Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terms such as “will,” “may,” “believes,” “intends,” “expects,” “anticipates,” “plans,” “projects,” “estimates,” “guidance,” and similar expressions that are intended to identify forward-looking statements that are not historical facts. These statements are made as of the date of this report or as otherwise indicated, based on current expectations. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Future Factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. We undertake no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events (whether anticipated or unanticipated), or otherwise
Future Factors include, among others, adverse changes in interest rates and interest rate relationships; our financial leverage and debt service requirements; dependence on key personnel; dependence on key stations and the advertising revenue they generate; U.S. national and local economic conditions or an economic recession; market volatility; demand for our services; the degree of competition by traditional and non-traditional competitors; our ability to successfully integrate acquired stations; regulatory requirements including royalties we pay; our intention to use a portion of the proceeds from the sale of non-core assets to fund stock buybacks; our expectation for political revenue to decrease in 2025 from 2024 levels as a result of fewer elections; our ability to execute our digital strategy; our intention to focus on the consumer as they Click, Visit, Call and Search as opposed to the product-oriented, low margin, high attrition offerings that many third-party providers deliver; our belief that our “blended advertising” model is easy to understand and buy in conjunction with radio; governmental and regulatory policy changes; changes in tax laws; the impact of technological advances; risks associated with cyber-attacks on our computer systems and those of our vendors; the outcomes of contingencies; trends in audience behavior; damage to our reputation resulting from adverse publicity, regulatory actions, litigation, and operational failures; the failure to meet client or listener expectations and other facts; changes in local real estate values; natural disasters; terrorist attacks; the wars in Ukraine and the Middle East; the effects of widespread outbreak of illness or disease, inflation or deflation; our belief that our cash flow from operations will be sufficient to meet debt service requirements for payments of interest and scheduled payments of principal under our Credit Facility if we borrow in the future ; increased energy costs; and risk factors described in our annual report on Form 10-K for the year ended December 31, 2024 or elsewhere in this quarterly report. These are representative of the Future Factors that could cause a difference between an ultimate actual outcome and a forward-looking statement.
Introduction
The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes thereto of Saga Communications, Inc. and its subsidiaries contained elsewhere herein and the audited financial statements and Management’s Discussion and Analysis contained in our annual report on Form 10-K for the year ended December 31, 2024. The following discussion is presented on a consolidated basis.
Critical Accounting Policies and Estimates
Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (GAAP), which require us to make estimates, judgments and assumptions that affect the reported amounts of certain assets, liabilities, revenues, expenses and related disclosures and contingencies. We evaluate estimates used in preparation of our financial statements on a continual basis. There have been no significant changes to our critical accounting policies that are described in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” in our annual report on Form 10-K for the year ended December 31, 2024.
We use certain financial measures that are not calculated in accordance with generally accepted accounting principles in the United States of America (GAAP) to assess our financial performance. For example, we evaluate the performance of our markets based on “station operating income” (operating income plus corporate general and
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administrative expenses, depreciation and amortization, other operating (income) expenses, and impairment of intangible assets). Station operating income is generally recognized by the broadcasting industry as a measure of performance, is used by analysts who report on the performance of the broadcasting industry and serves as an indicator of the market value of a group of stations. In addition, we use it to evaluate individual stations, market-level performance, overall operations and as a primary measure for incentive-based compensation of executives and other members of management. Station operating income is not necessarily indicative of amounts that may be available to us for debt service requirements, other commitments, reinvestment or other discretionary uses. Station operating income is not a measure of liquidity or of performance in accordance with GAAP, and should be viewed as a supplement to, and not a substitute for our results of operations presented on a GAAP basis.
Financial Condition and Results of Operations
General
We are a media company whose business provides radio, digital, e-commerce, local on-line news and non-traditional revenue initiatives. Saga operates in 28 markets and provides services to national, regional and local advertisers to meet their growing advertising needs .
Radio Stations
Our radio stations’ primary source of revenue is from the sale of advertising for broadcast on our stations. Depending on the format of a particular radio station, there are a predetermined number of advertisements available to be broadcast each hour.
