Holy Moly: Upon first glance of Salem Media Group‘s second quarter earnings release, distributed just past 1pm Pacific by the Southern California-based faith-focused and conservative talk broadcast company, one word glaringly sticks out among all others: Decreased.
It set the tone for a quarter in which net income plummeted on slightly less revenue.
For the three months ended June 30, Salem saw its total revenue slip to $66.1 million, from $67.8 million.
Once again, net broadcast revenue is the dollar driver for Salem, and this came in statistically flat for Q2, moving to $49.3 million from $50 million.
With operating expenses climbing to $35.93 million, from $35.87 million, Salem saw its net income decline to $1.27 million (5 cents per basic and diluted share), from $3.36 million (13 cents).
Among the other key results from Q2:
- Operating income decreased 11.2% to $8.6 million, from $9.7 million
- Adjusted EBITDA decreased 3.9% to $12.4 million, from $12.9 million
- Same Station Station Operating Income (SOI) decreased 5.3% to $13.4 million, from $14.1 million
Company executives did not comment on the results ahead of a conference call set for later Monday.
However, it did offer Q3 guidance. Salem is projecting total revenue to decline 6% to 8% from Q3 2016, when it saw total revenue of $71.3 million.
Why? Much of this revenue decline is due to the lack of political revenue and the elimination of four loss-making magazines, continued softness in Dallas and a reduced book release schedule in Q3 ’17, the company says.
Still, excluding the impact of these items, the company would be projecting revenue declines of 1% to 3%.
The company is also projecting operating expenses before gains or losses on the sale or 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 decline 2% to 5% compared to Q3 2016 non-GAAP operating expenses of $58.6 million.
