8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 5, 2003

SALEM COMMUNICATIONS CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware	000-26497	77-0121400
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4880 Santa Rosa Road
Camarillo, California	93012
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (805) 987-0400

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

TABLE OF CONTENTS

EXHIBIT 99.1

EXHIBIT 99.2

TABLE OF CONTENTS

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS

ITEM 9. REGULATION FD DISCLOSURE AND ITEM 12. RESULTS OF OPERATIONS AND

FINANCIAL CONDITION

EXHIBITS

SIGNATURE

EXHIBIT INDEX

Exhibit 99.1

Exhibit 99.2

ITEM 7.	FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
(c)	Exhibits. The following exhibits are filed with this report on Form 8-K:

Exhibit No.	Description
99.1	Press release of Salem Communications Corporation dated May 5, 2003 regarding first quarter 2003 earnings.
99.2	Press release of Salem Communications Corporation dated May 5, 2003 regarding the acquisitions of WAMG-AM, Boston, Massachusetts, and KKCS-AM, Colorado Springs, Colorado.

ITEM 9. REGULATION FD DISCLOSURE AND ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.*

ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

     The following information and the exhibits relating thereto are furnished pursuant to “Item 9. Regulation FD Disclosure” of this Current Report on Form 8-K and pursuant to the “Item 12. Results of Operations and Financial Condition” in accordance with SEC Release No.33-8216.

     On May 5, 2003, Salem Communications Corporation issued a press release regarding the first quarter 2003 earnings. A copy of the press release is attached hereto as Exhibit 99.1. In addition, Salem Communications Corporation issued a press release on May 5, 2003 to announce the pending acquisitions of WAMG-AM in Boston, Massachusetts, and KKCS-AM, Colorado Springs, Colorado. A copy of the press release is attached hereto as Exhibit 99.2.

     * The information furnished under Item 9 and Item 12 of this Current Report on Form 8-K, including Exhibits 99.1, and 99.2 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

2

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SALEM COMMUNICATIONS CORPORATION
Date: May 5, 2003
	By: /s/ DAVID A.R. EVANS David A.R. Evans Senior Vice President and Chief Financial Officer

3

EXHIBIT INDEX

EXHIBIT
NUMBER	DESCRIPTION
99.1	Press release of Salem Communications Corporation dated May 5, 2003 regarding first quarter 2003 earnings.
99.2	Press release of Salem Communications Corporation dated May 5, 2003 regarding the acquisitions of WAMG-AM, Boston, Massachusetts, and KKCS-AM, Colorado Springs, Colorado.

4 EX-99.1 3 v89828exv99w1.txt EXHIBIT 99.1 [SALEM COMMUNICATIONS LOGO] SALEM COMMUNICATIONS ANNOUNCES FIRST QUARTER 2003 RESULTS First Quarter Same Station Revenue and Same Station Operating Income Increase 7.8% and 11.8%, Respectively CAMARILLO, CA May 5, 2003 - Salem Communications Corporation (Nasdaq: SALM), the leading radio broadcaster focused on religious and family themes programming, announced today results for the first quarter ended March 31, 2003. Commenting on these results, Edward G. Atsinger III, President and CEO said, "In what was a challenging quarter for the radio industry, we have once again reported strong growth in both revenue and station operating income. We delivered industry leading revenue growth on the strength of our reliable block programming revenues and continued improvements in our start-up and developing properties. We are especially pleased with the progress of our music stations, which are converting solid ratings into strong income growth. In total, we are pleased to start 2003 with a quarter that emphasizes both the upside potential of our developing portfolio, as well as the downside protection our block programming revenues provide." FIRST QUARTER 2003 RESULTS For the quarter ended March 31, 2003, net broadcasting revenue increased 8.4% to $38.7 million from $35.7 million in the same period a year ago. The company reported operating income of $3.2 million for the quarter, compared with operating income of $4.2 million for the same period last year. The company reported a net loss of $6.1 million for the quarter, or $0.26 loss per share, compared with a net loss of $1.8 million, or $0.08 loss per share, for the same period last year. The net loss for the quarter ended March 31, 2003 included a one-time loss (net of an income tax benefit) of $4.0 million, or $0.17 loss per share, as a result of the early retirement of $100 million of the company's 9.5% senior subordinated notes. Station operating income (previously called broadcast cash flow) increased 12.7% to $12.4 million from $11.0 million in the corresponding 2002 period. Station operating margin (defined as station operating income as a percentage of net broadcasting revenue) increased to 31.9% in the first quarter of 2003 from 30.9% in the first quarter of 2002. The company expects this percentage to continue to improve as its developing radio stations continue to mature. On a same station basis, net broadcasting revenue and station operating income increased 7.8% to $38.5 million and 11.8% to $12.3 million, respectively, for the first quarter of 2003 as compared to the first quarter of 2002. Same station results have been favorably impacted by revenue and station operating income growth from our contemporary Christian music radio stations. EBITDA decreased 11.4% to $6.2 million in the first quarter of 2003 compared to $7.0 million in first quarter of 2002. First quarter 2003 EBITDA included a write-off of $1.3 million, resulting from the denial of the company's request to relocate one of its San Diego, California market radio towers and a write-off of $0.9 million, resulting from the FCC denial of a motion to upgrade night-time coverage of WGKA-AM in Atlanta, Georgia. Excluding these write-offs, EBITDA increased 20.0% to $8.4 million. Per share numbers were calculated based on 23,484,113 weighted average diluted shares for the quarter ended March 31, 2003, and 23,458,164 weighted average diluted shares for the comparable 2002 period. Continued . . . Page 2 STATION OPERATING INCOME ("SOI") MARGIN COMPOSITION ANALYSIS The following analysis of the company's radio station portfolio separates each station into one of four categories based upon first quarter 2003 performance, for analytical purposes only. The company believes this analysis is helpful in assessing the portfolio's financial and operational development. Three Months ended March 31, ---------------------------- (Revenue and SOI in millions)

