Saga Communications (SGA) 7 Nov 242024 Q3 Earnings call transcript

Good day, everyone, and welcome to the Saga Communications Third 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. Good morning, and welcome to our corporate team, our shareholders, the writers from our industry's trade publications, and our Saga employees, all who have joined us today for the third quarter earnings call.

being for you thank here. So interesting It's half hasn't Today, weeks, the been citizens another of in it? few the U.S. are elated.

woke their a payroll Regardless of saw our to more The for no question choose and these half up Street in We forced and times, unhappy or a other it's broadcast recently on it. frankly are the are turbulent future. aisle putting the of sectors the side been layoffs truly about advertising for and which partners advertising. you're on, yesterday hold concerned thing, and some on many Main meeting their It's of going between time. automotive

we So about it? the what question do do is,

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belief faith, no it long You must how matter an takes. prevail will that having you maintain unwavering

continuing consistent, be and through work must You uncertainty. pain to

You to must decisions and your acknowledge your and are and and it plan to as a must develop crisis. failure by bad inevitable, mistakes the and accept you embracing difficulties overcome acknowledge constraints temporary team challenges yourself, that temporary in live

change digital during that decision path a be economic this transformational personal unrest, spirituality, midst And Main small consciously would massive values morality, political and footprint made Street. of the This chose the ourselves different of downdrafts of maintain all uncertainty on chart in sense turbulence. Finally, you and stay discipline a layoffs, without expand focused, our must business and to meaning. to we painful type through we put

landscape, And only costs as a definition, time. but during this additional creates any and off plateau, additional R&D expense, of expenses Admittedly, expenses. will change we understands, of person and which consequences a knows for during we're Saga was innovation. mistakes and unintended nature, very its and money reinvestment, advantages course, at able grow. Now late and One occurred look there transformational that a is observe be reasonable others level then by its disadvantages. had intended the carefully that both the to the the digital into made and back entry advantage

too. disadvantages, were There

in During our space. sellers tardiness, we levels our the the skill of sacrificed relative digital

great philosophy the to a education up and of training necessary get digital speed deal was to we're So new and our media on implementing. time advisers

then spend, Matt grow understood We the with process radio's the verticals. and us understand by total team of Innovation Burgoyne. This are headed that have digital consumer consumer achieve for and growing inwardly Matt product-oriented role the clear, advertisers and a same our helped Growth, of aligned to journey how based It's who our intentions To digital his be to to those a is to a percentage Director protect results local ad growth radio built while Saga's at sales they this journey. the advertising. play is or on on exposed not a an focused in a and embarks our methodology when philosophy, for better process. time, product

specifics online just Q, on our business. search call we've dovetails them the the dash moment. XX that the graphics philosophy advertising. a implementing on website, a blended visit other share client's with news We months growing and client's streaming the nicely This top-of-funnel Sam move been and in of Saga's with capitalizes of will this of e-commerce, sites, the XX past radio best in for program. in on consumer verticals actions specific some to call philosophy click to power series it name, to or Furthermore, their the

the knowledge, that and advertisers knowledge advertisers direct with year, we the share providing to past enable using the in the and with to most resources This to from in in-house over advertising local So the been advertisers, national from way allows our them share media training, that large advisers with the have those our blended turn market levels compete sophistication digital tools. even win advertisers. easy-to-understand get them a the behemoth-sized playing field very equipping

As mind, by astounded to keep just track blended advertising, in returns. only we we begin our early are and of progress the we've begun,

when some the practice seeing advertising. are media incredible advisers outcomes We dutifully blended

radio spend. client's it doesn't Firstly, decrease the

cancel and the and and digital the to In the client's mid- the radio-only increases increases a spend that that client's radio outcome total with overall were radio saved fact, to businesses spend spend and to digits. us led results. advertising has blended advertising and digital actually radio high-double going significantly Blended blended increased

there that local more advertisers. this on path new for I'm getting then Until Sam, of growth. to I've you, continues getting direct innovation times, getting away. and it it we are to outcomes taken be They to More And not more getting going and patients, a number more our more that Question be, of had where over clients, include later. ultimately take turn sales. asked then, would we leads,

