SAGA COMMUNICATIONS INC

Previous wording

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terms such as “will,” “may,” “believes,” “intends,” “expects,” “anticipates,” “plans,” “estimates,” “guidance,” and similar expressions are intended to identify forward-looking statements that are not historical facts. These statements are made as of the date of this report or as otherwise indicated, based on current expectations. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Future Factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. We undertake no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events (whether anticipated or unanticipated), or otherwise

Current wording

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terms such as “will,” “may,” “believes,” “intends,” “expects,” “anticipates,” “plans,” “estimates,” “guidance,” and similar expressions that are intended to identify forward-looking statements that are not historical facts. These statements are made as of the date of this report or as otherwise indicated, based on current expectations. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Future Factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. We undertake no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events (whether anticipated or unanticipated), or otherwise

Previous wording

Future Factors include, among others, adverse changes in interest rates and interest rate relationships; our financial leverage and debt service requirements; dependence on key personnel; dependence on key stations and the advertising revenue they generate; U.S. national and local economic conditions or an economic recession; market volatility; demand for our services; the degree of competition by traditional and non-traditional competitors; our ability to successfully integrate acquired stations; regulatory requirements including royalties we pay; governmental and regulatory policy changes; changes in tax laws; the impact of technological advances; risks associated with cyber-attacks on our computer systems and those of our vendors; the outcomes of contingencies; trends in audience behavior; damage to our reputation resulting from adverse publicity, regulatory actions, litigation, operational failures, the failure to meet client or listener expectations and other facts; changes in local real estate values; natural disasters; terrorist attacks; the wars in Ukraine and Middle East, the effects of widespread outbreak of illness or disease, inflation; increased energy costs; and risk factors described in our annual report on Form 10-K for the year ended December 31, 2023 or in this quarterly report. These are representative of the Future Factors that could cause a difference between an ultimate actual outcome and a forward-looking statement.

Current wording

Future Factors include, among others, adverse changes in interest rates and interest rate relationships; our financial leverage and debt service requirements; dependence on key personnel; dependence on key stations and the advertising revenue they generate; U.S. national and local economic conditions or an economic recession; market volatility; demand for our services; the degree of competition by traditional and non-traditional competitors; our ability to successfully integrate acquired stations; regulatory requirements including royalties we pay; governmental and regulatory policy changes; changes in tax laws; the impact of technological advances; risks associated with cyber-attacks on our computer systems and those of our vendors; the outcomes of contingencies; trends in audience behavior; damage to our reputation resulting from adverse publicity, regulatory actions, litigation, operational failures, the failure to meet client or listener expectations and other facts; changes in local real estate values; natural disasters; terrorist attacks; the wars in Ukraine and the Middle East, the effects of widespread outbreak of illness or disease, inflation or deflation; increased energy costs; and risk factors described in our annual report on Form 10-K for the year ended December 31, 2023 or elsewhere in this quarterly report. These are representative of the Future Factors that could cause a difference between an ultimate actual outcome and a forward-looking statement.

Previous wording

Most advertising contracts are short-term and generally run for a few weeks only. The majority of our revenue is generated from local advertising, which is sold primarily by each radio market’s sales staff. For the six months ended June 30, 2024 and 2023, approximately 90% and 89%, respectively, of our radio stations’ gross revenue was from local advertising. To generate national advertising sales, we engage independent advertising sales representative firms that specialize in national sales for each of our broadcast markets.

Current wording

Most advertising contracts are short-term and generally run for a few weeks only. The majority of our revenue is generated from local advertising, which is sold primarily by each radio market’s sales staff. For the nine months ended September 30, 2024 and 2023, approximately 90% and 89%, respectively, of our radio stations’ gross revenue was from local advertising. To generate national advertising sales, we engage independent advertising sales representative firms that specialize in national sales for each of our broadcast markets.

Previous wording

Our financial results are dependent on a number of factors, the most significant of which is our ability to generate advertising revenue through rates charged to advertisers. The rates a station is able to charge are, in large part, based on a station’s ability to attract audiences in the demographic groups targeted by its advertisers. In a number of our markets, this is measured by periodic reports generated by independent national rating services. In the remainder of our markets it is measured by the results advertisers obtain through the actual running of an advertising schedule. Advertisers measure these results based on increased demand for their goods or services and/or actual revenues generated from such demand. Various factors affect the rate a station can charge, including the general strength of the local and national economies, population growth, ability to provide popular programming, local market competition, target marketing capability of radio compared to other advertising media, and signal strength.

