Salem Communications Announces Fourth Quarter 2008 Total Revenue of $54.8 Million

• Press Release
• Source: Salem Communications Corporation
• On 4:15 pm EDT, Thursday March 12, 2009

CAMARILLO, CA--(MARKET WIRE)--Mar 12, 2009 -- Salem Communications Corporation (NasdaqGM:SALM - News), a leading U.S. radio broadcaster, Internet content provider, and magazine and book publisher targeting audiences interested in Christian and family-themed content and conservative values, today announced results for the three and twelve months ended December 31, 2008.

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{"s" : "salm","k" : "c10,l10,p20,t10","o" : "","j" : ""}

Fourth Quarter 2008 Results

For the quarter ended December 31, 2008 compared to the quarter ended December 31, 2007:

 
--  Total revenue decreased 6.3% to $54.8 million from $58.5 million;
--  Operating expenses, including impairment of goodwill and indefinite-
    lived assets, increased 93.4% to $95.9 million from $49.6 million;
--  Operating loss from continued operations was $41.1 million for the
    quarter as compared to operating income of $8.8 million in the prior year;
--  Net loss was $30.6 million, or $1.29 net loss per share, compared to
    net income of $0.2 million, or $0.01 net income per diluted share;
--  EBITDA was a loss of $32.6 million for the quarter as compared to
    earnings of $11.6 million in the prior year;
--  Adjusted EBITDA increased 16.2% to $15.8 million from $13.6 million;

Broadcast

 
--  Net broadcast revenue decreased 8.6% to $47.1 million from $51.6
    million;
--  Station operating income ("SOI") increased 1.3% to $18.2 million from
    $18.0 million;
--  Same station net broadcast revenue decreased 8.7% to $44.9 million
    from $49.2 million;
--  Same station SOI increased 3.4% to $17.9 million from $17.3 million;
--  Same station SOI margin increased to 39.9% from 35.3%;

Non-broadcast

 
--  Non-broadcast revenue increased 11.1% to $7.7 million from $6.9
    million; and
--  Non-broadcast operating income increased to $1.3 million from $0.4
    million.

Included in the results for the quarter ended December 31, 2008 are:

 
--  A $0.1 million loss, net of tax, from discontinued operations of radio
    stations in Milwaukee, Wisconsin and Columbus, Ohio;
--  A $1.0 million gain ($0.7 million, net of tax, or $0.3 per diluted
    share) on the disposal of assets;
--  A $52.7 million impairment of goodwill and indefinite-lived assets
    ($34.4 million, net of tax, or $1.45 per share) related to the impairment
    of radio broadcasting licenses and goodwill in our Boston, Detroit,
    Cleveland, Louisville, Nashville, Tampa, Miami, Orlando, Sacramento, and
    Omaha markets;
--  A $1.3 million charge ($0.8 million, net of tax, or $0.05 per share)
    related to terminated transaction costs and abandoned license upgrades;
--  A $4.8 million charge ($3.2 million, net of tax, or $0.20 per share)
    related to the change in fair value of our interest rate swaps; and
--  A $4.7 million gain ($3.0 million, net of tax, or $0.13 per diluted
    share) on early redemption of long-term debt due to the repurchase of $9.4
    million of our 7 3/4% senior subordinated notes due in 2010.

Included in the results for the quarter ended December 31, 2007 are:

 
--  A $0.1 million loss on the disposal of assets;
--  A $1.0 million loss, net of tax, or $0.04 per share, from discontinued
    operations of radio stations in Milwaukee, Wisconsin and Columbus, Ohio
    and CCM Magazine; and
--  A $0.9 million non-cash compensation charge ($0.4 million, net of tax,
    or $0.02 per share) related to the expensing of stock options
    consisting primarily of:
    --  $0.6 million non-cash compensation included in corporate expenses;
        and
    --  $0.3 million non-cash compensation included in broadcast operating
        expenses.

These results reflect the reclassification of the operations of our Columbus, Ohio and Milwaukee, Wisconsin radio stations to discontinued operations for all periods presented. These stations had net broadcast revenue of approximately $1.0 million and generated a profit of $0.3 million for the quarter ended December 31, 2007 and net broadcast revenue of approximately $0.4 million and generated no profit for the quarter ended December 31, 2008.

