Saga Communications, Inc. (NASDAQ:SGA) Q2 2020 Earnings Conference Call August 5, 2020 11:00 AM ET Company Participants Ed Christian - President & Chief Executive Officer Sam Bush - Chief Financial Officer Conference Call Participants Operator Good morning ladies and gentlemen and welcome to the Saga Communications Q2 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn this over to your host; Ed Christian, President and CEO of Saga Communications. Sir the floor is yours. Ed Chris ...

PART I. FINANCIAL INFORMATION This section presents the company's unaudited financial statements, management's analysis of financial performance, market risk disclosures, and internal controls [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, reflecting a significant downturn due to COVID-19, including decreased revenue, a net loss, and an impairment charge [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20consolidated%20balance%20sheets) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $48,909 | $44,034 | | Accounts receivable, net | $10,164 | $18,962 | | Broadcast licenses, net | $91,600 | $95,311 | | Total assets | $243,053 | $252,394 | | **Liabilities & Equity** | | | | Total current liabilities | $14,710 | $17,501 | | Long-term debt | $10,000 | $10,000 | | Total liabilities | $54,460 | $60,042 | | Total stockholders' equity | $188,593 | $192,352 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20consolidated%20statements%20of%20operations) This statement details the company's financial performance over specific periods, including revenue, expenses, and net income or loss Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | Net operating revenue | $16,866 | $32,191 | $42,917 | $60,007 | | Impairment of broadcast licenses | $3,757 | $0 | $3,757 | $0 | | Operating income (loss) | $(8,659) | $6,608 | $(6,492) | $8,573 | | Net income (loss) | $(4,911) | $4,734 | $(3,231) | $6,104 | | Diluted EPS | $(0.82) | $0.80 | $(0.54) | $1.03 | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20consolidated%20statements%20of%20stockholders%27%20equity) This statement outlines the changes in the company's total stockholders' equity over the reporting period - Total stockholders' equity decreased from **$192.4 million** at the end of 2019 to **$188.6 million** at June 30, 2020. The decrease was primarily driven by a net loss of **$4.9 million** in Q2 2020 and dividend payments, partially offset by stock-based compensation[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20consolidated%20statements%20of%20cash%20flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,319 | $12,830 | | Net cash provided by (used in) investing activities | $313 | $(3,662) | | Net cash used in financing activities | $(3,757) | $(15,385) | | **Net increase (decrease) in cash** | **$4,875** | **$(6,217)** | - Cash and cash equivalents increased to **$48.9 million** at the end of the period, up from **$44.0 million** at the beginning of the year. The increase was driven by positive operating cash flow and proceeds from asset sales, which offset cash used for dividends and treasury stock purchases[16](index=16&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20unaudited%20condensed%20consolidated%20financial%20statements) This section provides detailed explanations and additional information supporting the unaudited condensed consolidated financial statements - Due to the economic impact of the COVID-19 pandemic, the company performed an impairment test and recorded a non-cash impairment charge of **$3.8 million** related to FCC licenses in eight markets[50](index=50&type=chunk)[51](index=51&type=chunk) Disaggregation of Revenue for Six Months Ended June 30 (in thousands) | Revenue Type | 2020 | 2019 | | :--- | :--- | :--- | | Broadcast Advertising Revenue, net | $38,995 | $54,683 | | Digital Advertising Revenue | $1,567 | $1,890 | | Other Revenue | $2,355 | $3,434 | | **Net Revenue** | **$42,917** | **$60,007** | - On June 18, 2020, the Board of Directors temporarily suspended the quarterly cash dividend in response to the uncertainty of the ongoing impact of COVID-19[96](index=96&type=chunk) - The company has a **$70 million** revolving credit facility, which was amended in May 2020 to include an alternative benchmark rate to LIBOR. As of June 30, 2020, **$10 million** was outstanding, with approximately **$60 million** of unused borrowing capacity[86](index=86&type=chunk)[94](index=94&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant negative impact of the COVID-19 pandemic on financial results, including a substantial revenue decrease, an impairment charge, and liquidity preservation measures - The COVID-19 pandemic led to numerous advertising cancellations, especially in sectors like events, automotive, and healthcare, causing a significant decline in revenue. The company anticipates Q3 2020 revenue to be **25% to 30% lower** than the prior year[103](index=103&type=chunk)[105](index=105&type=chunk) - In response to the pandemic, the company took several actions to protect liquidity, including delaying capital expenditures, suspending share repurchases, temporarily suspending the quarterly dividend, and implementing cost-reduction initiatives[105](index=105&type=chunk)[107](index=107&type=chunk) Comparison of Operations for Three Months Ended June 30 (in thousands) | Metric | 2020 | 2019 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net operating revenue | $16,866 | $32,191 | $(15,325) | (47.6)% | | Station operating expense | $18,652 | $22,879 | $(4,227) | (18.5)% | | Operating income (loss) | $(8,659) | $6,608 | $(15,267) | (231.0)% | | Net income (loss) | $(4,911) | $4,734 | $(9,645) | (203.7)% | - A **$3.8 million** impairment charge for broadcast licenses was recognized in Q2 2020 due to decreased revenue projections and an increased discount rate, both resulting from the COVID-19 pandemic's impact[165](index=165&type=chunk) - The company had approximately **$60 million** of unused borrowing capacity under its Revolving Credit Facility as of June 30, 2020, providing financial flexibility[152](index=152&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section confirms no material changes to market risk profile since the 2019 Annual Report, except for new risks related to the COVID-19 pandemic - There have been no material changes to the company's market risk profile since the 2019 Annual Report, except for risks introduced by the COVID-19 pandemic[171](index=171&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal controls over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures are effective[172](index=172&type=chunk) - No material changes were made to the company's internal controls over financial reporting during the second quarter of 2020[172](index=172&type=chunk) PART II. OTHER INFORMATION This section provides additional information including legal proceedings, updated risk factors, details on equity security sales, and a list of filed exhibits [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, none of which are expected to materially affect its financial statements - Ongoing legal proceedings are not expected to have a material financial impact on the company[175](index=175&type=chunk) [Risk Factors](index=29&type=section&id=Item%201a.%20Risk%20Factors) This section introduces new significant risk factors related to the COVID-19 pandemic, detailing its adverse impact on business operations, financial results, and cash flows - The COVID-19 pandemic and related government restrictions have adversely affected business, results of operations, and financial condition[177](index=177&type=chunk) - Uncertainty in the economic outlook has caused advertisers to reduce spending, and this trend may continue, negatively impacting revenue[178](index=178&type=chunk) - The duration and severity of the pandemic's impact are difficult to predict, and further restrictive measures could have a prolonged adverse effect on the business[180](index=180&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase activity for Q2 2020, noting the halt of the program due to COVID-19 related economic uncertainty Share Repurchases in Q2 2020 | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value that May Yet be Purchased Under the Program(a) | | :--- | :--- | :--- | :--- | | April 1 - April 30, 2020 | — | $ — | $19,214,262 | | May 1 - May 31, 2020 | — | $ — | $19,214,262 | | June 1 – June 31, 2020 | 808 | $25.82 | $19,193,403 | - The company has halted additional buybacks under its stock repurchase plan due to the uncertainty surrounding the COVID-19 virus[60](index=60&type=chunk)[154](index=154&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including loan document amendments and CEO/CFO certifications - Key exhibits filed include an Assumption Agreement and Amendment of Loan Documents, CEO/CFO certifications (Rule 13a-14(a) and Section 906), and XBRL data files[183](index=183&type=chunk)

Saga Communications, Inc. (NASDAQ:SGA) Q1 2020 Earnings Conference Call May 6, 2020 11:00 AM ET Company Participants Edward Christian - President and Chief Executive Officer Samuel Bush - Chief Financial Officer Conference Call Participants Operator Good morning, ladies and gentlemen, and welcome to the Saga Communications Incorporated Q1 Earnings Conference Call. At this time, all parties have been placed in a listen-only mode. It is now my pleasure to turn it over to your host, Ed Christian, President an ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period ended March 31, 2020 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-11588 Saga Communications, Inc. (Exact name of registrant as specified in its charter) Delaware 38-3042953 (State or other jurisdi ...