Current wording

Our financial results are dependent on a number of factors, the most significant of which is our ability to generate advertising revenue through rates charged to advertisers. The rates a station is able to charge are, in large part, based on a station’s ability to attract audiences in the demographic groups targeted by its advertisers. In a number of our markets, this is measured by periodic reports generated by independent national rating services. In the remainder of our markets it is measured by the results advertisers obtain through the actual running of an advertising schedule. Advertisers measure these results based on increased demand for their goods or services and/or actual revenues generated from such demand. Various factors affect the rates a station can charge, including the general strength of the local and national economies, population growth, ability to provide popular programming, local market competition, target marketing capability of radio compared to other advertising media, and signal strength.

Previous wording

During the six months ended June 30, 2024 and 2023 and the years ended December 31, 2023 and 2022, our Columbus, Ohio; Des Moines, Iowa; Milwaukee, Wisconsin; Norfolk, Virginia; and Portland, Maine markets, when combined, represented approximately 36%, 37%, 37% and 39%, respectively, of our consolidated net operating revenue. An adverse change in any of these radio markets or our relative market position in those markets could have a significant impact on our operating results as a whole.

Current wording

During the nine months ended September 30, 2024 and 2023 and the twelve months ended December 31, 2023 and 2022, our Columbus, Ohio; Des Moines, Iowa; Milwaukee, Wisconsin; Norfolk, Virginia; and Portland, Maine markets, when combined, represented approximately 37%, 36%, 37% and 39%, respectively, of our consolidated net operating revenue. An adverse change in any of these radio markets or our relative market position in those markets could have a significant impact on our operating results as a whole.

Previous wording

During the six months ended June 30, 2024 and 2023 and the years ended December 31,2023 and 2022, the radio stations in our five largest markets, when combined, represented approximately 36%, 39%, 40% and 43%, respectively, of our consolidated station operating income. The following table describes the percentage of our consolidated station operating income represented by each of these markets:

Current wording

During the nine months ended September 30, 2024 and 2023 and the twelve months ended December 31,2023 and 2022, the radio stations in our five largest markets, when combined, represented approximately 36%, 41%, 40% and 43%, respectively, of our consolidated station operating income. The following table describes the percentage of our consolidated station operating income represented by each of these markets:

Previous wording

For the six months ended June 30, 2024, consolidated net operating revenue was $53,406,000 compared with $54,479,000 for the six months ended June 30,2023, a decrease of $1,073,000 or 2.0%. We had an increase of approximately $262,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of $1,335,000 generated by stations we owned or operated for the comparable period in 2023. The decrease in same station revenue was primarily a result of decreases in gross local revenue of $2,912,000, and gross non-spot revenue of $175,000, partially offset by increases in gross interactive revenue of $1,370,000 and gross political revenue of $297,000, from the second quarter of 2023. The decrease in gross local revenues was attributable to decreases at our Clarksville, Tennessee; Columbus, Ohio; Des Moines, Iowa; Manchester, New Hampshire; and Milwaukee, Wisconsin markets. The decrease in gross non-spot revenue is primarily due to decreases at our Bellingham, Washington; Clarksville, Tennessee; Columbus, Ohio; Manchester, New Hampshire; and Yankton, South Dakota markets partially offset by an increase at our Portland, Maine market. The increase in gross interactive revenue is primarily due to an increase in our streaming and website advertising revenue. The gross political revenue increased due to an increase in the number of national, state and local elections.

