Salem Media Group (SALM) Tops Q2 EPS by 3c, Beats on Revenues; Offers Soft 3Q Revenue Outlook

Salem Media Group (NASDAQ: SALM) reported Q2 EPS of $0.11, $0.03 better than the analyst estimate of $0.08. Revenue for the quarter came in at $67.78 million versus the consensus estimate of $67.14 million.

Third Quarter 2017 Outlook

For the third quarter of 2017, the company is projecting total revenue to decline 6% to 8% from third quarter 2016 total revenue of $71.3 million. 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 the third quarter of 2017. 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 the third quarter of 2016 non-GAAP operating expenses of $58.6 million.

GUIDANCE:

Salem Media Group sees Q3 2017 revenue of $71.3 million, versus the consensus of $72.56 million.

Consolidated Highlights:

• Total revenue decreased 2.5% to $66.1 million from $67.8 million;
• Total operating expenses decreased 1.0% to $57.5 million from $58.1 million;
• Operating expenses, excluding 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, impairment losses, depreciation expense and amortization expense (1) decreased 2.1% to $53.8 million from $54.9 million;
• Operating income decreased 11.2% to $8.6 million from $9.7 million;
• Net income decreased to $1.3 million, or $0.05 net income per diluted share from $3.4 million, or $0.13 net income per diluted share;
• EBITDA (1) decreased 24.6% to $10.1 million from $13.4 million;
• Adjusted EBITDA (1) decreased 3.9% to $12.4 million from $12.9 million; and
• Net cash provided by operating activities decreased to $7.5 million from $8.6 million.

For earnings history and earnings-related data on Salem Media Group (SALM) click here.

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