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Salem Media Group, Inc./DE – ‘10-Q’ for 6/30/20 – ‘R18’

On:  Friday, 8/7/20, at 8:56pm ET   ·   For:  6/30/20   ·   Accession #:  1193125-20-213730   ·   File #:  0-26497

Previous ‘10-Q’:  ‘10-Q’ on 6/2/20 for 3/31/20   ·   Next:  ‘10-Q’ on 11/13/20 for 9/30/20   ·   Latest:  ‘10-Q’ on 11/13/23 for 9/30/23   ·   1 Reference:  By:  Salem Media Group, Inc./DE – ‘424B5’ on 4/16/21

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/07/20  Salem Media Group, Inc./DE        10-Q        6/30/20  105:10M                                    Donnelley … Solutions/FA

Quarterly Report   —   Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    974K 
 2: EX-31.1     Certification -- §302 - SOA'02                      HTML     34K 
 3: EX-31.2     Certification -- §302 - SOA'02                      HTML     34K 
 4: EX-32.1     Certification -- §906 - SOA'02                      HTML     30K 
 5: EX-32.2     Certification -- §906 - SOA'02                      HTML     30K 
12: R1          Cover Page                                          HTML     86K 
13: R2          Condensed Consolidated Balance Sheets               HTML    157K 
14: R3          Condensed Consolidated Balance Sheets               HTML     55K 
                (Parenthetical)                                                  
15: R4          Condensed Consolidated Statements of Operations     HTML    116K 
16: R5          Condensed Consolidated Statements of Operations     HTML     37K 
                (Parenthetical)                                                  
17: R6          Condensed Consolidated Statements of Stockholders'  HTML     74K 
                Equity                                                           
18: R7          Condensed Consolidated Statements of Cash Flows     HTML    162K 
19: R8          Business and Basis of Presentation                  HTML     85K 
20: R9          Summary of Significant Accounting Policies          HTML     38K 
21: R10         Recent Transactions                                 HTML     36K 
22: R11         Contingent Earn-Out Consideration                   HTML     34K 
23: R12         Revenue Recognition                                 HTML    220K 
24: R13         Inventories                                         HTML     40K 
25: R14         Property and Equipment                              HTML     55K 
26: R15         Operating and Finance Lease Right-of-Use Assets     HTML    121K 
27: R16         Broadcast Licenses                                  HTML     87K 
28: R17         Goodwill                                            HTML     83K 
29: R18         Other Indefinite-Lived Intangible Assets            HTML     42K 
30: R19         Amortizable Intangible Assets                       HTML     79K 
31: R20         Long-Term Debt                                      HTML    136K 
32: R21         Fair Value Measurements and Disclosures             HTML     54K 
33: R22         Income Taxes                                        HTML     43K 
34: R23         Commitments and Contingencies                       HTML     35K 
35: R24         Stock Incentive Plan                                HTML    127K 
36: R25         Equity Transactions                                 HTML     43K 
37: R26         Segment Data                                        HTML    222K 
38: R27         Subsequent Events                                   HTML     32K 
39: R28         Business and Basis of Presentation (Policies)       HTML    287K 
40: R29         Revenue Recognition (Tables)                        HTML    177K 
41: R30         Inventories (Tables)                                HTML     40K 
42: R31         Property and Equipment (Tables)                     HTML     53K 
43: R32         Operating and Finance Lease Right-of-Use Assets     HTML    119K 
                (Tables)                                                         
44: R33         Broadcast Licenses (Tables)                         HTML     78K 
45: R34         Goodwill (Tables)                                   HTML     77K 
46: R35         Other Indefinite-Lived Intangible Assets (Tables)   HTML     36K 
47: R36         Amortizable Intangible Assets (Tables)              HTML     81K 
48: R37         Long-Term Debt (Tables)                             HTML    122K 
49: R38         Fair Value Measurements and Disclosures (Tables)    HTML     47K 
50: R39         Stock Incentive Plan (Tables)                       HTML    128K 
51: R40         Equity Transactions (Tables)                        HTML     41K 
52: R41         Segment Data (Tables)                               HTML    206K 
