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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): September 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:

 

¨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 November 8, 2016, Saga Communications, Inc. issued a press release announcing its financial results for the three and nine months ended September 30, 2016. The press release, dated November 8, 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 November 8, 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: November 8, 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 November 8, 2016.

 

 

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

Saga Communications, Inc. Reports 3rd Quarter 2016 Results



Net Revenue increased 6.8%

GROSSE POINTE FARMS, Mich., Nov. 8, 2016 /PRNewswire/ -- Saga Communications, Inc. (NYSE MKT: SGA) today reported net revenue increased 6.8% to $36.1 million for the quarter ended September 30, 2016. Operating Income increased 43.5% to $9.3 million. Station operating expense increased 4.7% to $25.5 million (station operating expense includes depreciation and amortization attributable to the stations). Free cash flow was flat at $5.4 million. Same Station net revenue increased 2.2% to $33.9 million and same station operating expense was flat at $23.9 million. Net income for the period was $5.4 million ($0.92 per fully diluted share compared to $0.53 for the same period last year).

Net Revenue increased 8.3% to $105.3 million for the nine months ended September 30, 2016. Free cash flow increased 14.2% to $16.8 million. Station operating expense increased 5.8% to $75.6 million (station operating expense includes depreciation and amortization attributable to the stations). Operating income increased 29.8% to $23.1 million. Net income for the six-month period was $13.3 million ($2.26 per fully diluted share compared to $1.67 for the same period last year).

Capital expenditures were $1.6 million in the 3rd quarter compared to $2.2 million for the same period last year and $4.2 million for the nine-month period compared to $4.4 million last year. The Company expects to spend approximately $5.0 million to $5.5 million for capital expenditures during 2016.

Saga's 2016 3rd Quarter conference call will be on Tuesday, November 8, 2016 at 11:00 a.m. EST. The dial-in number for the call is (612) 234-9959. 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. EST on November 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", "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 Nine Months Ended

September 30, 2016 and 2015

(amounts in 000's except per share data)

(Unaudited)











 Three Months Ended  

 Nine Months Ended  




 September 30, 

 September 30, 




2016

2015

2016

2015

Operating Results






Net operating revenue


$         36,119

$        33,831

$       105,302

$         97,250

Station operating expense


25,459

24,324

75,564

71,400

Corporate general and administrative


2,728

2,577

8,065

7,642

Other operating (income) expense


(1,393)

433

(1,385)

447

Operating income


9,325

6,497

23,058

17,761

Interest expense


196

229

574

714

Write-off of debt issuance costs


-

557

-

557

Other income


-

-

-

(417)

Income before income tax expense


9,129

5,711

22,484

16,907

Income tax expense


3,715

2,599

9,235

7,190

Net income


$           5,414

$          3,112

$         13,249

$           9,717








Earnings Per Share







Basic


$             0.92

$           0.54

$             2.26

$             1.68


Diluted


$             0.92

$           0.53

$             2.26

$             1.67








Weighted average common shares


5,755

5,724

5,753

5,708

Weighted average common and common 







equivalent shares


5,764

5,752

5,762

5,749








Free Cash Flow






Net income 


$           5,414

$          3,112

$         13,249

$           9,717

Plus: Depreciation and amortization:







        Station


1,733

1,642

5,138

4,692


        Corporate


69

89

207

234


    Write-off of debt issuance costs


-

557

-

557

         Deferred tax provision


675

1,464

2,165

2,730

         Non-cash compensation


536

373

1,594

1,200

         Other operating (income) expense 


(1,393)

433

(1,385)

447

         Other income 


-

-

-

(417)

Less: Capital expenditures


(1,599)

(2,173)

(4,149)

(4,427)

Free cash flow


$           5,435

$          5,497

$         16,819

$         14,733













 September 30, 






2016

2015

Balance Sheet Data







Working capital




$         34,012

$         29,910


Net fixed assets




$         57,627

$         58,997


Net intangible assets and other assets




$       110,847

$         98,780


Total assets




$       217,803

$       204,162


Long-term debt (including current







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




$         36,365

$          36,365


Stockholders' equity




$       133,223

$        121,884








Saga Communications, Inc.

