QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
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(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) |
(I.R.S. EMPLOYER IDENTIFICATION NUMBER) | |
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| |
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) |
(ZIP CODE) |
Title of each Class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Class A Common Stock, $0.01 par value per share |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller Reporting Company | |||||
Emerging Growth Company |
Class A |
Outstanding at August 2, 2021 | |
Common Stock, $0.01 par value per share |
Class B |
Outstanding at August 2, 2021 | |
Common Stock, $0.01 par value per share |
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December 31, 2020 (Note 1) |
June 30, 2021 (Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | $ |
||||||
Trade accounts receivable (net of allowances of $ |
||||||||
Unbilled revenue |
||||||||
Other receivables (net of allowances of $ |
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Inventories (net of reserves of $ |
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Prepaid expenses |
||||||||
Assets held for sale |
— |
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Total current assets |
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Notes receivable (net of allowance of $ |
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Property and equipment (net of accumulated depreciation of $ |
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Operating lease right-of-use |
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Financing lease right-of-use |
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Broadcast licenses |
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Goodwill |
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Amortizable intangible assets (net of accumulated amortization of $ |
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Deferred financing costs |
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Other assets |
||||||||
Total assets |
$ | $ |
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | $ |
||||||
Accrued expenses |
||||||||
Accrued compensation and related expenses |
||||||||
Accrued interest |
||||||||
Contract liabilities |
||||||||
Deferred rent income |
||||||||
Income taxes payable |
||||||||
Current portion of operating lease liabilities |
||||||||
Current portion of financing lease liabilities |
||||||||
Current portion of long-term debt |
— |
|||||||
Total current liabilities |
||||||||
Long-term debt, less current portion |
||||||||
Operating lease liabilities, less current portion |
||||||||
Financing (capital) lease liabilities, less current portion |
||||||||
Deferred income taxes |
||||||||
Contract liabilities, long-term |
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Deferred rent income, less current portion |
||||||||
Other long-term liabilities |
||||||||
Total liabilities |
||||||||
Commitments and contingencies (Note 14) |
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Stockholders’ Equity: |
||||||||
Class A common stock, $ |
||||||||
Class B common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Treasury stock, at cost ( |
( |
) | ( |
) | ||||
Total stockholders’ equity |
||||||||
Total liabilities and stockholders’ equity |
$ | $ |
||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2020 | 2021 |
2020 | 2021 |
|||||||||||||
Net broadcast revenue |
$ | $ |
$ | $ |
||||||||||||
Net digital media revenue |
||||||||||||||||
Net publishing revenue |
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Total net revenue |
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Operating expenses: |
||||||||||||||||
Broadcast operating expenses, exclusive of depreciation and amortization shown below (including $ |
||||||||||||||||
Digital media operating expenses, exclusive of depreciation and amortization shown below |
||||||||||||||||
Publishing operating expenses, exclusive of depreciation and amortization shown below |
||||||||||||||||
Unallocated corporate expenses exclusive of depreciation and amortization shown below (including $ |
||||||||||||||||
Depreciation |
||||||||||||||||
Amortization |
||||||||||||||||
Change in the estimated fair value of contingent earn-out consideration |
— |
( |
) | — |
||||||||||||
Impairment of indefinite-lived long-term assets other than goodwill |
— | — |
— |
|||||||||||||
Impairment of goodwill |
— | — |
— |
|||||||||||||
Net (gain) loss on the disposition of assets |
( |
) |
||||||||||||||
Total operating expenses |
||||||||||||||||
Operating income (loss) |
( |
) | ( |
) | ||||||||||||
Other income (expense): |
||||||||||||||||
Interest income |
— | — |
— | |||||||||||||
Interest expense |
( |
) | ( |
) |
( |
) | ( |
) | ||||||||
Gain on early retirement of long-term debt |
— | — |
— |
|||||||||||||
Net miscellaneous income and (expenses) |
( |
) | ||||||||||||||
Net income (loss) before income taxes |
( |
) | ( |
) | ||||||||||||
Provision for (benefit from) income taxes |
( |
) | ( |
) |
( |
) | ||||||||||
Net income (loss) |
$ | ( |
) | $ |
$ | ( |
) | $ |
||||||||
Basic income (loss) per share data: |
||||||||||||||||
Basic income (loss) per share |
$ | ( |
) | $ |
$ | ( |
) | $ |
||||||||
Diluted income (loss) per share data: |
||||||||||||||||
Diluted income (loss) per share |
$ | ( |
) | $ |
$ | ( |
) | $ |
||||||||
Basic weighted average shares outstanding |
||||||||||||||||
Diluted weighted average shares outstanding |
||||||||||||||||
Class A Common Stock |
Class B Common Stock |
Additional |
||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Paid-In Capital |
Accumulated Deficit |
Treasury Stock |
Total |
|||||||||||||||||||||||||
Stockholders’ equity, December 31, 2019 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Cash distributions |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
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Stockholders’ equity, March 31, 2020 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||||||
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Distributions per share |
$ | $ | ||||||||||||||||||||||||||||||
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Stock-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
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Stockholders’ equity, June 30, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
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Class A Common Stock |
Class B Common Stock |
Additional |
||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Paid-In Capital |
Accumulated Deficit |
Treasury Stock |
Total |
|||||||||||||||||||||||||
Stockholders’ equity, December 31, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
Options exercised |
— |
— |
— |
— |
||||||||||||||||||||||||||||
Net income |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
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Stockholders’ equity, March 31, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
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Stock-based compensation |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
Net income |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
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|||||||||||||||||
Stockholders’ equity, June 30, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||||||
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Six Months Ended June 30, |
||||||||
2020 |
2021 |
|||||||
OPERATING ACTIVITIES |
||||||||
Net income (loss) |
$ | ( |
) | $ |
||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
Non-cash stock-based compensation |
||||||||
Depreciation and amortization |
||||||||
Amortization of deferred financing costs |
||||||||
Non-cash lease expense |
||||||||
Provision for bad debts |
( |
) | ||||||
Deferred income taxes |
( |
) | ||||||
Change in the estimated fair value of contingent earn-out consideration |
( |
) | — |
|||||
Impairment of indefinite-lived long-term assets other than goodwill |
— |
|||||||
Impairment of goodwill |
— |
|||||||
Gain on early retirement of long-term debt |
( |
) | — |
|||||
Net (gain) loss on the disposition of assets |
||||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable and unbilled revenue |
||||||||
Inventories |
( |
) | ||||||
Prepaid expenses and other current assets |
( |
) | ||||||
Accounts payable and accrued expenses |
||||||||
Operating leas e liabilities |
( |
) | ( |
) | ||||
Contract liabilities |
||||||||
Deferred rent income |
( |
) | ||||||
Other liabilities |
||||||||
Income taxes payable |
||||||||
Net cash provided by operating activities |
||||||||
INVESTING ACTIVITIES |
||||||||
Cash paid for capital expenditures net of tenant improvement allowances |
( |
) | ( |
) | ||||
Capital expenditures reimbursable under tenant improvement allowances and trade agreements |
( |
) | ( |
) | ||||
Deposit on broadcast assets and radio station acquisitions |
— | ( |
) | |||||
Purchases of broadcast assets and radio stations |
— | ( |
) | |||||
Purchases of digital media businesses and assets |
— | ( |
) | |||||
Proceeds from sale of assets |
||||||||
Proceeds from the cash surrender value of life insurance policies |
— | |||||||
Other |
( |
) | ( |
) | ||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
FINANCING ACTIVITIES |
||||||||
Payments to repurchase 6.75% Senior Secured Notes |
( |
) | ||||||
Proceeds from borrowings under ABL Facility |
||||||||
Payments on ABL Facility |
( |
) | ( |
) | ||||
Proceeds from borrowings under PPP Loans |
— | |||||||
Payments of debt issuance costs |
( |
) | ( |
) | ||||
Proceeds from the exercise of stock options |
— | |||||||
Payments on financing lease liabilities |
( |
) | ( |
) | ||||
Payment of cash distribution on common stock |
( |
) | — | |||||
Book overdraft |
( |
) | — | |||||
Net cash provided by financing activities |
||||||||
Net increase in cash and cash equivalents |
||||||||
Cash and cash equivalents at beginning of year |
||||||||
Cash and cash equivalents at end of period |
$ | $ |
||||||
Six Months June 30, |
||||||||
2020 |
2021 |
|||||||
Supplemental disclosures of cash flow information: |
||||||||
Cash paid during the period for: |
||||||||
Cash paid for interest, net of capitalized interest |
$ | $ |
||||||
Cash paid for interest on finance lease liabilities |
$ | $ |
||||||
Net cash paid for (received from) income taxes |
$ | ( |
) | $ |
||||
Other supplemental disclosures of cash flow information: |
||||||||
Barter revenue |
$ | $ |
||||||
Barter expense |
$ | $ |
||||||
Non-cash investing and financing activities: |
||||||||
Capital expenditures reimbursable under tenant improvement allowances |
$ | $ |
||||||
Right-of-use |
$ | $ |
||||||
Right-of-use |
$ | — | $ |
|||||
Non-cash capital expenditures for property & equipment acquired under trade agreements |
$ | $ |
||||||
Net assets and liabilities assumed in a non-cash acquisition |
$ | — | $ |
|||||
Estimated present value of contingent-earn out consideration |
$ | — | $ |
• | limiting capital expenditures; |
• | reducing discretionary spending, including travel and entertainment; |
• | eliminating open positions and freezing new hires; |
• | reducing staffing levels; |
• | implementing temporary company-wide pay cuts of 5%, 7.5% or 10% depending on salary level; |
• | furloughing certain employees; |
• | temporarily suspending the company 401(k) match; |
• | requesting rent concessions from landlords; |
• | requesting discounts from vendors; |
• | offering early payment discounts to certain customers in exchange for advance cash payments; and |
• | suspending the payment of distributions on our common stock indefinitely. |
• | we deferred $ |
• | relaxation of interest expense deduction limitation for income tax purposes; and |
• | we received Paycheck Protection Program (“PPP”) loans of $ million in total during the first quarter of 2021 based on the eligibility as determined on a per-location basis. During July 2021, the SBA forg a ve all but $ |
• | revenue recognition; |
• | asset impairments, including broadcasting licenses, goodwill and other indefinite-lived intangible assets; |
• | probabilities associated with the potential for contingent earn-out consideration; |
• | fair value measurements; |
• | contingency reserves; |
• | allowance for doubtful accounts; |
• | sales returns and allowances; |
• | barter transactions; |
• | inventory reserves; |
• | reserves for royalty advances; |
• | fair value of equity awards; |
• | self-insurance reserves; |
• | estimated lives for tangible and intangible assets; |
• | assessment of contract-based factors, asset-based factors, entity-based factors and market-based factors to determine the lease term impacting Right-Of-Use |
• | determining the Incremental Borrowing Rate (“IBR”) for calculating ROU assets and lease liabilities, |
• | income tax valuation allowances; |
• | uncertain tax positions; and |
• | estimates used in going concern analysis. |
Acquisition Date |
Description |
Total Consideration |
||||
(Dollars in thousands) |
||||||
|
$ |
|||||
|
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$ |
||||||
|
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Description |
Total Consideration |
|||
(Dollars in thousands) |
||||
Cash payments made upon closing |
$ |
|||
Deferred payments |
||||
Present value of estimated fair value of contingent earn-out consideration |
||||
Total purchase price consideration |
$ |
|||
Net Broadcast Assets Acquired |
Net Digital Assets Acquired |
Total Net Assets |
||||||||||||
(Dollars in thousands) |
||||||||||||||
Assets |
||||||||||||||
Property and equipment | $ | $ | $ | |||||||||||
Broadcast licenses | ||||||||||||||
Goodwill | ||||||||||||||
Customer lists and contracts | ||||||||||||||
Domain and brand names | ||||||||||||||
$ |
$ |
$ |
||||||||||||
Liabilities |
||||||||||||||
Contract liabilities, short-term | ( |
) | ( |
) | ||||||||||
$ |
$ |
$ |
||||||||||||
Short-Term |
Long-Term |
|||||||
(Dollars in thousands) |
||||||||
Balance, beginning of period January 1, 2021 |
$ | $ | ||||||
Revenue recognized during the period that was included in the beginning balance of contract liabilities |
( |
) | — | |||||
Additional amounts recognized during the period |
||||||||
Revenue recognized during the period that was recorded during the period |
( |
) | — | |||||
Transfers |
( |
) | ||||||
Balance, end of period June 30, 2021 |
$ | $ | ||||||
Amount refundable at beginning of period |
$ | $ | ||||||
Amount refundable at end of period |
$ | $ |
Amount |
||||
For the Twelve Months Ended June 30, |
(Dollars in thousands) |
|||
$ | ||||
$ | ||||
• | We do not adjust the promised amount of consideration for the effects of a significant financing component if the period between transfer of product and customer payment is expected to be less than one year at the time of contract inception; |
• | We do not assess promised goods or services as performance obligations if they are immaterial in the context of the contract with the customer; |
• | We exclude sales and similar taxes from the transaction price; |
• | We treat shipping and handling costs that occur after control transfers as fulfillment activities instead of assessing such activities as separate performance obligations; and |
• | We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2020 | 2021 |
2020 | 2021 |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Net broadcast barter revenue |
$ | $ |
$ | $ |
||||||||||||
Net digital media barter revenue |
— | — | — | — | ||||||||||||
Net publishing barter revenue |
— | — | ||||||||||||||
Net broadcast barter expense |
$ | $ |
$ | $ |
||||||||||||
Net digital media barter expense |
— | — | — | — | ||||||||||||
Net publishing barter expense |
— | — |
Six Months Ended June 30, 2021 |
||||||||||||||||
Broadcast |
Digital Media |
Publishing |
Consolidated |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
By Source of Revenue: |
||||||||||||||||
Block Programming—National |
$ | $ | — | $ | — | $ | ||||||||||
Block Programming—Local |
— | — | ||||||||||||||
Spot Advertising—National |
— | — | ||||||||||||||
Spot Advertising—Local |
— | — | ||||||||||||||
Infomercials |
— | — | ||||||||||||||
Network |
— | — | ||||||||||||||
Digital Advertising |
||||||||||||||||
Digital Streaming |
— | |||||||||||||||
Digital Downloads and eBooks |
||||||||||||||||
Subscriptions |
||||||||||||||||
Book Sales and e-commerce, net of estimated sales returns and allowances |
||||||||||||||||
Self-Publishing Fees |
— | — | ||||||||||||||
Print Advertising |
— | — | ||||||||||||||
Other Revenues |
||||||||||||||||
$ |
$ |
$ |
$ |
|||||||||||||
Timing of Revenue Recognition |
||||||||||||||||
Point in Time |
$ | $ | $ | $ | ||||||||||||
Rental Income (1) |
— | — | ||||||||||||||
$ |
$ |
$ |
$ |
|||||||||||||
Six Months Ended June 30, 2020 |
||||||||||||||||
Broadcast |
Digital Media |
Publishing |
Consolidated |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
By Source of Revenue: |
||||||||||||||||
Block Programming—National |
$ | $ | — | $ | — | $ | ||||||||||
Block Programming—Local |
— | — | ||||||||||||||
Spot Advertising—National |
— | — | ||||||||||||||
Spot Advertising—Local |
— | — | ||||||||||||||
Infomercials |
— | — | ||||||||||||||
Network |
— | — | ||||||||||||||
Digital Advertising |
||||||||||||||||
Digital Streaming |
— | |||||||||||||||
Digital Downloads and eBooks |
— | |||||||||||||||
Subscriptions |
||||||||||||||||
Book Sales and e-commerce, net of estimated sales returns and allowances |
||||||||||||||||
Self-Publishing Fees |
— | — | ||||||||||||||
Print Advertising |
— | |||||||||||||||
Other Revenues |
||||||||||||||||
$ |
$ |
$ |
$ |
|||||||||||||
Timing of Revenue Recognition |
||||||||||||||||
Point in Time |
$ | $ | $ | $ | ||||||||||||
Rental Income (1) |
— | — | ||||||||||||||
$ |
$ |
$ |
$ |
|||||||||||||
(1) | Rental income is not applicable to ASC Topic 606, but shown for the purpose of identifying each revenue source presented in total revenue on our Condensed Consolidated Financial Statements within this report on Form 10-Q. |
December 31, 2020 | June 30, 2021 |
|||||||
(Dollars in thousands) |
||||||||
Book inventories |
$ | $ |
||||||
Reserve for obsolescence |
( |
) | ( |
) | ||||
Inventory, net— |
$ | $ |
||||||
December 31, 2020 |
June 30, 2021 |
|||||||
(Dollars in thousands) |
||||||||
Land |
$ | $ |
||||||
Buildings |
||||||||
Office furnishings and equipment |
||||||||
Antennae, towers and transmitting equipment |
||||||||
Studio, production, and mobile equipment |
||||||||
Computer software and website development costs |
||||||||
Record and tape libraries |
— | |||||||
Automobiles |
||||||||
Leasehold improvements |
||||||||
Construction-in-progress |
||||||||
|
|
|
|
|||||
$ | $ |
|||||||
Less accumulated depreciation |
( |
) | ( |
) | ||||
|
|
|
|
|||||
$ | $ |
|||||||
|
|
|
|
June 30, 2021 |
||||||||||||
(Dollars in thousands) |
||||||||||||
Operating Leases |
Related Party | Other | Total | |||||||||
Operating leases ROU assets |
$ | $ | $ | |||||||||
Operating lease liabilities (current) |
$ | $ | $ | |||||||||
Operating lease liabilities (non-current) |
||||||||||||
|
|
|
|
|
|
|||||||
Total operating lease liabilities |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Weighted Average Remaining Lease Term |
||||
Operating leases |
||||
Finance leases |
||||
Weighted Average Discount Rate |
||||
Operating leases |
% | |||
Finance leases |
% |
Six Months Ended June 30, 2021 |
||||
(Dollars in thousands) |
||||
Amortization of finance lease ROU Assets |
$ | |||
Interest on finance lease liabilities |
||||
|
|
|||
Finance lease expense |
||||
Operating lease expense |
||||
Variable lease expense |
||||
Short-term lease expense |
||||
|
|
|||
Total lease expense |
$ | |||
|
|
Six Months Ended June 30, 2021 |
||||
(Dollars in thousands) |
||||
Cash paid for amounts included in the measurement of lease liabilities: |
||||
Operating cash flows from operating leases |
$ | |||
Operating cash flows from finance leases |
||||
Financing cash flows from finance leases |
||||
Leased assets obtained in exchange for new operating lease liabilities |
$ | |||
Leased assets obtained in exchange for new finance lease liabilities |
Operating Leases | ||||||||||||||||||||
Related Party | Other | Total | Finance Leases | Total | ||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
2021 (July-Dec) |
$ | $ | $ | $ | $ | |||||||||||||||
2022 |
||||||||||||||||||||
2023 |
||||||||||||||||||||
2024 |
||||||||||||||||||||
2025 |
||||||||||||||||||||
Thereafter |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Undiscounted Cash Flows |
$ | $ | $ | $ | $ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Less: imputed interest |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reconciliation to lease liabilities: |
||||||||||||||||||||
Lease liabilities—current |
