Toggle SGML Header (+)


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, 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 March 7, 2017, Saga Communications, Inc. issued a press release announcing its financial results for the three and twelve months ended December 31, 2016. The press release, dated March 7, 2017, 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 7, 2017.

 

 

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 7, 2017 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 March 7, 2017.

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

 
Exhibit 99.1
 

Saga Communications, Inc. Reports 4th Quarter and Year End 2016 Results



Net Revenue increased 4.7% for the Quarter and 7.3% for the Year

GROSSE POINTE FARMS, Mich., March 7, 2017 /PRNewswire/ -- Saga Communications, Inc. (NYSE MKT: SGA) today reported net revenue increased 4.7% to $37.3 million for the quarter ended December 31, 2016. Operating Income increased 33.0% to $8.4 million. Station operating expense increased 0.4% to $26.0 million (station operating expense includes depreciation and amortization attributable to the stations). Free cash flow increased 12.1% to $7.6 million. Same Station net revenue increased 2.9% to $36.1 million and same station operating expense was flat at $25.4 million. Net income for the fourth quarter was $4.9 million ($0.84 per fully diluted share compared to $0.63 for the same period last year).

Net Revenue increased 7.3% to $142.6 million for the twelve months ended December 31, 2016. Free cash flow increased 13.5% to $24.5 million. Station operating expense increased 4.4% to $101.5 million (station operating expense includes depreciation and amortization attributable to the stations). Operating income increased 30.7% to $31.5 million. Same Station net revenue increased 3.0% to $134.2 million and same station operating expense increased 0.7% to $95.4 million. Net income for the twelve-month period was $18.2 million ($3.09 per fully diluted share compared to $2.29 for the same period last year).

Capital expenditures were $0.7 million in the fourth quarter compared to $1.1 million for the same period last year and $4.9 million for the twelve-month period compared to $5.5 million last year. The Company expects to spend approximately $5.0 million to $6.0 million for capital expenditures during 2017.

Saga's 2016 4th Quarter and Year End conference call will be on Tuesday, March 7, 2017 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 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 March 7, 2017 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 68 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, 2016 and 2015

(amounts in 000's except per share data)

(Unaudited)











 Three Months Ended  

 Twelve Months Ended  




 December 31, 

 December 31, 




2016

2015

2016

2015

Operating Results






Net operating revenue


$         37,289

$        35,606

$       142,591

$        132,856

Station operating expense


25,978

25,868

101,542

97,268

Corporate general and administrative


2,915

2,449

10,980

10,091

Other operating (income) expense


(8)

94

(1,393)

541

Impairment of intangible assets


-

874

-

874

Operating income


8,404

6,321

31,462

24,082

Interest expense


202

174

776

888

Write-off of debt issuance costs


-

-

-

557

Other income


-

-

-

(417)

Income before income tax expense


8,202

6,147

30,686

23,054

Income tax expense


3,265

2,450

12,500

9,640

Net income


$           4,937

$          3,697

$         18,186

$         13,414








Earnings Per Share







Basic


$             0.84

$           0.63

$             3.10

$             2.31


Diluted


$             0.84

$           0.63

$             3.09

$             2.29








Weighted average common shares


5,785

5,732

5,761

5,706

Weighted average common and common 







equivalent shares


5,797

5,741

5,771

5,740








Free Cash Flow






Net income 


$           4,937

$          3,697

$         18,186

$         13,414

Plus: Depreciation and amortization:







        Station


1,804

1,842

6,942

6,534


        Corporate


114

56

321

290


    Write-off of debt issuance costs


-

-

-

557

         Deferred tax provision


995

910

3,160

3,640

         Non-cash compensation


507

455

2,101

1,655

         Other operating (income) expense 


(8)

94

(1,393)

541

         Impairment of intangible assets


-

874

-

874

         Other income 


-

-

-

(417)

Less: Capital expenditures


(712)

(1,116)

(4,861)

(5,543)

Free cash flow


$           7,637

$          6,812

$         24,456

$         21,545













 December 31, 






2016

2015

Balance Sheet Data







Working capital




$         37,749

$         33,557


Net fixed assets




$         56,562

$         58,131


Net intangible assets and other assets




$       110,664

$         98,545


Total assets




$       221,020

$       204,571


Long-term debt (including current







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




$         36,365

$         36,365


Stockholders' equity




$       134,982

$       122,816

Saga Communications, Inc.