PART I This part provides a comprehensive overview of the company's business, including its radio station portfolio, operational strategies, advertising sales, competitive landscape, and federal regulatory environment [Item 1. Business](index=5&type=section&id=Item%201.%20Business) The company primarily acquires and operates radio stations in mid-sized markets, focusing on local management and diverse programming after divesting its television segment - **Primarily engaged** in acquiring, developing, and operating broadcast properties, specifically radio stations after selling the television segment in 2017[19](index=19&type=chunk) Asset Holdings (as of Feb 29, 2020) | Asset Type | Quantity | | :--------- | :------- | | FM Radio Stations | 79 | | AM Radio Stations | 34 | | Metro Signals | 77 | | Markets Served | 27 | - Strategy focuses on operating **top-billing radio stations** in mid-sized markets (ranked **20-200**), emphasizing programming, marketing, and **strong decentralized local management**[27](index=27&type=chunk)[28](index=28&type=chunk)[31](index=31&type=chunk) [1.1. Radio Station Portfolio and Market Presence](index=5&type=section&id=1.1.%20Radio%20Station%20Portfolio%20and%20Market%20Presence) Saga operates a diverse portfolio of FM and AM radio stations across **27 markets**, utilizing various formats to target specific demographics for advertising revenue - **Key Markets** include Milwaukee, Columbus, Norfolk, Des Moines, Portland, Charleston, Springfield, Ocala-Gainesville, Manchester, Asheville, Harrisonburg, Yankton, Bellingham, Brattleboro, Bucyrus, Champaign, Charlottesville, Clarksville/Hopkinsville, Greenfield, Hilton Head, Ithaca, Jonesboro, Keene, Mitchell, Northampton, Spencer, and Springfield, IL[19](index=19&type=chunk)[20](index=20&type=chunk)[22](index=22&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - Diverse programming formats include Classic Hits, Adult Hits, Top 40, Country, Country Legends, Mainstream/Hot/Soft Adult Contemporary, Pure Oldies, Classic Rock, News/Talk, Alternative Rock, Sports, Christian, Adult Standards, and Gospel[20](index=20&type=chunk)[22](index=22&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[29](index=29&type=chunk) - Stations target specific demographics (e.g., Adults **40-64**, Men **18-49**, Women **25-54**) to attract advertisers[20](index=20&type=chunk)[22](index=22&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) [1.2. Business Strategy and Operations](index=11&type=section&id=1.2.%20Business%20Strategy%20and%20Operations) The strategy focuses on achieving **top ratings** in mid-sized markets through **effective programming**, market research, and **decentralized local management**, while seeking growth-oriented acquisitions - Programming and marketing are **key** to achieving **top ratings**, involving **extensive market research** (music evaluations, focus groups, strategic vulnerability studies) and audience promotions[28](index=28&type=chunk)[29](index=29&type=chunk) - Employs **strong decentralized local management** responsible for day-to-day operations, compensated based on financial performance; corporate management handles long-range planning, policies, resource allocation, and monitoring[31](index=31&type=chunk) - Seeks to acquire **reasonably priced broadcast properties** with **significant growth potential** in markets with well-established and relatively stable economies, often supported by state/federal government or major universities[32](index=32&type=chunk) [1.3. Advertising Sales and Revenue](index=11&type=section&id=1.3.%20Advertising%20Sales%20and%20Revenue) Advertising sales, **primarily local** (**88%** in 2019), are the main revenue source, with rates influenced by audience demographics and market competition - **Primary source of revenue** is from the sale of advertising for broadcast on stations[33](index=33&type=chunk) - Advertising rates are based primarily on a station's ability to attract target demographic audiences, market competition, supply and demand for advertising time, and other qualitative factors[34](index=34&type=chunk) Revenue Breakdown (Gross Revenue) | Revenue Type | 2019 | 2018 | 2017 | | :----------- | :--- | :--- | :--- | | Local Advertising | 88% | 87% | 87% | | National Advertising | 12% | 13% | 13% | - Maintains a local sales force generally larger than competitors to develop long-standing customer relationships and provides incentives for new client acquisition[35](index=35&type=chunk) [1.4. Competition and Industry Trends](index=12&type=section&id=1.4.%20Competition%20and%20Industry%20Trends) The broadcasting industry is **highly competitive**, with stations vying for listeners and advertising revenue against traditional and new media technologies - **Competes** for listeners/viewers and advertising revenues directly with other radio and/or television stations within their markets[37](index=37&type=chunk) - Faces **competition** for advertising revenues from other media, including broadcast television/radio, cable television, newspapers, magazines, direct mail, the Internet, coupons, and billboard advertising[38](index=38&type=chunk) - Subject to **competition from new media technologies**, such as audio programming delivery by cable and satellite television systems, satellite radio systems, direct reception from satellites, and Internet streaming[39](index=39&type=chunk) [1.5. Operational Aspects](index=12&type=section&id=1.5.%20Operational%20Aspects) Revenue is seasonal, with **Q1** being the **lowest**; the company maintains environmental compliance and manages a workforce of **663 full-time** and **339 part-time** employees - Revenue varies throughout the year, with advertising expenditures generally **lowest in the first quarter**[40](index=40&type=chunk) - Compliance with federal, state, and local environmental laws and regulations has not had a **material adverse effect** on the business historically[41](index=41&type=chunk) Employee Count (as of Dec 31, 2019) | Employee Type | Count | | :------------ | :---- | | Full-time | 663 | | Part-time | 339 | - Employs several high-profile personalities and has employment and non-competition agreements with its President, most on-air personalities, and commissioned sales representatives[43](index=43&type=chunk) [1.6. Federal Regulation of Radio Broadcasting](index=13&type=section&id=1.6.%20Federal%20Regulation%20of%20Radio%20Broadcasting) Radio operations are **extensively regulated** by the **FCC**, covering licensing, ownership limits, programming, and technical standards, with ongoing reviews of media ownership rules and new technologies - The ownership, operation, and sale of radio stations are subject to the jurisdiction of the **FCC**, which acts under authority granted by the Communications Act[45](index=45&type=chunk) - Radio broadcasting licenses are granted for maximum terms of **eight years** and are subject to renewal upon application to the FCC, based on public interest service and compliance[47](index=47&type=chunk) - Broadcast licenses may not be granted to any corporation with more than **one-fifth (20%)** of its stock owned or voted by aliens, or if controlled by a corporation with more than **25% alien ownership**, without FCC waiver[54](index=54&type=chunk) Local Ownership Rule (Reinstated) | Stations in Radio Market | Number of Stations We Can Own | Not More Than (Same Service AM or FM) | | :----------------------- | :---------------------------- | :------------------------------------ | | 14 or Fewer | Total of 5 (cannot own > 50% of market) | 3 | | 15-29 | Total of 6 | 4 | | 30-44 | Total of 7 | 4 | | 45 or More | Total of 8 | 5 | - The Prometheus Radio Project v. FCC decision (2019) vacated recent rule changes, reinstating prior media ownership rules regarding newspaper/broadcast cross-ownership, radio/television cross-ownership, local television ownership, and television joint sales agreements[62](index=62&type=chunk) - **FCC is reviewing** the Local Radio Ownership Rule, Local Television Ownership Rule, and the dual network rule[62](index=62&type=chunk) - Broadcasters are required to serve the 'public interest' by presenting programming responsive to community needs, and must comply with rules on political advertising, sponsorship identification, indecency, and technical operations[67](index=67&type=chunk) - **Equal Employment Opportunity (EEO) rules** prohibit discrimination and require outreach measures for job vacancies; the FCC is reviewing these rules[69](index=69&type=chunk) - Time Brokerage Agreements (TBAs) where a station purchases more than **15%** of another local station's broadcast time are considered an attributable ownership interest; simulcasting is limited to **25%**[71](index=71&type=chunk) - **New technologies** like Low Power FM (LPFM) radio, 'Franken FM' stations, Digital Audio Radio Satellite Service (DARS), Internet radio, In-Band On-Channel 'Hybrid Digital' (HD) radio, and FM translators for AM stations are subject to FCC rules and may impact operations[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - Pays for music broadcast licenses through performing rights societies (BMI, Global Music Rights, SoundExchange); the Music Modernization Act (2018) improves songwriter compensation and digital radio royalties[81](index=81&type=chunk) [1.7. Executive Officers](index=24&type=section&id=1.7.%20Executive%20Officers) The executive team comprises **key leaders** including the President, CEO, and CFO, who are elected annually and serve at the Board's discretion Key Executive Team | Name | Age | Position | | :---------------- | :-- | :---------------------------------------------------------------- | | Edward K. Christian | 75 | President, CEO, Chairman; Director | | Samuel D. Bush | 62 | Senior Vice President, Treasurer and Chief Financial Officer | | Marcia K. Lobaito | 71 | Senior Vice President, Corporate Secretary, and Director of Business Affairs (retiring March 2020 as SVP/Director of Business Affairs) | | Catherine A. Bobinski | 60 | Senior Vice President/Finance, Chief Accounting Officer and Corporate Controller | | Christopher S. Forgy | 59 | Senior Vice President of Operations | [Item 1A. Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from **cyclical advertising revenue**, **substantial debt**, **restrictive covenants**, **intense competition**, regulatory changes, and **concentrated ownership** - Advertising revenues are **cyclical** and **highly dependent** on global, U.S., and local economic conditions, making the company **vulnerable** to economic downturns[91](index=91&type=chunk)[99](index=99&type=chunk) - **Substantial indebtedness** (**$10 million** long-term debt at Dec 31, 2019) and debt service requirements, with potential unpredictable impacts from the expected LIBOR phase-out after 2021[93](index=93&type=chunk)[94](index=94&type=chunk) - Credit facility contains financial covenants that restrict financial and operational flexibility; failure to meet these could lead to immediate debt repayment[96](index=96&type=chunk) - **Dependence on key personnel**, particularly the President and CEO, and key on-air personalities; loss of popularity or departure could adversely affect revenue[97](index=97&type=chunk) - **Reliance on top five markets** (**39% of net operating revenue** in 2019) increases exposure to adverse events or conditions in those specific economies[98](index=98&type=chunk) - **Highly competitive business environment**, competing for listeners and advertising revenue with other radio/TV stations and diverse media (cable, satellite, internet, print, billboards)[100](index=100&type=chunk) - Challenges in identifying, consummating, and integrating acquired stations, including regulatory approvals, competition from other buyers, and potential unprofitability[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) - FCC broadcasting licenses (**37.8% of total assets**) are subject to annual impairment testing, which may result in future impairment losses[104](index=104&type=chunk) - **Extensive federal regulation** by the FCC; non-compliance could lead to license denial/revocation, shortened renewal terms, monetary forfeitures, or other penalties[105](index=105&type=chunk) - Potential for **new federal regulations or fees** (e.g., spectrum fees, music royalties) could impose additional financial burdens[107](index=107&type=chunk) - FCC's **vigorous enforcement of indecency rules** could lead to fines, license revocation, or opposition to license renewal applications[108](index=108&type=chunk) - **New technologies** in broadcasting (e.g., digital audio, satellite) may require substantial capital expenditures and could affect broadcasting operations[109](index=109&type=chunk) - Edward K. Christian, President, CEO, and Chairman, controls approximately **65% of the combined voting power**, influencing most stockholder matters and potential change of control transactions[111](index=111&type=chunk) - Market price of common stock may experience **volatility** due to lower trading volume and **concentrated ownership**[112](index=112&type=chunk) - Information technology and cybersecurity failures or data security breaches could harm business operations, customer service, and reputation[113](index=113&type=chunk)[114](index=114&type=chunk) [Item 1B. Unresolved Staff Comments](index=26&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) **No unresolved staff comments** exist - **No unresolved staff comments**[116](index=116&type=chunk) [Item 2. Properties](index=26&type=section&id=Item%202.