Salem Media Group, Inc. (the “company”) (Nasdaq: SALM) released
its results for the three and six months ended June 30, 2023.
Second Quarter 2023 Results
For the three months ended June 30, 2023 compared to the three
months ended June 30, 2022:
Consolidated
- Total revenue decreased 4.2% to $65.8 million from $68.7
million;
- Total operating expenses increased 13.9% to $69.9 million from
$61.4 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 5.2% to $63.1 million from $60.0
million;
- The company had an operating loss of $4.1 million as compared
to operating income of $7.3 million;
- The company had a net loss of $7.1 million, or $0.26 net loss
per share, compared to net income of $9.1 million, or $0.33 net
income per diluted share;
- EBITDA (1) decreased to $(0.6) million from $14.5 million;
and
- Adjusted EBITDA (1) decreased 77.2% to $2.7 million from $11.7
million.
Broadcast
- Net broadcast revenue decreased 5.3% to $49.7 million from
$52.5 million;
- Station Operating Income (“SOI”) (1) decreased 43.5% to $6.2
million from $10.9 million;
- Same Station (1) net broadcast revenue decreased 5.8% to $49.4
million from $52.4 million; and
- Same Station SOI (1) decreased 37.7% to $6.8 million from $10.9
million.
Digital Media
- Digital media revenue increased 0.5% to $10.9 million from
$10.8 million; and
- Digital Media Operating Income (1) decreased 27.5% to $1.8
million from $2.5 million.
Publishing
- Publishing revenue decreased 3.5% to $5.2 million from $5.4
million; and
- Publishing Operating Loss (1) increased to $0.8 million from
$6,000.
Included in the results for the three months ended June 30, 2023
are:
- A $1.8 million ($1.4 million, net of tax, or $0.05 per share)
impairment charge to the value of goodwill in Townhall;
- A $1.1 million ($0.8 million, net of tax, or $0.03 per share)
impairment charge to the value of broadcast licenses in Portland
and San Francisco;
- A $0.1 million ($0.1 million, net of tax) net loss on the
disposition of assets; 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 June 30, 2022
are:
- A $6.9 million ($5.1 million, net of tax, or $0.19 per diluted
share) net gain on the disposition of assets reflects a $6.5
million pre-tax gain on the sale of land used in the company’s
Denver, Colorado broadcast operations and a $0.5 million pre-tax
gain on the sale of the company’s radio stations in Louisville,
Kentucky that was offset by losses from various fixed asset
disposals;
- A $3.9 million ($2.9 million, net of tax, or $0.11 per share)
impairment charge to the value of broadcast licenses in Columbus,
Dallas, Greenville, Honolulu, Orlando, Portland, and
Sacramento;
- A $0.1 million ($0.1 million, net of tax) goodwill impairment
charge; and
- A $0.1 million ($0.1 million, net of tax) non-cash compensation
charge related to the expense of stock options.
Per share numbers are calculated based on 27,216,787 diluted
weighted average shares for the three months ended June 30, 2023,
and 27,570,881 diluted weighted average shares for the three months
ended June 30, 2022.
Year to Date 2023 Results
For the six months ended June 30, 2023 compared to the six
months ended June 30, 2022:
Consolidated
- Total revenue decreased 1.5% to $129.3 million from $131.3
million;
- Total operating expenses increased 15.6% to $137.5 million from
$119.0 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 8.2% to $125.2
million from $115.7 million;
- The company had an operating loss of $8.3 million as compared
to operating income of $12.3 million;
- The company recognized $3.9 million in film distribution income
from an unconsolidated equity investment in the six months ended
June 30, 2022;
- The company had a net loss of $12.2 million, or $0.45 net loss
per share, compared to net income of $10.9 million, or $0.39 net
income per diluted share;
- EBITDA (1) decreased to $(1.2) million from $22.7 million;
and
- Adjusted EBITDA (1) decreased 78.1% to $4.1 million from $18.5
million.
Broadcast
- Net broadcast revenue decreased 2.8% to $98.0 million from
$100.9 million;
- SOI (1) decreased 44.9% to $11.7 million from $21.2
million;
- Same station (1) net broadcast revenue decreased 3.2% to $97.5
million from $100.8 million; and
- Same station SOI (1) decreased 39.6% to $12.8 million from
$21.2 million.