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

quarter $XX.X year. the X.X% For million September XX, XXXX, to last net decreased revenue ended to $XX.X million compared

to as Political had was X.X% $XXX,XXX $XX.X $XX.X quarter, million. year. increased decreased to for basis $X station was share. was million, per income, for political to or Station quarter, operating expense the and net the the a expense million gross to for for On a and X.X% operating million, diluted income period. compared X.X% measure $X.XX year for third the X-month $XX.X same fully revenue operating financial non-GAAP net $XXX,XXX in this $X.X bit last period million revenue Station quarter, we same-station better a the decreased

Lafayette of XXXX. they on coming procedures Saga getting closed the the in operating As the and are as a XX, into is stations reminder, we culture. fully nicely along integrated Lafayette purchase May on Everything

write-off For last period. $XX the operating $XX.X to revenue decreased Gross or for X.X% the measure that political the diluted net expense abandonment as was the a $XXX,XXX in September the we at net $XXX,XXX income X-month million assets, net for XXXX, for fully look on ended other a million financial non-GAAP in the first and income months, nonproductive income, mind reported of XX, revenue to period X-month share. for that increased period and the $XX.X period, period a $X.X $X.X expense X million. was to compared licenses was the $X.XX per operating the million, X-month which for Station same X.X% sale year. million broadcast Keep Station was X you operating markets. quarter, noncash in

that acquired. the million Also, organization you other for $X.X in music cash we note quarter income, BMI received owned stock was the was second licensing should the in when which in that of recorded we redemption

advertising our its operating shows XX-Q, quarter in year decreased growth X.X% expense in on For revenue slower Digital a about as in $XX.X station has a earlier, than rate basis, totality, was $XX net quarters. million. past the Chris and the million increased it to period reported same-station in third talking to X.X% X-month this we

the little comparisons strategic news, This midyear, continues to including way profitable providing Expenses our digital digital was because and product digital revenue, with the continue NTR terminated have services a best is This eliminate to by events. partner result of Saga people be investments positive over we in new a Net of silo our in but significant gross next for growth that challenging partner of business business not e-commerce, our by online revenue was of dollars design couple and interactive, quarters. that the business. will as offerings, for to relationship that productions, decision market somewhat in impacted continued a revenue our strategic meaningful was profitability, did providing potential.

the was XX% the million booked Interactive a XXXX. have third year-to-date for the revenue, and the for and XXXX. X-month $X.X X.X% X.X% XX.X% quarter over up $XXX,XXX period. XX% was for more up $XX,XXX mentioned increase or and period on XX% in in up in color for efforts, quarter what programs or The is for before gross September little period. $XXX,XXX through up was our the period. to or X-month For is e-commerce $XXX,XXX $XXX,XXX the NTR XX, or or events X-month This of about a quarter XX% were digital or best $X.X same market's up the Adding revenue million

revenue the an which XX% increase. quarter, the is was For $XXX,XXX,

increased both as of news, million. subset in for XX% the of revenue best recorded should the portions or advertising $XXX,XXX quarter NTR and online note portions and year, revenue for a offerings printed quarter and or Interactive $X.X for which the for recorded that the have are Online Total X-month the segment. is the in and period. $XXX,XXX numbers, Interactive of You are in $XXX,XXX we was XX% this

same Capital expenditures year. for the $XXX,XXX period compared XX $XXX,XXX for last to were quarter the ended September

reflects and and $XX currently $XX.X expenditures million XXXX. we capital balance million as in credit short-term for Lafayette million same currently expenditures as period expect in X-month which and million million facility, million the of spend $X.X million between the have year. for to $X.X XX revolving November to against company's close of For the $X acquisition. last We September drawn cash $X were compared million to sheet our $XX We period, X. investments capital $X.X The used

dividends quarter XX, digits. date, soft, to We $X.XX share quarter to we are over in paid during the October million XXXX. per a million $XXX approximately currently our Pacing low paid pacing have down mid-single for the fourth remains quarterly shareholders we To $X.X and dividend for XXXX. of since on

