Saga Communications (SGA) 9 May 242024 Q1 Earnings call transcript

Good morning, everyone, and welcome to the Saga Communications First Quarter 2024 Earnings Release and Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Chris Forgy. Sir, the floor is yours.

Thank you, Matt. And as I said last time, we're going to find a place for you and our company with that docile tones that you have.

that. on work we'll So But again, is the to who and QX you, the time Matt, taking on call. thanks to earnings everyone thank join Saga's us rise. a support We debt continued on expense man XX-day more the hearing and the participation and company been company that old I've are are other in best appreciate increasing broadcast we interest, on plus bad Saga from your planet. Lately, more is believe like the Communications, receivables broadcasters, things booking paying and are Clients later. later even Saga buyer, a seller. is not a

talk still our look, cast [ the So a we the company. we take the over industry for too kind aforementioned to the of and of you there broken, not spend is nothing or a chosen there best And have some is to wows slowing of At do differently, and problems the and we the gravity here's school, sector. in Perhaps some X% me let it's Well, of to and us you. about radio and wonder, we've pie. just makes latter. Remember it ] buying in the sit story stay its can have a gets quo down, a is. But behave math choose could used -- media the of experienced just we bit. bit one course status

that XX% does of group ad example, market of market. in if is group shy getting the a in share only the X% just for that So you're total a that really in revenue spend radio of market, station in

web with so. money Spend that on but with ad X digital and do and use an customers with or have to digital average And talking over every advertising, XX% Forget "great single digital day, we vendors their about yet not the I'm deal X the providers. products development, to budget they they're different of ones us. relationships" X%,

primary this majority industry an with their X% part, have trust we discussion enough So to XX% the have I objective fact the talk our for as fact save all the of that has of trust The customers, with all to earned have months. protect us part risk. digital not times transformational for the the us a you those is, discussion to most you've about before calls, of final XX stated at to the And of bit yet. sellers XX% have in advertisers have not X% opinion, we the X% the this. heard many provide X% plus yet discussion. The time. them company. skills Saga our but our that just us to become of our is Saga's is, to necessary quarterly is a on and it change my do with the been and to the been through is But and qualify a who is our shocking, And going past

help them the our we're to into their and and earn the providing vision, finally, the skills provided our discussion. to have We place leaders XX% products, the sellers now

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traditional sites or Because work is subpar think now? top of work call virtue for our now I change would our of and have last our only funnel, we more the some terms, prep the performance. in I we will advertisers and Layman's partners been So advertising we and -- then details of services. Sam a many some online months. Saga why and by -- the call bear doesn't QX XX radio would media without bring as can and of this you for then radio and what and cover doing new our to agree, initiate It's would

the shocking a which misleading, bit are Sam the see Some story, will of headlines you provide. full and especially when

to manage not a someone it's satisfied we performance If broadcasters? don't not. the recently told relative Absolutely to by we any can't you manage and other alike of performance. Saga long-term, quarter spend me, Although relative means. Are our

growth to Our continue by as Yes, change a this direction voluntarily? up You expenses change costs? are. part we we encouraged the bet other of we're are and through the Are going go the operational and transformational we are. they progress of transformational necessary and through this of

need You spark a start to a fire.

been probably Bush. will is that, our the heard You Sam, that, over match turn with floor the now yours. it and to lit. And all has I Sam CFO,

Thank you, Chris.

of discussion performance my from favorite that involve section the most certain in attached directly uncertainties forward-looking and and that results about also contain are contain XX-K. This selected conference Now call. described statements paragraphs call most comparable GAAP financial our X the This tables. the financial measures of call financial whole risks for of recent the to a in in the our Factors will measure will measures. Risk all Form data are future non-GAAP operations non-GAAP Reconciliation

the to numbers. on Now

For $XX.X last decreased a this impact million did Political to major million XXXX, year. the X.X% quarter. revenue not $XX.X March to have net quarter compared XX, ended

$XXX,XXX expected Political we has We same quarter, we hot expect up the impact determine, are about, was races to operating where talked X-month million difficult how X.X% As do up in. Station compared the the year for pick it will Chris progresses, expense, as for markets this year. the year to year. be for had states slower gross far but they to political period. $XX the will in period and this than so and as been to last revenue $XXX,XXX it's still the