%20Properties) The company owns most of its studio and office properties, leases others, and owns substantially all broadcasting equipment, with all properties in good operational condition - Corporate headquarters located in Grosse Pointe Farms, Michigan[117](index=117&type=chunk) - Owns studios and offices for **25 of 28** operating locations; remaining studios and offices are in leased facilities (**2.5 to 5-year terms**)[118](index=118&type=chunk) - Owns or leases transmitter and antenna sites, with lease terms expiring in **6 months to 71 years**[118](index=118&type=chunk) - Properties are in **good condition** and suitable for operations; substantially all broadcasting equipment is owned[119](index=119&type=chunk)[120](index=120&type=chunk) [Item 3. Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, with management expecting **no material financial statement impact** - Subject to various outstanding claims and legal proceedings arising in the ordinary course of business[121](index=121&type=chunk) - Management anticipates that any potential liability will not **materially affect** the Company's financial statements[121](index=121&type=chunk) [Item 4. Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is **not applicable** to the company's operations - **Not applicable**[122](index=122&type=chunk) PART II This part covers the market for the company's common equity, selected financial data, management's discussion and analysis of financial condition and results of operations, and controls and procedures [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=31&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Class A Common Stock trades on NASDAQ, with dividends declared and share repurchases made under an authorized buy-back program - Class A Common Stock (SGA) trades on NASDAQ; Class B Common Stock has no public trading market[125](index=125&type=chunk) Shareholders (as of March 4, 2020) | Class | Holders of Record | | :---- | :---------------- | | Class A | ~170 | | Class B | 1 | Cash Dividends Declared Per Common Share | Year | Amount | | :--- | :----- | | 2019 | $1.20 | | 2018 | $1.45 | | 2017 | $2.00 | Equity Compensation Plan Information (as of Dec 31, 2019) | Plan Category | Shares to be Issued Upon Exercise of Outstanding Options | Weighted-Average Exercise Price | Shares Available for Future Issuance | | :------------------------------------------ | :------------------------------------------------- | :-------------------------------- | :---------------------------------- | | Employees' 401(k) Savings and Investment Plan | — | — | 520,665 | | 2005 Incentive Compensation Plan | 128,224 (restricted stock) | $0.00 | 326,650 | | **Total** | **128,224** | | **847,315** | Issuer Purchases of Equity Securities (Q4 2019) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet be Purchased Under the Program | | :------------------------- | :----------------------------- | :--------------------------- | :-------------------------------------------------------------------------- | | October 1 – October 31, 2019 | 138 | $29.840 | $19,799,944 | | November 1 – November 30, 2019 | 18,676 | $30.290 | $19,234,248 | | December 1 – December 31, 2019 | — | — | $19,234,248 | | **Total** | **18,814** | **$30.287** | **$19,234,248** | - Stock Buy-Back Program authorized up to **$75.8 million**, with **$19.2 million remaining authorization** as of December 31, 2019[135](index=135&type=chunk)[198](index=198&type=chunk) Performance Graph (Cumulative Total Return, $100 invested on Dec 31, 2014) | Item | 12/14 | 12/15 | 12/16 | 12/17 | 12/18 | 12/19 | | :-------------------------- | :---- | :---- | :---- | :---- | :---- | :---- | | Saga Communications Inc. | 100.00 | 90.93 | 122.57 | 103.08 | 88.08 | 83.72 | | CRSP Nasdaq Stock Market US | 100.00 | 107.71 | 118.26 | 152.91 | 150.41 | 204.71 | | Peer Group | 100.00 | 106.77 | 109.50 | 117.51 | 106.26 | 124.23 | [Item 6. Selected Financial Data](index=34&type=section&id=Item%206.%20Selected%20Financial%20Data) Selected financial data shows a slight decrease in 2019 net operating revenue and net income, alongside a **significant reduction** in long-term debt since 2015 Operating Data (in thousands, except per share amounts) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :---------------------------------- | :----- | :----- | :----- | :----- | :----- | | Net Operating Revenue | $123,072 | $124,829 | $118,149 | $118,955 | $111,792 | | Operating Income From Continuing Operations | $18,808 | $19,682 | $17,229 | $22,527 | $17,130 | | Net Income | $13,279 | $13,690 | $54,717 | $18,186 | $13,414 | | Basic Earnings Per Share | $2.23 | $2.30 | $9.27 | $3.10 | $2.31 | | Diluted Earnings Per Share | $2.23 | $2.30 | $9.27 | $3.09 | $2.29 | | Cash Dividends Declared Per Common Share | $1.20 | $1.45 | $2.00 | $1.30 | $1.10 | Balance Sheet Data (in thousands) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :-------------------------------- | :----- | :----- | :----- | :----- | :----- | | Total Assets | $252,394 | $248,477 | $248,769 | $219,998 | $203,464 | | Long-term Debt Including Current Portion | $10,000 | $20,000 | $25,000 | $35,287 | $35,287 | | Stockholders' Equity | $192,352 | $184,999 | $179,465 | $134,982 | $122,816 | - The historical results of operations for the Joplin, Missouri and Victoria, Texas television stations are presented as **discontinued operations** for all periods presented, following their sale on September 1, 2017[139](index=139&type=chunk)[140](index=140&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial performance, noting a slight revenue and net income decrease in 2019, **strong liquidity**, reduced debt, and plans for future acquisitions - Following the sale of television stations in 2017, the company has only **one reportable segment: radio**[143](index=143&type=chunk) - Performance is evaluated using 'station operating income' (operating income plus corporate general and administrative expenses, depreciation and amortization, other operating (income) expenses, and impairment of intangible assets)[144](index=144&type=chunk) - **Actively seeks and explores opportunities for expansion** through the acquisition of additional broadcast properties[145](index=145&type=chunk) [7.1. Overview of Operations](index=36&type=section&id=7.1.%20Overview%20of%20Operations) Radio stations generate revenue **primarily from seasonal local advertising**, with performance influenced by market conditions and supported by investments in programming and digital initiatives - Radio stations' **primary revenue source** is from the sale of advertising, with approximately **88% of gross revenue** from local advertising in 2019[146](index=146&type=chunk)[147](index=147&type=chunk) - Most advertising contracts are **short-term**, generally running for only a few weeks[147](index=147&type=chunk) - Revenue varies throughout the year, with advertising expenditures generally **lowest during the first quarter**[148](index=148&type=chunk) - Financial results are **dependent on factors** such as local and national economic conditions, population growth, popular programming, local market competition, and signal strength[151](index=151&type=chunk)[152](index=152&type=chunk) - Strategy involves increasing programming and advertising/promotion expenses for acquired stations to boost target demographic audience share, with targeted revenue levels expected in **two to five years**[153](index=153&type=chunk) - Expanding digital initiatives to provide a seamless experience across multiple platforms, including targeted digital advertising, online promotions, mobile messaging, and email marketing[157](index=157&type=chunk) [7.2. Segment Performance](index=38&type=section&id=7.2.%20Segment%20Performance) The **top five markets** consistently contribute a **significant portion** of consolidated net operating revenue and station operating income, highlighting their **critical financial impact** Top 5 Markets' Contribution to Consolidated Net Operating Revenue | Market | 2019 | 2018 | 2017 | | :--------------- | :--- | :--- | :--- | | Columbus, Ohio | 11% | 11% | 11% | | Des Moines, Iowa | 6% | 7% | 7% | | Manchester, New Hampshire | 5% | 5% | 5% | | Milwaukee, Wisconsin | 11% | 12% | 12% | | Norfolk, Virginia | 6% | 6% | 6% | | **Total** | **39%** | **41%** | **41%** | Top 5 Markets' Contribution to Consolidated Station Operating Income | Market | 2019 | 2018 | 2017 | | :--------------- | :--- | :--- | :--- | | Columbus, Ohio | 15% | 16% | 15% | | Des Moines, Iowa | 6% | 6% | 7% | | Manchester, New Hampshire | 6% | 6% | 6% | | Milwaukee, Wisconsin | 12% | 14% | 14% | | Norfolk, Virginia | 6% | 6% | 6% | | **Total** | **45%** | **48%** | **48%** | [7.3. Discontinued Operations - Television Stations](index=39&type=section&id=7.3.%20Discontinued%20Operations%20-%20Television%20Stations) The company sold its television stations in 2017, with all historical results reported as **discontinued operations**, previously generating revenue from local advertising - Sold Joplin, Missouri and Victoria, Texas television stations on September 1, 2017; all historical results are reported as **discontinued operations**[161](index=161&type=chunk) - Prior to sale, **primary revenue source** was local advertising (approximately **83% of gross revenue** for the **8 months** ended August 31, 2017)[167](index=167&type=chunk) - Revenue and operating income varied by market rank/size, available advertising revenue, programming popularity, and network affiliation agreements[163](index=163&type=chunk)[164](index=164&type=chunk) - **Primary operating expenses** included employee salaries, sales commissions, programming expenses (including news production and syndicated programming), depreciation, and advertising/promotion[169](index=169&type=chunk) [7.4. Consolidated Results of Operations](index=40&type=section&id=7.4.%20Consolidated%20Results%20of%20Operations) Consolidated net operating revenue and net income decreased in 2019 due to lower advertising revenue and operating income, despite reduced expenses Consolidated Financial Performance (in thousands, except %'s and per share information) | Metric | 2019 | 2018 | 2017 | $ Increase (Decrease) 2019 vs. 2018 | % Increase (Decrease) 2019 vs. 2018 | $ Increase (Decrease) 2018 vs. 2017 | % Increase (Decrease) 2018 vs. 2017 | | :---------------------------------- | :----- | :----- | :----- | :---------------------------------- | :------------------------------------ | :---------------------------------- | :------------------------------------ | | Net operating revenue | $123,072 | $124,829 | $118,149 | $(1,757) | (1.4)% | $6,680 | 5.7% | | Station operating expense | $92,692 | $93,727 | $87,759 | $(1,035) | (1.1)% | $5,968 | 6.8% | | Corporate G&A | $11,460 | $11,359 | $11,657 | $101 | 0.9% | $(298) | (2.6)% | | Operating income from continuing operations | $18,808 | $19,682 | $17,229 | $(874) | (4.4)% | $2,453 | 14.2% | | Net income | $13,279 | $13,690 | $54,717 | $(411) | (3.0)% | $(41,027) | N/M | | Earnings per share (diluted) | $2.23 | $2.30 | $9.27 | $(0.07) | (3.0)% | $(6.97) | N/M | - **Decrease in 2019 net operating revenue** primarily due to a **$5,967,000 decrease in same-station revenue**, driven by decreases in gross local revenue (**$3,373,000**), gross political revenue (**$1,987,000**), and gross national revenue (**$1,321,000**), partially offset by increases in gross non-spot revenue (**$649,000**) and decreased agency commissions (**$645,000**)[178](index=178&type=chunk) - **Decrease in 2019 station operating expense** primarily due to lower healthcare costs (**$1,358,000**), compensation-related costs (**$1,121,000**), local commission expense (**$758,000**), amortization expenses (**$402,000**), national rep commissions (**$267,000**), trade expense (**$266,000**), and music license fees (**$201,000**)[179](index=179&type=chunk) - **Net income decrease in 2019** was due to lower operating income, partially offset by a decrease in interest expense (**$211,000**) and income taxes (**$280,000**)[181](index=181&type=chunk) - **Net income decreased significantly in 2018 compared to 2017**, primarily due to a large income tax benefit in 2017 (approximately **$11.5 million** from the Tax Cuts and Jobs Act) and the gain recognized on the sale of television stations in 2017 (**$32,471,000 net of tax**)[186](index=186&type=chunk)[187](index=187&type=chunk) [7.5. Liquidity and Capital Resources](index=44&type=section&id=7.5.