Salem Media Group, Inc. Announces First Quarter 2022 Total Revenue of $62.6 Million
Research, News, and Market Data on Salem Media
IRVING, Texas–(BUSINESS WIRE)– Salem Media Group, Inc. (NASDAQ: SALM) released its results for the three months ended March 31, 2022.
First Quarter 2022 Results
For the quarter ended March 31, 2022 compared to the quarter ended March 31, 2021:
Consolidated
- Total revenue increased 5.5% to $62.6 million from $59.4 million;
- Total operating expenses increased 4.8% to $57.6 million from $55.0 million;
- Operating expenses, excluding gains or losses on the disposition of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense (1) increased 8.4% to $55.8 million from $51.4 million;
- Operating income increased 14.2% to $5.0 million from $4.4 million;
- Net income increased 438.4% to $1.7 million, or $0.06 net income per diluted share from $0.3 million, or $0.01 net income diluted per share;
- EBITDA (1) increased 8.6% to $8.2 million from $7.5 million;
- Adjusted EBITDA (1) decreased 13.6% to $6.8 million from $7.9 million; and
- Net cash used by operating activities decreased 53.1% to $4.3 million from $9.2 million.
Broadcast
- Net broadcast revenue increased 10.0% to $48.4 million from $44.0 million;
- Station Operating Income (“SOI”) (1) decreased 3.7% to $10.3 million from $10.7 million;
- Same Station (1) net broadcast revenue increased 9.4% to $48.1 million from $44.0 million; and
- Same Station SOI (1) decreased 5.0% to $10.3 million from $10.9 million.
Digital Media
- Digital media revenue increased 7.1% to $10.3 million from $9.6 million; and
- Digital Media Operating Income (1) increased 93.1% to $1.8 million from $0.9 million.
Publishing
- Publishing revenue decreased 31.8% to $3.9 million from $5.7 million; and
- Publishing Operating Loss (1) was $0.6 million compared to Publishing Operating Income (1) of $0.5 million.
Included in the results for the quarter ended March 31, 2022 are:
- A $1.7 million ($1.3 million, net of tax, or $0.05 per diluted share) net gain on the disposition of assets relates primarily to the gain on sale of land in Phoenix, Arizona offset by various fixed asset disposals; and
- A $0.2 million ($0.2 million, net of tax, or $0.01 per share) charge for debt modification costs; and
- A $0.1 million non-cash compensation charge ($0.1 million, net of tax) related to the expensing of stock options.
Included in the results for the quarter ended March 31, 2021 are:
- A $0.3 million ($0.2 million, net of tax, or $0.01 per share) net loss on the disposition of assets recorded upon the closing of the sale of radio station WKAT-AM and an FM translator in Miami, Florida; and
- A $0.1 million non-cash compensation charge ($0.1 million, net of tax) related to the expensing of stock options.
Per share numbers are calculated based on 27,610,407 diluted weighted average shares for the quarter ended March 31, 2022, and 27,138,773 diluted weighted average shares for the quarter ended March 31, 2021.
Balance Sheet
As of March 31, 2022, the company had $114.7 million outstanding on the 7.125% senior secured notes due 2028 (“2028 Notes”), $57.7 million outstanding on 6.75% senior secured notes due 2024 (“2024 Notes”), and no outstanding balance on the ABL Facility.
Acquisitions and Divestitures
The following transactions were completed since January 1, 2022:
- On May 2, 2022, the company acquired websites and related assets of Retirement Media for $0.2 million in cash.
- The company invested $3.5 million, for a total investment to date of $4.5 million, in a Limited Liability Company “LLC” that will own, distribute, and market a motion picture.
- On February 15, 2022, the company 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, the company closed on the sale of 4.5 acres of land in Phoenix, Arizona for $2.0 million in cash.
Pending transactions:
- On August 31, 2021, the company entered into an agreement to sell 9.3 acres of land in the Denver area for $8.2 million. The company expects to close this sale in the second quarter of 2022 and plans to continue broadcasting both KRKS-AM and KBJD-AM from this site.
