It was a quarter in which the earnings per share fell short of analyst estimates by a penny and revenue was a few thousand dollars below analyst forecasts, too. How can Saga Communications get out of the doldrums with its future quarterly revenue reviews? “We have to sell our way out,” says CEO Chris Forgy.
In his traditionally lengthy opening comments, a Saga trait paved by the late founder and CEO Ed Christian, Forgy noted how being faster and more efficient is something the Saga Board of Directors has tasked him with, after sharing a tale of how a potential $150,000 per month account came because of Saga’s “training and teaching of its leaders and media advisers over the past 1.5 years that we could have even had a seat at the table to discuss this type of money let alone win the money and then coach the client on how to fix issues they were experiencing with other third-party providers.”
He then took a more pointed tone in addressing the quarter ended June 30. “Are we delighted with where we are today? No, not at all. We should be doing better, but this isn’t the ’90s or early 2000s where you can see that new grocery store chain is opened in your market. And you go out and sell a big schedule or remote some antiquated promotion that has been done 100 times and get a windfall of cash. It just doesn’t happen that way. We are now playing in the modern ever-evolving digital age. It’s now much more sophisticated and requires skills and abilities to play and to play fast, and we are extremely optimistic. We’re looking ahead to the near future.”
Meanwhile, Digital growth is being seen in month after month, with sequential improvements ongoing today.
Forgy then took a folky turn, sharing a quote he thinks “is appropriate, not only for Saga, but for everyone listening. It says, ‘Those forged by the fire of adversity become living symbols of unbreakable will.’ Ladies and gentlemen, the traditional broadcast verticals that have carried us for years are challenged at best. And we’re seeing signs that some of these traditional revenue verticals will return. But the degree to which they will return as well as the timing of those returns really remains to be seen. The truth is we have to sell our way out of this macro downdrift and refuse the urge to cut our way out where you’re left with a shell of an organization with less people, less products, no process, no culture and no performance. I’ve said it before, I’ll say it again, money comes from customers.”
To go faster, Saga will “reduce unnecessary operating expenses to be more nimble, reinvest in research and development and in our people.”
Net revenue for the quarter ended June 30 dropped to $28.23 million, down from $29.72 million in Q2 2024. Net income also declined, to $1.13 million ($0.18 per share) from $2.5 million ($0.40). Operating income for the quarter fell to $1.41 million, from $2.14 million, while the non-GAAP Station Operating Income was $6 million compared to $6.41 million a year earlier.
Saga is also exploring a sale of tower assets, which could bring in high-seven to low-eight-figure proceeds. “We have committed at a board level and to our shareholders that we are looking at what we will do with the proceeds from this and that some of the proceeds will go into stock buybacks,” said Saga EVP/Chief Financial Officer Sam Bush.
