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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 8/05/22 Salem Media Group, Inc./DE 10-Q 6/30/22 101:13M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 3.34M 2: EX-31.1 Certification -- §302 - SOA'02 HTML 33K 3: EX-31.2 Certification -- §302 - SOA'02 HTML 33K 4: EX-32.1 Certification -- §906 - SOA'02 HTML 29K 5: EX-32.2 Certification -- §906 - SOA'02 HTML 29K 11: R1 Cover Page HTML 85K 12: R2 Condensed Consolidated Balance Sheets HTML 170K 13: R3 Condensed Consolidated Balance Sheets HTML 54K (Parenthetical) 14: R4 Condensed Consolidated Statements of Operations HTML 130K 15: R5 Condensed Consolidated Statements of Operations HTML 35K (Parenthetical) 16: R6 Condensed Consolidated Statements of Stockholders' HTML 74K Equity 17: R7 Condensed Consolidated Statements of Cash Flows HTML 175K 18: R8 Business and Basis of Presentation HTML 53K 19: R9 Summary of Significant Accounting Policies HTML 39K 20: R10 Recent Transactions HTML 70K 21: R11 Revenue Recognition HTML 248K 22: R12 Inventories HTML 31K 23: R13 Property and Equipment HTML 55K 24: R14 Operating and Finance Lease Right-of-Use Assets HTML 107K 25: R15 Broadcast Licenses HTML 59K 26: R16 Goodwill HTML 59K 27: R17 Amortizable Intangible Assets HTML 72K 28: R18 Long-Term Debt HTML 146K 29: R19 Fair Value Measurements HTML 41K 30: R20 Income Taxes HTML 38K 31: R21 Commitments and Contingencies HTML 35K 32: R22 Stock Incentive Plan HTML 111K 33: R23 Equity Transactions HTML 36K 34: R24 Segment Data HTML 207K 35: R25 Subsequent Events HTML 31K 36: R26 Basis of Presentation (Policies) HTML 70K 37: R27 Recent Transactions (Tables) HTML 68K 38: R28 Revenue Recognition (Tables) HTML 223K 39: R29 Property and Equipment (Tables) HTML 52K 40: R30 Operating and Finance Lease Right-of-Use Assets HTML 107K (Tables) 41: R31 Broadcast Licenses (Tables) HTML 75K 42: R32 Goodwill (Tables) HTML 60K 43: R33 Amortizable Intangible Assets (Tables) HTML 75K 44: R34 Long-Term Debt (Tables) HTML 125K 45: R35 Fair Value Measurements (Tables) HTML 40K 46: R36 Stock Incentive Plan (Tables) HTML 116K 47: R37 Segment Data (Tables) HTML 193K 48: R38 Business and Basis of Presentation - Additional HTML 45K Information (Detail) 49: R39 Recent Transactions - Schedule of Repurchases of HTML 63K 2024 Notes (Detail) 50: R40 Recent Transactions - Debt Transactions - HTML 34K Additional Information (Detail) 51: R41 Recent Transactions - Acquisitions - Additional HTML 40K Information (Detail) 52: R42 Recent Transactions - Summary of Fair Value of the HTML 46K Net Assets Acquired (Detail) 53: R43 Recent Transactions - Divestitures - Additional HTML 50K Information (Detail) 54: R44 Recent Transactions - Pending Transactions HTML 34K -Additional Information (Detail) 55: R45 Recent Transactions - Summary of Purchase HTML 38K Consideration Business Combination (Detail) 56: R46 Revenue Recognition - Additional Information HTML 38K (Detail) 57: R47 Revenue Recognition - Reconciliation of Revenue HTML 196K from Segments to Consolidated (Detail) 58: R48 Revenue Recognition - Significant Changes in Our HTML 55K Contract Liabilities (Detail) 59: R49 Revenue Recognition - Revenue, Remaining HTML 48K Performance Obligation, Expected Timing of Satisfaction (Detail) 60: R50 Revenue Recognition - 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Results of Impairment Testing HTML 64K of Broadcast Licenses Under Income Approach (Detail) 71: R61 Broadcast Licenses - Schedule of Changes in HTML 44K Broadcasting Licenses (Detail) 72: R62 Goodwill - Fair Value Measurement Inputs and HTML 42K Valuation Techniques For Goodwill (Detail) 73: R63 Goodwill - Schedule of Changes in Goodwill HTML 50K (Detail) 74: R64 Goodwill - Additional Information (Detail) HTML 33K 75: R65 Amortizable Intangible Assets - Summary of HTML 56K Significant Classes of Amortizable Intangible Assets (Detail) 76: R66 Amortizable Intangible Assets - Additional HTML 32K Information (Detail) 77: R67 Amortizable Intangible Assets - Amortizable HTML 44K Intangible Assets, Estimate Amortization Expense (Detail) 78: R68 Long-Term Debt - Long-Term Debt (Detail) HTML 46K 79: R69 Long-Term Debt - Long-Term Debt (Parenthetical) HTML 50K (Detail) 80: R70 Long-Term Debt - 7.125% Senior Secured Notes - HTML 100K Additional Information (Detail) 81: R71 Long-Term Debt - 6.75% Senior Secured Notes - HTML 84K Additional Information (Detail) 82: R72 Long - term Debt - Summary of Repurchase of Senior HTML 140K Secured Note (Detail) 83: R73 Long-Term Debt - Asset-Based Revolving Credit HTML 88K Facility - Additional Information (Detail) 84: R74 Long-Term Debt - Summary of Long-term Debt HTML 49K Obligations - Additional Information (Detail) 85: R75 Long-Term Debt - Principle Repayment Requirements HTML 46K Under Long Term Agreements Outstanding (Detail) 86: R76 Fair Value Measurements - Additional Information HTML 33K (Detail) 87: R77 Fair Value Measurements - Summary of Fair Value of HTML 43K Financial Assets and Liabilities (Detail) 88: R78 Income Taxes - Additional Information (Detail) HTML 48K 89: R79 Stock Incentive Plan - Additional Information HTML 40K (Detail) 90: R80 Stock Incentive Plan - Schedule of Stock-Based HTML 47K Compensation Expense Recognized (Detail) 91: R81 Stock Incentive Plan - Schedule of HTML 39K Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options and Restricted Stock Awards using Black-Scholes Option Valuation Model (Detail) 92: R82 Stock Incentive Plan - Schedule of Stock Option HTML 103K Activity (Detail) 93: R83 Stock Incentive Plan - Schedule of Information HTML 61K Regarding Restricted Stock Activity (Detail) 94: R84 Equity Transactions - Additional Information HTML 32K (Detail) 95: R85 Segment Data - Additional Information (Detail) HTML 32K 96: R86 Segment Data - Schedule of Segment Data (Detail) HTML 122K 99: XML IDEA XML File -- Filing Summary XML 187K 97: XML XBRL Instance -- d219868d10q_htm XML 3.69M 98: EXCEL IDEA Workbook of Financial Reports XLSX 201K 7: EX-101.CAL XBRL Calculations -- salm-20220630_cal XML 216K 8: EX-101.DEF XBRL Definitions -- salm-20220630_def XML 1.30M 9: EX-101.LAB XBRL Labels -- salm-20220630_lab XML 1.78M 10: EX-101.PRE XBRL Presentations -- salm-20220630_pre XML 1.48M 6: EX-101.SCH XBRL Schema -- salm-20220630 XSD 290K 100: JSON XBRL Instance as JSON Data -- MetaLinks 544± 831K 101: ZIP XBRL Zipped Folder -- 0001193125-22-212737-xbrl Zip 421K
10-Q |
i ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE |
i 77-0121400 | |
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) |
(I.R.S. EMPLOYER IDENTIFICATION NUMBER) | |
i 6400 NORTH BELT LINE ROAD i IRVING, TEXAS |
i 75063 | |
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) |
(ZIP CODE) |
Title of each Class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
i Class A Common Stock, $0.01 par value per share |
i SALM |
i NASDAQ Global Market |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
i Non-accelerated filer | ☒ | Smaller Reporting Company | i ☒ | |||
Emerging Growth Company | i ☐ |
Class A |
Outstanding at August 1, 2022 | |
Common Stock, $0.01 par value per share | i 21,661,091 shares |
Class B |
Outstanding at August 1, 2022 | |
Common Stock, $0.01 par value per share | i 5,553,696 shares |
PAGE NO. | ||||
COVER PAGE |
||||
INDEX |
||||
2 | ||||
PART I - FINANCIAL INFORMATION |
||||
3 | ||||
32 | ||||
56 | ||||
56 | ||||
PART II - OTHER INFORMATION |
||||
56 | ||||
56 | ||||
56 | ||||
56 | ||||
56 | ||||
57 | ||||
57 | ||||
57 | ||||
58 |
December 31, 2021 (Note 1) |
(Unaudited) |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | i 1,785 | $ |
i 2,540 |
||||
Accounts receivable (net of allowances of $ i 13,022 in 2021 and $ i 7,496 in 2022) |
i 25,663 | i 29,271 |
||||||
Unbilled revenue |
i 3,406 | i 2,960 |
||||||
Other receivables (net of allowances of $ i 455 in 2021 and $ i 586 in 2022) |
i 1,377 | i 2,721 |
||||||
Inventories |
i 960 | i 1,528 |
||||||
Prepaid expenses |
i 6,772 | i 8,380 |
||||||
Assets held for sale |
i 1,551 | i 267 |
||||||
Total current assets |
i 41,514 | i 47,667 |
||||||
Notes receivable (net of allowance of $ i 938 in 2021 and $ i 427 in 2022) |
i 274 | i 1,072 |
||||||
Property and equipment (net of accumulated depreciation of $ i 186,053 in 2021 and $ i 186,881
in 2022) |
i 79,339 | i 79,713 |
||||||
Operating lease right-of-use |
i 43,560 | i 44,020 |
||||||
Financing lease right-of-use |
i 105 | i 90 |
||||||
Broadcast licenses |
i 320,008 | i 313,500 |
||||||
Goodwill |
i 23,986 | i 23,861 |
||||||
Amortizable intangible assets (net of accumulated amortization of $ i 58,110 in 2021 and $ i 58,777
in 2022) |
i 2,444 | i 1,799 |
||||||
Deferred financing costs |
i 843 | i 774 |
||||||
Other assets |
i 4,039 | i 2,773 |
||||||
Total assets |
$ | i 516,112 | $ |
i 515,269 |
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | i 2,661 | $ |
i 2,623 |
||||
Accrued expenses |
i 12,006 | i 18,679 |
||||||
Accrued compensation and related expenses |
i 13,054 | i 12,278 |
||||||
Accrued interest |
i 1,030 | i 952 |
||||||
Contract liabilities |
i 12,294 | i 12,401 |
||||||
Deferred rent income |
i 157 | i 144 |
||||||
Income taxes payable |
i 1,544 | i 222 |
||||||
Current portion of operating lease liabilities |
i 8,651 | i 8,795 |
||||||
Current portion of financing lease liabilities |
i 58 | i 57 |
||||||
Current portion of long-term debt |
i — | i 10 |
||||||
Total current liabilities |
i 51,455 | i 56,161 |
||||||
Long-term debt, less current portion |
i 170,581 | i 155,595 |
||||||
Operating lease liabilities, less current portion |
i 42,208 | i 42,599 |
||||||
Financing (capital) lease liabilities, less current portion |
i 65 | i 53 |
||||||
Deferred income taxes |
i 67,012 | i 65,808 |
||||||
Contract liabilities, long-term |
i 2,222 | i 1,948 |
||||||
Deferred rent income, less current portion |
i 3,772 | i 3,705 |
||||||
Other long-term liabilities |
i 586 | i 65 |
||||||
Total liabilities |
i 337,901 | i 325,934 |
||||||
Commitments and contingencies (Note 14) |
i | i | ||||||
Stockholders’ Equity: |
||||||||
Class A common stock, $ i i 0.01 /
par value; authorized i i 80,000,000 /
shares; i 23,922,974 and i 23,978,741 issued and i 21,605,324
and i 21,661,091 outstanding at December 31, 2021 and June 30, 2022, respectively |
i 232 | i 232 |
||||||
Class B common stock, $ i i 0.01 /
par value; authorized i i 20,000,000 /
shares; i i i i 5,553,696 / / /
issued and outstanding at December 31, 2021 and June 30, 2022, respectively |
i 56 | i 56 |
||||||
Additional paid-in capital |
i 248,438 | i 248,706 |
||||||
Accumulated deficit |
( i 36,509 | ) | ( i 25,653 |
) | ||||
( i 34,006 | ) | ( i 34,006 |
) | |||||
Total stockholders’ equity |
i 178,211 | i 189,335 |
||||||
Total liabilities and stockholders’ equity |
