ANNUAL 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 |
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) |
(I.R.S. EMPLOYER IDENTIFICATION NUMBER) | |
|
||
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) |
(ZIP CODE) |
Title of each class |
Trading Symbol |
Name of the Exchange on which registered | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller Reporting Company | ||||
Emerging Growth Company |
Class A |
Outstanding at February 25, 2022 | |
Common Stock, $0.01 par value per share | ||
Class B |
Outstanding at February 25, 2022 | |
Common Stock, $0.01 par value per share |
Document |
Parts Into Which Incorporated | |
Proxy Statement for the Annual Meeting of Stockholders | Part III, Items 10, 11, 12, 13 and 14 |
PAGE |
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Item 1. |
3 |
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Item 1A. |
25 |
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Item 1B. |
25 |
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Item 2. |
25 |
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Item 3. |
26 |
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Item 4. |
27 |
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Item 5. |
28 |
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Item 6. |
28 |
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Item 7. |
29 |
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Item 7A. |
62 |
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Item 8. |
63 |
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Item 9. |
124 |
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Item 9A. |
124 |
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Item 9B. |
125 |
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Item 9C. |
125 |
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Item 10. |
126 |
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Item 11. |
126 |
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Item 12. |
126 |
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Item 13. |
126 |
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Item 14. |
126 |
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Item 15. |
127 |
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Item 16. |
127 |
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132 |
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133 |
• | 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 $3.3 million of employer FICA taxes from April 2020 through December 2020, of which 50% was paid in December 2021 and the remaining 50% is payable in December 2022; |
• | A relaxation of interest expense deduction limitation for income tax purposes; |
• | We received Paycheck Protection Program (“PPP”) loans of $11.2 million in total during the first quarter of 2021 through the Small Business Association (“SBA”) based on the eligibility as determined on a per-location basis; and |
• | In July 2021, the SBA forgave all but $20,000 of the PPP loans, with the remaining PPP loan repaid in July 2021. |
Market (1) |
MSA Rank (2) |
Station Call Letters |
Year Acquired |
Format | ||||
New York, NY |
1, 19 (3) | WMCA-AM |
1989 | Christian Teaching and Talk | ||||
WNYM-AM |
1994 | News Talk | ||||||
Los Angeles, CA |
2 | KKLA-FM |
1985 | Christian Teaching and Talk | ||||
KRLA-AM |
1998 | News Talk | ||||||
KFSH-FM |
2000 | Contemporary Christian Music | ||||||
Chicago, IL |
3 | WYLL-AM |
2001 | Christian Teaching and Talk | ||||
WIND-AM |
2005 | News Talk | ||||||
San Francisco, CA |
4, 37 (4) | KFAX-AM |
1984 | Christian Teaching and Talk | ||||
KDOW-AM |
2001 | Business | ||||||
KTRB-AM |
2018 | News Talk | ||||||
KDIA-AM |
2021 | Christian Teaching and Talk | ||||||
KDYA-AM |
2021 | Other |
Market (1) |
MSA Rank (2) |
Station Call Letters |
Year Acquired |
Format | ||||
Dallas-Fort Worth, TX |
5 | KLTY-FM |
1996 | Contemporary Christian Music | ||||
KWRD-FM |
2000 | Christian Teaching and Talk | ||||||
KSKY-AM |
2000 | News Talk | ||||||
KTNO-AM |
2015 | Spanish Language Christian Teaching and Talk | ||||||
Houston-Galveston, TX |
6 | KNTH-AM |
1995 | News Talk | ||||
KKHT-FM |
2005 | Christian Teaching and Talk | ||||||
Atlanta, GA |
7 | WNIV-AM |
2000 | Christian Teaching and Talk | ||||
WLTA-AM |
2000 | Christian Teaching and Talk | ||||||
WFSH-FM |
2000 | Contemporary Christian Music | ||||||
WGKA-AM |
2004 | News Talk | ||||||
WDWD-AM |
2015 | Christian Teaching and Talk | ||||||
Washington, D.C. |
8 | WAVA-FM |
1992 | Christian Teaching and Talk | ||||
WAVA-AM |
2000 | Christian Teaching and Talk | ||||||
WWRC-AM |
2017 | News Talk | ||||||
Philadelphia, PA |
9 | WFIL-AM |
1993 | Christian Teaching and Talk | ||||
WNTP-AM |
1994 | News Talk | ||||||
Boston, MA |
10 | WEZE-AM |
1997 | Christian Teaching and Talk | ||||
WROL-AM |
2001 | Christian Teaching and Talk | ||||||
Seattle-Tacoma, WA |
11 | KGNW-AM |
1986 | Christian Teaching and Talk | ||||
KLFE-AM (5) |
1994 | News Talk | ||||||
KKOL-AM |
Pending | Other | ||||||
KNTS-AM (5) |
1997 | Regional Mexican | ||||||
Detroit, MI |
13 | WDTK-AM |
2004 | News Talk | ||||
WLQV-AM |
2006 | Christian Teaching and Talk | ||||||
Phoenix, AZ |
14 | KKNT-AM |
1996 | News Talk | ||||
KPXQ-AM |
1999 | Christian Teaching and Talk | ||||||
KXXT-AM |
2014 | Christian Teaching and Talk | ||||||
Minneapolis-St. Paul, MN |
15 | KKMS-AM |
1996 | Christian Teaching and Talk | ||||
KDIZ-AM |
1998 | News Talk | ||||||
WWTC-AM |
2001 | News Talk | ||||||
KYCR-AM |
2015 | Business | ||||||
San Diego, CA |
16 | KPRZ-AM |
1987 | Christian Teaching and Talk | ||||
KCBQ-AM |
2000 | News Talk | ||||||
Tampa, FL |
17 | WTWD-AM (6) |
2000 | Christian Teaching and Talk | ||||
WTBN-AM (6) |
2001 | Christian Teaching and Talk | ||||||
WGUL-AM |
2005 | News Talk | ||||||
WLCC-AM |
2022 | Christian Teaching and Talk | ||||||
Denver-Boulder, CO |
18 | KRKS-FM |
1993 | Christian Teaching and Talk | ||||
KRKS-AM |
1994 | Christian Teaching and Talk | ||||||
KNUS-AM |
1996 | News Talk | ||||||
KBJD-AM (7) |
1999 | Other | ||||||
Portland, OR |
21 | KPDQ-FM |
1986 | Christian Teaching and Talk | ||||
KPDQ-AM |
1986 | Christian Teaching and Talk | ||||||
KFIS-FM |
2002 | Contemporary Christian Music | ||||||
KRYP-FM |
2005 | Regional Mexican | ||||||
KDZR-AM |
2015 | Spanish Language | ||||||
KPAM-AM |
2019 | News Talk | ||||||
San Antonio, TX |
24 | KSLR-AM |
1994 | Christian Teaching and Talk | ||||
KLUP-AM |
2000 | News Talk |
Market (1) |
MSA Rank (2) |
Station Call Letters |
Year Acquired |
Format | ||||
Riverside-San Bernardino, CA |
25 | KTIE-AM |
2001 | News Talk | ||||
Sacramento, CA |
27 | KFIA-AM |
1995 | Christian Teaching and Talk | ||||
KTKZ-AM |
1997 | News Talk | ||||||
KSAC-FM |
2002 | Business | ||||||
KKFS-FM |
2006 | Contemporary Christian Music | ||||||
Pittsburgh, PA |
29 | WORD-FM |
1993 | Christian Teaching and Talk | ||||
WPIT-AM |
1993 | Christian Teaching and Talk | ||||||
WPGP-AM |
2015 | News Talk | ||||||
Orlando, FL |
31 | WORL-AM |
2006 | News Talk | ||||
WTLN-AM |
2015 | Christian Teaching and Talk | ||||||
Cleveland, OH |
34 | WHKW-AM |
2000 | Christian Teaching and Talk | ||||
WFHM-FM |
2001 | Contemporary Christian Music | ||||||
WHK-AM |
2005 | News Talk | ||||||
Columbus, OH |
35 | WRFD-AM |
1987 | Christian Teaching and Talk | ||||
WTOH-FM |
2013 | News Talk | ||||||
Nashville, TN |
40 | WBOZ-FM (8) |
2000 | Contemporary Christian Music | ||||
WFFH-FM (8) |
2002 | Contemporary Christian Music | ||||||
WFFI-FM (8) |
2002 | Contemporary Christian Music | ||||||
Louisville, KY |
55 | WFIA-FM |
1999 | Operated by a third party under a Time Brokerage Agreement (“TBA”) | ||||
WGTK-AM |
2000 | Operated by a third party under a TBA | ||||||
WFIA-AM |
2001 | Operated by a third party under a TBA | ||||||
Greenville, SC |
58 | WGTK-FM |
2013 | News Talk | ||||
WRTH-FM |
2014 | Classic Hits | ||||||
WLTE-FM |
2014 | Classic Hits | ||||||
Honolulu, HI |
64 | KAIM-FM |
2000 | Contemporary Christian Music | ||||
KGU-AM |
2000 | Country | ||||||
KHCM-AM |
2000 | Operated by a third party under a TBA | ||||||
KHCM-FM |
2004 | Country Music | ||||||
KGU-FM |
2004 | Christian Teaching and Talk | ||||||
KKOL-FM |
2005 | Oldies | ||||||
KHNR-AM |
2006 | News Talk | ||||||
Sarasota-Bradenton, FL |
69 | WLSS-AM |
2005 | News Talk | ||||
Colorado Springs, CO |
86 | KGFT-FM |
1996 | Christian Teaching and Talk | ||||
KBIQ-FM |
1996 | Contemporary Christian Music | ||||||
KZNT-AM |
2003 | News Talk | ||||||
Little Rock, AR |
93 | KDIS-FM |
2014 | Christian Teaching and Talk | ||||
KKSP-FM |
2015 | Contemporary Christian Music | ||||||
KDXE-FM |
2018 | News Talk | ||||||
KZTS-AM |
2018 | Gospel | ||||||
Oxnard-Ventura, CA |
124 | KDAR-FM |
1974 | Christian Teaching and Talk | ||||
Warrenton, VA |
WRCW-AM |
2012 | News Talk |
(1) | Actual city of license may differ from metropolitan market served. |
(2) | All metropolitan statistical area (“MSA”) rank information used in this annual report, excluding information concerning the Commonwealth of Puerto Rico, is from the Fall 2021 Radio Market Survey Schedule & |
Population Rankings published by Nielsen. According to the Radio Market Survey, the population estimates are based upon the 2010 U.S. Bureau Census estimates updated and projected to January 1, 2022 by Nielsen Demographics. |
(3) | This market includes the Nassau-Suffolk, NY Metro market, which independently has a MSA rank of 19. |
(4) | This market includes the San Jose, CA market, which independently has a MSA rank of 37. |
(5) | KNTS-AM is an expanded band AM station paired with KLFE(AM). The licenses for these stations include a condition that the most recent license renewal was granted subject to the resolution of AM expanded band dual operating authority issues in MB Docket No. 07-294. |
(6) | WTBN-AM is simulcast with WTWD-AM, Tampa, FL. |
(7) | KBJD-AM is an expanded band AM station paired with KRKS(AM). The licenses for these stations include a condition that the most recent license renewal was granted subject to the resolution of AM expanded band dual operating authority issues in MB Docket No. 07-294. |
(8) | WBOZ-FM is trimulcast with WFFH-FM, Nashville, TN and WFFI-FM, Nashville, TN. |
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Market (1) |
Station Call Letters |
Frequency |
Operating Frequency |
Expiration Date of License |
FCC Class |
Height Above Average Terrain (in feet) |
Power (in Kilowatts) Day / Night | |||||||
New York, NY |
WMCA | AM | 570 | June 2022 | B | n/a | 5 / 5 | |||||||
WNYM | AM | 970 | June 2022 | B | n/a | 50 / 5 | ||||||||
Los Angeles, CA |
KKLA | FM | 99.5 | December 2029 | B | 2,959 | 10 | |||||||
KRLA | AM | 870 | December 2029 | B | n/a | 50 / 3 | ||||||||
KFSH | FM | 95.9 | December 2029 | A | 328 | 6 | ||||||||
Chicago, IL |
WYLL | AM | 1160 | December 2028 | B | n/a | 50 / 50 | |||||||
WIND | AM | 560 | December 2028 | B | n/a | 5 / 5 | ||||||||
San Francisco, CA |
KFAX | AM | 1100 | December 2029 | B | n/a | 50 / 50 | |||||||
KDOW | AM | 1220 | December 2029 | D | n/a | 5 / 0.145 | ||||||||
KTRB | AM | 860 | December 2029 | B | n/a | 50 / 50 | ||||||||
KDIA | AM | 1640 | December 2029 | B | n/a | 10 / 10 | ||||||||
KDYA | AM | 1190 | December 2029 | D | n/a | 3 / — | ||||||||
Dallas-Fort Worth, TX |
KLTY | FM | 94.9 | August 2029 | C | 1,667 | 100 | |||||||
KWRD | FM | 100.7 | August 2029 | C | 1,988 | 98 | ||||||||
KSKY | AM | 660 | August 2029 | B | n/a | 20 / 0.7 | ||||||||
KTNO | AM | 620 | August 2029 | B | n/a | 5 / 4.5 | ||||||||
Houston-Galveston, TX |
KNTH | AM | 1070 | August 2029 | B | n/a | 10 / 5 | |||||||
KKHT | FM | 100.7 | August 2029 | C | 1,952 | 100 | ||||||||
Atlanta, GA |
WNIV | AM | 970 | April 2028 | D | n/a | 5 / 0.039 | |||||||
WLTA | AM | 1400 | April 2028 | C | n/a | 1 / 1 | ||||||||
WFSH | FM | 104.7 | April 2028 | C1 | 1,657 | 24 | ||||||||
WGKA | AM | 920 | April 2028 | B | n/a | 14 / 0.49 | ||||||||
WDWD | AM | 590 | April 2028 | B | n/a | 12 / 4.5 | ||||||||
Washington, D.C. |
WAVA | FM | 105.1 | October 2027 | B | 604 | 33 | |||||||
WAVA | AM | 780 | October 2027 | D | n/a | 12 | ||||||||
WWRC | AM | 570 | October 2027 | B | n/a | 5 / 1 | ||||||||
Philadelphia, PA |
WFIL | AM | 560 | August 2022 | B | n/a | 5 / 5 | |||||||
WNTP | AM | 990 | August 2022 | B | n/a | 50 / 10 | ||||||||
Boston, MA |
WEZE | AM | 590 | April 2022 | B | n/a | 5 / 5 | |||||||
WROL | AM | 950 | April 2022 | D | n/a | 5 / 0.09 | ||||||||
Seattle-Tacoma, WA |
KGNW | AM | 820 | February 2030 | B | n/a | 50 / 5 | |||||||
KLFE (1) | AM | 1590 | February 2022(2) | B | n/a | 20 / 5 | ||||||||
KNTS (1) | AM | 1680 | February 2022(2) | B | n/a | 10 / 1 | ||||||||
Detroit, MI |
WDTK | AM | 1400 | October 2028 | C | n/a | 1 / 1 | |||||||
WLQV | AM | 1500 | October 2028 | B | n/a | 50 / 10 | ||||||||
Phoenix, AZ |
KKNT | AM | 960 | October 2029 | B | n/a | 5 / 5 | |||||||
KPXQ | AM | 1360 | October 2029 | B | n/a | 50 / 1 | ||||||||
KXXT | AM | 1010 | October 2029 | B | n/a | 15 / 0.25 | ||||||||
Minneapolis-St. Paul, MN |
KKMS | AM | 980 | April 2029 | B | n/a | 5 / 5 | |||||||
KDIZ | AM | 1570 | April 2029 | B | n/a | 4 / 0.22 | ||||||||
WWTC | AM | 1280 | April 2029 | B | n/a | 10 / 15 | ||||||||
KYCR | AM | 1440 | April 2029 | B | n/a | 5 / 0.5 | ||||||||
San Diego, CA |
KPRZ | AM | 1210 | December 2029 | B | n/a | 20 / 10 | |||||||
KCBQ | AM | 1170 | December 2029 | B | n/a | 50 / 2.9 | ||||||||
Tampa, FL |
WTWD | AM | 910 | February 2028 | B | n/a | 5 / 5 | |||||||
WTBN | AM | 570 | February 2028 | B | n/a | 5 / 5 | ||||||||
WGUL | AM | 860 | February 2028 | B | n/a | 5 / 1.5 |
Market (1) |
Station Call Letters |
Frequency |
Operating Frequency |
Expiration Date of License |
FCC Class |
Height Above Average Terrain (in feet) |
Power (in Kilowatts) Day / Night | |||||||
Denver-Boulder, CO |
KRKS | FM | 94.7 | April 2029 | C | 984 | 100 | |||||||
KRKS (1) | AM | 990 | April 2029 | B | n/a | 6.5 / 0.39 | ||||||||
KNUS | AM | 710 | April 2029 | B | n/a | 5 / 5 | ||||||||
KBJD (1) | AM | 1650 | April 2029 | B | n/a | 10 / 1 | ||||||||
Portland, OR |
KPDQ | FM | 93.9 | February 2030 | C1 | 1,270 | 52 | |||||||
KPDQ | AM | 800 | February 2030 | B | n/a | 1 / 0.5 | ||||||||
KFIS | FM | 104.1 | February 2030 | C2 | 1266 | 6.9 | ||||||||
KRYP | FM | 93.1 | February 2030 | C3 | 1,270 | 1.6 | ||||||||
KDZR | AM | 1640 | February 2030 | B | n/a | 10 / 1 | ||||||||
KPAM | AM | 860 | February 2022 | B | n/a | 50 / 15 | ||||||||
San Antonio, TX |
KSLR | AM | 630 | August 2029 | B | n/a | 5 / 4.3 | |||||||
KLUP | AM | 930 | August 2029 | B | n/a | 5 / 1 | ||||||||
Riverside-San Bernardino, CA |
KTIE | AM | 590 | December 2029 | B | n/a | 2.5 / 0.96 | |||||||
Sacramento, CA |
KFIA | AM | 710 | December 2021(2) | B | n/a | 25 / 1 | |||||||
KTKZ | AM | 1380 | December 2029 | B | n/a | 5 / 5 | ||||||||
KSAC | FM | 105.5 | December 2029 | B1 | 1,010 | 2.55 | ||||||||
KKFS | FM | 103.9 | December 2029 | A | 328 | 6 | ||||||||
Pittsburgh, PA |
WORD | FM | 101.5 | August 2022 | B | 535 | 43 | |||||||
WPIT | AM | 730 | August 2022 | D | n/a | 5 / 0.024 | ||||||||
WPGP | AM | 1250 | August 2022 | B | n/a | 5 / 5 | ||||||||
Orlando, FL |
WORL | AM | 950 | February 2028 | B | n/a | 12 / 5 | |||||||
WTLN | AM | 990 | February 2028 | B | n/a | 50 / 14 | ||||||||
Cleveland, OH |
WHKW | AM | 1220 | October 2028 | B | n/a | 50 / 50 | |||||||
WFHM | FM | 95.5 | October 2028 | B | 620 | 31 | ||||||||
WHK | AM | 1420 | October 2028 | B | n/a | 5 / 5 | ||||||||
Columbus, OH |
WRFD | AM | 880 | October 2028 | D | n/a | 23 | |||||||
WTOH | FM | 98.9 | October 2028 | A | 505 | 2.6 | ||||||||
Nashville, TN |
WBOZ | FM | 104.9 | August 2028 | A | 328 | 6 | |||||||
WFFH | FM | 94.1 | August 2028 | A | 453 | 3.2 | ||||||||
WFFI | FM | 93.7 | August 2028 | A | 755 | 1.15 | ||||||||
Louisville, KY |
WFIA | FM | 94.7 | August 2028 | A | 394 | 3.3 | |||||||
WGTK | AM | 970 | August 2028 | B | n/a | 5 / 5 | ||||||||
WFIA | AM | 900 | August 2028 | D | n/a | 0.93 / 0.162 | ||||||||
Greenville, SC |
WGTK | FM | 94.5 | December 2027 | C | 1,490 | 100 | |||||||
WRTH | FM | 103.3 | December 2027 | A | 479 | 2.7 | ||||||||
WLTE | FM | 95.9 | December 2027 | A | 233 | 6 | ||||||||
Honolulu, HI |
KAIM | FM | 95.5 | February 2030 | C | 1,854 | 100 | |||||||
KGU | AM | 760 | February 2030 | B | n/a | 10 / 10 | ||||||||
KHCM | AM | 880 | February 2030 | B | n/a | 2 / 2 | ||||||||
KHCM | FM | 97.5 | February 2030 | C1 | 46 | 80 | ||||||||
KGU | FM | 99.5 | February 2030 | C | 1,965 | 100 | ||||||||
KKOL | FM | 107.9 | February 2030 | C | 1,965 | 100 | ||||||||
KHNR | AM | 690 | February 2030 | B | n/a | 10 / 10 | ||||||||
Sarasota-Bradenton, FL |
WLSS | AM | 930 | February 2028 | B | n/a | 5 / 3 | |||||||
Little Rock, AR |
KDIS | FM | 99.5 | June 2028 | A | 312 | 6 | |||||||
KKSP | FM | 93.3 | June 2028 | C3 | 699 | 22 | ||||||||
KDXE | FM | 101.1 | June 2028 | A | 876 | 0.85 | ||||||||
KZTS | AM | 1380 | June 2028 | B | n/a | 5 / 2.5 |
Market (1) |
Station Call Letters |
Frequency |
Operating Frequency |
Expiration Date of License |
FCC Class |
Height Above Average Terrain (in feet) |
Power (in Kilowatts) Day / Night | |||||||
Colorado Springs, CO |
KGFT | FM | 100.7 | April 2029 | C | 2,218 | 78 | |||||||
KBIQ | FM | 102.7 | April 2029 | C | 2,280 | 72 | ||||||||
KZNT | AM | 1460 | April 2029 | B | n/a | 5 / 0.5 | ||||||||
Oxnard-Ventura, CA |
KDAR | FM | 98.3 | December 2029 | B1 | 1,289 | 1.5 | |||||||
Warrenton, Virginia |
WRCW | AM | 1250 | October 2027 | D | n/a | 3 / 0.125 |
1. | Radio station KNTS-AM is an expanded band station paired with station KLFE-AM in the Seattle, WA market, and station KBJD-AM is an expanded band station paired with KRKS-AM in the Denver, CO market. We are operating these four stations pursuant to FCC licenses or other FCC authority pending resolution by the FCC of the issue of AM expanded band dual operating authority. Depending upon how the FCC resolves that issue, it is possible that we will be required to surrender one station license in each station pair. Except for these stations, we are not currently aware of any facts that would prevent the timely renewal of our licenses to operate our radio stations, although there can be no assurance that our licenses will be renewed. |
2. | FCC license renewal pending. |
Market |
Station Call Letters |
Operating Frequency |
Expiration Date of License |
FCC Class |
Height Average (in feet) |
Power (in Day |
Power (in Night | |||||||
Boston |
W262CV (WROL) | 100.3 | 4/1/2022 | D | 164 | 0.25 | 0.25 | |||||||
Cleveland |
W245CY (WHKW) | 96.9 | 10/1/2028 | D | 520 | 0.005 | 0.005 | |||||||
Cleveland |
W273DG (WHK) | 102.5 | 10/1/2028 | D | 520 | 0.005 | 0.005 | |||||||
Colorado Springs |
K266CK (KZNT) | 101.1 | 4/1/2029 | D | -191 | 0.099 | 0.099 | |||||||
Columbus |
W240CX (WTOH) | 95.9 | 10/1/2028 | D | 505 | 0.99 | 0.525 | |||||||
Columbus |
W283CL (WRFD) | 104.5 | 10/1/2028 | D | 545 | 0.25 | 0.25 | |||||||
Dallas-Ft. Worth |
K273BJ (KLTY-FM) |
102.5 | 8/1/2029 | D | 434 | 0.25 | 0.25 | |||||||
Detroit |
W224CC (WLQV) | 92.7 | 10/1/2028 | D | 924 | 0.099 | 0.099 | |||||||
Detroit |
W268CN (WDTK) | 101.5 | 10/1/2028 | D | 914 | 0.099 | 0.099 | |||||||
Greenville |
W245CH (WGTK-FM) |
96.9 | 12/1/2027 | D | 1,364 | 0.25 | 0.25 | |||||||
Greenville |
W275BJ (WGTK-FM) |
102.9 | 12/1/2027 | D | 1,390 | 0.25 | 0.25 | |||||||
Honolulu |
K232FL (KHNR) | 94.3 | 2/1/2022 | D | 204 | 0.25 | 0.25 | |||||||
Honolulu |
K236CR (KGU-AM) |
95.1 | 2/1/2022 | D | 204 | 0.25 | 0.25 | |||||||
Houston |
K277DE (KNTH) | 103.3 | 8/1/2029 | D | 514 | 0.25 | 0.25 | |||||||
Little Rock |
K288EZ (KZTS) | 105.5 | 6/1/2028 | D | 332 | 0.25 | 0.25 | |||||||
Little Rock |
K277DP (KZTS) | 103.3 | 6/0/2028 | D | 323 | 0.25 | 0.25 | |||||||
Louisville |
W297BV (WFIA) | 107.3 | 8/1/2028 | D | 286 | 0.25 | 0.25 | |||||||
Louisville |
W228EO (WGTK) | 93.5 | 9/9/2022 | D | 191 | 0.099 | 0.099 | |||||||
Minneapolis |
K298CO (WWTC) | 107.5 | 4/1/2029 | D | 176 | 0.25 | 0.25 | |||||||
New York |
W272DX (WMCA) | 102.3 | 6/1/2022 | D | 357 | 0.25 | 0.25 | |||||||
Orlando |
W268CT (WTLN) | 101.5 | 2/1/2028 | D | 323 | 0.25 | 0.25 | |||||||
Orlando |
W235CR (WORL) | 94.9 | 2/1/2028 | D | 434 | 0.225 | 0.225 | |||||||
Pittsburgh |
W223CS (WPGP) | 92.5 | 8/1/2022 | D | 455 | 0.11 | 0.11 | |||||||
Pittsburgh |
W243BW (WPIT) | 96.5 | 8/1/2022 | D | 466 | 0.25 | 0.25 | |||||||
Portland |
K292HH (KPDQ) | 106.3 | 2/1/2022 | D | 1,150 | 0.099 | 0.099 | |||||||
Sacramento |
K289CT (KFIA) | 105.7 | 12/1/2021(1) | D | 291 | 0.25 | 0.25 | |||||||
San Diego |
K241CT (KCBQ) | 96.1 | 12/1/2029 | D | 826 | 0.25 | 0.25 |
Market |
Station Call Letters |
Operating Frequency |
Expiration Date of License |
FCC Class |
Height Average (in feet) |
Power (in Day |
Power (in Night | |||||||
San Diego |
K291CR (KPRZ) | 106.1 | 12/1/2029 | D | 820 | 0.25 | 0.25 | |||||||
San Francisco |
K237GZ (KDOW) | 95.3 | 12/1/2029 | D | 1,263 | 0.04 | 0.04 | |||||||
Seattle |
K281CQ (KGNW) | 104.1 | 2/1/2022 | D | 1,248 | 0.099 | 0.099 | |||||||
Tampa |
W271CY (WTWD) | 102.1 | 2/1/2028 | D | 271 | 0.125 | 0.125 | |||||||
Tampa |
W229DJ (WGUL) | 93.7 | 2/1/2028 | D | 272 | 0.099 | 0.099 | |||||||
Tampa/Sarasota |
W229BR (WLSS) | 93.7 | 2/1/2028 | D | 212 | 0.099 | 0.099 | |||||||
Tampa/Sarasota |
W262CP (WTBN) | 100.3 | 2/1/2028 | D | 1,074 | 0.25 | 0.25 | |||||||
Washington DC |
W244EB (WAVA) | 96.7 | 10/1/2027 | D | 641 | 0.15 | 0.15 |
1. | FCC Renewal pending |
2020 |
2021 |
|||||||||||||||||||||||||||||||
1 st Qtr |
2 nd Qtr |
3 rd Qtr |
4 th Qtr |
1 st Qtr |
2 nd Qtr |
3 rd Qtr |
4 th Qtr |
|||||||||||||||||||||||||
High (mid-day) |
$ | 1.74 | $ | 2.62 | $ | 2.46 | $ | 1.25 | $ |
3.95 |
$ |
3.15 |
$ |
3.85 |
$ |
6.82 |
||||||||||||||||
Low (mid-day) |
$ | 0.65 | $ | 0.69 | $ | 0.85 | $ | 0.78 | $ |
1.04 |
$ |
1.69 |
$ |
1.91 |
$ |
2.67 |
• | the coronavirus COVID-19 pandemic (“COVID-19”) that adversely impacted 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, |
• | the impact of inflation increasing operating costs and changing consumer habits, |
• | industry conditions, including existing competition and future competitive technologies, |
• | disruptions or postponements of advertising schedules and programming in response to national or world events, |
• | our ability to generate revenue from new sources, including local commerce and technology-based initiatives, and |
• | 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 number of video and graphic downloads. |
• | the sale of books and e-books; |
• | publishing fees from authors; and |
• | the sale of digital advertising in digital newsletters. |
• | 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. |
Year Ended December 31, |
||||||||
2020 | 2021 |
|||||||
(Dollars in thousands) |
||||||||
Net broadcast revenue |
$ | 178,127 | $ |
191,443 |
||||
Less broadcast operating expenses |
(140,942 | ) | (145,720 |
) | ||||
|
|
|
|
|||||
Station Operating Income |
$ | 37,185 | $ |
45,723 |
||||
|
|
|
|
|||||
Net digital media revenue |
$ | 39,593 | $ |
42,164 |
||||
Less digital media operating expenses |
(31,725 | ) | (33,797 |
) | ||||
|
|
|
|
|||||
Digital Media Operating Income |
$ | 7,868 | $ |
8,367 |
||||
|
|
|
|
|||||
Net publishing revenue |
$ | 18,519 | $ |
24,640 |
||||
Less publishing operating expenses |
(21,950 | ) | (23,220 |
) | ||||
|
|
|
|
|||||
Publishing Operating Income (Loss) |
$ | (3,431 | ) | $ |
1,420 |
|||
|
|
|
|
Year Ended December 31, |
||||||||
2020 | 2021 |
|||||||
(Dollars in thousands) |
||||||||
Net income (loss) |
$ | (54,062 | ) | $ |
41,514 |
|||
Plus provision for (benefit from) income taxes |
30,274 | (759 |
) | |||||
Plus net miscellaneous (income) and expenses |
9 | (110 |
) | |||||
Plus gain on the forgiveness of PPP loans |
— | (11,212 |
) | |||||
Plus (gain) loss on early retirement of long-term debt |
(49 | ) | 1,026 |
|||||
Plus interest expense, net of capitalized interest |
16,075 | 15,799 |
||||||
Less interest income |
(1 | ) | (10 |
) | ||||
|
|
|
|
|||||
Net operating income (loss) |
$ | (7,754 | ) | $ |
46,248 |
|||
|
|
|
|
|||||
Plus net (gain) loss on the disposition of assets |
1,575 | (23,575 |
) | |||||
Plus impairment of indefinite-lived long-term assets other than goodwill |
17,254 | — |
||||||
Plus impairment of goodwill |
307 | — |
||||||