%20Liquidity%20and%20Capital%20Resources) Liquidity is **strong** with a **$70 million credit facility** and **$60 million unused capacity**, long-term debt reduced to **$10 million**, and operating cash flows funding capital expenditures and acquisitions - Credit Facility is a **$70 million Revolving Credit Facility** (reduced from **$100 million** on July 1, 2019), maturing on June 27, 2023[189](index=189&type=chunk) - Approximately **$60 million of unused borrowing capacity** under the Revolving Credit Facility at December 31, 2019[195](index=195&type=chunk) - Long-term debt was **$10,000,000** at December 31, 2019, **down from $20,000,000** at December 31, 2018, due to **voluntary paydowns of $5,000,000** in February 2019 and **$5,000,000** in June 2019[93](index=93&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) Net Cash Flows from Operating Activities (Continuing Operations) | Year | Amount (in thousands) | | :--- | :-------------------- | | 2019 | $25,335 | | 2018 | $25,559 | | 2017 | $23,912 | - Capital expenditures for 2019 were **$5,732,000**; anticipated capital expenditures for 2020 are **$5.0 million to $5.5 million**, expected to be financed through funds generated from operations[199](index=199&type=chunk) - Repurchased **2.1 million shares** of Class A Common Stock for **$56.5 million** under the Stock Buy-Back Program from inception (1998) through December 31, 2019, with **$19.2 million remaining authorization**[198](index=198&type=chunk) - Acquired WPVQ-AM and W222CH for **$210,000** in January 2019[200](index=200&type=chunk) - Acquired WOGK-FM, WNDT-FM, WNDD-FM, and WNDN-FM for **$9.3 million** in December 2018[201](index=201&type=chunk) - Sold Joplin, Missouri and Victoria, Texas television stations on September 1, 2017, for approximately **$66.6 million**, generating **net proceeds of $69.5 million** and a **pretax gain of $50.8 million**[202](index=202&type=chunk) - Acquired South Carolina radio stations for approximately **$23 million** and WCVL-FM for **$1,650,000** in 2017[203](index=203&type=chunk)[204](index=204&type=chunk) - Declared **four quarterly cash dividends of $0.30 per share** in 2019, totaling **$1.20 per share**[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) - Future acquisitions and dividend payments are anticipated to be financed through funds generated from operations, borrowings under the Credit Agreement, or additional debt/equity financing[211](index=211&type=chunk) [7.6. Critical Accounting Policies and Estimates](index=48&type=section&id=7.6.%20Critical%20Accounting%20Policies%20and%20Estimates) **Critical accounting policies** involve estimates for revenue, doubtful accounts, acquisitions, and annual impairment testing for broadcast licenses (**$95.3 million**) and goodwill (**$19.0 million**), which represent **45.3% of total assets** - Revenue from commercial broadcast time is recognized when commercials are broadcast, **net of advertising agency commissions**[217](index=217&type=chunk) - Allowance for doubtful accounts is based on specific customer inability and past loss history, ranging from **50%** for amounts **90 days outstanding** to **100%** for amounts over **120 days outstanding**; historical estimates average **2-4% of outstanding receivables**[218](index=218&type=chunk) - Acquisitions are accounted for under the purchase method, allocating total cost to net assets based on estimated fair values, with any excess recorded as goodwill[219](index=219&type=chunk) Broadcast Licenses and Goodwill (as of Dec 31, 2019) | Asset Type | Amount (in thousands) | % of Total Assets | | :---------------- | :-------------------- | :---------------- | | Broadcast Licenses | $95,311 | 37.8% | | Goodwill | $18,963 | 7.5% | | **Total** | **$114,274** | **45.3%** | - Annual impairment test performed on October 1 for broadcast licenses and goodwill; **no impairment recorded in 2019 or 2018**[220](index=220&type=chunk)[221](index=221&type=chunk) - A **$1,449,000 impairment charge for broadcast licenses** was recognized in the fourth quarter of 2017, primarily due to declines in available market revenue, market revenue share, profit margins, and estimated long-term growth rates in the Springfield, Illinois market[222](index=222&type=chunk) Key Estimates and Assumptions for Broadcast License Impairment Test (Fourth Quarter 2019) | Metric | Range | | :-------------------------- | :------------ | | Discount rates | 12.2% - 12.2% | | Operating profit margin ranges | 19.0% - 36.4% | | Market long-term revenue growth rates | 0.0% - 2.9% | - Stock-based compensation for stock options is estimated using a Black-Scholes valuation model, and for restricted stock awards, it is determined based on the closing market price of Class A Common Stock on the grant date[224](index=224&type=chunk)[225](index=225&type=chunk) [7.7. Market Risk and Risk Management Policies](index=49&type=section&id=7.7.%20Market%20Risk%20and%20Risk%20Management%20Policies) Earnings are **sensitive** to **short-term interest rate changes** due to long-term debt, with a hypothetical **1% increase** impacting income before taxes by **$126,000** - Earnings are affected by changes in **short-term interest rates** due to long-term debt arrangements[227](index=227&type=chunk) - A hypothetical **1% increase in market interest rates** in 2019 would have decreased income before taxes by **$126,000**[227](index=227&type=chunk) [7.8. Inflation](index=49&type=section&id=7.8.%20Inflation) Inflation has **not significantly impacted** operations to date, but future high inflation could have an **adverse effect** - The impact of inflation on operations has **not been significant** to date, but future high inflation could have an **adverse effect**[228](index=228&type=chunk) [7.9. Recent Accounting Pronouncements](index=49&type=section&id=7.9.%20Recent%20Accounting%20Pronouncements) The company **adopted ASU 2016-02** on January 1, 2019, recognizing **$6.7 million in lease assets and liabilities**, and is evaluating other pronouncements with **no expected material impact** - **Adopted ASU 2016-02**, \"Leases (Topic 842)\" on January 1, 2019, using the modified retrospective method, resulting in the recognition of approximately **$6.7 million in right-of-use assets and lease liabilities**, with **no impact on retained earnings or cash flows**[323](index=323&type=chunk) - Currently evaluating ASU 2019-12, \"Income Taxes,\" and ASU 2016-13, \"Financial Instruments – Credit Losses,\" and does not expect a **material impact** from ASU 2017-04, \"Intangibles – Goodwill and Other\"[324](index=324&type=chunk)[325](index=325&type=chunk)[326](index=326&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item **incorporates by reference** the market risk disclosures from Item 7, detailing exposure to interest rate changes and their potential earnings impact - Information is **incorporated by reference** from the \"Market Risk and Risk Management Policies\" section in Item 7[231](index=231&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=50&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The financial statements are attached and filed as part of this annual report - The financial statements are attached and filed as part of this annual report[232](index=232&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=50&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) **No changes in or disagreements** with accountants on accounting and financial disclosure have occurred - **No changes in and disagreements** with accountants on accounting and financial disclosure[233](index=233&type=chunk) [Item 9A. Controls and Procedures](index=50&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were **effective** as of December 31, 2019, with an **unqualified opinion** from UHY LLP - Disclosure controls and procedures over financial reporting were **effective** as of December 31, 2019[234](index=234&type=chunk) - **No material changes** in internal controls over financial reporting during the quarter ended December 31, 2019[235](index=235&type=chunk) - Management concluded that internal control over financial reporting was **effective** as of December 31, 2019, based on the COSO framework[236](index=236&type=chunk)[238](index=238&type=chunk) - UHY LLP, an independent registered public accounting firm, issued an **unqualified opinion** on the effectiveness of the company's internal control over financial reporting as of December 31, 2019[241](index=241&type=chunk)[242](index=242&type=chunk) [Item 9B. Other Information](index=52&type=section&id=Item%209B.%20Other%20Information) **No other information** is reported under this item - **No other information** to report[248](index=248&type=chunk) PART III This part incorporates by reference information regarding directors, executive officers, corporate governance, executive compensation, security ownership, related party transactions, and principal accountant fees [Item 10. Directors, Executive Officers and Corporate Governance](index=52&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is **incorporated by reference** from the 2020 Proxy Statement - Information **incorporated by reference** from the Proxy Statement for the 2020 Annual Meeting of Stockholders[250](index=250&type=chunk) [Item 11. Executive Compensation](index=52&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is **incorporated by reference** from the 2020 Proxy Statement - Information **incorporated by reference** from the Proxy Statement for the 2020 Annual Meeting of Stockholders[251](index=251&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=52&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership details for beneficial owners and management are **incorporated by reference** from the 2020 Proxy Statement and Item 5 - Information **incorporated by reference** from the Proxy Statement for the 2020 Annual Meeting of Stockholders and the \"Securities Authorized for Issuance Under Equity Compensation Plan Information\" subheading under Item 5[252](index=252&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=52&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is **incorporated by reference** from the 2020 Proxy Statement - Information **incorporated by reference** from the Proxy Statement for the 2020 Annual Meeting of Stockholders[253](index=253&type=chunk) [Item 14. Principal Accountant Fees and Services](index=52&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Principal accountant fees and services information is **incorporated by reference** from the 2020 Proxy Statement - Information **incorporated by reference** from the Proxy Statement for the 2020 Annual Meeting of Stockholders[254](index=254&type=chunk) PART IV This part details the exhibits and financial statement schedules included in the annual report, providing a comprehensive list of financial disclosures [Item 15. Exhibits and Financial Statement Schedules](index=53&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This item lists consolidated financial statements, schedules, and exhibits filed as part of the annual report, including balance sheets and cash flow statements - Includes the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Consolidated Statements of Income, Consolidated Statements of Stockholders' Equity, Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements[257](index=257&type=chunk) - Financial Statement Schedules include Schedule II Valuation and Qualifying Accounts[258](index=258&type=chunk) - Exhibits filed in response to Item 601 of Regulation S-K are listed in the Exhibit Index[259](index=259&type=chunk) [Notes to Consolidated Financial Statements](index=59&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed information on accounting policies, financial instruments, asset valuation, debt, stock-based compensation, acquisitions, and related party transactions, **crucial for understanding financial statements** [Note 1. Summary of Significant Accounting Policies](index=59&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines **fundamental accounting policies**, including revenue recognition, asset impairment, leases, and stock-based compensation, and details the impact of recent accounting pronouncements - Saga Communications, Inc. is a broadcasting company **primarily engaged** in acquiring, developing, and operating radio stations, with television stations reported as **discontinued operations** since September 1, 2017[278](index=278&type=chunk) - Consolidated financial statements include Saga Communications, Inc. and its wholly-owned subsidiaries, with all **significant intercompany balances and transactions eliminated**[279](index=279&type=chunk) - The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts[280](index=280&type=chunk) - Concentration of risk includes certain cash deposits exceeding FDIC insurance limits and the **top five markets representing 39% of net operating revenue** in 2019[281](index=281&type=chunk) - Cash and cash equivalents consist of cash on hand and time deposits with original maturities of **three months or