As competitive our the for previous discussed of staff, reward increases a or recognition quarter's first an we the station do to and and approximately purposes, operating and in pay so. payroll of expense. strategic economic made pay increases related we calls, decision continue conference they the taxes in These amounted estimated increase $XXX,XXX work and do XX% to to

smaller total, insurance XX% amounted and of and first our content quarter. approximately also station This, our still in increases operating including debt in meaningful station expense. to surveys, expense total in increases interactive had We sales health streaming other increases in operating but expenses, the bad

product. Also, as our start-up $XXX,XXX up of the with bad bit overall was in for very quarter, the the This on unusual as does a well economic result more was overall and of was in news gross increase which online color an For conjunction include expenses, and issue expense content conditions the expense X expense interactive incurred Saga with for streaming $XXX,XXX. interactive some impacting the the clients. the agency debt for of mainly our was revenue

million year will for be of the an progresses. We had same $X.X this through last We of $XXX,XXX income loss the operating as to for quarter the year. an working quarter compared operating

of to As compared ended included million XX, X write-off noncash quarter to the which broadcast $X.X for abandonment expense, in expenditures was the the for $XXX,XXX was on non-GAAP XXXX between were spend measure, other loss for and for the a capital $X.X sale currently operating last press million quarter million expect income, $X.X $X.X assets, March in quarter. our XXXX. same quarter. Station markets $X indicated period Capital the We the expenditures and licenses release, the during million million operating year. of operating nonproductive for the in a

we previously quarter. revenue, was quarter, the to For good in see the our growth stated, as $XXX,XXX continued up which interactive for

it's note mostly local is direct quarter. for that down important which quarter, While for as $XXX,XXX e-commerce, revenue local the to the recorded increased gets revenue

to is believe As both that achieved there of these in still we significant growth be stated, Chris areas.

adjustments the local, our previously we operations, Neuhoff and XXXX. we stations The March family in total million level share on current the of $XX.X to Indiana as the both our price, X, XXXX, June X, quarterly interactive serving for $X.X their our million grow them NTR. Also, local foundation investments commitment in dividend March is staff's million. The XX, types, reflects We online strategically The approximate to of subject great $X.X a continue bring short-term X. of national, and XXXX. financial of company's purchase on to is strength from plan March work acquisition on as as we X corporate invest are Lafayette, million build revenue of and of community We balance per $X.XX paid off utilizing a market including specific cash to Saga e-commerce, in in planning of to $XX.X as family. radio into products sheet closing an on and news announced as to

soft a down low would At by our shareholders mid million the over down station since volatile quarter ended to X. digits. Based XXXX. on paid will $X.X That's single dividends and X%, the increase an quarter digits. XXXX. operating are both but our from as we the this pacing our to expense for and $XXX for April on paid low we've we expect currently April to X% of. Pacing and we date, also second to we past approximately proud somewhat suggested up of in compared that dividend first high what per change We current second May quarter digits, be year total point, the first to $X.XX currently single share June very to remained expect something overall as in which I'm approximate variable our projections, have for is To million single

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

with XX% Our you. to over a to it tax XX% going tax X% forward. And I rate be to X% deferred Chris, will that, turn of is expected back to with

you you, said have call the Thank I isn't We challenge just remember an if that broken, or during radio slowing will. earlier just down. Sam, think I it's perception image Sam.

but And efficient would if you, adults that, diverse know So week satellite reaches YouTube, audience ad given things an told all ROI does not provides spend of any radio air, I Amazon, if hyperlocal reaches combined, over out Music, the jump Apple like most these and you during do now. an have national and and both in delivers services an XX% and delivers plus because appetizer that I XX Sam U.S. I app. the app, app had you a I all what the anywhere, streaming CPMs greatest Spotify all the targetability, other of ever digitally simultaneously over provides is all right both

You like that app?

you get ask I'd to where it.

not to. her move prime, it's It's down but professional called radio when slowing to in then a maybe It's sector, speed something and And occurs, is to But radio. not speed loose. the down, broken, little for but a starts passed have them injury the the something Radio is athlete slowing you time order who's up tough to toughest to And of a career-ending have enough to and from slow just scale isn't entire it or can when back broken. for down. Think radio we on up just Saga cut Saga. big is them if is misunderstood. his change

and change to have is hard. You but change, no choice

for wait to We transformational growth. We've career-ending and are change to not injury, choosing a chosen. create but

You've during takes transformational will, the and the own to strong bring voluntarily. change. on times keep stoked. call, say and we this have stomach initiate this start about it to our it time, fire if ourselves, we've chosen, and our many it bringing discipline, spending investment done you And me heard We're very

