UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported): August 7, 2007
SALEM
COMMUNICATIONS CORPORATION
(Exact
Name of Registrant as Specified in its Charter)
|
Delaware
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000-26497
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77-0121400
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||
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(State
or Other Jurisdiction
|
(Commission
|
(IRS
Employer
|
||
|
of
Incorporation)
|
File
Number)
|
Identification
No.)
|
|
4880
Santa Rosa Road, Camarillo, California
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93012
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (805) 987-0400
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ]Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
[ ]Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE
OF CONTENTS
ITEM
2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
ITEM
7.01 REGULATION FD DISCLOSURE
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS
EXHIBITS
SIGNATURE
EXHIBIT
INDEX
Exhibit
99.1
ITEM
2.02 RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
On
August
7, 2007, Salem Communications Corporation issued a press release regarding
its
results of operations for the quarter ended June 30, 2007.
ITEM
7.01 REGULATION FD DISCLOSURE
On
August
7, 2007, Salem Communications Corporation issued a press release regarding
its
results of operations for the quarter ended June 30, 2007.
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
The following exhibit is furnished with this report on Form 8-K:
|
Exhibit
No.
|
Description
|
|
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99.1
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Press
release, dated August 7, 2007, of Salem Communications Corporation
regarding its results of operations for the quarter ended June 30,
2007.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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|
|
SALEM
COMMUNICATIONS CORPORATION
|
|
|
|
|
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Date:
August 7, 2007
|
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By:
/s/ EVAN D. MASYR
|
|
|
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Evan
D. Masyr
|
|
|
|
Senior
Vice President and
Chief
Financial
Officer
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EXHIBIT
INDEX
|
Exhibit
No.
|
Description
|
|
|
99.1
|
Press
release, dated August 7, 2007, of Salem Communications Corporation
regarding its results of operations for the quarter ended June 30,
2007.
|
EXHIBIT
99.1
SALEM
COMMUNICATIONS ANNOUNCES A 3.4% INCREASE IN SECOND QUARTER 2007 TOTAL
REVENUE
CAMARILLO,
Calif. August, 7, 2007 – Salem Communications Corporation (Nasdaq: SALM), a
leading U.S. radio broadcaster, Internet content provider, magazine and book
publisher targeting audiences interested in content related to faith, family
and
conservative values, today announced results for the three month period ended
June 30, 2007.
Commenting
on the company’s results, Edward G. Atsinger III, Chief Executive Officer of
Salem, said, “Our results for the quarter underscore the stability and
resiliency of our business model. While local spot advertising
experienced some challenges this quarter and declined 5.1% on a same station
basis, we achieved total revenue growth of 3.4% in the second quarter of
2007. Our programming revenue increased 4.8% and our Internet and
publishing businesses grew revenue 36.4% to $6.4 million. We continue to
see
solid growth in our non-broadcast media as we invest in new media businesses
that take advantage of the content and promotional abilities of our radio
stations.”
Second
Quarter 2007 Results
For
the
quarter ended June 30, 2007 compared to the quarter ended June 30,
2006:
|
·
|
Total
revenue increased 3.4% to $60.0 million from $58.1
million;
|
|
·
|
Operating
income decreased 58.2% to $10.9 million from $26.1
million;
|
|
·
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Net
income decreased 74.7% to $2.9 million, or $0.12 per diluted share,
from
$11.6 million, or $0.47 per diluted
share;
|
|
·
|
EBITDA
decreased 50.3% to $14.8 million from $29.8
million;
|
|
·
|
Adjusted
EBITDA increased 4.5% to $16.3 million from $15.6
million;
|
Broadcasting
|
·
|
Net
broadcasting revenue increased 0.5% to $53.7 from $53.4
million;
|
|
·
|
Station
operating income (“SOI”) increased 0.7% to $20.0 million from $19.9
million;
|
|
·
|
Same
station net broadcasting revenue increased 1.5% to $52.9 million
from
$52.1 million;
|
|
·
|
Same
station SOI increased 0.8% to $20.2 million from $20.0
million;
|
|
·
|
Same
station SOI margin decreased to 38.1% from
38.4%;
|
Non-broadcast
Media
|
·
|
Non-broadcast
revenue increased 36.4% to $6.4 million from $4.7 million;
and
|
|
·
|
Non-broadcast
operating income decreased to $0.7 million from $0.9
million.