2002 2003 ---------------------------------------------- ----------------------------------------------- Average Average SOI Margin % Stations Revenue SOI SOI % Stations Revenue SOI SOI % - ------------ -------- ------- --- ----- -------- ------- --- ----- 50% or greater 13 $ 9.4 $ 5.7 60.6% 14 $10.8 $ 6.5 60.2% 30 to 49% 23 12.9 5.4 41.9% 25 14.0 5.7 40.7% 0 to 29% 29 8.0 1.4 17.5% 34 8.6 1.4 16.3% Less than 0% 20 2.4 (2.0) (83.3%) 12 2.4 (0.6) (25.0%) ----- ----- ----- ----- ----- ----- ----- ----- Subtotal 85 32.7 10.5 32.1% 85 35.8 13.0 36.3% Other 0 3.0 0.5 16.7% 0 2.9 (0.7) (24.1%) ----- ----- ----- ----- ----- ----- ----- ----- Total 85 $35.7 $11.0 30.9% 85 $38.7 $12.3 31.9% ===== ===== ===== ===== ===== ===== ===== =====

STATION ACQUISITIONS AND SALES Additionally, since December 31, 2002, Salem has announced several radio stations acquisitions including: - The pending acquisition of WJGR-AM, WZNZ-AM, WZAZ-AM and WBGB-FM, in Jacksonville, Florida, from Concord Media Group Inc. for approximately $9.3 million. - The pending acquisition of WAMG-AM in Boston, Massachusetts, from Mega Communications for approximately $8.6 million. - The pending acquisition of KKCS-AM in Colorado Springs, Colorado, from Walton Stations - Colorado, Inc. for approximately $1.5 million. SECOND QUARTER OUTLOOK Salem achieved same station revenue growth of 9% for April 2003 and expects to achieve high single digit revenue growth for May 2003. Based on its most recent pacings, Salem expects second quarter same station revenue growth percentage in the high single digits. For the second quarter of 2003, Salem is projecting net broadcasting revenue of between $43.2 and $43.7 million. Net income for the second quarter of 2003 is projected to be between $1.0 and $1.4 million. Salem is expecting station operating income of between $14.9 and $15.4 million and EBITDA of between $10.7 and $11.2 million for the second quarter of 2003. Second quarter 2003 guidance reflects the following: - - The successful renewal of Salem's national block programming contracts. - - Continued growth from Salem's contemporary Christian music radio stations. - - Increased competition faced by Salem Radio Network business. - - The impact of refinancing $100 million of senior subordinated notes from a 9.5% interest rate to 7.75%. Additionally, for 2003 as a whole, the company expects corporate expenses of approximately $16.0 million. Salem also expects acquisition and improvement related capital expenditures of approximately $7.0 million, and maintenance capital expenditures of approximately $3.0 million. Page 3 Mr. Atsinger continued, "Our guidance for the second quarter reflects the high growth nature of our portfolio and the strength of our business model. We are successfully balancing cost containment while continuing the investment spending necessary to fuel growth. As the economy improves and our developing stations move to maturity, Salem is in an ideal position to capitalize." BALANCE SHEET During the first quarter of 2003, Salem Communications amended its credit facility to redefine various debt covenants and the financial ratio tests to provide the company additional borrowing flexibility. As of March 31, 2003, the company had total debt of $316.1 million and was in compliance with all of its covenants under the credit facility and bond indentures. Salem's bank leverage ratio was 6.7 as of March 31, 2003 versus a compliance covenant of 7.0. Salem's bond leverage ratio was 6.4 as of March 31, 2003 versus an incurrence covenant of 7.0. Salem will host a teleconference to discuss its results today at 5:00 PM Eastern Time. To access the teleconference, please dial 973-582-2741 ten minutes prior to the start time. The teleconference will also be available via live webcast on the investor relations portion of the company's website, located at www.salem.cc. If you are unable to listen to the live teleconference at its scheduled time, there will be a replay available through May 15, 2003, and can be accessed by dialing 973-341-3080, passcode 3889914. The webcast will also be archived on the company's website. Salem Communications Corporation, headquartered in Camarillo, California, is the leading U.S. radio broadcaster focused on religious and family themes programming. Upon the close of all announced transactions, the company will own and operate 91 radio stations, including 58 stations in the top 25 markets. In addition to its radio properties, Salem owns Salem Radio Network, which syndicates talk, news and music programming to over 1,500 affiliated radio stations; Salem Radio Representatives, a national sales force; Salem Web Network, the leading Internet provider of Christian content and online streaming; and Salem Publishing, a leading publisher of contemporary Christian music trade and consumer magazines. Analyst, Investor and Media Contacts: Amanda Strong-Larson Manger of Investor Relations Salem Communications (805) 987-0400 ext. 1081 amandas@salem.cc FORWARD LOOKING STATEMENTS Statements used in this press release that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated as a result of certain risks and uncertainties, including but not limited to the ability of Salem to close and integrate announced transactions, market acceptance of recently launched music formats, competition in the radio broadcast, Internet and publishing industries and from new technologies, adverse economic conditions, and other risks and uncertainties detailed from time to time in Salem's reports on Forms 10-K, 10-Q, 8-K and other filings filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Salem undertakes no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events. REGULATION G Station operating income is defined as net broadcasting revenues minus broadcasting operating expenses. EBITDA is defined as operating income before depreciation and amortization. In addition, Salem has provided supplemental information as an attachment to this press release reconciliing these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles ("GAAP"). The Page 4 company believes these non-GAAP financial measures, when considered in conjunction with the most directly comparable GAAP financial measures, provide useful measures of the company's operating performance. Station operating income and EBITDA are generally recognized by the broadcasting industry as important measures of performance and are used by investors as well as analysts who report on the industry to provide meaningful comparisons between broadcasting groups. Station operating income and EBITDA are not a measure of liquidity or of performance in accordance with GAAP, and should be viewed as a supplement to and not a substitute for, or superior to, the company's results of operations presented on a GAAP basis such as operating income and net income. In addition, Salem's definition of station operating income and EBITDA is not necessarily comparable to similarly titled measures reported by other companies. SALEM COMMUNICATIONS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT SHARE, PER SHARE AND MARGIN DATA)