Political nicely did pick in up October.

for November we had XXXX, X, year of total million. $X.X of political the As

just in recorded $X all Political last in right news be of the that current the total including ongoing revenue stations Based that our year. of addition the inflationary our We and XXXX, XXXX, During station fourth the $X.X a on currently development, for expense basis X% staff, year is we as political that by looks election in to same-station million compared in and the million states to approximately year. bulk environment in presidential we projections, October. million by investments increase $X.X online expect have significantly quarter for the the interactive approximately this was sales on our our operating will product. in the for to didn't expectations, to gross X% year training driven our

and expense million XXXX. the administrative that corporate We will anticipate for annual general $XX.X approximately be

with be rate expected is to rate tax to X.X% tax going XX% Our of XX% a forward. deferred

to back it Chris, after give you. lot numbers, a of I will

think I hear ongoing safe terms Sam, there's number that environment, in our Turbulence the use we and to and seems than in in experienced we phrases say a what that and Well, the of economy sectors. it's sector about. be to more recently. lot Nothing turbulent a turbulence those of one

most month city X radio online stations Carolinas. was Helene, havoc landfall made of the all hurricanes called that the Asheville, XXXnewsNOW. way you of site Florida, wreaked West There As Hurricane was and North also first massive The Carolina an the news to Coast of in of X decimated. know, absolutely owns last Asheville on the flooding. Saga

along ran under -- dire. Manager, not led circumstances it's what Dempsey, GM, Radio water. Asheville Group are from to Steve President, Because figuratively of that's The Richards; time we and literally Operations even Engineer, when others, was challenges by the with and members do, shine, them. away and when the Davis; Group Cameron towards Chief Tom many Media Asheville

flood interruption. hospital potable hospital injured was hospital XX% Water running into a brought were whatsoever weeks, power. staff had the no tanks of this. victims. could amount FEMA moment, and wiped so still and the facility The for were a Internet limited thus treatment agents, injured of water the today. picture was for The phone, was water access. no by out, with without No So the protected no treat there's there water city overwhelmed

from way was It a lost. assist. Texas there XXX Additional even lives And Canada medical to were over personnel zone. and the came all sadly, war like

to of containers their had hauling stations Group streets Media During mentioned they radio only to information feet radio the gasoline Asheville employees The full to operational and Group air. all community, microphones, to the thanks the radio all in Steve, live who who the air, on X-gallon on get information mode. Media The mountain for simulcasting because I way this the critical keep needed. were Asheville was the Media were them on our generators moment chaos, and and Asheville like Asheville were ago, stations disaster and X a X direction of up operational backup Cameron transmitters Group literally a the remained stations the

reached out Asheville. how Media The in in and Group of assistance. they we country Foundation impossible. responded to Asheville see could whatever me from out making It of grants even the Broadcasters to No needed. all of one employees help was and need over immediately to available were who Broadcasters America get could offer

Carolina and Group Charleston Saga's Media help Asheville with So employees. drove a with corporate and unloaded our Carolina North for team what did, we box and specifically to it office Group the stations, supplies truck of Media from South packed water it and our

took was ready and and there serve messages to on-air of inter-market operate, free able know letting the And Jeff ran and and also We Morning them. behalf they and and were in air who that finally, between XXX.X with an Show The businesses, Show FM open open live the listeners featuring WLVQ. Rizzo, that exchange QFMXX Columbus, on Torg Elliott Asheville's on WTMT on to were local place on Ohio, Morning Mountain,

the was emanated water the real sanitation, professionalism first all And those caused. Helene images of The stimulating, from frankly, that at were one a the The look and no aired best humanity on-the-ground must-hear entire exchange no radio was as radio. of it water, Saga-wide bowl devastation then stations. trapped no waste. cereal interview. and of a relief the of doubt. desperately resident power. Asheville for was and at had said, sense radio giant effort citizens No needed it, kickstarted interview without horrific, The And It in It riveting. on was a its proper who insulin Saga the

critically flood. an is Here's everywhere. enough. what so after our people can't important say a excerpt flood from to Hendersonville said "I victim the Radio