Plus change in the estimated fair value of contingent earn-out consideration |
(12 | ) | — |
|||||
Plus debt modification costs |
2,526 |
|||||||
Plus depreciation and amortization |
14,058 | 12,828 |
||||||
Plus unallocated corporate expenses |
16,194 | 17,483 |
||||||
|
|
|
|
|||||
Combined Station Operating Income, Digital Media Operating Income and Publishing Operating Income (Loss) |
$ | 41,622 | $ |
55,510 |
||||
|
|
|
|
|||||
Station Operating Income |
$ | 37,185 | $ |
45,723 |
||||
Digital Media Operating Income |
7,868 | 8,367 |
||||||
Publishing Operating Income (Loss) |
(3,431 | ) | 1,420 |
|||||
|
|
|
|
|||||
Combined Station Operating Income, Digital Media Operating Income and Publishing Operating Income (Loss) |
$ | 41,622 | $ |
55,510 |
||||
|
|
|
|
Year Ended December 31, |
||||||||
2020 | 2021 |
|||||||
(Dollars in thousands) |
||||||||
Net income (loss) |
$ | (54,062 | ) | $ |
41,514 |
|||
Plus interest expense, net of capitalized interest |
16,075 | 15,799 |
||||||
Plus provision for (benefit from) income taxes |
30,274 | (759 |
) | |||||
Plus depreciation and amortization |
14,058 | 12,828 |
||||||
Less interest income |
(1 | ) | (10 |
) | ||||
|
|
|
|
|||||
EBITDA |
$ | 6,344 | $ |
69,372 |
||||
|
|
|
|
|||||
Plus net (gain) loss on the disposition of assets |
1,575 | (23,575 |
) | |||||
Plus change in the estimated fair value of contingent earn-out consideration |
(12 | ) | — |
|||||
Plus debt modification costs |
— | 2,526 |
||||||
Plus impairment of indefinite-lived long-term assets other than goodwill |
17,254 | — |
||||||
Plus impairment of goodwill |
307 | — |
||||||
Plus net miscellaneous (income) and expenses |
9 | (110 |
) | |||||
Plus (gain) loss on early retirement of long-term debt |
(49 | ) | 1,026 |
|||||
Plus gain on the forgiveness of PPP loans |
— | (11,212 |
) | |||||
Plus non-cash stock-based compensation |
345 | 319 |
||||||
|
|
|
|
|||||
Adjusted EBITDA |
$ | 25,773 | $ |
38,346 |
||||
|
|
|
|
• | On September 10, 2021, we exchanged $112.8 million of the 2024 Notes for $114.7 million (reflecting a call premium of 1.688%) of newly issued 7.125% Senior Secured Notes due 2028 (“2028 Notes.”) Contemporaneously with the refinancing, we obtained commitments from the holders of the 2028 Notes to purchase up to $50 million in additional 2028 Notes (“Delayed Draw 2028 Notes,”) contingent upon satisfying certain performance benchmarks, the proceeds of which are to be used exclusively to repurchase or repay the remaining balance outstanding of the 2024 Notes. |
• | In addition to the exchange on September 10, 2021, we repurchased an additional $43.3 million in total of the 2024 Notes for $44.0 million in cash, recognizing a net loss of $1.0 million after adjusting for bond issuance costs through multiple transactions during the second half of 2021. |
• | We received $11.2 million in aggregate principal amount of PPP loans through the SBA during the first quarter of 2021 based on the eligibility of our radio stations and networks as determined on a per-location basis. We used the PPP loan proceeds according to the terms and filed timely applications for forgiveness. During July 2021, the SBA forgave all but $20,000 of the PPP loans resulting in a pre-tax gain on the forgiveness of $11.2 million. The remaining PPP loan was repaid in July 2021. |
• | On November 30, 2021, we sold approximately 77 acres of land in Tampa, Florida for $13.5 million in cash. We recognized a pre-tax gain on the sale of $12.9 million. |
• | On July 27, 2021, we sold the Hilary Kramer Financial Newsletter and related assets for $0.2 million to be collected in quarterly installments over the two-year period ending September 30, 2023. We recognized a pre-tax gain on the sale of $0.1 million. |
• | On July 23, 2021, we sold approximately 34 acres of land in Lewisville, Texas, for $12.1 million in cash. The land was being used as the transmitter site for company owned radio station KSKY-AM. We retained a portion of the land in the southwest corner of the site to continue operating the radio station. We recognized a pre-tax gain on the sale of $10.5 million. |
• | On July 2, 2021, we acquired the SeniorResource.com domain 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. |
• | 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. |
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Net Broadcast Revenue |
$ | 178,127 | $ |
191,443 |
$ | 13,316 | 7.5 | % | 75.4 | % | 74.1 |
% | ||||||||||||
Same Station Net Broadcast Revenue |
$ | 176,844 | $ |
190,038 |
$ | 13,194 | 7.5 | % |
Year Ended December 31, |
||||||||||||||||
2020 | 2021 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Block Programming: |
||||||||||||||||
National |
$ | 47,009 | 26.4 | % | $ |
48,705 |
25.4 |
% | ||||||||
Local |
24,267 | 13.6 | 24,759 |
12.9 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
71,276 | 40.0 | 73,464 |
38.4 |
|||||||||||||
Broadcast Advertising: |
||||||||||||||||
National |
15,288 | 8.6 | 14,294 |
7.5 |
||||||||||||
Local |
39,407 | 22.1 | 41,672 |
21.8 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
54,695 | 30.7 | 55,966 |
29.2 |
|||||||||||||
Station Digital (local) |
24,527 | 13.8 | 32,258 |
16.8 |
||||||||||||
Infomercials |
974 | 0.5 | 878 |
0.5 |
||||||||||||
Network |
19,371 | 10.9 | 19,789 |
10.3 |
||||||||||||
Other Revenue |
7,284 | 4.1 | 9,088 |
4.7 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Broadcast Revenue |
$ | 178,127 | 100.0 | % | $ |
191,443 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Net Digital Media Revenue |
$ | 39,593 | $ |
42,164 |
$ | 2,571 | 6.5 | % | 16.8 | % | 16.3 |
% |
Year Ended December 31, |
||||||||||||||||
2020 | 2021 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Digital Advertising, net |
$ | 20,644 | 52.1 | % | $ |
19,648 |
46.6 |
% | ||||||||
Digital Streaming |
3,446 | 8.7 | 3,450 |
8.2 |
||||||||||||
Digital Subscriptions |
9,208 | 23.3 | 12,228 |
29.0 |
||||||||||||
Digital Downloads |
5,904 | 14.9 | 6,373 |
15.1 |
||||||||||||
e-commerce |
140 | 0.4 | 269 |
0.6 |
||||||||||||
Other Revenue |
251 | 0.6 | 196 |
0.5 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Digital Media Revenue |
$ | 39,593 | 100.0 | % | $ |
42,164 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Net Publishing Revenue |
$ | 18,519 | $ |
24,640 |
$ | 6,121 | 33.1 | % | 7.8 | % | 9.5 |
% |
Year Ended December 31, |
||||||||||||||||
2020 | 2021 |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
Book Sales |
$ | 13,707 | 74.0 | % | $ |
20,455 |
83.0 |
% | ||||||||
Estimated Sales Returns & Allowances |
(4,479 | ) | (24.2 | ) | (5,348 |
) |
(21.7 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Book Sales |
9,228 | 49.8 | 15,107 |
61.3 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
E-Book Sales |
1,605 | 8.7 | 2,021 |
8.2 |
||||||||||||
Self-Publishing Fees |
5,424 | 29.3 | 6,081 |
24.7 |
||||||||||||
Print Magazine Subscriptions |
680 | 3.7 | 262 |
1.1 |
||||||||||||
Print Magazine Advertisements |
353 | 1.9 | 123 |
0.5 |
||||||||||||
Digital Advertising |
415 | 2.2 | 132 |
0.5 |
||||||||||||
Other Revenue |
814 | 4.4 | 914 |
3.7 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Publishing Revenue |
$ | 18,519 | 100.0 | % | $ |
24,640 |
100.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Broadcast Operating Expenses |
$ |
140,942 |
$ |
145,720 |
$ | 4,778 | 3.4 | % | 59.7 | % | 56.4 |
% | ||||||||||||
Same Station Broadcast Operating Expenses |
$ |
138,449 |
$ |
144,351 |
$ | 5,902 | 4.3 | % |
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Digital Media Operating Expenses |
$ | 31,725 | $ |
33,797 |
$ | 2,072 | 6.5 | % | 13.4 | % | 13.1 |
% |
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Publishing Operating Expenses |
$ | 21,950 | $ |
23,220 |
$ | 1,270 | 5.8 | % | 9.3 | % | 9.0 |
% |
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Unallocated Corporate Expenses |
$ | 16,194 | $ |
17,483 |
$ | 1,289 | 8.0 | % | 6.9 | % | 6.8 |
% |
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Debt Modification Costs |
$ | — | $ |
2,526 |
$ | 2,526 | 100.0 | % | — | % | 1.0 |
% |
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Depreciation Expense |
$ | 10,777 | $ |
10,933 |
$ | 156 | 1.4 | % | 4.6 | % | 4.2 |
% |
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Amortization Expense |
$ | 3,281 | $ |
1,895 |
$ | (1,386 | ) | (42.2 | )% | 1.4 | % | 0.7 |
% |
Year Ended December 31, |
||||||||||||||||||||||||
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 | )% | 7.3 | % | — | % |
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Impairment of Goodwill |
$ | 307 | $ | — | $ | (307 | ) | (100.0 | )% | — | % | — | % |
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Net (Gain) Loss on the Disposition of Assets |
$ | 1,575 | $ |
(23,575 |
) |
$ | (25,150 | ) | (1,596.8 | )% | 0.7 | % | (9.1 |
)% |
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Interest Income |
$ | 1 | $ |
10 |
$ | 9 | 900.0 | % | — | % | — |
% | ||||||||||||
Interest Expense |
(16,075 | ) | (15,799 |
) |
(276 | ) | (1.7 | )% | (6.8 | )% | (6.1 |
)% | ||||||||||||
Gain on the Forgiveness of PPP Loans |
— | 11,212 |
11,212 | 100.0 | % | — | 4.3 |
% | ||||||||||||||||
Gain (Loss) on Early Retirement of Long-Term Debt |
49 | (1,026 |
) |
(1,075 | ) | (2,193.9 | )% | — | % | (0.4 |
)% | |||||||||||||
Net Miscellaneous Income and (Expenses) |
(9 | ) | 110 |
119 | (13.2 | )% | — | % | — |
% |
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Provision for (Benefit from) Income Taxes |
$ | 30,274 | $ |
(759 |
) |
$ | (31,033 | ) | (102.5 | )% | 12.8 | % | (0.3 |
)% |
Year Ended December 31, |
||||||||||||||||||||||||
2020 | 2021 |
Change $ | Change % | 2020 | 2021 |
|||||||||||||||||||
(Dollars in thousands) |
% of Total Net Revenue | |||||||||||||||||||||||
Net Income (Loss) |
$ | (54,062 | ) | $ |
41,514 |
$ | 95,576 | (176.8 | )% | (22.9 | )% | 16.1 |
% |
(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. |
Sensitivity Analysis (1) | ||||||||||||
Increase in Risk-Adjusted Discount Rate |
Decrease in Operating Profit Margins |
Decrease in Long-Term Revenue Growth Rates |
||||||||||
(Dollars in thousands) |
||||||||||||
Incremental broadcast licenses impairment |
$ | 6,791 | $ | 181 | $ | 1,756 | ||||||
Incremental goodwill impairment |
581 | 648 | 127 |
(1) | Each assumption used in the sensitivity analysis is independent of the other assumptions |
• | 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 $3.3 million of employer FICA taxes from April 2020 through December 2020, of which 50% was paid in December 2021 and the remaining 50% is payable in December 2022; |
• | A relaxation of interest expense deduction limitation for income tax purposes; |
• | We received Paycheck Protection Program (“PPP”) loans of $11.2 million in total during the first quarter of 2021 through the Small Business Association (“SBA”) based on the eligibility as determined on a per-location basis; and |
• | In July 2021, the SBA forgave all but $20,000 of the PPP loans, with the remaining PPP loan repaid in July 2021. |
• | Accounts receivables, net of allowances, increased by $1.2 million compared to a decrease of $6.4 million for the prior year; |
• | Total revenue increased by $22.0 million; |
• | Operating expenses exclusive of depreciation, amortization, changes in the estimated fair value of contingent earn-out consideration, impairments, debt modification costs and net gain (loss) on the disposition of assets, increased by $9.4 million; |
• | Unbilled revenue increased $0.2 million; |
• | Our Day’s Sales Outstanding, or the average number of days to collect cash from the date of sale, decreased to 56 days at December 31, 2021, from 59 days in the same period of the prior year; |
• | Deferred income tax liabilities decreased by $1.9 million compared to an increase of $30.1 million during the same period of the prior year; and |
• | Net accounts payable and accrued expenses increased $4.5 million to $27.7 million from $23.2 million as of the prior year. |
• | Receiving $29.3 million of cash from the sale of assets during 2021 compared to $0.2 million of cash during same period of the prior year; |
• | Cash paid for capital expenditures increased $6.2 million to $10.8 million from $4.6 million during the same period of the prior year; |
• | Cash paid for acquisitions increased $4.9 million to $5.3 million compared to $0.4 million during the same period of the prior year; and |
• | Collection of $2.4 million in cash from the surrender of split dollar life insurance policies in 2020. |
• | We exchanged $112.8 million of our Senior Secured Notes due 2024 (“2024 Notes”) for $114.7 million (reflecting a call premium of 1.688%) of newly issued 7.125% Senior Secured Notes due 2028 (“2028 Notes”); |
• | We received $11.2 million in aggregate principal amount of PPP loans through the SBA during the first quarter of 2021 based on the eligibility of our radio stations and networks as determined on a per-location basis. During July 2021, the SBA forgave all but $20,000 of the PPP loans with the remaining PPP loan repaid in July 2021; |
• | We used $44.0 million in cash to repurchase $43.3 million in face value of the 2024 Notes compared to $3.4 million in cash to repurchase $3.5 million in face value of 2024 Notes during the same period of the prior year; |
• | Net repayments on our ABL Facility were $5.0 million during the year ended December 31, 2021, compared to $7.4 million during the same period of the prior year; and: |
• | There was no book overdraft at December 31, 2021 compared to $1.9 million at the end of the prior year. |
December 31, 2020 | December 31, 2021 |
|||||||
(Dollars in thousands) |
||||||||
7.125% Senior Secured Notes |
$ | — | $ |
114,731 |
||||
Less unamortized discount and debt issuance costs based on imputed interest rate of 7.64% |
— | (3,844 | ) | |||||
|
|
|
|
|||||
7.125% Senior Secured Notes net carrying value |
— | 110,887 |
||||||
|
|
|
|
|||||
6.75% Senior Secured Notes |
216,341 | 60,174 |
||||||
Less unamortized debt issuance costs based on imputed interest rate of 7.10% |
(2,577 | ) | (480 | ) | ||||
|
|
|
|
|||||
6.75% Senior Secured Notes net carrying value |
213,764 | 59,694 |
||||||
|
|
|
|
|||||
Asset-Based Revolving Credit Facility principal outstanding (1) |
5,000 | — | ||||||
|
|
|
|
|||||
Long-term debt less unamortized discount and debt issuance costs |
$ | 218,764 | $ |
170,581 |
||||
|
|
|
|
|||||
Less current portion |
(5,000 | ) | — | |||||
|
|
|
|
|||||
Long-term debt less unamortized discount and debt issuance costs, net of current portion |
$ | 213,764 | $ |
170,581 |
||||
|
|
|
|
1. | As of December 31, 2021, the Asset-Based Revolving Credit Facility (“ABL”), had a borrowing base of $25.0 million, no outstanding borrowings, and $0.3 million of outstanding letters of credit, resulting in a $23.3 million borrowing base availability. |
• | $114.7 million aggregate principal amount of 2028 Notes with semi-annual interest payments at an annual rate of 7.125%; |
• | $60.2 million aggregate principal amount of 2024 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. |
Date |
Principal Repurchased |
Cash Paid |
% of Face Value |
Bond Issue Costs |
Net Gain (Loss) |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
December 10, 2021 | $ | 35,000 | $ | 35,591 | 101.69 | % | $ | 321 | $ | (911 | ) | |||||||||
October 25, 2021 | 2,000 | 2,020 | 101.00 | % | 19 | (39 | ) | |||||||||||||
October 12, 2021 | 250 | 251 | 100.38 | % | 2 | (3 | ) | |||||||||||||
October 5, 2021 | 763 | 766 | 100.38 | % | 7 | (10 | ) | |||||||||||||
October 4, 2021 | 628 | 629 | 100.13 | % | 6 | (7 | ) | |||||||||||||
September 24, 2021 | 4,700 | 4,712 | 100.25 | % | 44 | (56 | ) | |||||||||||||
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 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
$ | 82,000 | $ | 79,555 | $ | 1,105 | $ | 1,340 | |||||||||||||
|
|
|
|
|
|
|
|
Amount |
||||
For the Year Ended December 31, |
(Dollars in thousands) |
|||
2022 |
$ | — | ||
2023 |
— | |||
2024 |
60,174 | |||
2025 |
— | |||
2026 |
— | |||
Thereafter |
114,731 | |||
|
|
|||
$ | 174,905 | |||
|
|
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
PAGE |
||||
64 | ||||
66 | ||||
67 |
||||
68 |
||||
69 |
||||
7 0 |
||||
7 2 |
• | evaluated management’s judgments in their assessment of identifying changes in market conditions, events or other circumstances that indicate an impairment of broadcast licenses may be present; |
• | tested the completeness, accuracy, appropriateness of aggregation and relevance of underlying data used in the valuation model based on Greenfield method; |
• | evaluated the significant assumptions used by management, including normalized market share and profit margin of an average station within a market based upon market size and station type, the forecasted growth rate of each radio market (including long-term growth rate), and the discount rate. This involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance in the market being evaluated, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit; and |
• | utilized valuation specialists to assist in evaluating the appropriateness of valuation model used, evaluating certain assumptions applied in the valuation model, and recalculations of the discounted cash flow schedules. |
December 31, |
||||||||
2020 | 2021 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
$ |
||||||
A ccounts receivable (net of allowances of $ |
||||||||
Unbilled revenue |
||||||||
Other receivables (net of allowances of $ |
||||||||
Inventories |
||||||||
Prepaid expenses |
||||||||
Assets held for sale |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
|
|
|
|
|||||
Notes receivable (net of allowance of $ in 2020 and $ in 2021) |
||||||||
Property and equipment (net of accumulated depreciation of $ |
||||||||
Operating lease right-of-use |
||||||||
Financing lease right-of-use |
||||||||
Broadcast licenses |
||||||||
Goodwill |
||||||||
Amortizable intangible assets (net of accumulated amortization of $ |
||||||||
Deferred financing costs |
||||||||
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 lease liabilities, less current portion |
||||||||
Deferred income taxes |
||||||||
Contract liabilities, long-term |
||||||||
Deferred rent income, less current portion |
||||||||
Other long-term liabilities |
||||||||
|
|
|
|
|||||
Total liabilities |
||||||||
|
|
|
|
|||||
Commitments and contingencies (Note 14) |
||||||||
Class A common stock, $ |
||||||||
Class B common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated earnings (deficit) |
( |
) |
( |
) | ||||
Treasury stock, at cost ( |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity |
$ |
$ |
||||||
|
|
|
|
Year Ended December 31, |
||||||||
2020 |
2021 |
|||||||
Net broadcast revenue |
$ | $ |
||||||
Net digital media revenue |
||||||||
Net publishing revenue |
||||||||
|
|
|
|
|||||
Total net revenue |
||||||||
|
|
|
|
|||||
Operating expenses: |
||||||||
Broadcast operating expenses, exclusive of depreciation and amortization shown below (including $ parties) |
||||||||
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 $ |
||||||||
Debt modification costs |
||||||||
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 the forgiveness of PPP loans |
||||||||
Gain (loss) 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 Class A and Class B common stock |
$ | ( |
) | $ | ||||
Diluted income (loss) per share data: |
||||||||
Diluted income (loss) per share Class A and Class B common stock |
$ | ( |
) | $ | ||||
Basic weighted average Class A and Class B shares outstanding |
||||||||
|
|
|
|
|||||
Diluted weighted average Class A and Class B shares outstanding |
||||||||
|
|
|
|
Class A Common Stock |
Class B Common Stock |
Additional Paid-In Capital |
Retained Earnings (Accumulated Deficit) |
Treasury Stock |
||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Total |
||||||||||||||||||||||||||||
Stockholders’ equity, December 31, 2019 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Distributions per share |
$ | $ |
||||||||||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
Cash distributions |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | ||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Stockholders’ equity, December 31, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Distributions per share |
$ | $ |
||||||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
Options exercised |
— |
— |
— |
— |
||||||||||||||||||||||||||||
Net income |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Stockholders’ equity, December 31, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||
2020 |
2021 |
|||||||
OPERATING ACTIVITIES |
||||||||
Net income (loss) |
$ | ( |
) | $ |
||||
Adjustments to reconcile net income 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 |
( |
) | ||||||
Impairment of indefinite-lived long-term assets other than goodwill |
||||||||
Impairment of goodwill |
||||||||
Gain on the forgiveness of PPP loans |
— | ( |
) | |||||
Change in the estimated fair value of contingent earn-out consideration |
( |
) | ||||||
Net (gain) loss on the disposition of assets |
( |
) | ||||||
Gain (loss) on early retirement of debt |
( |
) | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable and unbilled revenue |
( |
) | ||||||
Inventories |
( |
) | ||||||
Prepaid expenses and other current assets |
( |
) | ( |
) | ||||
Accounts payable and accrued expenses |
||||||||
Operating lease 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 |
( |
) | ( |
) | ||||
Deposit on broadcast assets and radio station acquisitions |
— | ( |
) | |||||
Purchases of broadcast assets and radio stations |
— | ( |
) | |||||
Purchases of digital media businesses and assets |
( |
) | ( |
) | ||||
Deferred payments on acquisitions |
— | ( |
) | |||||
Proceeds from sale of long-lived assets |
||||||||
Proceeds from the cash surrender value of life insurance policies |
||||||||
Other |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash provided by (used in) investing activities |
( |
) | ||||||
|
|
|
|
|||||
FINANCING ACTIVITIES |
||||||||
Proceeds from 2028 Notes |
— | |||||||
Payments to repurchase or exchange 2024 Notes |
( |
) | ( |
) | ||||
Proceeds from borrowings under ABL Facility |
||||||||
Payments on ABL Facility |
( |
) | ( |
) | ||||
Proceeds from borrowings under PPP Loans |
— | |||||||
Payments under PPP loans |
— | |||||||
Payments of debt issuance costs |
( |
) | ( |
) | ||||
Payments of acquisition-related contingent earn-out consideration |
( |
) | ||||||
Proceeds from the exercise of stock options |
— | |||||||
Payments on financing lease liabilities |
( |
) | ( |
) | ||||
Payment of cash distribution on common stock |
( |
) | ||||||
Book overdraft |
( |
) | ||||||
|
|
|
|
|||||
Net cash used in financing activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net increase (decrease) in cash and cash equivalents |
( |
) | ||||||
Cash and cash equivalents at beginning of year |
||||||||
|
|
|
|
|||||
Cash and cash equivalents at end of year |
$ | $ |
||||||
|
|
|
|
Year Ended December 31, |
||||||||
2020 |
2021 |
|||||||
Supplemental disclosures of cash flow information: |
||||||||
Cash paid during the year for: |
||||||||
Cash paid for interest |
$ | $ |
||||||
Cash paid for interest on finance lease liabilities |
$ | $ |
||||||
Cash paid for income taxes, net of refunds |
$ | $ |
||||||
Other supplemental disclosures of cash flow information: |
||||||||
Barter revenue |
$ | $ |
||||||
Barter expense |
$ | $ |
||||||
Non-cash investing and financing activities: |
||||||||
Capital expenditures reimbursable under tenant improvement allowances |
$ | $ |
||||||
Non-cash capital expenditures for property & equipment acquired under trade agreements |
$ | $ |
||||||
Deferred payments on acquisitions |
$ | $ |
— |
|||||
Right-of-use |
$ | $ |
||||||
Right-of-use |
$ | $ |
||||||
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 $ |
• |
A relaxation of interest expense deduction limitation for income tax purposes; |
• | W e received Paycheck Protection Program (“PPP”) loans of $per-location basis; and |
• | In July 2021, the SBA forgave all but $ |
Category |
Estimated Life | |
Buildings |
||
Office furnishings and equipment |
- years | |
Antennae, towers and transmitting equipment |
