Quarterly report pursuant to Section 13 or 15(d)

Segment Data

v3.21.1
Segment Data
3 Months Ended
Mar. 31, 2021
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, assesses the performance of each operating segment and determines 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 defined by Salem, is not necessarily comparable to other similarly titled captions of other companies.
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 print 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”) and Singing News
®
Radio.
Salem Media Representatives (“SMR”) is our national advertising sales firm with offices in 12 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 33 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 provides a full-service digital marketing strategy for each of our clients.
Digital Media
Our digital media-based businesses provide Christian, conservative, investing content,
e-commerce,
audio and video streaming, and other resources digitally through the web. Salem Web Network (“SWN”) websites include Christian content websites; BibleStudyTools.com, Crosswalk.com
®
, GodVine.com, iBelieve.com, GodTube
®
.com, OnePlace
.com, Christianity.com, GodUpdates.com, CrossCards
.com, ChristianHeadlines.com, LightSource.com, AllCreated.com, ChristianRadio.com, CCMmagazine.com, SingingNews
®
.com and SouthernGospel.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
e-commerce
websites, including SermonSearch
.com, ChurchStaffing.com, WorshipHouseMedia.com, SermonSpice
.com, WorshipHouseKids.com, Preaching.com, ChristianJobs.com, Youthworker.com, JourneyBoxMedia.com, Playblackmedia.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 three 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; (2) Salem Author Services, a self-publishing service for authors through Xulon Press and Mill City Press; and (3)
 Singing News
®
,
which produces and distributes a print magazine.
The table below presents financial information for each operating segment as of March 31, 2021 and 2020 based on the composition of our operating segments:

 
 
  
Broadcast
 
 
Digital Media
 
 
Publishing
 
 
Unallocated
Corporate
Expenses
 
 
Consolidated
 
 
  
(Dollars in thousands)
 
Three Months Ended March 31, 2021
  
     
 
     
 
     
 
     
 
     
Net revenue
  
$
44,048
 
 
$
9,619
 
 
$
5,686
 
 
$
—  
 
 
$
59,353
 
Operating expenses
  
 
33,343
 
 
 
8,673
 
 
 
5,205
 
 
 
4,288
 
 
 
51,509
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Net operating income (loss) before depreciation, amortization, and net (gain) loss on the disposition of assets
  
$
10,705
 
 
$
946
 
 
$
481
 
 
$
(4,288
 
$
7,844
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Depreciation
  
 
1,525
 
 
 
781
 
 
 
47
 
 
 
236
 
 
 
2,589
 
Amortization
  
 
4
 
 
 
432
 
 
 
145
 
 
 
—  
 
 
 
581
 
Net (gain) loss on the disposition of assets
  
 
318
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
318
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Net operating income (loss)
  
$
8,858
 
 
$
(267
 
$
289
 
 
$
(4,524
 
$
4,356
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Three Months Ended March 31, 2020
                                        
Net revenue
  
$
45,180
 
 
$
9,104
 
 
$
3,966
 
 
$
—  
 
 
$
58,250
 
Operating expenses
  
 
37,327
 
 
 
8,326
 
 
 
5,062
 
 
 
4,210
 
 
 
54,925
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
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
  
$
7,853
 
 
$
778
 
 
$
(1,096
 
$
(4,210
 
$
3,325
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Depreciation
  
 
1,645
 
 
 
771
 
 
 
69
 
 
 
228
 
 
 
2,713
 
Amortization
  
 
9
 
 
 
768
 
 
 
210
 
 
 
—  
 
 
 
987
 
Change in the estimated fair value of contingent
earn-out
consideration
  
 
—  
 
 
 
(5
 
 
 
 
 
—  
 
 
 
(5
Impairment of indefinite-lived long-term assets other than goodwill
  
 
16,994
 
 
 
—  
 
 
 
260
 
 
 
—  
 
 
 
17,254
 
Impairment of goodwill
  
 
184
 
 
 
10
 
 
 
105
 
 
 
8
 
 
 
307
 
Net (gain) loss on the disposition of assets
  
 
79
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
79
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Net operating income (loss)
  
$
(11,058
 
$
(766
 
$
(1,740
 
$
(4,446
 
$
(18,010
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
                                                                                                                                                                                          
 
 
  
Broadcast
 
  
Digital Media
 
  
Publishing
 
  
Unallocated
Corporate
 
  
Consolidated
 
 
  
(Dollars in thousands)
 
As of March 31, 2021
  
     
  
     
  
     
  
     
  
     
Inventories, net
  
$
—  
 
  
$
—  
 
  
$
588
 
  
$
—  
 
  
$
588
 
Property and equipment, net
  
 
63,671
 
  
 
5,977
 
  
 
732
 
  
 
8,218
 
  
 
78,598
 
Broadcast licenses
  
 
319,773
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
319,773
 
Goodwill
  
 
2,746
 
  
 
19,565
 
  
 
1,446
 
  
 
—  
 
  
 
23,757
 
Amortizable intangible assets, net
  
 
242
 
  
 
3,129
 
  
 
192
 
  
 
—  
 
  
 
3,563
 
As of December 31, 2020
                                            
Inventories, net
  
$
—  
 
  
$
—  
 
  
$
495
 
  
$
—  
 
  
$
495
 
Property and equipment, net
  
 
64,231
 
  
 
6,221
 
  
 
741
 
  
 
7,929
 
  
 
79,122
 
Broadcast licenses
  
 
319,773
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
319,773
 
Goodwill
  
 
2,746
 
  
 
19,565
 
  
 
1,446
 
  
 
—  
 
  
 
23,757
 
Amortizable intangible assets, net
  
 
246
 
  
 
3,434
 
  
 
337
 
  
 
—  
 
  
 
4,017