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CST: 19/09/2020 00:13:39   

CUMULUS MEDIA Reports Operating Results for the Third Quarter 2019

312 Days ago

ATLANTA, Nov. 11, 2019 (GLOBE NEWSWIRE) -- Cumulus Media Inc. (NASDAQ: CMLS) (the “Company,” “we,” “us,” or “our”) today announced operating results for the three and nine months ended September 30, 2019.

Third Quarter Financial Highlights

  • As compared to the third quarter of 2018 on an As Reported GAAP basis:
       --   Net revenue decreased 0.5%
       --   Net income was $16.3 million
       --   Adjusted EBITDA(1) decreased 5.5%
  • As compared to the third quarter of 2018 on a Same Station(2) basis, excluding the impact of political revenue:
       --   Net revenue increased 3.9%
       --   Adjusted EBITDA(1) increased 2.2%
  • As compared to the third quarter of 2018 on a Same Station(2) basis, including the impact of political revenue:
       --   Net revenue increased 3.2%
       --   Adjusted EBITDA(1) decreased 0.8%

Mary G. Berner, President and Chief Executive Officer of CUMULUS MEDIA, said, “In the third quarter, the Company turned in another strong performance with same station revenue and Adjusted EBITDA growth of 3.9% and 2.2%, respectively, on an ex-political basis.  Our operating plan has continued to deliver industry-leading digital revenue growth and continuing growth in our national and network channels.  We also made great progress in the quarter on our balance sheet as our free cash flow generation allowed us to fund a voluntary debt prepayment of approximately $29 million, which reduced net leverage to 4.5x.  Additionally, we completed a $525 million term loan refinancing that extended our debt maturity and reduced future interest expense.”

Within the quarter, the Company reassessed its reportable segments and concluded it has one reportable segment. Prior to this change, the Company had two reportable segments: Cumulus Radio Station Group and Westwood One.

References to "Successor Company" relate to the Company on and subsequent to June 4, 2018. References to "Predecessor Company" refer to the Company prior to June 4, 2018.  For the purposes of analyzing the results presented herein, the Company is presenting the combined results of operations for the period June 4, 2018 to September 30, 2018 of the Successor Company with the period January 1, 2018 to June 3, 2018 of the Predecessor Company. Although this presentation is not in accordance with accounting principles generally accepted in the United States, the Company believes presenting such combined results allows for a more meaningful comparison of results for the nine month period ended September 30, 2019 to the nine month period ended September 30, 2018. For more information regarding the Predecessor and Successor Company results, please see the Company’s Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission (the “SEC”).

 Operating Summary (in thousands, except percentages and per share data):

As Reported Three Months Ended
September 30, 2019
  Three Months Ended
September 30, 2018
  % Change
Net revenue $ 280,808     $ 282,254     (0.5 )%
Net income $ 16,323     $ 12,713     28.4 %
Adjusted EBITDA (1) $ 58,707     $ 62,104     (5.5 )%
Basic income per share $ 0.81     $ 0.64     N/A  
Diluted income per share $ 0.81     $ 0.63     N/A  


Same Station (2)      
  Three Months Ended
September 30, 2019
  Three Months Ended
September 30, 2018
  % Change
Net revenue $ 280,808     $ 272,189     3.2 %
Adjusted EBITDA (1) $ 58,707     $ 59,207     (0.8 )%


  Successor Company   Non-GAAP
Combined
Predecessor and
Successor Company
   
As Reported Nine Months Ended
September 30, 2019
  Nine Months Ended
September 30, 2018
  % Change
Net revenue $ 827,977     $ 831,182     (0.4 )%
Net income $ 59,635     $ 713,849     (91.6 )%
Adjusted EBITDA (1) $ 162,325     $ 168,731     (3.8 )%
Basic income per share $ 2.96       N/A     N/A  
Diluted income per share $ 2.95       N/A     N/A  


Same Station (2) Successor Company   Non-GAAP
Combined
Predecessor and
Successor Company
   
  Nine Months Ended
September 30, 2019
  Nine Months Ended
September 30, 2018
  % Change
Net revenue $ 824,246     $ 809,836     1.8 %
Adjusted EBITDA (1) $ 161,962     $ 161,569     0.2 %
                     

