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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): June 30, 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:

 

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))

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On August 4, 2016, Saga Communications, Inc. issued a press release announcing its financial results for the three and six months ended June 30, 2016. The press release, dated August 4, 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 August 4, 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: August 4, 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 August 4, 2016.

 

 

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

Saga Communications, Inc. Reports 2nd Quarter 2016 Results



Net Revenue increased 6.1%

GROSSE POINTE FARMS, Mich., Aug. 4, 2016 /PRNewswire/ -- Saga Communications, Inc. (NYSE MKT SGA) today reported net revenue increased 6.1% to $36.4 million for the quarter ended June 30, 2016. Free cash flow increased 15.6% to $6.5 million. Operating Income increased 12.6% to $8.4 million. Station operating expense increased 4.6% to $25.4 million (station operating expense includes depreciation and amortization attributable to the stations). Same Station net revenue increased 0.8% to $34.2 million and same station operating expense was flat at $24.0 million. Net income for the period was $4.8 million ($0.82 per fully diluted share compared to $0.77 for the same period last year).

Net Revenue increased 9.1% to $69.2 million for the six months ended June 30, 2016. Free cash flow increased 23.3% to $11.4 million. Station operating expense increased 6.4% to $50.1 million (station operating expense includes depreciation and amortization attributable to the stations). Operating income was $13.7 million. Net income for the six month period was $7.8 million ($1.33 per fully diluted share compared to $1.13 for the same period last year).

Capital expenditures were $1.5 million in the 2nd quarter compared to $1.3 million for the same period last year and $2.6 million for the six month period compared to $2.3 million last year. The Company currently expects to spend approximately $5.0 million to $5.5 million for capital expenditures during 2016.

Saga's 2016 2nd Quarter conference call will be on Thursday, August 4, 2016 at 11:00 a.m. EDT. The dial-in number for the call is (612) 234-9960. 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 August 4, 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 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 and Six Months Ended

June 30, 2016 and 2015

(amounts in 000's except per share data)

(Unaudited)











 Three Months Ended  

 Six Months Ended  




 June 30, 

 June 30, 




2016

2015

2016

2015

Operating Results






Net operating revenue


$         36,438

$        34,358

$         69,183

$         63,419

Station operating expense


25,420

24,311

50,105

47,076

Corporate general and administrative


2,620

2,583

5,337

5,065

Other operating expense


8

14

8

14

Operating income


8,390

7,450

13,733

11,264

Interest expense


189

244

378

485

Other income


-

(409)

-

(417)

Income before income tax expense


8,201

7,615

13,355

11,196

Income tax expense


3,390

3,141

5,520

4,591

Net income


$           4,811

$          4,474

$           7,835

$           6,605








Earnings Per Share







Basic


$             0.82

$           0.77

$             1.34

$             1.14


Diluted


$             0.82

$           0.77

$             1.33

$             1.13








Weighted average common shares


5,754

5,712

5,752

5,711

Weighted average common and common 







equivalent shares


5,763

5,757

5,761

5,759








Free Cash Flow






Net income 


$           4,811

$          4,474

$           7,835

$           6,605

Plus: Depreciation and amortization:







        Station


1,738

1,529

3,405

3,050


        Corporate


69

77

138

145

         Deferred tax provision


915

906

1,490

1,266

         Non-cash compensation


530

365

1,058

827

         Other operating expense 


8

14

8

14

         Other income 


-

(409)

-

(417)

Less: Capital expenditures


(1,540)

(1,304)

(2,550)

(2,254)

Free cash flow


$           6,531

$          5,652

$         11,384

$           9,236













 June 30, 






2016

2015

Balance Sheet Data







Working capital




$         28,790

$         38,173


Net fixed assets




$         57,816

$         53,900


Net intangible assets and other assets




$       110,741

$         93,620


Total assets




$       213,984

$       200,299


Long-term debt (including current




$         36,365

$         36,078


    portion of $1,078 and $0, respectively)







Stockholders' equity




$       129,036

$       120,476


Saga Communications, Inc.

