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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): November 4, 2021

SAGA COMMUNICATIONS, INC.

(Exact Name of Registrant as Specified in its Charter)

Florida

 

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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.01 per share

SGA

NASDAQ Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 2.02.Results of Operations and Financial Condition.

On November 4, 2021, Saga Communications, Inc. issued a press release announcing its financial results for the three and nine months ended September 30, 2021. The press release, dated November 4, 2021, is attached as Exhibit 99.1 to this Form 8-K.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.Financial Statements and Exhibits.

(d)

Exhibits.

99.1

Press Release dated November 4, 2021.

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

INDEX OF EXHIBITS

Exhibit No.

Description

99.1

Press Release dated November 4, 2021.

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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.

ugust

 

SAGA COMMUNICATIONS, INC.

 

 

 

 

 

 

 

 

 

Dated: November 4, 2021

By:

/s/ Samuel D. Bush

 

 

 

Samuel D. Bush

 

 

 

Senior Vice President and Chief

 

 

 

Financial Officer

 

Exhibit 99.1

Graphic

Saga Communications, Inc.

Reports 3rd Quarter 2021 Results

Net Revenue Increases 19.5% for the Quarter

Contact:

Samuel D. Bush

(313) 886-7070

Grosse Pointe Farms, MI – November 4, 2021 – Saga Communications, Inc. (Nasdaq - SGA) reported today that net revenue was $28.8 million for the quarter ended September 30, 2021 compared to $24.1 million for the same period last year. Station operating expense increased $2.1 million to $21.7 million for the quarter compared to the same period last year. Station operating income was $8.5 million for the quarter compared to $6.1 million for the third quarter last year. Free cash flow was $4.0 million for the quarter compared to $2.8 million for the same period last year. Operating income was $4.6 million for the quarter compared to $247 thousand for the same period last year. Net income was $3.5 million for the quarter. Diluted earnings per share were $0.58 in the third quarter of 2021.

Net revenue was $79.2 million for the nine-months ended September 30, 2021 compared to $67.1 million for the same period last year. Station operating expense increased $1.2 million to $61.6 million for the nine-month period compared to the same period last year. Station operating income was $21.7 million for the period compared to $11.4 million for the same period last year. Free cash flow was $9.9 million for the nine-month period compared to $2.5 million for the same period last year. Operating income was $10.1 million for the period ended September 30, 2021 compared to a loss of $6.2 million for the same period last year. Net income was $7.5 million for the period. Diluted earnings per share were $1.25 for the nine-month period.

The Company paid a quarterly dividend of $0.16 per share on October 22, 2021. The aggregate amount of the quarterly dividend was approximately $960 thousand. The Company has now paid over $73 million in dividends to shareholders since the first special dividend was paid in 2012.

The Company’s balance sheet reflects $62.2 million in cash on hand as of September 30, 2021 and $53.5 million as of November 1, 2021. The Company paid off the remaining balance of $10 million in bank debt on October 27, 2021.

Capital expenditures in the third quarter of 2021 were $1.2 million compared to $501 thousand for the quarter ended September 30, 2020 and $2.7 million for the nine-month period ended September 30, 2021 versus $1.9 million for the same period last year. The Company expects to spend approximately $4.0 – 4.5 million for capital expenditures during 2021.

Saga’s 2021 3rd Quarter conference call will be on Thursday November 4, 2021 at 1:00 p.m. EDT. The dial-in number for the call is (973) 528-0008. Enter conference code 918406. 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 11:00 a.m. EDT on November 4, 2021 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 the Company’s trailing twelve-month consolidated EBITDA and a reconciliation of operating income to station operating income.


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, 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 Consolidated Financial Data and 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,” “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 national and local economic changes and changes in the radio broadcast industry in general, and the ongoing economic impact of the COVID-19 pandemic 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 broadcasting company whose business is devoted to acquiring, developing and operating broadcast properties. Saga owns or operates broadcast properties in 27 markets, including 79 FM radio stations, 34 AM radio stations and 79 metro signals. 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, 2021 and 2020

(amounts in 000’s except per share data)

(Unaudited)

Three Months Ended

 

Nine Months Ended

September 30, 

 

September 30, 

    

2021

    

2020

    

2021

    

2020

Operating Results

Net operating revenue

$

28,845

    

$

24,143

  

$

79,192

$

67,060

Station operating expenses

 

21,690

    

19,616

  

 

61,630

 

60,467

Corporate general and administrative

 

2,538

    

2,838

  

 

7,470

 

8,923

Other operating expense (income), net

(2)

    

50

(25)

(1,234)

Impairment of broadcast licenses

 

 

1,392

  

 

 

5,149

Operating income (loss)

 

4,619

 

247

  

 

10,117

 

(6,245)

Interest expense

 

73

    

75

  

 

218

 

265

Interest income

 

(4)