THREE MONTHS ENDED MARCH ---------------------------------- 2002 2003 ------------ ------------ Gross broadcasting revenue $ 38,970 $ 42,056 Less agency commissions 3,250 3,350 ------------ ------------ Net broadcasting revenue 35,720 38,706 Other media revenue 1,695 1,921 ------------ ------------ Total revenue 37,415 40,627 Operating expenses: Broadcasting operating expenses 24,685 26,338 Cost of denied tower site and license upgrade -- 2,202 Other media operating expenses 2,033 1,860 Corporate expenses 3,687 4,044 Depreciation and amortization 2,852 3,025 ------------ ------------ Total operating expenses 33,257 37,469 ------------ ------------ Operating income 4,158 3,158 Other income (expense): Interest income 40 154 Loss on disposal of assets (226) -- Interest expense (6,706) (6,636) Loss on early redemption of long-term debt -- (6,440) Other expense, net (164) (69) ------------ ------------ Loss before income taxes (2,898) (9,833) Benefit for income taxes (1,117) (3,745) ------------ ------------ Loss before discontinued operations (1,781) (6,088) Discontinued operations, net of tax (18) -- ------------ ------------ Net loss $ (1,799) $ (6,088) ============ ============ Basic and diluted loss per share before discontinued operations $ (0.08) $ (0.26) Discontinued operations -- -- Basic and diluted loss per share after discontinued operations (0.08) (0.26) Basic and diluted weighted average shares outstanding 23,458,164 23,484,113 ============ ============ OTHER DATA (IN THOUSANDS, EXCEPT MARGIN DATA): Station operating income $ 11,035 $ 12,368 Station operating margin 30.9% 32.0% EBITDA $ 7,010 $ 6,183 EBITDA - Adjusted for cost of denied tower site and license upgrade 7,010 8,385

SALEM COMMUNICATIONS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)

DECEMBER 31, MARCH 31, 2002 2003 -------- -------- ASSETS Cash $ 26,325 $ 1,448 Restricted cash 107,661 -- Deferred income taxes 2,281 4,068 Other current assets 34,556 31,684 Property, plant and equipment, net 99,194 97,408 Intangible assets, net 380,508 380,152 Bond issue costs 7,854 6,043 Fair value of interest rate swap 7,790 7,181 Other assets 6,040 5,293 -------- -------- TOTAL ASSETS $672,209 $533,277 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $121,378 $ 17,266 Fair value of interest rate swap 7,790 7,181 Long-term debt and capital lease obligations 343,118 316,065 Deferred income taxes 26,447 24,079 Other liabilities 1,548 2,846 Stockholders' equity 171,928 165,840 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $672,209 $533,277 ======== ========