 Revenue Detail Summary (in thousands):

As Reported Three Months Ended
September 30, 2019
  Three Months Ended
September 30, 2018
  % Change
Broadcast Radio Revenue:          
Spot $ 161,211     $ 168,554     (4.4 )%
Network 78,404     75,716     3.6 %
Total Broadcast Radio Revenue 239,615     244,270     (1.9 )%
Digital 19,935     13,459     48.1 %
Other 21,258     24,525     (13.3 )%
Net Revenue $ 280,808     $ 282,254     (0.5 )%


  Successor Company   Non-GAAP
Combined
Predecessor and
Successor Company
   
As Reported Nine Months Ended
September 30, 2019
  Nine Months Ended
September 30, 2018
  % Change
Broadcast Radio Revenue:          
Spot $ 463,900     $ 488,276     (5.0 )%
Network 236,446     230,949     2.4 %
Total Broadcast Radio Revenue 700,346     719,225     (2.6 )%
Digital 56,984     34,626     64.6 %
Other 70,647     77,331     (8.6 )%
Net Revenue $ 827,977     $ 831,182     (0.4 )%


Same Station (2) Three Months Ended
September 30, 2019
  Three Months Ended
September 30, 2018
  % Change
Broadcast Radio Revenue:          
Spot $ 161,211     $ 161,306     (0.1 )%
Network 78,404     74,715     4.9 %
Total Broadcast Radio Revenue 239,615     236,021     1.5 %
Digital 19,935     13,171     51.4 %
Other 21,258     22,997     (7.6 )%
Net Revenue $ 280,808     $ 272,189     3.2 %


  Successor Company   Non-GAAP
Combined
Predecessor and
Successor Company
   
Same Station (2) Nine Months Ended
September 30, 2019
  Nine Months Ended
September 30, 2018
  % Change
Broadcast Radio Revenue:          
Spot $ 461,300     $ 474,057     (2.7 )%
Network 235,990     227,884     3.6 %
Total Broadcast Radio Revenue 697,290     701,941     (0.7 )%
Digital 56,896     34,130     66.7 %
Other 70,060     73,765     (5.0 )%
Net Revenue $ 824,246     $ 809,836     1.8 %
                     

Balance Sheet Summary (in thousands):

  September 30, 2019   December 31, 2018   % Change
Cash and cash equivalents $ 7,751     $ 27,584     (71.9 )%
Term loan (3) $ 525,000     $ 1,243,299     (57.8 )%
6.75% Senior notes (3) $ 500,000     $     N/A  


  Three Months Ended
September 30, 2019
  Three Months Ended
September 30, 2018
  % Change
Capital expenditures $ 6,684     $ 5,897     13.3 %

 

  Successor Company   Non-GAAP
Combined
Predecessor and
Successor Company
   
  Nine Months Ended
September 30, 2019
  Nine Months Ended
September 30, 2018
  % Change
Capital expenditures $ 17,399     $ 21,885     (20.5 )%

________________________________

  1. Adjusted EBITDA is not a financial measure calculated or presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). For additional information, see “Non-GAAP Financial Measure."
  2. Adjusted for certain station dispositions and swaps as if these dispositions and swaps had occurred as of April 1, 2019 and April 1, 2018 (or in the case of KLOS-FM, as of the commencement of the LMA on April 16, 2019 and as of April 16, 2018).
  3. Excludes unamortized debt issuance costs.

Earnings Conference Call Details
The Company will host a conference call today at 4:30 PM EST to discuss its third quarter 2019 operating results. A link to the webcast of the conference call will be available on the investor section of the Company’s website (www.cumulusmedia.com/investors). The conference call dial-in number for domestic callers is 877-830-7699 for call access. If prompted, the conference ID number is 2870957. Please call five to ten minutes in advance to ensure that you are connected prior to the call.

Following completion of the call, a recording of the call can be accessed via a link at www.cumulusmedia.com/investors.

