Salem Media Group, Inc. (the “company”) (Nasdaq: SALM) released
its results for the three and nine months ended September 30,
2023.
Third Quarter 2023 Results
For the three months ended September 30, 2023 compared to the
three months ended September 30, 2022:
Consolidated
- Total revenue decreased 5.0% to $63.5 million from $66.9
million;
- Total operating expenses increased 31.9% to $99.8 million from
$75.6 million;
- Operating expenses, excluding stock-based compensation expense,
debt modification costs, gains and losses on the sale or
disposition of assets, impairments, depreciation expense and
amortization expense (1) increased 0.2% to $61.0 million from $60.8
million;
- Operating loss increased to $36.3 million from $8.8
million;
- Net loss increased to $31.3 million, or $1.15 net loss per
share, from $11.9 million, or $0.44 net loss per share;
- EBITDA (1) decreased to $(33.1) million from $(5.7) million;
and
- Adjusted EBITDA (1) increased 9.3% to $2.5 million from $2.3
million.
Broadcast
- Net broadcast revenue decreased 4.2% to $49.0 million from
$51.1 million;
- Station Operating Income (“SOI”) (1) decreased 31.8% to $6.8
million from $10.0 million;
- Same Station (1) net broadcast revenue decreased 4.9% to $48.6
million from $51.0 million; and
- Same Station SOI (1) decreased 28.2% to $7.3 million from $10.1
million.
Digital Media
- Digital media revenue decreased 2.2% to $10.0 million from
$10.2 million; and
- Digital Media Operating Income (1) decreased 20.9% to $1.5
million from $1.9 million.
Publishing
- Publishing revenue decreased 17.5% to $4.6 million from $5.5
million; and
- Publishing Operating Loss (1) increased 36.6% to $1.4 million
from $1.0 million.
Included in the results for the three months ended September 30,
2023 are:
- A $35.1 million ($26.0 million, net of tax, or $0.95 per share)
impairment charge to the value of broadcast licenses in Boston,
Chicago, Cleveland, Colorado Springs, Columbus, Dallas, Detroit,
Greenville, Little Rock, Miami, New York, Orlando, Philadelphia,
Phoenix, Portland, Sacramento, San Diego, San Francisco and
Tampa;
- A $0.7 million ($0.5 million, net of tax, or $0.02 per share)
impairment charge to the value of goodwill in Townhall and Salem
Author Services;
- A $0.5 million ($0.3 million, net of tax, or $0.01 per diluted
share) net gain on the disposition of asset relates primarily to
the $0.4 million pre-tax gain on the sale of radio stations in
Seattle, Washington; and
- A $0.1 million non-cash compensation charge ($0.1 million, net
of tax) related to the expense of stock options.
Included in the results for the three months ended September 30,
2022 are:
- A $7.7 million ($5.7 million, net of tax, or $0.21 per share)
impairment charge to the value of broadcast licenses in Boston,
Chicago, Columbus, Dallas, Greenville, Honolulu, Little Rock,
Orlando, Philadelphia, Portland, Sacramento, and San
Francisco;
- A $0.2 million ($0.1 million, net of tax) loss on the disposal
of assets;
- A $3.8 million ($2.8 million, net of tax, or $0.10 per share)
legal settlement expense; and
- A $0.1 million non-cash compensation charge related to the
expensing of stock options.
Per share numbers are calculated based on 27,216,787 diluted
weighted average shares for the three months ended September 30,
2023 and 2022.