$ | $ | $ | $ | $ | |||||||||||||||
Lease liabilities—long-term |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Lease Liabilities |
$ | $ | $ | $ |
$ |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
Broadcast Licenses |
Twelve Months Ended December 31, 2020 |
Six Months Ended June 30, 2021 |
||||||
(Dollars in thousands) |
||||||||
Balance before cumulative loss on impairment, beginning of period |
$ | $ |
||||||
Accumulated loss on impairment, beginning of period |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Balance after cumulative loss on impairment, beginning of period |
||||||||
|
|
|
|
|||||
Acquisitions of radio stations |
— | |||||||
Dispositions of radio stations |
( |
) | — | |||||
Impairments based on the estimated fair value of broadcast licenses |
( |
) | — | |||||
|
|
|
|
|||||
Balance, end of period after cumulative loss on impairment |
$ | $ |
||||||
|
|
|
|
|||||
Balance, end of period before cumulative loss on impairment |
$ | $ |
||||||
Accumulated loss on impairment, end of period |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Balance, end of period after cumulative loss on impairment |
$ | $ |
||||||
|
|
|
|
Goodwill |
Twelve Months Ended December 31, 2020 |
Six Months Ended June 30, 2021 |
||||||
(Dollars in thousands) |
||||||||
Balance, beginning of period before cumulative loss on impairment, |
$ | $ |
||||||
Accumulated loss on impairment |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Balance, beginning of period after cumulative loss on impairment |
||||||||
|
|
|
|
|||||
Acquisitions of radio stations |
||||||||
Acquisitions of digital media entities |
— | |||||||
Impairments based on the estimated fair value goodwill |
( |
) | — |
|||||
|
|
|
|
|||||
Ending period balance |
$ | $ |
||||||
|
|
|
|
|||||
Balance, end of period before cumulative loss on impairment |
||||||||
Accumulated loss on impairment |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Ending period balance |
$ | $ |
||||||
|
|
|
|
June 30, 2021 |
||||||||||||
Cost | Accumulated Amortization |
Net | ||||||||||
(Dollars in thousands) |
||||||||||||
Customer lists and contracts |
$ |
$ |
( |
) |
$ |
|||||||
Domain and brand names |
( |
) |
||||||||||
Favorable and assigned leases |
( |
) |
||||||||||
Subscriber base and lists |
( |
) |
||||||||||
Author relationships |
( |
) |
||||||||||
Non-compete agreements |
( |
) |
||||||||||
Other amortizable intangible assets |
( |
) |
||||||||||
|
|
|
|
|
|
|||||||
$ |
$ |
( |
) |
$ |
||||||||
|
|
|
|
|
|
December 31, 2020 |
||||||||||||
Accumulated | ||||||||||||
Cost | Amortization | Net | ||||||||||
(Dollars in thousands) |
||||||||||||
Customer lists and contracts |
$ | $ | ( |
) | $ | |||||||
Domain and brand names |
( |
) | ||||||||||
Favorable and assigned leases |
( |
) | ||||||||||
Subscriber base and lists |
( |
) | ||||||||||
Author relationships |
( |
) | ||||||||||
Non-compete agreements |
( |
) | ||||||||||
Other amortizable intangible assets |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
$ |
$( |
$ |
||||||||||
|
|
|
|
|
|
Year Ended December 31, |
Amortization Expense |
|||
(Dollars in thousands) |
||||
2021 (July – Dec) |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
Total |
$ | |||
|
|
Date |
Principal Repurchased |
Cash Paid |
% of Face Value |
Bond Issue Costs |
Net Gain |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
$ | $ | % | $ | $ | ||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||
December 31, 2020 | June 30, 2021 |
|||||||
(Dollars in thousands) |
||||||||
6.75% Senior Secured Notes |
$ | $ |
||||||
Less unamortized debt issuance costs based on imputed interest rate of |
( |
) | ( |
) | ||||
|
|
|
|
|||||
6.75% Senior Secured Notes net carrying value |
||||||||
Asset-Based Revolving Credit Facility principal outstanding |
— | |||||||
SBA Paycheck Protection Program loans |
— | |||||||
|
|
|
|
|||||
Long-term debt less unamortized debt issuance costs |
$ | $ |
||||||
|
|
|
|
|||||
Less current portion |
( |
) | — | |||||
|
|
|
|
|||||
Long-term debt less unamortized debt issuance costs, net of current portion |
$ | $ |
||||||
|
|
|
|
• | $ |
• | Commitment fee of |
Amount |
||||
For the Year Ended June 30, |
(Dollars in thousands) |
|||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
|
|
|||
$ | ||||
|
|
• | Level 1 Inputs |
• | Level 2 Inputs |
• | Level 3 Inputs |
June 30, 2021 |
||||||||||||||||
Carrying Value on Balance Sheet |
Fair Value Measurement Category | |||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Liabilities: |
||||||||||||||||
Estimated fair value of contingent earn-out consideration included in accrued expenses |
$ |
— | — | $ | ||||||||||||
Long-term debt less unamortized debt issuance costs |
— | — |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2020 |
2021 |
2020 |
2021 |
|||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||
Stock option compensation expense included in unallocated corporate expenses |
$ | $ |
$ | $ |
||||||||||||
Stock option compensation expense included in broadcast operating expenses |
||||||||||||||||
Stock option compensation expense included in digital media operating expenses |
||||||||||||||||
Stock option compensation expense included in publishing operating expenses |
— | — | — | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total stock-based compensation expense, pre-tax |
$ | $ |
$ | $ |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Tax expense for stock-based compensation expense |
( |
) | ( |
) |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total stock-based compensation expense, net of tax |
$ | $ |
$ | $ |
||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended |
Six Months Ended |
Three Months Ended |
Six Months Ended |
|||||||||
June 30, 2020 |
June 30, 2020 |
June 30, 2021 |
June 30, 2021 |
|||||||||
Expected volatility |
n/a | % | n/a | % | ||||||||
Expected dividends |
n/a | % | n/a | % | ||||||||
Expected term (in years) |
n/a | n/a | ||||||||||
Risk-free interest rate |
n/a | % | n/a | % |
Options |
Shares | Weighted Average Exercise Price |
Weighted Average Grant Date Fair Value |
Weighted Average Remaining Contractual Term |
Aggregate Intrinsic Value |
|||||||||||||||
(Dollars in thousands, except weighted average exercise price and weighted average grant date fair value) |
||||||||||||||||||||
Outstanding at January 1, 2021 |
$ | $ | $ | — | ||||||||||||||||
Granted |
— | |||||||||||||||||||
Exercised |
( |
) | ||||||||||||||||||
Forfeited or expired |
( |
) | — | |||||||||||||||||
|
|
|||||||||||||||||||
Outstanding at June 30, 2021 |
$ |
$ |
$ |
|||||||||||||||||
|
|
|||||||||||||||||||
Exercisable at June 30, 2021 |
$ |
$ |
$ |
|||||||||||||||||
|
|
|||||||||||||||||||
Expected to Vest |
$ |
$ |
$ |
|||||||||||||||||
|
|
Restricted Stock Awards |
Shares | Weighted Average Grant Date Fair Value |
Weighted Average Remaining Contractual Term |
Aggregate Intrinsic Value |
||||||||||||
(Dollars in thousands, except weighted average exercise price and weighted average grant date fair value) |
||||||||||||||||
Outstanding at January 1, 2021 |
$ | $ | ||||||||||||||
Granted |
— | — | — | — | ||||||||||||
Lapsed |
— | — | — | — | ||||||||||||
Forfeited |
— | — | — | — | ||||||||||||
|
|
|||||||||||||||
Outstanding at June 30, 2021 |
$ | $ | ||||||||||||||
|
|
Broadcast |
Digital Media |
Publishing |
Unallocated Corporate Expenses |
Consolidated |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Three Months Ended June 30, 2021 |
||||||||||||||||||||
Net revenue |
$ |
$ |
$ |
$ | — | $ |
||||||||||||||
Operating expenses |
||||||||||||||||||||
Net operating income (loss) before depreciation, amortization, and net (gain) loss on the disposition of assets |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||
Depreciation |
||||||||||||||||||||
Amortization |
— | |||||||||||||||||||
Net (gain) loss on the disposition of assets |
— | ( |
) |
— | ( |
) | ||||||||||||||
Net operating income (loss) |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||
Three Months Ended June 30, 2020 |
||||||||||||||||||||
Net revenue |
$ | $ | $ | $ | — | $ | ||||||||||||||
Operating expenses |
||||||||||||||||||||
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 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||
Depreciation |
||||||||||||||||||||
Amortization |
||||||||||||||||||||
Change in the estimated fair value of contingent earn-out consideration |
— | — | — | |||||||||||||||||
Net (gain) loss on the disposition of assets |
— | — | ||||||||||||||||||
Net operating income (loss) |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||
Broadcast |
Digital Media |
Publishing |
Unallocated Corporate Expenses |
Consolidated |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Six Months Ended June 30, 2021 |
||||||||||||||||||||
Net revenue |
$ |
$ |
$ |
$ |
— |
$ |
||||||||||||||
Operating expenses |
||||||||||||||||||||
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 |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||
Depreciation |
||||||||||||||||||||
Amortization |
— |
|||||||||||||||||||
Net (gain) loss on the disposition of assets |
( |
) |
— |
|||||||||||||||||
Net operating income (loss) |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||
Six Months Ended June 30, 2020 |
||||||||||||||||||||
Net revenue |
$ | $ | $ | $ | — | $ | ||||||||||||||
Operating expenses |
||||||||||||||||||||
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 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||
Depreciation |
||||||||||||||||||||
Amortization |
||||||||||||||||||||
Change in the estimated fair value of contingent earn-out consideration |
— | ( |
) | — | — | ( |
) | |||||||||||||
Impairment of indefinite-lived long-term assets other than goodwill |
— | — | ||||||||||||||||||
Impairment of goodwill |
||||||||||||||||||||
Net (gain) loss on the disposition of assets |
— | — | ||||||||||||||||||
Net operating income (loss) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||
Broadcast |
Digital Media |
Publishing |
Unallocated Corporate |
Consolidated |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
As of June 30, 2021 |
||||||||||||||||||||
Inventories, net |
$ | — | $ | — | $ |
$ | — | $ |
||||||||||||
Property and equipment, net |
||||||||||||||||||||
Broadcast licenses |
— | — | — | |||||||||||||||||
Goodwill |
— | |||||||||||||||||||
Amortizable intangible assets, net |
— | |||||||||||||||||||
As of December 31, 2020 |
||||||||||||||||||||
Inventories, net |
$ | — | $ | — | $ | $ | — | $ | ||||||||||||
Property and equipment, net |
||||||||||||||||||||
Broadcast licenses |
— | — | — | |||||||||||||||||
Goodwill |
— | |||||||||||||||||||
Amortizable intangible assets, net |
— |
• | the coronavirus (“COVID-19”) is adversely impacting our business, |
• | risks and uncertainties relating to the need for additional funds to service our debt, |
• | risks and uncertainties relating to the need for additional funds to execute our business strategy, |
• | our ability to access borrowings under our ABL Facility, |
• | reductions in revenue forecasts, |
• | our ability to renew our broadcast licenses, |
• | changes in interest rates, |
• | the timing of our ability to complete any acquisitions or dispositions, |
• | costs and synergies resulting from the integration of any completed acquisitions, |
• | our ability to effectively manage costs, |
• | our ability to drive and manage growth, |
• | the popularity of radio as a broadcasting and advertising medium, |
• | changes in consumer tastes, |
• | the impact of general economic conditions in the United States or in specific markets in which we do business, |
• | industry conditions, including existing competition and future competitive technologies and cancellation, |
• | disruptions or postponements of advertising schedules and programming in response to national or world events, |
• | our ability to generate revenues from new sources, including local commerce and technology-based initiatives, |
• | the impact of regulatory rules or proceedings that may affect our business from time to time, and the future write off of any material portion of the fair value of our FCC broadcast licenses and goodwill. |
• | the sale of block program time to national and local program producers; |
• | the sale of advertising time on our radio stations to national and local advertisers; |
• | the sale of banner advertisements on our station websites or on our mobile applications; |
• | the sale of digital streaming advertisements on our station websites or on our mobile applications; |
• | the sale of advertisements included in digital newsletters; |
• | fees earned for the creation of custom web pages and custom digital media campaigns for our advertisers through Salem Surround; |
• | the sale of advertising time on our national network; |
• | the syndication of programming on our national network; |
• | the sale of advertising time through podcasts and video-on-demand |
• | product sales and royalties for on-air host materials, including podcasts and programs; and |
• | other revenue such as events, including ticket sales and sponsorships, listener purchase programs, where revenue is generated from special discounts and incentives offered to our listeners from our advertisers; talent fees for voice-overs or custom endorsements from our on-air personalities and production services, and rental income for studios, towers or office space. |
• | the sale of digital banner advertisements on our websites and mobile applications; |
• | the sale of digital streaming advertisements on websites and mobile applications; |
• | the support and promotion to stream third-party content on our websites; |
• | the sale of advertisements included in digital newsletters; |
• | the digital delivery of newsletters to subscribers; and |
• | the sale of video and graphic downloads. |
• | the sale of books and e-books; |
• | publishing fees from authors; |
• | the sale of digital advertising on our magazine websites and digital newsletters; |
• | subscription fees for our print magazine; and |
• | the sale of print magazine advertising. |
• | audience share; |
• | how well our programs and advertisements perform for our clients; |
• | the size of the market and audience reached; |
• | the number of impressions delivered; |
• | the number of advertisements and programs streamed; |
• | the number of page views achieved; |
• | the number of downloads completed; |
• | the number of events held, the number of event sponsorships sold and the attendance at each event; |
• | demand for books and publications; |
• | general economic conditions; and |
• | supply and demand for airtime on a local and national level. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2020 |
2021 |
2020 |
2021 |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Reconciliation of Net Broadcast Revenue to Same Station Net Broadcast Revenue |
||||||||||||||||
Net broadcast revenue |
$ | 39,470 | $ |
46,783 |
$ | 84,650 | $ |
90,831 |
||||||||
Net broadcast revenue – acquisitions |
— | (79 |
) |
— | (79 |
) | ||||||||||
Net broadcast revenue – dispositions |
(220 | ) | (42 |
) |
(443 | ) | (38 |
) | ||||||||
Net broadcast revenue – format change |
(104 | ) | (205 |
) |
(280 | ) | (345 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Same Station net broadcast revenue |
$ | 39,146 | $ |
46,457 |
$ | 83,927 | $ |
90,369 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
Reconciliation of Broadcast Operating Expenses To Same Station Broadcast Operating Expenses |
||||||||||||||||
Broadcast operating expenses |
$ | 33,094 | $ |
36,162 |
$ | 70,421 | $ |
69,505 |
||||||||
Broadcast operating expenses – acquisitions |
— | (38 |
) |
— | (38 |
) | ||||||||||
Broadcast operating expenses – dispositions |
(379 | ) | (79 |
) |
(881 | ) | (185 |
) | ||||||||
Broadcast operating expenses – format change |
(259 | ) | (206 |
) |
(519 | ) | (384 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Same Station broadcast operating expenses |
$ | 32,456 | $ |
35,839 |
$ | 69,021 | $ |
68,898 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
Reconciliation of Operating Income to Same Station Operating Income |
||||||||||||||||
Station Operating Income |
$ | 6,376 | $ |
10,621 |
$ | 14,229 | $ |
21,326 |
||||||||
Station operating (income) loss –acquisitions |
— | (41 |
) |
— | (41 |
) | ||||||||||
Station operating loss – dispositions |
159 | 37 |
438 | 147 |
||||||||||||
Station operating loss – format change |
155 | 1 |
239 | 39 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Same Station – Station Operating Income |
$ | 6,690 | $ |
10,618 |
$ | 14,906 | $ |
21,471 |
||||||||
|
|
|
|
|
|
|
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2020 |
2021 |
2020 |
2021 |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Calculation of Station Operating Income, Digital Media Operating Income and Publishing Operating Income (Loss) |
|
|||||||||||||||
Net broadcast revenue |
$ | 39,470 | $ |
46,783 |
$ | 84,650 | $ |
90,831 |
||||||||
Less broadcast operating expenses |
(33,094 | ) | (36,162 |
) |
(70,421 | ) | (69,505 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Station Operating Income |
$ | 6,376 | $ |
10,621 |
$ | 14,229 | $ |
21,326 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
Net digital media revenue |
$ | 9,443 | $ |
10,339 |
$ | 18,547 | $ |
19,958 |
||||||||
Less digital media operating expenses |
(7,653 | ) | (8,338 |
) |
(15,979 | ) | (17,011 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Digital Media Operating Income |
$ | 1,790 | $ |
2,001 |
$ | 2,568 | $ |
2,947 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
Net publishing revenue |
$ | 3,958 | $ |
6,660 |
$ | 7,924 | $ |
12,346 |
||||||||
Less publishing operating expenses |
(5,567 | ) | (6,426 |
) |
(10,629 | ) | (11,631 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Publishing Operating Income (Loss) |
$ | (1,609 | ) | $ |
234 |
$ | (2,705 | ) | $ |
715 |
||||||
|
|
|
|
|
|
|
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2020 |
2021 |
2020 |
2021 |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Reconciliation of Net Income (Loss) to Operating Income and Station Operating Income, Digital Media Operating Income and Publishing Operating Income (Loss) |
| |||||||||||||||
Net income (loss) |
$ | (2,515 | ) | $ |
2,257 |
$ | (57,719 | ) | $ |
2,580 |
||||||
Plus provision for (benefit from) income taxes |
(2,380 | ) | (488 |
) |
30,779 | (358 |
) | |||||||||
Plus net miscellaneous income and (expenses) |
(6 | ) | (63 |
) |
46 | (85 |
) | |||||||||
Plus (gain) on early retirement of long-term debt |
— | — | (49 | ) | — | |||||||||||
Plus interest expense, net of capitalized interest |
4,013 | 3,935 |
8,045 | 7,861 |
||||||||||||
Less interest income |
— | — | — | (1 |
) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net operating income (loss) |
$ | (888 | ) | $ |
5,641 |
$ | (18,898 | ) | $ |
9,997 |
||||||
|
|
|
|
|
|
|
|
|||||||||
Plus net (gain) loss on the disposition of assets |
34 | (263 |
) |
113 | 55 |
|||||||||||
Plus change in the estimated fair value of contingent earn-out consideration |
3 | — | (2 | ) | — | |||||||||||
Plus impairment of indefinite-lived long-term assets other than goodwill |
— | — | 17,254 | — | ||||||||||||
Plus impairment of goodwill |
— | — | 307 | — | ||||||||||||
Plus depreciation and amortization |
3,558 | 3,286 |
7,258 | 6,456 |
||||||||||||
Plus unallocated corporate expenses |
3,850 | 4,192 |
8,060 | 8,480 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Combined Station Operating Income, Digital Media Operating Income and Publishing Operating Loss |
$ | 6,557 | $ |
12,856 |
$ | 14,092 | $ |
24,988 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
Station Operating Income |
$ | 6,376 | $ |
10,621 |
$ | 14,229 | $ |
21,326 |
||||||||
Digital Media Operating Income |
1,790 | 2,001 |
2,568 | 2,947 |
||||||||||||
Publishing Operating Income (Loss) |
(1,609 | ) | 234 |
(2,705 | ) | 715 |
||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 6,557 | $ |
12,856 |
$ | 14,092 | $ |
24,988 |
|||||||||
|
|
|
|
|
|
|
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2020 |
2021 |
2020 |
2021 |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Reconciliation of Adjusted EBITDA to EBITDA to Net Income (Loss) |
| |||||||||||||||
Net income (loss) |
$ | (2,515 | ) | $ |
2,257 |
$ | (57,719 | ) | $ |
2,580 |
||||||
Plus interest expense, net of capitalized interest |
4,013 | 3,935 |
8,045 | 7,861 |
||||||||||||
Plus provision for (benefit from) income taxes |
(2,380 | ) | (488 |
) |
30,779 | (358 |
) | |||||||||
Plus depreciation and amortization |
3,558 | 3,286 |
7,258 | 6,456 |
||||||||||||
Less interest income |
— | — | — | (1 |
) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
EBITDA |
$ | 2,676 | $ |
8,990 |
$ | (11,637 | ) | $ |
16,538 |
|||||||
|
|
|
|
|
|
|
|
|||||||||
Plus net (gain) loss on the disposition of assets |
34 | (263 |
