What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-06 · 65 added, 41 removed, 331 unchanged (24% of the section changed)

5 unchanged sentences

Cash and cash equivalents

Short-term investments

Accounts receivable, net

31 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands, except per share data)

15 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the three months ended March 31, 2022 and 2021

For the three and six months ended June 30, 2022 and 2021

Stockholders’

5 unchanged sentences

Balance at March 31, 2021

Net income, three months ended June 30, 2021

Dividends declared per common share

Compensation expense related to restricted stock awards

Balance at June 30, 2021

Stockholders’

6 unchanged sentences

Balance at March 31, 2022

Net income, three months ended June 30, 2022

Dividends declared per common share

Compensation expense related to restricted stock awards

Balance at June 30, 2022

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(In thousands)

2 unchanged sentences

Cash flows from investing activities:

Purchase of Short-term investments

Acquisition of property and equipment

17 unchanged sentences

Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for annual financial statements.

In our opinion, the accompanying financial statements include all adjustments of a normal, recurring nature considered necessary for a fair presentation of our financial position as of March 31, 2022 and the results of operations for the three months ended March 31, 2022 and 2021.

Results of operations for three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

In our opinion, the accompanying financial statements include all adjustments of a normal, recurring nature considered necessary for a fair presentation of our financial position as of June 30, 2022 and the results of operations for the three and six months ended June 30, 2022 and 2021.

Results of operations for three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

We own or operate broadcast properties in 27 markets, including 79 FM and 35 AM radio stations and 80 metro signals.

1 unchanged sentence

annual report on Form 10-K for the year ended December 31, 2021.

We have evaluated events and transactions occurring subsequent to the balance sheet date of March 31, 2022, for items that should potentially be recognized in these financial statements or discussed within the notes to these financial statements.

We have evaluated events and transactions occurring subsequent to the balance sheet date of June 30, 2022, for items that should potentially be recognized in these financial statements or discussed within the notes to these financial statements.

Earnings Per Share Information

7 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands, except per share data)

6 unchanged sentences

Earnings per share:

There were no stock options outstanding that had an antidilutive effect on our earnings per share calculation for the three months ended March 31, 2022 and 2021, respectively.

There were no stock options outstanding that had an antidilutive effect on our earnings per share calculation for the three months ended June 30, 2022 and 2021, respectively.

The actual effect of these shares, if any, on the diluted earnings per share calculation will vary significantly depending on the fluctuation in the stock price.

Financial Instruments

We account for marketable securities in accordance with ASC 320, “ Investments – Debt Securities” , which require that certain debt securities be classified into one of three categories:

held-to-maturity, available-for-sale, or trading securities, and depending upon the classification, value the security at amortized cost or fair market value.

At June 30, 2022, we have recorded $ 10 million of held-to-maturity United States’ Treasury Bills at amortized cost basis, that has a fair market value of $ 10 million.

Our held-to-maturity United States’ Treasury Bills all have original maturity dates ranging from July 2022 to February 2023.

We had no marketable securities at December 31, 2021.

Our financial instruments are comprised of cash and cash equivalents, accounts receivable, accounts payable and long-term debt.

The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short maturities.

The carrying value of long-term debt approximates fair value as it carries interest rates that either fluctuate with the euro-dollar rate, prime rate or have been reset at the prevailing market rate at March 31, 2022.

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Allowance for Doubtful Accounts

6 unchanged sentences

In the event we recover amounts previously written off, we will reduce the specific allowance for credit loss.

Our allowance for doubtful accounts was $ 467,000 and $ 469,000 at March 31, 2022 and December 31, 2021, respectively.

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Our allowance for doubtful accounts was $ 359,000 and $ 469,000 at June 30, 2022 and December 31, 2021, respectively.

Our effective tax rate is higher than the federal statutory rate as a result of the inclusion of state taxes in the income tax amount.

25 unchanged sentences

Digital Advertising Revenue

We recognize revenue from our digital initiatives across multiple platforms such as targeted digital advertising, online promotions, advertising on our websites, mobile messaging, email marketing and other e-commerce.

We recognize revenue from our digital initiatives across multiple platforms such as targeted digital advertising, online promotions, advertising on our websites and online streams, mobile messaging, email marketing and other e-commerce.

Revenue is recorded when each specific performance obligation in the digital advertising campaign takes place, typically within a one month period.

3 unchanged sentences

Disaggregation of Revenue

Revenues from contracts with customers comprised the following for three months ended March 31, 2022 and 2021:

Revenues from contracts with customers comprised the following for three and six months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

(in thousands)

Types of Revenue

30 unchanged sentences

Amortizable intangible assets are included in other intangibles, deferred costs and investments in the consolidated balance sheets.

The Company considered the current and expected future economic and market conditions, and other potential indicators of impairment and determined a triggering event had not occurred which would necessitate any interim impairment tests during the three months ended March 31, 2022.

We will continue to monitor changes in economic and market conditions, and if any event or circumstances indicate a triggering event has occurred, we will perform an interim impairment test of our intangible assets at the appropriate time.

