Saga Communications, Inc. Reports 1st Quarter 2024 Results
Saga Communications, Inc. reported a 2.5% decrease in net revenue to $24.7 million in the first quarter of 2024 compared to the same period last year. Operating loss was $2.4 million, with a decrease in station operating income by 40.9% to $2.8 million. The Company had a net loss of $1.6 million and paid dividends totaling $5.4 million. The balance sheet shows $23.7 million in cash and short-term investments as of May 6, 2024.
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Net revenue decreased by 2.5% compared to the previous year, reflecting a decline in business performance.
The operating loss of $2.4 million in the first quarter of 2024 is a negative financial aspect for the Company and its shareholders.
Station operating income decreased by 40.9% to $2.8 million, indicating a significant decrease in operational profitability.
The net loss of $1.6 million in the first quarter is a negative financial indicator for the Company's performance.
Insights
The financial snapshot provided by Saga Communications, Inc. indicates a somewhat concerning trend for the company's performance in the first quarter of 2024. A 2.5% decrease in net revenue and a 5.9% increase in station operating expense are markers that could suggest operational challenges. Furthermore, the significant swing from an operating income to an operating loss, a stark contrast to the previous year's figures, reflects pressures that may be affecting the broadcasting industry or company-specific issues.
However, the company's commitment to shareholder returns, as evidenced by both regular and variable dividends, could be viewed as a sign of confidence in its long-term stability, despite the short-term setbacks. This approach may resonate with investors who prioritize consistent dividend income. Additionally, the healthy cash position reported could indicate a buffer that allows the company to navigate through the rough patch while continuing its capital return strategy.
Despite this, it's critical for investors to scrutinize the non-cash write-off associated with the sale and abandonment of non-productive assets as it could either be a strategic clean-up of the balance sheet or a sign of deeper underlying asset performance issues. Saga's balance sheet strength and future capital expenditure plans will be key factors that investors should monitor closely.
From a market perspective, Saga Communications' performance may reflect broader trends within the broadcasting industry. The decline in net revenue could be symptomatic of shifting consumer behaviors, increasing competition from digital media platforms and potential advertising market contractions. It is essential to understand how these macroeconomic factors, as well as company-specific strategic decisions, are influencing Saga's financial outcomes.
Additionally, the decrease in station operating income by 40.9% is noteworthy and implies a need for further investigation. Investors should consider whether this is an outlier or a harbinger of prolonged challenges in revenue generation versus expense management for the firm and potentially across the sector.
Investor confidence can be significantly influenced by the company's approach to managing these industry headwinds, its adaptability to a changing media landscape and its ability to maintain profitability and shareholder value amidst those changes.
GROSSE POINTE FARMS, Mich., May 09, 2024 (GLOBE NEWSWIRE) -- Saga Communications, Inc. (Nasdaq - SGA) (the “Company” or “Saga”) today reported that net revenue decreased
The Company paid a quarterly dividend of
The Company’s balance sheet reflects
Saga’s 2024 First Quarter conference call will be held on Thursday, May 9, 2024 at 11:00 a.m. The dial-in number for the call is (973) 528-0008. Enter conference code 690103. 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 May 9, 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 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, 31 AM radio stations and 78 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 Months Ended March 31, 2024 and 2023 (amounts in 000’s except per share data) (Unaudited) | |||||||||
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2024 | 2023 | ||||||||
| Operating Results | |||||||||
| Net operating revenue | $ | 24,664 | $ | 25,304 | |||||
| Station operating expense | 22,981 | 21,703 | |||||||
| Corporate general and administrative | 3,129 | 2,616 | |||||||
| Other operating expense, net | 971 | 80 | |||||||
| Operating (loss) income | (2,417 | ) | 905 | ||||||
| Interest expense | 43 | 43 | |||||||
| Interest income | (303 | ) | (289 | ) | |||||
| Other income, net | — | (119 | ) | ||||||
| Income (loss) before income tax expense | (2,157 | ) | 1,270 | ||||||
| Income tax provision (benefit) | |||||||||
| Current | (515 | ) | 280 | ||||||
| Deferred (benefit) | (65 | ) | 70 | ||||||
| (580 | ) | 350 | |||||||
| Net (loss) income | $ | (1,577 | ) | $ | 920 | ||||
| Earnings (loss) per share: | |||||||||
| Basic | $ | (0.25 | ) | $ | 0.15 | ||||
| Diluted | $ | (0.25 | ) | $ | 0.15 | ||||
| Weighted average common shares | 6,063 | 6,028 | |||||||