less**[283](index=283&type=chunk) - The carrying value of financial instruments (cash, receivables, payables, long-term debt) approximates fair value[284](index=284&type=chunk) Allowance for Doubtful Accounts Activity (in thousands) | Year Ended | Balance at Beginning of Period | Charged to Costs and Expenses | Allowance From Acquisitions | Write Off of Uncollectible Accounts, Net of Recoveries | Balance at End of Period | | :----------------- | :----------------------------- | :---------------------------- | :-------------------------- | :--------------------------------------------------- | :----------------------- | | December 31, 2019 | $759 | $578 | $— | $(666) | $671 | | December 31, 2018 | $727 | $444 | $25 | $(437) | $759 | | December 31, 2017 | $518 | $333 | $181 | $(305) | $727 | - Barter transactions involve trading air time for goods and services, recorded at fair market value as both an asset and a liability[287](index=287&type=chunk) Property and Equipment (in thousands) | Asset Type | Estimated Useful Life | 2019 | 2018 | | :-------------------------------- | :------------ | :----- | :----- | | Land and land improvements | — | $14,693 | $14,402 | | Buildings | 31.5 years | $37,984 | $35,812 | | Towers and antennae | 7-15 years | $24,762 | $25,959 | | Equipment | 3-15 years | $54,321 | $53,752 | | Furniture, fixtures and leasehold improvements | 7-20 years | $7,169 | $6,740 | | Vehicles | 5 years | $3,474 | $3,555 | | **Total Cost** | | **$142,403** | **$140,220** | | Accumulated depreciation | | $(83,692) | $(81,117) | | **Net property and equipment** | | **$58,711** | **$59,103** | - Intangible assets with **indefinite useful lives** (broadcast licenses and goodwill) are not amortized but are subject to annual impairment tests[291](index=291&type=chunk) - Costs related to debt issuance are capitalized and amortized to interest expense over the life of the debt[294](index=294&type=chunk) - Lease liabilities and right-of-use assets are recorded on the balance sheet for leases with terms over **one year**, based on the present value of lease payments[296](index=296&type=chunk) - Treasury stock repurchases reduce stockholders' equity; as of December 31, 2019, **$19.2 million remained authorized** for future repurchases[297](index=297&type=chunk) - Revenue from advertising is recognized when commercials are broadcast, **net of advertising agency commissions**, in accordance with ASC Topic 606[300](index=300&type=chunk) - Local Marketing Agreements (LMAs) involve one station selling blocks of air time to another party for programming and advertising sales; related revenue and expenses are included in consolidated statements[301](index=301&type=chunk) - Advertising and promotion costs are expensed as incurred[302](index=302&type=chunk) - Income taxes are calculated using the asset and liability method, with deferred tax assets and liabilities determined based on temporary differences[303](index=303&type=chunk) - Dividends declared on Class A and B shares are detailed, with **four quarterly cash dividends of $0.30 per share** declared in 2019[304](index=304&type=chunk)[305](index=305&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk) - Stock-based compensation expense for stock options is estimated using a Black-Scholes model, and for restricted stock awards, it is based on the closing market price of Class A Common Stock[317](index=317&type=chunk) - Earnings per share is calculated using the two-class method, allocating earnings to both common shares and participating securities (restricted stock units)[320](index=320&type=chunk) - **Adopted ASU 2016-02** \"Leases (Topic 842)\" on January 1, 2019, recognizing **$6.7 million in right-of-use assets and lease liabilities**; currently evaluating ASU 2019-12 \"Income Taxes,\" ASU 2017-04 \"Intangibles – Goodwill and Other,\" and ASU 2016-13 \"Financial Instruments – Credit Losses\"[323](index=323&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk)[326](index=326&type=chunk) [Note 2. Revenue](index=66&type=section&id=Note%202.%20Revenue) Revenue is **disaggregated** into broadcast, digital, and other sources, recognized upon airing or completion of performance obligations, with **no material impact** from Topic 606 adoption - **Adopted Topic 606** on January 1, 2018, using the modified retrospective method, with **no impact on the opening balance of retained earnings**[329](index=329&type=chunk) Revenues Disaggregated by Source (in thousands) | Types of Revenue | 2019 | 2018 | 2017 | | :-------------------------- | :----- | :----- | :----- | | Broadcast Advertising Revenue, net | $112,278 | $114,929 | $109,175 | | Digital Advertising Revenue | $3,783 | $3,900 | $3,610 | | Other Revenue | $7,011 | $6,000 | $5,364 | | **Net Revenue** | **$123,072** | **$124,829** | **$118,149** | - Broadcast Advertising Revenue is recognized when commercials are broadcast, **net of advertising agency commissions**[331](index=331&type=chunk) - Digital Advertising Revenue from targeted digital advertising, online promotions, websites, mobile messaging, and email marketing is recorded when each specific performance obligation takes place, typically within a **one-month period**[332](index=332&type=chunk) - Other Revenue (concerts, promotional events, tower rent) is generally recognized when the event is completed or performance obligation is satisfied[333](index=333&type=chunk) - Contract liabilities for prepayments from advertisers are expected to be recognized within **one year** and are included in accounts payable[335](index=335&type=chunk) [Note 3. Broadcast Licenses, Goodwill and Other Intangible Assets](index=67&type=section&id=Note%203.%20Broadcast%20Licenses,%20Goodwill%20and%20Other%20Intangible%20Assets) This note details accounting for **indefinite-lived broadcast licenses** and goodwill, tested annually for impairment, and amortizable finite-lived intangible assets, with a **$1.449 million impairment** in 2017 - Broadcast licenses and goodwill are deemed **indefinite-lived intangible assets**, not amortized, and subject to annual impairment tests (as of October 1)[291](index=291&type=chunk) - Fair value of broadcast licenses is determined using a discounted cash flow approach assuming a start-up scenario, incorporating market growth rates, operating profit margins, discount rates, and competition[337](index=337&type=chunk) - **No impairment of broadcast licenses was recorded in 2019 or 2018**[344](index=344&type=chunk)[349](index=349&type=chunk) - A **non-cash impairment charge of $1,449,000 for broadcast licenses** was recorded in the fourth quarter of 2017, primarily due to declines in available market revenue, market revenue share, profit margins, and estimated long-term growth rates in the Springfield, Illinois market[350](index=350&type=chunk) Broadcast Licenses (in thousands) | Item | Total | | :---------------------- | :----- | | Balance at January 1, 2018 | $93,259 | | Acquisitions | $1,991 | | Balance at December 31, 2018 | $95,250 | | Acquisitions | $61 | | Balance at December 31, 2019 | $95,311 | Key Estimates and Assumptions for Impairment Test (Fourth Quarter) | Metric | 2019 | 2018 | 2017 | | :-------------------------- | :----------- | :----------- | :----------- | | Discount rates | 12.2% - 12.2% | 12.0% - 12.0% | 12.4% - 12.5% | | Operating profit margin ranges | 19.0% - 36.4% | 19.0% - 36.4% | 19.0% - 36.4% | | Market long-term revenue growth rates | 0.0% - 2.9% | 0.5% - 2.9% | 1.1% - 3.5 % | - **No goodwill impairment was recorded** in the fourth quarter of 2019[351](index=351&type=chunk) Goodwill (in thousands) | Item | Total | | :---------------------- | :----- | | Balance at January 1, 2018 | $15,558 | | Acquisitions | $3,281 | | Balance at December 31, 2018 | $18,839 | | Acquisitions | $124 | | Balance at December 31, 2019 | $18,963 | Amortizable Intangible Assets (Net Amount, in thousands) | Asset Type | 2019 | 2018 | | :-------------------------- | :----- | :----- | | Non-competition agreements | $— | $— | | Favorable lease agreements | $426 | $461 | | Customer relationships | $1,076 | $2,026 | | Other intangibles | $107 | $260 | | **Total amortizable intangible assets** | **$1,609** | **$2,747** | - Aggregate amortization expense for these intangible assets was **$1,029,000** in 2019, **$1,094,000** in 2018, and **$860,000** in 2017[354](index=354&type=chunk) [Note 4. Discontinued Operations](index=71&type=section&id=Note%204.%20Discontinued%20Operations) The company sold its television stations in 2017 for **$66.6 million**, generating a **$50.8 million pretax gain**, with historical results reported as **discontinued operations** - Sold Joplin, Missouri and Victoria, Texas television stations on September 1, 2017, for approximately **$66.6 million**[356](index=356&type=chunk) - Received **net proceeds of $69.5 million** and recognized a **pretax gain of $50.8 million** (**$29.9 million net of tax**) from the Television Sale[356](index=356&type=chunk) - Historical results of these television stations are reported as **discontinued operations** for all periods presented[357](index=357&type=chunk) Components of Discontinued Operations (in thousands) | Metric | 2019 | 2018 | 2017 | | :------------------------------------------ | :--- | :--- | :----- | | Net operating revenue | $— | $— | $14,238 | | Station operating expense | $— | $— | $9,757 | | Operating income | $— | $— | $4,450 | | Pretax gain on the disposal of discontinued operations | $— | $— | $50,842 | | Income tax expense | $— | $— | $22,800 | | Income from discontinued operations, net of tax | $— | $— | $32,471 | - Proceeds from the Television Sale were used to finance acquisitions of radio stations in South Carolina (**$24.2 million**) and to pay down the Revolving Credit Facility (**$10.287 million**)[356](index=356&type=chunk) [Note 5. Long-Term Debt](index=73&type=section&id=Note%205.%20Long-Term%20Debt) Long-term debt comprises a **$70 million Revolving Credit Facility**, with **$10 million outstanding** at year-end 2019, secured by company assets and subject to financial covenants Long-Term Debt (in thousands) | Item | December 31, 2019 | December 31, 2018 | | :------------------------ | :---------------- | :---------------- | | Revolving Credit Facility | $10,000 | $20,000 | | Amounts payable within one year | $— | $(5,000) | | **Total Long-Term Debt** | **$10,000** | **$15,000** | Future Maturities of Long-Term Debt (in thousands) | Year Ending December 31, | Amount | | :----------------------- | :----- | | 2020 | $— | | 2021 | $— | | 2022 | $— | | 2023 | $10,000 | | 2024 | $— | | Thereafter | $— | | **Total** | **$10,000** | - The Credit Facility is a **$70 million five-year revolving facility**, reduced from **$100 million** on July 1, 2019, and matures on June 27, 2023[366](index=366&type=chunk) - Substantially all company assets (excluding FCC licenses) are pledged in support of the Credit Facility, and subsidiaries have guaranteed it[367](index=367&type=chunk) - Interest rates are variable, based on LIBOR (**1.75%** at Dec 31, 2019) plus **1% to 2%**, or the base rate plus **0% to 1%**, varying with financial leverage[370](index=370&type=chunk) - The Credit Facility contains financial covenants (**all in compliance** at Dec 31, 2019) regarding financial ratios, investments, indebtedness, dividends, distributions, guarantees, liens, and encumbrances[371](index=371&type=chunk) - **Voluntary paydowns of $5,000,000** were made on the Revolving Credit Facility in February and June 2019[371](index=371&type=chunk)[372](index=372&type=chunk) - Approximately **$60 million of unused borrowing capacity** under the Revolving Credit Facility at December 31, 2019[373](index=373&type=chunk) [Note 6. Supplemental Cash Flow Information](index=74&type=section&id=Note%206.%20Supplemental%20Cash%20Flow%20Information) This note provides **supplemental cash flow details**, including cash paid for interest and taxes, and non-cash transactions like barter and property acquisitions Supplemental Cash Flow Information (in thousands) | Item | 2019 | 2018 | 2017 | | :------------------------------------------------- | :----- | :----- | :----- | | Cash paid during the period for: | | | | | Interest | $635 | $884 | $850 | | Income taxes | $3,893 | $2,864 | $2,420 | | Non-cash transactions: | | | | | Barter revenue | $3,560 | $3,570 | $3,618 | | Barter expense | $3,370 | $3,677 | $3,367 | | Purchase of treasury shares in connection with exercise of stock options | $— | $— | $826 | | Acquisition of property and equipment | $28 | $11 | $8 | | Use of treasury shares for 401(k) match | $262 | $252 | $274 | [Note 7. Income Taxes](index=75&type=section&id=Note%207.