) |
113 | 55 |
|||||||||||
Plus change in the estimated fair value of contingent earn-out consideration |
3 | — | (2 | ) | — | |||||||||||
Plus impairment of indefinite-lived long-term assets other than goodwill |
— | — | 17,254 | — | ||||||||||||
Plus impairment of goodwill |
— | — | 307 | — | ||||||||||||
Plus net miscellaneous (income) and expenses |
(6 | ) | (63 |
) |
46 | (85 | ) | |||||||||
Plus (gain) on early retirement of long-term debt |
— | — | (49 | ) | — | |||||||||||
Plus non-cash stock-based compensation |
96 | 84 |
199 | 162 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | 2,803 | $ |
8,748 |
$ | 6,231 | $ |
16,670 |
||||||||
|
|
|
|
|
|
|
|
• | On June 1, 2021, we acquired radio stations KDIA-AM and KDYA-AM in San Francisco, California for $0.6 million in cash. |
• | On May 25, 2021, we sold Singing News Magazine and Singing News Radio for $0.1 million in cash. |
• | On April 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. |
• | 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. |
• | On March 18, 2021, we sold radio station WKAT-AM and an FM translator in Miami, Florida for $3.5 million. The buyer began operating the station under a LMA in November 2020. |
• | On September 15, 2020, we acquired the Hyper Pixels Media website and related assets for $1.1 million in cash. We paid $0.4 million in cash upon closing with deferred payments of $0.4 million due January 31, 2021 and $0.3 million due September 15, 2021. |
• | On April 6, 2020, we sold radio station WBZW-AM and an FM translator construction permit in Orlando, Florida, for $0.2 million in cash. |
Three Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Net Broadcast Revenue |
$ | 39,470 | $ |
46,783 |
$ | 7,313 | 18.5 | % | 74.7 | % | 73.3 |
% | ||||||||||||
Same Station Net Broadcast Revenue |
$ | 39,146 | $ |
46,457 |
$ | 7,311 | 18.7 | % |
Three Months Ended June 30, |
||||||||||||||||
2020 | 2021 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Block Programming: |
||||||||||||||||
National |
$ | 11,770 | 29.8 | % | $ |
11,861 |
25.4 |
% | ||||||||
Local |
5,632 | 14.3 | % | 5,817 |
12.4 |
% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
17,402 | 44.1 | % | 17,678 |
37.8 |
% | |||||||||||
Broadcast Advertising: |
||||||||||||||||
National |
2,587 | 6.6 | % | 3,458 |
7.4 |
% | ||||||||||
Local |
7,788 | 19.7 | % | 10,546 |
22.5 |
% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
10,375 | 26.3 | % | 14,004 |
29.9 |
% | |||||||||||
Broadcast Digital (local) |
5,655 | 14.3 | % | 7,728 |
16.5 |
% | ||||||||||
Infomercials |
228 | 0.6 | % | 225 |
0.5 |
% | ||||||||||
Network |
4,226 | 10.7 | % | 4,950 |
10.6 |
% | ||||||||||
Other Revenue |
1,584 | 4.0 | % | 2,198 |
4.7 |
% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Broadcast Revenue |
$ | 39,470 | 100.0 | % | $ |
46,783 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Net Digital Media Revenue |
$ | 9,443 | $ |
10,339 |
$ | 896 | 9.5 | % | 17.9 | % | 16.2 |
% |
Three Months Ended June 30, |
||||||||||||||||
2020 | 2021 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Digital Advertising, net |
$ | 4,547 | 48.2 | % | $ |
4,393 |
42.5 |
% | ||||||||
Digital Streaming |
853 | 9.0 | 862 |
8.3 |
||||||||||||
Digital Subscriptions |
2,157 | 22.8 | 3,299 |
31.9 |
||||||||||||
Digital Downloads |
1,802 | 19.1 | 1,694 |
16.4 |
||||||||||||
e-commerce |
27 | 0.3 | 67 |
0.6 |
||||||||||||
Other Revenues |
57 | 0.6 | 24 |
0.2 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Digital Media Revenue |
$ | 9,443 | 100.0 | % | $ |
10,339 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Net Publishing Revenue |
$ | 3,958 | $ |
6,660 |
$ | 2,702 | 68.3 | % | 7.5 | % | 10.4 |
% |
Three Months Ended June 30, |
||||||||||||||||
2020 | 2021 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Book Sales |
$ | 2,698 | 68.2 | % | $ |
6,212 |
93.3 |
% | ||||||||
Estimated Sales Returns & Allowances |
(560 | ) | (14.1 | ) | (1,918 |
) |
(28.8 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Book Sales |
2,138 | 54.1 | 4,294 |
64.5 |
||||||||||||
E-Book Sales |
250 | 6.3 | 453 |
6.8 |
||||||||||||
Self-Publishing Fees |
1,051 | 26.5 | 1,550 |
23.3 |
||||||||||||
Print Magazine Subscriptions |
174 | 4.4 | 104 |
1.6 |
||||||||||||
Print Magazine Advertisements |
91 | 2.3 | 54 |
0.8 |
||||||||||||
Digital Advertising |
52 | 1.3 | 70 |
1.1 |
||||||||||||
Other Revenue |
202 | 5.1 | 135 |
2.0 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Publishing Revenue |
$ | 3,958 | 100.0 | % | $ |
6,660 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change | Change | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Broadcast Operating Expenses |
$ | 33,094 | $ |
36,162 |
$ | 3,068 | 9.3 | % | 62.6 | % | 56.7 |
% | ||||||||||||
Same Station Broadcast Operating Expenses |
$ | 32,456 | $ |
35,839 |
$ | 3,383 | 10.4 | % |
Three Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Digital Media Operating Expenses |
$ | 7,653 | $ |
8,338 |
$ | 685 | 9.0 | % | 14.5 | % | 13.1 |
% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Publishing Operating Expenses |
$ | 5,567 | $ |
6,426 |
$ | 859 | 15.4 | % | 10.5 | % | 10.1 |
% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Unallocated Corporate Expenses |
$ | 3,850 | $ |
4,192 |
$ | 342 | 8.9 | % | 7.3 | % | 6.6 |
% |
Three Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Depreciation Expense |
$ | 2,718 | $ |
2,741 |
$ | 23 | 0.8 | % | 5.1 | % | 4.3 |
% |
Three Months Ended June 30, |
||||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||||
Amortization Expense |
$ | 840 | $ 545 |
$ | (295 | ) | (35.1) % | 1.6 | % | 0.9 |
% |
Three Months Ended June 30, | ||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 | |||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Net (Gain) Loss on the Disposition of assets |
$ | 34 | $ |
(263 |
) |
$ | (297 | ) | (873.5) % | 0.1 | % | (0.4) % |
Three Months Ended June 30, | ||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 | |||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Interest Expense |
$ | (4,013 | ) | $ |
(3,935 |
) |
78 | (1.9) % | (7.6) % |
(6.2) % | ||||||||||||||
Net Miscellaneous Income and (Expenses) |
6 | 63 |
57 | 950.0% | — % |
0.1% |
Three Months Ended June 30, | ||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 | |||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Provision for (Benefit from) Income Taxes |
$ | (2,380 | ) | $ |
(488 |
) |
$ | 1,892 | (79.5) % | (4.5) % | (0.8) % |
Three Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Net Income (Loss) |
$ | (2,515 | ) | $ |
2,257 |
$ | 4,772 | (189.7) % | (4.8) % | 3.5 |
% |
• | On June 1, 2021, we acquired radio stations KDIA-AM and KDYA-AM in San Francisco, California for $0.6 million in cash. |
• | On May 25, 2021, we sold Singing News Magazine and Singing News Radio for $0.1 million in cash. |
• | On April 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. |
• | 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. |
• | On March 18, 2021, we sold radio station WKAT-AM and an FM translator in Miami, Florida for $3.5 million. The buyer began operating the station under a LMA in November 2020. |
• | On September 15, 2020, we acquired the Hyper Pixels Media website and related assets for $1.1 million in cash. We paid $0.4 million in cash upon closing with deferred payments of $0.4 million due January 31, 2021 and $0.3 million due September 15, 2021. |
• | On April 6, 2020, we sold radio station WBZW-AM and an FM translator construction permit in Orlando, Florida, for $0.2 million in cash. |
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Net Broadcast Revenue |
$ | 84,650 | $ |
90,831 |
$ | 6,181 | 7.3 | % | 76.2 | % | 73.8 |
% | ||||||||||||
Same Station Net Broadcast Revenue |
$ | 83,927 | $ |
90,369 |
$ | 6,422 | 7.7 | % |
Six Months Ended June 30, |
||||||||||||||||
2020 | 2021 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Block Programming: |
||||||||||||||||
National |
$ | 23,804 | 28.1 | % | $ |
23,322 |
25.7 | % | ||||||||
Local |
12,440 | 14.7 | % | 11,773 |
13.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
36,244 | 42.8 | % | 35,095 |
38.6 | % | |||||||||||
Broadcast Advertising: |
||||||||||||||||
National |
6,544 | 7.7 | % | 7,118 |
7.8 | % | ||||||||||
Local |
19,145 | 22.6 | % | 19,441 |
21.4 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
25,689 | 30.3 | % | 26,559 |
29.2 | % | |||||||||||
Broadcast Digital (local) |
9,948 | 11.8 | % | 14,797 |
16.3 | % | ||||||||||
Infomercials |
536 | 0.6 | % | 462 |
0.5 | % | ||||||||||
Network |
8,614 | 10.2 | % | 9,821 |
10.8 | % | ||||||||||
Other Revenue |
3,619 | 4.3 | % | 4,097 |
4.5 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Broadcast Revenue |
$ | 84,650 | 100.0 | % | $ |
90,831 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Net Digital Media |
$ | 18,547 | $ |
19,958 |
$ | 1,411 | 7.6 | % | 16.7 | % | 16.2 |
% |
Six Months Ended June 30, |
||||||||||||||||
2020 | 2021 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Digital Advertising, net |
$ | 9,260 | 49.9 | % | $ |
8,806 |
44.1 |
% | ||||||||
Digital Streaming |
1,768 | 9.5 | 1,706 |
8.5 |
||||||||||||
Digital Subscriptions |
4,292 | 23.2 | 6,072 |
30.4 |
||||||||||||
Digital Downloads |
3,047 | 16.4 | 3,173 |
15.9 |
||||||||||||
e-commerce |
55 | 0.3 | 98 |
0.5 |
||||||||||||
Other Revenues |
125 | 0.7 | 103 |
0.5 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Digital Media Revenue |
$ | 18,547 | 100.0 | % | $ |
19,958 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Net Publishing Revenue |
$ | 7,924 | $ |
12,346 |
$ | 4,422 | 55.8 | % | 7.1 | % | 10.0 |
% |
Six Months Ended June 30, |
||||||||||||||||
2020 | 2021 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Book Sales |
$ | 5,391 | 68.0 | % | $ |
10,513 |
85.2 |
% | ||||||||
Estimated Sales Returns & Allowances |
(1,530 | ) | (19.3 | ) | (3,011 |
) |
(24.4 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Book Sales |
3,861 | 48.7 | 7,502 |
60.8 |
||||||||||||
E-Book Sales |
504 | 6.4 | 792 |
6.4 |
||||||||||||
Self-Publishing Fees |
2,453 | 31.0 | 3,174 |
25.7 |
||||||||||||
Print Magazine Subscriptions |
351 | 4.4 | 262 |
2.1 |
||||||||||||
Print Magazine Advertisements |
193 | 2.4 | 122 |
1.0 |
||||||||||||
Digital Advertising |
151 | 1.9 | 132 |
1.1 |
||||||||||||
Other Revenue |
411 | 5.2 | 362 |
2.9 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Publishing Revenue |
$ | 7,924 | 100.0 | % | $ |
12,346 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Broadcast Operating Expenses |
$ | 70,421 | $ |
69,505 |
$ | (916 | ) | (1.3 | )% | 63.4 | % | 56.4 |
% | |||||||||||
Same Station Broadcast Operating Expenses |
$ | 69,021 | $ |
68,898 |
$ | (123 | ) | (0.2 | )% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Digital Media Operating Expenses |
$ | 15,979 | $ |
17,011 |
$ | 1,032 | 6.5 | % | 14.4 | % | 13.8 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Publishing Operating Expenses |
$ | 10,629 | $ |
11,631 |
$ | 1,002 | 9.4 | % | 9.6 | % | 9.4 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Unallocated Corporate Expenses |
$ | 8,060 | $ |
8,480 |
$ | 420 | 5.2 | % | 7.3 | % | 6.9 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 |
2021 | Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Depreciation Expense |
$ | 5,431 | $ |
5,330 |
$ | (101 | ) | (1.9 | )% | 4.9 | % | 4.3 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Amortization Expense |
$ | 1,827 | $ |
1,126 |
$ | (701 | ) | (38.4 | )% | 1.6 | % | 0.9 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Impairment of Indefinite-Lived Long-Term Assets Other Than Goodwill |
$ | 17,254 | $ |
— |
$ | (17,254 | ) | (100.0 | )% | 15.5 | % | — |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Impairment of Goodwill |
$ | 307 | $ |
— |
$ | (307 | ) | (100.0 | )% | 0.3 | % | — |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 |
2021 | Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Net (Gain) Loss on the Disposition of assets |
$ | 113 | $ |
55 |
$ | (58 | ) | (51.3 | )% | 0.1 | % | — |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 |
2021 | Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Interest Income |
$ | — | $ |
1 |
$ | 1 | 100.0 | % | — | % | — |
% | ||||||||||||
Interest Expense |
(8,045 | ) | (7,861 |
) |
(184 | ) | (2.3 | )% | (7.2 | )% | (6.4 |
)% | ||||||||||||
Gain on Early Retirement of Long-Term Debt |
49 | — |
(49 | ) | (100.0 | )% | — | % | — |
% | ||||||||||||||
Net Miscellaneous Income and (Expenses) |
(46 | ) | 85 |
131 | (284.8 | )% | — | % | 0.1 |
% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Provision for (Benefit from) Income Taxes |
$ | 30,779 | $ |
(358 |
) |
$ | (31,137 | ) | (101.2 | )% | 27.7 | % | (0.3 |
)% |
Six Months Ended June 30, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
|
% of Total Net Revenue | ||||||||||||||||||||||
Net Income (Loss) |
$ | (57,719 | ) | $ |
2,580 |
$ | 60,299 | (104.5 | )% | (51.9 | )% | 2.1 |
% |
• | going concern evaluations; |
• | revenue recognition; |
• | asset impairments, including broadcasting licenses, goodwill and other indefinite-lived intangible assets; |
• | fair value measurements; |
• | contingency reserves; |
• | allowance for doubtful accounts; |
• | sales returns and allowances; |
• | barter transactions; |
• | inventory reserves; |
• | reserves for royalty advances; |
• | fair value of equity awards; |
• | self-insurance reserves; |
• | estimated lives for tangible and intangible assets; |
• | assessment of contract-based factors, asset-based factors, entity-based factors and market-based factors to determine the lease term impacting Right-Of-Use |
• | determining the Incremental Borrowing Rate (“IBR”) for calculating ROU assets and lease liabilities |
• | income tax valuation allowances; and |
• | uncertain tax positions. |
(1) | the difference between any recent fair value calculations and the carrying value; |
(2) | financial performance, such as station operating income, including performance as compared to projected results used in prior estimates of fair value; |
(3) | macroeconomic economic conditions, including limitations on accessing capital that could affect the discount rates used in prior estimates of fair value; |
(4) | industry and market considerations such as a decline in market-dependent multiples or metrics, a change in demand, competition, or other economic factors; |
(5) | operating cost factors, such as increases in labor, that could have a negative effect on future expected earnings and cash flows; |
(6) | legal, regulatory, contractual, political, business, or other factors; |
(7) | other relevant entity-specific events such as changes in management or customers; and |
(8) | any changes to the carrying amount of the indefinite-lived intangible asset. |
• | Level 1 Inputs—quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date; |
• | Level 2 Inputs—inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability; and |
• | Level 3 Inputs—unobservable inputs for the asset or liability. These unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances (which might include the reporting entity’s own data). |
• | The existence of a bargain renewal option |
• | The existence of contingent or variable payments |
• | The nature and terms of renewal or termination options |
• | The costs the lessee would incur to restore the asset before returning it to the lessor |
• | The existence of significant lessee-installed leasehold improvements that would still have economic value when the option becomes exercisable |
• | The physical location of the asset |
• | The costs that would be incurred to replace or find an alternative asset |
• | Historical practice |
• | Management’s intent |
• | Common industry practice |
• | The financial impact on the entity of extending or terminating the lease |
• | The importance of the leased asset to the entity’s operations |
• | Market rental or purchase rates for comparable assets |
• | Potential implications of local regulations and statutory requirements |
• | A significant decrease in the market price of a long-lived asset (asset group) |
• | A significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition |
• | A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator |
• | An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group) |
• | A current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group) |
• | A current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50 percent. |
• | limiting capital expenditures; |
• | reducing discretionary spending, including travel and entertainment; |
• | eliminating open positions and freezing new hires; |
• | reducing staffing levels; |
• | implementing temporary pay cuts of 5%, 7.5% or 10% depending on salary level; |
• | furloughing certain employees; |
• | temporarily suspending the company 401(k) match; |
• | requesting rent concessions from landlords; |
• | requesting discounts from vendors; |
• | offering early payment discounts to certain customers in exchange for advance cash payments; and |
• | suspending the payment of equity distributions until further notice. |
• | we deferred $3.3 million of employer FICA taxes from April 2020 through December 2020 , with 50% payable in December 2021 and 50% payable in December 2022; |
• | relaxation of interest expense deduction limitation for income tax purposes; and |
• | Paycheck Protection Program (“PPP”) loans available based on the eligibility determined on a per-location basis of $11.2 million on a consolidated basis. |
• | Total net revenue increased by $12.0 million; |
• | Operating expenses decreased by $16.9 million; |
• | Trade accounts receivables, net of allowances, increased by $0.1 million compared to a decrease of $8.3 million for the same period of the prior year; |
• | Unbilled revenue decreased $0.6 million; |
• | Our Day’s Sales Outstanding, or the average number of days to collect cash from the date of sale, increased to 58 days at June 30, 2021, from 56 days in the same period of the prior year; |
• | Deferred income tax liabilities increased by $1.0 million compared to an increase of $68.9 million during the same period of the prior year; and |
• | Net accounts payable and accrued expenses increased $0.9 million to $24.2 million from $23.3 million as of the prior year. |
• | We paid $1.9 million in cash for acquisitions during the six months ended June 30, 2021, compared to none during the same period of the prior year; |
• | Cash paid for capital expenditures increased $1.5 million to $4.0 million from $2.5 million; |
• | We collected $2.4 million in cash for the cash surrender value of split dollar life insurance policies in 2020; and |
• | Receipts from asset sales provided $3.6 million of cash during the six months ended June 30, 2021, compared to $0.2 million during the same period of the prior year. |
• | Proceeds of $11.2 million under PPP loans were received during the six-months ended June 30, 2021; |
• | A $1.9 million increase in the book overdraft from the prior year; |
• | We used $3.4 million in cash to repurchase $3.5 million in face value of the 6.75% Senior Secured Notes during the same period of the prior year; and |
• | Net repayments on our ABL Facility were $5.0 million during the six-months ended June 30, 2021, compared to net borrowings of $6.6 million during the same period of the prior year. |
Date |
Principal Repurchased |
Cash Paid |
% of Face Value |
Bond Issue Costs |
Net Gain |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
January 30, 2020 |
$ | 2,250 | $ | 2,194 | 97.50 | % | $ | 34 | $ | 22 | ||||||||||
January 27, 2020 |
1,245 | 1,198 | 96.25 | % | 20 | 27 | ||||||||||||||
December 27, 2019 |
3,090 | 2,874 | 93.00 | % | 48 | 167 | ||||||||||||||
November 27, 2019 |
5,183 | 4,548 | 87.75 | % | 82 | 553 | ||||||||||||||
November 15, 2019 |
3,791 | 3,206 | 84.58 | % | 61 | 524 | ||||||||||||||
March 28, 2019 |
2,000 | 1,830 | 91.50 | % | 37 | 134 | ||||||||||||||
March 28, 2019 |
2,300 | 2,125 | 92.38 | % | 42 | 133 | ||||||||||||||
February 20, 2019 |
125 | 114 | 91.25 | % | 2 | 9 | ||||||||||||||
February 19, 2019 |
350 | 319 | 91.25 | % | 7 | 24 | ||||||||||||||
February 12, 2019 |
1,325 | 1,209 | 91.25 | % | 25 | 91 | ||||||||||||||
January 10, 2019 |
570 | 526 | 92.25 | % | 9 | 35 | ||||||||||||||
December 21, 2018 |
2,000 | 1,835 | 91.75 | % | 38 | 127 | ||||||||||||||
December 21, 2018 |
1,850 | 1,702 | 92.00 | % | 35 | 113 | ||||||||||||||
December 21, 2018 |
1,080 | 999 | 92.50 | % | 21 | 60 | ||||||||||||||
November 17, 2018 |
1,500 | 1,357 | 90.50 | % | 29 | 114 | ||||||||||||||
May 4, 2018 |
4,000 | 3,770 | 94.25 | % | 86 | 144 | ||||||||||||||
April 10, 2018 |
4,000 | 3,850 | 96.25 | % | 87 | 63 | ||||||||||||||
April 9, 2018 |
2,000 | 1,930 | 96.50 | % | 43 | 27 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
$ | 38,659 | $ | 35,586 | $ | 706 | $ | 2,367 | |||||||||||||
|
|
|
|
|
|
|
|
December 31, 2020 | June 30, 2021 |