Year to Date 2023 Results
For the nine months ended September 30, 2023 compared to the
nine months ended September 30, 2022:
Consolidated
- Total revenue decreased 2.7% to $192.8 million from $198.2
million;
- Total operating expenses increased 21.9% to $237.3 million from
$194.6 million;
- Operating expenses, excluding gains or losses on the
disposition of assets, stock-based compensation expense, debt
modification costs, changes in the estimated fair value of
contingent earn-out consideration, impairments, depreciation
expense and amortization expense (1) increased 5.4% to $186.2
million from $176.6 million;
- The company had an operating loss of $44.6 million as compared
to operating income of $3.5 million;
- The company recognized $4.0 million in film distribution income
from an unconsolidated equity investment in the nine months ended
September 30, 2022;
- Net loss increased to $43.5 million, or $1.60 net loss per
share, from $1.0 million, or $0.04 net loss per share;
- EBITDA (1) decreased to $(34.3) million from $17.0 million;
and
- Adjusted EBITDA (1) decreased 68.4% to $6.6 million from $20.8
million.
Broadcast
- Net broadcast revenue decreased 3.3% to $147.0 million from
$152.0 million;
- SOI (1) decreased 40.7% to $18.5 million from $31.2
million;
- Same station (1) net broadcast revenue decreased 3.8% to $146.1
million from $151.8 million; and
- Same station SOI (1) decreased 35.9% to $20.1 million from
$31.3 million.
Digital media
- Digital media revenue increased 0.1% to $31.3 million; and
- Digital media operating income (1) decreased 22.4% to $4.8
million from $6.2 million.
Publishing
- Publishing revenue decreased 2.7% to $14.4 million from $14.8
million; and
- Publishing Operating Loss (1) increased 81.3% to $2.9 million
from $1.6 million.
Included in the results for the nine months ended September 30,
2023 are:
- A $38.4 million ($28.4 million, net of tax, or $1.04 per share)
impairment charge to the value of broadcast licenses in Boston,
Chicago, Cleveland, Colorado Springs, Columbus, Dallas, Detroit,
Greenville, Little Rock, Miami, New York, Orlando, Philadelphia,
Phoenix, Portland, Sacramento, San Diego, San Francisco and
Tampa;
- A $2.6 million ($1.9 million, net of tax, or $0.07 per share)
impairment charge to the value of goodwill in Townhall and Salem
Author Services;
- A $0.1 million loss on the early retirement of long-term debt
associated with the 2024 Notes;
- A $0.3 million ($0.2 million, net of tax, or $0.01 per diluted
share) net gain on the disposition of assets reflects a $3.3
million pre-tax gain on the sale of the economic interests in the
leases at our Greenville, South Carolina to a related party and a
$0.4 million estimated pre-tax gain on the sale of radio station
KNTS-AM and KLFE-FM in Seattle, Washington that was offset by a
$3.3 million estimated pre-tax loss on the pending sale of radio
station KSAC-FM in Sacramento, California and $0.1 million of net
losses from various fixed asset disposals; and
- A $0.3 million ($0.2 million, net of tax, or $0.01 per share)
non-cash compensation charge related to the expense of stock
options.
Included in the results for the nine months ended September 30,
2022 are:
- A $11.7 million ($8.6 million, net of tax, or $0.32 per share)
impairment charge to the value of broadcast licenses in Boston,
Chicago, Columbus, Dallas, Greenville, Honolulu, Little Rock,
Orlando, Philadelphia, Portland, Sacramento and San Francisco;
- A $8.5 million ($6.3 million, net of tax, or $0.23 per diluted
share) net gain on the disposition of assets related primarily to
the $6.5 million pre-tax gain on the sale of land used in the
company’s Denver, Colorado broadcast operations, the $1.8 million
pre-tax gain on sale of land used in the company’s Phoenix, Arizona
broadcast operations, and $0.5 million pre-tax gain on the sale of
the company’s radio stations in Louisville, Kentucky offset by
various fixed asset disposals;
- A $4.8 million ($3.5 million, net of tax, or $0.13 per share)
legal settlement expense;
- A $0.1 million ($0.1 million, net of tax) goodwill impairment
charge;
- A $0.2 million ($0.2 million, net of tax, or $0.01 per share)
charge for debt modification costs; and
- A $0.2 million ($0.2 million, net of tax, or $0.01 per share)
non-cash compensation charge related to the expensing of stock
options.