SALEM COMMUNICATIONS CORPORATION SUPPLEMENTAL INFORMATION

PROJECTED THREE MONTHS ENDED THREE MONTHS ENDING MARCH JUNE 2003 ---------------------- ------------------- 2002 2003 LOW HIGH -------- -------- ----- ----- (in thousands) (in millions) CAPITAL EXPENDITURES Acquisition related / income producing $ 3,408 $ 679 Maintenance 1,305 1,046 ----- ----- TOTAL CAPITAL EXPENDITURES $ 4,713 $ 1,725 ===== ===== TAX INFORMATION Cash tax expense $ 8 $ 793 Deferred tax expense (1,125) (4,538) ----- ----- PROVISION (BENEFIT) FOR INCOME TAXES $ (1,117) $ (3,745) ===== ===== Tax benefit of non-book amortization $ 2,744 $ 2,762 ===== ===== RECONCILIATION OF STATION OPERATING INCOME TO OPERATING INCOME Station Operating Income $ 11,035 $ 12,368 $14.9 $15.4 Plus: Other media revenue 1,695 1,921 2.0 2.0 Less: Cost of denied tower site and license upgrade -- (2,202) -- -- Other media operating expenses (2,033) (1,860) (2.2) (2.2) Corporate expenses (3,687) (4,044) (4.0) (4.0) Depreciation and amortization (2,852) (3,025) (3.1) (3.0) -------- -------- ----- ----- OPERATING INCOME $ 4,158 $ 3,158 $ 7.6 $ 8.2 ======== ======== ===== ===== RECONCILIATION OF EBITDA TO NET INCOME EBITDA $ 7,010 $ 6,183 $10.7 $11.2 Plus: Interest income 40 154 -- -- Less: Depreciation and amortization (2,852) (3,025) (3.1) (3.0) Gain (loss) on disposal of assets (226) -- -- -- Interest expense (6,706) (6,636) (5.8) (5.7) Loss on early redemption of long-term debt -- (6,440) -- -- Other expense, net (164) (69) (0.1) (0.1) (Provision) benefit for income taxes 1,117 3,745 (0.7) (1.0) Discontinued operations, net of tax (18) -- -- -- -------- -------- ----- ----- NET INCOME $ (1,799) $ (6,088) $ 1.0 $ 1.4 ======== ======== ===== ===== RECONCILIATION OF EBITDA TO EBITDA ADJUSTED FOR COST OF DENIED TOWER SITE AND LICENSE UPGRADE EBITDA $ 7,010 $ 6,183 Plus: Cost of denied tower site and license upgrade -- 2,202 ----- ----- EBITDA ADJUSTED FOR COST OF DENIED TOWER SITE AND LICENSE UPGRADE $ 7,010 $ 8,385 ===== =====

EX-99.2 4 v89828exv99w2.txt EXHIBIT 99.2 [SALEM COMMUNICATIONS LOGO] SALEM COMMUNICATIONS ANNOUNCES THE ACQUISITION OF AM RADIO STATIONS IN BOSTON AND COLORADO SPRINGS Camarillo, CA, May 5, 2003 -- Salem Communications Corporation (Nasdaq: SALM), the leading radio broadcaster focused on religious and family themes programming, announced today the acquisition of two AM radio stations. The Company will be acquiring WAMG-AM in Boston, Massachusetts, from Mega Communications for approximately $8.6 million. Edward G. Atsinger III, President and CEO commented, "It is increasingly difficult to find quality radio properties at appropriate prices in large markets, specifically the top 10. WAMG-AM has a good quality day and night signal and will allow us to launch our conservative news/talk format in the Boston market, as part of an integrated three-station cluster." Salem Communications will also be acquiring KKCS-AM in Colorado Springs, Colorado, from Walton Stations - Colorado, Inc. for approximately $1.5 million. The station will be part of a three-station cluster and will broadcast a conservative news/talk format. Mr. Atsinger continued, "These acquisitions are in line with our long-term goal of developing our clusters in large markets through our three strategic formats. We expect these stations to bring economies of scale to each of these markets and to deliver a strong return on investment." Salem Communications Corporation, headquartered in Camarillo, California, is the leading U.S. radio broadcaster focused on religious and family themes programming. Upon the close of all announced transactions, the company will own and operate 91 radio stations, including 58 stations in the top 25 markets. In addition to its radio properties, Salem owns Salem Radio Network, which syndicates talk, news and music programming to over 1,500 affiliated radio stations; Salem Radio Representatives, a national sales force; Salem Web Network, the leading internet provider of Christian content and online streaming; and Salem Publishing, a leading publisher of contemporary Christian music trade and consumer magazines. Forward Looking Statements Statements used in this press release that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated as a result of certain risks and uncertainties, including but not limited to the ability of Salem to close and integrate announced transactions, market acceptance of recently launched station formats, competition in the radio broadcast, Internet and publishing industries and from new technologies, adverse economic conditions, and other risks and uncertainties detailed from time to time in Salem's reports on Forms 10-K, 10-Q, 8-K and other filings filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Salem undertakes no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events. Analyst, Investor and Media Contacts: Amanda Strong-Larson Investor Relations Manager Salem Communications (805) 987-0400 x1081 amandas@salem.cc ### -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.1

                           [SALEM COMMUNICATIONS LOGO]

            SALEM COMMUNICATIONS ANNOUNCES FIRST QUARTER 2003 RESULTS

      First Quarter Same Station Revenue and Same Station Operating Income
                      Increase 7.8% and 11.8%, Respectively

CAMARILLO, CA May 5, 2003 - Salem Communications Corporation (Nasdaq: SALM), the
leading radio broadcaster focused on religious and family themes programming,
announced today results for the first quarter ended March 31, 2003.