– | |
Studio, production, and mobile equipment |
– | |
Computer software and website development costs |
||
Record and tape libraries |
||
Automobiles |
||
Leasehold improvements |
remaining lease term |
Category |
Estimated Life | |
Customer lists and contracts |
Lesser of 5 years or the life of contract | |
Domain and brand names |
- 7 | |
Favorable and assigned leases |
||
Subscriber base and lists |
– | |
Author relationships |
– | |
Non-compete agreements |
to |
(1) | changes in the level of income in any of our taxing jurisdictions; |
(2) | changes in statutes and rules applicable to taxable income in the jurisdictions in which we operate; |
(3) | changes in the expected outcome of income tax audits; |
(4) | changes in the estimate of expenses that are not deductible for tax purposes; |
(5) | income taxes in certain states where the states’ current taxable income is dependent on factors other than consolidated net income; |
(6) | the addition of operations in states that on average have different income tax rates from states in which we currently operate; and |
(7) | the effect of previously reported temporary differences between the and financial reporting bases of assets and liabilities. |
Year Ended December 31, |
||||||||
2020 |
2021 |
|||||||
(Dollars in thousands) |
||||||||
Balance, beginning of period |
$ | $ |
||||||
Self-funded costs |
||||||||
Claims paid |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Ending period balance |
$ | $ |
||||||
|
|
|
|
• |
Fixed payments, including in substance fixed payments, less any lease incentives paid or payable to the lessee |
• |
Variable lease payments that depend on an index or a rate, such as the Consumer Price Index or a market interest rate, |
• |
The exercise price of an option to purchase the underlying asset if the lessee is reasonably certain to exercise that option. |
• |
Payments for penalties for terminating the lease if the lease term reflects the lessee exercising an option to terminate the lease. |
• |
Fees paid by the lessee to the owners of a special-purpose entity for structuring the transaction |
• |
For a lessee only, amounts probable of being owed by the lessee under residual value guarantees |
Year Ended December 31, |
||||||||
2020 |
2021 |
|||||||
Weighted average shares |
||||||||
Effect of dilutive securities — stock options |
— | |||||||
|
|
|
|
|||||
Weighted average shares adjusted for dilutive securities |
||||||||
|
|
|
|
Acquisition Date |
|
Description |
|
Total Consideration |
| |
|
|
|
|
(Dollars in thousands) |
| |
|
$ |
|||||
|
||||||
|
KDIA-AM and KDYA-AM San Francisco, California (business acquisition) |
|||||
|
||||||
|
||||||
|
|
|||||
$ |
||||||
|
|
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 |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
$ |
$ |
$ |
||||||||||
|
|
|
|
|
|
Year Ended December 31, 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 |
— | — | ||||||||||||||
Advertising – Print |
— | — | ||||||||||||||
Other Revenue |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ |
$ |
$ |
$ |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Timing of Revenue Recognition |
||||||||||||||||
Point in Time |
$ | $ | $ | $ | ||||||||||||
Rental Income (1) |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ |
$ |
$ |
$ |
|||||||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, 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 |
— | — | ||||||||||||||
Advertising – Print |
— | |||||||||||||||
Other Revenue |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ |
$ |
$ |
$ |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Timing of Revenue Recognition |
||||||||||||||||
Point in Time |
$ | $ | $ | $ | ||||||||||||
Rental Income (1) |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ |
$ |
$ |
$ |
|||||||||||||
|
|
|
|
|
|
|
|
(1) | Rental income is not applicable to ASC 606, but shown for the purpose of identifying each revenue source presented in total revenue on our Consolidated Financial Statements within this annual report. |
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 December 31, 2021 |
$ | $ | ||||||
|
|
|
|
|||||
Amount refundable at beginning of period |
$ | $ | ||||||
Amount refundable at end of period |
$ | $ |
Amount |
||||
For the Year Ended December 31, |
(Dollars in thousands) |
|||
20 |
$ | |||
20 |
||||
20 |
||||
20 |
||||
20 |
||||
There |
||||
|
|
|||
$ | ||||
|
|
Year Ended |
||||||||
December 31, |
||||||||
2020 |
2021 |
|||||||
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 |
( |
) |
As of December 31, |
||||||||
2020 |
2021 |
|||||||
(Dollars in thousands) |
||||||||
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 |
||||||||
$ | $ |
|||||||
Less accumulated depreciation |
( |
) | ( |
) | ||||
$ |
||||||||
Land |
$ | |||||||
Construction-in-progress |
||||||||
$ | $ |
|||||||
December 31, 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 |
Twelve Months Ended December 31, 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 |
$ | |||
|
|
Twelve Months Ended December 31, 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) |
||||||||||||||||||||
2022 |
$ | $ | $ | $ | $ | |||||||||||||||
2023 |
||||||||||||||||||||
2024 |
||||||||||||||||||||
2025 |
||||||||||||||||||||
2026 |
||||||||||||||||||||
Thereafter |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Undiscounted Cash Flows |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Less: imputed interest |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reconciliation to lease liabilities: |
||||||||||||||||||||
Lease liabilities – current |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Lease liabilities – long-term |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Lease Liabilities |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
• |
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. |
Year Ended December 31, |
||||||||
2020 | 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 |
— | |||||||
Disposition of radio stations and FM translators |
( |
) | — |
|||||
Impairments based on the estimated fair value of broadcast licenses |
( |
) | — |
|||||
|
|
|
|
|||||
Balance, end of period after cumulative loss on impairment |
$ | $ |
8 |
|||||
|
|
|
|
|||||
Balance, end of period before cumulative loss on impairment |
$ | $ |
||||||
Accumulated loss on impairment |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Balance, end of period after cumulative loss on impairment |
$ | $ |
||||||
|
|
|
|
Geographic Market Clusters as of December 31, 2021 Percentage Range by Which 2020 Estimated Fair Value Exceeds 2021 Carrying Value |
||||||||||||||||
≤ 25% |
>26%-50% |
>51% to 75% |
> +than 76% |
|||||||||||||
Number of accounting units |
||||||||||||||||
Broadcast license carrying value (in thousands) |
Geographic Market Clusters as of December 31, 2021 Tested due to SOI Multiple or length of time from prior valuation – Percentage Range by Which 2020 Estimated Fair Value Exceeds 2021 Carrying Value |
||||||||||||||||
≤ 25% |
>26%-50% |
>51% to 75% |
> +than 76% |
|||||||||||||
Number of accounting units |
— |
|||||||||||||||
Broadcast license carrying value (in thousands) |
— |
1. |
gross operating revenue in the station’s designated market area, |
2. |
normalized market share, |
3. |
normalized profit margin, |
4. |
duration of the “ramp-up” period to reach normalized operations, (which was assumed to be three years), |
5. |
estimated start-up costs (based on market size), |
6. |
ongoing replacement costs of fixed assets and working capital, |
7. |
the calculations of yearly net free cash flows to invested capital; and |
8. |
amortization of the intangible asset, or the broadcast license. |
Broadcast Licenses |
December 31, 2020 |
December 31, 2021 | ||
Risk-adjusted discount rate |
||||
Operating profit margin ranges |
||||
Long-term revenue growth rates |
Market Cluster |
Excess Fair Value December 31, 2021 Estimate |
|||
Atlanta, GA |
% | |||
Boston, MA |
% | |||
Chicago, IL |
% | |||
Cleveland, OH |
% | |||
Col Springs, CO |
% | |||
Columbus, OH |
% | |||
Dallas, TX |
% | |||
Greenville, SC |
% | |||
Honolulu, HI |
% | |||
Little Rock |
% | |||
Louisville, KY |
% | |||
Minneapolis, MN |
% | |||
Orlando FL |
% | |||
Philadelphia, PA |
% | |||
Portland, OR |
% | |||
Sacramento, CA |
% | |||
San Diego, CA |
% | |||
San Francisco, C A |
% |
Year Ended December 31, |
||||||||
2020 |
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 digital media entities |
||||||||
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 |
$ | $ |
||||||
|
|
|
|
Broadcast Markets Enterprise Valuations |
December 31, 2020 |
December 31, 2021 | ||
Risk-adjusted discount rate |
||||
Operating profit margin ranges |
( |
( | ||
Long-term revenue growth rates |
- |
Broadcast Market Clusters as of December 31, 2021 Percentage Range by Which Estimated Fair Value Exceeds Carrying Value Including Goodwill |
||||||||||||||||
< 10% |
>11% to 20% |
>21% to 50% |
> than 51% |
|||||||||||||
Number of accounting units |
— |
— |
— |
|||||||||||||
Carrying value including goodwill ( in thousands |
— |
— |
— |
Digital Media Enterprise Valuations |
December 31, 2020 |
December 31, 2021 | ||
Risk adjusted discount rate |
||||
Operating profit margin ranges |
||||
Long-term revenue growth rates |
Digital Media Entities as of December 31, 2021 Value Including Goodwill |
||||||||||||||||
< 10% |
>10% to 20% |
>21% to 50% |
> than 51% |
|||||||||||||
Number of accounting units |
— |
— |
— |
|||||||||||||
Carrying value including goodwill ( in thousands |
— |
— |
— |
Publishing Enterprise Valuations |
December 31, 2020 | December 31, 2021 | ||
Risk adjusted discount rate |
||||
Operating margin ranges |
||||
Long-term revenue growth rates |
Publishing Entities as of December 31, 2021 |
||||||||||||||||
Percentage Range by Which Estimated Fair Value Exceeds Carrying Value Including Goodwill |
||||||||||||||||
< 10% |
>11% to 20% |
>21% to 50% |
> than 51% |
|||||||||||||
Number of accounting units |
— |
— |
— |
|||||||||||||
Carrying value including goodwill ( in thousands |
— | — | — |
As of December 31, 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 |
( |
) |
||||||||||
|
|
|
|
|
|
|||||||
$ |
$ |
( |
) |
$ |
||||||||
|
|
|
|
|
|
As of December 31, 2020 |
||||||||||||
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 |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
$ | $ | ( |
) | $ | ||||||||
|
|
|
|
|
|
Year ended December 31, |
Amortization Expense |
|||
(Dollars in thousands) |
||||
2022 |
$ | |||
2023 |
||||
2024 |
Year ended December 31, |
Amortization Expense |
|||
(Dollars in thousands) |
||||
2025 |
$ |
|||
2026 |
||||
Thereafter |
||||
|
|
|||
Total |
$ | |||
|
|
December 31, 2020 |
December 31, 2021 |
|||||||
(Dollars in thousands) |
||||||||
7.125% Senior Secured Notes |
$ | — | $ |
|||||
Less unamortized discount and debt issuance costs based on imputed interest rate of |
— | ( |
) | |||||
|
|
|
|
|||||
7.125% Senior Secured Notes net carrying value |
— | |||||||
|
|
|
|
|||||
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 (1) |
||||||||
|
|
|
|
|||||
Long-term debt less unamortized discount and debt issuance costs |
$ | $ |
||||||
|
|
|
|
|||||
Less current portion |
( |
) | ||||||
|
|
|
|
|||||
Long-term debt less unamortized discount and debt issuance costs, net of current portion |
$ | $ |
||||||
|
|
|
|
( 1 ) |
As of December 31, 2021, the Asset-Based Revolving Credit Facility (“ABL”), had a borrowing base of $ |
• | $ |
• | $ |
• | Commitment fee of |
Date |
Principal Repurchased |
Cash Paid |
% of Face Value |
Bond Issue Costs |
Net Gain (Loss) |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
$ | $ | % | $ | $ | ( |
) | ||||||||||||||
% | ( |
) | ||||||||||||||||||
% | ( |
) | ||||||||||||||||||
% | ( |
) | ||||||||||||||||||
% | ( |
) | ||||||||||||||||||
% | ( |
) | ||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
% | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
$ | $ | $ | $ | |||||||||||||||||
|
|
|
|
|
|
|
|
Amount |
||||
For the Year Ended December 31, |
(Dollars in thousands) |
|||
2022 |
$ |
|||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
|
|
|||
$ | ||||
|
|
1. |
Level 1 Inputs |
2. |
Level 2 Inputs |
3. |
Level 3 Inputs |
December 31, 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 discount and debt issuance costs |
Year Ended December 31, |
||||||||
2020 |
2021 |
|||||||
(Dollars in thousands) |
||||||||
Current: |
||||||||
Federal |
$ | — | $ |
|||||
State |
||||||||
|
|
|
|
|||||
Deferred: |
||||||||
Federal |
( |
) | ||||||
State |
( |
) | ||||||
|
|
|
|
|||||
( |
) | |||||||
|
|
|
|
|||||
Provision for income taxes |
$ | $ |
( |
) | ||||
|
|
|
|
As of December 31, |
||||||||
2020 |
2021 |
|||||||
(Dollars in thousands) |
||||||||
Deferred tax assets: |
||||||||
Financial statement accruals not currently deductible |
$ | $ |
||||||
Allowance for bad debt reserve |
||||||||
Net operating loss, AMT credit and other carryforwards |
||||||||
State taxes |
||||||||
Operating lease liabilities under ASC 842 |
||||||||
Other |
||||||||
|
|
|
|
|||||
Total deferred tax assets |
||||||||
Valuation allowance for deferred tax assets |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net deferred tax assets |
$ | $ |
||||||
|
|
|
|
|||||
Deferred tax liabilities: |
||||||||
Excess of net book value of property and equipment and software for financial reporting purposes over tax basis |
$ | $ |
||||||
Excess of net book value of intangible assets for financial reporting purposes over tax basis |
||||||||
Operating lease right-of-use |
||||||||
|
|
|
|
|||||
Total deferred tax liabilities |
||||||||
|
|
|
|
|||||
Net deferred tax liabilitie s |
$ | ( |
) | $ |
( |
) | ||
|
|
|
|
As of December 31, |
||||||||
2020 |
2021 |
|||||||
(Dollars in thousands) |
||||||||
Deferred income tax asset per balance sheet |
$ | — | $ |
— |
||||
Deferred income tax liability per balance sheet |
( |
) | ( |
) | ||||
|
|
|
|
|||||
$ | ( |
) | $ |
( |
) | |||
|
|
|
|
Year Ended December 31, |
||||||||
2020 |
2021 |
|||||||
(Dollars in thousands) |
||||||||
Statutory federal income tax (statutory tax rate) |
$ | ( |
) | $ |
||||
Effect of state taxes, net of federal |
||||||||
Permanent items |
||||||||
PPP loan forgiveness |
— | ( |
) | |||||
State rate change |
||||||||
Valuation allowance |
( |
) | ||||||
Stock based compensation cancellation |
||||||||
Other, net |
( |
) | ||||||
|
|
|
|
|||||
Provision for (benefit from) income taxes |
$ | $ |
( |
) | ||||
|
|
|
|
Year Ended December 31, |
||||||||
2020 |
2021 |
|||||||
(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 from stock-based compensation expense |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total stock-based compensation expense, net of tax |
$ | $ |
||||||
|
|
|
|
Year Ended December 31, 2020 |
Year Ended December 31, 2021 |
|||||||
Expected volatility |
% | % | ||||||
Expected dividends |
% | — |
% | |||||
Expected term (in years) |
||||||||
Risk-free interest rate |
% | % |
Options |
Shares | Weighted Average Exercise Price |
Weighted Average Grant Date Fair Value |
Weighted Average Remaining Contractual Term |
Aggregate Intrinsic Value |
|||||||||||||||
Outstanding at January 1, 2020 |
$ | $ | $ | — | ||||||||||||||||
Granted |
— | |||||||||||||||||||
Exercised |
— | — | — | — | ||||||||||||||||
Forfeited or expired |
( |
) | — | |||||||||||||||||
|
|
|||||||||||||||||||
Outstanding at December 31, 2020 |
$ | — | ||||||||||||||||||
|
|
|||||||||||||||||||
Exercisable at December 31, 2020 |
— | |||||||||||||||||||
|
|
|||||||||||||||||||
Expected to Vest |
$ | — | ||||||||||||||||||
Outstanding at January 1, 2021 |
$ |
$ |
$ |
— |
||||||||||||||||
Granted |
— |
|||||||||||||||||||
Exercised |
( |
) |
||||||||||||||||||
Forfeited or expired |
( |
) |
— |
|||||||||||||||||
|
|
|||||||||||||||||||
Outstanding at December 31, 2021 |
$ |
|||||||||||||||||||
|
|
|||||||||||||||||||
Exercisable at December 31, 2021 |
||||||||||||||||||||
|
|
|||||||||||||||||||
Expected to Vest |
$ |
Restricted Stock Awards |
Shares |
Weighted Average Grant Date Fair Value |
Weighted Average Remaining Contractual Term |
Aggregate Intrinsic Value |
||||||||||||
Non-Vested at January 1, 2020 |
$ | $ | ||||||||||||||
Granted |
— | — | — | — | ||||||||||||
Lapse of restrictions |
— | — | — | — | ||||||||||||
Forfeited or expired |
— | — | — | — | ||||||||||||
Outstanding at December 31, 2020 |
$ | $ | ||||||||||||||
Non-Vested at January 1, 2021 |
$ |
$ |
||||||||||||||
Granted |
— |
— |
— |
— |
||||||||||||
Lapse of restrictions |
( |
) |
— |
|||||||||||||
Forfeited or expired |
— |
— |
— |
— |
||||||||||||
Outstanding at December 31, 2021 |
— |
$ |
— |
— |
$ |
— |
||||||||||
Range of Exercise Prices |
Options | Weighted Average Contractual Life Remaining (Years) |
Weighted Average Exercise Price |
Exercisable Options |
Weighted Average Exercise Price |
|||||||||||||||||
$ | $ | $ | ||||||||||||||||||||
$ | ||||||||||||||||||||||
$ | ||||||||||||||||||||||
$ | ||||||||||||||||||||||
$ | ||||||||||||||||||||||
$ | ||||||||||||||||||||||
$ |
$ |
|||||||||||||||||||||
Broadcast |
Digital Media |
Publishing |
Unallocated Corporate Expenses |
Consolidated |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Year Ended December 31, 2021 |
|
|||||||||||||||||||
Net revenue |
$ |
$ |
$ |
$ |
— |
$ |
||||||||||||||
Operating expenses |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net operating income (loss) before depreciation, amortization, debt modification costs and net (gain) loss on the disposition of assets |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Debt modification costs |
— |
— |
— |
|||||||||||||||||
Depreciation |
||||||||||||||||||||
Amortization |
— |
|||||||||||||||||||
Net (gain) loss on the disposition of assets |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating income (loss) |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
Broadcast |
Digital Media |
Publishing |
Unallocated Corporate Expenses |
Consolidated |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Year Ended December 31, 2020 |
| |||||||||||||||||||
Net revenue |
$ | $ | $ | $ | — | $ | ||||||||||||||
Operating expenses |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net operating income (loss) before depreciation, amortization, impairments, change in estimated fair value of contingent earn-out consideration and net (gain) loss on the disposition of assets |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Depreciation |
||||||||||||||||||||
Amortization |
||||||||||||||||||||
Impairment of indefinite-lived long-term assets other than goodwill |
— | ( |
) | — | — | ( |
) | |||||||||||||
Impairment of goodwill |
— | — | ||||||||||||||||||
Change in estimated fair value of contingent earn-out consideration |
||||||||||||||||||||
Net (gain) loss on the disposition of assets |
— | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating income (loss) |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||
|
|
|
|
|
|
|
|
|
|
Broadcast |
Digital Media |
Publishing |
Corporate |
Consolidated |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
As of December 31, 2021 |
||||||||||||||||||||
Inventories, net |
$ |
— |
$ |
— |
$ |
$ |
— |
$ |
||||||||||||
Property and equipment, net |
||||||||||||||||||||
Broadcast licenses |
— |
— |
— |
|||||||||||||||||
Goodwill |
— |
|||||||||||||||||||
Amortizable intangible assets, net |
— |
— |
Broadcast |
Digital Media |
Publishing |
Corporate |
Consolidated |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
As of December 31, 2020 |
||||||||||||||||||||
Inventories, net |
$ | — | $ | — | $ | $ | — | $ | ||||||||||||
Property and equipment, net |
||||||||||||||||||||
Broadcast licenses |
— | — | — | |||||||||||||||||
Goodwill |
— | |||||||||||||||||||
Amortizable intangible assets, net |
— |
(a) |
Evaluation of Disclosure Controls and Procedures. |
(b) |
Management’s Annual Report on Internal Control Over Financial Reporting |
(1) |
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
(2) |
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of managements and directors of the Company; and |
(3) |
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
(c) |
Changes in Internal Control Over Financial Reporting. |
(a) | Financial Statements. The financial statements required to be filed hereunder are included in Item 8. |
Exhibit Number |
Exhibit Description |
Form |
File No. |
Date of First Filing |
Exhibit Number |
Filed Herewith | ||||||
10.06.19 | 8-K |
000-26497 |
04/14/08 | 10.06.26 | ||||||||
10.06.20 | 8-K |
000-26497 |
01/27/17 | 10.1 | ||||||||
10.06.21 | 8-K |
000-26497 |
05/10/17 | 10.1 | ||||||||
10.08.01 | DEFA14A | 000-26497 |
04/22/19 | Appendix A |
||||||||
10.08.02 | 10-K |
000-26497 |
03/16/05 | 10.08.02 | ||||||||
10.08.03 | 10-Q |
000-26497 |
11/09/05 | 10.01 | ||||||||
10.09 | 10-Q |
000-26497 |
05/15/01 | 10.11 | ||||||||
10.10.01 | 8-K |
000-26497 |
03/14/13 | 10.1 | ||||||||
10.10.02 | 8-K |
000-26497 |
03/14/13 | 10.2 | ||||||||
10.10.03 | 8-K |
000-26497 |
05/23/17 | 10.1 | ||||||||
10.10.04 | 8-K |
000-26497 |
05/23/17 | 10.2 |
Exhibit Number |
Exhibit Description |
Form |
File No. |
Date of First Filing |
Exhibit Number |
Filed Herewith | ||||||
10.10.05 | 8-K |
000-26497 |
05/23/17 | 10.3 | ||||||||
10.10.06 | 10-Q |
000-26497 |
08/08/17 | 10.5 | ||||||||
10.10.07 | 10-K |
000-26497 |
03/04/21 | 10.10.07 | ||||||||
10.10.08 | 8-K |
000-26497 |
09/16/21 | 4.1 | ||||||||
10.10.09 | 8-K |
000-26497 |
09/16/21 | 4.2 | ||||||||
10.10.10 | 8-K |
000-26497 |
09/16/21 | 10.01 | ||||||||
10.10.11 | 8-K |
000-26497 |
09/16/21 | 4.7 |
Exhibit Number |
Description of Exhibits | |
14 | Code of Ethics | |
21 | Subsidiaries of Salem Media Group Inc. | |
23.1 | Consent of Moss Adams LLP, Independent Registered Public Account Firm. | |
23.2 | Consent of Crowe LLP, Independent Registered Public Accounting Firm. | |
23.3 | Consent of Bond & Pecaro | |
31.1 | Certification of David P. Santrella Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act. | |
31.2 | Certification of Evan D. Masyr Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act. | |
32.1 | Certification of David P. Santrella Pursuant to 18 U.S.C. Section 1350. | |
32.2 | Certification of Evan D. Masyr Pursuant to 18 U.S.C. Section 1350. | |
101 | The following financial information from the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, formatted in Inline XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Consolidated Balance Sheets (ii) Consolidated Statements of Operations (iii) the Consolidated Statement of Stockholders’ Equity (iv) the Consolidated Statements of Cash Flows (v) the Notes to the Consolidated Financial Statements. | |
104 | The cover page of this Annual Report on Form 10-K, formatted in inline XBRL. |
March 4, 2022 |
SALEM MEDIA GROUP, INC. | |
By: /s/ DAVID P. SANTRELLA | ||
David P. Santrella | ||
Chief Executive Officer | ||
March 4, 2022 |
||
By: /s/ EVAN D. MASYR | ||
Evan D. Masyr | ||
Executive Vice President and Chief Financial Officer |
Signature |
Title |
Date | ||
/s/ DAVID P. SANTRELLA |
Chief Executive Officer | |||
David P. Santrella | (Principal Executive Officer) | March 4, 2022 | ||
/s/ EVAN D. MASYR |
Executive Vice President and Chief Financial Officer | |||
Evan D. Masyr | (Principal Financial Officer and Principal Accounting Officer) | March 4, 2022 | ||
/s/ EDWARD G. ATSINGER III |
Executive Chairman | |||
Edward G. Atsinger III | March 4, 2022 | |||
/s/ RICHARD A. RIDDLE |
Director | |||
Richard A. Riddle | March 4, 2022 | |||
/s/ ERIC HALVORSON |
Director | |||
Eric Halvorson | March 4, 2022 | |||
/s/ HEATHER W. GRIZZLE |
Director | |||
Heather W. Grizzle | March 4, 2022 | |||
/s/ STUART W. EPPERSON, JR. |
Director | |||
Stuart W. Epperson, Jr. | March 4, 2022 |
EXHIBIT 14
Financial Code of Conduct
Salem Media Group, Inc. (the Company) has always held itself and its directors and employees to the highest standards of ethical behavior in all business dealings. These standards include an expectation that the integrity of the Companys financial reporting will never be compromised. All Salem employees and directors have a primary responsibility to ensure that all Company transactions are properly accounted for in the Companys accounting records and reflected on the Companys public reports.
