Salem Communications Announces Strong Fourth Quarter 2004 Results.CAMARILLO Camarillo (kă'mərē`yō), city (1990 pop. 52,303), Ventura co., S Calif.; inc. 1964. It is the center of a fertile farm area where citrus fruits and flowers are grown. , Calif. -- Fourth Quarter Same Station Revenue and Same Station Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. Increase 9.2% and 15.0%, Respectively Salem Communications Salem Communications (NASDAQ: SALM) is a media company specializing in religious and conservative talk radio which operates in the United States, with 99 U.S. commercial radio stations (pending acquisitions) that are primarily concentrated in the nation's biggest markets, Corporation (Nasdaq:SALM), the leading radio broadcaster focused on Christian Christian flees the City of Destruction. [Br. Lit.: Pilgrim’s Progress] See : Escape Christian travels to Celestial City with cumbrous burden on back. [Br. Lit. and family themes programming, today announced results for the fourth quarter and full year ended December December: see month. 31, 2004. Commenting on these results, Edward Edward killed his father at his mother’s instigation. [Br. Balladry: Edward in Benét, 302] See : Patricide G. Atsinger III, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. said, "Our fourth quarter 2004 same station net broadcasting revenue and station operating income growth of 9.2% and 15.0%, respectively, will once again, significantly exceed the performance of the overall radio industry. This strong performance is fueled by growth at our start-up Start-up The earliest stage of a new business venture. and developing stations, particularly at our News Talk stations, which achieved a 16.8% increase in same station net broadcasting revenue." Mr. Atsinger continued, "The progress made in the News Talk segment of our business has further expanded our potential for future growth in 2005 and beyond. In 2004, we invested in new national programming talent with the addition of Bill Bennett
William Richards Bennett, PC, OBC, (born August 18, 1932 in Kelowna, British Columbia) was Premier of the Canadian province of British Columbia 1975–1986. , additional local news, traffic and weather content as well as in significant marketing and promotion of our News Talk stations. These investments resulted in an increase in same station listenership lis·ten·er·ship n. The people who listen to a radio program or station. of more than 30% from 2003 to 2004." Fourth Quarter 2004 Results For the quarter ended December 31, 2004, net broadcasting revenue increased 7.8% to $49.3 million from $45.8 million for the same period last year. The company reported operating income of $10.7 million for the quarter, compared with operating income of $10.0 million for the comparable period in 2003. Operating income for the fourth quarter of 2004 includes $0.7 million of costs associated with the abandonment of an AM license upgrade project. Operating income for the fourth quarter of 2003 includes a loss on disposal of assets of $0.5 million. The company reported net income of $3.7 million for the fourth quarter of 2004, or $0.14 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with net income of $2.1 million, or $0.09 per diluted share, for the same period last year. Net income for the fourth quarter of 2004 includes $0.5 million (net of tax), or $0.02 per share, of costs associated with the abandonment of an AM license upgrade project. Net income for the fourth quarter of 2003 includes a loss (net of tax) on disposal of assets of $0.3 million, or $0.01 per share. Station operating income ("SOI (Silicon On Insulator) A chip architecture that increases transistor switching speed by reducing capacitance (build-up of electrical charges in the transistor's elements), and thus reducing the discharge time. The power requirement is also reduced in some designs. ") increased 6.0% to $18.8 million for the fourth quarter of 2004 from $17.8 million in the corresponding period last year. SOI margin decreased to 38.2% in the fourth quarter of 2004 from 38.8% in the fourth quarter of 2003, primarily as a result of start-up costs associated with recently-acquired radio stations as well as increased marketing and promotional expense Noun 1. promotional expense - the cost of promoting a product business expense, trade expense - ordinary and necessary expenses incurred in a taxpayer's business or trade . On a same station basis, net broadcasting revenue increased 9.2% to $43.3 million and SOI increased 15.0% to $17.9 million for the fourth quarter of 2004 as compared to the fourth quarter of 2003. Same station results have been favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by net broadcasting revenue and SOI growth from the company's News Talk and Contemporary Christian Music Contemporary Christian Music (or CCM; also by its religious neutral term Inspirational music) is a genre of popular music which is lyrically focused on matters concerned with the Christian faith. radio stations. Same station SOI margin increased to 41.3% in the fourth quarter of 2004 from 39.3% in the fourth quarter of 2003. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become increased to $13.6 million in the fourth quarter of 2004 from $13.0 million in the fourth quarter of 2003. EBITDA for the fourth quarter of 2004 includes $0.7 million of costs associated with the abandonment of an AM license upgrade project. EBITDA for the fourth quarter of 2003 includes a $0.5 million loss on disposal of assets. Excluding these items, Adjusted EBITDA increased 6.7% to $14.3 million for the fourth quarter of 2004 from $13.4 million in the corresponding 2003 period. Per share numbers for the fourth quarter results are calculated based on 26,339,542 weighted average diluted shares for the quarter ended December 31, 2004, and 23,603,556 weighted average diluted shares for the comparable 2003 period. SOI Margin Composition Analysis The following presentation of the company's radio station portfolio, which is for analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. purposes only, separates each station into one of four categories based upon fourth quarter performance. The company believes this analysis is helpful in assessing the portfolio's financial and operational development.
