SAGA COMMUNICATIONS INC 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures 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”). 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. 43 Table of Contents Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework as set forth in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 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 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 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 44 Table of Contents 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. GAAP. 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. ​ 45 Table of Contents ​ Item 9B. Other Information N o n e . Items 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. PART III Item 10 . Directors, Executive Officers and Corporate Governance The information required by this item is incorporated by reference from 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. See also Item 1. Business — Information About Our Executive Officers. Item 11. Executive Compensation The information required by this item is incorporated by reference from 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. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters The information required by this item is incorporated by reference from 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. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item is incorporated by reference from 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. Item 14. 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 2025 Annual Meeting of Shareholders to be filed not later than 120 days after the end of the Company’s fiscal year. ​ 46 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules (a) 1. Financial Statements The following consolidated financial statements attached hereto are filed as part of this annual report: ​ ​ Report of Independent Registered Public Accounting Firm (PCAOB ID 173 ) 48 Report of Independent Registered Public Accounting Firm (PCAOB ID 1195 ) ​ 51 Consolidated Financial Statements: — Consolidated Balance Sheets as of December 31, 2024 and 2023 52 — Consolidated Statements of Income for the years ended December 31, 2024 and 2023 53 — Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2024 and 2023 54 — Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023 55 Notes to Consolidated Financial Statements 56 ​ 2. Financial Statement Schedules Schedule II Valuation and Qualifying Accounts is disclosed in Note 1 to the Consolidated Financial Statements attached hereto and filed as part of this annual report. All other schedules for which provision are made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted. 3. Exhibits The Exhibits filed in response to Item 601 of Regulation S-K are listed in the Exhibit Index, which is incorporated herein by reference. ​ 47 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ ​ 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 48 Table of Contents evaluating the overall presentation of the financial statements. 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 opinions. ​ 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. ​ 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 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. 49 Table of Contents ​ 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 ​ ​ ​ ​ 50 Table of Contents 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 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 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 ​ These consolidated financial statements are the responsibility of the Company’s management. 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 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 consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated financial statements. 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. ​ /s/ UHY LLP ​ Sterling Heights, Michigan ​ 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. ​ ​ 51 Table of Contents ​ Saga Communications, Inc. Consolidated Balance Sheets (In thousands, except par value) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 ​ ​ (In thousands) Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 18,860 ​ $ 29,582 Short-term investments ​ ​ 8,927 ​ ​ 10,595 Accounts receivable, less allowance of $ 1,071 ($ 618 in 2023) ​ 15,941 ​ 17,173 Prepaid expenses and other current assets ​ 2,606 ​ 2,451 Barter transactions ​ 752 ​ 843 Total current assets ​ 47,086 ​ 60,644 Property and equipment ​ 151,553 ​ 148,265 Less accumulated depreciation ​ 99,646 ​ 96,860 Net property and equipment ​ 51,907 ​ 51,405 Other assets: ​ ​ ​ ​ ​ ​ Broadcast licenses ​ 91,497 ​ 90,240 Goodwill ​ 19,229 ​ 19,236 Other intangibles, right of use assets, deferred costs and investments, net of accumulated amortization of $ 16,257 ($ 15,984 in 2023) ​ 12,006 ​ 10,688 Total assets ​ $ 221,725 ​ $ 232,213 ​ ​ ​ ​ ​ ​ ​ Liabilities and shareholders’ equity ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ Accounts payable ​ $ 3,080 ​ $ 2,802 Accrued expenses: ​ ​ ​ ​ ​ ​ Accrued payroll and payroll taxes ​ 5,542 ​ 5,318 Dividend payable ​ — ​ 12,505 Other accrued expenses ​ 7,006 ​ 6,480 Barter transactions ​ 930 ​ 924 Total current liabilities ​ 16,558 ​ 28,029 Deferred income taxes ​ 26,007 ​ 26,122 Long-term debt ​ 5,000 ​ — Other liabilities ​ 8,238 ​ 7,513 Total liabilities ​ 55,803 ​ 61,664 Commitments and contingencies (Note 11, 13 and 15) ​ — ​ — Shareholders’ equity: ​ ​ ​ ​ ​ ​ Preferred stock, 1,500 shares authorized, none issued and outstanding ​ ​ — ​ — Common stock: ​ ​ ​ ​ ​ ​ Class A common stock, $ .01 par value, 35,000 shares authorized, 8,183 issued ( 8,007 in 2023) ​ ​ 82 ​ ​ 80 Additional paid-in capital ​ 74,334 ​ 72,593 Retained earnings ​ 128,216 ​ 134,771 Treasury stock ( 1,764 shares in 2024 and 1,754 shares in 2023, at cost) ​ ( 36,710 ) ​ ( 36,895 ) Total shareholders’ equity ​ 165,922 ​ 170,549 Total liabilities and shareholders' equity ​ $ 221,725 ​ $ 232,213 ​ See accompanying notes. 52 Table of Contents Saga Communications, Inc. Consolidated Statements of Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ 2024 2023 ​ ​ (In thousands, except per share data) ​ Net operating revenue ​ $ 112,919 $ 115,504 Operating expenses: ​ ​ ​ ​ Station operating expense ​ 96,905 ​ 92,930 Corporate general and administrative ​ ​ 12,611 ​ ​ 10,966 Other operating expense (income), net ​ 1,048 ​ 120 ​ ​ 110,564 ​ 104,016 Operating income ​ ​ 2,355 ​ ​ 11,488 ​ Other (income) expenses: ​ ​ ​ ​ Interest expense ​ ​ 348 ​ 173 Interest income ​ ​ ( 1,047 ) ​ ​ ( 1,441 ) Other income ​ ​ ( 1,516 ) ​ ​ ( 119 ) Income before income tax expense ​ ​ 4,570 ​ ​ 12,875 Income tax (benefit) expense: ​ ​ ​ ​ ​ ​ ​ Current ​ ​ 1,225 ​ ​ 2,990 Deferred ​ ​ ( 115 ) ​ ​ 385 ​ ​ ​ 1,110 ​ 3,375 Net income ​ $ 3,460 ​ $ 9,500 ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share: ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.55 ​ $ 1.55 ​ Diluted ​ $ 0.55 ​ $ 1.55 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares ​ ​ 6,075 ​ ​ 6,045 ​ Weighted average common and common equivalent shares ​ ​ 6,075 ​ ​ 6,045 ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividends declared per share ​ $ 1.60 ​ $ 3.00 ​ ​ See accompanying notes. ​ 53 Table of Contents Saga Communications, Inc. Consolidated Statements of Shareholders’ Equity Years ended December 31, 2024 and 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Class A ​ Class B ​ Additional ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Common Stock ​ Common Stock ​ Paid-In ​ Retained ​ Treasury ​ Shareholders’ ​ Shares Amount Shares Amount Capital Earnings Stock Equity ​ ​ (In thousands) Balance at January 1, 2023 7,867 ​ $ 78 — ​ $ — ​ $ 71,664 ​ $ 143,896 ​ $ ( 37,109 ) ​ $ 178,529 Net income — ​ — — ​ — ​ — ​ 9,500 ​ — ​ 9,500 Issuance of restricted stock 140 ​ 2 — ​ — ​ ( 2 ) ​ — ​ — ​ — Dividends declared per common share — ​ — — ​ — ​ — ​ ( 18,625 ) ​ — ​ ( 18,625 ) Compensation expense related to restricted stock awards — ​ — — ​ — ​ 1,116 ​ — ​ — ​ 1,116 Purchase of shares held in treasury — ​ — — ​ — ​ — ​ — ​ ( 227 ) ​ ( 227 ) 401(k) plan contribution — ​ — — ​ — ​ ( 185 ) ​ — ​ 441 ​ 256 Balance at December 31, 2023 8,007 ​ $ 80 — ​ $ — ​ $ 72,593 ​ $ 134,771 ​ $ ( 36,895 ) ​ $ 170,549 Net income — ​ — — ​ — ​ — ​ 3,460 ​ — ​ 3,460 Issuance of restricted stock 177 ​ 2 — ​ — ​ ​ ( 2 ) ​ — ​ — ​ — Forfeiture of restricted stock ( 1 ) ​ — — ​ — ​ — ​ — ​ — ​ — Dividends declared per common share — ​ — — ​ — ​ — ​ ( 10,015 ) ​ — ​ ( 10,015 ) Compensation expense related to restricted stock awards — ​ — — ​ — ​ 1,950 ​ — ​ — ​ 1,950 Purchase of shares held in treasury — ​ — — ​ — ​ — ​ — ​ ( 290 ) ​ ( 290 ) 401(k) plan contribution — ​ — — ​ — ​ ( 207 ) ​ ​ — ​ 475 ​ 268 Balance at December 31, 2024 8,183 ​ $ 82 — ​ $ — ​ $ 74,334 ​ $ 128,216 ​ $ ( 36,710 ) ​ $ 165,922 ​ See accompanying notes. ​ 54 Table of Contents Saga Communications, Inc. Consolidated Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ 2024 2023 ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Statement of Cash Flows ​ ​ ​ ​ ​ ​ ​ Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 3,460 ​ $ 9,500 ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ ​ 5,283 ​ ​ 5,055 ​ Deferred income tax (benefit) expense ​ ​ ( 115 ) ​ ​ 385 ​ Amortization of deferred costs ​ ​ 36 ​ ​ 36 ​ Compensation expense related to restricted stock awards ​ ​ 1,950 ​ ​ 1,116 ​ Provision for credit losses ​ ​ 983 ​ ​ — ​ Loss on sale of assets, net ​ ​ 1,048 ​ ​ 120 ​ (Gain) on insurance claims ​ ​ ( 383 ) ​ ​ — ​ Other (gain), net ​ ​ ( 1,133 ) ​ ​ ( 119 ) ​ Barter (revenue) expense, net ​ ​ 89 ​ ​ 50 ​ Deferred and other