It is appropriate to adopt a code of conduct uniquely applicable to financial matters and which supplements the Code of Ethics to which all employees of the Company are subject.
Specifically, each person subject to this Code of Conduct will at all times:
1. | If working on financial documents and matters, ensure that external and internal financial data, and other information contained in the Companys public reports (a) present the facts in accordance with United States Generally Accepted Accounting Principles (GAAP) fairly and completely, and (b) accurately, timely and understandably set forth the facts they purport to represent. |
2. | Uphold honest and ethical conduct, especially in relation to the handling of actual and apparent conflicts of interest. |
3. | Report any conflicts of interest or any violation or suspected violation of this code of ethics as described below. |
4. | Ensure the Company is in full compliance with the law, all applicable rules and regulations, and Company policy, both in letter and in spirit. |
5. | Refrain from using the Companys confidential information, Company resources or corporate opportunities learned in the course of ones work for personal advantage without prior written approval from their supervisor. |
Any person who violates this Code of Conduct is subject to disciplinary action, which may include termination of employment. The same is true of people who know of but fail to report another employee or directors violation of law or Company policy.
Any person who has reason to believe or suspect that this Ethical Code has been violated should immediately report the basis for such belief or suspicion to the Company. The report can be made through the Companys Ethics Helpline either telephonically (at 866-224-2163) or via the Internet (at www.SalemEthics.com). Reports to the Companys Ethics Helpline may be left anonymously, but the more information provided the greater ability the Company will have to investigate.
EXHIBIT 21
SUBSIDIARIES OF SALEM MEDIA GROUP, INC.
Name |
State of Formation | |
Air Hot, Inc. |
Delaware | |
Bison Media, Inc. |
Colorado | |
Salem Communications Holding Corporation |
Ohio | |
Eagle Products, LLC |
Delaware | |
Inspiration Media, Inc. |
Washington | |
Inspiration Media of Texas, LLC |
Texas | |
New Inspiration Broadcasting Company, Inc. |
California | |
News Aggregator, LLC |
Delaware | |
NI Acquisition Corporation |
California | |
Reach Satellite Network, Inc. |
Tennessee | |
Salem Consumer Products, Inc. |
Delaware | |
Salem Media of Colorado, Inc. |
Colorado | |
Salem Media of Hawaii, Inc. |
Delaware | |
Salem Media of Illinois, LLC |
Delaware | |
Salem Media of Massachusetts, LLC |
Delaware | |
Salem Media of New York, LLC |
Delaware | |
Salem Media of Ohio, Inc. |
Ohio | |
Salem Media of Oregon, Inc. |
Oregon | |
Salem Media of Texas, Inc. |
Texas | |
Salem Media Representatives, Inc. |
Texas | |
Salem News Channel, LLC |
Delaware | |
Salem News Channel, LLC |
Texas | |
Salem News, Inc. |
Texas | |
Salem Radio Network Incorporated |
Delaware | |
Salem Radio Operations, LLC |
Delaware | |
Salem Radio Properties, Inc. |
Delaware | |
Salem Satellite Media, LLC |
Delaware | |
Salem Web Network, LLC |
Delaware | |
SCA License Corporation |
Delaware | |
SCA-Palo Alto, LLC |
Delaware | |
SRN News Network, Inc. |
Texas | |
SRN Store, Inc. |
Texas |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-233861) and Form S-8 (No. 333-44094, No. 333-113794, No. 333-125056, No. 333-182807, and 333-231460) of Salem Media Group, Inc., of our report dated March 4, 2022, related to the 2021 consolidated financial statements of Salem Media Group, Inc., appearing in this Annual Report on Form 10-K for the year ended December 31, 2021.
/s/ Moss Adams LLP
Los Angeles, California
March 4, 2022
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-40494, 333-113794, 333-125056, 333-182807 and 333-231460 on Form S-8 and 333-233861 on Form S-3 of Salem Media Group, Inc. of our report dated March 4, 2021 relating to the financial statements as of and for the year ended December 31, 2020, appearing in this Annual Report on Form 10-K for the year ended December 31, 2021.
/s/ Crowe LLP
Los Angeles, California
March 4, 2022
EXHIBIT 23.3
[Bond & Pecaro, Inc. letterhead]
Consent of Bond & Pecaro, Inc.
We hereby consent for Salem Medai Group, Inc. (the Company) to use Bond & Pecaro, Inc. name and data from our work product as of December 31, 2021 in public filings with the Securities and Exchange Commission.
/s/ Bond & Pecaro, Inc. |
Bond & Pecaro, Inc. |
January 1, 2022
Washington, D.C.
EXHIBIT 31.1
I, David P. Santrella, certify that:
1. | I have reviewed this annual report on Form 10-K 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: March 4, 2022 | ||
|
/s/ DAVID P. SANTRELLA | |
David P. Santrella | ||
Chief Executive Officer |
EXHIBIT 31.2
I, Evan D. Masyr, certify that:
1. | I have reviewed this annual report on Form 10-K 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: March 4, 2022 | ||
|
/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 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 Annual Report of the Company on Form 10-K for the period ended December 31, 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: March 4, 2022
By: | /s/ DAVID P. SANTRELLA | |
David P. Santrella | ||
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 Annual Report of the Company on Form 10-K for the period ended December 31, 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: March 4, 2022
By: | /s/ EVAN D. MASYR | |
Evan D. Masyr | ||
Executive Vice President and Chief Financial Officer |
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Trade accounts receivable, allowances | $ 13,022 | $ 14,069 |
Allowance for Doubtful Other Receivables, Current | 455 | 124 |
Notes receivable, allowance | 938 | 461 |
Property and equipment, accumulated depreciation | 186,053 | 180,336 |
Amortizable intangible assets, accumulated amortization | $ 58,110 | $ 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 | 23,922,974 | 23,447,317 |
Common stock, outstanding | 21,605,324 | 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 |
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Unallocated corporate expenses exclusive of depreciation and amortization | $ 17,483 | $ 16,194 |
Related Party [Member] | ||
Unallocated corporate expenses exclusive of depreciation and amortization | 38 | 207 |
Broadcast [Member] | Related Party [Member] | ||
Operating expenses | $ 1,822 | $ 1,753 |
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 A [Member]
Common Stock [Member]
|
Common Class B [Member] |
Common Class B [Member]
Common Stock [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 | ||||||
Distributions per share | $ 0.22 | $ 0.22 | ||||||
Stock-based compensation | 345 | 345 | ||||||
Cash distributions | (667) | (667) | ||||||
Net income (loss) | (54,062) | (54,062) | ||||||
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 | ||||||
Distributions per share | $ 0.25 | $ 0.25 | ||||||
Stock-based compensation | 319 | 319 | ||||||
Options exercised | 1,099 | 1,094 | $ 5 | |||||
Options exercised (in shares) | 475,657 | |||||||
Net income (loss) | 41,514 | 41,514 | ||||||
Balance at Dec. 31, 2021 | $ 178,211 | $ 248,438 | $ (36,509) | $ (34,006) | $ 232 | $ 56 | ||
Balance (in shares) at Dec. 31, 2021 | 23,922,974 | 5,553,696 |
Basis of Presentation |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | NOTE 1. BASIS OF PRESENTATION Description of 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 19. Segment Data. The accompanying Consolidated Financial Statements of Salem include the company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Impact of the COVID-19 Pandemic The COVID-19 global pandemic that began in March 2020 materially impacted our business. 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 we see progress being made in revenue returning to pre-pandemic levels, the COVID-19 pandemic continues to create significant uncertainty and disruption in the economy. These uncertainties could materially impact significant accounting estimates related to, but not limited to, allowances for doubtful accounts, impairments, and right-of-use assets. During 2020 we implemented several measures to reduce costs and conserve cash to ensure that we had adequate cash to meet our debt servicing requirements, including:
As the economy began to show signs of recovery, we reversed several of these cost reduction initiatives during 2021. We continue to operate with lower staffing levels where appropriate, we have not declared or paid equity distributions on our common stock, and the company 401(k) match was not reinstated until January 2022. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act provided emergency economic assistance for individuals and businesses impacted by the COVID-19 pandemic, including opportunities for additional liquidity, loan guarantees, and other government programs. On December 27, 2020, Congress passed the Consolidated Appropriations Act (“CAA”) that included a second relief package, which, among other things, provides for an extension of the Payroll Support Program established by the CARES Act. We utilized certain benefits of the CARES Act and the CAA, including:
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 could differ from those estimates. See Item 7 – Management Discussion and Analysis within this annual report for a discussion of our Critical Accounting Estimates. |
Summary of Significant Accounting Policies |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents We consider all highly liquid debt instruments, purchased with an initial maturity of three-months or less, to be cash equivalents. The carrying value of our cash and cash equivalents approximated fair value at each balance sheet date. Accounts Receivable and Unbilled Revenue Accounts receivable, net of allowances: Unbilled revenue end-of-flight, Allowance for Doubtful Accounts We maintain an allowance for doubtful accounts to provide for the estimated amount of receivables that may not be collected. The allowance is based on our historical collection experience, the age of the receivables, specific customer information and current economic conditions. Past due balances are generally not written-off until all collection efforts have been exhausted, including use of a collection agency. A considerable amount of judgment is required in assessing the likelihood of ultimate realization of these receivables, including the current creditworthiness of each customer. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. We have not modified our estimate methodology and we have not historically recognized significant losses from changes in our estimates. We believe that our estimates and assumptions are reasonable and that our reserves are accurately reflected. We do not include extended payment terms in our contracts with customers. Inventory Inventory consists of books published by Regnery ® Publishing. Inventory is recorded at the lower of cost or net realizable value as determined on a weighted average cost method. We review historical data and our own experiences to estimate the value of inventory on hand. Our analysis includes reviewing actual sales returns, royalty reserves, overall economic conditions, and demand for each title. We regularly monitor actual performance to our estimates and make adjustments as necessary. We have not modified our estimate methodology and we have not historically recognized significant losses from changes in our estimates. We believe that our estimates and assumptions are reasonable and that our reserves are accurately reflected. Property and Equipment We account for property and equipment in accordance with FASB ASC Topic 27,000360-10, “Property, Plant and Equipment during the year ended December 31, 2020. No interest was capitalized in 2021 based on the balance outstanding of our variable rate debt. Repair and maintenance costs are charged to expense as incurred. Improvements are capitalized if they extend the life of the asset or enhance the quality or ability of the asset to benefit operations. Depreciation is computed using the straight-line method over estimated useful lives as follo w s:
The carrying value of property and equipment is evaluated periodically in relation to the operating performance and anticipated future cash flows of the underlying radio stations and business units for indicators of impairment.When indicators of impairment are present, and the cash flows estimated to be generated from these assets is less than the carrying value, an adjustment to reduce the carrying value to the fair market value of the assets is recorded. See Note 6, Property and Equipment. Internally Developed Software and Website Development Costs We capitalize costs incurred during the application development stage related to the development of 2.1internal-use software as specified in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350-40 “Internal-Use Softwareinternal-use software are expensed as incurred. Website development activities include planning, design and development of graphics and content for new websites and operation of existing sites. Costs incurred that involve providing additional functions and features to the website are capitalized. Costs associated with website planning, maintenance, content development and training are expensed as incurred. We capitalized $ million and $ 3.4 million during the years ended December 31, 2021, and 2020, respectively, related to internally developed software and website development costs. Depreciation expense of the amounts capitalized was $ 2.6 million and $ 2.8 million for each of the years ending December 31, 2021, and 2020, respectively. Indefinite-Lived Intangible Assets We account for broadcast licenses and goodwill in accordance with FASB ASC Topic 350 “ Intangibles—Goodwill and Other Impairment testing requires an estimate of the fair value of our indefinite-lived intangible assets. We believe that these estimates of fair value are critical accounting estimates as the value is significant in relation to our total assets and the estimates incorporate variables and assumptions based on our experiences and judgment about our future operating performance. Fair value measurements use 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 the assumptions and estimates used in our estimates, we are subject to future Impairment charges, the amount of which may be material. The unobservable inputs are defined in FASB ASC Topic 820 “Fair Value Measurements and Disclosures” as Level 3 inputs discussed in detail in Note 12, Fair Value Measurements and Disclosures. We perform our annual impairment testing during the fourth quarter of each year as discussed in Note 8, Broadcast Licenses and in Note 9, Goodwill. Amortizable Intangible Assets Intangible assets are recorded at cost less accumulated amortization. Typically, intangible assets are acquired in conjunction with the acquisition of broadcast entities, digital media entities and publishing entities. These intangibles are amortized using the straight-line method over the following estimated useful lives:
The carrying value of our amortizable intangible assets are evaluated periodically in relation to the operating performance and anticipated future cash flows of the underlying radio stations and businesses for indicators of impairment. In accordance with FASB ASC Topic 360 “ Property, Plant and Equipment ,” when indicators of impairment are present and the undiscounted cash flows estimated to be generated from these assets are less than the carrying amounts of these assets, an adjustment to No adjustments to the carrying amounts of our amortizable intangible assets were necessary during the year ended December 31, 2021. Deferred Financing Costs Deferred financing costs incurred in conjunction with debt obligations are amortized to non-cash interest expense over the term of the agreement using the effective interest method. Deferred financing costs related to the Asset Based Loan Facility (“ABL Facility”) and the Delayed Draw 2028 Notes are reflected in long term assets net of accumulated amortization. Deferred financing costs related to the 2024 Notes and the 2028 Notes recorded as a reduction of “Long-term debt – less current portion” in the Consolidated Balance Sheets. See Note 11, Long-Term Debt. Income Tax Valuation Allowances (Deferred Taxes) We account for income taxes in accordance with FASB ASC Topic 740 “ Income Taxes We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. In the event we were to determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to earnings in the period in which we make such a determination. Likewise, if we later determine that it is more likely than not that the net deferred tax assets would be realized, we would reverse the applicable portion of the previously provided valuation allowance. For financial reporting purposes, we recorded a valuation allowance of $39.1 million as of December 31, 202 1 to offset $39.1 million of the deferred tax assets related , to federal and state net operating loss carryforwards of $20.7 million and $14.4 million respectively, along with $4 million of other financial statement accruals for a total valuation allowance of $39.1 million. This balance represents a decrease of $9.0 million during the year, from $48.1 million valuation allowance as of December 31, 20 2 . 0 We believe that our estimates and assumptions are reasonable and that our reserves are accurately reflected. Income Taxes and Uncertain Tax Positions We are subject to audit and review by various taxing jurisdictions. We may recognize liabilities on our financial statements for positions taken on uncertain tax positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others may be subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. It is inherently difficult and subjective to estimate such amounts, as this requires us to make estimates based on the various possible outcomes. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. 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. During the year ended December 31, 2021, we recognized liabilities associated with uncertain tax positions around our subsidiary Salem Communications Holding Company’s Pennsylvania tax filing. The position taken on the tax returns follows Pennsylvania Notice 2016-01 which provides guidance for reversal of intercompany interest income and associated expense yielding a net loss for Pennsylvania. The current liability recognized for the tax position is $0.3 million including interest and penalties. Our evaluation was performed for all tax years that remain subject to examination, which range from 2017 through 2020. Effective Tax Rate Our provision for income tax as a percentage of operating income before taxes, or our effective tax rate, may be impacted by:
Our annual effective tax rate may also be materially impacted by tax expense associated with non-amortizable assets such as broadcast licenses and goodwill as well as changes in the deferred tax valuation allowance. An impairment loss for financial statement purposes will result in an income tax benefit during the period incurred as the amortization of broadcasting licenses and goodwill is deductible for income tax purposes. Business Acquisitions We account for business acquisitions in accordance with the acquisition method of accounting as specified in FASB ASC Topic 805 “ Business Combinations earn-out consideration. Estimates of the fair value include discounted estimated cash flows to be generated by the acquired assets over their expected useful lives based on historical experience, market trends, and 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 contingent payments expected to be made using a weighted probability of possible payments. The unobservable inputs used in the determination of the fair value of the contingent earn-out consideration include our own assumptions about the likelihood of payment based on the established benchmarks and discount rates based on our internal rate of return analysis. 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 in Note 12, Fair Value Measurements. We may retain a third-party appraiser to estimate the fair value of the acquired net assets as of the acquisition date. As part of the 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 retroactively 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. Transactions that do not meet the definition of a business in ASU 2017-01 “Business Combinations (Topic 805) Clarifying the Definition of a Business” 2017-01, a fewer number of our radio station acquisitions qualify as business acquisitions and instead are accounted for as asset purchases. Costs associated with business acquisitions, such as consulting and legal fees, are expensed as incurred. We incurred acquisition related costs of $0.1 million in each of the years ended December 31, 2021, and 2020. Partial Self-Insurance on Employee Health Plan We provide health insurance benefits to eligible employees under a self-insured plan whereby we pay actual medical claims subject to certain stop loss limits. We record self-insurance liabilities based on actual claims filed and an estimate of those claims incurred but not reported. Our estimates are based on historical data and probabilities. Any projection of losses concerning our liability is subject to a high degree of variability. Among the causes of this variability are unpredictable external factors such as future inflation rates, changes in severity, benefit level changes, medical costs, and claim settlement patterns. Should the actual amount of claims increase or decrease beyond what was anticipated, we may adjust our future reserves. We have not modified our estimate methodology and we have not historically recognized significant losses from changes in our estimates. The following table presents the changes in our partial self-insurance reserves:
Derivative Instruments We are exposed to market risk from changes in interest rates. We actively monitor these fluctuations and may use derivative instruments primarily for the purpose of reducing the impact of changing interest rates on our variable rate debt and to reduce the impact of changing fair market values on our fixed rate debt. In accordance with our risk management strategy, we may use derivative instruments only for the purpose of managing risk associated with an asset, liability, committed transaction, or probable forecasted transaction that is identified by management. Our use of derivative instruments may result in short-term gains or losses that may increase the volatility of our earnings. Under FASB ASC Topic 815, “ Derivatives and Hedging,” As of December 31, 2021, we did not have any outstanding derivative instruments. Fair Value Measurements and Disclosures As of December 31, 2021, the carrying value of cash and cash equivalents, accounts receivables, accounts payable, accrued expenses and accrued interest approximates fair value due to the short-term nature of such instruments. The carrying value of the ABL Facility approximates fair value as the related interest rates approximate rates currently available to the company. The carrying amount of our long-term debt at December 31, 2021, was $174.9 million, compared to the estimated fair value of $176.2 million based on prevailing interest rates and trading activity for our long-term debt. See Note 12, Fair Value Measurements and Disclosures. Long-term Debt and Debt Covenant Compliance Our classification of outstanding borrowings on our 2024 Notes and 2028 Notes as long-term debt on our balance sheet is based on our assessment that, under the indentures and after considering our projected operating results and cash flows for the coming year, no principal payments are required to be made within the next twelve months. We may redeem the 2024 Notes and 2028 Notes, in whole or in part, 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, up to, but not including, the redemption date. See Note 11, Long-Term Debt. Reserves for Royalty Advances Royalties are paid in advance to book authors and capitalized as prepaid assets. Royalties are expensed as the related book revenue is earned or when we determine that future recovery of the royalty is not likely. We review historical data associated with royalty advances, earnings and recoverability based on actual results of Regnery ® Publishing. Historically, the longer the unearned portion of an advance remains outstanding, the less likely it is that we will recover the advance through the sale of the book. We apply our historical experience to outstanding royalty advances to estimate the likelihood of recovery. A provision was established to expense the balance of any unearned advance which we believe is not recoverable. Our analysis also considers other discrete factors, such as death of an author, any decision to not pursue publication of a title, poor market demand, and other relevant factors. We have not modified our estimate methodology and we have not historically recognized significant losses from changes in our estimates. We believe that our estimates and assumptions are reasonable and that our reserves are accurately reflected. Contingency Reserves In the ordinary course of business, we are involved in various legal proceedings, lawsuits, arbitrations, and other claims which are complex in nature and have outcomes that are difficult to predict. Consequently, we are unable to ascertain the ultimate aggregate amount of monetary liability or the financial impact with respect to these matters. We record contingency reserves to the extent we conclude that it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. The establishment of the reserve is based on a review of all relevant factors, the advice of legal counsel, and the subjective judgment of management. The reserves we have recorded to date have not been material to our consolidated financial position, results of operations, or cash flows. We believe that our estimates and assumptions are reasonable and that our reserves are accurately reflected. While we believe that the final resolution of any known matters, individually and in the aggregate, will not have a material adverse effect upon our consolidated financial position, results of operations, or cash flows, it is possible that we could incur additional losses. We maintain insurance that may provide coverage for such matters. Future claims against us, whether meritorious or not, could have a material adverse effect upon our consolidated financial position, results of operations or cash flows, including losses due to costly litigation and losses due to matters that require significant amounts of management time that can result in the diversion of significant operational resources. See Note 14, Commitments and Contingencies. Revenue Recognition We recognize revenue in accordance with ASC Topic 606, “ Revenue from Contracts with Customers” Significant management judgments and estimates must be made in connection with determining the amount of revenue to be recognized in any accounting period. We must assess the promises within each sales contract to determine if they are distinct performance obligations. Once the performance obligation(s) are determined, the transaction price is allocated to the performance obligation(s) based on a relative standalone selling price basis. If a sales contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price. If the stand-alone selling price is not determinable, an estimate is used. We make significant estimates related to variable consideration at the point of sale, including estimates for refunds and product returns. Stock-Based Compensation We account for stock-based compensation under the provisions of FASB ASC Topic 718, “ Compensation—Stock Compensation .” We record equity awards with stock-based compensation measured at the fair value of the award as of the grant date. We determine the fair value of our options using the Black-Scholes option-pricing model that requires the input of highly subjective assumptions, including the expected stock price volatility and expected term of the options granted. The exercise price for options is equal to the closing market price of Salem Media Group common stock as of the date of grant. We use the straight-line attribution method to recognize share-based compensation costs over the expected service period of the award. Upon exercise, cancellation, forfeiture, or expiration of stock options, or upon vesting or forfeiture of restricted stock awards, deferred tax assets for options and restricted stock awards with multiple vesting dates are eliminated for each vesting period on a first-in, first-out basis as if each vesting period was a separate award. See Note 15, Stock Incentive Plan. Advertising and Promotional Cost Costs of media advertising and associated production costs are expensed as incurred and amounted to approximately $10.6 million and $7.9 million for each of the years ended December 31, 2021 , and 2020, respectively.Leases We account for leases under the provisions of FASB ASC Topic 842, “ Leases Accounting Policy Elections under ASC 842 Lease Term The lease term can materially impact the value of the Right-of-Use Lease Payments Lease payments consist of the following payments (as applicable) related to the use of the underlying asset during the lease term:
Short-Term Lease Exemption We exclude short-term leases, or leases with a term of twelve months or less that do not contain a purchase option that we are reasonably certain to exercise, from our ROU asset and lease liability calculations. We consider the applicability of the short-term exception on month-to-month month-to-month one-month rent or a security deposit if the termination terms are not adhered to. We believe that these month-to-month month-to-month Service Agreements with an Embedded Lease Component We exclude certain service agreements that contain embedded leases for equipment based on the immaterial impact of these agreements. Our analysis includes cable and satellite television service agreements for which our monthly payment may include equipment rentals, coffee and water service at certain facilities that may include equipment rentals (we often meet minimum requirements and just pay for product used), security services that include a monthly fee for cameras or equipment, and other similar arrangements. Based on the insignificant amount of the monthly lease costs, we exclude these agreements from our ROU asset and liability calculations due to the immaterial impact to our financial statements. Incremental Borrowing Rate The ROU asset and related lease liabilities recorded under ASC 842 are calculated based on the present value of the lease payments using (1) the rate implicit in the lease or (2) the lessee’s IBR, defined as the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. As most leases do not provide an implicit rate, we estimate the IBR applicable to Salem using significant judgement and estimates, including the estimated value of the underlying leased asset, and the (a) credit history of Salem Media Group, (b) the credit worthiness of Salem Media Group, (c) the class of the underlying asset and the remaining term of the arrangement, and (d) the debt incurred under the lease liability as compared to amounts that would be borrowed. We developed a matrix to estimate the IBR for each lease class. We review the IBR estimates on a quarterly basis and update as necessary. Our analysis requires the use of significant judgement and estimates, including the estimated value of the underlying leased asset. We have not modified our estimate methodology and we have not recognized significant changes in our estimates. Portfolio Approach We apply a portfolio approach by applying a single IBR to leases with reasonably similar characteristics, including the remaining lease term, the underlying assets, and the economic environment. We believe that applying the portfolio approach is acceptable because the results do not materially differ from the application of the leases model to the individual leases in that portfolio. Sales Taxes and Other Similar Taxes We do not evaluate whether sales taxes or other similar taxes imposed by a governmental authority on a specific lease revenue-producing transaction that are collected by the lessor from the lessee are the primary obligation of the lessor as owner of the underlying leased asset. A lessor that makes this election will exclude these taxes from the measurement of lease revenue and the associated expense. Taxes assessed on a lessor’s total gross receipts or on the lessor as owner of the underlying asset (e.g., property taxes) are excluded from the scope of the policy election. A lessor must apply the election to all taxes in the scope of the policy election and would provide certain disclosures. Separating Consideration between Lease and Non-Lease Components We include the lease and non-lease components (or the fixed and variable consideration) as a single component accounted for as a lease. This practical expedient is elected by class of underlying assets as an accounting policy election and applies to all arrangements in that class of underlying assets that qualify for the expedient. ASC 842 provides this expedient to alleviate concerns that the costs and administrative burden of allocating consideration to the separate lease and non-lease components may not justify the benefit of more precisely reflecting the ROU asset and the lease liability. Contracts that include lease and non-lease components that are accounted for under the election not to separate require that all components that qualify for the practical expedient be combined. The components that do not qualify, such as those for which the timing and pattern of transfer of the lease and associated non-lease components are not the same, are accounted for separately. Accounting for a lease component of a contract and its associated non-lease components as a single lease component results in an allocation of the total contract consideration to the lease component. Therefore, the initial and subsequent measurement of the lease liability and ROU asset is greater than if the policy election was not applied. The greater ROU asset value is considered in our impairment analysis. Leasehold Improvements We may construct or otherwise invest in leasehold improvements to properties. The costs of these leasehold improvements are capitalized and depreciated over the shorter of the estimated useful life of the improvement or the lease term including anticipated renewal periods. (Gain) Loss on the Disposition of Assets We record gains or losses on the disposition of assets equal to the proceeds, if any, as compared to the net book value. Exchange transactions are accounted for in accordance with FASB ASC Topic 845 “ Non-Monetary TransactionsDiscontinued Operations We regularly review underperforming assets to determine if a sale or disposal might be a better way to monetize the assets. When a station, group of stations, or other asset group is considered for sale or disposal, we review the transaction to determine if or when the entity qualifies as a discontinued operation in accordance with the criteria of FASB ASC Topic 205-20 “Discontinued Operations Basic and Diluted Net Earnings Per Share Basic net earnings per share have been computed using the weighted average number of Class A and Class B shares of common stock outstanding during the period. Diluted net earnings per share is computed using the weighted average number of shares of Class A and Class B common stock outstanding during the period plus the dilutive effects of stock options. Options to purchase 1,925,417 and 2,291,020 shares of Class A common stock were outstanding at December 31, 2021, and 2020. Diluted weighted average shares outstanding exclude outstanding stock options whose exercise price is in excess of the average price of the company’s stock price. These options are excluded from the respective computations of diluted net income or loss per share because their effect would be anti-dilutive. The following table sets forth the shares used to compute basic and diluted net earnings per share for the periods indicated:
Segments We have three operating segments: (1) Broadcast, (2) Digital Media, and (3) Publishing, which also qualify as reportable segments. Our operating segments reflect how our chief operating decision makers, which we define as a collective group of senior executives, assesses the performance of each operating segment, and determines the appropriate allocations of resources to each segment. We continually review our operating segment classifications to align with operational changes in our business and may make changes as necessary. We measure and evaluate our operating segments based on operating income and operating expenses that do not include allocations of costs related to corporate functions, such as accounting and finance, human resources, legal, tax and treasury, which are reported as unallocated corporate expenses in our consolidated statements of operations included in this annual report. We also exclude costs such as amortization, depreciation, taxes, and interest expense. Variable Interest Entities We may enter into agreements or investments with other entities that could qualify as variable interest entities (“VIEs”) in accordance with FASB ASC Topic 810 “ Consolidation” re-evaluate the VIE when or if events occur that could change the status of the VIE. We may enter into lease arrangements with entities controlled by our principal stockholders or other related parties. We believe that the requirements of FASB ASC 810 do not apply to these entities because the lease arrangements do not contain explicit guarantees of the residual value of the real estate, do not contain purchase options or similar provisions and the leases are at terms that do not vary materially from leases that would have been available with unaffiliated parties. Additionally, we do not have an equity interest in the entities controlled by our principal stockholders or other related parties, and we do not guarantee debt of the entities controlled by our principal stockholders or other related parties. We also enter into Local Marketing Agreements (“LMAs”) or Time Brokerage Agreements (“TBAs”) contemporaneously with entering into an Asset Purchase Agreement (“APA”) to acquire or sell a radio station. Typically, both LMAs and TBAs are contractual agreements under which the station owner/licensee makes airtime available to a programmer/licensee in exchange for a fee and reimbursement of certain expenses. LMAs and TBAs are subject to compliance with the antitrust laws and the communications laws, including the requirement that the licensee must maintain independent control over the station and, in particular, its personnel, programming, and finances. The FCC has held that such agreements do not violate the communications laws as long as the licensee of the station receiving programming from another station maintains ultimate responsibility for, and control over, station operations and otherwise ensures compliance with the communications laws. The requirements of FASB ASC 810 may apply to entities under LMAs or TBAs, depending on the facts and circumstances related to each transaction. As of December 31, 2021, we did not have implicit or explicit arrangements that required consolidation under the guidance in FASB ASC 810. Concentrations of Business Risks We derive a substantial part of our total revenue from the sale of advertising. For the years ended December 31, 2021 , and 2020, 29.2% and 30.7%, respectively, of our total broadcast revenue was generated from the sale of broadcast advertising. We are particularly dependent on revenue from stations in the Los Angeles and Dallas markets, which generated 13.6% and 21.1% of the total broadcast advertising revenue for the year ended December 31, 2021, and 14.1% and 22.1% of the total broadcast advertising revenue for the year ended December 31, 2020. Because substantial portions of our revenue is derived from local advertisers in these key markets, our ability to generate revenue in those markets could be adversely affected by local or regional economic downturns. Concentrations of Credit Risks Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents; accounts receivable and derivative instruments. We place our cash and cash equivalents with high quality financial institutions. Such balances may be in excess of the Federal Deposit Insurance Corporation insured limits. To manage the related credit exposure, we continually monitor the credit worthiness of the financial institutions where we have deposits. Concentrations of credit risk with respect to accounts receivable are limited due to the wide variety of customers and markets in which we provide services, as well as the dispersion of our operations across many geographic areas. We perform ongoing credit evaluations of our customers, but generally do not require collateral to support customer receivables. We establish an allowance for doubtful accounts based on various factors including the credit risk of specific customers, age of receivables outstanding, historical trends, economic conditions, and other information. Historically, our bad debt expense has been within management’s expectations. 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. Reclassifications Certain reclassifications of amounts previously reported were made within footnote details to conform to the current period presentation. Recent Accounting Pronouncements All new accounting pronouncements that are in effect that may impact our financial statements have been implemented. We do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position, results of operations or cash flows. |
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Recent Transactions | NOTE 3. RECENT TRANSACTIONS During the year ended December 31, 2021 , we completed or entered into the following transactions: Debt Transactions On September 10, 2021 , we exchanged $112.8 million of the 2024 Notes for $114.7 million (reflecting a call premium of 1.688%) of newly issued 7.125% Senior Secured Notes due 2028 (“2028 Notes.”) Contemporaneously with the refinancing, we obtained commitments from the holders of the 2028 Notes to purchase up to $50 million in additional 2028 Notes (“Delayed Draw 2028 Notes,”) contingent upon satisfying certain performance benchmarks, the proceeds of which are to be used exclusively to repurchase or repay the remaining balance outstanding of the 2024 Notes. In addition to the exchange on September 10, 2021 , we repurchased an additional $43.3 million in total of the 2024 Notes for $44.0 million in cash, recognizing a net loss of $1.0 million after adjusting for bond issuance costs through multiple transactions during the second half of 2021. These transactions are described in Note 11, Long-Term Debt. We received $11.2 million in aggregate principal amount of PPP loans through the SBA during the first quarter of 2021 based on the eligibility of our radio stations and networks as determined on a per-location basis. The PPP loans were accounted for as debt in accordance with FASB ASC Topic 470. The loan balances and accrued interest were forgivable provided that the proceeds were used for eligible purposes, including payroll, benefits, rent and utilities within the covered period. We used the PPP loan proceeds according to the terms and filed timely applications for forgiveness. During July 2021, the SBA forgave all but $20,000 of the PPP loans resulting in a pre-tax gain on the forgiveness of $11.2 million. The remaining PPP loan was repaid in 2021. 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 our 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 a Local Marketing Agreement (“LMA”) or Time Brokerage Agreement (“TBA.”) On July 2, 2021, we acquired the SeniorResource.com domain 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. We recognized goodwill of $0.2 million attributable to the expected synergies to be realized when combining the operations of this entity into our existing operations. 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 year ending December 31, 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” 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 any 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 during the year ending December 31, 2021, is as follows:
The allocations presented in the table below are based upon estimates of the fair values using valuation techniques including income, cost and market approaches. The following preliminary purchase price allocations are based upon the valuation of assets and these estimates and assumptions are subject to change as we obtain additional information during the measurement period, which may be up to one year from the acquisition date. Differences between the preliminary and final valuation could be substantially different from the initial estimate.
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 November 30, 2021, we sold approximately 77 acres of land in Tampa, Florida for $13.5 million in cash. The land was the transmitter site for WTBN-AM that will be diplexed from our owned and operated WGUL-AM facility. We recognized a pre-tax gain on the sale of $12.9 million. On July 27, 2021, we sold the Hilary Kramer Financial Newsletter and related assets for $0.2 million to be collected in quarterly installments over the two-year period ending September 30, 2023. We recognized a pre-tax gain on the sale of $0.1 million. On July 23, 2021, we sold approximately 34 acres of land in Lewisville, Texas, for $12.1 million in cash. The land was being used for as the transmitter site for company owned radio station KSKY-AM. We retained a portion of the land in the southwest corner of the site to continue operating the radio station. We recognized a pre-tax gain on the sale of $10.5 million.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 an 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 into an 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 December 6, 2021, we entered into an APA to acquire radio station WLCC-AM and an FM translator in the Tampa, Florida market for $0.6 million of cash. The WLCC transmitter site will be used to broadcast radio station WTBN-AM due to the sale of land housing the WTBN-AM transmitter. We paid $0.1 million into an escrow account in December 2021 and closed on the acquisition on February 15, 2022. On November 18, 2021, we entered an agreement to sell 4.5 acres of land in Phoenix, Arizona for $2.0 million in cash. We will relocate our transmitter equipment for KXXT-AM from the site within 90 days of closing, which took place on January 10, 2022. On August 31, 2021, we entered an agreement to sell 9.3 acres of land in the Denver area for $8.2 million. We expect to close this sale early in 2022 and plan to continue broadcasting both KRKS-AM and KBJD-AM from this site.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 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 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. |
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Revenue Recognition | NOTE 4. REVENUE RECOGNITION We recognize revenue in accordance with ASC 606, “ Revenue from Contracts with Customers” The following table presents our revenues disaggregated by revenue source for each of our operating segments:
A summary of each of our revenue streams under ASC 606 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. Broadcast digital advertising revenue consists of local digital advertising, such as the sale of banner advertisements on our owned and operated websites, the sale of advertisements on our own and operated mobile applications, and advertisements in digital newsletters that we produce, as well as national digital advertising, or the sale of custom digital advertising solutions, such as web pages and social media campaigns, that we offer to our customers. Advertising revenue is recorded on a gross basis unless an agency represents the advertiser, in which case, revenue is reported net of the commission retained by the agency. Salem Surround, our national 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. 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 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. Other Revenue . 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. 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 The length of our typical sales agreement is 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 January 1, 2022, and December 31, 2026. The difference between the promised consideration and the cash selling price of the publications is not significant. Therefore, we have 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. Under ASC 606, estimates of variable consideration are to 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 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 from our audience members. Contract terms can range from a few weeks to a few months, depending on the charity or programmer. If the campaign does not generate a pre-determined level of donations or revenue to our customer, the consideration that we expect to be entitled to may vary above a minimum base level per the contract. Historically, under ASC Topic 605, we reported variable consideration as revenue when the amount was fixed and determinable. Under ASC 606, variable consideration is to be estimated using the expected value or the most likely amount to the extent it is probable that a significant reversal will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Based on the constraints for using estimates of variable consideration within ASC 606, and our historical experience with these campaigns, we will continue to recognize revenue at the base amount of the campaign with variable consideration recognized when the uncertainty of each campaign is resolved. These constraints include: (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, and (3) our experience has shown these contracts have a large number and broad range of possible outcomes. 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 revenue and expenses were as follows:
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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 weighted average cost method. |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 $10.9 million and $10.8 million for the years ended December 31, 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 the 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 period ended December 31, 2021. |
Operating and Finance Lease Right-of-Use Assets |
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Operating and Finance Lease Right-of-Use Assets | NOTE 7. OPERATING AND FINANCE LEASE RIGHT-OF-USE Leasing Transactions Our leased assets include offices and studios, transmitter locations, antenna sites, towers, tower sites, and land. Our lease portfolio has terms remaining from less than one-year up to twenty years. Many of these leases contain options under which we can extend the term from five to twenty years 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. Due to the adverse economic impact of the COVID-19 pandemic, we negotiated with our landlords in early 2020 to obtain rent concessions to improve our short-term liquidity. In accordance with the FASB’s recent Staff Q&A regarding rent concessions related to the effects of the COVID-19 pandemic, we did not apply the lease modification guidance under ASC 842 to rent concessions that resulted in total payments required under the modified contract were substantially the same as or less than total payments required by the original contract. For qualifying rent abatement concessions, we recorded negative lease expense for abatement during the period of relief. During the year ended December 31, 2020, we recognized negative lease expense related to rent abatement concessions of $0.3 million. At December 31, 2020, we deferred cash payments of $0.7 million that were reported in short-term and long-term operating lease liabilities as applicable based on repayment terms that range from one year through December 2024. At December 31, 2021, $0.2 million of the deferred cash payments remained with $28,000 payable in 2022, $26,000 payable in 2023 and the remainder payable in 2024.Balance Sheet Supplemental balance sheet information related to leases was 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 December 31, 2021, are as follows:
Impairment of ROU Assets ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360, “ Property, Plant, and Equipment ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU asset are not independent from the cash flows of other assets and liabilities. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. After a careful analysis of the guidance, we concluded that the appropriate unit of accounting for testing ROU assets for impairment is the broadcast market cluster level for radio station operations and the entity or division level for digital media entities, publishing entities and networks. Corporate ROU assets are tested on a consolidated level with consideration given to all cash flows of the company as corporate functions do not generate cash flows and are funded by revenue-producing activities at lower levels of the entity. ASC 360 requires three steps to identify, recognize and measure the impairment of a long-lived asset (asset group) to be held and used: Step 1 – Consider whether Indicators of Impairment are Present As detailed in ASC 360-10-35-21,
Other indicators should be considered if we believe that the carrying amount of an asset (asset group) may not be recoverable. Step 2 – Test for Recoverability If indicators of impairment are present, we are required to perform a recoverability test comparing the sum of the estimated undiscounted cash flows attributable to the long-lived asset or asset group in question to the carrying amount of the long-lived asset or asset group. ASC 360 does not specifically address how operating lease liabilities and future cash outflows for lease payments should be considered in the recoverability test. Under ASC 360, financial liabilities, or long-term debt, generally are excluded from an asset group while operating liabilities, such as accounts payable, generally are included. ASC 842 characterizes operating lease liabilities as operating liabilities. Because operating lease liabilities may be viewed as having attributes of finance liabilities as well as operating liabilities, it is generally acceptable for a lessee to either include or exclude operating lease liabilities from an asset group when testing whether the carrying amount of an asset group is recoverable provided the approach is applied consistently for all operating leases and when performing Steps 2 and 3 of the impairment model in ASC 360. In cases where we have received lease incentives, including operating lease liabilities in an asset group may result in the long-lived asset or asset group having a zero or negative carrying amount because the incentives reduce our ROU assets. We elected to exclude operating lease liabilities from the carrying amount of the asset group such that we test ROU assets for operating leases in the same manner that we test ROU assets for financing leases. Undiscounted Future Cash Flows The undiscounted future cash flows in Step 2 are based on our own assumptions rather than a market participant. If an election is made to exclude operating lease liabilities from the asset or asset group, all future cash lease payments for the lease should also be excluded. The standard requires lessees to exclude certain variable lease payments from lease payments and, therefore, from the measurement of a lessee’s lease liabilities. Because these variable payments do not reduce the lease liability, we include the variable payments we expect to make in our estimate of the undiscounted cash flows in the recoverability test (Step 2) using a probability-weighted approach. Step 3 – Measurement of an Impairment Loss If the undiscounted cash flows used in the recoverability test are less than the carrying amount of the long-lived asset (asset group), we are required to estimate the fair value of the long-lived asset or asset group and recognize an impairment loss when the carrying amount of the long-lived asset or asset group exceeds the estimated fair value. We elected to exclude operating lease liabilities from the estimated fair value, consistent with the recoverability test. Any impairment loss for an asset group must reduce only the carrying amounts of a long-lived asset or assets of the group, including the ROU assets. The loss must be allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long-lived asset of the group must not reduce the carrying amount of that asset below its fair value whenever the fair value is determinable without undue cost and effort. ASC 360 prohibits the subsequent reversal of an impairment loss for an asset held and used. Fair Value Considerations When determining the fair value of a ROU asset, we must estimate what market participants would pay to lease the asset or what a market participant would pay up front in one payment for the ROU asset, assuming no additional lease payments would be due. The ROU asset must be valued assuming its highest and best use, in its current form, even if that use differs from the current or intended use. If no market exists for an asset in its current form, but there is a market for a transformed asset, the costs to transform the asset are considered in the fair value estimate. Refer to Note 12, Fair Value Measurements and Disclosures. There were no indications of impairment during the year ended December 31, 2021. |
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 We continually monitor our stations’ compliance with the various regulatory requirements that are necessary for the FCC renewal and all of our broadcast licenses have been renewed. We expect all of our broadcast 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. The weighted-average period before the next renewal of our broadcasting licenses The following table presents the changes in broadcasting licenses that include acquisitions and divestitures of radio stations and FM translators as described in Note 3 — Recent Transactions.