Commenting on these results, Edward G. Atsinger III, President and CEO said, "In
what was a challenging quarter for the radio industry, we have once again
reported strong growth in both revenue and station operating income. We
delivered industry leading revenue growth on the strength of our reliable block
programming revenues and continued improvements in our start-up and developing
properties. We are especially pleased with the progress of our music stations,
which are converting solid ratings into strong income growth. In total, we are
pleased to start 2003 with a quarter that emphasizes both the upside potential
of our developing portfolio, as well as the downside protection our block
programming revenues provide."

FIRST QUARTER 2003 RESULTS

For the quarter ended March 31, 2003, net broadcasting revenue increased 8.4% to
$38.7 million from $35.7 million in the same period a year ago. The company
reported operating income of $3.2 million for the quarter, compared with
operating income of $4.2 million for the same period last year. The company
reported a net loss of $6.1 million for the quarter, or $0.26 loss per share,
compared with a net loss of $1.8 million, or $0.08 loss per share, for the same
period last year. The net loss for the quarter ended March 31, 2003 included a
one-time loss (net of an income tax benefit) of $4.0 million, or $0.17 loss per
share, as a result of the early retirement of $100 million of the company's 9.5%
senior subordinated notes.

Station operating income (previously called broadcast cash flow) increased 12.7%
to $12.4 million from $11.0 million in the corresponding 2002 period. Station
operating margin (defined as station operating income as a percentage of net
broadcasting revenue) increased to 31.9% in the first quarter of 2003 from 30.9%
in the first quarter of 2002. The company expects this percentage to continue to
improve as its developing radio stations continue to mature.

On a same station basis, net broadcasting revenue and station operating income
increased 7.8% to $38.5 million and 11.8% to $12.3 million, respectively, for
the first quarter of 2003 as compared to the first quarter of 2002. Same station
results have been favorably impacted by revenue and station operating income
growth from our contemporary Christian music radio stations.

EBITDA decreased 11.4% to $6.2 million in the first quarter of 2003 compared to
$7.0 million in first quarter of 2002. First quarter 2003 EBITDA included a
write-off of $1.3 million, resulting from the denial of the company's request to
relocate one of its San Diego, California market radio towers and a write-off of
$0.9 million, resulting from the FCC denial of a motion to upgrade night-time
coverage of WGKA-AM in Atlanta, Georgia. Excluding these write-offs, EBITDA
increased 20.0% to $8.4 million.

Per share numbers were calculated based on 23,484,113 weighted average diluted
shares for the quarter ended March 31, 2003, and 23,458,164 weighted average
diluted shares for the comparable 2002 period.


                                 Continued . . .

                                                                          Page 2

STATION OPERATING INCOME ("SOI") MARGIN COMPOSITION ANALYSIS

The following analysis of the company's radio station portfolio separates each
station into one of four categories based upon first quarter 2003 performance,
for analytical purposes only. The company believes this analysis is helpful in
assessing the portfolio's financial and operational development.

                          Three Months ended March 31,
                          ----------------------------
                          (Revenue and SOI in millions)



                                          2002                                                  2003
                     ----------------------------------------------        -----------------------------------------------
                                                             Average                                                Average
SOI Margin %         Stations     Revenue        SOI          SOI %        Stations      Revenue        SOI          SOI %
- ------------         --------     -------        ---          -----        --------      -------        ---          -----
                                                                                            
50% or greater           13        $ 9.4        $ 5.7          60.6%            14        $10.8        $ 6.5          60.2%
30 to 49%                23         12.9          5.4          41.9%            25         14.0          5.7          40.7%
0 to 29%                 29          8.0          1.4          17.5%            34          8.6          1.4          16.3%
Less than 0%             20          2.4         (2.0)        (83.3%)           12          2.4         (0.6)        (25.0%)
                      -----        -----        -----         -----          -----        -----        -----         -----
Subtotal                 85         32.7         10.5          32.1%            85         35.8         13.0          36.3%
Other                     0          3.0          0.5          16.7%             0          2.9         (0.7)        (24.1%)
                      -----        -----        -----         -----          -----        -----        -----         -----
Total                    85        $35.7        $11.0          30.9%            85        $38.7        $12.3          31.9%
                      =====        =====        =====         =====          =====        =====        =====         =====


STATION ACQUISITIONS AND SALES

Additionally, since December 31, 2002, Salem has announced several radio
stations acquisitions including:

      -     The pending acquisition of WJGR-AM, WZNZ-AM, WZAZ-AM and WBGB-FM, in
            Jacksonville, Florida, from Concord Media Group Inc. for
            approximately $9.3 million.