Per share numbers are calculated based on 27,216,787 diluted
weighted average shares for the nine months ended September 30,
2023, and 27,202,983 diluted weighted average shares for the nine
months ended September 30, 2022.
Balance Sheet
As of September 30, 2023, the company had $159.4 million
outstanding on the 7.125% senior secured notes due 2028 (“2028
Notes”) and $20.5 million outstanding on the ABL facility.
Acquisitions and Divestitures
The following transactions were completed since July 1,
2023:
- On November 6, 2023 the company sold radio stations WGTK-FM,
WRTH-FM and WLTE-FM in Greenville, South Carolina for $6.8
million.
- On July 21, 2023 the company sold radio station KNTS-AM in
Seattle, Washington for $0.2 million.
- On July 13, 2023 the company sold radio station KLFE-AM in
Seattle, Washington for $0.5 million. Radio station KLFE-AM was
being programmed under a Time Brokerage Agreement (“TBA”) as of
August 1, 2022.
Pending transactions:
- On October 17, 2023 the company entered into an agreement to
sell land in Sarasota, Florida for $9.5 million. The closing is
conditional upon getting the property rezoned, and the company
expects to close the sale in late 2024.
- On September 29, 2023 the company entered into an agreement to
sell Salem Church Products for $30.0 million. At closing the
company will receive $22.5 million in cash and a promissory note of
$7.5 million. The principal shall be due and payable in three
installments in the amount of $2.5 million starting the one-year
anniversary of the closing date in 2024 through 2026. When the
transaction closes, the parties will also enter into a $10.0
million multi-year agreement for the company to advertise Gloo
platform’s products and services across its radio and digital
platform. The company expects to close the sale in the fourth
quarter of this year.
- On September 1, 2023 the company entered into an agreement to
sell radio station WTWD-AM and an translator in Tampa, Florida for
$0.7 million subject to approval of the Federal Communications
Commission (“FCC”). The company expects to close the sale in the
fourth quarter of this year.
- On June 29, 2023 the company entered into an agreement to sell
radio station KSAC-FM in Sacramento, California for $1.0 million
subject to approval of the FCC. Radio station KSAC-FM started being
programmed under a TBA on August 1, 2023. The company expects to
close the sale in the fourth quarter of this year.
Conference Call Information
The company will host a teleconference to discuss its results on
November 13, 2023 at 4:00 p.m. Central Time. To access the
teleconference, please dial (888) 770-7291, and then ask to be
joined into the Salem Media Group Third Quarter 2023 call or listen
via the investor relations portion of the company’s website,
located at investor.salemmedia.com. A replay of the teleconference
will be available through November 27, 2023 and can be heard by
dialing (800) 770-2030, passcode 2413416 or on the investor
relations portion of the company’s website, located at
investor.salemmedia.com.
Follow us on Twitter @SalemMediaGrp.
Fourth Quarter 2023 Outlook
For the fourth quarter of 2023, the company is projecting total
revenue to decline between 6% and 8% from the fourth quarter 2022
total revenue of $68.8 million. This guidance assumes the closing
of the pending sale of Salem Church Products in the fourth quarter.
Excluding the impact of the 2022 political revenue and the
financial results from the pending asset sale, the company would
project total revenue to decline between 2% and 4%. The company is
also projecting operating expenses before gains or losses on the
sale or disposal of assets, stock-based compensation expense, legal
settlement, changes in the estimated fair value of contingent
earn-out consideration, impairments, depreciation expense and
amortization expense (“Recurring Operating Expenses”) to be between
flat and a decrease 3% compared to the fourth quarter of 2022
Recurring Operating Expenses of $61.6 million. Excluding the impact
of the pending asset sale, expenses are projected to be between an
increase of 1% and a decrease of 2%.