Three Months Ended December 31,
(Net Broadcasting Revenue and SOI in millions)
2003
--------------------------------
Average
SOI Margin % Stations Revenue SOI SOI %
------------------------------------- -------- ------- ------ --------
50% or greater 18 $17.0 10.4 61.3%
30 to 49% 36 15.9 6.0 37.6%
0 to 29% 33 8.7 1.2 13.4%
Less than 0% 5 0.5 (0.2) (50.8%)
-------- ------- ------ --------
Subtotal 92 42.1 17.4 41.2%
Other - 3.7 0.4 11.3%
-------- ------- ------ --------
Total 92 $45.8 $17.8 38.8%
======== ======= ====== ========
2004
------------------------------
Average
SOI Margin % Stations Revenue SOI SOI %
--------------------------------------- -------- ------- ----- -------
50% or greater 18 15.2 9.2 60.7%
30 to 49% 34 20.9 8.9 42.5%
0 to 29% 24 6.3 1.0 16.4%
Less than 0% 26 2.7 (0.7) (26.5%)
-------- ------- ----- -------
Subtotal 102 45.1 18.4 40.8%
Other - 4.2 0.4 9.9%
-------- ------- ----- -------
Total 102 49.3 18.8 38.2%
======== ======= ===== =======
Full Year 2004 Results For the twelve months ended December 31, 2004, net broadcasting revenue increased 10.0% to $187.5 million from $170.5 million for the same period last year. The company reported operating income of $38.5 million for the twelve months ended December 31, 2004, compared with operating income of $29.9 million for the same period last year. Operating income for the twelve months ended December 31, 2004 includes $0.7 million of costs associated with the abandonment of an AM license upgrade project and a loss on disposal of assets of $3.3 million. Operating income for the twelve months ended December 31, 2003 includes $2.2 million for costs associated with a denied tower site and license upgrade, $0.7 million for a write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. from the cancellation of a contemplated debt offering, and $0.2 million loss from the disposal of assets. The company reported net income of $7.3 million, or $0.29 per diluted share, compared with a net loss of $0.7 million, or $0.03 loss per share, for the same period last year. Net income for the twelve months ended December 31, 2004 includes the following losses (net of tax): --$2.0 million, or $0.08 loss per share, from the disposal of assets; --$4.0 million, or $0.16 loss per share, from the early redemption of $55.6 million of the company's 9.0% senior subordinated notes due 2011; --$0.5 million, or $0.02 loss per share, of costs associated with the abandonment of an AM license upgrade project; and --$0.1 million, or $0.01 loss per share, from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . The net loss for the twelve months ended December 31, 2003 includes the following losses (net of tax): --$4.0 million, or $0.17 loss per share, from the early redemption of $100 million of the company's 9.5% senior subordinated notes due 2007; --$1.4 million, or $0.06 loss per share, for costs associated with a denied tower site and license upgrade; --$0.1 million, or $0.01 loss per share, from the disposal of assets; and --$0.4 million, or $0.02 loss per share, from the cancellation of a contemplated debt offering. SOI for the twelve months ended December 31, 2004, increased 16.6% to $71.6 million from $61.4 million in the corresponding 2003 period. SOI margin increased to 38.2% for the twelve months ended December 31, 2004, from 36.0% for the same period in 2003. On a same station basis, net broadcasting revenue increased 9.8% to $177.7 million and SOI increased 21.8% to $70.9 million for full year 2004 as compared to full year 2003. EBITDA increased to $44.1 million for the twelve months ended December 31, 2004 from $35.4 million in the corresponding 2003 period. EBITDA for the twelve months ended December 31, 2004 includes: --$3.3 million loss from the disposal of assets; --$6.6 million loss from the early redemption of $55.6 million of the company's 9.0% senior subordinated notes due 2011; --$0.7 million for costs associated with the abandonment of an AM license upgrade project; and --$0.1 million loss (net of tax) from discontinued operations. EBITDA for the twelve months ended December 31, 2003 includes: --$6.4 million loss from the early redemption of $100 million of the company's 9.5% senior subordinated notes due 2007; --$2.2 million loss for costs associated with a denied tower site and license upgrade; --$0.2 million loss on disposal of assets; and --$0.7 million write-off from the cancellation of a contemplated debt offering. Excluding these items, Adjusted EBITDA increased 21.2% to $54.4 million for the twelve months ended December 31, 2004 from $44.9 million in the corresponding 2003 period. Per share numbers are calculated based on 25,371,649 weighted average diluted shares for the twelve months ended December 31, 2004, and 23,488,898 weighted average shares for the comparable 2003 period. Balance Sheet As of December 31, 2004, the company had net debt of $267.4 million and was in compliance with all of its covenants under its credit facility and bond indentures Bond indenture Contract that sets forth the promises of a bond issuer and the rights of investors. bond indenture See indenture. . Salem's bank leverage ratio was 4.5 as of December 31, 2004 versus a compliance covenant of 6.75. Salem's bond leverage ratio was 5.0 as of December 31, 2004 versus a compliance covenant of 7.0. As of December 31, 2003, Salem's bank leverage ratio and bond leverage ratio were 6.8 and 6.1, respectively. Acquisitions Since September September: see month. 