What changed in this filing

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Item 9A. Controls and Procedures

2025-03-31 compared with 2024-03-15 · 384 added, 256 removed, 847 unchanged (43% of the section changed)

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As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934 (the “Exchange Act”).

Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures over financial reporting were effective to ensure that material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act will be recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting during the year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

The term “disclosures controls and procedures” as defined and amended by the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives.

Based upon the evaluation performed as of December 31 2024, as a result of the material weakness in internal control over financial reporting described below in Management’s Report on Internal Control Over Financial Reporting, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures over financial reporting were not effective as of such date.

Management’s Report on Internal Control Over Financial Reporting

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Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Based on our evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2023.

Our internal control over financial reporting as of December 31, 2023 has been audited by UHY LLP, an independent registered public accounting firm, as stated in its report which appears below.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors Saga Communications, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Saga Communications, Inc.’s (the Company’s) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Saga Communications, Inc.

as of December 31, 2023 and 2022, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023 and the related notes and financial statement schedule, and our report dated March 15, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Sterling Heights, Michigan

March 15, 2024

Based on our evaluation, management concluded that our Company did not maintain effective internal control over financial reporting as of December 31, 2024 due to the material weakness described below.

Material Weaknesses in Internal Control Over Financial Reporting

Management has determined that the Company has the following material weakness in its internal control over financial reporting:

Ineffective Controls over Broadcast Revenue Reconciliations – a lack of effectively designed and implemented monitoring controls over recorded broadcast revenue combined with a lack of segregation of duties within the Traffic Management system that did not restrict or monitor users’ access privileges commensurate with their assigned authority and responsibility.

Ineffective Controls over Digital Revenue Reconciliations – a lack of effectively designed and implemented monitoring controls over recorded digital revenue, including procedures over the retention of documentation to ensure existence, completeness and accuracy of data used to support accounts related to revenue and accounts receivable in the financial statement close process.

These ineffective controls, individually or in the aggregate, could result in misstatements of accounts or disclosures that would results in a material misstatement of the interim or annual Consolidated Financial Statements that would not be prevented or detected.

Remediation Plans

Management is actively engaged in the implementation of remediation plans to address the controls contributing to the material weakness.

The remediation actions include, but are not limited to, the following:

Ineffective Controls over Broadcast Revenue Reconciliations – Enhance the monitoring controls over revenue reconciliation procedures, re-assess user access privileges and ensure that certain users conflict of duties within the system are appropriately mitigated through such monitoring controls.

Ineffective Controls over Digital Revenue Reconciliations – Evaluate and enhance design and implementation of digital process-level controls over the existence, completeness and accuracy of data included in various reports provided from third party providers that support our digital revenue accounts.

Ensure retention of revenue reconciliation documentation and review by management.

We believe these measures will effectively remediate the control deficiencies, but management is assessing the need for any additional steps to remediate the underlying causes that give rise to this material weakness.

The material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

There is no assurance that

additional remediation steps will not be necessary.

Our internal control over financial reporting as of December 31, 2024 has been audited by Crowe LLP, an independent registered public accounting firm, as stated in its report which appears below.

Notwithstanding the identified material weakness, Management believes the Consolidated Financial Statements included in this Form 10-K fairly present, in all material respects, our results of operations and cash flows for the year ended December 31, 2024 and our financial condition as of such date, in accordance with U.S.

Changes in Internal Control Over Financial Reporting

Except as set forth above, there were no changes in our internal controls over financial reporting during the year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Other Information

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Principal Accountant Fees and Services

The information required by this item is incorporated by reference to the information contained in our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed not later than 120 days after the end of the Company’s fiscal year.

The information required by this item is incorporated by reference to the information contained in our Proxy Statement for the 2025 Annual Meeting of Shareholders to be filed not later than 120 days after the end of the Company’s fiscal year.

Exhibits and Financial Statement Schedules

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Report of Independent Registered Public Accounting Firm (PCAOB ID 173 )

Report of Independent Registered Public Accounting Firm (PCAOB ID 1195 )

Consolidated Financial Statements:

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Saga Communications, Inc.

Shareholders and the Board of Directors of Saga Communications, Inc.

Grosse Pointe Farms, Michigan

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of Saga Communications, Inc.

(the "Company") as of December 31, 2024, the related consolidated statements of income, shareholders’ equity, and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").

We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework:

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, because of the effects of the material weakness discussed in the following paragraph, the Company has not maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework:

(2013) issued by COSO.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management's report.

● Material weakness in controls over the reconciliation process and review of local market IT access for broadcasting revenue and certain digital revenue streams prior to invoicing customers and recognizing revenue.

We considered this material weakness identified above in determining the nature, timing, and extent of audit tests applied in our audit of the 2024 financial statements, and our opinion on Internal Control over Financial Reporting does not affect our opinion on the financial statements.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as

evaluating the overall presentation of the financial statements.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Critical Audit Matter

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Evaluation

As disclosed in Note 4 to the consolidated financial statements, the Company’s consolidated goodwill balance was $19.2 million as of December 31, 2024.

Management performs an annual quantitative impairment test during the fourth quarter of each year, or more frequently when it is determined that events and circumstances indicate that it is more likely than not that goodwill is impaired.

The Company has one reporting unit for goodwill impairment testing purposes.

Impairment of goodwill is assessed by comparing the estimated fair value of the reporting unit to its carrying value.

Fair value is estimated by management using an income approach.

Management’s cash flow projections for its goodwill impairment testing included significant judgments and assumptions relating to projected revenues and projected revenue growth rates, projected operating margins, projected general and administrative expenses and the discount rate.

We considered auditing the evaluation of goodwill for impairment to be a critical audit matter because it involved a high degree of subjectivity in evaluating management’s estimates, judgments, and significant assumptions, as well as significant audit effort due to complexity in the aggregation and evaluation of significant amounts of data and the use of valuation specialists.

Our audit procedures related to the evaluation of goodwill for impairment included the following:

● Testing the effectiveness of management’s internal controls including controls addressing:

o Management’s review and approval of the inputs into the valuation model, including the relevance and reliability of external data used and the completeness and accuracy of internal data used.

o Management’s review and approval of the significant assumptions used within the valuation model including projected revenues, projected revenue growth rates, projected operating margins, projected general and administrative expenses and the discount rate.

● Substantively testing management’s process, including:

o Evaluated the appropriateness of the valuation model used and recalculated the valuation model.

o Tested inputs into the valuation model, including the relevance and reliability of external data used and the completeness and accuracy of internal data used.

o Evaluated the significant assumptions used by management, including projected revenues and projected revenue growth rates, projected operating margins, projected general and administrative expenses and the discount rate.

This involved evaluating whether the significant assumptions used by management were reasonable considering (i) the current and past performance of the Company, (ii) relevant external market and industry data, and (iii) whether these significant assumptions were consistent with evidence obtained in other areas of the audit.

o Utilized valuation specialists to assist in evaluating the methodology of and certain assumptions applied in the valuation model.

/s/ Crowe LLP

We have served as the Company's auditor since 2024

Fort Lauderdale, Florida

March 31, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

Saga Communications, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Saga Communications, Inc.

(the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement Schedule II, Valuation and Qualifying Accounts, listed in the index at item 15(a)(2) (collectively referred to as the “financial statements”).

We have audited the accompanying consolidated balance sheet of Saga Communications, Inc.