compensation ​ ​ ( 230 ) ​ ​ ( 100 ) ​ Changes in assets and liabilities, net of business acquisition: ​ ​ ​ ​ ​ ​ ​ Decrease (increase) in receivables and prepaid expenses ​ ​ 1,263 ​ ​ ( 1,303 ) ​ Increase in accounts payable, accrued expenses, and other liabilities ​ ​ 1,521 ​ ​ 639 ​ Total adjustments ​ ​ 10,312 ​ ​ 5,879 ​ Net cash provided by operating activities ​ ​ 13,772 ​ ​ 15,379 ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ Purchase of short-term investments ​ ​ ( 19,660 ) ​ ​ ( 20,728 ) ​ Redemption of short-term investments ​ ​ 20,728 ​ ​ 20,723 ​ Acquisition of property and equipment (Capital Expenditures) ​ ​ ( 3,767 ) ​ ( 4,356 ) ​ Acquisition of broadcast properties ​ ​ ( 5,711 ) ​ — ​ Proceeds from sale and disposal of assets ​ ​ 203 ​ ​ 1,747 ​ Proceeds from redemption of investments and other ​ ​ 1,526 ​ ​ — ​ Other investing activities ​ ​ ( 3 ) ​ 117 ​ Net cash used in investing activities ​ ​ ( 6,684 ) ​ ( 2,497 ) ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ Proceeds from long-term debt ​ ​ 5,000 ​ ​ — ​ Cash dividends paid ​ ​ ( 22,520 ) ​ ( 19,875 ) ​ Purchase of treasury shares ​ ​ ( 290 ) ​ ( 227 ) ​ Net cash used in financing activities ​ ​ ( 17,810 ) ​ ( 20,102 ) ​ Net decrease in cash and cash equivalents ​ ​ ( 10,722 ) ​ ( 7,220 ) ​ Cash and cash equivalents, beginning of period ​ ​ 29,582 ​ 36,802 ​ Cash and cash equivalents, end of period ​ $ 18,860 ​ $ 29,582 ​ ​ See accompanying notes. ​ 55 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements ​ 1. Summary of Significant Accounting Policies Nature of Business Saga Communications, Inc. 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 eighty-two FM, thirty-one AM radio stations and seventy-nine metro signals, serving twenty-eight markets throughout the United States. Principles of Consolidation The consolidated financial statements include the accounts of Saga Communications, Inc. and our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Our accounting estimates require the use of judgment as future events and the effect of these events cannot be predicted with certainty. The accounting estimates may change as new events occur, as more experience is acquired and as more information is obtained. We evaluate and update assumptions and estimates on an ongoing basis and may use outside experts to assist in the our evaluation, as considered necessary. Actual results may differ from estimates provided and there may be changes to those estimates in the future periods. Concentration of Risk Certain cash deposits with financial institutions may at times exceed FDIC insurance limits. 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. We perform ongoing credit evaluations of our customers and generally do not require collateral. We maintain an allowance for credit losses at a level which we believe is sufficient to cover potential credit losses. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and time deposits with original maturities of three months or less. We did no t have any time deposits at December 31, 2024 and 2023. Financial Instruments We account for marketable securities in accordance with ASC 320, “ Investments – Debt Securities, ” which require that certain debt securities be classified into one of three categories: held-to-maturity, available-for-sale, or trading securities, and depending upon the classification, value the security at amortized cost or fair market value. At December 31, 2024 and 2023, we have recorded $ 8.9 million and $ 10.6 million, respectively, of held-to-maturity U.S. Treasury Bills at amortized cost basis that have a fair market value of $ 8.9 million and $ 10.6 million respectively. Our held-to-maturity U.S. Treasury Bills all have original maturity dates ranging from March 2025 to June 2025. ​ 56 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) Our financial instruments are comprised of cash and cash equivalents, short-term investments, accounts receivable, accounts payable and long-term debt. The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short maturities. The carrying value of long-term debt approximates fair value as it carries interest rates that either fluctuate with the secured overnight financing rate (“SOFR”), prime rate or have been reset at the prevailing market rate at December 31, 2024. Allowance for Credit Losses A provision for credit losses is recorded based on our judgment of the collectability of receivables. Amounts are written off when determined to be fully uncollectible. Delinquent accounts are based on contractual terms. The activity in the allowance for credit losses during the year ended December 31, 2024 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Write Off of ​ ​ ​ Balance ​ Charged to ​ Allowance ​ Uncollectible ​ Balance at ​ ​ at Beginning ​ Costs and ​ From ​ Accounts, Net of ​ End of Year Ended of Period Expenses Acquisitions Recoveries Period ​ ​ (in thousands) December 31, 2024 ​ $ 618 ​ $ 983 ​ $ 18 ​ $ ( 548 ) ​ $ 1,071 December 31, 2023 ​ $ 519 ​ $ 397 ​ $ — ​ $ ( 298 ) ​ $ 618 ​ Barter Transactions Our radio stations trade air time for goods and services used principally for promotional, sales and other business activities. An asset and a liability are recorded at the fair market value of goods or services received. Barter revenue is recorded when commercials are broadcast, and barter expense is recorded when goods or services received are used. Property and Equipment Property and equipment are carried at cost. Expenditures for maintenance and repairs are expensed as incurred. When property and equipment is sold or otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts and the gain or loss realized on disposition is reflected in earnings. Depreciation is provided using the straight-line method based on the estimated useful life of the assets. We review our property and equipment for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If the assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair market value. We did not record any impairment of property and equipment during 2024 and 2023. ​ 57 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) Property and equipment consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated December 31, ​ Useful Life 2024 2023 ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Land and land improvements ​ — ​ $ 15,524 ​ $ 15,239 Buildings ​ 31.5 years ​ 41,292 ​ 40,460 Towers and antennae ​ 7 - 15 years ​ 27,969 ​ 27,145 Equipment ​ 3 - 15 years ​ 55,647 ​ 54,747 Furniture, fixtures and leasehold improvements ​ 7 - 20 years ​ 8,314 ​ 7,907 Vehicles ​ 5 years ​ 2,807 ​ 2,767 ​ ​ ​ ​ 151,553 ​ ​ 148,265 Accumulated depreciation ​ ​ ​ ( 99,646 ) ​ ( 96,860 ) Net property and equipment ​ ​ ​ ​ $ 51,907 ​ $ 51,405 ​ Depreciation expense for the years ended December 31, 2024 and 2023, was $ 5,013,000 and $ 5,013,000 , respectively. Intangible Assets Intangible assets deemed to have indefinite useful lives, which include broadcast licenses and goodwill, are not amortized and are subject to impairment tests which are conducted as of October 1 of each year, or more frequently if impairment indicators arise. We have 113 broadcast licenses serving 28 markets, which require renewal over the period of 2027- 2030. In determining that the Company’s broadcast licenses qualified as indefinite-lived intangible assets, management considered a variety of factors including our broadcast licenses may be renewed indefinitely at little cost; our broadcast licenses are essential to our business and we intend to renew our licenses indefinitely; we have never been denied the renewal of an FCC broadcast license nor do we believe that there will be any compelling challenge to the renewal of our broadcast licenses; 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. Favorable lease agreements are amortized over the leases length, ranging from one to twenty-six years . Other intangibles are amortized over one to fifteen years . Customer relationships are amortized over three years . Deferred Costs The costs related to the issuance of debt are capitalized and amortized to interest expense over the life of the Credit Facility. During the years ended December 31, 2024 and 2023, we recognized interest expense related to the amortization of debt issuance costs of $ 36,000 and $ 36,000 , respectively. At December 31, 2024 and 2023 the net book value of debt issuance costs related to our line of credit was $ 94,000 , and $ 130,000 , respectively, and was presented in other intangibles, deferred costs and investments in our Consolidated Balance Sheets. ​ 58 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) Leases We determine whether a contract is or contains a lease at inception. The lease liabilities and right-of-use assets are recorded on the balance sheet for all leases with an expected term of at least one year, based on the present value of the lease payments using (1) the rate implicit in the lease or (2) our incremental borrowing rate (“IBR”). Our IBR is defined as the rate of interest we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. We follow the accounting guidance for leases, which includes the recognition of lease expense for leases on a straight-line basis over the lease term. See Note 13 – Commitments and Contingencies for more information on Leases. Common Stock Our founder and former Chairman, President, and CEO, Edward K. Christian, passed away on August 19, 2022. As of the date of his passing, Mr. Christian, who was also our principal shareholder, held approximately 65 % of the combined voting power of the Company’s Common Stock based on our Class B Common Stock (together with the Class A Common Stock, collectively, the “Common Stock”) generally being entitled to ten votes per share. As a result, Mr. Christian was generally able to control the vote on most matters submitted to the vote of shareholders and, therefore, was able to direct our management and policies, except with respect to (i) the election of two Class A directors, (ii) those matters where the shares of our Class B Common Stock were only entitled to one vote per share, and (iii) other matters requiring a class vote under the provisions of our certificate of incorporation, bylaws or applicable law. Mr. Christian’s passing resulted in the conversion of his Class B Shares into Class A Shares that were transferred to an estate planning trust that now owns approximately 14.6 % of the common stock outstanding. As a result, we no longer have any shares of Class B Common Stock issued or outstanding . Treasury Stock In March 2013, our Board of Directors authorized an increase in the amount committed to our Stock Buy-Back Program (the “Buy-Back Program”) from $ 60 million to $ 75.8 million. The Buy-Back Program allows us to repurchase our Class A Common Stock. As of December 31, 2024, we had remaining authorization of $ 17.7 million for future repurchases of our Class A Common Stock. Repurchases of shares of our Common Stock are recorded as Treasury stock and result in a reduction of Shareholders’ equity. 