Saga munications(SGA) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q2 2024, net revenue decreased by 1.5% to $28.7 million compared to$29.2 million in the same period last year [9] - Station operating expense increased by 5.1% to $23.5 million for the quarter [9] - Net income for Q2 was$2.5 million or $0.40 per fully diluted share [9] - For the six-month period ended June 30, 2024, net revenue decreased by 2$53.4 million compared to $54.5 million last year [11] - Station operating income for the six months was$9.2 million, with net income of $900,000 or$0.15 per fully diluted share [11][12] Business Line Data and Key Metrics Changes - Digital or interactive revenue increased by $822,000 or 33.4$348,000 or 98.5% year-over-year [6] - Streaming revenue rose by $382,000 or 34$344,000 or 159% for the quarter [7] Market Data and Key Metrics Changes - The categories that experienced the largest decline included restaurants, recruitment, automotive, and grocery [3] - Political revenue for Q2 was $288,000, up from$108,000 in the same period last year [9] - Political revenue for the six-month period was $598,000 compared to$301,000 last year [11] Company Strategy and Development Direction - The company is focusing on transformational change and growth, particularly in the online news and community sites [20][24] - Emphasis on hyper-local news to connect with communities and create advertising opportunities [21][22] - Plans to strategically invest in operations to grow specific revenue types, including local and national, interactive, and e-commerce [15] Management's Comments on Operating Environment and Future Outlook - Management noted that the current economic environment is impacting local advertisers, particularly those spending $2,000 to$4,000 per month [4][29] - There is an expectation that these advertisers will return, but the timing is uncertain [29] - The company anticipates a soft pacing for Q3, down mid-single digits, but expects improvement [17] Other Important Information - Capital expenditures for Q2 were $1.5 million, with expectations to spend between$5 million and $5.5 million for the year [15] - The company has$24.1 million in cash and short-term investments as of June 30, 2024 [16] - A quarterly dividend of $0.26 per share was paid, totaling approximately$1.6 million [16] Q&A Session Summary Question: What are you hearing from your local advertisers regarding advertising trends? - Management indicated that local advertisers are holding back due to economic conditions but expect them to return [29] Question: What struggles have you experienced with your digital offerings? - Management highlighted the need for speed in execution and expressed confidence in the runway for current service offerings [30] Question: Can you discuss capital allocation and stock repurchases? - Management stated that capital allocation is continuously evaluated, and while buybacks are not currently part of the plan, they may be considered in the future [31]