30, 2004, Salem Salem, in the Bible Salem (sā`ləm) [Heb.,=peace], in the Bible, royal city of Melchizedek, traditionally identified with Jerusalem. Salem, city, India Salem, city (1991 pop. has announced the following acquisitions: --KCRO (660 AM) in Omaha, NE (Omaha-Council Bluffs, NE-IA market) for $3.1 million (now operated by Salem under a local marketing agreement); and --WGUL (860 AM), in Dunedin Dunedin, city, New Zealand Dunedin (dənē`dĭn), city (1996 pop. 118,143), SE South Island, New Zealand, at the head of Otago Harbor. Dunedin, with Port Chalmers, is an important port and industrial center. , FL (Tampa-St. Petersburg-Clearwater market) and WLSS WLSS White-Like Spread Spectrum (930 AM), in Sarasota Sarasota (sâr'əsō`tə), city (1990 pop. 50,961), seat of Sarasota co., SW Fla., on Sarasota Bay; settled c.1884, inc. 1914. , FL (Sarasota-Bradenton market) for $9.5 million. Additionally, since September 30, 2004, Salem has completed the following acquisitions: --WKAT (1360 AM) in Miami, FL (Miami-Ft. Lauderdale-Hollywood market) for $10.0 million; --KAST (92.9 FM) in Astoria Astoria (ăstôr`ēə). 1 Commercial, industrial, and residential section of NW Queens borough of New York City, SE N.Y.; settled in the 17th cent. as Hallet's Cove. It was renamed for John Jacob Astor in 1839. , OR (Portland Portland, town, England Portland, town (1991 pop. 12,945), Dorset, S England. It is on the Isle of Portland, a small rocky peninsula. Portland stone has been used in St. Paul's Cathedral and other important London buildings. Lobsters and crabs are harvested. market) for $8.0 million; --KIIS (850 AM) in Thousand Oaks Thousand Oaks, residential city (1990 pop. 104,352), Ventura co., S Calif., in a farm area; inc. 1964. Avocados, citrus, vegetables, strawberries, and nursery products are grown. , CA for $0.8 million; --KGBI (100.7 FM) in Omaha, NE (Omaha-Council Bluffs, NE-IA market) for $10.0 million ($8.0 million cash and $2.0 million promotional consideration); and --Christianity.com, an online provider of compelling Christian content and a wide range of ministry resources, for approximately $3.4 million. Station Exchanges Since September 30, 2004, Salem has begun to operate, under local marketing agreements, the following stations that Salem has agreed to acquire via an exchange with Univision  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. Communications: Stations to be Acquired via Exchange --WIND (560 AM) in Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. , IL (Chicago market); --KKHT (100.7 FM) in Winnie Winnie could refer to: General
--KOSL (94.3 FM) in Jackson Jackson. 1 City (1990 pop. 37,446), seat of Jackson co., S Mich., on the Grand River; inc. 1857. It is an industrial and commercial center in a farm region. , CA (Sacramento Sacramento, city, United States Sacramento (săkrəmĕn`tō), city (1990 pop. 369,365), state capital and seat of Sacramento co., central Calif. market); and --KHCK (1480 AM) in Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. , TX (Dallas-Ft. Worth market). Since September 30, 2004, Univision Communications has begun to operate, under local marketing agreements, the following stations that Salem has agreed to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. via an exchange with Univision Communications: Stations to be Divested via Exchange --WZFS (106.7 FM) in Des Plaines Des Plaines, city, United States Des Plaines (dĕs plānz), city (1990 pop. 53,223), Cook co., NE Ill., a suburb of Chicago on the Des Plaines River; inc. 1925. Among its manufactures are chemicals and electronic equipment. , IL (Chicago market); and --KSFB (100.7 FM) in San Rafael San Rafael (săn rəfĕl`), residential city (1990 pop. 48,404), seat of Marin co., W Calif., a suburb of San Francisco on the northern shore of San Francisco Bay; inc. 1913. , CA (San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden market). Since September 30, 2004, Salem completed a station exchange with Cox Radio Cox Radio NYSE: CXR is a publicly traded company that holds a number of radio stations. Private company Cox Broadcasting, Inc., a subsidiary of Cox Enterprises owns all of the company's super-voting Class B common stock, and thus controls the company. through which Salem acquired KGMZ KGMZ, "Oldies 107.9," is an Oldies radio station serving Honolulu, Hawaii. The Salem Communications outlet broadcasts at 107.9 MHz with a ERP of 100 kw and is licensed to Aiea, Hawaii. (107.9 FM) in Honolulu Honolulu (hŏn'əl  `l, hōnō–), city (1990 pop. , HI
