Financial Data and Key Metrics Changes - Total revenue for the second quarter decreased by 4.2% to $65.8 million, while operating expenses increased by 5.2% to $63.1 million, resulting in a 77.2% decline in adjusted EBITDA [53][58] - Net broadcast revenue decreased by 5.3% to $49.7 million, and broadcast operating expenses increased by 4.8% to $43.5 million, leading to a station operating income decrease of 43.5% [58][44] - Total debt as of June 30 was $182.0 million, composed of $159.4 million of 7.125% 2028 Notes and $22.6 million outstanding on the Asset Based Loan Facility [59] Business Line Data and Key Metrics Changes - Broadcast division revenue declined by 5.3%, with national spot revenue down 29.5% and local spot down 10.1%, largely due to a decrease in political revenue from $1.5 million to $0.3 million year-over-year [41][58] - Book Publishing revenue decreased by 3.5%, with book sales net of returns remaining flat compared to the previous year [42] - Digital revenue in the Broadcast division was $20.8 million, representing 31.6% of total revenue, with growth slowing to 0.5% [54] Market Data and Key Metrics Changes - The advertising market remains sluggish, with national advertising spending impacting local markets, leading to expectations of a challenging third quarter [26] - Political revenue is anticipated to increase in the second half of the year, with early spending observed in primary states, although the company has not yet seen significant revenue from political advertising [35][70] Company Strategy and Development Direction - The company is implementing cost-cutting measures, including eliminating the 401(k) match and restructuring management positions, aiming for approximately $10 million in annual savings [53] - The focus remains on digital growth, with investments in in-house digital expertise to reduce third-party marketing costs [48][54] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the tough economic environment and high interest rates affecting revenue and expenses, projecting total revenue to decline between 3% and 5% in the third quarter [60][53] - There is optimism regarding political revenue growth in 2024, with expectations of a significant increase compared to 2022 [31][70] Other Important Information - The company is working on several asset sales, including the sale of radio stations, to help de-leverage the balance sheet [43][28] - The company has signed a forbearance agreement with Wells Fargo Bank due to non-compliance with a covenant related to declining adjusted EBITDA and free cash flow [45] Q&A Session Summary Question: What is the outlook for political revenue? - Management indicated that political revenue was minimal at $0.3 million so far but anticipates an increase in late Q3 and Q4, with next year expected to be a significant political year [70] Question: Can you provide insights on expense growth and initiatives? - The company is investing in digital personnel to improve margins and reduce third-party costs, which is expected to lead to better profitability in the long run [63] Question: What is the current state of the advertising market? - Management described the advertising market as sluggish, with national spending impacting local markets, leading to expectations of a challenging third quarter [26][67]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 000-26497 SALEM MEDIA GROUP, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 77-0121400 (STATE OR OTHER J ...

Company Participants Michael Kupinski - NOBLE Capital Markets Edward Reily - EF Hutton David Marsh - Singular Research Please be advised that statements made on this call that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on currently available information. Actual results may differ materially from those anticipated, and reported resul ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________________ TO __________________ COMMISSION FILE NUMBER 000-26497 SALEM MEDIA GROUP, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER ...

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 000-26497 SALEM MEDIA GROUP, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022 OR If securities are registered p ...

Evan Masyr - EVP & CFO David Santrella - CEO David Evans - COO Good afternoon, ladies and gentlemen. Welcome to the Salem Media Group Q4 2022 Earnings Conference Call. [Operator Instructions]. In the room with me today are David Santrella, Chief Executive Officer; and David Evans, Chief Operating Officer. We will begin in just a moment with our prepared remarks. Once we are done, the conference call operator will come back on the line to instruct you on how to submit questions. One thing that you'll hear th ...

Salem Media Group, Inc. (OTCQX:SALM) Q3 2022 Earnings Conference Call November 3, 2022 5:00 PM ET Company Participants Evan Masyr - CFO David Santrella - CEO David Evans - COO Conference Call Participants Michael Kupinski - NOBLE Capital Markets Derrick Wenger - Concise Capital Edward Reilly - EF Hutton Operator Ladies and gentlemen, good afternoon. My name is Abby, and I will be your conference operator today. I would like to welcome everyone to the Salem Media Group, Inc. Third Quarter 202 Earnings Call. ...