      -     The pending acquisition of WAMG-AM in Boston, Massachusetts, from
            Mega Communications for approximately $8.6 million.

      -     The pending acquisition of KKCS-AM in Colorado Springs, Colorado,
            from Walton Stations - Colorado, Inc. for approximately $1.5
            million.

SECOND QUARTER OUTLOOK

Salem achieved same station revenue growth of 9% for April 2003 and expects to
achieve high single digit revenue growth for May 2003. Based on its most recent
pacings, Salem expects second quarter same station revenue growth percentage in
the high single digits.

For the second quarter of 2003, Salem is projecting net broadcasting revenue of
between $43.2 and $43.7 million. Net income for the second quarter of 2003 is
projected to be between $1.0 and $1.4 million. Salem is expecting station
operating income of between $14.9 and $15.4 million and EBITDA of between $10.7
and $11.2 million for the second quarter of 2003.

Second quarter 2003 guidance reflects the following:

- -     The successful renewal of Salem's national block programming contracts.

- -     Continued growth from Salem's contemporary Christian music radio stations.

- -     Increased competition faced by Salem Radio Network business.

- -     The impact of refinancing $100 million of senior subordinated notes from a
      9.5% interest rate to 7.75%.

Additionally, for 2003 as a whole, the company expects corporate expenses of
approximately $16.0 million. Salem also expects acquisition and improvement
related capital expenditures of approximately $7.0 million, and maintenance
capital expenditures of approximately $3.0 million.

                                                                          Page 3

Mr. Atsinger continued, "Our guidance for the second quarter reflects the high
growth nature of our portfolio and the strength of our business model. We are
successfully balancing cost containment while continuing the investment spending
necessary to fuel growth. As the economy improves and our developing stations
move to maturity, Salem is in an ideal position to capitalize."

BALANCE SHEET

During the first quarter of 2003, Salem Communications amended its credit
facility to redefine various debt covenants and the financial ratio tests to
provide the company additional borrowing flexibility. As of March 31, 2003, the
company had total debt of $316.1 million and was in compliance with all of its
covenants under the credit facility and bond indentures. Salem's bank leverage
ratio was 6.7 as of March 31, 2003 versus a compliance covenant of 7.0. Salem's
bond leverage ratio was 6.4 as of March 31, 2003 versus an incurrence covenant
of 7.0.

Salem will host a teleconference to discuss its results today at 5:00 PM Eastern
Time. To access the teleconference, please dial 973-582-2741 ten minutes prior
to the start time. The teleconference will also be available via live webcast on
the investor relations portion of the company's website, located at
www.salem.cc. If you are unable to listen to the live teleconference at its
scheduled time, there will be a replay available through May 15, 2003, and can
be accessed by dialing 973-341-3080, passcode 3889914. The webcast will also be
archived on the company's website.

Salem Communications Corporation, headquartered in Camarillo, California, is the
leading U.S. radio broadcaster focused on religious and family themes
programming. Upon the close of all announced transactions, the company will own
and operate 91 radio stations, including 58 stations in the top 25 markets. In
addition to its radio properties, Salem owns Salem Radio Network, which
syndicates talk, news and music programming to over 1,500 affiliated radio
stations; Salem Radio Representatives, a national sales force; Salem Web
Network, the leading Internet provider of Christian content and online
streaming; and Salem Publishing, a leading publisher of contemporary Christian
music trade and consumer magazines.

Analyst, Investor and Media Contacts:
Amanda Strong-Larson
Manger of Investor Relations
Salem Communications
(805) 987-0400 ext. 1081
amandas@salem.cc

FORWARD LOOKING STATEMENTS

Statements used in this press release that relate to future plans, events,
financial results, prospects or performance are forward-looking statements as
defined under the Private Securities Litigation Reform Act of 1995. Actual
results may differ materially from those anticipated as a result of certain
risks and uncertainties, including but not limited to the ability of Salem to
close and integrate announced transactions, market acceptance of recently
launched music formats, competition in the radio broadcast, Internet and
publishing industries and from new technologies, adverse economic conditions,
and other risks and uncertainties detailed from time to time in Salem's reports
on Forms 10-K, 10-Q, 8-K and other filings filed with the Securities and
Exchange Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. Salem
undertakes no obligation to update or revise any forward-looking statements to
reflect new information, changed circumstances or unanticipated events.

REGULATION G

Station operating income is defined as net broadcasting revenues minus
broadcasting operating expenses. EBITDA is defined as operating income before
depreciation and amortization. In addition, Salem has provided supplemental
information as an attachment to this press release reconciliing these non-GAAP
financial measures to the most directly comparable financial measures prepared
in accordance with generally accepted accounting principles ("GAAP"). The

                                                                          Page 4

company believes these non-GAAP financial measures, when considered in
conjunction with the most directly comparable GAAP financial measures, provide
useful measures of the company's operating performance.

