Saga Communications, Inc. Announces Variable Dividend Declaration and Reports 4th Quarter and Year End 2023 Results
- None.
- Net revenue decreased by 3.3% to $29.1 million for the quarter ended December 31, 2023.
- Station operating income decreased by 17.2% to $7.1 million for the quarter.
- Operating income was $2.8 million for the quarter compared to $4.9 million for the same quarter last year.
- Net income decreased to $2.5 million for the quarter compared to $4.3 million for the same period last year.
- Net revenue decreased by 1.8% to $112.8 million for the twelve-month period ended December 31, 2023.
- Operating income for the twelve-month period was $11.5 million compared to $13.1 million for the same period last year.
- Station operating income decreased by 15.0% to $27.4 million for the twelve-month period.
- The Company's balance sheet reflects a decrease in cash and short-term investments from $40.2 million as of December 31, 2023, to $30.4 million as of March 4, 2024.
Insights
The declaration of a variable dividend of $0.60 per share by Saga Communications, Inc. is a strategic move that signals the company's commitment to returning value to shareholders despite a decrease in net revenue. The payment, amounting to approximately $3.8 million, is significant as it is funded by cash reserves, indicating a strong liquidity position. This decision may be viewed favorably by investors seeking income, especially considering the cumulative $130 million in dividends paid since 2012. However, the decrease in net revenue and operating income, both quarterly and annually, raises concerns about the company's revenue generation capabilities, particularly in non-political years.
Furthermore, the increase in station operating expenses, both quarterly and annually, without a corresponding rise in revenue, suggests margin compression that could affect future profitability. The disparity in political revenue between the current and previous year also highlights the volatility in the broadcasting industry's revenue streams, which can significantly impact financial performance. Capital expenditure reductions may indicate prudent financial management but could also suggest limited investment in growth or maintenance, which may affect future competitiveness.
Analyzing the financials, the company's net income increased slightly for the twelve-month period compared to the previous year, which could be attributed to cost management or other non-operating income sources. Investors should consider the sustainability of such income in evaluating the company's long-term financial health. The planned acquisition of stations in the Lafayette, IN radio market represents a strategic investment that could potentially enhance market presence and revenue in the future, but it also entails risks associated with integration and market dynamics.
From a market perspective, Saga Communications' performance reflects broader trends in the broadcasting industry, where political advertising can significantly sway financial outcomes. The reported decrease in political revenue aligns with the cyclical nature of political advertising, peaking during election years and ebbing in off-years. The company's ability to increase gross revenue by 1% without political revenue suggests some resilience in its core operations.
The broadcasting industry is facing increasing competition from digital media platforms, which could be a factor in the flat year-over-year gross revenue, excluding political revenue. This competitive landscape necessitates strategic investments in content and technology to retain and grow audiences. Saga's decision to maintain a strong balance sheet while paying dividends is a balancing act between shareholder returns and the need for reinvestment to drive future growth.
Investors should monitor the company's performance in non-political years and the effectiveness of its growth strategies, including acquisitions like the Lafayette stations. The company's leverage ratio and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) are also critical metrics that provide insight into its debt management and operational efficiency, which are particularly relevant for assessing the company's financial stability in a changing media landscape.
The use of non-GAAP financial measures by Saga Communications, such as station operating income and trailing twelve-month consolidated EBITDA, is a common practice in the broadcasting industry to provide additional insight into a company's operational performance. These measures allow for a more focused analysis of core operations by excluding certain items that are not considered indicative of the company's ongoing performance. However, it is essential for stakeholders to understand that these measures do not replace GAAP metrics and should be used in conjunction with GAAP results for a complete financial analysis.
The reliance on non-GAAP measures can sometimes obscure the financial health of a company if not adequately reconciled with GAAP measures, which is why Saga's provision of detailed reconciliations is a positive transparency practice. Stakeholders should review these reconciliations carefully to understand the adjustments made and the rationale behind them. Additionally, the company's forward-looking statements regarding future dividends and stock buybacks suggest confidence in its financial strategy, but they also carry legal disclaimers as actual results may vary based on market and operational conditions.