- On June 2, 2021, the company entered into an agreement to acquire radio station KKOL-AM in Seattle, Washington for $0.5 million. The company paid $0.1 million in cash into an escrow account and began operating the station under a Local Marketing Agreement on June 7, 2021. The company expects the transaction to close in the latter half of 2022.
- On February 5, 2020, the company entered into an Asset Purchase Agreement with Word Broadcasting to sell 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 Time Brokerage Agreement (“TBA”). Due to changes in debt markets, the transaction was not funded, and it is uncertain when, or if, the transaction will close. Word Broadcasting continues to program the stations under a TBA that began in January 2017.
Conference Call Information
Salem will host a teleconference to discuss its results on May 10, 2022 at 3:00 p.m. Central Time. To access the teleconference, please dial (877) 524-8416, and then ask to be joined into the Salem Media Group First Quarter 2022 call or listen via the investor relations portion of the company’s website, located at investor.salemmedia.com. A replay of the teleconference will be available through May 24, 2022 and can be heard by dialing (877) 660-6853, passcode 13727921 or on the investor relations portion of the company’s website, located at investor.salemmedia.com.
Follow us on Twitter @SalemMediaGrp.
Second Quarter 2022 Outlook
For the second quarter of 2022, the company is projecting total revenue to increase between 6% and 8% from second quarter 2021 total revenue of $63.8 million. The company is also projecting operating expenses before gains or losses on the sale or disposal of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense to increase between 7% and 10% compared to the second quarter of 2021 non-GAAP operating expenses of $55.0 million.
A reconciliation of non-GAAP operating expenses, excluding gains
or losses on the disposition of assets, stock-based compensation expense,
changes in the estimated fair value of contingent earn-out consideration,
impairments, depreciation expense and amortization expense to the most directly
comparable GAAP measure is not available without unreasonable efforts on a
forward-looking basis due to the potential high variability, complexity and low
visibility with respect to the charges excluded from this non-GAAP financial
measure, in particular, the change in the estimated fair value of earn-out
consideration, impairments and gains or losses from the disposition of fixed
assets. The company expects the variability of the above charges may have a
significant, and potentially unpredictable, impact on its future GAAP financial
results.
About Salem Media Group, Inc.
Salem Media Group is America’s leading multimedia company specializing in Christian and conservative content, with media properties comprising radio, digital media and book and newsletter publishing. Each day Salem serves a loyal and dedicated audience of listeners and readers numbering in the millions nationally. With its unique programming focus, Salem provides compelling content, fresh commentary and relevant information from some of the most respected figures across the Christian and conservative media landscape. Learn more about Salem Media Group, Inc. at www.salemmedia.com, Facebook and Twitter.
Forward-Looking Statements
Statements used in this press release that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated as a result of certain risks and uncertainties, including but not limited to the ability of Salem to close and integrate announced transactions, market acceptance of Salem’s radio station formats, competition from new technologies, adverse economic conditions, and other risks and uncertainties detailed from time to time in Salem’s reports on Forms 10-K, 10-Q, 8-K and other filings filed with or furnished to the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Salem undertakes no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events.
(1) Regulation G
Management uses certain non-GAAP financial measures defined
below in communications with investors, analysts, rating agencies, banks and
others to assist such parties in understanding the impact of various items on
its financial statements. The company uses these non-GAAP financial measures to
evaluate financial results, develop budgets, manage expenditures and as a
measure of performance under compensation programs.
The company’s presentation of these non-GAAP financial measures
should not be considered as a substitute for or superior to the most directly
comparable financial measures as reported in accordance with GAAP.
