UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

 

 

PURSUANT TO SECTION 13 OR 15(D) OF THE

 

 

SECURITIES EXCHANGE ACT OF 1934

 

 

Date of Report (Date of earliest event reported): August 6, 2008

 

 

SALEM COMMUNICATIONS CORPORATION

 

 

(Exact Name of Registrant as Specified in its Charter)


 

[form8k8608001.jpg]

 

Delaware

 

000-26497

 

77-0121400

(State or Other Jurisdiction

 

(Commission

 

(IRS Employer

of Incorporation)

 

File Number)

 

Identification No.)

 

4880 Santa Rosa Road, Camarillo, California

 

93012

(Address of Principal Executive Offices)

 

(Zip Code)


 

Registrant's telephone number, including area code: (805) 987-0400

 

Not Applicable

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[   ]Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[   ]Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[   ]Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[   ]Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 













TABLE OF CONTENTS

 

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

ITEM 7.01 REGULATION FD DISCLOSURE

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

EXHIBITS

SIGNATURE

EXHIBIT INDEX

Exhibit 99.1







ITEM 2.02     RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On August 6, 2008, Salem Communications Corporation issued a press release regarding its results of operations for the quarter ended June 30, 2008.

 

 

ITEM 7.01     REGULATION FD DISCLOSURE

 

 

On August 6, 2008, Salem Communications Corporation issued a press release regarding its results of operations for the quarter ended June 30, 2008.

 

 

ITEM 9.01     FINANCIAL STATEMENTS AND EXHIBITS

 

 

(c)     Exhibits. The following exhibit is furnished with this report on Form 8-K:

 

Exhibit No.

 

Description

99.1

 

Press release, dated August 6, 2008, of Salem Communications Corporation regarding its results of operations for the quarter ended June 30, 2008.








SIGNATURE 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

 

 

 

 

SALEM COMMUNICATIONS CORPORATION

 

 

 

Date: August 6, 2008

 

By: /s/ EVAN D. MASYR

 

 

Evan D. Masyr

 

 

Senior Vice President and

Chief Financial Officer








EXHIBIT INDEX



Exhibit No.

 

Description

99.1

 

Press release, dated August 6, 2008, of Salem Communications Corporation regarding its results of operations for the quarter ended June 30, 2008.












EXHIBIT 99.1


[form8k8608002.jpg]




SALEM COMMUNICATIONS ANNOUNCES SECOND QUARTER 2008 TOTAL REVENUE OF $57.5 MILLION  


CAMARILLO, CA August 6, 2008 – Salem Communications Corporation (Nasdaq: SALM), a leading U.S. radio broadcaster, Internet content provider, and magazine and book publisher targeting audiences interested in Christian and family-themed content and conservative values, today announced results for the three and six months ended June 30, 2008.


Second Quarter 2008 Results


For the quarter ended June 30, 2008 compared to the quarter ended June 30, 2007:

·

Total revenue decreased 2.2% to $57.5 million from $58.8 million;

·

Operating expenses decreased 1.6% to $47.2 million from $47.9 million;

·

Operating income decreased 5.0% to $10.3 million from $10.9 million;

·

Net income increased 20.5% to $3.5 million, or $0.15 net income per diluted share, from $2.9 million, or $0.12 net income per diluted share;

·

EBITDA increased 0.4% to $14.8 million from $14.7 million;

·

Adjusted EBITDA decreased 9.0% to $14.7 million from $16.2 million;


Broadcast

·

Net broadcast revenue decreased 5.1% to $49.9 million from $52.6 million;

·

Station operating income (“SOI”) decreased 9.0% to $18.0 million from $19.8 million;

·

Same station net broadcast revenue decreased 5.5% to $48.4 million from $51.2 million;

·

Same station SOI decreased 8.3% to $17.8 million from $19.5 million;

·

Same station SOI margin decreased to 36.8% from 38.0%;


Non-broadcast

·

Non-broadcast revenue increased 21.9% to $7.5 million from $6.2 million; and

·

Non-broadcast operating income decreased 18.0% to $0.7 million from $0.8 million.


