What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-08 compared with 2025-11-07 · 123 added, 151 removed, 123 unchanged (69% of the section changed)

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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.

Forward-looking statements may be identified by the use of forward-looking terms such as “will,” “may,” “believes,” “intends,” “expects,” “anticipates,” “plans,” “estimates,” “guidance,” and similar expressions that are intended to identify forward-looking statements that are not historical facts.

These statements are made as of the date of this report or as otherwise indicated, based on current expectations.

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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;

Future Factors include, among others, changes in national, regional and local economic conditions and advertising demand;

shifts in audience behavior and listening habits;

competition from traditional and non-traditional media, including digital, streaming and other online platforms;

our ability to attract and retain advertising customers and to maintain or increase advertising rates;

adverse changes in interest rates and interest rate relationships;

our financial leverage, our ability to comply with debt covenants, and service our indebtedness;

dependence on key personnel;

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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;

variability in political advertising revenue due to election cycles, timing, candidate spending levels, regulatory developments, and advertising demand ;

our ability to execute our digital strategy, including our ability to deliver measurable outcomes across paid search, display, social and online news offerings;

our ability to successfully implement and scale our consumer-journey focus (including “ Click, Visit, Call and Search”) and to demonstrate value to customers;

our ability to maintain and grow our “blended advertising” model and to integrate radio and digital solutions in a manner that is easy for advertisers to adopt;

governmental and regulatory policy changes;

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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;

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;

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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 ;

geopolitical conflicts, including conflicts in regions where we or our advertisers conduct business, 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 Agreement if we borrow in the future;

increased energy costs;

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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

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.

For example, we evaluate the performance of our markets based on “station operating income” (operating income plus corporate general and administrative expenses, depreciation and amortization, other operating (income) expenses, impairment of intangible assets and impairment of goodwill).

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 it 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.

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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.

The most directly comparable GAAP measure to station operating income is operating income (loss).

Financial Condition and Results of Operations

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

We are a media company primarily engaged in acquiring, developing and operating broadcast properties including opportunities complementary to our core radio business including digital, e-commerce and non-traditional revenue initiatives.

We actively seek and explore opportunities for expansion through the acquisition of additional broadcast properties.

We review acquisition opportunities on an ongoing basis.

Radio Stations and Complementary Digital Marketing Services

Our radio stations’ primary source of revenue is from the sale of advertising for broadcast on our stations.

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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.

For the three months ended March 31, 2026 and 2025, approximately 90% and 88%, 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.

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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.

Furthermore, political advertising revenue may fluctuate significantly from period to period and year to year based on election cycles, the timing and competitiveness of races within our markets, and advertiser spending patterns.

While gross political revenue was not a significant factor in our first quarter results, we expect political advertising to increase in periods that include higher levels of election activity;

however, the timing and amount of political revenue is difficult to predict and may vary materially from historical levels.

Our gross political revenue for the three months ended March 31, 2026 and 2025 was $275,000 and $271,000, respectively.

For the remainder of the year, we have approximately $1.1 million of gross political revenue sold for a total of $1.4 million of gross political revenue sold thus far for the entire year compared to $650,000 for 2025.

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.

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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.

The rates a station is able to charge are, in large part, based on a station’s ability to attract audiences in the demographic groups targeted by its advertisers.

In a number of our markets, this is measured by periodic reports generated by independent national rating services.

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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.”

During the nine months ended September 30, 2025 and 2024 and the twelve months ended December 31, 2024 and 2023, our Charleston, South Carolina;

The advertising industry continues to evolve as businesses increasingly utilize multiple media channels to reach consumers.

In response to these industry trends, we have expanded the range of advertising solutions offered to our clients to include both broadcast radio advertising and complementary digital marketing services.

We continue to execute Saga’s digital strategy focused on the consumer journey.

Our integrated (or “blended”) advertising approach allows advertisers to combine the reach and audience engagement of radio with digital advertising tools that enable more targeted consumer engagement and campaign measurement.

These services include paid search advertising, targeted digital display advertising, streaming advertising, social media advertising, online video advertising, website-based advertising, on-line news services and other related digital marketing services.

Paid search advertising campaigns are designed to reach consumers actively searching for products or services.