GROSSE POINTE FARMS, Mich., March 07, 2024 (GLOBE NEWSWIRE) -- Saga Communications, Inc. (Nasdaq - SGA) (the “Company,” “we,” “us,” “our” or “Saga”) announced today that its Board of Directors (“Board”) declared a variable dividend of
The Company also reported that net revenue decreased
Net revenue decreased
The Company will pay a regular quarterly cash dividend of
The Company’s balance sheet reflects
Saga’s 2023 Fourth Quarter and Year-End conference call will be held on Thursday, March 7, 2024 at 11:00 a.m. The dial-in number for the call is (973) 528-0008. Enter conference code 960736. A recording and 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 please email the inquiry by 10:00 a.m. on March 7, 2024 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 directions will be discussed during the call.
Saga utilizes certain financial measures that are not calculated in accordance with generally accepted accounting principles (GAAP) to assess its financial performance. The attached Selected Supplemental Financial Data tables disclose the Company’s reconciliation of non-GAAP measures: GAAP operating income to station operating income, and GAAP net income to trailing twelve-month consolidated EBITDA as well as other financial data. Such non-GAAP measures include same station financial information, station operating income, 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, 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 the non-GAAP financial measures to the most directly comparable GAAP measure are attached in the Selected Supplemental Financial Data tables.
This press release contains certain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that are based upon current expectations and involve certain risks and uncertainties. Words such as “will,” “may,” “believes,” “intends,” “expects,” “anticipates,” “guidance,” and similar expressions are intended to identify forward-looking statements. The material risks facing our business are described in the reports Saga periodically files with the U.S. Securities and Exchange Commission, including, in particular, Item 1A of our Annual Report on Form 10-K. Readers should note that forward-looking statements may be impacted by several factors, including global, national, and local economic changes and changes in the radio broadcast industry in general as well as Saga’s actual performance. Actual results may vary materially from those described herein and Saga undertakes no obligation to update any information contained herein that constitutes a forward-looking statement.
Saga is a media company whose business is devoted to acquiring, developing and operating broadcast properties with a growing focus on opportunities complimentary to our core radio business including digital, e-commerce and non-traditional revenue initiatives. Saga owns or operates broadcast properties in 27 markets, including 79 FM, 33 AM radio stations and 80 metro signals. For additional information, contact us at (313) 886-7070 or visit our website at www.sagacom.com.
Contact:
Samuel D. Bush
(313) 886-7070
| Saga Communications, Inc. Selected Consolidated Financial Data For the Three and Twelve Months Ended December 31, 2023 and 2022 (amounts in 000’s except per share data) (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Operating Results | ||||||||||||||||
| Net operating revenue | $ | 29,145 | $ | 30,125 | $ | 112,773 | $ | 114,893 | ||||||||
| Station operating expense | 23,329 | 22,888 | 90,199 | 87,537 | ||||||||||||
| Corporate general and administrative | 3,026 | 2,330 | 10,966 | 14,300 | ||||||||||||
| Other operating (income) expense, net | (5 | ) | (17 | ) | 120 | (14 | ) | |||||||||
| Operating income | 2,795 | 4,924 | 11,488 | 13,070 | ||||||||||||
