Quarterly report pursuant to Section 13 or 15(d)

SEGMENT DATA

v3.7.0.1
SEGMENT DATA
6 Months Ended
Jun. 30, 2017
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. Unallocated corporate expenses include shared services, such as accounting and finance, human resources, legal, tax and treasury that are not directly attributable to any one of our operating segments.
 
During the third quarter of 2016, we reclassed Salem Consumer Products, our e-commerce business that sells books, DVD’s and editorial content developed by our on-air personalities, from our Digital Media segment to our Broadcast segment. With this reclassification, all revenue and expenses generated by on-air hosts, including broadcast programs and e-commerce product sales are consolidated to assess the financial performance of each network program.
 
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 continue to review our operating segment classifications to align with operational changes in our business and may make future 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; nor do they include costs such as amortization, depreciation, taxes or interest expense. Changes to our operating segments did not impact the reporting units used to test non-amortizable assets for impairment. All prior periods presented are updated to reflect the new composition of our operating segments. Segment performance, as defined by Salem, is not necessarily comparable to other similarly titled captions of other companies.
 
The table below presents financial information for each operating segment as of June 30, 2017 and 2016 based on the new composition of our operating segments:
 
 
 
 
 
 
 
 
 
Unallocated
 
 
 
 
 
 
 
Digital
 
 
 
Corporate
 
 
 
 
 
Broadcast
 
Media
 
Publishing
 
Expenses
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
Three Months Ended June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
49,251
 
$
10,866
 
$
5,995
 
$
—
 
$
66,112
 
Operating expenses
 
 
35,931
 
 
8,370
 
 
5,668
 
 
3,825
 
 
53,794
 
Net operating income (loss) before depreciation, amortization, change in the estimated fair value of contingent earn-out consideration, impairments and (gain) loss on disposal of assets
 
$
13,320
 
$
2,496
 
$
327
 
$
(3,825)
 
$
12,318
 
Depreciation
 
 
1,929
 
 
820
 
 
162
 
 
198
 
 
3,109
 
Amortization
 
 
18
 
 
816
 
 
308
 
 
1
 
 
1,143
 
Change in the estimated fair value of contingent earn-out consideration
 
 
—
 
 
(43)
 
 
—
 
 
—
 
 
(43)
 
Impairment of indefinite-lived long-term assets other than goodwill
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
Net gain on disposal of assets
 
 
(494)
 
 
—
 
 
(16)
 
 
—
 
 
(510)
 
Net operating income (loss)
 
$
11,867
 
$
903
 
$
(127)
 
$
(4,024)
 
$
8,619
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
49,971
 
$
11,047
 
$
6,761
 
$
—
 
$
67,779
 
Operating expenses
 
 
35,871
 
 
8,619
 
 
6,983
 
 
3,568
 
 
55,041
 
Net operating income (loss) before depreciation, amortization, change in the estimated fair value of contingent earn-out consideration, impairment losses and (gain) loss on disposal of assets
 
$
14,100
 
$
2,428
 
$
(222)
 
$
(3,568)
 
$
12,738
 
Depreciation
 
 
1,815
 
 
785
 
 
165
 
 
217
 
 
2,982
 
Amortization
 
 
23
 
 
1,093
 
 
72
 
 
1
 
 
1,189
 
Change in the estimated fair value of contingent earn-out consideration
 
 
—
 
 
(36)
 
 
(98)
 
 
—
 
 
(134)
 
Impairment of long-lived assets
 
 
700
 
 
—
 
 
—
 
 
—
 
 
700
 
Net (gain) loss on disposal of assets
 
 
(1,721)
 
 
20
 
 
(3)
 
 
3
 
 
(1,701)
 
Net operating income (loss)
 
$
13,283
 
$
566
 
$
(358)
 
$
(3,789)
 
$
9,702
 
 
 
 
 
 
 
 
 
 
Unallocated
 
 
 
 
 
 
 
Digital
 
 
 
Corporate
 
 
 
 
 
Broadcast
 
Media
 
Publishing
 
Expenses
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
Six Months Ended June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
97,055
 