Targeted digital display advertising campaigns are delivered through programmatic advertising platforms and allow advertisers to reach audiences based on geographic location, behavioral attributes, contextual relevance and other targeting parameters.

Most of our radio stations are able to be streamed on third party music platforms and our customers advertise between songs played on the streaming service.

Additionally, we have online news sites, where advertisers place web banners that link to the client’s website and other e-commerce initiatives.

Performance within these digital product categories may vary based on consumer behavior, advertiser demand, and the effectiveness of our sales execution.

We consider these categories part of our broader digital strategy to provide advertisers with measurable outcomes across multiple touchpoints in the consumer journey.

For the three months ended March 31, 2026 and 2025, approximately 19% and 14%, respectively, of our radio stations’ gross revenue was from digital advertising.

Our digital advertising services are supported by a centralized team of digital implementation specialists who work in conjunction with local market personnel to execute and optimize campaigns.

Campaign performance is monitored throughout the duration of the advertising schedule and clients are generally provided periodic reports which may include impressions, clicks, website visits, calls generated and other campaign performance indicators.

As part of our digital transformation strategy, we focus on a blended approach that combines broadcast radio with complementary digital products, including paid search and targeted digital display, to support the consumer journey.

In evaluating progress, we monitor key operating metrics such as (i) growth in paid search and targeted display activity, (ii) the number of advertising accounts that purchase blended campaigns and related client retention, and (iii) changes in local direct advertising activity associated with blended campaigns.

These operating metrics are intended to provide insight into our execution and adoption of our blended strategy, and may be influenced by factors such as overall advertising demand, our ability to train and retain personnel, competition, and client budget allocations.

Our digital advertising services rely on a number of third-party technology platforms and advertising exchanges, including major search, social media and programmatic advertising providers.

Changes in the policies, technologies or pricing structures of these platforms could affect the manner in which digital advertising services are delivered.

We expect the use of integrated advertising strategies combining broadcast and digital media to continue evolving as advertisers seek broader reach, targeted messaging and measurable marketing outcomes.

We also continue to evaluate opportunities to increase operating efficiencies through technology and automation, including the use of artificial intelligence in certain content and operational workflows, where appropriate, to support efficiency and scalability.

During the three months ended March 31, 2026 and 2025 and the years ended December 31, 2025 and 2024, 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.

Norfolk, Virginia and Portland, Maine markets, when combined, represented approximately 36%, 35%, 34% and 36%, 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.

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Net Operating Revenue

the Nine Months Ended

the Three Months Ended

for the Years Ended

September 30,

Charleston, South Carolina

Columbus, Ohio

Des Moines, Iowa

Milwaukee, Wisconsin

Norfolk, Virginia

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.

Portland, Maine

During the three months ended March 31, 2026 and 2025 and the years ended December 31, 2025 and 2024, the radio stations in our five largest markets, when combined, represented approximately 60%, 51%, 39% 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:

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Station Operating Income(*)

for the Nine Months Ended

for the Three Months Ended

for the Years Ended

September 30,

Charleston, South Carolina

Columbus, Ohio

Des Moines, Iowa

Milwaukee, Wisconsin

Norfolk, Virginia

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).

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

Portland, Maine

Station operating income is operating income adjusted for corporate general and administrative expenses, depreciation and amortization, other operating (income) expenses, impairment of goodwill and impairment of intangible assets (a non-GAAP measure).

Markets may reflect negative percentages when station operating income is negative.

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Results of Operations

The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024.

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025.

Three Months Ended

September 30,

(In thousands, except percentages and per share information)

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Other operating (income) expense, net

Operating income

Interest expense

Interest income

(Loss) income before income tax expense

Income tax (benefit) expense

Net (loss) income

Earnings (loss) per share (diluted)

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.

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,

(In thousands, except percentages and per share information)

Net operating revenue

Station operating expenses

Corporate general and administrative

Depreciation and amortization

Other operating (income) expense, net

Operating (loss) income

Operating loss

Interest expense

Interest income

(Loss) income before income tax expense

Loss before income tax expense

Income tax (benefit) expense

Net (loss) income

Earnings (loss) per share (diluted)

N/M = Not Meaningful

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;

For the three months ended March 31, 2026, consolidated net operating revenue was $22,867,000 compared with $24,212,000 for the three months ended March 31, 2025, a decrease of $1,345,000 or 5.6%.

