Annual report pursuant to Section 13 and 15(d)

Segment Data

v3.22.0.1
Segment Data
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Segment Data
NOTE 19. SEGMENT DATA
FASB ASC Topic 280, “
Segment Reporting
,” requires companies to provide certain information about their operating segments. We have three
operating segments: (1) Broadcast, (2) Digital Media, and (3) Publishing, which also qualify as reportable segments. Our operating segments reflect how our chief operating decision makers, which we define as a collective group of senior executives, assess the performance of each operating segment, and determine the appropriate allocations of resources to each segment. We continually review our operating segment classifications to align with operational changes in our business and may make changes as necessary.
We measure and evaluate our operating segments based on operating income and operating expenses that do not include allocations of costs related to corporate functions, such as accounting and finance, human resources, legal, tax and treasury, which are reported as unallocated corporate expenses in our condensed consolidated statements of operations included in this annual report. We also exclude costs such as amortization, depreciation, taxes, and interest expense.
Segment performance, as defined by Salem, is not necessarily comparable to other similarly titled captions of other companies.
Broadcast
Our foundational business is radio broadcasting, which includes the ownership and operation of radio stations in large metropolitan markets. Our broadcasting segment includes our national networks and national sales firms. National companies often prefer to advertise across the United States as an efficient and cost-effective way to reach their target audiences. Our national platform under which we offer radio airtime, digital campaigns and print advertisements can benefit national companies by reaching audiences throughout the United States.
Salem Radio Network
TM
(“SRN
TM
”), based in Dallas, Texas, develops, produces, and syndicates a broad range of programming specifically targeted to Christian and family-themed talk stations, music stations and News Talk stations. SRN
TM
delivers programming via satellite to approximately 3,200 affiliated radio stations throughout the United States, including several of our Salem-owned stations. SRN
TM
operates five divisions, SRN
TM
Talk, SRN
TM
News, SRN
TM
Websites, SRN
TM
Satellite Services and Salem Music Network that includes Today’s Christian Music (“TCM”).
Salem Media Representatives (“SMR”) is our national advertising sales firm with offices in 12 U.S. cities. SMR specializes in placing national advertising on Christian and talk formatted radio stations as well as other commercial radio station formats. SMR sells commercial airtime to national advertisers on our radio stations and through our networks, as well as for independent radio station affiliates. SMR also contracts with independent radio stations to create custom advertising campaigns for national advertisers to reach multiple markets.
Salem Surround, our multimedia advertising agency with locations in 33 markets across the United States, offers a comprehensive suite of digital marketing services to develop and execute audience-based marketing strategies for clients on both the national and local level. Salem Surround specializes in digital marketing services for each of our radio stations and websites as well as provides a full-service digital marketing strategy for each of our clients.
Digital Media
Our digital media-based businesses provide Christian, conservative, investing content,
e-commerce,
audio and video streaming, and other resources digitally through the web. Salem Web Network (“SWN”) websites include Christian content websites; BibleStudyTools.com, Crosswalk.com
®
, GodVine.com, iBelieve.com, GodTube
®
.com, OnePlace
™
.com, Christianity.com, GodUpdates.com, CrossCards
™
.com, ChristianHeadlines.com, LightSource.com, AllCreated.com, ChristianRadio.com, CCMmagazine.com, SingingNews
®
.com and SouthernGospel.com and our conservative opinion
websites; collectively known as Townhall Media, include Townhall.com
®
, HotAir
™
.com, Twitchy
®
.com, RedState
®
.com, BearingArms.com, ConservativeRadio.com and pjmedia.com. We also publish digital newsletters through Eagle Financial Publications, which provide market analysis and
non-individualized
investment strategies from financial commentators on a subscription basis.
Our church
e-commerce
websites, including SermonSearch
™
.com, ChurchStaffing.com, WorshipHouseMedia.com, SermonSpice
™
.com, WorshipHouseKids.com, Preaching.com, ChristianJobs.com, ShiftWorship.com, JourneyBoxMedia.com, Playblackmedia.com, and HyperPixelsMedia.com, offer a variety of digital resources including videos, song tracks, sermon archives and job listings to pastors and Church leaders.
Our web content is accessible through all of our radio station websites that feature content of interest to local audiences throughout the United States.
Publishing
Our publishing operating segment includes 
two
businesses: (1) Regnery
®
Publishing and Salem Books, traditional book publishers that have published dozens of bestselling books by leading conservative and Christian authors and personalities and (2) Salem Author Services, a self-publishing service for authors through Xulon Press and Mill City Press.