Additionally, these results reflect the reclassification of the operations of CCM Magazine to discontinued operations for all periods presented in addition to the impairment charge in the quarter ended December 31, 2007. The magazine had non-broadcast revenue of $0.2 million and generated a loss of $1.1 million for the quarter ended December 31, 2007 and generated no revenue or no profit for the quarter ended December 31, 2008.

The company had no other comprehensive income or loss for the quarter ended December 31, 2008 due to the interest rate swaps becoming ineffective during the fourth quarter. This is compared to $1.6 million, net of tax, for the quarter ended December 31, 2007 due to the change in fair market value of the company's interest rate swaps.

Per share numbers are calculated based on 23,673,788 diluted weighted average shares for the quarter ended December 31, 2008, and 23,668,778 diluted weighted average shares for the comparable 2007 period.

Year to Date 2008 Results

For the twelve month period ended December 31, 2008 compared to the twelve month period ended December 31, 2007:

 
--  Total revenue decreased 3.6% to $220.7 million from $228.9 million;
--  Operating expenses, including impairment of goodwill and indefinite-
    lived assets, increased 34.9% to $252.9 million from $187.5 million;
--  Operating loss from continued operations was $32.2 million as compared
    to operating income of $41.4 million in the prior year;
--  Net loss was $33.1 million, or $1.40 net loss per share, compared to
    net income of $8.2 million or $0.34 net income per diluted share;
--  EBITDA was a loss of $9.3 million for the year as compared to earnings
    of $55.8 million in the prior year;
--  Adjusted EBITDA decreased 5.2% to $54.8 million from $57.8 million;

Broadcast

 
--  Net broadcast revenue decreased 5.8% to $192.4 million from $204.3
    million;
--  SOI decreased 8.1% to $68.8 million from $74.9 million;
--  Same station net broadcast revenue decreased 6.2% to $185.0 million
    from $197.1 million;
--  Same station SOI decreased 6.7% to $68.3 million from $73.2 million;
--  Same station SOI margin decreased to 36.9% from 37.2%;

Non-broadcast

 
--  Non-broadcast revenue increased 15.2% to $28.4 million from $24.6
    million; and
--  Non-broadcast operating income increased 46.7% to $2.5 million from
    $1.7 million

Included in the results for the twelve month period ended December 31, 2008 are:

 
--  A $2.0 million income ($0.08 per diluted share), net of tax, from
    discontinued operations consisting primarily of:
    --  A $1.3 million gain, net of tax, from the sale of WRRD-AM in
        Milwaukee, Wisconsin;
    --  A $0.8 million gain, net of tax, from the sale of WFZH-FM in
        Milwaukee, Wisconsin; and
    --  The operating results of radio station WRFD-AM in Columbus, Ohio
        and the operating results of CCM Magazine.
--  A $6.9 million gain ($4.4 million, net of tax, or $0.19 per diluted
    share) on disposal of assets consisting primarily of a $6.1 million
    pre-tax gain from the disposal of the assets of KTEK-AM in Houston,
    Texas and a $1.1 million pre-tax gain from the disposal of the assets
    of WRVI-FM in Louisville, Kentucky.
--  A $73.0 million impairment of goodwill and indefinite-lived assets
    ($47.1 million, net of tax, or $1.99 per share) related to the
    impairment of radio broadcasting licenses and goodwill in our Boston,
    Detroit, Cleveland, Louisville, Nashville, Tampa, Miami, Orlando,
    Sacramento, and Omaha markets;
--  A $1.3 million charge ($0.8 million, net of tax, or $0.05 per share)
    related to terminated transaction costs and abandoned license upgrades;
--  A $4.8 million charge ($3.2 million, net of tax, or $0.20 per share)
    related to the change in fair value of our interest rate swaps;
--  A $4.7 million gain ($3.0 million, net of tax, or $0.13 per diluted
    share) on early redemption of long-term debt due to the repurchase of
    $9.4 million of our 7 3/4% senior subordinated notes due in 2010; and
--  A $3.4 million non-cash compensation charge ($2.2 million, net of tax,
    or $0.09 per share) related to the expensing of stock options.  This
    charge included approximately $1.6 million related to the voluntary
    surrender of unvested stock options by senior management.  The charge
    consists of:
    --  $2.8 million non-cash compensation included in corporate expenses;
    --  $0.5 million non-cash compensation included in broadcast operating
        expenses; and
    --  $0.1 million non-cash compensation included in non-broadcast
        operating expenses.