Regulation G defines and prescribes the conditions under which
certain non-GAAP financial information may be presented in this earnings
release. The company closely monitors EBITDA, Adjusted EBITDA, Station
Operating Income (“SOI”), Same Station net broadcast revenue, Same Station
broadcast operating expenses, Same Station Operating Income, Digital Media
Operating Income, Publishing Operating Income (Loss), and operating expenses
excluding gains or losses on the disposition of assets, stock-based
compensation, changes in the estimated fair value of contingent earn-out
consideration, impairments, depreciation and amortization, all of which are
non-GAAP financial measures. The company believes that these non-GAAP financial
measures provide useful information about its core operating results, and thus,
are appropriate to enhance the overall understanding of its financial performance.
These non-GAAP financial measures are intended to provide management and
investors a more complete understanding of its underlying operational results,
trends and performance.
The company defines Station Operating Income (“SOI”) as net
broadcast revenue minus broadcast operating expenses. The company defines
Digital Media Operating Income as net Digital Media Revenue minus Digital Media
Operating Expenses. The company defines Publishing Operating Income (Loss) as
net Publishing Revenue minus Publishing Operating Expenses. The company defines
EBITDA as net income before interest, taxes, depreciation, and amortization.
The company defines Adjusted EBITDA as EBITDA before gains or losses on the
disposition of assets, before changes in the estimated fair value of contingent
earn-out consideration, before impairments, before net miscellaneous income and
expenses, before gain on bargain purchase, before (gain) loss on early
retirement of long-term debt and before non-cash compensation expense. SOI,
Digital Media Operating Income, Publishing Operating Income (Loss), EBITDA and
Adjusted EBITDA are commonly used by the broadcast and media industry as
important measures of performance and are used by investors and analysts who
report on the industry to provide meaningful comparisons between broadcasters.
SOI, Digital Media Operating Income, Publishing Operating Income (Loss), EBITDA
and Adjusted EBITDA are not measures of liquidity or of performance in
accordance with GAAP and should be viewed as a supplement to and not a
substitute for or superior to its results of operations and financial condition
presented in accordance with GAAP. The company’s definitions of SOI, Digital
Media Operating Income, Publishing Operating Income (Loss), EBITDA and Adjusted
EBITDA are not necessarily comparable to similarly titled measures reported by
other companies.
The company defines Adjusted Free Cash Flow as Adjusted EBITDA
less cash paid for capital expenditures, less cash paid for income taxes, and
less cash paid for interest. The company considers Adjusted Free Cash Flow to
be a liquidity measure that provides useful information to management and
investors about the amount of cash generated by its operations after cash paid
for capital expenditures, cash paid for income taxes and cash paid for
interest. A limitation of Adjusted Free Cash Flow as a measure of liquidity is
that it does not represent the total increase or decrease in its cash balance
for the period. The company uses Adjusted Free Cash Flow, a non-GAAP liquidity
measure, both in presenting its results to stockholders and the investment
community, and in its internal evaluation and management of the business. The
company’s presentation of Adjusted Free Cash Flow is not intended to be
considered in isolation or as a substitute for the financial information
prepared and presented in accordance with GAAP. The company’s definition of
Adjusted Free Cash Flow is not necessarily comparable to similarly titled
measures reported by other companies.
The company defines Same Station net broadcast revenue as
broadcast revenue from its radio stations and networks that the company owns or
operates in the same format on the first and last day of each quarter, as well
as the corresponding quarter of the prior year. The company defines Same
Station broadcast operating expenses as broadcast operating expenses from its
radio stations and networks that the company owns or operates in the same
format on the first and last day of each quarter, as well as the corresponding
quarter of the prior year. The company defines Same Station SOI as Same Station
net broadcast revenue less Same Station broadcast operating expenses. Same
Station operating results include those stations that the company owns or
operates in the same format on the first and last day of each quarter, as well
as the corresponding quarter of the prior year. Same Station operating results
for a full calendar year are calculated as the sum of the Same Station-results
for each of the four quarters of that year. The company uses Same Station
operating results, a non-GAAP financial measure, both in presenting its results
to stockholders and the investment community, and in its internal evaluations
and management of the business. The company believes that Same Station
operating results provide a meaningful comparison of period over period
performance of its core broadcast operations as this measure excludes the
impact of new stations, the impact of stations the company no longer owns or
operates, and the impact of stations operating under a new programming format.