Digital media
- Digital media revenue increased 1.3% to $21.4 million from
$21.1 million; and
- Digital media operating income (1) decreased 23.1% to $3.4
million from $4.4 million.
Publishing
- Publishing revenue increased 6.1% to $9.9 million from $9.3
million; and
- Publishing Operating Loss (1) increased 156.5% to $1.5 million
from $0.6 million.
Included in the results for the six months ended June 30, 2023
are:
- A $3.2 million ($2.4 million, net of tax, or $0.09 per share)
impairment charge to the value of broadcast licenses in Miami,
Portland and San Francisco;
- A $1.8 million ($1.4 million, net of tax, or $0.05 per share)
impairment charge to the value of goodwill in Townhall;
- A $0.1 million loss on the early retirement of long-term debt
associated with the 2024 Notes; and
- A $0.2 million ($0.1 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 six months ended June 30, 2022
are:
- A $8.6 million ($6.4 million, net of tax, or $0.23 per diluted
share) net gain on the disposition of assets relates 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 $3.9 million ($2.9 million, net of tax, or $0.11 per share)
impairment charge to the value of broadcast licenses in Columbus,
Dallas, Greenville, Honolulu, Orlando, Portland, and
Sacramento;
- 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 ($0.1 million, net of tax) non-cash compensation
charge related to the expense of stock options.
Per share numbers are calculated based on 27,216,787 diluted
weighted average shares for the six months ended June 30, 2023, and
27,590,644 diluted weighted average shares for the six months ended
June 30, 2022.
Balance Sheet
As of June 30, 2023, the company had $159.4 million outstanding
on the 7.125% senior secured notes due 2028 (“2028 Notes”) and
$22.6 million outstanding on the ABL facility.
Effective June 30, 2023, the company was not in compliance with
its fixed charge coverage ratio. On August 7, 2023 the company
signed a forbearance whereby the bank agreed not to exercise
remedies on the default during the month of August. Additionally,
the notional amount of the revolver was reduced from $30.0 million
to $25.0 million with a minimum availability of $1.0 million.
Finally, the interest rate associated with the revolver increased
by two percentage points effective July 1, 2023 through the date of
the forbearance amendment.
Acquisitions and Divestitures
The following transactions were completed since April 1,
2023:
- On July 21, 2023 the company closed the sale of radio station
KNTS-AM in Seattle, Washington for $0.2 million.
- On July 13, 2023 the company closed the sale of 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.
- On May 25, 2023, the company entered into a rental income
purchase agreement with a related party to sell the assignment of
the rents from its Greenville, South Carolina radio transmitter
site for $3.5 million commencing on June 1, 2023 resulting in a
pre-tax gain of $3.3 million.
Pending transactions:
- 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 Federal Communications Commission
(“FCC”). Radio station KSAC-FM will begin being programmed under a
TBA on August 1, 2023. Based on its plan to sell the station, the
company recorded an estimated pre-tax loss on the sale of assets of
$3.3 million at June 30, 2023, reflecting the sales price as
compared to the carrying value of the assets and the estimated cost
to sell. 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
August 8, 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 Second 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 August 22, 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.
Third Quarter 2023 Outlook
For the third quarter of 2023, the company is projecting total
revenue to decline between 3% and 5% from the third quarter 2022
total revenue of $66.9 million. Excluding the impact of the 2022
political revenue, the company would project total revenue to
decline between 1% and 3%. 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 a decrease of 1% and
increase of 2% compared to the third quarter of 2022 Recurring
Operating Expenses of $60.8 million.
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, Facebook and Twitter.
