Saga Communications, Inc. Reports 4th Quarter and Year End 2007 Results

GROSSE POINTE FARMS, Mich., Feb. 28 /PRNewswire-FirstCall/ -- Saga Communications, Inc. today reported net operating revenue for the year ended December 31, 2007 increased 0.8% over the comparable period in 2006 to $144.0 million. The Company reported $3.5 million of net political revenue during the year ended December 31, 2006 compared to $1.4 million for the same period in 2007. Excluding political revenue, the Company's net operating revenue increased 2.3% for the period. Station operating expense increased 1.8% to $106.3 million (station operating expense includes depreciation and amortization attributable to the stations) and operating income decreased 6.9% to $27.9 million. Net income decreased 11.6% to $11.0 million ($.55 per fully diluted share) for the year ended December 31, 2007 compared to $12.5 million ($.61 per fully diluted share) for the same period in 2006. Free cash flow increased 0.2% to $16.1 million for the year. On a same station basis for the year, net operating revenue increased 0.1% to $143.0 million, operating income decreased 8.1% to $27.7 million and station operating expense increased 1.2% to $105.4 million.

For the quarter ended December 31, 2007 net operating revenue decreased 1.9% from the comparable period in 2006 to $37.5 million. The Company reported $2.4 million of net political revenue during the quarter ended December 31, 2006 compared to $852 thousand for the same period in 2007. Excluding political revenue, the Company's net operating revenue increased 2.4% for the period. Station operating expense decreased 0.9% to $27.3 million (station operating expense includes depreciation and amortization attributable to the stations) and operating income decreased 13.9% to $7.6 million. Net income decreased 14.7% to $3.1 million ($.16 per fully diluted share) for the quarter ended December 31, 2007 compared to $3.7 million ($.18 per fully diluted share) for 2006. Free cash flow decreased 13.2% to $4.1 million for the quarter. On a same station basis for the quarter, net operating revenue decreased 2.6% to $37.2 million, operating income decreased 14.5% to $7.5 million and station operating expense decreased 1.7% to $27.1 million.

Capital expenditures in the fourth quarter of 2007 were $3.7 million with $2.0 million being spent as a result of acquisitions, $309 thousand were related to digital radio and $147 thousand related to digital television. For the 2007 fiscal year total capital expenditures were approximately $9.9 million with approximately $3.7 million being spent as a result of acquisitions, $1.7 million related to digital radio and $147 thousand related to digital television.

Subsequent to the year ended December 31, 2007, the Company announced that its Board of Directors authorized an increase in the amount committed to its Stock Buy-Back Program from $30 million to $60 million. During the year ended 2007, the Company bought back 12,821 shares of stock for a total purchase price of $126,415. From January 1, 2008 through February 26, 2008, the Company has bought back 68,324 shares for a total purchase price of $407,918.

The attached Selected Supplemental Financial Data table discloses "as reported," "same station" and "pro forma" information by segment. The "as reported" amounts reflect our historical financial results and include the results of operations for stations that we did not own for the entire comparable period. The "same station" amounts reflect only the results of operations for stations that we owned for the entire comparable period. The "pro forma" amounts assume the 2007 and 2006 acquisitions and dispositions occurred as of January 1, 2006.

Saga Communications utilizes certain financial measures that are not calculated in accordance with generally accepted accounting principles (GAAP) to assess its financial performance. Such non-GAAP measures include same station financial information and free cash flow. These non-GAAP measures are generally recognized by the broadcasting industry as measures of performance and are used by Saga to assess its financial performance including but not limited to evaluating individual station and market-level performance, evaluating overall operations and as a primary measure for incentive based compensation of executives and other members of management. Saga's management believes these non-GAAP measures are used by analysts who report on the industry and by investors to provide meaningful comparisons between broadcasting groups, as well as an indicator of their market value. These measures are not measures of liquidity or of performance in accordance with GAAP, and should be viewed as a supplement to and not as a substitute for the results of operations presented on a GAAP basis including net operating revenue, operating income, and net income. Reconciliations for all of the non- GAAP financial measures to the most directly comparable GAAP measure are attached in the Selected Financial Data Non-GAAP Disclosures tables.