A reconciliation of Recurring Operating
Expenses (a non-GAAP measure) to the most directly comparable GAAP
measure is not available without unreasonable efforts on a
forward-looking basis due to the potential high variability,
complexity and low visibility with respect to the charges excluded
from this non-GAAP financial measure, in particular, the change in
the estimated fair value of earn-out consideration, impairments and
gains or losses from the disposition of fixed assets. The company
expects the variability of the above charges may have a
significant, and potentially unpredictable, impact on its future
GAAP financial results.
About Salem Media Group, Inc.
Salem Media Group is America’s leading multimedia company
specializing in Christian and conservative content, with media
properties comprising radio, digital media and book and newsletter
publishing. Each day Salem serves a loyal and dedicated audience of
listeners and readers numbering in the millions nationally. With
its unique programming focus, Salem provides compelling content,
fresh commentary and relevant information from some of the most
respected figures across the Christian and conservative media
landscape. Learn more about Salem Media Group, Inc. at
www.salemmedia.com.
Forward-Looking Statements
Statements used in this press release that relate to future
plans, events, financial results, prospects or performance are
forward-looking statements as defined under the Private Securities
Litigation Reform Act of 1995. Actual results may differ materially
from those anticipated as a result of certain risks and
uncertainties, including but not limited to the ability of the
company to close and integrate announced transactions, market
acceptance of the company’s radio station formats, competition from
new technologies, inflation and other adverse economic conditions,
and other risks and uncertainties detailed from time to time in the
company’s reports on Forms 10-K, 10-Q, 8-K and other filings filed
with or furnished to the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
The company undertakes no obligation to update or revise any
forward-looking statements to reflect new information, changed
circumstances or unanticipated events.
(1)
Regulation G
Management uses certain non-GAAP financial
measures defined below in communications with investors, analysts,
rating agencies, banks and others to assist such parties in
understanding the impact of various items on its financial
statements. The company uses these non-GAAP financial measures to
evaluate financial results, develop budgets, manage expenditures
and as a measure of performance under compensation programs.
The company’s presentation of these
non-GAAP financial measures should not be considered as a
substitute for or superior to the most directly comparable
financial measures as reported in accordance with GAAP.
Regulation G defines and prescribes the
conditions under which certain non-GAAP financial information may
be presented in this earnings release. The company closely monitors
EBITDA, Adjusted EBITDA, Station Operating Income (“SOI”), Same
Station net broadcast revenue, Same Station broadcast operating
expenses, Same Station Operating Income, Digital Media Operating
Income, Publishing Operating Loss, and operating expenses excluding
gains or losses on the disposition of assets, stock-based
compensation, changes in the estimated fair value of contingent
earn-out consideration, impairments, depreciation and amortization,
all of which are non-GAAP financial measures. The company believes
that these non-GAAP financial measures provide useful information
about its core operating results, and thus, are appropriate to
enhance the overall understanding of its financial performance.
These non-GAAP financial measures are intended to provide
management and investors a more complete understanding of its
underlying operational results, trends and performance.
The company defines Station Operating
Income (“SOI”) as net broadcast revenue minus broadcast operating
expenses. The company defines Digital Media Operating Income as net
Digital Media Revenue minus Digital Media Operating Expenses. The
company defines Publishing Operating Loss as net Publishing Revenue
minus Publishing Operating Expenses. The company defines EBITDA as
net income before interest, taxes, depreciation, and amortization.
The company defines Adjusted EBITDA as EBITDA before gains or
losses on the disposition of assets, before debt modification
costs, before changes in the estimated fair value of contingent
earn-out consideration, before impairments, before net
miscellaneous income and expenses, before (gain) loss on early
retirement of long-term debt and before non-cash compensation
expense. SOI, Digital Media Operating Income, Publishing Operating
Loss, EBITDA and Adjusted EBITDA are commonly used by the broadcast
and media industry as important measures of performance and are
used by investors and analysts who report on the industry to
provide meaningful comparisons between broadcasters. SOI, Digital
Media Operating Income, Publishing Operating Loss, EBITDA and
Adjusted EBITDA are not measures of liquidity or of performance in
accordance with GAAP and should be viewed as a supplement to and
not a substitute for or superior to its results of operations and
financial condition presented in accordance with GAAP. The
company’s definitions of SOI, Digital Media Operating Income,
Publishing Operating Loss, EBITDA and Adjusted EBITDA are not
necessarily comparable to similarly titled measures reported by
other companies.