Selected Supplemental Financial Data

For the Three Months Ended

September 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



September 30, 


September 30, 


September 30, 



2016

2015


2016

2015


2016

2015

Consolidated









Net operating revenue

$      36,119

$    33,831


$      33,848

$      33,134


$      36,119

$      35,510

Station operating expense

25,459

24,324


23,878

23,760


25,459

25,607

Corporate general and administrative

2,728

2,577


2,728

2,577


2,728

2,577

Other operating (income) expense

(1,393)

433


(1,393)

31


(1,393)

433

Operating income

9,325

6,497


8,635

6,766


9,325

6,893

Interest expense

196

229





196

229

Write-off of debt issuance costs

-

557





-

557

Income before income tax expense

9,129

5,711





9,129

6,107

Income tax expense

3,715

2,599





3,715

2,761

Net income 

$        5,414

$      3,112





$        5,414

$        3,346

Earnings per share:









  Basic

$          0.92

$        0.54





$          0.92

$          0.58

  Diluted

$          0.92

$        0.53





$          0.92

$          0.57













Actual


Same Station (1)


Pro Forma (2)



Three Months Ended


Three Months Ended


Three Months Ended



September 30, 


September 30, 


September 30, 



2016

2015


2016

2015


2016

2015

Radio Segment









Net operating revenue

$      29,878

$    28,536


$      27,607

$      27,839


$      29,878

$      30,215

Station operating expense

21,775

20,825


20,194

20,261


21,775

22,108

Other operating (income) expense

(1,393)

400


(1,393)

(2)


(1,393)

400

Operating income

$        9,496

$      7,311


$        8,806

$        7,580


$        9,496

$        7,707























Actual


Same Station (1)


Pro Forma (2)



Three Months Ended


Three Months Ended


Three Months Ended



September 30, 


September 30, 


September 30, 



2016

2015


2016

2015


2016

2015

Television Segment









Net operating revenue

$        6,241

$      5,295


$        6,241

$        5,295


$        6,241

$        5,295

Station operating expense

3,684

3,499


3,684

3,499


3,684

3,499

Other operating (income) expense

-

33


-

33


-

33

Operating income

$        2,557

$      1,763


$        2,557

$        1,763


$        2,557

$        1,763























Actual


Same Station (1)


Pro Forma (2)



Three Months Ended


Three Months Ended


Three Months Ended



September 30, 


September 30, 


September 30, 



2016

2015


2016

2015


2016

2015

Depreciation and amortization










by segment









Radio Segment

$        1,363

$      1,295


$        1,139

$        1,200


$        1,363

$        1,405

Television Segment

370

347


370

347


370

347

Corporate and Other

69

89


69

89


69

89



$        1,802

$      1,731


$        1,578

$        1,636


$        1,802

$        1,841











(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 Nine Months Ended

September 30, 2016 and 2015

(amounts in 000's except per share data)

(Unaudited)













Actual


Same Station (1)


Pro Forma (2)



Nine Months Ended


Nine Months Ended


Nine Months Ended



September 30, 


September 30, 


September 30, 



2016

2015


2016

2015


2016

2015

Consolidated









Net operating revenue

$    105,302

$      97,250


$      99,083

$      96,090


$    105,302

$    103,271

Station operating expense

75,564

71,400


71,050

70,268


75,579

76,032

Corporate general and administrative

8,065

7,642


8,065

7,642


8,065

7,642

Other operating (income) expense

(1,385)

447


(1,395)

41


(1,385)

447

Operating income

23,058

17,761


21,363

18,139


23,043

19,150

Interest expense

574

714





574

714

Write-off of debt issuance costs

-

557





-

557

Other income

-

(417)





-

(417)

Income before income tax expense

22,484

16,907





22,469

18,296

Income tax expense

9,235

7,190





9,229

7,759

Net income 

$      13,249

$        9,717





$      13,240

$      10,537

Earnings per share:









  Basic

$          2.26

$          1.68





$2.26

$1.82

  Diluted

$          2.26

$          1.67





$2.26

$1.81













Actual


Same Station (1)


Pro Forma (2)