The decrease was primarily a result of decreases in gross local revenue, gross national revenue, gross other income of $1,716,000, $247,000 and $197,000 respectively partially offset by increases in gross digital revenue of $879,000 for the comparable period of 2025.

The most significant decreases in gross local revenue were at our Asheville, North Carolina, Columbus, Ohio;

Des Moines, Iowa and Ocala, Florida markets.

The significant decreases in gross local revenue were partially offset by increases in our local e-commerce revenue which was up $100,000 or 23%.

The markets with the most significant decreases in gross national revenue were 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.

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.

Manchester, New Hampshire and Norfolk, Virginia markets.

The decrease in other income is primarily related to the tower lease income the Company is no longer receiving as a result of the tower sale discussed in Note 13 as part of the Company’s capital allocation plan to sell non-core assets.

The increase in gross digital revenue is primarily due to an increase in our digital services revenue of $1,090,000, which is comprised of display, which increased $636,000 or 120%, search, which increased $378,000 or 105%, and other digital services which includes OTT/CTV campaigns, social media campaigns, best of digital, search engine optimization, and managed email, which combined increased $63,000 or 19% and an increase in mobile streaming of $82,000 or 116%, partially offset by a decline in our national streaming revenue of $197,000 or 32%, local streaming revenue of $50,000 or 7%, and online news revenue of $44,000 or 7% .

Station operating expense was $22,012,000 for the three months ended March 31, 2026, compared with $21,963,000 for the three months ended March 31, 2025, an increase of $49,000 or 0.2%.

The increase in station operating expense was primarily the result of increases in digital services expenses, FCC related fees and sales survey expenses of $613,000, $105,000 and $60,000, respectively, partially offset by decreases in compensation-related expenses, and advertising and promotional expenses of $678,000 and $93,000, respectively for the comparable period of 2025.

The increases in our digital services expenses relate to the investment we are making in our digital fulfillment team and digital campaign managers, as well as the cost of the digital service products.

For 2026, we expect our digital service expenses to increase approximately $1 million to cover these additional hires.

We are also investing in local sales managers at several of our markets, which we expect to increase station operating expense approximately $500,000 in 2026.

We had an operating loss for the three months ended March 31, 2026 of $3,262,000 compared to an operating loss of $2,298,000 for the three months ended March 31, 2025, an increase in the loss of $964,000.

The increase was a result of the decrease in net operating revenue and a minor increase in station operating expense, as noted above, partially offset by a decrease in corporate general and administrative expenses of $191,000, a decrease in depreciation and amortization of $152,000 and by a decrease in other operating expense of $87,000.

The decrease in corporate general and administrative expenses was primarily comprised of decreases in additional expenses related to shareholder activism and a potential proxy contest of $110,000 in 2025 and a decrease in travel expense of approximately $82,000.

The decrease in depreciation and amortization is primarily attributable to a reduction in assets as a result of the tower sale described in Note 13.

In 2026, we recorded a gain on the sale of fixed assets and intangibles of $33,000 compared to a loss on the sale of fixed assets of $54,000 in 2025.

The gain on the sale of fixed assets is primarily related to the sale of a property in Springfield, Massachusetts as described in Note 12.

We generated a net loss of $2,394,000 ($ (0.38) per share on a fully diluted basis) during the three months ended March 31, 2026, compared to a net loss of $1,575,000 ($ (0.25) per share on a fully diluted basis) for the three months ended March 31, 2025, an increase in the net loss of $819,000.

The decrease in net income or increase in net loss is primarily due to the decrease in operating income, described above, a decrease in interest expense of $16,000, an increase in interest income of $12,000, an increase in other income of $32,000, and an increase in income tax benefit of $85,000.

The decrease in interest expense is due to a decrease in our interest rates.

The increase in our interest income is due to a higher cash on hand balance during the period.

The increase in other income was due to insurance proceeds.

The increase in the tax benefit is due to the increase in our loss before income taxes in 2026.

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%.

In connection with the Sale-Leaseback Transaction described in Note 13 to the accompanying consolidated financial statements, 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.