$
21,552
 
$
12,485
 
$
—
 
$
131,092
 
Operating expenses
 
 
71,767
 
 
17,072
 
 
12,019
 
 
8,950
 
 
109,808
 
Net operating income (loss) before depreciation, amortization, change in the estimated fair value of contingent earn-out consideration, impairments and (gain) loss on disposal of assets
 
$
25,288
 
 
4,480
 
$
466
 
$
(8,950)
 
$
21,284
 
Depreciation
 
 
3,748
 
 
1,597
 
 
356
 
 
388
 
 
6,089
 
Amortization
 
 
35
 
 
1,634
 
 
615
 
 
1
 
 
2,285
 
Change in the estimated fair value of contingent earn-out consideration
 
 
—
 
 
(42)
 
 
—
 
 
—
 
 
(42)
 
Impairment of indefinite-lived long-term assets other than goodwill
 
 
—
 
 
—
 
 
19
 
 
—
 
 
19
 
Net gain on disposal of assets
 
 
(496)
 
 
—
 
 
(9)
 
 
—
 
 
(505)
 
Net operating income (loss)
 
$
22,001
 
$
1,291
 
$
(515)
 
$
(9,339)
 
$
13,438
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
98,716
 
$
22,057
 
$
11,581
 
$
—
 
$
132,354
 
Operating expenses
 
 
72,021
 
 
17,643
 
 
11,931
 
 
7,781
 
 
109,376
 
Net operating income (loss) before depreciation, amortization, change in the estimated fair value of contingent earn-out consideration, impairment losses and (gain) loss on disposal of assets
 
$
26,695
 
$
4,414
 
$
(350)
 
$
(7,781)
 
$
22,978
 
Depreciation
 
 
3,678
 
 
1,552
 
 
315
 
 
429
 
 
5,974
 
Amortization
 
 
45
 
 
2,142
 
 
144
 
 
1
 
 
2,332
 
Change in the estimated fair value of contingent earn-out consideration
 
 
—
 
 
(106)
 
 
(156)
 
 
—
 
 
(262)
 
Impairment of long-lived assets
 
 
700
 
 
—
 
 
—
 
 
—
 
 
700
 
Net (gain) loss on disposal of assets
 
 
(1,542)
 
 
6
 
 
(21)
 
 
6
 
 
(1,551)
 
Net operating income (loss)
 
$
23,814
 
$
820
 
$
(632)
 
$
(8,217)
 
$
15,785
 
 
 
 
 
 
 
 
 
 
Unallocated
 
 
 
 
 
Broadcast
 
Digital Media
 
Publishing
 
Corporate
 
Consolidated
 
 
 
(Dollars in thousands)
 
As of June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventories, net
 
$
—
 
$
240
 
$
627
 
$
—
 
$
867
 
Property and equipment, net
 
 
85,691
 
 
6,520
 
 
1,379
 
 
8,027
 
 
101,617
 
Broadcast licenses
 
 
388,678
 
 
—
 
 
—
 
 
—
 
 
388,678
 
Goodwill
 
 
3,581
 
 
20,151
 
 
1,888
 
 
8
 
 
25,628
 
Other indefinite-lived intangible assets
 
 
—
 
 
—
 
 
313
 
 
—
 
 
313
 
Amortizable intangible assets, net
 
 
372
 
 
8,373
 
 
3,454
 
 
5
 
 
12,204
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventories, net
 
$
—
 
$
300
 
$
370
 
$
—
 
$
670
 
Property and equipment, net
 
 
86,976
 
 
6,634
 
 
1,779
 
 
7,401
 
 
102,790
 
Broadcast licenses
 
 
388,517
 
 
—
 
 
—
 
 
—
 
 
388,517
 
Goodwill
 
 
3,581
 
 
20,136
 
 
1,888
 
 
8
 
 
25,613
 
Other indefinite-lived intangible assets
 
 
—
 
 
—
 
 
332
 
 
—
 
 
332
 
Amortizable intangible assets, net
 
 
407
 
 
9,927
 
 
4,069
 
 
5
 
 
14,408