53: R42         Basis of Presentation - Additional Information      HTML     36K 
                (Detail)                                                         
54: R43         Recent Transactions - Debt Transactions -           HTML     44K 
                Additional Information (Detail)                                  
55: R44         Recent Transactions - Equity Transactions -         HTML     33K 
                Additional Information (Detail)                                  
56: R45         Recent Transactions - Divestitures - Additional     HTML     36K 
                Information (Detail)                                             
57: R46         Recent Transactions - Pending Transactions          HTML     47K 
                -Additional Information (Detail)                                 
58: R47         Contingent Earn-Out Consideration - Additional      HTML     33K 
                Information (Detail)                                             
59: R48         Revenue Recognition - Additional Information        HTML     39K 
                (Detail)                                                         
60: R49         Revenue Recognition - Trade and Barter              HTML     45K 
                Transactions Expenses (Detail)                                   
61: R50         Revenue Recognition - Significant Changes in Our    HTML     52K 
                Contract Liabilities (Detail)                                    
62: R51         Revenue Recognition - Revenue, Remaining            HTML     49K 
                Performance Obligation, Expected Timing of                       
                Satisfaction (Detail)                                            
63: R52         Revenue Recognition - Reconciliation of Revenue     HTML    118K 
                from Segments to Consolidated (Detail)                           
64: R53         Inventories - Schedule of Inventory on Hand by      HTML     39K 
                Segment (Detail)                                                 
65: R54         Property and Equipment - Summary of Categories of   HTML     60K 
                Property and Equipment (Detail)                                  
66: R55         Property and Equipment - Additional Information     HTML     32K 
                (Detail)                                                         
67: R56         Operating and Finance Lease Right-of-Use Assets -   HTML     51K 
                Additional Information (Detail)                                  
68: R57         Operating and Finance Lease Right-of-Use Assets -   HTML     54K 
                Supplemental Balance Sheet Information Related to                
                Leases (Detail)                                                  
69: R58         Operating and Finance Lease Right-of-Use Assets -   HTML     44K 
                Components of Lease Expense (Detail)                             
70: R59         Operating and Finance Lease Right-of-Use Assets -   HTML     40K 
                Schedule of Impact to Financial Statements of the                
                Adoption of ASU 842 (Detail)                                     
71: R60         Operating and Finance Lease Right-of-Use Assets -   HTML    115K 
                Summary of Future Lease Payments (Detail)                        
72: R61         Broadcast Licenses - Additional Information         HTML     37K 
                (Detail)                                                         
73: R62         Broadcast Licenses - Fair Value Measurement Inputs  HTML     43K 
                and Valuation Techniques for Broadcast Licenses                  
                (Detail)                                                         
74: R63         Broadcast Licenses - Results of Impairment Testing  HTML     52K 
                of Broadcast Licenses Under Income Approach                      
                (Detail)                                                         
75: R64         Broadcast Licenses - Schedule of Changes in         HTML     50K 
                Broadcasting Licenses (Detail)                                   
76: R65         Goodwill - Fair Value Measurement Inputs and        HTML     42K 
                Valuation Techniques For Goodwill (Detail)                       
77: R66         Goodwill - Schedule of Changes in Goodwill          HTML     51K 
                (Detail)                                                         
78: R67         Goodwill - Additional Information (Detail)          HTML     35K 
79: R68         Other Indefinite-Lived Intangible Assets - Fair     HTML     42K 
                Value Measurement Inputs and Valuation Techniques                
