Saga Communications, Inc.

Good day, ladies and gentlemen, and welcome to the Saga Communications, Inc. Q3 earnings conference call. At this time, all participants have been placed on a listen-only mode. It is now my pleasure to turn the floor over to your host, Ed Christian, President and CEO. Sir, the floor is yours.

Thank you, Kay, and I was going to kind of freak you out by going, thank you for holding. Your parties will be with you soon, something like that, too, which would make me wonder if we really were alive or not. Hello, everybody, and thank you for joining us on this call. Sam Bush, as always, is here with me to discuss what we have done, and I will be here to discuss what we plan to do. Do you like that? Putting you in a historical? You're historical, and I'm the futuristic person on this. With that said, I'll be back in a few minutes after this.

Sam does finish his recitation. Very good. Thank you, Ed. This call will contain forward-looking statements about our future performance and results of operations that involve risks and uncertainties that are described in the risk factor 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 in the selected financial data tables. Saga's third quarter results continue to show significant improvement as the economy continues to recover from the market uncertainties that are attributable to the COVID-19 pandemic and related economic issues. It's important to note that there are still numerous uncertainties that are ongoing, including the much-talked-about supply chain and employment issues. That said, net revenue for the third quarter increased 19.5% to $28.8 million. Free cash flow was $4 million for the quarter. Station operating expenses were up $2.1 million, with $1.7 million of that being due to increases in sales-related expenses, including commissions, sales surveys, and advertising and promotions expenses. Operating income was $4.6 million. Net income was $3.5 million, or 58 cents per fully diluted share. Gross political revenue for the quarter was $256,000 in 2021, compared to $1.8 million for the same period in 2020. Year-to-date through the end of the third quarter, gross political was $894,000 compared to $3.1 million for the same period last year. Without political, gross revenue increased 26% for the third quarter and 21.5% year-to-date. While we don't expect a return to 2019 revenue levels for the full year in 2021, we are pushing to get close to the 2019 monthly revenue levels as we approach the latter part of the year. Net revenue for July and August were both approximately 10% below 2019, while September was only down approximately 3%, resulting in the third quarter being down a little less than 8% when compared to the third quarter of 2019. Fourth quarter of 2021 is currently pacing ahead of the same period last year by a little over 8%, excluding political. Keep in mind that we had $3.8 million in gross political revenue during the fourth quarter of 2020. We are seeing some political in the fourth quarter this year, as in October we had a little less than 700,000, but we don't expect much additional political in November and December. Our strength continues to be local direct revenue, as when just that category for the third quarter is compared to 2019, we are down a little less than 1%. We are currently pacing approximately flat in local direct for the fourth quarter of this year compared to the fourth quarter of 2019. As a further comparison in the improvement in quarterly performance in 2021 compared to 2019, net revenue in the first quarter of 2021 was behind the same period in 2019 by 20%, while the second quarter of 2021 was behind 2019 by 13%. Of course, the current fourth quarter pacing numbers exclude the potential impact of ongoing events as previously mentioned. For the nine months ended September 30th, 2021, net revenue increased 18.1% to $79.2 million. Operating income was $10.1 million and station operating expense was $61.6 million for the nine months period ending September 30th, 2021. Free cash flow was $9.9 million for the period compared to $2.5 million for the same period in 2020. Net income for the nine months was $7.5 million or $1.25 per fully diluted share. Our balance sheet showed $62.2 million in cash on hand as of September 30th, 2021. Currently, we have $53.5 million of cash on hand, reflecting the $10 million pay down in bank debt on October 27, 2021. I also want to reiterate that Saga reinstated its quarterly dividend with the declaration of a $0.16 per share dividend, which was paid on July 16, 2021, followed up with another $0.16 per share dividend paid on October 22, 2021. This brings the total of all dividends paid since the first special dividend was paid in 2012 to over $73 million. And with that, I'll turn it back over to you.