Good morning, ladies and gentlemen, and welcome to the Saga Communications Q3 Earnings Conference Call. At this time, all participants are placed on listen-only mode. It is now my pleasure to turn the floor over to your host, Ed Christian, President and CEO of Saga Communications. Sir, the floor is yours.

Catherine, thank you very much, and welcome everybody. We have a lot of information to convey to you and some other additional thoughts. And with that, let me start by turning it over to Sam Bush as usual.

Thank you, Ed. 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 table. The third quarter continued to be materially impacted by the COVID pandemic, but as reported in the press release, we have seen significant increases in net revenue every month from the low point in April. Our net revenue in the third quarter was $24.1 million compared to $16.9 million in the second quarter. This is an increase of $7.3 million or 43.1% between the second and third quarters. Gross political for the quarter was $1.8 million, for the second quarter, it was $289,000 and for the nine months ended September 30, 2020, it was $3.1 million. As I already indicated, net revenue was up $7.3 million from the second to third quarter. So political certainly helped, but was not an overriding factor. Political continued to be strong in October and for the first few days of November. So we expect October to be our highest revenue month for the year with November remaining strong, but falling below October as political revenue was finished yesterday. Without political, we expect gross revenue to continue a positive trend throughout the rest of the year. Our focus on local continues to pay off as the combined local direct and local agency increased 32.4% between the second and third quarters of this year. We have $49.8 million in cash on hand as of November 2nd compared to approximately $44 million at the beginning of the year. We expect there to be some fluctuation in this amount as the year continues, but we believe that our cash balances will continue to increase, as we get to year-end. Again this is – if the current market conditions continue and we don't face another prolonged government-mandated shutdown in our markets. At the end of the quarter, our outstanding debt remained $10 million, which given the cash on hand presents no covenant or liquidity issues. Leverage per our bank covenants calculates at 0.82%, but is really negative when you consider the cash we have on hand. Ed with that short commentary on what continues to be an unprecedented year, I will turn it back over to you.

It could be precedented year, I don't know, Sam. But let me ask you a quick question. What did you compute the other day that the value of the cash per share of what it's currently trading at is like what $6? Something around that?

Yeah. Around number $6 per share.

Okay. So I'm just – just checking that up. Hello, everybody, and let's start in on this with me saying that, it's been a long nine months and we have not burned $1 of your money. There's been no cash burn at this company, which I think unto itself is a pretty good achievement. And we accomplished this through a number of different ways, and let's talk about that for a second. One was obviously, two things that you have to do is one is try to find a way to reverse the slide and bring it back up so that it decelerates each month in terms of that and begins to build back up a little bit. We haven't seen the rebuilding from ground zero yet from – or normalcy as it was from 2019. But nevertheless, we've had some really interesting things happen. Let me tell you for instance that, if we look at our local direct and for those of you who have been on the call before know that, Saga's big proponent of doing, reaching, teaching, selling directly to retailers to service providers to a number of the businesses like that. Right now, we're running about $1.5 million per month, ahead of our local direct. Overall, probably our local directors, excuse me, $1.5 million over our local agency which is pretty impressive for us. It really continues our commitment and accelerates it, which is – we're very happy about that. We're adding more programs to promote non-traditional revenue. We're doing for instance best of books with sales component attached to it, which is bought in hundreds of thousands of dollars and the lack of – because of the lack of non-traditional revenue. Where we have been impacted and it's a good healthy number is in events.…

Yes we do. We have two questions today.

That's nice. That's nice.

It is, it is. Somebody cares. The first question is --

Only two people care, I guess.

The first question is, do you see a stabilization of revenue or a continuing downward trend or what?