The company defines Same Station net
broadcast revenue as broadcast revenue from its radio stations and
networks that the company owns or operates in the same format on
the first and last day of each quarter, as well as the
corresponding quarter of the prior year. The company defines Same
Station broadcast operating expenses as broadcast operating
expenses from its radio stations and networks that the company owns
or operates in the same format on the first and last day of each
quarter, as well as the corresponding quarter of the prior year.
The company defines Same Station SOI as Same Station net broadcast
revenue less Same Station broadcast operating expenses. Same
Station operating results include those stations that the company
owns or operates in the same format on the first and last day of
each quarter, as well as the corresponding quarter of the prior
year. Same Station operating results for a full calendar year are
calculated as the sum of the Same Station operating results for
each of the four quarters of that year. The company uses Same
Station operating results, a non-GAAP financial measure, both in
presenting its results to stockholders and the investment
community, and in its internal evaluations and management of the
business. The company believes that Same Station operating results
provide a meaningful comparison of period over period performance
of its core broadcast operations as this measure excludes the
impact of new stations, the impact of stations the company no
longer owns or operates, and the impact of stations operating under
a new programming format. The company’s presentation of Same
Station operating results is not intended to be considered in
isolation or as a substitute for the financial information prepared
and presented in accordance with GAAP. The company’s definition of
Same Station operating results is not necessarily comparable to
similarly titled measures reported by other companies.
For all non-GAAP financial measures,
investors should consider the limitations associated with these
metrics, including the potential lack of comparability of these
measures from one company to another.
The Supplemental Information tables that
follow the condensed consolidated financial statements provide
reconciliations of the non-GAAP financial measures that the company
uses in this earnings release to the most directly comparable
measures calculated in accordance with GAAP. The company uses
non-GAAP financial measures to evaluate financial performance,
develop budgets, manage expenditures, and determine employee
compensation. The company’s presentation of this additional
information is not to be considered as a substitute for or superior
to the directly comparable measures as reported in accordance with
GAAP.
Salem Media Group, Inc.
Condensed Consolidated Statements of Operations (in thousands,
except share and per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2023
2022
2023
(Unaudited)
Net broadcast revenue
$
51,136
$
48,966
$
152,020
$
146,986
Net digital media revenue
10,189
9,965
31,293
31,335
Net publishing revenue
5,537
4,566
14,840
14,439
Total revenue
66,862
63,497
198,153
192,760
Operating expenses:
Broadcast operating expenses
41,178
42,171
120,837
128,498
Legal settlement
3,825
—
4,776
—
Digital media operating expenses
8,333
8,496
25,079
26,516
Publishing operating expenses
6,542
5,939
16,441
17,341
Unallocated corporate expenses
4,840
4,514
14,431
14,165
Debt modification costs
2
—
250
—
Depreciation and amortization
3,034
3,377
9,500
10,291
Change in the estimated fair value of
contingent earn-out consideration
—
(100
)
(5
)
(102
)
Impairment of indefinite-lived long-term
assets other than goodwill
7,725
35,113
11,660
38,376
Impairment of goodwill
—
733
127
2,580
Net (gain) loss on the disposition of
assets
167
(456
)
(8,461
)
(334
)
Total operating expenses
75,646
99,787
194,635
237,331
Operating income (loss)
(8,784
)
(36,290
)
3,518
(44,571
)
Other income (expense):
Interest income
17
14
166
40
Interest expense
(3,142
)
(3,626
)
(9,925
)
(10,596
)
Gain (loss) on early retirement of
long-term debt
—
—
(18
)
(60
)
Earnings (loss) from equity method
investment
102
7
4,015
(4
)
Net miscellaneous income and
(expenses)
(19
)
(184
)
(19
)
27
Net loss before income taxes
(11,826
)
(40,079
)
(2,263
)
(55,164
)
Provision for (benefit from) income
taxes
59
(8,782
)
(1,234
)
(11,619
)
Net loss
$
(11,885
)
$
(31,297
)
$
(1,029
)
$
(43,545
)
Basic loss per share Class A and Class B
common stock
$
(0.44
)
$
(1.15
)
$
(0.04
)
$
(1.60
)
Diluted loss per share Class A and Class B
common stock
$
(0.44
)
$
(1.15
)
$
(0.04
)
$
(1.60
)
Basic weighted average Class A and Class B
common stock shares outstanding
27,216,787
27,216,787
27,202,983
27,216,787
Diluted weighted average Class A and Class
B common stock shares outstanding
27,216,787
27,216,787
27,202,983
27,216,787
Salem Media Group, Inc.
