CAMARILLO, CA -- (Marketwire) -- 08/09/10 -- Salem Communications Corporation (NASDAQ: SALM), 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, released its results for the three and six months ended June 30, 2010.

Second Quarter 2010 Results

For the quarter ended June 30, 2010 compared to the quarter ended June 30, 2009:

Consolidated

--  Total revenue increased 5.2% to $53.1 million from $50.5 million;
--  Operating expenses decreased 24.4% to $43.0 million from $57.0 million;
--  Operating expenses excluding impairment of indefinite-live intangible
    assets, cost of denied tower site and abandoned projects and gain or
    loss on disposal of assets increased 6.1% to $43.1 million from
    $40.6 million;
--  Operating income from continued operations increased to $10.1 million
    from a loss of $6.5 million;
--  Net income increased to $0.7 million, or $0.03 net income per diluted
    share, from a loss of $5.0 million, or $0.21 net loss per share in the
    prior year;
--  EBITDA increased to $12.7 million from a loss of $2.0 million; and
--  Adjusted EBITDA increased 2.1% to $14.1 million from $13.8 million.

Broadcast

--  Net broadcast revenue increased 3.5% to $45.5 million from
    $43.9 million;
--  Station operating income ("SOI") increased 4.0% to $16.5 million from
    $15.9 million;
--  Same station net broadcast revenue increased 3.3% to $45.2 million from
    $43.7 million;
--  Same station SOI increased 4.1% to $16.6 million from $15.9 million;
    and
--  Same station SOI margin increased to 36.7% from 36.4%.

Non-broadcast

--  Non-broadcast revenue increased 16.9% to $7.7 million from
    $6.5 million; and
--  Non-broadcast operating income decreased 16.9% to $0.9 million from
    $1.1 million.

Included in the results for the quarter ended June 30, 2010 are:

--  A $1.1 million loss ($0.6 million, net of tax, or $0.03 per share) on
    early redemption of long-term debt due to the repurchase of
    $17.5 million of our 9 5/8% senior subordinated notes due in 2016; and
--  A $0.4 million non-cash compensation charge ($0.2 million, net of tax
    or $0.01 per share) related to the expensing of stock options
    consisting of:
    --  $0.2 million non-cash compensation included in corporate
        expenses; and
    --  $0.2 million non-cash compensation included in broadcast operating
        expenses.

Included in the results for the quarter ended June 30, 2009 are:

--  A $1.1 million charge ($0.7 million, net of tax, or $0.05 per share)
    related to the costs of a denied tower site relocation project for
    radio station KDOW-AM, San Francisco, California, which was rejected by
    the City of Hayward and an abandoned tower site relocation for KKLA-FM,
    Los Angeles, California;
--  A $13.7 million impairment of goodwill and indefinite-lived assets
    ($8.2 million, net of tax, or $0.35 per share) consisting of a
    $12.5 million impairment of radio broadcasting licenses and goodwill in
    our Dallas and Portland markets and a $1.2 million impairment of
    goodwill and mastheads in our non-broadcast segment;
--  A $1.6 million loss ($1.0 million, net of tax, or $0.04 per share) on
    disposal of assets primarily from the sale of radio station KPXI-FM in
    Tyler-Longview, Texas;
--  A $2.3 million benefit ($1.4 million, net of tax, or $0.10 per diluted
    share) related to the change in fair value of our interest rate swaps;
--  A $0.7 million gain ($0.4 million, net of tax, or $0.02 per diluted
    share) on early redemption of long-term debt due to the repurchase of
    $1.0 million of our 7 3/4% senior subordinated notes due in 2010; and
--  A $0.1 million non-cash compensation charge ($0.1 million, net of tax)
    related to the expensing of stock options.

These results reflect the reclassification of the operations of our Milwaukee, Wisconsin radio stations to discontinued operations for the three months ended June 30, 2009 and the reclassification of WRFD-AM, Columbus, Ohio, into operations from discontinued operations.

Per share numbers are calculated based on 24,542,417 diluted weighted average shares for the quarter ended June 30, 2010, and 23,673,788 diluted weighted average shares for the quarter ended June 30, 2009.

