SGA - Earnings call transcript Q2 2024 | Saga Communications, Inc.

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Operator

Good morning, everyone, and welcome to the Saga Communications Second Quarter 2024 Earnings Release and Conference Call. [Operator Instructions].

It is now my pleasure to turn the floor over to your host, Chris Forgy. Sir, the floor is yours.

Christopher Forgy

Thank you, Matt, And thank you to everyone who's taking time to join the Saga Q2 earnings call. interest, we your media believe the continued participation and company your planet. what in is appreciate your support questions, your on We the best

the indicated of single week. an political I XXXX. since uncertainty this East. overpriced. quiet and is rising they more sector talks of compounded Middle mentioned. -- a in the rates the marked week forces continue. both of and August, been any recession been in than risk this previous by and than countervailing probably depth a wider U.S. It's the in in there's interesting funds. month trading thinner usual There's conflict other impacted largest speed recent global delay the of There's the the day of Japan Tech a sell-off aforementioned decline interest stocks are in Fed's Monday The and a media recession, is the And which traditionally lower volumes is stocks

Interest indicators In downturn saw housing what? in of the coming. and economic rates out of Media other purchases. than don't this We the main we any to impact tends coming economic the and automotive control sector: going starts the media other into guess two words, it. earlier businesses. of influence this feel But of

To you will going are consumers cutting Wall with Main out recruitment, the it. on in we hiring grocery often. laying the thing. illustrate, in back automotive many employees, the cars focus not share less a Saga less time and But things mistake, We So control, the and during It's QX largest is don't and Street experienced fewer with were lot buying can decline which categories off cases, to a a and, on business restaurants, eating grocery, is that we we of spend make Street experiencing we thing. what shortly. no

local downdraft, me with not month return. core of to verticals that holding top-performing year taken market are of leaders starting performance, in the Recently, his now of $XX,XXX that that per in it's shared range was be being He pristine economic who months Saga's after said one said the Saga's particularly will $X,XXX some spending they'll back, a clients one who XX direct. experience local revenue or $X,XXX who they've per spend He big clients back assured us pause. and have it's to

percentage spend it's if, return. advertising. they the up question largest who not in per $X,XXX our invest being Saga those markets, makes of when but of will level this in That $X,XXX a month business of So said, to that customers

trained, effort to these months, on the types for XX resourced super change come heard customers better equipped an is and exit in So these you've has about This time. to to other better talk side about that some economic past transformational serve circumstances headwinds and preparing heard us out our better over been and and communities. and Saga some of our of mitigate the growth

a better. bit quarter. you is was hear, of will for QX, you As much a Saga know, QX rough as

we before details those the wanted just and have progress the we've performance, areas So Sam highlight some control. to made gets of we Saga's in into Q of I in which created

up Network, which Cat $XXX,XXX the XX.X%. was sales quarter. which ] in year-over-year flat is or $XXX,XXX strategy Our second quarter and up nationals as it quarter Alliance up or the result feeds silo, is our the part is second our of year-over-year, [ in to for slightly the flat national, new a thanks national for -- for up digital direct $XXX,XXX interactive E-commerce, local or into space Even XX.X%. year-over-year,

a XX% [ in process burger, This community our et Streaming the determine $XXX,XXX cetera, its which entire we in is that best that dentists, or select million and the output. vertical used quarter, is up $X.X XXXX, just did first $X.X Best ] best second online is for the million already up for and XXXX QX voting surpassed a XX%, XXXX, market. 'XX months months, pizza, has the the program, and all of In X the done is we've to in Of best in first XXXX space. X in of

And and we greater quarter June Sam's which for will the in detail a discuss $XXX,XXX remarks, was new ending XX, or then service, XXXX. following on XXX% up

aside, and subscribers, online of e-mail million service the XXX an page sites just started. app getting are There follow users -- X.X follow views, currently, we're ] on As the subscribers [ XX,XXX million. XX,XXX Facebook. currently new total us X.XX And

you to little more gives is of So of a highlight. going details. the Sam into get bit that