If and easy. I said, it, were be would everybody doing easy, it not a isn't wouldn't change I? immediate dam transformational As is worth certainly easy. Anything isn't

fear anyway. is moment stop just many courage. fact, holding Encourage nothing one more We're when it than gets In doing it longer. on lack hard, they

in months, those diligently want and XX staying and in will who of doubt the see it silos succeed. been developing We've don't believe difficulty, you of don't even for like to leadership part critical e-comm. with or is vision face growth our You you business sharing of a quarter-by-quarter

revenue, space in XXXX In this months, was our revenue. $X was up During streaming at year-over-year best $X.X our again, lift nearly was a million million, we 'XX month in biggest XX million the trailing XXX% our QX and month TTM April ever. year-over-year ever. April, and our was produced $X.X

and X.X the million step services That's in deployed vision of new begin will XX our we're sites X million users, Now over then online views Again, and the for our doing online growth million tools now process. this and speed. What is end services. growth amassed page of be Year-to-date, on $X.X have resources to new over operating a over transformational to started all XXXX. process. provided revenue by and June with the it next we have

we're and and necessary and we Now for teaching the providing to skills, leaders execute. media execute, advisers order in training must now our

resulting shows, morning expertise then and to audiences our Architect retraining paradigm our is products, over leadership have It's our ratings and broadcasters reach we persuade advisers all this think music. along time team, as consumers how the partners. more the behave to are along and or it's they our the Wayne heading ultimately and by our we Senior critical media acquired President transmitters, all about knowledge entire capitalize I look and Innovation a to shift corporate possess minds listeners of our we're are how that success. This the way, and product customers' Matt go Burgoyne and Growth, and our even about advertising our that's in sales on we up not for our Leland We the title, as with more with about cool on our tough about the an them, our about they effort towers, patients, through of those serve have with business. Saga's resolved for they and more Saga's learned engage clients and more Vice think process Operations, really customers, we advertiser,

there is broken. better through not go no than now So to really time down. Things change. just transformational right are this slowed They've

it by along, there subside, it a all said are headwinds other people those pack, sweating. revenue. definite on out broadcast our up stronger are and headwinds the and serving time doing the realizing when and during better comes the will being exponential new of versus have I side tough now when flat Saga As come growth In ahead times customers the are to

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remember may you fact, quote. In Ben Franklin's

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this first, questions, questions you the questions seen to we even done when nicer we've yes, were put honestly, asked Well, that, but get it Tennessee we went sooner answered We with already in so I when in and listening me, questions, along after here you'd always done I the coach. I put at nice some I'm -- want call. Chris, can that are turned did to get is, it's it's think can have -- helmet all so that to seeing had that. But looked and get say, going me your about all a if stuff of

and with progress So of a overall year, we've I'm you going being it digital, would revenue. And say XX revenue tend answers, between the XX% our basically XX% on certainly a in was my and approximately first this so overall conservative -- for for ones to financial guy, goes QX, them that to one But go about again, to is how quarter XX% to XX% I with digital the -- was approximately and that the -- track be our the interactive on that the year. were talked for which I digital we in ballpark percentage was about. XX% of of I'm in are

I So that question. appreciate

Going discuss as buybacks? year question I'm of together, some of there of current about and stock question for to to dividend, the the other thinking next The the them a and rest questions. well put on X amount please was when of as -- was discussing dividends going

take if We've I'll not you declared of the Sam, yet So that. dividend don't distribution. first half mind,

However, quarterly special intention shareholders. recommend to it operational dividend. it's value dividends management's to is the whether to or variable return

and that year, I Chris, new every the that, time we talked The variable quarterly special Board this well acquisition I for buybacks at for Board would and meeting. Board to years. first as opportunities. considers declare add conditions stock will their does paid our economic consider and this said earlier the at earlier dividend, current on I which based dividends as future discretion disconsider about and And

in We to dividends recommend call. already continue Lafayette, level the intent, have of in current you we've said, to this It's certainly the which about talked as foreseeable to like management the future. Board quarterly

question is -- again Next and it was...

questions lots of We today. got

them we've we but answered. of Well, did, already more

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speak, of clusters the weakness, have a where forward blending what was to markets relative question intentions going there we -- X and a in more size the and was and one is a that to asset tie was so had to our were? really then were in base, which quarter and that of our really questions. We it so the our stronger

brunt certainly all it of but decline took -- during markets BCF quarter, yes, the the impacted the the the sizes. So biggest cities of

Just operate are FYI, then our XXX. that markets the for are of markets will that XX Lafayette in following that will -- closing, markets XX smaller the we market XXX have -- be than

our move acquisition. midsize So we will focus consider to forward smaller be and markets as always the on

that we've Very good. got. all is And think with I that,

you As and calls always, if directly, you set reach out anybody to has and questions, -- Chris arrange I with we up can further please to directly.

everybody you Matt over it So the back call. And appreciate to attending will to up. wrap turn we

event. Thank concludes today's this Everyone, you.

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

Matt. you, Thank

Matt. you, Thank