(the “Company”) as of December 31, 2023, and the related consolidated statements of income, shareholders’ equity, and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of Saga Communications, Inc.

at December 31, 2023 and 2022, and the consolidated results of its operations and its cash flows for each of the three years in the period December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 15, 2024 expressed an unqualified opinion thereon.

at December 31, 2023, and the consolidated results of its operations and its cash flows for the year ended December 31, 2023, in conformity with generally accepted accounting principles in the United States of America.

Basis for Opinion

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Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

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Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to an account or disclosure that is material to the financial statements and (2) involved especially challenging, subjective, or complex judgments.

Critical Audit Matter – Broadcast License Impairment Analysis

As disclosed in Notes 1 and 3 to the financial statements, the Company evaluates Federal Communications Commission licenses (or “broadcast licenses”) for impairment on an annual basis as of October 1st or, more frequently, if events or changes in circumstances indicate that the carrying value of the Company’s broadcast licenses may not be recoverable.

The broadcast license balance as of December 31, 2023 was $90.2 million.

The Company considers potential impairment by comparing the fair value of a market’s broadcast license to its carrying value.

Fair value is estimated by management using the Greenfield method at the market level, which is a discounted cash flow approach assuming a start-up scenario in which the only assets held by an investor are broadcasting licenses.

Management’s cash flow projections include significant judgments and assumptions related to market growth rates and market profit margin, estimated available market revenue including market share, terminal values and discount rates.

We identified broadcast license impairment as a critical audit matter because of the significant judgments made by management to estimate the fair value of the Company’s broadcast licenses.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of inputs into the discounted cash flow model driven by management’s estimates.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures performed to evaluate the reasonableness of management’s estimates and assumptions included assessing the methodologies used by the Company and testing the significant assumptions used in the quantitative models.

We tested the effectiveness of the control over management’s evaluation and determination of estimates and assumptions used as the inputs in the impairment models.

We compared the cash flow models prepared by management to historical revenues and profit margins as well as third-party market data to evaluate the reasonableness of the assumptions.

We evaluated historical trends in assessing the reasonableness of growth rate assumptions and performed sensitivity analysis of significant assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in these assumptions.

We performed procedures to verify the mathematical accuracy of the calculations of broadcast license impairment used by management.

We involved our valuation specialists to assist us in identifying the significant assumptions underlying the models, assessing the rationale and supporting documents related to these assumptions and determining the appropriateness and reasonableness of the methodologies employed.

Furthermore, we assessed the appropriateness of the disclosures in the consolidated financial statements.

We have served as the Company’s auditor since 2015.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

We served as the Company’s auditor from 2015 through 2023.

Sterling Heights, Michigan

March 15, 2024

March 15, 2024, except for the effects of the tables reflecting the impact of the revisions for the year ended December 31, 2023, discussed in Note 2 (not presented herein) to the consolidated financial statements appearing under Item 8 of the Company’s annual report (Form 10-K) as to which the date is March 31, 2025.

Saga Communications, Inc.

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Other assets:

Broadcast licenses, net

Broadcast licenses

Other intangibles, right of use assets, deferred costs and investments, net of accumulated amortization of $ 16,257 ($ 15,984 in 2023)

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Deferred income taxes

Long-term debt

Other liabilities

Total liabilities

Commitments and contingencies

Commitments and contingencies (Note 11, 13 and 15)

Shareholders’ equity:

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Class A common stock, $ .01 par value, 35,000 shares authorized, 8,183 issued ( 8,007 in 2023)

Class B common stock, $ .01 par value, 3,500 shares authorized, 0 issued ( 0 in 2022)

Additional paid-in capital

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Income before income tax expense

Income tax provision:

Income tax (benefit) expense:

Earnings per share:

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Balance at January 1, 2023

Conversion of shares from Class B to Class A

Forfeiture of restricted stock

Dividends declared per common share

Compensation expense related to restricted stock awards

Purchase of shares held in treasury

401(k) plan contribution

Balance at December 31, 2021

Conversion of shares from Class B to Class A

Issuance of restricted stock

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Balance at December 31, 2023

Conversion of shares from Class B to Class A

Issuance of restricted stock

Forfeiture of restricted stock

Dividends declared per common share

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Depreciation and amortization

Deferred income tax expense

Deferred income tax (benefit) expense

Amortization of deferred costs

Compensation expense related to restricted stock awards

Provision for credit losses

Loss on sale of assets, net

(Gain) on insurance claims

Other (gain) loss, net

Other (gain), net

Barter (revenue) expense, net

Deferred and other compensation

Changes in assets and liabilities:

(Increase) decrease in receivables and prepaid expenses

Increase (decrease) in accounts payable, accrued expenses, and other liabilities

Changes in assets and liabilities, net of business acquisition:

Decrease (increase) in receivables and prepaid expenses

Increase in accounts payable, accrued expenses, and other liabilities

Total adjustments

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Proceeds from sale and disposal of assets

Proceeds from insurance claims

Proceeds from redemption of investments and other

Other investing activities

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Cash flows from financing activities:

Payments on long-term debt

Proceeds from long-term debt

Cash dividends paid

Payments for debt issuance costs

Purchase of treasury shares

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents, beginning of period

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is a media company whose business is devoted to acquiring, developing and operating broadcast properties including opportunities complimentary to our core radio business including digital, e-commerce and non-traditional revenue initiatives.

We currently own or operated seventy-nine FM, thirty-three AM radio stations and eighty metro signals, serving twenty-seven markets throughout the United States.

We currently own or operated eighty-two FM, thirty-one AM radio stations and seventy-nine metro signals, serving twenty-eight markets throughout the United States.

Principles of Consolidation

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Certain cash deposits with financial institutions may at times exceed FDIC insurance limits.

Our top five markets when combined represented 36 %, 38 % and 39 % of our net operating revenue for the years ended December 31, 2023, 2022 and 2021, respectively.

Our top five markets when combined represented 36 % and 37 % of our net operating revenue for the years ended years ended December 31, 2024 and 2023, respectively.

We sell advertising to local and national companies throughout the United States.

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Our held-to-maturity U.S.

Treasury Bills all have original maturity dates ranging from March 2024 to July 2024.

Treasury Bills all have original maturity dates ranging from March 2025 to June 2025.

Saga Communications, Inc.

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Delinquent accounts are based on contractual terms.

The activity in the allowance for credit losses during the years ended December 31, 2023, 2022 and 2021 was as follows:

The activity in the allowance for credit losses during the year ended December 31, 2024 and 2023 were as follows:

Uncollectible

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December 31, 2023

December 31, 2021

Barter Transactions

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and we do not believe that the technology used in broadcasting will be replaced by another technology in the foreseeable future.

The weighted-average period before the next renewal of the Company’s FCC licenses is 4.1 years.

Separable intangible assets that have finite lives are amortized over their useful lives using the straight-line method.

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Repurchases of shares of our Common Stock are recorded as Treasury stock and result in a reduction of Shareholders’ equity.

During 2023, 2022 and 2021, we acquired 11,274 shares at an average price of $ 20.12 per share, 6,044 shares at an average price of $ 24.27 per share and 16,577 shares at an average price of $ 26.25 per share, respectively.

During 2024 and 2023, we acquired 21,865 shares at an average price of $ 13.28 per share and 11,274 shares at an average price of $ 20.12 per share, respectively.