Sam, yours. floor So the is

Samuel D. Bush

of call forward-looking you, Thank Risk contain involve that our Form and recent Chris. risks performance that This about operations are our future of section and will described statements in most the attached and discussion results selected Factors contain will financial the Reconciliation tables. for to XX-K. financial data the comparable directly This a measure certain also financial GAAP of call are in all most non-GAAP measures non-GAAP measures. the uncertainties

impact. XX, quarter to revenue year. decreased X.X% June the last million XXXX, $XX.X did have Political to $XX.X not net a For million ended compared major

which the received the was fully increased acquired. the to we other revenue income million period of in stock music should per X.X% when for BMI redemption was had for compared for net $X.X and that expense political this measure, quarter period. $XX.X diluted operating non-GAAP or year. organization licensing in recorded quarter, quarter same $XXX,XXX Station operating last the you $X.XX that $X.X was owned share. Also, year $XXX,XXX to note financial million income, the X-month we a for was for and million $X.X we cash second Station million income, As the the gross in

didn't to in remiss [ there. With in of XX, now friends I'd on add I on the up basis. X stations we if are reporting ] purchase back Indiana May Lafayette same-station XXXX, Lafayette, the boiler to a be my

Christopher Forgy

down. Hammer

Samuel D. Bush

Chris. There we go,

in month quarter. second it. a is year that $XX.X basis, million. this That You're Lafayette to X% a the we said, X.X% for minor revenue mind $XX.X for and the this Keep quarter increased as station expense to year-to-date and million, during on same for second same-station net station on quarter only owned operating adjustment decreased X

or Station For to for income year. net operating revenue operating share. period compared increased for per ended fully diluted X-month period $X.X was period. revenue $XXX,XXX XX, the financial the the $XX.X months $XXX,XXX million to period a million X.X% and June X $XXX,XXX X-month XXXX, year. $XX.X net political to non-GAAP $XX.X the million for same for income, to compared the measure million, last decreased again, Gross Station expense $X.XX X% last was was

period, the licenses other which for of a Keep in you noncash mind a operating look net sale assets at loss of in write-off was that nonproductive quarter, the and X net a million reported markets. we that as on abandonment expense, included in the $XXX,XXX the $X.X income X-month and which first broadcast

for ago. Additionally, period talked about other X-month million the minute income performance reflects second just in $X.X the in a income comments quarter the net my that I

adapt payments expense pay the changing XX% an we from X.X% our more amounted the of of a for expense generate and economic quarter's basis, $XX.X the year to as to Both increase periods or we growth. million, For period severance markets to of basis, an include increases taxes net show a begin to increase estimated period. million increased second and revenue to normalization station related in $XXX,XXX a diverse approximately X.X% X-month decreased XX% in historical same-station to approximately expense a continue changes June operating station these the made $XX.X and in as management $X on payroll or the for as conditions range projects. well did million. increasingly approximately operating a of of to On to this revenue relative X-month couple need $XXX,XXX

meaningful smaller in bad other also station increases in expenses, our We operating had including sales surveys, health increases and interactive. still insurance, debt but

[ interactive expense gross the period, start-up $X.X more quarter year-to-date. $XXX,XXX in $XXX,XXX to conjunction overall bit product. revenue for a ] was the include for which X-month in with mentioned some news This expenses color our continues were quarter the interactive of the already and up and increase which Chris for of $XXX,XXX online for the For million overall,

for year. expenditures compared were XX, million ended June last XXXX $X.X quarter $X.X period Capital the to the same for million