Previously, on December 19, 2022, we entered into a Third Amendment to our Credit Agreement, (the “Third Amendment”), which extended the maturity date to December 19, 2027, reduced the lenders to JPMorgan Chase Bank, N.A., and the Huntington National Bank (collectively, 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 Agreement and each of our subsidiaries has guaranteed the Credit Agreement and has pledged substantially all of their assets (excluding their FCC licenses and certain other assets) in support of the Credit Agreement.

Interest rates under the Credit Agreement are payable, at our option, at alternatives equal to SOFR (3.68% at March 31, 2026), 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.

Letters of credit issued under the Credit Agreement 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 Agreement.

We previously paid quarterly commitment fees of 0.2% to 0.3% per annum on the unused portion of the Credit Agreement.

The Credit Agreement contains a number of financial covenants 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.

As of March 31, 2026, the Company was not in compliance with the minimum fixed charge coverage ratio covenant under its Credit Agreement which requires the Company to maintain a minimum fixed charge coverage ratio of 1.15 to 1.00 at the end of each fiscal quarter.

At March 31, 2026, the Company’s fixed charge coverage ratio was 0.92 to 1.00, constituting an event of default under the Credit Agreement.

On May 7, 2026, the Company obtained a waiver from its lenders for this covenant violation (the “Waiver”).

The Waiver applies solely to the noncompliance as of March 31, 2026 and does not modify the covenant requirements for future periods unless otherwise amended.

We are currently in discussions with the Lenders regarding a potential amendment to the Credit Agreement to, among other things, modify the fixed charge coverage ratio covenant calculation going forward.

However, there can be no assurance that we will be able to negotiate such an amendment.

If we are unable to obtain an amendment or otherwise comply with the covenant in future periods, the Lenders would have the right to declare all outstanding borrowings under the Credit Agreement immediately due and payable.

Our intent would be to pay-off the outstanding indebtedness using existing cash and cash equivalents, which we believe are sufficient for our short-term and long-term cash requirements.

We have $5,000,000 debt outstanding at December 31, 2025 and March 31, 2026 that we borrowed in conjunction with our Lafayette acquisition.

We have approximately $35 million of unused borrowing capacity under the Revolving Credit Agreement at both March 31, 2026 and December 31, 2025.

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.

During the three months ended March 31, 2026 and 2025, we had net cash flows from operating activities of $407,000 and $1,364,000, respectively.

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.

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.

In March 2013, our Board of Directors authorized an increase to our Stock Buy-Back Program (the “Buy-Back Program”) to allow us to purchase up to $75.8 million of our Class A Common Stock.

From its inception in 1998 through March 31, 2026, we have repurchased 2.4 million shares of our Class A Common Stock for $60.6 million.

During the three months ended March 31, 2026, approximately 1,067 shares were retained for payment of withholding taxes for approximately $13,000 related to the vesting of restricted stock.

We continue to monitor economic conditions to determine if and when it makes sense to make additional buybacks under our plan.

Our capital expenditures, exclusive of acquisitions, for the three months ended March 31, 2026 were $779,000 ($696,000 in 2025).

We anticipate capital expenditures in 2026 to be approximately $3.5 million, which we expect to finance through funds generated from operations.

During the first quarter of 2026, as part of the Company’s previously disclosed capital allocation plan to sell non-core assets, the Company sold a property in Springfield, Massachusetts for approximately $460,000.

As a result of the sale, the Company recorded a gain of approximately $80,000, which is recorded in other operating (income) expense, net in the Company’s Condensed Consolidated Statement of Operations.

During the three months ended March 31, 2026, the Company’s Board of Directors declared a quarterly cash dividend on its Class A Common Stock.

This dividend totaling approximately $1.6 million was paid during the first quarter of 2026.

During the three months ended March 31, 2025, the Company’s Board of Directors declared a quarterly cash dividend on its Class A Common Stock.

This dividend totaling approximately $1.6 million was paid during the first quarter of 2025.

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.

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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.

We have future cash obligations under various types of contracts, including the terms of our Credit Agreement, 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, 2025.

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.

We anticipate that our contractual cash obligations will be financed through funds generated from operations or additional borrowings under the Credit Agreement, or a combination thereof.

Recent Accounting Pronouncements

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What changed 10-Q

Item 2. Management’s Discussion and Analysis