Revenue Recognition

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All revenue is recognized in accordance with the Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin (“SAB”) No.

104, Topic 13, Revenue Recognition Revised and Updated and The Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers .

116, and The Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers .

Saga Communications, Inc.

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Advertising and promotion costs are expensed as incurred.

Such costs amounted to $ 1,705,000 , $ 1,646,000 and $ 1,396,000 for the years ended December 31, 2023, 2022 and 2021, respectively.

Such costs amounted to $ 1,595,000 and $ 1,705,000 for the years ended years ended December 31, 2024 and 2023, respectively.

The provision for income taxes is calculated using the asset and liability method, under which deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.

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The realization of deferred tax assets is primarily dependent upon the generation of future taxable income.

Our effective tax rate is higher than the federal statutory rate as a result of the inclusion of state taxes in the income tax amount and permanent differences primarily relating to executive compensation.

Our effective tax rate is higher than the federal statutory rate as a result of the inclusion of state taxes in the income tax amount offset by a permanent benefit difference primarily relating to executive compensation and the transfer of a split dollar life insurance policy to the estate of our former CEO that resulted in a permanent difference between book and taxable income.

The Company currently intends to declare regular quarterly cash dividends, we well as variable dividends in accordance with the terms of our variable dividend policy.

The Company may also declare special dividend in future periods.

The Company may also declare special dividends in future periods.

The declaration and payment of any future dividend, whether fixed, special or based on the variable policy will remain at the full discretion of the Board and will depend on the Company’s financial results, cash requirements, future expectations and other pertinent factors.

On December 7, 2023 , the Company’s Board of Directors declared a special cash dividend of $ 2.00 per share on its Classes A Common Stock.

This dividend, totaling approximately $ 12,500,000 , was paid on January 12, 2024 to shareholders of record on December 20, 2023 and is recorded in dividends payable in our Consolidated Balance Sheet at December 31, 2023.

On November 16, 2023 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.25 per share on its Class A Common Stock.

This dividend, totaling approximately $ 1,500,000 , was paid on December 15, 2023 to shareholders of record on November 27, 2023 .

On September 27, 2023 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.25 per share on its Class A Common Stock.

This dividend, totaling approximately $ 1,500,000 , was paid on November 3, 2023 to shareholders of record on October 11, 2023 .

On May 9, 2023 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.25 per share on its Class A Common Stock.

This dividend, totaling approximately $ 1,500,000 , was paid on June 16, 2023 to shareholders of record on May 22, 2023 .

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

On March 1, 2023 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.25 per share on its Class A Common Stock.

This dividend, totaling approximately $ 1,500,000 , was paid on April 7, 2023 to shareholders of record on March 20, 2023 .

On December 7, 2022 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.25 per share and a special cash dividend of $ 2.00 per share on its Classes A Common Stock.

This dividend, totaling approximately $ 13,800,000 , was paid on January 13, 2023 to shareholders of record on December 21, 2022 and is recorded in dividends payable in our Consolidated Balance Sheet at December 31, 2022.

On September 20, 2022 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.25 per share and a special cash dividend of $ 2.00 per share on its Classes A Common Stock.

This dividend, totaling approximately $ 13,600,000 , was paid on October 21, 2022 to shareholders of record on October 3, 2022 .

On June 6, 2022 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.20 per share on its Classes A and B Common Stock.

This dividend, totaling approximately $ 1,200,000 , was paid to our transfer agent on June 29, 2022 .

The dividend was paid by our transfer agent on July 1, 2022 to shareholders of record on June 13, 2022 .

On March 1, 2022 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.16 per share on its Classes A and B Common Stock.

This dividend, totaling approximately $ 970,000 , was paid on April 8, 2022 to shareholders of record on March 21, 2022 .

On December 14, 2021 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.16 per share and special cash dividend of $ 0.50 per share on its Classes A and B Common Stock.

This dividend, totaling approximately $ 3,990,000 , was paid on January 14, 2022 to shareholders of record on December 27, 2021 and was recorded in dividends payable on the Company’s Consolidated Balance Sheet at December 31, 2021 .

On September 28, 2021 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.16 per share on its Classes A and B Common Stock.

This dividend, totaling approximately $ 960,000 , was paid on October 22, 2021 to shareholders of record on October 8, 2021 .

On June 18, 2021 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.16 per share on its Classes A and B Common Stock.

This dividend, totaling approximately $ 960,000 , was paid on July 16, 2021 to shareholders of record on June 30, 2021 and was recorded in dividends payable on the Company’s Condensed Consolidated Balance Sheet at June 30, 2021.

The Company had previously temporarily suspended the quarterly cash dividend in response to the uncertainty of the ongoing impact of COVID-19 as of June 18, 2020.

During 2024, the Company’s Board of Directors has declared four quarterly cash dividends and a variable dividend on its Class A Common Stock.

These dividends totaling $ 1.60 per share and approximately $ 10.0 million were paid during 2024.

During 2023, the Company’s Board of Directors declared four quarterly cash dividends and one special dividend on its Class A Common Stock.

These dividends totaling $ 3.00 per share and approximately $ 18.6 million were accrued or paid during 2023.

Stock-Based Compensation

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Notes to Consolidated Financial Statements — (Continued)

We serve twenty-seven radio markets (reporting units) that aggregate into one operating segment (Radio), which also qualifies as a reportable segment.

We serve twenty-eight radio markets (reporting units) that aggregate into one operating segment (Radio), which also qualifies as a reportable segment.

We operate under one reportable business segment for which segment disclosure is consistent with the management decision-making process that determines the allocation of resources and the measuring of performance.

The Chief Operating Decision Maker (“CODM”) evaluates the results of the radio operating segment and makes operating and capital investment decisions based at the Company level.

The Company’s Chief Executive Officer is our Chief Operating Decision Maker (“CODM”) and evaluates the results of the radio operating segment and makes operating and capital investment decisions based at the Company level.

Furthermore, technological enhancements and system integration decisions are reached at the Company level and applied to all markets rather than to specific or individual markets to ensure that each market has the same tools and opportunities as every other market.

Managers at the market level do not report to the CODM and instead report to other senior management, who are responsible for the operational oversight of radio markets and for communication of results to the CODM.

In 2024, we adopted ASU 2023-07, which requires expanded disclosure of significant segment expenses and other segment items on an annual and interim basis.

The CODM is regularly provided with financial information consistent with the Consolidated Statement of Income presented within.

Specifically, the CODM utilizes consolidated operating income as profitability measures for purposes of marking operating decisions and assessing financial performance.

Further, the CODM reviews and utilizes station operating expense and corporate general and administrative expenses at the consolidated level to manage the Company’s operations.

As a result of the adoption of ASU 2023-07, we have expanded our disclosures to include significant expenses within our station operating expense line on our Consolidated Statement of Income below.

Other segment items included in the consolidated net income are interest expense, interest income, other (income) expenses, net and income tax (benefit) expense, which are reflected in the Consolidated Statement of Income.

We continually review our operating segment classification to align with operational changes in our business and may make changes as necessary.

Significant departmental expenses included in station operating expenses for the years ended December 31, 2024 and December 31, 2023 are as follows:

Years Ended December 31,

(In thousands, except per share data)

Programming and Technical

Station General and Administrative

Station Operating Expense

(1) Other includes production and news departments, advertising and promotional expense and station depreciation and amortization.

