|12 Months Ended|
Dec. 31, 2021
|Text Block [Abstract]|
NOTE 3. RECENT TRANSACTIONS
During the year ended December 31,
2021, we completed
orentered into the
2021, we exchanged $112.8 million of the 2024 Notes for $114.7 million (reflecting a call premium of 1.688%) of newly issued 7.125% Senior Secured Notes due 2028 (“2028 Notes.”) Contemporaneously with the refinancing, we obtained commitments from the holders of the 2028 Notes to purchase up to $50 million in additional 2028 Notes (“Delayed Draw 2028 Notes,”) contingent upon satisfying certain performance benchmarks, the proceeds of which are to be used exclusively to repurchase or repay the remaining balance outstanding of the 2024 Notes.
addition to the exchange
on September 10, 2021
, we repurchased an additional $43.3 million
of the 2024 Notes for $44.0 million in cash, recognizing a net loss of $1.0 million after adjusting for bond issuance costs
through multiple transactions
during the second half of 2021.
These transactions are described in Note 11, Long-Term Debt.
We received $11.2 million in aggregate principal amount of PPP loans through the SBA during the first quarter of 2021 based on the eligibility of our radio stations and networks as determined on a
per-locationbasis. The PPP loans were accounted for as debt in accordance with FASB ASC Topic 470. The loan balances and accrued interest were forgivable provided that the proceeds were used for eligible purposes, including payroll, benefits, rent and utilities within the covered period. We used the PPP loan proceeds according to the terms and filed timely applications for forgiveness. During July 2021, the SBA forgave all but $20,000 of the PPP loans resulting in a
pre-taxgain on the forgiveness of $11.2 million. The remaining PPP loan was repaid in 2021.
Shelf Registration Statement and
In April 2021, we filed a prospectus supplement to our shelf registration statement on Form
S-3with the SEC covering the offering, issuance and sale of up to $15.0 million of our Class A Common Stock pursuant to an
facility, with B. Riley Securities, Inc. acting as sales agent. No Common Stock transactions have taken place under the facility.
The operating results of our business acquisitions and asset purchases are included in our consolidated results of operations from their respective closing date or the date that we began operating them under a Local Marketing Agreement (“LMA”) or Time Brokerage Agreement (“TBA.”)
On July 2, 2021, we acquired the SeniorResource.com domain for $0.1 million in cash.
On July 1, 2021, we acquired the ShiftWorship.com domain and digital assets for $2.6 million in cash. The digital content library is operated within Salem Web Network’s church products division. We recognized goodwill of $0.2 million attributable to the expected synergies to be realized when combining the operations of this entity into our existing operations.
On June 1, 2021, we acquired radio stations
KDYA-AMin San Francisco, California for $0.6 million in cash. The radio stations were acquired in formats that we operate and resulted in $4,000 of goodwill attributable to the additional audience reach obtained and the expected synergies to be realized from combining the operations of these stations into our existing market
28, 2021, we acquired the Centerline New Media domain and digital assets for $1.3 million in cash. The digital content library is operated within Salem Web Network’s church products division. We recognized goodwill of $24,000 attributable to the expected synergies to be realized when combining the operations of this entity into our existing operations.
On March 8, 2021, we acquired the Triple Threat Trader newsletter. We paid no cash at the time of closing and assumed deferred subscription liabilities of $0.1 million. As part of the purchase agreement, we may pay up to an additional $11,000 in contingent
earn-outconsideration over the next two years based on the achievement of certain revenue benchmarks.
A summary of our business acquisitions and asset purchases during the year ending December 31, 2021, none of which were individually or in the aggregate material to our consolidated financial position as of the respective date of acquisition, is as follows:
Under the acquisition method of accounting as specified in FASB ASC Topic 805, “
,” the total acquisition consideration of a business is allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the date of the transaction. Transactions that do not meet the definition of a business in ASU
are recorded as asset purchases. Asset purchases are recognized based on their cost to acquire, including transaction costs. The cost to acquire an asset group is allocated to the individual assets acquired based on their relative fair value with no goodwill recognized.
