Saga Communications (SGA) 7 Mar 242023 Q4 Earnings call transcript

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in Saga Communications, a company that we believe is the best broadcast company on the planet.

As usual, we have a lot to talk about today, a new variable dividend program, $40 million worth of dry powder on hand, and something else new and different in the broadcast sector these days, an accretive acquisition.

Firstly, we are pleased to announce the addition of Lafayette, Indiana cluster to the Saga family. By way of new half media and Lafayette is expected to close in mid-May of quarter 2 of this year.

Purdue Bush, to Saga now home Communications. is University, and Sam the Lafayette into markets roster with folds Saga's Lafayette beautifully of market strategy. our acquisition and target consistent is a that And market, we number of have as years. frankly, covered a for We're talented of acquiring delighted get passionate a frankly group started. are an great who and with to entity brands broadcasters

service. And verticals, a and news digital previously forecasted was including XX new Lafayette launch This e-commerce. XXXX. the our for potential completed end has Sagafied, be local, once growth several of market by in to of We online the

As by have but to spot use year-end customers accelerated of the of prebooked have we by end end earnings not of the in time $X we today, revenue to reported I'm specs to generated our in creative online end been present Also has have the to pleased utilize of the quarter previous to as X. the on -- not announce audio that million messaging. the line already XX calls, which we intensity for with but and XXXX, year, markets over XX ideas

announce XX,XXX. XXXX, again, In XXXX, is to the produced I'm we're XX,XXX company. XX,XXX success In customers number we rose never pleased for for spec in that have XXXX, -- our level we The spots is is never that on yet to never produced spots in activity And spec all-time in -- high, really marketplaces. at our our our satisfied. Saga an markets really appetite really

earnings Business and calls? almost Oh, are. general bet countervailing forgot forces up economic I you headwinds. Are later year. hear inflation, this evil we on political we frequently same you the later one. experiencing other and about in booking Absolutely, yes, interest rates, the

of these number on You on you've calls on. a times -- been the that one probably heard

wind, of can't picture don't every is that hangs on is truth really have office a the these the adjust reads. we set adjust our sales, walls We can ago. market that we we? XX to managers, months Can of sales. direct We only control that out which or we do one the the what any of The things. exactly cannot

to and to navigate done was enable waters. economic angry This us

chronicled have last months. and we implemented points. we all data fact, XX In different that the XX in identified

Now this isn't the of in that exist this heard 'XXs is today back not did light ago. like XX Saga and 'XXs, XX points data may you XX points different exist months of in that that have

interested, installed will today processes asked annual the of you're the in growth in to year-end our bear of Annual a share in be quarter the Saga's you, please the operators fourth sector are these probably If make strategies, now fruit. note note as that, letter deployment just you question, these all we the be will currently of We we data beginning decline. find many and where in where President's double-digit with points XXXX able the report. to earnings right And without to of are many

QX as ending was from as down up XX/XX/XX down XX/XX/XX So X.X%. X.X%. was in with National well for the was QX ending QX the for highlights X.X% was few but of year a that, and the are year the year down Local here ending X.X%, XX/XX/XX

of net in total XX.X% quarter represent the for achieving both and XXXX revenue a of of net for XX/XX/XX, XX% up the XXXX. $X.X million for from up Streaming. XX/XX/XX. It over-the-air was the multiple year was in goal Total locally XX% ending the programmatically, X% ending our numbers broadcast streams in XX.X%. XXXX total These year simulcast up Streaming up through interactive which channels, interactive was business, to our and monetizes million with distribution $X.X rev. was

a certificates had exchange budget then business. who We campaign, Those E-comm augment limited gift their customers advertising on XX/XX/XX, discount. retain generate posted and utilize the so the at This the for do to wish year in million to helped existing provides ] to and purchase are revenue our deal and opportunity growing. certificates revenue increase still said or stations. so vertical a advertisers way, ad on to an $X.X E-commerce. in then station [ sites our a the by us ending market XXX% our

for ending was gross and XX/XX/XX a political, XX/XX/XX down net Again, for QX QX the X% the finished was up of year X.XX%. year and interest, excluding XXXX. in was rev Total down note X.X%, of revenue ending flat