%20Income%20Taxes) This note details income tax provisions, including the **$11.5 million tax benefit** from the 2017 Tax Act, deferred taxes, and the effective tax rate - The Tax Cuts and Jobs Act (2017) reduced the U.S. federal corporate income tax rate from **35% to 21%**[376](index=376&type=chunk) - Recorded a provisional **net tax benefit of $11.5 million** in 2017 related to the remeasurement of deferred tax balance due to the Tax Act[378](index=378&type=chunk) Net Deferred Tax Liabilities (in thousands) | Item | December 31, 2019 | December 31, 2018 | | :-------------------------------- | :---------------- | :---------------- | | Deferred tax liabilities: | | | | Property and equipment | $5,181 | $5,145 | | Intangible assets | $20,765 | $19,324 | | Prepaid expenses | $376 | $350 | | Total deferred tax liabilities | $26,322 | $24,819 | | Deferred tax assets: | | | | Allowance for doubtful accounts | $64 | $118 | | Compensation | $1,011 | $906 | | Other accrued liabilities | $95 | $63 | | Total net deferred tax assets | $1,170 | $1,087 | | **Net deferred tax liabilities** | **$25,152** | **$23,732** | - **No valuation allowance** for net deferred tax assets at December 31, 2019 and 2018[381](index=381&type=chunk) Provision for Income Taxes (in thousands) | Item | 2019 | 2018 | 2017 | | :-------------------------- | :----- | :----- | :----- | | Current: | | | | | Federal | $2,900 | $2,205 | $2,545 | | State | $1,100 | $835 | $(255) | | Total current | $4,000 | $3,040 | $2,290 | | Total deferred | $1,420 | $2,660 | $(8,210) | | **Total Income Tax Provision** | **$5,420** | **$5,700** | **$(5,920)** | Reconciliation of Income Tax at U.S. Federal Statutory Tax Rates (in thousands) | Item | 2019 | 2018 | 2017 | | :---------------------------------- | :----- | :----- | :----- | | Tax expense at U.S. statutory rates | $3,976 | $4,017 | $5,716 | | State tax expense (benefit), net of federal benefit | $1,079 | $1,134 | $(769) | | Other, net | $365 | $549 | $633 | | Federal tax reform - deferred tax rate change | $— | $— | $(11,500) | | **Total** | **$5,420** | **$5,700** | **$(5,920)** | - The 2019 and 2018 effective tax rates exceed the federal statutory rate primarily due to state income taxes; the 2017 rate differs due to the Tax Act and state income tax benefit[385](index=385&type=chunk) - **No accrued balances recorded** related to uncertain tax positions as of December 31, 2019 and 2018[387](index=387&type=chunk) [Note 8. Stock-Based Compensation](index=78&type=section&id=Note%208.%20Stock-Based%20Compensation) This note details stock-based compensation plans, primarily restricted stock awards valued at market price, with **128,224 shares outstanding** and **$4.195 million in unrecognized cost** at year-end 2019 - The Second Amended and Restated 2005 Incentive Compensation Plan allows for granting restricted stock, restricted stock units, incentive stock options, nonqualified stock options, and performance awards[389](index=389&type=chunk) - **No stock options were outstanding or granted** during the years ended December 31, 2019, 2018, and 2017[395](index=395&type=chunk) - Stock-based compensation expense is measured at the grant date fair value and recognized on a straight-line basis over the vesting period, adjusted for estimated forfeitures[391](index=391&type=chunk) Restricted Stock Transactions (Shares and Weighted Average Grant Date Fair Value) | Item | Shares | Weighted Average Grant Date Fair Value | | :---------------------------------- | :------- | :------------------------------------- | | Outstanding at January 1, 2017 | 103,262 | $43.73 | | Granted | 48,780 | $44.20 | | Vested | (54,598) | $42.13 | | Forfeited/canceled/expired | (805) | $46.23 | | Outstanding at December 31, 2017 | 96,639 | $44.85 | | Granted | 63,811 | $37.37 | | Vested | (49,493) | $43.98 | | Forfeited/canceled/expired | (1,781) | $45.39 | | Outstanding at December 31, 2018 | 109,176 | $40.87 | | Granted | 72,985 | $31.18 | | Vested | (51,021) | $42.66 | | Forfeited/canceled/expired | (2,916) | $40.30 | | **Non-vested and outstanding at December 31, 2019** | **128,224** | **$34.66** | - **Unrecognized compensation cost** related to unvested restricted stock awards aggregated **$4,195,000** at December 31, 2019[398](index=398&type=chunk) - **Total compensation expense** related to restricted stock-based arrangements was **$2,129,000** in 2019, **$2,201,000** in 2018, and **$2,279,000** in 2017[399](index=399&type=chunk) [Note 9. Employee Benefit Plans](index=80&type=section&id=Note%209.%20Employee%20Benefit%20Plans) The company offers a 401(k) plan and a Nonqualified Deferred Compensation Plan, funded by company-owned life insurance, and provides split dollar insurance benefits - Operates a defined contribution 401(k) Plan covering substantially all employees, with **discretionary company contributions of approximately $250,000** in 2019[400](index=400&type=chunk) - Established a Nonqualified Deferred Compensation Plan in 1999, allowing officers and certain management employees to defer compensation on a pre-tax basis; deferred compensation expense was **$135,000** in 2019[403](index=403&type=chunk) - Invests in company-owned life insurance policies to assist in funding deferred compensation programs, with cash surrender values recorded as assets in a rabbi trust[403](index=403&type=chunk) - Provides split dollar insurance benefits to certain executive officers, recording an asset equal to cumulative premiums paid[404](index=404&type=chunk) [Note 10. Acquisitions and Dispositions](index=81&type=section&id=Note%2010.%20Acquisitions%20and%20Dispositions) The company **actively acquires broadcast properties**, including **$210,000** in 2019 and **$9.3 million** in 2018, recognizing goodwill for brand power and growth opportunities - **Actively seeks and explores opportunities for expansion** through the acquisition of additional broadcast properties, accounted for under the purchase method[405](index=405&type=chunk) - Acquired WPVQ-AM and W222CH for an aggregate purchase price of **$210,000** on January 9, 2019[407](index=407&type=chunk) - Acquired WOGK-FM, WNDT-FM, WNDD-FM, and WNDN-FM for an aggregate purchase price of **$9.3 million** on December 31, 2018[410](index=410&type=chunk) - **Goodwill recognized in acquisitions** is attributed to the power of existing brands, synergies, and expected growth opportunities[407](index=407&type=chunk)[410](index=410&type=chunk) Condensed Consolidated Balance Sheet of 2019 and 2018 Acquisitions (in thousands) | Item | 2019 Acquisitions | 2018 Acquisitions | | :------------------------------------------ | :---------------- | :---------------- | | Assets Acquired: | | | | Current assets | $— | $559 | | Property and equipment | $25 | $3,007 | | Other assets: | | | | Broadcast licenses | $61 | $1,991 | | Goodwill | $124 | $3,281 | | Other intangibles, deferred costs and investments | $— | $1,123 | | Total other assets | $185 | $6,395 | | **Total assets acquired** | **$210** | **$9,961** | | Liabilities Assumed: | | | | Current liabilities | $— | $120 | | **Total liabilities assumed** | **$—** | **$120** | | **Net assets acquired** | **$210** | **$9,841** | Pro Forma Consolidated Results of Operations for Acquisitions (Unaudited, in thousands, except per share data) | Metric | 2019 | 2018 | | :---------------------------------- | :----- | :----- | | Net operating revenue | $123,072 | $129,228 | | Station operating expense | $92,692 | $97,314 | | Corporate general and administrative | $11,460 | $11,359 | | Other operating expenses | $112 | $61 | | Operating income | $18,808 | $20,494 | | Interest expense | $735 | $946 | | Interest income | $(610) | $(631) | | Other income | $(16) | $(23) | | Income before income tax expense | $18,699 | $20,202 | | Income tax expense (benefit) expense | $5,420 | $5,944 | | Net income | $13,279 | $14,258 | | Basic earnings per share | $2.23 | $2.40 | | Diluted earnings per share | $2.23 | $2.40 | [Note 11. Related Party Transactions](index=84&type=section&id=Note%2011.%20Related%20Party%20Transactions) This note details related party transactions, including the CEO's employment agreement, executive change in control agreements, historical agreements with a related entity, and transactions with a director - Employment agreement with Edward K. Christian (Chairman, President, and CEO) extends to March 31, 2025, and includes annual salary increases, discretionary and performance bonuses, stock options/grants, and various benefits[418](index=418&type=chunk) - Mr. Christian's average annual compensation, as defined by the employment agreement, was approximately **$1,889,000** for the **three years** ended December 31, 2019[419](index=419&type=chunk) - Change in Control Agreements for key executives (Samuel D. Bush, Marcia K. Lobaito, Catherine Bobinski, Christopher S. Forgy) provide lump sum payments (**1.5 times average of last three years' base salary and cash bonus**) upon a change in control[424](index=424&type=chunk)[425](index=425&type=chunk) - Historically, the company had Time Brokerage Agreements (TBAs) and Shared Services Agreements with Surtsey Media, a company **100%-owned by Mr. Christian's daughter**, for television stations KVCT and KFJX, which were terminated upon the Television Sale in 2017[428](index=428&type=chunk)[429](index=429&type=chunk) - Transactions with G. Dean Pearce (a director) include an asset purchase agreement for radio and translator stations in South Carolina for **$23 million** in 2017, and monthly rent payments for Hilton Head studio and office space[431](index=431&type=chunk) - Employed Eric Christian, son of Edward K. Christian, as Director of Solution Architecture effective June 19, 2019, with Audit Committee approval[432](index=432&type=chunk) [Note 12. Common Stock](index=87&type=section&id=Note%2012.%20Common%20Stock) This note outlines the rights of Class A and Class B Common Stock, including **identical dividends**, differing voting rights (Class B has **ten votes per share**), and conversion provisions - Stockholders are entitled to receive **identical dividends** (cash, property, or stock) on Class A and Class B Common Stock[434](index=434&type=chunk) - Voting Rights: Class A Common Stock has **one vote per share**, and Class B Common Stock has **ten votes per share** on most matters[435](index=435&type=chunk) - In director elections, Class A holders, as a separate class, elect **25% (two)** of the directors; remaining directors are elected by both classes voting as a single class (Class A: **one vote**, Class B: **ten votes**)[436](i

Saga Communications, Inc (NASDAQ:SGA) Q4 2019 Earnings Conference Call March 12, 2020 11:00 AM ET Company Participants Ed Christian - President and Chief Executive Officer Sam Bush - Chief Financial Officer Operator Good morning, ladies and gentlemen and welcome to the Saga Communications Fourth Quarter and Year End Earning Release Conference Call. At this time, all participants have been placed on a listen-only mode. It is now my pleasure to turn the floor over to your host, Ed Christian, President and CEO ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section covers the company's unaudited financial statements, management's analysis, market risk, and internal controls [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income, equity, and cash flows, with detailed notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20consolidated%20balance%20sheets%20%E2%80%94%20September%2030%2C%202019%20and%20December%2031%2C%202018) This section presents the company's financial position, detailing assets, liabilities, and equity for the specified periods Condensed Consolidated Balance Sheets (In thousands) | Metric (In thousands) | Sep 30, 2019 | Dec 31, 2018 | | :-------------------- | :----------- | :----------- | | Cash and cash equivalents | $41,072 | $44,729 | | Total current assets | $63,440 | $68,595 | | Total assets | $248,999 | $248,477 | | Total current liabilities | $17,206 | $23,165 | | Long-term debt | $10,000 | $15,000 | | Total liabilities | $58,596 | $63,478 | | Total stockholders' equity | $190,403 | $184,999 | - Total assets increased slightly to **$248,999 thousand** as of September 30, 2019, from **$248,477 thousand** at December 31, 2018[9](index=9&type=chunk) - Total liabilities decreased to **$58,596 thousand** as of September 30, 2019, from **$63,478 thousand** at December 31, 2018, primarily due to a reduction in current portion of long-term debt[9](index=9&type=chunk) [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20consolidated%20statements%20of%20income%20%E2%80%94%20Three%20and%20nine%20months%20ended%20September%2030%2C%202019%20and%202018) This section presents the company's financial performance, including revenue, operating income, and net income for the specified periods Condensed Consolidated Statements of Income (In thousands, except per share data) | Metric (In thousands, except per share data) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net operating revenue | $31,274 | $31,648 | $91,281 | $91,891 | | Operating income | $4,801 | $5,321 | $13,374 | $13,673 | | Net income | $3,334 | $3,695 | $9,438 | $9,395 | | Basic earnings per share | $0.56 | $0.62 | $1.59 | $1.58 | | Diluted earnings per share | $0.56 | $0.62 | $1.59 | $1.58 | | Dividends declared per share | $0.30 | $0.30 | $0.90 | $0.90 | - Net operating revenue decreased by **1.2%** for the three months ended September 30, 2019, and by **less than 1%** for the nine months ended September 30, 2019, compared to the same periods in 2018[12](index=12&type=chunk) - Net income decreased by **9.7%** for the three months ended September 30, 2019, but increased by **0.5%** for the nine months ended September 30, 2019, year-over-year[12](index=12&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20consolidated%20statements%20of%20stockholders'%20equity%20%E2%80%94%20for%20each%20quarterly%20period%20in%20the%20Nine%20months%20ended%20September%2030%2C%202019%20and%202018) This section presents changes in stockholders' equity, including net income, dividends, and share repurchases for the specified periods Condensed Consolidated Statements of Stockholders' Equity (In thousands) | Metric (In thousands) | Balance at Dec 31, 2018 | Balance at Sep 30, 2019 | | :-------------------- | :---------------------- | :---------------------- | | Total Stockholders' Equity | $184,999 | $190,403 | | Net income (9 months) | N/A | $9,438 | | Dividends declared per common share (9 months) | N/A | ($5,349) | | Purchase of shares held in treasury (9 months) | N/A | ($603) | - Total stockholders' equity increased from **$184,999 thousand** at December 31, 2018, to **$190,403 thousand** at September 30, 2019[15](index=15&type=chunk)[16](index=16&type=chunk) - The company declared regular cash dividends of **$0.30 per share** for each quarter in 2019, totaling **$0.90 per share** for the nine months ended September 30, 2019[15](index=15&type=chunk)[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20consolidated%20statements%20of%20cash%20flows%20%E2%80%94%20Nine%20months%20ended%20September%2030%2C%202019%20and%202018) This section presents the company's cash flows from operating, investing, and financing activities for the specified periods Condensed Consolidated Statements of Cash Flows (In thousands) | Metric (In thousands) | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :-------------------- | :-------------------------- | :-------------------------- | | Cash provided by operating activities | $18,968 | $18,167 | | Net cash used in investing activities | ($5,180) | ($4,124) | | Net cash used in financing activities | ($17,445) | ($18,279) | | Net decrease in cash and cash equivalents | ($3,657) | ($4,236) | | Cash and cash equivalents, end of period | $41,072 | $48,794 | - Cash provided by operating activities increased to **$18,968 thousand** for the nine months ended September 30, 2019, from **$18,167 thousand** in the prior year[18](index=18&type=chunk) - Net cash used in investing activities increased to **$5,180 thousand**, primarily due to the acquisition of broadcast properties in 2019[18](index=18&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20unaudited%20condensed%20consolidated%20financial%20statements) This section provides detailed explanations and disclosures for the financial statements, covering key accounting policies and significant items [1. Summary of Significant Accounting Policies](index=8&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the key accounting principles and policies used in preparing the financial statements - The financial statements are prepared in accordance with GAAP for interim financial information and Form 10-Q instructions[21](index=21&type=chunk) - The company owns or operates broadcast properties in **27 markets**, including **79 FM** and **34 AM** radio stations[23](index=23&type=chunk) [Earnings Per Share Information](index=9&type=section&id=Earnings%20Per%20Share%20Information) This section details the calculation of basic and diluted earnings per share, using the two-class method - Earnings per share is calculated using the two-class method, allocating earnings to common shares and participating securities (restricted stock units)[26](index=26&type=chunk) Earnings Per Share Information (In thousands, except per share data) | Metric (In thousands, except per share data) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income available to common stockholders | $3,273 | $3,632 | $9,265 | $9,235 | | Basic earnings per share | $0.56 | $0.62 | $1.59 | $1.58 | | Diluted earnings per share | $0.56 | $0.62 | $1.59 | $1.58 | [Financial Instruments](index=10&type=section&id=Financial%20Instruments) This section discusses the fair value of the company's financial instruments, including cash, receivables, payables, and long-term debt - The carrying value of cash and cash equivalents, accounts receivable, accounts payable, and long-term debt approximates fair value due to short maturities or prevailing market interest rates[29](index=29&type=chunk) [Income Taxes (Effective Tax Rate)](index=10&type=section&id=Income%20Taxes) This section explains the company's effective tax rate and its components, including the impact of state taxes - The company's effective tax rate is higher than the federal statutory rate due to the inclusion of state taxes[30](index=30&type=chunk) [Time Brokerage Agreements/Local Marketing Agreements](index=10&type=section&id=Time%20Brokerage%20Agreements%2FLocal%20Marketing%20Agreements) This section clarifies the accounting treatment for revenue and expenses derived from Time Brokerage Agreements and Local Marketing Agreements - Revenue and expenses related to Time Brokerage Agreements (TBAs) or Local Marketing Agreements (LMAs) are included in the condensed consolidated statements of income[31](index=31&type=chunk) [2. Recent Accounting Pronouncements](index=10&type=section&id=2.%20Recent%20Accounting%20Pronouncements) This section discusses the adoption of new accounting standards, including ASU 2016-02 on Leases, and the evaluation of other pronouncements - The company adopted ASU 2016-02, 'Leases (Topic 842)', on January 1, 2019, recording approximately **$6.7 million** in right-of-use assets and lease liabilities, with no impact on retained earnings or cash flows[32](index=32&type=chunk) - The company is evaluating ASU 2017-04 (Goodwill Impairment) and ASU 2016-13 (Credit Losses) but does not expect a material impact from ASU 2017-04[34](index=34&type=chunk)[35](index=35&type=chunk) [3. Revenue](index=11&type=section&id=3.%20Revenue) This section details the company's revenue recognition policies and disaggregates revenue by source for the specified periods - The company adopted Topic 606, 'Revenue from Contract with Customers', on January 1, 2018, with no impact on financial statements[36](index=36&type=chunk) Revenue by Type (in thousands) | Type of Revenue (in thousands) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :----------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Broadcast Advertising Revenue, net | $28,562 | $28,895 | $83,245 | $84,451 | | Digital Advertising Revenue | $879 | $936 | $2,769 | $2,887 | | Other Revenue | $1,833 | $1,817 | $5,267 | $4,553 | | Net Revenue | $31,274 | $31,648 | $91,281 | $91,891 | - Primary revenue sources are broadcast advertising (recognized upon airing), digital advertising (recognized when performance obligation takes place), and other revenue (from concerts, events, tower rent)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [4. Intangible Assets](index=13&type=section&id=4.%20Intangible%20Assets) This section describes the company's intangible assets, including FCC licenses and goodwill, and their impairment and amortization policies - FCC licenses and goodwill are evaluated for impairment annually as of October 1 or more frequently if circumstances indicate impairment[45](index=45&type=chunk) - Intangible assets with finite lives (favorable lease agreements, other intangibles, customer relationships) are amortized using the straight-line method over their useful lives (**1 to 26 years**)[46](index=46&type=chunk) [5. Common Stock and Treasury Stock](index=13&type=section&id=5.%20Common%20Stock%20and%20Treasury%20Stock) This section details the company's common stock and treasury stock activities, including the Stock Buy-Back Program and share repurchases - The company has a Stock Buy-Back Program with **$19.8 million** remaining authorization for future repurchases of Class A Common Stock as of September 30, 2019[47](index=47&type=chunk) Common Stock and Treasury Stock Repurchases (in thousands) | Period | Shares Repurchased | Amount (in thousands) | | :----- | :----------------- | :-------------------- | | 3 months ended Sep 30, 2019 | 9,600 | $276 | | 9 months ended Sep 30, 2019 | 20,700 | $603 | | 3 months ended Sep 30, 2018 | 20,100 | $748 | | 9 months ended Sep 30, 2018 | 34,600 | $1,295 | [6. Leases](index=14&type=section&id=6.%20Leases) This section details the company's lease accounting, including right-of-use assets, lease liabilities, and future payments - Right-of-use (ROU) assets and lease liabilities were **$6.0 million** and **$6.1 million**, respectively, at September 30, 2019[51](index=51&type=chunk) - Total lease expense for the three and nine months ended September 30, 2019, was **$420 thousand** and **$1,272 thousand**, respectively[52](index=52&type=chunk) Future Lease Payments (in thousands) | Years Ending December 31, | Total Lease Payments (in thousands) | | :------------------------ | :---------------------------------- | | 2019 (remaining) | $418 | | 2020 | $1,524 | | 2021 | $1,390 | | 2022 | $1,205 | | 2023 | $864 | | Thereafter | $1,889 | | **Total lease payments** | **$7,290** | | Less: Interest | $1,156 | | **Present value of lease liabilities** | **$6,134** | [7. Acquisitions and Dispositions](index=15&type=section&id=7.%20Acquisitions%20and%20Dispositions) This section outlines the company's acquisition activities, including details of broadcast property purchases and their pro forma financial impact - On January 9, 2019, the company acquired WFAT and W222CH for **$210 thousand**, attributing goodwill to existing brands and expected synergies[57](index=57&type=chunk)[141](index=141&type=chunk) - On December 31, 2018, the company closed on the acquisition of WOGK-FM, WNDT-FM, WNDD-FM, and WNDN-FM for **$9.3 million**, funded by operations[58](index=58&type=chunk)[142](index=142&type=chunk) Pro Forma Results (in thousands, except per share) | Pro Forma Results (in thousands) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net operating revenue | $31,274 | $32,772 | $91,281 | $95,220 | | Net income | $3,334 | $3,858 | $9,438 | $9,870 | | Basic EPS | $0.56 | $0.65 | $1.59 | $1.66 | [8. Income Taxes (Tax Cuts and Jobs Act)](index=18&type=section&id=8.%20Income%20taxes) This section discusses the impact of the Tax Cuts and Jobs Act on the company's income taxes, including the provisional net tax benefit recorded - The company recorded a provisional net tax benefit of **$11.5 million** in 2017 due to the Tax Cuts and Jobs Act, with no material adjustments required in 2018[69](index=69&type=chunk) [9. Stock-Based Compensation](index=18&type=section&id=9.%20Stock-Based%20Compensation) This section details the company's stock-based compensation plan, including amendments, authorized shares, and related expenses - The Second Amended and Restated 2005 Incentive Compensation Plan was amended in 2018, extending the award date to September 6, 2023, and increasing authorized shares[70](index=70&type=chunk) Stock-Based Compensation Expense (in thousands) | Metric (in thousands) | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2018 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total compensation expense related to restricted stock | $532 | $1,656 | $571 | $1,675 | | Associated tax benefit | $51 | $176 | $66 | $191 | [10. Long-Term Debt](index=19&type=section&id=10.%20Long-Term%20Debt) This section provides information on the company's long-term debt, including its revolving credit facility, borrowing capacity, and voluntary paydowns Long-Term Debt (In thousands) | Metric (In thousands) | Sep 30, 2019 | Dec 31, 2018 | | :-------------------- | :----------- | :----------- | | Revolving credit facility | $10,000 | $20,000 | | Amounts payable within one year | $0 | $5,000 | | Total Long-Term Debt | $10,000 | $15,000 | - The company's revolving credit facility was reduced to **$70 million** on July 1, 2019, and had **$60 million** of unused borrowing capacity at September 30, 2019[75](index=75&type=chunk)[130](index=130&type=chunk)[82](index=82&type=chunk)[136](index=136&type=chunk) - Voluntary paydowns of **$5 million** each were made on the Revolving Credit Facility in February and June 2019, using funds generated from operations[80](index=80&type=chunk)[81](index=81&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk)[147](index=147&type=chunk) [11. Litigation](index=20&type=section&id=11.%20Litigation) This section addresses legal proceedings, with management anticipating no material impact on the company's financial statements - Management anticipates that potential liability from various outstanding claims in the ordinary course of business will not materially affect the company's financial statements[83](index=83&type=chunk) [12. Dividends](index=21&type=section&id=12.