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 Revenue from the sale of commercial broadcast time to advertisers is recognized when commercials are broadcast. Revenue is reported net of advertising agency commissions. Agency commissions, when applicable are based on a stated percentage applied to gross billing. All revenue is recognized in accordance with the Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin (“SAB”) No. 116, and The Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers . ​ 59 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) Local Marketing Agreements We have entered into Time Brokerage Agreements (“TBAs”) or Local Marketing Agreements (“LMAs”) in certain markets. In a typical TBA/LMA, the FCC licensee of a station makes available, for a fee, blocks of air time on its station to another party that supplies programming to be broadcast during that air time and sells its own commercial advertising announcements during the time periods specified. Revenue and expenses related to TBAs/LMAs are included in the accompanying Consolidated Statements of Income. Assets and liabilities related to the TBAs/LMAs are included in the accompanying Consolidated Balance Sheets. Advertising and Promotion Costs Advertising and promotion costs are expensed as incurred. Such costs amounted to $ 1,595,000 and $ 1,705,000 for the years ended years ended December 31, 2024 and 2023, respectively. Income Taxes 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. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. 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 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. Dividends 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 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. 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 Stock-based compensation cost for stock option awards is estimated on the date of grant using a Black-Scholes valuation model and is expensed on a straight-line method over the vesting period of the options. Stock-based compensation expense is recognized net of estimated forfeitures. The fair value of restricted stock awards is determined based on the closing market price of our Class A Common Stock on the grant date and is adjusted at each reporting date based on the amount of shares ultimately expected to vest. See Note 8 — Stock-Based Compensation for further details regarding the expense calculated under the fair value based method. 60 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) Segments ​ 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 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, ​ ​ 2024 2023 ​ ​ (In thousands, except per share data) Programming and Technical ​ $ 29,926 $ 28,301 Station General and Administrative ​ 28,080 ​ 27,636 Selling ​ 23,472 ​ 23,042 Interactive ​ ​ 6,615 ​ ​ 5,483 Other (1) ​ 8,812 ​ 8,468 Station Operating Expense ​ $ 96,905 ​ $ 92,930 ​ ​ ​ ​ ​ ​ ​ (1) Other includes production and news departments, advertising and promotional expense and station depreciation and amortization. ​ ​ Earnings Per Share Earnings per share is calculated using the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security. We have participating securities related to restricted stock units, granted under our Second Amended and Restated 2005 Incentive Compensation Plan and our 2023 Incentive Compensation Plan, that earn dividends on an equal basis with common shares. In applying the two-class method, earnings are allocated to both common shares and participating securities. 61 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) The following table sets forth the computation of basic and diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2024 2023 ​ ​ (In thousands, except per share data) ​ Numerator: ​ ​ ​ ​ ​ Net income ​ ​ $ 3,460 ​ $ 9,500 ​ Less: Income allocated to unvested participating securities ​ ​ 111 ​ 149 ​ Net income available to common shareholders ​ ​ $ 3,349 ​ $ 9,351 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: ​ ​ ​ ​ ​ ​ Denominator for basic earnings per share — weighted average shares ​ ​ 6,075 ​ 6,045 ​ Effect of dilutive securities: ​ ​ ​ ​ ​ ​ Common stock equivalents ​ ​ — ​ — ​ Denominator for diluted earnings per share — adjusted weighted-average shares and assumed conversions ​ ​ 6,075 ​ 6,045 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share: ​ ​ ​ ​ ​ ​ Basic ​ ​ $ 0.55 ​ $ 1.55 ​ Diluted ​ ​ $ 0.55 ​ $ 1.55 ​ ​ 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. Recent Accounting Pronouncements New Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires expanded disclosure of significant segment expenses and other segment items on an annual and interim basis. ASU 2023-07 is effective for us for annual periods beginning after January 1, 2024 and interim periods beginning after January 1, 2025. 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): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires expanded disclosure of our income rate reconciliation and income taxes paid. ASU 2023-09 is effective for us for annual periods beginning after January 1, 2025. 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. 62 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) 2. 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 ​ ​ (Unaudited) ​ (in thousands) ​ ​ As Previously Reported on Form 10-Q ​ Digital Expense Reclassification ​ As Revised ​ ​ As Previously Reported on Form 10-Q ​ Digital Expense Reclassification ​ As Revised ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net operating revenue ​ $ 24,664 ​ $ 630 ​ $ 25,294 ​ $ 25,304 ​ $ 608 ​ $ 25,912 Station operating expenses ​ 22,981 ​ ​ 630 ​ ​ 23,611 ​ 21,703 ​ ​ 608 ​ ​ 22,311 Corporate G&A ​ 3,129 ​ ​ — ​ ​ 3,129 ​ 2,616 ​ ​ — ​ ​ 2,616 Other operating expense (income), net ​ ​ 971 ​ ​ — ​ ​ 971 ​ 80 ​ ​ — ​ ​ 80 Operating income (loss) ​ ( 2,417 ) ​ ​ — ​ ​ ( 2,417 ) ​ 905 ​ ​ — ​ ​ 905 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2024 ​ Three Months Ended June 30, 2023 ​ ​ (Unaudited) ​ (in thousands) ​ ​ As Previously Reported on Form 10-Q ​ Digital Expense Reclassification ​ As Revised ​ ​ As Previously Reported on Form 10-Q ​ Digital Expense Reclassification ​ As Revised ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net operating revenue ​ $ 28,742 ​ $ 974 ​ $ 29,716 ​ $ 29,175 ​ $ 792 ​ $ 29,967 Station operating expenses ​ 23,544 ​ ​ 974 ​ ​ 24,518 ​ 22,407 ​ ​ 792 ​ ​ 23,199 Corporate G&A ​ 3,049 ​ ​ — ​ ​ 3,049 ​ 2,472 ​ ​ — ​ ​ 2,472 Other operating expense (income), net ​ ​ 6 ​ ​ — ​ ​ 6 ​ — ​ ​ — ​ ​ — Operating income (loss) ​ 2,143 ​ ​ — ​ ​ 2,143 ​ 4,296 ​ ​ — ​ ​ 4,296 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2024 ​ Six Months Ended June 30, 2023 ​ ​ (Unaudited) ​ (in thousands) ​ ​ As Previously Reported on Form 10-Q ​ Digital Expense Reclassification ​ As Revised ​ ​ As Previously Reported on Form 10-Q ​ Digital Expense Reclassification ​ As Revised ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net operating revenue ​ $ 53,406 ​ $ 1,604 ​ $ 55,010 ​ $ 54,479 ​ $ 1,400 ​ $ 55,879 Station operating expenses ​ 46,525 ​ ​ 1,604 ​ ​ 48,129 ​ 44,110 ​ ​ 1,400 ​ ​ 45,510 Corporate G&A ​ 6,178 ​ ​ — ​ ​ 6,178 ​ 5,088 ​ ​ — ​ ​ 5,088 Other operating expense (income), net ​ ​ 977 ​ ​ — ​ ​ 977 ​ 80 ​ ​ — ​ ​ 80 Operating income (loss) ​ ( 274 ) ​ ​ — ​ ​ ( 274 ) ​ 5,201 ​ ​ — ​ ​ 5,201 63 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2024 ​ Three Months Ended September 30, 2023 ​ ​ (Unaudited) ​ (in thousands) ​ ​ As Previously Reported on Form 10-Q ​ Digital Expense Reclassification ​ As Revised ​ ​ As Previously Reported on Form 10-Q ​ Digital Expense Reclassification ​ As Revised ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net operating revenue ​ $ 28,118 ​ $ 576 ​ $ 28,694 ​ $ 29,149 ​ $ 707 ​ $ 29,856 Station operating expenses ​ 23,458 ​ ​ 576 ​ ​ 24,034 ​ 22,760 ​ ​ 707 ​ ​ 23,467 Corporate G&A ​ 2,966 ​ ​ — ​ ​ 2,966 ​ 2,852 ​ ​ — ​ ​ 2,852 Other operating expense (income), net ​ ​ 49 ​ ​ — ​ ​ 49 ​ 45 ​ ​ — ​ ​ 45 Operating income (loss) ​ 1,645 ​ ​ — ​ ​ 1,645 ​ 3,492 ​ ​ — ​ ​ 3,492 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2024 ​ Nine Months Ended September 30, 2023 ​ ​ (Unaudited) ​ (in thousands) ​ ​ As Previously Reported on Form 10-Q ​ Digital Expense Reclassification ​ As Revised ​ ​ As Previously Reported on Form 10-Q ​ Digital Expense Reclassification ​ As Revised ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net operating revenue ​ $ 81,524 ​ $ 2,180 ​ $ 83,704 ​ $ 83,628 ​ $ 2,107 ​ $ 85,735 Station operating expenses ​ 69,983 ​ ​ 2,180 ​ ​ 72,163 ​ 66,870 ​ ​ 2,107 ​ ​ 68,977 Corporate G&A ​ 9,144 ​ ​ — ​ ​ 9,144 ​ 7,940 ​ ​ — ​ ​ 7,940 Other operating expense (income), net ​ ​ 1,026 ​ ​ — ​ ​ 1,026 ​ 125 ​ ​ — ​ ​ 125 Operating income (loss) ​ 1,371 ​ ​ — ​ ​ 1,371 ​ 8,693 ​ ​ — ​ ​ 8,693 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve Months Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ As Previously Reported on Form 10-K ​ Digital Expense Reclassification ​ As Revised ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net operating revenue ​ $ 112,773 ​ $ 2,731 ​ $ 115,504 Station operating expenses ​ 90,199 ​ ​ 2,731 ​ ​ 92,930 Corporate G&A ​ 10,966 ​ ​ — ​ ​ 10,966 Other operating expense (income), net ​ 120 ​ ​ — ​ ​ 120 Operating income (loss) ​ 11,488 ​ ​ — ​ ​ 11,488 ​ ​ 3. Revenue Nature of goods and services The following is a description of principal activities from which we generate our revenue: Broadcast Advertising Revenue Our primary source of revenue is from the sale of advertising for broadcast on our stations. We recognize revenue from the sale of advertising as performance obligations are satisfied upon airing of the advertising; therefore, revenue is recognized at a point in time when each advertising spot is transmitted. 