Most advertising contracts are short-term and generally run for a few weeks only. The majority of our revenue is generated from local advertising, which is sold primarily by each radio market’s sales staff. For the nine months ended September 30, 2025 and 2024, approximately 89% and 87%, respectively, of our radio stations’ gross revenue was from local advertising. To generate national advertising sales, we engage independent advertising sales representative firms that specialize in national sales for each of our broadcast markets.
Our revenue varies throughout the year. Advertising expenditures, our primary source of revenue, generally have been lowest during the winter months, which include the first quarter of each year. Furthermore, we expect political revenue in 2025 to decrease from 2024 levels as a result of fewer elections at the national, state and local levels.
Our net operating revenue, station operating expense and operating income varies from market to market based upon each market’s rank or size which is based upon population and the available radio advertising revenue in that particular market.
The broadcasting industry and advertising in general is influenced by the state of the overall economy, including unemployment rates, inflation, energy prices and consumer interest rates. Our stations primarily broadcast in small to midsize markets. Historically, such markets have been more stable than major metropolitan markets during downturns in advertising spending but may not experience increases in such spending as significant as those in major metropolitan markets in periods of economic improvement.
Our financial results are dependent on a number of factors, the most significant of which is our ability to generate advertising revenue through rates charged to advertisers. The rates a station is able to charge along with advertising volume are, in large part, based on a station’s ability to attract audiences in the demographic groups targeted by its advertisers. In a number of our markets, this is measured by periodic reports generated by independent national rating services. In the remainder of our markets it is measured by the results advertisers obtain through the actual running of an advertising schedule. Advertisers measure these results based on increased demand for their goods or services and/or actual revenues generated from such demand. Various factors affect the rates a station can charge, including the general strength of the local and national economies, population growth, ability to provide popular programming, local market competition, target marketing capability of radio compared to other advertising media, and signal strength.
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When we acquire and/or begin to operate a station or group of stations we generally increase programming and advertising and promotion expenses to increase our share of our target demographic audience. Our strategy sometimes requires levels of spending commensurate with the revenue levels we plan on achieving in two to five years. During periods of economic downturns, or when the level of advertising spending is flat or down across the industry, this strategy may result in the appearance that our cost of operations is increasing at a faster rate than our growth in revenues, until such time as we achieve our targeted levels of revenue for the acquired station or group of stations.
The number of advertisements that can be broadcast without jeopardizing listening levels (and the resulting ratings) is limited in part by the format of a particular radio station. Our stations strive to maximize revenue by constantly managing the number of commercials available for sale and adjusting prices based upon local market conditions and ratings. While there may be shifts from time to time in the number of advertisements broadcast during a particular time of day, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year. Any change in our revenue, with the exception of those instances where stations are acquired or sold, is generally the result of inventory sell-out ratios and pricing adjustments, which are made to ensure that the station efficiently utilizes available inventory.
Our radio stations employ a variety of programming formats. We periodically perform market research, including music evaluations, focus groups and strategic vulnerability studies. Because reaching a large and demographically attractive audience is crucial to a station’s financial success, we endeavor to develop strong listener loyalty. Our stations also employ audience promotions to further develop and secure a loyal following. We believe that the diversification of formats on our radio stations helps to insulate us from the effects of changes in musical tastes of the public on any particular format.
The primary operating expenses involved in owning and operating radio stations are employee salaries and related benefits costs, sales commissions, programming expenses, depreciation, and advertising and promotion expenses.
The radio broadcasting industry is subject to rapid technological change, evolving industry standards and the emergence of new media technologies and services. These new technologies and media are gaining advertising share against radio and other traditional media.
We continue to execute Saga’s digital strategy. As previously announced, Saga is pivoting beyond its traditional reliance on broadcast radio toward a “blended advertising” model that integrates radio with search and display to meet advertisers at every stage of the consumer journey. Our intention is to focus on the consumer as they Click, Visit, Call and Search as opposed to the product-oriented, low margin, high attrition offerings that many third-party providers deliver. For the nine months ended September 30, 2025, interactive advertising revenue was $12,606,000 compared with $10,767,000 for the nine months ended September 30, 2024, an increase of $1,839,000 or 17.1%. Saga’s “blended advertising” model focuses on providing our customers with simple digital advertising solutions (Search, Display, among others) that we believe are easy to understand and buy in conjunction with radio. Our approach simplifies the process by pairing the emotional power of radio with the targeting precision of digital, helping advertisers be “wanted, found, and chosen.”
