    2,201 
Other operating expense, net   26    14    112    61 
Other (income) expense , net   (5)   2    (16)   (23)
Less: Capital expenditures   (1,065)   (1,472)   (5,732)   (5,922)
Free cash flow  $5,427   $5,933   $18,137   $19,453 

 

 

   December 31, 
   2019   2018 
Balance Sheet Data          
Working capital  $49,219   $45,430 
Net fixed assets  $58,711   $59,103 
Net intangible assets and other assets  $126,963   $120,779 
Total assets  $252,394   $248,477 
Long-term debt (including current portion          
of $0 and $5,000, respectively)  $10,000   $20,000 
Stockholders' equity  $192,352   $184,999 

 

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Three Months Ended
December 31, 2019 and 2018
(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, 
   2019   2018   2019   2018   2019   2018 
Consolidated                        
Net operating revenue  $31,791   $32,938   $30,705   $32,938   $31,791   $34,008 
Station operating expense   23,050    23,761    22,101    23,761    23,050    24,697 
Corporate general and administrative   3,281    3,154    3,281    3,154    3,281    3,154 
Other operating expense   26    14    26    14    26    14 
Operating income   5,434    6,009   $5,297   $6,009    5,434    6,143 
Interest expense   163    229              163    229 
Interest income   (125)   (187)             (125)   (187)
Other (income) expense, net   (5)   2              (5)   2 
Income before income tax expense   5,401    5,965              5,401    6,099 
Income tax expense   1,560    1,670              1,560    1,711 
Net income  $3,841   $4,295             $3,841   $4,388 
                               
Basic earnings per share  $0.64   $0.72             $0.64   $0.74 
Diluted earnings per share  $0.64   $0.72             $0.64   $0.74 

 

   Actual   Same Station (1)   Pro Forma (2) 
   Three Months Ended   Three Months Ended   Three Months Ended 
   December 31,   December 31,   December 31, 
   2019   2018   2019   2018   2019   2018 
Depreciation and amortization                              
by segment                              
Radio Stations  $1,747   $1,718   $1,599   $1,718   $1,747   $1,855 
Corporate   90    70    90    70    90    70 
   $1,837   $1,788   $1,689   $1,788   $1,837   $1,925 

 

(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 2018 and 2019 occurred as of January 1, 2018.

 

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
For the Twelve Months Ended
December 31, 2019 and 2018
(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, 
   2019   2018   2019   2018   2019   2018 
Consolidated                              
Net operating revenue  $123,072   $124,829   $118,862   $124,829   $123,072   $129,228 
Station operating expense   92,692    93,727    89,039    93,727    92,692    97,314 
Corporate general and administrative   11,460    11,359    11,460    11,359    11,460    11,359 
Other operating expense   112    61    112    61    112    61 
Operating income   18,808    19,682   $18,251   $19,682    18,808    20,494 
Interest expense   735    946              735    946 
Interest income   (610)   (631)             (610)   (631)
Other (income) expense, net   (16)   (23)             (16)   (23)
Income before income tax expense   18,699    19,390              18,699    20,202 
Income tax expense   5,420    5,700              5,420    5,944 
Net income  $13,279   $13,690             $13,279   $14,258 
                               
Basic earnings per share  $2.23   $2.30             $2.23   $2.40 
Diluted earnings per share  $2.23   $2.30             $2.23   $2.40 

 

   Actual   Same Station (1)   Pro Forma (2) 
   Twelve Months Ended   Twelve Months Ended   Twelve Months Ended 
   December 31,   December 31,   December 31, 
   2019   2018   2019   2018   2019   2018 
Depreciation and amortization                              
by segment                              
Radio Stations  $6,641   $6,507   $6,085   $6,507   $6,641   $7,039 
Corporate   304    279    304    279    304    279 
   $6,945   $6,786   $6,389   $6,786   $6,945   $7,318 

 

(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 2018 and 2019 occurred as of January 1, 2018.

 

 

 

 

Saga Communications, Inc.
Selected Supplemental Financial Data
December 31, 2019 and 2018
(amounts in 000's except ratios)
(Unaudited)

 

   12 Months Ended 
   December 31, 
   2019   2018 (2) 
         (Proforma) 
Trailing 12 Month Consolidated Earnings Before Interest,          
  Taxes, Depreciation and Amortization ("EBITDA") (1)          
Net income  $13,279   $14,258 
Exclusions:          
Gain (loss) on sale of assets   (112)   (61)
Other gains and (losses)   16    23 
Interest income   610    631 
Other   190    (107)
Total exclusions   704    486 
Consolidated adjusted net income (1)   12,575    13,772 
Plus:  Interest expense   735    946 
Income tax expense   5,420    5,944 
Depreciation & amortization expense   6,945    7,318 
Non-cash stock based compensation expense   2,129    2,201 
Trailing twelve month consolidated EBITDA (1)  $27,804   $30,181 
           
Total long-term debt, including current maturities  $10,000   $20,000 
Divided by trailing twelve month consolidated EBITDA (1)   27,804    30,181 
Leverage ratio   0.36    0.66 

 

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

(2)2018 includes proforma acquisitions.

 

 

 

Saga Communications, Inc.
Selected Financial Data Non-GAAP Disclosures
For the Three and Twelve Months Ended
December 31, 2019 and 2018
(amounts in 000's)
(Unaudited)

 

Reconciliation of Actual 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, 
   2019   Period   2019   2018   Period   2018 
Consolidated                              
Net operating revenue  $31,791   $(1,086)  $30,705   $32,938   $-   $32,938 
Station operating expense   23,050    (949)   22,101    23,761    -    23,761 
Corporate general and administrative   3,281    -    3,281    3,154    -    3,154 
Other operating expense   26    -    26    14    -    14 
Operating income  $5,434   $(137)  $5,297   $6,009   $-   $6,009 
                               
Depreciation and amortization  $1,837   $(148)  $1,689   $1,788   $-   $1,788 

 

 

       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, 
   2019   Period   2019   2018   Period   2018 
Consolidated                              
Net operating revenue  $123,072   $(4,210)  $118,862   $124,829   $-   $124,829 
Station operating expense   92,692    (3,653)   89,039    93,727    -    93,727 
Corporate general and administrative   11,460    -    11,460    11,359    -    11,359 
Other operating expense   112    -    112    61    -    61 
Operating income  $18,808   $(557)  $18,251   $19,682   $-   $19,682 
                               
Depreciation and amortization  $6,945   $(556)  $6,389   $6,786   $-   $6,786 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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