EXHIBIT 99.1 SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA OF SALEM HOLDING The following table presents summary historical, pro forma and other financial data of Salem Holding, the issuer in the proposed financing, and its consolidated subsidiaries. The following summary historical financial data as of and for the three years ended December 31, 2000 have been derived from Parent's and Salem Holding's audited consolidated financial statements. The summary historical financial data as of and for the three months ended March 31, 2000 and 2001 have been derived from Parent's and Salem Holding's unaudited condensed consolidated financial statements, which financial statements include all adjustments, consisting only of normal recurring adjustments, which are, in our opinion, necessary for a fair presentation of the results of operations for such periods. The results of operations for the three months ended March 31, 2001 are not necessarily indicative of the results for the full year. Pro forma data for the year ended December 31, 2000 and for the three months ended and as of March 31, 2001 are derived from the unaudited pro forma condensed consolidated financial statements of Salem Holding and give effect to the Dividend, accrued interest income and expense related to the loan made by Salem Holding to Parent, proceeds of approximately $2.8 million to be received from the Settlement and the use of such proceeds to repay borrowings under Salem Holding's credit facility, and the proposed financing and the application of the net proceeds therefrom, as if such transactions had occurred at the beginning of the relevant periods, in the case of the Statement of Operations and Other Data, and as of March 31, 2001, in the case of the Balance Sheet Data. While the pro forma data for the year ended December 31, 2000 and the three months ended March 31, 2001 are based on adjustments we deem appropriate and which are factually supported based on currently available data, the pro forma data may not be indicative of what actual results would have been, nor does this information purport to present Salem Holding's financial results for future periods.
PRO FORMA PRO FORMA THREE MONTHS ENDED THREE MONTHS YEAR ENDED DECEMBER 31, YEAR ENDED MARCH 31, ENDED ------------------------------ DECEMBER 31, ------------------- MARCH 31, 1998(1) 1999(1) 2000 2000 2000(1) 2001 2001 -------- -------- -------- ------------ -------- -------- ------------ (DOLLARS IN THOUSANDS) STATEMENT OF OPERATIONS: Net broadcasting revenue........ $ 77,891 $ 87,122 $107,786 $108,236 $22,609 $29,724 $29,724 Other media revenue............. -- 6,424 7,916 -- 1,791 1,965 -- -------- -------- -------- -------- ------- ------- ------- Total revenue................... 77,891 93,546 115,702 108,236 24,400 31,689 29,724 Broadcasting operating expenses...................... 42,526 46,291 60,121 60,121 12,705 19,556 19,556 Other media operating expenses...................... -- 9,985 14,863 -- 4,144 2,536 -- Corporate expenses.............. 7,395 8,507 10,457 9,745 2,454 3,847 3,670 Stock and related cash grant.... -- 2,550 -- -- -- -- -- Depreciation and amortization... 14,058 18,233 23,243 20,753 4,939 6,964 6,392 -------- -------- -------- -------- ------- ------- ------- Operating income (loss)......... 13,912 7,980 7,018 17,617 158 (1,214) 106 Interest income................. 291 1,005 504 418 288 85 37 Interest income from related party(2)...................... -- -- 1,249 7,734 -- 1,986 1,986 Gain (loss) on sale of assets... 236 (219) 773 4,254 -- (8) (8) Gain on sale of assets to related party................. -- -- 28,794 28,794 -- -- -- Interest expense................ (15,941) (14,219) (15,572) (23,875) (2,520) (6,467) (6,973) Other income (expense), net..... (422) (633) (856) (894) (287) (42) (8) -------- -------- -------- -------- ------- ------- ------- Income (loss) before income taxes and extraordinary item.......................... (1,924) (6,086) 21,910 34,048 (2,361) (5,660) (4,860) Provision (benefit) for income taxes......................... (343) (1,611) 8,249 13,105 (704) (2,012) (1,692) -------- -------- -------- -------- ------- ------- ------- Income (loss) before extraordinary item............ (1,581) (4,475) 13,661 20,943 (1,657) (3,648) (3,168) Extraordinary loss, net of tax effect........................ -- (3,570) -- -- -- -- -- -------- -------- -------- -------- ------- ------- ------- Net income (loss)............... $ (1,581) $ (8,045) $ 13,661 $ 20,943 $(1,657) $(3,648) $(3,168) ======== ======== ======== ======== ======= ======= =======
PRO FORMA PRO FORMA THREE MONTHS ENDED THREE MONTHS YEAR ENDED DECEMBER 31, YEAR ENDED MARCH 31, ENDED ------------------------------ DECEMBER 31, ------------------- MARCH 31, 1998(1) 1999(1) 2000 2000 2000(1) 2001 2001 -------- -------- -------- ------------ -------- -------- ------------ (DOLLARS IN THOUSANDS) OTHER DATA: Broadcast cash flow(3).......... $ 35,365 $ 40,831 $ 47,665 $ 48,115 $ 9,904 $10,168 $10,168 Broadcast cash flow margin...... 45.4% 46.8% 44.2% 44.5% 43.8% 34.3% 34.2% EBITDA(3)....................... 27,970 28,763 30,261 38,370 5,097 5,750 6,498 Broadcast EBITDA(3)............. 27,970 32,324 37,208 38,370 7,450 6,321 6,498 Operating cash flow(4).......... 28,261 29,768 32,014 46,522 5,385 7,821 8,521 Pro forma as adjusted EBITDA(4)..................... 41,463 Pro forma as adjusted operating cash flow(4).................. 49,615 Pro forma debt to pro forma as adjusted EBITDA(4)(5)......... 6.9x Pro forma debt to pro forma as adjusted operating cash flow(4)(5).................... 5.8x Pro forma ratio of earnings to fixed charges(6).............. 2.3x
PRO FORMA AS OF AS OF MARCH 31, MARCH 31, 2001 2001 --------- ----------- (DOLLARS IN THOUSANDS) BALANCE SHEET DATA: Cash and cash equivalents................................... $ 2,674 $ 2,247 Intangible assets, net...................................... 255,810 248,613 Total assets................................................ 428,460 420,100 Total debt (including current portion)...................... 287,124 288,792 Total stockholders' equity.................................. 121,052 115,326
