Saga munications(US:SGA)2025-11-07 21:11Revenue Performance - For the nine months ended September 30, 2025, interactive advertising revenue increased to $12,606,000, up by $1,839,000 or 17.1% compared to $10,767,000 for the same period in 2024[137]. - Approximately 89% of the radio stations' gross revenue for the nine months ended September 30, 2025, was generated from local advertising, compared to 87% for the same period in 2024[127]. - The five largest markets (Charleston, Columbus, Des Moines, Milwaukee, and Norfolk) represented approximately 35% of consolidated net operating revenue for the nine months ended September 30, 2025[138]. - The radio stations in the five largest markets accounted for approximately 34% of consolidated station operating income for the nine months ended September 30, 2025[139]. - The company expects political revenue in 2025 to decrease from 2024 levels due to fewer elections at national, state, and local levels[128]. Operating Expenses - The primary operating expenses include employee salaries, sales commissions, programming expenses, and advertising and promotion expenses[136]. - Station operating expenses increased to $24,674,000, an increase of $1,965,000 or 8.7% compared to $22,709,000 for the three months ended September 30, 2024[144]. - Station operating expenses for the nine months ended September 30, 2025, were $68,863,000, an increase of $390,000 or 0.6% compared to $68,473,000 for the same period in 2024[150]. - The increase in station operating expenses was primarily due to a $2,086,000 increase in music licensing fees[144]. Financial Performance - For the three months ended September 30, 2025, net operating revenue decreased to $28,166,000, down $528,000 or 1.8% from $28,694,000 in the same period of 2024[143]. - The company reported an operating loss of $626,000 for the three months ended September 30, 2025, a decrease of $2,271,000 from operating income of $1,645,000 in the same period of 2024[145]. - Net loss for the three months ended September 30, 2025, was $532,000 ($(0.08) per share), compared to net income of $1,267,000 ($0.20 per share) for the same period in 2024, a decrease of $1,799,000[146]. - For the nine months ended September 30, 2025, net operating revenue was $80,607,000, down $3,097,000 or 3.7% from $83,704,000 in the same period of 2024[149]. - The company experienced an operating loss of $1,515,000 for the nine months ended September 30, 2025, compared to operating income of $1,371,000 for the same period in 2024, a decrease of $2,886,000[151]. - Net loss for the nine months ended September 30, 2025, was $979,000 ($(0.15) per share), compared to net income of $2,191,000 ($0.35 per share) for the same period in 2024, a decrease of $3,170,000[152]. - The decrease in net income was primarily due to a decrease in operating income and an increase in interest expense of $87,000[152]. Debt and Financing - The Company reduced the aggregate amount of the Lender's revolving commitments from $50 million to $40 million[154]. - As of September 30, 2025, the Company had $5 million of debt outstanding related to the Lafayette acquisition[158]. - The Company had approximately $45 million of unused borrowing capacity under the Credit Facility as of September 30, 2025[159]. - The Company has pledged substantially all of its assets in support of the Credit Facility[155]. - Interest rates under the Credit Facility are based on SOFR, which was 4.24% as of September 30, 2025, plus a spread of 1% to 2%[157]. - The Company anticipates financing future acquisitions and dividend payments through funds generated from operations or additional debt[167]. Cash Flow and Capital Expenditures - Net cash flows from operating activities for the nine months ended September 30, 2025, were $5.482 million, down from $10.141 million in 2024[160]. - Capital expenditures for the nine months ended September 30, 2025, were $2.6 million, with an anticipated range of $3 million to $3.5 million for 2025[163]. - The Company declared three quarterly cash dividends totaling $0.75 per share, amounting to approximately $4.8 million as of September 30, 2025[165]. - The Company incurred $161,000 of transaction fees related to the Credit Facility due to the Third Amendment, which are being amortized over the remaining life of the Credit Facility[156]. Advertising Strategy - The company operates in 28 markets, providing services to national, regional, and local advertisers[125]. - The advertising revenue is influenced by the overall economy, including factors such as unemployment rates and inflation[130]. - The company is pivoting towards a "blended advertising" model that integrates radio with digital solutions[137]. - The number of advertisements broadcast is managed to maximize revenue while maintaining audience ratings[134].