Earnings Per Share

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In applying the two-class method, earnings are allocated to both common shares and participating securities.

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

The following table sets forth the computation of basic and diluted earnings per share:

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Earnings per share:

There were no stock options outstanding that had an antidilutive effect on our earnings per share calculation for the years ended December 31, 2023, 2022, and 2021, respectively.

There were no stock options outstanding that had an antidilutive effect on our earnings per share calculation for the years ended years ended December 31, 2024 and 2023, respectively.

The actual effect of these shares, if any, on the diluted earnings per share calculation will vary significantly depending on fluctuations in the stock price.

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Recent Accounting Pronouncements

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ASU 2023-07 is effective for us for annual periods beginning after January 1, 2024 and interim periods beginning after January 1, 2025.

We are currently evaluating the impact ASU 2023-07 will have on our financial statement disclosures.

The Company adopted this standard in the fourth quarter of 2024.

The adoption of ASU-2023-07 did not have a significant impact on the Company’s financial results and operations but did add incremental financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

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We are currently evaluating the impact ASU 2023-09 will have on our financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (DISE)” (“ASU 2024-03”), which requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses on an annual and interim basis.

In January 2024, the FASB issued ASU 2025-01 clarifying the effective date for ASU-2024-03.

ASU 2024-03 is effective for us for annual periods beginning January 1, 2027 and interim periods beginning after January 1, 2028.

We are currently evaluating the impact ASU 2024-03 will have on our financial statement disclosures.

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Revision of Previously Issued Consolidated Financial Statements

The Company previously presented certain interactive or digital revenue net of expenses to third-party providers.

After further review of the principal versus agent guidance in ASC 606, the Company determined it was acting as the principal and therefore should be presenting that digital revenue gross and including the expenses to third-party providers in station operating expense.

Included in the adjustments below is the reclassification of these expenses out of net revenue and into station operating expense for the years ended December 31, 2024 and 2023 and the quarterly and year to date information for each quarter in 2023 and for the first three quarters in 2024.

In order to assess materiality with respect to the adjustments, the Company considered Staff Accounting Bulletin (“SAB”) 99, Materiality and SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in the Current Year Financial Statements, and determined that the impact of the adjustments on prior period consolidated financial statements was immaterial.

These reclassifications, both individually and in the aggregate, had no impact to previously reported retained earnings, operating income (loss), income (loss) before income tax expense, net income (loss), earnings (loss) per share, cash flows from operations, investing or financing activities, or the timing of cash payments for income taxes.

The impact of the adjustments on our Consolidated Statements of Income for the nine months ended September 30, 2024 and the year ended December 31, 2023 and previously reported interim periods within those periods is as follows:

Three Months Ended March 31, 2024

Three Months Ended March 31, 2023

(in thousands)

As Previously Reported on Form 10-Q

Digital Expense Reclassification

As Previously Reported on Form 10-Q

Digital Expense Reclassification

Net operating revenue

Station operating expenses

Corporate G&A

Other operating expense (income), net

Operating income (loss)

Three Months Ended June 30, 2024

Three Months Ended June 30, 2023

(in thousands)

As Previously Reported on Form 10-Q

Digital Expense Reclassification

As Previously Reported on Form 10-Q

Digital Expense Reclassification

Net operating revenue

Station operating expenses

Corporate G&A

Other operating expense (income), net

Operating income (loss)

Six Months Ended June 30, 2024

Six Months Ended June 30, 2023

(in thousands)

As Previously Reported on Form 10-Q

Digital Expense Reclassification

As Previously Reported on Form 10-Q

Digital Expense Reclassification

Net operating revenue

Station operating expenses

Corporate G&A

Other operating expense (income), net

Operating income (loss)

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Three Months Ended September 30, 2024

Three Months Ended September 30, 2023

(in thousands)

As Previously Reported on Form 10-Q

Digital Expense Reclassification

As Previously Reported on Form 10-Q

Digital Expense Reclassification

Net operating revenue

Station operating expenses

Corporate G&A

Other operating expense (income), net

Operating income (loss)

Nine Months Ended September 30, 2024

Nine Months Ended September 30, 2023

(in thousands)

As Previously Reported on Form 10-Q

Digital Expense Reclassification

As Previously Reported on Form 10-Q

Digital Expense Reclassification

Net operating revenue

Station operating expenses

Corporate G&A

Other operating expense (income), net

Operating income (loss)

Twelve Months Ended December 31, 2023

(in thousands)

As Previously Reported on Form 10-K

Digital Expense Reclassification

Net operating revenue

Station operating expenses

Corporate G&A

Other operating expense (income), net

Operating income (loss)

Nature of goods and services

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Agency commissions are calculated based on a stated percentage applied to gross billing revenue for our advertising inventory placed by agency and are reported as a reduction of advertising revenue.

Digital Advertising Revenue

We recognize revenue from our digital initiatives across multiple platforms such as targeted digital advertising, online promotions, advertising on our websites and digital audio streams, mobile messaging, email marketing and other e-commerce.

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Interactive Advertising Revenue

We recognize revenue from our digital initiatives across multiple platforms such as targeted display advertising, search engine management, search engine optimization, online promotions, advertising on our online news sites and websites and digital audio streams, mobile messaging, email marketing and other e-commerce.

Revenue is recorded when each specific performance obligation in the digital advertising campaign takes place, typically within a one month period.

Digital audio stream revenue is recognized when the commercial spots have streamed.

Third-party products such as targeted display advertising are recognized over time as digital items are used for advertising content and impression targets are met each month.

The Company assesses each digital order to determine if the Company is operating as the principal or an agent.

The Company currently operates as the principal for interactive revenue.

Other Revenue

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Revenue is generally recognized when the event is completed, as the promotional events are completed or as each performance obligation is satisfied.

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Disaggregation of Revenue

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We evaluate our FCC licenses for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired.

We operate our broadcast licenses in each market as a single asset and determine the fair value by relying on a discounted cash flow approach assuming a start-up scenario in which the only assets held by an investor are broadcast licenses.

We operate our broadcast licenses in each market as a single asset and determine the fair value by relying on a discounted cash flow approach assuming a start-up scenario in which the only

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

assets held by an investor are broadcast licenses.

The fair value calculation contains assumptions incorporating variables that are based on past experiences and judgments about future operating performance using industry normalized information for an average station within a market.

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We also evaluate goodwill for impairment annually, or more frequently if certain circumstances are present.

If the carrying amount of goodwill in a reporting unit is greater than the implied value of goodwill determined by completing a hypothetical purchase price allocation using estimated fair value of the reporting unit, the carrying amount of goodwill in that reporting unit is reduced to its implied value.

The Company has one reporting unit for purposes of goodwill impairment testing.

In 2024, the income approach was used and it is based upon a discounted cash flow analysis incorporating significant assumptions such as projected revenues including a projected long-term growth rate, projected operating margins, projected general and administrative expenses, and a discount rate appropriate for the industry.

In 2023, we utilized the market approach.

Under each approach, if the fair value of our reporting unit is less than the carrying amount, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds our reporting unit’s fair value.

The loss recognized will not exceed the total amount of goodwill allocated to our reporting unit.

We evaluate amortizable intangible assets for recoverability when circumstances indicate impairment may have occurred, using an undiscounted cash flow methodology.

