Wednesday, May 09, 2007

Income down, expenses up for KOAM owner

The first quarter report from Saga Communications, owner of KOAM and KFJX in the Joplin area, was a mixed bag, according to a news release filed today with the Securities and Exchange Commission:

Saga Communications, Inc. (NYSE-SGA) today reported net operating revenue for the three month period increased 2.2% from the comparable period in 2006 to $31.9 million, operating income decreased 20.7% to $3.6 million and station operating expense increased 5.2% to $26.0 million (station operating expense includes depreciation and amortization attributable to the stations). Net income decreased 52.0% to $740 thousand ($.04 per fully diluted share) for the quarter ended March 31, 2007 compared to $1.5 million ($.07 per fully diluted share) for 2006. Free cash flow decreased to $859 thousand for the quarter from $1.9 million for the comparable period last year. On a same station basis for the year, net operating revenue increased 2.0% to $31.8 million, operating income decreased 20.0% to $3.6 million and station operating expense increased 4.8% to $25.9 million.
For the quarter, even with a $284 thousand reduction in gross political revenue, the company’s net operating revenue increased $692 thousand. Station operating expenses increased $1.3 million for the quarter, $722 thousand of which was related to our decision to continue to invest in the future of our business with additional advertising and promotion expense as well as additional sales compensation expense. In addition, $165 thousand of the increase in station operating expense was due to an increase in our health care costs. Adjusted for these specific expense increases our overall station operating expenses increased 2%.
Capital expenditures in the first quarter of 2007 were approximately $2.4 million with approximately $923 thousand being spent as a result of acquisitions and $160 thousand was as a part of our ongoing HD Radio conversions. Capital expenditures in the first quarter of 2006 were approximately $2.0 million with approximately $400 thousand being spent as a result of acquisitions. We continue to expect our 2007 annual capital expenditures to be $10.0 million compared to $10.5 million in 2006.

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