Year to Date 2010 Results

For the six months ended June 30, 2010 compared to the six months ended June 30, 2009:

Consolidated

--  Total revenue increased 2.3% to $101.4 million from $99.2 million;
--  Operating expenses decreased 13.9% to $83.3 million from $96.7 million;
--  Operating expenses excluding impairment of indefinite-live intangible
    assets, cost of denied tower site and abandoned projects and gain or
    loss on disposal of assets increased 3.7% to $83.3 million from
    $80.3 million;
--  Operating income from continued operations increased to $18.2 million
    from $2.5 million;
--  Net income increased to $0.9 million, or $0.04 net income per diluted
    share, from a loss of $2.1 million, or $0.09 net loss per share in the
    prior year;
--  EBITDA increased to $24.3 million from $10.8 million; and
--  Adjusted EBITDA decreased 2.7% to $26.1 million from $26.8 million.

Broadcast

--  Net broadcast revenue increased 0.6% to $86.9 million from
    $86.3 million;
--  Station operating income ("SOI") increased 0.8% to $31.9 million from
    $31.6 million;
--  Same station net broadcast revenue increased 0.5% to $86.5 million from
    $86.1 million;
--  Same station SOI increased 0.8% to $32.0 million from $31.7 million;
    and
--  Same station SOI margin increased to 37.0% from 36.9%.

Non-broadcast

--  Non-broadcast revenue increased 13.7% to $14.6 million from
    $12.8 million; and
--  Non-broadcast operating income decreased 8.1% to $1.4 million from
    $1.6 million.

Included in the results for the six months ended June 30, 2010 are:

--  A $1.1 million loss ($0.6 million, net of tax, or $0.03 per share) on
    early redemption of long-term debt due to the repurchase of
    $17.5 million of our 9 5/8% senior subordinated notes due in 2016; and
--  A $0.7 million non-cash compensation charge ($0.4 million, net of tax
    or $0.02 per share) related to the expensing of stock options
    consisting of:
  --  $0.5 million non-cash compensation included in corporate expenses;
  --  $0.1 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 six months ended June 30, 2009 are:

--  A $1.1 million charge ($0.7 million, net of tax, or $0.05 per share)
    related to the costs of a denied tower site relocation project for
    radio station KDOW-AM, San Francisco, California, which was rejected by
    the City of Hayward and an abandoned tower site relocation for KKLA-FM,
    Los Angeles, California;
--  A $13.7 million impairment of goodwill and indefinite-lived assets
    ($8.2 million, net of tax, or $0.35 per share) consisting of a
    $12.5 million impairment of radio broadcasting licenses and goodwill in
    our Dallas and Portland markets and a $1.2 million impairment of
    goodwill and mastheads in our non-broadcast segment;
--  A $1.6 million loss ($1.0 million, net of tax, or $0.04 per share) on
    disposal of assets primarily from the sale of radio station KPXI-FM in
    Tyler-Longview, Texas;
--  A $2.4 million benefit ($1.4 million, net of tax, or $0.10 per diluted
    share) related to the change in fair value of our interest rate swaps;
--  A $0.7 million gain ($0.4 million, net of tax, or $0.02 per diluted
    share) on early redemption of long-term debt due to the repurchase of
    $1.0 million of our 7 3/4% senior subordinated notes due in 2010; and
--  A $0.2 million non-cash compensation charge ($0.1 million, net of tax,
    or $0.01 per share) related to the expensing of stock options
    consisting of:
  --  $0.1 million non-cash compensation included in corporate expenses;
      and
  --  $0.1 million non-cash compensation included in broadcast operating
      expenses.

These results reflect the reclassification of the operations of our Milwaukee, Wisconsin radio stations to discontinued operations for the six months ended June 30, 2009 and the reclassification of WRFD-AM, Columbus, Ohio, into operations from discontinued operations.

Per share numbers are calculated based on 24,492,180 diluted weighted average shares for the six months ended June 30, 2010, and 23,673,788 diluted weighted average shares for the six months ended June 30, 2009.

Balance Sheet

As of June 30, 2010, the company had net debt of $304.4 million and was in compliance with the covenants of its credit facility and bond indenture. The company's bank leverage ratio was 5.86 versus a compliance covenant of 7.0.

