Saga Reports Q2 Profit, Increased Revenue

Saga Communications, Inc. Tuesday reported net revenue increased 1.6% to $34.4 million for the quarter ended June 30, 2015.

Free cash flow decreased $281 thousand to $5.7 million. Station operating expense increased $812 thousand to $24.3 million (station operating expense includes depreciation and amortization attributable to the stations).  Operating income was $7.5 million.  Net income for the period was $4.5 million ($0.77 per fully diluted share).

Net revenue increased 0.3% to $63.4 million for the year ended June 30, 2015.  Free cash flow decreased $105 thousand to $9.2 million.  Station operating expense increased $630 thousand to $47.1 million (station operating expense includes depreciation and amortization attributable to the stations).  Operating income was $11.3 million.  Net income for the six month period was $6.6 million ($1.13 per fully diluted share).

Capital expenditures were $1.3 million in the 2nd quarter compared to $1.5 million for the same period last year.  The Company currently expects to spend approximately $5.0 million to $5.5 million for capital expenditures during 2015.

Ed Christian

During Tuesday's conference with analysts, Saga CEO and Chairman Ed Christian said broadcasting mirrors the economy.  He quoted a headline in he Wall Street Journal to amplify.  Christian added the headline "says it all. Economy picks up but stays in a rut. I couldn’t have said it any better and if I’ve said it once, I’ve said it 100 of times, 100s of times actually. Broadcasting mirrors the economy."

"Saga was up thankfully, but we are in a rut. It is not and I really underscore the word not, because we are an endangered industry. Just today in Inside Radio, there was the lead article that radio’s audience hit an all time high in Q2, some 245 million people use radio in a given week, according to Nielsen. That’s pretty impressive."

According to Christian, "If we do our craft properly, these people -- these 245 million people respond to our advertising messages and businesses continue to respect the power and reach of broadcast advertising. Please, do me a favor and disregard what the tin-foil-hat people say about radio and TV. We are not going to be replaced by targeted display. There is room for targeted display, but not entirely on our expense."