Financial Analysis

9. Acquisitions and Dispositions The consolidated statements of income (loss) 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 assets 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. 2025 Dispositions On February 18, 2025, we submitted a request to the FCC to cancel our FCC license for WVAX-AM located in our Charlottesville, Virginia market. We recorded a $19,000 loss on the disposal in our other operating (income) expense , net line item on our Consolidated Statement of Income (Loss). 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. ser …

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"12. 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, 2025, we do not have any non-cancellable operating lease commitments that have not yet commenced. ROU assets are classified as operating right of use assets 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 $10.3 million and $6.9 million at December 31, 2025 and 2024, respectively. Lease liabilities were $5.4 million and $7.3 million at December 31, 2025 and 2024, respectively, of which $1.4 million and $1.5 million were current lease liabilities and $4.0 million and $5.8 million were long-term lease liabilities at December 31, 202 …

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8. 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 $1,000 in 2025 and 2024, respectively. The Companys discretionary contribution to the plan was approximately $305,000 and $291,000 for the years ended December 31, 2025 and 2024, 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, 2025 and 2024 was $307,000 and $332,000, respectively. Deferred compensation liability for the years ended December 31, 2025 and 2024 was $2.9 million and $2.4 million, 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 cumulati …

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4. Long-Term Debt Long-term debt consisted of the following: December 31, December 31, 2025 2024 (In thousands) Revolving credit facility $ 5,000 $ 5,000 Amounts payable within one year $ 5,000 $ 5,000 Future maturities of long-term debt are as follows: Year Ending December 31, Amount (In thousands) 2026 $ 2027 5,000 2028 2029 2030 Thereafter $ 5,000 In connection with the Sale-Leaseback Transaction described in Note 16, the Company entered into a Fourth Amendment (Fourth Amendment) to its Credit Agreement, dated as of August 18, 2015 and amended on September 1, 2017, June 17, 2018, and December 19, 2022, between the Company, JPMorgan Chase Bank, N.A. and The Huntington National Bank (collectively, the Lenders), and JPMorgan Chase Bank, N.A., in its capacity as Administrative Agent for the Lenders (Agent), (i) reducing the aggregate amount of the Lenders revolving commitments from $50,000,000 to $40,000,000, and (ii) releasing the Agents security interest in the GTC Assets, but not any proceeds paid for the GTC Assets or any other collateral. On December 19, 2022, we entered into a Third Amendment 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 B …

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Years Ended December 31, 2025 2024 (in thousands) Types of Revenue Broadcast Advertising Revenue, net $ 81,575 $ 89,740 Digital Advertising Revenue 16,947 14,221 Other Revenue 8,590 8,958 Net Revenue $ 107,112 $ 112,919 …

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7. 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. As of December 31, 2025, there are no longer any unvested restricted stock awards for the Second Restated 2005 Plan. 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 C …

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13. 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 ($000s omitted): Fair Value Fair Value December 31, December 31, Financial Instrument Hierarchy 2025 2024 Cash and cash equivalents Level 1 $ 22,506 $ 18,860 Short-term investments Level 1 9,300 8,927 Accounts receivable, net of allowance Level 1 14,031 15,941 Revolving Credit Facility Level 2 5,000 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 investm …

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6. Income Taxes On July, 4, 2025, new tax law was signed known as the One Big Beautiful Bill Act (OBBBA), providing permanent extension for several business tax provisions originally enacted under the Tax Law and Jobs Act and introduced significant changes to the U.S. federal income tax system, effective beginning with the 2025 calendar year. Key provisions of the legislation include the restoration of 100% bonus depreciation. The Company recorded the impacts of the new OBBBA tax provisions in its financial statements for 2025. The primary impact of the legislation was increased tax amortization and depreciation. An income tax benefit of $2,570,000 was recorded for the year ended December 31, 2025 compared to income tax expense of $1,110,000 for the year ended December 31, 2024. The effective tax rate was approximately 24.5% for the year ended December 31, 2025 compared to 24.3% for the year ended December 31, 2024. 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. 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 Companys deferred tax liabilities …

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14. 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 Companys financial statements. …

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10. Related Party Transactions Payments Under the Principal Shareholder Employment Agreement Following the passing of Mr. Christian on August 19, 2022, the Company was required to make several payments to his estate as outlined in his employment agreement and disclosed previously. Under the agreement, the Company was responsible to pay the estates income tax obligation relating to the transfer of a split dollar life insurance policy and as such, recorded $480,000 in the fourth quarter of 2024 when the transfer of the policy occurred. The payment was made to the estate on July 31, 2025. Additionally, under the agreement, the Company shall continue to pay for the healthcare coverage and life insurance premiums for Mr. Christians spouse for ten years which totals approximately $800,000. Mr. Forgys 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. Forgys 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. Forgys 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 an …

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2. 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. Digital 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 op …

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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 complementary to our core radio business including digital, e-commerce and non-traditional revenue initiatives. We currently own or operate eighty-two FM, thirty 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 our evaluation, as considered necessary. Actual results may differ from estimates provided and there may be chan …

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11. 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. Christians 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 shareho …

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17. Subsequent Events On February 12, 2026, the Companys 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 20, 2026 to shareholders of record on February 26, 2026. See Note 16 Sale Leaseback Transaction for a discussion of certain Amendments to the Companys sale-leaseback transaction. …

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