|||||||
(Dollars in thousands) |
||||||||
6.75% Senior Secured Notes |
$ | 216,341 | $ |
216,341 |
||||
Less unamortized debt issuance costs based on imputed interest rate of 7.08% |
(2,577 | ) | (2,209 |
) | ||||
|
|
|
|
|||||
6.75% Senior Secured Notes net carrying value |
213,764 | 214,132 | ||||||
Asset-Based Revolving Credit Facility principal outstanding |
5,000 | — |
||||||
SBA Paycheck Protection Program loans |
— | 11,195 |
||||||
|
|
|
|
|||||
Long-term debt less unamortized debt issuance costs |
$ | 218,764 | $ |
225,327 |
||||
|
|
|
|
|||||
Less current portion |
(5,000 | ) | — |
|||||
|
|
|
|
|||||
Long-term debt less unamortized debt issuance costs, net of current portion |
$ | 213,764 | $ |
225,327 |
||||
|
|
|
|
• | $216.3 million aggregate principal amount of Notes with semi-annual interest payments at an annual rate of 6.75%; and |
• | Commitment fee of 0.25% to 0.375% per annum on the unused portion of the ABL Facility. |
Amount |
||||
For the Year Ended June 30, |
(Dollars in thousands) |
|||
2022 |
$ | — | ||
2023 |
— | |||
2024 |
216,341 | |||
2025 |
— | |||
2026 |
11,195 | |||
Thereafter |
— | |||
|
|
|||
$ | 227,536 | |||
|
|
Exhibit Number |
Exhibit Description |
Form |
File No. |
Date of First Filing |
Exhibit Number |
Filed Herewith | ||||||||||||||
31.1 | Certification of Edward G. Atsinger III Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act. | — | — | — | — | X | ||||||||||||||
31.2 | Certification of Evan D. Masyr Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act. | — | — | — | — | X | ||||||||||||||
32.1 | Certification of Edward G. Atsinger III Pursuant to 18 U.S.C. Section 1350. | — | — | — | — | X | ||||||||||||||
32.2 | Certification of Evan D. Masyr Pursuant to 18 U.S.C. Section 1350. | — | — | — | — | X | ||||||||||||||
101 | The following financial information from the Quarterly Report on Form 10Q for the three and six months ended June 30, 2021, formatted in iXBRL (Inline Extensible Business Reporting Language) and furnished electronically herewith: (i) the Condensed Consolidated Balance Sheets (ii) Condensed Consolidated Statements of Operations (iii) the Condensed Consolidated Statements of Cash Flows (iv) the Notes to the Condensed Consolidated Financial Statements. | — | — | — | — | X | ||||||||||||||
104 | The cover page of this Quarterly Report on Form 10-Q, formatted in inline XBRL. |
SALEM MEDIA GROUP, INC. | ||||||
August 4, 2021 | By: | /s/ EDWARD G. ATSINGER III | ||||
Edward G. Atsinger III | ||||||
Chief Executive Officer | ||||||
(Principal Executive Officer) | ||||||
August 4, 2021 | By: | /s/ EVAN D. MASYR | ||||
Evan D. Masyr | ||||||
Executive Vice President and Chief Financial Officer | ||||||
(Principal Financial Officer) |
EXHIBIT 31.1
I, Edward G. Atsinger III, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Salem Media Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 4, 2021
/s/ EDWARD G. ATSINGER III |
Edward G. Atsinger III |
President and Chief Executive Officer |
EXHIBIT 31.2
I, Evan D. Masyr, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Salem Media Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 4, 2021
/s/ EVAN D. MASYR |
Evan D. Masyr |
Executive Vice President and Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned hereby certifies, in his capacity as President and Chief Executive Officer of Salem Media Group, Inc. (the Company), for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on his knowledge:
| the Quarterly Report of the Company on Form 10-Q for the period ended June 30, 2021 (the Report) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
| the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: August 4, 2021 | ||||||
By: | /s/ EDWARD G. ATSINGER III | |||||
Edward G. Atsinger III | ||||||
President and Chief Executive Officer |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned hereby certifies, in his capacity as Executive Vice President and Chief Financial Officer of Salem Media Group, Inc. (the Company), for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on his knowledge:
| the Quarterly report of the Company on Form 10-Q for the period ended June 30, 2021 (the Report) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
| the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: August 4, 2021 | ||||||
By: | /s/ EVAN D. MASYR | |||||
Evan D. Masyr | ||||||
Executive Vice President and Chief Financial Officer |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Trade accounts receivable, allowances | $ 14,498 | $ 14,069 |
Other receivables | 455 | 124 |
Inventories, reserves | 1,508 | 1,499 |
Notes receivable, allowance | 815 | 461 |
Property and equipment, accumulated depreciation | 184,521 | 180,336 |
Amortizable intangible assets, accumulated amortization | $ 58,476 | $ 58,897 |
Treasury stock, shares | 2,317,650 | 2,317,650 |
Common Class A [Member] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 80,000,000 | 80,000,000 |
Common stock, issued | 23,633,099 | 23,447,317 |
Common stock, outstanding | 21,315,449 | 21,129,667 |
Common Class B [Member] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 20,000,000 | 20,000,000 |
Common stock, issued | 5,553,696 | 5,553,696 |
Common stock, outstanding | 5,553,696 | 5,553,696 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Operating expenses | $ 58,141 | $ 53,759 | $ 113,138 | $ 130,019 |
Unallocated corporate expenses exclusive of depreciation and amortization | 4,192 | 3,850 | 8,480 | 8,060 |
Related Party [Member] | ||||
Unallocated corporate expenses exclusive of depreciation and amortization | 2 | 0 | 5 | 180 |
Broadcast [Member] | ||||
Operating expenses | 36,162 | 33,094 | 69,505 | 70,421 |
Broadcast [Member] | Related Party [Member] | ||||
Operating expenses | $ 446 | $ 435 | $ 889 | $ 866 |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands |
Total |
Additional Paid-in Capital [Member] |
Retained Earnings (Accumulated Deficit) [Member] |
Treasury Stock [Member] |
Common Class A [Member] |
Common Class B [Member] |
---|---|---|---|---|---|---|
Balance at Dec. 31, 2019 | $ 189,663 | $ 246,680 | $ (23,294) | $ (34,006) | $ 227 | $ 56 |
Balance (in shares) at Dec. 31, 2019 | 23,447,317 | 5,553,696 | ||||
Stock-based compensation | 103 | 103 | ||||
Cash distributions | (667) | (667) | ||||
Net income (loss) | (55,204) | (55,204) | ||||
Balance at Mar. 31, 2020 | 133,895 | 246,783 | (79,165) | (34,006) | $ 227 | $ 56 |
Balance (in shares) at Mar. 31, 2020 | 23,447,317 | 5,553,696 | ||||
Balance at Dec. 31, 2019 | 189,663 | 246,680 | (23,294) | (34,006) | $ 227 | $ 56 |
Balance (in shares) at Dec. 31, 2019 | 23,447,317 | 5,553,696 | ||||
Net income (loss) | (57,719) | |||||
Balance at Jun. 30, 2020 | 131,476 | 246,879 | (81,680) | (34,006) | $ 227 | $ 56 |
Balance (in shares) at Jun. 30, 2020 | 23,447,317 | 5,553,696 | ||||
Balance at Mar. 31, 2020 | 133,895 | 246,783 | (79,165) | (34,006) | $ 227 | $ 56 |
Balance (in shares) at Mar. 31, 2020 | 23,447,317 | 5,553,696 | ||||
Stock-based compensation | 96 | 96 | ||||
Net income (loss) | (2,515) | (2,515) | ||||
Balance at Jun. 30, 2020 | 131,476 | 246,879 | (81,680) | (34,006) | $ 227 | $ 56 |
Balance (in shares) at Jun. 30, 2020 | 23,447,317 | 5,553,696 | ||||
Distributions per share | $ 0.025 | $ 0.025 | ||||
Balance at Dec. 31, 2020 | 135,279 | 247,025 | (78,023) | (34,006) | $ 227 | $ 56 |
Balance (in shares) at Dec. 31, 2020 | 23,447,317 | 5,553,696 | ||||
Stock-based compensation | 78 | 78 | ||||
Options exercised | 392 | 390 | $ 2 | |||
Options exercised (in shares) | 185,782 | |||||
Net income (loss) | 323 | 323 | ||||
Balance at Mar. 31, 2021 | 136,072 | 247,493 | (77,700) | (34,006) | $ 229 | $ 56 |
Balance (in shares) at Mar. 31, 2021 | 23,633,099 | 5,553,696 | ||||
Balance at Dec. 31, 2020 | 135,279 | 247,025 | (78,023) | (34,006) | $ 227 | $ 56 |
Balance (in shares) at Dec. 31, 2020 | 23,447,317 | 5,553,696 | ||||
Net income (loss) | 2,580 | |||||
Balance at Jun. 30, 2021 | 138,413 | 247,577 | (75,443) | (34,006) | $ 229 | $ 56 |
Balance (in shares) at Jun. 30, 2021 | 23,633,099 | 5,553,696 | ||||
Balance at Mar. 31, 2021 | 136,072 | 247,493 | (77,700) | (34,006) | $ 229 | $ 56 |
Balance (in shares) at Mar. 31, 2021 | 23,633,099 | 5,553,696 | ||||
Stock-based compensation | 84 | 84 | ||||
Net income (loss) | 2,257 | 2,257 | ||||
Balance at Jun. 30, 2021 | $ 138,413 | $ 247,577 | $ (75,443) | $ (34,006) | $ 229 | $ 56 |
Balance (in shares) at Jun. 30, 2021 | 23,633,099 | 5,553,696 |
Business and Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business and Basis of Presentation | NOTE 1. BUSINESS AND BASIS OF PRESENTATION Business Salem Media Group, Inc. (“Salem,” “we,” “us,” “our” or the “company”) is a domestic multimedia company specializing in Christian and conservative content. Our media properties include radio broadcasting, digital media, and publishing entities. We have three operating segments: (1) Broadcast, (2) Digital Media, and (3) Publishing, which are discussed in Note 17 – Segment Data. Impact of the COVID-19 Pandemic The COVID-19 global pandemic that began in March 2020 continues to impact our business. Measures taken by federal, state and local governments to prevent the spread of COVID-19 have adversely affected workforces, business operations and overall economic conditions resulting in a significant economic downturn. We experienced a rapid decline in revenue from advertising, programming, events and book sales. Several advertisers reduced or ceased advertising spending due to the outbreak and stay-at-home While the economic downturn is expected to be temporary, there remains to be considerable uncertainty around the duration. Advertising revenue continues to improve over the lowest levels that were experienced during April and May of 2020 but remains significantly below prior years. The exact timing and pace of the economic recovery has not been determinable due to varying degrees of restrictions and resurgences. Due to continuing uncertainties regarding the ultimate scope and trajectory of COVID-19’s spread and evolution, it is impossible to predict the total impact that the pandemic will have on our business. If public and private entities continue to enforce restrictive measures, the material adverse effect on our business, results of operations, financial condition and cash flows could persist. Our businesses could also continue to be impacted by the disruptions from COVID-19 and resulting adverse changes in advertising and consumer behavior. Lower revenue and longer days to collect receivables negatively impacts future availability under our credit facility. Availability under our Asset Based Loan (“ABL Facility”) is subject to a borrowing base consisting of (a) 90% of the eligible accounts receivable plus (b) a calculated amount based on the value of certain real property. The maximum amount available under our ABL Facility increased to $25.0 million at June 30, 2021 compared to $24.8 million at December 31, 2020, of which none was outstanding at June 30, 2021 compared to $5.0 million outstanding at December 31, 2020. We implemented several measures during 2020 to reduce costs and conserve cash to ensure that we have adequate cash to meet our debt servicing requirements, including:
As the economy begins to show signs of recovery, many of these cost reduction initiatives have been reversed during 2021. We continue to operate with lower staffing levels, we have not reinstated the company 401(k) match and we have not paid equity distributions on our common stock. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act provides opportunities for additional liquidity, loan guarantees, and other government programs to support companies affected by the COVID-19 pandemic and their employees. On December 27, 2020, Congress passed the Consolidated Appropriations Act (“CAA”) that includes a second relief package, which, among other things, provides for an extension of the Payroll Support Program established by the CARES Act. We have utilized certain benefits of the CARES Act, and we may be entitled to benefits under the CAA based on our individual locations, including:
We believe that our customers have benefited from the enhanced benefits provided by the CARES Act, and that they will also benefit from the CAA. The CAA provides for another round of direct payments, enhanced unemployment benefits, education funding, and aid to sectors still reeling from the economic fallout of the pandemic. While these measures may benefit many of our customers, we cannot assure you that the implementation of these measures will offset the negative impact of COVID-19 on our customers. If the CAA or any additional stimulus measures are not sufficient to remediate the financial stress on our customers as a result of the pandemic, we may experience ongoing challenges in growing and maintaining revenue and we may experience an increase in delinquencies that could materially and adversely impact our results of operations and financial condition in future periods. We continue to review and consider any available potential benefit under the CARES Act and the CAA for which we qualify. We cannot predict the manner in which such benefits or any of the other benefits described herein will be allocated or administered and we cannot assure you that we will be able to access such benefits in a timely manner or at all. If the U.S. government or any other governmental authority agrees to provide such aid under the CARES Act, the CAA, or any other crisis relief assistance it may impose certain requirements on the recipients of the aid, including restrictions on executive officer compensation, dividends, prepayment of debt, limitations on debt and other similar restrictions that may apply for a period of time after the aid is repaid or redeemed in full. Basis of Presentation The accompanying Condensed Consolidated Financial Statements of Salem include the company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Information with respect to the three and six months ended June 30, 2021 and 2020 is unaudited. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited interim financial statements contain all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the financial position, results of operations and cash flows of the company. The unaudited interim financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report for Salem filed on Form 10-K for the year ended December 31, 2020. Our results are subject to seasonal fluctuations and therefore, the results of operations for the interim periods presented are not necessarily indicative of the results of operations for a full year. The balance sheet at December 31, 2020 included in this report has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP. Certain reclassifications have been made to the prior year financial statements to conform to the presentation in the current year, which had no impact on the previously reported financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results can be materially different from these estimates and assumptions. Significant areas for which management uses estimates include:
These estimates require the use of judgment as future events and the effect of these events cannot be predicted with certainty. The estimates will change as new events occur, as more experience is acquired and as more information is obtained. We evaluate and update our assumptions and estimates on an ongoing basis and we may consult outside experts to assist as considered necessary. The
COVID-19 pandemic continues to create significant uncertainty and disruption in the global economy and financial markets. It is reasonably possible that these uncertainties could materially impact our estimates related to, but not limited to, revenue recognition, broadcast licenses, goodwill and income taxes. As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. Our estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in our consolidated financial statements. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES There have been no changes to our significant accounting policies described in Note 2 to our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 4, 2021, that have had a material impact on our Condensed Consolidated Financial Statements and related notes. Recent Accounting Pronouncements Changes to accounting principles are established by the FASB in the form of ASUs to the FASB’s Codification. We consider the applicability and impact of all ASUs on our financial position, results of operations, cash flows, or presentation thereof. Described below are ASUs that may be applicable to our financial position, results of operations, cash flows, or presentation thereof. ASUs not listed below were assessed and determined to not be applicable to our financial position, results of operations, cash flows, or presentation thereof. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope Reference Rate Reform In June 2016, the FASB issued ASU
2016-13, Financial Instruments-Credit Losses, held-to-maturity available-for-sale 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses 2016-13. ASU 2018-19 has the same effective date and transition requirements as ASU 2016-13. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments 2016-13. In May 2019, the FASB issued ASU 2019-05, Financial Instruments – Credit Losses (Topic 326) 2016-13. In October 2019, the FASB voted to delay the implementation date for certain companies, including those, such as Salem, that qualify as a smaller reporting company under SEC rules, until January 1, 2023. We will adopt this ASU on its effective date of January 1, 2023. We do not expect the adoption of this ASU to have a material impact on our consolidated financial position, results of operations, cash flows, or presentation thereof. |
Recent Transactions |
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Recent Transactions | NOTE 3. RECENT TRANSACTIONS During the six-month period ended June 30, 2021, we completed or entered into the following transactions: Debt Transactions We received $11.2 million in aggregate principal amount of PPP loans through the Small Business Administration (“SBA”) during the first quarter of 2021 available to our radio stations and networks by location under the CAA. The PPP loans and accrued interest are forgivable provided that the proceeds are used for eligible purposes, including payroll, benefits, rent and utilities within the covered period of up to 24 weeks from funding of the loans. The amount of PPP loan and accrued interest that is forgiven can be reduced if we reduce payroll or eliminate positions during the covered period. We are using, and intend to continue to use, the PPP loan proceeds according to the terms and will file timely applications for forgiveness. The PPP loans accrue interest at 1% annually and mature in five years for any amount that is not forgiven. The PPP loans are reflected in long-term debt in the accompanying condensed consolidated financial statements in accordance with FASB ASC Topic 470, Debt During July 2021, the SBA forg a ve all but $20,000 of the PPP loans.Shelf Registration Statement and At-the-Market In April 2021, we filed a prospectus supplement to our shelf registration statement on Form S-3 with the SEC covering the offering, issuance and sale of up to $15.0 million of the company’s Class A Common Stock pursuant to an at-the-market Acquisitions 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 an LMA or TBA. On June 1, 2021, we acquired radio stations KDIA-AM and KDYA-AM in 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 cluster. On April 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-out consideration over the next two years based on the achievement of certain revenue benchmarks. A summary of our business acquisitions and asset purchases during the six-month period ending June 30, 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, “ Business Combinations 2017-01 “Business Combinations (Topic 805) Clarifying the Definition of a Business” Fair value estimates include the discounted cash flows expected to be generated by the assets over their expected useful lives based on historical experience, market trends and the impact of any synergies believed to be achieved from the acquisition. Acquisitions may include contingent consideration, the fair value of which is estimated as of the acquisition date as the present value of the expected contingent payments as determined using weighted probabilities of the payment amounts. We may retain an independent third-party appraiser to estimate the fair value of the net assets acquired as of the acquisition date. As part of this valuation and appraisal process, the third-party appraiser prepares a report assigning estimated fair values to the various assets acquired. These fair value estimates are subjective in nature and require careful consideration and judgment. Management reviews the third-party reports for reasonableness of the assigned values. We believe that these valuations and analysis provide appropriate estimates of the fair value for the net assets acquired as of the acquisition date. The initial valuations for business acquisitions are subject to refinement during the measurement period, which may be up to one year from the acquisition date. During this measurement period, we may record adjustments to the net assets acquired based on additional information obtained for items that existed as of the acquisition date. Upon the conclusion of the measurement period, any adjustments are reflected in our Consolidated Statements of Operations. To date, we have not recorded adjustments to the estimated fair values used in our business acquisition consideration during or after the measurement period. Property and equipment are recorded at the estimated fair value and depreciated on a straight-line basis over their estimated useful lives. Finite-lived intangible assets are recorded at their estimated fair value and amortized on a straight-line basis over their estimated useful lives. Goodwill, which represents the organizational systems and procedures in place to ensure the effective operation of the entity, may also be recorded and tested for impairment. Costs associated with business acquisitions, such as consulting and legal fees, are expensed as incurred. We recognized costs associated with acquisitions of $11,000 during the six months ended June 30, 2021, which are included in unallocated corporate expenses or broadcast operating expense based on the nature of the acquisition in the accompanying Consolidated Statements of Operations. 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-out consideration. We estimate the fair value of contingent earn-out consideration 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 the six-month period ending June 30, 2021, is as follows:
