Salem Media Group, Inc. Announces Third Quarter 2023 Total Revenue of $63.5 Million

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%.

 

Salem Media Group, Inc. Announces Third Quarter 2023 Total Revenue of $63.5 Million

Contacts

Evan D. Masyr

Executive Vice President and Chief Financial Officer

(805) 384-4512

evan@salemmedia.com

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