Company Quick10K Filing
Saga Communications
Price31.32 EPS2,352
Shares0 P/E0
MCap0 P/FCF0
Net Debt-31 EBIT20
TEV-31 TEV/EBIT-2
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-09
10-Q 2020-06-30 Filed 2020-08-10
10-Q 2020-03-31 Filed 2020-05-11
10-K 2019-12-31 Filed 2020-03-13
10-Q 2019-09-30 Filed 2019-11-12
10-Q 2019-06-30 Filed 2019-08-09
10-Q 2019-03-31 Filed 2019-05-10
10-K 2018-12-31 Filed 2019-03-15
10-Q 2018-09-30 Filed 2018-11-09
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-03-13
10-Q 2017-09-30 Filed 2017-11-09
10-Q 2017-06-30 Filed 2017-08-09
10-Q 2017-03-31 Filed 2017-05-04
10-K 2016-12-31 Filed 2017-03-10
10-Q 2016-09-30 Filed 2016-11-09
10-Q 2016-06-30 Filed 2016-08-05
10-Q 2016-03-31 Filed 2016-05-09
10-K 2015-12-31 Filed 2016-03-14
10-Q 2015-09-30 Filed 2015-11-09
10-Q 2015-06-30 Filed 2015-08-07
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-03-13
10-Q 2014-09-30 Filed 2014-11-10
10-Q 2014-06-30 Filed 2014-08-11
10-Q 2014-03-31 Filed 2014-05-12
10-K 2013-12-31 Filed 2014-03-17
10-Q 2013-09-30 Filed 2013-11-12
10-Q 2013-06-30 Filed 2013-08-09
10-Q 2013-03-31 Filed 2013-05-10
10-K 2012-12-31 Filed 2013-03-15
10-Q 2012-09-30 Filed 2012-11-09
10-Q 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-09
10-K 2011-12-31 Filed 2012-03-15
10-Q 2011-09-30 Filed 2011-11-09
10-Q 2011-06-30 Filed 2011-08-09
10-Q 2011-03-31 Filed 2011-05-10
10-K 2010-12-31 Filed 2011-03-16
10-Q 2010-09-30 Filed 2010-11-12
10-Q 2010-06-30 Filed 2010-08-16
10-Q 2010-03-31 Filed 2010-05-14
10-K 2009-12-31 Filed 2010-03-16
8-K 2020-11-04
8-K 2020-08-05
8-K 2020-06-30
8-K 2020-06-18
8-K 2020-05-20
8-K 2020-05-11
8-K 2020-03-31
8-K 2020-03-04
8-K 2020-01-06
8-K 2019-12-31
8-K 2019-12-11
8-K 2019-09-30
8-K 2019-09-12
8-K 2019-06-30
8-K 2019-05-30
8-K 2019-05-13
8-K 2019-03-31
8-K 2019-02-26
8-K 2019-02-26
8-K 2018-12-31
8-K 2018-11-28
8-K 2018-11-28
8-K 2018-10-29
8-K 2018-09-30
8-K 2018-09-28
8-K 2018-08-14
8-K 2018-08-01
8-K 2018-06-30
8-K 2018-06-27
8-K 2018-05-24
8-K 2018-05-23
8-K 2018-05-14
8-K 2018-03-31
8-K 2018-02-28
8-K 2017-12-31

SGA 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 sga-20200930xex31d1.htm
EX-31.2 sga-20200930xex31d2.htm
EX-32 sga-20200930xex32.htm

Saga Communications Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
2802241681125602012201420172020
Assets, Equity
40322416802012201420172020
Rev, G Profit, Net Income
10.04.0-2.0-8.0-14.0-20.02012201420172020
Ops, Inv, Fin

