Saga Q3 Revenues Up 5%; Ed Christian Expresses Anger Over NAB Performance Rights Position

Ed Christian

SAGA COMMUNICATIONS third-quarter net operating revenue rose 5% to $32.8 million, with net income up from $25 million in third quarter 2009 to $3.6 million in third quarter 2010 (58 to 85 cents/diluted share).  Free cash flow increased 4.5% to $6 million.

SAGA reported that it had $15.5 million in cash and CD balances as of SEPTEMBER 30th, with outstanding bank debt of $105.6 million with a trailing 12-month leverage ratio calculated as a multiple of EBITDA of 3.1x.  Net of cash and CDs against outstanding debt, the ratio would be 2.7x.  The company has paid down $20 million of debt so far in 2010, including $4.5 million paid after the end of the third quarter, reducing the ratio to 3x.  SAGA said that it intends to continue to use excess cash to pay down debt.

As far as SAGA goes, it's a tax. It's a levy on my profits, and I have a responsibility to shareholders to not gratuitously give away 1% of my gross revenue.

Ed Christian Disagrees With NAB On Performance Rights

During the financial call, Chairman/CEO ED CHRISTIAN weighed in on the ongoing Performance Rights Royalty. Fielding a question via e-mail, CHRISTIAN said he would take a "contrary position to the NAB" on that issue.

Two weeks ago (NET NEWS 10/25), the NAB released it's "term sheet" which expressed its vision for a settlement of the issue.

CHRISTIAN, referencing that NAB offer, said "We don't believe that we're an industry that just gratuitously gives away 1% of our net revenue." He added later, "As far as SAGA goes, it's a tax. It's a levy on my profits, and I have a responsibility to shareholders to not gratuitously give away 1% of my gross revenue."

He was angry that the NAB didn't hold a member-wide vote on the matter, adding it was "interesting" that a trade organization "speaks for the industry without ever polling its members."

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