It’s been a roller-coaster month for Salem Media Group and its shareholders.
On March 12, shares rose to $3.13, capping off a slow but steady climb from a New Year’s Eve low of $2.09 after a dismal Q4 sent Salem shares to their lowest closing prices since July 2009.
The growth stopped. Now, Salem is again dealing with values that take the company back in time by a decade.
With light trading of 29,053 shares as of 12:28pm Eastern, Salem shares were off 5%, to $2.46.
Average volume for SALM is just 40,381 shares, as the company’s stock has a 1-year target price of $4.75.
Salem hasn’t achieved that price since early August 2018.
Much of the decline is likely due to Q1 2019 forecasts projecting total revenue to decline between 3% and 5% from Q1 2018 total revenue of $63.8 million.
Wells Fargo Securities analyst Davis Hebert didn’t like the revenue projections, noting in the company’s Q4 conference call that it was “a little bit below our expectations.”
Despite the poor outlook and lackluster Q4, investors could find solace in a rise in Q4 net broadcast revenue to $51.08 million from $50.7 million. The ugly duckling of Salem’s business units is the Publishing arm. Here, an operating loss of $510,000 was seen, rising from $375,000.
And, with Salem stock sliding in Q4, the company took the same approach as Entercom and Townsquare Media did by taking a $2.87 million impairment charge.
What about Salem’s debt? Some $238.57 million in Senior Secured Notes due 2024 at a 6.75% interest rate is outstanding, as is $19.66 million in asset-based revolving credit facility with a 4.45% interest rate.
Paring down debt was on the mind of Noble Capital Markets Director of Research Michael Kupinski. “Have you identified additional assets that you plan to sell in 2019,” he asked during the Q4 call, “and the amount of proceeds that you’re kind of hoping to receive from those perspective asset sales?”
On Monday (3/25), one asset sale was brought forth, with Salem pocketing $750,000 from the sale of WSPZ-AM 1260 in Washington, D.C.
The stock decline comes as Salem on Friday revealed that Heather Grizzle has been named to its Board of Directors, as of March 19. Grizzle is a founding partner of Causeway Strategies, “a boutique consulting firm that helps individuals, organizations and corporations to communicate, connect and advance their objectives more effectively.” Her background includes work in the White House and the U.S. House of Representatives, as well as corporate communications in New York and charity sector communications in London.
Grizzle succeeds Roland Hinz, who retired from his position as a board member on December 12, 2018.