SAGA COMMUNICATIONS INC00008861362020Q3--12-31falseP5YP1Y0000000.300.300.320.300.30true0000886136sga:StockBuyBackProgramMember2020-07-012020-09-300000886136sga:StockBuyBackProgramMember2020-01-012020-09-300000886136sga:StockBuyBackProgramMember2019-07-012019-09-300000886136sga:StockBuyBackProgramMember2019-01-012019-09-300000886136us-gaap:CommonClassBMember2020-01-012020-09-300000886136us-gaap:CommonClassAMember2020-01-012020-09-300000886136us-gaap:TreasuryStockMember2020-09-300000886136us-gaap:RetainedEarningsMember2020-09-300000886136us-gaap:AdditionalPaidInCapitalMember2020-09-300000886136us-gaap:TreasuryStockMember2020-06-300000886136us-gaap:RetainedEarningsMember2020-06-300000886136us-gaap:AdditionalPaidInCapitalMember2020-06-3000008861362020-06-300000886136us-gaap:TreasuryStockMember2020-03-310000886136us-gaap:RetainedEarningsMember2020-03-310000886136us-gaap:AdditionalPaidInCapitalMember2020-03-3100008861362020-03-310000886136us-gaap:TreasuryStockMember2019-12-310000886136us-gaap:RetainedEarningsMember2019-12-310000886136us-gaap:AdditionalPaidInCapitalMember2019-12-310000886136us-gaap:TreasuryStockMember2019-09-300000886136us-gaap:RetainedEarningsMember2019-09-300000886136us-gaap:AdditionalPaidInCapitalMember2019-09-300000886136us-gaap:TreasuryStockMember2019-06-300000886136us-gaap:RetainedEarningsMember2019-06-300000886136us-gaap:AdditionalPaidInCapitalMember2019-06-3000008861362019-06-300000886136us-gaap:TreasuryStockMember2019-03-310000886136us-gaap:RetainedEarningsMember2019-03-310000886136us-gaap:AdditionalPaidInCapitalMember2019-03-3100008861362019-03-310000886136us-gaap:TreasuryStockMember2018-12-310000886136us-gaap:RetainedEarningsMember2018-12-310000886136us-gaap:AdditionalPaidInCapitalMember2018-12-310000886136us-gaap:CommonClassBMember2020-09-300000886136us-gaap:CommonClassAMember2020-09-300000886136us-gaap:CommonClassBMember2020-06-300000886136us-gaap:CommonClassAMember2020-06-300000886136us-gaap:CommonClassBMember2020-03-310000886136us-gaap:CommonClassAMember2020-03-310000886136us-gaap:CommonClassBMember2019-12-310000886136us-gaap:CommonClassAMember2019-12-310000886136us-gaap:CommonClassBMember2019-09-300000886136us-gaap:CommonClassAMember2019-09-300000886136us-gaap:CommonClassBMember2019-06-300000886136us-gaap:CommonClassAMember2019-06-300000886136us-gaap:CommonClassBMember2019-03-310000886136us-gaap:CommonClassAMember2019-03-310000886136us-gaap:CommonClassBMember2018-12-310000886136us-gaap:CommonClassAMember2018-12-310000886136us-gaap:StockOptionMemberus-gaap:CommonClassBMember2013-10-160000886136us-gaap:StockOptionMemberus-gaap:CommonClassAMember2013-10-160000886136sga:IncentiveCompensationPlanMemberus-gaap:CommonClassAMember2013-10-160000886136sga:ConvertForClassBMemberus-gaap:CommonClassAMember2013-10-160000886136us-gaap:CommonClassBMember2013-10-012013-10-160000886136us-gaap:RestrictedStockMember2020-09-300000886136us-gaap:RestrictedStockMember2019-12-310000886136sga:OtherRevenueMember2020-07-012020-09-300000886136sga:DigitalAdvertisingRevenueMember2020-07-012020-09-300000886136sga:BroadcastAdvertisingRevenueNetMember2020-07-012020-09-300000886136sga:OtherRevenueMember2020-01-012020-09-300000886136sga:DigitalAdvertisingRevenueMember2020-01-012020-09-300000886136sga:BroadcastAdvertisingRevenueNetMember2020-01-012020-09-300000886136sga:OtherRevenueMember2019-07-012019-09-300000886136sga:DigitalAdvertisingRevenueMember2019-07-012019-09-300000886136sga:BroadcastAdvertisingRevenueNetMember2019-07-012019-09-300000886136sga:OtherRevenueMember2019-01-012019-09-300000886136sga:DigitalAdvertisingRevenueMember2019-01-012019-09-300000886136sga:BroadcastAdvertisingRevenueNetMember2019-01-012019-09-300000886136us-gaap:RevolvingCreditFacilityMember2019-06-072019-06-070000886136us-gaap:RevolvingCreditFacilityMember2019-02-042019-02-040000886136srt:ScenarioForecastMembersga:W295blMember2020-01-012020-12-310000886136sga:W295blMember2019-01-012019-12-310000886136sga:TowerInKeeneNewHampshireMember2020-01-012020-03-310000886136us-gaap:RevolvingCreditFacilityMember2020-09-300000886136us-gaap:RevolvingCreditFacilityMember2019-12-310000886136us-gaap:RevolvingCreditFacilityMember2020-09-300000886136us-gaap:RevolvingCreditFacilityMemberus-gaap:RevolvingCreditFacilityMember2019-07-010000886136us-gaap:RevolvingCreditFacilityMember2015-08-180000886136us-gaap:LondonInterbankOfferedRateLIBORMember2020-09-300000886136srt:MinimumMemberus-gaap:RevolvingCreditFacilityMember2020-01-012020-09-300000886136srt:MaximumMemberus-gaap:RevolvingCreditFacilityMember2020-01-012020-09-3000008861362020-01-012020-06-300000886136srt:MinimumMembersga:OtherIntangibleMember2020-01-012020-09-300000886136srt:MinimumMembersga:FavorableLeaseAgreementsMember2020-01-012020-09-300000886136srt:MaximumMembersga:OtherIntangibleMember2020-01-012020-09-300000886136srt:MaximumMembersga:FavorableLeaseAgreementsMember2020-01-012020-09-300000886136us-gaap:CustomerRelationshipsMember2020-01-012020-09-3000008861362019-12-272019-12-2700008861362019-09-232019-09-2300008861362019-06-142019-06-1400008861362019-03-122019-03-1200008861362020-03-042020-03-0400008861362019-12-112019-12-1100008861362019-09-122019-09-1200008861362019-05-302019-05-3000008861362019-02-262019-02-2600008861362020-03-012020-03-0400008861362019-12-012019-12-1100008861362019-09-012019-09-1200008861362019-05-012019-05-3000008861362019-02-012019-02-2600008861362020-03-162020-03-1600008861362020-01-172020-01-1700008861362019-10-112019-10-1100008861362019-07-052019-07-0500008861362019-04-102019-04-1000008861362019-03-292019-03-290000886136us-gaap:RevolvingCreditFacilityMember2018