With it I Bola will Bush. Sam ], maker turn [ that, over our to

Reconciliation the recent and to Chris. Risk Factors measures our section measure most the you, will our I'm non-GAAP obligatory comparable paragraphs. of in call selected for of table. measures. will contain financial Form performance about a call operations most forward-looking in certain involve contain non-GAAP uncertainties XX-K. described already risks financial This also the statements discussion are GAAP going attached and that Thank the to all of future data that and has are the This financial with results directly start

policy the distributing ever any say that adds Directors I dividends it's our on fourth declared year-end net our as of back adopted XX% buyback acquisitions. amount announced and let variable a based the and Board any capital XXXX this dividend expenditures starts morning. me Chris during deduct or to income our years year well that calculated X, is dividend are where on and with release applicable, and quite shareholders amount dividend stock of were expenses as noncash in of variable and able First, XXXX. declare was our quarter December along The to that proud press first with The

result call of purposes. dividend variable the for the I'll cash calculation this reference available for

to quarterly The to dividend the previously more cash appropriate special million. liquid considered its balances dividend During dividends $XX.X and cash restructuring based XXXX, on in capital Saga's performance declared million the August on a cash Board million conditions. security cash well as and of over a time $X.X Board our special dividend allocation of being $XX approximately reduce to intentions as economic level from based stated XXXX in

indicated, As quarterly more the dividend tomorrow policy I million $XXX will be dividends the wanted paid variable as million $XXX be X, our first since that out of in the release stress well have that, paid paid to dividends. dividend Saga including dividend over XXXX. to is on as to the than press April in Again, in inception

change to All to said, we sheet to to local special our economic and in of through return changes a variable global, continues believe discussions position may and level and cash national maintain in relative and our based to right on strong for our is financial the to Board shareholders on continue radio dividends. potential industry have conditions, The value acquisitions. the quarterly strategic balance this the Saga

missed Also, in it X indicated, We Lafayette, new of sold Indiana. ago to opportunity radio them they acquisition on off as is years to be exciting working family. when Chris announced of the acquire a stations to closing the previously towards our out were of number

not have with purchase commitment current Saga them some serving Crane great opportunities ] the Indiana, The into in again great master's stations local degree of that break promise singing Purdue. opportunity foundation are front [ to we the especially Unfortunately, to received from I'm in off staff's their at on of them out school the tremendous I my to pleased [indiscernible]. this I Purdue Chris, did as community family. a I back as build radio bring is would that

glad am you, I And for that. Sam. Thank

Now numbers. on to the

performance compared net million decreased $XX.X to our would revenue year Chris was income, said, last year. gross year. million X-month XX, . Operating X.X% we have increased quarter as the operating last revenue in to million, December $X.X the $X.X Without this $XX.X station the overall Chris Station impacted increased same XXXX, $X.X a $XXX,XXX from quarter. measure, As million the the approximately X.X% and for for gross revenue compared million period. ended Again, for to income had as to year. last non-GAAP the for was political quarter politic, million period expense operating for political $XX.X X% said,

XX, December X.X% $XXX.X last revenue XXXX, compared $XXX.X million net For decreased period year. the to XX-month million ended to

year, period year, last same Again, Chris $XXX,XXX to political political ready compared of gross out, was for for as This gross year for period $X.X the had the the revenue pointed we year. for adjusting income flat was million Operating last $XX.X expense operating $XX.X station $XX.X same million. year. Station X% for the period income, million million. to increased again, and operating measure, for XX-month was the non-GAAP a

payroll year-to-date staff meaningful to in had other maintenance million quarter to increase approximately and music not the and $XXX,XXX made operating increases previous Similar pay increase. or the Most increases X the and quarters, received health previous to repairs, discussed past our As they station surveys. sales increases, of in in our of XX% the and increased years. approximately or in a XXXX to any conference operating license still of but programming recognition tremendous expense fees, expenses, XX% strategic related an estimated insurance, amounted compensation do. them in increases X included pay utility the of expenses station rights taxes give $X.X work calls, These fourth smaller decision we

by the to year-end a new of of G&A our in Chris year. increase was $XXX,XXX were million best-of-class decrease I was of talked our hiring recorded passing, XXXX corporate about keep quarter lead of Christian's talked related initiatives individuals You $XXX,XXX impacted in by approximately expense calls, to more bit already. during Ed due and mind specific that need in you a and was Chris onetime for the revenue results expense about in expense, little that The call this third to in to that which offset an $X.X have heard corporate which previous

million $XXX,XXX XX, expenditures period the compared quarter same for ended XXXX, to the Capital for $X.X year. last December were

to expenditures XX-month last $X expect currently between this period, in capital spend compared and year million were capital expenditures year. million the to for million $X million XXXX. $X.X We For $X.X

which saw we the for revenue was gross revenue up was diversify and $X.X million we in earlier, nontraditional referenced up revenue, Chris which which Interactive, continued our national, up growth as $XXX,XXX, to year, was $XXX,XXX. As