Acquisitions and Divestitures

The following transactions were completed since April 1, 2010:

--  On June 8, 2010, we completed the acquisition of tangle.com and
    GodTube.com, Christian content and community websites for
    $2.5 million.

The following transactions are currently pending:

--  On June 24, 2010, we entered into an agreement to sell radio station
    KXMX-AM, Los Angeles, California, for $12.0 million. The sale is
    expected to close in the fourth quarter of 2010.

Conference Call Information

Salem will host a teleconference to discuss its results on August 9, 2010 at 2:00 p.m. Pacific Time. To access the teleconference, please dial (719) 457-2664, passcode 8354406 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 August 23, 2010 and can be heard by dialing (719) 457-0820, passcode 8354406 or on the investor relations portion on the company's website, located at www.salem.cc.

Third Quarter 2010 Outlook

For the third quarter of 2010, Salem is projecting total revenue to increase 1% to 3% over third quarter 2009 total revenue of $49.2 million. Salem is also projecting operating expenses before gain or loss on disposal of assets, terminated transaction costs and abandoned license upgrades and impairments to increase 3% to 6% as compared to the third quarter of 2009 operating expenses of $40.5 million.

Salem Communications Corporation is the largest commercial U.S. radio broadcasting company that provides programming targeted at audiences interested in Christian and family-themed radio content, as measured by the number of stations and audience coverage. Upon completion of all announced transactions, the company will own a national portfolio of 95 radio stations in 37 markets, including 59 stations in 22 of the top 25 markets. We also program the Family Talk™ Christian-themed talk format on XM Radio, channel 170.

Salem also owns Salem Radio Network, a national radio network that syndicates talk, news and music programming to approximately 2,000 affiliated radio stations and Salem Media Representatives, a national media advertising sales firm with offices across the country.

In addition to its radio broadcast business, Salem owns a non-broadcast media division. Salem Web Network is a provider of online Christian and conservative-themed content and streaming and includes websites such as Christian faith focused Christianity.com, Christian living focused Crosswalk.com®, Online Bible Study at BibleStudyTools.com, and Christian radio ministries online at OnePlace.com. Additionally Salem owns conservative news leader Townhall.com® and conservative political blog, HotAir.com providing conservative commentary, news and blogging. Salem Publishing™ circulates Christian and conservative magazines such as Homecoming® The Magazine, YouthWorker Journal™, The Singing News, FaithTalk Magazine, Preaching and Townhall Magazine™. Xulon Press™ is a provider of self publishing services targeting the Christian audience.

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, change in fair value of interest rate swaps, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before discontinued operations (net of tax), impairment of indefinite-lived intangible assets, cost of denied tower site and abandoned projects, gain or loss on the disposal of assets, gain or loss on early redemption of long-term debt 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 data and
 margin data)
                              Three Months Ended       Six Months Ended
                                   June 30,                June 30,
                            ----------------------  ----------------------
                               2009        2010        2009        2010
                            ----------  ----------  ----------  ----------
                                              (Unaudited)
Net broadcast revenue       $   43,945  $   45,471  $   86,340  $   86,879
Non-broadcast revenue            6,547       7,653      12,811      14,569
                            ----------  ----------  ----------  ----------
Total revenue                   50,492      53,124      99,151     101,448
Operating expenses:
  Broadcast operating
   expenses                     28,091      28,984      54,706      54,981
  Non-broadcast operating
   expenses                      5,439       6,732      11,237      13,123
  Corporate expenses             3,271       3,717       6,614       7,986
  Cost of denied tower site
   and abandoned projects        1,111           -       1,111           -
  Impairment of
   indefinite-lived
   intangible assets            13,663           -      13,663           -
  Depreciation and
   amortization                  3,763       3,621       7,744       7,177
  (Gain) loss on disposal
   of assets                     1,615         (18)      1,616          (5)
                            ----------  ----------  ----------  ----------
Total operating expenses        56,953      43,036      96,691      83,262
                            ----------  ----------  ----------  ----------
Operating income (loss)         (6,461)     10,088       2,460      18,186
Other income (expense):
  Interest income                   73          46         147          94
  Interest expense              (4,279)     (7,776)     (8,638)    (15,468)
  Change in fair value of
   interest rate swaps           2,296           -       2,376           -
  Gain (loss) on early
   redemption of long-term
   debt                            660      (1,050)        660      (1,050)
  Other expense, net               (27)          -         (48)        (31)
                            ----------  ----------  ----------  ----------
Income (loss) from
 continuing operations
 before income taxes            (7,738)      1,308      (3,043)      1,731
Provision for (benefit
 from) income taxes             (2,685)        610        (902)        829
                            ----------  ----------  ----------  ----------
Income (loss) from
 continuing operations          (5,053)        698      (2,141)        902
Income from discontinued
 operations, net of tax             36          ­-          13           -
                            ----------  ----------  ----------  ----------
Net income (loss)           $   (5,017) $      698  $   (2,128) $      902
                            ==========  ==========  ==========  ==========