Station operating income and EBITDA are generally recognized by the broadcasting
industry as important measures of performance and are used by investors as well
as analysts who report on the industry to provide meaningful comparisons between
broadcasting groups. Station operating income and EBITDA are not a measure of
liquidity or of performance in accordance with GAAP, and should be viewed as a
supplement to and not a substitute for, or superior to, the company's results of
operations presented on a GAAP basis such as operating income and net income. In
addition, Salem's definition of station operating income and EBITDA is not
necessarily comparable to similarly titled measures reported by other companies.

SALEM COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE, PER SHARE AND MARGIN DATA)



                                                                                    THREE MONTHS ENDED
                                                                                          MARCH
                                                                            ----------------------------------
                                                                                2002                  2003
                                                                            ------------          ------------
                                                                                            
Gross broadcasting revenue                                                  $     38,970          $     42,056
Less agency commissions                                                            3,250                 3,350
                                                                            ------------          ------------
Net broadcasting revenue                                                          35,720                38,706
Other media revenue                                                                1,695                 1,921
                                                                            ------------          ------------
Total revenue                                                                     37,415                40,627
Operating expenses:
  Broadcasting operating expenses                                                 24,685                26,338
  Cost of denied tower site and license upgrade                                       --                 2,202
  Other media operating expenses                                                   2,033                 1,860
  Corporate expenses                                                               3,687                 4,044
  Depreciation and amortization                                                    2,852                 3,025
                                                                            ------------          ------------
Total operating expenses                                                          33,257                37,469
                                                                            ------------          ------------
Operating income                                                                   4,158                 3,158
Other income (expense):
  Interest income                                                                     40                   154
  Loss on disposal of assets                                                        (226)                   --
  Interest expense                                                                (6,706)               (6,636)
  Loss on early redemption of long-term debt                                          --                (6,440)
  Other expense, net                                                                (164)                  (69)
                                                                            ------------          ------------
Loss before income taxes                                                          (2,898)               (9,833)
Benefit for income taxes                                                          (1,117)               (3,745)
                                                                            ------------          ------------
Loss before discontinued operations                                               (1,781)               (6,088)
Discontinued operations, net of tax                                                  (18)                   --
                                                                            ------------          ------------
Net loss                                                                    $     (1,799)         $     (6,088)
                                                                            ============          ============
Basic and diluted loss per share before discontinued operations             $      (0.08)         $      (0.26)
Discontinued operations                                                               --                    --
Basic and diluted loss per share after discontinued operations                     (0.08)                (0.26)
Basic and diluted weighted average shares outstanding                         23,458,164            23,484,113
                                                                            ============          ============
OTHER DATA (IN THOUSANDS, EXCEPT MARGIN DATA):
Station operating income                                                    $     11,035          $     12,368
Station operating margin                                                            30.9%                 32.0%
EBITDA                                                                      $      7,010          $      6,183
EBITDA  - Adjusted for cost of denied tower site and license upgrade               7,010                 8,385


SALEM COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)



                                                  DECEMBER 31,      MARCH 31,
                                                     2002             2003
                                                    --------        --------
                                                              
ASSETS
Cash                                                $ 26,325        $  1,448
Restricted cash                                      107,661              --
Deferred income taxes                                  2,281           4,068
Other current assets                                  34,556          31,684
Property, plant and equipment, net                    99,194          97,408
Intangible assets, net                               380,508         380,152
Bond issue costs                                       7,854           6,043
Fair value of interest rate swap                       7,790           7,181
Other assets                                           6,040           5,293
                                                    --------        --------
TOTAL ASSETS                                        $672,209        $533,277
                                                    ========        ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities                                 $121,378        $ 17,266
Fair value of interest rate swap                       7,790           7,181
Long-term debt and capital lease obligations         343,118         316,065
Deferred income taxes                                 26,447          24,079
Other liabilities                                      1,548           2,846
Stockholders' equity                                 171,928         165,840
                                                    --------        --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $672,209        $533,277
                                                    ========        ========


SALEM COMMUNICATIONS CORPORATION
SUPPLEMENTAL INFORMATION



                                                                                                      PROJECTED
                                                                         THREE MONTHS ENDED       THREE MONTHS ENDING
                                                                                MARCH                   JUNE 2003
                                                                       ----------------------     -------------------
                                                                         2002          2003         LOW        HIGH
                                                                       --------      --------      -----      -----
                                                                            (in thousands)           (in millions)
                                                                                                  