                For Mastheads (Detail)                                           
80: R69         Other Indefinite-Lived Intangible Assets -          HTML     35K 
                Additional Information (Detail)                                  
81: R70         Amortizable Intangible Assets - Summary of          HTML     56K 
                Significant Classes of Amortizable Intangible                    
                Assets (Detail)                                                  
82: R71         Amortizable Intangible Assets - Additional          HTML     32K 
                Information (Detail)                                             
83: R72         Amortizable Intangible Assets - Amortizable         HTML     45K 
                Intangible Assets, Estimate Amortization Expense                 
                (Detail)                                                         
84: R73         Long-Term Debt - 6.75% Senior Secured Notes -       HTML     53K 
                Additional Information (Detail)                                  
85: R74         Long - term Debt - Summary of Repurchase of Senior  HTML    105K 
                Secured Note (Detail)                                            
86: R75         Long-Term Debt - Asset-Based Revolving Credit       HTML     89K 
                Facility - Additional Information (Detail)                       
87: R76         Long-Term Debt - Long-Term Debt (Detail)            HTML     45K 
88: R77         Long-Term Debt - Long-Term Debt (Parenthetical)     HTML     33K 
                (Detail)                                                         
89: R78         Long-Term Debt - Summary of Long-term Debt          HTML     54K 
                Obligations - Additional Information (Detail)                    
90: R79         Long-Term Debt - Principle Repayment Requirements   HTML     37K 
                Under Long Term Agreements Outstanding (Detail)                  
91: R80         Fair Value Measurements and Disclosures -           HTML     33K 
                Additional Information (Detail)                                  
92: R81         Fair Value Measurements and Disclosures - Summary   HTML     39K 
                of Fair Value of Financial Assets and Liabilities                
                (Detail)                                                         
93: R82         Income Taxes - Additional Information (Detail)      HTML     72K 
94: R83         Stock Incentive Plan - Additional Information       HTML     59K 
                (Detail)                                                         
95: R84         Stock Incentive Plan - Schedule of Stock-Based      HTML     50K 
                Compensation Expense Recognized (Detail)                         
96: R85         Stock Incentive Plan - Schedule of                  HTML     40K 
                Weighted-Average Assumptions Used to Estimate Fair               
                Value of Stock Options and Restricted Stock Awards               
                using Black-Scholes Option Valuation Model                       
                (Detail)                                                         
97: R86         Stock Incentive Plan - Schedule of Stock Option     HTML     83K 
                Activity (Detail)                                                
98: R87         Stock Incentive Plan - Schedule of Information      HTML     40K 
                Regarding Restricted Stock Activity (Detail)                     
99: R88         Equity Transactions - Additional Information        HTML     33K 
                (Detail)                                                         
100: R89         Equity Transactions - Schedule of Cash              HTML     50K  
                Distributions Declared and Paid (Detail)                         
101: R90         Segment Data - Additional Information (Detail)      HTML     32K  
102: R91         Segment Data - Schedule of Segment Data (Detail)    HTML    116K  
104: XML         IDEA XML File -- Filing Summary                      XML    196K  
103: EXCEL       IDEA Workbook of Financial Reports                  XLSX    141K  
 6: EX-101.INS  XBRL Instance -- salm-20200630                       XML   3.87M 
 8: EX-101.CAL  XBRL Calculations -- salm-20200630_cal               XML    211K 
 9: EX-101.DEF  XBRL Definitions -- salm-20200630_def                XML   1.11M 
10: EX-101.LAB  XBRL Labels -- salm-20200630_lab                     XML   1.59M 
11: EX-101.PRE  XBRL Presentations -- salm-20200630_pre              XML   1.31M 
 7: EX-101.SCH  XBRL Schema -- salm-20200630                         XSD    259K 
105: ZIP         XBRL Zipped Folder -- 0001193125-20-213730-xbrl      Zip    269K