8 unchanged sentences

Common Stock and Treasury Stock

The following summarizes information relating to the number of shares of our common stock issued in connection with stock transactions through March 31, 2022:

The following summarizes information relating to the number of shares of our common stock issued in connection with stock transactions through June 30, 2022:

Common Stock Issued

4 unchanged sentences

Balance, December 31, 2021

Balance, March 31, 2022

Balance, June 30, 2022

We have a Stock Buy-Back Program to allow us to purchase up to $ 75.8 million of our Class A Common Stock.

As of March 31, 2022, we have remaining authorization of $ 18.4 million for future repurchases of our Class A Common Stock.

As of June 30, 2022, we have remaining authorization of $ 18.4 million for future repurchases of our Class A Common Stock.

On September 14, 2017, the Board of Directors authorized the repurchase of our Class A Common Stock under our trading plan adopted pursuant to Securities and Exchange Commission Rule 10b5-1.

5 unchanged sentences

Given the unprecedented uncertainty surrounding the COVID-19 virus and the resulting economic issues we have halted the directions for any additional buybacks under our plan.

During the three months ended March 31, 2022 and 2021 no shares were repurchased under the Stock Buy-Back Program.

During the three and six months ended June 30, 2022 and 2021 no shares were repurchased under the Stock Buy-Back Program.

We lease certain land, buildings and equipment for use in our operations.

5 unchanged sentences

Our lease agreements do not contain any residual value guarantees or material restrictive covenants.

As of March 31, 2022, we do not have any non-cancellable operating lease commitments that have not yet commenced.

As of June 30, 2022, we do not have any non-cancellable operating lease commitments that have not yet commenced.

ROU assets are classified within other intangibles, deferred costs and investments, net on the condensed consolidated balance sheet while current lease liabilities are classified within other accrued expenses and long-term lease liabilities are classified within other liabilities.

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

ROU assets were $ 5.8 million and $ 6.1 million at March 31, 2022 and December 31, 2021 respectively.

Lease liabilities were $ 6.1 million and $ 6.4 million at March 31, 2022 and December 31, 2021, respectively.

During the three months ended March 31, 2022, we recorded additional ROU assets under operating leases of $ 119,000 .

Payments on lease liabilities during the three months ended March 31, 2022 and 2021 totaled $ 478,000 , and $ 469,000 , respectively.

ROU assets were $ 5.5 million and $ 6.1 million at June 30, 2022 and December 31, 2021 respectively.

Lease liabilities were $ 5.8 million and $ 6.4 million at June 30, 2022 and December 31, 2021, respectively.

During the six months ended June 30, 2022, we recorded additional ROU assets under operating leases of $ 219,000 .

Payments on lease liabilities during the three and six months ended June 30, 2022 and 2021 totaled $ 428,000 , $ 906,000 , $ 415,000 , and $ 884,000 , respectively.

Lease expense includes cost for leases with terms in excess of one year.

For the three months ended March 31, 2022 and 2021, our total lease expense was $ 444,000 and $ 440,000 , respectively.

For the three and six months ended June 30, 2022 and 2021, our total lease expense was $ 449,000 , $ 893,000 , $ 442,000 and $ 882,000 , respectively.

Short-term lease costs are de minimus.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

We have no financing leases and minimum annual rental commitments under non-cancellable operating leases consisted of the following at March 31, 2022 (in thousands):

We have no financing leases and minimum annual rental commitments under non-cancellable operating leases consisted of the following at June 30, 2022 (in thousands):

Years Ending December 31,

3 unchanged sentences

(b) Lease payments include options to extend lease terms that are reasonably certain of being exercised.

There were no legally binding minimum lease payments for leases signed but not yet commenced at March 31, 2022.

There were no legally binding minimum lease payments for leases signed but not yet commenced at June 30, 2022.

Therefore, we must estimate our discount rate for such leases to determine the present value of lease payments at the lease commencement date.

(d) The weighted average remaining lease term and weighted average discount rate used in calculating our lease liabilities were 6.2 years and 4.2 % , respectively, at March 31, 2022.

(d) The weighted average remaining lease term and weighted average discount rate used in calculating our lease liabilities were 6.1 years and 4.2 % , respectively, at June 30, 2022.

Acquisitions and Dispositions

35 unchanged sentences

This legislation currently has no material impact to the Company’s financial statements.

An income tax expense of $ 480,000 was recorded for the three months ended March 31, 2022 compared to $ 330,000 for the three months ended March 31, 2021.

The effective tax rate was approximately 28.5 % for the three months ended March 31, 2022 compared to 30.3 % for the three months ended March 31, 2021.

An income tax expense of $ 1,575,000 was recorded for the three months ended June 30, 2022 compared to $ 1,325,000 for the three months ended June 30, 2021.

The effective tax rate was approximately 29.2 % for the three months ended June 30, 2022 compared to 28.9 % for the three months ended June 30, 2021.

An income tax expense of $ 2,055,000 was recorded for the six months ended June 30, 2022 compared to $ 1,655,000 for the three months ended June 30, 2021.

