Salem Communications Corp. Reports Operating Results (10-Q)

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Aug 09, 2012
Salem Communications Corp. (SALM, Financial) filed Quarterly Report for the period ended 2012-06-30.

Salem Communications Corp has a market cap of $123.3 million; its shares were traded at around $4.95 with a P/E ratio of 22 and P/S ratio of 0.6. The dividend yield of Salem Communications Corp stocks is 2.8%. Salem Communications Corp had an annual average earning growth of 3.6% over the past 10 years.

Highlight of Business Operations:

Net broadcast revenues increased due to overall improving economic conditions and a greater demand for radio air time as compared to the same period of the prior year. Included in these results are a $0.4 million increase in political advertisements and a

Net broadcast revenues increased due to overall improving economic conditions and a greater demand for radio air time as compared to the same period of the prior year. Included in these results are a $0.6 million increase in political advertisements and a $1.3 million increase in block programming revenue primarily from our Christian Teaching and Talk formatted stations. Increases in block programming revenues reflect the annual rate increases partially offset by discounts offered through our unwired network under which available air-time is packaged and sold to programmers at discounted rates. Also included in this increase are a $0.4 million increase in network revenues and a $0.1 million increase in national spots primarily from our News Talk and Business format stations. Overall, increases in national advertising reflect higher sales volume due to advertisers purchasing more air-time. These increases were partially offset by a decline of $0.4 million in local spot advertising sales.

STATION OPERATING INCOME. SOI decreased $0.5 million, or 3.1%, to $15.9 million for the three months ended June 30, 2012, compared to $16.4 million for the same period of the prior year. As a percentage of net broadcast revenue, SOI decreased to 34.2% for the three months ended June 30, 2012 from 36.0% for the same period of the prior year. On a same station basis, SOI decreased $0.5 million, or 3.1%, to $15.9 million for the three months ended June 30, 2012 from $16.4 million for the same period of the prior year. As a percentage of same station net broadcast revenue, same station SOI decreased to 34.3% for the three months ended June 30, 2012 from 36.1% for the same period of the prior year. The decline in SOI is primarily due to higher operating expenses, including personnel related costs during the three months ending June 30, 2012 compared to the same period of the prior year.

STATION OPERATING INCOME. SOI decreased $0.6 million, or 2.0%, to $30.7 million for the six months ended June 30, 2012, compared to $31.3 million for the same period of the prior year. As a percentage of net broadcast revenue, SOI decreased to 34.0% for the six months ended June 30, 2012 from 35.5% for the same period of the prior year. On a same station basis, SOI decreased $0.4 million, or 1.3%, to $30.6 million for the six months ended June 30, 2012 from $31.0 million for the same period of the prior year. As a percentage of same station net broadcast revenue, same station SOI decreased to 34.1% for the six months ended June 30, 2012 from 35.4% for the same period of the prior year. The decline in SOI is primarily due to higher operating expenses, including personnel related costs during the three months ending June 30, 2012 compared to the same period of the prior year.

Advertising time that our radio stations exchange for goods and or services is recorded as barter revenue when the advertisement is broadcast at an amount equal to our estimate fair value of what was received. The value of the goods and services received in such barter transactions is charged to expense when used. Barter advertising revenue included in broadcast revenue for the three and six months ended June 30, 2012 was approximately $1.5 million and $2.6 million, and $1.4 million and $2.6 million for the same period of the prior year. Barter expenses were approximately the same as barter revenue for each period.

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