Saga Communications, Inc. (NYSEMKT: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.