Saga Communications Reports $112.9 Million Revenue for Fiscal Year 2024, Faces Decline in Operating Income

Saga Communications, Inc. reported a consolidated net operating revenue of $112.9 million for the fiscal year ending December 31, 2024, a decrease of 2.2% from $115.5 million in 2023. The decline was attributed to a drop in gross local revenues, which fell by $8.9 million, partially offset by increases in political revenue and digital revenue. Political revenue surged to $3.3 million in 2024, up from $944,000 in 2023, due to a higher number of elections. The company's operating income also saw a significant decline, dropping to $2.4 million from $11.5 million the previous year, reflecting increased operating expenses and a rise in corporate general and administrative costs.

In terms of strategic developments, Saga Communications completed the acquisition of several radio stations in the Greater Lafayette, Indiana market for $5.3 million in May 2024. This acquisition is part of the company's ongoing strategy to expand its portfolio of broadcast properties. The company currently operates 82 FM and 31 AM radio stations across 28 markets, with a focus on mid-sized markets. The company aims to leverage its local presence and community involvement to enhance listener engagement and advertising revenue.

Operationally, Saga Communications reported a total of 601 full-time and 240 part-time employees as of December 31, 2024. The company emphasizes a decentralized management structure, allowing local management teams to drive day-to-day operations and community engagement. The company’s advertising revenue is primarily generated from local sales, which accounted for 88% of gross revenue in 2024, while national advertising contributed 12%. The company maintains a larger local sales force compared to competitors, which it believes provides a competitive advantage in developing long-term customer relationships.

The company’s financial outlook remains cautious, with expectations of reduced political revenue in 2025 due to fewer elections. Additionally, the company faces challenges from economic conditions, including inflation and potential downturns in advertising spending. As of December 31, 2024, Saga Communications had long-term debt of approximately $5 million and reported compliance with its credit facility covenants. The company plans to finance future acquisitions and dividend payments through operational cash flows and potential borrowings, although it acknowledges the uncertainty surrounding market conditions and financing availability.

In summary, while Saga Communications has made strategic acquisitions and continues to operate a significant number of radio stations, it faces challenges in revenue generation and profitability amid changing market dynamics and economic conditions. The company is actively working to address internal control weaknesses and enhance its financial reporting processes, which it believes will support its long-term growth objectives.