|
Included
in the results for the quarter ended June 30, 2007 are:
|
·
|
A
$0.6 million gain ($0.4 million gain, net of tax, or $0.02 per
diluted
share) on the disposal of assets;
|
|
·
|
A
$0.9 million non-cash compensation charge ($0.5 million, net of
tax, or
$0.02 per share) related to the expensing of stock options consisting
primarily of:
|
|
o
|
$0.6
million non-cash compensation included in corporate expenses;
and
|
|
o
|
$0.2
million non-cash compensation included in broadcasting operating
expenses.
|
Included
in the results for the quarter ended June 30, 2006 are:
|
·
|
A
$15.5 million gain ($9.4 million gain, net of tax, or $0.38 per
diluted
share) on the disposal of assets;
and
|
|
·
|
A
$1.3 million non-cash compensation charge ($0.8 million, net of
tax, or
$0.03 per share) related to the expensing of stock options consisting
primarily of:
|
|
o
|
$1.1
million non-cash compensation included in corporate expenses;
and
|
|
o
|
$0.2
million non-cash compensation included in broadcasting operating
expenses.
|
On
February 7, 2007, we sold WKNR (850 AM) in Cleveland, Ohio. We discontinued
operating this radio station under a local marketing agreement effective
December 1, 2006. For the quarter ended June 30, 2007, this station did not
generate any revenue or profit. For the comparable 2006 period, the station
generated net broadcasting revenue of $0.6 million and generated no
profit.
Other
comprehensive income of $1.1 million, net of tax, for the quarter ended June
30,
2007 and $0.9 million, net of tax, for the quarter ended June 30, 2006 is
due to
the change in fair market value of the company's interest rate
swaps.
Per
share
numbers are calculated based on 23,855,967 diluted weighted average shares
for
the quarter ended June 30, 2007 and 24,356,275 diluted weighted average shares
for the comparable 2006 period.
Year
to Date 2007 Results
For
the
six month period ended June 30, 2007 compared to the six month period ended
June
30, 2006:
|
·
|
Total
revenue increased 5.5% to $116.1 million from $110.1
million;
|
|
·
|
Operating
income decreased 38.0% to $22.8 million from $36.8
million;
|
|
·
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Net
income decreased 58.8% to $5.9 million, or $0.25 net income per
diluted
share, from net income of $14.3 million or $0.58 net income per
diluted
share;
|
|
·
|
EBITDA
decreased 30.4% to $30.6 million from $43.9
million;
|
|
·
|
Adjusted
EBITDA increased 8.6% to $29.6 million from $27.2
million
|
Broadcasting
|
·
|
Net
broadcasting revenue increased 1.9% to $104.1 million from $102.2
million;
|
|
·
|
SOI
increased 2.7% to $38.0 million from $37.0
million;
|
|
·
|
Same
station net broadcasting revenue increased 2.5% to $102.3 million
from
$99.8 million;
|
|
·
|
Same
station SOI increased 1.8% to $38.1 million from $37.4
million;
|
|
·
|
Same
station SOI margin decreased to 37.2% from
37.5%;
|
Non-broadcast
Media
|
·
|
Non-broadcast
revenue increased 51.7% to $12.0 million from $7.9 million;
and
|
|
·
|
Non-broadcast
operating income increased 65.3% to $1.1 million from $0.7
million
|
Included
in the results for the six month period ended June 30, 2007 are:
|
·
|
A
$2.6 million gain ($1.5 million gain, net of tax or $0.06 gain
per diluted
share) from the disposal of assets;
and
|
|
·
|
A
$1.6 million non-cash compensation charge ($0.9 million, net of
tax, or
$0.4 per share) related to the expensing of stock options consisting
of:
|
|
o
|
$1.1
million non-cash compensation included in corporate
expenses;
|
|
o
|
$0.4
million non-cash compensation included in broadcasting operating
expenses;
and
|
|
o
|
$0.1
million non-cash compensation included in non-broadcast operating
expenses.