| Weighted average common and common equivalent shares | 6,063 | 6,028 | |||||||
| March 31, | ||||||||||||
| 2024 | 2023 | |||||||||||
| Balance Sheet Data | ||||||||||||
| Working capital | $ | 27,216 | $ | 38,334 | ||||||||
| Net fixed assets | $ | 51,230 | $ | 53,313 | ||||||||
| Net intangible assets and other assets | $ | 119,243 | $ | 119,435 | ||||||||
| Total assets | $ | 218,046 | $ | 228,539 | ||||||||
| Long-term debt | $ | — | $ | — | ||||||||
| Stockholders' equity | $ | 164,372 | $ | 178,419 | ||||||||
| Saga Communications, Inc. Selected Consolidated Financial Data For the Three Months Ended March 31, 2024 and 2023 (amounts in 000’s except per share data) (Unaudited) | |||||||||
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2024 | 2023 | ||||||||
| (Unaudited) | |||||||||
| (In thousands) | |||||||||
| Statement of Cash Flows | |||||||||
| Cash flows from operating activities: | |||||||||
| Net (loss) income | $ | (1,577 | ) | $ | 920 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
| Depreciation and amortization | 1,198 | 1,237 | |||||||
| Deferred income tax expense (benefit) | (65 | ) | 70 | ||||||
| Amortization of deferred costs | 9 | 9 | |||||||
| Compensation expense related to restricted stock awards | 453 | 245 | |||||||
| Loss on sale of assets, net | 971 | 80 | |||||||
| Other (gain), net | - | (119 | ) | ||||||
| Barter (revenue) expense, net | 13 | (48 | ) | ||||||
| Deferred and other compensation | (24 | ) | (245 | ) | |||||
| Changes in assets and liabilities: | |||||||||
| Decrease in receivables and prepaid expenses | 2,135 | 2,367 | |||||||
| Increase in accounts payable, accrued expenses, and other liabilities | 690 | 319 | |||||||
| Total adjustments | 5,380 | 3,915 | |||||||
| Net cash provided by operating activities | 3,803 | 4,835 | |||||||
| Cash flows from investing activities: | |||||||||
| Purchase of short-term investments | (4,297 | ) | (2,067 | ) | |||||
| Redemption of short-term investments | 6,432 | 2,067 | |||||||
| Acquisition of property and equipment (Capital Expenditures) | (1,050 | ) | (1,362 | ) | |||||
| Proceeds from sale and disposal of assets | 21 | 616 | |||||||
| Other investing activities | (246 | ) | 117 | ||||||
| Net cash provided by (used in) investing activities | 860 | (629 | ) | ||||||
| Cash flows from financing activities: | |||||||||
| Cash dividends paid | (14,068 | ) | (13,754 | ) | |||||
| Net cash used in financing activities | (14,068 | ) | (13,754 | ) | |||||
| Net decrease in cash and cash equivalents | (9,405 | ) | (9,548 | ) | |||||
| Cash and cash equivalents, beginning of period | 29,582 | 36,802 | |||||||
| Cash and cash equivalents, end of period | $ | 20,177 | $ | 27,254 | |||||
| Saga Communications, Inc. Selected Supplemental Financial Data For the Three Months Ended March 31, 2024 and 2023 (amounts in 000’s) (Unaudited) | |||||||||
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2024 | 2023 | ||||||||
| Reconciliation of GAAP operating income to station operating income (a non-GAAP financial measure) | |||||||||
| Operating (loss) income | $ | (2,417 | ) | $ | 905 | ||||
| Plus: | |||||||||
| Corporate general and administrative | 3,129 | 2,616 | |||||||
| Other operating expense, net | 971 | 80 | |||||||
| Station depreciation and amortization | 1,152 | 1,197 | |||||||
| Station operating income | $ | 2,835 | $ | 4,798 | |||||
| Other financial data | |||||||||
| Depreciation and amortization: | |||||||||
| Radio Stations | $ | 1,152 | $ | 1,197 | |||||
| Corporate | $ | 46 | $ | 40 | |||||
| Compensation expense related to restricted stock awards | $ | 453 | (1) | $ | 245 | (1) | |||
| Other operating expense, net (2) | $ | 971 | $ | 80 | |||||
| Other income, net (2) | $ | - | $ | (119 | ) | ||||
| Deferred income tax expense (benefit) (2) | $ | (65 | ) | $ | 70 | ||||
| Acquisition of property and equipment (Capital Expenditures) | $ | 1,050 | (1) | $ | 1,362 | (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 March 31, 2024 (amounts in 000's) (Unaudited) | ||||||||||||||||
| 12 Months Ended December 31, 2023 | Less: 3 Months Ended March 31, 2023 | Plus: 3 Months Ended March 31, 2024 | Trailing 12 Months Ended March 31, 2024 | |||||||||||||
| 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 (loss) | $ | 9,500 | $ | 920 | $ | (1,577 | ) | $ | 7,003 | |||||||
| Exclusions: | ||||||||||||||||
| Gain (loss) on sale of assets, net | (120 | ) | (80 | ) | (971 | ) | (1,011 | ) | ||||||||
| Other income, net | 1,510 | 456 | 290 | 1,344 | ||||||||||||
| Total exclusions | 1,390 | 376 | (681 | ) | 333 | |||||||||||
| Consolidated adjusted net income (1) | 8,110 | 544 | (896 | ) | 6,670 | |||||||||||
| Plus: | ||||||||||||||||
| Interest expense | 173 | 43 | 43 | 173 | ||||||||||||
| Income tax provision (benefit) | 3,375 | 350 | (580 | ) | 2,445 | |||||||||||
| Depreciation & amortization expense | 5,055 | 1,237 | 1,198 | 5,016 | ||||||||||||
| Non-cash compensation | 1,116 | 245 | 453 | 1,324 | ||||||||||||
| Trailing twelve month consolidated EBITDA (1) | $ | 17,829 | $ | 2,419 | $ | 218 | $ | 15,628 | ||||||||
(1) As defined in the Company's credit facility.
FAQ
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