Selected Supplemental Financial Data

For the Three Months Ended

December 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



December 31, 


December 31, 


December 31, 



2016

2015


2016

2015


2016

2015

Consolidated









Net operating revenue

$      37,289

$    35,606


$      36,134

$      35,118


$      37,289

$      36,187

Station operating expense

25,978

25,868


25,378

25,376


25,978

26,369

Corporate general and administrative

2,915

2,449


2,915

2,449


2,915

2,449

Other operating (income) expense

(8)

94


(14)

24


(8)

94

Impairment of intangible assets

-

874


-

874


-

874

Operating income

8,404

6,321


$        7,855

$        6,395


8,404

6,401

Interest expense

202

174





202

174

Write-off of debt issuance costs

-

-





-

-

Other income

-

-





-

-

Income before income tax expense

8,202

6,147





8,202

6,227

Income tax expense

3,265

2,450





3,265

2,483

Net income 

$        4,937

$      3,697





$        4,937

$        3,744

Earnings per share:









  Basic

$          0.84

$        0.63





$          0.84

$          0.64

  Diluted

$          0.84

$        0.63





$          0.84

$          0.64













Actual


Same Station (1)


Pro Forma (2)



Three Months Ended


Three Months Ended


Three Months Ended



December 31, 


December 31, 


December 31, 



2016

2015


2016

2015


2016

2015

Radio Segment









Net operating revenue

$      30,747

$    29,963


$      29,592

$      29,475


$      30,747

$      30,544

Station operating expense

22,042

22,122


21,442

21,630


22,042

22,623

Other operating (income) expense

37

85


31

15


37

85

Impairment of intangible assets

-

874


-

874


-

874

Operating income

$        8,668

$      6,882


$        8,119

$        6,956


$        8,668

$        6,962























Actual


Same Station (1)


Pro Forma (2)



Three Months Ended


Three Months Ended


Three Months Ended



December 31, 


December 31, 


December 31, 



2016

2015


2016

2015


2016

2015

Television Segment









Net operating revenue

$        6,542

$      5,643


$        6,542

$        5,643


$        6,542

$        5,643

Station operating expense

3,936

3,746


3,936

3,746


3,936

3,746

Other operating (income) expense

(45)

(1)


(45)

(1)


(45)

(1)

Impairment of intangible assets

-

-


-

-


-

-

Operating income

$        2,651

$      1,898


$        2,651

$        1,898


$        2,651

$        1,898























Actual


Same Station (1)


Pro Forma (2)



Three Months Ended


Three Months Ended


Three Months Ended



December 31, 


December 31, 


December 31, 



2016

2015


2016

2015


2016

2015

Depreciation and amortization










by segment









Radio Segment

$        1,440

$      1,459


$        1,388

$        1,459


$        1,440

$        1,503

Television Segment

364

383


364

383


364

383

Corporate and Other

114

56


114

56


114

56



$        1,918

$      1,898


$        1,866

$        1,898


$        1,918

$        1,942











(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 Twelve Months Ended

December 31, 2016 and 2015

(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, 



2016

2015


2016

2015


2016

2015

Consolidated









Net operating revenue

$    142,591

$    132,856


$    134,206

$    130,287


$    142,591

$    139,458

Station operating expense

101,542

97,268


95,389

94,726


101,557

102,401

Corporate general and administrative

10,980

10,091


10,980

10,091


10,980

10,091

Other operating (income) expense

(1,393)

541


(1,410)

65


(1,393)