Included in the results for the twelve month period ended December 31, 2007 are:

 
--  A $2.2 million gain ($1.2 million, net of tax, or $0.05 per diluted
    share) on disposal of fixed assets consisting primarily of a $3.4
    million pre-tax gain from the sale of selected assets of WKNR-AM in
    Cleveland, Ohio, partially offset by the pre-tax loss of $0.5 million
    recognized on the sale of radio station WVRY-FM, Nashville, Tennessee
    and other disposals of fixed assets.
--  A $0.8 million loss, net of tax, or $0.04 per share, from discontinued
    operations of radio stations Milwaukee, Wisconsin and Columbus, Ohio
    and CCM Magazine; and
--  A $3.4 million non-cash compensation charge ($1.9 million, net of tax,
    or $0.08 per share) related to the expensing of stock options
    consisting of:
    --  $2.4 million non-cash compensation included in corporate expenses;
    --  $0.8 million non-cash compensation included in broadcasting
        operating expenses; and
    -- $0.2 million non-cash compensation included in other media operating
        expenses

These results reflect the reclassification of the operations of our Columbus, Ohio and Milwaukee, Wisconsin radio stations to discontinued operations for all periods presented. These stations had net broadcast revenue of approximately $3.7 million and generated a profit of $0.8 million for the twelve months ended December 31, 2007 and net broadcast revenue of approximately $2.1 million and generated a profit of $0.3 million for the twelve months ended December 31, 2008.

Additionally, these results reflect the reclassification of the operations of CCM Magazine to discontinued operations for all periods presented. The magazine had non-broadcast revenue of $1.0 million and generated a loss of $1.2 million for the twelve months ended December 31, 2007 and non-broadcast revenue of approximately $0.4 million and generated a profit of $0.1 million for the twelve months ended December 31, 2008.

Other comprehensive loss of $0.5 million, net of tax, for the twelve months ended December 31, 2008 and $2.3 million, net of tax, for the twelve months ended December 31, 2007 is due to the change in fair market value of the company's interest rate swaps.

Per share numbers are calculated based on 23,671,288 diluted weighted average shares for the twelve months ended December 31, 2008 and 23,788,568 diluted weighted average shares for the comparable 2007 period.

Balance Sheet

As of December 31, 2008, the company had net debt of $323.5 million and was in compliance with the covenants of its credit facilities and bond indentures. The company's bank leverage ratio was 5.56 versus a compliance covenant of 6.75 and its bond leverage ratio was 5.63 versus a compliance covenant of 7.0.

Effective March 11, 2009, the company amended its bank credit facility. Among other things, the amendment modified language in the calculation of the pro-forma debt service covenant, restricted its ability to pay dividends or buyback stock and terminated the company's revolving line of credit. The company paid an amendment fee of 50 basis points, or approximately $1.2 million.

Acquisitions and Divestitures

The following transactions are currently pending:

 
--  WAMD (970 AM) in Baltimore, Maryland will be acquired for
    approximately $2.7 million.  The Company has already paid the seller a
    deposit of $2.7 million for this radio station; and
--  WRFD (880 AM) in Columbus, Ohio will be sold for approximately $4.0
    million.

First Quarter 2009 Outlook

For the first quarter of 2009, Salem is projecting total revenue to decrease 11% to 14% over first quarter 2008 total revenue of $54.0 million. Salem is also projecting operating expenses before gain or loss on disposal of assets and impairments to decline 10% to 12% as compared to the first quarter of 2008 operating expenses of $47.2 million.

Conference Call Information

Salem will host a teleconference to discuss its results today, on March 12, 2009 at 2:00 p.m. Pacific Time. To access the teleconference, please dial (973) 582-2717 or listen via the investor relations portion of the company's website, located at www.salem.cc. A replay of the teleconference will be available through March 26, 2009 and can be heard by dialing (706) 645-9291, pass code 84868925 or on the investor relations portion of the company's website, located at www.salem.cc.

In addition to its radio properties, Salem owns Salem Radio Network®, which syndicates talk, news and music programming to approximately 2,000 affiliates; Salem Radio Representatives(TM), a national radio advertising sales force; Salem Web Network(TM), an Internet provider of Christian content and online streaming; and Salem Publishing(TM), a publisher of Christian-themed magazines. Upon the close of all announced transactions, the company will own 93 radio stations, including 59 stations in 23 of the top 25 markets. Additional information about Salem may be accessed at the company's website, www.salem.cc.