Chris down for $X.X it's gets While note, local revenue which as recorded year, to as direct increased for e-commerce, was million local to that mostly the year. did revenue important the

there these as our in efforts. continued be achieved well growth areas all that in still digital as believe We is significant to

market to plan and both we e-commerce We level. a operations, invest continue and specific corporate interactive as our on local, including work national, our financial strategically revenue NTR. grow at to types, to strength in utilizing

call of their quarter As reporting discussed in due our filings. our renewed focus on SEC's and to earnings the non-GAAP measures of financial the second review

with have have in included We second our to quarterly earnings complete press release to the as releases statement we XX-Qs. flows include Form of quarter our historically a opposed our cash starting statement adjusted press abbreviated

but releases measure, press We also to station the now filings. was $XX.X non-GAAP of GAAP in which income balance primarily in income, continue reflects December to the $XX.X and make million due our cash in table, and this operating million financial last X, company's is include that special short-term the of which allows dividend data reported to year comparisons reconciliation users press The and of and investments March as year. to of XXXX, direct sheet include paid as XX, other previous XXXX, and release operating filings December a of to data declared early

the for soft. is quarter Pacing first

down and softer. the March been January we much pacing currently strong. started low quarter, For February digits. to out are mid-single have

May low mid-single digits. and are April Although up to pacing currently

addition the uncertain ongoing It policy, continues interest given other market inflationary advertising worldwide to the Fed's issues. unsettled to an economy, still rate in be environment, the

to our for year We that currently XXXX. approximately as to expense X.X% will X.X% expect operating increase by compared the station

to general significantly anticipate for by sales million the staff, the We our in be and addition to driven our million corporate $XX.X approximately is XXXX. and this In training inflationary ongoing administrative will environment, expense interactive annual development. investments $XX.X

X% is rate you over forward. that Chris. to of XX% going want I back of a all tax with to deferred you expected out, And Thank Our now to XX% X% tax turn be I'll to you.

Thank you, Sam.

son yes? So Sam, [indiscernible] is pilot, Delta a your

. locations delta well as tanker AXXXs KC-XXX international a is a the refueling pilot, Air for Force to pilot as Reserve. He flying

an down could tell you barreling and know hour, typically is on? is XXX-plus Brandon the not, what that focused runway, when what is So I miles don't he me, probably

Detroit the he well, going DTW I I called way the to Frankfurt, the And him on and him and at question. down his runway actually last night, we're was which Germany. roughly XXX at destination, we are about said, he toward getting and which ask that an is in Airport night's air plane Frankfurt, knots, hour, on our off XXX last in focused the headed miles case and listed was final

yes? on focused [indiscernible], that's not ground, but he's So the

him. He not. is is on in he front No, of what's focused

with focus desired place each hand We trust our the some this. the task of and going with other ahead of processes time round the We on don't to We're destination. deliver us. us at spend enterprise lot its a choose to behind to and

also same Milwaukee, package However, to Saga's of been back time, look received a Commercial where the and at see sometimes where order Director in you helpful the Production Wisconsin, I it you're in from These were holidays taken Miniki. into and is different There's breathtaking Wisconsin. have to a going. of form calendar. photos a really the from collection Joe photographs. of of in then presented parts had Joe a collection scenic curated XXXX

the to while cover back moving forward. phrase, looking the calendar, of open [indiscernible] which drawn I carried As package, the the

the forward. or say simply as heard are the it Many phrase end originate, of Latin far the hangs we we translation, put We're are are XXXX processes The That's during optimistic others. I really and so bear [indiscernible], beyond moving this, looking maturation now we Sam fruit use, [indiscernible] on starting this. and reaching you call beginning, goes while and place in optimistic about reason this stage. the back, is from to and like just

our uncertain a our purpose, XXXX, or our faith and of sense we communities, so with cynicism and do our begin somewhat shareholders, without in trust we and a our of unrelenting employees As certainty serving an despair. processes with customers,

hair We with optimistic our will for on a run XXXX. and like in set growth sale belief very is fire,

Saga your Communications, all yet company interest time best any some. Sam, forward do your the questions? the of on back, again then planet. and broadcast moving support Thank Looking we have your and and for you

did. We few We in. a got questions

them of are related. Some

one us for as but still some are rates please enter details you beyond? and had made them peers progress, we of Some playing a you XXXX sending great is, out our totally is our couple independent. are like the XXXX Chris, first And investors, digital We is more of give Notes the our as on wondering beyond. questions. and what and out, we've pointed that that thoughts growth

you'd still number and Currently, and then during represents local big process total color if in We're biggest start X% I to like, during I'll Sam. call and and in net you remarks we this our others. this our revenue. of add Again, gains have that XXXX. can area. going our impact touched anticipate digital on Sam XX% process process, completed. And digital. is in implementing blended the lift about the will and we of from with markets. both just selling anticipate and this this we're that We forecasted our

Sam, add? anything want you else to

No.

my individuals With good to adapting little good. to were before the at fast think We running out that's you pointed got the that a slower, pace on as think in folks right the team very I but improvement some very it. to in do I and we're brought reference we digital best-of-class We've a -- adopting see marketplace, XXXX. you'll now, hand.