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
Six Months Ended
June 30,
June 30,
2022
2023
2022
2023
(Unaudited)
Net broadcast revenue
$
52,452
$
49,680
$
100,884
$
98,020
Net digital media revenue
10,804
10,860
21,104
21,370
Net publishing revenue
5,426
5,234
9,303
9,873
Total revenue
68,682
65,774
131,291
129,263
Operating expenses:
Broadcast operating expenses
41,538
43,518
79,659
86,327
Legal settlement
951
—
951
—
Digital media operating
expenses
8,273
9,026
16,746
18,020
Publishing operating expenses
5,432
6,026
9,899
11,402
Unallocated corporate
expenses
4,781
4,655
9,591
9,651
Debt modification costs
20
—
248
—
Depreciation and amortization
3,190
3,521
6,466
6,914
Change in the estimated fair
value of contingent earn-out consideration
—
—
(5
)
(2
)
Impairment of indefinite-lived
long-term assets other than goodwill
3,935
1,139
3,935
3,263
Impairment of goodwill
127
1,847
127
1,847
Net (gain) loss on the
disposition of assets
(6,893
)
143
(8,628
)
122
Total operating expenses
61,354
69,875
118,989
137,544
Operating income (loss)
7,328
(4,101
)
12,302
(8,281
)
Other income (expense):
Interest income
149
13
149
26
Interest expense
(3,389
)
(3,539
)
(6,783
)
(6,970
)
Gain (loss) on early retirement
of long-term debt
35
—
(18
)
(60
)
Earnings (loss) from equity
method investment
3,913
(19
)
3,913
(11
)
Net miscellaneous income and
(expenses)
(1
)
(9
)
—
211
Net income (loss) before income
taxes
8,035
(7,655
)
9,563
(15,085
)
Benefit from income taxes
(1,082
)
(561
)
(1,293
)
(2,837
)
Net income (loss)
$
9,117
$
(7,094
)
$
10,856
$
(12,248
)
Basic income (loss) per share
Class A and Class B common stock
$
0.33
$
(0.26
)
$
0.39
$
(0.45
)
Diluted income (loss) per share
Class A and Class B common stock
$
0.33
$
(0.26
)
$
0.39
$
(0.45
)
Basic weighted average Class A
and Class B common stock shares outstanding
27,214,787
27,216,787
27,196,081
27,216,787
Diluted weighted average Class A
and Class B common stock shares outstanding
27,570,881
27,216,787
27,590,644
27,216,787
Salem Media Group,
Inc.
Condensed Consolidated Balance
Sheets
(in thousands)
December 31, 2022
June 30, 2023
(Unaudited)
Assets
Cash
$
—
$
2
Accounts receivable, net
30,756
29,526
Other current assets
14,301
16,533
Property and equipment, net
81,296
83,467
Operating and financing lease right-of-use
assets
43,734
44,628
Intangible assets, net
330,008
328,059
Deferred financing costs
681
56
Other assets
4,346
4,976
Total assets
$
505,122
$
507,247
Liabilities and Stockholders’
Equity
Current liabilities
$
64,610
$
77,796
Long-term debt
150,367
152,297
Operating and financing lease liabilities,
less current portion
42,445
42,423
Deferred income taxes
66,732
63,901
Other liabilities
5,611
7,510
Stockholders’ Equity
175,357
163,320
Total liabilities and stockholders’
equity
$
505,122
$
507,247
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
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
Salem Media Group,
Inc.
Supplemental
Information
(in thousands)
Three Months Ended
Six Months Ended
June 30,
June 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
$
61,354
$
69,875
$
118,989
$
137,544
Less legal settlement
(951
)
—
(951
)
—
Less debt modification costs
(20
)
—
(248
)
—
Less depreciation and amortization
expense
(3,190
)
(3,521
)
(6,466
)
(6,914
)
Less change in estimated fair value of
contingent earn-out consideration
—
—
5
2
Less impairment of indefinite-lived
long-term assets other than goodwill
(3,935
)
(1,139
)
(3,935
)
(3,263
)
Less impairment of goodwill
(127
)
(1,847
)
(127
)
(1,847
)
Less net gain (loss) on the disposition of
assets
6,893
(143
)
8,628
(122
)
Less stock-based compensation expense
(68
)
(136
)
(174
)
(211
)
Total Recurring Operating
Expenses
$
59,956
$
63,089
$
115,721
$
125,189
Reconciliation of Net Broadcast Revenue
to Same Station Net Broadcast Revenue
Net broadcast revenue
$
52,452
$
49,680
$
100,884
$
98,020
Net broadcast revenue – acquisitions
—
(293
)
—
(498
)
Net broadcast revenue – dispositions
(68
)
(27
)
(115
)
(24
)
Net broadcast revenue – format change
—
—
—
—
Same Station net broadcast revenue
$
52,384
$
49,360
$
100,769
$
97,498
Reconciliation of Broadcast Operating
Expenses to Same Station Broadcast Operating Expenses
Broadcast operating expenses
$
41,538
$
43,518
$
79,659
$
86,327
Broadcast operating expenses –
acquisitions
—
(872
)
(15
)
(1,531
)
Broadcast operating expenses –
dispositions
(54
)
(73
)
(79
)
(98
)
Broadcast operating expenses – format
change
—
—
—
—
Same Station broadcast operating
expenses
$
41,484
$
42,573
$
79,565
$
84,698
Reconciliation of SOI to Same Station
SOI
Station Operating Income
$
10,914
$
6,162
$
21,225
$
11,693
Station operating (income) loss –
acquisitions
—
579
15
1,033
Station operating (income) loss –
dispositions
(14
)
46
(36
)
74
Station operating (income) loss – format
change
—
—
—
—
Same Station - Station Operating
Income
$
10,900
$
6,787
$
21,204
$
12,800
Salem Media Group,
Inc.