-06-272018-06-270000886136us-gaap:RevolvingCreditFacilityMember2015-07-192015-08-180000886136srt:MinimumMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-01-012020-09-300000886136srt:MinimumMemberus-gaap:BaseRateMember2020-01-012020-09-300000886136srt:MaximumMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-01-012020-09-300000886136srt:MaximumMemberus-gaap:BaseRateMember2020-01-012020-09-300000886136us-gaap:CommonClassBMember2019-01-012019-12-310000886136us-gaap:CommonClassAMember2019-01-012019-12-310000886136us-gaap:CommonClassAMember2020-03-042020-03-040000886136us-gaap:CommonClassBMember2020-03-012020-03-040000886136us-gaap:CommonClassBMember2019-12-012019-12-110000886136us-gaap:CommonClassAMember2019-12-012019-12-110000886136us-gaap:CommonClassBMember2019-09-012019-09-120000886136us-gaap:CommonClassAMember2019-09-012019-09-120000886136us-gaap:CommonClassBMember2019-05-012019-05-300000886136us-gaap:CommonClassAMember2019-05-012019-05-300000886136us-gaap:CommonClassBMember2019-02-012019-02-260000886136us-gaap:CommonClassAMember2019-02-012019-02-2600008861362019-09-3000008861362018-12-310000886136sga:W295blMember2020-01-022020-01-020000886136sga:WpvqAmAndW222chMember2019-01-092019-01-090000886136us-gaap:RevolvingCreditFacilityMembersga:SecondAmendmentMember2020-01-012020-09-300000886136us-gaap:RestrictedStockMember2020-07-012020-09-300000886136us-gaap:RestrictedStockMember2020-01-012020-09-300000886136us-gaap:RestrictedStockMember2019-07-012019-09-300000886136us-gaap:RestrictedStockMember2019-01-012019-09-300000886136us-gaap:TreasuryStockMember2020-07-012020-09-300000886136us-gaap:RetainedEarningsMember2020-07-012020-09-300000886136us-gaap:CommonClassBMember2020-07-012020-09-300000886136us-gaap:CommonClassAMember2020-07-012020-09-300000886136us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300000886136us-gaap:TreasuryStockMember2020-04-012020-06-300000886136us-gaap:RetainedEarningsMember2020-04-012020-06-300000886136us-gaap:CommonClassBMember2020-04-012020-06-300000886136us-gaap:CommonClassAMember2020-04-012020-06-300000886136us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-3000008861362020-04-012020-06-300000886136us-gaap:TreasuryStockMember2020-01-012020-03-310000886136us-gaap:RetainedEarningsMember2020-01-012020-03-310000886136us-gaap:CommonClassBMember2020-01-012020-03-310000886136us-gaap:CommonClassAMember2020-01-012020-03-310000886136us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-3100008861362020-01-012020-03-310000886136us-gaap:TreasuryStockMember2019-07-012019-09-300000886136us-gaap:RetainedEarningsMember2019-07-012019-09-300000886136us-gaap:CommonClassBMember2019-07-012019-09-300000886136us-gaap:CommonClassAMember2019-07-012019-09-300000886136us-gaap:AdditionalPaidInCapitalMember2019-07-012019-09-3000008861362019-07-012019-09-300000886136us-gaap:TreasuryStockMember2019-04-012019-06-300000886136us-gaap:RetainedEarningsMember2019-04-012019-06-300000886136us-gaap:CommonClassBMember2019-04-012019-06-300000886136us-gaap:CommonClassAMember2019-04-012019-06-300000886136us-gaap:AdditionalPaidInCapitalMember2019-04-012019-06-3000008861362019-04-012019-06-300000886136us-gaap:TreasuryStockMember2019-01-012019-03-310000886136us-gaap:RetainedEarningsMember2019-01-012019-03-310000886136us-gaap:CommonClassBMember2019-01-012019-03-310000886136us-gaap:CommonClassAMember2019-01-012019-03-310000886136us-gaap:AdditionalPaidInCapitalMember2019-01-012019-03-3100008861362019-01-012019-03-3100008861362013-10-012013-10-1600008861362019-01-012019-09-3000008861362020-07-012020-09-300000886136srt:MinimumMembersrt:ScenarioForecastMember2021-01-012021-12-310000886136srt:MaximumMember2021-01-012021-12-310000886136srt:MinimumMember2020-01-012020-09-300000886136srt:MaximumMember2020-01-012020-09-300000886136srt:MinimumMemberus-gaap:MeasurementInputLongTermRevenueGrowthRateMember2020-09-300000886136srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMember2020-09-300000886136srt:MinimumMembersga:MeasurementInputOperatingProfitMarginMember2020-09-300000886136srt:MaximumMemberus-gaap:MeasurementInputLongTermRevenueGrowthRateMember2020-09-300000886136srt:MaximumMemberus-gaap:MeasurementInputDiscountRateMember2020-09-300000886136sga:MeasurementInputOperatingProfitMarginMember2020-09-300000886136srt:MinimumMemberus-gaap:MeasurementInputLongTermRevenueGrowthRateMember2019-12-310000886136srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMember2019-12-310000886136srt:MinimumMembersga:MeasurementInputOperatingProfitMarginMember2019-12-310000886136srt:MaximumMemberus-gaap:MeasurementInputLongTermRevenueGrowthRateMember2019-12-310000886136srt:MaximumMemberus-gaap:MeasurementInputDiscountRateMember2019-12-310000886136srt:MaximumMembersga:MeasurementInputOperatingProfitMarginMember2019-12-310000886136srt:MinimumMemberus-gaap:MeasurementInputLongTermRevenueGrowthRateMember2018-12-310000886136srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMember2018-12-310000886136srt:MinimumMembersga:MeasurementInputOperatingProfitMarginMember2018-12-310000886136srt:MaximumMemberus-gaap:MeasurementInputLongTermRevenueGrowthRateMember2018-12-310000886136srt:MaximumMemberus-gaap:MeasurementInputDiscountRateMember2018-12-310000886136srt:MaximumMembersga:MeasurementInputOperatingProfitMarginMember2018-12-310000886136us-gaap:RevolvingCreditFacilityMember2020-01-012020-09-3000008861362020-09-3000008861362019-12-310000886136us-gaap:CommonClassBMember2020-11-050000886136us-gaap:CommonClassAMember2020-11-0500008861362020-01-012020-09-30xbrli:sharesiso4217:USDxbrli:puresga:itemiso4217:USDxbrli:sharessga:segment