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

·

A $0.6 million income ($0.03 gain per diluted share), net of tax, from discontinued operations primarily consisting of:

o

A $0.8 million gain, net of tax, from the sale of WFZH-FM in Milwaukee, Wisconsin; and

o

The operating results of radio station WRFD-AM in Columbus, Ohio and CCM Magazine;

·

A $0.6 million non-cash compensation charge ($0.3 million, net of tax, or $0.01 per share) related to the expensing of stock options consisting primarily of:

o

$0.4 million non-cash compensation included in corporate expenses; and

o

$0.1 million non-cash compensation included in broadcast operating expenses.


Included in the results for the quarter ended June 30, 2007 are:

·

A $0.6 million loss ($0.4 million loss, net of tax, or $0.02 per share) on the disposal of assets; and

·

A $0.9 million non-cash compensation charge ($0.5 million, net of tax, or $0.02 per share) related to the expensing of stock options consisting primarily of:








o

$0.6 million non-cash compensation included in corporate expenses; and

o

$0.2 million non-cash compensation included in broadcast operating expenses.


These results reflect the reclassification of the operations of our Columbus, Ohio and Milwaukee, Wisconsin radio stations to discontinued operations for all periods presented. These stations had net broadcast revenue of approximately $1.0 million and generated a profit of $0.2 million for the quarter ended June 30, 2007 and net broadcast revenue of approximately $0.5 million and generated a profit of $0.1 million for the quarter ended June 30, 2008.  


Additionally, these results reflect the reclassification of the operations of CCM Magazine to discontinued operations for all periods presented. The magazine had non-broadcast revenue of $0.2 million and generated a loss of $0.1 million for the quarter ended June 30, 2007 and net broadcast revenue of approximately $0.1 million and generated no profit for the quarter ended June 30, 2008.


Other comprehensive income of $2.0 million, net of tax, for the quarter ended June 30, 2008 and $1.1 million, net of tax, for the quarter ended June 30, 2007 is due to the change in fair market value of the company’s interest rate swaps.


Per share numbers are calculated based on 23,668,788 diluted weighted average shares for the quarter ended June 30, 2008, and 23,855,967 diluted weighted average shares for the comparable 2007 period.


Year to Date 2008 Results


For the six month period ended June 30, 2008 compared to the six month period ended June 30, 2007:

·

Total revenue decreased 1.8% to $111.5 million from $113.6 million;

·

Operating expenses decreased 2.9% to $88.4 million from $91.0 million;

·

Operating income increased 2.4% to $23.2 million from $22.6 million;

·

Net income increased 45.1% to $8.5 million, or $0.36 net income per diluted share, from $5.9 million or $0.25 net income per diluted share;

·

EBITDA increased 8.4% to $32.9 million from $30.4 million;

·

Adjusted EBITDA decreased 10.5% to $26.2 million from $29.3 million;


Broadcast

·

Net broadcast revenue decreased 4.2% to $97.9 million from $102.1 million;

·

SOI decreased 9.2% to $34.2 million from $37.6 million;

·

Same station net broadcast revenue decreased 4.8% to $94.5 million from $99.3 million;

·

Same station SOI decreased 8.2% to $33.9 million from $37.0 million;

·

Same station SOI margin decreased to 35.9% from 37.2%;


Non-broadcast

·

Non-broadcast revenue increased 19.1% to $13.7 million from $11.5 million; and

·

Non-broadcast operating income decreased 50.8% to $0.6 million from $1.2 million


Included in the results for the six month period ended June 30, 2008 are:

·

A $6.0 million gain primarily from the disposal of the assets of KTEK-AM in Houston, Texas ($3.4 million gain, net of tax, or $0.14 per diluted share);

·

A $2.1 million income ($0.09 gain per diluted share), net of tax, from discontinued operations consisting primarily of:

o

A $1.3 million gain, net of tax, from the sale of WRRD-AM in Milwaukee, Wisconsin;

o

A $0.8 million gain, net of tax, from the sale of WFZH-FM in Milwaukee, Wisconsin; and

o

The operating results of radio station WRFD-AM in Columbus, Ohio and the operating results of CCM Magazine;

·

A $1.3 million non-cash compensation charge ($0.7 million, net of tax, or $0.03 per share) related to the expensing of stock options consisting of:

o

$1.0 million non-cash compensation included in corporate expenses;  

o

$0.2 million non-cash compensation included in broadcast operating expenses; and

o

$0.1 million non-cash compensation included in non-broadcast operating expenses.


