[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 November 5, 2007
|
Common
Stock, $0.01 par value per share
|
|
18,115,092
shares
|
Class
B
|
|
Outstanding
at November 5, 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
|
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
|
44
|
|||
EXHIBIT
INDEX
|
45
|
December
31, 2006
|
September
30, 2007
|
|||||||||||
(Note
1)
|
(Unaudited)
|
|||||||||||
ASSETS
|
||||||||||||
Current
assets:
|
||||||||||||
Cash
and cash equivalents
|
$ |
710
|
$ |
673
|
||||||||
Trade
accounts receivable (net of allowance for doubtful accounts
of $7,606 in
2006 and $7,617 in 2007)
|
31,984
|
31,359
|
||||||||||
Other
receivables
|
551
|
380
|
||||||||||
Prepaid
expenses
|
2,330
|
2,584
|
||||||||||
Income
tax receivable
|
—
|
38
|
||||||||||
Deferred
income taxes
|
5,020
|
5,125
|
||||||||||
Total
current assets
|
40,595
|
40,159
|
||||||||||
Property,
plant and equipment (net of accumulated depreciation
of $74,766 in 2006
and $81,112 in 2007)
|
128,713
|
130,894
|
||||||||||
Broadcast
licenses
|
476,544
|
472,463
|
||||||||||
Goodwill
|
20,606
|
20,498
|
||||||||||
Other
indefinite-lived intangible assets
|
2,892
|
2,892
|
||||||||||
Amortizable
intangible assets (net of accumulated amortization of
$10,846 in 2006 and
$13,181 in 2007)
|
8,368
|
6,771
|
||||||||||
Bond
issue costs
|
593
|
481
|
||||||||||
Bank
loan fees
|
2,996
|
2,237
|
||||||||||
Fair
value of interest rate swap agreements
|
1,290
|
451
|
||||||||||
Other
assets
|
3,667
|
4,545
|
||||||||||
Total
assets
|
$ |
686,264
|
$ |
681,391
|
||||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||||
Current
liabilities:
|
||||||||||||
Accounts
payable
|
$ |
3,421
|
$ |
1,546
|
||||||||
Accrued
expenses
|
6,446
|
5,636
|
||||||||||
Accrued
compensation and related expenses
|
7,033
|
7,506
|
||||||||||
Accrued
interest
|
4,275
|
3,829
|
||||||||||
Deferred
revenue
|
4,050
|
4,732
|
||||||||||
Current
portion of long-term debt and capital lease obligations
|
2,048
|
3,696
|
||||||||||
Income
taxes payable
|
22
|
—
|
||||||||||
Total
current liabilities
|
27,295
|
26,945
|
||||||||||
Long-term
debt and capital lease obligations, less current portion
|
358,978
|
350,457
|
||||||||||
Deferred
income taxes
|
53,935
|
61,611
|
||||||||||
Deferred
revenue
|
7,063
|
7,358
|
||||||||||
Other
liabilities
|
1,277
|
1,302
|
||||||||||
Total
liabilities
|
448,548
|
447,673
|
||||||||||
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 20,432,742
issued and 18,115,092 outstanding at September 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
September 30,
2007
|
56
|
56
|
||||||||||
Additional
paid-in capital
|
221,466
|
224,013
|
||||||||||
Retained
earnings
|
47,433
|
43,350
|
||||||||||
Treasury
stock, at cost (2,130,418 shares at December 31, 2006
and 2,317,650 at
September 30, 2007)
|
(32,218 | ) | (34,006 | ) | ||||||||
Accumulated
other comprehensive income
|
775
|
101
|
||||||||||
Total
stockholders’ equity
|
237,716
|
233,718
|
||||||||||
Total
liabilities and stockholders’ equity
|
$ |
686,264
|
$ |
681,391
|
||||||||
See
accompanying notes
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2006
|
2007
|
2006
|
2007
|
|||||||||||||
Net
broadcasting revenue
|
$ |
52,509
|
$ |
51,888
|
$ |
154,664
|
$ |
155,978
|
||||||||
Non-broadcast
revenue
|
5,402
|
6,208
|
13,338
|
18,250
|
||||||||||||
Total
revenue
|
57,911
|
58,096
|
168,002
|
174,228
|
||||||||||||
Operating
expenses:
|
||||||||||||||||
Broadcasting
operating expenses, exclusive of depreciation and amortization
shown below
(including $202 and $311 for the quarter ended September 30,
2006 and
2007, respectively, and $816 and $927 for the nine months ended
September
30, 2006 and 2007, respectively, paid to related parties)
|
31,821
|
32,719
|
97,013
|
98,831
|
||||||||||||
Non-broadcast
operating expenses, exclusive of depreciation and amortization
shown
below
|
5,311
|
5,820
|
12,570
|
16,743
|
||||||||||||
Corporate
expenses, exclusive of depreciation and amortization shown below
(including $47 and $192 for the quarter ended September 30, 2006
and 2007,
respectively, and $197 and $337 for the nine months ended September
30,
2006 and 2007, respectively, paid to related parties)
|
5,637
|
5,425
|
18,333
|
16,735
|
||||||||||||
Depreciation
(including $261 and $181 for the quarter ended September 30 2006
and 2007,
respectively, and $486 and $470 for the nine months ended September
30,
2006 and 2007, respectively for non-broadcast businesses)
|
3,198
|
2,973
|
9,056
|
8,987
|
||||||||||||
Amortization
(including $632 and $721 for the quarter ended September 30 2006
and 2007,
respectively, and $1,474 and $2,207 for the nine months ended
September
30, 2006 and 2007, respectively for non-broadcast
businesses)
|
759
|
748
|
2,062
|
2,334
|
||||||||||||
(Gain)
loss on disposal of assets
|
167
|
309
|
(18,872 | ) | (2,326 | ) | ||||||||||
Total
operating expenses
|
46,893
|
47,994
|
120,162
|
141,304
|
||||||||||||
Operating
income from continuing operations
|
11,018
|
10,102
|
47,840
|
32,924
|
||||||||||||
Other
income (expense):
|
||||||||||||||||
Interest
income
|
68
|
52
|
114
|
160
|
||||||||||||
Interest
expense
|
(6,490 | ) | (6,375 | ) | (19,857 | ) | (19,137 | ) | ||||||||
Loss
on early redemption of long-term debt
|
(3,625 | ) |
—
|
(3,625 | ) |
—
|
||||||||||
Other
income (expense), net
|
(120 | ) |
83
|
(466 | ) |
230
|
||||||||||
Income
from continuing operations before income taxes
|
851
|
3,862
|
24,006
|
14,177
|
||||||||||||
Provision
for income taxes
|
200
|
1,764
|
9,378
|
6,190
|
||||||||||||
Income
from continuing operations
|
651
|
2,098
|
14,628
|
7,987
|
||||||||||||
Income
from discontinued operations, net of tax
|
802
|
—
|
1,106
|
—
|
||||||||||||
Net
income
|
$ |
1,453
|
$ |
2,098
|
$ |
15,734
|
$ |
7,987
|
||||||||
Other
comprehensive income (loss), net of tax
|
(1,468 | ) | (1,498 | ) |
462
|
(674 | ) | |||||||||
Comprehensive
income (loss)
|
$ | (15 | ) | $ |
600
|
$ |
16,196
|
$ |
7,313
|
|||||||
Basic
earnings per share from continuing operations
|
$ |
0.03
|
$ |
0.09
|
$ |
0.60
|
$ |
0.34
|
||||||||
Income
per share from discontinued operations
|
0.03
|
—
|
0.05
|
—
|
||||||||||||
Basic
earnings per share
|
$ |
0.06
|
$ |
0.09
|
$ |
0.65
|
$ |
0.34
|
||||||||
Diluted
earnings per share from continuing operations
|
$ |
0.03
|
$ |
0.09
|
$ |
0.60
|
$ |
0.34
|
||||||||
Income
per share from discontinued operations
|
0.03
|
—
|
0.05
|
—
|
||||||||||||
Diluted
earnings per share
|
$ |
0.06
|
$ |
0.09
|
$ |
0.65
|
$ |
0.34
|
||||||||
Basic
weighted average shares outstanding
|
23,983,085
|
23,772,647
|
24,338,649
|
23,823,757
|
||||||||||||
Diluted
weighted average shares outstanding
|
23,990,729
|
23,776,449
|
24,347,388
|
23,828,495
|
||||||||||||
See
accompanying notes
|
Nine
Months Ended September 30,
|
||||||||||
2006
|
2007
|
|||||||||
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|||
Income
from continuing operations
|
$
|
14,628
|
$
|
7,987
|
||||||
Adjustments
to reconcile income from continuing operations to net cash provided
by
operating activities:
|
|
|
|
|
|
|
|
|||
Non-cash
stock-based compensation
|
3,546
|
2,515
|
||||||||
Loss
on early redemption of debt
|
3,625
|
—
|
||||||||
|
Depreciation
and amortization
|
|
|
11,118
|
|
|
|
11,321
|
|
|
Amortization
of bond issue costs and bank loan fees
|
1,069
|
871
|
||||||||
Amortization
and accretion of financing items
|
(214)
|
82
|
||||||||
|
Provision
for bad debts
|
|
|
2,572
|
|
|
|
1,875
|
|
|
Deferred
income taxes
|
9,816
|
5,960
|
||||||||
(Gain)
loss on disposal of assets
|
|
|
(18,872)
|
|
|
|
(2,326)
|
|
||
Changes
in operating assets and liabilities:
|
||||||||||
|
|
Accounts
receivable
|
|
|
(2,557)
|
|
|
|
(1,117)
|
|
Prepaid
expenses and other current assets
|
(251)
|
(254)
|
||||||||
|
|
Accounts
payable and accrued expenses
|
|
|
4,323
|
|
|
(1,829)
|
||
Deferred
revenue
|
378
|
977
|
||||||||
|
|
Other
liabilities
|
|
|
(174)
|
|
|
127
|
||
Income
taxes payable
|
|
—
|
|
(22)
|
||||||
Net
cash provided by continuing operating activities
|
|
|
29,007
|
|
|
|
26,167
|
|
||
INVESTING
ACTIVITIES
|
||||||||||
Capital
expenditures
|
|
|
(16,129)
|
|
|
(11,959)
|
||||
Purchases
of broadcast assets
|
|
|
(19,229)
|
|
|
—
|
||||
Purchase
of non-broadcast businesses
|
(11,246)
|
(962)
|
||||||||
Proceeds
from the disposal of property, plant and equipment
|
2,208
|
7,963
|
||||||||
Other
|
|
|
(1,519)
|
|
|
(747)
|
|
|||
Net
cash used in investing activities of continuing operations
|
(45,915)
|
(5,705)
|
||||||||
FINANCING
ACTIVITIES
|
||||||||||
Proceeds
from borrowings under credit facilities
|
153,000
|
20,500
|
||||||||
Payments
of long-term debt and notes payable
|
|
|
(15,878)
|
|
|
(29,624)
|
||||
Net
borrowings and repayment on Swingline credit facility
|
599
|
1,145
|
||||||||
Repurchase
of Class A common stock
|
(20,679)
|
(1,788)
|
||||||||
Payment
of bond premium
|
(4,231)
|
—
|
||||||||
Payments
to redeem 9% notes
|
(94,031)
|
—
|
||||||||
Payment
of dividend on common stock
|
(14,609)
|
(10,010)
|
||||||||
Proceeds
from exercise of stock options
|
95
|
30
|
||||||||
Tax
benefit related to stock options exercised
|
1
|
1
|
||||||||
Payments
on capital lease obligations
|
|
|
(17)
|
|
|
(24)
|
||||
Payments
of costs related to bank credit facility and debt
financing
|
(273)
|
—
|
||||||||
Book
overdraft
|
—
|
(729)
|
||||||||
Net
cash provided by (used in) financing activities
|
|
3,977
|
|
(20,499)
|
||||||
CASH
FLOWS OF DISCONTINUED OPERATIONS
|
||||||||||
Operating
cash flows
|
(2,336)
|
—
|
||||||||
Investing
cash flows
|
11,778
|
—
|
||||||||
Total
cash inflow from discontinued operations
|
9,442
|
—
|
||||||||
Net
increase (decrease) in cash and cash equivalents
|
|
|
(3,489)
|
|
|
(37)
|
|
|||
Cash
and cash equivalents at beginning of year
|
|
3,979
|
|
710
|
||||||
Cash
and cash equivalents at end of period
|
|
$
|
490
|
|
|
$
|
673
|
|
||
Supplemental
disclosures of cash flow information:
|
||||||||||
|
Cash
paid during the period for
|
|
|
|
|
|
||||
Interest
|
$
|
19,012
|
$
|
18,691
|
||||||
|
|
Income
taxes
|
|
$
|
199
|
|
|
$
|
293
|
|
Non-cash
investing and financing activities:
|
||||||||||
Assets acquired
through capital lease obligations
|
$
|
—
|
$
|
800
|
Amount
|
||||
(Dollars
in thousands)
|
||||
Asset
|
||||
Property
and equipment
|
$ |
130
|
||
Domain
and brand names
|
337
|
|||
Subscriber
list
|
151
|
|||
Customer
lists and contracts
|
32
|
|||
Goodwill
|
21
|
|||
$ |
671
|
|
|
||||||
Three
Months Ended
September
30, 2006
|
Nine
Months Ended
September
30, 2006
|
||||||
(Dollars
in thousands)
|
|||||||
Operating
loss
|
$ | (114) | $ | (274) | |||
Gain
on sale or exchange of radio stations
|
1,387
|
2,043
|
|||||
Gain
from discontinued operations before income taxes
|
1,273
|
1,769
|
|||||
Provision
for income taxes
|
471
|
663
|
|||||
Income
from discontinued operations, net of tax
|
$ |
802
|
$ |
1,106
|
|||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2006
|
2007
|
2006
|
2007
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Stock
option compensation expense included in corporate expenses
|
$ |
671
|
$ |
643
|
$ |
2,845
|
$ |
1,741
|
||||||||
Restricted
stock units compensation expense included in corporate
expenses
|
22
|
15
|
66
|
47
|
||||||||||||
Stock
option compensation expense included in broadcast operating
expenses
|
211
|
180
|
584
|
617
|
||||||||||||
Stock
option compensation expense included in non-broadcast operating
expenses
|
22
|
43
|
51
|
110
|
||||||||||||
Total
stock-based compensation expense
|
$ |
926
|
$ |
881
|
$ |
3,546
|
$ |
2,515
|
||||||||
Tax
benefit from stock-based compensation expense
|
(361 | ) | (385 | ) | (1,406 | ) | (1,108 | ) | ||||||||
Total
stock-based compensation expense net of tax benefit
|
$ |
565
|
$ |
496
|
$ |
2,140
|
$ |
1,407
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2006
|
2007
|
2006
|
2007
|
|||||||||||||
Expected
volatility
|
53.90 | % | 46.44 | % | 52.55 | % | 44.76 | % | ||||||||
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
|
4.80 | % | 4.16 | % | 4.93 | % | 4.48 | % |
Options
|
Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Term
|
Weighted
Average Grant Date Fair Value
|
Aggregate
Intrinsic Value
|
||||||||||||
Outstanding
at January 1, 2006
|
1,924,269
|
$ |
23.82
|
$ |
—
|
||||||||||||
Granted
|
361,950
|
13.39
|
$ |
7.47
|
—
|
||||||||||||
Exercised
|
(8,250 | ) |
11.58
|
8,605
|
|||||||||||||
Forfeited
or expired
|
(118,905 | ) |
22.20
|
—
|
|||||||||||||
Outstanding
at September 30, 2006
|
2,159,064
|
22.19
|
4.8
years
|
—
|
|||||||||||||
Exercisable
at September 30, 2006
|
1,309,337
|
25.25
|
3.3
years
|
—
|
|||||||||||||
Outstanding
at January 1, 2007
|
2,146,564
|
$ |
22.30
|
$ |
—
|
||||||||||||
Granted
|
393,900
|
11.79
|
$ |
8.10
|
—
|
||||||||||||
Exercised
|
(2,500 | ) |
11.81
|
4,219
|
|||||||||||||
Forfeited
or expired
|
(106,790 | ) |
19.59
|
—
|
|||||||||||||
Outstanding
at September 30, 2007
|
2,431,174
|
$ |
20.73
|
4.5
years
|
—
|
||||||||||||
Exercisable
at September 30, 2007
|
1,436,762
|
$ |
24.32
|
2.8
years
|
—
|
Restricted
Stock Units
|
Shares
|
Weighted
Average Grant Date Fair Value
|
||||||
Non-Vested
at January 1, 2006
|
5,000
|
$ |
17.90
|
|||||
Granted
|
6,000
|
11.15
|
||||||
Vested
|
(5,000 | ) |
17.90
|
|||||
Forfeited
|
—
|
—
|
||||||
Non-Vested
at September 30, 2006
|
6,000
|
$ |
11.15
|
|||||
Non-Vested
at January 1, 2007
|
6,000
|
$ |
11.15
|
|||||
Granted
|
5,000
|
10.15
|
||||||
Vested
|
(6,000 | ) |
11.15
|
|||||
Forfeited
|
—
|
—
|
||||||
Non-Vested
at September 30, 2007
|
5,000
|
$ |
10.15
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2006
|
2007
|
2006
|
2007
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Mark-to-market
gain (loss)
|
$ | (2,551 | ) | $ | (2,496 | ) | $ |
770
|
$ | (1,123 | ) | |||||
Less
tax provision (benefit)
|
(1,083 | ) | (998 | ) |
308
|
(449 | ) | |||||||||
Other
comprehensive income (loss)
|
$ | (1,468 | ) | $ | (1,498 | ) | $ |
462
|
$ | (674 | ) |
December
31, 2006
|
September
30, 2007
|
|||||||
(Dollars
in thousands)
|
||||||||
Term
loans under credit facility
|
$ |
238,125
|
$ |
236,100
|
||||
Revolving
line of credit under credit facility
|
19,100
|
12,000
|
||||||
Swingline
credit facility
|
1,241
|
2,387
|
||||||
7¾%
Senior Subordinated Notes due 2010
|
100,000
|
100,000
|
||||||
Fair
market value of interest rate swap agreement
|
—
|
284
|
||||||
Seller
financed note to acquire Townhall.com
|
2,444
|
2,526
|
||||||
Capital
leases and other loans
|
116
|
856
|
||||||
361,026
|
354,153
|
|||||||
Less
current portion
|
2,048
|
3,696
|
||||||
$ |
358,978
|
$ |
350,457
|
Twelve
Months Ended September 30,
|
Amount
|
|||
(Dollars
in thousands)
|
||||
2008
|
$ |
3,696
|
||
2009
|
18,088
|
|||
2010
|
231,335
|
|||
2011
|
100,024
|
|||
2012
|
30
|
|||
Thereafter
|
696
|
|||
353,869
|
||||
Fair
value of interest rate swap
|
284
|
|||
|
$ |
354,153
|
As
of September 30, 2007
|
||||||||||||
|
Accumulated
|
|
||||||||||
Cost
|
Amortization
|
Net
|
||||||||||
(Dollars
in thousands)
|
||||||||||||
Customer
lists and contracts
|
$ |
10,588
|
$ | (7,292 | ) | $ |
3,296
|
|||||
Domain
and brand names
|
4,906
|
(2,262 | ) |
2,644
|
||||||||
Favorable
and assigned leases
|
1,581
|
(1,209 | ) |
372
|
||||||||
Other
amortizable intangible assets
|
2,877
|
(2,418 | ) |
459
|
||||||||
$ |
19,952
|
$ | (13,181 | ) | $ |
6,771
|
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
(October 1 – December 31)
|
|
|
$
|
700
|
|
2008
|
2,667
|
||||
2009
|
|
|
|
1,417
|
|
2010
|
933
|
||||
2011
|
|
|
|
369
|
|
Thereafter
|
685
|
||||
Total
|
$
|
6,771
|
Radio
Broadcasting
|
Non-broadcast
|
Corporate
|
Consolidated
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Three
Months Ended September 30, 2006
|
||||||||||||||||
Net
revenue
|
$ |
52,509
|
$ |
5,402
|
$ |
—
|
$ |
57,911
|
||||||||
Operating
expenses
|
31,821
|
5,311
|
5,637
|
42,769
|
||||||||||||
Operating
income (loss before depreciation, amortization and (gain) loss
on disposal
of assets
|
20,688
|
91
|
(5,637 | ) |
15,142
|
|||||||||||
Depreciation
|
2,640
|
261
|
297
|
3,198
|
||||||||||||
Amortization
|
122
|
632
|
5
|
759
|
||||||||||||
Operating
income (loss) before income taxes
|
$ |
17,926
|
$ | (802 | ) | $ | (5,939 | ) | $ |
11,185
|
Three
Months Ended September 30, 2007
|
||||||||||||||||
Net
revenue
|
$ |
51,888
|
$ |
6,208
|
$ |
—
|
$ |
58,096
|
||||||||
Operating
expenses
|
32,719
|
5,820
|
5,425
|
43,964
|
||||||||||||
Operating
income (loss) before depreciation, amortization and (gain) loss
on
disposal of assets
|
19,169
|
388
|
(5,425 | ) |
14,132
|
|||||||||||
Depreciation
|
2,511
|
181
|
281
|
2,973
|
||||||||||||
Amortization
|
23
|
721
|
4
|
748
|
||||||||||||
Operating
income (loss) before income taxes
|
$ |
16,635
|
$ | (514 | ) | $ | (5,710 | ) | $ |
10,411
|
Radio
Broadcasting
|
Non-broadcast
|
Corporate
|
Consolidated
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Nine
Months Ended September 30, 2006
|
||||||||||||||||
Net
revenue
|
$ |
154,664
|
$ |
13,338
|
$ |
—
|
$ |
168,002
|
||||||||
Operating
expenses
|
97,013
|
12,570
|
18,333
|
127,916
|
||||||||||||
Operating
income (loss) before depreciation, amortization and (gain) loss
on
disposal of assets
|
57,651
|
768
|
(18,333 | ) |
40,086
|
|||||||||||
Depreciation
|
7,690
|
486
|
880
|
9,056
|
||||||||||||
Amortization
|
574
|
1,474
|
14
|
2,062
|
||||||||||||
Operating
income (loss) before income taxes
|
$ |
49,387
|
$ | (1,192 | ) | $ | (19,227 | ) | $ |
28,968
|
Nine
Months Ended September 30, 2007
|
||||||||||||||||
Net
revenue
|
$ |
155,978
|
$ |
18,250
|
$ |
—
|
$ |
174,228
|
||||||||
Operating
expenses
|
98,831
|
16,743
|
16,735
|
132,309
|
||||||||||||
Operating
income (loss) before depreciation, amortization and (gain) loss
on
disposal of assets
|
57,147
|
1,507
|
(16,735 | ) |
41,919
|
|||||||||||
Depreciation
|
7,673
|
470
|
844
|
8,987
|
||||||||||||
Amortization
|
113
|
2,207
|
14
|
2,334
|
||||||||||||
Operating
income (loss) before income taxes
|
$ |
49,361
|
$ | (1,170 | ) | $ | (17,593 | ) | $ |
30,598
|
Radio
Broadcasting
|
Non-broadcast
|
Corporate
|
Consolidated
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
December
31, 2006
|
||||||||||||||||
Total
property, plant and equipment, net
|
$ |
115,604
|
$ |
2,830
|
$ |
10,279
|
$ |
128,713
|
||||||||
Goodwill
|
5,011
|
15,587
|
8
|
20,606
|
||||||||||||
September
30, 2007
|
||||||||||||||||
Total
property, plant and equipment, net
|
$ |
115,875
|
$ |
4,897
|
$ |
10,122
|
$ |
130,894
|
||||||||
Goodwill
|
4,857
|
15,633
|
8
|
20,498
|
Reconciliation
of operating income from continuing operations before depreciation,
amortization, and (gain) loss on disposal of assets to income from
continuing operations before income taxes:
|
||||||||||||||||
Three
Months Ended
|
Nine
months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2006
|
2007
|
2006
|
2007
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Operating
income before depreciation, amortization, and gain (loss) on disposal
of
assets
|
$ |
15,142
|
$ |
14,132
|
$ |
40,086
|
$ |
41,919
|
||||||||
Depreciation
expense
|
(3,198 | ) | (2,973 | ) | (9,056 | ) | (8,987 | ) | ||||||||
Amortization
expense
|
(759 | ) | (748 | ) | (2,062 | ) | (2,334 | ) | ||||||||
Interest
income
|
68
|
52
|
114
|
160
|
||||||||||||
Gain
(loss) on disposal of assets
|