|
Included
in the results for the six month period ended June 30, 2006 are:
|
·
|
A
$19.0 million gain ($11.5 million gain, net of tax, or $0.47 per
diluted
share) on the disposal of assets;
|
|
·
|
A
$0.3 million loss from discontinued operations, net of tax or $0.01
per
diluted share; and
|
|
·
|
A
$2.6 million non-cash compensation charge ($1.6 million, net of
tax, or
$0.06 per share) related to the expensing of stock options consisting
of:
|
|
o
|
$2.2
million non-cash compensation included in corporate expenses;
and
|
|
o
|
$0.4
million non-cash compensation included in broadcasting operating
expenses.
|
For
the
six months ended June 30, 2007, WKNR (850 AM) in Cleveland, Ohio, which was
sold
on February 7, 2007, did not generate any revenue or profit. For the
comparable 2006 period, the station generated net broadcasting revenue of
$1.2
million and lost $0.1 million.
Other
comprehensive income of $0.8 million, net of tax, for the six months ended
June
30, 2007 and $1.9 million, net of tax, for the six months ended June 30,
2006 is
due to the change in fair market value of the company's interest rate
swaps.
Per
share
numbers are calculated based on 23,854,518 diluted weighted average shares
for
the six months ended June 30, 2007 and 24,525,718 diluted weighted average
shares for the comparable 2006 period.
SOI
Margin Composition Analysis
The
following table, which is for analytical purposes only, has been created
by
assigning each station in the company’s radio station portfolio to one of four
categories based upon the station’s first quarter SOI margin. The company
believes this table is helpful in assessing the portfolio’s financial and
operational development.
Three
Months Ended June 30,
(Net
Broadcasting Revenue and SOI in millions)
|
2006
|
2007
|
|||||||||||||||||||||||||||||||
|
Average
|
Average
|
|||||||||||||||||||||||||||||||
|
SOI
Margin %
|
Stations
|
Revenue
|
SOI
|
SOI
%
|
Stations
|
Revenue
|
SOI
|
SOI
%
|
||||||||||||||||||||||||
|
50%
or greater
|
27
|
$ |
23.6
|
$ |
14.7
|
62.1 | % |
21
|
$ |
21.7
|
$ |
13.3
|
61.5 | % | ||||||||||||||||||
|
30%
to 49%
|
22
|
11.8
|
4.7
|
40.1 | % |
25
|
13.6
|
5.4
|
39.6 | % | ||||||||||||||||||||||
|
0%
to 29%
|
31
|
10.8
|
1.8
|
16.9 | % |
30
|
10.4
|
2.1
|
19.5 | % | ||||||||||||||||||||||
|
Less
than 0%
|
19
|
3.0
|
(1.0 | ) | (33.8 | %) |
22
|
3.7
|
(0.9 | ) | (23.9 | %) | ||||||||||||||||||||
|
Subtotal
|
99
|
49.2
|
20.2
|
41.0 | % |
98
|
49.4
|
19.9
|
40.2 | % | ||||||||||||||||||||||
|
Other
|
-
|
4.2
|
(0.3 | ) | (7.0 | %) |
-
|
4.3
|
0.1
|
3.5 | % | |||||||||||||||||||||
|
Total
|
99
|
$ |
53.4
|
$ |
19.9
|
37.2 | % |
98
|
53.7
|
20.0
|
37.3 | % | ||||||||||||||||||||
Balance
Sheet
As
of
June 30, 2007, the company had net debt of $347.9 million and was in compliance
with the covenants of its credit facilities and bond indentures. The company’s
bank leverage ratio was 5.6 versus a compliance covenant of 6.75 and its
bond
leverage ratio was 4.9 versus a compliance covenant of 7.0.
Stock
Repurchases
During
the quarter ended June 30 2007, the company did not repurchase shares of
its
Class A common stock and had 23,850,020 shares of its Class A and Class B
common
stock outstanding.