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During the nine months ended September 30, 2025 and 2024 and the twelve months ended December 31, 2024 and 2023, our Charleston, South Carolina; Columbus, Ohio; Des Moines, Iowa; Milwaukee, Wisconsin; and Norfolk, Virginia markets, when combined, represented approximately 35%, 35%, 36% and 37%, respectively, of our consolidated net operating revenue. An adverse change in any of these radio markets or our relative market position in those markets could have a significant impact on our operating results as a whole.
The following table describes the percentage of our consolidated net operating revenue represented by each of these markets:
Percentage of Consolidated
Percentage of Consolidated
Net Operating Revenue for
Net Operating Revenue
the Nine Months Ended
for the Years Ended
September 30,
December 31,
2025
2024
2024
2023
Market:
Charleston, South Carolina
6
%
6
%
6
%
6
%
Columbus, Ohio
7
%
8
%
8
%
9
%
Des Moines, Iowa
5
%
5
%
5
%
5
%
Milwaukee, Wisconsin
12
%
11
%
12
%
11
%
Norfolk, Virginia
5
%
5
%
5
%
6
%
During the nine months ended September 30, 2025 and 2024 and the twelve months ended December 31, 2024 and 2023, the radio stations in our five largest markets, when combined, represented approximately 34%, 36%, 37% and 40%, respectively, of our consolidated station operating income. The following table describes the percentage of our consolidated station operating income represented by each of these markets:
Percentage of Consolidated
Percentage of Consolidated
Station Operating Income (*)
Station Operating Income(*)
for the Nine Months Ended
for the Years Ended
September 30,
December 31,
2025
2024
2024
2023
Market:
Charleston, South Carolina
8
%
7
%
7
%
5
%
Columbus, Ohio
2
%
4
%
5
%
10
%
Des Moines, Iowa
—
%
4
%
3
%
4
%
Milwaukee, Wisconsin
20
%
15
%
17
%
12
%
Norfolk, Virginia
4
%
6
%
5
%
9
%
*
Station operating income is operating income adjusted for corporate general and administrative expenses, depreciation and amortization, other operating (income) expenses, and impairment of intangible assets (a non-GAAP measure).
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Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024
Results of Operations
The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024.
Three Months Ended
September 30,
$ Increase
% Increase
2025
2024
(Decrease)
(Decrease)
(In thousands, except percentages and per share information)
Net operating revenue
$
28,166
$
28,694
$
(528)
(1.8)
%
Station operating expenses
24,674
22,709
1,965
8.7
%
Corporate general and administrative
2,820
2,900
(80)
(2.8)
%
Depreciation and amortization
1,307
1,391
(84)
(6.0)
%
Other operating (income) expense, net
(9)
49
(58)
N/M
Operating income
(626)
1,645
(2,271)
(138.1)
%
Interest expense
108
121
(13)
(10.7)
%
Interest income
(216)
(255)
39
N/M
Other income
(81)
(78)
(3)
N/M
(Loss) income before income tax expense
(437)
1,857
(2,294)
(123.5)
%
Income tax (benefit) expense
Current
290
415
(125)
(30.1)
%
Deferred
(195)
175
(370)
(211.4)
%
95
590
(495)
(83.9)
%
Net (loss) income
$
(532)
$
1,267
$
(1,799)
(142.0)
%
Earnings (loss) per share (diluted)
$
(0.08)
$
0.20
$
(0.28)
(140.0)
%
N/M = Not Meaningful
For the three months ended September 30, 2025, consolidated net operating revenue was $28,166,000 compared with $28,694,000 for the three months ended September 30, 2024, a decrease of $528,000 or 1.8%. The decrease in revenue was primarily a result of decreases in gross national revenue of $627,000, gross political revenue of $604,000 and gross local revenue of $599,000, partially offset by an increase in gross interactive revenue of $1,121,000 and a decrease in agency commissions of $185,000, from the third quarter of 2024. The decrease in gross national revenue is primarily due to decreases at our Columbus, Ohio; Manchester, New Hampshire and Ocala, Florida markets partially offset by an increase at our Norfolk, Virginia market. The gross political revenue decreased due to a decrease in the number of national, state and local elections. The decrease in gross local revenues was attributable to decreases at our Des Moines, Iowa; Lafayette, Indiana and Norfolk, Virginia markets partially offset by an increase in our Charleston, South Carolina market. The increase in gross interactive revenue is primarily due to an increase in our SEM, display and streaming advertising revenue. The decrease in agency commissions is due to the decrease in national and local agency revenue.