The company’s presentation of Same Station operating results are not intended
to be considered in isolation or as a substitute for the financial information
prepared and presented in accordance with GAAP. The company’s definition of
Same Station operating results is not necessarily comparable to similarly
titled measures reported by other companies.
For all non-GAAP financial measures, investors should consider
the limitations associated with these metrics, including the potential lack of
comparability of these measures from one company to another.
The Supplemental Information tables that follow the condensed
consolidated financial statements provide reconciliations of the non-GAAP
financial measures that the company uses in this earnings release to the most
directly comparable measures calculated in accordance with GAAP. The company
uses non-GAAP financial measures to evaluate financial performance, develop
budgets, manage expenditures, and determine employee compensation. The company’s
presentation of this additional information is not to be considered as a
substitute for or superior to the directly comparable measures as reported in
accordance with GAAP.
|
Salem Media Group, Inc.
|
|
Condensed Consolidated Statements of
Operations
|
|
(in thousands, except share and per share
data)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2021
|
|
2022
|
|
|
|
(Unaudited)
|
|
Net broadcast revenue
|
|
$
|
44,048
|
|
|
$
|
48,432
|
|
|
Net digital media revenue
|
|
|
9,619
|
|
|
|
10,300
|
|
|
Net publishing revenue
|
|
|
5,686
|
|
|
|
3,877
|
|
|
Total revenue
|
|
|
59,353
|
|
|
|
62,609
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Broadcast operating expenses
|
|
|
33,343
|
|
|
|
38,121
|
|
|
Digital media operating expenses
|
|
|
8,673
|
|
|
|
8,473
|
|
|
Publishing operating expenses
|
|
|
5,205
|
|
|
|
4,467
|
|
|
Unallocated corporate expenses
|
|
|
4,288
|
|
|
|
4,810
|
|
|
Change in the estimated fair value of contingent earn-out consideration
|
|
|
—
|
|
|
|
(5
|
)
|
|
Debt modification costs
|
|
|
—
|
|
|
|
228
|
|
|
Depreciation and amortization
|
|
|
3,170
|
|
|
|
3,276
|
|
|
Net (gain) loss on the disposition of assets
|
|
|
318
|
|
|
|
(1,735
|
)
|
|
Total operating expenses
|
|
|
54,997
|
|
|
|
57,635
|
|
|
Operating income
|
|
|
4,356
|
|
|
|
4,974
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
Interest income
|
|
|
1
|
|
|
|
—
|
|
|
Interest expense
|
|
|
(3,926
|
)
|
|
|
(3,394
|
)
|
|
Loss on early retirement of long-term debt
|
|
|
—
|
|
|
|
(53
|
)
|
|
Net miscellaneous income and (expenses)
|
|
|
22
|
|
|
|
1
|
|
|
Net income before income taxes
|
|
|
453
|
|
|
|
1,528
|
|
|
Provision for (benefit from) income taxes
|
|
|
130
|
|
|
|
(211
|
)
|
|
Net income
|
|
$
|
323
|
|
|
$
|
1,739
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share Class A and Class B common stock
|
|
$
|
0.01
|
|
|
$
|
0.06
|
|
|
Diluted earnings per share Class A and Class B common stock
|
|
$
|
0.01
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average Class A and Class B common stock shares outstanding
|
|
|
26,736,639
|
|
|
|
27,177,375
|
|
|
Diluted weighted average Class A and Class B common stock shares outstanding
|
|
|
27,138,773
|
|
|
|
27,610,407
|
|
|
Salem Media Group, Inc.