If the future undiscounted cash flows for the intangible asset

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

are less than net book value, then the net book value is reduced to the estimated fair value.

If the future undiscounted cash flows for the intangible asset are less than net book value, then the net book value is reduced to the estimated fair value.

Amortizable intangible assets are included in other intangibles, deferred costs and investments in the consolidated balance sheets.

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We completed our impairment annual impairment test of broadcast licenses during the fourth quarter of 2024 and determined that the fair value of the broadcast licenses was greater than the carrying value recorded for each of our markets and, accordingly, no impairment was recorded.

The following table reflects certain key estimates and assumptions used in the impairment tests during the fourth quarter ended 2023, the fourth quarter of 2022 and the fourth quarter of 2021.

The following table reflects certain key estimates and assumptions used in the impairment tests during the fourth quarter ended 2024 and the fourth quarter of 2023.

The ranges for operating profit margin and market long-term revenue growth rates vary by market.

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(1) the market specific operating profit margin range remained relatively consistent;

(2) the market long-term revenue growth rates were relatively consistent;

(3) the discount rate decreased from 2021 and remained relatively consistent after that;

(2) the market long-term revenue growth rates decreased slightly;

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

the discount rate decreased from 2023;

and (4) current year revenue projections decreased with amounts previously projected for 2024.

Discount rates

12.3 % - 12.6

Operating profit margin ranges

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17.8 % - 36.4

Market long-term revenue growth rates

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We will continue to monitor potential triggering events and perform the appropriate analysis when deemed necessary.

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

2023 Impairment Test

During the fourth quarter of 2023, we completed our annual impairment test of broadcast and determined that the fair value of the broadcast licenses was greater than the carrying value recorded for each of our markets and, accordingly, no impairment was recorded.

2021 Impairment Test

During the fourth quarter of 2021, we completed our annual impairment test of broadcast and determined that the fair value of the broadcast licenses was greater than the carrying value recorded for each of our markets and, accordingly, no impairment was recorded.

During the fourth quarter of 2024 and 2023, the Company performed its annual impairment test of goodwill in accordance with ASC 350 and determined that the fair value was in excess of its carrying value and, accordingly, no impairment was recorded.

The following table reflects certain key estimates and assumptions used in the impairment tests during the fourth quarter ended 2024:

Discount rate

Operating profit margin ranges

19.7 % - 27.0

Long-term revenue growth rate

If actual market conditions are less favorable than those estimated by us or if events occur or circumstances change that would reduce the fair value of our broadcast licenses below the carrying value, we may be required to recognize additional impairment charges in future periods.

Such a charge could have a material effect on our consolidated financial statements.

We will continue to monitor potential triggering events and perform the appropriate analysis when deemed necessary.

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

We have recorded the changes to goodwill for each of the years ended December 31, 2024 and 2023 as follows:

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Total amortizable intangible assets

Aggregate amortization expense for these intangible assets for the years ended December 31, 2023, 2022 and 2021, was $ 42,000 , $ 48,000 and $ 387,000 , respectively.

Aggregate amortization expense for these intangible assets for the years ended years ended December 31, 2024 and 2023, was $ 270,000 and $ 42,000 , respectively.

Our estimated annual amortization expense for the years ending December 31, 2025, 2026, 2027, 2028 and 2029 is $ 389,000 , $ 388,000 , $ 133,000 , $ 31,000 and $ 26,000 , respectively.

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Long-Term Debt

The Company has no debt outstanding at December 31, 2023 or December 31, 2022.

Long-term debt consisted of the following:

(In thousands)

Revolving credit facility

Amounts payable within one year

Future maturities of long-term debt are as follows:

(In thousands)

On December 19, 2022, we entered into a Third Amendment to our Credit Facility, (the “Third Amendment”), which extended the maturity date to December 19, 2027, reduced the lenders to JPMorgan Chase Bank, N.A., and the Huntington National Bank (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.

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Letters of credit issued under the Credit Facility will be subject to a participation fee (which is equal to the interest rate applicable to Eurocurrency Loans, as defined in the Credit Agreement) payable to each of the Lenders and a fronting fee equal to 0.25 % per annum payable to the issuing bank.

Under the Third Amendment, we now pay quarterly commitment fees of 0.25 % per annum on the unused portion of the Credit Facility.

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

The Credit Facility contains a number of financial covenants (all of which we were in compliance with at December 31, 2023) 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 approximately $ 50 million of unused borrowing capacity under the Revolving Credit Facility at both December 31, 2023 and December 31, 2022.

Under the Third Amendment, we now pay quarterly commitment fees of 0.25 % per annum on the unused portion of the

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Credit Facility.

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

The Credit Facility contains a number of financial covenants (all of which we were in compliance with at December 31, 2024) 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 approximately $ 45 million and $ 50 million unused borrowing capacity under the Revolving Credit Facility at December 31, 2024 and 2023, respectively.

Supplemental Cash Flow Information

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The effective tax rate was approximately 24.3 % for the year ended December 31, 2024 compared to 26.2 % for the year ended December 31, 2023.

The 2022 year to date tax rate was impacted by $ 3.8 million in expenses in the third quarter related to the compensation of our CEO upon his death, in accordance with his employment agreement that are permanent differences between our book and taxable income.

The 2024 year to date tax rate was impacted by the transfer of a split dollar life insurance policy in the fourth quarter valued at $ 1 million to the estate of our previous CEO in accordance with his employment agreement that was a permanent benefit difference between our book and taxable income.

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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Intangible assets

Right of use assets

Prepaid expenses

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Allowance for credit losses

Lease liability

Other accrued liabilities

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Net deferred tax liabilities

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Deferred tax assets are required to be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

At December 31, 2024 and December 31, 2023, we do no t have a valuation allowance for net deferred tax assets.

At December 31, 2023 and 2022, net deferred tax liabilities include a deferred tax asset of $ 1,350,000 and $ 1,313,000 , respectively, relating to deferred compensation, stock-based compensation expense, accrued compensation, the allowance for credit losses, and other accrued expenses.

At December 31, 2024 and 2023, net deferred tax liabilities include a deferred tax asset of $ 3,495,000 and $ 3,165,000 , respectively, relating to deferred compensation, stock-based compensation expense, accrued compensation, lease liabilities, the allowance for credit losses, and other accrued expenses.

The significant components of the provision for income taxes are as follows:

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Total Income Tax Provision

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

The reconciliation of income tax at the U.S.

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State tax expense, net of federal benefit

The 2023, 2022 and 2021 effective tax rates exceed the federal statutory rate primarily due to non-deductible compensation related expenses and state income taxes.

Tax benefit on executive compensation

Tax expense on deficit from restricted stock vesting

Tax benefit from dividends paid on restricted stock

The 2024 effective tax rate exceeds the federal statutory rate primarily due to the inclusion of state taxes in the income tax amount offset by a permanent benefit difference primarily relating to executive compensation and the transfer of a split dollar life insurance policy to the estate of our former CEO that resulted in a permanent difference between book and taxable income.

The 2023 effective tax rates exceed the federal statutory rate primarily due to non-deductible compensation related expenses and state income taxes.

The Company files income taxes in the U.S.

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federal examinations by the Internal Revenue Service (IRS) for years prior to 2021.

The Company is subject to examination for income and non-income tax filings in various states.

The Company is subject to examination for income and non-income tax filings in various states and are currently undergoing an examination of our U.S.

Federal Income tax return for 2022.