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. 64 Table of Contents 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 Other revenue includes revenue from concerts, promotional events, tower rent and other miscellaneous items. Revenue is generally recognized when the event is completed, as the promotional events are completed or as each performance obligation is satisfied. Disaggregation of Revenue The following table presents revenues disaggregated by revenue source: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ ​ 2024 2023 ​ (in thousands) Types of Revenue ​ ​ ​ ​ ​ ​ Broadcast Advertising Revenue, net ​ ​ $ 89,740 ​ $ 94,228 ​ Digital Advertising Revenue ​ ​ 14,221 ​ 12,354 ​ Other Revenue ​ ​ 8,958 ​ 8,922 ​ Net Revenue ​ ​ $ 112,919 ​ $ 115,504 ​ ​ Contract Liabilities Payments from our advertisers are generally due within 30 days although certain advertisers are required to pay in advance. When an advertiser pays for the services in advance of the performance obligations these prepayments are contract liabilities. Typical contract liabilities relate to prepayments for advertising spots not yet run; prepayments from sponsors for events that have not yet been held; and gift cards sold on our websites used to finance a broadcast advertising campaign. Generally all contract liabilities are expected to be recognized within one year and are included in accounts payable in the Company’s Consolidated Financial Statements and are immaterial. Transaction Price Allocated to the Remaining Performance Obligations As the majority of our contracts are one year or less, we have utilized the optional exemption under ASC 606-10-50-14 and will not disclose information about the remaining performance obligations for contracts which have original expected durations of one year or less. ​ 4. Broadcast Licenses, Goodwill and Other Intangible Assets 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 65 Table of Contents 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. These variables include, but are not limited to: (1) the forecasted growth rate of each radio market, including population, household income, retail sales and other expenditures that would influence advertising expenditures; (2) the estimated available advertising revenue within the market and the related market share and profit margin of an average station within a market; (3) estimated capital start-up costs and losses incurred during the early years; (4) risk-adjusted discount rate; (5) the likely media competition within the market area; and (6) terminal values. If the carrying amount of FCC licenses is greater than their estimated fair value in a given market, the carrying amount of FCC licenses in that market is reduced to its estimated fair value. We also evaluate goodwill for impairment annually, or more frequently if certain circumstances are present. 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 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. Broadcast Licenses We have recorded the changes to broadcast licenses for the years ended December 31, 2024 and 2023 as follows: ​ ​ ​ ​ ​ ​ Total ​ ​ (in thousands) ​ ​ ​ ​ Balance at January 1, 2023 ​ $ 90,307 Disposals ​ ( 67 ) Balance at December 31, 2023 ​ $ 90,240 Acquisitions ​ 2,150 Disposals ​ ​ ( 893 ) Balance at December 31, 2024 ​ $ 91,497 ​ 2024 Impairment Test 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 2024 and the fourth quarter of 2023. The ranges for operating profit margin and market long-term revenue growth rates vary by market. In general, when comparing between 2024 and 2023: (1) the market specific operating profit margin range remained relatively consistent; (2) the market long-term revenue growth rates decreased slightly; (3) 66 Table of Contents 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. ​ ​ ​ ​ ​ ​ ​ ​ Fourth Fourth ​ ​ Quarter ​ Quarter ​ ​ 2024 2023 Discount rates 9.0 % 10 % Operating profit margin ranges 17.8 % - 36.4 % 17.8 % - 36.4 % Market long-term revenue growth rates 0.5 % - 1.5 % 1.0 % - 2.0 % ​ 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. 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. Goodwill 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 9.0 % Operating profit margin ranges 19.7 % - 27.0 % Long-term revenue growth rate 1.2 % ​ 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. 67 Table of Contents 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: ​ ​ ​ ​ ​ ​ Total ​ ​ (in thousands) ​ ​ ​ ​ Balance at January 1, 2023 ​ $ 19,236 Acquisitions ​ — Balance at December 31, 2023 ​ $ 19,236 Acquisitions ​ 76 Disposals ​ ​ ( 83 ) Balance at December 31, 2024 ​ $ 19,229 ​ ​ 68 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) Other Intangible Assets We have recorded amortizable intangible assets at December 31, 2024 as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ Carrying ​ Accumulated ​ Net ​ Amount Amortization Amount ​ ​ (In thousands) Non-competition agreements ​ $ 3,861 ​ $ 3,861 ​ $ — Favorable lease agreements ​ 5,965 ​ 5,679 ​ 286 Customer relationships ​ 5,560 ​ 4,860 ​ 700 Other intangibles ​ 2,001 ​ 1,857 ​ 144 Total amortizable intangible assets ​ $ 17,387 ​ $ 16,257 ​ $ 1,130 ​ We have recorded amortizable intangible assets at December 31, 2023 as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ ​ ​ ​ Carrying ​ Accumulated ​ Net ​ Amount Amortization Amount ​ (In thousands) Non-competition agreements $ 3,861 ​ $ 3,861 $ — Favorable lease agreements ​ ​ 5,965 ​ 5,652 ​ ​ 313 Customer relationships ​ ​ 4,660 ​ 4,660 ​ ​ — Other intangibles ​ ​ 1,844 ​ 1,811 ​ ​ 33 Total amortizable intangible assets $ 16,330 $ 15,984 $ 346 ​ 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. ​ ​ ​ ​ 69 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) 5. Long-Term Debt Long-term debt consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 ​ ​ (In thousands) Revolving credit facility ​ $ 5,000 ​ $ — Amounts payable within one year ​ — ​ — ​ ​ $ 5,000 ​ $ — ​ Future maturities of long-term debt are as follows: ​ ​ ​ ​ ​ Year Ending ​ December 31, ​ Amount ​ ​ (In thousands) ​ ​ ​ ​ 2025 ​ $ — 2026 ​ — 2027 ​ 5,000 2028 ​ — 2029 ​ — Thereafter ​ — ​ ​ $ 5,000 ​ 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. We have pledged substantially all of our assets (excluding our FCC licenses and certain other assets) in support of the Credit Facility and each of our subsidiaries has guaranteed the Credit Facility and has pledged substantially all of their assets (excluding their FCC licenses and certain other assets) in support of the Credit Facility. Approximately $ 266,000 of debt issuance costs related to the Credit Facility were capitalized and are being amortized over the life of the Credit Facility. These debt issuance costs are included in other assets, net in the consolidated balance sheets. As a result of the Second Amendment, we incurred an additional $ 120,000 of transaction fees related to the Credit Facility that were capitalized. As a result of the Third Amendment, the Company incurred an additional $ 161,000 of transaction fees related to the Credit Facility that were capitalized. The cumulative transaction fees are being amortized over the remaining life of the Credit Facility. Interest rates under the Credit Facility are payable, at our option, at alternatives equal to SOFR ( 4.49 % at December 31, 2024), plus 1 % to 2 % or the base rate plus 0 % to 1 % . The spread over SOFR and the base rate vary from time to time, depending upon our financial leverage. Letters of credit issued under the Credit Facility will be subject to a participation fee (which is equal to the interest rate applicable to Eurocurrency Loans, as defined in the Credit Agreement) payable to each of the Lenders and a fronting fee equal to 0.25 % per annum payable to the issuing bank. Under the Third Amendment, we now pay quarterly commitment fees of 0.25 % per annum on the unused portion of the 70 Table of Contents 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. ​ 6. Supplemental Cash Flow Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2024 2023 ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid during the period for: ​ ​ ​ ​ ​ ​ ​ Interest ​ $ 315 ​ $ 100 ​ Income taxes ​ $ 1,608 ​ $ 2,790 ​ Non-cash transactions: ​ ​ ​ ​ ​ ​ ​ Barter revenue ​ $ 2,442 ​ $ 2,402 ​ Barter expense ​ $ 2,531 ​ $ 2,452 ​ Acquisition of property and equipment ​ $ — ​ $ 55 ​ Use of treasury shares for 401(k) match ​ $ 268 ​ $ 256 ​ ​ ​ 7. Income Taxes An income tax expense of $ 1,110,000 was recorded for the year ended December 31, 2024 compared to income tax expense of $ 3,375,000 for the year ended December 31, 2023. 