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended September 30, 2020

or

TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to

Commission file number 1-11588

Saga Communications, Inc.

(Exact name of registrant as specified in its charter)

Florida

38-3042953

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

73 Kercheval Avenue
Grosse Pointe Farms, Michigan
(Address of principal executive offices)

48236
(Zip Code)

(313) 886-7070

(Registrant’s telephone number, including area code)

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 $.01 per share

SGA

NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No .

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer þ

Non-accelerated filer

Smaller Reporting Company 

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No þ

The number of shares of the registrant’s Class A Common Stock, $.01 par value, and Class B Common Stock, $.01 par value, outstanding as of November 5, 2020 was 5,038,969 and 953,842, respectively.

Table of Contents

INDEX

Page

PART I. FINANCIAL INFORMATION

3

Item 1. Financial Statements (Unaudited)

3

Condensed consolidated balance sheets — September 30, 2020 and December 31, 2019

3

Condensed consolidated statements of operations — Three and nine months ended September 30, 2020 and 2019

4

Condensed consolidated statements of stockholders’ equity – Three and nine months ended September 30, 2020 and 2019

5

Condensed consolidated statements of cash flows — Nine months ended September 30, 2020 and 2019

7

Notes to unaudited condensed consolidated financial statements

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3. Quantitative and Qualitative Disclosures about Market Risk

29

Item 4. Controls and Procedures

29

PART II OTHER INFORMATION

30

Item 1. Legal Proceedings

30

Item 1a. Risk Factors

30

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

31

Item 6. Exhibits

31

Signatures

32

EX-31.1

EX-31.2

EX-32

EX-101 INSTANCE DOCUMENT

EX-101 SCHEMA DOCUMENT

EX-101 CALCULATION LINKBASE DOCUMENT

EX-101 LABELS LINKBASE DOCUMENT

EX-101 PRESENTATION LINKBASE DOCUMENT

EX-101 DEFINITION LINKBASE DOCUMENT

2

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

SAGA COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

    

September 30, 

    

December 31, 

2020

2019

    

    

(Unaudited)

    

(Note)

(In thousands)

Assets

    

Current assets:

Cash and cash equivalents

$

48,279

$

44,034

Accounts receivable, net

 

13,668

 

18,962

Prepaid expenses and other current assets

 

3,278

 

2,478

Barter transactions

 

1,227

 

1,246

Total current assets

 

66,452

 

66,720

Property and equipment

 

142,648

 

142,403

Less accumulated depreciation

 

86,771

 

83,692

Net property and equipment

 

55,877

 

58,711

Other assets:

Broadcast licenses, net

 

90,208

 

95,311

Goodwill

 

19,106

 

18,963

Other intangibles, deferred costs and investments, net

 

11,521

 

12,689

$

243,164

$

252,394

Liabilities and stockholders’ equity

 

Current liabilities:

 

Accounts payable

$

2,226

$

2,117

Payroll and payroll taxes

 

6,446

 

7,439

Dividend payable

 

 

1,797

Other accrued expenses

 

4,910

 

4,996

Barter transactions

 

1,080

 

1,152

Total current liabilities

 

14,662

 

17,501

Deferred income taxes

 

23,227

 

25,152

Long-term debt

 

10,000

 

10,000

Other liabilities

 

7,036

 

7,389

Total liabilities

 

54,925

 

60,042

Commitments and contingencies

 

 

Stockholders’ equity:

Common stock

 

77

 

77

Additional paid-in capital

 

68,479

 

66,811

Retained earnings

 

156,722

 

162,822

Treasury stock

 

(37,039)

 

(37,358)

Total stockholders’ equity

 

188,239

 

192,352

$

243,164

$

252,394

Note: The balance sheet at December 31, 2019 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

See notes to unaudited condensed consolidated financial statements.