Station operating expense was $24,674,000 for the three months ended September 30, 2025, compared with $22,709,000 for the three months ended September 30, 2024, an increase of $1,965,000 or 8.7%. The increase is related to increases in music licensing fees and digital service expenses of $2,086,000 and $332,000, respectively, partially offset by decreases in compensation-related expenses, bad debt expenses, and advertising and promotional expenses of $217,000, $106,000 and $93,000, respectively, from the third quarter of 2024. As disclosed in our footnotes, on August 19, 2025, the RMLC announced (as did each of ASCAP and BMI, respectively) that the RMLC had entered into separate settlement agreements with each of ASCAP and BMI to resolve rate-setting proceedings pending in the United States District Court for the Southern District of New York. The settlements established final license fee rates which apply retroactively for the period from January 1, 2022 through September 30, 2025 and on a go forward basis until December 31, 2029. During the third quarter of 2025, the Company recorded an aggregate of approximately $2.1 million related to the ASCAP and BMI retroactive rate adjustments in the station operating expenses in the Company’s Condensed Consolidated Statement of Operations.
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We had an operating loss for the three months ended September 30, 2025 of $626,000 compared to operating income $1,645,000 for the three months ended September 30, 2024, a decrease of $2,271,000. The decrease in operating income was the result of a decrease in net operating revenue, and an increase in station operating expenses noted above, partially offset by an increase in other operating income of $58,000, a decrease in corporate general and administrative expenses of $80,000 and a decrease in depreciation and amortization of $84,000. The decrease in corporate general and administrative expenses was primarily due to decreases in managers meeting expenses of $151,000 and legal expenses of $66,000 partially offset by an increases in stock-based compensation of $44,000. The increase in other operating expenses was due to the loss on disposal of fixed assets in the third quarter 2025.
We generated a net loss of $532,000 ( ($0.08) per share on a fully diluted basis) during the three months ended September 30, 2025, compared to net income of $1,267,000 ($0.20 per share on a fully diluted basis) for the three months ended September 30, 2024, a decrease of $1,799,000. The decrease in net income is primarily due to the decrease in operating income, described above, a decrease in interest income of $39,000, and a decrease in other income of $3,000, partially offset by a decrease in interest expense of $13,000 and a decrease in income tax expense of $495,000. The decrease in interest income is related to the decrease in the amount of short-term investment accounts. The decrease in our income tax expense is due to lower income before income tax expense from the third quarter of 2024.
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Results of Operations
The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024.