The fair value of the net assets acquired was allocated as follows:
Divestitures 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 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-tax gain on the sale of $0.5 million. On March 18, 2021, we sold radio station WKAT-AM and 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 a Local Marketing Agreement (“LMA”) in November 2020. We recognized an estimated pre-tax loss of $1.4 million during the three-month period ended September 30, 2020, the date we entered the 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-off of the remaining Miami assets as a result of exiting this market. We adjusted the pre-tax loss 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. Pending Transactions On June 2, 2021, we entered into an APA to acquire radio station KKOL-AM in 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 April 10, 2021, we entered into an agreement to sell approximately 34 acres of land in Lewisville, Texas, currently being used as the transmitter site for company owned radio station KSKY-AM, for $12.1 million in cash. We will retain enough of the property in the southwest corner of the site to operate the transmitter. The transaction closed on July 23, 2021. On February 5, 2020, we entered into an APA with Word Broadcasting to sell radio stations
WFIA-AM, WFIA-FM and WGTK-AM in Louisville, Kentucky for $4.0 million with credits applied from amounts previously paid, including a portion of the monthly fees paid under a Time Brokerage Agreement (“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. |
Revenue Recognition |
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Revenue Recognition | NOTE 4. REVENUE RECOGNITION We recognize revenue in accordance with ASC 606, “ Revenue from Contracts with Customers” Principal versus Agent Considerations When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent. Contract Assets Contract Assets—Costs to Obtain a Contract: Contract Liabilities Contract liabilities consist of customer advance payments and billings in excess of revenue recognized. We may receive payments from our customers in advance of completing our performance obligations. Additionally, new customers, existing customers without approved credit terms and authors purchasing specific self-publishing services, are required to make payments in advance of the delivery of the products or performance of the services. We record contract liabilities equal to the amount of payments received in excess of revenue recognized, including payments that are refundable if the customer cancels the contract according to the contract terms. Contract liabilities were historically recorded under the caption “deferred revenue” and are reported as current liabilities on our consolidated financial statements when the time to fulfill the performance obligations under terms of our contracts is less than one year. Long-term contract liabilities represent the amount of payments received in excess of revenue earned, including those that are refundable, when the time to fulfill the performance obligation is greater than one year. Our long-term liabilities consist of subscriptions with a term of two-years for which some customers have purchased and paid for multiple years. Significant changes in our contract liabilities balances during the period are as follows:
We expect to satisfy these performance obligations as follows:
Significant Financing Component Our sales agreements are typically less than 12 months; however, we may sell subscriptions with a two-year term. The balance of our long-term contract liabilities represents the unsatisfied performance obligations for subscriptions with a remaining term in excess of one year. We review long-term contract liabilities that are expected to be completed in excess of one year to assess whether the contract contains a significant financing component. The balance includes subscriptions that will be satisfied at various dates between July 1, 2021, and June 30, 2026. The difference between the promised consideration and the cash selling price of the publications is not significant and therefore, we concluded that subscriptions do not contain a significant financing component under ASC 606. Our self-publishing contracts may exceed a one-year term due to the length of time for an author to submit and approve a manuscript for publication. The author may pay for publishing services in installments over the production timeline with payments due in advance of performance. The timing of the transfer of goods and services under self-publishing arrangements are at the discretion of the author and based on future events that are not substantially within our control. We require advance payments to provide us with protection from incurring costs for products that are unique and only sellable to the author. Based on these considerations, we have concluded that our self-publishing contracts do not contain a significant financing component under ASC 606. Variable Consideration We make significant estimates related to variable consideration at the point of sale, including estimates for refunds and product returns. Revenue estimates for variable consideration may be recognized before contingencies are resolved in certain circumstances, including when it is probable that a significant reversal in the amount of any estimated cumulative revenue will not occur. We enter into certain agreements under which the amount of revenue we earn is contingent upon the amount of money raised by our customer over the contract term. Our customer is typically a charity or programmer that purchases blocks of programming time or spots to generate revenue by way of donations from our audience members. Contract terms range from a few weeks to a few months, depending on the charity or programmer. If a campaign does not generate a pre-determined level of donations or revenue to our customer, the consideration that we expect to be entitled will vary significantly. Based on the constraints for using estimates of variable consideration within ASC 606 including: (1) the amount of consideration received is highly susceptible to factors outside of our influence, specifically the extent to which our audience donates or contributes to our customer or programmer, (2) the length of time in which the uncertainty about the amount of consideration expected is to be resolved, (3) our experience and (4) the contract has a large number and broad range of possible consideration amounts, we recognize revenue at the base amount of the campaign with variable consideration recognized when the uncertainty of each campaign is resolved. Practical Expedients and Exemptions We elected certain practical expedients and policy elections as follows:
A summary of our principal sources of revenue is as follows: Block Programming . 1 /2 , 25 or 50-minutes of time. We separate block program revenue into three categories, National, Local and Infomercial revenue. Our stations are classified by format, including Christian Teaching and Talk, News Talk, Contemporary Christian Music, Spanish Language Christian Teaching and Talk and Business. National and local programming content is complementary to our station format while infomercials are closely associated with long-form advertisements. Block Programming revenue may include variable consideration for charities and programmers that purchase blocks of airtime to generate donations and contributions from our audience. Block programming revenue is recognized at the time of broadcast, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Programming revenue is recorded on a gross basis unless an agency represents the programmer, in which case, revenue is reported net of the commission retained by the agency. Spot Advertising Network Revenue . Digital Advertising. Salem Surround, our multimedia advertising agency, 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. In our role as a digital agency, our sales team provides our customers with integrated digital advertising solutions that optimize the performance of their campaign, which we view as one performance obligation. Our advertising campaigns are designed to be “white label” agreements between Salem and our advertiser, meaning we provide special care and attention to the details of the campaign. We provide custom digital product offerings, including tools for metasearch, retargeting, website design, reputation management, online listing services, and social media marketing. Digital advertising solutions may include third-party websites, such as Google or Facebook, which can be included in a digital advertising social media campaign. We manage all aspects of the digital campaign, including social media placements, review and approval of target audiences, and the monitoring of actual results to make modifications as needed. We may contract directly with a third-party, however, we are responsible for delivering the campaign results to our customer with or without the third-party. We are responsible for any payments due to the third-party regardless of the campaign results and without regard to the status of payment from our customer. We have discretion in setting the price to our customer without input or approval from the third-party. Accordingly, revenue is reported gross, as principal, as the performance obligation is delivered, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Digital Streaming Digital Downloads and e-books e-books. Payments for downloaded materials are due in advance of the download, however, the download is often instant upon confirmation of payment. Digital download revenue is recognized at the time of download, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Revenue is recorded at the gross amount due from the customer. All sales are final with no allowances made for returns. Subscriptions on-air content, and subscriptions to our print magazine. Subscription terms typically range from three months to two years, with a money-back guarantee for the first 30 days. Refunds after the first 30-day period are considered on a pro-rata basis based on the number of publications issued and delivered. Payments are due in advance of delivery and can be made in full upon subscribing or in quarterly installments. Cash received in advance of the subscription term, including amounts that are refundable, is recorded in contract labilities. Revenue is recognized ratably over the subscription term at the point in time that each publication is transmitted or shipped, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Revenue is reported net of estimated cancellations, which are based on our experience and historical cancellation rates during the cancellable period. Book Sales e-Commerce E-Commerce revenue is recognized at the time of shipment, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Revenue is reported net of estimated returns, which are based on our experience and historical return rates. Returned products are recorded in inventory if they are unopened and re-saleable with a corresponding reduction in the cost of goods sold. Self-Publishing Fees e-Books. As each book and related support services are unique to each author, authors must make payments in advance of the performance. Payments are typically made in installments over the expected production timeline for each publication. We record contract liabilities equal to the amount of payments received, including those amounts that are fully or partially refundable. Contract liabilities were historically recorded under the caption “deferred revenue” and are reported as current liabilities or long-term liabilities on our consolidated financial statements based on the time to fulfill the performance obligations under terms of the contract. Refunds are limited based on the percentage completion of each publishing project. Revenue is recognized upon completion of each performance obligation, which represents the point in time that control of the product is transferred to the author, thereby completing our performance obligation. Revenue is recorded at the net amount due from the author, including discounts based on the service package. Advertising—Print Other Revenues . on-air hosts, rental income for studios and towers, production services, and shipping and handling fees. We recognize event revenue, including fees earned for ticket sales and sponsorships, when the event occurs, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Revenue for all other products and services is recorded as the products or services are delivered or performed, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Other revenue is reported on a gross basis unless an agency represents the customer, in which case, revenue is reported net of the commission retained by the agency. Trade and Barter Transactions In broadcasting, trade or barter agreements are commonly used to reduce cash expenses by exchanging advertising time for goods or services. We may enter barter agreements to exchange airtime or digital advertising for goods or services that can be used in our business or that can be sold to our audience under Listener Purchase Programs. The terms of these barter agreements permit us to preempt the barter airtime or digital campaign in favor of customers who purchase the airtime or digital campaign for cash. The value of these non-cash exchanges is included in revenue in an amount equal to the fair value of the goods or services we receive. Each transaction must be reviewed to determine that the products, supplies and/or services we receive have economic substance, or value to us. We record barter operating expenses upon receipt and usage of the products, supplies and services, as applicable. We record barter revenue as advertising spots or digital campaigns are delivered, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Barter revenue is recorded on a gross basis unless an agency represents the programmer, in which case, revenue is reported net of the commission retained by the agency. Trade and barter revenues and expenses were as follows:
The following table presents our revenues disaggregated by revenue source for each of our operating segments:
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Inventories | NOTE 5. INVENTORIES Inventories consist of finished books from Regnery ® Publishing. All inventories are valued at the lower of cost or net realizable value as determined on a First-In First-Out cost method net of estimated reserves for obsolescence. The following table provides details of inventory on hand:
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Property and Equipment | NOTE 6. PROPERTY AND EQUIPMENT We account for property and equipment in accordance with FASB ASC Topic 360-10, Property, Plant and Equipment The following is a summary of the categories of our property and equipment:
Depreciation expense was approximately $2.7 million for the three-month periods ended June 30, 2021 and 2020, and $5.3 million and $5.4 million for the
six-month periods ended June 30, 2021 and 2020, respectively. We periodically review long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. This review requires us to estimate the fair value of the assets using significant unobservable inputs that reflect our own assumptions about the estimates that market participants would use in measuring fair value, including assumptions about risk. If actual future results are less favorable than t he assumptions and estimates we used, we are subject to future impairment charges, the amount of which may be material. There were no indications of impairment during the three- and six-month period ended June 30, 2021. |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating and Finance Lease Right-of-Use Assets | NOTE 7. OPERATING AND FINANCE LEASE RIGHT-OF-USE Leases We account for leases in accordance with ASC 842, “ Leases Leasing Transactions Our leased assets include offices and studios, transmitter locations, antenna sites, tower and tower sites, and land. Our lease portfolio has terms remaining from less than one-year to up to twenty years. Many of these leases contain options under which the term from to twenty years. Renewal options are excluded from our calculation of lease liabilities unless we are reasonably assured to exercise the renewal option. Our lease agreements do not contain residual value guarantees or material restrictive covenants. We lease certain properties from our principal stockholders or from trusts and partnerships created for the benefit of the principal stockholders and their families. These leases are designated as Related Party leases in the details provided. Operating leases are reflected on our balance sheet within operating lease ROU assets and the related current and non-current operating lease liabilities. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from lease agreement. Operating lease ROU assets and liabilities are recognized at the commencement date, or the date on which the lessor makes the underlying asset available for use, based upon the present value of the lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectation regarding the lease terms. Variable lease costs, such as common area maintenance, property taxes and insurance, are expensed as incurred. Balance Sheet Supplemental balance sheet information related to leases is as follows:
Lease Expense The components of lease expense were as follows:
Supplemental Cash Flow Supplemental cash flow information related to leases was as follows:
Maturities Future minimum lease payments under leases that had initial or remaining non-cancelable lease terms in excess of one year as of June 30, 2021, are as follows:
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Broadcast Licenses |
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Broadcast Licenses | NOTE 8. BROADCAST LICENSES We account for broadcast licenses in accordance with FASB ASC Topic 350 Intangibles—Goodwill and Other licenses to be renewed in the future and therefore, we consider our broadcast licenses to be indefinite-lived intangible assets. We are not aware of any legal, competitive, economic or other factors that materially limit the useful life of our broadcast licenses. There were no indications of impairment during the three- and six-month period ended June 30, 2021. The following table presents the changes in broadcasting licenses that include acquisitions and divestitures of radio stations and FM translators.
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Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | NOTE 9. GOODWILL We account for goodwill in accordance with FASB ASC Topic 350 “ Intangibles—Goodwill and Other six-month period ended June 30, 2021. The following table presents the changes in goodwill including business acquisitions and dispositions as discussed in Note 3 of our Condensed Consolidated Financial Statements.