Broadcast Licenses Impairment Test We perform our annual impairment testing during the fourth quarter of each year, which coincides with our budget and planning process for the upcoming year. The unit of accounting we use to test broadcast licenses is the cluster level, which we define as a group of radio stations operating in the same geographic market, sharing the same building and equipment, and managed by a single general manager. The cluster level is the lowest level for which discrete financial information and cash flows are available and the level reviewed by management to analyze operating results. The first step of our impairment testing is to perform a qualitative assessment as to whether it is more likely than not that a broadcast license is impaired. This qualitative assessment requires significant judgment when considering the events and circumstances that may affect the estimated fair value of our broadcast licenses. We review the significant assumptions and key estimates applicable to our prior year estimated fair value calculations to assess if events and circumstances have occurred that could affect these assumptions and key estimates. We also review internal benchmarks and the economic performance for each market cluster to assess if it is more likely than not that impairment exists. As part of our qualitative assessment, we calculate the excess fair value, or the amount by which our prior year estimated fair value exceeds the current year carrying value. Based on our analysis and review, including the financial performance of each market, we believe that a 25% excess fair value margin is a reasonable benchmark for our qualitative analysis. Markets with an excess fair value of 25% or more, which have had no significant changes in the prior year assumptions and key estimates, are not likely to be impaired. Markets with an excess fair value that is less than 25% are subject to further testing. The table below presents the percentage within a range by which our prior year start-up income estimated fair value exceeds the current year carrying value for the 24 broadcasting market licenses tested:
The second part of our qualitative assessment consists of a review of the financial operating results for each market cluster. Radio stations are often sold on the basis of a multiple of projected cash flow, or Station Operating Income (“SOI”) defined as net broadcast revenue less broadcast operating expenses. See Item 7 – Management Discussion and Analysis within this annual report for information on SOI, a non-GAAP measure. Numerous trade organizations and analysts review these radio station sales to track SOI multiples applicable to each transaction. Based on published reports and analysis of market transactions, we believe industry benchmarks to be in the six to seven times cash flow range. We elected an SOI benchmark of four as a reasonable indicator of fair value. Markets with an SOI multiple in excess of four are subject to further testing. Based on this qualitative review, we identified six markets subject to further testing. There were no additional markets identified during the current period that were subject to further testing based on the length of time elapsed from prior reviews, The table below shows the percentage within a range by which our prior year estimated fair value exceeded the carrying value of our broadcasting licenses for these six market clusters:
Based on this assessment, we engaged Bond & Pecaro, an independent third-party appraisal and valuation firm, to assist us with determining the enterprise value of 18 of our market clusters. The estimated fair value of each market cluster was determined using the Greenfield Method, a form of the income approach. The premise of the Greenfield Method is that the value of a broadcast license is equivalent to a hypothetical start-up in which the only asset owned by the station as of the valuation date is the broadcast license. This approach eliminates factors that are unique to our operation of the station, including its format and historical financial performance. The method then assumes the entity has to purchase, build, or rent all of the other assets needed to operate a comparable station to the one in which the broadcast license is being utilized as of the valuation date. Cash flows are estimated and netted against all start-up costs, expenses, and investments necessary to achieve a normalized and mature state of operations, thus reflecting only the cash flows directly attributable to the broadcast license. A multi-year discounted cash flow approach is then used to determine the net present value of these cash flows to derive an indication of fair value. For cash flows beyond the projection period, a terminal value is calculated using the Gordon constant growth model and long-term industry growth rate assumptions based on long-term industry growth and Gross Domestic Product (“GDP”) inflation rates. The primary assumptions used in the Greenfield Method are:
The assumptions used reflect those of a hypothetical market participant and not necessarily the actual or projected results of Salem. The key estimates and assumptions used in the start-up income valuation for the broadcast licenses tested in each period were as follows:
The risk-adjusted discount rate reflects the Weighted Average Cost of Capital (“WACC”) developed based on data from same or similar industry participants and publicly available market data as of the measurement date. Based on our review and analysis during our annual testing period, there were no impairment charges recorded during the annual testing period ended December 31, 2021. The table below presents the results of our impairment testing under the start-up income approach:
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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 indicate that an asset may be impaired. We perform our annual impairment testing during the fourth quarter of each year, which coincides with our budget and planning process for the upcoming year. The following table presents the changes in goodwill including business acquisitions as described in Note 3—Recent Transactions.
Goodwill Impairment Testing When performing our annual impairment testing for goodwill, the fair value of each applicable accounting unit is estimated using a discounted cash flow analysis, which is a form of the income approach. The discounted cash flow analysis utilizes a five to ten-year projection period to derive operating cash flow projections from a market participant view. We make certain assumptions regarding future revenue growth based on industry market data, historical performance, and our expectations of future performance. We also make assumptions regarding working capital requirements and ongoing capital expenditures for fixed assets. Future net free cash flows are calculated on a debt free basis and discounted to present value using a risk adjusted discount rate. The terminal year value is calculated using the Gordon constant growth method and long-term growth rate assumptions based on long-term industry growth and GDP inflation rates. The resulting fair value estimates, net of any interest-bearing debt, are then compared to the carrying value of each reporting unit’s net assets. The first step of our impairment testing is to perform a qualitative assessment to determine if events and circumstances have occurred that indicate it is more likely than not that the fair value of the assets, including goodwill, are less than their carrying values. We review the significant inputs used in our prior year fair value estimates to determine if any changes to those inputs should be made. We estimate the fair value using a market approach and compare the estimated fair value of each entity to its carrying value, including goodwill. Under the market approach, we apply a multiple of four to each entities operating income to estimate the fair value. We believe that a multiple of four is a reasonable indicator of fair value as in Note 8, Broadcast Licenses. If the results of our qualitative assessment indicate that the fair value of a reporting unit may be less than its carrying value, we perform a second quantitative review of the reporting unit. We engage an independent third-party appraisal and valuation firm to assist us with determining the enterprise value as part of this quantitative review. Goodwill - Broadcast Markets The unit of accounting we use to test goodwill associated with our radio stations is the cluster level, which we define as a group of radio stations operating in the same geographic market, sharing the same building and equipment, and managed by a single general manager. The cluster level is the lowest level for which discrete financial information and cash flows are available and the level reviewed by management to analyze operating results. Five of our 31 market clusters have goodwill associated with them as of our annual testing period ended December 31, 2021. The key estimates and assumptions used for our enterprise valuations were as follows:
The risk-adjusted discount rate reflects the WACC developed based on data from same or similar industry participants and publicly available market data as of the measurement date. Based on our qualitative review, we tested one market cluster for goodwill impairment. We engaged Bond & Pecaro, an independent appraisal and valuation firm, to assist us in estimating the enterprise of value our market clusters to test goodwill for impairment. The enterprise valuation assumes that the subject assets are installed as part of an operating business rather than as a hypothetical start-up. The analysis includes both an income and cost approach to valuation. The income approach uses a discounted cash flow projection while the cost approach, or “stick” value of the underlying assets is used. Based on our review and analysis, we determined that no impairment charges were necessary to the carrying value of our broadcast market goodwill as of the annual testing period ended December 31, 2021. The tables below present the percentage within a range by which the estimated fair value exceeded the carrying value of each of our market clusters, includin g goodwill:
Goodwill – Digital Media The unit of accounting we use to test goodwill in our digital media segment is the entity level, which includes SWN, Townhall.com ® , and Eagle Financial Publications. The financial statements for SWN include the operating results and cash flows for our Christian content websites and our church product websites. The financial statements for Townhall.com® reflect the operating results for each of our conservative opinion websites. Eagle Financial Publications include our investing websites and related digital publications. The entity level is the level reviewed by management and the lowest level for which discrete financial information is available. Two of our digital media entities have goodwill associated with them as of our annual testing period ended December 31, 2021. We tested one of these entities for impairment because it was not tested in the prior year. We engaged Bond & Pecaro, an independent appraisal and valuation firm, to assist us in estimating the enterprise of value of the entity for impairment. The enterprise valuation assumes that the subject assets are installed as part of an operating business rather than as a hypothetical start-up. The key estimates and assumptions used for our enterprise valuations were as follows:
The risk-adjusted discount rate reflects the WACC developed based on data from same or similar industry participants and publicly available market data as of the measurement date. Based on our review and analysis, we determined that no impairment charges were necessary to the carrying value of goodwill associated with our digital media entities as of the annual testing period ended December 31, 2021. The estimated fair value exceeded the carrying value by 113.2%. The table below presents the percentage within a range by which the estimated fair value exceeded the carrying value of the digital media entities, including goodwill.
Goodwill - Publishing The unit of accounting we use to test goodwill in our publishing segment is the entity level, which includes Regnery ® Publishing and Salem Author Services. Regnery® Publishing is a book publisher based in Washington DC that operates from a stand-alone facility under one general manager, with operating results and cash flows of reported at the entity level. Salem Author Services operates from a stand-alone facility in Orlando, Florida under one general manager who is responsible for the operating results and cash flows. The entity level is the level reviewed by management and the lowest level for which discrete financial information is available. Two of our publishing entities have goodwill associated with them as of our annual testing period ended December 31, 2021. We tested one of these entities because it had not been tested in the prior year and we tested the other entity based on the amount by which the prior estimated fair value exceeded the carrying value. We engaged Bond & Pecaro, an independent appraisal and valuation firm, to assist us in estimating the enterprise of value this publishing entity to test goodwill for impairment. The enterprise valuation assumes that the subject assets are installed as part of an operating business rather than as a hypothetical start-up. The key estimates and assumptions used for our enterprise valuations were as follows:
The risk-adjusted discount rate reflects the WACC developed based on data from same or similar industry participants and publicly available market data as of the measurement date. Based on our review and analysis, we determined that no impairment charges were necessary to the carrying value of goodwill associated with our publishing entities as of the annual testing period ended December 31, 2021. The estimated fair value exceeded the carrying value by 122.5%. The table below presents the percentage within a range by which the estimated fair value exceeded the carrying value of our remaining accounting units, including goodwill.
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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 $1.9 million and $3.3 million for the years ended December 31, 2021 , and 2020, respectively. Based on the amortizable intangible assets as of December 31, 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. Long-term debt consists of the following:
Our weighted average interest rate was 6.65% and 6.99% at December 31, 2020 , and December 31, 2021, respectively. In addition to the outstanding amounts listed above, we also have interest obligations related to our long-term debt as follows as of December 31, 2021:
7.125% Senior Secured Notes On September 10, 2021, we exchanged $112.8 million of the 2024 Notes for $114.7 million (reflecting a call premium of 1.688%) of newly issued 7.125% Senior Secured Notes due 2028 (“2028 Notes.”) Contemporaneously with the refinancing, we obtained commitments from the holders of the 2028 Notes to purchase up to $50 million in additional 2028 Notes (“Delayed Draw 2028 Notes,”) contingent upon satisfying certain performance benchmarks, the proceeds of which are to be used exclusively to repurchase or repay the remaining balance outstanding of the 2024 Notes. The 2028 Notes and the related guarantees were exchanged and sold to certain holders of the 2024 Notes, whom we believe to be qualified institutional buyers, in a private placement. The 2028 Notes and the related guarantees have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act or any state securities laws. The transaction was assessed on a lender-specific level and was accounted for as a debt modification in accordance with FASB ASC Topic 470. The 2028 Notes are guaranteed on a senior secured basis. We may redeem the 2028 Notes, in whole or in part, at any time prior to June 1, 2024 , at a price equal to 100% of the principal amount of the 2028 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, 2024, we may redeem some or all of the 2028 Notes at the redemption prices (expressed as percentages of the principal amount to be redeemed) set forth in the 2028 Notes i ndenture, plus accrued and unpaid interest, if any, to, but not including the redemption date. In addition, we may redeem up to 35% of the aggregate principal amount of the 2028 Notes before June 1, 2024, with the net cash proceeds from certain equity offerings at a redemption price of 107.125% of the principal amount plus accrued and unpaid interest, if any, to, but not including the redemption date. We may also redeem up to 10% of the aggregate original principal amount of the 2028 Notes per twelve-month period, in connection with up to two redemptions in such twelve-month period, at a redemption price of 101% of the principal amount plus accrued and unpaid interest to, but not including, the redemption date. The 2028 Notes mature on June 1, 2028, unless earlier redeemed or repurchased. Interest accrues on the 2028 Notes from September 10, 2021, and is payable semi-annually, in cash in arrears, on June 1 and December 1 of each year, commencing December 1, 2021. Based on the balance of the 2028 Notes outstanding, we are required to pay $8.2 million per year in interest. As of December 31, 2021 , accrued interest on the 2028 Notes was $0.7 million. The indenture to the 2028 Notes e i ndenture. We record debt issuance costs of $4.2 million, of which $2.3 million of third-party debt modification costs are reflected in operating expenses for the current period, $0.8 million is deferred with the Delayed Draw 2028 Notes, and $1.1 million, along with $3.0 million from the exchanged 2024 Notes, is being amortized as part of the effective yield on the 2028 Notes. During twelve-month period ended December 31, 2021, $0.3 million of debt issuance costs, discount and delayed draw associated with the Notes was amortized to interest ed expense. SBA PPP Loans We received $11.2 million in aggregate principal amount of PPP loans through the SBA during the first quarter of 2021 based on the eligibility of our radio stations and networks as determined on a per-location basis. The PPP loans were accounted for as debt in accordance with FASB ASC Topic 470. The loan balances and accrued interest were forgivable provided that the proceeds were used for eligible purposes, including payroll, benefits, rent and utilities within the covered period. We used the PPP loan proceeds according to the terms and filed timely applications for forgiveness. During July 2021, the SBA forgave all but $20,000 of the PPP loans resulting in a pre-tax gain on the forgiveness of $11.2 million. The remaining PPP loan was repaid in July 2021. 6.75% Senior Secured Notes On May 19, 2017, we issued 6.75% Senior Secured Notes (“2024 Notes”) in a private placement. The 2024 Notes are guaranteed on a senior secured basis by our existing subsidiaries (“Subsidiary Guarantors”). The 2024 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 is payable semi-annually, in cash in arrears, on June 1 and December 1 of each year. The 2024 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. 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 indenture relating to the 2024 Notes 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. At December 31, 2021, we were, and we remain, in compliance with all of the covenants under the indenture. We recorded 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 twelve-month period ended December 31, 2021, and 2020, $0.6 million and $0.7 million, respectively, of debt issuance costs associated with the Notes was amortized to interest expense. Based on the balance of the 2024 Notes outstanding of $60.2 million, we are required to pay $4.1 million per year in interest on the 2024 Notes. As of December 31, 2021, accrued interest on the 2024 Notes was $0.3 million. We may from time to time, depending on market conditions and prices, contractual restrictions, our financial liquidity, and other factors, seek to repurchase the 2024 Notes in open market transactions, privately negotiated transactions, by tender offer or otherwise, as market conditions warrant. As described above, on September 10, 2021, we exchanged $112.8 million of the 2024 Notes for $114.7 million of newly issued 2028 Notes, reflecting a call premium of 1.688%. Bond issuance costs of $1.1 million associated with the $112.8 million of the 2024 Notes are being amortized as part of the effective yield on the 2028 Notes. In addition to the exchange on Sep , we repurchased an additional $43.3 milliontember 10, 2021 in total of the 2024 Notes for $44.0 million in cash, recognizing a net loss of $1.0 million after adjusting for bond issuance costs through multiple transactions during the second half of 2021. 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, the company entered into the ABL Facility pursuant to a Credit Agreement (“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. 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 December 31, 2021, the amount available under the ABL Facility was $23.3 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, 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 December 31, 2021, we were, and we remain, in compliance with all of the covenants under Credit Agreement. We recorded debt issue costs of $0.9 million that were 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 each of the years ended December 31, 2021, and 2020, $0.1 million and $0.2 million of debt issuance costs associated with the ABL Facility was amortized to interest expense, respectively. At December 31, 2021, the blended interest rate on amounts outstanding under the ABL Facility was 0.0%.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. At December 31, 2021, we were, and we remain, in compliance with all of the covenants under the Credit Agreement. Maturities of Long-Term Debt and Capital Lease Obligations Principal repayment requirements under all long-term debt agreements outstanding at December 31, 2021 for each of the next five years and thereafter are as follows:
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Fair Value Measurements and Disclosures |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements and Disclosures | NOTE 12. FAIR VALUE MEASUREMENTS AND DISCLOSURES 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 December 31, 2021, the carrying value of cash and cash equivalents, 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 December 31, 2021 , was $174.9 million compared to the estimated fair value of $176.2 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 |
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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 and 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. For financial reporting purposes, we recorded a valuation allowance of $39.1 million as of December 31, 202 1 to offset $39.1 million of the deferred tax assets related to federal , and state net operating loss carryforwards of $20.7 million and $14.4 million respectively, along with $4 million of s for a total valuation allowance of $39.1 million. This balance represents a de crease of $9.0 million during the year, from $48.1 million valuation allowance as of December 31, 202 . 0 The consolidated provision for income taxes is as follows:
Consolidated deferred tax assets and liabilities consist of the following:
The following table reconciles the above net deferred tax liabilities to the financial statements:
A reconciliation of the statutory federal income tax rate to the provision for income tax is as follows:
At December 31, 202 1 , we had net operating loss carryforwards for federal income tax purposes of approximately $98.4 million that expire in years 2024 through 2038 and for state income tax purposes of approximately $607.7 million that expire in years 2022 through 2041. 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 which resulted in recognition of a $ 48.1 million valuation allowance for the year ended December 31, 2020, the federal and state net operating loss carry forwards. During 2021, through operational activity of the company primarily through various land sales throughout the year, we utilized our operating loss carryforwards and adjusted the related valuation allowance by bringing the total valuation allowance to $ million for the year ended December 31, 2021. 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 utilized certain benefits of the CAA through receipt of PPP loans in the amount of $11.2 million. We used the PPP loan proceeds according to the terms and filed timely applications for forgiveness. During July 2021, the SBA forgave all but $20,000 of the PPP loans resulting in a pre-tax gain on the forgiveness of $11.2 million. The effects of the CAA have resulted in a favorable permanent tax effected adjustment of $2.4 million. |
Commitments and Contingencies |
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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 consolidated financial position, results of operations or cash flows. |
Stock Incentive Plan |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Incentive Plan | NOTE 15. STOCK INCENTIVE PLAN Our Amended and Restated 1999 Stock Incentive Plan (“Plan”) provides for grants of equity-based awards to employees, maximum of 8,000,000 non-employee directors and officers, and advisors (“Eligible Persons”). A shares are authorized under the Plan of which 2,379,001 were available for issuance at December 31, 2021. 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. Stock-based compensation expense fluctuates over time as a result of the vesting periods for outstanding awards and the number of awards that actually vest. The following table reflects the components of stock-based compensation expense recognized in the Consolidated Statements of Operations for the years ended December 31, 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 years ended December 31, 2021, and 2020:
Activity with respect to the company’s option awards during the two years ended December 31, 2021, is as follows (Dollars in thousands, except weighted average exercise price and weighted average grant date fair value):
Activity with respect to the company’s restricted stock awards during the year ended December 31, 2021, is as follows:
Additional information regarding options outstanding as of December 31, 2021, is as follows:
The aggregate intrinsic value represents the difference between the company’s closing stock price on December 31, 2021 of $3.06 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 years ended December 31, 2021 , and 2020 was $0.3 million and $0.4 million, respectively. As of December 31, 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 2.2 years. |
Related Party Transactions |
12 Months Ended |
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Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 16. RELATED PARTY TRANSACTIONS Our Board has adopted a written policy for review, approval and monitoring of transactions between Salem and its related parties. The policy applies to any transaction or series of transactions in which Salem is a participant, the amount involved exceeds $120,000 and a Related Party (as defined in Item 404(a) of SEC Regulation S-K) has a direct or indirect material interest, excluding, among other things, compensation arrangements with respect to employment and Board membership. Related Parties includes our directors, executive officers, nominees to become a director, any person beneficially owning more than 5% of any class of our stock, immediate family members of any of the foregoing, and any entity in which any of the foregoing persons is employed or is a general partner or principal or in which the person has a 10% or greater beneficial ownership interest. Under the Policy, related party transactions must be reported to our general counsel and be reviewed and approved or ratified by the Board in accordance with the terms of the Policy, prior to the effectiveness or consummation of the transaction, whenever practicable. The Board will review all relevant information available about the potential related party transaction and may, in its sole discretion, impose such conditions as it deems appropriate on Salem or the Related Party in connection with the approval of the related party transaction. We also poll our directors and executive officers on an annual basis with respect to related party transactions and their service as an officer or director of other entities. Any director involved in a related party transaction that is being reviewed or approved must recuse himself or herself from participation in any related deliberation or decision. Other than compensation arrangements for our directors and executive officers, the following is a summary of transactions for the years ended December 31, 2021 and December 31, 2020 to which we have been a party in which the amount involved exceeds $120,000 annually and in which any of our then directors, executive officers or holders of more than 5% of any class of our stock at the time of such transaction, or any members of their immediate family, or is a general partner or principal or in which the person has a 10% or greater beneficial ownership interest, had or will have a direct or indirect material interest. Leases with Principal Stockholders A trust controlled by the Executive Chairman of the company, Edward G. Atsinger III, owns real estate on which assets of one radio station are located. Salem has entered into a lease agreement with this trust. Rental expense related to this lease included in operating expense for each of the year’s ending December 31, 2021, and 2020 amounted to $0.2 million. Mr. Ted Atsinger, son of the Executive Chairman is the beneficiary and/or successor trustee. Land and buildings occupied by various Salem radio stations are leased from entities owned by the company’s Executive Chairman and its Chairman Emeritus. Rental expense under these leases included in operating expense for each of the years ending December 31, 2021, and 2020 was $1.6 million and $1.5 million, respectively. Know the Truth – Mr. Riddle Know the Truth is a non-profit organization that is a customer of Salem Media Group, Inc. During 2021 and 2020 the company billed Know the Truth approximately $0.4 million and $0.6 million for airtime on its stations. The company had receivable balances of $0.8 million and $1.0 million at December 31, 2021, and 2020, respectively. Mr. Riddle, a director of the company, joined the Know the Truth board in 2010 and remains a member of this board. Split-Dollar Life Insurance Salem maintained split-dollar life insurance policies for its Chairman Emeritus and Executive Chairman since 1997. Since 2003, the company has been the owner of the split-dollar life insurance policies and was entitled to recover all of the premiums paid on the policies. The premiums were $0.2 million for the year ended December 31, 2020. The policies were surrendered during 2020 with net proceeds of $2.4 million paid to the company. The company paid $0.3 million of the proceeds to the Chairman Emeritus and $0.3 million of the proceeds to the Executive Chairman in exchange for surrendering the policies. Transportation Services Supplied by Sun Air Jets From time to time, the company rents aircraft from a company owned by Edward G. Atsinger III, Executive Chairman and director of Salem. As approved by the independent members of the company’s board of directors, the company rents these aircraft on an hourly basis for general corporate needs. Total rental expense for these aircraft for the years ended December 31, 2021, and 2020 was approximately $26,000 and $298,000, respectively. At December 31, 2020, $100,000 of the $298,000 paid to Sun Air Jets during 2020 was applied as an advance to secure future flights at discounted rates of which $26,000 was utilized during 2021. |
Defined Contribution Plan |
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Text Block [Abstract] | |
Defined Contribution Plan | NOTE 17. DEFINED CONTRIBUTION PLAN We maintain a 401(k) defined contribution plan (“401(k) Plan”), which covers eligible employees as defined in the 401(k) Plan. Participants are allowed to make non-forfeitable contributionsCOVID-19 pandemic. The company contributed and expensed $0.8 million into the 401(k) Plan during the year ended December 31, 2020. |
Equity Transactions |
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Dec. 31, 2021 | |
Federal Home Loan Banks [Abstract] | |
Equity Transactions | NOTE 18. EQUITY TRANSACTIONS 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 our Class A Common Stock pursuant to an at-the-market facility. We account for stock-based compensation expense in accordance with FASB ASC Topic 718, “ Compensation-Stock Compensation non-cash stock-based compensation expense of $0.3 million to additional paid-in capital during each of the years ended December 31, 2021, and 2020. Our dividend policy is based upon our Board of Directors’ current assessment of our business and the environment in which we operate. 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. 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. |
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Segment Data | NOTE 19. SEGMENT DATA FASB ASC Topic 280, “ Segment Reporting operating segments: (1) Broadcast, (2) Digital Media, and (3) Publishing, which also qualify as reportable segments. Our operating segments reflect how our chief operating decision makers, which we define as a collective group of senior executives, assess the performance of each operating segment, and determine the appropriate allocations of resources to each segment. We continually review our operating segment classifications to align with operational changes in our business and may make changes as necessary. We measure and evaluate our operating segments based on operating income and operating expenses that do not include allocations of costs related to corporate functions, such as accounting and finance, human resources, legal, tax and treasury, which are reported as unallocated corporate expenses in our condensed consolidated statements of operations included in this annual report. 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. Broadcast 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 3,200 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, ShiftWorship.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 two 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 December 31, 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 20. SUBSEQUENT EVENTS On February 15, 2022, we closed on the acquisition of WLCC-AM in Brandon, Florida for $600,000 in cash. On January 12, 2022, we repurchased $2.5 million of the 2024 Notes at 101.25% of face value recognizing a loss of $53,000. On January 10, 2022, we closed on the sale of 4.5 acres of land in Phoenix, Arizona for $2.0 million in cash. We recorded a pre-tax gain of $1.8 million on the sale and have access to the land for 90-days to relocate our transmitter equipment for KXXT-AM. Subsequent events reflect all applicable transactions through the date of the filing. |
Basis of Presentation (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business | Description of 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 19. Segment Data. The accompanying Consolidated Financial Statements of Salem include the company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. |
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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 materially impacted our business. 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 we see progress being made in revenue returning to pre-pandemic levels, the COVID-19 pandemic continues to create significant uncertainty and disruption in the economy. These uncertainties could materially impact significant accounting estimates related to, but not limited to, allowances for doubtful accounts, impairments, and right-of-use assets. During 2020 we implemented several measures to reduce costs and conserve cash to ensure that we had adequate cash to meet our debt servicing requirements, including:
As the economy began to show signs of recovery, we reversed several of these cost reduction initiatives during 2021. We continue to operate with lower staffing levels where appropriate, we have not declared or paid equity distributions on our common stock, and the company 401(k) match was not reinstated until January 2022. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act provided emergency economic assistance for individuals and businesses impacted by the COVID-19 pandemic, including opportunities for additional liquidity, loan guarantees, and other government programs. On December 27, 2020, Congress passed the Consolidated Appropriations Act (“CAA”) that included a second relief package, which, among other things, provides for an extension of the Payroll Support Program established by the CARES Act. We utilized certain benefits of the CARES Act and the CAA, including:
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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 could differ from those estimates. See Item 7 – Management Discussion and Analysis within this annual report for a discussion of our Critical Accounting Estimates. |
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Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid debt instruments, purchased with an initial maturity of three-months or less, to be cash equivalents. The carrying value of our cash and cash equivalents approximated fair value at each balance sheet date. |
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Accounts Receivable and Unbilled Revenue | Accounts Receivable and Unbilled Revenue Accounts receivable, net of allowances: Unbilled revenue end-of-flight, |
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Allowance for Doubtful Accounts | Allowance for Doubtful Accounts We maintain an allowance for doubtful accounts to provide for the estimated amount of receivables that may not be collected. The allowance is based on our historical collection experience, the age of the receivables, specific customer information and current economic conditions. Past due balances are generally not written-off until all collection efforts have been exhausted, including use of a collection agency. A considerable amount of judgment is required in assessing the likelihood of ultimate realization of these receivables, including the current creditworthiness of each customer. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. We have not modified our estimate methodology and we have not historically recognized significant losses from changes in our estimates. We believe that our estimates and assumptions are reasonable and that our reserves are accurately reflected. We do not include extended payment terms in our contracts with customers. |
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Inventory | Inventory Inventory consists of books published by Regnery ® Publishing. Inventory is recorded at the lower of cost or net realizable value as determined on a weighted average cost method. We review historical data and our own experiences to estimate the value of inventory on hand. Our analysis includes reviewing actual sales returns, royalty reserves, overall economic conditions, and demand for each title. We regularly monitor actual performance to our estimates and make adjustments as necessary. We have not modified our estimate methodology and we have not historically recognized significant losses from changes in our estimates. We believe that our estimates and assumptions are reasonable and that our reserves are accurately reflected. |
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Property and Equipment | Property and Equipment We account for property and equipment in accordance with FASB ASC Topic 27,000360-10, “Property, Plant and Equipment during the year ended December 31, 2020. No interest was capitalized in 2021 based on the balance outstanding of our variable rate debt. Repair and maintenance costs are charged to expense as incurred. Improvements are capitalized if they extend the life of the asset or enhance the quality or ability of the asset to benefit operations. Depreciation is computed using the straight-line method over estimated useful lives as follo w s:
The carrying value of property and equipment is evaluated periodically in relation to the operating performance and anticipated future cash flows of the underlying radio stations and business units for indicators of impairment.Equipment.
