Salem Communications Announces Third Quarter 2009 Total Revenue of $48.9 Million

2009-11-05 22:40:02 -

CAMARILLO, CA -- (Marketwire) -- 11/05/09 -- Salem Communications Corporation (NASDAQ: SALM), 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, released its results for the three and nine months ended September 30, 2009.

Third Quarter 2009 Results

For the quarter ended September 30, 2009 compared to the quarter ended September 30, 2008:

Consolidated

-- Total revenue decreased 10.2% to $48.9 million from $54.4 million;
-- Operating expenses decreased 20.8% to $54.4 million from
   $68.7 million;
-- Operating expenses excluding impairment of goodwill and indefinite-
   lived assets and gain or loss on disposal of assets decreased 16.6%
   to $40.2 million from $48.2 million;
-- Operating loss from continued operations was $5.5 million in the
   current quarter as compared to $14.2 million in the prior year;
-- Net loss was $4.6 million, or $0.19 net loss per share, as compared
   to $11.0 million, or $0.47 net loss per share;
-- EBITDA was a loss of $0.2 million for the quarter as compared to a
   loss of $9.7 million in the prior year; and
-- Adjusted EBITDA decreased 2.3% to $12.5 million from $12.7 million.

Broadcast

-- Net broadcast revenue decreased 11.4% to $42.0 million from
   $47.4 million;
-- Station operating income ("SOI") decreased 8.2% to $15.1 million
   from $16.4 million;
-- Same station net broadcast revenue decreased 12.2% to $40.9 million
   from $46.6 million;
-- Same station SOI decreased 9.9% to $15.0 million from $16.7 million;
   and
-- Same station SOI margin increased to 36.8% from 35.8%.

Non-broadcast

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Included in the results for the quarter ended September 30, 2009 are:

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Included in the results for the quarter ended September 30, 2008 are:

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These results reflect the reclassification of the operations of our Columbus, Ohio and Milwaukee, Wisconsin radio stations to discontinued operations for all periods presented. These stations had net broadcast revenue of approximately $0.4 million and generated a profit of $0.1 million for the quarter ended September 30, 2008 and net broadcast revenue of approximately $0.3 million and generated a profit of $41,000 for the quarter ended September 30, 2009.

Additionally, these results reflect the reclassification of the operations of CCM Magazine to discontinued operations. The magazine generated no non-broadcast revenue and profit for the quarter ended September 30, 2008.

The company had no other comprehensive income or loss for the quarter ended September 30, 2009 due to the interest rate swaps becoming ineffective during the fourth quarter of 2008. This is compared to other comprehensive loss of $0.3 million, net of tax, for the quarter ended September 30, 2008 due to the change in fair market value of the company's interest rate swaps.

Per share numbers are calculated based on 23,933,940 diluted weighted average shares for the quarter ended September 30, 2009, and 23,673,788 diluted weighted average shares for the quarter ended September 30, 2008.

Year to Date 2009 Results

For the nine month period ended September 30, 2009 compared to the nine month period ended September 30, 2008:

Consolidated

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Broadcast

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Non-broadcast

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Included in the results for the nine month period ended September 30, 2009 are:

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Included in the results for the nine month period ended September 30, 2008 are:

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These results reflect the reclassification of the operations of our Columbus, Ohio and Milwaukee, Wisconsin radio stations to discontinued operations for all periods presented. These stations had net broadcast revenue of approximately $1.7 million and generated a profit of $0.2 million for the nine months ended September 30, 2008 and net broadcast revenue of approximately $1.1 million and generated a profit of $0.2 million for the nine months ended September 30, 2009.

Additionally, these results reflect the reclassification of the operations of CCM Magazine to discontinued operations for all periods presented. The magazine had non-broadcast revenue of $0.4 million and generated a profit of $0.1 million for the nine months ended September 30, 2008.

The company had no other comprehensive income or loss for the nine months ended September 30, 2009 due to the interest rate swaps becoming ineffective during the fourth quarter of 2008. Other comprehensive loss of $0.5 million, net of tax, for the nine months ended September 30, 2008 is due to the change in fair market value of the company's interest rate swaps.

Per share numbers are calculated based on 23,670,505 diluted weighted average shares for the nine months ended September 30, 2009 and 23,670,455 diluted weighted average shares for the comparable 2008 period.

Balance Sheet

As of September 30, 2009, the company had net debt of $290.2 million and was in compliance with the covenants of its credit facilities and bond indentures. The company's bank leverage ratio was 5.16 versus a compliance covenant of 5.75 and its bond leverage ratio was 5.23 versus a compliance covenant of 7.0.

Acquisitions and Divestitures

The following transaction is currently pending:

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Fourth Quarter 2009 Outlook

For the fourth quarter of 2009, Salem is projecting total revenue to decrease 8% to 10% over fourth quarter 2008 total revenue of $54.8 million.
Salem is also projecting operating expenses before gain or loss on disposal of assets, terminated transaction costs and abandoned license upgrades and impairments to decline 5% to 8% as compared to the fourth quarter of 2008 operating expenses of $43.0 million.

In addition to its radio properties, Salem owns Salem Radio Network®, which syndicates talk, news and music programming to approximately 2,000 affiliates; Salem Media Representatives(TM), a national radio advertising sales force; Salem Web Network(TM), an Internet provider of Christian content and online streaming; and Salem Publishing(TM), a publisher of Christian-themed magazines. Upon the close of all announced transactions, the company will own 93 radio stations, including 58 stations in 22 of the top 25 markets. Additional information about Salem may be accessed at the company's website, www.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 broadcast revenues minus broadcast 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 discontinued operations (net of tax), impairment of goodwill and indefinite-lived asset, 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 broadcast 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 broadcast. 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.

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Company Contact:
Evan D. Masyr
Salem Communications
(805) 987-0400 ext. 1053
evanm@salem.cc :