$ | i 516,112 | $ |
i 515,269 |
||||
Three Months Ended June 30, |
Six Months Ended |
|||||||||||||||
2021 | 2022 |
2021 |
2022 |
|||||||||||||
Net broadcast revenue |
$ | i 46,783 | $ |
i 52,452 |
$ | i 90,831 | $ |
i 100,884 |
||||||||
Net digital media revenue |
i 10,339 | i 10,804 |
i 19,958 | i 21,104 |
||||||||||||
Net publishing revenue |
i 6,660 | i 5,426 |
i 12,346 | i 9,303 |
||||||||||||
Total net revenue |
i 63,782 | i 68,682 |
i 123,135 | i 131,291 |
||||||||||||
Operating expenses: |
||||||||||||||||
Broadcast operating expenses, exclusive of depreciation and amortization shown below (including $ i 446 and $ i 453
for the three months ended June 30, 2021 and 2022, respectively, and $ i 889 and $ i 901
for the six months ended June 30, 2021 and 2022, respectively, paid to related parties) |
i 36,162 | i 42,489 |
i 69,505 | i 80,610 |
||||||||||||
Digital media operating expenses, exclusive of depreciation and amortization shown below |
i 8,338 | i 8,273 |
i 17,011 | i 16,746 |
||||||||||||
Publishing operating expenses, exclusive of depreciation and amortization shown below |
i 6,426 | i 5,432 |
i 11,631 | i 9,899 |
||||||||||||
Unallocated corporate expenses exclusive of depreciation and amortization shown below (including $ i 2 and $ i 159
for the three months ended June 30, 2021 and 2022, respectively, and $ i 5 and $ i 168
for the six months ended June 30, 2021 and 2022, respectively, paid to related parties) |
i 4,192 | i 4,781 |
i 8,480 | i 9,591 |
||||||||||||
Debt modification costs |
i — | i 20 |
i — | i 248 |
||||||||||||
Depreciation |
i 2,741 | i 2,858 |
i 5,330 | i 5,800 |
||||||||||||
Amortization |
i 545 | i 332 |
i 1,126 | i 666 |
||||||||||||
Change in the estimated fair value of contingent earn-out consideration |
i — | i — |
i — | ( i 5 |
) | |||||||||||
Impairment of indefinite-lived long-term assets other than goodwill |
i — | i 3,935 |
i — | i 3,935 |
||||||||||||
Impairment of goodwill |
i — | i 127 |
i — | i 127 |
||||||||||||
Net (gain) loss on the disposition of assets |
( i 263 | ) | ( i 6,893 |
) |
i 55 | ( i 8,628 |
) | |||||||||
Total operating expenses |
i 58,141 | i 61,354 |
i 113,138 | i 118,989 |
||||||||||||
Operating income (loss) |
i 5,641 | i 7,328 |
i 9,997 | i 12,302 |
||||||||||||
Other income (expense): |
||||||||||||||||
Interest income |
i — | i 149 |
i 1 | i 149 |
||||||||||||
Interest expense |
( i 3,935 | ) | ( i 3,389 |
) |
( i 7,861 | ) | ( i 6,783 |
) | ||||||||
Gain (loss) on early retirement of long-term debt |
i — | i 35 |
i — | ( i 18 |
) | |||||||||||
Earnings from equity method investment |
i — | i 3,913 |
i — | i 3,913 |
||||||||||||
Net miscellaneous income and (expenses) |
i 63 | ( i 1 |
) |
i 85 | i — |
|||||||||||
Net income before income taxes |
i 1,769 | i 8,035 |
i 2,222 | i 9,563 |
||||||||||||
Benefit from income taxes |
( i 488 | ) | ( i 1,082 |
) |
( i 358 | ) | ( i 1,293 |
) | ||||||||
Net income |
$ | i 2,257 | $ |
i 9,117 |
$ | i 2,580 | $ |
i 10,856 |
||||||||
Basic income per share data: |
||||||||||||||||
Basic income per share |
$ | i 0.08 | $ |
i 0.33 |
$ | i 0.10 | $ |
i 0.39 |
||||||||
Diluted income per share data: |
||||||||||||||||
Diluted income per share |
$ | i 0.08 | $ |
i 0.33 |
$ | i 0.10 | $ |
i 0.39 |
||||||||
Basic weighted average shares outstanding |
i 26,869,145 | i 27,214,787 |
i 26,802,892 | i 27,196,081 |
||||||||||||
Diluted weighted average shares outstanding |
i 27,232,423 | i 27,570,881 |
i 27,185,598 | i 27,590,644 |
||||||||||||
See accompanying notes |
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, 2020 |
i 23,447,317 | $ | i 227 | i 5,553,696 | $ | i 56 | $ | i 247,025 | $ | ( i 78,023 | ) | $ | ( i 34,006 | ) | $ | i 135,279 | ||||||||||||||||
Stock-based compensation |
— | — | — | — | i 78 | — | — | i 78 | ||||||||||||||||||||||||
Options exercised |
i 185,782 | i 2 | — | — | i 390 | — | — | i 392 | ||||||||||||||||||||||||
Net income |
— | — | — | — | — | i 323 | — | i 323 | ||||||||||||||||||||||||
Stockholders’ equity, March 31, 2021 |
i 23,633,099 | $ | i 229 | i 5,553,696 | $ | i 56 | $ | i 247,493 | $ | ( i 77,700) | $ | ( i 34,006 | ) | $ | i 136,072 | |||||||||||||||||
Stock-based compensation |
— | — | — | — | i 84 | — | — | i 84 | ||||||||||||||||||||||||
Net income |
— | — | — | — | — | i 2,257 | — | i 2,257 | ||||||||||||||||||||||||
Stockholders’ equity, June 30, 2021 |
i 23,633,099 |
$ |
i 229 |
i 5,553,696 |
$ |
i 56 |
$ |
i 247,577 |
$ |
( i 75,443) |
$ |
( i 34,006) |
$ |
i 138,413 |
||||||||||||||||||
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 |
i 23,922,974 | $ | i 232 | i 5,553,696 | $ | i 56 | $ | i 248,438 | $ | ( i 36,509 | ) | $ | ( i 34,006 | ) | $ | i 178,211 | ||||||||||||||||
Stock-based compensation |
— | — | — | — | i 106 | — | — | i 106 | ||||||||||||||||||||||||
Options exercised |
i 40,913 | — | — | — | i 94 | — | — | i 94 | ||||||||||||||||||||||||
Lapse of restricted shares |
i 14,854 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Net income |
— | — | — | — | — | i 1,739 | — | i 1,739 | ||||||||||||||||||||||||
Stockholders’ equity, March 31, 2022 |
i 23,978,741 |
$ |
i 232 |
i 5,553,696 |
$ |
i 56 |
$ |
i 248,638 |
$ |
( i 34,770 |
) |
$ |
( i 34,006 |
) |
$ |
i 180,150 |
||||||||||||||||
Stock-based compensation |
— | — | — | — | i 68 | — | — | i 68 | ||||||||||||||||||||||||
Net income |
— | — | — | — | — | i 9,117 | — | i 9,117 | ||||||||||||||||||||||||
Stockholders’ equity, June 30, 2022 |
i 23,978,741 |
$ |
i 232 |
i 5,553,696 |
$ |
i 56 |
$ |
i 248,706 |
$ |
( i 25,653 |
) |
$ |
( i 34,006 |
) |
$ |
i 189,335 |
||||||||||||||||
Six Months Ended |
||||||||
2022 |
||||||||
OPERATING ACTIVITIES |
||||||||
Net income |
$ | i 2,580 | $ |
i 10,856 |
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Non-cash stock-based compensation |
i 162 | i 174 |
||||||
Depreciation and amortization |
i 6,456 | i 6,466 |
||||||
Amortization of deferred financing costs |
i 426 | i 496 |
||||||
Non-cash lease expense |
i 4,348 | i 4,414 |
||||||
Provision for bad debts |
( i 325 | ) | ( i 102 |
) | ||||
Deferred income taxes |
( i 403 | ) | ( i 1,204 |
) | ||||
Change in the estimated fair value of contingent earn-out consideration |
i — | ( i 5 |
) | |||||
Impairment of indefinite-lived long-term assets other than goodwill |
i — | i 3,935 |
||||||
Impairment of goodwill |
i — | i 127 |
||||||
(Gain) loss on early retirement of long-term debt |
i — | i 18 |
||||||
Net (gain) loss on the disposition of assets |
i 55 | ( i 8,628 |
) | |||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable and unbilled revenue |
i 421 | ( i 5,314 |
) | |||||
Inventories |
( i 224 | ) | ( i 568 |
) | ||||
Prepaid expenses and other current assets |
( i 319 | ) | ( i 1,608 |
) | ||||
Accounts payable and accrued expenses |
i 453 | i 5,162 |
||||||
Operating lease liabilities |
( i 4,931 | ) | ( i 4,324 |
) | ||||
Contract liabilities |
i 1,310 | ( i 167 |
) | |||||
Deferred rent income |
i 111 | ( i 88 |
) | |||||
Other liabilities |
i 35 | ( i 518 |
) | |||||
Income taxes payable |
i 42 | ( i 1,322 |
) | |||||
Net cash provided by operating activities |
i 10,197 | i 7,800 |
||||||
INVESTING ACTIVITIES |
||||||||
Cash paid for capital expenditures net of tenant improvement allowances |
( i 3,994 | ) | ( i 6,153 |
) | ||||
Capital expenditures reimbursable under tenant improvement allowances and trade agreements |
( i 19 | ) | ( i 52 |
) | ||||
Deposit on broadcast assets and radio station acquisitions |
( i 100 | ) | i — |
|||||
Purchases of broadcast assets and radio stations |
( i 600 | ) | ( i 548 |
) | ||||
Purchases of digital media businesses and assets |
( i 1,300 | ) | ( i 190 |
) | ||||
Return of equity investment in OneParty America LLC |
i — | i 4,500 |
||||||
Equity investment in OneParty America LLC |
( i 500 | ) | ( i 3,500 |
) | ||||
Proceeds from sale of assets |
i 3,627 | i 14,150 |
||||||
Other |
( i 314 | ) | i 106 |
|||||
Net cash provided by (used in) investing activities |
( i 3,200 | ) | i 8,313 |
|||||
FINANCING ACTIVITIES |
||||||||
Payments to repurchase 2024 Notes |
i — | ( i 15,394 |
) | |||||
Proceeds from borrowings under ABL Facility |
i 16 | i 26,229 |
||||||
Payments on ABL Facility |
( i 5,016 | ) | ( i 26,219 |
) | ||||
Proceeds from borrowings under PPP Loans |
i 11,195 | i — |
||||||
Payments of debt issuance costs |
( i 19 | ) | ( i 37 |
) | ||||
Proceeds from the exercise of stock options |
i 392 | i 94 |
||||||
Payments on financing lease liabilities |
( i 32 | ) | ( i 31 |
) | ||||
Net cash provided by (used in) financing activities |
i 6,536 | ( i 15,358 |
) | |||||
Net increase in cash and cash equivalents |
i 13,533 | i 755 |
||||||
Cash and cash equivalents at beginning of year |
i 6,325 | i 1,785 |
||||||
Cash and cash equivalents at end of period |
$ | i 19,858 | $ |
i 2,540 |
||||
Six Months Ended |
||||||||
2022 |
||||||||
Supplemental disclosures of cash flow information: |
||||||||
Cash paid during the period for: |
||||||||
Cash paid for interest, net of capitalized interest |
$ | i 7,391 | $ |
i 6,156 |
||||
Cash paid for interest on finance lease liabilities |
$ | i 4 | $ |
i 4 |
||||
Net cash paid for (received from) income taxes |
$ | i 3 | $ |
i 1,233 |
||||
Other supplemental disclosures of cash flow information: |
||||||||
Barter revenue |
$ | i 1,065 | $ |
i 1,525 |
||||
Barter expense |
$ | i 1,092 | $ |
i 1,632 |
||||
Non-cash investing and financing activities: |
||||||||
Capital expenditures reimbursable under tenant improvement allowances |
$ | i 19 | $ |
i 52 |
||||
Right-of-use |
$ | i 1,957 | $ |
i 5,569 |
||||
Right-of-use |
$ | i 4 | $ |
i 17 |
||||
Non-cash capital expenditures for property & equipment acquired under trade agreements |
$ | i 27 | $ |
i — |
||||
Net assets and liabilities assumed in a non-cash acquisition |
$ | i 129 | $ |
i — |
||||
Estimated present value of contingent-earn out consideration |
$ | i 11 | $ |
i 6 |
||||
See accompanying notes |
• | We deferred $ i 3.3 million of employer FICA taxes from April 2020 through December 2020, of which 50% was paid in December 2021 and the remaining 50% is payable in December 2022; |
• | A relaxation of interest expense deduction limitation for income tax purposes; |
• | We received Paycheck Protection Program (“PPP”) loans of $ i 11.2 million in total during the first quarter of 2021 through the Small Business Association (“SBA”) based on the eligibility as determined on a per-location basis; and |
• | In July 2021, the SBA forgave all but $ i 20,000 of the PPP loans, with the remaining PPP loan repaid in July 2021. |
• | revenue recognition; |
• | asset impairments, including broadcasting licenses and goodwill; |
• | contingency reserves; |
• | allowance for doubtful accounts; |
• | barter transactions; |