Included in the results for the six month period ended June 30, 2007 are:

·

A $3.4 million pre-tax gain  from the sale of selected assets of WKNR-AM in Cleveland, Ohio, partially offset by the pre-tax loss of $0.5 million recognized on the sale of radio station WVRY-FM, Nashville, Tennessee and various fixed asset disposals; and

·

A $1.6 million non-cash compensation charge ($0.9 million, net of tax, or $0.04 per share) related to the expensing of stock options consisting of:

o

$1.1 million non-cash compensation included in corporate expenses;

o

$0.4 million non-cash compensation included in broadcast operating expenses; and

o

$0.1 million non-cash compensation included in non-broadcast operating expenses.


These results reflect the reclassification of the operations of our Columbus, Ohio and Milwaukee, Wisconsin radio stations to discontinued operations for all periods presented. These stations had net broadcast revenue of approximately $1.9 million and generated a profit of $0.3 million for the six months ended June 30, 2007 and net broadcast revenue of approximately $1.3 million and generated a profit of $0.1 million for the six months ended June 30, 2008.  


Additionally, these results reflect the reclassification of the operations of CCM Magazine to discontinued operations for all periods presented. The magazine had non-broadcast revenue of $0.6 million and generated no profit for the six months ended June 30, 2007 and non-broadcast revenue of approximately $0.4 million and generated a profit of $0.1 million for the six months ended June 30, 2008.


Other comprehensive loss $0.2 million, net of tax, for the six months ended June 30, 2008 and other comprehensive income of $0.8 million, net of tax, for the six months ended June 30, 2007 is due to the change in fair market value of the company's interest rate swaps.


Per share numbers are calculated based on 23,668,788 diluted weighted average shares for the six months ended June 30, 2008 and 23,854,518 diluted weighted average shares for the comparable 2007 period.


Balance Sheet


As of June 30, 2008, the company had net debt of $343.6 million and was in compliance with the covenants of its credit facilities and bond indentures. The company’s bank leverage ratio was 5.99 versus a compliance covenant of 6.75 and its bond leverage ratio was 6.03 versus a compliance covenant of 7.0.


Acquisitions and Divestitures


The following transactions were completed since April 1, 2008:

·

Three transmitter sites were acquired from principal shareholders on April 8, 2008 for approximately $5.0 million;

·

WMCU (1080 AM) in Miami, Florida was acquired for approximately $12.3 million on April 11, 2008 (Salem began operating the station under a local marketing agreement on October 18, 2007);

·

WFZH (105.3 FM) in Milwaukee, Wisconsin, was sold for $8.1 million on May 30, 2008 which resulted in a pre-tax gain of $1.4 million;

·

Intercristo.com was purchased for $1.2 million on June 6, 2008; and

·

WAMD (970 AM) in Baltimore, Maryland was acquired for approximately $2.7 million on July 18, 2008.

The following transactions are currently pending:

·

KKSN (910 AM) in Portland, Oregon will be acquired for approximately $4.5 million (Salem began operating this station under a local marketing agreement on February 1, 2007 with the call letters KTRO);

·

KKMO (1360 AM) in Seattle, Washington will be sold for approximately $3.7 million; and

·

WRFD (880 AM) in Columbus, Ohio will be sold for approximately $4.0 million.


Third Quarter 2008 Outlook


For the third quarter of 2008, Salem is projecting total revenue to decrease in the low-single digit range over third quarter 2007 total revenue of $56.9 million.  Salem is also projecting operating expenses before gain or loss on disposal of assets to be flat as compared to the third quarter of 2007 operating expenses of $46.6 million.


Conference Call Information

Salem will host a teleconference to discuss its results today, on August 6, 2008 at 2:00 p.m. Pacific Time. To access the teleconference, please dial (973) 582-2717 or listen via the investor relations portion of the company’s website, located at www.salem.cc.  A replay of the teleconference will be available through August 20, 2008 and can be heard by dialing (706) 645-9291, pass code 56241726 or on the investor relations portion of the company’s website, located at www.salem.cc.


In addition to its radio properties, Salem owns Salem Radio Network®, which syndicates talk, news and music programming to approximately 2,000 affiliates; Salem Radio Representatives™, a national radio advertising sales force; Salem Web Network™, an Internet provider of Christian content and online streaming; and Salem Publishing™, a publisher of Christian-themed magazines. Upon the close of all announced transactions, the company will own 94 radio stations, including 58 stations in 23 of the top 25 markets. Additional information about Salem may be accessed at the company’s website, www.salem.cc.