%20Dividends) This section details the dividends declared by the Board of Directors, including regular and special cash dividends per share - The Board of Directors declared regular cash dividends of **$0.30 per share** on Class A and B Common Stock in September, May, and February 2019, each totaling approximately **$1.8 million**[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) - A quarterly cash dividend of **$0.30 per share** and a special cash dividend of **$0.25 per share** were declared in November 2018, totaling approximately **$3.3 million**[88](index=88&type=chunk)[146](index=146&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition and results of operations, detailing revenue, expenses, liquidity, capital resources, and forward-looking statements [Results of Operations](index=22&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, focusing on changes in net operating revenue, operating income, and expenses - Consolidated net operating revenue decreased by **$374 thousand (1.2%)** for the three months and **$610 thousand (less than 1%)** for the nine months ended September 30, 2019, compared to 2018[114](index=114&type=chunk)[122](index=122&type=chunk) - Operating income decreased by **$520 thousand (9.8%)** for the three months and **$299 thousand (2.2%)** for the nine months ended September 30, 2019[116](index=116&type=chunk)[124](index=124&type=chunk) Results of Operations (in thousands, except per share) | Metric (in thousands, except per share) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net operating revenue | $31,274 | $31,648 | $91,281 | $91,891 | | Station operating expense | $23,600 | $23,429 | $69,642 | $69,966 | | Operating income | $4,801 | $5,321 | $13,374 | $13,673 | | Net income | $3,334 | $3,695 | $9,438 | $9,395 | | Diluted EPS | $0.56 | $0.62 | $1.59 | $1.58 | - Same station gross local revenue decreased by **$847 thousand** (3 months) and **$1,764 thousand** (9 months), while gross political revenue decreased by **$390 thousand** (3 months) and **$926 thousand** (9 months) due to fewer elections[114](index=114&type=chunk)[122](index=122&type=chunk) - Station operating expense increased by **$171 thousand (less than 1%)** for the three months but decreased by **$324 thousand (less than 1%)** for the nine months, primarily due to decreases in healthcare costs and commissions[115](index=115&type=chunk)[123](index=123&type=chunk) [General Business Overview](index=22&type=section&id=General) This section provides an overview of the company's broadcast operations, primary revenue sources, and key market contributions - The company is a broadcast company primarily engaged in acquiring, developing, and operating broadcast properties, owning or operating **79 FM** and **34 AM** radio stations in **27 markets**[95](index=95&type=chunk) - The primary source of revenue is from the sale of advertising, with approximately **89%** of radio segment's gross revenue from local advertising for the nine months ended September 30, 2019[96](index=96&type=chunk)[97](index=97&type=chunk) - Five largest markets (Columbus, Des Moines, Manchester, Milwaukee, Norfolk) represented approximately **38%** of consolidated net operating revenue and **44%** of consolidated station operating income for the nine months ended September 30, 2019[108](index=108&type=chunk)[109](index=109&type=chunk) [Forward-Looking Statements](index=29&type=section&id=Forward-Looking%20Statements) This section highlights that forward-looking statements are subject to various risks and uncertainties, including financial, operational, and external factors - Forward-looking statements are subject to risks and uncertainties, including financial leverage, dependence on key personnel/stations, economic conditions, ability to integrate acquisitions, regulatory requirements, new technologies, natural disasters, and terrorist attacks[127](index=127&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity and capital resources, including its credit facility, cash flows, capital expenditures, and share repurchases - The company's Credit Facility was amended in June 2018, extending the maturity date to June 27, 2023, and the revolving credit facility was reduced to **$70 million** on July 1, 2019[130](index=130&type=chunk) - Net cash flows from operating activities were **$18,968 thousand** for the nine months ended September 30, 2019, an increase from **$18,167 thousand** in 2018[138](index=138&type=chunk) - Capital expenditures for 2019 are anticipated to be **$5.5 million to $6.0 million**, expected to be financed through funds generated from operations[140](index=140&type=chunk) - The company repurchased **20,700 shares** of Class A Common Stock for **$603 thousand** during the nine months ended September 30, 2019, under its Stock Buy-Back Program[139](index=139&type=chunk) [Summary Disclosures About Contractual Obligations and Commercial Commitments](index=32&type=section&id=Summary%20Disclosures%20About%20Contractual%20Obligations%20and%20Commercial%20Commitments) This section summarizes the company's contractual cash obligations and commercial commitments, outlining their expected financing sources - Contractual cash obligations are expected to be financed through funds generated from operations or additional borrowings under the Credit Facility[150](index=150&type=chunk) [Critical Accounting Policies and Estimates](index=32&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms no significant changes to the company's critical accounting policies and estimates since the prior annual report - There have been no significant changes to the company's critical accounting policies and estimates since the Annual Report on Form 10-K for the year ended December 31, 2018[151](index=151&type=chunk) [Recent Accounting Pronouncements (MD&A Reference)](index=32&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 of the financial statements for details on recent accounting pronouncements - Recent accounting pronouncements are described in Note 2 to the accompanying financial statements[152](index=152&type=chunk) [Inflation](index=32&type=section&id=Inflation) This section addresses the impact of inflation on the company's operations, noting that it has not been significant to date - The impact of inflation on the company's operations has not been significant to date[153](index=153&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the Annual Report on Form 10-K for market risk disclosures, noting no material changes since that report - There have been no material changes to the market risk information included in the 2018 Annual Report on Form 10-K[154](index=154&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The company's disclosure controls and procedures were effective as of September 30, 2019[155](index=155&type=chunk) - No material changes occurred in the company's internal controls over financial reporting during the quarter ended September 30, 2019[155](index=155&type=chunk) [PART II OTHER INFORMATION](index=33&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers other information not included in the financial statements, such as legal proceedings, equity sales, exhibits, and official signatures [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) This section addresses legal proceedings, with management anticipating no material impact on the company's financial statements from current claims - Management anticipates that any potential liability from various outstanding claims in the ordinary course of business will not materially affect the company's financial statements[157](index=157&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's repurchases of Class A Common Stock under its Stock Buy-Back Program during the third quarter of 2019 Class A Common Stock Repurchases (in thousands) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet be Purchased Under the Program | | :----- | :------------------------------- | :--------------------------- | :--------------------------------------------------------------------------- | | July 1 – July 31, 2019 | — | $— | $20,079,838 | | August 1 – August 31, 2019 | 8,679 | $28.80 | $19,829,876 | | September 1 – September 30, 2019 | 905 | $28.52 | $19,804,062 | | **Total** | **9,584** | **$28.78** | **$19,804,062** | - The company repurchased **9,584 shares** of Class A Common Stock for an average price of **$28.78 per share** during the three months ended September 30, 2019[159](index=159&type=chunk) - As of September 30, 2019, approximately **$19.8 million** remained authorized for future repurchases under the Stock Buy-Back Program[159](index=159&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications from the CEO and CFO, and XBRL documents - Exhibits include certifications of the Chief Executive Officer and Chief Financial Officer pursuant to the Securities Exchange Act of 1934 and Sarbanes-Oxley Act of 2002[161](index=161&type=chunk)[163](index=163&type=chunk) - XBRL Instance, Schema, Calculation, Definition, Labels, and Presentation Linkbase Documents are also filed as exhibits[163](index=163&type=chunk) [Signatures](index=35&type=section&id=Signatures) This section contains the official signatures of authorized officers, Samuel D. Bush and Catherine A. Bobinski, certifying the report - The report was signed on November 12, 2019, by Samuel D. Bush, Senior Vice President and Chief Financial Officer, and Catherine A. Bobinski, Senior Vice President, Chief Accounting Officer and Corporate Controller[166](index=166&type=chunk)

Financial Data and Key Metrics Changes - Net revenue for Q3 2019 was $31.3 million, a slight decrease from $31.7 million in the same quarter last year [6] - Free cash flow decreased to $4.5 million from $5.2 million year-over-year, impacted by a reduction in deferred tax provision [8] - Deferred tax provision was $400,000 compared to $785,000 last year [9] - Total debt outstanding at the end of the quarter was $10 million, with cash on hand at $41.1 million [12] Business Line Data and Key Metrics Changes - Political revenue for the quarter was $96,000, down from $486,000 last year, indicating a significant decline [6] - CapEx for the first nine months was approximately $4.7 million, slightly above the previous year [11] - The company expects CapEx for the year to be between $5.5 million and $6 million [11] Market Data and Key Metrics Changes - The company is experiencing downward pressure on advertising rates, particularly from national advertisers [17][19] - There is a noted decline in spending from local agencies, attributed to economic uncertainty and consumer debt levels [23][25] Company Strategy and Development Direction - The company aims to focus on local direct business and enhance training for sales staff to improve performance [36][40] - A commitment to innovative approaches in radio advertising is emphasized, including the exploration of new technologies like DRM for AM radio [35] - The company plans to continue paying regular dividends and considers special dividends as declared by the Board [13] Management's Comments on Operating Environment and Future Outlook - Management expressed dissatisfaction with the quarter's performance, citing external economic pressures and internal challenges [16] - There is a belief that radio advertising remains effective, but the application and pricing strategies need to be reevaluated [17][21] - Management acknowledges the need for a cultural shift within the company to adapt to changing market conditions [46][47] Other Important Information - The company repurchased 9,584 shares for $276,000 during the quarter, totaling 20,691 shares for $603,000 year-to-date [14] - The company produced 3,227 creative spots for clients, generating $1.4 million in additional revenue [41][44] Q&A Session Summary Question: What are the expectations for political revenue in the upcoming quarter? - Management indicated that political revenue has been disappointing and is expected to remain soft due to last year's high spending levels [10] Question: How is the company addressing the challenges in advertising rates? - Management emphasized a focus on training and direct client relationships rather than competing on price [36][40] Question: What is the company's strategy for future growth? - The strategy includes enhancing local direct business, exploring new advertising technologies, and maintaining a strong commitment to dividends [36][39][46]

Saga Communications, Inc. (NASDAQ:SGA) Q2 2019 Results Earnings Conference Call August 6, 2019 11:00 AM ET Company Participants Edward Christian - President, CEO and Chairman Samuel Bush - Senior VP, Treasurer and CFO Conference Call Participants Operator Ladies and gentlemen, thank you for standing by. Welcome to the Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period ended June 30, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-11588 Saga Communications, Inc. (Exact name of registrant as specified in its charter) Delaware 38-3042953 (State or other jurisdic ...