Condensed Consolidated Balance Sheets (in thousands)
December 31, 2022
September 30, 2023
(Unaudited)
Assets
Cash
$
—
$
—
Accounts receivable, net
30,756
29,558
Other current assets
14,301
24,237
Property and equipment, net
81,296
80,077
Operating and financing lease right-of-use
assets
43,734
45,179
Intangible assets, net
330,008
287,234
Deferred financing costs
681
77
Other assets
4,346
4,938
Total assets
$
505,122
$
471,300
Liabilities and Stockholders’
Equity
Current liabilities
$
64,610
$
81,430
Long-term debt
150,367
152,611
Operating and financing lease liabilities,
less current portion
42,445
42,846
Deferred income taxes
66,732
55,077
Other liabilities
5,611
7,184
Stockholders’ Equity
175,357
132,152
Total liabilities and stockholders’
equity
$
505,122
$
471,300
SALEM MEDIA GROUP,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share
and per share data)
Class A
Class B
Common Stock
Common Stock
Additional
Paid-In
Accumulated
Treasury
Shares
Amount
Shares
Amount
Capital
Deficit
Stock
Total
Stockholders’ equity, December 31,
2021
23,922,974
$
232
5,553,696
$
56
$
248,438
$
(36,509
)
$
(34,006
)
$
178,211
Stock-based compensation
—
—
—
—
106
—
—
106
Options exercised
40,913
—
—
—
94
—
—
94
Lapse of restricted shares
14,854
—
—
—
—
—
—
—
Net income
—
—
—
—
—
1,739
—
1,739
Stockholders’ equity, March 31, 2022
23,978,741
$
232
5,553,696
$
56
$
248,638
$
(34,770
)
$
(34,006
)
$
180,150
Stock-based compensation
—
—
—
—
68
—
—
68
Net income
—
—
—
—
—
9,117
—
9,117
Stockholders’ equity, June 30, 2022
23,978,741
$
232
5,553,696
$
56
$
248,706
$
(25,653
)
$
(34,006
)
$
189,335
Stock-based compensation
—
—
—
—
54
—
—
54
Options exercised
2,000
—
—
—
4
—
—
4
Net loss
—
—
—
—
—
(11,885
)
—
(11,885
)
Stockholders’ equity, September 30,
2022
23,980,741
$
232
5,553,696
$
56
$
248,764
$
(37,538
)
$
(34,006
)
$
177,508
Class A
Class B
Common Stock
Common Stock
Additional
Paid-In
Accumulated
Treasury
Shares
Amount
Shares
Amount
Capital
Deficit
Stock
Total
Stockholders’ equity, December 31,
2022
23,980,741
$
232
5,553,696
$
56
$
248,820
$
(39,745
)
$
(34,006
)
$
175,357
Stock-based compensation
—
—
—
—
75
—
—
75
Net loss
—
—
—
—
—
(5,154
)
—
(5,154
)
Stockholders’ equity, March 31,
2023
23,980,741
$
232
5,553,696
$
56
$
248,895
$
(44,899
)
$
(34,006
)
$
170,278
Stock-based compensation
—
—
—
—
136
—
—
136
Net loss
—
—
—
—
—
(7,094
)
—
(7,094
)
Stockholders’ equity, June 30,
2023
23,980,741
$
232
5,553,696
$
56
$
249,031
$
(51,993
)
$
(34,006
)
$
163,320
Stock-based compensation
—
—
—
—
129
—
—
129
Net loss
—
—
—
—
—
(31,297
)
—
(31,297
)
Stockholders’ equity, September
30, 2023
23,980,741
$
232
5,553,696
$
56
$
249,160
$
(83,290
)
$
(34,006
)
$
132,152
Salem Media Group, Inc.