Current wording

For the three months ended September 30, 2024, consolidated net operating revenue was $28,118,000 compared with $29,149,000 for the three months ended September 30,2023, a decrease of $1,031,000 or 3.5%. We had an increase of approximately $666,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of $1,697,000 generated by stations we owned or operated for the comparable period in 2023 (“same station”). The decrease in same station revenue was primarily a result of decreases in gross local revenue of $2,635,000 and gross national revenue of $107,000, partially offset by increases in gross political revenue of $442,000, non-spot revenue of $240,000 and gross interactive revenue of $95,000 and a decrease in agency commissions of $226,000, from the third quarter of 2023. The decrease in gross local revenues was attributable to decreases at our Clarksville, Tennessee; Columbus, Ohio; Des Moines, Iowa; Manchester, New Hampshire; Milwaukee, Wisconsin; and Norfolk, Virginia markets. The decrease in gross national revenue is primarily due to a decrease at our Norfolk, Virginia market partially offset by an increase at our Columbus, Ohio market. The decrease in agency commissions is due to the decrease in national and local agency revenue. The gross political revenue increased due to an increase in the number of national, state and local elections. The increase in non-spot revenue is due to increases at our Manchester, New Hampshire; Milwaukee, Wisconsin; Portland, Maine; and Yankton, South Dakota markets. The increase in gross interactive revenue is primarily due to an increase in our streaming and website advertising revenue.

Previous wording

Station operating expense was $23,544,000 for the three months ended June 30, 2024, compared with $22,407,000 for the three months ended June 30,2023, an increase of $1,137,000 or 5.1%. We had an increase of approximately $233,000 that was attributable to stations that we did not own or operate for the entire comparable period, combined with an increase of $904,000 generated by stations we owned or operated for the comparable period in 2023. The increase in same station operating expense was primarily a result of increases in compensation-related expenses, bad debt expenses, and interactive consulting and content expenses of $718,000, $207,000, and $120,000, respectively, partially offset by decreases in music licensing expenses, and barter expenses of $75,000, and $71,000, respectively, from the second quarter of 2023.

Current wording

Station operating expense was $23,458,000 for the three months ended September 30, 2024, compared with $22,760,000 for the three months ended September 30,2023, an increase of $698,000 or 3.1%. We had an increase of approximately $775,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of $77,000 generated by stations we owned or operated for the comparable period in 2023. The decrease in same station operating expense was primarily a result of decreases in compensation-related expenses and music licensing expenses of $363,000 and $90,000, respectively, partially offset by increases in bad debt expenses, interactive consulting and content expenses, sales survey expenses and advertising and promotion expenses of $165,000, $115,000, $40,000 and $35,000, respectively, from the third quarter of 2023.

Previous wording

We had operating income for the three months ended June 30, 2024 of $2,143,000 compared to $4,296,000 for the three months ended June 30,2023, a decrease of $2,153,000. The decrease in operating income was the result of a decrease in net operating revenue and an increase in station operating expenses noted above, and an increase in corporate general and administrative expenses of $577,000 and an increase in other operating (income) expense, net of $6,000. The increase in corporate general and administrative expenses was primarily due to increases in stock-based compensation, compensation-related expenses, and computer software and cyber security expenses of $272,000, $205,000, and $83,000, respectively.

Current wording

We had operating income for the three months ended September 30, 2024 of $1,645,000 compared to $3,492,000 for the three months ended September 30,2023, a decrease of $1,847,000. The decrease in operating income was the result of a decrease in net operating revenue and an increase in station operating expenses noted above, and an increase in corporate general and administrative expenses of $114,000 and an increase in other operating (income) expense, net of $4,000. The increase in corporate general and administrative expenses was primarily due to increases in stock-based compensation, computer software and cyber security expenses and compensation-related expenses of $224,000, $110,000, and $29,000, respectively, partially offset by decreases in insurance related costs and other consulting expenses of $132,000 and $101,000, respectively.

Previous wording

We generated net income of $2,501,000 ($0.40 per share on a fully diluted basis) during the three months ended June 30, 2024, compared to $3,350,000 ($0.55 per share on a fully diluted basis) for the three months ended June 30,2023, a decrease of $849,000. The decrease in net income is primarily due to the decrease in operating income, described above, an increase in interest expense of $28,000, a decrease in interest income of $96,000, partially offset by an increase in other income of $1,133,000 and a decrease in income tax expense of $295,000. The increase in interest expense is due to an increase in debt outstanding. The decrease in interest income is related to the decrease in the amount of short-term investment accounts. The increase in other income is due to the $1,133,000 received related to the sale of an investment in BMI. The gain on sale of investment is recorded in other (income) expense, net in the Company’s Condensed Consolidated Statement of Operation. The decrease in our income tax expense is due to lower income before income tax expense from the second quarter of 2024.