The table below presents financial information for each operating segment as of December 31, 2021, and 2020 based on the composition of our operating segments:

    
Broadcast
    
Digital
Media
    
Publishing
    
Unallocated
Corporate
Expenses
    
Consolidated
  
    
(Dollars in thousands)
  
Year Ended December 31, 2021
 
                                
Net revenue
   
$
191,443
 
  
$
42,164
 
  
$
24,640
 
  
$
—  
 
  
$
258,247
 
Operating expenses
   
 
145,720
 
  
 
33,797
 
  
 
23,220
 
  
 
17,483
 
  
 
220,220
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net operating income (loss) before depreciation, amortization, debt modification costs and net (gain) loss on the disposition of assets
   
$
45,723
 
  
$
8,367
 
  
$
1,420
 
  
$
(17,483
) 
  
$
38,027
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Debt modification costs
   
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
2,526
 
  
 
2,526
 
Depreciation
   
 
6,186
 
  
 
3,557
 
  
 
210
 
  
 
980
 
  
 
10,933
 
Amortization
   
 
17
 
  
 
1,541
 
  
 
337
 
  
 
—  
 
  
 
1,895
 
Net (gain) loss on the disposition of assets
   
 
(23,212
) 
  
 
(83
) 
  
 
(306
) 
  
 
26
 
  
 
(23,575
) 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Operating income (loss)
   
$
62,732
 
  
$
3,352
 
  
$
1,179
 
  
$
(21,015
) 
  
$
46,248
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
  
Broadcast
 
  
Digital
Media
 
 
Publishing
 
 
Unallocated
Corporate
Expenses
 
 
Consolidated
 
 
  
(Dollars in thousands)
 
Year Ended December 31, 2020
 
Net revenue
    $ 178,127      $ 39,593     $ 18,519     $ —       $ 236,239  
Operating expenses
      140,942        31,725       21,950       16,194       210,811  
    
 
 
     
 
 
    
 
 
    
 
 
    
 
 
  
Net operating income (loss) before depreciation, amortization, impairments, change in estimated fair value of contingent
earn-out
consideration and net (gain) loss on the disposition of assets
    $ 37,185      $ 7,868     $ (3,431 )    $ (16,194 )    $ 25,428  
    
 
 
     
 
 
    
 
 
    
 
 
    
 
 
  
Depreciation
      6,464        3,096       281       936       10,777  
Amortization
      23        2,416       841       1       3,281  
Impairment of indefinite-lived long-term assets other than goodwill
      —          (12 )      —         —         (12 ) 
Impairment of goodwill
      16,994        —         260       —         17,254  
Change in estimated fair value of contingent
earn-out
consideration
      184        10       105       8       307  
Net (gain) loss on the disposition of assets
      1,554        —         2       19       1,575  
    
 
 
     
 
 
    
 
 
    
 
 
    
 
 
  
Operating income (loss)
    $ 11,966      $ 2,358     $ (4,920 )    $ (17,158 )    $ (7,754 ) 
    
 
 
     
 
 
    
 
 
    
 
 
    
 
 
  
 
 
  
Broadcast
 
  
Digital
Media
 
  
Publishing
 
  
Corporate
 
  
Consolidated
 
 
  
(Dollars in thousands)
 
As of December 31, 2021
  
      
  
      
  
      
  
      
Inventories, net
   
$
—  
 
   
$
—  
 
   
$
960
 
   
$
—  
 
   
$
960
 
Property and equipment, net
   
 
61,694
 
   
 
8,447
 
   
 
746
 
   
 
8,452
 
   
 
79,339
 
Broadcast licenses
   
 
320,008
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
320,008
 
Goodwill
   
 
2,750
 
   
 
19,790
 
   
 
1,446
 
   
 
—  
 
   
 
23,986
 
Amortizable intangible assets, net
   
 
229
 
   
 
2,215
 
   
 
—  
 
   
 
—  
 
   
 
2,444
 
 
 
  
Broadcast
 
  
Digital
Media
 
  
Publishing
 
  
Corporate
 
  
Consolidated
 
 
  
(Dollars in thousands)
 
As of December 31, 2020
  
      
  
      
  
      
  
      
Inventories, net
    $ —        $ —        $ 495      $ —        $ 495  
Property and equipment, net
      64,231        6,221        741        7,929        79,122  
Broadcast licenses
      319,773        —          —          —          319,773  
Goodwill
      2,746        19,565        1,446        —          23,757  
Amortizable intangible assets, net
      246        3,434        337        —          4,017