Company Contact:

Tomasita Aranda

Salem Communications

(805) 987-0400 ext. 1067

tomasitaa@salem.cc




Forward Looking Statements

Statements used in this press release that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated as a result of certain risks and uncertainties, including but not limited to the ability of Salem to close and integrate announced transactions, market acceptance of Salem’s radio station formats, competition from new technologies, adverse economic conditions, and other risks and uncertainties detailed from time to time in Salem's reports on Forms 10-K, 10-Q, 8-K and other filings filed with or furnished to the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Salem undertakes no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events.








Regulation G

Station operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA are financial measures not prepared in accordance with generally accepted accounting principles (“GAAP”). Station operating income is defined as net broadcast revenues minus broadcast operating expenses. Non-broadcast operating income is defined as non-broadcast revenue minus non-broadcast operating expenses.  EBITDA is defined as net income before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before discontinued operations (net of tax), gain or loss on the disposal of assets and non-cash compensation expense.  In addition, Salem has provided supplemental information as an attachment to this press release, reconciling these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP. The company believes these non-GAAP financial measures, when considered in conjunction with the most directly comparable GAAP financial measures, provide useful measures of the company’s operating performance.   


Station operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA are generally recognized by the broadcast industry as important measures of performance and are used by investors as well as analysts who report on the industry to provide meaningful comparisons between broadcast. Station operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA are not a measure of liquidity or of performance in accordance with GAAP, and should be viewed as a supplement to and not a substitute for, or superior to, the company’s results of operations presented on a GAAP basis such as operating income and net income. In addition, Salem’s definitions of station operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled measures reported by other companies.

































Salem Communications Corporation

 

 

 

 

 

Condensed Consolidated Statements of Operations

 

 

 

 

 

(in thousands, except share, per share and margin data)

 

 

 

 

 

 

 

 

 

 

 

 

 Three Months Ended

 

 Six Months Ended

 

 June 30,

 

 June 30,

 

 2007

 2008

 

 2007

 2008

 

 (unaudited)

Net broadcast revenue

 $       52,594

 $       49,938

 

 $     102,137

 $       97,855

Non-broadcast revenue

            6,174

            7,524

 

          11,462

          13,654

Total revenue

          58,768

          57,462

 

        113,599

        111,509

Operating expenses:

 

   

 

 

 

  Broadcast operating expenses

          32,788

          31,906

 

          64,498

          63,692

  Non-broadcast operating expenses

            5,351

            6,849

 

          10,309

          13,087

  Corporate expenses

            5,496

            4,482

 

          11,310

            9,759

  Depreciation and amortization

            3,652

            3,903

 

            7,505

            7,818

  (Gain) loss on disposal of assets

               631

                 10

 

           (2,638)

           (6,004)

Total operating expenses

          47,918

          47,150

 

          90,984

          88,352

Operating income

          10,850

          10,312

 

          22,615

          23,157

Other income (expense):

 

 

 

 

 

  Interest income

                 48

               113

 

               108

               134

  Interest expense

           (6,308)

           (5,488)

 

         (12,762)

         (11,562)

  Other income (expense), net

               182

                (49)

 

               147

              (100)

Income from continuing operations before income taxes

            4,772

            4,888

 

          10,108

          11,629

Provision for income taxes

            1,896

            1,996

 

            4,337

            5,135

Income from continuing operations

            2,876

            2,892

 

            5,771

            6,494

Income from discontinued operations, net of tax

                 48

               632

 

               118

            2,053

Net income

 $         2,924

 $         3,524

 

 $         5,889

 $         8,547

Other comprehensive income (loss), net of tax

            1,112

            1,961

 

               824

              (183)

Comprehensive income

 $         4,036

 $         5,485

 

 $         6,713

 $         8,364

 

 

 

 

 

 

Basic income per share before discontinued operations

 $           0.12

 $           0.12

 

 $           0.24

 $           0.27

Income from discontinued operations, net of tax

 $                 -   

 $           0.03

 

 $                 -   

 $           0.09

Basic income per share after discontinued operations

 $           0.12

 $           0.15

 

 $           0.25

 $           0.36

 

 

 

 

 

 

Diluted income per share before discontinued operations

 $           0.12

 $           0.12

 

 $           0.24

 $           0.27

Income from discontinued operations, net of tax

 $                 -   

 $           0.03

 

