Q1 2021 Saga Communications Inc Earnings Call

And we look forward to talking with you soon.

The line and we'll be right back with you.

[music].

Good morning, ladies and gentlemen, and welcome to the Saga Communications first quarter earnings release and conference call.

At this time all participants are in a listen only mode.

It's now my pleasure to turn the floor over to your host for today, Sam Bush Chief Financial Officer, Sir the floor is yours.

Thank you Kathy.

First let me start by reading our obligatory disclaimer statements. This call will contain forward looking statements about our future performance and results of operations that involve risks and uncertainties that are described and the risk factors section of our most recent form 10-K.

This call will also contain a discussion of certain non-GAAP financial measures reconciliation for all the non-GAAP financial measures to the most directly comparable GAAP measure are attached and the selected financial data tables.

Well for the first time and almost 24 years.

And that I've been at saga and the almost 30 years that saga has been a public company and will not be on the call today.

And recently suffered and muscle Paul and he's back but remains fully functional and active and saga day to day business, obviously the century as painful.

His doctor called him into his office this morning to get additional X rays and he is there now.

He is always will be available for direct calls to discuss saga first quarter performance as well as what we are seeing as the future develops.

He and I as well as Chris Borghi, Agile parks, others have had good conversations with them and this morning as he heads up to meet his doctor and see.

He was very disappointed not to be able to be on this call.

Not to be able to tell the and lightning stories, our paint the brick and picture of our business that he does on each of these quarterly calls, but I will give you the highlights and rest assured and is doing fine. Its just unfortunate circumstance for timing relative to the call and relative to these doctors availability.

So August 1st quarter results continue to show and unfavorable comparison to the prior period and 2020 that we had yet to fully experience the ongoing marketplace, uncertainties, which began in March of last year.

During this time, we have continued to manage the business at every level.

The net revenue reduction we experienced during the first quarter when compared to last year was more than offset by expense reductions at both the station operating expense and the corporate G&A levels. This allowed us to post operating income of 883000 for the first quarter, which compares to 837000 last year after adjusting for the one.

1.4 million of other income we received in 2020 for the sales of land and a building that we're no longer useful to our operations.

Our free cash flow for the quarter of $1 8 million was 21 four per cent better than the comparable period last year.

Gross political revenue for the quarter was 209000 and 2021.

Compared to 1 million for the same period and 2020.

We expect political revenue to continue to be lower in 2020, one due to the new normal election cycle and the significant amount of political revenue, we did in 2020.

As expected January and February net revenue showed negative comparisons to the comparable periods in 2020.

Net revenue and March was positive and comparison to last year, and we expect ongoing months and the second quarter to show significant gains against comparable periods last year.

Internally, while we don't expect to return to 2019 revenue levels for the full year and 2021, we are pushing to get close to the 2019 monthly revenue levels as we approach the latter part of the year.

We are focusing our efforts on comparisons to the revenue we obtained in 2019 and managing our operations Accordingly.

All our internal management reports have been revamped to show how 2021 is developing and comparison to 2019.

Pearsons to 2020 after February are not very meaningful revenue relative to how we should be performing as we move toward a post pandemic environment.

Posting high double digit growth against 2020 monthly numbers is nice, but given the type of year. It was it is not meaningful and the long run.

We had $56 3 million and cash on hand as of March 31, 2021. Currently we have $57 4 million of cash on hand.

Our outstanding debt remains at 10 million, which given the cash on hand presents no covenants or liquidity issues leverage per our bank covenants as negative when you consider the cash we have on hand and.

And I was when obviously you all would be.

Looking forward to adds a picture S comments, and what's going on and the industry and Unfortunately, we will be going that now, but we did get a few questions that Ed and I talked about this morning, and I wanted to be sure that I gave you.

You his and my perspective on on where we think things are.

So we did have a few questions.

The first one was a question of saga reinstating, a dividend and what needs to occur for that to happen.

Senior management and board level, we are constantly managing performance, which at this time includes our first quarter results as well as how we see April may and June developing we also are looking at the economic variables that we can't control such as the ongoing issues with the supply chain and consumer confidence and consumer spending.

And as well as how the states are reacting and what Theyre doing to open up the economy as well as potentials for walking it back down at some point if the if there are increases and pandemic levels of.

Of COVID-19.

Our intention is to reinstate a dividend as soon as it is feasible, but at the same time, we do not want to reinstate it and then just shortly thereafter have to make corrections to it if the economic conditions more and such.

Believe me this is a.

Daily weekly conversation and we will continue to be so until the dividend is reinstated.

Secondly, we are asked why we were asked why we don't pay back the last 10 million of our bank debt given we are earning so little interest on our cash on hand. This too is the subject of much consideration and will be a topic of conversation at our June board of directors meeting.

Paying the balance off is certainly a very strong possibility of.

Stay tuned for more on this.

Finally, we had a question about how the second quarter was developing as I mentioned before we have.

Before we are seeing very good progress with April and May growth being up and the high double digits. We are also seeing very positive trends against pacing towards getting back to 2019 revenue levels, which is and even more important measure.

While there are still uncertainties across the board where revenue is concerned one category that is still to develop is events with current and previous state controls, we pretty much lost this category of revenue and 2020 and this is a very important category for any radio company include.

Including saga.

We are beginning to see some resurgence of events, we still have a long ways to go and the good news is that in Ocala, Florida, we have been able to schedule and outdoor Expo and the new World Equestria and center in August the.

Space, we are utilizing is a 65000 square foot space or a catalyst sales team has already sold out all the sponsorships available for this event.

This has historically been a really good event for the market, but this goes beyond what we have even seen before.

We have a few more of these types of examples that certainly encourage us for the future development. This year and we do believe the revenue impact in 2021 form of dance will be significantly better than 2020.

As always please give out or I called and a further discuss the first quarter, earning release as well as what we're seeing for the future and will certainly be available for those calls I want to reiterate as I stated before that while the injury is painful and timing just required him to be at ease Doctor's office. This morning for some additional X rays and <unk>.

Zambia He is fully functional and believe me active day to day hour to hour, we still get a emails and [laughter] calls all hours of the day at night as you all know.

This is what it does and what it will always do so thank you for joining us for the call today and with that I'm going to turn it back over to Kathy.

Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.

Thank you Kathy.

Have a good day.

Yeah.