Acquisitions
and Divestitures
During
the quarter ended June 30, 2007, Salem completed the following
transaction:
|
·
|
WVRY
(105.1 FM) in Waverly, Tennessee was sold on May 29, 2007 for $0.9
million.
|
The
following transaction was pending as of June 30, 2007:
|
·
|
KKSN
(910 AM) in Portland, Oregon will be acquired for approximately
$4.5
million (this station is operated by Salem under a local marketing
agreement beginning February 1, 2007 with call letters
KTRO).
|
Third
Quarter 2007 Outlook
For
the
third quarter of 2007, Salem is projecting:
|
·
|
Total
revenue to be between $58.0 million and $58.5 million compared
to third
quarter 2006 total revenue of $57.9
million;
|
|
·
|
Adjusted
EBITDA to be between $13.8 million and $14.3 million compared to
third
quarter 2006 Adjusted EBITDA of $15.9 million;
and
|
|
·
|
Net
income per diluted share to be between $0.08 and
$0.09.
|
Third
quarter 2007 outlook reflects the following:
|
·
|
Same
station net broadcasting revenue to be between $51.3 million to
$51.8 million compared to $51.3 million in third quarter
2006;
|
|
·
|
Non-broadcast
revenue increasing to approximately $5.9 million from $5.4 million
in
third quarter 2006;
|
|
·
|
Same
station SOI declining to between $18.7 million and $19.2 million
from
$20.7 million in third quarter
2006;
|
|
·
|
Non-cash
compensation expense of $0.6 million compared to third quarter
2006
non-cash compensation expense of $0.9
million;
|
|
·
|
Increased
marketing and programming costs of $0.9 million primarily on News
Talk
stations in Chicago, Denver, Louisville and Phoenix, and on Contemporary
Christian Music stations in Dallas, Atlanta and
Sacramento;
|
|
·
|
Continued
growth from our core block programming business and our underdeveloped
radio stations, particularly our News Talk
stations;
|
|
·
|
Ongoing
softness in the radio advertising market;
and
|
|
·
|
The
impact of recent acquisition and divestiture
transactions.
|
Conference
Call Information
Salem
will host a teleconference to discuss its results today, on August 7, 2007
at
5:00 p.m. Eastern Time. To access the teleconference, please dial 973-935-8511
ten minutes prior to the start time or listen via the investor relations
portion
of the company’s website, located at www.salem.cc. A replay of the
teleconference will be available through August 24, 2007 and can be heard
by
dialing 973-341-3080, pass code 9051778 or on the investor relations portion
of
the company’s website, located at www.salem.cc.
Salem
Communications Corporation (Nasdaq: SALM) is a leading U.S. radio broadcaster,
Internet content provider, and magazine and book publisher targeting audiences
interested in Christian and family-themed content and conservative values.
In
addition to its radio properties, Salem owns Salem Radio Network®, which
syndicates talk, news and music programming to approximately 2,000 affiliates;
Salem Radio Representatives™, a national radio advertising sales force; Salem
Web Network™, an Internet provider of Christian content and online streaming;
and Salem Publishing™, a publisher of Christian-themed magazines. Upon the close
of all announced transactions, the company will own 97 radio stations, including
61 stations in 23 of the top 25 markets. Additional information about Salem
may
be accessed at the company’s website, www.salem.cc.
Media
Contact:
Investor / Analyst Contact:
Denise
Davis
Elizabeth Stewart
Director
of
Communications
Investor Relations
Salem
Communications
Salem Communications
(805)
987-0400 ext.
1081
(805) 987-0400 ext. 1065
denised@salem.cc
Elizabeth.Stewart@salem.cc
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.
Regulation
G
Station
operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA
are
financial measures not prepared in accordance with generally accepted accounting
principles (“GAAP”). Station operating income is defined as net broadcasting
revenues minus broadcasting operating expenses. Non-broadcast operating income
is defined as non-broadcast revenue minus non-broadcast operating
expenses. EBITDA is defined as net income before interest, taxes,
depreciation and amortization. Adjusted EBITDA is defined as EBITDA before
loss
on early redemption of long-term debt, discontinued operations (net of tax),
litigation costs, gain or loss on the disposal of assets and non-cash
compensation expense. In addition, Salem has provided supplemental
information as an attachment to this press release, reconciling these non-GAAP
financial measures to the most directly comparable financial measures prepared
in accordance with GAAP. The company believes these non-GAAP financial measures,
when considered in conjunction with the most directly comparable GAAP financial
measures, provide useful measures of the company’s operating
performance.