• | assessment of contract-based factors, asset-based factors, entity-based factors and market-based factors to determine the lease term impacting Right-Of-Use |
• | determining the Incremental Borrowing Rate (“IBR”) for calculating ROU assets and lease liabilities, |
Date |
Principal Repurchased |
Cash Paid |
% of Face Value |
Bond Issue Costs |
Net Gain (Loss) |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
$ | i 5,000 | $ | i 4,947 | i 98.95 | % | $ | i 35 | $ | i 18 | |||||||||||
i 3,000 | i 2,970 | i 99.00 | % | i 21 | i 9 | |||||||||||||||
i 2,464 | i 2,446 | i 99.25 | % | i 17 | i 1 | |||||||||||||||
i 2,525 | i 2,500 | i 99.00 | % | i 18 | i 7 | |||||||||||||||
i 2,500 | i 2,531 | i 101.26 | % | i 22 | ( i 53 | ) |
Description |
Total Consideration |
|||
(Dollars in thousands) |
||||
Cash payments made upon closing |
$ |
i 738 |
||
Escrow deposits paid in prior years |
i 60 |
|||
|
|
|||
Total purchase price consideration |
$ |
i 798 |
||
|
|
Net Broadcast Assets |
Net Digital Media Assets |
Total Net Assets |
||||||||||||
Assets |
||||||||||||||
Property and equipment | $ | i 418 | i 166 | i 584 | ||||||||||
Broadcast licenses | i 190 | — | i 190 | |||||||||||
Goodwill | — | i 2 | i 2 | |||||||||||
Domain and brand names | — | i 11 | i 11 | |||||||||||
Non-Compete agreement |
— | i 11 | i 11 | |||||||||||
|
|
|
|
|
|
|||||||||
$ |
i 608 |
$ |
i 190 |
$ |
i 798 |
|||||||||
|
|
|
|
|
|
Six Months Ended June 30, 2022 |
||||||||||||||||
Broadcast |
Digital Media |
Publishing |
Consolidated |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
By Source of Revenue: |
||||||||||||||||
Block Programming – National |
$ | i 26,399 | $ | — | $ | — | $ | i 26,399 | ||||||||
Block Programming – Local |
i 12,049 | — | — | i 12,049 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Broadcast Programming Revenue |
i 38,448 |
— | — | i 38,448 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Spot Advertising – National |
i 7,700 | — | — | i 7,700 | ||||||||||||
Spot Advertising – Local |
i 21,552 | — | — | i 21,552 | ||||||||||||
Network Advertising |
i 10,240 | — | — | i 10,240 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Broadcast Advertising Revenue |
i 39,492 |
— | — | i 39,492 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Infomercials |
i 373 | — | — | i 373 | ||||||||||||
Other Revenue |
i 4,484 | — | — | i 4,484 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other Broadcast Revenue |
i 4,857 |
— | — | i 4,857 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Digital Advertising |
i 14,112 | i 9,088 | i — | i 23,200 | ||||||||||||
Digital Streaming |
i 2,492 | i 1,798 | i — | i 4,290 | ||||||||||||
Digital Downloads |
i 387 | i 3,797 | i — | i 4,184 | ||||||||||||
Digital Subscriptions |
i 503 | i 6,343 | i — | i 6,846 | ||||||||||||
Other Digital Revenue |
i 593 | i 78 | i — | i 671 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Digital Revenue |
i 18,087 |
i 21,104 |
i — | i 39,191 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Book Sales |
— | — | i 6,204 | i 6,204 | ||||||||||||
Estimated Sales Returns & Allowances |
— | i — | ( i 1,444 | ) | ( i 1,444 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Book Sales |
— | i — | i 4,760 | i 4,760 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
E-Book Sales |
— | i — | i 625 | i 625 | ||||||||||||
Self-Publishing Fees |
i — | i — | i 3,379 | i 3,379 | ||||||||||||
Other Publishing Revenue |
i — | i — | i 539 | i 539 | ||||||||||||
Publishing Revenue |
i — | i — | i 9,303 |
i 9,303 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ |
i 100,884 |
$ |
i 21,104 |
$ |
i 9,303 |
$ |
i 131,291 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Timing of Revenue Recognition |
||||||||||||||||
Point in Time |
$ | i 99,744 | $ | i 21,104 | $ | i 9,303 | $ | i 130,151 | ||||||||
Rental Income (1) |
i 1,140 | i — | i — | i 1,140 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ |
i 100,884 |
$ |
i 21,104 |
$ |
i 9,303 |
$ |
i 131,291 |
|||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2021 |
||||||||||||||||
Broadcast |
Digital Media |
Publishing |
Consolidated |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
By Source of Revenue: |
||||||||||||||||
Block Programming – National |
$ | i 23,322 | $ | — | $ | — | $ | i 23,322 | ||||||||
Block Programming – Local |
i 11,773 | — | — | i 11,773 | ||||||||||||
Broadcast Programming Revenue |
i 35,095 |
— | — | i 35,095 |
||||||||||||
Spot Advertising – National |
i 7,118 | — | — | i 7,118 | ||||||||||||
Spot Advertising – Local |
i 19,441 | — | — | i 19,441 | ||||||||||||
Network Advertising |
i 9,821 | — | — | i 9,821 | ||||||||||||
Broadcast Advertising Revenue |
i 36,380 |
— | — | i 36,380 |
||||||||||||
Infomercials |
i 462 | — | — | i 462 | ||||||||||||
Other Revenue |
i 4,097 | — | — | i 4,097 | ||||||||||||
Other Broadcast Revenue |
i 4,559 |
— | — | i 4,559 |
||||||||||||
Digital Advertising |
i 11,745 | i 8,806 | i 132 | i 20,683 | ||||||||||||
Digital Streaming |
i 2,093 | i 1,706 | — | i 3,799 | ||||||||||||
Digital Downloads |
i 200 | i 3,267 | — | i 3,467 | ||||||||||||
Digital Subscriptions |
i 562 | i 6,072 | — | i 6,634 | ||||||||||||
Other Digital Revenue |
i 197 | i 107 | — | i 304 | ||||||||||||
Digital Revenue |
i 14,797 |
i 19,958 |
i 132 |
i 34,887 |
||||||||||||
Book Sales |
— | — | i 10,513 | i 10,513 | ||||||||||||
Estimated Sales Returns & Allowances |
— | — | ( i 3,011 | ) | ( i 3,011 | ) | ||||||||||
Net Book Sales |
— | — | i 7,502 | i 7,502 | ||||||||||||
E-Book Sales |
— | — | i 792 | i 792 | ||||||||||||
Self-Publishing Fees |
— | — | i 3,174 | i 3,174 | ||||||||||||
Publishing Magazine Subscriptions |
— | — | i 262 | i 262 | ||||||||||||
Other Publishing Revenue |
— | — | i 484 | i 484 | ||||||||||||
Publishing Revenue |
— |
— | i 12,214 |
i 12,214 |
||||||||||||
$ |
i 90,831 |
$ |
i 19,958 |
$ |
i 12,346 |
$ |
i 123,135 |
|||||||||
Timing of Revenue Recognition |
— |
|||||||||||||||
Point in Time |
$ | i 89,583 | $ | i 19,958 | $ | i 12,346 | $ | i 121,887 | ||||||||
Rental Income (1) |
i 1,248 | i — | i — | i 1,248 | ||||||||||||
$ |
i 90,831 |
$ |
i 19,958 |
$ |
i 12,346 |
$ |
i 123,135 |
|||||||||
(1) | Rental income is not applicable to ASC Topic 606, but shown for the purpose of identifying each revenue source presented in total revenue on our Condensed Consolidated Financial Statements within this report on Form 10-Q. |
Short Term | Long-Term |
|||||||
(Dollars in thousands) |
||||||||
Balance, beginning of period January 1, 2022 |
$ | i 12,294 | $ | i 2,222 | ||||
Revenue recognized during the period that was included in the beginning balance of contract liabilities |
( i 6,868 | ) | i — | |||||
Additional amounts recognized during the period |
i 12,525 | i 424 | ||||||
Revenue recognized during the period that was recorded during the period |
( i 6,248 | ) | i — | |||||
Transfers |
i 698 | ( i 698 | ) | |||||
Balance, end of period June 30, 2022 |
$ | i 12,401 | $ | i 1,948 | ||||
Amount refundable at beginning of period |
$ | i 12,282 | $ | i 2,222 | ||||
Amount refundable at end of period |
$ | i 12,389 | $ | i 1,948 |
Amount |
||||
For the Year Ended June 30, |
(Dollars in thousands) |
|||
2023 |
$ | i 12,401 | ||
2024 |
i 1,264 | |||
2025 |
i 448 | |||
2026 |
i 138 | |||
2027 |
i 98 | |||
Thereafter |
i — | |||
$ | i 14,349 | |||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 | 2022 |
2021 | 2022 |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Net broadcast barter revenue |
$ | i 674 | $ |
i 679 |
$ | i 1,065 | $ |
i 1,525 |
||||||||
Net digital media barter revenue |
i — | i — |
i — | i — |
||||||||||||
Net publishing barter revenue |
i — | i — |
i — | i — |
||||||||||||
Net broadcast barter expense |
$ | i 712 | $ |
i 873 |
$ | i 1,085 | $ |
i 1,632 |
||||||||
Net digital media barter expense |
i — | i — |
i — | i — |
||||||||||||
Net publishing barter expense |
i 7 | i — |
i 7 | i — |
As of |
||||||||
December 31, 2021 | ||||||||
(Dollars in thousands) |
||||||||
Buildings |
$ | i 28,593 | $ |
i 28,406 |
||||
Office furnishings and equipment |
i 36,598 | i 36,601 |
||||||
Antennae, towers and transmitting equipment |
i 77,813 | i 74,937 |
||||||
Studio, production, and mobile equipment |
i 29,498 | i 29,094 |
||||||
Computer software and website development costs |
i 38,271 | i 39,265 |
||||||
Automobiles |
i 1,515 | i 1,556 |
||||||
Leasehold improvements |
i 18,104 | i 17,739 |
||||||
$ | i 230,392 | $ |
i 227,598 |
|||||
Less accumulated depreciation |
( i 186,053 | ) | ( i 186,881 |
) | ||||
i 44,339 | $ |
i 40,717 |
||||||
Land |
$ | i 26,896 | i 26,893 |
|||||
Construction-in-progress |
i 8,104 | i 12,103 |
||||||
Property and Equipment, net |
$ | i 79,339 | $ |
i 79,713 |
||||
(Dollars in thousands) |
||||||||||||
Operating Leases |
Related Party | Other | Total | |||||||||
Operating leases ROU assets |
$ | i 6,717 | $ | i 37,303 | $ | i 44,020 | ||||||
Operating lease liabilities (current) |
$ | i 877 | $ | i 7,918 | $ | i 8,795 | ||||||
Operating lease liabilities (non-current) |
i 5,944 | i 36,655 | i 42,599 | |||||||||
Total operating lease liabilities |
$ | i 6,821 | $ | i 44,573 | $ | i 51,394 | ||||||
Weighted Average Remaining Lease Term |
||||
Operating leases |
i 7.6 years | |||
Finance leases |
i 2.6 years | |||
Weighted Average Discount Rate |
||||
Operating leases |
i 8.11 | % | ||
Finance leases |
i 6.18 | % |
Six Months Ended June 30, 2022 |
||||
(Dollars in thousands) |
||||
Amortization of finance lease ROU Assets |
$ | i 30 | ||
Interest on finance lease liabilities |
i 4 | |||
Finance lease expense |
i 34 | |||
Operating lease expense |
i 6,479 | |||
Variable lease expense |
i 290 | |||
Short-term lease expense |
i 623 | |||
Total lease expense |
$ | i 7,426 | ||
Six Months Ended June 30, 2022 |
||||
(Dollars in thousands) |
||||
Cash paid for amounts included in the measurement of lease liabilities: |
||||
Operating cash flows from operating leases |
$ | i 7,519 | ||
Operating cash flows from finance leases |
i 2 | |||
Financing cash flows from finance leases |
i 31 | |||
Leased assets obtained in exchange for new operating lease liabilities |
$ | i 5,569 | ||
Leased assets obtained in exchange for new finance lease liabilities |
i 17 |
Operating Leases | ||||||||||||||||||||
Related Party | Other | Total | Finance Leases | Total | ||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
2023 (July-Dec) |
$ | i 1,308 | $ | i 10,620 | $ | i 11,928 | $ | i 60 | $ | i 11,988 | ||||||||||
2024 |
i 1,250 | i 10,022 | i 11,272 | i 26 | i 11,298 | |||||||||||||||
2025 |
i 1,274 | i 8,547 | i 9,821 | i 21 | i 9,842 | |||||||||||||||
2026 |
i 1,280 | i 7,475 | i 8,755 | i 8 | i 8,763 | |||||||||||||||
2027 |
i 865 | i 4,355 | i 5,220 | i 4 | i 5,224 | |||||||||||||||