$X June ended period [indiscernible] million X XXXX. expect spend X-month were currently [ $X.X expenditures for prior and to [indiscernible] XXXX, capital to the capital We ]the $X.X million between quarter same XX, where the properties. For in expenditures month period the period

products types, and financial corporate including online We operations national, level invest market to our grow e-commerce, use interactive, to to local at specific we work as plan and strength utilizing in revenue and a our continue both strategically NPR. on

balance and in short-term of June as XXXX million $XX.X company's investments and of $XX.X reflects The X, million August sheet as XX, XXXX. cash

a we of the debt overall part $X million credit as while, have allocation of facility on acquisition million part For revolving $XX outstanding Lafayette, done the we our as first of time This closing as drew in was Indiana. capital our plans. down

dividend quarterly per $X.XX share a on approximately million $X.X of paid We June XXXX. for XX,

an was paid our our paid $XXX week total and of date, because to in over the of paid per about first first of it dividends share million, XXXX, we for $X.X since on quarter. X, also XXXX. I'm $X.XX approximate variable To talking We dividend shareholders this the April have million

remained results our election the soft and we to than results We first compared initial XXXX. projection. presidential were currently reported mid-single the do reported to the quarter on pacing quarter final be when based pacing same quarter Pacing digits. better today, revenue we approximately earnings. improve are for to And third expect our slow this very we reported last as the down Political the this for in results continues

During political the quarter $XXX,XXX million third $X the $X.X the the last in quarter, in million quarter, approximately $X.X presidential fourth quarter million revenue. we XXXX, in first for recorded and the gross in election second in

the revenue. In again, first quarter, quarter second XXXX, and recorded for quarter, in fourth political $XXX,XXX gross the the for third quarter, the $XXX,XXX in in $XXX,XXX $XXX,XXX we

recorded in and currently third end in have second previously pending the we approximately indicated, I have the As fourth through the $XXX,XXX quarters. and political quarter $XXX,XXX of

We increases haven't pick year, but up seen are expecting political we significant this yet. to any

Based on will basis compared X% to current station by expect operating as currently on a year XXXX. the same-station our we expense for X% to our increase that approximately projections,

driven corporate our sales staff, will significantly is expense this $XX general environment, ongoing online our by inflationary million anticipate the for that investments and to million including product. training, We our in interactive be news $XX.X between addition development, administrative XXXX. and In annual

tax to of deferred is X% forward. to to tax rate XX% a X% with going be Our XX%

you. And Chris, back will it to that, turn I over with

Christopher Forgy

you, Thank Sam.

to strategies. then some and I radio of I wanted growth some As earlier, spend transformational Saga's on one mentioned time

markets the of and As like and perhaps Publisher publications some General previous XX Manager, Katie Editor calls teams close of the soon source the the Lafayette, way recently and Services. many to Kentucky our tell of airborne ahead deployed is women onboarded. original way as this Media. local and from based our Blog, This reporting. to as city ], Iraq moving being be Clarksville, earnings brainchild practical or read you departments. XX have connected eds, the Innovative Direct the former community of Tennessee was years and have and . Katie total stay ClarksvilleNOW. on out XXXst once community The news community and steam to Indiana, an heard and Director Saga on with were Radio a Campbell, I fire Sage's development Ink Online news, newest is what sites mentioned you men that hall, No was needed who reason they police deep of of news now the to is News known before the focus product, no fact came and ago site more for and full [ Wiles be will in local op online the Jacob's investigated to was was and We on sports on dive deployment. XX-plus Fort news local solution while acquisition,

local for the news of unbiased the the time, newspaper a At same source. created unfortunate industry void decline

unrelenting serve. is in in One we nonnegotiables communities which of to Saga's company-wide the hyperlocal

we of the of some where fact, Mayor our I were for have team city was market board stations City the even Council, the located. In asked local radio served members of simple. leadership the school on is want or ran aspect thing That Barrett do is by answer what from what why interviewed #X and was local connectivity. the so the critical. My recently people media. It was local is of Media,

difference markets in, all surveys. we these and want something more impact, a we new can feasible to seeing consistent that create on this local hyper markets in feel -- People connected to make connect it hyper special. impact to And is in the and verticals. with operates data markets Saga the in are tech and make those

create mention that community with also and opportunities ties. online conduits meaningful local business the all civic, We foster community advertising created and These new relationships service leaders. with are an site. Not to

of Recently, Jacobs this week. of found X Media XX read conducted another radio newsletters core out survey that type fans each

