Quarterly report pursuant to Section 13 or 15(d)

Segment Data

v3.23.1
Segment Data
 3 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
Segment Data
NOTE 17. 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 quarterly report on Form
10-Q.
We also exclude costs such as amortization, depreciation, taxes, and interest expense.
Segment performance, as we define it, 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 other 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 10 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 national multimedia advertising agency with locations in 29 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 providing a full-service multimedia marketing strategy for each of our clients.
Salem Podcast Network (“SPN”), is a highly specialized platform for conservative, political, news, and family-oriented podcasts. SPN reaches over 13 million downloads per month, and regularly ranks amongst the top 100 most downloaded news and political podcasts according to the Apple Podcast Rankings.
SalemNOW is our online destination to a watch variety of
on-demand.
SalemNOW is dedicated exclusive conservative and faith-based films consisting of box office hits, acclaimed documentaries, music festivals, interviews with top Christian artists, events with our conservative talk show hosts and many other videos. SalemNOW can be found on mobile apps, and streaming services such as Roku, Apple TV, Amazon Fire Stick and select smart TVs.
Salem News Channel (“SNC”) is a conservative news, opinion and commentary television network hosted by a number of engaging, compelling and respected conservative media personalities. SNC’s mission is to serve the media needs of audiences interested in political news and opinion content with a Judeo, Christian world vision and seeks to become the leading provider of conservative news and option content for the rapidly growing OTT television and multi-screen digital audience.
Digital Media
Our digital media-based businesses provide Christian, conservative, investing content, audio and video streaming, and other resources digitally through the web. Salem Web Network (“SWN”) websites include Christian content websites; BibleStudyTools.com, Crosswalk.com
®
, Christianity.com, iBelieve.com, GodTube
®
.com, OnePlace
®
.com, GodUpdates.com, CrossCards
™
.com, ChristianHeadlines.com, and LightSource.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 product websites, including SermonSearch
™
.com, ChurchStaffing.com, WorshipHouseMedia.com, SermonSpice
™
.com, WorshipHouseKids.com, Preaching.com, ChristianJobs.com, ShiftWorship.com, JourneyBoxMedia.com, Playbackmedia.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 March 31, 2023 and 2022 based on the composition of our operating segments:
 
    
Broadcast
    
Digital
Media
    
Publishing
    
Unallocated
Corporate
Expenses
    
Consolidated
  
                                
    
(Dollars in thousands)
  
Three Months Ended March 31, 2023
                                         
Net revenue
   
$
48,340
 
  
$
10,510
 
  
$
4,639
 
  
$
—  
 
  
$
63,489
 
Operating expenses
   
 
42,809
 
  
 
8,994
 
  
 
5,376
 
  
 
4,996
 
  
 
62,175
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net operating income (loss) before depreciation, amortization, change in the estimated fair value of contingent
earn-out
consideration, impairments and net (gain) loss on the disposition of assets
   
$
5,531
 
  
$
1,516
 
  
$
(737
) 
  
$
(4,996
) 
  
$
1,314
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Depreciation
   
 
1,555
 
  
 
1,026
 
  
 
63
 
  
 
206
 
  
 
2,850
 
Amortization
      —      
 
518
 
  
 
25
 
     —      
 
543
 
Change in the estimated fair value of contingent
earn-out
consideration
      —      
 
(2
) 
     —         —      
 
(2
) 
Impairment of indefinite-lived long-term assets other than goodwill
   
 
2,124
 
     —         —         —      
 
2,124
 
Net (gain) loss on the disposition of assets
   
 
(22
) 
     —         —      
 
1
 
  
 
(21
) 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net operating income (loss)
   
$
1,874
 
  
$
(26
) 
  
$
(825
) 
  
$
(5,203
) 
  
$
(4,180
) 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Three Months Ended March 31, 2022
                                         
Net revenue
    $ 48,432     $ 10,300     $ 3,877     $ —       $ 62,609  
Operating expenses
      38,121       8,473       4,467       4,810       55,871  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net operating income (loss) before debt modification costs, depreciation, amortization, change in the estimated fair value of contingent
earn-out
consideration and net (gain) loss on the disposition of assets
    $ 10,311     $ 1,827     $ (590 )    $ (4,810 )    $ 6,738  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Debt modification costs
      —         —         —         228       228  
Depreciation
      1,656       941       80       265       2,942  
Amortization
      4       330       —         —         334  
Change in the estimated fair value of contingent
earn-out
consideration
      —         (5 )      —         —         (5 ) 
Net (gain) loss on the disposition of assets
      (1,738 )      —         —         3       (1,735 ) 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net operating income (loss)
    $ 10,389     $ 561     $ (670 )    $ (5,306 )    $ 4,974  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
    
Broadcast
     
Digital
Media
     
Publishing
     
Unallocated
Corporate
     
Consolidated
  
                                    
    
(Dollars in thousands)
  
As of March 31, 2023
                                             
Inventories, net
    $ —        $ —       
$
1,708
 
   
$
—  
 
   
$
1,708
 
Property and equipment, net
   
 
66,480
 
   
 
7,539
 
   
 
513
 
   
 
9,157
 
   
 
83,689
 
Broadcast licenses
   
 
305,192
 
      —          —          —       
 
305,192
 
Goodwill
   
 
2,703
 
   
 
21,197
 
   
 
1,446
 
      —       
 
25,346
 
Amortizable intangible assets, net
   
 
212
 
   
 
5,208
 
   
 
274
 
      —       
 
5,694
 
As of December 31, 2022
                                             
Inventories, net
    $ —        $ —        $ 1,513      $ —        $ 1,513  
Property and equipment, net
      63,634        7,751        546        9,365        81,296  
Broadcast licenses
      303,774        —          —          —          303,774  
Goodwill
      2,623        20,016        1,446        —          24,085  
Amortizable intangible assets, net
      213        1,637        299        —          2,149