Nine Months Ended
September 30,
$ Increase
% Increase
2025
2024
(Decrease)
(Decrease)
(In thousands, except percentages and per share information)
Net operating revenue
$
80,607
$
83,704
$
(3,097)
(3.7)
%
Station operating expenses
68,863
68,473
390
0.6
%
Corporate general and administrative
9,061
8,987
74
0.8
%
Depreciation and amortization
3,900
3,847
53
1.4
%
Other operating (income) expense, net
298
1,026
(728)
N/M
Operating (loss) income
(1,515)
1,371
(2,886)
(210.5)
%
Interest expense
322
235
87
37.0
%
Interest income
(648)
(809)
161
N/M
Other income
(105)
(1,211)
1,106
N/M
(Loss) income before income tax expense
(1,084)
3,156
(4,240)
(134.3)
%
Income tax (benefit) expense
Current
130
715
(585)
(81.8)
%
Deferred
(235)
250
(485)
(194.0)
%
(105)
965
(1,070)
(110.9)
%
Net (loss) income
$
(979)
$
2,191
$
(3,170)
(144.7)
%
Earnings (loss) per share (diluted)
$
(0.15)
$
0.35
$
(0.50)
(142.9)
%
N/M = Not Meaningful
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For the nine months ended September 30, 2025, consolidated net operating revenue was $80,607,000 compared with $83,704,000 for the nine months ended September 30, 2024, a decrease of $3,097,000 or 3.7%. We had an increase of approximately $837,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of $3,934,000 generated by stations we owned or operated for the comparable period in 2024. The decrease in same station revenue was primarily a result of decreases in gross local revenue of $3,947,000, gross national revenue of $1,188,000, gross political revenue of $882,000 and gross non-spot revenue of $142,000 partially offset by increases in gross interactive revenue of $1,737,000 and a decrease in agency commissions of $612,000 from 2024. The decrease in gross local revenues was attributable to decreases at our Columbus, Ohio; Des Moines, Iowa; Ithaca, New York; and Norfolk, Virginia markets. The decrease in gross national revenue is primarily due to a decrease at our Charleston, South Carolina; Columbus, Ohio and Portland, Maine markets partially offset by increases at our Milwaukee, Wisconsin and Norfolk, Virginia markets. The gross political revenue decreased due to a decrease in the number of national, state and local elections. The decrease in gross non-spot revenue is due to decreases at our Columbus, Ohio market. The decrease in agency commissions is due to the decrease in national and local agency revenue. The increase in gross interactive revenue is primarily due to an increase in our streaming, including mobile streaming, SEM, display and website advertising revenue.
Station operating expense was $68,863,000 for the nine months ended September 30, 2025, compared with $68,473,000 for the nine months ended September 30, 2024, an increase of $390,000 or 0.6%. We had an increase of approximately $943,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of $553,000 generated by stations we owned or operated for the comparable period in 2024. The decrease in same station operating expense was primarily a result of decreases in compensation-related expenses, bad debt expenses, advertising and promotional expenses and maintenance and repairs expenses of $1,475,000, $470,000, $339,000 and $139,000, respectively, from the comparable period in 2024 partially offset by an increase in music licensing fees of $2,092,000. As noted above and disclosed in our footnotes, on August 19, 2025, the RMLC announced (as did each of ASCAP and BMI, respectively) that the RMLC had entered into separate settlement agreements with each of ASCAP and BMI to resolve rate-setting proceedings pending in the United States District Court for the Southern District of New York. The settlements established final license fee rates which apply retroactively for the period from January 1, 2022 through September 30, 2025 and on a go forward basis until December 31, 2029. During the third quarter of 2025, the Company recorded an aggregate of approximately $2.1 million related to the ASCAP and BMI retroactive rate adjustments in the station operating expenses in the Company’s Condensed Consolidated Statement of Operations.
We had an operating loss for the nine months ended September 30, 2025, of $1,515,000 compared to operating income of $1,371,000 for the nine months ended September 30, 2024, a decrease of $2,886,000. The change from operating income to an operating loss was the result of a decrease in net operating revenue and an increase in station operating expenses noted above, and an increase in corporate general and administrative expenses of $74,000, an increase in depreciation and amortization of $53,000 and a decrease other operating (income) expense, net of $728,000. The increase in corporate general and administrative expenses was primarily due to additional expenses related to shareholder activism and a potential proxy of contest of $226,000, and increases in stock-based compensation, other consulting expenses, and maintenance and repairs of $181,000, $61,000, and $29,000 partially offset by decreases in legal expenses, manager meeting expenses travel related expenses and insurance related costs of $180,000, $151,000, $114,000 and $137,000, respectively. In 2024, we recorded a loss on the sale of fixed assets and intangibles of $1,026,000 compared to a loss on the sale of fixed assets of $298,000 in 2025. The loss on sale of fixed assets and intangibles recorded in other operating expense in 2024 primarily relates to the sale of WYSE-AM, W275CP translator and W248CM translator located in our Asheville, North Carolina market and the relinquishment of our FCC license for KBAI-AM located in our Bellingham, Washington market, described in footnote 7 (Acquisitions and Dispositions).