Forward-Looking Statements

Statements used in this press release 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. Actual results may differ materially from those anticipated as a result of certain risks and uncertainties, including but not limited to the ability of Salem to close and integrate announced transactions, market acceptance of Salem's radio station formats, competition from new technologies, adverse economic conditions, and other risks and uncertainties detailed from time to time in Salem's reports on Forms 10-K, 10-Q, 8-K and other filings filed with or furnished to the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Salem undertakes no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events.

Regulation G

Station operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA are financial measures not prepared in accordance with generally accepted accounting principles ("GAAP"). Station operating income is defined as net broadcast revenues minus broadcast operating expenses. Non-broadcast operating income is defined as non-broadcast revenue minus non-broadcast operating expenses. EBITDA is defined as net income before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before discontinued operations (net of tax), impairment of goodwill and indefinite-lived assets, gain or loss on the disposal of assets and non-cash compensation expense. In addition, Salem has provided supplemental information as an attachment to this press release, reconciling these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP. The company believes these non-GAAP financial measures, when considered in conjunction with the most directly comparable GAAP financial measures, provide useful measures of the company's operating performance.

Station operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA are generally recognized by the broadcast industry as important measures of performance and are used by investors as well as analysts who report on the industry to provide meaningful comparisons between broadcast. Station operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA are not a measure of liquidity or of performance in accordance with GAAP, and should be viewed as a supplement to and not a substitute for, or superior to, the company's results of operations presented on a GAAP basis such as operating income and net income. In addition, Salem's definitions of station operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled measures reported by other companies.

 
Salem Communications Corporation
Condensed Consolidated Statements of Operations
(in thousands, except share, per share and margin data)

                           Three Months Ended       Twelve Months Ended
                              December 31,              December 31,
                            2007         2008         2007         2008
                        -----------  -----------  -----------  -----------
                              (unaudited)
Net broadcast revenue   $    51,564  $    47,131  $   204,309  $   192,357
Non-broadcast revenue         6,886        7,651       24,622       28,362
                        -----------  -----------  -----------  -----------
Total revenue                58,450       54,782      228,931      220,719
Operating expenses:
  Broadcast operating
   expenses                  33,569       28,900      129,448      123,534
  Terminated
   transaction costs
   and abandoned
   license upgrades               -        1,275            -        1,275
  Non-broadcast
   operating expenses         6,474        6,302       22,921       25,866
  Corporate expenses          5,579        3,726       22,314       20,040
  Impairment of goodwill
   and indefinite-lived
   assets                         -       52,690            -       73,010
  Depreciation and
   amortization               3,844        4,066       15,023       16,102
  (Gain) loss on
   disposal of assets           137       (1,030)      (2,192)      (6,892)
                        -----------  -----------  -----------  -----------
Total operating
 expenses                    49,603       95,929      187,514      252,935
                        -----------  -----------  -----------  -----------
Operating income (loss)       8,847      (41,147)      41,417      (32,216)
Other income (expense):
  Interest income                23           66          183          247
  Interest expense           (6,351)      (5,366)     (25,488)     (22,381)
  Change in fair value
   of interest rate
   swaps                          -       (4,827)           -       (4,827)
  Gain on early
   redemption of
   long-term debt                 -        4,664            -        4,664
  Other income
   (expense), net               (66)         (57)         164          121
                        -----------  -----------  -----------  -----------
Income (loss) from
 continuing operations
 before income taxes          2,453      (46,667)      16,276      (54,392)
Provision for (benefit
 from) income taxes           1,231      (16,202)       7,266      (19,302)
                        -----------  -----------  -----------  -----------
Income (loss) from
 continuing operations        1,222      (30,465)       9,010      (35,090)
Income (loss) from
 discontinued
 operations, net of tax      (1,034)        (126)        (835)       2,004
                        -----------  -----------  -----------  -----------
Net income (loss)       $       188  $   (30,591) $     8,175  $   (33,086)
                        ===========  ===========  ===========  ===========
Other comprehensive
 loss, net of tax            (1,593)           -       (2,267)        (480)
                        -----------  -----------  -----------  -----------
Comprehensive income
 (loss)                 $    (1,405) $   (30,591) $     5,908  $   (33,566)
                        ===========  ===========  ===========  ===========

Basic income (loss) per
 share before
 discontinued
 operations             $      0.05  $     (1.29) $      0.38  $     (1.48)
Income (loss) from
 discontinued
 operations, net of tax $     (0.04) $     (0.01) $     (0.04) $      0.08
Basic income (loss) per
 share after
 discontinued
 operations             $      0.01  $     (1.29) $      0.34  $     (1.40)