|
|
Condensed Consolidated Balance Sheets
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021
|
|
|
March 31, 2022
|
|
|
|
|
|
|
|
(Unaudited)
|
|
Assets
|
|
|
|
|
|
|
|
Cash
|
|
$
|
1,785
|
|
$
|
—
|
|
Accounts receivable, net
|
|
|
25,663
|
|
|
28,000
|
|
Other current assets
|
|
|
14,066
|
|
|
15,330
|
|
Property and equipment, net
|
|
|
79,339
|
|
|
80,262
|
|
Operating and financing lease right-of-use assets
|
|
|
43,665
|
|
|
45,985
|
|
Intangible assets, net
|
|
|
346,438
|
|
|
346,294
|
|
Deferred financing costs
|
|
|
843
|
|
|
793
|
|
Other assets
|
|
|
4,313
|
|
|
6,994
|
|
Total assets
|
|
$
|
516,112
|
|
$
|
523,658
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity
|
|
|
|
|
|
|
|
Current liabilities
|
|
$
|
51,455
|
|
$
|
57,031
|
|
Long-term debt
|
|
|
170,581
|
|
|
168,300
|
|
Operating and financing lease liabilities, less current portion
|
|
|
42,273
|
|
|
44,777
|
|
Deferred income taxes
|
|
|
67,012
|
|
|
67,007
|
|
Other liabilities
|
|
|
6,580
|
|
|
6,393
|
|
Stockholders’ Equity
|
|
|
178,211
|
|
|
180,150
|
|
Total liabilities
and stockholders’ equity
|
|
$
|
516,112
|
|
$
|
523,658
|
|
SALEM MEDIA GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ EQUITY
(Dollars in thousands, except share and per
share data)
|
|
|
Class A
|
|
Class B
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
Common Stock
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paid-In
|
|
Accumulated
|
|
Treasury
|
|
|
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Stock
|
|
Total
|
|
Stockholders’
equity, December 31, 2020
|
23,447,317
|
|
$
|
227
|
|
5,553,696
|
|
$
|
56
|
|
$
|
247,025
|
|
$
|
(78,023
|
)
|
|
$
|
(34,006
|
)
|
|
$
|
135,279
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
|
—
|
|
|
|
78
|
|
Options exercised
|
185,782
|
|
|
2
|
|
—
|
|
|
—
|
|
|
390
|
|
|
—
|
|
|
|
—
|
|
|
|
392
|
|
Net income
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
323
|
|
|
|
—
|
|
|
|
323
|
|
Stockholders’
equity,
March 31, 2021
|
23,633,099
|
|
$
|
229
|
|
5,553,696
|
|
$
|
56
|
|
$
|
247,493
|
|
$
|
(77,700
|
)
|
|
$
|
(34,006
|
)
|
|
$
|
136,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
Class B
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
Common Stock
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paid-In
|
|
Accumulated
|
|
Treasury
|
|
|
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Stock
|
|
Total
|
|
Stockholders’
equity, December 31, 2021
|
23,922,974
|
|
$
|
232
|
|
5,553,696
|
|
$
|
56
|
|
$
|
248,438
|
|
$
|
(36,509
|
)
|
|
$
|
(34,006
|
)
|
|
$
|
178,211
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
106
|
|
|
—
|
|
|
|
—
|
|
|
|
106
|
|
Options exercised
|
40,913
|
|
|
—
|
|
—
|
|
|
—
|
|
|
94
|
|
|
—
|
|
|
|
—
|
|
|
|
94
|
|
Lapse in restricted shares
|
14,854
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Net income
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,739
|
|
|
|
—
|
|
|
|
1,739
|
|
Stockholders’
equity, March 31, 2022
|
23,978,741
|
|
$
|
232
|
|
5,553,696
|
|
$
|
56
|
|
$
|
248,638
|
|
$
|
(34,770
|
)
|
|
$
|
(34,006
|
)
|
|
$
|
180,150
|
|
SALEM MEDIA GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
(Dollars in thousands)
|
|
(Unaudited)
|
|
|
Three Months Ended
March 31,
|
|
|
2021
|
|
2022
|
|
OPERATING ACTIVITIES
|
|
|
|
|
Net income
|
$
|
323
|
|
|
$
|
1,739
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
Non-cash stock-based compensation
|
|
78
|
|
|
|
106
|
|
|
Depreciation and amortization
|
|
3,170
|
|
|
|
3,276
|
|
|
Amortization of deferred financing costs
|
|
213
|
|
|
|
247
|
|
|
Non-cash lease expense
|
|