GROUP INVESTOR INVESTOR PRESENTATION PRESENTATION NASDAQ: SALM | October 2022 Safe Harbor Certain statements in this presentation constitute "forward-looking statements" within the meaning of the private securities litigation reform act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2022 increased by 7.7% to $68.7 million compared to Q2 2021 [27] - Operating expenses increased by 10.7% to $60.9 million, while adjusted EBITDA rose by 33.6% to $11.7 million, including $3.9 million from the film "2000 Mules" [27][7] - Compared to Q2 2019, total revenue increased by 6.2% and adjusted EBITDA increased by 15.1% [28] Business Line Data and Key Metrics Changes - Broadcast division revenue increased by 12.1% to $52.5 million, with digital revenue within this division growing by 27.9% to $9.9 million [28][11] - National Digital Media division revenue increased by 4.5% to $10.8 million, while publishing revenue decreased by 18.5% to $5.4 million [32][15] - Political revenue for the quarter was $1.5 million, significantly up from $400,000 in Q2 2021 [13][54] Market Data and Key Metrics Changes - Local advertising revenue increased by 6.9%, while national advertising revenue rose by 17.4% [12] - The church products business saw an 18.2% growth due to acquisitions made last year [14] Company Strategy and Development Direction - The company is focusing on digital revenue growth, which now represents over 30% of total revenue, and expects it to be the fastest-growing segment [10] - Salem Media Group is exploring further investment opportunities in films that align with its audience, following the success of "2000 Mules" [20] Management's Comments on Operating Environment and Future Outlook - Management noted that the political environment is particularly intense, which is expected to drive revenue growth in Q3 [40] - The company anticipates total revenue growth of 6% to 8% for Q3 2022 compared to Q3 2021 [33] Other Important Information - The leverage ratio improved to 3.97%, the lowest in over 20 years, allowing the board to consider resuming dividend payments [22][24] - The company repurchased $13 million of bonds during the quarter, contributing to a stronger balance sheet [22] Q&A Session Summary Question: Can you provide insights on the components of expected Q3 revenue growth? - Management highlighted political advertising, strong book releases, and digital revenue as key drivers for Q3 growth [37][39] Question: What is the performance of the network business and national advertising? - The network business is performing well, driven by integrated media deals, and political content is a significant contributor to national advertising growth [39][54] Question: What are the factors behind the expense growth for Q3? - Increased expenses are attributed to the reinstatement of the 401(k) match, investments in the Salem News Channel, and higher travel and marketing costs [41][43] Question: What is the total benefit received from "2000 Mules"? - The total benefit from "2000 Mules" is approximately $4.8 million, in addition to the return of the initial investment of $4.5 million [58]