Diluted income (loss)
 per share before
 discontinued
 operations             $      0.05  $     (1.29) $      0.38  $     (1.48)
Income (loss) from
 discontinued
 operations, net of tax $     (0.04) $     (0.01) $     (0.04) $      0.08
Diluted income (loss)
 per share after
 discontinued
 operations             $      0.01  $     (1.29) $      0.34  $     (1.40)

Basic weighted average
 shares outstanding      23,668,788   23,673,788   23,785,015   23,671,288
                        ===========  ===========  ===========  ===========
Diluted weighted
 average shares
 outstanding             23,668,788   23,673,788   23,788,568   23,671,288
                        ===========  ===========  ===========  ===========

Other Data:
Station operating
 income                 $    17,995  $    18,231  $    74,861  $    68,823
Station operating
 margin                        34.9%        38.7%        36.6%        35.8%

 
Salem Communications Corporation
Condensed Consolidated Balance Sheets
(in thousands)

                                               December 31,   December 31,
                                                   2007           2008
                                               -------------  -------------

Assets
Cash                                           $         447  $       1,892
Trade accounts receivable, net                        30,030         28,530
Deferred income taxes                                  5,567          5,670
Other current assets                                   3,256          2,844
Assets of discontinued operations                      8,829            204
Property, plant and equipment, net                   130,857        133,706
Intangible assets, net                               492,156        423,709
Bond issue costs                                         444            268
Bank loan fees                                         1,994            981
Other assets                                           6,218          9,914
                                               -------------  -------------
Total assets                                   $     679,798  $     607,718
                                               =============  =============

Liabilities and Stockholders' Equity
Current liabilities                            $      26,290  $      22,897
Long-term debt and capital lease obligations         350,106        329,507
Deferred income taxes                                 61,381         43,106
Other liabilities                                      8,843          9,092
Stockholders' equity                                 233,178        203,116
                                               -------------  -------------
Total liabilities and stockholders' equity     $     679,798  $     607,718
                                               =============  =============




Salem Communications Corporation
Supplemental Information
 (in thousands)

                              Three Months Ended      Twelve Months Ended
                                 December 31,            December 31,
                               2007        2008        2007        2008
                            ----------- ----------  ----------- ----------
                                              (unaudited)
Capital expenditures
Acquisition related /
 income producing           $     1,856 $       48  $     7,259 $    3,949
Maintenance                       2,143      1,083        8,555      5,126
                            ----------- ----------  ----------- ----------

Total capital expenditures  $     3,999 $    1,131  $    15,814 $    9,075
                            =========== ==========  =========== ==========

Tax information
Cash tax expense (benefit)  $        75 $      (71) $       368 $      279
Deferred tax expense
 (benefit)                        1,156    (16,131)       6,898    (19,581)
                            ----------- ----------  ----------- ----------

Provision for (benefit
 from) income taxes         $     1,231 $  (16,202) $     7,266 $  (19,302)
                            =========== ==========  =========== ==========

Tax benefit of non-book
 amortization               $     4,180 $    1,623  $    16,120 $   11,398
                            =========== ==========  =========== ==========

Reconciliation of Same
 Station Net Broadcast
 Revenue to Total Net Broadcast
 Revenue
Net broadcast revenue -
 same station               $    49,179 $   44,906  $   197,106 $  184,974
Net broadcast revenue -
 acquisitions                       261        457          427      1,766
Net broadcast revenue -
 dispositions                       208         16          907        362
Net broadcast revenue -
 format changes                   1,916      1,752        5,869      5,255
                            ----------- ----------  ----------- ----------

Total net broadcasting
 revenue                    $    51,564 $   47,131  $   204,309 $  192,357
                            =========== ==========  =========== ==========

Reconciliation of Same
 Station Broadcast
 Operating Expenses to Total
 Broadcast Operating Expenses
Broadcast operating
 expenses - same station    $    31,832 $   26,971  $   123,868 $  116,641
Broadcast operating
 expenses - acquisitions            190        344          425      1,433
Broadcast operating
 expenses - dispositions             78          7          461        244
Broadcast operating
 expenses - format changes        1,469      1,578        4,694      5,216
                            ----------- ----------  ----------- ----------