541

Impairment of intangible assets

-

874


-

874


-

874

Operating income

31,462

24,082


$      29,247

$      24,531


31,447

25,551

Interest expense

776

888





776

888

Write-off of debt issuance costs

-

557





-

557

Other income

-

(417)





-

(417)

Income before income tax expense

30,686

23,054





30,671

24,523

Income tax expense

12,500

9,640





12,494

10,242

Net income 

$      18,186

$      13,414





$      18,177

$      14,281

Earnings per share:









  Basic

$          3.10

$          2.31





$          3.10

$          2.46

  Diluted

$          3.09

$          2.29





$          3.09

$          2.44













Actual


Same Station (1)


Pro Forma (2)



Twelve Months Ended


Twelve Months Ended


Twelve Months Ended



December 31, 


December 31, 


December 31, 



2016

2015


2016

2015


2016

2015

Radio Segment









Net operating revenue

$    118,955

$    111,792


$    110,570

$    109,223


118,955

118,394

Station operating expense

86,799

83,188


80,646

80,646


86,814

88,321

Other operating (income) expense

(1,351)

499


(1,368)

23


(1,351)

499

Impairment of intangible assets

-

874


-

874


-

874

Operating income

$      33,507

$      27,231


$      31,292

$      27,680


$      33,492

$      28,700























Actual


Same Station (1)


Pro Forma (2)



Twelve Months Ended


Twelve Months Ended


Twelve Months Ended



December 31, 


December 31, 


December 31, 



2016

2015


2016

2015


2016

2015

Television Segment









Net operating revenue

$      23,636

$      21,064


$      23,636

$      21,064


23,636

21,064

Station operating expense

14,743

14,080


14,743

14,080


14,743

14,080

Other operating (income) expense

(42)

32


(42)

32


(42)

32

Impairment of intangible assets

-

-


-

-


-

-

Operating income

$        8,935

$        6,952


$        8,935

$        6,952


$        8,935

$        6,952























Actual


Same Station (1)


Pro Forma (2)



Twelve Months Ended


Twelve Months Ended


Twelve Months Ended



December 31, 


December 31, 


December 31, 



2016

2015


2016

2015


2016

2015

Depreciation and amortization










by segment









Radio Segment

$        5,555

$        5,135


$        4,663

$        4,844


$        5,570

$        5,705

Television Segment

1,387

1,399


1,387

1,399


1,387

1,399

Corporate and Other

321

290


321

290


321

290



$        7,263

$        6,824


$        6,371

$        6,533


$        7,278

$        7,394











(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

December 31, 2016

(amounts in 000's except ratios)

(Unaudited)


































Trailing



Twelve Months Ended


Add:


Twelve Months Ended



December 31,


Proforma


December 31,



2016


Acquisitions


2016


2015

Trailing 12 Month Consolidated Earnings Before Interest,








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








Net income

$                         18,186


$                       (9)


$           18,177


$          14,384

Exclusions:









Gain (loss) on sale of assets

1,393


-


1,393


(541)


Gain on insurance claim

-


-


-


417


Impairment of intangible assets

-


-


-


(874)


Write-off of debt issuance costs

-


-


-


(557)


Other

298


-


298


119

Total exclusions

1,691


-


1,691


(1,436)

Consolidated adjusted net income (1)

16,495


(9)


16,486


15,820

Plus:  Interest expense

776


-


776


888


Income tax expense

12,500


(6)


12,494


10,314


Depreciation & amortization expense

7,263


15


7,278


7,219


Amortization of television syndicated programming contracts

628


-


628


637


Non-cash stock based compensation expense

2,101


-


2,101


1,655

Less: Cash television programming payments

(625)


-


(625)


(635)

Trailing twelve month consolidated EBITDA (1)

$                         39,138


$                       -


$           39,138


$          35,898










Total long-term debt, including current maturities





$           36,365


$          36,365

Divided by trailing twelve month consolidated EBITDA (1)





39,138


35,898

Leverage ratio (1)





0.9


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

December 31, 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




December 31,


Entire Comparable


December 31,


December 31,


Entire Comparable


December 31,




2016


Period


2016


2015


Period


2015


Consolidated













Net operating revenue

$              37,289


$              (1,155)