Current wording

We generated net income of $1,267,000 ($0.20 per share on a fully diluted basis) during the three months ended September 30, 2024, compared to $2,729,000 ($0.45 per share on a fully diluted basis) for the three months ended September 30,2023, a decrease of $1,462,000. The decrease in net income is primarily due to the decrease in operating income, described above, an increase in interest expense of $77,000, a decrease in interest income of $136,000, partially offset by an increase in other income of $78,000 and a decrease in income tax expense of $520,000. The increase in interest expense is due to an increase in debt outstanding. The decrease in interest income is related to the decrease in the amount of short-term investment accounts. The increase in other income is due to the gain on insurance claims of $78,000 received as a result of weather-related damages. The gain on insurance claim is recorded in other (income) expense, net in the Company’s Condensed Consolidated Statement of Operation. The decrease in our income tax expense is due to lower income before income tax expense from the third quarter of 2024.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023.

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023.

Previous wording

For the three months ended June 30, 2024, consolidated net operating revenue was $28,742,000 compared with $29,175,000 for the three months ended June 30,2023, a decrease of $433,000 or 1.5%. We had an increase of approximately $262,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of $695,000 generated by stations we owned or operated for the comparable period in 2023 (“same station”). The decrease in same station revenue was primarily a result of decreases in gross local revenue of $1,728,000 and gross national revenue of $46,000, partially offset by increases in gross interactive revenue of $803,000 and gross political revenue of $180,000, from the second quarter of 2023. The decrease in gross local revenues was attributable to decreases at our Bellingham, Washington; Clarksville, Tennessee; Columbus, Ohio; Manchester, New Hampshire; Milwaukee, Wisconsin; Norfolk, Virginia; and Ocala, Florida markets. The decrease in gross national revenue is primarily due to a decrease at our Norfolk, Virginia market partially offset by an increase at our Columbus, Ohio market. The increase in gross interactive revenue is primarily due to an increase in our streaming and website advertising revenue. The gross political revenue increased due to an increase in the number of national, state and local elections.

Current wording

For the nine months ended September 30, 2024, consolidated net operating revenue was $81,524,000 compared with $83,628,000 for the nine months ended September 30,2023, a decrease of $2,104,000 or 2.5%. We had an increase of approximately $926,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of $3,030,000 generated by stations we owned or operated for the comparable period in 2023. The decrease in same station revenue was primarily a result of decreases in gross local revenue of $5,552,000, and gross national revenue of $163,000, partially offset by increases in gross interactive revenue of $1,470,000 and gross political revenue of $735,000, and a decrease in agency commissions of $371,000 from 2023. The decrease in gross local revenues was attributable to decreases at our Clarksville, Tennessee; Columbus, Ohio; Des Moines, Iowa; Manchester, New Hampshire; and Milwaukee, Wisconsin markets. The decrease in gross national revenue is primarily due to a decrease at our Norfolk, Virginia market partially offset by increases at our Bellingham, Washington; Columbus, Ohio and Springfield, Illinois markets. The decrease in agency commissions is due to the decrease in national and local agency revenue. The increase in gross interactive revenue is primarily due to an increase in our streaming and website advertising revenue. The gross political revenue increased due to an increase in the number of national, state and local elections.

Previous wording

Station operating expense was $46,525,000 for the six months ended June 30, 2024, compared with $44,110,000 for the six months ended June 30,2023, an increase of $2,415,000 or 5.5%. We had an increase of approximately $233,000 that was attributable to stations that we did not own or operate for the entire comparable period, combined with an increase of $2,182,000 generated by stations we owned or operated for the comparable period in 2023. The increase in same station operating expense was primarily a result of increases in compensation-related expense, bad debt expenses, interactive consulting and content expenses, sales rating survey expenses, and promotional expenses of $1,301,000, $494,000, $245,000, $179,000, and $81,000, respectively, partially offset by decreases in barter expenses and music licensing expenses of $64,000, and $56,000, respectively, from the comparable period in 2023.

