Salem Communications (SALM) reports a strong quarter

Salem Communications (ticker: SALM) reported results on May 5, 2005 for
the first quarter 2005.  Below are some highlights.

Results 1Q05 vs. 1Q04:

• Reported EPS: $0.09 vs. $0.05 (+80%)
• Consensus EPS was $0.08
• Revenue: $50.2M vs. $45.1M (+11%)
• Consensus revenue was $49.3M
• Operating income: $9.0M vs. $7.8M (+15%)
• Operating margin: 17.9% vs. 17.2% (+70bps)
• Net income: $2.4M vs. $1.2M (+92%)
• Net margin: 4.8% vs. 2.8% (+200bps)
• Station operating income: $17.3M vs. $15.6M (+11%)
• Station operating margin: 36.2% vs. 36.2% (0bps)
• Cash: $5.9M vs. $11.0M (-47%)
• Debt: $304.194M vs. $281.024M (+8%)

Revenues, by segment 1Q05 vs. 1Q04:

• Net broadcasting revenues: $47.8M vs. $43.2M (+11%)
• Other media revenue: $2.4M vs. $1.9M (+25%)

2Q05 Guidance:

• Revenues: $50.9M - $51.4M
• EPS: $0.11 - $0.13
• Station Operating Income: $18.5M - $19.0M

2005 Guidance:

• Corporate expenses: $20M
• Capex: $13M

Quick comments:

• Q1 results are in-line with SALM's recently revised guidance
• Share repurchase: The company hasn't repurchased any shares in its $25 million stock repurchase program which was approved in November 2004
• Same-station net broadcasting growth: +11%; same-station operating income growth: +17.5%
• Fish stations (Contemporary Christian format) same-station revenue growth: +15.7%
• Christian Teaching & Talk same-station revenue growth: +6.5%
• New Talk same-station net broadcast growth: +17%
• Joe Davis promoted to Chief Operating Officer during Q1