| Interest expense | 43 | 34 | 173 | 130 | ||||||||||||
| Interest income | (414 | ) | (223 | ) | (1,441 | ) | (410 | ) | ||||||||
| Other income, net | — | (616 | ) | (119 | ) | (652 | ) | |||||||||
| Income before income tax expense | 3,166 | 5,729 | 12,875 | 14,002 | ||||||||||||
| Income tax provision (benefit) | ||||||||||||||||
| Current | 970 | 1,475 | 2,990 | 3,865 | ||||||||||||
| Deferred (benefit) | (305 | ) | (25 | ) | 385 | 935 | ||||||||||
| 665 | 1,450 | 3,375 | 4,800 | |||||||||||||
| Net income | $ | 2,501 | $ | 4,279 | $ | 9,500 | $ | 9,202 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.37 | $ | 0.70 | $ | 1.52 | $ | 1.52 | ||||||||
| Diluted | $ | 0.37 | $ | 0.70 | $ | 1.52 | $ | 1.52 | ||||||||
| Weighted average common shares | 6,030 | 6,013 | 6,045 | 5,973 | ||||||||||||
| Weighted average common and common equivalent shares | 6,030 | 6,013 | 6,045 | 5,973 | ||||||||||||
| December 31, | ||||||||||||
| 2023 | 2022 | |||||||||||
| Balance Sheet Data | ||||||||||||
| Working capital | $ | 32,615 | $ | 38,482 | ||||||||
| Net fixed assets | $ | 51,405 | $ | 53,198 | ||||||||
| Net intangible assets and other assets | $ | 120,164 | $ | 119,696 | ||||||||
| Total assets | $ | 232,213 | $ | 240,753 | ||||||||
| Long-term debt | $ | — | $ | — | ||||||||
| Stockholders' equity | $ | 170,549 | $ | 178,529 | ||||||||
| Saga Communications, Inc. Selected Consolidated Financial Data For the Twelve Months Ended December 31, 2023 and 2022 (amounts in 000’s except per share data) (Unaudited) | ||||||||
| Years Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| (In thousands) | ||||||||
| Statement of Cash Flows | ||||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 9,500 | $ | 9,202 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 5,055 | 5,171 | ||||||
| Deferred income tax expense | 385 | 935 | ||||||
| Amortization of deferred costs | 36 | 10 | ||||||
| Compensation expense related to restricted stock awards | 1,116 | 1,858 | ||||||
| Loss on sale of assets, net | 120 | (14 | ) | |||||
| (Gain) on insurance claims | — | (534 | ) | |||||
| Other (gain), net | (119 | ) | (118 | ) | ||||
| Barter (revenue) expense, net | 50 | 46 | ||||||
| Deferred and other compensation | (100 | ) | 1,425 | |||||
| Changes in assets and liabilities: | ||||||||
| (Increase) decrease in receivables and prepaid expenses | (1,303 | ) | (1,135 | ) | ||||
| Increase (decrease) in accounts payable, accrued expenses, and other liabilities | 639 | 279 | ||||||
| Total adjustments | 5,879 | 7,923 | ||||||
| Net cash provided by operating activities | 15,379 | 17,125 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchase of short-term investments | (20,728 | ) | (18,000 | ) | ||||
| Redemption of short-term investments | 20,723 | 8,000 | ||||||
| Acquisition of property and equipment (Capital Expenditures) | (4,356 | ) | (5,994 | ) | ||||
| Acquisition of broadcast properties | — | (57 | ) | |||||
| Proceeds from sale and disposal of assets | 1,747 | 411 | ||||||
| Proceeds from insurance claims | — | 534 | ||||||
| Other investing activities | 117 | 116 | ||||||
| Net cash used in investing activities | (2,497 | ) | (14,990 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Cash dividends paid | (19,875 | ) | (19,785 | ) | ||||
| Payments for debt issuance costs | — | (161 | ) | |||||
| Purchase of treasury shares | (227 | ) | (147 | ) | ||||
| Net cash used in financing activities | (20,102 | ) | (20,093 | ) | ||||
| Net decrease in cash and cash equivalents | (7,220 | ) | (17,958 | ) | ||||
| Cash and cash equivalents, beginning of period | 36,802 | 54,760 | ||||||
| Cash and cash equivalents, end of period | $ | 29,582 | $ | 36,802 | ||||