Forward-Looking Statements
Certain statements in this release may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Such statements are statements other than historical fact and relate to our intent, belief or current expectations primarily with respect to our future operating, financial, and strategic performance. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ from those contained in or implied by the forward-looking statements as a result of various factors including, but not limited to, risks and uncertainties related to our recently completed financial restructuring and other risk factors described from time to time in our filings with the Securities and Exchange Commission. Many of these risks and uncertainties are beyond our control, and the unexpected occurrence or failure to occur of any such events or matters could significantly alter our actual results of operations or financial condition. CUMULUS MEDIA assumes no responsibility to update any forward-looking statement as a result of new information, future events, or otherwise.

About CUMULUS MEDIA
CUMULUS MEDIA (NASDAQ: CMLS) is a leading audio-first media and entertainment company delivering premium content to over a quarter billion people every month - wherever and whenever they want it. CUMULUS MEDIA engages listeners with high-quality local programming through 428 owned-and-operated stations across 87 markets; delivers nationally-syndicated sports, news, talk, and entertainment programming from iconic brands including the NFL, the NCAA, the Masters, the Olympics, the Academy of Country Music Awards, and many other world-class partners across nearly 8,000 affiliated stations through Westwood One, the largest audio network in America; and inspires listeners through its rapidly growing network of original podcasts that are smart, entertaining and thought-provoking. CUMULUS MEDIA provides advertisers with personal connections, local impact and national reach through on-air and on-demand digital, mobile, social, and voice-activated platforms, as well integrated digital marketing services, powerful influencers, full-service audio solutions, industry-leading research and insights, and live event experiences. CUMULUS MEDIA is the only audio media company to provide marketers with local and national advertising performance guarantees. For more information visit www.cumulusmedia.com.

Non-GAAP Financial Measure

From time to time we utilize certain financial measures that are not prepared or calculated in accordance with GAAP to assess our financial performance and profitability. Consolidated adjusted earnings before interest, taxes, depreciation, and amortization ("Adjusted EBITDA") is the financial metric by which management and the chief operating decision maker allocate resources of the Company and analyze the performance of the Company as a whole. Management also uses this measure to determine the contribution of our core operations to the funding of our corporate resources utilized to manage our operations and the funding of our non-operating expenses including debt service and acquisitions.

In determining Adjusted EBITDA, the Company excludes from net income items not related to core operations and those that are non-cash including: interest, taxes, depreciation, amortization, stock-based compensation expense, gain or loss on the exchange, sale, or disposal of any assets or stations, early extinguishment of debt, local marketing agreement fees, expenses relating to acquisitions, divestitures, restructuring costs, reorganization items and non-cash impairments of assets, if any.

Due to the significant effect that the Company’s material station acquisitions and dispositions have had on our results of operations, the Company also presents certain financial information herein on a “Same Station” basis, with and excluding the effect of political advertising in order to address the cyclical nature of the two-year election cycle. Same Station metrics are adjusted for material station acquisitions and dispositions as if these acquisitions and dispositions had occurred as of the beginning of the comparable prior period. Same station financial measures excluding the impact of political advertising are further adjusted to exclude the impact of political advertising in the comparable periods.

Management believes that Adjusted EBITDA and Same Station financial measures, with and excluding the impact of political advertising, although not measures that are calculated in accordance with GAAP, are commonly employed by the investment community as measures for determining the market value of a media company and comparing the operational and financial performance among media companies. Management has also observed that Adjusted EBITDA and Same Station financial measures, with and excluding the impact of political advertising, are routinely utilized to evaluate and negotiate the potential purchase price for media companies. Given the relevance to our overall value, management believes that investors consider the metrics to be extremely useful.

Adjusted EBITDA and Same Station financial measures, with and excluding the impact of political advertising, should not be considered in isolation or as a substitute for net income (loss), net revenue, operating income, cash flows from operating activities or any other measure for determining the Company’s operating performance or liquidity that is calculated in accordance with GAAP. In addition, Adjusted EBITDA and Same Station financial measures, with and excluding the impact of political advertising, may be defined or calculated differently by other companies and comparability may be limited.

