Saga munications(US:SGA)2019-11-10 09:56Financial Data and Key Metrics Changes - Net revenue for Q3 2019 was $31.3 million, a slight decrease from $31.7 million in the same quarter last year [6] - Free cash flow decreased to $4.5 million from $5.2 million year-over-year, impacted by a reduction in deferred tax provision [8] - Deferred tax provision was $400,000 compared to $785,000 last year [9] - Total debt outstanding at the end of the quarter was $10 million, with cash on hand at $41.1 million [12] Business Line Data and Key Metrics Changes - Political revenue for the quarter was $96,000, down from $486,000 last year, indicating a significant decline [6] - CapEx for the first nine months was approximately $4.7 million, slightly above the previous year [11] - The company expects CapEx for the year to be between $5.5 million and $6 million [11] Market Data and Key Metrics Changes - The company is experiencing downward pressure on advertising rates, particularly from national advertisers [17][19] - There is a noted decline in spending from local agencies, attributed to economic uncertainty and consumer debt levels [23][25] Company Strategy and Development Direction - The company aims to focus on local direct business and enhance training for sales staff to improve performance [36][40] - A commitment to innovative approaches in radio advertising is emphasized, including the exploration of new technologies like DRM for AM radio [35] - The company plans to continue paying regular dividends and considers special dividends as declared by the Board [13] Management's Comments on Operating Environment and Future Outlook - Management expressed dissatisfaction with the quarter's performance, citing external economic pressures and internal challenges [16] - There is a belief that radio advertising remains effective, but the application and pricing strategies need to be reevaluated [17][21] - Management acknowledges the need for a cultural shift within the company to adapt to changing market conditions [46][47] Other Important Information - The company repurchased 9,584 shares for $276,000 during the quarter, totaling 20,691 shares for $603,000 year-to-date [14] - The company produced 3,227 creative spots for clients, generating $1.4 million in additional revenue [41][44] Q&A Session Summary Question: What are the expectations for political revenue in the upcoming quarter? - Management indicated that political revenue has been disappointing and is expected to remain soft due to last year's high spending levels [10] Question: How is the company addressing the challenges in advertising rates? - Management emphasized a focus on training and direct client relationships rather than competing on price [36][40] Question: What is the company's strategy for future growth? - The strategy includes enhancing local direct business, exploring new advertising technologies, and maintaining a strong commitment to dividends [36][39][46]