Selected Supplemental Financial Data

For the Three Months Ended

June 30, 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



June 30, 


June 30, 


June 30, 



2016

2015


2016

2015


2016

2015

Consolidated









Net operating revenue

$      36,438

$    34,358


$      34,227

$      33,965


$      36,438

$      36,746

Station operating expense

25,420

24,311


23,952

23,957


25,420

25,968

Corporate general and administrative

2,620

2,583


2,620

2,583


2,620

2,583

Other operating expense

8

14


-

18


8

14

Operating income

8,390

7,450


$        7,655

$        7,407


8,390

8,181

Interest expense

189

244





189

244

Other income

-

(409)





-

(409)

Income before income tax expense

8,201

7,615





8,201

8,346

Income tax expense

3,390

3,141





3,390

3,441

Net income 

$        4,811

$      4,474





$        4,811

$        4,905

Earnings per share:









  Basic

$          0.82

$        0.77





$0.84

$0.86

  Diluted

$          0.82

$        0.77





$0.83

$0.85













Actual


Same Station (1)


Pro Forma (2)



Three Months Ended


Three Months Ended


Three Months Ended



June 30, 


June 30, 


June 30, 



2016

2015


2016

2015


2016

2015

Radio Segment









Net operating revenue

$      30,866

$    29,017


$      28,655

$      28,624


$      30,866

$      31,405

Station operating expense

21,842

20,819


20,374

20,465


21,842

22,476

Other operating expense

8

14


-

18


8

14

Operating income

$        9,016

$      8,184


$        8,281

$        8,141


$        9,016

$        8,915























Actual


Same Station (1)


Pro Forma (2)



Three Months Ended


Three Months Ended


Three Months Ended



June 30, 


June 30, 


June 30, 



2016

2015


2016

2015


2016

2015

Television Segment









Net operating revenue

$        5,572

$      5,341


$        5,572

$        5,341


$        5,572

$        5,341

Station operating expense

3,578

3,492


3,578

3,492


3,578

3,492

Operating income

$        1,994

$      1,849


$        1,994

$        1,849


$        1,994

$        1,849























Actual


Same Station (1)


Pro Forma (2)



Three Months Ended


Three Months Ended


Three Months Ended



June 30, 


June 30, 


June 30, 



2016

2015


2016

2015


2016

2015

Depreciation and amortization










by segment









Radio Segment

$        1,406

$      1,207


$        1,182

$        1,199


$        1,406

$        1,416

Television Segment

332

322


332

322


332

322

Corporate and Other

69

77


69

77


69

77



$        1,807

$      1,606


$        1,583

$        1,598


$        1,807

$        1,815


(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 and 2016 occurred as of January 1, 2015.


Saga Communications, Inc.

Selected Supplemental Financial Data

For the Six Months Ended

June 30, 2016 and 2015

(amounts in 000's except per share data)

(Unaudited)













Actual


Same Station (1)


Pro Forma (2)



Six Months Ended


Six Months Ended


Six Months Ended



June 30, 


June 30, 


June 30, 



2016

2015


2016

2015


2016

2015

Consolidated









Net operating revenue

$      69,183

$      63,419


$      65,235

$      62,956


$      69,183

$      67,761

Station operating expense

50,105

47,076


47,172

46,508


50,120

50,425

Corporate general and administrative

5,337

5,065


5,337

5,065


5,337

5,065

Other operating expense (income), net

8

14


(2)

10


8

14

Operating income

13,733

11,264


$      12,728

$      11,373


13,718

12,257

Interest expense

378

485





378

485

Other income

-

(417)





-

(417)

Income before income tax expense

13,355

11,196





13,340

12,189

Income tax expense

5,520

4,591





5,514

4,998

Net income 

$        7,835

$        6,605





$        7,826

$        7,191

Earnings per share:









  Basic

$          1.34

$          1.14





$1.36

$1.26

  Diluted

$          1.33

$          1.13





$1.36

$1.25













Actual


Same Station (1)


Pro Forma (2)