For further information, please contact:
Cumulus Media Inc.
Investor Relations
IR@cumulus.com
404-260-6600

Supplemental Financial Data and Reconciliations

                               
CUMULUS MEDIA INC.
Unaudited Condensed Consolidated Statements of Operations
(Dollars in thousands)
                               
  Successor Company     Successor Company        Non-GAAP
Combined
Predecessor and
Successor Company
 
    Three Months Ended
September 30, 2019
      Three Months Ended
September 30, 2018
      Nine Months Ended
September 30, 2019
      Nine Months Ended
September 30, 2018
 
Net revenue $ 280,808     $ 282,254     $ 827,977     $ 831,182  
Operating expenses:                              
Content costs   98,335       98,494       295,931       291,349  
Selling, general and administrative expenses   115,289       114,345       344,609       347,057  
Depreciation and amortization   11,885       14,142       40,020       40,567  
Local marketing agreement fees   902       1,006       2,383       3,173  
Corporate expenses   8,649       7,009       25,726       24,024  
Stock-based compensation expense   1,492       1,131       3,806       2,014  
Restructuring costs   1,764       2,738       17,565       12,134  
Impairment of assets held on sale   5,000             5,000        
(Gain) loss on sale of assets or stations   (8,188 )     34       (55,912 )     192  
Total operating expenses   235,128       238,899       679,128       720,510  
Operating income   45,680       43,355       148,849       110,672  
Non-operating (expense) income:                              
Reorganization items, net                     466,201  
Interest expense   (22,754 )     (22,403 )     (66,101 )     (28,839 )
Interest income   9       16       21       70  
Gain on early extinguishment of debt               381        
Other expense, net   18       (3,177 )     (44 )     (3,430 )
Total non-operating (expense) income, net   (22,727 )     (25,564 )     (65,743 )     434,002  
Income before income tax (expense) benefit   22,953       17,791       83,106       544,674  
Income tax (expense) benefit   (6,630 )     (5,078 )     (23,471 )     169,175  
Net income $ 16,323     $ 12,713     $ 59,635     $ 713,849  


    Successor Company         Predecessor Company  
    Period from June 4, 2018
through September 30, 2018
        Period from January 1, 2018
through June 3, 2018
 
Net revenue $ 377,258       $ 453,924  
Operating expenses:                
Content costs   127,464         163,885  
Selling, general and administrative expenses   151,779         195,278  
Depreciation and amortization   18,521         22,046  
Local marketing agreement fees   1,364         1,809  
Corporate expenses   9,541         14,483  
Stock-based compensation expense   1,783         231  
Acquisition-related restructuring costs   9,679         2,455  
Loss on sale of assets or stations   34         158  
Total operating expenses   320,165         400,345  
Operating income   57,093         53,579  
Non-operating (expense) income:                
Reorganization items, net           466,201  
Interest expense   (28,579 )       (260 )
Interest income   20         50  
Other expense, net   (3,157 )       (273 )
Total non-operating (expense) income, net   (31,716 )       465,718  
Income before income tax (expense) benefit   25,377         519,297  
Income tax (expense) benefit   (7,684 )       176,859  
Net income $ 17,693       $ 696,156  
                 

The following tables reconcile net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA for the periods presented herein (dollars in thousands):      

As Reported   Three Months Ended
September 30, 2019
      Three Months Ended
September 30, 2018
 
GAAP net income $ 16,323     $ 12,713  
Income tax expense   6,630       5,078  
Non-operating expense, including net interest expense   22,727       25,564  
Local marketing agreement fees   902       1,006  
Depreciation and amortization   11,885       14,142  
Stock-based compensation expense   1,492       1,131  
Impairment of assets held for sale   5,000        
(Gain) loss on sale of assets or stations   (8,188 )     34  
Restructuring costs   1,764       2,738  
Franchise taxes   172       (302 )
Adjusted EBITDA $ 58,707     $ 62,104  


Same Station   Three Months Ended
September 30, 2019
      Three Months Ended
September 30, 2018
 
