SAGA COMMUNICATIONS INC Q3 FY2024 earnings call

• Saga's approach to turbulent times is based on the Stockdale Paradox, involving confronting brutal facts, maintaining faith, being consistent, acknowledging mistakes, overcoming difficulties, and staying focused.
• The company consciously expanded its digital footprint during turbulence, with blended advertising philosophy capitalizing on radio's power to drive consumer actions.
• Lafayette stations were integrated into Saga's operating procedures and culture.
• Saga responded to Hurricane Helene in Asheville, with radio stations remaining on air, providing critical info, and community support efforts.

For the quarter ended September 30, 2024, net revenue decreased 3.5% to $28.1 million compared to $29.1 million last year. Same-station net revenue decreased 5.8% to $27.5 million. Political revenue was $677,000 in Q3 2024 vs $234,000 same period last year. For the nine-month period ended September 30, 2024, net revenue decreased 2.5% to $81.5 million, with political revenue at $1.3 million vs $538,000 last year. Digital advertising growth was slower in Q3 due to terminating a non-profitable digital services partner. E-commerce was up 33% ($153,000) in Q3 and 89% ($849,000) nine-month. Interactive was up 4.5% ($122,000) Q3 and 21.4% ($1.5 million) nine-month. NTR events up 11% ($246,000) Q3 and 1.5% ($87,000) nine-month. Market's best of programs booked $1.3 million year-to-date, 21% increase over 2023, with Q3 revenue $522,000 (11% increase). Online news up 68% ($242,000) Q3 and 66% ($631,000) nine-month.

• Pacing for Q4 remains soft, down low to mid-single digits.
• Political revenue for the year is expected to be $3.3 million, with Q4 political revenue at $2 million.
• Station operating expense on a same-station basis is expected to increase 3%-5% for 2024.
• Corporate general and administrative expense预计 $12.2 million for 2024.
• Tax rate expected to be 27%-31% with a deferred tax rate of 6.9%.

• Challenges in growing digital business due to time, talent, training, and speed; Saga was late to digital landscape, requiring significant education/training.
• Economic uncertainties, including layoffs in automotive and broadcast sectors affecting advertising partners' ability to advertise.

Q: In terms of the digital business what are the headwinds that you face in growing your digital business?

A: The headwinds are time, talent, training, and speed. We were behind in digital processes, taking time and money to catch up; talent was difficult to find/hire; training takes time to practice; and we need to speed up results.

Q: Would you like to say anything else about the advertising market in Q4?

A: There's both good and bad news. There are layoffs in sectors affecting advertising partners' ability to advertise, but some factors are out of our control; we focus on what we can control and keep moving forward.