Current wording

Station operating expense was $69,983,000 for the nine months ended September 30, 2024, compared with $66,870,000 for the nine months ended September 30,2023, an increase of $3,113,000 or 4.7%. We had an increase of approximately $998,000 that was attributable to stations that we did not own or operate for the entire comparable period, combined with an increase of $2,115,000 generated by stations we owned or operated for the comparable period in 2023. The increase in same station operating expense was primarily a result of increases in compensation-related expense, bad debt expenses, interactive consulting and content expenses, sales rating survey expenses, and advertising and promotion expenses of $938,000, $659,000, $360,000, $219,000, and $116,000, respectively, partially offset by decreases in music licensing expenses of $146,000, respectively, from the comparable period in 2023.

Previous wording

We had an operating loss for the six months ended June 30, 2024, of $274,000 compared to operating income of $5,201,000 for the six months ended June 30,2023, a decrease of $5,475,000. The decrease in operating income was the result of a decrease in net operating revenue and an increase in station operating expenses noted above, and an increase in corporate general and administrative expenses of $1,090,000 and an increase in other operating (income) expense, net of $897,000. The increase in corporate general and administrative expenses was primarily due to increases in stock-based compensation, compensation-related expenses, and travel-related expenses of $480,000, $400,000, and $159,000, respectively. In 2024, we recorded a loss on the sale of fixed assets and intangibles of $977,000 compared to a loss on the sale of fixed assets of $80,000 in 2023. The loss on sale of fixed assets and intangibles recorded in other operating expense in 2024 primarily relates to the sale of WYSE-AM, W275CP translator and W248CM translator located in our Asheville, North Carolina market and the relinquishment of our FCC license for KBAI-AM located in our Bellingham, Washington market, described in footnote 7 (Acquisitions and Dispositions).

Current wording

We had operating income for the nine months ended September 30, 2024, of $1,371,000 compared to $8,693,000 for the nine months ended September 30,2023, a decrease of $7,322,000. The decrease in operating income was the result of a decrease in net operating revenue and an increase in station operating expenses noted above, and an increase in corporate general and administrative expenses of $1,204,000 and an increase in other operating (income) expense, net of $901,000. The increase in corporate general and administrative expenses was primarily due to increases in stock-based compensation, compensation-related expenses, computer software and cyber security expenses and travel-related expenses of $704,000, $414,000, $255,000 and $153,000, respectively, partially offset by decreases in insurance related costs and other consulting expenses of $196,000 and $74,000, respectively. In 2024, we recorded a loss on the sale of fixed assets and intangibles of $1,026,000 compared to a loss on the sale of fixed assets of $125,000 in 2023. The loss on sale of fixed assets and intangibles recorded in other operating expense in 2024 primarily relates to the sale of WYSE-AM, W275CP translator and W248CM translator located in our Asheville, North Carolina market and the relinquishment of our FCC license for KBAI-AM located in our Bellingham, Washington market, described in footnote 7 (Acquisitions and Dispositions).

Previous wording

We generated net income of $924,000 ($0.15 per share on a fully diluted basis) during the six months ended June 30, 2024, compared to $4,270,000 ($0.70 per share on a fully diluted basis) for the six months ended June 30,2023 ended, a decrease of $3,346,000. The decrease in net income is primarily due to the decrease in operating income, described above, an increase in interest expense of $28,000, a decrease in interest income of $82,000 partially offset by an increase in other income of $1,014,000 and a decrease in income tax expense of $1,225,000. The increase in interest expense is due to an increase in debt outstanding. The decrease in interest income is related to the decrease in the amount of short-term investment accounts. The increase in other income is due to the $1,133,000 received related to the sale of an investment in BMI. The gain on sale of investment is recorded in other (income) expense, net in the Company’s Condensed Consolidated Statement of Operation. The decrease in our income tax expense is due to lower income before income tax expense for the comparable period.

Current wording

We generated net income of $2,191,000 ($0.35 per share on a fully diluted basis) during the nine months ended September 30, 2024, compared to $6,999,000 ($1.15 per share on a fully diluted basis) for the nine months ended September 30,2023 ended, a decrease of $4,808,000. The decrease in net income is primarily due to the decrease in operating income, described above, an increase in interest expense of $105,000, a decrease in interest income of $218,000 partially offset by an increase in other income of $1,092,000 and a decrease in income tax expense of $1,745,000. The increase in interest expense is due to an increase in debt outstanding. The decrease in interest income is related to the decrease in the amount of short-term investment accounts. The increase in other income is due to the $1,133,000 received related to the sale of an investment in BMI and $78,000 in insurance proceeds received as a result of weather-related damages. The gain on sale of investment and gain on insurance claims are recorded in other (income) expense, net in the Company’s Condensed Consolidated Statement of Operation. The decrease in our income tax expense is due to lower income before income tax expense for the comparable period.