Net income $ 16,323     $ 9,816  
Income tax expense   6,630       5,078  
Non-operating expense, including net interest expense   22,727       25,564  
Local marketing agreement fees   902       1,006  
Depreciation and amortization   11,885       14,142  
Stock-based compensation expense   1,492       1,131  
Impairment of assets held for sale   5,000        
(Gain) loss on sale of assets or stations   (8,188 )     34  
Restructuring costs   1,764       2,738  
Franchise taxes   172       (302 )
Adjusted EBITDA $ 58,707     $ 59,207  


       
As Reported   Nine Months Ended
September 30, 2019
 
GAAP net income $ 59,635  
Income tax expense   23,471  
Non-operating expense, including net interest expense   66,124  
Local marketing agreement fees   2,383  
Depreciation and amortization   40,020  
Stock-based compensation expense   3,806  
Impairment of assets held for sale   5,000  
Gain on sale of assets or stations   (55,912 )
Restructuring costs   17,565  
Franchise taxes   614  
Gain on early extinguishment of debt   (381 )
Adjusted EBITDA $ 162,325  


    Successor Company       Predecessor Company       Non-GAAP
Combined
Predecessor and
Successor Company
 
As Reported   Period from June 4, 2018
through September 30, 2018
      Period from January 1, 2018
through June 3, 2018
      Nine Months Ended September 30, 2018  
GAAP net income $ 17,693     $ 696,156     $ 713,849  
Income tax expense (benefit)   7,684       (176,859 )     (169,175 )
Non-operating expense, including net interest expense   31,716       483       32,199  
Local marketing agreement fees   1,364       1,809       3,173  
Depreciation and amortization   18,521       22,046       40,567  
Stock-based compensation expense   1,783       231       2,014  
Loss on sale of assets or stations   34       158       192  
Reorganization items, net         (466,201 )     (466,201 )
Restructuring costs   9,679       2,455       12,134  
Franchise taxes   (255 )     234       (21 )
Adjusted EBITDA $ 88,219     $ 80,512     $ 168,731  


    Successor Company       Non-GAAP
Combined
Predecessor and
Successor Company
 
Same Station   Nine Months Ended
September 30, 2019
      Nine Months Ended
September 30, 2018
 
Net income $ 59,272     $ 706,590  
Income tax expense (benefit)   23,471       (169,175 )
Non-operating expense, including net interest expense   66,124       32,199  
Local marketing agreement fees   2,383       3,173  
Depreciation and amortization   40,020       40,567  
Stock-based compensation expense   3,806       2,014  
Impairment of assets held for sale   5,000        
(Gain) loss on sale of assets or stations   (55,912 )     192  
Reorganization items, net         (466,201 )
Restructuring costs   17,565       12,134  
Franchise taxes   614       (21 )
Gain on early extinguishment of debt   (381 )      
Adjusted EBITDA $ 161,962     $ 161,569  
               

The following tables reconcile as reported net revenue and as reported Adjusted EBITDA to same station net revenue and same station Adjusted EBITDA, both including and excluding the impact of political, for the periods presented herein (dollars in thousands):

    Three Months Ended
September 30, 2019
      Three Months Ended
September 30, 2018
 
As reported net revenue $ 280,808     $ 282,254  
Station dispositions and swaps         (10,065 )
Same station net revenue 280,808     $ 272,189  
Political revenue   (1,713 )     (3,633 )
Same station net revenue, excluding impact of political revenue $ 279,095     $ 268,556  


    Nine Months Ended
September 30, 2019
(Successor Company)
      Nine Months Ended
September 30, 2018
(Non-GAAP Combined
Predecessor and
Successor Company)
 
As reported net revenue $ 827,977     $ 831,182  
Station dispositions and swaps   (3,731 )     (21,346 )
Same station net revenue $ 824,246     $ 809,836  
Political revenue   (3,447 )     (8,698 )
Same station net revenue, excluding impact of political revenue $ 820,799     $ 801,138  


    Three Months Ended
September 30, 2019
      Three Months Ended
September 30, 2018
 
As reported Adjusted EBITDA $ 58,707     $ 62,104  
Station dispositions and swaps         (2,897 )
Same station Adjusted EBITDA $ 58,707     $ 59,207  
Political EBITDA   (1,541 )     (3,270 )
Same station Adjusted EBITDA, excluding impact of political EBITDA $ 57,166     $ 55,937  