‘R18’   —   Other Indefinite-Lived Intangible Assets

This is an IDEA Financial Report.  [ Alternative Formats ]

 
v3.20.2
Other Indefinite-Lived Intangible Assets
 6 Months Ended
Text Block [Abstract]  
Other Indefinite-Lived Intangible Assets
NOTE 11. OTHER INDEFINITE-LIVED INTANGIBLE ASSETS
Other indefinite-lived intangible assets consist of mastheads, or the graphic elements that identify our publications to readers and advertisers. These include customized typeset page headers, section headers, and column graphics as well as other name and identity stylized elements within the body of each publication. We are not aware of any legal, competitive, economic or other factors that materially limit the useful life of our mastheads. We account for mastheads in accordance with FASB ASC Topic 350
Intangibles—Goodwill and Other
. We do not amortize mastheads, but rather test for impairment annually or more frequently if events or circumstances indicate that an asset may be impaired.
We performed an interim review of mastheads during the first quarter of 2020 due to the
COVID-19
pandemic and the resulting
stay-at-home
orders that began to adversely impact revenues. We assessed a variety of factors, including media industry forecasts and the amount by which the prior estimated fair value exceeded the carrying value. The results of our first quarter of 2020 interim impairment analysis are described further below.
Impairment testing requires estimates of the fair value of our indefinite-lived intangible assets. We believe that these fair value estimates are critical accounting estimates as the value is significant in relation to our total assets and the estimates incorporate variables and assumptions based on our experiences and judgment about our future operating performance. Fair value measurements use significant unobservable inputs that reflect our own assumptions about the estimates that market participants would use in measuring fair value, including assumptions about risk. If actual future results are less favorable than the assumptions and estimates used in our estimates, we are subject to future impairment charges, the amount of which may be material. The unobservable inputs are defined in FASB ASC Topic 820 “Fair Value Measurements and Disclosures” as Level 3 inputs discussed in detail in Note 14 – Fair Value Measurements.
For the interim testing performed in the first quarter of 2020, we engaged Bond & Pecaro, an independent appraisal and valuation firm, to assist us in estimating the fair value of mastheads using a Relief from Royalty method, a form of the income approach. The Relief from Royalty method estimates the fair value of mastheads through use of a discounted cash flow model that incorporates a hypothetical “royalty rate” that a third-party owner would be willing to pay in lieu of owning the asset. The royalty rate is based on observed royalty rates for comparable assets as of the measurement date. We adjust the selected royalty rate to account for a percentage of the royalty fee that could be attributed to the use of other intangibles, such as goodwill, time in existence, trade secrets and industry expertise. The adjusted royalty rate represents the royalty fee remaining that could be attributed to the use of the masthead only.
Pre-tax
royalty income is based on a
10-year
revenue forecast and assumed to carry on into perpetuity. Revenue beyond the projection period (terminal year) is based on estimated long-term industry growth rates. The analysis also incorporates the present value of the tax amortization benefit associated with mastheads. The key estimates and assumptions are as follows:
 
Mastheads
    
Risk-adjusted discount rate
  10.0%  
10.5%
Long-term revenue growth rates
  (4.0%) – (1.0%)  
(1.0%) – (25.0%)
Royalty rate
  3.00%  
3.00%
 
The risk-adjusted discount rate reflects the WACC developed based on data from same or similar industry participants and publicly available market data as of the measurement date.
Based on our review and analysis, we recorded an impairment charge to mastheads of $0.3 million as of the interim testing period ended March 31, 2020. The impairment charge was driven by decreases in the projected long-term revenue growth rates for the print magazine industry and an increase in the WACC. We believe that these factors are indicative of trends in the industry as a whole and not unique to our company or operations. The impairment charge during the first quarter of 2020 reduced the value of our mastheads to zero eliminating subsequent testing.

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing    Date    Other Filings
Filed on:8/7/208-K
For Period end:6/30/2011-K,  NT 11-K
3/31/2010-Q
12/31/1910-K,  11-K,  4,  5,  NT 11-K
 List all Filings 

1 Subsequent Filing that References this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 4/16/21  Salem Media Group, Inc./DE        424B5                  1:709K                                   Donnelley … Solutions/FA
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Filing Submission 0001193125-20-213730   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
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