Previous wording

On December 19, 2022, we entered into a Third Amendment to our Credit Facility, (the “Third Amendment”), which extended the maturity date to December 19, 2027, reduced the lenders to JPMorgan Chase Bank, N.A., and the Huntington National Bank (the “Lenders”), established an interest rate equal to the secured overnight financing rate (“SOFR”) as administered by the SOFR Administrator (currently established as the Federal Reserve Bank of New York) as the interest base and increased the basis points.

Current wording

On December 19, 2022, we entered into the Third Amendment to our Credit Facility, (the “Third Amendment”), which extended the maturity date to December 19, 2027, reduced the lenders to JPMorgan Chase Bank, N.A., and the Huntington National Bank (the “Lenders”), established an interest rate equal to the secured overnight financing rate (“SOFR”) as administered by the SOFR Administrator (currently established as the Federal Reserve Bank of New York) as the interest base, and increased the basis points.

Previous wording

Approximately $266,000 of debt issuance costs related to the Credit Facility were capitalized and are being amortized over the life of the Credit Facility. These debt issuance costs are included in other assets, net in the consolidated balance sheets. As a result of the Second Amendment, the Company incurred an additional $120,000 of transaction fees related to the Credit Facility that were capitalized. As a result of the Third Amendment, the Company incurred an additional $161,000 of transaction fees related to the Credit Facility that were capitalized. The cumulative transaction fees are being amortized over the remaining life of the Credit Facility.

Current wording

Approximately $266,000 of debt issuance costs related to the Credit Facility were capitalized and are being amortized over the life of the Credit Facility. These debt issuance costs are included in other assets, net in the consolidated balance sheets. As a result of the Second Amendment to our Credit Facility, the Company incurred an additional $120,000 of transaction fees related to the Credit Facility that were capitalized. As a result of the Third Amendment, the Company incurred an additional $161,000 of transaction fees related to the Credit Facility that were capitalized. The cumulative transaction fees are being amortized over the remaining life of the Credit Facility.

Previous wording

Interest rates under the Credit Facility are payable, at our option, at alternatives equal to SOFR (5.33% at June 30, 2024), plus 1% to 2% or the base rate plus 0% to 1%. The spread over SOFR and the base rate vary from time to time, depending upon our financial leverage. Letters of credit issued under the Credit Facility will be subject to a participation fee (which is equal to the interest rate applicable to Eurocurrency Loans, as defined in the Credit Agreement) payable to each of the Lenders and a fronting fee equal to 0.25% per annum payable to the issuing bank. Under the Third Amendment, we now pay quarterly commitment fees of 0.25% per annum on the unused portion of the Credit Facility. We previously paid quarterly commitment fees of 0.2% to 0.3% per annum on the unused portion of the Revolving Credit Facility.

Current wording

Interest rates under the Credit Facility are payable, at our option, at alternatives equal to SOFR (5.16% at September 30,2024), plus 1% to 2% or the base rate plus 0% to 1%. The spread over SOFR and the base rate vary from time to time, depending upon our financial leverage. Letters of credit issued under the Credit Facility will be subject to a participation fee (which is equal to the interest rate applicable to Eurocurrency Loans, as defined in the Credit Agreement) payable to each of the Lenders and a fronting fee equal to 0.25% per annum payable to the issuing bank. Under the Third Amendment, we now pay quarterly commitment fees of 0.25% per annum on the unused portion of the Credit Facility. We previously paid quarterly commitment fees of 0.2% to 0.3% per annum on the unused portion of the Revolving Credit Facility.

Previous wording

During the six months ended June 30, 2024 and 2023, we had net cash flows from operating activities of $5,047,000 and $6,038,000, respectively. We believe that cash flow from operations will be sufficient to meet quarterly debt service requirements for payments of interest and principal under our Credit Facility if we borrow in the future. However, if such cash flow is not sufficient we may be required to sell additional equity securities, refinance our obligations or dispose of one or more of our properties in order to make such scheduled payments. There can be no assurance that we would be able to effect any such transactions on favorable terms, if at all.

Current wording

During the nine months ended September 30, 2024 and 2023, we had net cash flows from operating activities of $10,141,000 and $13,921,000, respectively. We believe that cash flow from operations will be sufficient to meet quarterly debt service requirements for payments of interest and principal under our Credit Facility if we borrow in the future. However, if such cash flow is not sufficient we may be required to sell additional equity securities, refinance our obligations or dispose of one or more of our properties in order to make such scheduled payments. There can be no assurance that we would be able to effect any such transactions on favorable terms, if at all.

Previous wording

In March 2013, our board of directors authorized an increase to our Stock Buy-Back Program (the “Buy-Back Program”) to allow us to purchase up to $75.8 million of our Class A Common Stock. From its inception in 1998 through June 30, 2024, we have repurchased 2.2 million shares of our Class A Common Stock for $57.8 million. During the three and six months ended June 30,2024, we did not repurchase any shares related to the Buy-Back Program. We halted the directions issued for any additional buybacks under our plan in 2020. We continue to monitor economic conditions to determine if and when it makes sense to make additional buybacks under our plan.

Current wording

In March 2013, our board of directors authorized an increase to our Stock Buy-Back Program (the “Buy-Back Program”) to allow us to purchase up to $75.8 million of our Class A Common Stock. From its inception in 1998 through September 30, 2024, we have repurchased 2.2 million shares of our Class A Common Stock for $57.8 million. During the three and nine months ended September 30,2024, 715 shares were retained for the payment of withholding taxes for $11,000 related to the vesting of restricted stock. We halted the directions issued for any additional buybacks under our plan in 2020. We continue to monitor economic conditions to determine if and when it makes sense to make additional buybacks under our plan.

Previous wording

Our capital expenditures, exclusive of acquisitions, for the six months ended June 30, 2024 were $2,574,000 ($2,637,000 in 2023). We anticipate capital expenditures in 2024 to be approximately $5.0 million to $5.5 million, which we expect to finance through funds generated from operations.

Current wording

Our capital expenditures, exclusive of acquisitions, for the nine months ended September 30, 2024 were $3,199,000 ($3,397,000 in 2023). We anticipate capital expenditures in 2024 to be approximately $4.0 million to $4.5 million, which we expect to finance through funds generated from operations.

Previous wording

On February 13, 2024, we entered into an agreement to purchase the assets of WKOA (FM), WKHY (FM), WASK (FM), WXXB (FM), WASK (AM) and W269DJ from Neuhoff Communications, Inc. serving the Greater Lafayette, Indiana radio market for $5.3 million, subject to certain purchase price adjustments. The Company closed on this transaction on May 31, 2024, using funds from operations and borrowings under our credit agreement, of $5,850,000, which included the purchase price of $5,300,000, the purchase of $482,000 in accounts receivable and certain closing adjustments and transactional costs of approximately $68,000.

Current wording

On February 13, 2024, we entered into an agreement to purchase the assets of WKOA (FM), WKHY (FM), WASK (FM), WXXB (FM), WASK (AM) and W269DJ from Neuhoff Communications, Inc. serving the Greater Lafayette, Indiana radio market for $5.3 million, subject to certain purchase price adjustments. The Company closed on this transaction on May 31, 2024, using funds from operations and borrowings under our credit agreement, of $5,832,000, which included the purchase price of $5,300,000, the purchase of $499,000 in accounts receivable and transactional costs of approximately $121,000 offset by $88,000 in certain closing adjustments..

Previous wording

During 2024, the Company’s Board of Directors has declared two quarterly cash dividends and a variable dividend on its Class A Common Stock. These dividends totaling $1.10 per share and approximately $6.9 million were paid during 2024.

Current wording

During 2024, the Company’s Board of Directors has declared three quarterly cash dividends and a variable dividend on its Class A Common Stock. These dividends totaling $1.35 per share and approximately $8.5 million were paid or accrued as of September 30, 2024.