As of December 31, 2024, and 2023 there were no accrued balances recorded related to uncertain tax positions.

We classify income tax-related interest and penalties that are related to income tax liabilities as a component of income tax expense.

For the years ended December 31, 2023, 2022 and 2021, we had $-, $-, and $ 600 , respectively, tax-related interest and penalties and had $ 0 accrued at December 31, 2023 and 2022.

For the year ended December 31, 2024 and 2023, we had $ 2,000 and $-, respectively, in tax-related interest and penalties and had $ 0 accrued at December 31, 2024 and 2023.

Saga Communications, Inc.

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Forfeited/canceled/expired

Outstanding at December 31, 2022

Forfeited/canceled/expired

Non-vested and outstanding at December 31, 2024

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Acquisitions and Dispositions

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

The consolidated statements of income include the operating results of the acquired stations from their respective dates of acquisition.

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Notes to Consolidated Financial Statements — (Continued)

Pending Acquisitions

2024 Acquisitions and Dispositions

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 which we expect to finance through funds generated from operations or borrowings under our credit agreement.

We expect to close on this acquisition in the second quarter of 2024.

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.

Management attributes the goodwill recognized in the acquisition to the power of the existing brands in Lafayette, Indiana as well as synergies and growth opportunities expected through the combination with the Company’s existing stations.

The $ 76,000 allocated to goodwill is deductible for tax purposes.

The fair value of the property and equipment was estimated using cost and market approaches.

The fair value of the FCC license was estimated using the discounted cash flow method.

Goodwill was equal to the amount the purchase price exceeded the values allocated to the tangible and identifiable intangible assets.

The Company finalized the fair value of the FCC license and goodwill during the fourth quarter of 2024 from the initial estimated after final determination of key assumptions used in the discounted cash flow analysis.

The key assumptions used in the discounted cash flow analysis for the fair value of the FCC license were as follows:

Discount rate

Operating profit margin ranges

Market long-term revenue growth rates

On May 31, 2024, we closed on an agreement to sell WNDN-FM located in our Ocala-Gainesville, Florida market to Suncoast Radio, Inc.

for $ 150,000 .

We recorded a $ 20,000 loss on the sale in our other operating (income) expense , net line on our Consolidated Statement of Operations.

On March 29, 2024, we closed on an agreement to sell WYSE-AM, W275CP translator and W248CM translator located in our Asheville, North Carolina market to EZ Radio LLC for $ 10,000 .

We recorded a $ 147,000 loss on the sale in our other operating (income) expense , net line item on our Consolidated Statement of Operations.

On March 22, 2024, we submitted a request to the FCC to cancel our FCC license for KBAI-AM located in our Bellingham, Washington market.

We recorded an $ 800,000 loss on the disposal in our other operating (income) expense, net line item on our Consolidated Statement of Operations.

2023 Dispositions

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We recorded a $ 22,000 loss on the disposal in our other operating (income) expense, net line items in our Consolidated Statement of Operations.

2022 Acquisitions

On July 12, 2021, we entered into an agreement to acquire WIZZ-AM and a translator from P.

Radio for $ 61,800 of which $ 5,000 was paid in 2021 and the remainder was paid on April 6, 2022 when we closed on the transaction.

Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the Greenfield, Massachusetts market as well as synergies and growth opportunities expected through the combination with the Company’s existing stations.

The translators are start-up stations and therefore, have no pro forma revenue and expenses.

2021 Acquisitions

On January 8, 2021, the Company closed on an agreement to purchase WBQL and W288DQ from Consolidated Media, LLC, for an aggregate purchase price of $ 175,000 , of which $ 25,000 was paid in 2020 and the remaining $ 150,000 paid in 2021.

Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the Clarksville, Tennessee market as well as synergies and growth opportunities expected through the combination with the Company’s existing stations.

The translators are start-up stations and therefore, have no pro forma revenue and expenses.

Saga Communications, Inc.

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The following condensed balance sheets represent the estimated fair value assigned to the related assets and liabilities of the 2024 and 2023 acquisitions at their respective acquisition dates.

The allocation of the purchase price for the 2024 acquisition is final at December 31, 2024.

Condensed Consolidated Balance Sheet of 2024 and 2023 Acquisitions

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Assets Acquired:

Current assets

Property and equipment

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Broadcast licenses

Other intangibles, deferred costs and investments

Total other assets

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Notes to Consolidated Financial Statements — (Continued)

Pro Forma Results of Operations for Acquisitions (Unaudited)

The following unaudited pro forma results of our operations for the years ended December 31, 2024 and 2023 assume the 2024 acquisitions occurred as of January 1, 2023.

The pro forma results give effect to certain adjustments, including depreciation, amortization of intangible assets, increased interest expense on acquisition debt and related income tax effects.

The pro forma results have been prepared for comparative purposes only and do not purport to indicate the results of operations that would actually have occurred had the combinations been in effect on the dates indicated or which may occur in the future.

Years Ended December 31,

(In thousands, except per share data)

Pro forma Consolidated Results of Operations

Net operating revenue

Station operating expense

Corporate general and administrative

Other operating expense (income), net

Operating income

Interest expense

Interest income

Other income, net

Income before income tax expense

Income tax expense (benefit)

Earnings per share:

Related Party Transactions

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Pursuant to the 2011 employment agreement, commencing on June 1, 2012, and each anniversary thereafter, the Compensation Committee was required to determine in its discretion the amount of any increase in Mr.

Christian’s then existing annual salary;

Christian’s then existing

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

annual salary;

provided, however, that such increase would not be less than the greater of 3 % or a cost of living increase based on the consumer price index.

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Christian’s passing, he had approximately 55,000 shares of unvested restricted stock that immediately vested at a price of $ 24.80 for a total of $ 1.4 million in common stock received by the estate.

Christian’s estate is now the beneficiary of the Split Dollar life insurance policy that has a cash surrender value of approximately $ 971,000 .

Under the agreement, the Company will be responsible to pay the estate’s income tax obligation relating to the payout of the life insurance policy.

The estimate of the possible loss related to that tax obligation cannot be made at this time due to uncertainties related to the timing of the transfer.

Christian’s estate is now the beneficiary of the Split Dollar life insurance policy that had a cash surrender value of approximately $ 1,029,000 at the time of transfer.

Under the agreement, the Company is responsible to pay the estate’s income tax obligation relating to the transfer of the life insurance policy and as such, recorded $ 500,000 in the fourth quarter of 2024 when the transfer of the policy occurred.

Lastly, under the agreement, the Company shall continue to pay for the healthcare coverage and life insurance premiums for Mr.

Christian’s spouse for ten years which totals approximately $ 800,000 .

Lada’s Letter Agreement

On August 21, 2022, we entered into a letter employment agreement with Warren S.

Lada, a member of our Board, to serve as our Interim President and CEO following the death of Mr.

Christian, to serve in this capacity while the Company conducted a formal search for a permanent successor to Mr.

Under the terms of the letter agreement we paid Mr.

Lada an annualized base salary of $ 750,000 during his service as Interim President and CEO;

provided local transportation to the Company offices for up to three days a week and he was eligible to participate in the Company’s benefit plans, including the 401(k) plan, as an employee, upon completion of the eligibility requirements.

Forgy’s Employment Agreement

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Forgy, who was appointed as our President and CEO effective December 7, 2022.

