PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Unaudited Q1 2019 financials report decreased assets and liabilities, net income of $1.37 million, and $6.3 million cash from operations Condensed Consolidated Balance Sheets Total assets decreased to $245.5 million and liabilities to $60.1 million as of March 31, 2019, with stockholders' equity remaining stable Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $39,170 | $44,729 | | Total current assets | $59,673 | $68,595 | | Net property and equipment | $58,739 | $59,103 | | Broadcast licenses, net | $95,311 | $95,250 | | Goodwill | $18,974 | $18,839 | | Total Assets | $245,453 | $248,477 | | Liabilities & Equity | | | | Total current liabilities | $14,417 | $23,165 | | Long-term debt | $15,000 | $15,000 | | Total Liabilities | $60,127 | $63,478 | | Total Stockholders' Equity | $185,326 | $184,999 | Condensed Consolidated Statements of Income Q1 2019 net operating revenue slightly decreased to $27.8 million, resulting in net income of $1.37 million or $0.23 diluted EPS Q1 2019 vs Q1 2018 Income Statement (in thousands, except per share data) | Metric | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Net operating revenue | $27,816 | $28,009 | | Station operating expenses | $23,163 | $23,397 | | Operating income | $1,965 | $2,319 | | Net income | $1,370 | $1,529 | | Diluted EPS | $0.23 | $0.26 | - Dividends declared per share remained constant at $0.30 for the first quarter of both 2019 and 201814 Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity increased slightly to $185.3 million in Q1 2019, influenced by net income, stock compensation, and dividends Changes in Stockholders' Equity for Q1 2019 (in thousands) | Description | Amount | | :--- | :--- | | Balance at December 31, 2018 | $184,999 | | Net income | $1,370 | | Dividends declared | ($1,784) | | Compensation expense related to restricted stock | $559 | | Purchase of shares held in treasury | ($80) | | 401(k) plan contribution | $262 | | Balance at March 31, 2019 | $185,326 | Condensed Consolidated Statements of Cash Flows Q1 2019 saw $6.3 million cash from operations, with investing and financing activities causing a $5.6 million net decrease in cash Q1 2019 vs Q1 2018 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Cash provided by operating activities | $6,305 | $4,372 | | Net cash used in investing activities | ($1,726) | ($1,204) | | Net cash used in financing activities | ($10,138) | ($8,404) | | Net decrease in cash | ($5,559) | ($5,236) | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail the adoption of the new lease standard, Q1 2019 revenue disaggregation, a small acquisition, and long-term debt specifics - The company adopted the new lease standard (ASU 2016-02) on January 1, 2019, using the modified retrospective method, recording right-of-use assets and lease liabilities of approximately $6.7 million35 Disaggregation of Revenue for Q1 (in thousands) | Revenue Source | 2019 | 2018 | | :--- | :--- | :--- | | Broadcast Advertising Revenue, net | $25,191 | $25,758 | | Digital Advertising Revenue | $875 | $950 | | Other Revenue | $1,750 | $1,301 | | Net Revenue | $27,816 | $28,009 | - On January 9, 2019, the company acquired WPVQ-AM and W222CH in Greenfield, Massachusetts for an aggregate purchase price of $210 thousand61 - The company's $100 million revolving credit facility was amended in June 2018 to extend the maturity date to June 27, 2023. As of March 31, 2019, $15 million was outstanding, with $85 million of unused borrowing capacity8086 Management's Discussion and Analysis of Financial Condition and Results of Operations Q1 2019 consolidated net operating revenue decreased by 0.7% due to lower advertising, resulting in a 15.3% drop in operating income Consolidated Results of Operations Q1 2019 vs Q1 2018 (in thousands) | Metric | Q1 2019 | Q1 2018 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net operating revenue | $27,816 | $28,009 | ($193) | (0.7)% | | Station operating expense | $23,163 | $23,397 | ($234) | (1.0)% | | Operating income | $1,965 | $2,319 | ($354) | (15.3)% | | Net income | $1,370 | $1,529 | ($159) | (10.4)% | - The decrease in same-station revenue was driven by declines in gross national revenue ($653k), gross political revenue ($215k), and gross local revenue ($542k)114 - The company's five largest markets (Columbus, Des Moines, Manchester, Milwaukee, Norfolk) represented approximately 38% of consolidated net operating revenue and 43% of consolidated station operating income in Q1 2019109110 - The company anticipates capital expenditures for 2019 to be between $5.0 million and $5.5 million, financed through funds from operations131 Quantitative and Qualitative Disclosures about Market Risk No material changes to market risk information were reported since the 2018 Annual Report on Form 10-K - There have been no material changes to the market risk information included in the company's 2018 Annual Report on Form 10-K144 Controls and Procedures CEO and CFO concluded disclosure controls and procedures are effective, with no material changes to internal controls during the quarter - The company's CEO and CFO concluded that disclosure controls and procedures are effective as of the end of the reporting period146 - No changes in internal controls over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls146 PART II. OTHER INFORMATION Legal Proceedings Management anticipates no material financial statement impact from ongoing legal claims and proceedings in the ordinary course of business - Management anticipates that potential liabilities from outstanding claims and legal proceedings will not have a material effect on the company's financial statements148 Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 2,505 shares of Class A Common Stock in Q1 2019, with $20.3 million remaining for future buy-backs Share Repurchases in Q1 2019 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2019 | 1,753 | $31.86 | | February 2019 | 752 | $31.90 | | March 2019 | 0 | $0.00 | | Total | 2,505 | $31.87 | - As of the end of Q1 2019, the company had approximately $20.3 million remaining under its stock buy-back authorization150 Exhibits This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL data files - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32) and XBRL Instance Documents152153
Saga munications(SGA) - 2019 Q1 - Quarterly Report