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Internally Developed Software and Website Development Costs | Internally Developed Software and Website Development Costs We capitalize costs incurred during the application development stage related to the development of 2.1internal-use software as specified in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350-40 “Internal-Use Softwareinternal-use software are expensed as incurred. Website development activities include planning, design and development of graphics and content for new websites and operation of existing sites. Costs incurred that involve providing additional functions and features to the website are capitalized. Costs associated with website planning, maintenance, content development and training are expensed as incurred. We capitalized $ million and $ 3.4 million during the years ended December 31, 2021, and 2020, respectively, related to internally developed software and website development costs. Depreciation expense of the amounts capitalized was $ 2.6 million and $ 2.8 million for each of the years ending December 31, 2021, and 2020, respectively. |
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Indefinite-Lived Intangible Assets | Indefinite-Lived Intangible Assets We account for broadcast licenses and goodwill in accordance with FASB ASC Topic 350 “ Intangibles—Goodwill and Other Impairment testing requires an estimate of the fair value of our indefinite-lived intangible assets. We believe that these estimates of fair value are critical accounting estimates as the value is significant in relation to our total assets and the estimates incorporate variables and assumptions based on our experiences and judgment about our future operating performance. Fair value measurements use 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 the assumptions and estimates used in our estimates, we are subject to future Impairment charges, the amount of which may be material. The unobservable inputs are defined in FASB ASC Topic 820 “Fair Value Measurements and Disclosures” as Level 3 inputs discussed in detail in Note 12, Fair Value Measurements and Disclosures. We perform our annual impairment testing during the fourth quarter of each year as discussed in Note 8, Broadcast Licenses and in Note 9, Goodwill. |
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Amortizable Intangible Assets | Amortizable Intangible Assets Intangible assets are recorded at cost less accumulated amortization. Typically, intangible assets are acquired in conjunction with the acquisition of broadcast entities, digital media entities and publishing entities. These intangibles are amortized using the straight-line method over the following estimated useful lives:
The carrying value of our amortizable intangible assets are evaluated periodically in relation to the operating performance and anticipated future cash flows of the underlying radio stations and businesses for indicators of impairment. In accordance with FASB ASC Topic 360 “ Property, Plant and Equipment ,” when indicators of impairment are present and the undiscounted cash flows estimated to be generated from these assets are less than the carrying amounts of these assets, an adjustment to No adjustments to the carrying amounts of our amortizable intangible assets were necessary during the year ended December 31, 2021. |
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Deferred Financing Costs | Deferred Financing Costs Deferred financing costs incurred in conjunction with debt obligations are amortized to
non-cash interest expense over the term of the agreement using the effective interest method. Deferred financing costs related to the Asset Based Loan Facility (“ABL Facility”) and the Delayed Draw 2028 Notes are reflected in long term assets net of accumulated amortization. Deferred financing costs related to the 2024 Notes and the 2028 Notes recorded as a reduction of “Long-term debt – less current portion” in the Consolidated Balance Sheets. See Note 11, Long-Term Debt. |
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Income Tax Valuation Allowances (Deferred Taxes) | Income Tax Valuation Allowances (Deferred Taxes) We account for income taxes in accordance with FASB ASC Topic 740 “ Income Taxes We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. In the event we were to determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to earnings in the period in which we make such a determination. Likewise, if we later determine that it is more likely than not that the net deferred tax assets would be realized, we would reverse the applicable portion of the previously provided valuation allowance. For financial reporting purposes, we recorded a valuation allowance of $39.1 million as of December 31, 202 1 to offset $39.1 million of the deferred tax assets related , to federal and state net operating loss carryforwards of $20.7 million and $14.4 million respectively, along with $4 million of other financial statement accruals for a total valuation allowance of $39.1 million. This balance represents a decrease of $9.0 million during the year, from $48.1 million valuation allowance as of December 31, 20 2 . 0 We believe that our estimates and assumptions are reasonable and that our reserves are accurately reflected. |
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Income Taxes and Uncertain Tax Positions | Income Taxes and Uncertain Tax Positions We are subject to audit and review by various taxing jurisdictions. We may recognize liabilities on our financial statements for positions taken on uncertain tax positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others may be subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. It is inherently difficult and subjective to estimate such amounts, as this requires us to make estimates based on the various possible outcomes. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. 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. During the year ended December 31, 2021, we recognized liabilities associated with uncertain tax positions around our subsidiary Salem Communications Holding Company’s Pennsylvania tax filing. The position taken on the tax returns follows Pennsylvania Notice 2016-01 which provides guidance for reversal of intercompany interest income and associated expense yielding a net loss for Pennsylvania. The current liability recognized for the tax position is $0.3 million including interest and penalties. Our evaluation was performed for all tax years that remain subject to examination, which range from 2017 through 2020. |
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Effective Tax Rate | Effective Tax Rate Our provision for income tax as a percentage of operating income before taxes, or our effective tax rate, may be impacted by:
Our annual effective tax rate may also be materially impacted by tax expense associated with
non-amortizable assets such as broadcast licenses and goodwill as well as changes in the deferred tax valuation allowance. An impairment loss for financial statement purposes will result in an income tax benefit during the period incurred as the amortization of broadcasting licenses and goodwill is deductible for income tax purposes. |
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Business Acquisitions | Business Acquisitions We account for business acquisitions in accordance with the acquisition method of accounting as specified in FASB ASC Topic 805 “ Business Combinations earn-out consideration. Estimates of the fair value include discounted estimated cash flows to be generated by the acquired assets over their expected useful lives based on historical experience, market trends, and 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 contingent payments expected to be made using a weighted probability of possible payments. The unobservable inputs used in the determination of the fair value of the contingent earn-out consideration include our own assumptions about the likelihood of payment based on the established benchmarks and discount rates based on our internal rate of return analysis. 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 in Note 12, Fair Value Measurements. We may retain a third-party appraiser to estimate the fair value of the acquired net assets as of the acquisition date. As part of the 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 retroactively 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. Transactions that do not meet the definition of a business in ASU 2017-01 “Business Combinations (Topic 805) Clarifying the Definition of a Business” 2017-01, a fewer number of our radio station acquisitions qualify as business acquisitions and instead are accounted for as asset purchases. Costs associated with business acquisitions, such as consulting and legal fees, are expensed as incurred. We incurred acquisition related costs of $0.1 million in each of the years ended December 31, 2021, and 2020. |
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Partial Self-Insurance on Employee Health Plan | Partial Self-Insurance on Employee Health Plan We provide health insurance benefits to eligible employees under a self-insured plan whereby we pay actual medical claims subject to certain stop loss limits. We record self-insurance liabilities based on actual claims filed and an estimate of those claims incurred but not reported. Our estimates are based on historical data and probabilities. Any projection of losses concerning our liability is subject to a high degree of variability. Among the causes of this variability are unpredictable external factors such as future inflation rates, changes in severity, benefit level changes, medical costs, and claim settlement patterns. Should the actual amount of claims increase or decrease beyond what was anticipated, we may adjust our future reserves. We have not modified our estimate methodology and we have not historically recognized significant losses from changes in our estimates. The following table presents the changes in our partial self-insurance reserves:
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Derivative Instruments | Derivative Instruments We are exposed to market risk from changes in interest rates. We actively monitor these fluctuations and may use derivative instruments primarily for the purpose of reducing the impact of changing interest rates on our variable rate debt and to reduce the impact of changing fair market values on our fixed rate debt. In accordance with our risk management strategy, we may use derivative instruments only for the purpose of managing risk associated with an asset, liability, committed transaction, or probable forecasted transaction that is identified by management. Our use of derivative instruments may result in short-term gains or losses that may increase the volatility of our earnings. Under FASB ASC Topic 815, “ Derivatives and Hedging,” As of December 31, 2021, we did not have any outstanding derivative instruments. |
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Fair Value Measurements and Disclosures | Fair Value Measurements and Disclosures As of December 31, 2021, the carrying value of cash and cash equivalents, accounts receivables, accounts payable, accrued expenses and accrued interest approximates fair value due to the short-term nature of such instruments. The carrying value of the ABL Facility approximates fair value as the related interest rates approximate rates currently available to the company. The carrying amount of our long-term debt at December 31, 2021, was $174.9 million, compared to the estimated fair value of $176.2 million based on prevailing interest rates and trading activity for our long-term debt. See Note 12, Fair Value Measurements and Disclosures. |
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Long-term Debt and Debt Covenant Compliance | Long-term Debt and Debt Covenant Compliance Our classification of outstanding borrowings on our 2024 Notes and 2028 Notes as long-term debt on our balance sheet is based on our assessment that, under the indentures and after considering our projected operating results and cash flows for the coming year, no principal payments are required to be made within the next twelve months. We may redeem the 2024 Notes and 2028 Notes, in whole or in part, 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, up to, but not including, the redemption date. See Note 11, Long-Term Debt. |
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Reserves for Royalty Advances | Reserves for Royalty Advances Royalties are paid in advance to book authors and capitalized as prepaid assets. Royalties are expensed as the related book revenue is earned or when we determine that future recovery of the royalty is not likely. We review historical data associated with royalty advances, earnings and recoverability based on actual results of Regnery ® Publishing. Historically, the longer the unearned portion of an advance remains outstanding, the less likely it is that we will recover the advance through the sale of the book. We apply our historical experience to outstanding royalty advances to estimate the likelihood of recovery. A provision was established to expense the balance of any unearned advance which we believe is not recoverable. Our analysis also considers other discrete factors, such as death of an author, any decision to not pursue publication of a title, poor market demand, and other relevant factors. We have not modified our estimate methodology and we have not historically recognized significant losses from changes in our estimates. We believe that our estimates and assumptions are reasonable and that our reserves are accurately reflected. |
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Contingency Reserves | Contingency Reserves In the ordinary course of business, we are involved in various legal proceedings, lawsuits, arbitrations, and other claims which are complex in nature and have outcomes that are difficult to predict. Consequently, we are unable to ascertain the ultimate aggregate amount of monetary liability or the financial impact with respect to these matters. We record contingency reserves to the extent we conclude that it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. The establishment of the reserve is based on a review of all relevant factors, the advice of legal counsel, and the subjective judgment of management. The reserves we have recorded to date have not been material to our consolidated financial position, results of operations, or cash flows. We believe that our estimates and assumptions are reasonable and that our reserves are accurately reflected. While we believe that the final resolution of any known matters, individually and in the aggregate, will not have a material adverse effect upon our consolidated financial position, results of operations, or cash flows, it is possible that we could incur additional losses. We maintain insurance that may provide coverage for such matters. Future claims against us, whether meritorious or not, could have a material adverse effect upon our consolidated financial position, results of operations or cash flows, including losses due to costly litigation and losses due to matters that require significant amounts of management time that can result in the diversion of significant operational resources. See Note 14, Commitments and Contingencies. |
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Revenue Recognition | Revenue Recognition We recognize revenue in accordance with ASC Topic 606, “ Revenue from Contracts with Customers” Significant management judgments and estimates must be made in connection with determining the amount of revenue to be recognized in any accounting period. We must assess the promises within each sales contract to determine if they are distinct performance obligations. Once the performance obligation(s) are determined, the transaction price is allocated to the performance obligation(s) based on a relative standalone selling price basis. If a sales contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price. If the stand-alone selling price is not determinable, an estimate is used. We make significant estimates related to variable consideration at the point of sale, including estimates for refunds and product returns. |
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Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation under the provisions of FASB ASC Topic 718, “ Compensation—Stock Compensation .” We record equity awards with stock-based compensation measured at the fair value of the award as of the grant date. We determine the fair value of our options using the Black-Scholes option-pricing model that requires the input of highly subjective assumptions, including the expected stock price volatility and expected term of the options granted. The exercise price for options is equal to the closing market price of Salem Media Group common stock as of the date of grant. We use the straight-line attribution method to recognize share-based compensation costs over the expected service period of the award. Upon exercise, cancellation, forfeiture, or expiration of stock options, or upon vesting or forfeiture of restricted stock awards, deferred tax assets for options and restricted stock awards with multiple vesting dates are eliminated for each vesting period on a first-in, first-out basis as if each vesting period was a separate award. See Note 15, Stock Incentive Plan. |
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Advertising and Promotional Cost | Advertising and Promotional Cost Costs of media advertising and associated production costs are expensed as incurred and amounted to approximately $10.6 million and $7.9 million for each of the years ended December 31, 2021 , and 2020, respectively. |
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Leases | Leases We account for leases under the provisions of FASB ASC Topic 842, “ Leases Accounting Policy Elections under ASC 842 Lease Term The lease term can materially impact the value of the Right-of-Use Lease Payments Lease payments consist of the following payments (as applicable) related to the use of the underlying asset during the lease term:
Short-Term Lease Exemption We exclude short-term leases, or leases with a term of twelve months or less that do not contain a purchase option that we are reasonably certain to exercise, from our ROU asset and lease liability calculations. We consider the applicability of the short-term exception on month-to-month month-to-month one-month rent or a security deposit if the termination terms are not adhered to. We believe that these month-to-month month-to-month Service Agreements with an Embedded Lease Component We exclude certain service agreements that contain embedded leases for equipment based on the immaterial impact of these agreements. Our analysis includes cable and satellite television service agreements for which our monthly payment may include equipment rentals, coffee and water service at certain facilities that may include equipment rentals (we often meet minimum requirements and just pay for product used), security services that include a monthly fee for cameras or equipment, and other similar arrangements. Based on the insignificant amount of the monthly lease costs, we exclude these agreements from our ROU asset and liability calculations due to the immaterial impact to our financial statements. Incremental Borrowing Rate The ROU asset and related lease liabilities recorded under ASC 842 are calculated based on the present value of the lease payments using (1) the rate implicit in the lease or (2) the lessee’s IBR, defined as the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. As most leases do not provide an implicit rate, we estimate the IBR applicable to Salem using significant judgement and estimates, including the estimated value of the underlying leased asset, and the (a) credit history of Salem Media Group, (b) the credit worthiness of Salem Media Group, (c) the class of the underlying asset and the remaining term of the arrangement, and (d) the debt incurred under the lease liability as compared to amounts that would be borrowed. We developed a matrix to estimate the IBR for each lease class. We review the IBR estimates on a quarterly basis and update as necessary. Our analysis requires the use of significant judgement and estimates, including the estimated value of the underlying leased asset. We have not modified our estimate methodology and we have not recognized significant changes in our estimates. Portfolio Approach We apply a portfolio approach by applying a single IBR to leases with reasonably similar characteristics, including the remaining lease term, the underlying assets, and the economic environment. We believe that applying the portfolio approach is acceptable because the results do not materially differ from the application of the leases model to the individual leases in that portfolio. Sales Taxes and Other Similar Taxes We do not evaluate whether sales taxes or other similar taxes imposed by a governmental authority on a specific lease revenue-producing transaction that are collected by the lessor from the lessee are the primary obligation of the lessor as owner of the underlying leased asset. A lessor that makes this election will exclude these taxes from the measurement of lease revenue and the associated expense. Taxes assessed on a lessor’s total gross receipts or on the lessor as owner of the underlying asset (e.g., property taxes) are excluded from the scope of the policy election. A lessor must apply the election to all taxes in the scope of the policy election and would provide certain disclosures. Separating Consideration between Lease and Non-Lease Components We include the lease and non-lease components (or the fixed and variable consideration) as a single component accounted for as a lease. This practical expedient is elected by class of underlying assets as an accounting policy election and applies to all arrangements in that class of underlying assets that qualify for the expedient. ASC 842 provides this expedient to alleviate concerns that the costs and administrative burden of allocating consideration to the separate lease and non-lease components may not justify the benefit of more precisely reflecting the ROU asset and the lease liability. Contracts that include lease and non-lease components that are accounted for under the election not to separate require that all components that qualify for the practical expedient be combined. The components that do not qualify, such as those for which the timing and pattern of transfer of the lease and associated non-lease components are not the same, are accounted for separately. Accounting for a lease component of a contract and its associated non-lease components as a single lease component results in an allocation of the total contract consideration to the lease component. Therefore, the initial and subsequent measurement of the lease liability and ROU asset is greater than if the policy election was not applied. The greater ROU asset value is considered in our impairment analysis. |
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Leasehold Improvements | Leasehold Improvements We may construct or otherwise invest in leasehold improvements to properties. The costs of these leasehold improvements are capitalized and depreciated over the shorter of the estimated useful life of the improvement or the lease term including anticipated renewal periods. |
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(Gain) Loss on the Disposition of Assets | (Gain) Loss on the Disposition of Assets We record gains or losses on the disposition of assets equal to the proceeds, if any, as compared to the net book value. Exchange transactions are accounted for in accordance with FASB ASC Topic 845 “ Non-Monetary Transactions |
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Discontinued Operations | Discontinued Operations We regularly review underperforming assets to determine if a sale or disposal might be a better way to monetize the assets. When a station, group of stations, or other asset group is considered for sale or disposal, we review the transaction to determine if or when the entity qualifies as a discontinued operation in accordance with the criteria of FASB ASC Topic 205-20 “Discontinued Operations |
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Basic and Diluted Net Earnings Per Share | Basic and Diluted Net Earnings Per Share Basic net earnings per share have been computed using the weighted average number of Class A and Class B shares of common stock outstanding during the period. Diluted net earnings per share is computed using the weighted average number of shares of Class A and Class B common stock outstanding during the period plus the dilutive effects of stock options. Options to purchase 1,925,417 and 2,291,020 shares of Class A common stock were outstanding at December 31, 2021, and 2020. Diluted weighted average shares outstanding exclude outstanding stock options whose exercise price is in excess of the average price of the company’s stock price. These options are excluded from the respective computations of diluted net income or loss per share because their effect would be anti-dilutive. The following table sets forth the shares used to compute basic and diluted net earnings per share for the periods indicated:
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Segments | Segments We have three operating segments: (1) Broadcast, (2) Digital Media, and (3) Publishing, which also qualify as reportable segments. Our operating segments reflect how our chief operating decision makers, which we define as a collective group of senior executives, assesses the performance of each operating segment, and determines the appropriate allocations of resources to each segment. We continually review our operating segment classifications to align with operational changes in our business and may make changes as necessary. We measure and evaluate our operating segments based on operating income and operating expenses that do not include allocations of costs related to corporate functions, such as accounting and finance, human resources, legal, tax and treasury, which are reported as unallocated corporate expenses in our consolidated statements of operations included in this annual report. We also exclude costs such as amortization, depreciation, taxes, and interest expense. |
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Variable Interest Entities | Variable Interest Entities We may enter into agreements or investments with other entities that could qualify as variable interest entities (“VIEs”) in accordance with FASB ASC Topic 810 “ Consolidation” re-evaluate the VIE when or if events occur that could change the status of the VIE. We may enter into lease arrangements with entities controlled by our principal stockholders or other related parties. We believe that the requirements of FASB ASC 810 do not apply to these entities because the lease arrangements do not contain explicit guarantees of the residual value of the real estate, do not contain purchase options or similar provisions and the leases are at terms that do not vary materially from leases that would have been available with unaffiliated parties. Additionally, we do not have an equity interest in the entities controlled by our principal stockholders or other related parties, and we do not guarantee debt of the entities controlled by our principal stockholders or other related parties. We also enter into Local Marketing Agreements (“LMAs”) or Time Brokerage Agreements (“TBAs”) contemporaneously with entering into an Asset Purchase Agreement (“APA”) to acquire or sell a radio station. Typically, both LMAs and TBAs are contractual agreements under which the station owner/licensee makes airtime available to a programmer/licensee in exchange for a fee and reimbursement of certain expenses. LMAs and TBAs are subject to compliance with the antitrust laws and the communications laws, including the requirement that the licensee must maintain independent control over the station and, in particular, its personnel, programming, and finances. The FCC has held that such agreements do not violate the communications laws as long as the licensee of the station receiving programming from another station maintains ultimate responsibility for, and control over, station operations and otherwise ensures compliance with the communications laws. The requirements of FASB ASC 810 may apply to entities under LMAs or TBAs, depending on the facts and circumstances related to each transaction. As of December 31, 2021, we did not have implicit or explicit arrangements that required consolidation under the guidance in FASB ASC 810. |
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Concentrations of Business Risks | Concentrations of Business Risks We derive a substantial part of our total revenue from the sale of advertising. For the years ended December 31, 2021 , and 2020, 29.2% and 30.7%, respectively, of our total broadcast revenue was generated from the sale of broadcast advertising. We are particularly dependent on revenue from stations in the Los Angeles and Dallas markets, which generated 13.6% and 21.1% of the total broadcast advertising revenue for the year ended December 31, 2021, and 14.1% and 22.1% of the total broadcast advertising revenue for the year ended December 31, 2020. Because substantial portions of our revenue is derived from local advertisers in these key markets, our ability to generate revenue in those markets could be adversely affected by local or regional economic downturns. |
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Concentrations of Credit Risks | Concentrations of Credit Risks Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents; accounts receivable and derivative instruments. We place our cash and cash equivalents with high quality financial institutions. Such balances may be in excess of the Federal Deposit Insurance Corporation insured limits. To manage the related credit exposure, we continually monitor the credit worthiness of the financial institutions where we have deposits. Concentrations of credit risk with respect to accounts receivable are limited due to the wide variety of customers and markets in which we provide services, as well as the dispersion of our operations across many geographic areas. We perform ongoing credit evaluations of our customers, but generally do not require collateral to support customer receivables. We establish an allowance for doubtful accounts based on various factors including the credit risk of specific customers, age of receivables outstanding, historical trends, economic conditions, and other information. Historically, our bad debt expense has been within management’s expectations. 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. |
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Reclassifications | Reclassifications Certain reclassifications of amounts previously reported were made within footnote details to conform to the current period presentation. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements All new accounting pronouncements that are in effect that may impact our financial statements have been implemented. We do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position, results of operations or cash flows. |
Summary of Significant Accounting Policies (Tables) |
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Summary of Depreciation Using the Straight-line Method over Estimated Useful Lives |
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Summary of Intangibles are Amortized Using the Straight-line Method over Estimated Useful Lives | These intangibles are amortized using the straight-line method over the following estimated useful lives:
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Schedule of Partial Self Insurance Reserve | The following table presents the changes in our partial self-insurance reserves:
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Shares Used to Compute Basic and Diluted Net Earning Per Share | The following table sets forth the shares used to compute basic and diluted net earnings per share for the periods indicated:
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Recent Transactions (Tables) |
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Schedule of Business Acquisitions | A summary of our business acquisitions and asset purchases during the year ending December 31, 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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Summary of Total Acquisition Consideration | The total purchase price consideration for our business acquisitions and asset purchases during the year ending December 31, 2021, is as follows:
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Total Acquisition Consideration Allocated |
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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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 revenue and expenses were as follows:
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Property and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 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) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of 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 | Future minimum lease payments under leases that had initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2021, are as follows:
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Broadcast Licenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 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 as described in Note 3 — Recent Transactions.