Station
operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA
are
generally recognized by the broadcasting industry as important measures of
performance and are used by investors as well as analysts who report on the
industry to provide meaningful comparisons between broadcasting. Station
operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA
are
not a measure 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, the
company’s results of operations presented on a GAAP basis such as operating
income and net income. In addition, Salem’s definitions of station operating
income, non-broadcast operating income, EBITDA and Adjusted EBITDA are not
necessarily comparable to similarly titled measures reported by other
companies.
|
Salem
Communications Corporation
Condensed
Consolidated
Statements
of Operations
|
||||||||||||||||
|
(in
thousands, except share, per share and margin
data)
|
||||||||||||||||
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
2006
|
2007
|
2006
|
2007
|
|||||||||||||
|
(unaudited)
|
||||||||||||||||
|
Net
broadcasting revenue
|
$ |
53,381
|
$ |
53,650
|
$ |
102,155
|
$ |
104,090
|
||||||||
|
Non-broadcast
revenue
|
4,684
|
6,388
|
7,936
|
12,042
|
||||||||||||
|
Total
revenue
|
58,065
|
60,038
|
110,091
|
116,132
|
||||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
Broadcasting
operating expenses
|
33,498
|
33,629
|
65,192
|
66,112
|
||||||||||||
|
Non-broadcast
operating expenses
|
3,827
|
5,652
|
7,259
|
10,923
|
||||||||||||
|
Corporate
expenses
|
6,256
|
5,496
|
12,696
|
11,310
|
||||||||||||
|
Depreciation
and amortization
|
3,866
|
3,699
|
7,161
|
7,600
|
||||||||||||
|
(Gain)
loss on disposal of assets
|
(15,510 | ) |
634
|
(19,039 | ) | (2,635 | ) | |||||||||
|
Total
operating expenses
|
31,937
|
49,110
|
73,269
|
93,310
|
||||||||||||
|
Operating
income
|
26,128
|
10,928
|
36,822
|
22,822
|
||||||||||||
|
Other
income (expense):
|
||||||||||||||||
|
Interest
income
|
-
|
48
|
46
|
108
|
||||||||||||
|
Interest
expense
|
(6,779 | ) | (6,308 | ) | (13,367 | ) | (12,762 | ) | ||||||||
|
Other
income (expense), net
|
(174 | ) |
182
|
(346 | ) |
147
|
||||||||||
|
Income
from continuing operations before income taxes
|
19,175
|
4,850
|
23,155
|
10,315
|
||||||||||||
|
Provision
for income taxes
|
7,584
|
1,926
|
9,178
|
4,426
|
||||||||||||
|
Income
from continuing operations
|
11,591
|
2,924
|
13,977
|
5,889
|
||||||||||||
|
Discontinued
operations, net of tax
|
(25 | ) |
-
|
304
|
-
|
|||||||||||
|
Net
income
|
$ |
11,566
|
$ |
2,924
|
$ |
14,281
|
$ |
5,889
|
||||||||
|
Other
comprehensive income, net of tax
|
894
|
1,112
|
1,930
|
824
|
||||||||||||
|
Comprehensive
income
|
$ |
12,460
|
$ |
4,036
|
$ |
16,211
|
$ |
6,713
|
||||||||
|
Basic
income per share before discontinued operations
|
$ |
0.48
|
$ |
0.12
|
$ |
0.57
|
$ |
0.25
|
||||||||
|
Discontinued
operations, net of tax
|
$ |
-
|
$ |
-
|
$ |
0.01
|
$ |
-
|
||||||||
|
Basic
income per share after discontinued operations
|
$ |
0.48
|
$ |
0.12
|
$ |
0.58
|
$ |
0.25
|
||||||||
|
Diluted
income per share before discontinued operations
|
$ |
0.48
|
$ |
0.12
|
$ |
0.57
|
$ |
0.25
|
||||||||