Total broadcast operating
 expenses                   $    33,569 $   28,900  $   129,448 $  123,534
                            =========== ==========  =========== ==========

Reconciliation of Same
 Station Operating Income
 to Total Station Operating
 Income
Station operating income -
 same station               $    17,347 $   17,935  $    73,238 $   68,333
Station operating income -
 acquisitions                        71        113            2        333
Station operating income -
 dispositions                       130          9          446        118
Station operating income -
 format changes                     447        174        1,175         39
                            ----------- ----------  ----------- ----------

Total station operating
 income                     $    17,995 $   18,231  $    74,861 $   68,823
                            =========== ==========  =========== ==========




Salem Communications Corporation
Supplemental Information
(in thousands)

                           Three Months Ended       Twelve Months Ended
                              December 31,              December 31,
                            2007         2008         2007         2008
                        -----------  -----------  -----------  -----------
                                            (unaudited)
Reconciliation of
 Station Operating
 Income and Non-Broadcast
 Operating Income to
 Operating Income
 (Loss)
Station operating
 income                 $    17,995  $    18,231  $    74,861  $    68,823
Non-broadcast operating
 income                         412        1,349        1,701        2,496
Less:
  Corporate expenses         (5,579)      (3,726)     (22,314)     (20,040)
  Depreciation and
   amortization              (3,844)      (4,066)     (15,023)     (16,102)
  Terminated transaction
   costs and abandoned
   license  upgrades              -       (1,275)           -       (1,275)
  Impairment of goodwill
   and indefinite-lived
   assets                         -      (52,690)           -      (73,010)
  Gain (loss) on
   disposal of assets          (137)       1,030        2,192        6,892
                        -----------  -----------  -----------  -----------

Operating income (loss) $     8,847  $   (41,147) $    41,417  $   (32,216)
                        ===========  ===========  ===========  ===========

Reconciliation of
 Adjusted EBITDA to
 EBITDA to Net Income
 (Loss)

Adjusted EBITDA         $    13,628  $    15,841  $    57,794  $    54,774
Less:
  Stock-based
   compensation                (866)         (44)      (3,382)      (3,374)
  Impairment of
   long-lived assets              -      (52,690)           -      (73,010)
  Terminated transaction
   costs and abandoned
   license upgrades               -       (1,275)           -       (1,275)
  Gain on early
   redemption of
   long-term debt                 -        4,664            -        4,664
  Discontinued
   operations, net of
   tax                       (1,034)        (126)        (835)       2,004
  Gain (loss) on
   disposal of assets          (137)       1,030        2,192        6,892
                        -----------  -----------  -----------  -----------
EBITDA                       11,591      (32,600)      55,769       (9,325)
Plus:
  Interest income                23           66          183          247
Less:
  Depreciation and
   amortization              (3,844)      (4,066)     (15,023)     (16,102)
  Interest expense           (6,351)      (5,366)     (25,488)     (22,381)
  Change in fair value
   of interest rate
   swaps                          -       (4,827)           -       (4,827)
  Provision for
   (benefit from)
   income taxes              (1,231)      16,202       (7,266)      19,302
                        -----------  -----------  -----------  -----------
Net income (loss)       $       188  $   (30,591) $     8,175  $   (33,086)
                        ===========  ===========  ===========  ===========


                       Outstanding at Applicable
                        December 31,   Interest
                           2008          Rate
                        -----------  -----------
Selected Debt and Swap
 Data

  7 3/4% senior
   subordinated notes   $    90,605         7.75%
  Senior bank term loan
   B debt (1)                71,615         3.69%
  Senior bank term loan
   C debt (swap matures
   7/1/2012) (2)             30,000         6.74%
  Senior bank term loan
   C debt (swap matures
   7/1/2012) (2)             30,000         6.45%
  Senior bank term loan
   C debt (swap matures
   7/1/2012) (2)             30,000         6.28%
  Senior bank term C
   debt (at variable
   rates) (1)                70,852         3.64%

(1) Subject to rolling LIBOR plus a spread currently at 1.75% and
    incorporated into the rate set forth above.

(2) Under its swap agreements, the Company pays a fixed rate plus a spread
    based on the Company's leverage, as defined in its credit agreement.
    As of December 31, 2008, that spread was 1.75% and is incorporated into
    the applicable interest rates set forth above.

     Company Contact:
     Tomasita Solis
     Salem Communications
     (805) 987-0400 ext. 1067
     tomasitaa@salem.cc