Business Combinations (Topic 805) Clarifying the Definition of a Business”
The total acquisition consideration is equal to the sum of all cash payments, the fair value of any deferred payments and promissory notes, and the present value of any estimated contingent
earn-outconsideration. We estimate the fair value of any contingent
earn-outconsideration using a probability-weighted discounted cash flow model. The fair value measurement is based on significant inputs that are not observable in the market and thus represent a Level 3 measurement as defined in Note 12, Fair Value Measurements and Disclosures.
The total purchase price consideration for our business acquisitions and asset purchases during the year ending December 31, 2021, is as follows:
presentedin the table below are based upon estimates of the fair values using valuation techniques including income, cost and market approaches. The following preliminary purchase price allocations are based upon the valuation of assets and these estimates and assumptions are subject to change as we obtain additional information during the measurement period, which may be up to one year from the acquisition date. Differences between the preliminary and final valuation could be substantially different from the initial estimate.
The operating results of business and asset divestitures are excluded from our consolidated results of operations from their respective closing date or the date that a third-party began operating them under an LMA or TBA.
On November 30, 2021, we
soldapproximately 77 acres of land in Tampa, Florida for $13.5 million in cash. The land was the transmitter site for
WTBN-AMthat will be diplexed from our owned and operated
WGUL-AMfacility. We recognized a
pre-taxgain on the sale of $12.9 million.
On July 27, 2021, we sold the Hilary Kramer Financial Newsletter and related assets for $0.2 million to be collected in quarterly installments over the
two-yearperiod ending September 30, 2023. We recognized a
pre-taxgain on the sale of $0.1 million.
On July 23, 2021, we sold approximately 34 acres of land in Lewisville, Texas, for $12.1 million in cash. The land was being used for as the transmitter site for company owned radio station
KSKY-AM.We retained a portion of the land in the southwest corner of the site to continue operating the radio station. We recognized a
pre-taxgain on the sale of $10.5 million.
On May 25, 2021, we sold Singing News Magazine and Singing News Radio for $0.1 million in cash. In addition to the assets sold, the buyer assumed deferred subscription liabilities of $0.4 million resulting in a
pre-taxgain on the sale of $0.5 million.
On March 18, 2021, we sold radio station
WKAT-AMand an FM translator in Miami, Florida for $3.5 million. We collected $3.2 million in cash upon closing and received a promissory note for $0.3 million due one year from the closing date. The buyer began operating the station under an LMA in November 2020. We recognized an estimated
pre-taxloss of $1.4 million during the three-month period ended September 30, 2020, the date we entered into an Asset Purchase Agreement (“APA”) with the buyer, which reflected the sale price as compared to the carrying value of the assets to be sold, estimated closing costs, and the
write-offof the remaining Miami assets as a result of exiting this market. We adjusted the
pre-taxloss by $0.4 million to $1.8 million upon closing based on the actual closing costs incurred and a reconciliation of total station assets to the assets included in the sale.
On December 6, 2021, we entered into an APA to acquire radio station
WLCC-AMand an FM translator in the Tampa, Florida market for $0.6 million of cash. The WLCC transmitter site will be used to broadcast radio station
WTBN-AMdue to the sale of land housing the
WTBN-AMtransmitter. We paid $0.1 million into an escrow account
in December 2021 and closed on the acquisition on February 15, 2022.
On November 18, 2021, we entered an agreement to sell 4.5 acres of land in Phoenix, Arizona
for$2.0 million in cash. We will relocate our transmitter equipment for
KXXT-AMfrom the site within 90 days of closing,
which took place on January 10, 2022.
On August 31, 2021, we entered an agreement to sell 9.3 acres of land in the Denver area for $8.2 million. We expect to close this sale early in 2022 and plan to continue broadcasting both
KBJD-AMfrom this site.
On June 2, 2021, we entered into an APA to acquire radio station
KKOL-AMin Seattle, Washington for $0.5 million. We paid $0.1 million in cash into an escrow account and we began operating the station under an LMA on June 7, 2021.
On February 5, 2020, we entered into an APA with Word Broadcasting to sell radio stations
WGTK-AMin Louisville, Kentucky for $4.0 million with credits applied from amounts previously paid, including a portion of the monthly fees paid under a TBA. Due to changes in debt markets, the transaction was not funded, and it is uncertain when, or if, the transaction will close. Word Broadcasting continues to program the stations under a TBA that began in January 2017.
Acquisitions and recent transactions disclosure.
No definition available.
No definition available.