|
Discontinued
operations, net of tax
|
$ |
-
|
$ |
-
|
$ |
0.01
|
$ |
-
|
||||||||
|
Diluted
income per share after discontinued operations
|
$ |
0.47
|
$ |
0.12
|
$ |
0.58
|
$ |
0.25
|
||||||||
|
Basic
weighted average shares outstanding
|
24,347,520
|
23,850,020
|
24,516,432
|
23,849,312
|
||||||||||||
|
Diluted
weighted average shares outstanding
|
24,356,275
|
23,855,967
|
24,525,718
|
23,854,518
|
||||||||||||
|
Other
Data:
|
||||||||||||||||
|
Station
operating income
|
$ |
19,883
|
$ |
20,021
|
$ |
36,963
|
$ |
37,978
|
||||||||
|
Station
operating margin
|
37.2 | % | 37.3 | % | 36.2 | % | 36.5 | % | ||||||||
|
Salem
Communications Corporation
|
||||||||
|
Condensed
Consolidated Balance Sheets
|
||||||||
|
(in
thousands)
|
||||||||
|
December
31,
|
June
30,
|
|||||||
|
2006
|
2007
|
|||||||
|
(unaudited)
|
||||||||
|
Assets
|
||||||||
|
Cash
|
$ |
710
|
$ |
752
|
||||
|
Trade
accounts receivable, net
|
31,984
|
31,335
|
||||||
|
Deferred
income taxes
|
5,020
|
5,009
|
||||||
|
Other
current assets
|
2,881
|
3,036
|
||||||
|
Property,
plant and equipment, net
|
128,713
|
130,808
|
||||||
|
Intangible
assets, net
|
508,410
|
502,916
|
||||||
|
Bond
issue costs
|
593
|
518
|
||||||
|
Bank
loan fees
|
2,996
|
2,488
|
||||||
|
Fair
value of interest rate swaps
|
1,290
|
2,663
|
||||||
|
Other
assets
|
3,667
|
4,449
|
||||||
|
Total
assets
|
$ |
686,264
|
$ |
683,974
|
||||
|
Liabilities
and Stockholders' Equity
|
||||||||
|
Current
liabilities
|
$ |
27,295
|
$ |
25,672
|
||||
|
Long-term
debt and capital lease obligations
|
358,978
|
344,951
|
||||||
|
Deferred
income taxes
|
53,935
|
60,810
|
||||||
|
Other
liabilities
|
8,340
|
8,507
|
||||||
|
Stockholders'
equity
|
237,716
|
244,034
|
||||||
|
Total
liabilities and stockholders' equity
|
$ |
686,264
|
$ |
683,974
|
||||
|
Salem
Communications Corporation
|
||||||||||||||||
|
Supplemental
Information
|
||||||||||||||||
|
(in
thousands)
|
||||||||||||||||
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
2006
|
2007
|
2006
|
2007
|
|||||||||||||
|
(unaudited)
|
||||||||||||||||
|
Capital
expenditures
|
||||||||||||||||
|
Acquisition
related / income producing
|
$ |
4,520
|
$ |
2,047
|
$ |
7,793
|
$ |
3,771
|
||||||||
|
Maintenance
|
1,708
|
2,342
|
3,465
|
5,017
|
||||||||||||
|
Total
capital expenditures
|
$ |
6,228
|
$ |
4,389
|
$ |
11,258
|
$ |
8,788
|
||||||||
|
Tax
information
|
||||||||||||||||
|
Cash
tax expense
|
$ |
76
|
$ |
47
|
$ |
76
|
$ |
215
|
||||||||
|
Deferred
tax expense
|
7,508
|
1,879
|
9,102
|
4,211
|
||||||||||||
|
Provision
for income taxes
|
$ |
7,584
|
$ |
1,926
|
$ |
9,178
|
$ |
4,426
|
||||||||
|
Tax
benefit of non-book amortization
|
$ |
3,685
|
$ |
3,936
|
$ |
7,262
|
$ |
8,112
|
||||||||
|
Reconciliation
of Same Station Net Broadcasting Revenue to
|
||||||||||||||||
|
Total
Net Broadcasting Revenue
|
||||||||||||||||
|
Net
broadcasting revenue - same station
|
$ |
52,096
|
$ |
52,901
|
$ |
99,785
|
$ |
102,300
|
||||||||
|
Net
broadcasting revenue - acquisitions
|
-
|
146
|
172
|
623
|
||||||||||||
|
Net
broadcasting revenue - dispositions
|
840
|
66
|
1,427
|
66
|
||||||||||||
|
Net