- ------------------------------ (1) Summary consolidated financial and other data of Salem Holding as of and for the two years ended December 31, 1999 and as of and for the three months ended March 31, 2000 is identical to Parent's consolidated financial results for those periods because Parent formed Salem Holding as a wholly-owned subsidiary in May 2000 and assigned substantially all of its assets and liabilities to Salem Holding in August 2000. This transaction was accounted for as an exchange of assets among entities under common control and, accordingly, the assets exchanged were recorded at their historical cost in a manner similar to the pooling of interest method of accounting. (2) Represents accrued interest income on a promissory note from Parent. Salem Holding borrowed under its credit facility to make the related loan to Parent. (3) We define broadcast cash flow as net operating income, excluding other media revenue and other media operating expenses, before depreciation and amortization and corporate expenses. We define EBITDA as net operating income before depreciation and amortization. We define broadcast EBITDA as EBITDA excluding other media businesses. EBITDA for the year ended December 31, 1999 excludes a $2.6 million charge ($1.9 million, net of income tax) for a one-time stock grant concurrent with our initial public offering. Although broadcast cash flow, EBITDA and broadcast EBITDA are not measures of performance calculated in accordance with generally accepted accounting principles, we believe that they are useful because they are measures widely used in the radio broadcast industry to evaluate a radio company's operating performance. However, you should not consider broadcast cash flow, EBITDA and broadcast EBITDA in isolation or as substitutes for net income, cash flows from operating activities and other statement of operations or cash flows data prepared in accordance with generally accepted accounting principles as a measure of liquidity or profitability. These measures are not necessarily comparable to similarly titled measures employed by other companies. (4) We define operating cash flow as consolidated net income (adjusted to exclude, among other things, net gains on dispositions of assets outside the ordinary course of business) plus specified net losses, taxes, interest expense, and depreciation, amortization and other non-cash charges, in accordance with the indenture governing the 9 1/2% notes and the proposed indenture governing the proposed financing. This includes accrued interest income. The table below sets forth certain statement of operations and other data on a pro forma basis and on a pro forma as adjusted basis. The pro forma data as of and for the year ended December 31, 2000 give effect to the Dividend, the Settlement and the use of proceeds therefrom to repay borrowings under the credit facility, accrued interest income and expense related to Salem Holding's loan to Parent, and the proposed financing and the application of the net proceeds therefrom, as if such transactions had occurred at the beginning of the period. The pro forma as adjusted data for the year ended December 31, 2000 give further effect to certain in-format radio station acquisitions and dispositions as if such transactions had occurred at the beginning of the period. The acquisition adjustments represent management's estimate of the historical operating results of certain in-format acquisitions (stations acquired where the format was not changed immediately upon the acquisition) for the period from January 1, 2000 through the date of acquisition, based on analysis of the historical results for various periods and based on estimates of allocations received from the selling entities, all of which management believes are reasonable. The acquisition adjustments also give effect to management fees that would be payable to Salem Holding from Salem Communications Acquisition Corporation had the in-format acquisition of WROL-AM, Boston, MA, in April 2001 occurred on January 1, 2000. The acquisition adjustments exclude all stations where the format was changed immediately upon acquisition because such pre-acquisition operating results are not meaningful. The disposition adjustments represent historical operating results through the date of sale of certain stations sold during the relevant period and are derived from our historical financial information. The disposition adjustments exclude the effect of the sale of KPRZ-FM, Colorado Springs, CO, and KKHT-FM, Houston, TX, which were exchanged for other radio stations, because these stations had been integrated with existing stations prior to the sale. The pro forma and pro forma as adjusted information may not be indicative of what actual results would have been, nor does this information purport to present Salem Holding's financial results for future periods. We do not provide pro forma as adjusted data for the three months ended March 31, 2001 because there were no radio station acquisitions or dispositions by Salem Holding during such period.
PRO FORMA PRO FORMA AS ADJUSTED YEAR ENDED YEAR ENDED DECEMBER 31, ACQUISITION DISPOSITION DECEMBER 31, 2000 ADJUSTMENTS ADJUSTMENTS 2000 ------------ ----------- ----------- ------------ Net revenue............................. $108,236 $14,608 $(2,375) $120,469 Operating expense....................... 69,866 10,498 (1,358) 79,006 -------- ------- ------- -------- EBITDA.................................. 38,370 4,110 (1,017) 41,463 Interest income......................... 8,152 -- -- 8,152 -------- ------- ------- -------- Operating cash flow..................... $ 46,522 $ 4,110 $(1,017) $ 49,615 ======== ======= ======= ========
(5) Pro forma debt to pro forma as adjusted EBITDA and pro forma debt to pro forma as adjusted operating cash flow represent total pro forma debt, including current portion and the effects of this offering, outstanding at the end of the relevant period, divided by pro forma as adjusted EBITDA and pro forma as adjusted operating cash flow, respectively. (6) For purposes of computing the pro forma ratio of earnings to fixed charges, "earnings" consist of income (loss) before income taxes and extraordinary item plus fixed charges, and "fixed charges" consist of interest expense plus an allocation of a portion of rent expense representing interest. The pro forma earnings to fixed charges ratio assumes the issuance of the notes offered hereby and the repayment of borrowings under Salem Holding's credit facility as if each occurred at the beginning of the period presented.