3

Table of Contents

SAGA COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

    

Three Months Ended

 

Nine Months Ended

September 30, 

 

September 30, 

    

2020

    

2019

    

2020

    

2019

(Unaudited)

(In thousands, except per share data)

Net operating revenue

$

24,143

    

$

31,274

  

$

67,060

    

$

91,281

Station operating expenses

 

19,616

 

23,600

  

 

60,467

 

69,642

Corporate general and administrative

 

2,838

 

2,788

  

 

8,923

 

8,179

Other operating expense (income), net

50

85

(1,234)

86

Impairment of broadcast licenses

 

1,392

 

  

 

5,149

 

Operating income (loss)

 

247

 

4,801

  

 

(6,245)

 

13,374

Interest expense

 

75

 

180

  

 

265

 

572

Interest income

 

(8)

 

(162)

  

 

(141)

 

(485)

Other income

(11)

(213)

(11)

Income (loss) before income tax (benefit) expense

 

180

 

4,794

  

 

(6,156)

 

13,298

Income tax (benefit) expense

 

1,130

 

1,460

  

 

(1,975)

 

3,860

Net income (loss)

$

(950)

$

3,334

  

$

(4,181)

$

9,438

  

Earnings (loss) per share:

  

Basic

$

(0.16)

$

.56

  

$

(0.70)

$

1.59

Diluted

$

(0.16)

$

.56

  

$

(0.70)

$

1.59

  

Weighted average common shares

 

5,869

 

5,834

  

 

5,867

 

5,840

Weighted average common and common equivalent shares

 

5,869

 

5,834

  

 

5,867

 

5,840

  

Dividends declared per share

$

$

.30

  

$

.32

$

.90

See notes to unaudited condensed consolidated financial statements.

4

Table of Contents

SAGA COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Class A

Class B

Additional

Total

Common Stock

Common Stock

Paid-In

Retained

Treasury

Stockholders’

    

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Earnings

    

Stock

    

Equity

(unaudited) (In thousands)

Balance at December 31, 2018

6,732

$

67

923

$

9

$

64,795

$

156,689

$

(36,561)

$

184,999

Net income, Three months ended March 31, 2019

 

 

 

 

 

1,370

 

 

1,370

Dividends declared per common share

 

 

 

 

 

 

(1,784)

 

 

(1,784)

Compensation expense related to restricted stock awards

 

 

 

 

 

559

 

 

 

559

Purchase of shares held in treasury

 

 

 

 

 

 

 

(80)

 

(80)

401(k) plan contribution

 

 

 

 

 

(113)

 

 

375

 

262

Balance at March 31, 2019

 

6,732

$

67

 

923

$

9

$

65,241

$

156,275

$

(36,266)

$

185,326

Net income, Three months ended June 30, 2019

 

 

 

 

 

 

4,734

 

 

4,734

Dividends declared per common share

 

 

 

 

 

 

(1,784)

 

 

(1,784)

Compensation expense related to restricted stock awards

 

 

 

 

 

565

 

 

 

565

Purchase of shares held in treasury

 

 

 

 

 

 

 

(247)

 

(247)

Balance at June 30, 2019

 

6,732

$

67

 

923

$

9

$

65,806

$

159,225

$

(36,513)

$

188,594

Net income, Three months ended September 30, 2019

3,334

3,334

Forfeiture of restricted stock

 

(2)

 

 

 

 

 

 

 

Dividends declared per common share

(1,781)

(1,781)

Compensation expense related to restricted stock awards

532

532

Purchase of shares held in treasury

(276)

(276)

Balance at September 30, 2019

6,730

$

67

923

$

9

$

66,338

$

160,778

$

(36,789)

$

190,403

5

Table of Contents

Class A

Class B

Additional

Total

Common Stock

Common Stock

Paid-In

Retained

Treasury

Stockholders’

    

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Earnings

    

Stock

    

Equity

(unaudited) (In thousands)

Balance at December 31, 2019

6,771

$

68

954

$

9

$

66,811

$

162,822

$

(37,358)

$

192,352

Net income, Three months ended March 31, 2020

 

 

 

 

 

 

1,680

 

 

1,680

Dividends declared per common share

 

 

 

 

 

 

(1,919)

 

 

(1,919)

Compensation expense related to restricted stock awards

 

 

 

 

 

569

 

 

 

569

Purchase of shares held in treasury

 

 

 

 

 

 

 

(20)

 

(20)

401(k) plan contribution

 

 

 

 

 

(131)

 

 

382

 

251

Balance at March 31, 2020

6,771

$

68

 

954

$

9

$

67,249

$

162,583

$

(36,996)

$

192,913

Net loss, Three months ended June 30, 2020

 

 

 

 

 

 

(4,911)

 

 

(4,911)

Forfeiture of restricted stock

(2)

Compensation expense related to restricted stock awards

 

 

 

 

 

612

 

 

 

612

Purchase of shares held in treasury

 

 

 

 

 

 

 

(21)

 

(21)

Balance at June 30, 2020

 

6,769

$

68

 

954

$

9

$

67,861

$

157,672

$

(37,017)

$

188,593

Net loss, Three months ended September 30, 2020

(950)

(950)

Compensation expense related to restricted stock awards

618

618

Purchase of shares held in treasury

(22)

(22)

Balance at September 30, 2020

6,769

$

68

954

$

9

$

68,479

$

156,722

$

(37,039)

$

188,239

See notes to unaudited condensed consolidated financial statements.

