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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): March 31, 2016

 

 

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:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 

Item 2.02.Results of Operations and Financial Condition.

 

On May 5, 2016, Saga Communications, Inc. issued a press release announcing its financial results for the three months ended March 31, 2016. The press release, dated May 5, 2016, is attached as Exhibit 99.1 to this Form 8-K.

 

Item 9.01.Financial Statements and Exhibits.

 

  (d)Exhibits.

 

99.1Press Release dated May 5, 2016.

 

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: May 5, 2016 By: /s/ Samuel D. Bush  
    Samuel D. Bush  
    Senior Vice President and Chief  
    Financial Officer  

 

 

 

 

INDEX OF EXHIBITS

 

Exhibit No. Description
   
99.1 Press Release dated May 5, 2016.

 

 

 

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

Saga Communications, Inc. Reports 1st Quarter 2016 Results



Free Cash Flow Increased 35.4%

GROSSE POINTE FARMS, Mich., May 5, 2016 /PRNewswire/ -- Saga Communications, Inc. (NYSE MKT: SGA) today reported free cash flow increased 35.4% to $4.9 million for the quarter ended March 31, 2016. Net revenue increased 12.7% to $32.8 million. Operating Income increased 40.1% to $5.3 million. Station operating expense increased 8.4% to $24.7 million (station operating expense includes depreciation and amortization attributable to the stations). Same Station net revenue increased 7.0% to $31.0 million and same station operating expense increased 3.0% to $23.2 million. Net income for the period was $3.0 million ($0.52 per fully diluted share compared to $0.36 for the same period last year).

Capital expenditures were $1 million in the 1st quarter which was approximately comparable to the same period last year. The Company currently expects to spend approximately $5.0 million to $5.5 million for capital expenditures during 2016.

During the 1st Quarter the Company closed on its purchase of WLVQ-FM in Columbus, OH for $13 million. The Company began operating WLVQ – FM pursuant to a Local Marketing Agreement as of November 16, 2015.

Saga's 2016 1st Quarter conference call will be on Thursday, May 5, 2016 at 11:00 a.m. EDT. The dial-in number for the call is (612) 332-0345. 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 May 5, 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", "same station" and "proforma" 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. The "proforma" amounts assume all acquisitions and dispositions in 2015 and 2016 occurred as of January 1, 2015.

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 Months Ended

March 31, 2016 and 2015

(amounts in 000's except per share data)

(Unaudited)









 Three Months Ended  




 March 31,  




2016

2015

Operating Results




Net operating revenue


$         32,745

$        29,061

Station operating expense


24,685

22,765

Corporate general and administrative


2,717

2,482

Operating income


5,343

3,814

Interest expense


189

241

Other income


-

(8)

Income before income tax expense


5,154

3,581

Income tax expense


2,130

1,450

Net income


$           3,024

$          2,131






Earnings Per Share





Basic


$             0.52

$           0.37


Diluted


$             0.52

$           0.36






Weighted average common shares


5,751

5,710

Weighted average common and common 





equivalent shares


5,759

5,762






Free Cash Flow




Net income 


$           3,024

$          2,131

Plus: Depreciation and amortization:





        Station


1,667

1,521


        Corporate


69

68

         Deferred tax provision


575

360

         Non-cash compensation


528

462

         Other income 


-

(8)

Less: Capital expenditures


(1,010)

(950)

Free cash flow


$           4,853

$          3,584









 March 31, 




2016

2015

Balance Sheet Data





Working capital


$         25,003

$        33,262


Net fixed assets


$         57,924

$        54,557


Net intangible assets and other assets


$       110,795

$        93,477


Total assets


$       209,727

$      195,548


Long-term debt


$         36,365

$        36,078


Stockholders' equity


$       125,162

$      116,897

Saga Communications, Inc.

Selected Supplemental Financial Data

For the Three Months Ended

March 31, 2016 and 2015

(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



March 31, 


March 31, 


March 31, 



2016

2015


2016

2015


2016

2015

Consolidated









Net operating revenue

$      32,745

$    29,061


$      31,008

$      28,991


$      32,745

$      31,015

Station operating expense

24,685

22,765


23,221

22,551


24,700

24,457

Corporate general and administrative

2,717

2,482


2,717

2,482


2,717

2,482

Other operating (income) expense, net

-

-


(2)

-


-

-

Operating income

5,343

3,814


$        5,072

$        3,958


5,328

4,076

Interest expense

189

241





189

241

Other income

-

(8)





-

(8)

Income before income tax expense

5,154

3,581





5,139

3,843

Income tax expense

2,130

1,450





2,124

1,557

Net income 

$        3,024

$      2,131





$        3,015

$        2,286

Earnings per share:









  Basic

$          0.52

$        0.37





$          0.52

$          0.40

  Diluted

$          0.52

$        0.36





$          0.52

$          0.40













Actual


Same Station (1)


Pro Forma (2)



Three Months Ended


Three Months Ended


Three Months Ended



March 31, 


March 31, 


March 31, 



2016

2015


2016

2015


2016

2015

Radio Segment









Net operating revenue

$      27,464

$    24,276


$      25,727

$      24,206


$      27,464

$      26,230

Station operating expense

21,140

19,422


19,676

19,208


21,155

21,114

Other operating (income) expense, net

(3)

