[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT
OF 1934
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT
OF 1934
|
DELAWARE
(STATE
OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
|
|
77-0121400
(I.R.S.
EMPLOYER IDENTIFICATION NUMBER)
|
|
|
|
4880
SANTA ROSA ROAD CAMARILLO, CALIFORNIA
(ADDRESS
OF PRINCIPAL
EXECUTIVE
OFFICES)
|
|
93012
(
ZIP CODE)
|
Class
A
|
|
Outstanding
at May 2, 2007
|
Common
Stock, $0.01 par value per share
|
|
18,296,324
shares
|
Class
B
|
|
Outstanding
at May 2, 2007
|
Common
Stock, $0.01 par value per share
|
|
5,553,696
shares
|
PAGE
NO.
|
|||
COVER
PAGE
|
|
||
INDEX
|
|||
PART
I - FINANCIAL INFORMATION
|
|
||
Item 1.
Financial Statements
|
2
|
||
|
Item 2.
Management’s Discussion and Analysis of Financial Condition
and
Results of Operations
|
|
19
|
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
|
30
|
||
|
Item 4.
Controls and Procedures
|
|
32
|
PART
II - OTHER INFORMATION
|
32
|
||
|
Item 1.
Legal Proceedings
|
|
32
|
Item
1A. Risk Factors
|
32
|
||
Item 2.
Unregistered Sales of Equity Securities and Use of
Proceeds
|
32
|
||
|
Item 3.
Defaults Upon Senior Securities
|
|
33
|
Item 4.
Submission of Matters to a Vote of Security Holders
|
33
|
||
|
Item 5.
Other Information
|
|
33
|
Item 6.
Exhibits
|
33
|
||
SIGNATURES
|
|
45
|
|
EXHIBIT
INDEX
|
46
|
December
31, 2006
|
March
31, 2007
|
||||||||
(Note
1)
|
(Unaudited)
|
||||||||
ASSETS
|
|||||||||
Current
assets:
|
|||||||||
|
Cash
and cash equivalents
|
|
$
|
710
|
|
$
|
598
|
|
|
Accounts
receivable (net of allowance for doubtful accounts of $7,606 in 2006
and
$7,318 in 2007)
|
31,984
|
30,214
|
|||||||
|
Other
receivables
|
|
|
551
|
|
|
507
|
|
|
Prepaid
expenses
|
2,330
|
2,406
|
|||||||
Income
tax receivable
|
—
|
30
|
|||||||
|
Deferred
income taxes
|
|
|
5,020
|
|
|
4,943
|
|
|
Total
current assets
|
|
40,595
|
|
38,698
|
|||||
Property,
plant and equipment (net of accumulated depreciation of $74,766 in
2006
and $76,458 in 2007)
|
|
|
128,713
|
|
|
129,620
|
|
||
Broadcast
licenses
|
476,544
|
473,571
|
|||||||
Goodwill
|
|
|
20,606
|
|
|
20,606
|
|
||
Other
indefinite-lived intangible assets
|
2,892
|
2,892
|
|||||||
Amortizable
intangible assets (net of accumulated amortization of $10,846 in
2006 and
$11,657 in 2007)
|
8,368
|
7,878
|
|||||||
Bond
issue costs
|
|
|
593
|
|
|
556
|
|
||
Bank
loan fees
|
2,996
|
2,741
|
|||||||
Fair
value of interest rate swap agreements
|
|
|
1,290
|
|
|
913
|
|
||
Other
assets
|
|
3,667
|
|
3,770
|
|||||
Total
assets
|
|
$
|
686,264
|
|
$
|
681,245
|
|
||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||||
Current
liabilities
|
|||||||||
Accounts
payable
|
$
|
3,421
|
$
|
2,504
|
|||||
|
Accrued
expenses
|
|
|
6,446
|
|
|
5,577
|
|
|
Accrued
compensation and related expenses
|
7,033
|
7,935
|
|||||||
|
Accrued
interest
|
|
|
4,275
|
|
|
5,866
|
|
|
Deferred
revenue
|
4,050
|
4,610
|
|||||||
Current
portion of long-term debt and capital lease obligations
|
2,048
|
2,431
|
|||||||
|
Income
tax payable
|
|
|
22
|
|
|
—
|
|
|
Total
current liabilities
|
27,295
|
28,923
|
|||||||
Long-term
debt and capital lease obligations, less current portion
|
|
|
358,978
|
|
|
346,821
|
|
||
Deferred
income taxes
|
|
|
53,935
|
|
|
58,114
|
|
||
Deferred
revenue
|
7,063
|
7,123
|
|||||||
Other
liabilities
|
|
|
1,277
|
|
|
1,146
|
|
||
Total
liabilities
