0000886136false00008861362023-05-032023-05-03

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): May 3, 2023

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 May 3, 2023, Saga Communications, Inc. issued a press release announcing its financial results for the three months ended March 31, 2023. The press release, dated May 3, 2023, 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 May 3, 2023.

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 May 3, 2023.

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: May 3, 2023

By:

/s/ Samuel D. Bush

 

 

 

Samuel D. Bush

 

 

 

Senior Vice President and Chief

 

 

 

Financial Officer

 

Exhibit 99.1

Graphic

Saga Communications, Inc.

Reports 1st Quarter 2023 Results

Contact:

Samuel D. Bush

(313) 886-7070

Grosse Pointe Farms, MI –May 3, 2023 – Saga Communications, Inc. (Nasdaq - SGA) (the “Company” or “Saga”) today reported that net revenue increased 1.3% to $25.3 million for the quarter ended March 31, 2023 compared to $25.0 million for the same period last year.   Station operating expense increased $1.1 million for the quarter to $21.7 million compared to the same period last year.  A significant part of the increase in station operating expense for the quarter was due to a $272 thousand increase in our self-insured health care costs and a $446 thousand increase in employee compensation including payroll taxes at the station level. After a number of years of holding the Company’s compensation expenses flat, we decided that adjustments in our employee compensation were warranted in consideration of the economic times and inflationary environment. For the quarter, station operating income decreased $770 thousand to $4.8 million, and operating income was $905 thousand compared to $1.7 million for the same quarter last year. Free cash flow was $1.1 million for the quarter compared to $1.9 million for the same period last year. Capital expenditures were $1.4 million for the quarter compared to $923 thousand for the same period last year. We had net income of $920 thousand for the quarter compared to net income of $1.2 million for the first quarter last year.  Diluted earnings per share were $0.15 in the first quarter of 2023.  

The Company paid a quarterly dividend of $0.25 per share on April 7, 2023. The aggregate amount of the quarterly dividend was approximately $1.5 million. To date Saga has paid over $108 million in dividends to shareholders since the first special dividend was paid in 2012. The Company intends to declare regular quarterly cash dividends, special dividends, variable dividends and stock buybacks in the future.  

The Company’s balance sheet reflects $37.5 million in cash and short-term investments as of March 31, 2023 and $35.0 million as of May 1, 2023. The Company expects to spend approximately $5.0 – $5.5 million for capital expenditures during 2023.

Saga’s 2023 First Quarter conference call will be held on Wednesday, May 3, 2023 at 11:00 a.m.  The dial-in number for the call is (973) 528-0008. Enter conference code 465239.  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 3, 2023 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.

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 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 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, 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.


Saga Communications, Inc.

Selected Consolidated Financial Data

For the Three Months Ended

March 31, 2023 and 2022

(amounts in 000’s except per share data)

(Unaudited)

Three Months Ended

March 31, 

    

2023

    

2022

Operating Results

Net operating revenue

$

25,304

$

24,967

Station operating expense

 

21,703

 

20,568

Corporate general and administrative

 

2,616

 

2,694

Other operating (income) expense, net

80

(5)

Operating income

 

905

 

1,710

Interest expense

 

43

 

32

Interest income

 

(289)

 

(4)

Other income, net

(119)

(2)

Income before income tax expense

 

1,270

 

1,684

Income tax expense

 

350

 

480

Net income

$

920

$

1,204

Earnings per share:

Basic

$

0.15

$

0.20

Diluted

$

0.15

$

0.20

Weighted average common shares

 

6,028

 

5,948

Weighted average common and common equivalent shares

 

6,028

 

5,948

Free Cash Flow

Net income

$

920

$

1,204

Plus: Depreciation and amortization:

Radio Stations

 

1,197

 

1,169

Corporate

 

40

 

62

Deferred tax provision

 

70

 

80

Non-cash compensation

 

245

 

339

Other operating (income) expense, net

 

80

 

(5)

Other income, net

 

(119)

 

(2)

Less: Capital expenditures

 

(1,362)

 

(923)

Free cash flow

$

1,071

$

1,924

 

March 31, 

    

 

2023

    

2022

Balance Sheet Data

 

  

  

Working capital

$

38,334

$

56,405

Net fixed assets

$

53,313

$

53,042

Net intangible assets and other assets

$

119,435

$

119,799

Total assets

$

228,539

$

245,075

Long-term debt

$

$

Stockholders' equity

$

178,419

$

197,742


Saga Communications, Inc.

Selected Supplemental Financial Data

March 31, 2023

(amounts in 000's)

(Unaudited)

    

    

Less:

    

Plus:

    

Trailing

 

12 Months Ended

3 Months Ended

3 Months Ended

12 Months Ended

 

December 31, 

March 31, 

March 31, 

March 31, 

 

2022

2022

2023

2023

 

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

 

  

 

  

 

  

 

  

Net income

$

9,202

$

1,204

$

920

$

8,918

Exclusions:

 

  

 

  

 

  

 

  

Gain (loss) on sale of assets, net

 

14

 

5

 

(80)

 

(71)

Gain on insurance proceeds

 

534

 

 

 

534

Other income, net

 

482

 

15

 

456

 

923

Total exclusions

 

1,030

 

20

 

376

 

1,386

Consolidated adjusted net income (1)

 

8,172

 

1,184

 

544

 

7,532

Plus:

Interest expense

 

130

 

32

 

43

 

141

Income tax expense

 

4,800

 

480

 

350

 

4,670

Depreciation & amortization expense

 

5,171

 

1,231

 

1,237

 

5,177

Non-cash compensation

 

1,858

 

339

 

245

 

1,764

Trailing twelve month consolidated EBITDA (1)

$

20,131

$

3,266

$

2,419

$

19,284


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


Saga Communications, Inc.

Selected Supplemental Financial Data

For the Three Months Ended

March 31, 2023 and 2022

(amounts in 000’s)

(Unaudited)

Three Months Ended

March 31, 

    

2023

    

2022

Operating income to station operating income reconciliation:

Operating income

$

905

$

1,710

Plus:

 

 

Corporate general and administrative

 

2,616

 

2,694

Other operating (income) expense, net

80

(5)

Station depreciation and amortization

1,197

1,169

Station operating income

$

4,798

$

5,568