- Net Revenue: Decreased 3.5% to $28.1 million for Q3 2024.
- Political Revenue: $677,000 for the quarter, up from $234,000 last year.
- Station Operating Expense: Increased 3.1% to $23.5 million for the quarter.
- Station Operating Income: $6 million for the quarter.
- Net Income: $1.3 million or $0.20 per fully diluted share for the quarter.
- Same-Station Net Revenue: Decreased 5.8% to $27.5 million for Q3 2024.
- Same-Station Operating Expense: Decreased 0.3% to $22.7 million for the quarter.
- Net Revenue (Nine Months): Decreased 2.5% to $81.5 million.
- Gross Political Revenue (Nine Months): $1.3 million, up from $538,000 last year.
- Station Operating Expense (Nine Months): Increased 4.7% to $70 million.
- Station Operating Income (Nine Months): $15.2 million.
- Net Income (Nine Months): $2.2 million or $0.35 per fully diluted share.
- Digital Advertising Growth: Slower growth rate in Q3 due to strategic partner termination.
- E-commerce Revenue: Up 33% or $153,000 in Q3; up 89% or $849,000 for nine months.
- Interactive Revenue: Up 4.5% or $122,000 in Q3; up 21.4% or $1.5 million for nine months.
- NTR Events Revenue: Up 11% or $246,000 in Q3; up 1.5% or $87,000 for nine months.
- Online News Revenue: Increased 68% or $242,000 in Q3; up 66% or $631,000 for nine months.
- Capital Expenditures: $625,000 for Q3; $3.2 million for nine months.
- Cash and Short-term Investments: $28.7 million as of September 30, 2024.
- Dividend: $0.25 per share, totaling approximately $1.6 million for the quarter.
Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Saga Communications Inc (SGA, Financial) has successfully implemented a blended advertising strategy, which has significantly increased both radio-only and total radio and digital spend.
- The company has seen substantial growth in its e-commerce and interactive segments, with e-commerce up 33% in the third quarter and 89% for the nine-month period.
- Saga Communications Inc (SGA) has maintained a strong cash position with $28.7 million in cash and short-term investments as of September 30, 2024.
- The acquisition and integration of the Lafayette stations are progressing well, aligning with Saga's operating procedures and culture.
- Saga Communications Inc (SGA) has demonstrated resilience and community support during crises, such as the Asheville flooding, showcasing the critical role of radio in disaster situations.
Negative Points
- Net revenue for the third quarter decreased by 3.5% compared to the previous year, indicating challenges in maintaining revenue growth.
- The company faces headwinds in its digital business due to the termination of a partnership with a digital services provider, impacting revenue comparisons.
- Saga Communications Inc (SGA) reported a decrease in net income for the nine-month period, partly due to a noncash write-off on the sale and abandonment of nonproductive broadcast assets.
- The advertising market remains soft, with the company pacing down low to mid-single digits for the fourth quarter.
- Saga Communications Inc (SGA) is experiencing increased station operating expenses, driven by strategic investments and an inflationary environment.
Q & A Highlights
Q: What are the headwinds Saga Communications faces in growing its digital business?
A: Christopher Forgy, President and CEO, explained that the main challenges are time, talent, training, and speed. The company was significantly behind in its digital processes, requiring substantial catch-up in terms of investment and training. Finding and onboarding talented sales staff has been difficult, and training them to be proficient takes time. The goal is to improve speed and efficiency as they become more adept.
Q: Can you elaborate on the tone of the advertising market heading into Q4, excluding political factors?
A: Christopher Forgy noted both positive and negative aspects. While there have been significant layoffs in the automotive and broadcast sectors, affecting advertising budgets, the stock market has shown positive performance. Some advertisers are struggling to balance payroll with advertising expenses. Saga focuses on controlling what they can and maintaining momentum.
Q: How is Saga Communications addressing the challenges in the advertising market?
A: Christopher Forgy emphasized the importance of people as a resource and the need for training and equipping them. Despite economic challenges, Saga is committed to investing in its staff and maintaining strong relationships with advertising partners to navigate the turbulent market.
Q: What impact did the recent hurricanes have on Saga's operations?
A: Christopher Forgy highlighted the resilience of Saga's Asheville Media Group during Hurricane Helene. Despite severe conditions, including power and water outages, the team kept five out of seven radio stations operational, providing critical information to the community. This demonstrated the vital role of radio in disaster situations.
Q: What strategic decisions have been made regarding Saga's digital business?
A: Samuel Bush, CFO, mentioned that Saga terminated a relationship with a digital services partner that was not profitable, despite contributing to gross revenue. This decision will affect revenue comparisons in the short term but aligns with Saga's focus on sustainable growth in its digital business.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