|
|
448,548
|
|
442,127
|
|||||
Commitments
and contingencies
|
|||||||||
Stockholders’
equity
|
|||||||||
|
Class A
common stock, $0.01 par value; authorized 80,000,000 shares; 20,424,242
issued and 18,293,824 outstanding at December 31, 2006 and 20,426,742
issued and 18,296,324 outstanding at March 31, 2007
|
|
|
204
|
|
|
204
|
|
|
Class B
common stock, $0.01 par value; authorized 20,000,000 shares; 5,553,696
issued and outstanding shares at December 31, 2006 and March 31,
2007
|
56
|
56
|
|||||||
|
Additional
paid-in capital
|
|
|
221,466
|
|
|
222,251
|
|
|
Retained
earnings
|
47,433
|
48,338
|
|||||||
Treasury
stock, at cost (2,130,418 shares at December 31, 2006 and March 31,
2007)
|
(32,218)
|
(32,218)
|
|||||||
Accumulated
other comprehensive income
|
|
775
|
|
487
|
|||||
Total
stockholders’ equity
|
|
|
237,716
|
|
|
239,118
|
|
||
Total
liabilities and stockholders’ equity
|
$
|
686,264
|
$
|
681,245
|
|||||
See
accompanying notes
|
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2006
|
2007
|
|||||||
(Dollars
in thousands)
|
||||||||
Net
revenue
|
|
|||||||
Radio
broadcasting
|
$
|
48,774
|
$
|
50,440
|
||||
|
Non-broadcast
|
|
3,252
|
|
|
|
5,654
|
|
Consolidated
net revenue
|
$
|
52,026
|
$
|
56,094
|
||||
Operating
expenses before depreciation, amortization and gain on disposal
of
assets
|
|
|
||||||
Radio
broadcasting
|
$
|
31,694
|
$
|
32,483
|
||||
|
Non-broadcast
|
|
3,432
|
|
|
|
5,271
|
|
Corporate
|
|
6,440
|
|
5,814
|
||||
Consolidated
operating expenses before depreciation, amortization and gain on
disposal
of assets
|
$
|
41,566
|
|
|
$
|
43,568
|
|
|
Operating
income from continuing operations before depreciation, amortization
and
gain on disposal of assets
|
||||||||
|
Radio
broadcasting
|
$
|
17,080
|
|
|
$
|
17,957
|
|
Non-broadcast
|
(180)
|
383
|
||||||
|
Corporate
|
|
(6,440)
|
|
|
(5,814)
|
|
|
Consolidated
operating income from continuing operations before depreciation,
amortization and gain on disposal of assets
|
$
|
10,460
|
$
|
12,526
|
||||
Depreciation
|
|
|
|
|
|
|||
Radio
broadcasting
|
$
|
2,374
|
$
|
2,665
|
||||
|
Non-broadcast
|
|
87
|
|
|
|
139
|
|
Corporate
|
|
284
|
|
287
|
||||
Consolidated
depreciation expense
|
$
|
2,745
|
|
|
$
|
3,091
|
||
Amortization
|
||||||||
Radio
broadcasting
|
$
|
228
|
$
|
67
|
||||
|
Non-broadcast
|
|
317
|
|
|
|
738
|
|
Corporate
|
|
5
|
|
5
|
||||
Consolidated
amortization expense
|
$
|
550
|
|
|
$
|
810
|
||
Operating
income from continuing operations before gain on disposal of
assets
|
||||||||
|
Radio
broadcasting
|
$
|
14,478
|
|
|
$
|
15,225
|
|
Non-broadcast
|
(584)
|
(494)
|
||||||
|
Corporate
|
|
(6,729)
|
|
|
(6,106)
|
||
Consolidated
operating income from continuing operations before gain on disposal
of
assets
|
$
|
7,165
|
$
|
8,625
|
||||
Total
property, plant and equipment, net
|
|
|
|
|
|
|
||
Radio
broadcasting
|
$
|
115,604
|
$
|
115,616
|
||||
|
Non-broadcast
|
|
2,830
|
|
|
|
3,516
|
|
Corporate
|
|
10,279
|
|
10,488
|
Three
Months Ended March 31,
|
|||||||||||
2006
|
2007
|
||||||||||
OPERATING
ACTIVITIES
|
|
|
|||||||||
Income
from continuing operations
|
$
|
2,386
|
$
|
2,965
|
|||||||
Adjustments
to reconcile income from continuing operations to net cash provided
by
operating activities:
|
|
|
|
|
|||||||
Non-cash
stock-based compensation
|
1,309
|
754
|
|||||||||
Depreciation
and amortization
|
3,295
|
3,901
|
|||||||||
|
Amortization
of bond issue costs and bank loan fees
|
|
|
386
|
|
|
292
|
||||
Amortization
and accretion of financing items
|
(126)
|
31
|
|||||||||
Provision
for bad debts
|
662
|
464
|
|||||||||
|
Deferred
income taxes
|
|
|
1,743
|
|
|
2,388
|
||||
Gain
on disposal of assets
|
(3,529)
|
(3,269)
|
|||||||||
|
Changes
in operating assets and liabilities:
|
|
|
|
|
||||||
Accounts
receivable
|
1,506
|
1,320
|
|||||||||
Prepaid
expenses and other current assets
|
60
|
(76)
|
|||||||||
|
|
Accounts
payable and accrued expenses
|
|
|
805
|
|
816
|
||||
Deferred
revenue
|
299
|
620
|
|||||||||
|
|
Other
liabilities
|
|
|
(124)
|
|
(29)
|
||||
Income
tax payable
|
|
41
|
|
(22)
|
|||||||
Net
cash provided by continuing operating activities
|
|
|
8,713
|
|
|
10,155
|
|
||||
INVESTING
ACTIVITIES
|
|||||||||||
Capital
expenditures
|
|
|
(5,680)
|
|
(4,081)
|
||||||
Purchases
of radio station assets
|
(17,830)
|
—
|
|||||||||
Purchase
of non-broadcast properties
|
|
|
(6,296)
|
|
(300)
|
||||||
Proceeds
from disposals of assets
|
4
|
7,060
|
|||||||||
Other
|
|
|
635
|
|
13
|
|
|||||
Net
cash provided by (used in) investing activities
|
(29,167)
|
2,692
|
|||||||||
FINANCING
ACTIVITIES
|
|||||||||||
Repurchases
of Class A common stock
|
(15,149)
|
—
|
|||||||||
Proceeds
from borrowings under credit facilities
|
|
|
32,578
|
|
2,500
|
||||||
Payments
of long-term debt
|
(1)
|
(15,165)
|
|||||||||
Proceeds
from exercise of stock options
|
24
|
30
|
|||||||||
Tax
benefit related to stock options exercised
|
|
|
1
|
|
1
|
||||||
Payments
on loans and capital lease obligations
|
(7)
|
(13)
|
|||||||||
Other
|
—
|
(312)
|
|||||||||
Net
cash provided by (used in) by financing activities
|
|
17,446
|
|
(12,959)
|
|||||||
CASH
FLOWS FROM DISCONTINUED OPERATIONS
|
|||||||||||
Operating
cash flows
|
(971)
|
—
|
|||||||||
Investing
cash flows
|
695
|
—
|
|||||||||
Total
cash used in discontinued operations
|
(276)
|
—
|
|||||||||
Net
decrease in cash and cash equivalents
|
|
|
(3,284)
|
|
(112)
|
|
|||||
Cash
and cash equivalents at beginning of year
|
|
3,979
|
|
710
|
|||||||
Cash
and cash equivalents at end of period
|
|
$
|
695
|
|
$
|
598
|
|
||||
Supplemental
disclosures of cash flow information:
|
|||||||||||
|
Cash
paid during the period for:
|
|
|
|
|
||||||
Interest
|
$
|
5,289
|
$
|
4,863
|
|||||||
|
|
Income
taxes
|
|
$
|
49
|
|
$
|
168
|
|
||
Noncash
investing and financing activities:
|
|||||||||||
Assets
acquired through capital lease obligations
|
$
|
—
|
$
|
800
|
|||||||
See
accompanying notes
|
Amount
|
||
(Dollars
in thousands)
|
||
Asset
|
|
|
Domain
names
|
$
268
|
|
Customer
lists and contracts
|
32
|
|
$
300
|
Three
Months Ended
|
|||||
March
31, 2006
|
|||||
Operating
loss
|
$
|
(142)
|
|||
Gain
on sale or exchange of radio stations
|
667
|
||||
Gain
from discontinued operations, net of tax
|
525
|
||||
Provision
for income taxes
|
196
|
||||
Income
from discontinued operations, net of tax
|
$
|
329
|
Three
Months Ended March 31,
|
|||
2006
|
|
2007
|
|
Stock
option compensation expense included in corporate expenses
|
$
1,073
|
|
$
507
|
Restricted
stock units compensation expense included in corporate expenses
|
22
|
|
16
|
Stock
option compensation expense included in broadcast operating expenses
|
207
|
|
207
|
Stock
option compensation expense included in non-broadcast operating
expenses
|
7
|
|
24
|
Total
stock-based compensation expense
|
$
1,309
|
|
$
754
|
Tax
benefit from stock-based compensation expense
|
(527)
|
|
(345)
|
Total
stock-based compensation expense net of tax benefit
|
$
782
|
|
$
409
|
Three
Months Ended March 31,
|
|||
2006
|
|
2007
|
|
Expected
volatility
|
48.3%
|
|
67.0%
|
Expected
dividends
|
0.0%
|
|
0.0%
|
Expected
term (in years)
|
5
-
8
|
|
5
- 8
|
Risk-free
interest rate
|
4.73%
|
|
4.53%
|
Options
|
Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Term
|
Aggregate
Intrinsic Value
|
|||||
Outstanding
at January 1, 2007
|
2,146,564
|
$
22.30
|
$
47,873
|
||||||
Granted
|
279,650
|
11.80
|
3,300
|
||||||
Exercised
|
(2,500)
|
11.81
|
5
|
||||||
Forfeited
or expired
|
(28,950)
|
18.39
|
532
|
||||||
Outstanding
at March 31, 2007
|
2,394,764
|
$
21.13
|
4.7
years
|
$
50,611
|
|||||
Exercisable
at March 31, 2007
|
1,389,425
|
$
24.70
|
3.0
years
|
$
34,313
|
Restricted
Stock Units
|
Shares
|
Weighted
Average
Exercise
Price
|
|||
Non-Vested
at January 1, 2007
|
6,000
|
$
11.15
|
|||
Granted
|
—
|
—
|
|||
Vested
|
—
|
—
|
|||
Forfeited
|
—
|
—
|
|||
Non-Vested
at March 31, 2007
|
6,000
|
$
11.15
|
December
31, 2006
|
March
31, 2007
|
||||
(Dollars
in thousands)
|
|||||
Term
loans under credit facility
|
$
|
238,125
|
|
$
|
237,300
|
Revolving
line of credit under credit facility
|
19,100
|
8,500
|
|||
Swingline
credit facility
|
1,241
|
-
|
|||
7¾%
Senior Subordinated Notes due 2010
|
100,000
|
100,000
|
|||
Fair
market value of interest swap agreement
|
|
-
|
|
|
104
|
Capital
leases and other loans
|
|
2,560
|
|
3,348
|
|
361,026
|
349,252
|
||||
Less
current portion
|
|
2,048
|
|
|
2,431
|
$
|
358,978
|
$
|
346,821
|
Twelve
Months Ended March 31,
|
Amount
|
|
(Dollars
in thousands)
|
||
2008
|
$
|
2,431
|
2009
|
12,238
|
|
2010
|
74,490
|
|
2011
|
259,251
|
|
2012
|
27
|
|
Thereafter
|
711
|
|
|
$
|
349,148
|
Fair
value of interest rate swap agreements
|
104
|
|
$
|
349,252
|
|
As
of March 31, 2007
|
|||||||||||
|
|
Accumulated
|
|
|
|
||||||
Cost
|
|
Amortization
|
|
Net
|
|||||||
(Dollars
in thousands)
|
|||||||||||
Customer
lists and contracts
|
$
|
10,437
|
$
|
(6,485)
|
$
|
3,952
|
|||||
Domain
and brand names
|
4,775
|
(1,765)
|
3,010
|
||||||||
Favorable
and assigned leases
|
1,581
|
(1,166)
|
415
|
||||||||
Other
amortizable intangible assets
|
|
2,742
|
|
(2,241)
|
|
501
|
|||||
$
|
19,535
|
$
|
(11,657)
|
$
|
7,878
|
As
of December 31, 2006
|
|||||||||
|
|
Accumulated
|
|
|
|
||||
Cost
|
|
Amortization
|
|
Net
|
|||||
(Dollars
in thousands)
|
|||||||||
Customer
lists and contracts
|
$
|
10,404
|
$
|
(6,030)
|
$
|
4,374
|
|||
Domain
and brand names
|
4,487
|
(1,533)
|
2,954
|
||||||
Favorable
and assigned leases
|
1,581
|
(1,144)
|
437
|
||||||
Other
amortizable intangible assets
|
|
2,742
|
|
(2,139)
|
|
603
|
|||
$
|
19,214
|
$
|
(10,846)
|
$
|
8,368
|
Year
Ending December 31,
|
Estimated
future Amortization Expense
|
|
(Dollars
in thousands)
|
||
2007
(April 1 - December 31)
|
$
|
2,177
|
2008
|
2,535
|
|
2009
|
|
1,283
|
2010
|
832
|
|
2011
|
|
370
|
Thereafter
|
681
|
|
Total
|
$
|
7,878
|
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2006
|
2007
|
|||||||
(Dollars
in thousands)
|
||||||||
Net
revenue
|
|
|||||||
Radio
broadcasting
|
$
|
48,774
|
$
|
50,440
|
||||
|
Non-broadcast
|
|
3,252
|
|
|
|
5,654
|
|
Consolidated
net revenue
|
$
|
52,026
|
$
|
56,094
|
||||
Operating
expenses before depreciation, amortization and gain on disposal of
assets
|
|
|
||||||
Radio
broadcasting
|
$
|
31,694
|
$
|
32,483
|
||||
|
Non-broadcast
|
|
3,432
|
|
|
|
5,271
|
|
Corporate
|
|
6,440
|
|
5,814
|
||||
Consolidated
operating expenses before depreciation, amortization and gain on
disposal
of assets
|
$
|
41,566
|
|
|
$
|
43,568
|
|
|
Operating
income from continuing operations before depreciation, amortization
and
gain on disposal of assets
|
||||||||
|
Radio
broadcasting
|
$
|
17,080
|
|
|
$
|
17,957
|
|
Non-broadcast
|
(180)
|
383
|
||||||
|
Corporate
|
|
(6,440)
|
|
|
(5,814)
|
|
|
Consolidated
operating income from continuing operations before depreciation,
amortization and gain on disposal of assets
|
$
|
10,460
|
$
|
12,526
|
||||
Depreciation
|
|
|
|
|
|
|||
Radio
broadcasting
|
$
|
2,374
|
$
|
2,665
|
||||
|
Non-broadcast
|
|
87
|
|
|
|
139
|
|
Corporate
|
|
284
|
|
287
|
||||
Consolidated
depreciation expense
|
$
|
2,745
|
|
|
$
|
3,091
|
||
Amortization
|
||||||||
Radio
broadcasting
|
$
|
228
|
$
|
67
|
||||
|
Non-broadcast
|
|
317
|
|
|
|
738
|
|
Corporate
|
|
5
|
|
5
|
||||
Consolidated
amortization expense
|
$
|
550
|
|
|
$
|
810
|
||
Operating
income from continuing operations before gain on disposal of
assets
|
||||||||
|
Radio
broadcasting
|
$
|
14,478
|
|
|
$
|
15,225
|
|
Non-broadcast
|
(584)
|
(494)
|
||||||
|
Corporate
|
|
(6,729)
|
|
|
(6,106)
|
||
Consolidated
operating income from continuing operations before gain on disposal
of
assets
|
$
|
7,165
|
$
|
8,625
|
||||
Total
property, plant and equipment, net
|
|
|
|
|
|
|
||
Radio
broadcasting
|
$
|
115,604
|
$
|
115,616
|
||||
|
Non-broadcast
|
|
2,830
|
|
|
|
3,516
|
|
Corporate
|
|
10,279
|
|
10,488
|
||||
Consolidated
property, plant and equipment, net
|
$
|
128,713
|
|
|
$
|
129,620
|
|
Three
months ended
|
||||||||||||||||
March
31,
|
||||||||||||||||
2006
|
2007
|
|||||||||||||||
Goodwill
|
|
|
|
|
|
|
||||||||||
Radio
broadcasting
|
$
|
5,011
|
$
|
5,011
|
||||||||||||
|
Non-broadcast
|
|
15,587
|
|
|
|
15,587
|
|
||||||||
Corporate
|
|
8
|
|
8
|
||||||||||||
Consolidated
goodwill
|
$
|
20,606
|
|
|
$
|
20,606
|
|
|||||||||
Reconciliation
of operating income from continuing operations before depreciation,
amortization and gain on disposal of assets to income from continuing
operations before income taxes
|
||||||||||||||||
Three
Months Ended
|
||||||||||||||||
March
31,
|
||||||||||||||||
2006
|
2007
|
|||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
|
Operating
income from continuing operations before depreciation, amortization
and
gain (loss) on disposal of assets
|
$
|
10,460
|
|
$
|
12,526
|
||||||||||
Depreciation
expense
|
(2,745)
|
(3,091)
|
||||||||||||||
|
Amortization
expense
|
|
(550)
|
|
|
(810)
|
||||||||||
Interest
income
|
46
|
60
|
||||||||||||||
|
Gain
on disposal of assets
|
|
3,529
|
|
|
3,269
|
||||||||||
Interest
expense
|
(6,588)
|
(6,454)
|
||||||||||||||
|
Other
expense, net
|
|
(172)
|
|
|
(35)
|
||||||||||
Income
from continuing operations before income taxes
|
$
|
3,980
|
$
|
5,465
|
As
of March 31, 2007
|
|||||||||||||
Issuer
and
|
|||||||||||||
Guarantor
|
|||||||||||||
Guarantors
|
Subsidiaries
|
||||||||||||
Other
|
Salem
|
||||||||||||
Parent
|
AcquisitionCo
|
Media
|
HoldCo
|
Adjustments
|
Consolidated
|
||||||||
Current
assets:
|
|||||||||||||
Cash
and cash equivalents
|
$
—
|
$
117
|
$
161
|
$
320
|
$
—
|
$
598
|
|||||||
|
Accounts
receivable
|
|
—
|
|
2,924
|
929
|
26,445
|
(84)
|
30,214
|
||||
Other
receivables
|
—
|
14
|
3
|
490
|
—
|
507
|
|||||||
|
Prepaid
expenses
|
|
—
|
|
108
|
280
|
2,018
|
—
|
2,406
|
||||
Income
tax receivable
|
—
|
(9)
|
(8)
|
47
|
—
|
30
|
|||||||
Deferred
income taxes
|
|
—
|
|
263
|
176
|
4,504
|
—
|
4,943
|
|||||
Total
current assets
|
|
—
|
|
3,417
|
|
1,541
|
|
33,824
|
|
(84)
|
|
38,698
|
|
Investment
in subsidiaries
|
211,063
|
—
|
—
|
—
|
(211,063)
|
—
|
|||||||
Property,
plant and equipment, net
|
—
|
6,911
|
374
|
122,335
|
—
|
129,620
|
|||||||
Broadcast
licenses
|
|
—
|
|
94,473
|
—
|
379,098
|
—
|
473,571
|
|||||
Goodwill
|
—
|
10,256
|
2,554
|
7,796
|
—
|
20,606
|
|||||||
Other
indefinite-lived intangible assets
|
—
|
—
|
2,892
|
—
|
—
|
2,892
|
|||||||
Amortizable
intangible assets, net
|
|
—
|
|
5,044
|
1,131
|
1,703
|
—
|
7,878
|
|||||
Bond
issue costs
|
—
|
—
|
—
|
556
|
—
|
556
|
|||||||
Bank
loan fees
|
|
—
|
|
—
|
—
|
2,741
|
—
|
2,741
|
|||||
Fair
value of interest rate swap
|
—
|
—
|
—
|
913
|
—
|
913
|
|||||||
Intercompany
receivables
|
|
104,920
|
9,918
|
—
|
176,980
|
(291,818)
|
—
|
||||||
Other
assets
|
—
|
60
|
27
|
3,683
|
—
|
3,770
|
|||||||
Total
assets
|
|
$
315,983
|
|
$
130,079
|
|
$
8,519
|
|
$
729,629
|
|
$
(502,965)
|
|
$
681,245
|
As
of March 31, 2007
|
|||||||||||||
Issuer
and
|
|||||||||||||
Guarantor
|
|||||||||||||
Guarantors
|
Subsidiaries
|
||||||||||||
Other
|
Salem
|
||||||||||||
Parent
|
AcquisitionCo
|
Media
|
HoldCo
|
Adjustments
|
Consolidated
|
||||||||
Current
liabilities:
|
|
|
|||||||||||
Accounts
payable
|
$
—
|
$37
|
$
123
|
$
2,344
|
$
—
|
$
2,504
|
|||||||
|
Accrued
expenses
|
|
—
|
|
484
|
330
|
4,966
|
(203)
|
5,577
|
||||
Accrued
compensation and related expenses
|
—
|
656
|
161
|
7,118
|
—
|
7,935
|
|||||||
|
Accrued
interest
|
|
—
|
|
—
|
—
|
5,866
|
—
|
5,866
|
||||
Deferred
revenue
|
—
|
—
|
4,057
|
553
|
—
|
4,610
|
|||||||
Current
maturities of long-term debt
|
—
|
—
|
—
|
2,431
|
—
|
2,431
|
|||||||
Total
current liabilities
|
|
—
|
|
1,177
|
4,671
|
23,278
|
(203)
|
28,923
|
|||||
Intercompany
payables
|
74,946
|
101,222
|
13,734
|
101,797
|
(291,699)
|
—
|
|||||||
Long-term
debt
|
|
—
|
2,523
|
—
|
344,298
|
—
|
346,821
|
||||||
Deferred
income taxes
|
|
1,919
|
14,756
|
(9,346)
|
50,785
|
—
|
58,114
|
||||||
Deferred
revenue
|
—
|
515
|
(1,373)
|
7,981
|
—
|
7,123
|
|||||||
Other
liabilities
|
|
—
|
—
|
—
|
1,146
|
—
|
1,146
|
||||||
Total
stockholders’ equity
|
239,118
|
9,886
|
833
|
200,344
|
(211,063)
|
239,118
|
|||||||
Total
liabilities and stockholders’ equity
|
|
$
315,983
|
|
$
130,079
|
|
$
8,519
|
|
$729,629
|
|
$
(502,965)
|
|
$
681,245
|
Three
Months Ended March 31, 2007
|
|||||||||||||
Issuer
and
|
|||||||||||||
Guarantor
|
|||||||||||||
Guarantors
|
Subsidiaries
|
||||||||||||
Other
|
Salem
|
||||||||||||
Parent
|
AcquisitionCo
|
Media
|
HoldCo
|
Adjustments
|
Consolidated
|
||||||||
Net
broadcasting revenue
|
|
$
—
|
$
2,778
|
$
—
|
$
48,290
|
$
(628)
|
$
50,440
|
||||||
Non-broadcast
revenue
|
—
|
3,076
|
1,604
|
1,134
|
(160)
|
5,654
|
|||||||
Total
revenue
|
|
—
|
5,854
|
1,604
|
49,424
|
(788)
|
56,094
|
||||||
Operating
expenses:
|
|||||||||||||
|
Broadcasting
operating expenses
|
|
—
|
1,889
|
—
|
30,527
|
67
|
32,483
|
|||||
Non-broadcast
operating expenses
|
—
|
3,013
|
1,957
|
916
|
(615)
|
5,271
|
|||||||
|
Corporate
expenses
|
|
—
|
336
|
—
|
5,718
|
(240)
|
5,814
|
|||||
Amortization
|
—
|
425
|
101
|
284
|
—
|
810
|
|||||||
|
Depreciation
|
|
—
|
246
|
40
|
2,805
|
—
|
3,091
|
|||||
Gain
on disposal of assets
|
—
|
—
|
—
|
(3,269)
|
—
|
(3,269)
|
|||||||
Total
operating expenses
|
|
—
|
5,909
|
2,098
|
36,981
|
(788)
|
44,200
|
||||||
Operating
income (loss)
|
—
|
(55)
|
(494)
|
12,443
|
—
|
11,894
|
|||||||
Other
income (expense):
|
|||||||||||||
Equity
in earnings of consolidated subsidiaries, net
|
5,111
|
—
|
—
|
—
|
(5,111)
|
—
|
|||||||
Interest
income
|
1,916
|
—
|
—
|
3,070
|
(4,926)
|
60
|
|||||||
|
Interest
expense
|
|
(2,143)
|
(2,337)
|
(326)
|
(6,574)
|
4,926
|
(6,454)
|
|||||
|
Other
income (expense)
|
|
—
|
—
|
—
|
(35)
|
—
|
(35)
|
|||||
Income
(loss) before income taxes
|
|
4,884
|
(2,392)
|
(820)
|
8,904
|
(5,111)
|
5,465
|
||||||
Provision
(benefit) for income taxes
|
1,919
|
(580)
|
(395)
|
1,556
|
—
|
2,500
|
|||||||
Net
income (loss)
|
|
$-
2,965
|
$
(1,812)
|
$
(425)
|
$
7,348
|
$
(5,111)
|
$
2,965
|
||||||
Other
comprehensive income (loss)
|
(288)
|
—
|
—
|
(288)
|
288
|
(288)
|
|||||||
Comprehensive
income (loss)
|
$
2,677
|
$
(1,812)
|
$
(425)
|
$
7,060
|
$
(4,823)
|
$
2,677
|
· |
the
sale of block program time, both to national and local program producers,
|
· |
the
sale of advertising time on our radio stations, both to national
and local
advertisers, and
|
· |
the
sale of advertising time on our national radio
network.
|
· |
audience
share,
|
· |
how
well our stations perform for our
clients,
|
· |
the
size of the market,
|
· |
the
general economic conditions in each market,
and
|
· |
supply
and demand on both a local and national
level.
|
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2006
|
2007
|
%
Change
|
|||||
Net
broadcasting revenue
|
|
$
48,774
|
|
$
50,440
|
|
3.4%
|
|
Non-broadcast
revenue
|
3,252
|
5,654
|
73.9%
|
||||
Total
revenue
|
|
52,026
|
|
56,094
|
|
7.8%
|
|
Operating
expenses:
|
|||||||
|
Broadcasting
operating expenses
|
|
31,694
|
|
32,483
|
|
2.5%
|
Non-broadcast
operating expenses
|
3,432
|
5,271
|
53.6%
|
||||
|
Corporate
expenses
|
|
6,440
|
|
5,814
|
|
(9.7)%
|
Depreciation
|
2,745
|
3,091
|
12.6%
|
||||
Amortization
|
550
|
810
|
47.3%
|
||||
|
Gain
on disposal of assets
|
|
(3,529)
|
|
(3,269)
|
|
(7.4)%
|
Total
operating expenses
|
41,332
|
44,200
|
6.9%
|
||||
Operating
income from continuing operations
|
|
10,694
|
|
11,894
|
|
11.2%
|
|
Other
income (expense):
|
|||||||
Interest
income
|
46
|
60
|
30.4%
|
||||
|
Interest
expense
|
|
(6,588)
|
|
(6,454)
|
|
(2.0)%
|
Other
expense, net
|
(172)
|
(35)
|
(79.7)%
|
||||
Income
from continuing operations before income taxes
|
|
3,980
|
|
5,465
|
|
37.3
%
|
|
Provision
for income taxes
|
1,594
|
2,500
|
56.8%
|
||||
Income
from continuing operations
|
|
2,386
|
|
2,965
|
|
24.3%
|
|
Income
from discontinued operations, net of tax
|
329
|
—
|
(100.0)%
|
||||
Net
income
|
$
2,715
|
$
2,965
|
9.2%
|
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2006
|
2007
|
||||||
Net
broadcasting revenue
|
|
94
|
%
|
|
90
|
%
|
|
Non-broadcast
revenue
|
6
|
%
|
10
|
%
|
|||
Total
revenue
|
|
100
|
%
|
|
100
|
%
|
|
Operating
expenses:
|
|||||||
|
Broadcasting
operating expenses
|
|
61
|
%
|
|
58
|
%
|
Non-broadcast
operating expenses
|
7
|
%
|
10
|
%
|
|||
|
Corporate
expenses
|
|
12
|
%
|
|
10
|
%
|
Depreciation
and amortization
|
5
|
%
|
6
|
%
|
|||
Amortization
|
1
|
1
|
%
|
||||
Gain
on disposal of assets
|
(7)
|
%
|
(6)
|
%
|
|||
|
Total
operating expenses
|
|
79
|
%
|
|
79
|
%
|
Operating
income from continuing operations
|
21
|
%
|
21
|
%
|
|||
Other
income (expense):
|
|
|
|
|
|
||
Interest
income
|
—
|
%
|
—
|
%
|
|||
|
Interest
expense
|
|
(13)
|
%
|
|
(11)
|
%
|
Other
expense, net
|
—
|
%
|
—
|
%
|
|||
Income
from continuing operations before income taxes
|
|
8
|
%
|
|
10
|
%
|
|
Provision
for income taxes
|
3
|
%
|
5
|
%
|
|||
Income
from continuing operations
|
|
5
|
%
|
|
5
|
%
|
|
Income
from discontinued operations, net of tax
|
—
|
%
|
—
|
%
|
|||
Net
income
|
5
|
%
|
5
|
%
|
|||
Three
Months Ended March 31,
|
||||
(Dollars
in thousands)
|
||||
2006
|
2007
|
|||
Station
operating income
|
|
$
17,080
|
|
$
17,957
|
Plus
non-broadcast revenue
|
3,252
|
5,654
|
||
Less
non-broadcast operating expenses
|
(3,432)
|
(5,271)
|
||
Less
depreciation and amortization
|
|
(3,295)
|
|
(3,901)
|
Less
gain on disposal of assets
|
3,529
|
3,269
|
||
Less
corporate expenses
|
|
(6,440)
|
|
(5,814)
|
Operating
income
|
|
$
10,694
|
|
$
11,894
|
As
of December 31, 2006
|
As
of March 31, 2007
|
|||||
(Dollars
in thousands)
|
||||||
Term
loan B
|
$
73,125
|
$
73,125
|
||||
Term
loan C
|
165,000
|
|
164,175
|
|||
Revolving
line of credit under credit facility
|
19,100
|
8,500
|
||||
Swingline
credit facility
|
1,241
|
—
|
||||
7¾%
senior subordinated notes due 2010
|
100,000
|
100,000
|
||||
Fair
market value of interest rate swap
|
—
|
104
|
||||
Capital
leases and other loans
|
2,560
|
3,348
|
||||
$
361,026
|
$
349,252
|
|||||
Less
current portion
|
2,048
|
|
2,431
|
|||
$
358,978
|
$
346,821
|
· |
Outstanding
borrowings of $237.3 million on term loans with interest payments
due at
LIBOR plus 1.25% to 1.75% or at prime rate plus 0.25% to 0.75%, depending
on our total leverage ratio, and a commitment fee of 0.375% on the
unused
portion.
|
· |
Outstanding
borrowings of $8.5 million under a revolving line of credit with
interest
payments due at the banks prime rate.
|
· |
$100
million senior subordinated notes with semi-annual interest payments
at 7
¾%.
|
Incorporated
by Reference
|
||||||||||||
Exhibit
Number
|
Exhibit
Description
|
Form
|
File
No.
|
Date
of
First
Filing
|
Exhibit
Number
|
Filed
Herewith
|
||||||
3.01
|
Amended
and Restated Certificate of Incorporation of Salem Communications
Corporation, a Delaware corporation.
|
8-K
|
333-41733-29
|
04/14/99
|
3.1
|
|||||||
3.02
|
Bylaws
of Salem Communications Corporation, a Delaware Corporation.
|
8-K
|
333-41733-29
|
04/14/99
|
3.2
|
|||||||
3.03
|
Certificate
of Incorporation of Salem Communications Holding Corporation.
|
8-K
|
000-26497
|
09/08/00
|
2.01
|
|||||||
3.04
|
Bylaws
of Salem Communications Holding Corporation.
|
8-K
|
000-26497
|
09/08/00
|
2.02
|
|||||||
3.05
|
Certificate
of Incorporation of Salem Communications Acquisition Corporation.
|
8-K
|
000-26497
|
09/08/00
|
2.03
|
|||||||
3.06
|
Bylaws
of Salem Communications Acquisition Corporation.
|
8-K
|
000-26497
|
09/08/00
|
2.04
|
|||||||
3.07
|