Well, that's a good open-ended question. It depends. And that's not a ducking answer. But let me just share some information. And like any good scout, I always keep my ear down to the railroad track. So I can tell when the trains are coming. And that's an old thing, I don't really put my ear to the track, Sam, just so you get that straight. What I'm hearing is, in the larger markets, the top 10 top 25, whatever it is. There is a fear that they have reached a new norm, which, in the larger markets, is running like minus 20 from comparable years. And the fear is that this is going to be where they are. And for several months they've kind of hung in there and they're not seeing minus 15, minus whatever it is. In the secondary markets, where we operate, we do have some -- we are not in the top 25, but I think 7% of our stations are in the top 50, or 25 to 50, whatever it is. It's more down in the lower teens 12%, 14% and holding kind of right there for now. Now is that going to change? Well that all depends. It depends on where the economy goes and everything else. But it seems that the larger markets are getting hit harder than the secondary markets where you have more ball control over what you do in terms of sales, where you can be creative. And you have a smaller universe to play in, but a bigger playing field within that universe itself. So do I see anything catastrophic coming up? No. But that could change tomorrow. That's asking me to look into some sort of magic ball and figure that out, or do it in the Ouija board like we did years ago. That, if we get down to 12% and that becomes a new normal for a while, we're okay. Because we have made, as you noted, and they're without giving the exact figures -- we have reduced our overhead substantially without impacting the effect of our organization. We've had no risk to speak of. We don't go in there with wholesale, laying off of people and announcing a 40 or 50 people are gone. That hasn't happened with us. We have crafted surgically, literally, a pass that reduces expenses that holds us there. So we're good. But the question is, is it 20%? Is it 12%? It depends on the marketplace. It depends on the size of the market and it depends on the station itself. So it's a very hard question to answer. Am I optimistic? Yes. Do I think that we're going to be right back to where we were last year? No. I think 2021 is going to be another slagging year, as long as the economy keeps some momentum moving forward. And it's not a quick turnaround is other issues. Okay. That's my answer.

Very good. And the second question is, Nielsen has made a policy change, under which it will no longer include the ratings for non-subscribing radio stations in the summary data set that fuels the major buying systems used by agencies and advertisers. What revenue impact do you expect the policy change to have in Saga's markets, where it doesn't subscribe to Nielsen ratings?

Well, okay. Good question actually. It's the hot topic in the industry right now. I presume that's written by when the question comes in from one of the trades. I won't ask you then. We don't discuss that. Well, what I mean by first saying, there is no secret to this. And Saga is not a client of Nielsen. And so, therefore what I'm saying is not based on a client relationship with the Nielsen company. Let me explain to some of those who don't understand exactly what's going on here. Nielsen surveys two different sets of markets. One is the diary market, which is, in my opinion, a highly automated way of surveying, where you're asking a responder to carry personally a diary for seven days and contemporaneously fill out line-by-line, what he listens to, what radio station, what time it starts, what time it ends. And well, I'll give you an example on this, because this will take a few minutes to answer. When I was an adjunct professor at Central Eastern University, one of the lectures that I did was with grad students. When talking about statistics and ratings, and questions in broadcasting radio and television, but primarily radio with that case. And we would sit down, and I would say to them, and I had from Nielsen in that time diaries, they punch holes in them, so they can't be used. And I pass them out to the -- it was like 15 grad students in the class. Past month, each one of them, have looked at the kind of strange, so nicely explained to them. You're right now expected to as a class exercise, carry this for a week and contemporaneously record your radio listening. These are again grad students, so we weren't talking about…

No. I think you've covered. And you certainly have said what you feel, as you always do, which is great.

No. It's all logic.

It is totally.

It is what it is. And nobody is taking the thing, they're being powered into, well, maybe we're better radio stations. You're not. Like us, we have the relationships with our clients, one-on-one. They know what we can do, in the community. And this is something that Nielsen has a little problem understanding is that, radio stations can be successful through one-on-one client relationships, because they can see and feel and touch, and believe what happens in the community. I'm done. Okay.

Absolutely, when somebody walks in their store and buys they know why it's there is why local direct is doing, what it's doing, which is terrific.

It works. Do I have time for one more, quick story? In our -- the retraining of salespeople our new salespeople, one of the things that we have kind of mandated is that, you can't sell short. Everything has got to be long on it. And so one of the new salespeople went out there, in one of the markets and I'm not going to do, who or where. But, why don't and was trained went through all the certification. And she was out calling out an HVAC dealer. This is a category we've really started working very heavily to get HVAC companies in. Because in a depressed economy or an under economy, if your air-conditioning or heater goes out, you need to call somebody. So she sat down and did the presentation to the owner of the HVAC location and went through it all. And he finally said, okay, yeah, I think, I'm trying radio. I know. Let's do it for three weeks. She said sir, I'm sorry I can't sell you three weeks. He said fine. She said no sir, I would -- I can't -- our minimum at the radio station it's 12 weeks. Because if we sold just three weeks, we wouldn't be doing you any good because, there's not enough repetitions. There's not enough imaging, there's not enough chance for us for brand building and everything else like this. Finally the guy said, okay, I'll take 12 weeks. Under the old school of thinking in a radio, the salespeople would come in and say, hey, I just scored so and so for three weeks, for a new advertising. No. We're going in to prove the radio works and we do it for 12 weeks. That's where we get the results. And get the returns from people. So, now I can shut up and say, Catherine, please sign me off. Okay.

Thank you. Ladies and gentlemen, 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, Catherine.