Saga Communications, Inc. is a broadcasting company whose business is devoted to acquiring, developing and operating broadcast properties. The Company owns or operates broadcast properties in 26 markets, including 61 FM and 30 AM radio stations, 3 state radio networks, 2 farm radio networks, 5 television stations and 4 low-power television stations. For additional information, contact us at (313) 886-7070 or visit our website at http://www.sagacommunications.com/.

Saga's fourth quarter and year end 2007 results conference call will be on Thursday, February 28, 2008 at 2:00 PM EST. The dial in number for domestic calls is 800/230-1093. For international callers the number is 612/332-0802. The call can be replayed for 7 days by calling domestically 800/475-6701 or internationally 320/365-3844 and referring to access code 908881. Thereafter, a transcript of the call will be available on our website.

The Company requests that all parties that have a question that they would like to submit to the Company to please email the inquiry by 1:00 PM EST on February 28, 2008 to SagaIR@sagacom.com. The Company will discuss, during the limited period of the conference call, those inquiries it deems of general relevance and interest. Only inquiries made in compliance with the foregoing will be discussed during the call.

This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as "believes," "expects," "anticipates," "guidance" and similar expressions are intended to identify forward-looking statements. Key risks, including risks associated with Saga's ability to effectively integrate the stations it acquires and the impact of federal regulation on Saga's business, are described in the reports Saga Communications, Inc. periodically files with the U.S. Securities and Exchange Commission, including Item 1A of our annual report on form 10-K. Readers should note that these statements may be impacted by several factors, including national and local economic changes and changes in the radio and television broadcast industry in general, as well as Saga's actual performance. Results may vary from those stated herein and Saga undertakes no obligation to update the information contained here.