Basic income (loss) per
 share before discontinued
 operations                 $    (0.21) $     0.03  $    (0.09) $     0.04
Income from discontinued
 operations, net of tax              -           -           -           -
Basic income (loss) per
 share after discontinued
 operations                 $    (0.21) $     0.03  $    (0.09) $     0.04

Diluted income (loss) per
 share before discontinued
 operations                 $    (0.21) $     0.03  $    (0.09) $     0.04
Income from discontinued
 operations, net of tax              -           -           -           -
Diluted income (loss) per
 share after discontinued
 operations                 $    (0.21) $     0.03  $    (0.09) $     0.04

Basic weighted average
 shares outstanding         23,673,788  23,819,158  23,673,788  23,771,675
                            ==========  ==========  ==========  ==========
Diluted weighted average
 shares outstanding         23,673,788  24,542,417  23,673,788  24,492,180
                            ==========  ==========  ==========  ==========

Other Data:
Station operating income    $   15,854  $   16,487  $   31,634  $   31,898
Station operating margin          36.1%       36.3%       36.6%       36.7%










Salem Communications Corporation
Condensed Consolidated Balance Sheets
(in thousands)
                                                  December 31,   June 30,
                                                      2009         2010
                                                  ------------ ------------
                                                                (Unaudited)
Assets
Cash                                              $      8,945 $      3,475
Restricted cash                                            100          100
Trade accounts receivable, net                          27,289       27,047
Deferred income taxes                                    4,700        4,916
Other current assets                                     3,459        4,838
Property, plant and equipment, net                     121,174      119,049
Intangible assets, net                                 397,801      401,482
Bond issue costs                                         7,078        6,896
Bank loan fees                                           1,515        1,341
Other assets                                             6,984        6,681
                                                  ------------ ------------
Total assets                                      $    579,045 $    575,825
                                                  ============ ============

Liabilities and Stockholders' equity
Current liabilities                                     20,373       20,642
Long-term debt and capital lease obligations           313,969      307,739
Deferred income taxes                                   38,973       39,763
Other liabilities                                        8,531        8,689
Stockholders' equity                                   197,199      198,992
                                                  ------------ ------------
Total liabilities and stockholders' equity        $    579,045 $    575,825
                                                  ============ ============









Salem Communications Corporation
Supplemental Information
(in thousands)                      Three Months Ended   Six Months Ended
                                         June 30,            June 30,
                                      2009      2010      2009      2010
                                    --------  --------  --------  --------
                                                  (Unaudited)
Capital expenditures
Acquisition related / income
 producing                          $    108  $    412  $    295  $    441
Maintenance                            1,320     1,990     1,755     3,345
                                    --------  --------  --------  --------
Total capital expenditures          $  1,428  $  2,402  $  2,050  $  3,786
                                    ========  ========  ========  ========

Tax information
Cash tax expense                    $    272  $    235  $    280  $    217
Deferred tax expense (benefit)        (2,957)      375    (1,182)      612
                                    --------  --------  --------  --------
Provision for (benefit from) income
 taxes                              $ (2,685) $    610  $   (902) $    829
                                    ========  ========  ========  ========

Tax benefit of non-book
 amortization                       $  3,013  $  2,616  $  5,857  $  5,247
                                    ========  ========  ========  ========