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Amortizable Intangible Assets |
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Amortizable Intangible Assets | NOTE 10. AMORTIZABLE INTANGIBLE ASSETS The following tables provide a summary of our significant classes of amortizable intangible assets:
Amortization expense was approximately $0.5 million and $0.8 million for the three-month periods ended June 30, 2021 and 2020, respectively and $1.1 million and $1.8 million for the six-month periods ended June 30, 2021 and 2020, respectively. Based on the amortizable intangible assets as of June 30, 2021, we estimate amortization expense for the next five years to be as follows:
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Long-Term Debt |
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Long-Term Debt | NOTE 11. LONG-TERM DEBT Salem Media Group, Inc. has no independent assets or operations, the subsidiary guarantees relating to certain debt are full and unconditional and joint and several, and any subsidiaries of Salem Media Group, Inc. other than the subsidiary guarantors are minor. SBA PPP Loans We received $11.2 million in aggregate principal amount of PPP loans through the SBA during the first quarter of 2021 available to our radio stations and networks by location under the CAA. The PPP loans and accrued interest are forgivable provided that the proceeds are used for eligible purposes, including payroll, benefits, rent and utilities within the covered period of up to 24 weeks from funding of the loans. The amount of PPP loan and accrued interest that is forgiven can be reduced if we reduce payroll or eliminate positions during the covered period. We are using, and intend to continue to use, the PPP loan proceeds according to the terms and will file timely applications for forgiveness. The PPP loans accrue interest at 1% annually and mature in five years for any amount that is not forgiven. The PPP loans are reflected in long-term debt in the accompanying condensed consolidated financial statements in accordance with FASB ASC Topic 470, Debt During July 2021, the SBA forg a ve all but $20,000 of the PPP loans.6.75% Senior Secured Notes On May 19, 2017, we issued 6.75% Senior Secured Notes (“Notes”) in a private placement. The Notes are guaranteed on a senior secured basis by our existing subsidiaries (the “Subsidiary Guarantors”). The Notes bear interest at a rate of 6.75% per year and mature on June 1, 2024, unless they are earlier redeemed or repurchased. Interest initially accrued on the Notes from May 19, 2017 and is payable semi-annually, in cash in arrears, on June 1 and December 1 of each year, commencing December 1, 2017. The Notes are secured by a first-priority lien on substantially all assets of ours and the Subsidiary Guarantors other than the ABL Facility Priority Collateral (as described below) (the “Notes Priority Collateral”). There is no direct lien on our FCC licenses to the extent prohibited by law or regulation (other than the economic value and proceeds thereof). The Notes were redeemable, in whole or in part, at any time on or before June 1, 2020 at a price equal to 100% of the principal amount of the Notes plus a “make-whole” premium as of, and accrued and unpaid interest, if any, to, but not including, the redemption date. At any time on or after June 1, 2020, the Notes are redeemable at the redemption prices (expressed as percentages of the principal amount to be redeemed) set forth in the Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date. The indenture relating to the Notes (the “Indenture”) contains covenants that, among other things and subject in each case to certain specified exceptions, limit our ability and the ability of our restricted subsidiaries to: (i) incur additional debt; (ii) declare or pay dividends, redeem stock or make other distributions to stockholders; (iii) make investments; (iv) create liens or use assets as security in other transactions; (v) merge or consolidate, or sell, transfer, lease or dispose of substantially all of our assets; (vi) engage in transactions with affiliates; and (vii) sell or transfer assets. The Indenture provides for the following events of default (each, an “Event of Default”): (i) default in payment of principal or premium on the Notes at maturity, upon repurchase, acceleration, optional redemption or otherwise; (ii) default for 30 days in payment of interest on the Notes; (iii) the failure by us or certain restricted subsidiaries to comply with other agreements in the Indenture or the Notes, in certain cases subject to notice and lapse of time; (iv) the failure of any guarantee by certain significant Subsidiary Guarantors to be in full force and effect and enforceable in accordance with its terms, subject to notice and lapse of time; (v) certain accelerations (including failure to pay within any grace period) of other indebtedness of ours or any restricted subsidiary if the amount accelerated (or so unpaid) is at least $15 million; (vi) certain judgments for the payment of money in excess of $15 million; (vii) certain events of bankruptcy or insolvency with respect to us or any significant subsidiary; and (viii) certain defaults with respect to any collateral having a fair market value in excess of $15 million. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the outstanding Notes may declare the principal of the Notes and any accrued interest on the Notes to be due and payable immediately, subject to remedy or cure in certain cases. Certain events of bankruptcy or insolvency are Events of Default which will result in the Notes being due and payable immediately upon the occurrence of such Events of Default. At June 30, 2021, we were, and we remain, in compliance with all of the covenants under the Indenture. Based on the balance of the Notes currently outstanding, we are required to pay $14.6 million per year in interest on the Notes. As of June 30, 2021, accrued interest on the Notes was $1.2 million. We incurred debt issuance costs of $6.3 million that were recorded as a reduction of the debt proceeds that are being amortized to non-cash interest expense over the life of the Notes using the effective interest method. During the three and six-month periods ended June 30, 2021, $0.2 million and $0.4 million, respectively, of debt issuance costs associated with the Notes was amortized to interest expense. During the three and six-month periods ended June 30, 2020, $0.2 million and $0.4 million, respectively, of debt issuance costs associated with the Notes was amortized to interest expense. We may from time to time, depending on market conditions and prices, contractual restrictions, our financial liquidity and other factors, seek to repurchase the Notes in open market transactions, privately negotiated transactions, by tender offer or otherwise, as market conditions warrant. Based on the then existing market conditions, we completed repurchases of our 6.75% Senior Secured Notes at amounts less than face value as follows:
Asset-Based Revolving Credit Facility On May 19, 2017, we entered into the ABL Facility pursuant to a Credit Agreement (the “Credit Agreement”) by and among us and our subsidiaries party thereto as borrowers, Wells Fargo Bank, National Association, as administrative agent and lead arranger, and the lenders that are parties thereto. We used the proceeds of the ABL Facility, together with the net proceeds from the Notes offering, to repay outstanding borrowings under our previously existing senior credit facilities, and related fees and expenses. Current proceeds from the ABL Facility are used to provide ongoing working capital and for other general corporate purposes, including permitted acquisitions. The ABL Facility is a five-year $30.0 million revolving credit facility due March 1, 2024, which includes a $5.0 million subfacility for standby letters of credit and a $7.5 million subfacility for swingline loans. All borrowings under the ABL Facility accrue interest at a rate equal to a base rate or LIBOR plus a spread. The spread, which is based on an availability-based measure, ranges from 0.50% to 1.00% for base rate borrowings and 1.50% to 2.00% for LIBOR borrowings. If an event of default occurs, the interest rate may increase by 2.00% per annum. Amounts outstanding under the ABL Facility may be paid and then reborrowed at our discretion without penalty or premium. Additionally, we pay a commitment fee on the unused balance from 0.25% to 0.375% per year based on the level of borrowings. On October 20, 2020, we entered into a fourth amendment to our ABL Facility that provides a one-time waiver with respect to the current covenant testing period allowing the covenant trigger event date be the first day after the availability on the ABL Facility had equaled or exceeded (1) 15% of the maximum revolver amount and (2) $4.5 million and a waiver permitting our July 2020 financial statements to be issued on or before September 30, 2020 due to delays that were caused by a ransomware attack. On April 7, 2020, we entered into a third amendment to ABL Facility that increased the advance rate on eligible accounts receivable from 85% to 90% and extended the maturity date from May 19, 2022 to March 1, 2024. The April 7, 2020 amendment also allows for an alternative benchmark rate that may include SOFR due to LIBOR being scheduled to be discontinued at the end of calendar year 2021. Availability under the ABL Facility is subject to a borrowing base consisting of (a) 90% of the eligible accounts receivable plus (b) a calculated amount based on the value of certain real property. As of June 30, 2021, the amount available under the ABL Facility was $25.0 million of which none was outstanding. The ABL Facility has a first-priority lien on our and the Subsidiary Guarantors’ accounts receivable, inventory, deposit and securities accounts, certain real estate and related assets (the “ABL Facility Priority Collateral”) and by a second-priority lien on the Notes Priority Collateral. There is no direct lien on our FCC licenses to the extent prohibited by law or regulation (other than the economic value and proceeds thereof). The Credit Agreement includes a springing fixed charge coverage ratio of 1.0 to 1.0, which is tested during the period commencing on the last day of the fiscal month most recently ended prior to the date on which Availability (as defined in the Credit Agreement) is less than the greater of 15% of the Maximum Revolver Amount (as defined in the Credit Agreement) and $4.5 million and continuing for a period of 60 consecutive days after the first day on which Availability exceeds such threshold amount. The Credit Agreement also includes other negative covenants that are customary for credit facilities of this type, including covenants that, subject to exceptions described in the Credit Agreement, restrict our ability and the ability of our subsidiaries (i) to incur additional indebtedness; (ii) to make investments; (iii) to make distributions, loans or transfers of assets; (iv) to enter into, create, incur, assume or suffer to exist any liens, (v) to sell assets; (vi) to enter into transactions with affiliates; (vii) to merge or consolidate with, or dispose of all assets to a third party, except as permitted thereby; (viii) to prepay indebtedness; and (ix) to pay dividends. The Credit Agreement provides for the following events of default: (i) default for non-payment of any principal or letter of credit reimbursement when due or any interest, fees or other amounts within five days of the due date; (ii) the failure by any borrower or any subsidiary to comply with any covenant or agreement contained in the Credit Agreement or any other loan document, in certain cases subject to applicable notice and lapse of time; (iii) any representation or warranty made pursuant to the Credit Agreement or any other loan document is incorrect in any material respect when made; (iv) certain defaults of other indebtedness of any borrower or any subsidiary of indebtedness of at least $10 million; (v) certain events of bankruptcy or insolvency with respect to any borrower or any subsidiary; (vi) certain judgments for the payment of money of $10 million or more; (vii) a change of control; and (viii) certain defaults relating to the loss of FCC licenses, cessation of broadcasting and termination of material station contracts. If an event of default occurs and is continuing, the Administrative Agent and the Lenders may accelerate the amounts outstanding under the ABL Facility and may exercise remedies in respect of the collateral. At June 30, 2021, we were, and we remain, in compliance with all of the covenants under Credit Agreement. We incurred debt issue costs of $0.9 million that w ere recorded as an asset and are being amortized to non-cash interest expense over the term of the ABL Facility using the effective interest method. During the three and six-month periods ended June 30, 2021, $29,000 and $0.1 million, respectively, of debt issuance costs associated with the ABL was amortized to interest expense. During the three and six-month periods ended June 30, 2020, $50,000 and $0.1 million, respectively, of debt issue costs associated with the ABL was amortized to interest expense. We report outstanding balances on the ABL Facility as short-term regardless of the maturity date based on use of the ABL Facility to fund ordinary and customary operating cash needs with frequent repayments. We believe that our borrowing capacity under the ABL Facility allows us to meet our ongoing operating requirements, fund capital expenditures and satisfy our debt service requirements for at least the next twelve months. Summary of long-term debt obligations Long-term debt consisted of the following:
In addition to the outstanding amounts listed above, we also have interest payments related to our long-term debt as follows as of June 30, 2021:
Maturities of Long-Term Debt Principal repayment requirements under all long-term debt agreements outstanding at June 30, 2021 for each of the next five years and thereafter are as follows:
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Fair Value Measurements |
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Fair Value Measurements | NOTE 12. FAIR VALUE MEASUREMENTS Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” FASB ASC Topic 820 “ Fair Value Measurements and Disclosures,”
Under ASC 820, a fair value measurement of a nonfinancial asset considers a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. Therefore, fair value is a market-based measurement and not an entity-specific measurement. It is determined based on assumptions that market participants would use in pricing the asset or liability. The exit price objective of a fair value measurement applies regardless of the reporting entity’s intent and/or ability to sell the asset or transfer the liability at the measurement date. As of June 30, 2021, the carrying value of cash and cash equivalents, trade accounts receivables, accounts payable, accrued expenses and accrued interest approximates fair value due to the short-term nature of such instruments. The carrying amount of the Notes at June 30, 2021 was $216.3 million compared to the estimated fair value of $210.9 million, based on the prevailing interest rates and trading activity of our Notes. We have certain assets that are measured at fair value on a non-recurring basis that are adjusted to fair value only when the carrying values exceed the fair values. The categorization of the framework used to price the assets is considered Level 3 due to the subjective nature of the unobservable inputs used when estimating the fair value. The following table summarizes the fair value of our financial assets and liabilities that are measured at fair value:
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Income Taxes |
6 Months Ended |
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Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 13. INCOME TAXES We recognize deferred tax assets and liabilities for future tax consequences attributable to differences between our consolidated financial statement carrying amount of assets a nd liabilities and their respective tax bases. We measure these deferred tax assets and liabilities using enacted tax rates expected to apply in the years in which these temporary differences are expected to reverse. We recognize the effect on deferred tax assets and liabilities resulting from a change in tax rates in income in the period that includes the date of the change. The adoption of ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes 2019-12”) in the current year did not have a material impact on our consolidated financial position, results of operations, cash flows, or presentation thereof.At December 31, 2020, we had net operating loss carryforwards for federal income tax purposes of approximately $135.3 million that expire in years 2021 through 2038 and for state income tax purposes of approximately $610.8 million that expire in years 2021 through 2040. As a result of our adjusted cumulative three-year pre-tax book loss as of December 31, 2020, we performed an assessment of positive and negative evidence with respect to the realization of our net deferred tax assets. This assessment included the evaluation of scheduled reversals of deferred tax liabilities, the availability of carryforwards and estimates of projected future taxable income. The economic uncertainty from the COVID-19 pandemic provided additional negative evidence that outweighed positive evidence resulting in our conclusion that additional deferred tax assets of $35.1 million related to federal and state net operating loss carryforwards are more likely than not to be not realized. As such, an additional valuation allowance of $35.1 million was recorded, for a total valuation allowance of $48.1 million as of the year ended December 31, 2020. During the interim period ended June 30, 2021, we computed the income tax provision using the estimated effective annual rate applicable for the full year. We updated our forecast to project income for the 2021 calendar year. In accordance with the guidance under ASC 740-270-25-4, we measured the estimated utilization of the operating loss carryforwards and the release of the valuation allowance for both federal and state jurisdictions. The effective tax rate differs from our statutory rate as a result of the forecasted change in the valuation allowance against expected operating income and changes to the deferred tax liability for amortization of indefinite-lived intangible assets. The amortization of our indefinite-lived intangible assets for tax purposes, but not for book purposes, creates deferred tax liabilities. A reversal of deferred tax liabilities may occur when indefinite-lived intangibles: (1) become impaired; or (2) are sold, which would typically only occur in connection with the sale of the assets of a station or groups of stations or the entire company in a taxable transaction. Due to the amortization for tax purposes and not book purposes of our indefinite-lived intangible assets, we expect to continue to generate deferred tax liabilities in future periods exclusive of any impairment losses in future periods. These deferred tax liabilities and net operating loss carryforwards result in differences between our provision for income tax and cash paid for taxes. We review and reevaluate uncertain tax positions on a quarterly basis. Changes in assumptions may result in the recognition of a tax benefit or an additional charge to the tax provision. Valuation Allowance (Deferred Taxes) For financial reporting purposes, we recorded a valuation allowance of $28.4 million as of December 31, 2020 to offset $28.4 million of the deferred tax assets related to the federal net operating loss carryforwards, and $19.7 million of the deferred tax assets related to state net operating loss carryforwards of $15.7 million and other financial statement accrual assets of $4.0 million, for a total valuation allowance of $48.1 million for the year ended December 31, 2020. |
Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 14. COMMITMENTS AND CONTINGENCIES We enter into various agreements in the normal course of business that contain minimum guarantees. Minimum guarantees are typically tied to future events, such as future revenue earned in excess of the contractual level. Accordingly, the fair value of these arrangements is zero. We may record contingent earn-out consideration representing the estimated fair value of future liabilities associated with acquisitions that may have additional payments due upon the achievement of certain performance targets. The fair value of the contingent earn-out consideration is estimated as of the acquisition date as the present value of the expected contingent payments as determined using weighted probabilities of the expected payment amounts. We review the probabilities of possible future payments to estimate the fair value of any contingent earn-out consideration on a quarterly basis over the earn-out period. Actual results are compared to the estimates and probabilities of achievement used in our forecasts. Should actual results of the acquired business increase or decrease as compared to our estimates and assumptions, the estimated fair value of the contingent earn-out consideration liability will increase or decrease, up to the contracted limit, as applicable. Changes in the estimated fair value of the contingent earn-out consideration are reflected in our results of operations in the period in which they are identified. Changes in the estimated fair value of the contingent earn-out consideration may materially impact and cause volatility in our operating results. We and our subsidiaries, incident to our business activities, are parties to a number of legal proceedings, lawsuits, arbitration and other claims. Such matters are subject to many uncertainties and outcomes that are not predictable with assurance. We evaluate claims based on what we believe to be both probable and reasonably estimable. We maintain insurance that may provide coverage for such matters. Consequently, we are unable to ascertain the ultimate aggregate amount of monetary liability or the financial impact with respect to these matters. We believe, at this time, that the final resolution of these matters, individually and in the aggregate, will not have a material adverse effect upon our condensed consolidated financial position, results of operations or cash flows. |
Stock Incentive Plan |
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Stock Incentive Plan | NOTE 15. STOCK INCENTIVE PLAN Our Amended and Restated 1999 Stock Incentive Plan (the “Plan”) provides for grants of equity-based awards to employees, non-employee directors and officers, and advisors (“Eligible Persons”). The Plan is designed to promote the interests of the company using equity investment interests to attract, motivate, and retain individuals. A maximum of 8,000,000 shares are authorized under the Plan. All awards have restriction periods tied primarily to employment and/or service. The Plan allows for accelerated or continued vesting in certain circumstances as defined in the Plan including death, disability, a change in control, and termination or retirement. The Board of Directors, or a committee appointed by the Board, has discretion subject to limits defined in the Plan, to modify the terms of any outstanding award. Awards granted to non-employee directors are made in exchange for their services to the company as directors and therefore, the guidance in FASB ASC Topic 505-50 Equity Based Payments to Non-Employees Under the Plan, the Board, or a committee appointed by the Board, may impose restrictions on the exercise of awards during pre-defined blackout periods. Insiders may participate in plans established pursuant to Rule 10b5-1 under the Exchange Act that allow them to exercise awards subject to pre-established criteria. We recognize non-cash stock-based compensation expense based on the estimated fair value of awards in accordance with FASB ASC Topic 718 Compensation—Stock Compensation six- month periods ended June 30, 2021 and 2020:
Stock Option and Restricted Stock Grants Eligible employees may receive stock option awards annually with the number of shares and type of instrument generally determined by the employee’s salary grade and performance level. Incentive and non-qualified stock option awards allow the recipient to purchase shares of our common stock at a set price, not to be less than the closing market price on the date of award, for no consideration payable by the recipient. The related number of shares underlying the stock option is fixed at the time of the grant. Options generally vest over a four-year period with a maximum term of five years from the vesting date. In addition, certain management and professional level employees may receive stock option awards upon the commencement of employment. The Plan also allows for awards of restricted stock that contain transfer restrictions under which they cannot be sold, pledged, transferred or assigned until the period specified in the award, generally from to five years. Restricted stock awards are independent of option grants and are granted at no cost to the recipient other than applicable taxes owed by the recipient. The awards are considered issued and outstanding from the date of grant. The fair value of each award is estimated as of the date of the grant using the Black-Scholes valuation model. The expected volatility reflects the consideration of the historical volatility of our common stock as determined by the closing price over a to ten-year term commensurate with the expected term of the award. Expected dividends reflect the amount of quarterly distributions authorized and declared on our Class A and Class B common stock as of the grant date. The expected term of the awards is based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rates for periods within the expected term of the award are based on the U.S. Treasury yield curve in effect during the period the options were granted. We have used historical data to estimate future forfeiture rates to apply against the gross amount of compensation expense determined using the valuation model. These estimates have approximated our actual forfeiture rates. The weighted-average assumptions used to estimate the fair value of the stock options using the Black-Scholes valuation model were as follows for the three- and six-month periods ended June 30, 2021 and 2020:
Activity with respect to the company’s option awards during the six-month period ended June 30, 2021 is as follows:
Activity with respect to the company’s restricted stock awards during the six-month period ended June 30, 2021 is as follows:
The aggregate intrinsic value represents the difference between the company’s closing stock price on June 30, 2021 of $2.55 and the option exercise price of the shares for stock options that were in the money, multiplied by the number of shares underlying such options. The total fair value of options vested during the periods ended June 30, 2021 and 2020 was $0.3 million and $0.4 million, respectively. As of June 30, 2021, there was $0.1 million of total unrecognized compensation cost related to
non-vested stock option awards. This cost is expected to be recognized over a weighted-average period of 2.1 years. |
Equity Transactions |
6 Months Ended |
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Jun. 30, 2021 | |
Federal Home Loan Banks [Abstract] | |
