Good day, and welcome to Saga Communications Second Quarter Earnings Release Conference Call.[Operator Instructions] It is now my pleasure to turn the floor over to your host, Chris Forgy, President and CEO at Saga Communications. Sir, the floor is yours.

Thank you, Paul, and thank you to everyone who has taken the time to join Saga's 2025 Q2 Earnings Call. As always, we appreciate your continued support, your interest and your participation in Saga Communications, what we believe is the best media company on the planet. Before my remarks, I will turn the floor over to Sam for our introduction. Sam?

Thank you, Chris. As a reminder, 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 Factors section of our most recent Form 10-K. 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 attached in the selected financial data tables. And now Chris, on with the show.

Thank you, Sam. You probably remember, Sam, during the most recent Saga Board meeting, the Board of Directors meeting, I received a text from Matt Burgoyne. Matt serves as Saga's Director of Innovation and Growth and leads and oversees Saga's transformational digital strategy that you've heard so much about. We call it blended advertising. In the text, Matt shared with me an experience he and the team in one of our Saga markets were navigating through. And this single client represented an opportunity to win $1.3 million annually. Although this type of account is atypical, we refer to this type of customer as a whale. And whales, frankly, they're very complex beasts. Our opportunity to win this business was created in part by the failure of another broadcast company to deliver and fulfill the customers' needs and by the relationship our market manager had developed with this customer. The fact of the matter is they trusted us to perform. So long story short, the problems that existed with this poor performance of the campaign were not of our doing, but of the result of poor performance of other third-party providers the customer was using. Matt and his team provided an outline of the necessary changes needed and a road map on how to fix them. The customer left the meeting knowing their third-party providers were the problem. But more importantly, they now had a partner, a partner in Saga who knew how to identify the issues and how to fix them. In Matt's words, "they trust us implicitly." As they all left the meeting, the customer was talking about an additional campaign and advice they wanted us to put together for them. This account alone has the potential this time next year to be $150,000 a month account. Most to…

Thank you, Chris. For the quarter ended June 30, 2025, net revenue decreased $1.5 million or 5% to $28.2 million compared to $29.7 million last year. Station operating expense decreased $1.1 million or 4.6% to $22.2 million for the 3-month period. For the quarter, we had an operating income of $1.4 million compared to $2.1 million last year. Station operating income, a non-GAAP measure, was $6 million for the quarter compared to $6.4 million for the same period last year. Capital expenditures were $1.3 million for the quarter compared to $1.5 million for the second quarter last year. We had net income of $1.1 million for the quarter compared to $2.5 million for the same period last year. On a same-station basis for the quarter ended June 30, 2025, net revenue decreased $1.9 million or 6.4% to $27.6 million, and station operating expense decreased $1.5 million or 6.4% to $21.7 million. For the 6-month period ended June 30, 2025, net revenue decreased $2.6 million or 4.7% to $52.4 million compared to $55 million last year. Station operating expense decreased $1.6 million or 3.4% to $44.2 million for the 6-month period. For the 6-month period, we had an operating loss of $889,000 compared to an operating loss of $274,000 last year. Station operating income, again, a non-GAAP measure, was $8.2 million for the 6-month period compared to $9.2 million for the same period last year. Capital expenditures were $2 million for the 6-month period compared to $2.6 million for the same period last year. We had a net loss of $447,000 for the 6-month period compared to net income of $924,000 for the same period last year. On a same-station basis for the 6 months ended June 30, 2025, net revenue decreased $3.6 million or 6.5% to $51.2 million and station…

Thank you, Sam. As a part of that significant expense reduction Sam referred to, we're bringing several of our third-party digital expenses in-house to save money, increase margins and really to be more efficient. We're also selectively utilizing AI solutions for things like digital reconciliation of invoices and in the area of radio station voice and imaging, we are realizing $0.25 million in annual savings by using voice to voice AI versus the third-party production providers used previously. These 2 examples saved employees' jobs, money, and made us more efficient. So what's the plan? Speed, reiteration, reduced expenses, reinvestment, research and development, capital allocation, capital management and growth. That's the plan. Thank you again for your time and interest and support of Saga Communications, what we believe to be the best media company on the planet. Sam, do we have any questions?

We did get a few questions, Chris. The first one, we did talk about Q3 pacing a little bit. And obviously, we will continue to let folks know as we see where pacing goes as we go into the future. Then we got the question and you and I talked about this last week. It says in terms of your digital business, many continue to report strong indications for the growth of this business. And we've already reported today that we are seeing strong growth. We had strong growth in the second quarter, and we're seeing very strong pacing growth for the third quarter. There is a second part to this question. Are you seeing any impact from customers on the recent decline in search traffic? And are there any implications on lower eyeballs to sites?

Well, I think part of that is a little bit of a misnomer, Sam. There aren't less searches being done, just more places to search. It's a little bit fragmented right now. And when a client goes searching, it's fragmented as they go on to search. Our goal is to make sure that we are there when they are searching and where they are searching. And we're committed to doing that, whether it's on Google, AI or social. We really want to meet them where they are.

Very good. The last question we received is, can we talk about capital allocations at this point. And I referred to that in my comments that we have looked at and are in nonbinding negotiations to sell some of our tower sites, and we expect proceeds from that sale to be in the high 7-figure or low 8 -- figure range. We have a number of other somewhat smaller potential sites that we are looking at as well as other opportunities to sell noncore assets. And we have committed at a Board level and to our shareholders that we are looking at what we will do with the proceeds from this and that some of the proceeds will go into stock buybacks as well as obviously continuing the quarterly dividend. And with that, Chris, I think we're good. And Paul, I'll turn it back over to you to wrap up.

Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.

Thank you, Paul.