(Honolulu market) and divested Honolulu, HI stations KHNR KHNR is a News/Talk radio station serving Honolulu, Hawaii. The Salem Communications outlet broadcasts at 690 KHz with a ERP of 10 kW-U. HistoryKHNR-AM's history at 690 can be traced back to its early days as the original home of Top 40 KKUA during the 1960s, 1970s and (650 AM) and KJPN (940 AM). First Quarter 2005 Outlook For the first quarter of 2005, Salem is projecting net broadcasting revenue between $46.7 million and $47.2 million. Net income for the first quarter of 2005 is projected to be between $0.06 and $0.08 per diluted share. Salem is projecting SOI between $16.0 million and $16.5 million for the first quarter of 2005. First quarter 2005 outlook reflects the following: --Start up costs associated with recently acquired stations in the Atlanta Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. , Chicago, Cleveland Cleveland, former county, England Cleveland, former county, NE England, created under the Local Government Act of 1972 (effective 1974). It was composed of the county boroughs of Hartlepool and Teeside and parts of the former counties of Durham and , Dallas, Detroit Detroit, city, United States Detroit (dĭtroit`), city (1990 pop. 1,027,974), seat of Wayne co., SE Mich., on the Detroit River and between lakes St. Clair and Erie; inc. as a city 1815. , Honolulu, Houston, Sacramento, Miami, and Omaha markets as well as the launch of Bill Bennett's "Morning in America "Morning in America" is the common name of an effective political campaign television commercial formally titled "Prouder, Stronger, Better" and featuring the opening line "It's morning again in America." The ad was part of the 1984 U.S. (TM);" --Costs associated with the introduction of News Talk programming on our stations in Baltimore Baltimore, city (1990 pop. 736,014), N central Md., surrounded by but politically independent of Baltimore co., on the Patapsco River estuary, an arm of Chesapeake Bay; inc. 1745. , Dallas, Philadelphia, San Antonio San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. and San Francisco; --The exchange of WZFS (106.7 FM) in Des Plaines, IL (Chicago market) and KSFB (100.7 FM) in San Rafael, CA (San Francisco) to Univision Communications for WIND (560 AM) in Chicago, IL, KOBT (100.7 FM) in Winnie, TX (Houston-Galveston market); KOSL KOSL Kill on Sight & Loot (gaming) (94.3 FM) in Jackson, CA (Sacramento market), and KHCK (1480 AM) in Dallas, TX (Dallas-Ft. Worth market); --Continued growth from Salem's underdeveloped un·der·de·vel·oped adj. Not adequately or normally developed; immature. radio stations, particularly our News Talk radio stations and our Contemporary Christian Music stations; --Additional audit fees associated with the implementation of the requirements of Section 404 of the Sarbanes-Oxley Act See SOX. of 2002; --First quarter 2005 net broadcasting revenue growth and same station net broadcasting revenue growth in the high single digits; and --First quarter 2005 overall SOI growth in the low to mid single digits, due to the impact of start-up costs associated with recently acquired stations, and same station SOI growth in the low double digits Double Digits was a pricing game on the American television game show, The Price Is Right. Played from April 20, 1973 through May 18, 1973's show, it was played for a car and used small prizes. . Full Year 2005 Outlook Additionally, for 2005 as a whole, the company expects corporate expenses of approximately $18.5 million. This includes costs associated with the implementation of the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 of approximately $0.5 million. Salem also expects acquisition related / income producing capital expenditures of approximately $7.5 million and maintenance capital expenditures of approximately $5.5 million. Acquisition related / income producing capital expenditures include expenses for the upgrades of our radio station signals at WYLL (1160 AM) in Chicago, IL (Chicago market) and WFSH (104.7 FM) in Athens, GA (Atlanta market) as well as studio construction costs in Honolulu, HI that will allow the company to eliminate office rent expense in that market. Sarbanes-Oxley Update The company is in the process of testing its internal controls over financial reporting, as required by the Sarbanes-Oxley Act of 2002. Management has not yet completed its evaluation of internal controls. Accordingly, the Company will utilize a 45-day extension granted under the SEC's November 30, 2004 Exemptive Order for companies with public equity float of less than $700 million as of June 30, 2004 and meeting certain other criteria. By May 2, 2005, the Company will file an amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , which will include management's assessment of the effectiveness of its internal control over financial reporting as well as our independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. opinion on management's assessment of the effectiveness of internal control over financial reporting and on the effectiveness of internal control over financial reporting. While completing its evaluation of internal controls, management may identify matters that either individually or in the aggregate could constitute material weaknesses. A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement mis·state tr.v. mis·stat·ed, mis·stat·ing, mis·states To state wrongly or falsely. mis·state  ment n. of the annual or