Forgy’s employment agreement has an initial term of three years , and we and Mr.

Forgy may mutually agree to extend the term for an additional two years.

Either party may provide written notice of its intent not to extend the initial term at least one year prior to the end of the initial term.

Forgy’s employment agreement had an initial term of three years , and in December 2024, pursuant to the agreement, we and Mr.

Forgy mutually agreed to extend the term for the additional two years (the “renewal period”).

Under the agreement, Mr.

Forgy’s base salary is set at $ 670,000 for the first year and will increase 4 % annually.

If the Company and Mr.

Forgy mutually agree to renew the term of Mr.

Forgy’s employment for an additional two years , Mr.

Forgy’s base salary would increase in the fourth and fifth year by 4 % as well.

Forgy will have the opportunity to earn an annual performance bonus under the CEO Plan.

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Forgy is also eligible for equity awards under the 2023 Incentive Compensation Plan, or any successor equity incentive plan, in accordance with the provisions of that plan that apply to the CEO.

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Forgy will continue to participate in our employee benefit plans, including the medical reimbursement plan, 401(k) plan, deferred compensation plan, and other health and welfare benefit plans.

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Forgy’s employment is terminated by us for cause, if he resigns without good reason, or if his employment terminates by reason of death or disability, he will receive any accrued but unpaid base salary and any benefits under the Company’s benefit plans (the “accrued amounts.”)

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Forgy’s employment is terminated by us without cause or if he resigns for good reason, he will receive the accrued amounts;

continuation of his base salary for the longer of 18 months or the remainder of the three year initial term or the two-year renewal term, as applicable;

continuation of his base salary for the longer of 18 months or the remainder of the three year initial term or the two-year renewal period, as applicable;

any awarded but unpaid annual bonus with respect to any completed fiscal year preceding the termination date;

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Forgy and his spouse for up to 18 months .

Forgy consents to the renewal term and the Company does not consent, Mr.

Forgy will be entitled to the accrued amounts;

an amount equal to 150 % of the sum of (i) Mr.

Forgy’s base salary paid in the prior calendar year plus (ii) his annual bonus earned for the previous fiscal year, immediate and full vesting of any unvested shares of restricted stock then held by Mr.

and payment or reimbursement of COBRA premiums for Mr.

Forgy and his spouse for up to 18 months .

Forgy agreed that, for a period of 12 months after the termination of his employment, he will not (i) solicit business of the type performed by the Company anywhere in the United States;

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Christian, our President, CEO and Chairman at the time, as our Director of Solution Architecture.

Eric Christian was promoted to Vice President of Digital Solutions in July 2020 and was subsequently was promoted to Chief Marketing Officer in February 2023.

Eric Christian was promoted to Vice President of Digital Solutions in July 2020 and was subsequently promoted to Chief Marketing Officer in February 2023.

The Board of Directors approved the employment of Eric Christian and subsequent promotions.

As previously disclosed, Edward K.

Chrisian passed away in August 2022 and resulted in the conversion of his Class B Shares into Class A Shares that were transferred to an estate planning trust, of which Edward K.

Chrisian passed away in August 2022 which resulted in the conversion of his Class B Shares into Class A Shares that were transferred to an estate planning trust, of which Edward K.

Christian’s surviving spouse, and Eric Christian’s mother is the trustee of.

The estate owns approximately 14.6 % of the Common Stock outstanding.

As previously disclosed, as a result of the passing of our founder and former Chairman, President and CEO, Edward K.

We also employed Sera Christian, granddaughter of the trustee of the Edward K.

Christian estate.

As previously disclosed, the passing of our founder and former Chairman, President and CEO Edward K.

Christian, and the resultant transfer of his Class B shares into an estate planning trust resulted in an automatic conversion of each Class B share he held into one fully paid and non-assessable Class A share.

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Holders of shares of Common Stock vote as a single class on all matters submitted to a vote of the shareholders, with each share of Class A Common Stock entitled to one vote.

Christian’s passing, each share of Class B Common Stock was entitled to ten votes, except (i) in the election for directors, (ii) with respect to any “going private” transaction between the Company and the principal shareholder, and (iii) as otherwise provided by law.

Christian’s passing, each share of Class B Common Stock was entitled to ten votes, except (i) in the election for directors, (ii) with respect to any “going private” transaction between the Company and the Class B shareholder, and (iii) as otherwise provided by law.

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Christian’s passing, in the election of directors, the holders of Class A Common Stock, voting as a separate class, were entitled to elect twenty-five percent, or two, of our directors.

Christian’s passing, in the election of directors, the holders of Class A Common Stock, voting as a separate class, were entitled to elect twenty-five percent, or two, of our at the time eight directors.

The holders of the Common Stock, voting as a single class with each share of Class A Common Stock entitled to one vote and each share of Class B Common Stock entitled to ten votes, were entitled to elect the remaining directors.

The Board of Directors consisted of eight members at December 31, 2023.

Currently, our Board of Directors consists of eight members.

The Board of Directors consisted of seven members at December 31, 2024.

Currently, our Board of Directors consists of seven members.

Holders of Common Stock are not entitled to cumulative voting in the election of directors.

The holders of the Common Stock vote as a single class with respect to any proposed “going private” transaction with the principal shareholder or an affiliate of the principal shareholder, with each share of each class of Common Stock entitled to one vote per share.

The holders of the Common Stock vote as a single class with respect to any proposed “going private” transaction with each share of each class of Common Stock entitled to one vote per share.

Under Florida law, the affirmative vote of the holders of a majority of the outstanding shares of any class of common stock is required to approve, among other things, a change in the designations, preferences and limitations of the shares of such class of common stock.

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As of December 31, 2024, we do not have any non-cancellable operating lease commitments that have not yet commenced.

ROU assets are classified within other intangibles, deferred costs and investments, net on the condensed consolidated balance sheet while current lease liabilities are classified within other accrued expenses and long-term lease liabilities are classified within other liabilities.

ROU assets are classified within other intangibles, deferred costs and investments, net on the consolidated balance sheet while current lease liabilities are classified within other accrued expenses and long-term lease liabilities are classified within other liabilities.

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

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that was effective January 1, 2022 and will remain in effect until the date on which the parties reached agreement as to, or there is court determination of, new interim or final fees, terms, and conditions of a new license for the five year period commencing on January 1, 2022 and concluding on December 31, 2026;

(3) reached an agreement with the Society of European Stage Authors and Composers that is retroactive to January 1, 2016 and is currently on an interim license at the rate that was in place at the end of 2022 and (4) in February 2022, RMLC and Global Music Rights (“GMR”) announced that the conditions of their agreement to settle the GMR-RMLC antitrust and/or unfair competition litigations had been reached and we have entered into an agreement with GMR.

(3) reached an agreement with the Society of European Stage Authors and Composers after arbitration in November 2024 that is retroactive to January 2023 for a blanket fee from 2023-26 and (4) in February 2022, RMLC and Global Music Rights (“GMR”) announced that the conditions of their agreement to settle the GMR-RMLC antitrust and/or unfair competition litigations had been reached and we have entered into an agreement with GMR.

To secure the rights to stream music content over the Internet, we also must obtain performance rights licenses and pay public performance royalties to copyright owners of sound recordings (typically, performing artists and record companies).

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Short-term investments

Accounts receivable, net of allowance

Revolving Credit Facility

Our financial instruments are comprised of cash and cash equivalents, short-term investments and long-term debt.