2,161
|
|
|
|
2,202
|
|
|
Provision for bad debts
|
|
(295
|
)
|
|
|
(209
|
)
|
|
Deferred income taxes
|
|
188
|
|
|
|
(5
|
)
|
|
Change in the estimated fair value of contingent earn-out consideration
|
|
—
|
|
|
|
(5
|
)
|
|
Loss on early retirement of long-term debt
|
|
—
|
|
|
|
53
|
|
|
Net (gain) loss on the disposition of assets
|
|
318
|
|
|
|
(1,735
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable and unbilled revenue
|
|
2,549
|
|
|
|
(2,229
|
)
|
|
Inventories
|
|
(93
|
)
|
|
|
(411
|
)
|
|
Prepaid expenses and other current assets
|
|
(750
|
)
|
|
|
(748
|
)
|
|
Accounts payable and accrued expenses
|
|
2,490
|
|
|
|
4,024
|
|
|
Operating lease liabilities
|
|
(2,497
|
)
|
|
|
(1,852
|
)
|
|
Contract liabilities
|
|
1,122
|
|
|
|
136
|
|
|
Deferred rent income
|
|
170
|
|
|
|
(58
|
)
|
|
Other liabilities
|
|
29
|
|
|
|
—
|
|
|
Income taxes payable
|
|
21
|
|
|
|
(218
|
)
|
|
Net cash provided by operating activities
|
|
9,197
|
|
|
|
4,313
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
Cash paid for capital expenditures net of tenant improvement allowances
|
|
(1,859
|
)
|
|
|
(3,439
|
)
|
|
Capital expenditures reimbursable under tenant improvement allowances and trade agreements
|
|
—
|
|
|
|
(40
|
)
|
|
Deposit on broadcast assets and radio station acquisitions
|
|
(100
|
)
|
|
|
—
|
|
|
Purchases of broadcast assets and radio stations
|
|
—
|
|
|
|
(540
|
)
|
|
Investment in LLC
|
|
—
|
|
|
|
(2,000
|
)
|
|
Proceeds from sale of long-lived assets
|
|
3,501
|
|
|
|
2,001
|
|
|
Other
|
|
(238
|
)
|
|
|
(858
|
)
|
|
Net cash provided by (used in) investing activities
|
|
1,304
|
|
|
|
(4,876
|
)
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
Payments to repurchase 2024 Notes
|
|
—
|
|
|
|
(2,531
|
)
|
|
Proceeds from borrowings under ABL Facility
|
|
16
|
|
|
|
6,257
|
|
|
Payments on ABL Facility
|
|
(5,016
|
)
|
|
|
(6,257
|
)
|
|
Proceeds from borrowings under PPP Loans
|
|
11,195
|
|
|
|
—
|
|
|
Payments of debt issuance costs
|
|
(3
|
)
|
|
|
—
|
|
|
Proceeds from the exercise of stock options
|
|
392
|
|
|
|
94
|
|
|
Payments on financing lease liabilities
|
|
(16
|
)
|
|
|
(16
|
)
|
|
Book overdraft
|
|
—
|
|
|
|
1,231
|
|
|
Net cash provided by (used in) financing activities
|
|
6,568
|
|
|
|
(1,222
|
)
|
|
Net increase (decrease) in cash and cash equivalents
|
|
17,069
|
|
|
|
(1,785
|
)
|
|
Cash and cash equivalents at beginning of year
|
|
6,325
|
|
|
|
1,785
|
|
|
Cash and cash equivalents at end of period
|
$
|
23,394
|
|
|
$
|
—
|
|
The company defines EBITDA (1) as net income before interest, taxes, depreciation, and amortization. The table below presents a reconciliation of EBITDA (1) to Net Income (Loss), the most directly comparable GAAP measure. EBITDA (1) is a non-GAAP financial performance measure that is not to be considered a substitute for or superior to the directly comparable measures reported in accordance with GAAP. The company defines Adjusted EBITDA (1) as EBITDA (1) before gains or losses on the disposition of assets, before changes in the estimated fair value of contingent earn-out consideration, before impairments, before net miscellaneous income and expenses, before (gain) loss on early retirement of long-term debt and before non-cash compensation expense. The table below presents a reconciliation of Adjusted EBITDA (1) to Net Income, the most directly comparable GAAP measure. Adjusted EBITDA (1) is a non-GAAP financial performance measure that is not to be considered a substitute for or superior to the directly comparable measures reported in accordance with GAAP.