 $                 -   

 $           0.09

Diluted income per share after discontinued operations

 $           0.12

 $           0.15

 

 $           0.25

 $           0.36

 

 

 

 

 

 

Basic weighted average shares outstanding

   23,850,020

   23,668,788

 

   23,849,312

   23,668,788

Diluted weighted average shares outstanding

   23,855,967

   23,668,788

 

   23,854,518

   23,668,788

 

 

 

 

 

 

Other Data:

   

   

 

   

   

Station operating income

 $       19,806

 $       18,032

 

 $       37,639

 $       34,163

Station operating margin

37.7%

36.1%

 

36.9%

34.9%

 

 

 

 

 

 









Salem Communications Corporation

 

 

 

 

Condensed Consolidated Balance Sheets

 

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 December 31,

 

 June 30,

 

 

 2007

 

 2008

 

 

 

 

(unaudited)

Assets

 

 

 

 

Cash

 

 $              447

 

 $              278

Trade accounts receivable, net

 

            30,030

 

            30,321

Deferred income taxes

 

              5,567

 

              5,479

Other current assets

 

              3,256

 

              4,808

Assets of discontinued operations

 

              8,829

 

                 198

Property, plant and equipment, net

 

          130,857

 

          137,541

Intangible assets, net

 

          492,156

 

          500,076

Bond issue costs

 

                 444

 

                 370

Bank loan fees

 

              1,994

 

              1,488

Other assets

 

              6,218

 

              7,234

Total assets

 

 $       679,798

 

 $       687,793

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

Current liabilities

 

 $         26,290

 

 $         33,399

Long-term debt and capital lease obligations

 

          350,106

 

          335,005

Deferred income taxes

 

            61,381

 

            67,462

Other liabilities

 

              8,843

 

              9,071

Stockholders' equity

 

          233,178

 

          242,856

Total liabilities and stockholders' equity

 

 $       679,798

 

 $       687,793

 

 

   

 

   

























Salem Communications Corporation

 

 

 

 

 

Supplemental Information

 

 

 

 

 

(in thousands)

 

 

 

 

 

 

 Three Months Ended

 

 Six Months Ended

 

 June 30,

 

 June 30,

 

 2007

 2008

 

 2007

 2008

 

 (unaudited)

Capital expenditures

 

 

 

 

 

Acquisition related / income producing

 $         2,047

 $         1,427

 

 $         3,771

 $         2,801

Maintenance

            2,287

            1,056

 

            4,962

            2,613

 

 

 

 

 

 

Total capital expenditures

 $         4,334

 $         2,483

 

 $         8,733

 $         5,414

 

 

 

 

 

 

Tax information

 

 

 

 

 

Cash tax expense

 $              47

 $            371

 

 $            215

 $            309

Deferred tax expense

            1,849

            1,625

 

            4,122

            4,826

 

 

 

 

 

 

Provision for income taxes

 $         1,896

 $         1,996

 

 $         4,337

 $         5,135

 

 

 

 

 

 

Tax benefit of non-book amortization

 $         3,936

 $         3,714

 

 $         8,112

 $         7,841

 

 

 

 

 

 

Reconciliation of Same Station Net Broadcast Revenue to

 

 

 

 

 

  Total Net Broadcast Revenue

 

 

 

 

 

Net broadcast revenue - same station

 $       51,242

 $       48,449

 

 $       99,275

 $       94,543

Net broadcast revenue - acquisitions

                 71

426

 

121

936

Net broadcast revenue - dispositions

244

                 93

 

540

346

Net broadcast revenue - format changes

1,037

970

 

            2,201

2,030

 

 

 

 

 

 

Total net broadcast revenue

 $       52,594

 $       49,938

 

 $     102,137

 $       97,855

 

 

 

 

 

 

Reconciliation of Same Station Broadcast Operating Expenses to

 

 

 

 

 

  Total Broadcast Operating Expenses

 

 

 

 

 

Broadcast operating expenses - same station

 $       31,773

 $       30,605

 

 $       62,325

 $       60,634

Broadcast operating expenses - acquisitions

                 76

               322

 

               176

               774

Broadcast operating expenses - dispositions

               119

               113

 

               346

               239

Broadcast operating expenses - format changes

               820

               866

 

            1,651

            2,045

 

 

 

 

 

 