Supplemental Information (in thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2023
2022
2023
(Unaudited)
Reconciliation of Total Operating
Expenses to Operating Expenses excluding Legal Settlement, Debt
Modification Costs, Depreciation and Amortization Expense, Changes
in the Estimated Fair Value of Contingent Earn-out Consideration,
Impairments, Gains or Losses on the Disposition of Assets and
Stock-based Compensation Expense (Recurring Operating
Expenses)
Operating Expenses
$
75,646
$
99,787
$
194,635
$
237,331
Less legal settlement
(3,825
)
—
(4,776
)
—
Less debt modification costs
(2
)
—
(250
)
—
Less depreciation and amortization
expense
(3,034
)
(3,377
)
(9,500
)
(10,291
)
Less change in estimated fair value of
contingent earn-out consideration
—
100
5
102
Less impairment of indefinite-lived
long-term assets other than goodwill
(7,725
)
(35,113
)
(11,660
)
(38,376
)
Less impairment of goodwill
—
(733
)
(127
)
(2,580
)
Less net gain (loss) on the disposition of
assets
(167
)
456
8,461
334
Less stock-based compensation expense
(54
)
(129
)
(228
)
(340
)
Total Recurring Operating
Expenses
$
60,839
$
60,991
$
176,560
$
186,180
Reconciliation of Net Broadcast Revenue
to Same Station Net Broadcast Revenue
Net broadcast revenue
$
51,136
$
48,966
$
152,020
$
146,986
Net broadcast revenue – acquisitions
—
(410
)
—
(908
)
Net broadcast revenue – dispositions
(88
)
—
(203
)
(24
)
Net broadcast revenue – format change
—
—
—
—
Same Station net broadcast revenue
$
51,048
$
48,556
$
151,817
$
146,054
Reconciliation of Broadcast Operating
Expenses to Same Station Broadcast Operating Expenses
Broadcast operating expenses
$
41,178
$
42,171
$
120,837
$
128,498
Broadcast operating expenses –
acquisitions
—
(851
)
(15
)
(2,382
)
Broadcast operating expenses –
dispositions
(253
)
(33
)
(332
)
(131
)
Broadcast operating expenses – format
change
—
—
—
—
Same Station broadcast operating
expenses
$
40,925
$
41,287
$
120,490
$
125,985
Reconciliation of SOI to Same Station
SOI
Station Operating Income
$
9,958
$
6,795
$
31,183
$
18,488
Station operating (income) loss –
acquisitions
—
441
15
1,474
Station operating (income) loss –
dispositions
165
33
129
107
Station operating (income) loss – format
change
—
—
—
—
Same Station - Station Operating
Income
$
10,123
$
7,269
$
31,327
$
20,069
Salem Media Group, Inc.