|
Salem Media Group, Inc.
|
|
Supplemental Information
|
|
(in thousands)
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2021
|
|
2022
|
|
|
(Unaudited)
|
|
Net income
|
|
$
|
323
|
|
$
|
1,739
|
|
Plus interest expense, net of capitalized interest
|
|
|
3,926
|
|
|
3,394
|
|
Plus provision for (benefit from) income taxes
|
|
|
130
|
|
|
(211)
|
|
Plus depreciation and amortization
|
|
|
3,170
|
|
|
3,276
|
|
Less interest income
|
|
|
(1)
|
|
|
—
|
|
EBITDA
|
|
$
|
7,548
|
|
$
|
8,198
|
|
Less net (gain) loss on the disposition of assets
|
|
|
318
|
|
|
(1,735)
|
|
Less change in the estimated fair value of contingent
earn-out consideration
|
|
|
—
|
|
|
(5)
|
|
Plus debt modification costs
|
|
|
—
|
|
|
228
|
|
Plus loss on early retirement of long-term debt
|
|
|
—
|
|
|
53
|
|
Plus net miscellaneous income and expenses
|
|
|
(22)
|
|
|
(1)
|
|
Plus non-cash stock-based compensation
|
|
|
78
|
|
|
106
|
|
Adjusted EBITDA
|
|
$
|
7,922
|
|
$
|
6,844
|
The company defines Adjusted Free Cash Flow (1) as Adjusted EBITDA (1) less cash paid for capital expenditures, less cash paid for income taxes, and less cash paid for interest. The company considers Adjusted Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by its operations after cash paid for capital expenditures, cash paid for income taxes and cash paid for interest. A limitation of Adjusted Free Cash Flow as a measure of liquidity is that it does not represent the total increase or decrease in its cash balance for the period. The company uses Adjusted Free Cash Flow, a non-GAAP liquidity measure, both in presenting its results to stockholders and the investment community, and in its internal evaluation and management of the business. The company’s presentation of Adjusted Free Cash Flow is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The company’s definition of Adjusted Free Cash Flow is not necessarily comparable to similarly titled measures reported by other companies.
The table below presents a reconciliation of Adjusted Free Cash Flow to net cash provided by operating activities, the most directly comparable GAAP measure. Adjusted Free Cash Flow is a non-GAAP liquidity measure that is not to be considered a substitute for or superior to the directly comparable measures reported in accordance with GAAP.
|
Salem Media Group, Inc.