broadcasting revenue - format changes
|
445
|
537
|
771
|
1,101
|
||||||||||||
|
Total
net broadcasting revenue
|
$ |
53,381
|
$ |
53,650
|
$ |
102,155
|
$ |
104,090
|
||||||||
|
Reconciliation
of Same Station Broadcasting Operating Expenses
to
|
||||||||||||||||
|
Total
Broadcasting Operating Expenses
|
||||||||||||||||
|
Broadcasting
operating expenses - same station
|
$ |
32,103
|
$ |
32,745
|
$ |
62,377
|
$ |
64,216
|
||||||||
|
Broadcasting
operating expenses - acquisitions
|
-
|
228
|
176
|
657
|
||||||||||||
|
Broadcasting
operating expenses - dispositions
|
844
|
64
|
1,511
|
106
|
||||||||||||
|
Broadcasting
operating expenses - format changes
|
551
|
592
|
1,128
|
1,133
|
||||||||||||
|
Total
broadcasting operating expenses
|
$ |
33,498
|
$ |
33,629
|
$ |
65,192
|
$ |
66,112
|
||||||||
|
Reconciliation
of Same Station Station Operating Income to
|
||||||||||||||||
|
Total
Station Operating Income
|
||||||||||||||||
|
Station
operating income - same station
|
$ |
19,993
|
$ |
20,156
|
$ |
37,408
|
$ |
38,084
|
||||||||
|
Station
operating income - acquisitions
|
-
|
(82 | ) | (4 | ) | (34 | ) | |||||||||
|
Station
operating income - dispositions
|
(4 | ) |
2
|
(84 | ) | (40 | ) | |||||||||
|
Station
operating income - format changes
|
(106 | ) | (55 | ) | (357 | ) | (32 | ) | ||||||||
|
Total
station operating income
|
$ |
19,883
|
$ |
20,021
|
$ |
36,963
|
$ |
37,978
|
||||||||
|
Salem
Communications Corporation
|
||||||||||||||||
|
Supplemental
Information
|
||||||||||||||||
|
(in
thousands)
|
||||||||||||||||
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
2006
|
2007
|
2006
|
2007
|
|||||||||||||
|
(unaudited)
|
||||||||||||||||
|
Reconciliation
of Station Operating Income and Non-Broadcast
|
||||||||||||||||
|
Operating
Income to Operating Income
|
||||||||||||||||
|
Station
operating income
|
$ |
19,883
|
$ |
20,021
|
$ |
36,963
|
$ |
37,978
|
||||||||
|
Non-broadcast
operating income
|
857
|
736
|
677
|
1,119
|
||||||||||||
|
Less:
|
||||||||||||||||
|
Corporate
expenses
|
(6,256 | ) | (5,496 | ) | (12,696 | ) | (11,310 | ) | ||||||||
|
Depreciation
and amortization
|
(3,866 | ) | (3,699 | ) | (7,161 | ) | (7,600 | ) | ||||||||
|
Gain
(loss) on disposal of assets
|
15,510
|
(634 | ) |
19,039
|
2,635
|
|||||||||||
|
Operating
income
|
$ |
26,128
|
$ |
10,928
|
$ |
36,822
|
$ |
22,822
|
||||||||
|
Reconciliation
of Adjusted EBITDA to EBITDA to Net Income
|
||||||||||||||||
|
Adjusted
EBITDA
|
$ |
15,622
|
$ |
16,323
|
$ |
27,218
|
$ |
29,568
|
||||||||
|
Less:
|
||||||||||||||||
|
Stock-based
compensation
|
(1,312 | ) | (880 | ) | (2,620 | ) | (1,634 | ) | ||||||||
|
Discontinued
operations, net of tax
|
(25 | ) |
-
|
304
|
-
|
|||||||||||
|
Gain
(loss) on disposal of assets
|
15,510
|
(634 | ) |
19,039
|
2,635
|
|||||||||||
|
EBITDA
|
29,795
|
14,809
|
43,941
|
30,569
|
||||||||||||
|
Plus:
|
||||||||||||||||
|
Interest
income
|
-
|
48
|
46
|
108
|
||||||||||||
|
Less:
|
||||||||||||||||
|
Depreciation
and amortization
|
(3,866 | ) | (3,699 | ) | (7,161 | ) | (7,600 | ) | ||||||||
|
Interest
expense
|
(6,779 | ) | (6,308 | ) | (13,367 | ) | (12,762 | ) | ||||||||
|
Provision