Thereafter |
i 3,955 | i 22,801 | i 26,756 | i 1 | i 26,757 | |||||||||||||||
Undiscounted Cash Flows |
$ | i 9,932 | $ | i 63,820 | $ | i 73,752 | $ | i 120 | $ | i 73,872 | ||||||||||
Less: imputed interest |
( i 3,111 | ) | ( i 19,247 | ) | ( i 22,358 | ) | ( i 10 | ) | ( i 22,368 | ) | ||||||||||
Total |
$ |
i 6,821 |
$ |
i 44,573 |
$ |
i 51,394 |
$ |
i 110 |
$ |
i 51,504 |
||||||||||
Reconciliation to lease liabilities: |
||||||||||||||||||||
Lease liabilities – current |
$ | i 877 | $ | i 7,918 | $ | i 8,795 | $ | i 57 | $ | i 8,852 | ||||||||||
Lease liabilities – long-term |
i 5,944 | i 36,655 | i 42,599 | i 53 | i 42,652 | |||||||||||||||
Total Lease Liabilities |
$ |
i 6,821 |
$ |
i 44,573 |
$ |
i 51,394 |
$ |
i 110 |
$ |
i 51,504 |
||||||||||
(1) | gross operating revenue in the station’s designated market area, |
(2) | normalized market share, |
(3) | normalized profit margin, |
(4) | duration of the “ramp-up” period to reach normalized operations, (which was assumed to be three years), |
(5) | estimated start-up costs (based on market size), |
(6) | ongoing replacement costs of fixed assets and working capital, |
(7) | the calculations of yearly net free cash flows to invested capital; and |
(8) | amortization of the intangible asset, or the broadcast license. |
Broadcast Licenses |
December 31, 2020 | |||
Risk-adjusted discount rate |
i 8.5% | i 9.5% | ||
Operating profit margin ranges |
i 3.9% - i 30.9%% |
i 3.9% - i 30.9% | ||
Long-term revenue growth rates |
i 0.4% - i 0.7% | i 0.4% - i 0.7% |
Market Cluster |
Excess Fair Value June 30, 2022 | |
Atlanta, GA |
i 61.2% | |
Boston, MA |
i 2.0% | |
Chicago, IL |
i 1.7% | |
Cleveland, OH |
i 10.0% | |
Col Springs, CO |
i 36.9% | |
Columbus, OH |
( i 7.8)% | |
Dallas, TX |
( i 3.0)% | |
Greenville, SC |
( i 4.2)% | |
Honolulu, HI |
( i 4.8)% | |
Little Rock, AR |
i 8.9% | |
Minneapolis, MN |
i 126.6% | |
Orlando FL |
( i 5.5)% | |
Philadelphia, PA |
i 1.1% | |
Portland, OR |
( i 0.5)% | |
Sacramento, CA |
( i 5.6)% | |
San Diego, CA |
i 31.2% | |
San Francisco, CA |
i 7.0% |
Broadcast Licenses |
Twelve Months Ended December 31, 2021 |
Six Months Ended |
||||||
(Dollars in thousands) |
||||||||
Balance before cumulative loss on impairment, beginning of period |
$ | i 434,209 | $ |
i 434,444 |
||||
Accumulated loss on impairment, beginning of period |
( i 114,436 | ) | ( i 114,436 |
) | ||||
|
|
|
|
|||||
Balance after cumulative loss on impairment, beginning of period |
i 319,773 | i 320,008 |
||||||
Acquisitions of radio stations |
i 235 | i 190 |
||||||
Dispositions of radio stations and FM translators |
— | ( i 2,763 |
) | |||||
Loss on impairment |
i — | ( i 3,935 |
) | |||||
|
|
|
|
|||||
Balance, end of period after cumulative loss on impairment |
$ | i 320,008 | $ |
i 313,500 |
||||
|
|
|
|
|||||
Balance, end of period before cumulative loss on impairment |
$ | i 434,444 | $ |
i 429,566 |
||||
Accumulated loss on impairment, end of period |
( i 114,436 | ) | ( i 116,066 |
) | ||||
|
|
|
|
|||||
Balance, end of period after cumulative loss on impairment |
$ | i 320,008 | $ |
i 313,500 |
||||
|
|
|
|
Broadcast Markets Enterprise Valuations |
December 31, 2021 | |||
Risk-adjusted discount rate |
i 8.5% | i 9.5% | ||
Operating profit margin ranges |
( i 1.4%) – i 15.0% | ( i 7.8%) – i 15.0% |
||
Long-term revenue growth rates |
i 0.4% | i 0.4% |
Goodwill |
Twelve Months Ended December 31, 2021 |
Six Months Ended June 30, 2022 |
||||||
(Dollars in thousands) |
||||||||
Balance, beginning of period before cumulative loss on impairment, |
$ | i 28,520 | $ |
i 28,749 |
||||
Accumulated loss on impairment |
( i 4,763 | ) | ( i 4,763 |
) | ||||
|
|
|
|
|||||
Balance, beginning of period after cumulative loss on impairment |
i 23,757 | i 23,986 |
||||||
|
|
|
|
|||||
Acquisitions of radio stations |
i 4 | — |
||||||
Acquisitions of digital media entities |
i 225 | i 2 |
||||||
Loss on impairment |
i — | ( i 127 |
) | |||||
|
|
|
|
|||||
Ending period balance |
$ | i 23,986 | $ |
i 23,861 |
||||
|
|
|
|
|||||
Balance, end of period before cumulative loss on impairment |
i 28,749 | i 28,751 |
||||||
Accumulated loss on impairment |
( i 4,763 | ) | ( i 4,890 |
) | ||||
|
|
|
|
|||||
Ending period balance |
$ | i 23,986 | $ |
i 23,861 |
||||
|
|
|
|
As of June 30, 2022 |
||||||||||||
Accumulated | ||||||||||||
Cost | Amortization | Net |
||||||||||
(Dollars in thousands) |
||||||||||||
Customer lists and contracts |
$ | i 23,700 | $ |
( i 22,609 |
) |
$ |
i 1,091 |
|||||
Domain and brand names |
i 19,886 | ( i 19,581 |
) |
i 305 |
||||||||
Favorable and assigned leases |
i 2,188 | ( i 1,968 |
) |
i 220 |
||||||||
Subscriber base and lists |
i 8,647 | ( i 8,474 |
) |
i 173 |
||||||||
Author relationships |
i 2,771 | ( i 2,771 |
) |
i — | ||||||||
Non-compete agreements |
i 2,052 | ( i 2,042 |
) |
i 10 |
||||||||
Other amortizable intangible assets |
i 1,332 | ( i 1,332 |
) |
i — | ||||||||
|
|
|
|
|
|
|||||||
$ | i 60,576 | $ |
( i 58,777 |
) |
$ |
i 1,799 |
||||||
|
|
|
|
|
|
As of December 31, 2021 |
||||||||||||
Accumulated | ||||||||||||
Cost | Amortization | Net | ||||||||||
(Dollars in thousands) |
||||||||||||
Customer lists and contracts |
$ | i 23,700 | $ | ( i 22,198 | ) | $ | i 1,502 | |||||
Domain and brand names |
i 19,875 | ( i 19,421 | ) | i 454 | ||||||||
Favorable and assigned leases |
i 2,188 | ( i 1,960 | ) | i 228 | ||||||||
Subscriber base and lists |
i 8,647 | ( i 8,387 | ) | i 260 | ||||||||
Author relationships |
i 2,771 | ( i 2,771 | ) | i — | ||||||||
Non-compete agreements |
i 2,041 | ( i 2,041 | ) | i — | ||||||||
Other amortizable intangible assets |
i 1,332 | ( i 1,332 | ) | i — | ||||||||
|
|
|
|
|
|
|||||||
$ i 60,554 | $( i 58,110) | $ i 2,444 | ||||||||||
|
|
|
|
|
|
Year Ended December 31, |
Amortization Expense |
|||
(Dollars in thousands) |
||||
2022 (July – Dec) |
$ | i 557 | ||
2023 |
i 803 | |||
2024 |
i 209 | |||
2025 |
i 24 | |||
2026 |
i 14 | |||
Thereafter |
i 192 | |||
|
|
|||
Total |
$ | i 1,799 | ||
|
|
December 31, 2021 | ||||||||
(Dollars in thousands) |
||||||||
2028 Notes |
$ | i 114,731 | $ |
i 114,731 |
||||
Less unamortized discount and debt issuance costs based on imputed interest rate of i 7.64% |
( i 3,844 | ) | ( i 3,549 |
) | ||||
2028 Notes, net carrying value |
i 110,887 | i 111,182 |
||||||
2024 Notes |
i 60,174 | i 44,685 |
||||||
Less unamortized debt issuance costs based on imputed interest rate of i 7.10% |
( i 480 | ) | ( i 272 |
) | ||||
2024 Notes, net carrying value |
i 59,694 | i 44,413 |
||||||
Asset-Based Revolving Credit Facility principal outstanding (1) |
i — | i 10 |
||||||
Long-term debt less unamortized discount and debt issuance costs |
$ | i 170,581 | $ |
i 155,605 |
||||
Less current portion |
i — | ( i 10 |
) | |||||
Long-term debt less unamortized discount and debt issuance costs, net of current portion |
$ | i 170,581 | $ |
i 155,595 |
||||
(1) | As of June 30, 2022, the Asset-Based Revolving Credit Facility (“ABL”), had a borrowing base of $ i 24.3 million, outstanding borrowings of $ i 10,000,
and $ i 0.3 million of outstanding letters of credit, resulting in a $ i 24.0 million
borrowing base availability. |
• | $ i 114.7 million aggregate principal amount of 2028 Notes with semi-annual interest payments at an annual rate of i 7.125%;
|
• | $ i 44.7 million aggregate principal amount of 2024 Notes with semi-annual interest payments at an annual rate of i 6.75%;
and |
• | Commitment fee of i 0.25% to i 0.375%
per annum on the unused portion of the ABL Facility. |
Date |
Principal Repurchased |
Cash Paid |
% of Face Value |
Bond Issue Costs |
Net Gain (Loss) |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
$ | i 5,000 | $ | i 4,947 | i 98.95 | % | $ | i 35 | $ | i 18 | |||||||||||
i 3,000 | i 2,970 | i 99.00 | % | i 21 | i 9 | |||||||||||||||
i 2,464 | i 2,446 | i 99.25 | % | i 17 | i 1 | |||||||||||||||
i 2,525 | i 2,500 | i 99.00 | % | i 18 | i 7 | |||||||||||||||
i 2,500 | i 2,531 | i 101.26 | % | i 22 | ( i 53 | ) | ||||||||||||||
i 35,000 | i 35,591 | i 101.69 | % | i 321 | ( i 912 | ) | ||||||||||||||
i 2,000 | i 2,020 | i 101.00 | % | i 19 | ( i 39 | ) | ||||||||||||||
i 250 | i 251 | i 100.38 | % | i 2 | ( i 3 | ) | ||||||||||||||
i 763 | i 766 | i 100.38 | % | i 7 | ( i 10 | ) | ||||||||||||||
i 628 | i 629 | i 100.13 | % | i 6 | ( i 7 | ) | ||||||||||||||
i 4,700 | i 4,712 | i 100.25 | % | i 44 | ( i 56 | ) | ||||||||||||||
i 2,250 | i 2,194 | i 97.50 | % | i 34 | i 22 | |||||||||||||||
i 1,245 | i 1,198 | i 96.25 | % | i 20 | i 27 | |||||||||||||||
i 3,090 | i 2,874 | i 93.00 | % | i 48 | i 167 | |||||||||||||||
i 5,183 | i 4,548 | i 87.75 | % | i 82 | i 553 | |||||||||||||||
i 3,791 | i 3,206 | i 84.58 | % | i 61 | i 524 | |||||||||||||||
i 2,000 | i 1,830 | i 91.50 | % | i 37 | i 134 | |||||||||||||||
i 2,300 | i 2,125 | i 92.38 | % | i 42 | i 133 | |||||||||||||||
i 125 | i 114 | i 91.25 | % | i 2 | i 9 | |||||||||||||||
i 350 | i 319 | i 91.25 | % | i 7 | i 24 | |||||||||||||||
i 1,325 | i 1,209 | i 91.25 | % | i 25 | i 91 | |||||||||||||||
i 570 | i 526 | i 92.25 | % | i 9 | i 35 | |||||||||||||||
i 2,000 | i 1,835 | i 91.75 | % | i 38 | i 127 | |||||||||||||||
i 1,850 | i 1,702 | i 92.00 | % | i 35 | i 113 | |||||||||||||||
i 1,080 | i 999 | i 92.50 | % | i 21 | i 60 | |||||||||||||||
i 1,500 | i 1,357 | i 90.50 | % | i 29 | i 114 | |||||||||||||||
i 4,000 | i 3,770 | i 94.25 | % | i 86 | i 144 | |||||||||||||||
i 4,000 | i 3,850 | i 96.25 | % | i 87 | i 63 | |||||||||||||||
i 2,000 | i 1,930 | i 96.50 | % | i 43 | i 27 | |||||||||||||||
$ | i 97,489 | $ | i 94,949 | $ | i 1,218 | $ | i 1,322 | |||||||||||||
Amount |
||||
For the Year Ended June 30, |
(Dollars in thousands) |
|||
2023 |
$ | i 10 | ||
2024 |
i 44,685 | |||
2025 |
i — | |||
2026 |
i — | |||
2027 |
i — | |||
Thereafter |
i 114,731 | |||
$ | i 159,426 | |||
Carrying Value on Balance Sheet |
Fair Value Measurement Category | |||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Liabilities: |
||||||||||||||||
Estimated fair value of contingent earn-out consideration included in accrued expenses |
$ |
i 6 |
i — | i — | $ | i 6 | ||||||||||
Long-term debt less unamortized debt issuance costs |
i 155,605 |
i — | i 151,923 | i — |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
||||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||
Stock option compensation expense included in unallocated corporate expenses |
$ | i 24 | $ |
i 34 |
$ | i 52 | $ |
i 36 |
||||||||
Restricted stock shares compensation expense included in corporate expenses |
i — | i — | i — | i 54 |
||||||||||||
Stock option compensation expense included in broadcast operating expenses |
i 33 | i 19 |
i 61 | i 49 |
||||||||||||
Stock option compensation expense included in digital media operating expenses |