Nine Months Ended


Nine Months Ended


Nine Months Ended



September 30, 


September 30, 


September 30, 



2016

2015


2016

2015


2016

2015

Radio Segment









Net operating revenue

$      88,208

$      81,829


$      81,989

$      80,669


88,208

87,850

Station operating expense

64,757

61,066


60,243

59,934


64,772

65,698

Other operating (income) expense

(1,388)

414


(1,398)

8


(1,388)

414

Operating income

$      24,839

$      20,349


$      23,144

$      20,727


$      24,824

$      21,738























Actual


Same Station (1)


Pro Forma (2)



Nine Months Ended


Nine Months Ended


Nine Months Ended



September 30, 


September 30, 


September 30, 



2016

2015


2016

2015


2016

2015

Television Segment









Net operating revenue

$      17,094

$      15,421


$      17,094

$      15,421


17,094

15,421

Station operating expense

10,807

10,334


10,807

10,334


10,807

10,334

Other operating (income) expense

3

33


3

33


3

33

Operating income

$        6,284

$        5,054


$        6,284

$        5,054


$        6,284

$        5,054























Actual


Same Station (1)


Pro Forma (2)



Nine Months Ended


Nine Months Ended


Nine Months Ended



September 30, 


September 30, 


September 30, 



2016

2015


2016

2015


2016

2015

Depreciation and amortization










by segment









Radio Segment

$        4,115

$        3,676


$        3,471

$        3,565


$        4,130

$        4,202

Television Segment

1,023

1,016


1,023

1,016


1,023

1,016

Corporate and Other

207

234


207

234


207

234



$        5,345

$        4,926


$        4,701

$        4,815


$        5,360

$        5,452











(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

September 30, 2016

(amounts in 000's except ratios)

(Unaudited)






































Less:


Plus:




Trailing



12 Mos Ended


9 Mos Ended


9 Mos Ended


Add:


12 Mos Ended



December 31,


September 30,


September 30,


Proforma


September 30,



2015


2015


2016


Acquisitions


2016

Trailing 12 Month Consolidated Earnings Before Interest,










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










Net income

$                  13,414


$                  9,717


$                 13,249


$                       38


$                  16,984

Exclusions:











Gain (loss) on sale of assets

(541)


(447)


1,385


-


1,291


Gain on insurance claim

417


417


-


-


-


Impairment of intangible assets

(874)


-


-


-


(874)


Write-off of debt issuance costs

(557)


(557)


-


-


-


Other

119


147


236


-


208

Total exclusions

(1,436)


(440)


1,621


-


625

Consolidated adjusted net income (1)

14,850


10,157


11,628


38


16,359

Plus:  Interest expense

888


714


574


-


748


Income tax expense

9,640


7,190


9,235


27


11,712


Depreciation & amortization expense

6,824


4,926


5,345


59


7,302


Amortization of television syndicated programming contracts

637


479


467


-


625


Non-cash stock based compensation expense

1,655


1,200


1,594


-


2,049

Less: Cash television programming payments

(635)


(476)


(466)


-


(625)

Trailing twelve month consolidated EBITDA (1)

$                  33,859


$                 24,190


$                 28,377


$                     124


$                  38,170












Total long-term debt, including current maturities









$                  36,365

Divided by trailing twelve month consolidated EBITDA (1)









38,170

Leverage ratio









0.95























(1)

As defined in the Company's credit facility.























Saga Communications, Inc.



Selected Financial Data Non-GAAP Disclosures



For the Three Months Ended



September 30, 2016 and 2015



(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





September 30,


Entire Comparable


September 30,


September 30,


Entire Comparable


September 30,





2016


Period


2016


2015


Period


2015



Consolidated














Net operating revenue

$              36,119


$              (2,271)


$              33,848


$              33,831


$                 (697)


$              33,134



Station operating expense

25,459


(1,581)


23,878


24,324


(564)


23,760



Corporate general and administrative

2,728


-


2,728


2,577


-


2,577



Other operating (income) expense

(1,393)


-


(1,393)


433


(402)


31



Operating income

$                9,325


$                 (690)


$                8,635


$                6,497


$                  269


$                6,766


















Depreciation and amortization

$                1,802


$                 (224)


$                1,578


$                1,731


$                   (95)