$              36,134


$              35,606


$                 (488)


$              35,118


Station operating expense

25,978


(600)


25,378


25,868


(492)


25,376


Corporate general and administrative

2,915


-


2,915


2,449


-


2,449


Other operating (income) expense

(8)


(6)


(14)


94


(70)


24


Impairment of intangible assets

-


-


-


874


-


874


Operating income

$                8,404


$                 (549)


$                7,855


$                6,321


$                    74


$                6,395
















Depreciation and amortization

$                1,918


$                   (52)


$                1,866


$                1,898


$                     -


$                1,898




















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,




2016


Period


2016


2015


Period


2015


Radio Segment













Net operating revenue

$              30,747


$              (1,155)


$              29,592


$              29,963


$                 (488)


$              29,475


Station operating expense

22,042


(600)


21,442


22,122


(492)


21,630


Other operating (income) expense

37


(6)


31


85


(70)


15


Impairment of intangible assets

-


-


-


874


-


874


Operating income

$                8,668


$                 (549)


$                8,119


$                6,882


$                    74


$                6,956
















Depreciation and amortization

$                1,440


$                   (52)


$                1,388


$                1,459


$                     -


$                1,459




















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,




2016


Period


2016


2015


Period


2015


Television Segment













Net operating revenue

$                6,542


$                     -


$                6,542


$                5,643


$                     -


$                5,643


Station operating expense

3,936


-


3,936


3,746


-


3,746


Other operating (income) expense

(45)


-


(45)


(1)


-


(1)


Impairment of intangible assets

-


-


-


-


-


-


Operating income

$                2,651


$                     -


$                2,651


$                1,898


$                     -


$                1,898
















Depreciation and amortization

$                   364


$                     -


$                   364


$                   383


$                     -


$                   383


Saga Communications, Inc.

Selected Financial Data Non-GAAP Disclosures

For the Twelve Months Ended

December 31, 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




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,




2016


Period


2016


2015


Period


2015


Consolidated













Net operating revenue

$            142,591


$              (8,385)


$            134,206


$            132,856


$              (2,569)


$            130,287


Station operating expense

101,542


(6,153)


95,389


97,268


(2,542)


94,726


Corporate general and administrative

10,980


-


10,980


10,091


-


10,091


Other operating (income) expense

(1,393)


(17)


(1,410)


541


(476)


65


Impairment of intangible assets

-


-


-


874


-


874


Operating income

$              31,462


$              (2,215)


$              29,247


$              24,082


$                  449


$              24,531
















Depreciation and amortization

$                7,263


$                 (892)


$                6,371


$                6,824


$                 (291)


$                6,533




















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,




2016


Period


2016


2015


Period


2015


Radio Segment













Net operating revenue

$            118,955


$              (8,385)


$            110,570


$            111,792


$              (2,569)


$            109,223


Station operating expense

86,799


(6,153)


80,646


83,188


(2,542)


80,646


Other operating (income) expense

(1,351)


(17)


(1,368)


499


(476)


23


Impairment of intangible assets

-


-


-


874


-


874


Operating income

$              33,507


$              (2,215)


$              31,292


$              27,231


$                  449


$              27,680
















Depreciation and amortization

$                5,555


$                 (892)


$                4,663


$                5,135


$                 (291)


$                4,844




















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,




2016


Period


2016


2015


Period


2015


Television Segment













Net operating revenue

$              23,636


$                     -


$              23,636


$              21,064


$                     -


$              21,064


Station operating expense

14,743


-


14,743


14,080


-


14,080


Other operating (income) expense

(42)


-


(42)


32


-


32


Impairment of intangible assets

-


-


-


-


-


-


Operating income

$                8,935


$                     -


$                8,935


$                6,952


$                     -


$                6,952
















Depreciation and amortization

$                1,387


$                     -


$                1,387


$                1,399


$                     -


$                1,399




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

(Back To Top)