Six Months Ended


Six Months Ended


Six Months Ended



June 30, 


June 30, 


June 30, 



2016

2015


2016

2015


2016

2015

Radio Segment









Net operating revenue

$      58,330

$      53,293


$      54,382

$      52,830


58,330

57,635

Station operating expense

42,982

40,241


40,049

39,673


42,997

43,590

Other operating expense (income), net

5

14


(5)

10


5

14

Operating income

$      15,343

$      13,038


$      14,338

$      13,147


$      15,328

$      14,031























Actual


Same Station (1)


Pro Forma (2)



Six Months Ended


Six Months Ended


Six Months Ended



June 30, 


June 30, 


June 30, 



2016

2015


2016

2015


2016

2015

Television Segment









Net operating revenue

$      10,853

$      10,126


$      10,853

$      10,126


10,853

10,126

Station operating expense

7,123

6,835


7,123

6,835


7,123

6,835

Other operating expense (income), net

3

-


3

-


3

-

Operating income

$        3,727

$        3,291


$        3,727

$        3,291


$        3,727

$        3,291























Actual


Same Station (1)


Pro Forma (2)



Six Months Ended


Six Months Ended


Six Months Ended



June 30, 


June 30, 


June 30, 



2016

2015


2016

2015


2016

2015

Depreciation and amortization










by segment









Radio Segment

$        2,752

$        2,381


$        2,332

$        2,365


$        2,767

$        2,797

Television Segment

653

669


653

669


653

669

Corporate and Other

138

145


138

145


138

145



$        3,543

$        3,195


$        3,123

$        3,179


$        3,558

$        3,611


(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 and 2016 occurred as of January 1, 2015.

Saga Communications, Inc.

Selected Supplemental Financial Data

June 30, 2016

(amounts in 000's except ratios)

(Unaudited)






































Less:


Plus:




Trailing



12 Mos Ended


6 Mos Ended


6 Mos Ended


Add:


12 Mos Ended



December 31,


June 30,


June 30,


Proforma


June 30,



2015


2015


2016


Acquisitions


2016

Trailing 12 Month Consolidated Earnings Before Interest










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










Net income

$13,414


$6,605


$7,835


$272


$14,916

Exclusions:











Gain (loss) on sale of assets

(541)


(14)


(8)


-


(535)


Gain on insurance claim

417


417


-


-


-


Impairment of intangible assets

(874)


-


-


-


(874)


Write-off of debt issuance costs

(557)


-


-


-


(557)


Other

119


102


215


-


232

Total exclusions

(1,436)


505


207


-


(1,734)

Consolidated adjusted net income (1)

14,850


6,100


7,628


272


16,650

Plus:  Interest expense

888


485


378


-


781


Income tax expense

9,640


4,591


5,520


189


10,758


Depreciation & amortization expense

6,824


3,195


3,543


169


7,341


Amortization of television syndicated programming contracts

637


321


312


-


628


Non-cash stock based compensation expense

1,655


827


1,058


-


1,886

Less: Cash television programming payments

(635)


(319)


(312)


-


(628)

Trailing twelve month consolidated EBITDA (1)

$33,859


15,200


$18,127


630


37,416












Total long-term debt, including current maturities









$36,365

Divided by trailing twelve month consolidated EBITDA (1)









37,416

Leverage ratio









0.97























(1)

As defined in the Company's credit facility.











Saga Communications, Inc.


Selected Financial Data Non-GAAP Disclosures


For the Three Months Ended


June 30, 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




June 30,


Entire Comparable


June 30,


June 30,


Entire Comparable


June 30,




2016


Period


2016


2015


Period


2015


Consolidated













Net operating revenue

$              36,438


$              (2,211)


$              34,227


$              34,358


$                 (393)


$              33,965


Station operating expense

25,420


(1,468)


23,952


24,311


(354)


23,957


Corporate general and administrative

2,620


-


2,620


2,583


-


2,583


Other operating expense

8


(8)


-


14


4


18


Operating income

$                8,390


$                 (735)


$                7,655


$                7,450


$                   (43)


$                7,407
















Depreciation and amortization

$                1,807


$                 (224)