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 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. ​ 71 Table of Contents 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. Significant components of the Company’s deferred tax liabilities and assets are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: ​ ​ ​ ​ ​ ​ Property and equipment ​ $ 3,852 ​ $ 3,976 Intangible assets ​ 23,377 ​ 23,006 Right of use assets ​ ​ 1,803 ​ ​ 1,815 Prepaid expenses ​ 470 ​ 490 Total deferred tax liabilities ​ 29,502 ​ 29,287 Deferred tax assets: ​ ​ ​ ​ ​ ​ Allowance for credit losses ​ 194 ​ 81 Compensation ​ 1,259 ​ 1,107 Lease liability ​ ​ 1,890 ​ ​ 1,907 Other accrued liabilities ​ 152 ​ 70 ​ ​ 3,495 ​ 3,165 Less: valuation allowance ​ — ​ — Total net deferred tax assets ​ 3,495 ​ 3,165 Net deferred tax liabilities ​ $ 26,007 ​ $ 26,122 Current portion of deferred tax assets ​ $ 628 ​ $ 279 Non-current portion of deferred tax liabilities ​ ( 26,635 ) ​ ( 26,401 ) Net deferred tax liabilities ​ $ ( 26,007 ) ​ $ ( 26,122 ) ​ 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, 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2024 2023 ​ ​ (In thousands) ​ Current: ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 940 ​ $ 2,240 ​ State ​ 285 ​ 750 ​ Total current ​ 1,225 ​ 2,990 ​ Total deferred ​ ( 115 ) ​ 385 ​ Total Income Tax Provision ​ $ 1,110 ​ $ 3,375 ​ ​ 72 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) The reconciliation of income tax at the U.S. federal statutory tax rates to income tax expense (benefit) is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2024 2023 ​ ​ (In thousands) ​ Tax expense (benefit) at U.S. statutory rates ​ $ 951 ​ $ 2,694 ​ State tax expense, net of federal benefit ​ 270 ​ 637 ​ Tax benefit on executive compensation ​ ​ ( 134 ) ​ ​ 44 ​ Tax expense on deficit from restricted stock vesting ​ ​ 167 ​ ​ 52 ​ Tax benefit from dividends paid on restricted stock ​ ( 144 ) ​ ( 52 ) ​ ​ ​ $ 1,110 ​ $ 3,375 ​ ​ 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. federal jurisdiction, and in various state and local jurisdictions. The Company is no longer subject to U.S. 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 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 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. ​ 73 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) ​ 8. Stock-Based Compensation 2005 Incentive Compensation Plan On May 13, 2019 our shareholders approved an amendment to the Second Amended and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan (as amended, “The Second Restated 2005 Plan”). This plan was first approved in 2005, and subsequently re-approved in 2010 and 2013. The amendment to the Second Restated 2005 Plan (i) extended the date for making awards to September 6, 2023 and (ii) increased the number of authorized shares under the Plan by 90,000 shares of Class B Common Stock. The Second Restated 2005 Plan allowed for the granting of restricted stock, restricted stock units, incentive stock options, nonqualified stock options, and performance awards to eligible employees and non-employee directors. The number of shares of Common Stock that was allowed to be issued under the Second Restated 2005 Plan may not exceed 370,000 shares of Class B Common Stock, 990,000 shares of Class A Common Stock of which up to 620,000 shares of Class A Common Stock were to be issued pursuant to incentive stock options and 370,000 Class A Common Stock were to be issued upon conversion of Class B Common Stock. Awards denominated in Class A Common Stock were to be granted to any employee or director under the Second Restated 2005 Plan. Upon the passing of Mr. Christian, we no longer have any holders of Class B Common Stock, as those awards denominated in Class B Common Stock were only able to be granted to Mr. Christian. Stock options granted under the Second Restated 2005 Plan were to be for terms not exceeding ten years from the date of grant and could not be exercised at a price which was less than 100% of the fair market value of shares at the date of grant . 2023 Incentive Compensation Plan On May 8, 2023 our shareholders approved the 2023 Incentive Compensation Plan (the “2023 Plan”). The 2023 Plan replaces the Second Restated 2005 Plan. The Board of Directors does not intend to make any further awards under the Second Restated 2005 Plan. However, each outstanding award under the Second Restated 2005 Plan will remain outstanding under the Second Restated 2005 Plan and will continue to be governed under its terms and any applicable award agreement. The 2023 Plan allows for the granting of restricted stock, restricted stock units, incentive stock options, nonqualified stock options, and performance awards, including cash to eligible employees and non-employee directors of the Company and its subsidiaries. The number of shares of Common Stock that may be issued under the 2023 Plan may not exceed 600,000 shares of Class A Common Stock. Stock-Based Compensation Our stock-based compensation expense is measured and recognized for all stock-based awards to employees using the estimated fair value of the award. Compensation expense is recognized over the period during which an employee is required to provide service in exchange for the award. For these awards, we have recognized compensation expense using a straight-line amortization method. Accounting guidance requires that stock-based compensation expense be based on awards that are ultimately expected to vest; therefore stock-based compensation has been adjusted for estimated forfeitures. When estimating forfeitures, we consider voluntary termination behaviors as well as trends of actual option forfeitures. All stock options were fully vested and expensed at December 31, 2012, therefore there was no compensation expense related to stock options for the years ended December 31, 2024 and 2023. We calculated the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The estimated expected volatility, expected term of options and estimated annual forfeiture rate were determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant. 74 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) There were no options granted during 2024 and 2023 and there were no stock options outstanding as of December 31, 2024. The following summarizes the restricted stock transactions for the year ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ Shares Fair Value ​ ​ ​ ​ ​ ​ Outstanding at January 1, 2023 91,120 ​ $ 27.15 Granted 139,633 ​ 20.41 Vested ( 37,224 ) ​ 26.74 Forfeited/canceled/expired — ​ — Outstanding at December 31, 2023 193,529 ​ $ 22.36 Granted 177,634 ​ ​ 11.86 Vested ( 85,321 ) ​ ​ 22.94 Forfeited/canceled/expired ( 1,040 ) ​ ​ 23.07 Non-vested and outstanding at December 31, 2024 284,802 ​ $ 15.64 Weighted average remaining contractual life (in years) 2.3 ​ ​ The weighted average grant date fair value of restricted stock that granted during 2024 and 2023 was $ 2,107,000 and $ 2,850,000 , respectively. The net value of unrecognized compensation cost related to unvested restricted stock awards aggregated $ 4,264,000 and $ 4,132,000 at December 31, 2024 and 2023, respectively. For the years ended December 31, 2024 and 2023 we had $ 1,950,000 and $ 1,116,000 , respectively, of total compensation expense related to restricted stock-based arrangements. The expense is included in corporate general and administrative expenses in our results of operations. The associated tax benefit recognized for the years ended December 31, 2024 and 2023 was $ 513,000 and $ 294,000 , respectively. ​ 75 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) ​ 9. Employee Benefit Plans 401(k) Plan We have a defined contribution pension plan (“401(k) Plan”) that covers substantially all employees. Employees can elect to have a portion of their wages withheld and contributed to the plan. The 401(k) Plan also allows us to make a discretionary contribution. Total administrative expense under the 401(k) Plan was $ 1,000 and $ 0 in 2024 and 2023, respectively. The Company’s discretionary contribution to the plan was approximately $ 291,000 and $ 268,000 for the years ended December 31, 2024 and 2023, respectively. Deferred Compensation Plan In 1999 we established a Nonqualified Deferred Compensation Plan which allows officers and certain management employees to annually elect to defer a portion of their compensation, on a pre-tax basis, until their retirement. The retirement benefit to be provided is based on the amount of compensation deferred and any earnings thereon. Deferred compensation expense for the years ended December 31, 2024 and 2023 was $ 332,000 and $ 226,000 , respectively. We invest in company-owned life insurance policies to assist in funding these programs. The cash surrender values of these policies are in a rabbi trust and are recorded as our assets. Split Dollar Officer Life Insurance We provide split dollar insurance benefits to certain executive officers and record an asset equal to the cumulative premiums paid on the related policies, as we will fully recover these premiums under the terms of the plan. We retain a collateral assignment of the cash surrender values and policy death benefits payable to insure recovery of these premiums. ​ 10. Acquisitions and Dispositions The consolidated statements of income include the operating