Equity Transactions | NOTE 16. EQUITY TRANSACTIONS We account for stock-based compensation expense in accordance with FASB ASC Topic 718, Compensation-Stock Compensation non-cash stock-based compensation expense has been recorded to additional paid-in capital for the three- and six-month periods ended June 30, 2021 , respectively, in comparison to $0.1 million and $0.2 million of non-cash stock-based compensation expense having been recorded to additional paid-in capital for the three- and six-month periods ended June 30, 2020, respectively. Our dividend policy is based upon our Board of Directors’ current assessment of our business and the environment in which we operate. The declaration of any future distributions and the establishment of the per share amount, record dates, and payment dates are subject to final determination by our Board of Directors and dependent upon future earnings, cash flows, financial and legal requirements, and other factors. On May 6, 2020, our Board of Directors voted to discontinue equity distributions until further notice due to the adverse economic impact of the
COVID-19 pandemic on our financial position, results of operations, and cash flows. |
Segment Data |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Data | NOTE 17. SEGMENT DATA FASB ASC Topic 280, “ Segment Reporting 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. Broadcasting 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 (“SRNTM ”), 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. SRNTM delivers programming via satellite to approximately 3,300 affiliated radio stations throughout the United States, including several of our Salem-owned stations. SRNTM operates five divisions, SRNTM Talk, SRNTM News, SRNTM Websites, SRNTM Satellite Services and Salem Music Network that includes Today’s Christian Music (“TCM”). 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 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 and (2) Salem Author Services, a self-publishing service for authors through Xulon Press and Mill City Press. The table below presents financial information for each operating segment as of June 30, 2021 and 2020 based on the composition of our operating segments:
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Subsequent Events |
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Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18. SUBSEQUENT EVENTS During July 2021, the SBA forg a ve all but $ of the PPP loans outstanding.On July 2, 2021, we a cquired SeniorResource.com 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. Subsequent events reflect all applicable transactions through the date of the filing. |
Business and Basis of Presentation (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business | Business Salem Media Group, Inc. (“Salem,” “we,” “us,” “our” or the “company”) is a domestic multimedia company specializing in Christian and conservative content. Our media properties include radio broadcasting, digital media, and publishing entities. We have three operating segments: (1) Broadcast, (2) Digital Media, and (3) Publishing, which are discussed in Note 17 – Segment Data. |
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Impact Of The COVID19 Pandemic | Impact of the COVID-19 Pandemic The COVID-19 global pandemic that began in March 2020 continues to impact our business. Measures taken by federal, state and local governments to prevent the spread of COVID-19 have adversely affected workforces, business operations and overall economic conditions resulting in a significant economic downturn. We experienced a rapid decline in revenue from advertising, programming, events and book sales. Several advertisers reduced or ceased advertising spending due to the outbreak and stay-at-home While the economic downturn is expected to be temporary, there remains to be considerable uncertainty around the duration. Advertising revenue continues to improve over the lowest levels that were experienced during April and May of 2020 but remains significantly below prior years. The exact timing and pace of the economic recovery has not been determinable due to varying degrees of restrictions and resurgences. Due to continuing uncertainties regarding the ultimate scope and trajectory of COVID-19’s spread and evolution, it is impossible to predict the total impact that the pandemic will have on our business. If public and private entities continue to enforce restrictive measures, the material adverse effect on our business, results of operations, financial condition and cash flows could persist. Our businesses could also continue to be impacted by the disruptions from COVID-19 and resulting adverse changes in advertising and consumer behavior. Lower revenue and longer days to collect receivables negatively impacts future availability under our credit facility. Availability under our Asset Based Loan (“ABL Facility”) is subject to a borrowing base consisting of (a) 90% of the eligible accounts receivable plus (b) a calculated amount based on the value of certain real property. The maximum amount available under our ABL Facility increased to $25.0 million at June 30, 2021 compared to $24.8 million at December 31, 2020, of which none was outstanding at June 30, 2021 compared to $5.0 million outstanding at December 31, 2020. We implemented several measures during 2020 to reduce costs and conserve cash to ensure that we have adequate cash to meet our debt servicing requirements, including:
As the economy begins to show signs of recovery, many of these cost reduction initiatives have been reversed during 2021. We continue to operate with lower staffing levels, we have not reinstated the company 401(k) match and we have not paid equity distributions on our common stock. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act provides opportunities for additional liquidity, loan guarantees, and other government programs to support companies affected by the COVID-19 pandemic and their employees. On December 27, 2020, Congress passed the Consolidated Appropriations Act (“CAA”) that includes a second relief package, which, among other things, provides for an extension of the Payroll Support Program established by the CARES Act. We have utilized certain benefits of the CARES Act, and we may be entitled to benefits under the CAA based on our individual locations, including:
We believe that our customers have benefited from the enhanced benefits provided by the CARES Act, and that they will also benefit from the CAA. The CAA provides for another round of direct payments, enhanced unemployment benefits, education funding, and aid to sectors still reeling from the economic fallout of the pandemic. While these measures may benefit many of our customers, we cannot assure you that the implementation of these measures will offset the negative impact of COVID-19 on our customers. If the CAA or any additional stimulus measures are not sufficient to remediate the financial stress on our customers as a result of the pandemic, we may experience ongoing challenges in growing and maintaining revenue and we may experience an increase in delinquencies that could materially and adversely impact our results of operations and financial condition in future periods. We continue to review and consider any available potential benefit under the CARES Act and the CAA for which we qualify. We cannot predict the manner in which such benefits or any of the other benefits described herein will be allocated or administered and we cannot assure you that we will be able to access such benefits in a timely manner or at all. If the U.S. government or any other governmental authority agrees to provide such aid under the CARES Act, the CAA, or any other crisis relief assistance it may impose certain requirements on the recipients of the aid, including restrictions on executive officer compensation, dividends, prepayment of debt, limitations on debt and other similar restrictions that may apply for a period of time after the aid is repaid or redeemed in full. |
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Basis Of Presentation | Basis of Presentation The accompanying Condensed Consolidated Financial Statements of Salem include the company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Information with respect to the three and six months ended June 30, 2021 and 2020 is unaudited. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited interim financial statements contain all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the financial position, results of operations and cash flows of the company. The unaudited interim financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report for Salem filed on Form 10-K for the year ended December 31, 2020. Our results are subject to seasonal fluctuations and therefore, the results of operations for the interim periods presented are not necessarily indicative of the results of operations for a full year. The balance sheet at December 31, 2020 included in this report has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP. Certain reclassifications have been made to the prior year financial statements to conform to the presentation in the current year, which had no impact on the previously reported financial statements. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results can be materially different from these estimates and assumptions. Significant areas for which management uses estimates include:
These estimates require the use of judgment as future events and the effect of these events cannot be predicted with certainty. The estimates will change as new events occur, as more experience is acquired and as more information is obtained. We evaluate and update our assumptions and estimates on an ongoing basis and we may consult outside experts to assist as considered necessary. The
COVID-19 pandemic continues to create significant uncertainty and disruption in the global economy and financial markets. It is reasonably possible that these uncertainties could materially impact our estimates related to, but not limited to, revenue recognition, broadcast licenses, goodwill and income taxes. As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. Our estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in our consolidated financial statements. |
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Revenue Recognition | REVENUE RECOGNITION We recognize revenue in accordance with ASC 606, “ Revenue from Contracts with Customers” Principal versus Agent Considerations When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent. Contract Assets Contract Assets—Costs to Obtain a Contract: Contract Liabilities Contract liabilities consist of customer advance payments and billings in excess of revenue recognized. We may receive payments from our customers in advance of completing our performance obligations. Additionally, new customers, existing customers without approved credit terms and authors purchasing specific self-publishing services, are required to make payments in advance of the delivery of the products or performance of the services. We record contract liabilities equal to the amount of payments received in excess of revenue recognized, including payments that are refundable if the customer cancels the contract according to the contract terms. Contract liabilities were historically recorded under the caption “deferred revenue” and are reported as current liabilities on our consolidated financial statements when the time to fulfill the performance obligations under terms of our contracts is less than one year. Long-term contract liabilities represent the amount of payments received in excess of revenue earned, including those that are refundable, when the time to fulfill the performance obligation is greater than one year. Our long-term liabilities consist of subscriptions with a term of two-years for which some customers have purchased and paid for multiple years. Significant changes in our contract liabilities balances during the period are as follows:
We expect to satisfy these performance obligations as follows:
Significant Financing Component Our sales agreements are typically less than 12 months; however, we may sell subscriptions with a two-year term. The balance of our long-term contract liabilities represents the unsatisfied performance obligations for subscriptions with a remaining term in excess of one year. We review long-term contract liabilities that are expected to be completed in excess of one year to assess whether the contract contains a significant financing component. The balance includes subscriptions that will be satisfied at various dates between July 1, 2021, and June 30, 2026. The difference between the promised consideration and the cash selling price of the publications is not significant and therefore, we concluded that subscriptions do not contain a significant financing component under ASC 606. Our self-publishing contracts may exceed a one-year term due to the length of time for an author to submit and approve a manuscript for publication. The author may pay for publishing services in installments over the production timeline with payments due in advance of performance. The timing of the transfer of goods and services under self-publishing arrangements are at the discretion of the author and based on future events that are not substantially within our control. We require advance payments to provide us with protection from incurring costs for products that are unique and only sellable to the author. Based on these considerations, we have concluded that our self-publishing contracts do not contain a significant financing component under ASC 606. Variable Consideration We make significant estimates related to variable consideration at the point of sale, including estimates for refunds and product returns. Revenue estimates for variable consideration may be recognized before contingencies are resolved in certain circumstances, including when it is probable that a significant reversal in the amount of any estimated cumulative revenue will not occur. We enter into certain agreements under which the amount of revenue we earn is contingent upon the amount of money raised by our customer over the contract term. Our customer is typically a charity or programmer that purchases blocks of programming time or spots to generate revenue by way of donations from our audience members. Contract terms range from a few weeks to a few months, depending on the charity or programmer. If a campaign does not generate a pre-determined level of donations or revenue to our customer, the consideration that we expect to be entitled will vary significantly. Based on the constraints for using estimates of variable consideration within ASC 606 including: (1) the amount of consideration received is highly susceptible to factors outside of our influence, specifically the extent to which our audience donates or contributes to our customer or programmer, (2) the length of time in which the uncertainty about the amount of consideration expected is to be resolved, (3) our experience and (4) the contract has a large number and broad range of possible consideration amounts, we recognize revenue at the base amount of the campaign with variable consideration recognized when the uncertainty of each campaign is resolved. Practical Expedients and Exemptions We elected certain practical expedients and policy elections as follows:
A summary of our principal sources of revenue is as follows: Block Programming . 1 /2 , 25 or 50-minutes of time. We separate block program revenue into three categories, National, Local and Infomercial revenue. Our stations are classified by format, including Christian Teaching and Talk, News Talk, Contemporary Christian Music, Spanish Language Christian Teaching and Talk and Business. National and local programming content is complementary to our station format while infomercials are closely associated with long-form advertisements. Block Programming revenue may include variable consideration for charities and programmers that purchase blocks of airtime to generate donations and contributions from our audience. Block programming revenue is recognized at the time of broadcast, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Programming revenue is recorded on a gross basis unless an agency represents the programmer, in which case, revenue is reported net of the commission retained by the agency. Spot Advertising Network Revenue . Digital Advertising. Salem Surround, our multimedia advertising agency, 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. In our role as a digital agency, our sales team provides our customers with integrated digital advertising solutions that optimize the performance of their campaign, which we view as one performance obligation. Our advertising campaigns are designed to be “white label” agreements between Salem and our advertiser, meaning we provide special care and attention to the details of the campaign. We provide custom digital product offerings, including tools for metasearch, retargeting, website design, reputation management, online listing services, and social media marketing. Digital advertising solutions may include third-party websites, such as Google or Facebook, which can be included in a digital advertising social media campaign. We manage all aspects of the digital campaign, including social media placements, review and approval of target audiences, and the monitoring of actual results to make modifications as needed. We may contract directly with a third-party, however, we are responsible for delivering the campaign results to our customer with or without the third-party. We are responsible for any payments due to the third-party regardless of the campaign results and without regard to the status of payment from our customer. We have discretion in setting the price to our customer without input or approval from the third-party. Accordingly, revenue is reported gross, as principal, as the performance obligation is delivered, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Digital Streaming Digital Downloads and e-books e-books. Payments for downloaded materials are due in advance of the download, however, the download is often instant upon confirmation of payment. Digital download revenue is recognized at the time of download, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Revenue is recorded at the gross amount due from the customer. All sales are final with no allowances made for returns. Subscriptions on-air content, and subscriptions to our print magazine. Subscription terms typically range from three months to two years, with a money-back guarantee for the first 30 days. Refunds after the first 30-day period are considered on a pro-rata basis based on the number of publications issued and delivered. Payments are due in advance of delivery and can be made in full upon subscribing or in quarterly installments. Cash received in advance of the subscription term, including amounts that are refundable, is recorded in contract labilities. Revenue is recognized ratably over the subscription term at the point in time that each publication is transmitted or shipped, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Revenue is reported net of estimated cancellations, which are based on our experience and historical cancellation rates during the cancellable period. Book Sales e-Commerce E-Commerce revenue is recognized at the time of shipment, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Revenue is reported net of estimated returns, which are based on our experience and historical return rates. Returned products are recorded in inventory if they are unopened and re-saleable with a corresponding reduction in the cost of goods sold. Self-Publishing Fees e-Books. As each book and related support services are unique to each author, authors must make payments in advance of the performance. Payments are typically made in installments over the expected production timeline for each publication. We record contract liabilities equal to the amount of payments received, including those amounts that are fully or partially refundable. Contract liabilities were historically recorded under the caption “deferred revenue” and are reported as current liabilities or long-term liabilities on our consolidated financial statements based on the time to fulfill the performance obligations under terms of the contract. Refunds are limited based on the percentage completion of each publishing project. Revenue is recognized upon completion of each performance obligation, which represents the point in time that control of the product is transferred to the author, thereby completing our performance obligation. Revenue is recorded at the net amount due from the author, including discounts based on the service package. Advertising—Print Other Revenues . on-air hosts, rental income for studios and towers, production services, and shipping and handling fees. We recognize event revenue, including fees earned for ticket sales and sponsorships, when the event occurs, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Revenue for all other products and services is recorded as the products or services are delivered or performed, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Other revenue is reported on a gross basis unless an agency represents the customer, in which case, revenue is reported net of the commission retained by the agency. Trade and Barter Transactions In broadcasting, trade or barter agreements are commonly used to reduce cash expenses by exchanging advertising time for goods or services. We may enter barter agreements to exchange airtime or digital advertising for goods or services that can be used in our business or that can be sold to our audience under Listener Purchase Programs. The terms of these barter agreements permit us to preempt the barter airtime or digital campaign in favor of customers who purchase the airtime or digital campaign for cash. The value of these non-cash exchanges is included in revenue in an amount equal to the fair value of the goods or services we receive. Each transaction must be reviewed to determine that the products, supplies and/or services we receive have economic substance, or value to us. We record barter operating expenses upon receipt and usage of the products, supplies and services, as applicable. We record barter revenue as advertising spots or digital campaigns are delivered, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Barter revenue is recorded on a gross basis unless an agency represents the programmer, in which case, revenue is reported net of the commission retained by the agency. Trade and barter revenues and expenses were as follows:
The following table presents our revenues disaggregated by revenue source for each of our operating segments:
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Changes to accounting principles are established by the FASB in the form of ASUs to the FASB’s Codification. We consider the applicability and impact of all ASUs on our financial position, results of operations, cash flows, or presentation thereof. Described below are ASUs that may be applicable to our financial position, results of operations, cash flows, or presentation thereof. ASUs not listed below were assessed and determined to not be applicable to our financial position, results of operations, cash flows, or presentation thereof. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope Reference Rate Reform In June 2016, the FASB issued ASU
2016-13, Financial Instruments-Credit Losses, held-to-maturity available-for-sale 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses 2016-13. ASU 2018-19 has the same effective date and transition requirements as ASU 2016-13. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments 2016-13. In May 2019, the FASB issued ASU 2019-05, Financial Instruments – Credit Losses (Topic 326) 2016-13. In October 2019, the FASB voted to delay the implementation date for certain companies, including those, such as Salem, that qualify as a smaller reporting company under SEC rules, until January 1, 2023. We will adopt this ASU on its effective date of January 1, 2023. We do not expect the adoption of this ASU to have a material impact on our consolidated financial position, results of operations, cash flows, or presentation thereof. |
Recent Transactions (Tables) |
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Disclosure Details Of Business Acquistion | A summary of our business acquisitions and asset purchases during the six-month period ending June 30, 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:
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Disclosure Details Of Purchase Consideration Business Combination | The total purchase price consideration for our business acquisitions and asset purchases the six-month period ending June 30, 2021, is as follows:
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Fair value of the net assets acquired | The fair value of the net assets acquired was allocated as follows:
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Revenue Recognition (Tables) |
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Changes in Our Contract Liabilities | Significant changes in our contract liabilities balances during the period are as follows:
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Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | We expect to satisfy these performance obligations as follows:
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Trade and Barter Transactions Expenses | Trade and barter revenues and expenses were as follows:
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Reconciliation of Revenue from Segments to Consolidated | The following table presents our revenues disaggregated by revenue source for each of our operating segments:
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory on Hand by Segment | The following table provides details of inventory on hand:
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Property and Equipment (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Categories of Property and Equipment | The following is a summary of the categories of our property and equipment:
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Operating and Finance Lease Right-of-Use Assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases is as follows:
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Components of Lease Expense | Lease Expense The components of lease expense were as follows:
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Schedule of other information related to leases | Supplemental cash flow information related to leases was as follows:
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Schedule of Future Minimum Lease Payments Based on Former Accounting Guidance | Future minimum lease payments under leases that had initial or remaining non-cancelable lease terms in excess of one year as of June 30, 2021, are as follows:
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Broadcast Licenses (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Broadcasting Licenses | The following table presents the changes in broadcasting licenses that include acquisitions and divestitures of radio stations and FM translators.
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Goodwill (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Goodwill | The following table presents the changes in goodwill including business acquisitions and dispositions as discussed in Note 3 of our Condensed Consolidated Financial Statements.
