Saga Communications, Inc.

Good day, ladies and gentlemen, and welcome to the Saga Communications fourth quarter and year-end earnings conference call. At this time, all participants are in a listen-only mode. It is now my pleasure to turn the floor over to your host, Ed Christian. Sir, the floor is yours.

Catherine, thank you very much. Welcome, everybody, to another one of our thrilling, entertaining shows. I will tell you that Sam Bush will be on momentarily with us. He is here right now. But I also want you to know that Sam's elaborate numbers, which will occupy several minutes, are the only scripted thing that we have today. The rest will be, I hope, interesting, shall we say. And with that, Sam will be interesting, too. I don't want to say that what he has is not interesting. Let's get past that, because he's giving me this evil look right now. So I'm just going to turn it right over to him and be quiet for a while.

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. For the year ended December 31, 2021, net revenue increased 13.1% to $108.3 million. Gross political revenue for the full year in 2021 was $1.8 million compared to $6.9 million for the same period in 2020. When political is excluded, gross revenue increased 18.4% year over year. Station operating expense only increased 2% to $83.2 million for the 12-month period. while operating income was $15.1 million compared to $3.9 million when impairment charges are excluded for the year ended December 31st, 2020. We had no impairment charges in 2021. Free cash flow was $13.8 million for the year compared to $7.6 million for the same period in 2020. Net income for the 12 months ended December 31st, 2021 was $11.2 million or $1.85 per fully diluted share. Net revenue for the fourth quarter of 2021 increased 1.4% over the fourth quarter of 2020 to $29.2 million. Gross political revenue for the quarter was $886,000 in 2021 compared to $3.8 million for the same period in 2020. Without political, gross revenue increased 10.6% for the fourth quarter while station operating expenses were up only 2.3% for the quarter to $21.6 million. Operating income was $4.9 million Free cash flow was 3.9 million for the quarter. Net income was 3.7 million or 60 cents per fully diluted share for the fourth quarter. First quarter of 2022 is currently pacing ahead of the same period last year by a little over 11%. Although with the recent global turmoil, we have seen a bit of a softer market develop in March and going forward. Our strength continues to be local direct revenue. Local direct in the fourth quarter of 2021 was approximately flat with 2019, and 14.3% ahead of the same period in 2020. For the year, local direct was below 2019 by only 3.8% and ahead of the full year 2020 by 19.8%. Local direct represents approximately 50% of our total net revenue for 2021. And I think Ed and Chris are going to talk a little bit more about this in a little bit. This is up from 46% and 47% in 2019 and 2020 respectively. Our balance sheet shows $54.8 million in cash on hand as of December 31, 2021. Currently, we have $56.2 million of cash on hand. I also want to remind everyone that Saga reinstated its quarterly dividend in 2021 with a $0.16 per share quarterly dividend paid on July 16, followed with another $0.16 per share quarterly dividend paid on October 22, and a combined $0.16 per share quarterly and $0.50 per share special dividend that was paid on January 14. Saga's Board of Directors declared a further dividend of $0.16 per share on March 1 to be paid on April 8 of this year. With the recently declared dividend, Saga will have paid over $78 million in dividends since the initial dividend was paid in 2012. Capital expenditures in the fourth quarter of 2021 were $1.3 million compared to $434,000 for the quarter ended December 31, 2020. and $4 million for the 12-month period into December 31, 2021 versus $2.3 million for the same period last year. The company expects to spend a bit more on capital items in 2022 as we reduced our capital spending in 2020 and 2021 due to the uncertainty associated with the COVID-19 pandemic and resulting supply chain disruption. Currently, we expect to spend approximately $5.5 to $6 million for capital expenditures during 2022. This does include a couple of building projects, which we will discuss further as the year develops and as they come to fruition. Ed, with that, I'll turn it back over to you.