6

Table of Contents

SAGA COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

 

September 30, 

 

     

2020

     

2019

    

(Unaudited)

 

(In thousands)

Cash flows from operating activities:

    

Net cash provided by operating activities

$

8,206

$

18,968

Cash flows from investing activities:

Acquisition of property and equipment

 

(1,880)

 

(4,667)

Acquisition of broadcast properties

 

(190)

 

(763)

Proceeds from sale and disposal of assets

1,675

250

Proceeds from insurance claims

 

213

Other investing activities

 

 

Net cash provided by (used in) investing activities

 

(182)

 

(5,180)

Cash flows from financing activities:

Cash dividends paid

 

(3,716)

 

(6,842)

Payments on long-term debt

 

 

(10,000)

Purchase of treasury shares

 

(63)

 

(603)

Net cash used in financing activities

 

(3,779)

 

(17,445)

Net increase (decrease) in cash and cash equivalents

 

4,245

 

(3,657)

Cash and cash equivalents, beginning of period

 

44,034

 

44,729

Cash and cash equivalents, end of period

$

48,279

$

41,072

See notes to unaudited condensed consolidated financial statements.

7

Table of Contents

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for annual financial statements.

In our opinion, the accompanying financial statements include all adjustments of a normal, recurring nature considered necessary for a fair presentation of our financial position as of September 30, 2020 and the results of operations for the three and nine months ended September 30, 2020 and 2019. Results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.

We own or operate broadcast properties in 27 markets, including 79 FM and 34 AM radio stations and 78 metro signals.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Saga Communications, Inc. Annual Report on Form 10-K for the year ended December 31, 2019.

We have evaluated events and transactions occurring subsequent to the balance sheet date of September 30, 2020, for items that should potentially be recognized in these financial statements or discussed within the notes to the financial statements.

Earnings Per Share Information

Earnings per share is calculated using the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security. The Company has participating securities related to restricted stock units, granted under the Company’s Second Amended and Restated 2005 Incentive Compensation Plan, that earn dividends on an equal basis with common shares. In applying the two-class method, earnings are allocated to both common shares and participating securities.

8

Table of Contents

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table sets forth the computation of basic and diluted earnings (loss) per share:

Three Months Ended

 

Nine Months Ended

 

September 30, 

 

September 30, 

 

    

2020

    

2019

    

2020

    

2019

    

(In thousands, except per share data)

 

Numerator:

 

  

 

  

  

 

  

Net income (loss)

$

(950)

$

3,334

$

(4,181)

$

9,438

Less: Income (loss) allocated to unvested participating securities

 

(20)

 

61

 

(86)

 

173

Net income (loss) available to common stockholders

$

(930)

$

3,273

$

(4,095)

$

9,265

Denominator:

 

 

 

 

Denominator for basic earnings (loss) per share — weighted average shares

 

5,869

 

5,834

 

5,867

 

5,840

Effect of dilutive securities:

 

 

 

 

Common stock equivalents

 

 

 

 

Denominator for diluted earnings (loss) per share — adjusted weighted-average shares and assumed conversions

 

5,869

 

5,834

 

5,867

 

5,840

Earnings (loss) per share:

 

 

 

 

Basic

$

(.16)

$

.56

$

(.70)

$

1.59

Diluted

$

(.16)

$

.56

$

(.70)

$

1.59

There were no stock options outstanding that had an antidilutive effect on our earnings per share calculation for the three and nine months ended September 30, 2020 and 2019, respectively. The actual effect of these shares, if any, on the diluted earnings per share calculation will vary significantly depending on the fluctuation in the stock price.

Financial Instruments

Our financial instruments are comprised of cash and cash equivalents, accounts receivable, accounts payable and long-term debt. The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short maturities. The carrying value of long-term debt approximates fair value as it carries interest rates that either fluctuate with the euro-dollar rate, prime rate or have been reset at the prevailing market rate at September 30, 2020.

Allowance for Doubtful Accounts

A provision for doubtful accounts is recorded based on our judgment of collectability of receivables. Amounts are written off when determined to be fully uncollectible. Delinquent accounts are based on contractual terms. We have included in our calculation of our allowance for doubtful accounts, the potential impact of the COVID-19 pandemic on our customers’ businesses and their ability to pay their accounts receivable. We maintain a specific allowance for estimated losses resulting from the inability of certain customers to make required payments. We also consider factors external to the specific customer, including current conditions and forecasts of economic conditions, including the potential impact of the COVID-19 pandemic. In the event we recover amounts previously written off, we will reduce the specific allowance for credit loss.

9

Table of Contents

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Income Taxes

Our effective tax rate is higher than the federal statutory rate as a result of the inclusion of state taxes in the income tax amount. We have historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period.