We tapping needed podcasts about and market And local a these consumed leaders by engaged and that are. community are into more wanted medium is than a leadership. to talk is it our We local local community them. We and meet connected them community relationship of Chief inform of sites. council, the to our mayor, a with market with and city the others to the mission Police forge

They and community. community because leadership tell source local trusted it's no this to available other is from local connect, how news use how with get news we their us, communicate they they there. news that hear the online our sites out is out there frequently we fact, In

you? one takes before, transformational one, share I change Sage I've past has commitment this unrelenting all do Why been over part time, said this the the change important XX months. Because and resources. and Communications as of And transformational with experiencing is just growth

now for stabilize increases, not The and we ago. We albeit are them off long expense are everything. now to grow. forecasted planned, level expenses and Our beginning

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Samuel D. Bush

we've Chris. address already did questions a And now, most get few that about we talked little bit. you, of Thank we'll a which

Samuel D. Bush

talked more the Do You've but like the little they lowers to you would already into give this that bit, holding your The hearing they anticipate as given reported the question trends rates? a economy? advertising a advertisers? the color? the Fed have stepping about up quarter first third Are you trends. are have macroeconomic from deteriorated given back advertising is broadcasters What local

Christopher Forgy

for Yes, Sam. question. the Thanks

I than it's thing. impact a more a Wall business, sector of return. not thing, they greatly interest media matter category will month a said as Main businesses. And that advertisers said have it's so And that said, earlier, I $X,XXX $X,XXX Street when. As most to just a being of per of and inflation rates It's Street

that small back, So anticipate in we is business. them pause which clearly do a taken have but a they coming space .

Samuel D. Bush

Very much so.

second you The thank question -- for that.

is, second believe effectively digital believe Do suite? of radio offer to that with need experienced still you offer that current service that an will are to One product what Do rollout to expanded CRM on the your of have offerings? the products. expanded you The broadcasters recently has struggles runway transitioned you digital you services leading your you have your that to invest offerings? question

Christopher Forgy

first. So answer question is is speed the first I'll we And what that speed, need.

so a in entire made perspective, processes. sales operation. and The is to from And the our products investments been tied CRM the people, have tightly our the

a team second the with it's and processes, making And and before new not kind nature our of to Now more act. they matter getting is the of processes execution. more comfortable having think

to able better So play fast and be to And they're they because second make fast. our serve and nature, can play we'll like. clunky once customers able be won't it the it

we coming impact a have because able about one don't last. yes, a about we And And is one one slowest, is we is had it place And that unfortunately. the the lot is -- -- of by largest as getting know said, growth haven't taking the a Saga. want it. to will And a piece have people and the talked about of talk we've to lot it reason fast runway that other I've play the don't we number that's comfortable. there's significant So ahead We're us. at changes being transformational and

Samuel D. Bush

discusses the the of of question about the question, et Chris. but it's basis. I'll represent Do allocation, point? We've allocation the go. I allocation of a Board Very sell-off repurchases We currently our But with was, continuously, stock acquisitions, you, shares? continuous best as in dividends, a at capital this The good. talk capital Thank you cetera, program can answer share on do have last XXbX capital active. buybacks, said not recent place

have our to we in out capital. over paid years, return million dividends of XX past $XXX shareholders the a as Over

$XX capital XX-plus have of past million they price allocations. purchase future. have of years, the Board X.X not the part a over been shares of Additionally, buybacks a will approximately in approximately And continue million. the evaluate at The recently, while to we plans repurchased may stock be

Okay.

you've that, add, wrap got to think, we I up. if than it other anything Chris, can

Christopher Forgy

it thank back adjourn. Thank very Sam, you No, we'll turn over I you you, to and think can Matt, all much.

Samuel D. Bush

wrap it you . let We'll up. Matt. you, Thank

Operator

Thank you. event. concludes this Everyone, today's

time, You participation. wonderful a your this and you day. may at have . Thank for disconnect

Samuel D. Bush

Thank you, Matt.

Saga Communications (SGA) 8 Aug 242024 Q2 Earnings call transcript