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Amortizable Intangible Assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Classes of Amortizable Intangible Assets | The following tables provide a summary of our significant classes of amortizable intangible assets:
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Amortizable Intangible Assets, Estimate Amortization Expense | Based on the amortizable intangible assets as of June 30, 2021, we estimate amortization expense for the next five years to be as follows:
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Long-Term Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt Instruments Senior Secured Note | Based on the then existing market conditions, we completed repurchases of our 6.75% Senior Secured Notes at amounts less than face value as follows:
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Long-Term Debt | Long-term debt consisted of the following:
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Principle Repayment Requirements Under Long Term Agreements Outstanding | Principal repayment requirements under all long-term debt agreements outstanding at June 30, 2021 for each of the next five years and thereafter are as follows:
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured at Fair Value | The following table summarizes the fair value of our financial assets and liabilities that are measured at fair value:
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Stock Incentive Plan (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-Based Compensation Expense Recognized | The following table reflects the components of stock-based compensation expense recognized in the Condensed Consolidated Statements of Operations for the three- and six- month periods ended June 30, 2021 and 2020:
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Schedule of Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options and Restricted Stock Awards using Black-Scholes Option Valuation Model | The weighted-average assumptions used to estimate the fair value of the stock options using the Black-Scholes valuation model were as follows for the three- and six-month periods ended June 30, 2021 and 2020:
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Schedule of Stock Option Activity | Activity with respect to the company’s option awards during the six-month period ended June 30, 2021 is as follows:
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Schedule of Information Regarding Restricted Stock Activity | Activity with respect to the company’s restricted stock awards during the six-month period ended June 30, 2021 is as follows:
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Segment Data (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Data | The table below presents financial information for each operating segment as of June 30, 2021 and 2020 based on the composition of our operating segments:
|
Business and Basis of Presentation - Additional Information (Detail) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2021
USD ($)
Segments
|
Jul. 31, 2021
USD ($)
|
Mar. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
|
Number of operating segments | Segments | 3 | |||
Long-term Debt, Gross | $ 225,327 | $ 218,764 | ||
Payroll taxes, specifically employer | 3,300 | |||
Payroll Protection Plans [Member] | ||||
Long-term Debt, Gross | $ 11,200 | |||
Payroll Protection Plans [Member] | Subsequent Event [Member] | ||||
Unforgiven loans payable | $ 20,000 | |||
Revolving Credit Facility [Member] | ||||
Debt instrument maximum borrowing capacity | $ 25,000 | 24,800 | ||
Debt instrument outstanding | $ 5,000 |
Recent Transactions - Shelf Registration Statement and At-the-Market Facility - Additional Information (Detail) $ in Millions |
Apr. 30, 2021
USD ($)
|
---|---|
Common Class A [Member] | |
Shares authorized for sales and issuance | $ 15.0 |
Recent Transactions - Acquisitions - Additional Information (Detail) - USD ($) |
6 Months Ended | |||||
---|---|---|---|---|---|---|
Jun. 01, 2021 |
Apr. 28, 2021 |
Jun. 30, 2021 |
Mar. 08, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Business Acquisition [Line Items] | ||||||
Asset Acquisition, contingent earnout consideration | $ 11,000 | |||||
Goodwill | $ 23,785,000 | $ 23,757,000 | $ 23,998,000 | |||
Business combination, recognized identifiable assets acquired and liabilities assumed, contingent liability | $ 100,000 | |||||
Triple Threat Trader Newsletter [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Asset Acquisition, transaction costs | $ 11,000 | |||||
KDIA AM AND KDYA AM Sanfrancisco California [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Payments to Acquire Businesses | $ 600,000 | |||||
Goodwill | $ 4,000 | |||||
Centerline New Media Domain And Digital Assets [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Payments to Acquire Businesses | $ 1,300,000 | |||||
Goodwill | $ 24,000 |
Recent Transactions - Pending Transactions -Additional Information (Detail) - USD ($) $ in Millions |
Apr. 10, 2021 |
Jun. 07, 2021 |
Jun. 02, 2021 |
---|---|---|---|
Radio station KSKY-AM [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Proceeds from sale of real estate | $ 12.1 | ||
Radio Station KKOL In Seattle [Member] | |||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |||
Escrow Deposit | $ 0.1 | ||
Payable for asset acquistion | $ 0.5 |
Recent Transactions - Disclosure Details Of Purchase Consideration Business Combination (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2021
USD ($)
| |
Business Acquisition [Line Items] | |
Total purchase price consideration | $ 2,027 |
Two Thousand And Twenty One Acquistions [Member] | |
Business Acquisition [Line Items] | |
Cash payments made upon closing | 1,900 |
Deferred payments | 116 |
Present value of estimated fair value of contingent earn-out consideration | 11 |
Total purchase price consideration | $ 2,027 |
Recent Transactions - Summary of Fair Value of the Net Assets Acquired (Details) $ in Thousands |
Jun. 30, 2021
USD ($)
|
---|---|
Assets | |
Property and equipment | $ 1,441 |
Broadcast licenses | 235 |
Goodwill | 28 |
Customer lists and contracts | 314 |
Domain and brand names | 22 |
Net assets acquired | 2,040 |
Liabilities | |
Contract liabilities | (13) |
Total purchase price consideration | 2,027 |
Net Broadcast [Member] | |
Assets | |
Property and equipment | 361 |
Broadcast licenses | 235 |
Goodwill | 4 |
Customer lists and contracts | 0 |
Domain and brand names | 0 |
Net assets acquired | 600 |
Liabilities | |
Contract liabilities | 0 |
Total purchase price consideration | 600 |
Net digital media assets acquired [Member] | |
Assets | |
Property and equipment | 1,080 |
Broadcast licenses | 0 |
Goodwill | 24 |
Customer lists and contracts | 314 |
Domain and brand names | 22 |
Net assets acquired | 1,440 |
Liabilities | |
Contract liabilities | (13) |
Total purchase price consideration | $ 1,427 |
Revenue Recognition - Additional Information (Detail) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2021
USD ($)
Segments
| |
Disaggregation of Revenue [Line Items] | |
Prepaid commission expense | $ | $ 0.7 |
Number of operating segments | Segments | 3 |
Minimum [Member] | |
Disaggregation of Revenue [Line Items] | |
Sale of subscription revenue term | 3 months |
Maximum [Member] | |
Disaggregation of Revenue [Line Items] | |
Sale of subscription revenue term | 2 years |
Revenue Recognition - Significant Changes in Our Contract Liabilities (Detail) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2021
USD ($)
| |
Change in Contract with Customer, Liability [Abstract] | |
Short Term, Balance, beginning of period | $ 11,652 |
Short Term, Revenue recognized during the period that was included in the beginning balance of contract liabilities | (6,292) |
Short Term, Additional amounts recognized during the period | 13,531 |
Short Term, Revenue recognized during the period that was recorded during the period | (6,948) |
Short Term, Transfers | 458 |
Short Term, Balance, end of period | 12,401 |
Short Term, Amount refundable at beginning of period | 11,607 |
Short Term, Amount refundable at end of period | 12,389 |
Long-Term, Balance, beginning of period | 1,869 |
Long-Term, Additional amounts recognized during the period | 756 |
Long-Term, Transfers | (458) |
Long-Term, Balance, end of period | 2,167 |
Long-Term, Amount refundable at beginning of period | 1,869 |
Long-Term, Amount refundable at end of period | $ 2,167 |
Revenue Recognition - Trade and Barter Transactions Expenses (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Revenue Recognition [Line Items] | ||||
Total net revenue | $ 63,782 | $ 52,871 | $ 123,135 | $ 111,121 |
Broadcast [Member] | Advertising Barter Transactions [Member] | ||||
Revenue Recognition [Line Items] | ||||
Total net revenue | 674 | 508 | 1,065 | 1,674 |
Cost | 712 | 524 | 1,085 | 1,558 |
Publishing [Member] | ||||
Revenue Recognition [Line Items] | ||||
Total net revenue | 12,346 | 7,924 | ||
Publishing [Member] | Advertising Barter Transactions [Member] | ||||
Revenue Recognition [Line Items] | ||||
Total net revenue | $ 5 | $ 31 | ||
Cost | $ 7 | $ 7 |
Inventories - Schedule of Inventory on Hand by Segment (Detail) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Inventory [Line Items] | ||
Reserve for obsolescence | $ (1,508) | $ (1,499) |
Inventory, net | 719 | 495 |
Book Inventories [Member] | ||
Inventory [Line Items] | ||
Inventories, gross | 2,227 | 1,994 |
Reserve for obsolescence | (1,508) | (1,499) |
Inventory, net | $ 719 | $ 495 |
Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 2.7 | $ 2.7 | $ 5.3 | $ 5.4 |
Operating and Finance Lease Right-of-Use Assets - Additional Information (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2021 | |
Operating lease, existence of option to extend | true |
Operating lease, option to extend | Many of these leases contain options under which we can extend the term from five to twenty years |
Finance lease, option to extend | Many of these leases contain options under which we can extend the term from five to twenty years |
Minimum [Member] | |
Operating lease, remaining lease term | 1 year |
Operating lease, extension term | 5 years |
Finance lease, extension term | 5 years |
Maximum [Member] | |
Operating lease, remaining lease term | 20 years |
Operating lease, extension term | 20 years |
Finance lease, extension term | 20 years |
Operating and Finance Lease Right-of-Use Assets - Components of Lease Expense (Detail) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2021
USD ($)
| |
Leases [Abstract] | |
Amortization of finance lease ROU Assets | $ 32 |
Interest on finance lease liabilities | 4 |
Finance lease expense | 36 |
Operating lease expense | 6,438 |
Variable lease expense | 310 |
Short-term lease expense | 352 |
Total lease expense | $ 7,136 |
Operating and Finance Lease Right-of-Use Assets - Schedule of Impact to Financial Statements of the Adoption of ASU 842 (Detail) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2021
USD ($)
| |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 7,097 |
Operating cash flows from finance leases | 2 |
Financing cash flows from finance leases | 32 |
Leased assets obtained in exchange for new operating lease liabilities | 1,957 |
Leased assets obtained in exchange for new finance lease liabilities | $ 4 |
Broadcast Licenses - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Indefinite-lived Intangible Assets [Line Items] | |||
Impairment charge | $ 17,254 | ||
Broadcast Licenses [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
License renewable term | 8 years | ||
Impairment charge | $ 0 | $ 0 |
Broadcast Licenses - Schedule of Changes in Broadcasting Licenses (Detail) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2021 |
Dec. 31, 2020 |
|
Indefinite-lived Intangible Assets [Line Items] | ||
Balance, beginning of period before cumulative loss on impairment | $ 434,209 | $ 435,300 |
Accumulated loss on impairment, Beginning Balance | (114,436) | (97,442) |
Balance, beginning of period after cumulative loss on impairment | 319,773 | 337,858 |
Disposition of radio stations | (1,091) | |
Impairments based on the estimated fair value of broadcast licenses | (16,994) | |
Balance, end of period before cumulative loss on impairment | 434,444 | 434,209 |
Accumulated loss on impairment, Ending Balance | (114,436) | (114,436) |
Balance, end of period after cumulative loss on impairment | 320,008 | $ 319,773 |
Radio Stations [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Acquisitions of radio stations | $ 235 |
Goodwill - Schedule of Changes in Goodwill (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
|
Goodwill [Line Items] | ||||
Balance, beginning of period before cumulative loss on impairment | $ 28,520 | $ 28,454 | $ 28,454 | |
Accumulated loss on impairment | (4,763) | (4,456) | (4,456) | |
Balance, beginning of period after cumulative loss on impairment | 23,757 | 23,998 | 23,998 | |
Impairments based on the estimated fair value goodwill | $ 0 | 0 | $ (307) | (307) |
Balance, end of period before cumulative loss on impairment | 28,548 | 28,548 | 28,520 | |
Accumulated loss on impairment | (4,763) | (4,763) | (4,763) | |
Ending period balance | $ 23,785 | 23,785 | 23,757 | |
Radio Stations [Member] | ||||
Goodwill [Line Items] | ||||
Acquisitions | 4 | $ 66 | ||
Digital Media [Member] | ||||
Goodwill [Line Items] | ||||
Acquisitions | $ 24 |
Goodwill - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
|
Impairment of goodwill | $ 0 | $ 0 | $ 307 | $ 307 |
Amortizable Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Property, Plant and Equipment [Line Items] | ||||
Amortization of intangible assets | $ 0.5 | $ 0.8 | $ 1.1 | $ 1.8 |
Amortizable Intangible Assets - Amortizable Intangible Assets, Estimate Amortization Expense (Detail) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 796 | |
2022 | 1,318 | |
2023 | 784 | |
2024 | 117 | |
2025 | 13 | |
Thereafter | 198 | |
Net | $ 3,226 | $ 4,017 |
Long-Term Debt - 6.75% Senior Secured Notes - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
Jul. 31, 2021 |
Mar. 31, 2021 |
May 19, 2017 |
|
Debt Instrument [Line Items] | ||||||||
Interest payable, current | $ 1,227 | $ 1,227 | $ 1,225 | |||||
Debt related commitment fees and debt issuance costs | 6,300 | |||||||
Long-term debt, gross | $ 225,327 | $ 225,327 | $ 218,764 | |||||
Small Business Association [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate, stated percentage | 1.00% | 1.00% | ||||||
Long-term debt, gross | $ 11,200 | |||||||
Debt instrument term | 5 years | 5 years | ||||||
Debt Instrument Redemption Period One [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, redemption price, percentage of principal amount redeemed | 100.00% | |||||||
6.75% Senior Secured Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate, stated percentage | 6.75% | 6.75% | 6.75% | |||||
Debt instrument, debt default, description of violation or event of default | The Indenture provides for the following events of default (each, an “Event of Default”): (i) default in payment of principal or premium on the Notes at maturity, upon repurchase, acceleration, optional redemption or otherwise; (ii) default for 30 days in payment of interest on the Notes; (iii) the failure by us or certain restricted subsidiaries to comply with other agreements in the Indenture or the Notes, in certain cases subject to notice and lapse of time; (iv) the failure of any guarantee by certain significant Subsidiary Guarantors to be in full force and effect and enforceable in accordance with its terms, subject to notice and lapse of time; (v) certain accelerations (including failure to pay within any grace period) of other indebtedness of ours or any restricted subsidiary if the amount accelerated (or so unpaid) is at least $15 million; (vi) certain judgments for the payment of money in excess of $15 million; (vii) certain events of bankruptcy or insolvency with respect to us or any significant subsidiary; and (viii) certain defaults with respect to any collateral having a fair market value in excess of $15 million. | |||||||
Debt instrument debt default percentage | 25.00% | |||||||
Interest expense, debt | $ 14,600 | |||||||
Interest payable, current | $ 1,200 | 1,200 | ||||||
Debt related commitment fees and debt issuance costs | $ 200 | $ 200 | $ 400 | $ 400 | ||||
Payroll Protection Plans [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | $ 11,200 | |||||||
Payroll Protection Plans [Member] | Subsequent Event [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Unforgiven loans payable | $ 20,000 |
Long-Term Debt - Long-Term Debt (Detail) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt less unamortized debt issuance costs | $ 225,327 | $ 218,764 |
Less current portion | (5,000) | |
Long-term Debt | 225,327 | 213,764 |
Asset-Based Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 5,000 | |
6.75% Senior Secured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt and capital lease obligations current and noncurrent | 216,341 | 216,341 |
Less unamortized debt issuance costs based on imputed interest rate of 7.08% | (2,209) | (2,577) |
Long-term Debt | 214,132 | $ 213,764 |
SBA Paycheck Protection Program loans [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 11,195 |
Long-Term Debt - Long-Term Debt (Parenthetical) (Detail) |
Jun. 30, 2021 |
---|---|
6.75% Senior Secured Notes [Member] | Debt Issuance Costs [Member] | |
Debt Instrument [Line Items] | |
Imputed interest rate percentage | 7.08% |
Long-Term Debt - Summary of Long-term Debt Obligations - Additional Information (Detail) - USD ($) |
6 Months Ended | |
---|---|---|
May 19, 2017 |
Jun. 30, 2021 |
|
Shares Issued And Outstanding [Line Items] | ||
Debt instrument, face amount | $ 216,300,000 | |
Asset-Based Revolving Credit Facility [Member] | ||
Shares Issued And Outstanding [Line Items] | ||
Debt instrument, face amount | $ 30,000,000.0 | |
Asset-Based Revolving Credit Facility [Member] | Minimum [Member] | ||
Shares Issued And Outstanding [Line Items] | ||
Line of credit facility, unused capacity, commitment fee percentage | 0.25% | 0.25% |
Asset-Based Revolving Credit Facility [Member] | Maximum [Member] | ||
Shares Issued And Outstanding [Line Items] | ||
Line of credit facility, unused capacity, commitment fee percentage | 0.375% | |
6.75% Senior Secured Notes [Member] | ||
Shares Issued And Outstanding [Line Items] | ||
Debt instrument, interest rate, stated percentage | 6.75% | 6.75% |
Long-Term Debt - Principle Repayment Requirements Under Long Term Agreements Outstanding (Detail) $ in Thousands |
Jun. 30, 2021
USD ($)
|
---|---|
Maturities of Long-term Debt [Abstract] | |
2022 | $ 0 |
2023 | 0 |
2024 | 216,341 |
2025 | 0 |
2026 | 11,195 |
Thereafter | 0 |
Total | $ 227,536 |
Fair Value Measurements - Additional Information (Detail) |
Jun. 30, 2021
USD ($)
|
---|---|
Fair Value Disclosures [Abstract] | |
Carrying value of notes | $ 216,300,000 |
Debt instrument, estimated fair value | $ 210,900,000 |
Fair Value Measurements - Summary of Fair Value of Financial Assets and Liabilities (Detail) - Other Indefinite Lived Intangible Assets [Member] $ in Thousands |
Jun. 30, 2021
USD ($)
|
---|---|
Liabilities: | |
Estimated fair value of contingent earn-out consideration included in accrued expenses | $ 11 |
Long-term debt less unamortized debt issuance costs | 225,327 |
Fair Value, Inputs, Level 2 [Member] | |
Liabilities: | |
Long-term debt less unamortized debt issuance costs | 208,779 |
Fair Value, Inputs, Level 3 [Member] | |
Liabilities: | |
Estimated fair value of contingent earn-out consideration included in accrued expenses | $ 11 |
Stock Incentive Plan - Schedule of Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options and Restricted Stock Awards using Black-Scholes Option Valuation Model (Detail) |
6 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected volatility | 74.83% | 53.96% |
Expected dividends | 0.00% | 7.30% |
Expected term (in years) | 7 years 8 months 12 days | 7 years 7 months 6 days |
Risk-free interest rate | 0.96% | 1.14% |
Stock Incentive Plan - Schedule of Information Regarding Restricted Stock Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2021 |
Dec. 31, 2020 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Outstanding Shares, Beginning Balance | 107,990 | |
Outstanding Shares, Ending Balance | 107,990 | 107,990 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ 1.85 | |
Weighted Average Grant Date Fair Value, Ending Balance | $ 1.85 | $ 1.85 |
Weighted Average Contractual Life Remaining | 7 months 6 days | 1 year 8 months 1 day |
Aggregate Intrinsic Value, Beginning Balance | $ 112 | |
Aggregate Intrinsic Value, Ending Balance | $ 275 | $ 112 |
Equity Transactions - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Non-cash stock-based compensation expense related to additional paid-in capital | $ 0.1 | $ 0.1 | $ 0.2 | $ 0.2 |
Segment Data - Additional Information (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2021
Segments
| |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - USD ($) $ in Thousands |
Jul. 02, 2021 |
Jul. 01, 2021 |
Jul. 31, 2021 |
---|---|---|---|
Payroll Protection Plans [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unforgiven loans payable | $ 20,000 | ||
SeniorResource.com [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Payment to acquire business | $ 100 | ||
ShiftWorship.com [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Payment to acquire business | $ 2,600 |
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