The effective tax rate was approximately 29.0 % for the three months ended June 30, 2022 compared to 29.2 % for the three months ended June 30, 2021.

Income tax provisions for interim (quarterly) periods are based on estimated annual income tax rates and are adjusted for the effects of significant, infrequent or unusual items (i.e.

16 unchanged sentences

All stock options granted were fully vested and expensed at December 31, 2012;

therefore, there was no compensation expense related to stock options for the three months ended March 31, 2022 and 2021, respectively.

There were no stock options granted during 2022 or 2021 and there were no stock options outstanding as of March 31, 2022.

therefore, there was no compensation expense related to stock options for the three and six months ended June 30, 2022 and 2021, respectively.

There were no stock options granted during 2022 or 2021 and there were no stock options outstanding as of June 30, 2022.

All outstanding stock options were exercised in 2017.

The following summarizes the restricted stock transactions for the three months ended March 31, 2022:

The following summarizes the restricted stock transactions for the three and six months ended June 30, 2022:

Outstanding at January 1, 2022

Non-vested and outstanding at March 31, 2022

Non-vested and outstanding at June 30, 2022

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

For the three months ended March 31, 2022 and 2021, we had $ 339,000 and $ 343,000 , respectively, of total compensation expense related to restricted stock-based compensation arrangements.

For the three and six months ended June 30, 2022 and 2021, we had $ 338,000 , $ 677,000 , $ 357,000 and $ 700,000 , respectively, of total compensation expense related to restricted stock-based compensation arrangements.

This expense is included in corporate general and administrative expenses in our results of operations.

The associated tax benefit recognized for the three months ended March 31, 2022 and 2021 was $ 37,000 and $ 30,000 , respectively.

The associated tax benefit recognized for the three and six months ended June 30, 2022 and 2021 was $ 37,000 , $ 74,000 , $ 33,000 and $ 64,000 , respectively.

Long-Term Debt

On October 27, 2021, we used $ 10 million from funds generated by operations to voluntarily pay down the remaining amounts on our Revolving Credit Facility and as such, have no debt outstanding at March 31, 2022.

On August 18, 2015, we entered into a new credit facility (the “Credit Facility”) with JPMorgan Chase Bank, N.A., The Huntington National Bank, Citizens Bank, National Association and J.P.

11 unchanged sentences

The cumulative transaction fees are being amortized over the remaining life of the Credit Facility.

Interest rates under the Credit Facility are payable, at our option, at alternatives equal to LIBOR ( 0.3320 % at March 31, 2022), plus 1 % to 2 % or the base rate plus 0 % to 1 %.

Interest rates under the Credit Facility are payable, at our option, at alternatives equal to LIBOR ( 1.579 % at June 30, 2022), plus 1 % to 2 % or the base rate plus 0 % to 1 % .

The spread over LIBOR and the base rate vary from time to time, depending upon our financial leverage.

2 unchanged sentences

We also pay quarterly commitment fees of 0.2 % to 0.3 % per annum on the unused portion of the Revolving Credit Facility.

The Credit Facility contains a number of financial covenants (all of which we were in compliance with at March 31, 2022) which, among other things, require us to maintain specified financial ratios and impose certain limitations on us with respect to investments, additional indebtedness, dividends, distributions, guarantees, liens and encumbrances.

We had approximately $ 50 million of unused borrowing capacity under the Revolving Credit Facility at March 31, 2022.

The Credit Facility contains a number of financial covenants (all of which we were in compliance with at June 30, 2022) which, among other things, require us to maintain specified financial ratios and impose certain limitations on us with respect to investments, additional indebtedness, dividends, distributions, guarantees, liens and encumbrances.

We had approximately $ 50 million of unused borrowing capacity under the Revolving Credit Facility at June 30, 2022.

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company is subject to various outstanding claims which arise in the ordinary course of business and to other legal proceedings.

Management anticipates that any potential liability of the Company, which may arise out of or with respect to these matters, will not materially affect the Company’s financial statements.

From time to time, the Company may be involved in various legal proceedings that are incidental to the Company’s business.

In management’s opinion, the Company is not a party to any current legal proceedings that are material to its financial condition, either individually or in the aggregate.

On June 6, 2022 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.20 per share on its Classes A and B Common Stock.

This dividend, totaling approximately $ 1,200,000 , was paid to our transfer agent on June 29, 2022 .

The dividend was paid by our transfer agent on July 1, 2022 to shareholders of record on June 13, 2022 .

On March 1, 2022 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.16 per share on its Classes A and B Common Stock.

This dividend, totaling approximately $ 970,000 , was paid on April 8, 2022 to shareholders of record on March 21, 2022 and was recorded in dividends payable on the Company’s Condensed Consolidated Balance sheet at March 31, 2022.

This dividend, totaling approximately $ 970,000 , was paid on April 8, 2022 to shareholders of record on March 21, 2022 .

On December 14, 2021 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.16 per share and special cash dividend of $ 0.50 per share on its Classes A and B Common Stock.

10 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements