Good day, everyone, and welcome to the Saga Communications second quarter earnings release and conference call. At this time, all participants are placed on a listen-only mode. It is now my pleasure to hand the floor over to your host, Chris Forgy, President and CEO of Saga. Sir, the floor is yours.

Thank you, Matthew. And once again, thank you to everyone who has taken the time to join Saga Communications' 2026 Q2 earnings call. We appreciate your continued support, your interest, and your participation in Saga Communications, Inc., what we believe is the best media company on the planet. Before my remarks, I'm going to surrender the floor to Sam, but only for a moment, Sam, so don't get comfortable. And then I'll be back with my comments shortly thereafter. Sam?

Thank you, Chris. This call will contain forward-looking statements about our future performance and results of operations that involve risks and uncertainties that are described in the risk factor section of our most recent form 10-K and 10-Qs. This call will also contain a discussion of certain non-GAAP financial measures. Reconciliation for all the non-GAAP financial measures to the most directly comparable GAAP measure are included in the selected financial data tables. For the quarter ended June 30, 2026, net revenue decreased $1.8 million or 6.5% to $26.4 million compared to $28.2 million last year. Station operating expense increased $1.2 million or 5.4% for the quarter or 3.9% excluding the non-cash rent expense. We incurred the non-cash rent expense as a result of the tower sale we have discussed on previous calls. I will add more detail in a few minutes as well as talk more about station operating expenses in general as we continue to make progress on our digital initiatives. It is important to note that even with the revenue challenges we are facing and the added expenses that we are incurring with our ongoing digital transformation, we reported station operating income for the quarter of $3 million and operating income of $623,000. While this is not where we want it to be, It is a part of the challenge, as Chris says, of remodeling the house while we are still living in it. Chris will add more color to various revenue line items, both traditional and digital, in his comments. For the six-month period into June 30, 2026, net revenue decreased $3.2 million, or 6%, to $49.3 million. Station operating expense increased $1.3 million, or 2.8%, for the six months. are 1.9% excluding the non-cash tower rent expense. Gross political revenue for the second quarter this year was $450,000 compared to $50,000 for the same period last year, and $725,000 compared to $321,000 for the six-month period ended June 30th. For the remainder of the year, we currently have another $1.1 million in gross political revenue sold. This compares to gross political revenue of $650,000 for the total year in 2025 and $3.3 million for the total year in 2024. In addition to the non-cash tower rent expense mentioned above, station operating expenses were also impacted by our sales manager, digital campaign manager, and related digital fulfillment team hiring initiatives. During the second quarter, we hired nine sales managers, We hired sales managers in nine of our markets, increasing station operating expense by approximately $146,000 for the quarter and six-month period. We also continued our hiring of digital campaign managers and related fulfillment team members in the second quarter, which added $211,000 to station operating expenses and $290,000 for the six-month period. Operating income also reflects an impact from the tower sale as we transferred leases on the towers we sold. These leases were generating approximately $200,000 in revenue per quarter as we've previously reported. We expect our station operating expense to increase 1.5% to 2.5% for the year when including the added expenses that we are taking on to build out the infrastructure related to our digital transformation and the non-cash tower rental expense. Our corporate general and administrative expense was down 13% or $398,000 for the quarter and 9.4% or $589,000 for the six-month period. We expect that our corporate general and administrative expense to be approximately $11.8 to $12 million for 2026 compared with $12.3 million last year. As stated in our year-end filings, the company closed on the sale of telecommunications towers and related property on October 17th The purchase agreement and related lease documents were amended during the second quarter of this year to align the previously executed documents with the intended economic substance of the transaction. The structure of the transaction allowed us to be able to defer taxes related to the gain on the $5.4 million non-cash proceeds from the sale over the 25-year term of lease agreements. We are reporting in our financial statements a non-cash tower rent expense and non-cash interest income. The press release, our forthcoming 10Q, which will be filed tomorrow, and my previous comments as well as our previous public disclosures give a more detailed explanation of this complex transaction. The key takeaway is that we were able to monetize a number of our towers, maintain the ability to use those same towers for our ongoing operations and not incur any cash tower rent. Unlike other Unlike other tower sale transactions that have been in the industry, we did not leverage the future tower rent expenses that might have been incurred to obtain the increased liquidity that the tower sale afforded us. The company paid a quarterly dividend of $0.25 per share on June 12, 2026. The aggregate value of the quarterly dividend was approximately $1.6 million. With the most recent declared dividend, Saga will have paid over $145 million in dividends to shareholders since the first special dividend was paid in 2012. The company's balance sheet reflected $27.8 million in cash and short-term investments as of June 30, 2026, and $22.9 million as of August 10, 2026. The reduction in cash and short-term investments was primarily due to the repayment in full of the $5 million We had outstanding under our revolving credit agreement. After repayment of the $5 million and after evaluating our cash position, short-term investments, expected operating cash flows, and anticipated liquidity needs, we terminated our existing credit agreement as it would have given us less flexibility to use our cash in short-term investments relative to paying dividends, share repurchases, investments in our digital initiatives, capital expenditures, or other strategic opportunities. We will put a new agreement in place when it makes sense as we continue with our transformation. For the quarter ended June 30, 2026, the company recorded capital expenditures of $1.3 million, which was comparable to the same period last year. For the six-month period, capital expenditures were $2 million, which was also comparable to the same period last year. The company expects to spend approximately $3 to $3.5 million in capital expenditures during 2026. In addition to the tower sale, which generated $10.5 million in cash, we've also stated that we've been working to evaluate our non-core assets with the intent of monetizing those assets at a value that is higher than is recognized in Saga's stock price. This allows us, from a cash perspective, to offset the cash spent on some, if not all, the capital expenses and operational expenses increases required to operate our core business as well as invest in our digital transformation. Since the fourth quarter of last year, we have sold or are selling, including a scheduled closing tomorrow on a property in South Carolina, six non-core properties for proceeds of over $4 million. This includes Saga's former Sarasota house, which sold for $1.7 million, and an unused tower site in Portland, Maine, for $1 million. Revenue for the third quarter is pacing down mid-single digits, with digital up mid-to-high single digits. Thank you for joining us. and more. The sales manager and digital campaign managers and related fulfillment team hiring initiatives will allow our media advisors to have more direct hands-on involvement with the sales resources they need to increase their levels of productivity while the digital campaign managers and related fulfillment team initiative will allow them to spend more time calling on existing and potential clients to solicit new business as they now have the assistance they need to help build the unique blended campaigns that are required to grow our digital business and mitigate the decline in radio ad spend. It also allows us to have the talent to monitor the performance of the blended campaigns which will allow us to retain a higher percentage of Return Blended Clients. All said, we believe Saga is in a strong financial position to improve profitability as our digital initiative improves both local radio and digital revenue. And with Chris, I'll turn it back over to you.

Thank you, Sam. As you've heard Sam say, we are, as the industry is, facing headwinds. Traditional advertising verticals are experiencing real challenges. not so much from an audience consumption standpoint, but more from a monetization standpoint. For Saga, our traditional verticals, local, national, and non-traditional revenue are all experiencing double-digit decline year-over-year and for the quarter ending June 2026. Year-over-year local revenue was down 11% year-to-date and was down 11.2% for the quarter. National revenue was down 19.5% year-to-date and was down 25% for the quarter. Non-traditional revenue was down 12.9% year-to-date and was down 16.4% for the quarter. Conversely, FOG's blended digital strategy you've heard so much about and that our teams have been building for the last three years and includes search, display, SEO, social, managed email and OTT and CTV was up year-over-year, 76.4% for the six months ending June 2026. And blended was up 60.8% for the quarter year-over-year.

E-commerce was up 15.2% year-to-date and was up 10.7% for the quarter. For the six months ending June 30th, 2026,

Digital as a percentage of gross revenue was 19% compared to 14% during the same period in 2025. Year over year, all other digital revenue was down 8.4% year to date and was down 9.6% for the quarter. Three plus years ago, Saga's mission was to build a digital platform that honored and grew our traditional core competency, which is radio. It was to provide people, products, and processes necessary to compete in a very crowded, competitive, and profitable digital space. One that Saga, by the way, as I've said many times, was at least 12 years late to the party. We set out to create a practical digital platform that was easy to understand, easy to buy, easy to execute, easy to measure, easy to renew, and always focused on the journey a consumer takes when they interact with a product or service and deliver it with clarity, simplicity, transparency, and seed to market. And as Sam said earlier on this call, and I have said many times before, we're still remodeling the house while we're still living in the house. Along the way on this renovation project, we've had to relocate a few walls here and there, and we've had to change out a framing crew or two. We've improved our supply chains and even upgraded our remodeling products we use. And during all this process, one thing has remained constant, the foundation. The foundation is strong, stable, and steadfast. And that commitment to the customer to get them wanted, found, and chosen more often and do it with what we do best, radio.

That foundation is strong and is here to withstand

the strongest of storms. So more specifically, here's what Saga has been up to since our last earnings call. In the area of getting customers found, we brought all of our search tools in-house and have three full-time search specialists to procure, implement, and optimize all of Saga's search campaigns. In the area of getting customers chosen, we've hired and trained 10 digital campaign managers, and hired nine directors of sales spread over nine specific Saga markets who were in need of one. We then partnered with Marketron NXT for all of Saga's other digital fulfillment products other than search. Marketron is already Saga's solution for radio traffic and billing and has a much improved and robust digital fulfillment solution. So the migration was natural for Saga to move our digital fulfillment directly to NXT. This migration provides consistency, better preparation, and speed to market for our leaders, our digital campaign managers, and our media advisors. TAGA is also pleased to announce it has forged a partnership with Burrell and Associates. Gordon Burrell and his team are now working with our leadership and sales teams to give us more visibility into the markets in which we operate. Questions will be asked like, where is the available money? How much money are clients currently spending? And why are they spending it where they're spending it? What is our share of the spent? How do we get more of it? And how do we acquire, retain, grow the revenue in the categories of business that are buying most? We will accomplish this by maximizing available programmatic revenue, growing Saga's share of available revenue spent in video, by expanding our offerings to reflect multi-sources of opportunistic revenue, by focusing on our share of market and not dollar volume, by growing our share of specific categories of business and, thus, share of wallet, and by effectively executing a surgical-like sales strategy. In essence, the Burrell partnership provides Saga with data, market, and advertiser visibility, all pointing us towards a north compass to allow our customers to better compete and allow Saga to complete the journey of the consumer. We've also promoted Paul O'Malley, Saga's former president and GM of Charleston South Carolina Cluster, to the position of Senior Vice President of Revenue Development. Paul's focus will be on traditional, non-traditional, and digital revenue. During Paul's time in Charleston, he was instrumental in Charleston's success. in Saga's blended digital strategy. And we're excited to have them in this position. We've also solicited the talents and minds of our Saga extremely gifted talented leaders and employees. One team member developed and introduced an AI lead gen solution that Saga is using today to help our media groups as well as our digital solutions get wanted, found, and chosen more often. Another Saga team member also using AI created both a search calculator and a proposal writing solution that allows Saga's media advisors to create customer-focused proposals complete with a problem to solve and a solution in virtually one half of the time it previously took to create the very same proposal. Again, speed to market. All these pivots along with the migration of other third-party solutions to be in-house make Saga, its leaders, and its media advisors more efficient, more effective, fast, and profitable. So we've talked about creating a media environment conducive to the success of getting our customers wanted, found, and chosen more often. Thus far, we've covered getting found and chosen, but we haven't discussed getting wanted. I really saved the best for last in this category for good reason. This is the why those of us who are in this crazy business wake up and do what we do every day. This falls into the category of getting our customers wanted. In other words, that's top of funnel, that's traditional media, and more specifically, that's radio. And from my vantage point, I'm really seeing a growing migration or a return to traditional media and more specifically to radio. Advertisers seem to be seeking simplicity, clarity, transparency, familiarity, and a connection to the community. That's what advertisers are wanting more and more of, and that's what radio delivers, particularly in our saga markets. On that note, I'd like to share some very exciting news with you today. Saga radio stations have been very active in their respective communities and in the industry. over the first half of 2026. In the spring, WYMG-FM in Springfield, Illinois won the coveted NAB Service to America Award. In Ocala, WOGK-FM was recognized as the favorite radio station and midday personality Louis Stokes was recognized as the favorite on-air personality in the greater Gainesville, Ocala area in Florida. And we've seen a lot of this type of recognition across all of Saugus' footprints. and continue to see it. Also, Saga recently enjoyed four, count them, four nominations for the 2027 Marconi Awards. First, we had Milwaukee, Wisconsin's WHOGFM, The Hog, was nominated for Large Market Station of the Year. Portland, Maine, Blake Show with Kelly and Todd were nominated for Medium Market Personality of the Year. And WPOR in Portland was also nominated for Medium Market Station of the Year. in Jonesboro, Arkansas. The Stafford and Frigo Show on KDXY FM 104.9 The Fox was nominated for Small Market Personalities of the Year. Also, during the first half of 2026, Saga Markets raised nearly $4 million in their local communities for their communities. Now that is giving back and connecting with our local communities. Finally, In this just past week, University of Florida College of Journalism and Communication and Saga Communications announced a landmark seven-year joint sales partnership. The sales agreement expands Saga's broadcast footprint in the Ocala-Gainesville, Florida market. The new lineup of stations consists of WOGK-FM, WRUF, AM&FM, and WIND-FM, as well as the University of Florida Gator Sports Network. This joint sales agreement extends beyond traditional sales representation by creating opportunities for advertisers, for students, for faculty, and industry professionals to work together on initiatives and strategic partnerships involving the broadcast facilities themselves, as well as broadcast media sales, digital media, audience development, sports media, content strategy, internships, mentorships, and industry events and a number of other areas that prepare students for careers in the evolving media landscape. In other words, this strategic and a creative sales partnership, along with everything else discussed today, really reflects Saga's commitment to investing in both our present and in our future by working with outstanding hyper local media properties, as well as investing in our next generation of media professionals. And if the passion, excitement, and commitment for traditional media and the desire for learning and growth that exists with the nearly 3,000 students in the University of Florida School of Journalism and Communication is any indication, radio and traditional media, though it may be facing some headwinds today, looks really very bright for tomorrow.