Supplemental Information (in thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2023
2022
2023
(Unaudited)
Calculation of Station Operating
Income, Digital Media Operating Income and Publishing Operating
Loss
Net broadcast revenue
$
51,136
$
48,966
$
152,020
$
146,986
Less broadcast operating expenses
(41,178
)
(42,171
)
(120,837
)
(128,498
)
Station Operating Income
$
9,958
$
6,795
$
31,183
$
18,488
Net digital media revenue
$
10,189
$
9,965
$
31,293
$
31,335
Less digital media operating expenses
(8,333
)
(8,496
)
(25,079
)
(26,516
)
Digital Media Operating Income
$
1,856
$
1,469
$
6,214
$
4,819
Net publishing revenue
$
5,537
$
4,566
$
14,840
$
14,439
Less publishing operating expenses
(6,542
)
(5,939
)
(16,441
)
(17,341
)
Publishing Operating Loss
$
(1,005
)
$
(1,373
)
$
(1,601
)
$
(2,902
)
The company defines EBITDA (1) as net income before interest,
taxes, depreciation, and amortization. The table below presents a
reconciliation of EBITDA (1) to Net Loss, the most directly
comparable GAAP measure. EBITDA (1) is a non-GAAP financial
performance measure that is not to be considered a substitute for
or superior to the directly comparable measures reported in
accordance with GAAP. The company defines Adjusted EBITDA (1) as
EBITDA (1) before gains or losses on the disposition of assets,
before debt modification costs, before changes in the estimated
fair value of contingent earn-out consideration, before
impairments, before net miscellaneous income and expenses, before
(gain) loss on early retirement of long-term debt, and before
non-cash compensation expense. The table below presents a
reconciliation of Adjusted EBITDA (1) to Net Loss, the most
directly comparable GAAP measure. Adjusted EBITDA (1) is a non-GAAP
financial performance measure that is not to be considered a
substitute for or superior to the directly comparable measures
reported in accordance with GAAP.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2023
2022
2023
(Unaudited)
Reconciliation of EBITDA and Adjusted
EBITDA to Net Loss
Net loss
$
(11,885
)
$
(31,297
)
$
(1,029
)
$
(43,545
)
Plus interest expense, net of capitalized
interest
3,142
3,626
9,925
10,596
Plus provision for (benefit from) income
taxes
59
(8,782
)
(1,234
)
(11,619
)
Plus depreciation and amortization
3,034
3,377
9,500
10,291
Less interest income
(17
)
(14
)
(166
)
(40
)
EBITDA
$
(5,667
)
$
(33,090
)
$
16,996
$
(34,317
)
Plus net (gain) loss on the disposition of
assets
167
(456
)
(8,461
)
(334
)
Plus change in the estimated fair value of
contingent
earn-out consideration
—
(100
)
(5
)
(102
)
Plus debt modification costs
2
—
250
—
Plus impairment of indefinite-lived
long-term assets
other than goodwill
7,725
35,113
11,660
38,376
Plus impairment of goodwill
—
733
127
2,580
Plus net miscellaneous (income) and
expenses
19
184
19
(27
)
Plus (gain) loss on early retirement of
long- term
debt
—
—
18
60
Plus non-cash stock-based compensation
54
129
228
340
Adjusted EBITDA
$
2,300
$
2,513
$
20,832
$
6,576
Selected Debt Data
Outstanding at
Applicable Interest
Rate
September 30, 2023
Senior Secured Notes due 2028 (1)
$
159,416,000
7.125
%
Asset-based revolving credit facility
(2)
$
20,523,877
9.83
%
(1)
$159.4 million notes with semi-annual
interest payments at an annual rate of 7.125%.
(2)
Outstanding borrowings under the ABL
Facility, with interest payments due at SOFR plus 1.5% to 2.0% per
annum with a SOFR floor of 0.5% or prime rate plus 0.5% to 1.0% per
annum. Effective July 1, the interest payments are SOFR plus 4.0%
or prime rate plus 3.0%.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231106203825/en/
Evan D. Masyr Executive Vice President and Chief Financial
Officer (805) 384-4512 evan@salemmedia.com
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