CAPITAL EXPENDITURES
Acquisition related / income producing                                 $  3,408      $    679
Maintenance                                                               1,305         1,046
                                                                          -----         -----
TOTAL CAPITAL EXPENDITURES                                             $  4,713      $  1,725
                                                                          =====         =====
TAX INFORMATION
Cash tax expense                                                       $      8      $    793
Deferred tax expense                                                     (1,125)       (4,538)
                                                                          -----         -----
PROVISION (BENEFIT) FOR INCOME TAXES                                   $ (1,117)     $ (3,745)
                                                                          =====         =====
Tax benefit of non-book amortization                                   $  2,744      $  2,762
                                                                          =====         =====
RECONCILIATION OF STATION OPERATING INCOME TO OPERATING INCOME
Station Operating Income                                               $ 11,035      $ 12,368      $14.9      $15.4
Plus:
  Other media revenue                                                     1,695         1,921        2.0        2.0
Less:
  Cost of denied tower site and license upgrade                              --        (2,202)        --         --
  Other media operating expenses                                         (2,033)       (1,860)      (2.2)      (2.2)
  Corporate expenses                                                     (3,687)       (4,044)      (4.0)      (4.0)
  Depreciation and amortization                                          (2,852)       (3,025)      (3.1)      (3.0)
                                                                       --------      --------      -----      -----
OPERATING INCOME                                                       $  4,158      $  3,158      $ 7.6      $ 8.2
                                                                       ========      ========      =====      =====
RECONCILIATION OF EBITDA TO NET INCOME
EBITDA                                                                 $  7,010      $  6,183      $10.7      $11.2
Plus:
  Interest income                                                            40           154         --         --
Less:
  Depreciation and amortization                                          (2,852)       (3,025)      (3.1)      (3.0)
  Gain (loss) on disposal of assets                                        (226)           --         --         --
  Interest expense                                                       (6,706)       (6,636)      (5.8)      (5.7)
  Loss on early redemption of long-term debt                                 --        (6,440)        --         --
  Other expense, net                                                       (164)          (69)      (0.1)      (0.1)
  (Provision) benefit for income taxes                                    1,117         3,745       (0.7)      (1.0)
  Discontinued operations, net of tax                                       (18)           --         --         --
                                                                       --------      --------      -----      -----
NET INCOME                                                             $ (1,799)     $ (6,088)     $ 1.0      $ 1.4
                                                                       ========      ========      =====      =====
RECONCILIATION OF EBITDA TO EBITDA ADJUSTED FOR COST OF DENIED
  TOWER SITE AND LICENSE UPGRADE
EBITDA                                                                 $  7,010      $  6,183
Plus:
  Cost of denied tower site and license upgrade                              --         2,202
                                                                          -----         -----
EBITDA ADJUSTED FOR COST OF DENIED TOWER SITE AND LICENSE UPGRADE      $  7,010      $  8,385
                                                                          =====         =====

EX-99.2

                          [SALEM COMMUNICATIONS LOGO]

               SALEM COMMUNICATIONS ANNOUNCES THE ACQUISITION OF
                AM RADIO STATIONS IN BOSTON AND COLORADO SPRINGS

Camarillo, CA, May 5, 2003 -- Salem Communications Corporation (Nasdaq: SALM),
the leading radio broadcaster focused on religious and family themes
programming, announced today the acquisition of two AM radio stations.

The Company will be acquiring WAMG-AM in Boston, Massachusetts, from Mega
Communications for approximately $8.6 million.

Edward G. Atsinger III, President and CEO commented, "It is increasingly
difficult to find quality radio properties at appropriate prices in large
markets, specifically the top 10. WAMG-AM has a good quality day and night
signal and will allow us to launch our conservative news/talk format in the
Boston market, as part of an integrated three-station cluster."

Salem Communications will also be acquiring KKCS-AM in Colorado Springs,
Colorado, from Walton Stations - Colorado, Inc. for approximately $1.5 million.
The station will be part of a three-station cluster and will broadcast a
conservative news/talk format.

Mr. Atsinger continued, "These acquisitions are in line with our long-term goal
of developing our clusters in large markets through our three strategic formats.
We expect these stations to bring economies of scale to each of these markets
and to deliver a strong return on investment."

Salem Communications Corporation, headquartered in Camarillo, California, is the
leading U.S. radio broadcaster focused on religious and family themes
programming. Upon the close of all announced transactions, the company will own
and operate 91 radio stations, including 58 stations in the top 25 markets. In
addition to its radio properties, Salem owns Salem Radio Network, which
syndicates talk, news and music programming to over 1,500 affiliated radio
stations; Salem Radio Representatives, a national sales force; Salem Web
Network, the leading internet provider of Christian content and online
streaming; and Salem Publishing, a leading publisher of contemporary Christian
music trade and consumer magazines.

Forward Looking Statements

Statements used in this press release that relate to future plans, events,
financial results, prospects or performance are forward-looking statements as
defined under the Private Securities Litigation Reform Act of 1995. Actual
results may differ materially from those anticipated as a result of certain
risks and uncertainties, including but not limited to the ability of Salem to
close and integrate announced transactions, market acceptance of recently
launched station formats, competition in the radio broadcast, Internet and
publishing industries and from new technologies, adverse economic conditions,
and other risks and uncertainties detailed from time to time in Salem's reports
on Forms 10-K, 10-Q, 8-K and other filings filed with the Securities and
Exchange Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. Salem
undertakes no obligation to update or revise any forward-looking statements to
reflect new information, changed circumstances or unanticipated events.

Analyst, Investor and Media Contacts:

Amanda Strong-Larson
Investor Relations Manager
Salem Communications
(805) 987-0400 x1081
amandas@salem.cc                            ###