results of the acquired stations from their respective dates of acquisition. All acquisitions were accounted for as purchases and, accordingly, the total purchase consideration was allocated to the acquired assets and assumed liabilities based on their estimated fair values as of the acquisition dates. The excess of the consideration paid over the estimated fair value of net assets acquired have been recorded as goodwill. The Company accounts for acquisition under the provisions of FASB ASC Topic 805, Business Combinations . Management assigned fair values to the acquired property and equipment through a combination of cost and market approaches based upon each specific asset’s replacement cost, with a provision for depreciation, and to the acquired intangibles, primarily an FCC license, based on the Greenfield valuation methodology, a discounted cash flow approach. ​ 76 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) 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, 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 9.5 % Operating profit margin ranges 27.5 % Market long-term revenue growth rates 0.5 % ​ 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 On February 28, 2023, we closed on an agreement to sell WPVQ-AM located in our Greenfield, Massachusetts market to Hampden Communications Corp for $ 2,000 . We recorded a $ 43,000 loss on the sale in our other operating (income) expense , net line item on our Consolidated Statement of Operations. On March 20, 2023, we submitted a request to the FCC to cancel our FCC license for WHMQ-AM located in our Greenfield, Massachusetts market. We recorded a $ 22,000 loss on the disposal in our other operating (income) expense, net line items in our Consolidated Statement of Operations. 77 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) Condensed Consolidated Balance Sheet of 2024 and 2023 Acquisitions: 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisitions in ​ 2024 2023 ​ ​ (In thousands) Assets Acquired: ​ ​ ​ ​ ​ ​ Current assets ​ $ 534 $ — Property and equipment ​ ​ 2,035 ​ — Other assets: ​ ​ ​ ​ ​ ​ Broadcast licenses ​ 2,150 ​ — Goodwill ​ 76 ​ — Other intangibles, deferred costs and investments ​ 1,044 ​ — Total other assets ​ 3,270 ​ — Total assets acquired ​ 5,839 ​ — Liabilities Assumed: ​ ​ ​ ​ ​ ​ Current liabilities ​ 128 ​ — Total liabilities assumed ​ 128 ​ — Net assets acquired ​ $ 5,711 ​ $ — ​ ​ 78 Table of Contents Saga Communications, Inc. 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, ​ 2024 2023 ​ ​ (In thousands, except per share data) Pro forma Consolidated Results of Operations ​ ​ ​ ​ ​ ​ Net operating revenue ​ $ 114,087 ​ $ 118,764 Station operating expense ​ 98,049 ​ 95,688 Corporate general and administrative ​ 12,611 ​ 10,966 Other operating expense (income), net ​ 1,048 ​ 120 Operating income ​ 2,379 ​ 11,990 Interest expense ​ 479 ​ 488 Interest income ​ ( 1,047 ) ​ ( 1,441 ) Other income, net ​ ( 1,516 ) ​ ( 119 ) Income before income tax expense ​ 4,463 ​ 13,062 Income tax expense (benefit) ​ ​ ​ ​ ​ ​ Current ​ ​ 1,200 ​ ​ 3,015 Deferred ​ ( 119 ) ​ 389 ​ ​ ​ 1,081 ​ ​ 3,404 Net income ​ $ 3,382 ​ $ 9,658 ​ ​ ​ ​ ​ ​ ​ Earnings per share: ​ ​ ​ ​ ​ ​ Basic ​ $ 0.54 ​ $ 1.57 Diluted ​ $ 0.54 ​ $ 1.57 ​ ​ ​ ​ ​ ​ ​ ​ ​ 11. Related Party Transactions Mr. Christian’s Employment Agreement On January 25, 2022, we entered into a third amendment (the “2022 Amendment”) to the employment agreement with Edward K. Christian dated June 1, 2011 (the “2011 employment agreement”), which had previously been amended on February 12, 2016 (the “2016 amendment”) and on February 26, 2019 (the “2019 amendment”). The 2011 employment agreement, as amended by the 2016 amendment, the 2019 amendment, and the 2022 amendment, is referred to herein as the “amended 2011 employment agreement.” The 2022 amendment extended Mr. Christian’s employment with the Company from March 31, 2025 to March 31, 2027 and made certain changes to the 2011 employment agreement to cause it to be compliant with Section 409A of the Internal Revenue Code. Pursuant to the amended 2011 employment agreement, we paid Mr. Christian a salary at the rate of $ 860,000 per year, adjusted as discussed in the next paragraph below. Mr. Christian was permitted to defer any or all of his annual salary. Additionally, the Company was authorized to pay for Mr. Christian’s tax preparation services on an annual basis, the amount of which was subject to income tax as additional compensation. 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 79 Table of Contents 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. Pursuant to the 2016 amendment, the amended 2011 employment agreement provided that such increase in Mr. Christian’s then existing salary would not be less than the greater of 4 % or a cost of living increase based on the consumer price index. The amended 2011 employment agreement also provided that Mr. Christian was eligible for equity awards under the 2005 Incentive Compensation Plan as shall be approved by the Compensation Committee and bonuses in such amounts as shall be determined pursuant to the terms of the CEO Plan or as otherwise determined by the Compensation Committee in its discretion based on the performance of the Company and the accomplishments of objectives established by the Compensation Committee in consultation with Mr. Christian. Under the amended 2011 employment agreement, Mr. Christian was eligible to participate, in accordance with their terms, in all medical and health plans, life insurance, profit sharing, 401(k) Plan, pension, and such other employment benefits as are maintained by the Company or its affiliates for other key employees performing services. During the term of the employment agreement, the Company was required to maintain all existing policies of insurance on Mr. Christian’s life, including the existing split dollar policy. The Company was also required to pay for Mr. Christian to participate in an executive medical plan and to maintain its existing medical reimbursement policy. Mr. Christian was also furnished with an automobile and other fringe benefits as have been afforded him in the past or as are consistent with his position. In addition, the Company agreed to maintain an office for Mr. Christian in Sarasota County, Florida. The 2016 amendment increased the paid vacation time awarded to Mr. Christian on the anniversary date of the 2011 employment agreement from four weeks to six weeks of paid vacation. ​ 80 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) Payments Under the Principal Shareholder Employment Agreement The amended 2011 employment agreement terminated upon Mr. Christian’s death on August 19, 2022. As a result of his passing the Company was required to make several payments to his estate as outlined in his employment agreement, and described above. In accordance with ASC 712-10-25, Nonretirement Postemployment Benefits , we accrued all necessary expenses as of September 30, 2022. As a result of our contractual obligations under the Mr. Christian’s agreement, Mr. Christian’s estate was the beneficiary of a gross amount of approximately $ 5.8 million in cash, common stock and a life insurance policy of which $ 3.9 million was recorded upon his passing in the third quarter of 2022, and $ 1.9 million had been accrued for in previous periods. The estate was the beneficiary of a lump-sum payment of his current base salary plus accrued unused vacation time totaling $ 1.9 million which was paid in October 2022. Mr. Christian’s estate was also provided with a prorated bonus that Mr. Christian earned of approximately $ 633,000 which was paid in March 2023. Mr. Christian had approximately $ 65,000 withheld as deferred compensation that was paid to the estate in January 2023. Additionally, under the agreement, any award previously granted under the Company’s 2005 Incentive Compensation Plan were immediately vested and provided to the estate. At the date of Mr. 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. Mr. 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 . Mr. Forgy’s Employment Agreement On November 16, 2022, we entered into an employment agreement with Christopher S. Forgy, who was appointed as our President and CEO effective December 7, 2022. Mr. 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. Mr. Forgy will have the opportunity to earn an annual performance bonus under the CEO Plan. His bonus in any fiscal year will be in a minimum of 35 % and a maximum of 100 % of his annual base salary as of January 1 of the fiscal year, and will be based on his performance and the achievement of performance goals established by the Compensation Committee within the first 90 days of the fiscal year. The Board may instead grant Mr. Forgy a discretionary bonus in the case of a financial, national or global occurrence, or a generally difficult year. Mr. Forgy was granted a $ 245,000 discretionary bonus for the 2023 fiscal year and a $ 243,950 discretionary bonus for the 2024 fiscal year. Mr. 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. Mr. 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. He will be entitled to five weeks of paid vacation days per calendar year. The Company will furnish him with an automobile, pay the initiation fee and monthly dues for a non-golf country club membership and provide Mr. Forgy with a split dollar life insurance agreement with premiums payable by the Company. Either the Company or Mr. Forgy may terminate the employment term for any reason generally with 30 days advance notice. If Mr. 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.”) 81 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) If Mr. 