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The unaudited condensed consolidated financial statements for H1 2022 show net income surged to **$10.9 million**, driven by revenue growth, asset sales, and equity investment earnings, with stable assets and reduced liabilities [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$515.3 million** as of June 30, 2022, while total liabilities reduced to **$325.9 million**, increasing stockholders' equity to **$189.3 million** Balance Sheet Highlights (in thousands) | Balance Sheet Highlights (in thousands) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $47,667 | $41,514 | | **Broadcast Licenses** | $313,500 | $320,008 | | **Total Assets** | **$515,269** | **$516,112** | | **Total Current Liabilities** | $56,161 | $51,455 | | **Long-term Debt, less current portion** | $155,595 | $170,581 | | **Total Liabilities** | **$325,934** | **$337,901** | | **Total Stockholders' Equity** | **$189,335** | **$178,211** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income for Q2 2022 surged to **$9.1 million** on **$68.7 million** revenue, driven by asset gains and equity investment earnings, with H1 net income reaching **$10.9 million** Income Statement Highlights (in thousands) | Income Statement Highlights (in thousands) | Q2 2022 | Q2 2021 | H1 2022 | H1 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Net Revenue** | $68,682 | $63,782 | $131,291 | $123,135 | | **Operating Income** | $7,328 | $5,641 | $12,302 | $9,997 | | **Net (gain) loss on disposition of assets** | $(6,893) | $(263) | $(8,628) | $55 | | **Earnings from equity method investment** | $3,913 | $— | $3,913 | $— | | **Net Income** | **$9,117** | **$2,257** | **$10,856** | **$2,580** | | **Diluted EPS** | **$0.33** | **$0.08** | **$0.39** | **$0.10** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2022 operating cash flow decreased to **$7.8 million**, while investing activities provided **$8.3 million** from asset sales, and financing used **$15.4 million** for debt repurchase Cash Flow Summary (in thousands) | Cash Flow Summary (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $7,800 | $10,197 | | **Net cash provided by (used in) investing activities** | $8,313 | $(3,200) | | **Net cash provided by (used in) financing activities** | $(15,358) | $6,536 | | **Net increase in cash and cash equivalents** | $755 | $13,533 | | **Cash and cash equivalents at end of period** | $2,540 | $19,858 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business segments, accounting policies, recent transactions, impairment charges on licenses and goodwill, and long-term debt structure - The company operates in three segments: Broadcast, Digital Media, and Publishing, specializing in Christian and conservative content[30](index=30&type=chunk) - The company invested in OneParty America LLC ("OPA"), which produced the documentary "2,000 Mules". This equity method investment generated **$3.9 million** in earnings for the company in Q2 2022[36](index=36&type=chunk)[39](index=39&type=chunk) - During H1 2022, the company completed several transactions, including the sale of land in Denver for **$8.2 million** (pre-tax gain of **$6.5 million**) and the sale of radio stations in Louisville for **$4.0 million** (pre-tax gain of **$0.5 million**)[56](index=56&type=chunk)[57](index=57&type=chunk) - Due to rising interest rates increasing the Weighted Average Cost of Capital (WACC), the company recorded a **$3.9 million** impairment charge on broadcast licenses and a **$0.1 million** charge on goodwill[101](index=101&type=chunk)[106](index=106&type=chunk)[114](index=114&type=chunk) - The company repurchased **$15.5 million** of its 2024 Notes for **$15.4 million** in cash during the first six months of 2022[261](index=261&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses H1 2022 financial performance, highlighting **6.6% revenue growth** and a surge in net income to **$10.9 million**, driven by Broadcast segment strength, asset sales, and equity investment earnings [Results of Operations](index=41&type=section&id=Results%20of%20Operations) H1 2022 total net revenue grew **6.6%** to **$131.3 million**, with Broadcast revenue up **11.1%**, driving net income to **$10.9 million** despite impairment charges Revenue by Segment (in thousands) | Revenue by Segment (in thousands) | H1 2022 | H1 2021 | % Change | | :--- | :--- | :--- | :--- | | Net Broadcast Revenue | $100,884 | $90,831 | 11.1% | | Net Digital Media Revenue | $21,104 | $19,958 | 5.7% | | Net Publishing Revenue | $9,303 | $12,346 | (24.6)% | | **Total Net Revenue** | **$131,291** | **$123,135** | **6.6%** | - Broadcast revenue growth was driven by increases in block programming (+$3.3 million), advertising (+$2.7 million), and digital revenue (+$3.3 million), reflecting higher demand as pandemic restrictions eased[264](index=264&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk) - Publishing revenue declined primarily due to a **$2.7 million (36.6%)** decrease in net book sales from Regnery Publishing, reflecting lower volume and average price per unit compared to the prior year[278](index=278&type=chunk) - The company recorded impairment charges totaling **$4.1 million** in H1 2022 (**$3.9 million** for broadcast licenses, **$0.1 million** for goodwill) due to rising interest rates and changes in macroeconomic conditions[290](index=290&type=chunk)[292](index=292&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) H1 2022 operating cash flow decreased to **$7.8 million**, offset by **$14.2 million** from asset sales, with **$15.4 million** used for debt repurchase, leaving **$24.0 million** ABL availability - Net cash from operating activities decreased by **$2.4 million** in H1 2022 compared to H1 2021, primarily due to a **$10.2 million** increase in operating expenses and a **$3.6 million** increase in accounts receivable[309](index=309&type=chunk) - The company is actively deleveraging, having repurchased **$15.5 million** principal of its 2024 Notes in H1 2022. Total long-term debt principal outstanding was **$159.4 million** at June 30, 2022[261](index=261&type=chunk)[342](index=342&type=chunk) - As of June 30, 2022, the company had **$24.0 million** in borrowing availability under its Asset-Based Revolving Credit Facility (ABL)[317](index=317&type=chunk)[337](index=337&type=chunk) - The company invested **$3.5 million** in and received a full return of its **$4.5 million** investment from OneParty America LLC ("OPA"), the entity behind the documentary "2,000 Mules"[310](index=310&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Disclosure regarding market risk is not provided as the company qualifies as a smaller reporting company - Disclosure about market risk is not required as Salem Media Group, Inc. qualifies as a smaller reporting company[348](index=348&type=chunk) [Item 4. Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control over financial reporting - The company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of the end of the reporting period[348](index=348&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[349](index=349&type=chunk) [PART II - OTHER INFORMATION](index=59&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, which management expects will not materially impact its financial position or operations - The company is involved in various legal proceedings in the normal course of business but does not expect them to have a material adverse effect on its financial condition[351](index=351&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) Disclosure of risk factors is not required as the company qualifies as a smaller reporting company - Disclosure of risk factors is not required as Salem Media Group, Inc. qualifies as a smaller reporting company[352](index=352&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - None reported[353](index=353&type=chunk) [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported by the company during the period - None reported[354](index=354&type=chunk) [Item 5. Other Information](index=60&type=section&id=Item%205.%20Other%20Information) No other information required for disclosure under this item was reported by the company - None reported[356](index=356&type=chunk) [Item 6. Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and XBRL data files - The report includes certifications from the CEO and CFO as required by the Exchange Act and U.S.C. Section 1350, as well as XBRL financial data[358](index=358&type=chunk)