Saga Communications, Inc. Selected Consolidated Financial Data For The Three and Twelve Months Ended December 31, 2007 and 2006 (amounts in 000's except per share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2007 2006 2007 2006 Operating Results Net operating revenue $37,501 $38,219 $144,023 $142,946 Station operating expense 27,316 27,563 106,302 104,396 Corporate general and administrative 2,606 2,165 9,800 8,870 Other operating income - (312) - (312) Operating income 7,579 8,803 27,921 29,992 Interest expense 2,093 2,372 8,954 9,379 Other expense (income), net 131 145 273 (500) Income before income tax 5,355 6,286 18,694 21,113 Income tax expense 2,222 2,615 7,690 8,665 Net income $3,133 $3,671 $11,004 $12,448 Earnings per share Basic $0.16 $0.18 $0.55 $0.61 Diluted $0.16 $0.18 $0.55 $0.61 Weighted average common shares 20,118 20,227 20,091 20,442 Weighted average common shares and common shares equivalents 20,132 20,241 20,115 20,458 Free Cash Flow Net income $3,133 $3,671 $11,004 $12,448 Plus: Depreciation and amortization: Station 2,135 2,177 7,982 7,961 Corporate 58 50 204 194 Deferred tax provision 1,983 2,073 5,144 5,183 Non-cash compensation 375 326 1,366 1,310 Other expense (income), net 131 145 273 (500) Less: Capital expenditures (3,672) (3,668) (9,852) (10,504) Free cash flow $4,143 $4,774 $16,121 $16,092 Balance Sheet Data Working capital $24,075 $21,617 Net fixed assets 76,217 73,658 Net intangible assets and other assets 220,045 210,044 Total assets 337,644 322,641 Long term debt (including current portion of $0 and $0, respectively) 129,911 133,911 Stockholders' equity 149,076 136,236 Saga Communications, Inc. Selected Supplemental Financial Data For the Three Months Ended December 31, 2007 and 2006 (amounts in 000's except per share data) (Unaudited) As-Reported Same Station Pro Forma (1) Three Months Ended Three Months Ended Three Months Ended December 31, December 31, December 31, 2007 2006 2007 2006 2007 2006 Consolidated Net operating revenue $37,501 $38,219 $37,225 $38,219 $37,537 $38,582 Station operating expense 27,316 27,563 27,091 27,563 27,352 27,864 Corporate general and administrative 2,606 2,165 2,606 2,165 2,606 2,165 Other operating income - (312) - (312) - (312) Operating income 7,579 8,803 $7,528 $8,803 7,579 8,865 Interest expense 2,093 2,372 2,093 2,372 Other expense (income), net 131 145 131 145 Income tax expense 2,222 2,615 2,222 2,641 Net income $3,133 $3,671 $3,133 $3,707 Earnings per share: Basic $0.16 $0.18 $0.16 $0.18 Diluted $0.16 $0.18 $0.16 $0.18 As-Reported Same Station Pro Forma (1) Three Months Ended Three Months Ended Three Months Ended December 31, December 31, December 31, 2007 2006 2007 2006 2007 2006 Radio Segment Net operating revenue $32,956 $33,174 $32,680 $33,174 $32,992 $33,537 Station operating expense 23,702 23,952 23,477 23,952 23,738 24,253 Other operating income - (312) - (312) - (312) Operating income $9,254 $9,534 $9,203 $9,534 $9,254 $9,596 As-Reported Same Station Pro Forma (1) Three Months Ended Three Months Ended Three Months Ended December 31, December 31, December 31, 2007 2006 2007 2006 2007 2006 Television Segment Net operating revenue $4,545 $5,045 $4,545 $5,045 $4,545 $5,045 Station operating expense 3,614 3,611 3,614 3,611 3,614 3,611 Operating income $931 $1,434 $931 $1,434 $931 $1,434 As-Reported Same Station Pro Forma (1) Three Months Ended Three Months Ended Three Months Ended December 31, December 31, December 31, 2007 2006 2007 2006 2007 2006 Depreciation and amortization by segment Radio Segment $1,710 $1,719 $1,653 $1,719 $1,723 $1,770 Television Segment 425 458 425 458 425 458 Corporate and Other 58 50 58 50 58 50 $2,193 $2,227 $2,136 $2,227 $2,206 $2,278 (1) Pro Forma results assume all acquisitions and dispositions in 2006 and 2007 occurred as of January 1, 2006. Saga Communications, Inc. Selected Supplemental Financial Data For the Twelve Months Ended December 31, 2007 and 2006 (amounts in 000's except per share data) (Unaudited) As-Reported Same Station Pro Forma (1) Twelve Months Twelve Months Twelve Months Ended Ended Ended December 31, December 31, December 31, 2007 2006 2007 2006 2007 2006 Consolidated Net operating revenue $144,023 $142,946 $142,948 $142,867 $144,982 $144,446 Station operating expense 106,302 104,396 105,409 104,129 107,159 105,626 Corporate general and administrative 9,800 8,870 9,800 8,870 9,800 8,870 Other operating income - (312) - (312) - (312) Operating income 