interim financial statements will not be prevented or detected.
Management does not believe that the extended time to complete its
evaluation of internal controls will affect the accuracy of its
financial statements as of and for the year ended December 31, 2004.
Management is not currently aware of any internal control weaknesses
that either individually or in the aggregate constitute material
weaknesses.Salem will host a teleconference to discuss its results today at 5:00 PM Eastern Time. To access the teleconference, please dial (973) 582-2734 ten minutes prior to the start time. The teleconference will also be available via live webcast on the investor relations Investor relations The process by which the corporation communicates with its investors. portion of the company's website, located at www.salem.cc. If you are unable to listen to the live teleconference at its scheduled time In rallying, the Scheduled Time of any crew is the time, calculated at the beginning of the event, that they should arrive at any given control. It is different from Due Time in that Due Time is dynamic, ie it can change throughout the event as competitors drop time; whereas , there will be a replay available through March 31, 2005. This replay can be accessed by dialing (973) 341-3080, pass-code 5754218 or heard on the company's website. Salem Communications Corporation, headquartered in Camarillo, California Camarillo is a city in Ventura County, California, United States. The population was 57,077 at the 2000 census. A January 1, 2006 California Department of Finance estimate lists the population at 64,034. The Ventura Freeway (U.S. Route 101) is the city's primary thoroughfare. , is the leading U.S. radio broadcaster focused on Christian and family themes programming. Upon the close of all announced acquisitions, the company will own 106 radio stations, including 69 stations in 24 of the top 25 markets. In addition to its radio properties, Salem owns Salem Radio Network, which syndicates talk, news and music programming to approximately 1,900 affiliated radio stations; Salem Radio Representatives, a national sales force; Salem Web Network Salem Web Network represents the largest faith-based audiences on the Internet and is headquartered in Richmond, Virginia with offices in Dallas and Nashville. Salem Web Network is owned and operated by Salem Communications Salem Corp. , the leading Internet provider Internet provider - Internet Service Provider of Christian content and online streaming; and Salem Publishing Salem Publishing, a division of Salem Communications is the publisher of CCM Magazine, and other magazines formerly published by CCM Communications. The organization publishes a variety of magazines, including CCM, Singing News, Preaching, , a leading publisher of Christian themed magazines. Information about Salem Communications may be accessed online at 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as defined under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 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 here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . Salem undertakes no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or or unanticipated events. Regulation G SOI, EBITDA and Adjusted EBITDA are financial measures not prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). SOI is defined as net broadcasting revenues minus broadcasting operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . EBITDA is defined as net income before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for the cost of a denied tower site and license upgrade, the loss on early redemption of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , gain or loss on disposal of assets and the loss from discontinued operations, net of tax. 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. SOI, EBITDA and Adjusted EBITDA are generally recognized by the radio broadcasting The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industry as tools in measuring performance and in applying valuation methodologies for companies in the media, entertainment and communication industries. Investors and analysts who report on the industry use these measures to provide comparisons between broadcasting groups. SOI, EBITDA and Adjusted EBITDA are not measures of liquidity or of performance in accordance with GAAP, and should be viewed as supplements to and not substitutes 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 SOI, EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled measures employed by other companies.
