Year End Financial Reporting Package
For the year ended December 31, 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)
(305) 441-6901
(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 |
Consolidated Balance Sheets as of December 31, 2022 and 2021 | |
Consolidated Statements of Operations for the years ended December 31, 2022 and 2021 | 6 |
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2022 and 2021 | 7 |
Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 | 8 |
Notes to Consolidated Financial Statements | 9 |
Management's Discussion and Analysis of Financial Condition and Results of Operations | 33 |
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors of
Spanish Broadcasting System, Inc. and Subsidiaries
Miami, Florida
Opinion
We have audited the consolidated financial statements of Spanish Broadcasting System, Inc. and Subsidiaries, which comprise the consolidated balance sheets as of December 31, 2022 and 2021, and the related consolidated statements of operations, changes in stockholders' equity, and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Spanish Broadcasting System, Inc. and Subsidiaries as of December 31, 2022 and 2021, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Spanish Broadcasting System, Inc. and Subsidiaries and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Spanish Broadcasting System, Inc. and Subsidiaries' ability to continue as a going concern for one year from the date the consolidated financial statements are available to be issued.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
In performing an audit in accordance with GAAS, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Spanish Broadcasting System, Inc. and Subsidiaries' internal control. Accordingly, no such opinion is expressed.
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- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Spanish Broadcasting System, Inc. and Subsidiaries' ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Other Information
Management is responsible for the other information included in the Year End Financial Reporting Package. The other information comprises the Management's Discussion and Analysis of Financial Condition and Results of Operations but does not include the consolidated financial statements and our auditor's report thereon. Our opinion on the consolidated financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audits of the consolidated financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the consolidated financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
/s/ Crowe LLP
Fort Lauderdale, Florida
April 25, 2023
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SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets December 31, 2022 and 2021 (In thousands, except share data)
December 31, | December 31, | ||||||
2022 | 2021 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 7,517 | $ | 16,243 | |||
Receivables: | |||||||
Trade | 44,805 | 50,551 | |||||
Barter | 312 | 309 | |||||
45,117 | 50,860 | ||||||
Less: allowance for doubtful accounts | 2,389 | 3,027 | |||||
Net receivables | 42,728 | 47,833 | |||||
Prepaid expenses and other current assets | 3,084 | 8,384 | |||||
Total current assets | 53,329 | 72,460 | |||||
Property and equipment, net | 23,052 | 21,324 | |||||
FCC broadcasting licenses | 309,537 | 297,179 | |||||
Goodwill | 32,806 | 32,806 | |||||
Operating lease right-of-use assets | 22,083 | 19,770 | |||||
Other assets | 808 | 1,045 | |||||
Total assets | $ | 441,615 | $ | 444,584 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 20,997 | $ | 25,801 | |||
Accrued interest | 10,540 | 10,394 | |||||
Unearned revenue | 1,310 | 1,454 | |||||
Operating lease liabilities | 1,085 | 1,075 | |||||
Other short term liabilities | 46 | - | |||||
Total current liabilities | 33,978 | 38,724 | |||||
Operating lease liabilities - net of current portion | 23,570 | 20,624 | |||||
9.75% Senior Secured Notes due 2026, net of deferred financing costs of $5,963 at December 31, 2022 | and | 304,037 | 302,128 | ||||
$7,872 at December 31, 2021 (Note 7) | |||||||
Deferred tax liabilities | 58,169 | 56,772 | |||||
Other liabilities, less current portion | 3,766 | 3,677 | |||||
Total liabilities | 423,520 | 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 December 31, 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 December 31, 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 December 31, 2022 and December 31, 2021 | - | - | |||||
Additional paid-in capital | 652,797 | 652,544 | |||||
Accumulated deficit | (634,707) | (629,890) | |||||
Total stockholders' equity | 18,095 | 22,659 | |||||
Total liabilities and stockholders' equity | $ | 441,615 | $ | 444,584 | |||
See accompanying notes to consolidated financial statements.
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SBS - Spanish Broadcasting System Inc. published this content on 25 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2023 20:28:25 UTC.