Reconciliation of Same Station Net
 Broadcast Revenue to Total Net
 Broadcast Revenue
Net broadcast revenue - same
 station                            $ 43,735  $ 45,195  $ 86,057  $ 86,478
Net broadcast revenue -
 acquisitions                              6        76         6        90
Net broadcast revenue -
 dispositions                              -         -         2         -
Net broadcast revenue - format
 changes                                 204       200       275       311
                                    --------  --------  --------  --------
Total net broadcast revenue         $ 43,945  $ 45,471  $ 86,340  $ 86,879
                                    ========  ========  ========  ========

Reconciliation of Same Station
 Broadcast Operating Expenses to
 Total Broadcast Operating Expenses
Broadcast operating expenses - same
 station                            $ 27,827  $ 28,631  $ 54,330  $ 54,487
Broadcast operating expenses -
 acquisitions                              -       105         1       137
Broadcast operating expenses -
 dispositions                              1         -        21         -
Broadcast operating expenses -
 format changes                          263       248       354       357
                                    --------  --------  --------  --------
Total broadcast operating expenses  $ 28,091  $ 28,984  $ 54,706  $ 54,981
                                    ========  ========  ========  ========

Reconciliation of Same Station
 Operating Income to Total Station
 Operating Income
Station operating income - same
 station                            $ 15,908  $ 16,564  $ 31,727  $ 31,991
Station operating income -
 acquisitions                              6       (29)        5       (47)
Station operating income -
 dispositions                             (1)        -       (19)        -
Station operating income - format
 changes                                 (59)      (48)      (79)      (46)
                                    --------  --------  --------  --------
Total station operating income      $ 15,854  $ 16,487  $ 31,634  $ 31,898
                                    ========  ========  ========  ========









Salem Communications Corporation
Supplement Information
(in thousands)                Three Months Ended       Six Months Ended
                                   June 30,                June 30,
                               2009        2010        2009        2010
                            ----------  ----------  ----------  ----------
                                             (Unaudited)
Reconciliation of SOI and
 Non-Broadcast Operating
 Income to Operating Income
 (Loss)

Station operating income    $   15,854  $   16,487  $   31,634  $   31,898
Non-broadcast operating
 income                          1,108         921       1,574       1,446
Less:
  Corporate expenses            (3,271)     (3,717)     (6,614)     (7,986)
  Cost of denied tower site
   and abandoned projects       (1,111)          -      (1,111)          -
  Impairment of
   indefinite-lived
   intangible assets           (13,663)          -     (13,663)          -
  Depreciation and
   amortization                 (3,763)     (3,621)     (7,744)     (7,177)
  Gain (loss) on disposal
   of assets                    (1,615)         18      (1,616)          5
                            ----------  ----------  ----------  ----------

Operating income (loss)     $   (6,461) $   10,088  $    2,460  $   18,186
                            ==========  ==========  ==========  ==========

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

Adjusted EBITDA             $   13,811  $   14,095  $   26,776  $   26,063
Less:
  Stock-based compensation        (147)       (404)       (230)       (736)
  Cost of denied tower site
   and abandoned projects       (1,111)          -      (1,111)          -
  Impairment of
   indefinite-lived
   intangible assets           (13,663)          -     (13,663)          -
  Gain (loss) on early
   redemption of long-term
   debt                            660      (1,050)        660      (1,050)
  Discontinued operations,
   net of tax                       36           -          13           -
  Gain (loss) on disposal
   of assets                    (1,615)         18      (1,616)          5
                            ----------  ----------  ----------  ----------
EBITDA                          (2,029)     12,659      10,829      24,282
Plus:
  Interest income                   73          46         147          94
Less:
  Depreciation and
   amortization                 (3,763)     (3,621)     (7,744)     (7,177)
  Interest expense              (4,279)     (7,776)     (8,638)    (15,468)
  Change in fair value of
   interest rate swaps           2,296           -       2,376           -
  Provision for (benefit
   from) income taxes            2,685        (610)        902        (829)
                            ----------  ----------  ----------  ----------

Net income (loss)           $   (5,017) $      698  $   (2,128) $      902
                            ==========  ==========  ==========  ==========


                           Outstanding  Applicable
                           at June 30,   Interest
                               2010        Rate
Selected Debt and Swap Data

9 5/8% senior subordinated
 notes                      $  282,500        9.63%
Revolving credit facility   $   26,000        3.85%