Total broadcast operating expenses

 $       32,788

 $       31,906

 

 $       64,498

 $       63,692

 

 

 

 

 

 

Reconciliation of Same Station Station Operating Income to

 

 

 

 

 

  Total Station Operating Income

 

 

 

 

 

Station operating income - same station

 $       19,469

 $       17,844

 

 $       36,950

 $       33,909

Station operating income - acquisitions

                  (5)

               104

 

                (55)

               162

Station operating income - dispositions

               125

                (20)

 

               194

               107

Station operating income - format changes

               217

               104

 

               550

                (15)

 

 

 

 

 

 

Total station operating income

 $       19,806

 $       18,032

 

 $       37,639

 $       34,163



Salem Communications Corporation

 

 

 

 

 

Supplemental Information

 

 

 

 

 

(in thousands)

 

 

 

 

 

 

 Three Months Ended

 

 Six Months Ended

 

 June 30,

 

 June 30,

 

 2007

 2008

 

 2007

 2008

 

 (unaudited)

Reconciliation of Station Operating Income and Non-Broadcast

 

 

 

 

 

  Operating Income to Operating Income

 

 

 

 

 

Station operating income

 $       19,806

 $       18,032

 

 $       37,639

 $       34,163

Non-broadcast operating income

               823

               675

 

            1,153

               567

Less:

 

 

 

 

 

  Corporate expenses

           (5,496)

           (4,482)

 

         (11,310)

           (9,759)

  Depreciation and amortization

           (3,652)

           (3,903)

 

           (7,505)

           (7,818)

  Gain (loss) on disposal of assets

              (631)

                (10)

 

            2,638

            6,004

Operating income

 $       10,850

 $       10,312

 

 $       22,615

 $       23,157

 

 

 

 

 

 

Reconciliation of Adjusted EBITDA to EBITDA to Net Income

 

 

 

 

 

Adjusted EBITDA

 $       16,195

 $       14,745

 

 $       29,263

 $       26,186

Less:

 

 

 

 

 

  Stock-based compensation

              (880)

              (569)

 

           (1,634)

           (1,315)

  Discontinued operations, net of tax

                 48

               632

 

               118

            2,053

  Gain (loss) on disposal of assets

              (631)

                (10)

 

            2,638

            6,004

EBITDA

          14,732

          14,798

 

          30,385

          32,928

Plus:

 

 

 

 

 

  Interest income

                 48

               113

 

               108

               134

Less:

 

 

 

 

 

  Depreciation and amortization

           (3,652)

           (3,903)

 

           (7,505)

           (7,818)

  Interest expense

           (6,308)

           (5,488)

 

         (12,762)

         (11,562)

  Provision for income taxes

           (1,896)

           (1,996)

 

           (4,337)

           (5,135)

Net income

 $         2,924

 $         3,524

 

 $         5,889

 $         8,547

 

   

    

   

   

   

 

 

 Applicable

 

 

 

 

 Outstanding

 Interest

 

 

 

 

 at 6/30/2008

 Rate

 

 

 

Selected Debt and Swap Data

 

 

 

 

 

  7 3/4% senior subordinated notes

 $     100,000

7.75%

 

 

 

  Senior bank term loan B debt (1)

          71,990

4.50%

 

 

 

  Senior bank term loan C debt (swap matures 7/1/2012) (2)

          30,000

6.74%

 

 

 

  Senior bank term loan C debt (swap matures 7/1/2012) (2)

          30,000

6.45%

 

 

 

  Senior bank term loan C debt (swap matures 7/1/2012) (2)

          30,000

6.28%

 

 

 

  Senior bank term C debt (at variable rates) (1)

          71,678

4.44%

 

 

 

  Senior bank revolving debt (1)

            7,000

4.25%

 

 

 

  Swingline credit facility (3)

               891

4.75%

 

 

 

 

   

 

 

   

 

(1)  Subject to rolling LIBOR plus a spread currently at 1.75% and incorporated into the rate set forth above.

 

 

 

 

 

 

 

 

 

(2)  Under its swap agreements, the Company pays a fixed rate plus a spread based on the Company's leverage, as defined in its

 

      credit agreement. As of June 30, 2008, that spread was 1.75% and is incorporated into the applicable interest rates set

 

      forth above.

 

 

 

 

 

 

 

 

 

 

 

(3)  Subject to prime interest rate less 0.25%.