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 period, as applicable; any awarded but unpaid annual bonus with respect to any completed fiscal year preceding the termination date; immediate and full vesting of any unvested shares of restricted stock then held by Mr. Forgy; and payment or reimbursement of COBRA premiums for Mr. Forgy and his spouse for up to 18 months . Mr. 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; (ii) solicit from any person who has purchased services from the Company during the three years preceding his termination for business of the type performed by the Company in the United States, or in any other location; or (iii) offer employment to any person employed by the Company, or entice any such person to leave employment with the Company. The employment agreement also contains customary confidentiality and non-disparagement covenants. Change in Control Agreements In December 2007, Samuel D. Bush, Senior Vice President and Chief Financial Officer, and Catherine Bobinski, Senior Vice President/Finance, Chief Accounting Officer and Corporate Controller, entered into Change in Control Agreements. In September 2018, Christopher S. Forgy, Senior Vice President of Operations entered into a Change in Control Agreement. In July 2020, Eric Christian, Chief Marketing Officer entered into a Change in Control Agreement. Eric Christian is the son of Edward K. Christian, our former President, CEO and Chairman. A change in control is defined to mean the occurrence of (a) any person or group becoming the beneficial owner, directly or indirectly, of more than 30 % of the combined voting power of the Company’s then outstanding securities and Mr. Christian ceasing to be Chairman and CEO of the Company; (b) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which results in the voting securities of the Company outstanding immediately prior thereto continuing to represent more than 50 % of the combined voting securities of the Company or such surviving entity; or (c) the approval of the shareholders of the Company of a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of its assets. ​ 82 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) If there is a change in control, the Company shall pay a lump sum payment within 45 days of 1.5 times the average of the executive’s last three full calendar years of such executive’s base salary and any annual cash bonus paid. In the event that such payment constitutes a “parachute payment” within the meaning of Section 280G subject to an excise tax imposed by Section 4999 of the Internal Revenue Code, the Company shall pay the executive an additional amount so that the executive will receive the entire amount of the lump sum payment before deduction for federal, state and local income tax and payroll tax. In the event of a change in control (other than the approval of plan of liquidation), the Company or the surviving entity may require as a condition to receipt of payment that the executive continue in employment for a period of up to six months after consummation of the change in control. During such six months, executive will continue to earn his pre-existing salary and benefits. In such case, the executive shall be paid the lump sum payment upon completion of the continued employment. If, however, the executive fails to remain employed during this period of continued employment for any reason other than (a) termination without cause by the Company or the surviving entity, (b) death, (c) disability or (d) breach of the agreement by the Company or the surviving entity, then executive shall not be paid the lump sum payment. In addition, if the executive’s employment is terminated by the Company without cause within six months prior to the consummation of a change in control, then the executive shall be paid the lump sum payment within 45 days of such change in control. Other Related Party Transactions Effective June 19, 2019, we employed Eric Christian, son of Edward K. 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 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 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. We also employed Sera Christian, granddaughter of the trustee of the Edward K. Christian estate. ​ 12. Common Stock 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. We no longer have any shares of Class B Common Stock issued or outstanding , nor will there be any issued in the future. Dividends. Shareholders are entitled to receive such dividends as may be declared by our Board of Directors out of funds legally available for such purpose. However, no dividend may be declared or paid in cash or property on any share of any class of Common Stock unless simultaneously the same dividend is declared or paid on each share of the other class of common stock. In the case of any stock dividend, holders of Class A Common Stock are entitled to receive the same percentage dividend (payable in shares of Class A Common Stock) as the holders of Class B Common Stock receive (payable in shares of Class B Common Stock). Voting Rights. 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. Prior to Mr. 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. ​ 83 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) Prior to Mr. 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 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 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. Liquidation Rights. Upon our liquidation, dissolution, or winding-up, the holders of Class A Common Stock are entitled to share ratably in accordance with the number of shares held in all assets available for distribution after payment in full of creditors. ​ 13. Commitments and Contingencies Leases We lease certain land, buildings and equipment for use in our operations. We recognize lease expense for these leases on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Right-of-use ("ROU") assets and lease liabilities are recorded on the balance sheet for all leases with an expected term of at least one year. Some leases include one or more options to renew . The exercise of lease renewal options is generally at our discretion. The depreciable lives of ROU assets are limited to the expected lease term. Our lease agreements do not contain any residual value guarantees or material restrictive covenants. 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 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. ROU assets were $ 6.9 million and $ 7.0 million at December 31, 2024 and 2023, respectively. Lease liabilities were $ 7.3 million and $ 7.3 million at December 31, 2024 and 2023, respectively. During the year ended December 31, 2024, we recorded additional ROU assets under operating leases of $ 1,558,000 , which is a non-cash transaction. Payments on lease liabilities during the year ended December 31, 2024 and 2023 totaled $ 1,883,000 and $ 1,826,000 , respectively. Lease expense includes cost for leases with terms in excess of one year. For the years ended December 31, 2024 and 2023, our total lease expense was $ 1,915,000 and $ 1,864,000 , respectively. Short-term lease costs are de minimus. ​ 84 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) We have no financing leases and minimum annual rental commitments under non-cancellable operating leases consisted of the following at December 31, 2024 (in thousands): ​ ​ ​ ​ ​ Years Ending December 31, ​ ​ 2025 $ 1,892 2026 ​ 1,805 2027 ​ 1,622 2028 ​ 1,200 2029 ​ 730 Thereafter ​ 1,463 Total lease payments (a) ​ 8,712 Less: Interest (b) ​ 1,444 Present value of lease liabilities (c) ​ $ 7,268 (a) Lease payments include options to extend lease terms that are reasonably certain of being exercised. There were no legally binding minimum lease payments for leases signed but not yet commenced at December 31, 2024. (b) Our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our discount rate for such leases to determine the present value of lease payments at the lease commencement date. (c) The weighted average remaining lease term and weighted average discount rate used in calculating our lease liabilities were 6.2 years and 5.8 % , respectively, at December 31, 2024. Performance Fees and Royalties We incur fees from performing rights organizations (“PRO”) to license our public performance of the musical works contained in each PRO’s repertory. The Radio Music Licensing Committee (“RMLC”), of which we are a represented participant, (1) entered into an Interim License Agreement with American Society of Composers, Authors and Publishers 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; (2) entered into an Interim License Agreement with Broadcast Music, Inc. 