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 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

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,” “projects,” “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 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, 2024 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.

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, and 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, 2024 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 three months ended March 31, 2025 and 2024, approximately 90% and 90%, 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 six months ended June 30, 2025 and 2024, approximately 90% and 90%, 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 revenue varies throughout the year. Advertising expenditures, our primary source of revenue, generally have been lowest during the winter months, which include the first quarter of each year. Furthermore, we expect political revenue in 2025 to decrease from 2024 levels as a result of less elections at the national, state and local levels.

Current wording

Our revenue varies throughout the year. Advertising expenditures, our primary source of revenue, generally have been lowest during the winter months, which include the first quarter of each year. Furthermore, we expect political revenue in 2025 to decrease from 2024 levels as a result of fewer elections at the national, state and local levels.

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 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.

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 along with advertising volume 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

We continue to execute Saga’s digital strategy focused on the consumer as opposed to the product-oriented, low margin, high attrition offerings that many third-party providers deliver. There has been a significant increase in digital ad spending. Saga’s “Blended Advertising” process focuses on providing our customers with simple digital advertising solutions (SEM, SEO, Targeted Display among others) that are easy to understand and buy in conjunction with radio. These are the same local advertisers that studies show say they trust radio account executives the most for market knowledge and advice but aren’t currently buying digital from us. Our digital strategy focuses on the consumer journey as they Click, Visit, Call and Search. Our Radio Station’s get the advertiser wanted and our digital platform gets the advertiser found and chosen.

Current wording

We continue to execute Saga’s digital strategy focused on the consumer as opposed to the product-oriented, low margin, high attrition offerings that many third-party providers deliver. There has been a significant increase in digital ad spending. For the six months ended June 30, 2025, interactive advertising revenue was $8,053,000 compared with $7,333,000 for the six months ended June 30,2024, an increase of $720,000 or 9.9%. Saga’s “Blended Advertising” process focuses on providing our customers with simple digital advertising solutions (SEM, SEO, Targeted Display among others) that are easy to understand and buy in conjunction with radio. These are the same local advertisers that studies show say they trust radio account executives the most for market knowledge and advice but are not currently buying digital from us. Our digital strategy focuses on the consumer journey as they Click, Visit, Call and Search. Our radio station’s get the advertiser wanted and our digital platform gets the advertiser found and chosen.

Previous wording

During the three months ended March 31, 2025 and 2024 and the years ended December 31, 2024 and 2023, our Charleston, South Carolina: Columbus, Ohio; Des Moines, Iowa; Milwaukee, Wisconsin; and Norfolk, Virginia markets, when combined, represented approximately 34%, 36%, 36% and 37%, 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 six months ended June 30, 2025 and 2024 and the twelve months ended December 31, 2024 and 2023, our Charleston, South Carolina; Columbus, Ohio; Des Moines, Iowa; Milwaukee, Wisconsin; and Norfolk, Virginia markets, when combined, represented approximately 35%, 36%, 36% and 37%, 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 three months ended March 31, 2025 and 2024 and the years ended December 31,2024 and 2023, the radio stations in our five largest markets, when combined, represented approximately 37%, 38%, 37% and 40%, 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 six months ended June 30, 2025 and 2024 and the twelve months ended December 31,2024 and 2023, the radio stations in our five largest markets, when combined, represented approximately 38%, 36%, 37% and 40%, 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

Station operating expense was $21,963,000 for the three months ended March 31, 2025, compared with $22,459,000 for the three months ended March 31,2024, a decrease of $496,000 or 2.2%. We had an increase of approximately $619,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of $1,115,000 generated by stations we owned or operated for the comparable period in 2024. The decrease in same station operating expense was primarily the result of decreases in compensation-related expenses, bad debt expenses, digital services expenses, advertising and promotional expenses and repairs and maintenance expenses of $633,000, $198,000, $143,000, $63,000 and $52,000, respectively, for the comparable period of 2024.

Current wording

Station operating expense was $22,226,000 for the three months ended June 30, 2025, compared with $23,305,000 for the three months ended June 30,2024, a decrease of $1,079,000 or 4.6%. We had an increase of approximately $390,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of $1,469,000 generated by stations we owned or operated for the comparable period in 2024. The decrease in same station operating expense was primarily a result of decreases in compensation-related expenses, digital services expenses, bad debt expenses, advertising and promotional expenses and maintenance and repairs expenses of $675,000, $283,000, $176,000, $175,000 and $73,000, respectively, from the second quarter of 2024.

Previous wording

We generated a net loss of $1,575,000 ($ (0.25) per share on a fully diluted basis) during the three months ended March 31, 2025, compared to a net loss of $1,577,000 ($ (0.25) per share on a fully diluted basis) for the three months ended March 31,2024, an increase of $2,000. The increase in net income or decrease in net loss is primarily due to the increase in operating income, described above, an increase in other income of $23,000, and an increase in income tax benefit of $5,000 partially offset by an increase in interest expense of $64,000 and a decrease in interest income of $81,000. The increase in other income was due to insurance proceeds. The increase in the tax benefit is due to a minor increase in our loss before income taxes in 2025. The increase in interest expense is due to the increase in debt outstanding. The decrease in interest income is due to lower interest rates on our short-term investments.

Current wording

We generated net income of $1,128,000 ($0.18 per share on a fully diluted basis) during the three months ended June 30, 2025, compared to $2,501,000 ($0.40 per share on a fully diluted basis) for the three months ended June 30,2024, a decrease of $1,373,000. The decrease in net income is primarily due to the decrease in operating income, described above, an increase in interest expense of $36,000, a decrease in interest income of $41,000, and a decrease in other income of $1,132,000, partially offset by a decrease in income tax expense of $570,000. 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 decrease in other income is due to a one-time gain in 2024 related to the sale of an investment in BMI. The decrease in our income tax expense is due to lower income before income tax expense from the second quarter of 2024.

Previous wording

For the three months ended March 31, 2025, consolidated net operating revenue was $24,212,000 compared with $25,294,000 for the three months ended March 31,2024, a decrease of $1,082,000 or 4.3%. We had an increase of approximately $595,000 that was attributable to stations that we did not own or operate for the comparable period, offset by a decrease of $1,677,000 generated by stations we owned or operated for the comparable period in 2024 (“same station”). The decrease in same station revenue was primarily a result of decreases in gross local revenue and gross national revenue of $1,815,000 and $432,000 respectively partially offset by increases in gross interactive revenue and non-spot revenue of $342,000 and $97,000, respectively, and a decrease in agency commissions of $198,000 for the comparable period of 2024. The most significant decreases in gross local revenue were at our Clarksville, Tennessee; Columbus, Ohio; Des Moines, Iowa; Ithaca, New York; and Norfolk, Virginia markets. The markets with the most significant decreases in gross national revenue were at our Charleston, South Carolina; Manchester, New Hampshire; Ocala, Florida; Portland, Maine; and Springfield, Massachusetts 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 revenue and our website advertising revenue. The increase in our non-spot revenue is mainly due to increases at our Manchester, New Hampshire and Milwaukee, Wisconsin markets.

Current wording

For the six months ended June 30, 2025, consolidated net operating revenue was $52,441,000 compared with $55,010,000 for the six months ended June 30,2024, a decrease of $2,569,000 or 4.7%. We had an increase of approximately $979,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of $3,548,000 generated by stations we owned or operated for the comparable period in 2024. The decrease in same station revenue was primarily a result of decreases in gross local revenue of $3,443,000, gross national revenue of $613,000, gross political revenue of $277,000 and gross non-spot revenue of $173,000 partially offset by increases in gross interactive revenue of $609,000 and a decrease in agency commissions of $444,000 from 2024. The decrease in gross local revenues was attributable to decreases at our Columbus, Ohio; Des Moines, Iowa; Ithaca, New York; and Norfolk, Virginia markets. The decrease in gross national revenue is primarily due to a decrease at our Charleston, South Carolina; Columbus, Ohio and Portland, Maine markets partially offset by increases at our Milwaukee, Wisconsin and Norfolk, Virginia markets. The gross political revenue decreased due to a decrease in the number of national, state and local elections partially offset by an increase at our Milwaukee, Wisconsin market. The decrease in gross non-spot revenue is due to decreases at our Columbus, Ohio market. 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, including mobile streaming, display and website advertising revenue.

Previous wording

We had an operating loss for the three months ended March 31, 2025 of $2,298,000 compared to an operating loss of $2,417,000 for the three months ended March 31,2024, an increase of $119,000. The increase was a result of the decrease in net operating revenue partially offset by a decrease in station operating expense, as noted above, along with an increase in corporate general and administrative expenses of $84,000, and an increase in depreciation and amortization of $128,000 offset by a decrease in other operating expense of $917,000. The increase in corporate general and administrative expenses was primarily comprised of increases in consulting and audit related fees of $116,000, additional expenses related to shareholder activism and a potential proxy contest of $110,000, and computer software and cybersecurity expenses of $48,000 partially offset by a decrease in other legal fees of $166,000 and a decrease in compensation related expenses of $25,000. In addition to the $110,000 spent in the first quarter related to shareholder activism and related matters, we expect to spend additional amounts in the second quarter of 2025. The increase in depreciation and amortization is primarily attributable to stations that we did not own or operate for the entire comparable period. In 2025, we recorded a loss on the sale of fixed assets and intangibles of $54,000 compared to a loss on the sale of fixed assets of $971,000 in 2024. 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 an operating loss for the six months ended June 30, 2025, of $889,000 compared to an operating loss of $274,000 for the six months ended June 30,2024, an increase of $615,000. The increase in our operating loss was the result of a decrease in net operating revenue, partially offset by a decrease in station operating expenses noted above, and an increase in corporate general and administrative expenses of $154,000 and an increase in depreciation and amortization of $137,000 partially offset by a decrease other operating (income) expense, net of $670,000. The increase in corporate general and administrative expenses was primarily due to additional expenses related to shareholder activism and a potential proxy of contest of $199,000, and increases in stock-based compensation, other consulting expenses, and maintenance and repairs of $137,000, $72,000, and $32,000 partially offset by decreases in legal expenses, travel related expenses and insurance related costs of $114,000, $110,000 and $93,000, 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 $307,000 in 2025. 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

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 a Third Amendment (the “Third Amendment”) to our Credit Facility, (the “Credit Facility”), 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

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 used 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 (4.45% at June 30,2025), 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 Credit Facility.

Previous wording

We have $5,000,000 debt outstanding at December 31, 2024 and March 31, 2025 that we borrowed in conjunction with our Lafayette acquisition.

Current wording

We had $5,000,000 debt outstanding at June 30, 2025 and December 31, 2024 that we borrowed in conjunction with our Lafayette acquisition.

Previous wording

We have approximately $45 million of unused borrowing capacity under the Revolving Credit Facility at both March 31, 2025 and December 31, 2024.

Current wording

We had approximately $45 million of unused borrowing capacity under the Credit Facility at June 30, 2025 and December 31, 2024, respectively.

Previous wording

During the three months ended March 31, 2025 and 2024, we had net cash flows from operating activities of $1,364,000 and $3,803,000, respectively. We believe that cash flow from operations will be sufficient to meet quarterly debt service requirements for payments of interest and scheduled payments of 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 six months ended June 30, 2025 and 2024, we had net cash flows from operating activities of $2,119,000 and $5,047,000, respectively. We believe that cash flow from operations will be sufficient to meet quarterly debt service requirements for payments of interest and scheduled payments of 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 March 31, 2025, we have repurchased 2.2 million shares of our Class A Common Stock for $58.1 million. During the three months ended March 31,2025, 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. As part of our overall capital allocation plan for fiscal year 2025, we intend to use a portion of the proceeds from the potential sale of non-core assets to fund stock buybacks under the Stock Buy-Back Program, which may include open market purchases, block trades or other forms of buybacks.

Current wording

In March 2013, our Board of Directors authorized an increase to our 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, 2025, we have repurchased 2.2 million shares of our Class A Common Stock for $58.1 million. During the three and six months ended June 30, 2025 we did not repurchase any related to the Buy-Back Program. We halted the directions issued for any additional buybacks under our plan in 2020. As part of our overall capital allocation plan for fiscal year 2025, we intend to use a portion of the proceeds from the potential sale of non core assets to fund stock buybacks under the Buy Back Program, which may include open market purchases, block trades or other forms of buybacks.

Previous wording

Our capital expenditures, exclusive of acquisitions, for the three months ended March 31, 2025 were $696,000 ($1,050,000 in 2024). We anticipate capital expenditures in 2025 to be approximately $4.0 million to $4.5 million, which we expect to finance through funds generated from operations.

Current wording

Our capital expenditures, exclusive of acquisitions, for the six months ended June 30, 2025 were $2,010,000 ($2,574,000 for the six months ended June 30, 2024). We anticipate capital expenditures in 2025 to be approximately $3.0 million to $3.5 million, which we expect to finance through funds generated from operations.

Previous wording

During 2024, the Company’s Board of Directors declared four quarterly cash dividends and a variable dividend on its Class A Common Stock. These dividends totaling $1.60 per share and approximately $10.0 million were paid during 2024.

Current wording

During the six months ended June 30, 2025, the Company’s Board of Directors have declared two quarterly cash dividends on its Class A Common Stock. These dividends totaling $0.50 per share and approximately $3.2 million were paid as of June 30, 2025.

Previous wording

During 2025, the Company’s Board of Directors declared a quarterly cash dividend on its Class A Common Stock. This dividend totaling approximately $1.6 million was paid during the first quarter of 2025.

Current wording

During the six months ended June 30, 2024, the Company’s Board of Directors 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. Additionally, $12.5 million was paid in 2024, relating to the special dividend declared in December 2023.