(167 | ) | (309 | ) |
18,872
|
2,326
|
||||||||||
Interest
expense
|
(6,490 | ) | (6,375 | ) | (19,857 | ) | (19,137 | ) | ||||||||
Loss
on early redemption of long-term debt
|
(3,625 | ) |
—
|
(3,625 | ) |
—
|
||||||||||
Other
income (expense), net
|
(120 | ) |
83
|
(466 | ) |
230
|
||||||||||
Income
from continuing operations before income taxes
|
$ |
851
|
$ |
3,862
|
$ |
24,006
|
$ |
14,177
|
As
of September 30, 2007
|
|||||||||||||||||||||||||
Issuer
and
|
|||||||||||||||||||||||||
Guarantor
|
|||||||||||||||||||||||||
Guarantors
|
Subsidiaries
|
||||||||||||||||||||||||
Parent
|
AcquisitionCo
|
Other
Media
|
Salem
Holding
|
Adjustments
|
Salem
Consolidated
|
||||||||||||||||||||
Current
assets:
|
|||||||||||||||||||||||||
Cash
and cash equivalents
|
$ |
—
|
$ |
95
|
$ |
255
|
$ |
323
|
$ |
—
|
$ |
673
|
|||||||||||||
Trade
accounts receivable, net
|
—
|
3,002
|
772
|
27,682
|
(97 | ) |
31,359
|
||||||||||||||||||
Other
receivables
|
—
|
8
|
5
|
367
|
—
|
380
|
|||||||||||||||||||
Prepaid
expenses
|
—
|
83
|
260
|
2,241
|
—
|
2,584
|
|||||||||||||||||||
Income
tax receivable
|
—
|
7
|
(3 | ) |
34
|
—
|
38
|
||||||||||||||||||
Deferred
income taxes
|
—
|
362
|
142
|
4,621
|
—
|
5,125
|
|||||||||||||||||||
Total
current assets
|
—
|
3,557
|
1,431
|
35,268
|
(97 | ) |
40,159
|
||||||||||||||||||
Investment
in subsidiaries
|
226,266
|
—
|
—
|
—
|
(226,266 | ) |
—
|
||||||||||||||||||
Property,
plant and equipment, net
|
—
|
8,232
|
576
|
122,086
|
—
|
130,894
|
|||||||||||||||||||
Broadcast
licenses
|
—
|
94,473
|
—
|
377,990
|
—
|
472,463
|
|||||||||||||||||||
Goodwill
|
—
|
10,281
|
2,575
|
7,642
|
—
|
20,498
|
|||||||||||||||||||
Other
indefinite-lived intangible assets
|
—
|
—
|
2,892
|
—
|
—
|
2,892
|
|||||||||||||||||||
Amortizable
intangible assets, net
|
—
|
4,276
|
1,106
|
1,389
|
—
|
6,771
|
|||||||||||||||||||
Bond
issue costs
|
—
|
—
|
—
|
481
|
—
|
481
|
|||||||||||||||||||
Bank
loan fees
|
—
|
—
|
—
|
2,237
|
—
|
2,237
|
|||||||||||||||||||
FV
of interest rate swap
|
—
|
—
|
—
|
451
|
—
|
451
|
|||||||||||||||||||
Intercompany
receivables
|
99,944
|
10,845
|
—
|
114,768
|
(225,557 | ) |
—
|
||||||||||||||||||
Other
assets
|
—
|
60
|
30
|
4,455
|
—
|
4,545
|
|||||||||||||||||||
Total
assets
|
$ |
326,210
|
$ |
131,724
|
$ |
8,610
|
$ |
666,767
|
$ | (451,920 | ) | $ |
681,391
|
As
of September 30, 2007
|
||||||||||||||||||||||||
Issuer
and
|
||||||||||||||||||||||||
Guarantor
|
||||||||||||||||||||||||
Guarantors
|
Subsidiaries
|
|||||||||||||||||||||||
Other
|
Salem
|
|||||||||||||||||||||||
Parent
|
AcquisitionCo
|
Media
|
Salem
Holding
|
Adjustments
|
Consolidated
|
|||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||||||
Accounts
payable
|
$ |
—
|
$ | (48 | ) | $ |
46
|
$ |
1,548
|
$ |
—
|
$ |
1,546
|
|||||||||||
Accrued
expenses
|
—
|
476
|
410
|
4,914
|
(164 | ) |
5,636
|
|||||||||||||||||
Accrued
compensation and related expenses
|
—
|
895
|
186
|
6,425
|
—
|
7,506
|
||||||||||||||||||
Accrued
interest
|
—
|
—
|
—
|
3,829
|
—
|
3,829
|
||||||||||||||||||
Deferred
revenue
|
—
|
—
|
4,171
|
561
|
—
|
4,732
|
||||||||||||||||||
Current
maturities of long-term debt
|
—
|
1,242
|
—
|
2,454
|
—
|
3,696
|
||||||||||||||||||
Total
current liabilities
|