Supplemental
Information
(in thousands)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2023
2022
2023
(Unaudited)
Calculation of Station Operating
Income, Digital Media Operating Income and Publishing Operating
Income (Loss)
Net broadcast revenue
$
52,452
$
49,680
$
100,884
$
98,020
Less broadcast operating expenses
(41,538
)
(43,518
)
(79,659
)
(86,327
)
Station Operating Income
$
10,914
$
6,162
$
21,225
$
11,693
Net digital media revenue
$
10,804
$
10,860
$
21,104
$
21,370
Less digital media operating expenses
(8,273
)
(9,026
)
(16,746
)
(18,020
)
Digital Media Operating Income
$
2,531
$
1,834
$
4,358
$
3,350
Net publishing revenue
$
5,426
$
5,234
$
9,303
$
9,873
Less publishing operating expenses
(5,432
)
(6,026
)
(9,899
)
(11,402
)
Publishing Operating Income (Loss)
$
(6
)
$
(792
)
$
(596
)
$
(1,529
)
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 Income
(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 Income (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
Six Months Ended
June 30,
June 30,
2022
2023
2022
2023
(Unaudited)
Reconciliation of EBITDA and Adjusted
EBITDA to Net Income (Loss)
Net income (loss)
$
9,117
$
(7,094
)
$
10,856
$
(12,248
)
Plus interest expense, net of capitalized
interest
3,389
3,539
6,783
6,970
Plus benefit from income taxes
(1,082
)
(561
)
(1,293
)
(2,837
)
Plus depreciation and amortization
3,190
3,521
6,466
6,914
Less interest income
(149
)
(13
)
(149
)
(26
)
EBITDA
$
14,465
$
(608
)
$
22,663
$
(1,227
)
Plus net (gain) loss on the disposition of
assets
(6,893
)
143
(8,628
)
122
Plus change in the estimated fair value of
contingent earn-out consideration
—
—
(5
)
(2
)
Plus debt modification costs
20
—
248
—
Plus impairment of indefinite-lived
long-term assets other than goodwill
3,935
1,139
3,935
3,263
Plus impairment of goodwill
127
1,847
127
1,847
Plus net miscellaneous (income) and
expenses
1
9
—
(211
)
Plus (gain) loss on early retirement of
long-term debt
(35
)
—
18
60
Plus non-cash stock-based compensation
68
136
174
211
Adjusted EBITDA
$
11,688
$
2,666
$
18,532
$
4,063
Selected Debt Data
Outstanding at
June 30, 2023
Applicable
Interest Rate
Senior Secured Notes due 2028 (1)
$
159,416,000
7.125
%
Asset-based revolving credit facility
(2)
$
22,615,023
7.74
%
(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 will be SOFR plus
4.0% or prime rate plus 3.0% which reduced to the previous rates
upon the signing of the forbearance amendment.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230807353391/en/
Evan D. Masyr Executive Vice President and Chief Financial
Officer (805) 384-4512 evan@salemmedia.com
Salem Media (NASDAQ:SALM)
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