i 27 | i 15 |
i 49 | i 35 |
||||||||||||
Total stock-based compensation expense, pre-tax |
$ | i 84 | $ |
i 68 |
$ | i 162 | $ |
i 174 |
||||||||
Tax expense for stock-based compensation expense |
( i 22 | ) | ( i 18 | ) | ( i 42 | ) | ( i 45 | ) | ||||||||
Total stock-based compensation expense, net of tax |
$ | i 62 | $ |
i 50 |
$ | i 120 | $ |
i 129 |
||||||||
Three Months Ended |
Six Months Ended |
Three Months Ended |
Six Months Ended |
|||||||||||||
Expected volatility |
i n/a | i 74.83 | % | i n/a | i 84.69 | % | ||||||||||
Expected dividends |
i n/a | i 0.00 | % | i n/a | i 0.00 | % | ||||||||||
Expected term (in years) |
i n/a | i 7.7 | i n/a | i 9.5 | ||||||||||||
Risk-free interest rate |
i n/a | i 0.96 | % | i n/a | i 1.61 | % |
Options |
Shares | Weighted Average Exercise Price |
Weighted Average Grant Date Fair Value |
Weighted Average Remaining Contractual Term |
Aggregate Intrinsic Value |
|||||||||||||||
(Dollars in thousands, except weighted average exercise price and weighted average grant date fair value) |
||||||||||||||||||||
Outstanding at January 1, 2022 |
i 1,900,417 | $ | i 3.01 | $ | i 1.37 | i 4.4 years | $ | i 1,310 | ||||||||||||
Granted |
i 100,000 | i 3.26 | i 2.66 | i — | ||||||||||||||||
Exercised |
( i 40,913 | ) | i 2.31 | i 1.16 | i 50 | |||||||||||||||
Forfeited or expired |
( i 166,164 | ) | i 6.10 | i 3.47 | i — | |||||||||||||||
Outstanding at June 30, 2022 |
i 1,793,340 |
i 2.76 |
i 1.25 |
i 4.5 years |
$ |
i 549 |
||||||||||||||
Exercisable at June 30, 2022 |
i 1,066,090 |
i 3.36 |
i 1.40 |
i 3.0 years |
i 174 |
|||||||||||||||
Expected to Vest |
i 690,524 |
i 2.78 |
i 1.26 |
i 4.5 years |
$ |
i 530 |
||||||||||||||
Restricted Stock Awards |
Shares | Weighted Average Grant Date Fair Value |
Weighted Average Remaining Contractual Term |
Aggregate Intrinsic Value |
||||||||||||
(Dollars in thousands, except weighted average exercise price and weighted average grant date fair value) |
||||||||||||||||
Outstanding at January 1, 2022 |
i — | i — | — | i — | ||||||||||||
Granted |
i 14,854 | i 3.66 | — | $ |
i 54 |
|||||||||||
Lapsed |
i — | i — |
— | i — | ||||||||||||
Forfeited |
i — | i — |
— | i — | ||||||||||||
Outstanding at June 30, 2022 |
i 14,854 |
i 3.66 |
i 1.7 |
$ |
i 31 |
|||||||||||
Broadcast |
Digital Media |
Publishing |
Unallocated Corporate Expenses |
Consolidated |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Three Months Ended June 30, 2022 |
||||||||||||||||||||
Net revenue |
$ |
i 52,452 |
$ |
i 10,804 |
$ |
i 5,426 |
$ |
i — |
$ |
i 68,682 |
||||||||||
Operating expenses |
i 42,489 |
i 8,273 |
i 5,432 |
i 4,781 |
i 60,975 |
|||||||||||||||
Net operating income (loss) before debt modification costs, depreciation, amortization, impairments, and net (gain) loss on the disposition of assets |
$ |
i 9,963 |
$ |
i 2,531 |
$ |
( i 6 |
) |
$ |
( i 4,781 |
) |
$ |
i 7,707 |
||||||||
Debt modification costs |
— | — | — | i 20 |
i 20 |
|||||||||||||||
Depreciation |
i 1,530 |
i 979 |
i 89 |
i 260 |
i 2,858 |
|||||||||||||||
Amortization |
i 4 |
i 328 |
i — | i — | i 332 |
|||||||||||||||
Impairment of indefinite-lived long-term assets other than goodwill |
i 3,935 |
— | — | — | i 3,935 |
|||||||||||||||
Impairment of goodwill |
i 127 |
— | — | — | i 127 |
|||||||||||||||
Net (gain) loss on the disposition of assets |
( i 6,919 |
) |
( i 1 |
) |
i — | i 27 |
( i 6,893 |
) | ||||||||||||
Net operating income (loss) |
$ |
i 11,286 |
$ |
i 1,225 |
$ |
( i 95 |
) |
$ |
( i 5,088 |
) |
$ |
i 7,328 |
||||||||
Three Months Ended June 30, 2021 |
||||||||||||||||||||
Net revenue |
$ | i 46,783 | $ | i 10,339 | $ | i 6,660 | $ | i — | $ | i 63,782 | ||||||||||
Operating expenses |
i 36,162 | i 8,338 | i 6,426 | i 4,192 | i 55,118 | |||||||||||||||
Net operating income (loss) before depreciation, amortization, change in the estimated fair value of contingent earn-out consideration, impairments, and net (gain) loss on the disposition of assets |
$ | i 10,621 | $ | i 2,001 | $ | i 234 | $ | ( i 4,192 | ) | $ | i 8,664 | |||||||||
Depreciation |
i 1,603 | i 860 | i 44 | i 234 | i 2,741 | |||||||||||||||
Amortization |
i 4 | i 397 | i 144 | i — | i 545 | |||||||||||||||
Net (gain) loss on the disposition of assets |
i — | i 65 | ( i 328 | ) | i — | ( i 263 | ) | |||||||||||||
Net operating income (loss) |
$ | i 9,014 | $ | i 679 | $ | i 374 | $ | ( i 4,426 | ) | $ | i 5,641 | |||||||||
Broadcast |
Digital Media |
Publishing |
Unallocated Corporate Expenses |
Consolidated |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Six Months Ended June 30, 2022 |
||||||||||||||||||||
Net revenue |
$ |
i 100,884 |
$ |
i 21,104 |
$ |
i 9,303 |
$ | i — | $ |
i 131,291 |
||||||||||
Operating expenses |
i 80,610 |
i 16,746 |
i 9,899 |
i 9,591 |
i 116,846 |
|||||||||||||||
Net operating income (loss) before debt modification costs, depreciation, amortization, change in the estimated fair value of contingent earn-out consideration, impairments, and net (gain) loss on the disposition of assets |
$ |
i 20,274 |
$ |
i 4,358 |
$ |
( i 596 |
) |
$ |
( i 9,591 |
) |
$ |
i 14,445 |
||||||||
Debt modification costs |
— | — | — | i 248 |
i 248 |
|||||||||||||||
Depreciation |
i 3,186 |
i 1,920 |
i 169 |
i 525 |
i 5,800 |
|||||||||||||||
Amortization |
i 8 |
i 658 |
i — | i — | i 666 |
|||||||||||||||
Change in the estimated fair value of contingent earn-out consideration |
— | ( i 5 |
) |
— | — | ( i 5 |
) | |||||||||||||
Impairment of indefinite-lived long-term assets other than goodwill |
i 3,935 |
— | — | — | i 3,935 |
|||||||||||||||
Impairment of goodwill |
i 127 |
— | — | — | i 127 |
|||||||||||||||
Net (gain) loss on the disposition of assets |
( i 8,657 |
) |
( i 1 |
) |
i — | i 30 |
( i 8,628 |
) | ||||||||||||
Net operating income (loss) |
$ |
i 21,675 |
$ |
i 1,786 |
$ |
( i 765 |
) |
$ |
( i 10,394 |
) |
$ |
i 12,302 |
||||||||
Six Months Ended June 30, 2021 |
||||||||||||||||||||
Net revenue |
$ | i 90,831 | $ | i 19,958 | $ | i 12,346 | $ | i — | $ | i 123,135 | ||||||||||
Operating expenses |
i 69,505 | i 17,011 | i 11,631 | i 8,480 | i 106,627 | |||||||||||||||
Net operating income (loss) before depreciation, amortization, change in the estimated fair value of contingent earn-out consideration, impairments, and net (gain) loss on the disposition of assets |
$ | i 21,326 | $ | i 2,947 | $ | i 715 | $ | ( i 8,480 | ) | $ | i 16,508 | |||||||||
Depreciation |
i 3,128 | i 1,641 | i 91 | i 470 | i 5,330 | |||||||||||||||
Amortization |
i 8 | i 829 | i 289 | i — | i 1,126 | |||||||||||||||
Net (gain) loss on the disposition of assets |
i 318 | i 65 | ( i 328 | ) | i — | i 55 | ||||||||||||||
Net operating income (loss) |
$ | i 17,872 | $ | i 412 | $ | i 663 | $ | ( i 8,950 | ) | $ | i 9,997 | |||||||||
Broadcast |
Digital Media |
Publishing |
Unallocated Corporate |
Consolidated |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
As of June 30, 2022 |
||||||||||||||||||||
Inventories, net |
$ | i — | $ | i — | $ |
i 1,528 |
$ |
i — |
$ |
i 1,528 |
||||||||||
Property and equipment, net |
i 62,370 |
i 8,115 |
i 641 |
i 8,587 |
i 79,713 |
|||||||||||||||
Broadcast licenses |
i 313,500 |
i — | i — | i — | i 313,500 |
|||||||||||||||
Goodwill |
i 2,622 |
i 19,793 |
i 1,446 |
i — | i 23,861 |
|||||||||||||||
Amortizable intangible assets, net |
i 221 |
i 1,578 |
i — | i — | i 1,799 |
|||||||||||||||
As of December 31, 2021 |
||||||||||||||||||||
Inventories, net |
$ | — | $ | — | $ | i 960 | $ | — | $ | i 960 | ||||||||||
Property and equipment, net |
i 61,694 | i 8,447 | i 746 | i 8,452 | i 79,339 | |||||||||||||||
Broadcast licenses |
i 320,008 | — | — | — | i 320,008 | |||||||||||||||
Goodwill |
i 2,750 | i 19,790 | i 1,446 | — | i 23,986 | |||||||||||||||
Amortizable intangible assets, net |
i 229 | i 2,215 | i — | — | i 2,444 |
• | the coronavirus COVID-19 pandemic (“COVID-19”) that adversely impacted our business, |
• | risks and uncertainties relating to the need for additional funds to service our debt, |
• | risks and uncertainties relating to the need for additional funds to execute our business strategy, |
• | our ability to access borrowings under our ABL Facility, |
• | reductions in revenue forecasts, |
• | our ability to renew our broadcast licenses, |
• | changes in interest rates, |
• | the timing of our ability to complete any acquisitions or dispositions, |
• | costs and synergies resulting from the integration of any completed acquisitions, |
• | our ability to effectively manage costs, |
• | our ability to drive and manage growth, |
• | the popularity of radio as a broadcasting and advertising medium, |
• | changes in consumer tastes, |
• | the impact of general economic conditions in the United States or in specific markets in which we do business, |
• | the impact of inflation increasing operating costs and changing consumer habits, |
• | industry conditions, including existing competition and future competitive technologies, |
• | disruptions or postponements of advertising schedules and programming in response to national or world events, |
• | our ability to generate revenue from new sources, including local commerce and technology-based initiatives, and |
• | the impact of regulatory rules or proceedings that may affect our business from time to time, and the future write-off of any material portion of the fair value of our FCC broadcast licenses and goodwill. |
• | the sale of block program time to national and local program producers; |
• | the sale of advertising time on our radio stations to national and local advertisers; |
• | the sale of banner advertisements on our station websites or on our mobile applications; |
• | the sale of digital streaming advertisements on our station websites or on our mobile applications; |
• | fees earned for the creation of custom web pages and custom digital media campaigns for our advertisers through Salem Surround; |
• | the sale of advertising time on our national network; |
• | the syndication of programming on our national network; |
• | the sale of advertising time through podcasts and video-on-demand |
• | product sales and royalties for on-air host materials, including podcasts, programs and media content including documentary motion pictures, films; and |
• | other revenue such as events, including ticket sales and sponsorships, listener purchase programs, where revenue is generated from special discounts and incentives offered to our listeners from our advertisers, talent fees for voice-overs or custom endorsements from our on-air personalities and production services, and rental income for studios, towers, or office space. |
• | the sale of digital banner advertisements on our websites and mobile applications; |
• | the sale of digital streaming advertisements on websites and mobile applications; |