$                1,583


$                1,606


$                     (8)


$                1,598




















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




June 30,


Entire Comparable


June 30,


June 30,


Entire Comparable


June 30,




2016


Period


2016


2015


Period


2015


Radio Segment













Net operating revenue

$              30,866


$              (2,211)


$              28,655


$              29,017


$                 (393)


$              28,624


Station operating expense

21,842


(1,468)


20,374


20,819


(354)


20,465


Other operating expense

8


(8)


-


14


4


18


Operating income

$                9,016


$                 (735)


$                8,281


$                8,184


$                   (43)


$                8,141
















Depreciation and amortization

$                1,406


$                 (224)


$                1,182


$                1,207


$                     (8)


$                1,199




















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




June 30,


Entire Comparable


June 30,


June 30,


Entire Comparable


June 30,




2016


Period


2016


2015


Period


2015


Television Segment













Net operating revenue

$                5,572


$                     -


$                5,572


$                5,341


$                     -


$                5,341


Station operating expense

3,578


-


3,578


3,492


-


3,492


Operating income

$                1,994


$                     -


$                1,994


$                1,849


$                     -


$                1,849
















Depreciation and amortization

$                   332


$                     -


$                   332


$                   322


$                     -


$                   322



Saga Communications, Inc.


Selected Financial Data Non-GAAP Disclosures


For the Six Months Ended


June 30, 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




Six Months


and Dispositions


Six Months


Six Months


and Dispositions


Six Months




Ended


Not Included in 


Ended


Ended


Not Included in 


Ended




June 30,


Entire Comparable


June 30,


June 30,


Entire Comparable


June 30,




2016


Period


2016


2015


Period


2015


Consolidated













Net operating revenue

$              69,183


$              (3,948)


$              65,235


$              63,419


$                 (463)


$              62,956


Station operating expense

50,105


(2,933)


47,172


47,076


(568)


46,508


Corporate general and administrative

5,337


-


5,337


5,065


-


5,065


Other operating expense (income), net

8


(10)


(2)


14


(4)


10


Operating income

$              13,733


$              (1,005)


$              12,728


$              11,264


$                   109


$              11,373
















Depreciation and amortization

$                3,543


$                 (420)


$                3,123


$                3,195


$                   (16)


$                3,179




















Adjustment






Adjustment






Actual


For Acquisitions


Same Station


Actual


For Acquisitions


Same Station




Six Months


and Dispositions


Six Months


Six Months


and Dispositions


Six Months




Ended


Not Included in 


Ended


Ended


Not Included in 


Ended




June 30,


Entire Comparable


June 30,


June 30,


Entire Comparable


June 30,




2016


Period


2016


2015


Period


2015


Radio Segment













Net operating revenue

$              58,330


$              (3,948)


$              54,382


$              53,293


$                 (463)


$              52,830


Station operating expense

42,982


(2,933)


40,049


40,241


(568)


39,673


Other operating expense (income), net

5


(10)


(5)


14


(4)


10


Operating income

$              15,343


$              (1,005)


$              14,338


$              13,038


$                   109


$              13,147
















Depreciation and amortization

$                2,752


$                 (420)


$                2,332


$                2,381


$                   (16)


$                2,365




















Adjustment






Adjustment






Actual


For Acquisitions


Same Station


Actual


For Acquisitions


Same Station




Six Months


and Dispositions


Six Months


Six Months


and Dispositions


Six Months




Ended


Not Included in 


Ended


Ended


Not Included in 


Ended




June 30,


Entire Comparable


June 30,


June 30,


Entire Comparable


June 30,




2016


Period


2016


2015


Period


2015


Television Segment













Net operating revenue

$              10,853


$                     -


$              10,853


$              10,126


$                     -


$              10,126


Station operating expense

7,123


-


7,123


6,835


-


6,835


Other operating expense (income), net

3


-


3


-


-


-


Operating income

$                3,727


$                     -


$                3,727


$                3,291


$                     -


$                3,291
















Depreciation and amortization

$                   653


$                     -


$                   653


$                   669


$                     -


$                   669




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

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