$                1,636






















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





September 30,


Entire Comparable


September 30,


September 30,


Entire Comparable


September 30,





2016


Period


2016


2015


Period


2015



Radio Segment














Net operating revenue

$              29,878


$              (2,271)


$              27,607


$              28,536


$                 (697)


$              27,839



Station operating expense

21,775


(1,581)


20,194


20,825


(564)


20,261



Other operating (income) expense

(1,393)


-


(1,393)


400


(402)


(2)



Operating income

$                9,496


$                 (690)


$                8,806


$                7,311


$                  269


$                7,580


















Depreciation and amortization

$                1,363


$                 (224)


$                1,139


$                1,295


$                   (95)


$                1,200






















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





September 30,


Entire Comparable


September 30,


September 30,


Entire Comparable


September 30,





2016


Period


2016


2015


Period


2015



Television Segment














Net operating revenue

$                6,241


$                     -


$                6,241


$                5,295


$                     -


$                5,295



Station operating expense

3,684


-


3,684


3,499


-


3,499



Other operating (income) expense

-


-


-


33


-


33



Operating income

$                2,557


$                     -


$                2,557


$                1,763


$                     -


$                1,763


















Depreciation and amortization

$                   370


$                     -


$                   370


$                   347


$                     -


$                   347


















Saga Communications, Inc.


Selected Financial Data Non-GAAP Disclosures


For the Nine Months Ended


September 30, 2016 and 2015


(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




Nine Months


and Dispositions


Nine Months


Nine Months


and Dispositions


Nine Months




Ended


Not Included in 


Ended


Ended


Not Included in 


Ended




September 30,


Entire Comparable


September 30,


September 30,


Entire Comparable


September 30,




2016


Period


2016


2015


Period


2015


Consolidated













Net operating revenue

$            105,302


$              (6,219)


$              99,083


$              97,250


$              (1,160)


$              96,090


Station operating expense

75,564


(4,514)


71,050


71,400


(1,132)


70,268


Corporate general and administrative

8,065


-


8,065


7,642


-


7,642


Other operating (income) expense

(1,385)


(10)


(1,395)


447


(406)


41


Operating income

$              23,058


$              (1,695)


$              21,363


$              17,761


$                  378


$              18,139
















Depreciation and amortization

$                5,345


$                 (644)


$                4,701


$                4,926


$                 (111)


$                4,815




















Adjustment






Adjustment






Actual


For Acquisitions


Same Station


Actual


For Acquisitions


Same Station




Nine Months


and Dispositions


Nine Months


Nine Months


and Dispositions


Nine Months




Ended


Not Included in 


Ended


Ended


Not Included in 


Ended




September 30,


Entire Comparable


September 30,


September 30,


Entire Comparable


September 30,




2016


Period


2016


2015


Period


2015


Radio Segment













Net operating revenue

$              88,208


$              (6,219)


$              81,989


$              81,829


$              (1,160)


$              80,669


Station operating expense

64,757


(4,514)


60,243


61,066


(1,132)


59,934


Other operating (income) expense

(1,388)


(10)


(1,398)


414


(406)


8


Operating income

$              24,839


$              (1,695)


$              23,144


$              20,349


$                  378


$              20,727
















Depreciation and amortization

$                4,115


$                 (644)


$                3,471


$                3,676


$                 (111)


$                3,565




















Adjustment






Adjustment






Actual


For Acquisitions


Same Station


Actual


For Acquisitions


Same Station




Nine Months


and Dispositions


Nine Months


Nine Months


and Dispositions


Nine Months




Ended


Not Included in 


Ended


Ended


Not Included in 


Ended




September 30,


Entire Comparable


September 30,


September 30,


Entire Comparable


September 30,




2016


Period


2016


2015


Period


2015


Television Segment













Net operating revenue

$              17,094


$                     -


$              17,094


$              15,421


$                     -


$              15,421


Station operating expense

10,807


-


10,807


10,334


-


10,334


Other operating (income) expense

3


-


3


33


-


33


Operating income

$                6,284


$                     -


$                6,284


$                5,054


$                     -


$                5,054
















Depreciation and amortization

$                1,023


$                     -


$                1,023


$                1,016


$                     -


$                1,016


















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

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