• | the support and promotion to stream third-party content on our websites; |
• | the sale of advertisements included in digital newsletters; |
• | the digital delivery of newsletters to subscribers; and |
• | the sale of video and graphic downloads. |
• | the sale of books and e-books; |
• | publishing fees from authors; and |
• | the sale of digital advertising in digital newsletters; |
• | audience share; |
• | how well our programs and advertisements perform for our clients; |
• | the size of the market and audience reached; |
• | the number of impressions delivered; |
• | the number of advertisements and programs streamed; |
• | the number of page views achieved; |
• | the number of downloads completed; |
• | the number of events held, the number of event sponsorships sold and the attendance at each event; |
• | demand for books and publications; |
• | general economic conditions; and |
• | supply and demand for airtime on a local and national level. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Reconciliation of Net Broadcast Revenue to Same Station Net Broadcast Revenue |
| |||||||||||||||
Net broadcast revenue |
$ | 46,783 | $ |
52,452 |
$ | 90,831 | $ |
100,884 |
||||||||
Net broadcast revenue – acquisitions |
— | (14 |
) |
— | (247 |
) | ||||||||||
Net broadcast revenue – dispositions |
(96 | ) | (56 |
) |
(113 | ) | (49 |
) | ||||||||
Net broadcast revenue – format change |
— | — | (65 | ) | (111 |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Same Station net broadcast revenue |
$ | 46,687 | $ |
52,382 |
$ | 90,653 | $ |
100,477 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
Reconciliation of Broadcast Operating Expenses to Same Station Broadcast Operating Expenses |
| |||||||||||||||
Broadcast operating expenses |
$ | 36,162 | $ |
42,489 |
$ | 69,505 | $ |
80,610 |
||||||||
Broadcast operating expenses – acquisitions |
— | (63 |
) |
(1 | ) | (279 |
) | |||||||||
Broadcast operating expenses – dispositions |
(81 | ) | (24 |
) |
(214 | ) | (48 |
) | ||||||||
Broadcast operating expenses – format change |
— | — | (131 | ) | (132 |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Same Station broadcast operating expenses |
$ | 36,081 | $ |
42,402 |
$ | 69,159 | $ |
80,151 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
Reconciliation of Operating Income to Same Station Operating Income |
| |||||||||||||||
Station Operating Income |
$ | 10,621 | $ |
9,963 |
$ | 21,326 | $ |
20,274 |
||||||||
Station operating (income) loss –acquisitions |
— | 49 |
1 | 32 |
||||||||||||
Station operating (income) loss – dispositions |
(15 | ) | (32 |
) |
101 | (1 |
) | |||||||||
Station operating loss – format change |
— | — | 66 | 21 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Same Station – Station Operating Income |
$ | 10,606 | $ |
9,980 |
$ | 21,494 | $ |
20,326 |
||||||||
|
|
|
|
|
|
|
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
||||||||||||||||
2022 |
2021 |
2022 |
||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Calculation of Station Operating Income, Digital Media Operating Income and Publishing Operating Income (Loss) |
|
|||||||||||||||
Net broadcast revenue |
$ | 46,783 | $ |
52,452 |
$ | 90,831 | $ |
100,884 |
||||||||
Less broadcast operating expenses |
(36,162 | ) | (42,489 |
) |
(69,505 | ) | (80,610 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Station Operating Income |
$ | 10,621 | $ |
9,963 |
$ | 21,326 | $ |
20,274 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
Net digital media revenue |
$ | 10,339 | $ |
10,804 |
$ | 19,958 | $ |
21,104 |
||||||||
Less digital media operating expenses |
(8,338 | ) | (8,273 |
) |
(17,011 | ) | (16,746 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Digital Media Operating Income |
$ | 2,001 | $ |
2,531 |
$ | 2,947 | $ |
4,358 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
Net publishing revenue |
$ | 6,660 | $ |
5,426 |
$ | 12,346 | $ |
9,303 |
||||||||
Less publishing operating expenses |
(6,426 | ) | (5,432 |
) |
(11,631 | ) | (9,899 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Publishing Operating Income (Loss) |
$ | 234 | $ |
(6 |
) |
$ | 715 | $ |
(596 |
) | ||||||
|
|
|
|
|
|
|
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
||||||||||||||||
2022 |
2021 |
2022 |
||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Reconciliation of Net Income to Operating Income and Station Operating Income, Digital Media Operating Income and Publishing Operating Income (Loss) |
| |||||||||||||||
Net income |
$ | 2,257 | $ |
9,117 |
$ | 2,580 | $ |
10,856 |
||||||||
Plus benefit from income taxes |
(488 | ) | (1,082 |
) |
(358 | ) | (1,293 |
) | ||||||||
Plus net miscellaneous income and (expenses) |
(63 | ) | 1 |
(85 | ) | — |
||||||||||
Plus (gain) loss on early retirement of long-term debt |
— | (35 |
) |
— | 18 |
|||||||||||
Plus earnings from equity method investment |
— | (3,913 |
) |
— | (3,913 |
) | ||||||||||
Plus interest expense, net of capitalized interest |
3,935 | 3,389 |
7,861 | 6,783 |
||||||||||||
Less interest income |
— | (149 |
) |
(1 | ) | (149 |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net operating income |
$ | 5,641 | $ |
7,328 |
$ | 9,997 | $ |
12,302 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
Plus net (gain) loss on the disposition of assets |
(263 | ) | (6,893 |
) |
55 | (8,628 |
) | |||||||||
Plus change in the estimated fair value of contingent earn-out consideration |
— | — |
— | (5 |
) | |||||||||||
Plus debt modification costs |
— | 20 |
— | 248 |
||||||||||||
Plus impairment of indefinite-lived long-term assets other than goodwill |
— | 3,935 |
— | 3,935 |
||||||||||||
Plus impairment of goodwill |
— | 127 |
— | 127 |
||||||||||||
Plus depreciation and amortization |
3,286 | 3,190 |
6,456 | 6,466 |
||||||||||||
Plus unallocated corporate expenses |
4,192 | 4,781 |
8,480 | 9,591 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Combined Station Operating Income, Digital Media Operating Income and Publishing Operating Loss |
$ | 12,856 | $ |
12,488 |
$ | 24,988 | $ |
24,036 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
Station Operating Income |
$ | 10,621 | $ |
9,963 |
$ | 21,326 | $ |
20,274 |
||||||||
Digital Media Operating Income |
2,001 | 2,531 |
2,947 | 4,358 |
||||||||||||
Publishing Operating Income (Loss) |
234 | (6 |
) |
715 | (596 |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 12,856 | $ |
12,488 |
$ | 24,988 | $ |
24,036 |
|||||||||
|
|
|
|
|
|
|
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
||||||||||||||||
2022 |
2021 |
2022 |
||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Reconciliation of Adjusted EBITDA to EBITDA to Net Income |
| |||||||||||||||
Net income |
$ | 2,257 | $ |
9,117 |
$ | 2,580 | $ |
10,856 |
||||||||
Plus interest expense, net of capitalized interest |
3,935 | 3,389 |
7,861 | 6,783 |
||||||||||||
Plus benefit from income taxes |
(488 | ) | (1,082 |
) |
(358 | ) | (1,293 |
) | ||||||||
Plus depreciation and amortization |
3,286 | 3,190 |
6,456 | 6,466 |
||||||||||||
Less interest income |
— | (149 |
) |
(1 | ) | (149 |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
EBITDA |
$ | 8,990 | $ |
14,465 |
$ | 16,538 | $ |
22,663 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
Plus net (gain) loss on the disposition of assets |
(263 | ) | (6,893 |
) |
55 | (8,628 |
) | |||||||||
Plus change in the estimated fair value of contingent earn-out consideration |
— | — | — | (5 |
) | |||||||||||
Plus debt modification costs |
— | 20 |
— | 248 |
||||||||||||
Plus impairment of indefinite-lived long-term assets other than goodwill |
— | 3,935 |
— | 3,935 |
||||||||||||
Plus impairment of goodwill |
— | 127 |
— | 127 |
||||||||||||
Plus net miscellaneous (income) and expenses |
(63 | ) | 1 |
(85 | ) | — | ||||||||||
Plus (gain) loss on early retirement of long-term debt |
— | (35 |
) |
— | 18 |
|||||||||||
Plus non-cash stock-based compensation |
84 | 68 |
162 | 174 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | 8,748 | $ |
11,688 |
$ | 16,670 | $ |
18,532 |
||||||||
|
|
|
|
|
|
|
|
• | On June 27, 2022, we sold 9.3 acres of land in the Denver area for $8.2 million resulting in a pre-tax gain of $6.5 million. |
• | On May 25, 2022, we sold radio stations WFIA-AM, WFIA-FM and WGTK-AM in Louisville, Kentucky for $4.0 million with credits applied from amounts previously paid, including a portion of the monthly fees paid under a TBA. We recorded a pre-tax gain of $0.5 million. |
• | On May 2, 2022, we acquired websites and related assets of Retirement Media for $0.2 million in cash. We recorded goodwill of approximately $2,400 associated with the expected synergies to be realized upon combining the operations into our digital media platform within Eagle Financial Publications. The accompanying Condensed Consolidated Statement of Operations reflects the operating results of this entity as of the closing date within our digital media segment. |
• | On February 15, 2022, we closed on the acquisition of radio station WLCC-AM and an FM translator in the Tampa, Florida market for $0.6 million of cash. |
• | On January 10, 2022, we closed on the sale of 4.5 acres of land in Phoenix, Arizona for $2.0 million in cash. We recorded a pre-tax gain of $1.8 million on the sale. |
• | During the three months ended June 30, 2022, we completed repurchases of $13.0 million of the 2024 Notes for $12.9 million in cash, recognizing a net gain of $35,000 after adjusting for bond issuance costs as detailed in Note 11 – Long-Term Debt of our Condensed Consolidated Financial Statements included in Part 1 of this quarterly report on Form 10-Q. |
Three Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Net Broadcast Revenue |
$ | 46,783 | $ |
52,452 |
$ | 5,669 | 12.1 | % | 73.3 | % | 76.4 |
% | ||||||||||||
Same Station Net Broadcast Revenue |
$ | 46,687 | $ |
52,382 |
$ | 5,695 | 12.2 | % |
Three Months Ended June 30, |
||||||||||||||||
2021 | 2022 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Block Programming: |
||||||||||||||||
National |
$ | 11,861 | 25.4 | % | $ |
13,340 |
25.4 |
% | ||||||||
Local |
5,817 | 12.4 | % | 5,876 |
11.2 |
% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
17,678 | 37.8 | % | 19,216 |
36.6 |
% | |||||||||||
Broadcast Advertising: |
||||||||||||||||
National |
3,458 | 7.4 | % | 4,059 |
7.7 |
% | ||||||||||
Local |
10,546 | 22.5 | % | 11,269 |
21.5 |
% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
14,004 | 29.9 | % | 15,328 |
29.2 |
% | |||||||||||
Station Digital (local) |
7,728 | 16.5 | % | 9,881 |
18.9 |
% | ||||||||||
Infomercials |
225 | 0.5 | % | 182 |
0.4 |
% | ||||||||||
Network |
4,950 | 10.6 | % | 5,409 |
10.3 |
% | ||||||||||
Other Revenue |
2,198 | 4.7 | % | 2,436 |
4.6 |
% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Broadcast Revenue |
$ | 46,783 | 100.0 | % | $ |
52,452 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Net Digital Media Revenue |
$ | 10,339 | $ |
10,804 |
$ | 465 | 4.5 | % | 16.2 | % | 15.7 |
% |
Three Months Ended June 30, |
||||||||||||||||
2021 | 2022 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Digital Advertising, net |
$ | 4,393 | 42.5 | % | $ |
4,549 |
42.1 |
% | ||||||||
Digital Streaming |
862 | 8.3 | 897 |
8.3 |
||||||||||||
Digital Subscriptions |
3,299 | 31.9 | 3,191 |
29.5 |
||||||||||||
Digital Downloads |
1,694 | 16.4 | 2,047 |
19.0 |
||||||||||||
Other Revenues |
91 | 0.9 | 120 |
1.1 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Digital Media Revenue |
$ | 10,339 | 100.0 | % | $ |
10,804 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Net Publishing Revenue |
$ | 6,660 | $ |
5,426 |
$ | (1,234 | ) | (18.5 | )% | 10.4 | % | 7.9 |
% |
Three Months Ended June 30, |
||||||||||||||||
2021 | 2022 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Book Sales |
$ | 6,212 | 93.3 | % | $ |
3,643 |
67.1 |
% | ||||||||
Estimated Sales Returns & Allowances |
(1,918 | ) | (28.8 | ) | (609 |
) |
(11.2 |
) | ||||||||
Net Book Sales |
4,294 | 64.5 | 3,034 |
55.9 |
||||||||||||
E-Book Sales |
453 | 6.8 | 338 |
6.3 |
||||||||||||
Self-Publishing Fees |
1,550 | 23.3 | 1,652 |
30.4 |
||||||||||||
Print Magazine Subscriptions |
104 | 1.6 | — | — | ||||||||||||
Print Magazine Advertisements |
54 | 0.8 | — | — | ||||||||||||
Digital Advertising |
70 | 1.1 | — | — | ||||||||||||
Other Revenue |
135 | 2.0 | 402 |
7.4 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Publishing Revenue |
$ | 6,660 | 100.0 | % | $ |
5,426 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Broadcast Operating Expenses |
$ | 36,162 | $ |
42,489 |
$ | 6,327 | 17.5 | % | 56.7 | % | 61.9 |
% | ||||||||||||
Same Station Broadcast Operating Expenses |
$ | 36,081 | $ |
42,402 |
$ | 6,321 | 17.5 | % |
Three Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Digital Media Operating Expenses |
$ | 8,338 | $ |
8,273 |
$ | (65 | ) | (0.8 | )% | 13.1 | % | 12.0 |
% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Publishing Operating Expenses |
$ | 6,426 | $ |
5,432 |
$ | (994 | ) | (15.5 | )% | 10.1 | % | 7.9 |
% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Unallocated Corporate Expenses |
$ |
4,192 |
$ |
4,781 |
$ |
589 |
14.1 |
% |
6.6 |
% |
7.0 |
% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Debt Modification Costs |
$ |
— |
$ |
20 |
$ |
20 |
— |
% |
— |
% |
— |
% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Depreciation Expense |
$ | 2,741 | $ |
2,858 |
$ | 117 | 4.3 | % | 4.3 | % | 4.2 |
% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Amortization Expense |
$ |
545 |
$ |
332 |
$ |
(213 |
) |
(39.1 |
)% |
0.9 |
% |
0.5 |
% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Impairment of Indefinite-Lived Long-Term Assets Other Than Goodwill |
$ |
— |
$ |
3,935 |
$ |
3,935 |
— |
% |
— |
% |
5.7 |
% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Impairment of Goodwill |
$ |
— |
$ |
127 |
$ |
127 |
— |
% |
— |
% |
0.2 |
% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Net (Gain) Loss on the Disposition of assets |
$ |
(263 |
) |
$ |
(6,893 |
) |
$ |
(6,630 |
) |
2,520.9 |
% |
(0.4 |
)% |
(10.0 |
)% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Interest Income |
$ |
— |
$ |
149 |
$ |
149 |
— |
% |
— |
% |
0.2 |
% | ||||||||||||
Interest Expense |
(3,935 |
) |
(3,389 |
) |
(546 |
) |
(13.9 |
)% |
(6.2 |
)% |
(4.9 |
)% | ||||||||||||
Gain (Loss) on Early Retirement of Long-Term Debt |
— |
35 |
35 |
— |
% |
— |
% |
0.1 |
% | |||||||||||||||
Earnings from equity method investment |
— |
3,913 |
3,913 |
— |
% |
— |
% |
5.7 |
% | |||||||||||||||
Net Miscellaneous Income and (Expenses) |
63 |
(1 |
) |
(64 |
) |
(101.6 |
)% |
0.1 |
% |
— |
% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Benefit from Income Taxes |
$ |
(488 |
) |
$ |
(1,082 |
) |
$ |
(594 |
) |
121.7 |
% |
(0.8 |
)% |
(1.6 |
)% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Net Income |
$ |
2,257 |
$ |
9,117 |
$ |
6,860 |
303.9 |
% |
3.5 |
% |
13.3 |
% |
• | On June 27, 2022, we sold 9.3 acres of land in the Denver area for $8.2 million resulting in a pre-tax gain of $6.5 million. |
• | On May 25, 2022, we sold radio stations WFIA-AM, WFIA-FM and WGTK-AM in Louisville, Kentucky for $4.0 million with credits applied from amounts previously paid, including a portion of the monthly fees paid under TBA. We recorded a pre-tax gain of $0.5 million. |
• | On May 2, 2022, we acquired websites and related assets of Retirement Media for $0.2 million in cash. The accompanying Condensed Consolidated Statement of Operations reflects the operating results of this entity as of the closing date within our digital media segment. |
• | On February 15, 2022, we closed on the acquisition of radio station WLCC-AM and an FM translator in the Tampa, Florida market for $0.6 million of cash. |
• | On January 10, 2022, we closed on the sale of 4.5 acres of land in Phoenix, Arizona for $2.0 million in cash. We recorded a pre-tax gain of $1.8 million on the sale. |
• | On November 30, 2021, we sold approximately 77 acres of land in Tampa, Florida for $13.5 million in cash. We recognized a pre-tax gain on the sale of $12.9 million. |
• | On July 27, 2021, we sold the Hilary Kramer Financial Newsletter and related assets for $0.2 million to be collected in quarterly installments over the two-year period ending September 30, 2023. We recognized a pre-tax gain on the sale of $0.1 million. |
• | On July 23, 2021, we sold approximately 34 acres of land in Lewisville, Texas, for $12.1 million in cash. We recognized a pre-tax gain on the sale of $10.5 million. |
• | On July 2, 2021, we acquired the SeniorResource.com domain for $0.1 million in cash. |
• | On July 1, 2021, we acquired the ShiftWorship.com domain and digital assets for $2.6 million in cash. The digital content library is operated within Salem Web Network’s church products division. |
• | On June 1, 2021, we acquired radio stations KDIA-AM and KDYA-AM in San Francisco, California for $0.6 million in cash. |
• | On May 25, 2021, we sold Singing News Magazine and Singing News Radio for $0.1 million in cash. |
• | On April 28, 2021, we acquired the Centerline New Media domain and digital assets for $1.3 million in cash. The digital content library is operated within Salem Web Network’s church products division. |
• | On March 8, 2021, we acquired the Triple Threat Trader newsletter. We paid no cash at the time of closing and assumed deferred subscription liabilities of $0.1 million. |
• | On March 18, 2021, we sold radio station WKAT-AM and an FM translator in Miami, Florida for $3.5 million. The buyer began operating the station under a LMA in November 2020. |
Six Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Net Broadcast Revenue |
$ | 90,831 | $ |
100,884 |
$ | 10,053 | 11.1 | % | 73.8 | % | 76.8 |
% | ||||||||||||
Same Station Net Broadcast Revenue |
$ | 90,653 | $ |
100,477 |
$ | 9,824 | 10.8 | % |
Six Months Ended June 30, |
||||||||||||||||
2021 |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Block Programming: |
||||||||||||||||
National |
$ | 23,322 | 25.7 | % | $ |
26,399 |
26.2 |
% | ||||||||
Local |
11,773 | 13.0 | % | 12,049 |
11.9 |
% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
35,095 | 38.6 | % | 38,448 |
38.1 |
% | |||||||||||
Broadcast Advertising: |
||||||||||||||||
National |
7,118 | 7.8 | % | 7,700 |
7.6 |
% | ||||||||||
Local |
19,441 | 21.4 | % | 21,552 |
21.4 |
% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
26,559 | 29.2 | % | 29,252 |
29.0 |
% | |||||||||||
Broadcast Digital (local) |
14,797 | 16.3 | % | 18,087 |
17.9 |
% | ||||||||||
Infomercials |
462 | 0.5 | % | 373 |
0.4 |
% | ||||||||||
Network |
9,821 | 10.8 | % | 10,240 |
10.2 |
% | ||||||||||
Other Revenue |
4,097 | 4.5 | % | 4,484 |
4.8 |
% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Broadcast Revenue |
$ | 90,831 | 100.0 | % | $ |
100,884 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Net Digital Media Revenue |
$ | 19,958 | $ |
21,104 |
$ | 1,146 | 5.7 | % | 16.2 | % | 16.1 |
% |
Six Months Ended June 30, |
||||||||||||||||
2021 | 2022 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Digital Advertising, net |
$ | 8,806 | 44.1 | % | $ |
9,088 |
43.1 |
% | ||||||||
Digital Streaming |
1,706 | 8.5 | 1,798 |
8.5 |
||||||||||||
Digital Subscriptions |
6,072 | 30.4 | 6,343 |
30.1 |
||||||||||||
Digital Downloads |
3,173 | 15.9 | 3,645 |
17.3 |
||||||||||||
Other Revenues |
201 | 1.1 | 230 |
1.0 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Digital Media Revenue |
$ | 19,958 | 100.0 | % | $ |
21,104 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Net Publishing Revenue |
$ | 12,346 | $ |
9,303 |
$ | (3,043 | ) | (24.6 | )% | 10.0 | % | 7.1 |
% |
Six Months Ended June 30, |
||||||||||||||||
2021 | 2022 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Book Sales |
$ | 10,513 | 85.2 | % | $ |
6,204 |
66.7 |
% | ||||||||
Estimated Sales Returns & Allowances |
(3,011 | ) | (24.4 | ) | (1,444 | ) | (15.5 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Book Sales |
7,502 | 60.8 | 4,760 |
51.2 |
||||||||||||
E-Book Sales |
792 | 6.4 | 625 |
6.7 |
||||||||||||
Self-Publishing Fees |
3,174 | 25.7 | 3,379 |
36.3 |
||||||||||||
Print Magazine Subscriptions |
262 | 2.1 | — |
— |
||||||||||||
Print Magazine Advertisements |
122 | 1.0 | — |
— |
||||||||||||
Digital Advertising |
132 | 1.1 | — |
— |
||||||||||||
Other Revenue |
362 | 2.9 | 539 |
5.8 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Publishing Revenue |
$ | 12,346 | 100.0 | % | $ |
9,303 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Broadcast Operating Expenses |
$ | 69,505 | $ |
80,610 |
$ | 11,105 | 16.0 | % | 56.4 | % | 61.4 |
% | ||||||||||||
Same Station Broadcast Operating Expenses |
$ | 69,159 | $ |
80,151 |
$ | 10,992 | 15.9 | % |
Six Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Digital Media Operating Expenses |
$ | 17,011 | $ |
16,746 |
$ | (265 | ) | (1.6 | )% | 13.8 | % | 12.8 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Publishing Operating Expenses |
$ | 11,631 | $ |
9,899 |
$ | (1,732 | ) | (14.9 | )% | 9.4 | % | 7.5 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Unallocated Corporate Expenses |
$ |
8,480 |
$ |
9,591 |
$ |
1,111 |
13.1 |
% |
6.9 |
% |
7.3 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Debt Modification Costs |
$ |
— |
$ |
248 |
$ |
248 |
— |
% |
— |
% |
0.2 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Depreciation Expense |
$ |
5,330 |
$ |
5,800 |
$ |
470 |
8.8 |
% |
4.3 |
% |
4.4 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Amortization Expense |