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Schedule Of Carrying Value and Fair Value of Broadcast Licenses | The table below presents the percentage within a range by which our prior year start-up income estimated fair value exceeds the current year carrying value for the 24 broadcasting market licenses tested:
The table below shows the percentage within a range by which our prior year estimated fair value exceeded the carrying value of our broadcasting licenses for these six market clusters:
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Schedule of Estimates and Assumptions Used in the Start - Up Income Valuation for Broadcast Licenses | The assumptions used reflect those of a hypothetical market participant and not necessarily the actual or projected results of Salem. The key estimates and assumptions used in the start-up income valuation for the broadcast licenses tested in each period were as follows:
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Schedule of Interim Impairment Testing Under Start-Up Income Approach | The table below presents the results of our impairment testing under the start-up income approach:
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Goodwill (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Goodwill | The following table presents the changes in goodwill including business acquisitions as described in Note 3—Recent Transactions.
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Broadcast Markets Enterprise Valuations [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value and Fair Value of Financial Instrument Disclosure | The tables below present the percentage within a range by which the estimated fair value exceeded the carrying value of each of our market clusters, includin g goodwill:
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Schedule of Assumptions Used | The key estimates and assumptions used for our enterprise valuations were as follows:
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Digital Media [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value and Fair Value of Financial Instrument Disclosure | The table below presents the percentage within a range by which the estimated fair value exceeded the carrying value of the digital media entities, including goodwill.
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Schedule of Assumptions Used | The key estimates and assumptions used for our enterprise valuations were as follows:
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Publishing [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value and Fair Value of Financial Instrument Disclosure | The table below presents the percentage within a range by which the estimated fair value exceeded the carrying value of our remaining accounting units, including goodwill.
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Schedule of Assumptions Used | The key estimates and assumptions used for our enterprise valuations were as follows:
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Amortizable Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Classes of Amortizable Intangible Assets |
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Amortizable Intangible Assets, Estimate Amortization Expense |
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Long-Term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-term debt consists of the following:
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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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Fair Value Measurements and Disclosures (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 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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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Consolidated Provision for Income Taxes | The consolidated provision for income taxes is as follows:
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Schedule of Consolidated Deferred Tax Asset and Liability | Consolidated deferred tax assets and liabilities consist of the following:
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Schedule of Reconciliation of Net Deferred Tax Liabilities to Financial Instrument | The following table reconciles the above net deferred tax liabilities to the financial statements:
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Schedule of Reconciliation of Statutory Federal Income Tax Rate to Provision for Income Tax | A reconciliation of the statutory federal income tax rate to the provision for income tax is as follows:
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Stock Incentive Plan (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 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 Consolidated Statements of Operations for the years ended December 31, 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 years ended December 31, 2021, and 2020:
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Schedule of Stock Option Activity | Activity with respect to the company’s option awards during the two years ended December 31, 2021, is as follows (Dollars in thousands, except weighted average exercise price and weighted average grant date fair value):
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Schedule of Information Regarding Restricted Stock Activity | Activity with respect to the company’s restricted stock awards during the year ended December 31, 2021, is as follows:
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Stock Options Outstanding Additional Information | Additional information regarding options outstanding as of December 31, 2021, is as follows:
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Segment Data (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Data | The table below presents financial information for each operating segment as of December 31, 2021, and 2020 based on the composition of our operating segments:
|
Basis of Presentation - Additional Information (Detail) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021
USD ($)
Segments
|
Jul. 31, 2021
USD ($)
|
Mar. 31, 2021
USD ($)
|
|
Number of operating segments | Segments | 3 | ||
Payroll taxes, specifically employer | $ 3,300 | ||
Payroll Protection Plans [Member] | |||
Long-term Debt, Gross | $ 11,200 | ||
Unforgiven loans payable | $ 20,000 |
Summary of Significant Accounting Policies - Schedule of Partial Self Insurance Reserve (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Self Insurance [Abstract] | ||
Balance, beginning of period | $ 543 | $ 640 |
Self-funded costs | 7,783 | 7,477 |
Claims paid | (7,809) | (7,574) |
Ending period balance | $ 517 | $ 543 |
Summary of Significant Accounting Policies - Schedule of Shares Used to Compute Basic and Diluted Net Earning Per Share (Detail) - shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Earnings Per Share [Abstract] | ||
Weighted average shares | 26,892,540 | 26,683,363 |
Effect of dilutive securities — stock options | 404,078 | |
Weighted average shares adjusted for dilutive securities | 27,296,618 | 26,683,363 |
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 ($) $ in Thousands |
Jul. 02, 2021 |
Jul. 01, 2021 |
Jun. 01, 2021 |
Apr. 28, 2021 |
Dec. 31, 2021 |
Mar. 08, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|---|---|---|---|
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 200 | $ 23,986 | $ 23,757 | $ 23,998 | ||||
Asset Acquisition, contingent earnout consideration | $ 11,000 | |||||||
Business combination, recognized identifiable assets acquired and liabilities assumed, contingent liability | $ 100 | |||||||
Senior Resource.com [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to Acquire Productive Assets | $ 100 | |||||||
Centerline New Media Domain And Digital Assets [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to Acquire Businesses | $ 1,300 | |||||||
Goodwill | $ 24,000 | |||||||
SALMKdia Am And Kdya Am Sanfrancisco California [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to Acquire Businesses | $ 600 | |||||||
Goodwill | $ 4,000 | |||||||
Shift Worship.com [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 2,600 |
Recent Transactions - Summary of Fair Value of the Net Assets Acquired (Detail) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Assets | |
Property and equipment | $ 3,582 |
Broadcast licenses | 235 |
Goodwill | 229 |
Customer lists and contracts | 789 |
Domain and brand names | 66 |
Net assets acquired | 4,901 |
Liabilities | |
Contract liabilities | (194) |
Total purchase price consideration | 4,707 |
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 | 3,221 |
Broadcast licenses | 0 |
Goodwill | 225 |
Customer lists and contracts | 789 |
Domain and brand names | 66 |
Net assets acquired | 4,301 |
Liabilities | |
Contract liabilities | (194) |
Total purchase price consideration | $ 4,107 |
Recent Transactions - Summary of Purchase Consideration Business Combination (Detail) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Business Acquisition [Line Items] | |
Total purchase price consideration | $ 4,707 |
Two Thousand And Twenty One Acquistions [Member] | |
Business Acquisition [Line Items] | |
Cash payments made upon closing | 4,580 |
Deferred payments | 116 |
Present value of estimated fair value of contingent earn-out consideration | 11 |
Total purchase price consideration | $ 4,707 |
Revenue Recognition - Additional Information (Detail) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 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 |
12 Months Ended |
---|---|
Dec. 31, 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 | (8,587) |
Short Term, Additional amounts recognized during the period | 27,011 |
Short Term, Revenue recognized during the period that was recorded during the period | (18,472) |
Short Term, Transfers | 690 |
Short Term, Balance, end of period | 12,294 |
Short Term, Amount refundable at beginning of period | 11,607 |
Short Term, Amount refundable at end of period | 12,282 |
Long-Term, Balance, beginning of period | 1,869 |
Long-Term, Additional amounts recognized during the period | 1,043 |
Long-Term, Transfers | (690) |
Long-Term, Balance, end of period | 2,222 |
Long-Term, Amount refundable at beginning of period | 1,869 |
Long-Term, Amount refundable at end of period | $ 2,222 |
Revenue Recognition - Trade and Barter Transactions Expenses (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Revenue Recognition [Line Items] | ||
Total net revenue | $ 258,247 | $ 236,239 |
Broadcast [Member] | Advertising Barter Transactions [Member] | ||
Revenue Recognition [Line Items] | ||
Total net revenue | 2,567 | 2,810 |
Cost | 2,638 | 2,952 |
Digital Media [Member] | ||
Revenue Recognition [Line Items] | ||
Total net revenue | 42,164 | 39,593 |
Digital Media [Member] | Advertising Barter Transactions [Member] | ||
Revenue Recognition [Line Items] | ||
Total net revenue | 0 | 0 |
Cost | ||
Publishing [Member] | ||
Revenue Recognition [Line Items] | ||
Total net revenue | 24,640 | 18,519 |
Publishing [Member] | Advertising Barter Transactions [Member] | ||
Revenue Recognition [Line Items] | ||
Total net revenue | 0 | 38 |
Cost | $ (5) | $ 1 |
Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 10.9 | $ 10.8 |
Operating and Finance Lease Right-of-Use Assets - Components of Lease Expense (Detail) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Leases [Abstract] | |
Amortization of finance lease ROU Assets | $ 64 |
Interest on finance lease liabilities | 8 |
Finance lease expense | 72 |
Operating lease expense | 12,874 |
Variable lease expense | 699 |
Short-term lease expense | 590 |
Total lease expense | $ 14,235 |
Operating and Finance Lease Right-of-Use Assets - Schedule of Impact to Financial Statements of the Adoption of ASU 842 (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 13,953 | |
Operating cash flows from finance leases | 5 | |
Financing cash flows from finance leases | 63 | |
Leased assets obtained in exchange for new operating lease liabilities | 6,507 | |
Leased assets obtained in exchange for new finance lease liabilities | $ 17 | $ 45 |
Broadcast Licenses - Additional Information (Detail) |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Broadcast Licenses [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
License renewable term | 8 years |
Percentage of fair value over carrying value benchmark for qualitative impairment analysis | 25.00% |
Licensing Agreements [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Weighted Average Period before Next Renewal or Extension | 7 years 3 months 18 days |
Broadcast Licenses - Schedule of Changes in Broadcasting Licenses (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 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 |
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 FM translators and construction permits | $ 235 | |
Disposition of radio stations and FM translators | $ (1,091) |
Goodwill - Schedule of Changes in Goodwill (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Goodwill [Line Items] | ||
Balance, beginning of period before cumulative loss on impairment | $ 28,520 | $ 28,454 |
Accumulated loss on impairment | (4,763) | (4,456) |
Balance, beginning of period after cumulative loss on impairment | 23,757 | 23,998 |
Impairments based on the estimated fair value goodwill | 0 | (307) |
Balance, end of period before cumulative loss on impairment | 28,749 | 28,520 |
Accumulated loss on impairment | (4,763) | (4,763) |
Ending period balance | 23,986 | 23,757 |
Radio Stations [Member] | ||
Goodwill [Line Items] | ||
Acquisitions | 4 | $ 66 |
Digital Media [Member] | ||
Goodwill [Line Items] | ||
Acquisitions | $ 225 |
Goodwill - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Impairment of goodwill | $ 0 | $ 307 |
Digital Media [Member] | ||
Impairment of goodwill | $ 0 | |
Goodwill [Member] | ||
Percentage Increase Decrease In Fair Value Of Goodwill | 113.20% | |
Goodwill [Member] | Publishing [Member] | ||
Percentage Increase Decrease In Fair Value Of Goodwill | 122.50% |
Goodwill - Carrying Value and Fair Value of Goodwill (Detail) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
Accounting
| |
Greater Than11% to 20% [Member] | Radio Clusters [Member] | |
Carrying Amounts And Fair Values Of Financial Instruments [Line Items] | |
Number of accounting units | Accounting | 1 |
Carrying value including goodwill | $ | $ 8,539 |
Greater Than 51% [Member] | Digital Media [Member] | |
Carrying Amounts And Fair Values Of Financial Instruments [Line Items] | |
Number of accounting units | Accounting | 1 |
Carrying value including goodwill | $ | $ 26,671 |
Greater Than 51% [Member] | Publishing [Member] | |
Carrying Amounts And Fair Values Of Financial Instruments [Line Items] | |
Number of accounting units | Accounting | 1 |
Carrying value including goodwill | $ | $ 1,854 |
Amortizable Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Line Items] | ||
Amortization of intangible assets | $ 1.9 | $ 3.3 |
Amortizable Intangible Assets - Amortizable Intangible Assets, Estimate Amortization Expense (Detail) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 1,219 | |
2023 | 796 | |
2024 | 206 | |
2025 | 21 | |
2026 | 11 | |
Thereafter | 191 | |
Net | $ 2,444 | $ 4,017 |
Long-Term Debt - 6.75% Senior Secured Notes - Additional Information (Detail) - USD ($) |
6 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 24, 2021 |
Sep. 10, 2021 |
Jul. 31, 2021 |
Jul. 01, 2021 |
Dec. 31, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Mar. 31, 2021 |
May 19, 2017 |
|
Debt Instrument [Line Items] | |||||||||
Interest payable, current | $ 1,030,000 | $ 1,030,000 | $ 1,225,000 | ||||||
Debt related commitment fees and debt issuance costs | 6,300,000 | ||||||||
Principal Repurchased | $ 43,300,000 | ||||||||
Repayments of Secured Debt | 44,000,000.0 | ||||||||
Net gain | 1,000,000.0 | ||||||||
Gain (Loss) on Extinguishment of Debt | $ 11,200,000 | $ 11,200,000 | (1,026,000) | 49,000 | |||||
Debt Instrument, Face Amount | 174,900,000 | 174,900,000 | |||||||
Ppp Loan [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument Repayment date description | July 2021 | ||||||||
Small Business Association [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term Debt, Gross | $ 11,200,000 | $ 11,200,000 | $ 11,200,000 | $ 11,200,000 | |||||
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 relating to the 2024 Notes 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. | ||||||||
Debt related commitment fees and debt issuance costs | $ 600,000 | $ 700,000 | |||||||
Debt Instrument, Face Amount | $ 60,200,000 | 60,200,000 | |||||||
Payroll Protection Plans [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term Debt, Gross | $ 11,200,000 | ||||||||
Unforgiven loans payable | $ 20,000,000 | ||||||||
2024 Notes [member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest expense, debt | 4,100,000 | ||||||||
Interest payable, current | 300,000 | 300,000 | |||||||
Debt Conversion, Converted Instrument, Amount | 112,800,000 | ||||||||
Long-term Debt, Gross | 60,200,000 | 60,200,000 | |||||||
Principal Repurchased | 43,300,000 | ||||||||
Repayments of Secured Debt | $ 44,000,000.0 | ||||||||
Net gain | $ 1,000.0 | ||||||||
Bond Issuance Cost | 1,100,000 | ||||||||
Debt Instrument, Face Amount | 112,800,000 | ||||||||
2028 Notes [member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest expense, debt | 8,200,000 | ||||||||
Interest payable, current | $ 700,000 | $ 700,000 | |||||||
Debt Conversion, Converted Instrument, Amount | $ 114,700,000 | ||||||||
Percentage of call premium | 1.688% |
Long-Term Debt - Long-Term Debt (Detail) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt less unamortized debt issuance costs | $ 170,581 | $ 218,764 |
Less current portion | 0 | (5,000) |
Long-term Debt | 170,581 | 213,764 |
Asset-Based Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 0 | 5,000 |
7.125% Senior Secured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt and capital lease obligations current and noncurrent | 114,731 | |
Less unamortized debt issuance costs based on imputed interest rate of 7.08% | (3,844) | |
Long-term Debt | 110,887 | |
6.75% Senior Secured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt and capital lease obligations current and noncurrent | 60,174 | 216,341 |
Less unamortized debt issuance costs based on imputed interest rate of 7.08% | (480) | (2,577) |
Long-term Debt | $ 59,694 | $ 213,764 |
Long-Term Debt - Principle Repayment Requirements Under Long Term Agreements Outstanding (Detail) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Maturities of Long-term Debt [Abstract] | |
2022 | $ 0 |
2023 | 0 |
2024 | 60,174 |
2025 | 0 |
2026 | 0 |
Thereafter | 114,731 |
Total | $ 174,905 |
Fair Value Measurements and Disclosures - Additional Information (Detail) - USD ($) $ in Millions |
Dec. 06, 2021 |
Dec. 31, 2020 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Carrying value of notes | $ 174.9 | |
Debt instrument, estimated fair value | $ 176.2 | $ 176.2 |
Income Tax - Schedule of Consolidated Provision for Income Taxes (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Current: | ||
Federal | ||
State | 1,112 | $ 169 |
Current Income Tax Expense (Benefit), Total | 1,112 | 169 |
Deferred: | ||
Federal | (1,277) | 17,283 |
State | (594) | 12,822 |
Deferred Income Taxes and Tax Credits, Total | (1,871) | 30,105 |
Provision for income taxes | $ (759) | $ 30,274 |
Income Tax - Schedule of Consolidated Deferred Tax Asset and Liabilities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Deferred tax assets: | ||
Financial statement accruals not currently deductible | $ 2,738 | $ 2,908 |
Allowance for bad debt reserve | 3,399 | 3,672 |
Net operating loss, AMT credit and other carryforwards | 35,290 | 44,154 |
State taxes | 216 | 35 |
Operating lease liabilities under ASC 842 | 13,596 | 14,909 |
Other | 3,965 | 2,440 |
Total deferred tax assets | 59,204 | 68,118 |
Valuation allowance for deferred tax assets | (39,135) | (48,073) |
Net deferred tax assets | 20,069 | 20,045 |
Deferred tax liabilities: | ||
Excess of net book value of property and equipment and software for financial reporting purposes over tax basis | 145 | 1,066 |
Excess of net book value of intangible assets for financial reporting purposes over tax basis | 75,747 | 75,380 |
Operating lease right-of-use assets under ASC 842 | 11,189 | 12,482 |
Total deferred tax liabilities | 87,081 | 88,928 |
Net deferred tax liabilities | $ (67,012) | $ (68,883) |
Income Tax - Schedule of Reconciliation of Net Deferred Tax Liabilities to Financial Instrument (Detail) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Components of Deferred Tax Assets and Liabilities [Abstract] | ||
Deferred income tax liability per balance sheet | $ (67,012) | $ (68,883) |
Net deferred tax liabilities | $ (67,012) | $ (68,883) |
Income Tax - Reconciliation of Statutory Federal Income Tax Rate to Provision for Income Tax (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Statutory federal income tax rate (statutory tax rate) | $ 8,559 | $ (4,995) |
Effect of state taxes, net of federal | 643 | 10,468 |
Permanent items | 172 | 379 |
PPP loan forgiveness | (2,351) | |
State rate change | 531 | 63 |
Valuation allowance | (8,903) | 24,302 |
Stock based compensation cancellation | 181 | 196 |
Other, net | 409 | (139) |
Provision for income taxes | $ (759) | $ 30,274 |
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) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected volatility | 75.98% | 53.96% |
Expected dividends | 7.30% | |
Expected term (in years) | 7 years 9 months 18 days | 7 years 7 months 6 days |
Risk-free interest rate | 1.03% | 1.14% |
Stock Incentive Plan - Schedule of Information Regarding Restricted Stock Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Outstanding Shares, Beginning Balance | 107,990 | 107,990 | |
Outstanding Shares, Lapse of restrictions | (107,990) | ||
Outstanding Shares, Ending Balance | 107,990 | 107,990 | |
Weighted Average Grant Date Fair Value, Beginning Balance | $ 1.85 | $ 1.85 | |
Weighted Average Grant Date Fair Value, Lapse of restrictions | $ 1.85 | ||
Weighted Average Grant Date Fair Value, Ending Balance | $ 1.85 | $ 1.85 | |
Weighted Average Contractual Life Remaining | 8 months 12 days | 8 months 12 days | 1 year 8 months 1 day |
Aggregate Intrinsic Value, Beginning Balance | $ 112 | $ 156 | |
Aggregate Intrinsic Value, Lapse of restrictions | 200 | ||
Aggregate Intrinsic Value, Ending Balance | $ 112 | $ 112 | $ 156 |
Related Party Transactions - Additional Information (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Description of related party transaction | The policy applies to any transaction or series of transactions in which Salem is a participant, the amount involved exceeds $120,000 and a Related Party (as defined in Item 404(a) of SEC Regulation S-K) has a direct or indirect material interest, excluding, among other things, compensation arrangements with respect to employment and Board membership. Related Parties includes our directors, executive officers, nominees to become a director, any person beneficially owning more than 5% of any class of our stock, immediate family members of any of the foregoing, and any entity in which any of the foregoing persons is employed or is a general partner or principal or in which the person has a 10% or greater beneficial ownership interest. | |
Net proceeds from life insurance policies to Salem | $ 0 | $ 2,363,000 |
Related party annual payments for insurance premiums | 200,000 | |
Edward G Atsinger III Chief Executive Officer And Director [Member] | ||
Rental payments for aircraft | 26,000 | 298,000 |
Related party transaction, amounts of transaction | 26,000 | |
Related party prepaid deposit | 100,000 | |
Chairman And Chief Executive Officer [Member] | Land and Building [Member] | ||
Operating leases, rent expense | 1,600,000 | 1,500,000 |
Know the Truth [Member] | ||
Related party transaction, other revenues from transactions with related party | 400,000 | 600,000 |
Accounts receivable, related parties | $ 800,000 | 1,000,000.0 |
Other Than Compensation Arrangements [Member] | ||
Description of related party transaction | we have been a party in which the amount involved exceeds $120,000 annually and in which any of our then directors, executive officers or holders of more than 5% of any class of our stock at the time of such transaction, or any members of their immediate family, or is a general partner or principal or in which the person has a 10% or greater beneficial ownership interest, had or will have a direct or indirect material interest. | |
Chairman Emeritus [Member] | Trust [Member] | ||
Operating leases, rent expense | $ 200,000 | 200,000 |
Split Dollar Life Insurance [Member] | ||
Net proceeds from life insurance policies to Salem | 2,400,000 | |
Split Dollar Life Insurance [Member] | Executive Chairman [Member] | ||
Related party transaction, amounts of transaction | 300,000 | |
Split Dollar Life Insurance [Member] | Chairman Emeritus [Member] | ||
Related party transaction, amounts of transaction | $ 300,000 |
Defined Contribution Plan - Additional Information (Detail) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
| |
Defined Contribution Benefit Plans [Line Items] | |
Defined contribution plan maximum employee contribution as percentage of base salary | 60.00% |
Defined benefit plan, contributions by employer | $ 0.8 |
First Five Percent Of Each Participants Contributions [Member] | |
Defined Contribution Benefit Plans [Line Items] | |
Defined contribution plan employer matching contribution to employee contribution | 50.00% |
Defined contribution plan employee contributions percentage of eligible compensation | 5.00% |
Equity Transactions - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Apr. 30, 2021 |
|
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 | $ 319 | $ 345 | |
Common Class A [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Shares authorized for sales and issuance | $ 15,000 |
Segment Data - Additional Information (Detail) |
12 Months Ended |
---|---|
Dec. 31, 2021
Segments
| |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
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