| Saga Communications, Inc. Selected Supplemental Financial Data For the Three and Twelve Months Ended December 31, 2023 and 2022 (amounts in 000’s) (Unaudited) | |||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||
| Reconciliation of GAAP operating income to station operating income (a non-GAAP financial measure) | |||||||||||||||||
| Operating income | $ | 2,795 | $ | 4,924 | $ | 11,488 | $ | 13,070 | |||||||||
| Plus: | |||||||||||||||||
| Corporate general and administrative | 3,026 | 2,330 | 10,966 | 14,300 | |||||||||||||
| Other operating (income) expense, net | (5 | ) | (17 | ) | 120 | (14 | ) | ||||||||||
| Station depreciation and amortization | 1,255 | 1,303 | 4,854 | 4,925 | |||||||||||||
| Station operating income | $ | 7,071 | $ | 8,540 | $ | 27,428 | $ | 32,281 | |||||||||
| Other financial data | |||||||||||||||||
| Depreciation and amortization: | |||||||||||||||||
| Radio Stations | $ | 1,255 | $ | 1,303 | $ | 4,854 | $ | 4,925 | |||||||||
| Corporate | $ | 63 | $ | 34 | $ | 201 | $ | 246 | |||||||||
| Compensation expense related to restricted stock awards | $ | 373 | $ | 132 | $ | 1,116 | (1) | $ | 1,858 | (1) | |||||||
| Other operating (income) expense, net (2) | $ | (5 | ) | $ | (17 | ) | $ | 120 | $ | (14 | ) | ||||||
| Other income, net (2) | $ | - | $ | (616 | ) | $ | (119 | ) | $ | (652 | ) | ||||||
| Deferred income tax expense (benefit) (2) | $ | (305 | ) | $ | (25 | ) | $ | 385 | $ | 935 | |||||||
| Acquisition of property and equipment (Capital Expenditures) | $ | 959 | $ | 1,263 | $ | 4,356 | (1) | $ | 5,994 | (1) | |||||||
(1) As presented in the Statement of Cash Flows in the Selected Consolidated Financial Data tables
(2) As presented in the Operating Results in the Selected Consolidated Financial Data tables
| Saga Communications, Inc. Selected Supplemental Financial Data December 31, 2023 and 2022 (amounts in 000's) (Unaudited) | |||||||
| 12 Months Ended | |||||||
| December 31, | |||||||
| 2023 | 2022 | ||||||
| Reconciliation of GAAP Net Income to trailing 12 Month Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") (a non-GAAP financial measure) (1) | |||||||
| Net income | $ | 9,500 | $ | 9,202 | |||
| Exclusions: | |||||||
| Gain (loss) on sale of assets, net | (120 | ) | 14 | ||||
| Gain on insurance proceeds | — | 534 | |||||
| Other income, net | 1,510 | 482 | |||||
| Total exclusions | 1,390 | 1,030 | |||||
| Consolidated adjusted net income (1) | 8,110 | 8,172 | |||||
| Plus: | |||||||
| Interest expense | 173 | 130 | |||||
| Income tax provision (benefit) | 3,375 | 4,800 | |||||
| Depreciation & amortization expense | 5,055 | 5,171 | |||||
| Non-cash compensation | 1,116 | 1,858 | |||||
| Trailing twelve month consolidated EBITDA (1) | $ | 17,829 | $ | 20,131 | |||
(1) As defined in the Company's credit facility.
FAQ
What is the dividend amount declared by Saga Communications, Inc. (SGA)?
How will the dividend be funded by Saga Communications, Inc. (SGA)?
What was the percentage decrease in net revenue for Saga Communications, Inc. (SGA) for the quarter ended December 31, 2023?
What was the operating income for Saga Communications, Inc. (SGA) for the quarter ended December 31, 2023?
What was the net income for Saga Communications, Inc. (SGA) for the quarter ended December 31, 2023?
How much was the decrease in station operating income for Saga Communications, Inc. (SGA) for the quarter ended December 31, 2023?
What was the percentage decrease in net revenue for Saga Communications, Inc. (SGA) for the twelve-month period ended December 31, 2023?
What was the operating income for Saga Communications, Inc. (SGA) for the twelve-month period ended December 31, 2023?
How much did the Company's balance sheet reflect in cash and short-term investments as of December 31, 2023?