$ |
1,126 |
$ |
666 |
$ |
(460 |
) |
(40.9 |
)% |
0.9 |
% |
0.5 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Impairment of Indefinite-Lived Long-Term Assets Other Than Goodwill |
$ |
— |
$ |
3,935 |
$ |
3,935 |
— |
% |
— |
% |
3.0 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Impairment of Goodwill |
$ |
— |
$ |
127 |
$ |
127 |
— |
% |
— |
% |
0.1 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Net (Gain) Loss on the Disposition of assets |
$ |
55 |
$ |
(8,628 |
) |
$ |
(8,683 |
) |
(15,787.3 |
)% |
— |
% |
(6.6 |
)% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2022 |
Change $ |
Change % |
2021 |
2022 |
||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Interest Income |
$ |
1 |
$ |
149 |
$ |
148 |
14,800.0 |
% |
— |
% |
0.1 |
% | ||||||||||||
Interest Expense |
(7,861 |
) |
(6,783 |
) |
(1,078 |
) |
(13.7 |
)% |
(6.4 |
)% |
(5.2 |
)% | ||||||||||||
Gain (Loss) on Early Retirement of Long-Term Debt |
— |
(18 |
) |
(18 |
) |
— |
% |
— |
% |
— |
% | |||||||||||||
Earnings from equity method investment |
— |
3,913 |
3,913 |
— |
% |
— |
% |
3.0 |
% | |||||||||||||||
Net Miscellaneous Income and (Expenses) |
85 |
— |
(85 |
) |
(100.0 |
)% |
0.1 |
% |
— |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change % | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Benefit from Income Taxes |
$ | (358 | ) | $ |
(1,293 |
) |
$ | (935 | ) | 261.2 | % | (0.3 | )% | (1.0 |
)% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2021 | 2022 |
Change $ | Change% | 2021 | 2022 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue |
||||||||||||||||||||||
Net Income |
$ |
2,580 |
$ |
10,856 |
$ | 8,276 | 320.8 | % | 2.1 | % | 8.3 |
% |
• | We deferred $3.3 million of employer FICA taxes from April 2020 through December 2020, of which 50% was paid in December 2021 and the remaining 50% is payable in December 2022; |
• | A relaxation of interest expense deduction limitation for income tax purposes; |
• | We received Paycheck Protection Program (“PPP”) loans of $11.2 million in total during the first quarter of 2021 through the Small Business Association (“SBA”) based on the eligibility as determined on a per-location basis; and |
o | In July 2021, the SBA forgave all but $20,000 of the PPP loans, with the remaining PPP loan repaid in July 2021. |
• | Total net revenue increased $8.2 million; |
• | Operating expenses exclusive of depreciation, amortization, changes in the estimated fair value of contingent earn-out consideration, impairments and net gain (loss) on the disposition of assets, increased $10.2 million; |
• | Trade accounts receivables, net of allowances, increased $3.6 million compared to an increase of $0.1 million for the same period of the prior year; |
• | Unbilled revenue decreased $0.4 million; |
• | Our Day’s Sales Outstanding, or the average number of days to collect cash from the date of sale, decreased to 52 days at June 30, 2022 from 58 days in the same period of the prior year; |
• | Net accounts payable and accrued expenses increased $9.4 million to $33.6 million from $24.2 million as of the prior year; and |
• | Net inventories on hand increased $0.6 million to $1.5 million at June 30, 2022 compared to a $0.2 million increase to $0.7 million for the same period of the prior year. |
• | Cash paid for capital expenditures increased $2.2 million to $6.2 million from $4.0 million; |
• | Cash paid for investments was $3.5 million in the current year; |
• | Cash received from return of investments was $4.5 million in the current year; |
• | We received $14.2 million of cash from the sale of assets during the six months ended June 30, 2022 compared to $3.6 million of cash during same period of the prior year; and |
• | Cash paid for acquisitions was $0.7 million for the six months ended June 30, 2022 compared to $1.9 million during the same period of the prior year. |
• | Proceeds of $11.2 million under PPP loans were received during the three-months ended March 31, 2021; |
• | We used $15.4 million of cash to repurchase $15.5 million in face value of the 2024 Notes during the six-months ended June 30, 2022; and |
• | Net repayments on our ABL Facility of $5.0 million during the six-months ended March 31, 2021. |
December 31, 2021 | ||||||||
(Dollars in thousands) |
||||||||
2028 Notes |
$ | 114,731 | $ |
114,731 |
||||
Less unamortized discount and debt issuance costs based on imputed interest rate of 7.64% |
(3,844 | ) | (3,549 |
) | ||||
2028 Notes, net carrying value |
110,887 | 111,182 |
||||||
2024 Notes |
60,174 | 44,685 |
||||||
Less unamortized debt issuance costs based on imputed interest rate of 7.10% |
(480 | ) | (272 |
) | ||||
2024 Notes, net carrying value |
59,694 | 44,413 |
||||||
Asset-Based Revolving Credit Facility principal outstanding (1) |
— | 10 |
||||||
Long-term debt less unamortized discount and debt issuance costs |
$ | 170,581 | $ |
155,605 |
||||
Less current portion |
— | (10 |
) | |||||
Long-term debt less unamortized discount and debt issuance costs, net of current portion |
$ | 170,581 | $ |
155,595 |
||||
(1) | As of June 30, 2022, the Asset-Based Revolving Credit Facility (“ABL”), had a borrowing base of $24.3 million, outstanding borrowings of $10,000, and $0.3 million of outstanding letters of credit, resulting in a $24.0 million borrowing base availability. |
• | $114.7 million aggregate principal amount of 2028 Notes with semi-annual interest payments at an annual rate of 7.125%; |
• | $44.7 million aggregate principal amount of 2024 Notes with semi-annual interest payments at an annual rate of 6.75%; and |
• | Commitment fee of 0.25% to 0.375% per annum on the unused portion of the ABL Facility. |
Date |
Principal Repurchased |
Cash Paid |
% of Face Value |
Bond Issue Costs |
Net Gain (Loss) |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
$ | 5,000 | $ | 4,947 | 98.95 | % | $ | 35 | $ | 18 | |||||||||||
3,000 | 2,970 | 99.00 | % | 21 | 9 | |||||||||||||||
2,464 | 2,446 | 99.25 | % | 17 | 1 | |||||||||||||||
2,525 | 2,500 | 99.00 | % | 18 | 7 | |||||||||||||||
2,500 | 2,531 | 101.26 | % | 22 | (53 | ) | ||||||||||||||
35,000 | 35,591 | 101.69 | % | 321 | (912 | ) | ||||||||||||||
2,000 | 2,020 | 101.00 | % | 19 | (39 | ) | ||||||||||||||
250 | 251 | 100.38 | % | 2 | (3 | ) | ||||||||||||||
763 | 766 | 100.38 | % | 7 | (10 | ) | ||||||||||||||
628 | 629 | 100.13 | % | 6 | (7 | ) | ||||||||||||||
4,700 | 4,712 | 100.25 | % | 44 | (56 | ) | ||||||||||||||
2,250 | 2,194 | 97.50 | % | 34 | 22 | |||||||||||||||
1,245 | 1,198 | 96.25 | % | 20 | 27 | |||||||||||||||
3,090 | 2,874 | 93.00 | % | 48 | 167 | |||||||||||||||
5,183 | 4,548 | 87.75 | % | 82 | 553 | |||||||||||||||
3,791 | 3,206 | 84.58 | % | 61 | 524 | |||||||||||||||
2,000 | 1,830 | 91.50 | % | 37 | 134 | |||||||||||||||
2,300 | 2,125 | 92.38 | % | 42 | 133 | |||||||||||||||
125 | 114 | 91.25 | % | 2 | 9 | |||||||||||||||
350 | 319 | 91.25 | % | 7 | 24 | |||||||||||||||
1,325 | 1,209 | 91.25 | % | 25 | 91 | |||||||||||||||
570 | 526 | 92.25 | % | 9 | 35 | |||||||||||||||
2,000 | 1,835 | 91.75 | % | 38 | 127 | |||||||||||||||
1,850 | 1,702 | 92.00 | % | 35 | 113 | |||||||||||||||
1,080 | 999 | 92.50 | % | 21 | 60 | |||||||||||||||
1,500 | 1,357 | 90.50 | % | 29 | 114 | |||||||||||||||
4,000 | 3,770 | 94.25 | % | 86 | 144 | |||||||||||||||
4,000 | 3,850 | 96.25 | % | 87 | 63 | |||||||||||||||
2,000 | 1,930 | 96.50 | % | 43 | 27 | |||||||||||||||
$ 97,489 | $ 94,949 | $ 1,218 | $ 1,322 | |||||||||||||||||
Amount |
||||
For the Year Ended June 30, |
(Dollars in thousands) |
|||
2023 |
$ | 10 | ||
2024 |
44,685 | |||
2025 |
— | |||
2026 |
— | |||
2027 |
— | |||
Thereafter |
114,731 | |||
$ | 159,426 | |||
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
ITEM 4. |
CONTROLS AND PROCEDURES. |
Exhibit Number |
Exhibit Description |
Form |
File No. |
Date of First Filing |
Exhibit Number |
Filed Herewith | ||||||
31.1 | Certification of David P. Santrella Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act. | - | - | - | - | X | ||||||
31.2 | Certification of Evan D. Masyr Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act. | - | - | - | - | X | ||||||
32.1 | Certification of David P. Santrella Pursuant to 18 U.S.C. Section 1350. | - | - | - | - | X | ||||||
32.2 | Certification of Evan D. Masyr Pursuant to 18 U.S.C. Section 1350. | - | - | - | - | X | ||||||
101 | The following financial information from the Quarterly Report on Form 10Q for the three and six months ended June 30, 2022, formatted in XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Condensed Consolidated Balance Sheets (ii) Condensed Consolidated Statements of Operations (iii) the Condensed Consolidated Statements of Cash Flows (iv) the Notes to the Condensed Consolidated Financial Statements. | - | - | - | - | X | ||||||
104 | The cover page of this Quarterly Report on Form 10-Q, in inline XBRL |
- | - | - | - | X |
SALEM MEDIA GROUP, INC. | ||||||
August 4, 2022 | ||||||
By: | /s/ DAVID P. SANTRELLA | |||||
David P. Santrella | ||||||
Chief Executive Officer | ||||||
(Principal Executive Officer) | ||||||
August 4, 2022 | ||||||
By: | /s/ EVAN D. MASYR | |||||
Evan D. Masyr | ||||||
Executive Vice President and Chief Financial Officer | ||||||
(Principal Financial Officer) |
This ‘10-Q’ Filing | Date | Other Filings | ||
---|---|---|---|---|
6/1/28 | ||||
6/30/27 | ||||
6/1/24 | ||||
3/1/24 | ||||
1/1/24 | ||||
9/30/23 | ||||
1/1/23 | ||||
Filed as of: | 8/5/22 | |||
Filed on: | 8/4/22 | 8-K | ||
8/1/22 | ||||
7/1/22 | ||||
For Period end: | 6/30/22 | |||
6/27/22 | ||||
6/13/22 | ||||
6/10/22 | ||||
6/7/22 | ||||
5/25/22 | ||||
5/19/22 | ||||
5/17/22 | ||||
5/2/22 | ||||
3/31/22 | 10-Q, 8-K | |||
3/4/22 | 10-K, 4 | |||
2/15/22 | SC 13G/A | |||
1/12/22 | ||||
1/10/22 | ||||
1/1/22 | 3 | |||
12/31/21 | 10-K, 5 | |||
12/10/21 | ||||
12/1/21 | ||||
11/30/21 | ||||
10/25/21 | 4 | |||
10/12/21 | ||||
10/5/21 | ||||
10/4/21 | ||||
9/24/21 | ||||
9/10/21 | 8-K | |||
7/27/21 | ||||
7/23/21 | ||||
7/2/21 | ||||
7/1/21 | 4 | |||
6/30/21 | 10-Q | |||
6/7/21 | ||||
6/2/21 | ||||
6/1/21 | ||||
5/25/21 | ||||
4/28/21 | ||||
3/31/21 | 10-Q | |||
3/18/21 | ||||
3/8/21 | ||||
12/31/20 | 10-K | |||
10/20/20 | ||||
9/30/20 | 10-Q | |||
6/30/20 | 10-Q, 11-K, NT 11-K | |||
5/6/20 | 8-K, DEF 14A | |||
4/7/20 | 4, 8-K | |||
1/30/20 | 4 | |||
1/27/20 | 4, 4/A | |||
12/27/19 | 4 | |||
11/27/19 | 4 | |||
11/15/19 | ||||
3/28/19 | ||||
2/20/19 | ||||
2/19/19 | ||||
2/12/19 | ||||
1/10/19 | ||||
12/21/18 | ||||
11/17/18 | ||||
5/4/18 | ||||
4/10/18 | ||||
4/9/18 | ||||
5/19/17 | 8-K | |||
List all Filings |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 12/09/22 Salem Media Group, Inc./DE S-3/A 7:1.2M Donnelley … Solutions/FA 10/03/22 Salem Media Group, Inc./DE S-3 7:840K Donnelley … Solutions/FA |