Saga Communications (SGA) Q2 2024 earnings summary

Executive summary

• Q2 2024 net revenue decreased 1.5% year-over-year to $28.7 million; six-month revenue down 2.0% to $53.4 million.

• Q2 2024 net income was $2.5 million ($0.40/share), down 25.3% from Q2 2023; six-month net income was $0.9 million ($0.15/share), down 78.4% year-over-year.

• Operating income for Q2 2024 was $2.1 million, down 50.1% from Q2 2023; six-month operating loss was $0.3 million versus $5.2 million income in 2023.

• Digital and interactive revenues rose sharply year-over-year, with digital/interactive revenue up $822,000 (33.4%) and e-commerce up $348,000 (98.5%) for Q2.

• Acquisition of five radio stations and one translator in Lafayette, Indiana, closed May 31, 2024, funded by a $5 million draw on a revolving credit facility.

Financial highlights

• Station operating expense rose 5.1% in Q2 to $23.5 million; six-month expense up 5.5% to $46.5 million.

• Station Operating Income for Q2 was $6.4 million; net income margin for Q2 was approximately 8.7%.

• Capital expenditures for Q2 were $1.5 million; $2.6 million for the six months; full-year capex expected at $5.0–$5.5 million.

• Cash and short-term investments totaled $24.1 million as of June 30, 2024; $26.2 million as of August 5, 2024.

• Other income in Q2 included a $1.1 million gain from the sale of a Broadcast Music, Inc. investment.

Outlook and guidance

• Q3 pacing remains soft, currently down mid-single digits, but management expects improvement.

• Political advertising revenue is expected to pick up later in the year, but remains slow compared to 2020.

• Station operating expense on a same-station basis projected to increase 4%-5% for 2024.

• Annual corporate, general, and administrative expense expected between $12 million and $12.5 million.

• Tax rate guidance is 26%-29%, with deferred tax of 3%-6%.