    

(8)

  

 

(14)

 

(141)

Other income, net

(279)

    

(582)

(213)

Income (loss) before income tax expense (benefit)

 

4,829

 

180

  

 

10,495

 

(6,156)

Income tax expense (benefit)

 

1,375

    

1,130

  

 

3,030

 

(1,975)

Net income (loss)

$

3,454

$

(950)

  

$

7,465

$

(4,181)

  

Earnings (loss) per share:

  

Basic

$

0.58

$

(0.16)

  

$

1.25

$

(0.70)

Diluted

$

0.58

$

(0.16)

  

$

1.25

$

(0.70)

  

Weighted average common shares

 

5,917

 

5,869

  

 

5,916

 

5,867

Weighted average common and common equivalent shares

 

5,917

 

5,869

  

 

5,916

 

5,867

Free Cash Flow

Net income (loss)

$

3,454

$

(950)

$

7,465

$

(4,181)

Plus: Depreciation and amortization:

Radio Stations

 

1,391

 

1,556

 

4,093

 

4,769

Corporate

 

69

 

75

 

208

 

224

Deferred tax provision (benefit)

 

210

 

575

 

410

 

(1,925)

Non-cash compensation

 

348

 

618

 

1,048

 

1,799

Other operating (income) expense, net

 

(2)

 

50

 

(25)

 

(1,234)

Other income, net

 

(279)

 

 

(582)

 

(213)

Impairment of intangible assets

1,392

5,149

Less: Capital expenditures

 

(1,232)

 

(501)

 

(2,687)

 

(1,880)

Free cash flow

$

3,959

$

2,815

$

9,930

$

2,508

 

September 30, 

    

 

2021

    

2020

Balance Sheet Data

 

  

  

Working capital

$

55,707

$

51,790

Net fixed assets

$

53,451

$

55,877

Net intangible assets and other assets

$

119,593

$

120,835

Total assets

$

255,114

$

243,164

Long-term debt, including $10,000 and $0 of current debt, respectively

$

10,000

$

10,000

Stockholders' equity

$

197,364

$

188,239


Saga Communications, Inc.

Selected Supplemental Financial Data

September 30, 2021

(amounts in 000's except ratios)

(Unaudited)

    

    

Less:

    

Plus:

    

Trailing

 

12 Months Ended

Nine Months Ended

Nine Months Ended

12 Months Ended

 

December 31, 

September 30, 

September 30, 

September 30, 

 

2020

2020

2021

2021

 

Trailing 12 Month Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") (1) and Leverage Ratio

 

  

 

  

 

  

 

  

Net income (loss)

$

(1,913)

$

(4,181)

$

7,465

$

9,733

Exclusions:

 

  

 

  

 

  

 

  

Gain on sale of assets

 

1,247

 

1,234

 

25

 

38

Gain on insurance proceeds

 

233

 

213

 

567

 

587

Other gains

15

15

Interest income

 

148

 

141

 

14

 

21

Impairment of intangible assets

(5,149)

(5,149)

Other

 

133

 

119

 

87

 

101

Total exclusions

 

(3,388)

 

(3,442)

 

708

 

762

Consolidated adjusted net income (loss) (1)

 

1,475

 

(739)

 

6,757

 

8,971

Plus:

Interest expense

 

340

 

265

 

218

 

293

Income tax expense (benefit)

 

705

 

(1,975)

 

3,030

 

5,710

Depreciation & amortization expense

 

6,524

 

4,993

 

4,301

 

5,832

Non-cash compensation

 

2,221

 

1,799

 

1,048

 

1,470

Trailing twelve month consolidated EBITDA (1)

$

11,265

$

4,343

$

15,354

$

22,276

Total long-term debt, including current maturities

 

  

 

  

$

10,000

Divided by trailing twelve month consolidated EBITDA (1)

 

  

 

  

 

22,276

Leverage ratio

 

  

 

  

 

0.45


(1)As defined in the Company's credit facility.


Saga Communications, Inc.

Selected Supplemental Financial Data

For the Three and Nine Months Ended

September 30, 2021 and 2020

(amounts in 000’s except per share data)

(Unaudited)

Three Months Ended

 

Nine Months Ended

September 30, 

 

September 30, 

    

2021

    

2020

    

2021

    

2020

Operating income (loss) to station operating income reconciliation:

Operating income (loss)

$

4,619

    

$

247

  

$

10,117

$

(6,245)

Plus:

 

 

  

 

 

Corporate general and administrative

 

2,538

 

2,838

  

 

7,470

 

8,923

Other operating expense (income), net

(2)

50

(25)

(1,234)

Impairment of broadcast licenses

 

 

1,392

  

 

 

5,149

Station depreciation and amortization

1,391

1,556

4,093

4,769

Station operating income

$

8,546

$

6,083

  

$

21,655

$

11,362