[ is call a has of innovation And leading very architect Matt this the done this. implementing progress. just name development on We one and ] take him the and recognize this to pleased the to time I is yeoman's is very in and who of somebody want thus change. and he And [indiscernible], the this. excited with His far, charge we're work who

told for already. were people, and Lafayette? ask them, paid in said of a Lafayette, multiple always shareholder a when ask X was banker, also And a which I'm because lot and ask multiples not we've about what's a the a you couple X I've have I I [indiscernible] talked Did of there multiples told Shareholders deal. about Chris

broker what and the said, they being enhance as buyer there There's financed, received. position the banker the got what paid, business, they broker their there's they multiple. the to there's said real the Here's the in what seller what best the said was then

at tough multiples So of look them a are to number we use different in ways. because

you the is know strongly and Some the Purdue see I people down we is And it. you and when Long to make out, backs of buildings. the all area. as we're new short changes. of is, Lafayette much here's there extremely, when a great pointed do believe sorts think, or don't add going go University the how therefore, do growing opportunity, Chris it about cranes acquisition and they an multiple

which the plant, Lafayette a Rolls plant, expanded a with Caterpillar has is aviation aviation itself division Rolls so [indiscernible] big relationship department expanded of and has at Purdue has there their which [indiscernible] because on. with the

[indiscernible] very a what we're for has they've been locally to involved a just It's up doing. that really set New the market. And and fact our to us use basis enhance exciting tools all resources so

impact multiple are and give financials we prepared So closing hear they financial specific how to XXXX, a forward. a you'll go we we're as or not more impact give about but forward for looking our to

prepared are We out. say to boiler

out. Boiler [indiscernible].

Noble or answered a questions. got think for to the And general We couple also opportunities? from question current M&A Michael first one quarter. expand another are pacing Capital. Kupinski the other second these the I And asking upon seeing is already of quarter are questions and there for We data And at we I've Chris, he's provided market? Lafayette, some of how

As said are there other we before, opportunities.

they to yesterday, we received X fact, continue In come. and will

we make our be shown be are very and I they're marketplace think prudent those seller, not be when consistent we've going a careful to acquisition strategy. to purchases, we'll as obviously, they purchases, a but buyer, and market we with do will the in that need

yes, are forward. think there So I opportunities going

case-by-case review on move just a those basis We accordingly. will and

Kupinski. Michael extent, touched more add Again give it, chance question, bit the if to then on some Chris. you'd final already you And a like, to from and color little we've good. a Very it but to

company, outlook What been you your peer your classified others group. growth In is This terms a the for are national national are as it's advertising? been seeing that What is has advertising? revenue area what tough for of not? but diversification the for strategy,

because -- that our way, as storytelling Saga presentations, the part the is help a of that impact help, again, have previous CATs national executing story Bruce in the earnings with your [indiscernible] compelling local $X and national now the a face-to-face, proud more Well, to initiatives. our sales, our success we've that that Michael, network and forecasted like cats stories. XXXX. the more very also of taken Director much our team with stated team and in we're of additional million belly-to-belly NSM, calls, huge Research investment taken we approach of CATs and we've to of We've Tom in to Mario Warner. $X.X vertical. has that a in making the We're better have We're revenue our on telling had an And Christino, community million

Very good.

for did. to had I think I X of last good I had But I similar political some was wasn't. It that more basically, it's the it. And outlook for that our really the what's question. We color said to the year? remainder one.

one. questions. answer going got Sam, you haven't to you let I'm to these do this

Okay. . Political always is variable.

we depending While were have where ago, what's years to the down and where we're the But at we end at where be state, going we past to X a year, the in we on X of ago. where it think were look surprises, both years back we because X were X where we years years ago, battleground also the projection good had we of election. ago, bad were we've comes

going a most of there. whether as race, get big community. sometimes our or medium-sized money political presidential there's what's race, comes big a school a make a a oriented, senatorial difference you down we to on tell that board not in small can community money, big going or also race it's It in a to governor's a to it be will congressional election I is

because not have as We a outlook have had still this much would So the to of a project any political seen numbers us this where of we starting I've up on. and year, And political big for to so do year. we with point as there any also it pick we for But out radio -- heard be this there's we later thought positive far at see. lot are. they significant hard significant it's believe that just there'll a -- for confidence

to talking an are consultant. We outside

are have on with already out in if us X. here basically the in he We there up handle those with Who can help we're market a what's have call, our the not on setting in right what's every point direction does week in tune markets. and going local or next in managers

quarter see third you'll oriented. a think think it's to quarter be going but lot I fourth So more, I and

Get for entertaining, be your popcorn certain. it will because that's

say To good. least. the Well,

think I done. we're

over think, ready Matt, you you let up. we're back it to and it I to wrap turn

everyone. This today's concludes you, Thank Certainly. event.

this participation. may You have a day. and time, you disconnect Thank your at wonderful for