What the can't without on TV do honestly not you don't think just I radio? a because I sometimes would when it's we simply flip disaster available. because forget a or Internet hits, know. we

bless So And "God ended she I am radio." very very, with thankful." quote her

and to She say She The or we without and podcasting didn't would do our response said, do radio. what the to would unprecedented. communities passion say commitment would without needs streaming. what didn't Saga's audio. we for we people She serve do what was without our

can outcomes information Name the What hours. and a communities Asheville's with beacon of disaster our audio, original providing #X exemplifies say darkest serve listeners our can in that that? customers. hope, is one. reach the how the as radio connecting of essential and commands Radio other for connecting driving media medium attention, deeply

the And by of they donations. are you if still are taking way, any interested, still

B-U-N-C-O-M-B-E. to go that Buncombe, county in. could which is is Asheville One You O-N-E the located

weather So said meaningful walking you come will and forge this best all side to more we our punching of these profitable them. "The equipped Frost and out how other better all times, to and Robert storm? on trained, Saga continue turbulent with better both customers, bring figurative stronger, we is is a through way the do relationships back best. it through." out literal around, and

for Thank part talk earnings being and call, you time. to we'll you QX Saga's again next of

Chris, in. few we of depth. we've but can into Most a a touched come little them we at had on, least bit go maybe more questions

staff, sales The talented business, headwinds in first digital face digital of competitive environment, what that your economic digital business, terms you the growing the is, are in headwinds?

X for are and Board. I with are Sam, think corporate it's And to that start about the The simply just our advisers, XX this catch were really our with time, to on focusing our We causing when our processes. talked with cause there the and issues things the media years up. can really, team, with come like question. words in about training our are talent, or time -- behind speed, that leadership downdraft us staff, XX that or we've mind and some digital of

So we of That do. had lot a and money training. time and to catch-up takes

to transition, sales really made we before difficult, been it's Frankly, hire Talent. and onboard this talent. find, good

really that talent. with processes hire and our we to even strong and evaluate have So the find

mentioned, talent and the people, the The to it to takes then So then it onboarding time. practice time time not And And only the get it. really good training, do training I is training. challenge. as takes at and the of a also takes

will to run are faster you results which and final the The speed. and slow, element this, the that's we having So come. we practice play brings you it, the not learn, fast, the get can faster play can we better in better more the the at we

good. Very

talked what's you Main saying without Street. But last to with the that looking know Palestine, And the the We about the say been also were and economics else like the what on over political in advertising all QX? world, at of and anything little of heading QX You would a the the about the been going in of market aspects elections, the car year obviously Ukraine, on advertisers on political. talked bit issues tone market Street the Israel, going the what's Main advertising about forth. you into so

I saw and weeks of I news. news Stellantis GM and mean, just layoffs there's good Well, not think good so couple make in ago. Detroit you a major both

we couple they're most And that major not sector people saw to from are people the to me, happened and train without I them understand, and them. equip resources finished. also We over can't last of layoffs the what win important days, resource, broadcast and without and our

for the is really -- of that's table. off really it So me, that part

our I of to has yesterday. pretty the markets their got same stock one of our from actually saying leaders said think, the I meeting, or having Board That was a when multiple time, been a partners advertising were advertisers in are actually times. well At whether meet But market that about payroll performing in I pause it our that that that. actually campaigns. decisions shared said advertising one and wasn't metaphor to make

So on can there ones keep We bad focus is control we we news, punching we control, some and and the fast both really good don't. and and news just through. some run

Very good.

I up you the call. think think in Matt, direction. if And everybody, I we're Absolutely. good, for we're right wrap the want to thanks, moving joining.

Thank you.

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

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