    Nine Months Ended
September 30, 2019
(Successor Company)
      Nine Months Ended
September 30, 2018
(Non-GAAP Combined
Predecessor and
Successor Company)
 
As reported Adjusted EBITDA $ 162,325     $ 168,731  
Station dispositions and swaps   (363 )     (7,162 )
Same station Adjusted EBITDA $ 161,962     $ 161,569  
Political EBITDA   (3,102 )     (7,828 )
Same station Adjusted EBITDA, excluding impact of political EBITDA $ 158,860     $ 153,741  
               

The following tables provide disaggregated revenue detail by quarter for 2019 and 2018 as reported and same station (dollars in thousands):

As Reported   Three Months Ended
September 30, 2019
    Three Months Ended
June 30, 2019
    Three Months Ended
March 31, 2019
Broadcast Radio Revenue:                
Spot $ 161,211   $ 163,111   $ 139,579
Network   78,404     72,877     85,164
Total Broadcast Radio Revenue   239,615     235,988     224,743
Digital   19,935     20,208     16,841
Other   21,258     23,477     25,912
Net Revenue $ 280,808   $ 279,673   $ 267,496


Same Station   Three Months Ended
September 30, 2019
    Three Months Ended
June 30, 2019
    Three Months Ended
March 31, 2019
Broadcast Radio Revenue:                
Spot $ 161,211   $ 160,510   $ 139,579
Network   78,404     72,421     85,164
Total Broadcast Radio Revenue   239,615     232,931     224,743
Digital   19,935     20,120     16,841
Other   21,258     22,890     25,912
Net Revenue $ 280,808   $ 275,941   $ 267,496


  Successor Company
    Non-GAAP
Combined
Predecessor and
Successor Company
    Predecessor Company
As Reported   Three Months Ended
December 31, 2018
    Three Months Ended
September 30, 2018
    Three Months Ended
June 30, 2018
    Three Months Ended
March 31, 2018
Broadcast Radio Revenue:                      
Spot $ 180,169   $ 168,554   $ 174,502   $ 145,221
Network   85,101     75,716     72,389     82,844
Total Broadcast Radio Revenue   265,270     244,270     246,891     228,065
Digital   15,638     13,459     11,929     9,239
Other   28,270     24,525     26,429     26,375
Net Revenue $ 309,178   $ 282,254   $ 285,249   $ 263,679


    Successor Company
    Non-GAAP
Combined
Predecessor and
Successor Company
    Predecessor Company
Same Station   Three Months Ended
December 31, 2018
    Three Months Ended
September 30, 2018
    Three Months Ended
June 30, 2018
    Three Months Ended
March 31, 2018
Broadcast Radio Revenue:                      
Spot $ 173,854   $ 161,306   $ 167,617   $ 145,135
Network   82,493     74,715     70,326     82,844
Total Broadcast Radio Revenue   256,347     236,021     237,943     227,979
Digital   15,407     13,171     11,669     9,290
Other   26,818     22,997     24,493     26,274
Net Revenue $ 298,572   $ 272,189   $ 274,105   $ 263,543
                       

The following table discloses net revenue for each of the Predecessor and Successor Company periods presented herein.  When combined, these periods present the Company's non-GAAP combined Predecessor and Successor net revenue for the nine months ended September 30, 2018 (dollars in thousands):

    Successor Company     Predecessor Company
    Period from June 4, 2018
through September 30, 2018
    Period from January 1, 2018
through June 3, 2018
Net revenue $ 377,258   $ 453,924
           

The following table discloses capital expenditures for each of the Predecessor and Successor Company periods presented below.  When combined, these periods present the Company's non-GAAP combined Predecessor and Successor capital expenditures for the nine months ended September 30, 2018 (dollars in thousands):

    Successor Company       Predecessor Company  
    Period from June 4, 2018
through September 30, 2018
      Period from January 1, 2018
through June 3, 2018
 
Capital expenditures $ 7,866     $ 14,019  

 

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