27,921 29,992 $27,739 $30,180 28,023 30,262 Interest expense 8,954 9,379 8,954 9,379 Other expense (income), net 273 (500) 273 (500) Income tax expense 7,690 8,665 7,732 8,776 Net income $11,004 $12,448 $11,064 $12,607 Earnings per share: Basic $0.55 $0.61 $0.55 $0.62 Diluted $0.55 $0.61 $0.55 $0.62 As-Reported Same Station Pro Forma (1) Twelve Months Twelve Months Twelve Months Ended Ended Ended December 31, December 31, December 31, 2007 2006 2007 2006 2007 2006 Radio Segment Net operating revenue $126,596 $125,274 $125,521 $125,195 $127,555 $126,774 Station operating expense 92,162 90,627 91,269 90,360 93,019 91,857 Other operating income - (312) - (312) - (312) Operating income $34,434 $34,959 $34,252 $35,147 $34,536 $35,229 As-Reported Same Station Pro Forma (1) Twelve Months Twelve Months Twelve Months Ended Ended Ended December 31, December 31, December 31, 2007 2006 2007 2006 2007 2006 Television Segment Net operating revenue $17,427 $17,672 $17,427 $17,672 $17,427 $17,672 Station operating expense 14,140 13,769 14,140 13,769 14,140 13,769 Operating income $3,287 $3,903 $3,287 $3,903 $3,287 $3,903 As-Reported Same Station Pro Forma (1) Twelve Months Twelve Months Twelve Months Ended Ended Ended December 31, December 31, December 31, 2007 2006 2007 2006 2007 2006 Depreciation and amortization by segment Radio Segment $6,363 $6,288 $6,153 $6,231 $6,548 $6,519 Television Segment 1,619 1,673 1,619 1,673 1,619 1,673 Corporate and Other 204 194 204 194 204 194 $8,186 $8,155 $7,976 $8,098 $8,371 $8,386 (1) Pro Forma results assume all acquisitions and dispositions in 2006 and 2007 occurred as of January 1, 2006. Saga Communications, Inc. Selected Supplemental Financial Data Quarterly Proforma Information December 31, 2007 and 2006 (amounts in 000's except per share data) (Unaudited) Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended March 31, June 30, 2007 2006 2007 2006 Consolidated Net operating revenue $32,193 $31,543 $38,752 $38,131 Station operating expense 26,284 25,020 27,284 26,674 Corporate general and administrative 2,316 1,981 2,606 2,499 Other operating income - - - - Operating income 3,593 4,542 8,862 8,958 Interest expense 2,297 2,277 2,281 2,355 Other expense (income), net 35 (355) 47 (215) Income tax expense 509 1,074 2,686 2,783 Net income $752 $1,546 $3,848 $4,035 Earnings per share: Basic $0.04 $0.08 $0.19 $0.20 Diluted $0.04 $0.08 $0.19 $0.20 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended March 31, June 30, 2007 2006 2007 2006 Radio Segment Net operating revenue $28,203 $27,632 $34,174 $33,804 Station operating expense 22,802 21,732 23,723 23,265 Other operating income - - - - Operating income $5,401 $5,900 $10,451 $10,539 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended March 31, June 30, 2007 2006 2007 2006 Television Segment Net operating revenue $3,990 $3,911 $4,578 $4,327 Station operating expense 3,482 3,288 3,561 3,409 Operating income $508 $623 $1,017 $918 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended March 31, June 30, 2007 2006 2007 2006 Depreciation and amortization by segment Radio Segment $1,566 $1,599 $1,599 $1,596 Television Segment 389 392 400 414 Corporate and Other 47 48 51 48 $2,002 $2,039 $2,050 $2,058 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended September 30, December 31, 2007 2006 2007 2006 Consolidated Net operating revenue $36,500 $36,190 $37,537 $38,582 Station operating expense 26,239 26,068 27,352 27,864 Corporate general and administrative 2,272 2,225 2,606 2,165 Other operating income - - - (312) Operating income 7,989 7,897 7,579 8,865 Interest expense 2,283 2,375 2,093 2,372 Other expense (income), net 60 (75) 131 145 Income tax expense 2,315 2,278 2,222 2,641 Net income $3,331 $3,319 $3,133 $3,707 Earnings per share: Basic $0.17 $0.16 $0.16 $0.18 Diluted $0.17 $0.16 $0.16 $0.18 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended September 30, December 31, 2007 2006 2007 2006 Radio Segment Net operating revenue $32,186 $31,801 $32,992 $33,537 Station operating expense 22,756 22,607 23,738 24,253 Other operating income - - - (312) Operating income $9,430 $9,194 $9,254 $9,596 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended September 30, December 31, 2007 2006 2007 2006 Television Segment Net operating revenue $4,314 $4,389 $4,545 $5,045 Station operating expense 3,483 3,461 3,614 3,611 Operating income $831 $928 $931 $1,434 Pro Forma (1) Pro Forma (1) Three Months Ended