Broadcasting, digital media and publishing revenue was up. And, total operating expenses were down. The result?
Salem Media Group’s Q4 net income roared ahead, year-over-year.
Total revenue increased 7.2% to $69.1 million from $64.5 million. Total operating expenses decreased 16.2% to $48.7 million from $58.1 million.
As such, Salem’s net income increased to $16.8 million ($0.61 per diluted share) from $3.3 million ($0.12) in Q4 2020.
Adjusted EBITDA increased 9.3% to $10.8 million.
Speaking on his company’s earnings call held late Thursday for analysts and investors, CEO Dave Santrella pointed to the strong digital growth in Q4 as a particular highlight.
Still, traditional radio revenue is just over 60% of Salem’s total revenue, and 40% is from digital and publishing.
Also of significance in Q4 2021 is the closing of two real estate sales. On November 30, 2021, Salem sold 77 acres of land in Tampa for $13.5 million. This was followed by the January 10, 2022, sale of 4.5 acres of land in Phoenix. “In both cases, we’re moving our Transmar locations to on other Salem radio stations in the market,” Santrella said.
There’s one more land deal in the works: Nine acres in the Denver area are being sold for $8.2 million. “We expect to close on this in the second quarter of 2022,” Santrella said. “We’ll continue broadcasting both KRKS-AM and KBJD-AM from this transmitter site after closing.”
The last of three “significant developments” for Salem in Q4 2021 is its debt and leverage. “During the fourth quarter, we repurchased $38.6 million of our 2024 bonds using cash from our balance sheet,” Santrella said. “On December 31, 2021, we had $60.2 million of 2024 notes remaining and a total debt of $174.9 million. This reduced debt burden, coupled with the growth in adjusted EBITDA, resulted in a leverage ratio of 4.46x. This is the lowest our debt and leverage have been since 2000.”
How strong is the Radio division? When comparing to 2019, Broadcast digital revenue improved 85.8%. “This growth is being driven by some of our more recent digital initiatives, including Salem Surround and the Salem Podcast Network, which was launched on January 1, 2021,” Santrella said. “In Q4 alone, the Salem Podcast Network generated revenue of $1.6 million and in its first year of operation, we had revenue of $6.4 million.”
Local spot advertising revenue increased 7.2%, while national spot decreased 27% compared to Q4 2020.
Advertising, however, is still not back to its pre-pandemic levels due to the economy. Compared to Q4 2019, total spot advertising decreased 13.9% in the quarter.
