Quarterly report pursuant to Section 13 or 15(d)

SEGMENT DATA

v3.8.0.1
SEGMENT DATA
9 Months Ended
Sep. 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 September 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 September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
48,424
 
$
10,446
 
$
6,563
 
$
—
 
$
65,433
 
Operating expenses
 
 
37,040
 
 
8,169
 
 
6,686
 
 
4,233
 
 
56,128
 
Net operating income (loss) before depreciation, amortization, change in the estimated fair value of contingent earn-out consideration and net (gain) loss on the sale or disposal of assets
 
$
11,384
 
$
2,277
 
$
(123)
 
$
(4,233)
 
$
9,305
 
Depreciation
 
 
1,920
 
 
792
 
 
159
 
 
211
 
 
3,082
 
Amortization
 
 
11
 
 
860
 
 
264
 
 
—
 
 
1,135
 
Change in the estimated fair value of contingent earn-out consideration
 
 
—
 
 
(12)
 
 
—
 
 
—
 
 
(12)
 
Net (gain) loss on the sale or disposal of assets
 
 
97
 
 
—
 
 
—
 
 
(2)
 
 
95
 
Net operating income (loss)
 
$
9,356
 
$
637
 
$
(546)
 
$
(4,442)
 
$
5,005
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
51,052
 
$
11,999
 
$
8,221
 
$
—
 
$
71,272
 
Operating expenses
 
 
37,434
 
 
9,172
 
 
8,020
 
 
4,147
 
 
58,773
 
Net operating income (loss) before depreciation, amortization, change in the estimated fair value of contingent earn-out consideration and net (gain) loss on the sale or disposal of assets
 
$
13,618
 
$
2,827
 
$
201
 
$
(4,147)
 
$
12,499
 
Depreciation
 
 
1,753
 
 
840
 
 
174
 
 
209
 
 
2,976
 
Amortization
 
 
22
 
 
1,091
 
 
228
 
 
—
 
 
1,341
 
Change in the estimated fair value of contingent earn-out consideration
 
 
—
 
 
(13)
 
 
(183)
 
 
—
 
 
(196)
 
Net (gain) loss on the sale or disposal of assets
 
 
(633)
 
 
176
 
 
—
 
 
—
 
 
(457)
 
Net operating income (loss)
 
$
12,476
 
$
733
 
$
(18)
 
$
(4,356)
 
$
8,835
 
 
 
 
 
 
 
 
 
 
Unallocated
 
 
 
 
 
 
 
Digital
 
 
 
Corporate
 
 
 
 
 
Broadcast
 
Media
 
Publishing
 
Expenses
 
Consolidated
 
 
 
(Dollars in thousands)
 
Nine Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
145,479
 
$
31,998
 
$
19,048
 
$
—
 
$
196,525
 
Operating expenses
 
 
108,807
 
 
25,241
 
 
18,705
 
 
13,183
 
 
165,936
 
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 sale or disposal of assets
 
$
36,672
 
 
6,757
 
$
343
 
$
(13,183)
 
$
30,589
 
Depreciation
 
 
5,668
 
 
2,389
 
 
515
 
 
599
 
 
9,171
 
Amortization
 
 
46
 
 
2,494
 
 
879
 
 
1
 
 
3,420
 
Change in the estimated fair value of contingent earn-out consideration
 
 
—
 
 
(54)
 
 
—
 
 
—
 
 
(54)
 
 Impairment of indefinite-lived long-term assets other than goodwill
 
 
—
 
 
—
 
 
19
 
 
—
 
 
19
 
Net (gain) loss on the sale or disposal of assets
 
 
(399)
 
 
—
 
 
(9)
 
 
(2)
 
 
(410)
 
Net operating income (loss)
 
$
31,357
 
$
1,928
 
$
(1,061)
 
$
(13,781)
 
$
18,443
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
149,768
 
$
34,056
 
$
19,802
 
$
—
 
$
203,626
 
Operating expenses
 
 
109,455
 
 
26,815
 
 
19,951
 
 
11,928
 
 
168,149
 
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 sale or disposal of assets
 
$
40,313
 
$
7,241
 
$
(149)
 
$
(11,928)
 
$
35,477
 
Depreciation
 
 
5,431
 
 
2,392
 
 
489
 
 
638
 
 
8,950
 
Amortization
 
 
67
 
 
3,233
 
 
372
 
 
1
 
 
3,673
 
Change in the estimated fair value of contingent earn-out consideration
 
 
—
 
 
(119)
 
 
(339)
 
 
—
 
 
(458)
 
Impairment of long-lived assets
 
 
700
 
 
—
 
 
—
 
 
—
 
 
700
 
Net (gain) loss on the sale or disposal of assets
 
 
(2,175)
 
 
182
 
 
(21)
 
 
6
 
 
(2,008)
 
Net operating income (loss)
 
$
36,290
 
$
1,553
 
$
(650)
 
$
(12,573)
 
$
24,620
 
 
 
 
 
 
Digital
 
 
 
Unallocated
 
 
 
 
 
Broadcast
 
Media
 
Publishing
 
Corporate
 
Consolidated
 
 
 
(Dollars in thousands)
 
As of September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventories, net
 
$
—
 
$
327
 
$
482
 
$
—
 
$
809
 
Property and equipment, net
 
 
86,187
 
 
6,603
 
 
1,326
 
 
8,087
 
 
102,203
 
Broadcast licenses
 
 
388,720
 
 
—
 
 
—
 
 
—
 
 
388,720
 
Goodwill
 
 
3,594
 
 
20,946
 
 
1,888
 
 
8
 
 
26,436
 
Other indefinite-lived intangible assets
 
 
—
 
 
—
 
 
313
 
 
—
 
 
313
 
Amortizable intangible assets, net
 
 
361
 
 
10,720
 
 
3,190
 
 
5
 
 
14,276
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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