So if processes had been refined, streamlined, and people are set.

The training is larger and the larger investment in infrastructure is in place.

Our radio foundation is solid. All that is left to do is to execute and monetize what we built. It's about execution and monetization of what we built.

Thank you again for your time and your interest. and support of Saga Communications, what we believe is the best media company on the planet. Stan, do we have any questions?

We did get a few questions in, excuse me, we did get a few questions in, Chris, most of which I think we've talked about. There was questions about current pacings and I believe I gave a pretty full disclosure on that for Q3 and then actually into the early portion of Q4. Thoughts on political? I reported the and many more. the actual elections as opposed to the primaries and so forth. Then I think the biggest question, there were some other questions about digital which you have talked about already relative to the prospects for growth in digital and where we are with digital. But then I think you just helped to emphasize that one of the questions came in, does the company feel that it has the right feature sets to be successful in digital or are there additional products and services that need to be invested into?

Well, as I stated, most of the major investments have been made. We're already real strong in search and display, as referenced in my statement about the growth of the blend, which primarily deals with search and display and radio. And we will adjust and add to our digital offerings as this ever-changing digital landscape continues to change, and it will. But it's always going to be based on what the customer needs to compete and to better compete in a competitive marketplace, whether it's with social media, video display, and much of the other things I've spoke about. We'll make those shifts as the client's needs are dictated or dictate. We will shift and expand as the market does. And make no mistake, it will shift.

I think that's good and with that I don't think we have any other questions so Matthew I think you can go ahead and wrap up the call.

Thank you. Everyone this concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.