We generated a net loss of $979,000 ($(0.15) per share on a fully diluted basis) during the nine months ended September 30, 2025, compared to net income of $2,191,000 ($0.35 per share on a fully diluted basis) for the nine months ended September 30, 2024 ended, a decrease of $3,170,000. The decrease in net income is primarily due to the decrease in operating income, described above, an increase in interest expense of $87,000, a decrease in interest income of $161,000 and a decrease in other income of $1,106,000 partially offset by a decrease in income tax expense of $1,070,000. The increase in interest expense is due to an increase in debt outstanding. The decrease in interest income is related to the decrease in the amount of short-term investment accounts. The decrease in other income is due to the $1,133,000 received related to the sale of an investment in BMI in 2024. The decrease in our income tax expense is due to lower income before income tax expense for the comparable period.
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Liquidity and Capital Resources
Debt Arrangements and Debt Service Requirements
In connection with entering into the purchase agreement described above in Footnote 16 – Subsequent Events, the Company entered into a Fourth Amendment (“Fourth Amendment”) to its Credit Agreement, dated as of August 18, 2015 and amended on September 1, 2017, June 17, 2018, and December 19, 2022, between the Company, JPMorgan Chase Bank, N.A. and The Huntington National Bank (collectively, the “Lenders”), and JPMorgan Chase Bank, N.A., in its capacity as Administrative Agent for the Lenders (“Agent”), (i) reducing the aggregate amount of the Lender’s revolving commitments from $50,000,000 to $40,000,000, and (ii) releasing the Agent’s security interest in the GTC Assets, but not any proceeds paid for the GTC Assets or any other collateral. On December 19, 2022, we entered into a Third Amendment (the “Third Amendment”) to our Credit Facility, (the “Credit Facility”), which extended the maturity date to December 19, 2027, reduced the lenders to JPMorgan Chase Bank, N.A., and the Huntington National Bank (the “Lenders”), established an interest rate equal to the secured overnight financing rate (“SOFR”) as administered by the SOFR Administrator (currently established as the Federal Reserve Bank of New York) as the interest base, and increased the basis points.
We have pledged substantially all of our assets (excluding our FCC licenses and certain other assets) in support of the Credit Facility and each of our subsidiaries has guaranteed the Credit Facility and has pledged substantially all of their assets (excluding their FCC licenses and certain other assets) in support of the Credit Facility.
Approximately $266,000 of debt issuance costs related to the Credit Facility were capitalized and are being amortized over the life of the Credit Facility. These debt issuance costs are included in other assets, net in the consolidated balance sheets. As a result of the Second Amendment, the Company incurred an additional $120,000 of transaction fees related to the Credit Facility that were capitalized. As a result of the Third Amendment, the Company incurred an additional $161,000 of transaction fees related to the Credit Facility that were capitalized. The cumulative transaction fees are being amortized over the remaining life of the Credit Facility.
Interest rates under the Credit Facility are payable, at our option, at alternatives equal to SOFR (4.24% at September 30, 2025), plus 1% to 2% or the base rate plus 0% to 1%. The spread over SOFR and the base rate vary from time to time, depending upon our financial leverage. Letters of credit issued under the Credit Facility will be subject to a participation fee (which is equal to the interest rate applicable to Eurocurrency Loans, as defined in the Credit Agreement) payable to each of the Lenders and a fronting fee equal to 0.25% per annum payable to the issuing bank. Under the Third Amendment, we now pay quarterly commitment fees of 0.25% per annum on the unused portion of the Credit Facility. We previously paid quarterly commitment fees of 0.2% to 0.3% per annum on the unused portion of the Credit Facility.
The Credit Facility contains a number of financial covenants (all of which we were in compliance with at September 30, 2025) which, among other things, require us to maintain specified financial ratios and impose certain limitations on us with respect to investments, additional indebtedness, dividends, distributions, guarantees, liens and encumbrances.