Salem Communications Corporation
Condensed Consolidated Statements of Operations
(in thousands, except share, per share and margin data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2004 2003 2004
---------------------- ----------------------
Net broadcasting revenue $45,774 $49,331 $170,483 $187,543
Other media revenue 1,823 2,640 7,865 9,342
---------------------- ----------------------
Total revenue 47,597 51,971 178,348 196,885
Operating expenses:
Broadcasting operating
expenses 28,017 30,506 109,043 115,896
Cost of denied /
abandoned tower site
and license upgrade - 746 2,202 746
Other media operating
expenses 2,002 2,379 7,942 8,600
Corporate expenses 4,028 4,644 16,091 17,480
Cost of terminated
offering - - 651 -
Depreciation and
amortization 3,112 3,057 12,291 12,433
(Gain) loss on
disposal of assets 477 (45) 214 3,266
---------------------- ----------------------
Total operating expenses 37,636 41,287 148,434 158,421
---------------------- ----------------------
Operating income 9,961 10,684 29,914 38,464
Other income (expense):
Interest income 17 22 212 171
Interest expense (5,768) (4,413) (23,474) (19,931)
Loss on early
redemption of long-
term debt - - (6,440) (6,588)
Other expense, net (120) (117) (410) (116)
---------------------- ----------------------
Income (loss) before
income taxes &
discontinued operations 4,090 6,176 (198) 12,000
Provision for income
taxes 1,977 2,483 479 4,576
---------------------- ----------------------
Income (loss) before
discontinued operations 2,113 3,693 (677) 7,424
Discontinued operations,
net of tax - - - (91)
---------------------- ----------------------
Net income (loss) $2,113 $3,693 $(677) $7,333
====================== ======================
Basic income (loss) per
share before
discontinued operations $0.09 $0.14 $(0.03) $0.29
Discontinued operations - - - -
Basic income (loss) per
share after
discontinued operations 0.09 0.14 (0.03) 0.29
Diluted income (loss)
per share before
discontinued operations $0.09 $0.14 $(0.03) $0.29
Discontinued operations - - - -
Diluted income (loss)
per share after
discontinued operations 0.09 0.14 (0.03) 0.29
Basic weighted average
shares outstanding 23,497,495 26,228,163 23,488,898 25,220,678
====================== ======================
Diluted weighted average
shares outstanding 23,603,556 26,339,542 23,488,898 25,371,649
====================== ======================
Other Data:
Station operating income $17,757 $18,825 $61,440 $71,647
Station operating margin 38.8% 38.2% 36.0% 38.2%
Salem Communications Corporation
Condensed Consolidated Balance Sheets
(in thousands)
December December
31, 31,
2003 2004
--------- ---------
Assets
Cash $5,620 $10,994
Accounts receivable, net 31,509 29,535
Deferred income taxes 4,754 4,683
Other current assets 4,901 3,712
Property, plant and equipment, net 97,393 102,987
Intangible assets, net 397,131 420,466
Bond issue costs 5,631 3,342
Bank loan fees 3,988 3,710
Fair value of interest rate swap 6,045 4,142
Other assets 3,039 2,213
--------- ---------
Total assets $560,011 $585,784
========= =========
Liabilities and Stockholders' Equity
Current liabilities $18,955 $20,045
Long-term debt and capital lease obligations 330,046 277,292
Fair value in excess of book value of debt hedged
with interest rate swap 6,045 3,732
Deferred income taxes 28,999 32,715
Other liabilities 4,144 4,363
Stockholders' equity 171,822 247,637
--------- ---------
Total liabilities and stockholders' equity $560,011 $585,784
========= =========
Salem Communications Corporation
Supplemental Information
Three Months Twelve Months
Ended Ended
December 31, December 31,
2003 2004 2003 2004
---------------- ------------------
Capital expenditures (in thousands)
Acquisition related / income
producing $1,410 $2,329 $5,367 $11,426
Maintenance 1,140 1,921 3,611 6,443
---------------- ------------------
Total capital expenditures $2,550 $4,250 $8,978 $17,869
================ ==================
Tax information
Cash tax expense $262 $80 $725 $300
Deferred tax expense (benefit) 1,715 2,403 (246) 4,276
---------------- ------------------
Provision for income taxes $1,977 $2,483 $479 $4,576
================ ==================
Tax benefit of non-book
amortization $2,855 $2,390 $11,175 $11,199
================ ==================
Reconciliation of Same Station Net
Broadcasting Revenue to
Total Net Broadcasting Revenue
Net broadcasting revenue - same
station $39,661 $43,318 $161,799 $177,667
Net broadcasting revenue -
acquisitions / dispositions /
format changes 6,113 6,013 8,684 9,876
---------------- ------------------
Total net broadcasting revenue $45,774 $49,331 $170,483 $187,543
================ ==================
Reconciliation of Same Station Broadcasting
Operating Expenses to
Total Broadcasting Operating
Expenses
Broadcasting operating expenses -
same station $24,091 $25,409 $103,566 $106,735
Broadcasting operating expenses -
acquisitions / dispositions /
format changes 3,926 5,097 5,477 9,161
---------------- ------------------
Total broadcasting operating
expenses $28,017 $30,506 $109,043 $115,896
================ ==================
Reconciliation of Same Station Station
Operating Income to
Total Station Operating Income
Station operating income - same
station $15,570 $17,909 $58,233 $70,932
Station operating income -
acquisitions / dispositions /
format changes 2,187 916 3,207 715
---------------- ------------------
Total station operating income $17,757 $18,825 $61,440 $71,647
================ ==================
Reconciliation of Station Operating Income to
Operating Income
Station operating income $17,757 $18,825 $61,440 $71,647
Plus:
Other media revenue 1,823 2,640 7,865 9,342
Less:
Cost of denied / abandoned tower
site and license upgrade - (746) (2,202) (746)
Other media operating expenses (2,002) (2,379) (7,942) (8,600)
Corporate expenses (4,028) (4,644) (16,091) (17,480)
Cost of terminated offering - - (651) -
Depreciation and amortization (3,112) (3,057) (12,291) (12,433)
Gain (loss) on disposal of
assets (477) 45 (214) (3,266)
---------------- ------------------
Operating income $9,961 $10,684 $29,914 $38,464
================ ==================
Reconciliation of Adjusted EBITDA to EBITDA to Net
Income (Loss)
Adjusted EBITDA $13,430 $14,325 $44,862 $54,793
Less:
Cost of denied / abandoned tower
site and license upgrade - (746) (2,202) (746)
Loss on early redemption of
long-term debt - - (6,440) (6,588)
Cost of terminated offering - - (651) -
Gain (loss) on disposal of
assets (477) 45 (214) (3,266)
Discontinued operations, net of
tax - - - (91)
---------------- ------------------
EBITDA 12,953 13,624 35,355 44,102
Plus:
Interest income 17 22 212 171
Less:
Depreciation and amortization (3,112) (3,057) (12,291) (12,433)
Interest expense (5,768) (4,413) (23,474) (19,931)
Provision for income taxes (1,977) (2,483) (479) (4,576)
---------------- ------------------
Net income (loss) $2,113 $3,693 $(677) $7,333
================ ==================
Salem Communications Corporation
Supplemental Information
Projected
Three
Months
Ending
March 31,
2005
Low High
------------
Reconciliation of Station Operating Income to Operating
Income
Station operating income $16.0 $16.5
Plus:
Other media revenue 2.4 2.4
Less:
Other media operating expenses (2.4) (2.4)
Corporate expenses (4.6) (4.6)
Depreciation and amortization (3.3) (3.3)
------------
Operating income $8.1 $8.6
============
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