|
|
Supplemental Information
|
|
(in thousands)
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2021
|
|
2022
|
|
|
(Unaudited)
|
|
Net cash provided by operating activities
|
|
$
|
9,197
|
|
|
$
|
4,313
|
|
|
Non-cash stock-based compensation
|
|
|
(78
|
)
|
|
|
(106
|
)
|
|
Depreciation and amortization
|
|
|
(3,170
|
)
|
|
|
(3,276
|
)
|
|
Amortization of deferred financing costs
|
|
|
(213
|
)
|
|
|
(247
|
)
|
|
Non-cash lease expense
|
|
|
(2,161
|
)
|
|
|
(2,202
|
)
|
|
Provision for bad debts
|
|
|
295
|
|
|
|
209
|
|
|
Deferred income taxes
|
|
|
(188
|
)
|
|
|
5
|
|
|
Change in the estimated fair value of contingent earn- out consideration
|
|
|
—
|
|
|
|
5
|
|
|
Net (gain) loss on the disposition of assets
|
|
|
(318
|
)
|
|
|
1,735
|
|
|
Loss on early retirement of long-term debt
|
|
|
—
|
|
|
|
(53
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable and unbilled revenue
|
|
|
(2,549
|
)
|
|
|
2,229
|
|
|
Inventories
|
|
|
93
|
|
|
|
411
|
|
|
Prepaid expenses and other current assets
|
|
|
750
|
|
|
|
748
|
|
|
Accounts payable and accrued expenses
|
|
|
(2,490
|
)
|
|
|
(4,024
|
)
|
|
Contract liabilities
|
|
|
(1,122
|
)
|
|
|
(136
|
)
|
|
Operating lease liabilities (deferred rent)
|
|
|
2,497
|
|
|
|
1,852
|
|
|
Deferred rent income
|
|
|
(170
|
)
|
|
|
58
|
|
|
Other liabilities
|
|
|
(29
|
)
|
|
|
—
|
|
|
Income taxes payable
|
|
|
(21
|
)
|
|
|
218
|
|
|
Net income
|
|
$
|
323
|
|
|
$
|
1,739
|
|
|
Plus interest expense, net of capitalized interest
|
|
|
3,926
|
|
|
|
3,394
|
|
|
Plus provision for (benefit from) income taxes
|
|
|
130
|
|
|
|
(211
|
)
|
|
Plus depreciation and amortization
|
|
|
3,170
|
|
|
|
3,276
|
|
|
Less interest income
|
|
|
(1
|
)
|
|
|
—
|
|
|
EBITDA
|
|
$
|
7,548
|
|
|
$
|
8,198
|
|
|
Plus net (gain) loss on the disposition of assets
|
|
|
318
|
|
|
|
(1,735
|
)
|
|
Plus change in the estimated fair value of contingent earn-out consideration
|
|
|
—
|
|
|
|
(5
|
)
|
|
Plus debt modification costs
|
|
|
—
|
|
|
|
228
|
|
|
Plus loss on early retirement of long-term debt
|
|
|
—
|
|
|
|
53
|
|
|
Plus net miscellaneous income and expenses
|
|
|
(22
|
)
|
|
|
(1
|
)
|
|
Plus non-cash stock-based compensation
|
|
|
78
|
|
|
|
106
|
|
|
Adjusted EBITDA
|
|
$
|
7,922
|
|
|
$
|
6,844
|
|
|
Less net cash paid for capital expenditures (1)
|
|
|
(1,859
|
)
|
|
|
(3,439
|
)
|
|
Plus cash received (paid for) taxes
|
|
|
79
|
|
|
|
(12
|
)
|
|
Less cash paid for interest, net of capitalized interest
|
|
|
(53
|
)
|
|
|
(65
|
)
|
|
Adjusted Free Cash Flow
|
|
$
|
6,089
|
|
|
$
|
3,328
|
|
|
(1) Net cash paid for capital expenditures reflects actual cash payments net of cash reimbursements under tenant improvement allowances and net of property and equipment acquired in trade transactions.
|
|
Selected Debt Data
|
|
Outstanding at
|
Applicable Interest Rate
|
|
March 31, 2022
|
|
Senior Secured Notes due 2028 (1)
|
$
|
114,731,000
|
7.125%
|
|
Senior Secured Notes due 2024 (2)
|
$
|
57,674,000
|
6.750%
|
|
(1) $114.7 million notes with semi-annual interest payments at an annual rate of 7.125%.
|
|
(2) $57.7 million notes with semi-annual interest payments at an annual rate of 6.750%.
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220506005535/en/
Evan D. Masyr
Executive Vice President and Chief
Financial Officer
(805) 384-4512
evan@salemmedia.com
Source: Salem Media Group, Inc.