We had $5,000,000 debt outstanding at September 30, 2025 and December 31, 2024 that we borrowed in conjunction with our Lafayette acquisition.
We had approximately $45 million of unused borrowing capacity under the Credit Facility at September 30, 2025 and December 31, 2024, respectively.
Sources and Uses of Cash
During the nine months ended September 30, 2025 and 2024, we had net cash flows from operating activities of $5,482,000 and $10,141,000, respectively. We believe that cash flow from operations will be sufficient to meet quarterly debt service requirements for payments of interest and scheduled payments of principal under our Credit Facility if we borrow in the future. However, if such cash flow is not sufficient we may be required to sell additional equity securities, refinance our obligations or dispose of one or more of our properties in order to make such scheduled payments. There can be no assurance that we would be able to effect any such transactions on favorable terms, if at all.
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In March 2013, our Board of Directors authorized an increase to our Buy-Back Program to allow us to purchase up to $75.8 million of our Class A Common Stock. From its inception in 1998 through September 30, 2025, we have repurchased 2.2 million shares of our Class A Common Stock for $58.1 million. During the three and nine months ended September 30, 2025 we did not repurchase any related to the Buy-Back Program. We halted the directions issued for any additional buybacks under our plan in 2020. As part of our overall capital allocation plan for fiscal year 2025, we intend to use a portion of the proceeds from the sale of non-core assets to fund stock buybacks under the Buy Back Program, which may include open market purchases, block trades or other forms of buybacks.
Our capital expenditures, exclusive of acquisitions, for the nine months ended September 30, 2025 were $2,600,000 ($3,199,000 for the nine months ended September 30, 2024). We anticipate capital expenditures in 2025 to be approximately $3.0 million to $3.5 million, which we expect to finance through funds generated from operations.
On February 13, 2024, we entered into an agreement to purchase the assets of WKOA (FM), WKHY (FM), WASK (FM), WXXB (FM), WASK (AM) and W269DJ from Neuhoff Communications, Inc. serving the Greater Lafayette, Indiana radio market for $5.3 million, subject to certain purchase price adjustments. The Company closed on this transaction on May 31, 2024, using funds from operations and borrowings under our credit agreement, of $5,832,000, which included the purchase price of $5,300,000, the purchase of $499,000 in accounts receivable and transactional costs of approximately $121,000 offset by $88,000 in certain closing adjustments.
During the nine months ended September 30, 2025, the Company’s Board of Directors have declared three quarterly cash dividends on its Class A Common Stock. These dividends totaling $0.75 per share and approximately $4.8 million were paid as of September 30, 2025.
During the nine months ended September 30, 2024, the Company’s Board of Directors declared three quarterly cash dividends and a variable dividend on its Class A Common Stock. These dividends totaling $1.35 per share and approximately $8.5 million were paid or accrued during 2024. Additionally, $12.5 million was paid in 2024, relating to the special dividend declared in December 2023.
We anticipate that any future acquisitions of radio stations and dividend payments will be financed through funds generated from operations, borrowings under the Credit Agreement, additional debt or equity financing, cash on hand, or a combination thereof. However, there can be no assurances that any such financing will be available on acceptable terms, if at all.
Summary Disclosures About Contractual Obligations and Commercial Commitments
We have future cash obligations under various types of contracts, including the terms of our Credit Facility, operating leases, programming contracts, employment agreements, and other operating contracts. For additional information concerning our future cash obligations see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation — Summary Disclosures About Contractual Obligations” in our annual report on Form 10-K for the year ended December 31, 2024.
We anticipate that our contractual cash obligations will be financed through funds generated from operations or additional borrowings under the Credit Facility, or a combination thereof.
Recent Accounting Pronouncements
Recent accounting pronouncements are described in Note 2 to the accompanying financial statements.
Inflation
The impact of inflation on our operations has not been significant to date. We are, however, starting to see the effects of higher inflation starting to impact costs of most goods and services. There can be no assurance that a high rate of inflation in the future would not have an adverse effect on our operations.
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