SPANISH BROADCASTING SYSTEM : HAS FURNISHED ITS THIRD QUARTER 2022 FINANCIAL REPORTING PACKAGE

Quarterly Financial Reporting Package

For the period ended September 30, 2022

Spanish Broadcasting System, Inc.

and Subsidiaries

Delaware	13-3827791
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
	7007 NW 77th Ave.
	Miami, Florida 33166

(Address of principal executive offices) (Zip Code)

[phone]

(Company's telephone number, including area code)

Title of each class		Trading Symbol(s)	Name of exchange/market on which traded
Common Stock, par value $0.0001 per share		SBSAA	OTC Pink Market
		Transfer Agent
	Broadridge Corporate Solutions, Inc.
		51 Mercedes Way
		Edgewood, New York 11717

Table of Contents
FINANCIAL INFORMATION:	Page
Financial Statements - Unaudited	3
Unaudited Condensed Consolidated Balance Sheets	3
Unaudited Condensed Consolidated Statements of Operations	4
Unaudited Condensed Consolidated Statements of Cash Flows	5
Notes to the Unaudited Condensed Consolidated Financial Statements	6
Management's Discussion and Analysis of Financial Condition and Results of Operations	18

FINANCIAL INFORMATION

Financial Statements - Unaudited

SPANISH BROADCASTING SYSTEM, INC.

AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except share data)

		September 30,			December 31,
		2022			2021
Assets
Current assets:
Cash and cash equivalents	$	7,062	$	16,243
Receivables:
Trade		36,961			50,551
Barter		321			309
		37,282			50,860
Less: allowance for doubtful accounts		2,464			3,027
Net receivables		34,818			47,833
Prepaid expenses and other current assets		7,007			8,384
Total current assets		48,887			72,460
Property and equipment, net		22,775			21,324
FCC broadcasting licenses		309,537			297,179
Goodwill		32,806			32,806
Operating lease right-of-use assets		21,861			19,770
Other assets		874			1,045
Total assets	$	436,740	$	444,584
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses	$	18,451	$	25,801
Accrued interest		3,026			10,394
Unearned revenue		1,463			1,454
Operating lease liabilities		1,015			1,075
Revolving credit facility		4,000			-
Other short term liabilities		32			-
Total current liabilities		27,987			38,724
Operating lease liabilities - net of current portion		23,197			20,624
9.75% Senior Secured Notes due 2026, net of deferred financing costs of $6,440 at September 30, 2022		303,560			302,128
and $7,872 at December 31, 2021 (Note 7)
Deferred tax liabilities		58,772			56,772
Other liabilities, less current portion		3,721			3,677
Total liabilities		417,237			421,925
Stockholders' equity:
Series C convertible preferred stock, $0.01 par value and liquidation value. Authorized 600,000		4			4
shares; 380,000 shares issued and outstanding at September 30, 2022 and at December 31, 2021.
Class A common stock, $0.0001 par value. Authorized 100,000,000 shares; 5,041,878 shares issued
and outstanding at September 30, 2022 and at December 31, 2021		1			1
Class B common stock, $0.0001 par value. Authorized 50,000,000 shares; 2,340,353 shares issued
and outstanding at September 30, 2022 and December 31, 2021		-			-
Additional paid-in capital		652,733			652,544
Accumulated deficit		(633,235)			(629,890)
Total stockholders' equity		19,503			22,659
Total liabilities and stockholders' equity	$	436,740	$	444,584

See accompanying notes to unaudited condensed consolidated financial statements.

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SPANISH BROADCASTING SYSTEM, INC.

AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations

(In thousands, except per share data)

		Three Months Ended			Nine Months Ended
		September 30,			September 30,
		2022			2021			2022			2021
Net revenue	$	41,271	$	38,959	$	119,182	$	99,776
Operating expenses:
Engineering and programming		9,921			9,111			27,680			24,371
Selling, general and administrative		17,849			16,305			57,413			42,850
Corporate expenses		3,579			3,538			12,087			8,906
Depreciation and amortization		869			797			2,471			2,359
Total operating expenses		32,218			29,751			99,651			78,486
Gain on the disposal of assets		(8)			-			(21)			(198)
Recapitalization costs		-			-			-			420
Other operating expense (income)		40			1			40			(8)
Operating income		9,021			9,207			19,512			21,076
Other expenses:
Interest expense		(8,077)			(8,106)			(24,363)			(24,133)
Dividends on Series B preferred stock classified as
interest expense		-			-			-			(1,323)
Income (Loss) before income tax		944			1,101			(4,851)			(4,380)
Income tax expense (benefit)		38			255			(1,506)			(318)
Net income (loss)	$	906	$	846	$	(3,345)	$	(4,062)
Class A and B net income (loss) per common share (Note 3)
Basic and Diluted	$	0.11	$	0.11	$	(0.41)	$	(0.54)

See accompanying notes to the unaudited condensed consolidated financial statements.

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SPANISH BROADCASTING SYSTEM, INC.

AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)

		Nine Months Ended
		September 30,
		2022			2021
Cash flows from operating activities:
Net loss	$	(3,345)	$	(4,062)
Adjustments to reconcile net loss to net cash provided by operating activities:
Dividends on Series B preferred stock classified as interest expense		-			1,323
Gain on the disposal of assets, net of disposal costs		(21)			-
Gain on insurance proceeds received for damage to equipment		-			(198)
Stock-based compensation		189			1
Depreciation and amortization		2,471			2,359
Net barter income		(399)			(134)
Provision for trade doubtful accounts		448			706
Amortization of deferred financing costs		1,432			1,192
Deferred income taxes		2,000			(3,139)
Unearned revenue-barter		127			232
Changes in operating assets and liabilities:
Trade receivables		12,511			1,899
Prepaid expenses and other current assets		1,377			(2,119)
Other assets		1,388			2,029
Accounts payable and accrued expenses		(7,872)			807
Accrued interest		(7,368)			1,031
Other liabilities		(528)			(565)
Net cash provided by operating activities		2,410			1,362
Cash flows from investing activities:
Purchases of property and equipment		(3,316)			(2,214)
Acquisition of radio stations and related assets		(12,663)			-
Insurance proceeds received for damage to equipment		377			198
Proceeds from the sale of property and equipment		11			-
Net proceeds towards FCC repack assets		-			70
Net cash used in investing activities		(15,591)			(1,946)
Cash flows from financing activities:
Proceeds from revolving credit facility		4,000			-
Proceeds from 9.75% senior secured notes due 2026		-			310,000
Payment of financing fees		-			(9,532)
Payment of 12.5% senior secured notes		-			(249,864)
Repurchase and redemption Series B preferred stock		-			(69,731)
Net cash provided by (used in) financing activities	$	4,000			(19,127)
Net decrease in cash and cash equivalents		(9,181)			(19,711)
Cash and cash equivalents at beginning of period		16,243			28,178
Cash and cash equivalents at end of period	$	7,062	$	8,467
Supplemental cash flows information:
Interest paid	$	30,300	$	21,747
Income tax paid with cash	$	4,592	$	2,218
Noncash investing and financing activities:
Gain on repurchase of Series B preferred stock	$	-	$	118,714
Common stock issuance in settlement of Series B preferred stock	$	-	$	7,660

See accompanying notes to unaudited condensed consolidated financial statements.

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