Three Months Ended September 30, December 31, 2007 2006 2007 2006 Depreciation and amortization by segment Radio Segment $1,660 $1,554 $1,723 $1,770 Television Segment 405 409 425 458 Corporate and Other 48 48 58 50 $2,113 $2,011 $2,206 $2,278 (1) Pro Forma results assume all acquisitions and dispositions in 2006 and 2007 occurred as of January 1, 2006. Saga Communications, Inc. Selected Financial Data Non-GAAP Disclosures For the Three Months Ended December 31, 2007 and 2006 (amounts in 000's) (Unaudited) Reconciliation of As-Reported (historical) information to Same Station Operating Income Adjustment Adjustment For For As- Acquisitions Same As- Acquisitions Same Reported and Station Reported and Station Three Dispositions Three Three Dispositions Three Months Not Included Months Months Not Included Months Ended in Entire Ended Ended in Entire Ended Dec. 31, Comparable Dec. 31, Dec. 31, Comparable Dec. 31, 2007 Period 2007 2006 Period 2006 Consolidated Net operating revenue $37,501 $(276) $37,225 $38,219 - $38,219 Station operating expense 27,316 (225) 27,091 27,563 - 27,563 Corporate general and administrat- ive 2,606 - 2,606 2,165 - 2,165 Other operating income - - - (312) - (312) Operating income $7,579 $(51) $7,528 $8,803 - $8,803 Adjustment Adjustment For For As- Acquisitions Same As- Acquisitions Same Reported and Station Reported and Station Three Dispositions Three Three Dispositions Three Months Not Included Months Months Not Included Months Ended in Entire Ended Ended in Entire Ended Dec. 31, Comparable Dec. 31, Dec. 31, Comparable Dec. 31, 2007 Period 2007 2006 Period 2006 Radio Segment Net operating revenue $32,956 $(276) $32,680 $33,174 - $33,174 Station operating expense 23,702 (225) 23,477 23,952 - 23,952 Other operating income - - - (312) - (312) Operating income $9,254 $(51) $9,203 $9,534 - $9,534 Adjustment Adjustment For For As- Acquisitions Same As- Acquisitions Same Reported and Station Reported and Station Three Dispositions Three Three Dispositions Three Months Not Included Months Months Not Included Months Ended in Entire Ended Ended in Entire Ended Dec. 31, Comparable Dec. 31, Dec. 31, Comparable Dec. 31, 2007 Period 2007 2006 Period 2006 Television Segment Net operating revenue $4,545 - $4,545 $5,045 - $5,045 Station operating expense 3,614 - 3,614 3,611 - 3,611 Operating income $931 - $931 $1,434 - $1,434 Saga Communications, Inc. Selected Financial Data Non-GAAP Disclosures For the Twelve Months Ended December 31, 2007 and 2006 (amounts in 000's) (Unaudited) Reconciliation of As-Reported (historical) information to Same Station Operating Income Adjustment Adjustment For For As- Acquisitions Same As- Acquisitions Same Reported and Station Reported and Station Twelve Dispositions Twelve Twelve Dispositions Twelve Months Not Included Months Months Not Included Months Ended in Entire Ended Ended in Entire Ended Dec. 31, Comparable Dec. 31, Dec. 31, Comparable Dec. 31, 2007 Period 2007 2006 Period 2006 Consolidated Net operating revenue $144,023 $(1,075) $142,948 $142,946 $(79) $142,867 Station operating expense 106,302 (893) 105,409 104,396 (267) 104,129 Corporate general and administrat- ive 9,800 - 9,800 8,870 - 8,870 Other operating income - - - (312) - (312) Operating income $27,921 $(182) $27,739 $29,992 $188 $30,180 Adjustment Adjustment For For As- Acquisitions Same As- Acquisitions Same Reported and Station Reported and Station Twelve Dispositions Twelve Twelve Dispositions Twelve Months Not Included Months Months Not Included Months Ended in Entire Ended Ended in Entire Ended Dec. 31, Comparable Dec. 31, Dec. 31, Comparable Dec. 31, 2007 Period 2007 2006 Period 2006 Radio Segment Net operating revenue $126,596 $(1,075) $125,521 $125,274 $(79) $125,195 Station operating expense 92,162 (893) 91,269 90,627 (267) 90,360 Other operating income - - - (312) - (312) Operating income $34,434 $(182) $34,252 $34,959 $188 $35,147 Adjustment Adjustment For For As- Acquisitions Same As- Acquisitions Same Reported and Station Reported and Station Twelve Dispositions Twelve Twelve Dispositions Twelve Months Not Included Months Months Not Included Months Ended in Entire Ended Ended in Entire Ended Dec. 31, Comparable Dec. 31, Dec. 31, Comparable Dec. 31, 2007 Period 2007 2006 Period 2006 Television Segment Net operating revenue $17,427 - $17,427 $17,672 - $17,672 Station operating expense 14,140 - 14,140 13,769 - 13,769 Operating income $3,287 - $3,287 $3,903 - $3,903