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 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). We pay the applicable royalty rates to SoundExchange, the organization designated by the Copyright Royalty Board (“CRB”) to collect and distribute royalties under these statutory licenses. From time to time, SoundExchange notifies us that certain calendar years are subject to routine audits of our royalty payments. The results of such audits could result in higher royalty payments for the subject years. There is no guarantee that the licenses and associated royalty rates that currently are available to us will be available to us in the future. In addition, Congress may consider and adopt legislation that would require us to pay royalties to sound recording copyright owners for broadcasting those recordings on our terrestrial radio stations. ​ ​ 85 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) Contingencies In 2003, in connection with our acquisition of one FM radio station, WJZK-FM serving the Columbus, Ohio market, we entered into an agreement whereby we would pay the seller up to an additional $ 1,000,000 if we obtain approval from the FCC for a city of license change. ​ 14. Fair Value Measurements As defined in ASC Topic 820, fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 — Unobservable inputs in which there is little or no market data available, which requires management to develop its own assumptions in pricing the asset or liability. Our assets and liabilities disclosed at fair value are summarized below ($000’s omitted): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value ​ ​ Fair Value ​ December 31, ​ December 31, Financial Instrument Hierarchy 2024 2023 Cash and cash equivalents Level 1 ​ $ 18,860 ​ $ 29,582 Short-term investments ​ Level 1 ​ ​ 8,927 ​ ​ 10,595 Accounts receivable, net of allowance ​ Level 1 ​ ​ 15,941 ​ ​ 17,173 Revolving Credit Facility Level 2 ​ 5,000 ​ — ​ 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, 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. Non-Recurring Fair Value Measurements We have certain assets that are measured at fair value on a non-recurring basis under the circumstances and events described in Note 4 — Broadcast Licenses, Goodwill and Other Intangibles, and are adjusted to fair value only when the carrying values are more than the fair values. During the fourth quarter of 2024, 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. ​ 86 Table of Contents Saga Communications, Inc. Notes to Consolidated Financial Statements — (Continued) 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. 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. ​ ​ 15. Litigation 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. ​ 16. Other Income 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"). The Spectrum Act authorized the FCC to conduct incentive auctions in which licensees could voluntarily relinquish their spectrum usage rights in order to permit the assignment by auction of new initial licenses subject to flexible use service rules, in exchange for a portion of the resulting auction proceeds. 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 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. 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. ​ 17. 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 , was paid on March 7, 2025 to shareholders of record on February 18, 2025 . ​ ​ 87 Table of Contents EXHIBIT INDEX ​ Exhibit No. Location Description 3.1 22 Articles of Incorporation of Saga Communications Reincorporation, Inc . 3.2 22 Bylaws, as amended April 16, 2020 . 4 14 Description of the Company’s Securities 10.1 1 Summary of Executive Insured Medical Reimbursement Plan. 10.2 2 Saga Communications, Inc. 2003 Employee Stock Option Plan . 10.3 5 Chief Executive Officer Annual Incentive Plan. 10.4 3 Second Amended and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan 10.5 7 Form of Stock Option Agreement under the Second Amended and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan . 10.6 7 Form of Restricted Stock Option Agreement under the Second Amended and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan . 10.7 6 Employment Agreement of Edward K. Christian dated as of June 17, 2011. 10.8 4 Change in Control Agreement of Samuel D. Bush dated as of December 28, 2007. 10.9 9 Change in Control Agreement of Catherine A. Bobinski dated as of December 28, 2007. 10.10 8 Amendment to Employment Agreement of Edward K. Christian dated as of February 12, 2016 . 10.11 10 Amendment to the Second Amendment and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan as of April 16, 2018. 10.12 11 Letter of Employment for Christopher S. Forgy, Senior Vice President / Operations effective May 28, 2018 . 10.13 12 Change in Control Agreement of Christopher Forgy dated as of September 28, 2018 . 10.14 13 Amendment to Employment Agreement of Edward K. Christian dated as of February 26, 2019 . 10.15 ​ 15 ​ Change in Control Agreement of Eric Christian dated as of July 6, 2020 . 10.16 ​ 16 ​ Third Amendment to Employment Agreement dated January 25, 2022 between Saga Communications, Inc, and Edward K. Christian . 10.17 ​ 17 ​ Employment Agreement of Christopher Forgy dated as of November 16, 2022. 10.18 ​ 17 ​ Letter of Employment of Wayne Leland dated as of November 16, 2022. 10.19 ​ 18 ​ Third Amendment to Credit Agreement dated December 19, 2022 between the Company and JPMorgan Chase Bank, N.A., and The Huntington National Bank. 10.20 ​ 19 ​ Saga Communications, Inc. 2023 Incentive Compensation Plan 10.21 ​ 20 ​ Form of Restricted Stock Option Agreement for Employees under the Saga Communications, Inc. 2023 Incentive Compensation Plan 10.22 ​ 20 ​ Form of Restricted Stock Option Agreement for Directors under the Saga Communications, Inc. 2023 Incentive Compensation Plan 10.23 ​ * ​ Saga Communications, Inc. 2005 Deferred Compensation Plan Effective December 1998 10.24 ​ * ​ Amendment to the Saga Communications, Inc. 2005 Deferred Compensation Plan Effective January 2009 10.25 ​ * ​ Trust for Saga Communications, Inc. 2005 Deferred Compensation Plan April 2007 10.26 ​ * ​ Nonqualified Deferred Compensation Plan Trust Agreement Effective December 2024 19 ​ * ​ Saga Communications, Inc. Insider Trading Policy 21 * Subsidiaries. 23.1 * Consent of Crowe LLP . 23.2 ​ ​ ​ Consent of UHY LLP . 31.1 * Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 * Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 88 Table of Contents 32 * Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and Rule 13-14(b) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 ​ 21 ​ Saga Communications, Inc. Policy for Recovery of Erroneously Awarded Compensation 101.INS * Inline XBRL Instance Document 101.SCH * Inline XBRL Taxonomy Extension Schema Document 101.CAL * Inline XBRL Taxonomy Calculation Linkbase Document 101.DEF * Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB * Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE * Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 ​ ​ ​ Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101) ​ ​ * Filed herewith. 1 Exhibit filed with the Company’s Registration Statement on Form S-1 (File No. 33-47238) filed on December 10, 1992 and incorporated by reference herein. 2 Exhibit filed with the Company’s Registration Statement on From 8-A (File No. 333-107686) filed on August 5, 2003 and incorporated by reference herein. 3 Exhibit filed as Appendix A to the Company’s Consent Solicitation (Filed No: 001-11588) filed on September 17, 2013 and incorporated by reference herein. 4 Exhibit filed with the Company’s Form 8-K filed on January 4, 2008 and incorporated by reference herein. 5 Exhibit filed with the Company’s Proxy Statement for the 2020 Annual Meeting of Stockholders and incorporated by reference herein. 6 Exhibit filed with the Company’s Form 10-Q for the quarter ended June 30, 2011 and incorporated by reference herein. 7 Exhibit filed with the Company’s Form 8-K filed on October 16, 2013 and incorporated by reference herein. 8 Exhibit filed with the Company’s Form 8-K/A filed on April 8, 2016 and incorporated by reference herein. 9 Exhibit filed with the Company’s Form 10-K for the year ended December 31, 2015 and incorporated by reference herein. 10 Exhibit filed as Appendix A to the Corporation’s Definitive Proxy Statement (File No. 001-11588) filed on April 16, 2018 and incorporated by reference herein. 11 Exhibit filed with the Company’s Form 10-Q for the quarter ended June 30, 2018 and incorporated by reference herein. 12 Exhibit filed with the Company’s Form 8-K filed on September 28, 2018 and incorporated by reference herein. 13 Exhibit filed with the Company’s Form 8-K filed on March 1, 2019 and incorporated by reference herein. ​ ​ 14 Exhibit filed with the Company’s Form 10-K for the year ended December 31, 2019 and incorporated by reference herein. ​ ​ 89 Table of Contents 15 Exhibit filed with the Company’s Form 10-K for the year ended December 31, 2020 and incorporated by reference herein. ​ ​ 16 Exhibit filed with the Company’s Form 8-K filed on January 27, 2022 and incorporated by reference herein. ​ ​ 17 Exhibits filed with the Company’s Form 8-K filed on November 16, 2022 and incorporated by reference herein. ​ ​ 18 Exhibit filed with the Company’s Form 10-K for the year ended December 31, 2022 and incorporated by reference herein. ​ ​ 19 Exhibit filed with the Company’s Form S-8 filed on August 10, 2023 and incorporated by reference herein. ​ ​ 20 Exhibits filed with the Company’s Form 10-Q for the quarter ended September 30, 2023 and incorporated by reference herein. ​ ​ 21 Exhibit filed with the Company’s Form 10-K filed on March 15, 2024 and incorporated by reference herein. ​ ​ 22 Exhibit filed with the Company’s Form 8-K filed on May 20, 2020 and incorporated by reference herein. 23 ​ ​ 90 Table of Contents SIGNATURES 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. ​ SAGA COMMUNICATIONS, INC. By: /s/ Christopher S. Forgy Christopher S. Forgy President, Chief Executive Officer and Director ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 31, 2025. ​ Signatures /s/ Christopher S. Forgy President, Chief Executive Officer and Christopher S. Forgy Director /s/ Samuel D. Bush Executive Vice President, Samuel D. Bush Chief Financial Officer and Treasurer /s/ Catherine A. Bobinski Senior Vice President/Finance, Catherine A. Bobinski Chief Accounting Officer and Corporate Controller /s/ Clarke R. Brown, Jr. Director Clarke R. Brown, Jr. /s/ Timothy J. Clarke Director Timothy J. Clarke /s/ Roy F. Coppedge III Director Roy F. Coppedge /s/ Warren Lada Chairman of the Board and Director Warren Lada /s/ Marcia K. Lobaito Director Marcia K. Lobaito /s/ Michael W. Schechter Director Michael W. Schechter ​ ​ ​ ​ ​ 91