-


(5)

-


(3)

-

Operating income

$        6,327

$      4,854


$        6,056

$        4,998


$        6,312

$        5,116























Actual


Same Station (1)


Pro Forma (2)



Three Months Ended


Three Months Ended


Three Months Ended



March 31, 


March 31, 


March 31, 



2016

2015


2016

2015


2016

2015

Television Segment









Net operating revenue

$        5,281

$      4,785


$        5,281

$        4,785


$        5,281

$        4,785

Station operating expense

3,545

3,343


3,545

3,343


3,545

3,343

Other operating (income) expense, net

3

-


3

-


3

-

Operating income

$        1,733

$      1,442


$        1,733

$        1,442


$        1,733

$        1,442























Actual


Same Station (1)


Pro Forma (2)



Three Months Ended


Three Months Ended


Three Months Ended



March 31, 


March 31, 


March 31, 



2016

2015


2016

2015


2016

2015

Depreciation and amortization










by segment









Radio Segment

$        1,346

$      1,174


$        1,151

$        1,166


$        1,361

$        1,381

Television Segment

321

347


321

347


321

347

Corporate and Other

69

68


69

68


69

68



$        1,736

$      1,589


$        1,541

$        1,581


$        1,751

$        1,796











(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 and dispositions in 2015 and 2016 occurred as of January 1, 2015.




Saga Communications, Inc.

Selected Supplemental Financial Data

March 31, 2016

(amounts in 000's except ratios)

(Unaudited)






































Less:


Plus:




Trailing



12 Mos Ended


3 Mos Ended


3 Mos Ended


Add:


12 Mos Ended



December 31,


March 31,


March 31,


Proforma


March 31,



2015


2015


2016


Acquisitions


2016

Trailing 12 Month Consolidated Earnings Before Interest










  Taxes, Depreciation and Amortization ("EBITDA") (1)










Net income

$13,414


$2,131


$3,024


$703


$15,010

Exclusions:











Gain (loss) on sale of assets

(541)


8


-




(549)


Gain on insurance claim

417


-


-




417


Impairment of intangible assets

(874)


-


-




(874)


Write-off of debt issuance costs

(557)


-


-




(557)


Other

119


21


70




168

Total exclusions

(1,436)


29


70


0


(1,395)

Consolidated adjusted net income (1)

14,850


2,102


2,954


703


16,405

Plus:  Interest expense

888


241


189




836


Income tax expense

9,640


1,450


2,130


489


10,809


Depreciation & amortization expense

6,824


1,589


1,736


378


7,349


Amortization of television syndicated programming contracts

637


162


158




633


Non-cash stock based compensation expense

1,655


462


528




1,721

Less: Cash television programming payments

(635)


(159)


(158)




(634)

Trailing twelve month consolidated EBITDA (1)

$33,859


$5,847


$7,537


$1,570


$37,119












Total long-term debt, including current maturities









$36,365

Divided by trailing twelve month consolidated EBITDA (1)









37,119

Leverage ratio









1.0












(1)

As defined in the Company's credit facility.












Saga Communications, Inc.



Selected Financial Data Non-GAAP Disclosures



For the Three Months Ended



March 31, 2016 and 2015



(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





March 31,


Entire Comparable


March 31,


March 31,


Entire Comparable


March 31,





2016


Period


2016


2015


Period


2015



Consolidated














Net operating revenue

$              32,745


$              (1,737)


$              31,008


$              29,061


$                   (70)


$              28,991



Station operating expense

24,685


(1,464)


23,221


22,765


(214)


22,551



Corporate general and administrative

2,717


-


2,717


2,482


-


2,482



Other operating (income) expense, net

-


(2)


(2)


-


-


-



Operating income

$                5,343


$                 (271)


$                5,072


$                3,814


$                  144


$                3,958


















Depreciation and amortization

$                1,736


$                 (195)


$                1,541


$                1,589


$                     (8)


$                1,581






















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





March 31,


Entire Comparable


March 31,


March 31,


Entire Comparable


March 31,





2016


Period


2016


2015


Period


2015



Radio Segment














Net operating revenue

$              27,464


$              (1,737)


$              25,727


$              24,276


$                   (70)


$              24,206



Station operating expense

21,140


(1,464)


19,676


19,422


(214)


19,208



Other operating (income) expense, net

(3)


(2)


(5)


-


-

#

-



Operating income

$                6,327


$                 (271)


$                6,056


$                4,854


$                  144


$                4,998


















Depreciation and amortization

$                1,346


$                 (195)


$                1,151


$                1,174


$                     (8)


$                1,166






















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





March 31,


Entire Comparable


March 31,


March 31,


Entire Comparable


March 31,





2016


Period


2016


2015


Period


2015



Television Segment














Net operating revenue

$                5,281


$                     -


$                5,281


$                4,785


$                     -


$                4,785



Station operating expense

3,545


-


3,545


3,343


-


3,343



Other operating (income) expense,
net

3


-


3


-


-


-



Operating income

$                1,733


$                     -


$                1,733


$                1,442


$                     -


$                1,442


















Depreciation and amortization

$                   321


$                     -


$                   321


$                   347


$                     -


$                   347




CONTACT: Samuel D. Bush, 313/886-7070

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