for income taxes
|
(7,584 | ) | (1,926 | ) | (9,178 | ) | (4,426 | ) | ||||||||
|
Net
income
|
$ |
11,566
|
$ |
2,924
|
$ |
14,281
|
$ |
5,889
|
||||||||
|
Applicable
|
||||||||||||||||
|
Outstanding
|
Interest
|
|||||||||||||||
|
at
6/30/2007
|
Rate
|
|||||||||||||||
|
Selected
Debt and Swap Data
|
||||||||||||||||
|
7
3/4% senior subordinated notes
|
$ |
100,000
|
7.75 | % | ||||||||||||
|
Senior
bank term loan B debt (1)
|
73,125
|
7.13 | % | |||||||||||||
|
Senior
bank term loan C debt (swap matures 7/1/2012) (2)
|
30,000
|
6.74 | % | |||||||||||||
|
Senior
bank term loan C debt (swap matures 7/1/2012) (2)
|
30,000
|
6.45 | % | |||||||||||||
|
Senior
bank term loan C debt (swap matures 7/1/2012) (2)
|
30,000
|
6.28 | % | |||||||||||||
|
Senior
bank term C debt (at variable rates) (1)
|
73,350
|
7.13 | % | |||||||||||||
|
Senior
bank revolving debt
(at
variable rates) (1)
|
8,500
|
7.13 | % | |||||||||||||
|
Swingline
credit facility (3)
|
293
|
8.25 | % | |||||||||||||
|
(1) Subject
to rolling LIBOR plus a spread currently at 1.75% and incorporated
into
the rate set forth above.
|
||||||||||||||||
|
(2) Under
its swap agreements, the Company pays a fixed rate plus a spread
based on
the Company's leverage, as defined in its
|
||||||||||||||||
|
credit
agreement. As of June 30, 2007, that spread was 1.75% and is incorporated
into the applicable interest rates set
|
||||||||||||||||
|
forth
above.
|
||||||||||||||||
|
(3) Subject
to prime interest rate.
|
||||||||||||||||
|
Salem
Communications Corporation
|
||||||||||||
|
Supplemental
Information
|
||||||||||||
|
(in
millions)
|
||||||||||||
|
Projected
|
|
|
||||||||||
|
Three
Months Ending
|
Three
Months
|
|||||||||||
|
September
30, 2007
|
Ended
|
|||||||||||
|
Low
|
High
|
September
30, 2006
|
||||||||||
|
(unaudited)
|
||||||||||||
|
Reconciliation
of Station Operating Income to Operating Income
|
||||||||||||
|
Station
operating income
|
$ |
18.8
|
$ |
19.3
|
||||||||
|
Plus:
|
||||||||||||
|
Non-broadcast
revenue
|
5.9
|
5.9
|
||||||||||
|
Less:
|
||||||||||||
|
Non-broadcast
operating expenses
|
(5.7 | ) | (5.7 | ) | ||||||||
|
Corporate
expenses
|
(5.2 | ) | (5.2 | ) | ||||||||
|
Stock-based
compensation (corporate expense portion)
|
(0.4 | ) | (0.4 | ) | ||||||||
|
Depreciation
and amortization
|
(3.8 | ) | (3.8 | ) | ||||||||
|
Operating
income
|
$ |
9.6
|
$ |
10.1
|
||||||||
|
Reconciliation
of Same Station Net Broadcasting Revenue to
|
||||||||||||
|
Total
Net Broadcasting Revenue
|
||||||||||||
|
Net
broadcasting revenue - same station
|
$ |
51.3
|
$ |
51.8
|
$ |
51.3
|
||||||
|
Net
broadcasting revenue - acquisitions / dispositions / format
changes
|
0.8
|
0.8
|
1.2
|
|||||||||
|
Total
net broadcasting revenue
|
$ |
52.1
|
$ |
52.6
|
$ |
52.5
|
||||||
|
Reconciliation
of Same Station Station Operating Income to
|
||||||||||||
|
Total
Station Operating Income
|
||||||||||||
|
Station
operating income - same station
|
$ |
18.7
|
$ |
19.2
|
$ |
20.7
|
||||||
|
Station
operating income - acquisitions / dispositions / format
changes
|
0.1
|
0.1
|
-
|
|||||||||
|
Total
station operating income
|
$ |
18.8
|
$ |
19.3
|
$ |
20.7
|
||||||