Segments

We serve twenty-seven radio markets (reporting units) that aggregate into one operating segment (Radio), which also qualifies as a reportable segment. We operate under one reportable business segment for which segment disclosure is consistent with the management decision-making process that determines the allocation of resources and the measuring of performance. The Chief Operating Decision Maker (“CODM”) evaluates the results of the radio operating segment and makes operating and capital investment decisions based at the Company level. Furthermore, technological enhancements and system integration decisions are reached at the Company level and applied to all markets rather than to specific or individual markets to ensure that each market has the same tools and opportunities as every other market. Managers at the market level do not report to the CODM and instead report to other senior management, who are responsible for the operational oversight of radio markets and for communication of results to the CODM. We continually review our operating segment classification to align with operational changes in our business and may make changes as necessary.

Time Brokerage Agreements/Local Marketing Agreements

We have entered into Time Brokerage Agreements (“TBAs”) or Local Marketing Agreements (“LMAs”) in certain markets. In a typical TBA/LMA, the FCC licensee of a station makes available, for a fee, blocks of air time on its station to another party that supplies programming to be broadcast during that air time and sells their own commercial advertising announcements during the time periods specified. Revenue and expenses related to TBAs/LMAs are included in the accompanying unaudited Condensed Consolidated Statements of Income. Assets and liabilities related to the TBAs/LMAs are included in the accompanying unaudited Condensed Consolidated Balance Sheets.

2. Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350)” (“ASU 2017-04”) which removes step 2 from the goodwill impairment test. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. ASU 2017-04 will be applied prospectively and is effective for fiscal years and interim impairment tests performed in periods beginning after December 15, 2019 with early adoption permitted. The Company adopted this standard January 1, 2020 and there was no material impact.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. The guidance requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires the consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years and interim periods beginning after December 15, 2019. The Company adopted this standard January 1, 2020 and there was no material impact.

Recent Accounting Pronouncements – Not Yet Adopted

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Incomes Taxes” (“ASU 2019-02”) which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing

10

Table of Contents

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

guidance regarding the tax treatment of certain franchise taxes, goodwill and nontaxable entities, among other items to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021 and interim periods beginning after December 15, 2022. We are currently evaluating the impact of this standard on our consolidated financial statements.

3. Revenue

Nature of goods and services

The following is a description of principal activities from which we generate our revenue:

Broadcast Advertising Revenue

Our primary source of revenue is from the sale of advertising for broadcast on our stations. We recognize revenue from the sale of advertising as performance obligations are satisfied upon airing of the advertising; therefore, revenue is recognized at a point in time when each advertising spot is transmitted. Agency commissions are calculated based on a stated percentage applied to gross billing revenue for our advertising inventory placed by an agency and are reported as a reduction of advertising revenue.

Digital Advertising Revenue

We recognize revenue from our digital initiatives across multiple platforms such as targeted digital advertising, online promotions, advertising on our websites, mobile messaging, email marketing and other e-commerce. Revenue is recorded when each specific performance obligation in the digital advertising campaign takes place, typically within a one month period.

Other Revenue

Other revenue includes revenue from concerts, promotional events, tower rent and other miscellaneous items. Revenue is generally recognized when the event is completed, as the promotional events are completed or as each performance obligation is satisfied.

Disaggregation of Revenue

Revenues from contracts with customers comprised the following for the three and nine months ended September 30, 2020 and 2019:

Three Months Ended

 

Nine Months Ended

 

September 30, 

 

September 30, 

 

    

2020

    

2019

    

2020

    

2019

     

(in thousands)

 

(in thousands)

 

Types of Revenue

    

    

Broadcast Advertising Revenue, net

$

22,124

$

28,562

$

61,119

$

83,245

Digital Advertising Revenue

 

845

 

879

 

2,412

 

2,769

Other Revenue

 

1,174

 

1,833

 

3,529

 

5,267

Net Revenue

$

24,143

$

31,274

$

67,060

$

91,281

Contract Liabilities

Payments from our advertisers are generally due within 30 days although certain advertisers are required to pay in advance. When an advertiser pays for the services in advance of the performance obligations these prepayments are recorded as contract liabilities. Typical contract liabilities relate to prepayments for advertising spots not yet run; prepayments from sponsors for events that have not yet been held; and gift cards sold on our websites used to finance a broadcast advertising campaign. Generally all contract liabilities are expected to be recognized within one year and are included in accounts payable in the Company’s Condensed Consolidated Financial Statements and are immaterial.

11

Table of Contents

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Transaction Price Allocated to the Remaining Performance Obligations

As the majority of our sales contracts are one year or less, we have utilized the optional exemption under ASC 606-10-50-14 and will not disclose information about the remaining performance obligations for sales contracts which have original expected durations of one year or less.

