Salem Seeks More Cash As Q1 Revs Come In Flat


Salem Media Group intends to offer some $255 million aggregate principal amount of senior secured notes due 2024 in a private offering that’s exempt from the registration requirements of the Securities Act of 1933.

The news comes as the conservative and Christian-themed media company saw its Q1 net income soar on flat revenue.

Total revenue came in at $65 million, up from $64.6 million.

Net income jumped to $1.1 million (4 cents per diluted share), $353,000 (1 cent).

However, Salem net revenue is driven by its broadcast division, and in Q1 this totaled $47.8 million, down from $48.7 million in Q1 2016.

How does Q2 look for Salem?

Not great. The company is projecting total revenue to decline 1% to 3% from Q2 2016, to $67.8 million. The decline is due to the lack of political revenue, the elimination of four loss-making magazines during the quarter … and the fact that the company released Hillary’s America by Dinesh D’Souza late in Q2 2016. The company does not have a comparable book release scheduled for Q2 2017.

Yet, excluding the impact of these items, Salem would be projecting revenue growth of 0.5% to 2.5%.

The company is also projecting operating expenses before gains or losses on the disposal of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense to be between a decrease of 1% and an increase of 2% compared to the second quarter of 2016 non-GAAP operating expenses of $54.9 million.