The carrying value of cash and cash equivalents approximate fair value due to their short maturities.

The fair value of cash and cash equivalents and short-term investments are derived from quoted market prices and are considered a level 1.

The carrying value of cash and cash equivalents, short-term investments and accounts receivable approximate fair value due to their short maturities.

The fair value of cash and cash equivalents, and short-term investments derived from quoted market prices and are considered a level 1.

Interest on the Credit Facility is at a variable rate, and as such the debt obligation outstanding approximates fair value and is considered a level 2.

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During the fourth quarter of 2023, we reviewed the fair value of the assets that are measured at fair value on a non-recurring basis and concluded that these assets were not impaired as the fair value of these assets equaled or exceeded their carrying values.

During the fourth quarter of 2021, we reviewed the fair value of the assets that are measured at fair value on a non-recurring basis and concluded that these assets were not impaired as the fair value of these assets equaled or exceeded their carrying values.

Quarterly Results of Operations (Unaudited)

September 30,

(in thousands, except per share data)

Net operating revenue

Station operating expenses

Corporate G&A

Other operating expense (income), net

Operating income (loss)

Other (income) expenses:

Interest expense

Interest (income)

Other (income) expense

Income before income taxes

Income tax provision (benefit)

Net income (loss)

Basic earnings(loss) per share

Weighted average common shares

Diluted earnings (loss) per share

Weighted average common and common equivalent shares

Additionally, we measured Property, Plant and Equipment and Broadcast License at fair value on a non-recurring basis under the circumstances and events described in Note 10 – Acquisitions and Dispositions for our Lafayette, Indiana market purchase during 2024.

The Company is subject to various outstanding claims which arise in the ordinary course of business and to other legal proceedings.

Management anticipates that any potential liability of the Company, which may arise out of or with respect to these matters, will not materially affect the Company’s financial statements.

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

During the third and fourth quarters of 2024, we had weather-related damages.

The Company’s insurance policy provides coverage for repairs and replacements.

As a part of the insurance settlement during the third quarter of 2024, the Company received cash proceeds of $ 383,000 , resulting in a gain of $ 383,000 , which is recorded in other (income) expense, net, in the Company’s Consolidated Statements of Income.

During the second quarter of 2024, the Company received $ 1,133,000 related to the sale of an investment in Broadcast Music, Inc.

(“BMI”) and recorded a gain of $ 1,133,000 .

The gain on sale of investment is recorded in other (income) expense, net in the Company’s Consolidated Statement of Operations.

In 2012, Congress mandated that the FCC conduct an incentive auction of broadcast television spectrum as set forth in the Middle Class Tax Relief and Job Creation Act of 2012 ("Spectrum Act").

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The Spectrum Act appropriated $1.75 billion to the TV Broadcaster Relocation Fund ("Reimbursement Fund") for costs reasonably incurred by Full Power and Class A broadcast television licensees reassigned to new channels ("repack"), as well as Multichannel Video Programming Distributors ("MVPDs") that incurred costs related to continuing to carry the signals of reassigned broadcast stations.

The 2018 Reimbursement Expansion Act appropriated $1 billon in additional funds for the Reimbursement Fund and expanded eligible entities for reimbursement to include FM stations affected by the repack.

During 2022, the Company received approximately $ 116,000 in reimbursement for our FM stations.

The 2018 Reimbursement Expansion Act appropriated $1 billion in additional funds for the Reimbursement Fund and expanded eligible entities for reimbursement to include FM stations affected by the repack.

During the first quarter of 2023, we received approximately $ 115,000 in reimbursement for our FM stations.

Both of these reimbursements are recorded in other (income) expense, net in the Company’s Consolidated Statement of Operations.

This reimbursement was recorded in other (income) expense, net in the Company’s Consolidated Statement of Operations.

We do not anticipate receiving any additional reimbursements related to this.

During the first quarter of 2022, there was fire damage to a transmission line in our Des Moines, Iowa market.

The Company’s insurance policy provided coverage for removal and replacement of the transmission line and related equipment.

As part of the insurance settlement during the fourth quarter of 2022, the Company received cash proceeds of $ 445,000 , resulting in a gain of $ 445,000 which is recorded in the other (income) expense, net, in the Company’s Consolidated Statements of Income.

During the first quarter of 2021, there was weather-related damage to an antenna in our Des Moines, Iowa market.

The Company’s insurance policy provided coverage for removal and replacement of the antenna and related equipment.

As part of the initial insurance settlement during the first quarter of 2021, the Company received cash proceeds of $ 250,000 , resulting in a gain of $ 250,000 .

We received additional cash proceeds of $ 290,000 in the third quarter, resulting in a gain of $ 290,000 .

The total gain of $ 540,000 is recorded in other (income) expense, net, in the Company’s Consolidated Statements of Income.

Subsequent Events

On February 5, 2025 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.25 per share on its Class A Common Stock.

This dividend, totaling approximately $ 1,600,000 , will be paid on March 8, 2024 to shareholders of record on February 20, 2024 .

On March 6, 2024 the Company’s Board of Directors declared a variable cash dividend of $ 0.60 per share on its Class A Common Stock.

This dividend, totaling approximately $ 3,800,000 , will be paid on April 5, 2024 to shareholders of record on March 18, 2024 .

This dividend, totaling approximately $ 1,600,000 , was paid on March 7, 2025 to shareholders of record on February 18, 2025 .

EXHIBIT INDEX

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Third Amendment to Employment Agreement dated January 25, 2022 between Saga Communications, Inc, and Edward K.

Letter of Agreement regarding employment of Warren S.

Lada as Interim President and CEO dated August 21, 2022.

Employment Agreement of Christopher Forgy dated as of November 16, 2022.

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2023 Incentive Compensation Plan

Saga Communications, Inc.

2005 Deferred Compensation Plan Effective December 1998

Amendment to the Saga Communications, Inc.

2005 Deferred Compensation Plan Effective January 2009

Trust for Saga Communications, Inc.

2005 Deferred Compensation Plan April 2007

Nonqualified Deferred Compensation Plan Trust Agreement Effective December 2024

Saga Communications, Inc.

Insider Trading Policy

Subsidiaries.

Consent of Crowe LLP .

Consent of UHY LLP .

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Exhibit filed with the Company’s Form 8-K filed on January 27, 2022 and incorporated by reference herein.

Exhibit filed with the Company’s Form 8-K filed on August 25, 2022 and incorporated by reference herein.

Exhibits filed with the Company’s Form 8-K filed on November 16, 2022 and incorporated by reference herein.

Exhibit filed wit the Company’s Form 10-K for the year ended December 31, 2022 and incorporated by reference herein.

Exhibit filed with the Company’s Form 10-K for the year ended December 31, 2022 and incorporated by reference herein.

Exhibit filed with the Company’s Form S-8 filed on August 10, 2023 and incorporated by reference herein.

Exhibits filed with the Company’s Form 10-Q for the quarter ended September 30, 2023 and incorporated by reference herein.

Exhibit filed with the Company’s Form 10-K filed on March 15, 2024 and incorporated by reference herein.

Exhibit filed with the Company’s Form 8-K filed on May 20, 2020 and incorporated by reference herein.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 31, 2025.

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/s/ Samuel D.

Senior Vice President,

Executive Vice President,

Chief Financial Officer and Treasurer

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures