[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)
|
Yes
[X ]
|
No [ ] |
Large
accelerated filer
[ ]
|
Accelerated
filer [X ]
|
Non-accelerated
filer [ ]
|
Class
A
|
Outstanding
at August 3, 2007
|
|
Common
Stock, $0.01 par value per share
|
18,296,324
shares
|
Class
B
|
Outstanding
at August 3, 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
|
31
|
||
|
Item 4. Controls
and Procedures
|
|
32
|
PART
II - OTHER INFORMATION
|
33
|
||
|
Item 1. Legal
Proceedings
|
|
33
|
Item
1A. Risk Factors
|
33
|
||
Item 2. Unregistered
Sales of Equity Securities and Use of Proceeds
|
33
|
||
|
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
|
|
48
|
|
EXHIBIT
INDEX
|
49
|
December
31,
2006
|
June
30, 2007
|
||||||||
(Note
1)
|
(Unaudited)
|
||||||||
ASSETS
|
|||||||||
Current
assets:
|
|||||||||
|
Cash
and cash equivalents
|
|
$
|
710
|
|
|
$
|
752
|
|
Trade
accounts receivable (net of allowance for doubtful accounts of $7,606
in
2006 and $7,454 in 2007)
|
31,984
|
31,335
|
|||||||
|
Other
receivables
|
|
|
551
|
|
|
|
581
|
|
Prepaid
expenses
|
2,330
|
2,416
|
|||||||
Income
tax receivable
|
—
|
39
|
|||||||
|
Deferred
income taxes
|
|
|
5,020
|
|
|
|
5,009
|
|
Total
current assets
|
|
40,595
|
|
40,132
|
|||||
Property,
plant and equipment (net of accumulated depreciation of $74,766 in
2006
and $78,493 in 2007)
|
|
|
128,713
|
|
|
|
130,808
|
|
|
Broadcast
licenses
|
476,544
|
472,463
|
|||||||
Goodwill
|
|
|
20,606
|
|
|
|
20,463
|
|
|
Other
indefinite-lived intangible assets
|
2,892
|
2,892
|
|||||||
Amortizable
intangible assets (net of accumulated amortization of $10,846 in
2006 and
$12,433 in 2007)
|
8,368
|
7,098
|
|||||||
Bond
issue costs
|
|
|
593
|
|
|
|
518
|
|
|
Bank
loan fees
|
2,996
|
2,488
|
|||||||
Fair
value of interest rate swap agreements
|
|
|
1,290
|
|
|
|
2,663
|
|
|
Other
assets
|
|
3,667
|
|
4,449
|
|||||
Total
assets
|
|
$
|
686,264
|
|
|
$
|
683,974
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||||
Current
liabilities:
|
|||||||||
Accounts
payable
|
$
|
3,421
|
$
|
1,496
|
|||||
|
Accrued
expenses
|
|
|
6,446
|
|
|
|
6,264
|
|
Accrued
compensation and related expenses
|
7,033
|
7,412
|
|||||||
Accrued
interest
|
4,275
|
2,252
|
|||||||
|
Deferred
revenue
|
|
|
4,050
|
|
|
|
4,565
|
|
Current
portion of long-term debt and capital lease obligations
|
2,048
|
3,683
|
|||||||
|
Income
taxes payable
|
|
|
22
|
|
|
|
—
|
|
Total
current liabilities
|
27,295
|
25,672
|
|||||||
Long-term
debt and capital lease obligations, less current portion
|
|
|
358,978
|
|
|
|
344,951
|
|
|
Deferred
income taxes
|
|
|
53,935
|
|
|
|
60,810
|
|
|
Deferred
revenue
|
7,063
|
7,303
|
|||||||
Other
liabilities
|
|
|
1,277
|
|
|
|
1,204
|
|
|
Total
liabilities
|
|
448,548
|
|
439,940
|
|||||
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 June 30, 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 June 30,
2007
|
56
|
56
|
|||||||
|
Additional
paid-in capital
|
|
|
221,466
|
|
|
|
223,131
|
|
Retained
earnings
|
47,433
|
51,262
|
|||||||
Treasury
stock, at cost (2,130,418 shares at December 31, 2006 and June 30,
2007)
|
(32,218)
|
(32,218)
|
|||||||
Accumulated
other comprehensive income
|
|
775
|
|
1,599
|
|||||
Total
stockholders’ equity
|
|
|
237,716
|
|
|
|
244,034
|
|
|
Total
liabilities and stockholders’ equity
|
$
|
686,264
|
$
|
683,974
|
|||||
See
accompanying notes
|
Three
Months Ended
|
Six
Months Ended
|
||||||||
June
30,
|
June
30,
|
||||||||
2006
|
|
2007
|
2006
|
|
2007
|
||||
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, exclusive of depreciation and amortization
shown below
(including $337 and $307 for the quarter ended June 30, 2006
and 2007,
respectively, and $614 and $617 for the six months ended June
30, 2006 and
2007, respectively, paid to related parties)
|
33,498
|
33,629
|
65,192
|
66,112
|
|||||
Non-broadcast
operating expenses, exclusive of depreciation and amortization shown
below
|
3,827
|
5,652
|
7,259
|
10,923
|
|||||
Corporate
expenses, exclusive of depreciation and amortization shown
below
(including $52 and $76 for the quarter ended June 30, 2006
and 2007,
respectively, and $150 and $145 for the six months ended June
30, 2006 and
2007, respectively, paid to related parties)
|
6,256
|
5,496
|
12,696
|
11,310
|
|||||
Depreciation
(including $138 and $150 for the quarter ended June 30 2006
and 2007,
respectively, and $225 and $289 for the six months ended June
30, 2006 and
2007, respectively for non-broadcast businesses)
|
3,113
|
2,923
|
5,858
|
6,014
|
|||||
Amortization
(including $525 and $748 for the quarter ended June 30 2006
and 2007,
respectively, and $842 and $1,486 for the six months ended
June 30, 2006
and 2007, respectively for non-broadcast businesses)
|
753
|
776
|
1,303
|
1,586
|
|||||
(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 from continuing operations
|
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
|
|||||
Income
(loss) from 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
earnings per share from continuing operations
|
$ 0.48
|
$ 0.12
|
$ 0.57
|
$ 0.25
|
|||||
Income
per share from discontinued operations
|
—
|
—
|
0.01
|
—
|
|||||
Basic
earnings per share
|
$ 0.48
|
$ 0.12
|
$ 0.58
|
$ 0.25
|
|||||
Diluted
earnings per share from continuing operations
|
$ 0.48
|
$ 0.12
|
$ 0.57
|
$ 0.25
|
|||||
Income
(loss) per share from discontinued operations
|
—
|
—
|
0.01
|
—
|
|||||
Diluted
earnings per share
|
$ 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
|
|||||
See
accompanying notes
|
Six
Months Ended June 30,
|
||||||||||
2006
|
2007
|
|||||||||
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|||
Income
from continuing operations
|
$
|
13,977
|
$
|
5,889
|
||||||
Adjustments
to reconcile income from continuing operations to net cash provided
by
operating activities:
|
|
|
|
|
|
|
|
|||
Non-cash
stock-based compensation
|
2,620
|
1,634
|
||||||||
|
Depreciation
and amortization
|
|
|
7,161
|
|
|
|
7,600
|
|
|
Amortization
of bond issue costs and bank loan fees
|
535
|
583
|
||||||||
Amortization
and accretion of financing items
|
(252)
|
58
|
||||||||
|
Provision
for bad debts
|
|
|
1,699
|
|
|
|
1,173
|
|
|
Deferred
income taxes
|
9,160
|
4,277
|
||||||||
(Gain)
loss on disposal of assets
|
|
|
(19,039)
|
|
|
|
(2,635)
|
|
||
Changes
in operating assets and liabilities:
|
||||||||||
|
|
Accounts
receivable
|
|
|
(1,106)
|
|
|
|
(593)
|
|
Prepaid
expenses and other current assets
|
(146)
|
(86)
|
||||||||
|
|
Accounts
payable and accrued expenses
|
|
|
2,565
|
|
|
(2,673)
|
||
Deferred
revenue
|
1,078
|
755
|
||||||||
|
|
Other
liabilities
|
|
|
(189)
|
|
|
28
|
||
Income
taxes payable
|
|
157
|
|
(22)
|
||||||
Net
cash provided by continuing operating activities
|
|
|
18,220
|
|
|
|
15,988
|
|
||
INVESTING
ACTIVITIES
|
||||||||||
Capital
expenditures
|
|
|
(11,258)
|
|
|
(8,788)
|
||||
Purchases
of
broadcast assets
|
|
|
(19,229)
|
|
|
—
|
||||
Purchase
of
non-broadcast businesses
|
(10,509)
|
(311)
|
||||||||
Proceeds
from
sale of property, plant and equipment
|
2,106
|
7,963
|
||||||||
Other
|
|
|
(206)
|
|
|
(649)
|
|
|||
Net
cash used in investing activities of continuing operations
|
(39,096)
|
(1,785)
|
||||||||
FINANCING
ACTIVITIES
|
||||||||||
Proceeds
from
borrowings under credit facilities
|
35,000
|
2,793
|
||||||||
Repurchase
of
Class A common stock
|
(15,149)
|
—
|
||||||||
Payments
of
long-term debt and notes payable
|
|
|
(2,002)
|
|
|
(15,991)
|
||||
Proceeds
from
exercise of stock options
|
24
|
30
|
||||||||
Tax
benefit related to stock options exercised
|
1
|
1
|
||||||||
Payments
on
capital lease obligations
|
|
|
(14)
|
|
|
(21)
|
||||
Book
overdraft
|
—
|
(973)
|
||||||||
Net
cash provided by (used in) financing activities
|
|
17,860
|
|
(14,161)
|
||||||
CASH
FLOWS OF DISCONTINUED OPERATIONS
|
||||||||||
Operating
cash flows
|
(231)
|
—
|
||||||||
Investing
cash flows
|
(2)
|
—
|
||||||||
Total
cash outflow from discontinued operations
|
(233)
|
—
|
||||||||
Net
increase (decrease) in cash and cash equivalents
|
|
|
(3,249)
|
|
|
42
|
|
|||
Cash
and cash equivalents at beginning of year
|
|
3,979
|
|
710
|
||||||
Cash
and cash equivalents at end of period
|
|
$
|
730
|
|
|
$
|
752
|
|
||
Supplemental
disclosures of cash flow information:
|
||||||||||
Cash
paid during the period for
|
|
|
|
|
|
|||||
Interest
|
$
|
12,459
|
$
|
10,739
|
||||||
|
|
Income
taxes
|
|
$
|
76
|
|
|
$
|
215
|
|
Non-cash
investing and financing activities:
|
||||||||||
Assets acquired
through capital lease obligations
|
$
|
—
|
$
|
800
|
Amount
|
||||
(Dollars
in thousands)
|
||||
Asset
|
|
|||
Domain
names
|
$ |
268
|
||
Customer
lists and contracts
|
32
|
|||
Goodwill
|
11
|
|||
$ |
311
|
Three
Months Ended
|
Six
Months Ended
|
|||||||
June
30, 2006
|
June
30, 2006
|
|||||||
Operating
loss
|
$
|
(18)
|
$
|
(160)
|
||||
Gain
(loss) on sale or exchange of radio stations
|
(11)
|
656
|
||||||
Gain
(loss) from discontinued operations before income taxes
|
(29)
|
496
|
||||||
Provision
(benefit) for (from) income taxes
|
|
(4)
|
192
|
|||||
Income
(loss) from discontinued operations, net of tax
|
$
|
(25)
|
$
|
304
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2006
|
2007
|
2006
|
2007
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Stock
option compensation expense included in corporate expenses
|
$ |
1,101
|
$ |
591
|
$ |
2,174
|
$ |
1,098
|
||||||||
Restricted
stock units compensation expense included in corporate
expenses
|
22
|
16
|
44
|
32
|
||||||||||||
Stock
option compensation expense included in broadcast operating
expenses
|
166
|
230
|
373
|
437
|
||||||||||||
Stock
option compensation expense included in non-broadcast operating
expenses
|
23
|
43
|
29
|
67
|
||||||||||||
Total
stock-based compensation expense
|
$ |
1,312
|
$ |
880
|
$ |
2,620
|
$ |
1,634
|
||||||||
Tax
benefit from stock-based compensation expense
|
(520 | ) | (378 | ) | (1,044 | ) | (723 | ) | ||||||||
Total
stock-based compensation expense net of tax benefit
|
$ |
792
|
$ |
502
|
$ |
1,576
|
$ |
911
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2006
|
2007
|
2006
|
2007
|
|||||||||||||
Expected
volatility
|
50.65
|
% | 43.88 | % | 52.1 | % | 43.65 | % | ||||||||
Expected
dividends
|
0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||
Expected
term (in years)
|
6
-
9
|
6
- 9
|
6
-
9
|
6
- 9
|
||||||||||||
Risk-free
interest rate
|
5.09 | % | 4.83 | % | 4.97 | % | 4.70 | % |
Options
|
Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Term
|
Weighted
Average Grant Date Fair Value
|
Aggregate
Intrinsic Value
|
|||||||||||
Outstanding
at January 1, 2007
|
2,146,564
|
$ |
22.30
|
$ |
—
|
|||||||||||
Granted
|
388,900
|
11.82
|
$ |
6.35
|
—
|
|||||||||||
Exercised
|
(2,500 | ) |
11.81
|
4,219
|
||||||||||||
Forfeited
or expired
|
(83,965 | ) |
20.98
|
—
|
||||||||||||
Outstanding
at June 30, 2007
|
2,448,999
|
$ |
20.70
|
4.7
years
|
—
|
|||||||||||
Exercisable
at June 30, 2007
|
1,416,062
|
$ |
24.35
|
3.0
years
|
18,796
|
Restricted
Stock Units
|
Shares
|
Weighted
Average
Exercise
Price
|
||||||
Non-Vested
at January 1, 2007
|
6,000
|
$ |
11.15
|
|||||
Granted
|
—
|
—
|
||||||
Vested
|
—
|
—
|
||||||
Forfeited
|
—
|
—
|
||||||
Non-Vested
at June 30, 2007
|
6,000
|
$ |
11.15
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2006
|
2007
|
2006
|
2007
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Mark-to-market
adjustment
|
$ |
1,489
|
$ |
1,853
|
$ |
3,216
|
$ |
1,373
|
||||||||
Tax
Provision (benefit)
|
595
|
741
|
1,286
|
549
|
||||||||||||
Other
comprehensive income
|
$ |
894
|
$ |
1,112
|
$ |
1,930
|
$ |
824
|
||||||||
December
31,
2006
|
June
30,
2007
|
||||||||
(Dollars
in thousands)
|
|||||||||
|
|||||||||
Term
loans under credit facility
|
$ |
238,125
|
$ |
236,475
|
|||||
Revolving
line of credit under credit facility
|
19,100
|
8,500
|
|||||||
Swingline
credit facility
|
1,241
|
293
|
|||||||
7¾%
Senior Subordinated Notes due 2010
|
100,000
|
100,000
|
|||||||
Seller
financed note to acquire Townhall.com
|
2,444
|
2,502
|
|||||||
Capital
leases and other loans
|
116
|
864
|
|||||||
361,026
|
348,634
|
||||||||
Less
current portion
|
2,048
|
3,683
|
|||||||
$ |
358,978
|
$ |
344,951
|
Twelve
Months Ended June 30,
|
Amount
|
|
|
(Dollars
in thousands)
|
|
2008
|
$ |
3,683
|
2009
|
12,482
|
|
2010
|
231,715
|
|
2011
|
100,023
|
|
2012
|
28
|
|
Thereafter
|
703
|
|
|
$ |
348,634
|
As
of June 30, 2007
|
||||||||||||
|
Accumulated
|
|
||||||||||
Cost
|
Amortization
|
Net
|
||||||||||
(Dollars
in thousands)
|
||||||||||||
Customer
lists and contracts
|
$ |
10,437
|
$ | (6,890 | ) | $ |
3,547
|
|||||
Domain
and brand names
|
4,771
|
(2,018 | ) |
2,753
|
||||||||
Favorable
and assigned leases
|
1,581
|
(1,188 | ) |
393
|
||||||||
Other
amortizable intangible assets
|
2,742
|
(2,337 | ) |
405
|
||||||||
$ |
19,531
|
$ | (12,433 | ) | $ |
7,098
|
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
|
Amortization
Expense
|
|
(Dollars
in thousands)
|
||
2007
(July 1 – December 31)
|
$ |
1,398
|
2008
|
2,533
|
|
2009
|
1,282
|
|
2010
|
832
|
|
2011
|
369
|
|
Thereafter
|
684
|
|
Total
|
$ |
7,098
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2006
|
2007
|
2006
|
2007
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Net
revenue
|
||||||||||||||||
Radio
broadcasting
|
$ |
53,381
|
$ |
53,650
|
$ |
102,155
|
$ |
104,090
|
||||||||
Non-broadcast
|
4,684
|
6,388
|
7,936
|
12,042
|
||||||||||||
Consolidated
net revenue
|
$ |
58,065
|
$ |
60,038
|
$ |
110,091
|
$ |
116,132
|
||||||||
Operating
expenses before depreciation, amortization and (gain) loss on disposal
of
assets
|
||||||||||||||||
Radio
broadcasting
|
$ |
33,498
|
$ |
33,629
|
$ |
65,192
|
$ |
66,112
|
||||||||
Non-broadcast
|
3,827
|
5,652
|
7,259
|
10,923
|
||||||||||||
Corporate
|
6,256
|
5,496
|
12,696
|
11,310
|
||||||||||||
Consolidated
operating expenses before depreciation, amortization and (gain) loss
on
disposal of assets
|
$ |
43,581
|
$ |
44,777
|
$ |
85,147
|
$ |
88,345
|
||||||||
Operating
income from continuing operations before depreciation, amortization
and
(gain) loss on disposal of assets
|
||||||||||||||||
Radio
broadcasting
|
$ |
19,883
|
$ |
20,021
|
$ |
36,963
|
$ |
37,978
|
||||||||
Non-broadcast
|
857
|
736
|
677
|
1,119
|
||||||||||||
Corporate
|
(6,256 | ) | (5,496 | ) | (12,696 | ) | (11,310 | ) | ||||||||
Consolidated
operating income from continuing operations before depreciation,
amortization and (gain) loss on disposal of assets
|
$ |
14,484
|
$ |
15,261
|
$ |
24,944
|
$ |
27,787
|
||||||||
Depreciation
|
||||||||||||||||
Radio
broadcasting
|
$ |
2,676
|
$ |
2,497
|
$ |
5,050
|
$ |
5,162
|
||||||||
Non-broadcast
|
138
|
150
|
225
|
289
|
||||||||||||
Corporate
|
299
|
276
|
583
|
563
|
||||||||||||
Consolidated
depreciation expense
|
$ |
3,113
|
$ |
2,923
|
$ |
5,858
|
$ |
6,014
|
||||||||
Amortization
|
||||||||||||||||
Radio
broadcasting
|
$ |
224
|
$ |
23
|
$ |
452
|
$ |
90
|
||||||||
Non-broadcast
|
525
|
748
|
842
|
1,486
|
||||||||||||
Corporate
|
4
|
5
|
9
|
10
|
||||||||||||
Consolidated
amortization expense
|
$ |
753
|
$ |
776
|
$ |
1,303
|
$ |
1,586
|
||||||||
Operating
income from continuing operations before (gain) loss on disposal
of
assets
|
||||||||||||||||
Radio
broadcasting
|
$ |
16,983
|
$ |
17,501
|
$ |
31,461
|
$ |
32,726
|
||||||||
Non-broadcast
|
194
|
(162 | ) | (390 | ) | (656 | ) | |||||||||
Corporate
|
(6,559 | ) | (5,777 | ) | (13,288 | ) | (11,883 | ) | ||||||||
Consolidated
operating income from continuing operations before (gain) loss on
disposal
of assets
|
$ |
10,618
|
$ |
11,562
|
$ |
17,783
|
$ |
20,187
|
December
31,
|
June
30,
|
||||||||||||||||||||||||
2006
|
2007
|
||||||||||||||||||||||||
Total
property, plant and equipment, net
|
(Dollars
in thousands)
|
||||||||||||||||||||||||
Radio
broadcasting
|
$
|
115,604
|
$
|
116,354
|
|||||||||||||||||||||
Non-broadcast
|
2,830
|
4,316
|
|||||||||||||||||||||||
Corporate
|
|
|
|
10,279
|
|
10,138
|
|||||||||||||||||||
Consolidated
property, plant and equipment, net
|
$
|
128,713
|
$
|
130,808
|
|||||||||||||||||||||
December
31,
|
June
30,
|
||||||||||||||||||||||||
2006
|
2007
|
||||||||||||||||||||||||
Goodwill
|
(Dollars
in thousands)
|
||||||||||||||||||||||||
Radio
Broadcasting
|
$
|
5,011
|
$
|
4,857
|
|||||||||||||||||||||
Non-broadcast
|
15,587
|
15,598
|
|||||||||||||||||||||||
Corporate
|
8
|
8
|
|||||||||||||||||||||||
Consolidated
Goodwill
|
$
|
20,606
|
$
|
20,463
|
|||||||||||||||||||||
Reconciliation
of operating income before depreciation, amortization, and
(gain) loss on disposal of assets to income from continuing operations
before income taxes:
|
|||||||||||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
||||||||||||||||||||||||
June
30,
|
June
30,
|
||||||||||||||||||||||||
2006
|
|
2007
|
2006
|
|
2007
|
||||||||||||||||||||
(Dollars
in thousands)
|
|||||||||||||||||||||||||
Operating
income before depreciation, amortization, and gain (loss) on disposal
of
assets
|
$
|
14,484
|
$
|
15,261
|
$
|
24,944
|
$
|
27,787
|
|||||||||||||||||
Depreciation
expense
|
(3,113)
|
(2,923)
|
(5,858)
|
(6,014)
|
|||||||||||||||||||||
Amortization
expense
|
(753)
|
(776)
|
(1,303)
|
(1,586)
|
|||||||||||||||||||||
Interest
income
|
—
|
48
|
46
|
108
|
|||||||||||||||||||||
Gain
(loss) on disposal of assets
|
15,510
|
(634)
|
19,039
|
2,635
|
|||||||||||||||||||||
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
|
As
of June 30, 2007
|
|||||||||||||||||||||||||
Issuer
and
|
|||||||||||||||||||||||||
Guarantor
|
|||||||||||||||||||||||||
Guarantors
|
Subsidiaries
|
||||||||||||||||||||||||
|
|
||||||||||||||||||||||||
Parent
|
AcquisitionCo
|
Other
Media
|
Salem
Holding
|
Adjustments
|
Salem
Consolidated
|
||||||||||||||||||||
Current
assets:
|
|||||||||||||||||||||||||
Cash
and cash equivalents
|
$ |
—
|
$ |
123
|
$ |
314
|
$ |
315
|
$ |
—
|
$ |
752
|
|||||||||||||
Trade
accounts receivable, net
|
—
|
2,901
|
718
|
27,789
|
(73 | ) |
31,335
|
||||||||||||||||||
Other
receivables
|
—
|
11
|
3
|
567
|
—
|
581
|
|||||||||||||||||||
Prepaid
expenses
|
—
|
134
|
245
|
2,037
|
—
|
2,416
|
|||||||||||||||||||
Income
tax receivable
|
—
|
(6 | ) | (5 | ) |
50
|
—
|
39
|
|||||||||||||||||
Deferred
income taxes
|
—
|
305
|
153
|
4,551
|
—
|
5,009
|
|||||||||||||||||||
Total
current assets
|
—
|
3,468
|
1,428
|
35,309
|
(73 | ) |
40,132
|
||||||||||||||||||
Investment
in subsidiaries
|
215,654
|
—
|
—
|
—
|
(215,654 | ) |
—
|
||||||||||||||||||
Property,
plant and equipment, net
|
—
|
7,726
|
415
|
122,667
|
—
|
130,808
|
|||||||||||||||||||
Broadcast
licenses
|
—
|
94,473
|
—
|
377,990
|
—
|
472,463
|
|||||||||||||||||||
Goodwill
|
—
|
10,256
|
2,565
|
7,642
|
—
|
20,463
|
|||||||||||||||||||
Other
indefinite-lived intangible assets
|
—
|
—
|
2,892
|
—
|
—
|
2,892
|
|||||||||||||||||||
Amortizable
intangible assets, net
|
—
|
4,625
|
1,002
|
1,471
|
—
|
7,098
|
|||||||||||||||||||
Bond
issue costs
|
—
|
—
|
—
|
518
|
—
|
518
|
|||||||||||||||||||
Bank
loan fees
|
—
|
—
|
—
|
2,488
|
—
|
2,488
|
|||||||||||||||||||
FV
of interest rate swap
|
—
|
—
|
—
|
2,663
|
—
|
2,663
|
|||||||||||||||||||
Intercompany
receivables
|
106,818
|
10,477
|
—
|
184,360
|
(301,655 | ) |
—
|
||||||||||||||||||
Other
assets
|
—
|
60
|
26
|
4,363
|
—
|
4,449
|
|||||||||||||||||||
Total
assets
|
$ |
322,472
|
$ |
131,085
|
$ |
8,328
|
$ |
739,471
|
$ | (517,382 | ) | $ |
683,974
|
As
of June 30, 2007
|
||||||||||||||||||||||||
Issuer
and
|
||||||||||||||||||||||||
Guarantor
|
||||||||||||||||||||||||
Guarantors
|
Subsidiaries
|
|||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Parent
|
AcquisitionCo
|
Other
Media
|
Salem
Holding
|
Adjustments
|
Salem
Consolidated
|
|||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||||||
Accounts
payable
|
$ |
—
|
$ | (42 | ) | $ |
65
|
$ |
1,473
|
$ |
—
|
$ |
1,496
|
|||||||||||
Accrued
expenses
|
—
|
593
|
482
|
5,315
|
(126 | ) |
6,264
|
|||||||||||||||||
Accrued
compensation and related expenses
|
—
|
729
|
125
|
6,558
|
—
|
7,412
|
||||||||||||||||||
Accrued
interest
|
—
|
—
|
—
|
2,252
|
—
|
2,252
|
||||||||||||||||||
Deferred
revenue
|
—
|
—
|
4,003
|
562
|
—
|
4,565
|
||||||||||||||||||
Current
maturities of long-term debt
|
—
|
1,242
|
—
|
2,441
|
—
|
3,683
|
||||||||||||||||||
Total
current liabilities
|
—
|
2,522
|
4,675
|
18,601
|
(126 | ) |
25,672
|
|||||||||||||||||
Intercompany
payables
|
77,178
|
104,404
|
14,730
|
105,290
|
(301,602 | ) |
—
|
|||||||||||||||||
Long-term
debt
|
—
|
1,305
|
—
|
343,646
|
—
|
344,951
|
||||||||||||||||||
Deferred
income taxes
|
1,260
|
13,777
|
(9,819 | ) |
55,592
|
—
|
60,810
|
|||||||||||||||||
Deferred
revenue
|
—
|
598
|
(1,576 | ) |
8,281
|
—
|
7,303
|
|||||||||||||||||
Other
liabilities
|
—
|
—
|
—
|
1,204
|
—
|
1,204
|
||||||||||||||||||
Stockholders’
equity
|
244,034
|
8,479
|
318
|
206,857
|
(215,654 | ) |
244,034
|
|||||||||||||||||
Total
liabilities and stockholders’ equity
|
$ |
322,472
|
$ |
131,085
|
$ |
8,328
|
$ |
739,471
|
$ | (517,382 | ) | $ |
683,974
|
Six
Months Ended June 30, 2007
|
||||||||||||||||||||||||
Issuer
and
|
||||||||||||||||||||||||
Guarantor
|
||||||||||||||||||||||||
Guarantors
|
Subsidiaries
|
|||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Parent
|
AcquisitionCo
|
Other
Media
|
Salem
Holding
|
Adjustments
|
Salem
Consolidated
|
|||||||||||||||||||
Net
broadcasting revenue
|
$ |
—
|
$ |
5,729
|
$ |
—
|
$ |
99,665
|
$ | (1,304 | ) | $ |
104,090
|
|||||||||||
Non-broadcast revenue
|
—
|
6,356
|
3,615
|
2,592
|
(521 | ) |
12,042
|
|||||||||||||||||
Total
revenue
|
—
|
12,085
|
3,615
|
102,257
|
(1,825 | ) |
116,132
|
|||||||||||||||||
Operating
expenses:
|
||||||||||||||||||||||||
Broadcasting
operating expenses
|
—
|
3,920
|
—
|
62,107
|
85
|
66,112
|
||||||||||||||||||
Non-broadcast operating
expenses
|
—
|
6,101
|
4,251
|
1,987
|
(1,416 | ) |
10,923
|
|||||||||||||||||
Corporate
expenses
|
—
|
655
|
—
|
11,149
|
(494 | ) |
11,310
|
|||||||||||||||||
Depreciation
|
—
|
480
|
78
|
5,456
|
—
|
6,014
|
||||||||||||||||||
Amortization
|
—
|
841
|
229
|
516
|
—
|
1,586
|
||||||||||||||||||
Gain
(loss) on disposal of assets
|
—
|
1
|
—
|
(2,636 | ) |
—
|
(2,635 | ) | ||||||||||||||||
Total
operating expenses
|
—
|
11,998
|
4,558
|
78,579
|
(1,825 | ) |
93,310
|
|||||||||||||||||
Operating
income (loss)
|
—
|
87
|
(943 | ) |
23,678
|
—
|
22,822
|
|||||||||||||||||
Other
income (expense):
|
||||||||||||||||||||||||
Equity
in earnings of consolidated subsidiaries, net
|
6,175
|
—
|
—
|
—
|
(6,175 | ) |
—
|
|||||||||||||||||
Interest
income
|
3,881
|
5
|
—
|
6,614
|
(10,392 | ) |
108
|