4. Broadcast License, Goodwill and Other Intangible Assets

We evaluate our FCC licenses for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. We operate our broadcast licenses in each market as a single asset and determine the fair value by relying on a discounted cash flow approach assuming a start-up scenario in which the only assets held by an investor are broadcast licenses. The fair value calculation contains assumptions incorporating variables that are based on past experiences and judgments about future operating performance using industry normalized information for an average station within a market. These variables include, but are not limited to: (1) the forecasted growth rate of each radio market, including population, household income, retail sales and other expenditures that would influence advertising expenditures; (2) the estimated available advertising revenue within the market and the related market share and profit margin of an average station within a market; (3) estimated capital start-up costs and losses incurred during the early years; (4) risk-adjusted discount rate; (5) the likely media competition within the market area; and (6) terminal values. If the carrying amount of FCC licenses is greater than their estimated fair value in a given market, the carrying amount of FCC licenses in that market is reduced to its estimated fair value.

We also evaluate goodwill for impairment annually, or more frequently if certain circumstances are present. If the carrying amount of goodwill is greater than the implied value of goodwill determined by completing a hypothetical purchase price allocation using estimated fair value, the carrying amount of goodwill is reduced to its implied value.

We evaluate amortizable intangible assets for recoverability when circumstances indicate impairment may have occurred, using an undiscounted cash flow methodology. If the future undiscounted cash flows for the intangible asset are less than net book value, then the net book value is reduced to the estimated fair value. Amortizable intangible assets are included in other intangibles, deferred costs and investments in the consolidated balance sheets.

2020 Impairment Test

Due to the impact of the COVID-19 pandemic on the U.S. economy and the related significant negative impact on our revenue for the second and third quarter of 2020, and the significant decline in our revenue pacing information for the fourth quarter of 2020 (excluding political advertising) and beyond in the majority of our markets, the Company tested its FCC License for impairment during the second quarter and again in the third quarter of 2020. We also reviewed our value of goodwill and other long-lived assets during the second quarter of 2020 as of June 30, 2020 and again in the third quarter of 2020 as of September 30, 2020, noting no impairment in goodwill or other long-lived assets. Our broadcast revenue has been significantly negatively impacted in the majority of the states where we operate, due to economic shutdowns and the related decline in advertising spending nationwide as most companies were making massive payroll cuts out of a necessity to survive with their revenues also significantly impacted. We have experienced a significant number of cancellations of advertising on our stations, with the greatest decreases in the following industries/categories: Automotive, Entertainment, Home Improvement, Professional Services, Restaurants, and Retail. The only category where we saw an increase over the prior quarter and year to date were political advertising and government/public service/issue. We also saw significant declines in our revenue related to events, venues, travel and sports as these types of businesses have been virtually shut down. We are starting to see increased revenues from our low point in Q2 2020, however, they are not at the previously expected recovery rate. Many areas of advertising and markets are slower to recover than we had expected during our Q2 2020 impairment analysis.

As a result of the quantitative impairment test performed as of June 30, 2020, the Company determined that the fair value of the broadcast licenses were less than the carrying amount on the balance sheet and recorded non-cash impairment charges totaling $3.8 million related to the FCC licenses in our Bucyrus, Ohio; Champaign, Illinois; Charleston, South Carolina; Columbus, Ohio; Harrisonburg, Virginia; Hilton Head, South Carolina; Mitchell, South Dakota; and Ocala, Florida markets. The impairment charges were primarily due to a decrease in projected revenue in

12

Table of Contents

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

these markets due to the impact of the COVID-19 pandemic, an increase in the discount rate used in the discounted cash flow analyses to estimate the fair value of our FCC licenses due to certain risks specifically associated with the Company and the radio broadcasting industry, and a decrease in mature operating margins in small markets due to the cost of operations in a small market.

As a result of the quantitative impairment test performed as of September 30, 2020, the Company determined that the fair value of the broadcast licenses were less than the carrying amount on the balance sheet and recorded non-cash impairment charges totaling $1.4 million for the quarter ended September 30, 2020 related to the FCC licenses in our Bellingham, Washington; Champaign, Illinois; Charleston, South Carolina; Columbus, Ohio; Harrisonburg, Virginia; Mitchell, South Dakota; Spencer, Iowa and Springfield, Illinois. The impairment charges were primarily due to a decrease in projected revenue in these markets due to the impact of the COVID-19 pandemic, an increase in the discount rate used in 2019 but slightly less than in the second quarter of 2020, in the discounted cash flow analyses to estimate the fair value of our FCC licenses due to certain risks specifically associated with the Company and the radio broadcasting industry, and a decrease in mature operating margins in small markets due to the cost of operations in a small market. If actual market conditions are less favorable than those estimated by us or if events occur or circumstances change that would reduce the fair value of our broadcast licenses below the carrying value, we may be required to recognize additional impairment charges in future periods. Such a charge could have a material effect on our consolidated financial statements.

The following table reflects certain key estimates and assumptions used in the impairment test in the second and third quarter of 2020 and the fourth quarter of 2019, and 2018. The ranges for operating profit margin and market long-term revenue growth rates vary by market. In general, when comparing among 2020, 2019 and 2018: (1) the market specific operating profit margin range remained relatively consistent with some decreases to our smaller markets due to the cost of operations in a small market ; (2) the market long-term revenue growth rates were relatively consistent; (3) the discount rate increased a small percentage due to the COVID-19 pandemic; and (4) current year revenue projections were 10.4% - 21.4% lower than previously projected for 2020 and revenue projections for 2021 were 7.6% - 10.7% lower than previously projected.