Cumulus Media Inc. (NASDAQ: CMLS) (the "Company," "Cumulus Media,"
"we," "us," or "our") today announced operating results for the
three months ended March 31, 2024.
Mary G. Berner, President and Chief Executive
Officer of Cumulus Media, said, “We are thrilled to have refinanced
our capital structure to secure five-year maturities with favorable
terms through a successful debt exchange and ABL Facility upsize
and extension. This is an excellent outcome for the Company
especially given the generally difficult financing environment for
legacy media companies. Specifically, we extended maturities to
2029, reduced the principal amount of outstanding debt by
approximately $33 million, obtained attractive interest rates,
maintained a structure free of financial maintenance covenants, and
increased capacity on our ABL Facility by 25%.”
Berner continued, “The importance of these
transactions is underscored by the continuing choppiness in the
macroeconomic environment. While our Q1 revenue was in line with
guidance and a marked improvement from 2023 trends, it is also
reflective of the uncertainty that continues to weigh on
advertisers. With the advertising environment still unsettled,
these new terms provide us additional time and flexibility to
execute against our key business priorities - accelerating digital
growth, reducing fixed costs, and continuing to de-lever our
balance sheet - each of which is foundational to our ability to
build long-term shareholder value."
Q1 Performance Summary:
- Posted total net revenue of $200.1 million, a decline of 2.7%,
a sequential improvement versus Q4 2023's year-over-year
performance
- Generated digital revenue of $34.4 million, an increase of 7.3%
year-over-year
- Digital revenue comprising 17% of total company revenue
- Digital marketing services growth of 25% driven by the addition
of new products and investment in our digital sales
capabilities
- Recorded first quarter net loss of $14.2 million compared to
net loss of $21.5 million in Q1 2023 and Adjusted EBITDA(1) of $8.4
million compared to $10.3 million in Q1 2023
- Continued to improve operating leverage by reducing fixed costs
by approximately $4 million
Updated Capital Structure Activity:
- Consummated the exchange offer for our 6.75% Senior Notes and
First Lien Term Loans due 2026 on May 2, 2024, with favorable terms
and aggregate participation of approximately 97% of debt
outstanding
- Total debt reduced by approximately $33 million
- Existing debt maturities extended from 2026 to 2029
- Interest rate modified on exchanged Notes to 8.00% and
exchanged Term Loans to SOFR + 500 basis points
- Amended ABL Facility, increasing capacity to $125 million from
$100 million and extending maturity to 2029
Operating Summary (dollars in thousands, except
percentages and per share data):
For the three months
ended March 31, 2024, the Company reported net revenue
of $200.1 million, a decrease of 2.7% from the three
months ended March 31, 2023, net loss of $14.2
million and Adjusted EBITDA of $8.4 million.
As Reported |
Three Months Ended March 31, 2024 |
|
Three Months Ended March 31, 2023 |
|
% Change |
Net revenue |
$ |
200,053 |
|
|
$ |
205,692 |
|
|
(2.7 |
)% |
Net loss |
$ |
(14,154 |
) |
|
$ |
(21,467 |
) |
|
34.1 |
% |
Adjusted EBITDA |
$ |
8,405 |
|
|
$ |
10,329 |
|
|
(18.6 |
)% |
Basic loss per share |
$ |
(0.85 |
) |
|
$ |
(1.17 |
) |
|
27.4 |
% |
Diluted loss per share |
$ |
(0.85 |
) |
|
$ |
(1.17 |
) |
|
27.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
Revenue Detail Summary (dollars in
thousands):
As Reported |
Three Months Ended March 31, 2024 |
|
Three Months Ended March 31, 2023 |
|
% Change |
Broadcast radio revenue: |
|
|
|
|
|
Spot |
$ |
90,573 |
|
|
$ |
97,713 |
|
|
(7.3 |
)% |
Network |
|
49,162 |
|
|
|
50,297 |
|
|
(2.3 |
)% |
Total
broadcast radio revenue |
|
139,735 |
|
|
|
148,010 |
|
|
(5.6 |
)% |
Digital |
|
34,447 |
|
|
|
32,089 |
|
|
7.3 |
% |
Other |
|
25,871 |
|
|
|
25,593 |
|
|
1.1 |
% |
Net revenue |
$ |
200,053 |
|
|
$ |
205,692 |
|
|
(2.7 |
)% |
|
Balance Sheet Summary (dollars in
thousands):
|
|
March 31, 2024 |
|
December 31, 2023 |
Cash and cash equivalents |
|
$ |
68,339 |
|
|
$ |
80,660 |
|
Term loan due 2026 (2) |
|
$ |
329,510 |
|
|
$ |
329,510 |
|
6.75% Senior notes (2) |
|
$ |
346,245 |
|
|
$ |
346,245 |
|
|
Three Months Ended March 31, 2024 |
|
Three Months Ended March 31, 2023 |
Capital expenditures |
$ |
8,166 |
|
|
$ |
7,372 |
|
(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”).
(2) Excludes
unamortized debt issuance costs.
Earnings Conference Call Details
The Company will host a conference call today at
8:30 AM ET to discuss its first quarter 2024 operating results.
NetRoadshow (NRS) is the service provider for this call. They will
require email address verification (one-time only) and will provide
registration confirmation. To participate in the conference call,
please register in advance using the link on the Company's investor
relations website at www.cumulusmedia.com/investors. Upon
completing registration, a calendar invitation will follow with
call access details, including a unique PIN, and replay
details.
To join by phone with operator-assisted dial-in, domestic
callers should dial 833-470-1428 and international callers should
dial 404-975-4839. If prompted, the participant access code is
587250. Please call five to ten minutes in advance to ensure that
you are connected prior to the call.
The conference call will also be broadcast live
in listen-only mode through a link on the Company’s investor
relations website at www.cumulusmedia.com/investors. This link can
also be used to access a recording of the call, which will be
available shortly following its completion.
Please see an update to the Company’s investor
presentation on the Company's investor relations website at
www.cumulusmedia.com/investors, which may be referenced on the
conference call. Unless otherwise specified, information contained
in the investor presentation or on our website is not incorporated
into this press release or other documents we file with, or furnish
to, the SEC.
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 and our plans and objectives.
Any such forward-looking statements are not guarantees of future
performance and involve risks, uncertainties and other factors that
may cause actual results, performance or achievements to differ
from those contained in or implied by the forward-looking
statements as a result of various factors. Such factors include,
among others, risks and uncertainties related to the implementation
of our strategic operating plans, the continued uncertain financial
and economic conditions, the rapidly changing and competitive media
industry, and the economy in general. We are subject to additional
risks and uncertainties described in our quarterly and annual
reports filed with the Securities and Exchange Commission from time
to time, including in the "Risk Factors," and "Management’s
Discussion and Analysis of Financial Condition and Results of
Operations" sections contained therein. You should not rely on
forward-looking statements since they involve known and unknown
risks, uncertainties and other factors that are, in some cases,
beyond the Company’s control, and the unexpected occurrence or
failure to occur of any such events or matters could cause our
actual results, performance, financial condition or achievements to
differ materially from those expressed or implied by such
forward-looking statements. Cumulus Media assumes no responsibility
to update any forward-looking statements, which are based upon
expectations as of the date hereof, as a result of new information,
future events or otherwise.
About Cumulus Media
Cumulus Media (NASDAQ: CMLS) is an audio-first
media 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
401 owned-and-operated radio stations across 85 markets; delivers
nationally-syndicated sports, news, talk, and entertainment
programming from iconic brands including the NFL, the NCAA, the
Masters, CNN, AP News, the Academy of Country Music Awards, and
many other world-class partners across more than 9,800 affiliated
stations through Westwood One, the largest audio network in
America; and inspires listeners through the Cumulus Podcast
Network, 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 broadcast and on-demand digital, mobile, social, and
voice-activated platforms, as well as 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 Measures
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 addition, consolidated Adjusted EBITDA is a key
metric for purposes of calculating and determining our compliance
with certain covenants contained in our Refinanced Credit
Agreement.
In determining Adjusted EBITDA, we exclude the
following from net loss: interest, taxes, depreciation,
amortization, stock-based compensation expense, gain or loss on the
exchange, sale, or disposal of any assets or stations or early
extinguishment of debt, restructuring costs, expenses relating to
acquisitions and divestitures, non-routine legal expenses incurred
in connection with certain litigation matters, and non-cash
impairments of assets, if any.
Management believes that Adjusted EBITDA, with
and excluding impact of political advertising, although not a
measure that is calculated in accordance with GAAP, is commonly
employed by the investment community as a measure 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, with and excluding impact of
political advertising, is 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 these metrics to be extremely useful.
The Company presents revenue, excluding impact
of political revenue. As a result of the cyclical nature of the
electoral system and the seasonality of the related political
revenue, management believes presenting net revenue, excluding
impact of political revenue, provides useful information to
investors about the Company’s revenue growth comparable from period
to period.
We refer to Adjusted EBITDA, with and excluding
the impact of political advertising, and net revenue, excluding the
impact of political revenue, as the "Non-GAAP Financial Measures."
Non-GAAP Financial Measures should not be considered in isolation
or as a substitute for net income, 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, Non-GAAP
Financial Measures may be defined or calculated differently by
other companies and, therefore, comparability may be limited.
For further information, please
contact:Cumulus Media Inc.Investor
Relations DepartmentIR@cumulus.com404-260-6600
Supplemental Financial Data and
Reconciliations
Cumulus Media Inc.Unaudited Condensed
Consolidated Statements of Operations(Dollars in
thousands) |
|
|
|
Three Months EndedMarch 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Net revenue |
|
$ |
200,053 |
|
|
$ |
205,692 |
|
Operating expenses: |
|
|
|
|
Content costs |
|
|
85,057 |
|
|
|
88,666 |
|
Selling, general & administrative expenses |
|
|
94,760 |
|
|
|
94,301 |
|
Depreciation and amortization |
|
|
14,869 |
|
|
|
14,684 |
|
Corporate expenses |
|
|
12,630 |
|
|
|
12,598 |
|
Stock-based compensation expense |
|
|
1,072 |
|
|
|
1,126 |
|
Restructuring costs |
|
|
2,130 |
|
|
|
291 |
|
Loss (gain) on sale of assets or stations |
|
|
9 |
|
|
|
(7,009 |
) |
Total operating expenses |
|
|
210,527 |
|
|
|
204,657 |
|
Operating (loss) income |
|
|
(10,474 |
) |
|
|
1,035 |
|
Non-operating expense: |
|
|
|
|
Interest expense |
|
|
(17,360 |
) |
|
|
(17,666 |
) |
Interest income |
|
|
346 |
|
|
|
369 |
|
Gain on early extinguishment of debt |
|
|
— |
|
|
|
617 |
|
Other expense (income), net |
|
|
14,833 |
|
|
|
(18 |
) |
Total non-operating expense, net |
|
|
(2,181 |
) |
|
|
(16,698 |
) |
Loss before income taxes |
|
|
(12,655 |
) |
|
|
(15,663 |
) |
Income tax expense |
|
|
(1,499 |
) |
|
|
(5,804 |
) |
Net loss |
|
$ |
(14,154 |
) |
|
$ |
(21,467 |
) |
|
The following tables reconcile net 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 March 31, 2024 |
|
Three Months Ended March 31, 2023 |
GAAP net loss |
|
$ |
(14,154 |
) |
|
$ |
(21,467 |
) |
Income tax expense |
|
|
1,499 |
|
|
|
5,804 |
|
Non-operating expense, including net interest expense |
|
|
2,181 |
|
|
|
17,315 |
|
Depreciation and amortization |
|
|
14,869 |
|
|
|
14,684 |
|
Stock-based compensation expense |
|
|
1,072 |
|
|
|
1,126 |
|
Loss (gain) on sale or disposal of assets or stations |
|
|
9 |
|
|
|
(7,009 |
) |
Gain on early extinguishment of debt |
|
|
— |
|
|
|
(617 |
) |
Restructuring costs |
|
|
2,130 |
|
|
|
291 |
|
Non-routine legal expenses |
|
|
608 |
|
|
|
3 |
|
Franchise taxes |
|
|
191 |
|
|
|
199 |
|
Adjusted EBITDA |
|
$ |
8,405 |
|
|
$ |
10,329 |
|
|
The following tables reconcile the as reported net revenue and
as reported Adjusted EBITDA, both including and excluding the
impact of political, for the periods presented herein (dollars in
thousands):
|
|
Three Months Ended March 31, 2024 |
|
Three Months Ended March 31, 2023 |
As reported net revenue |
|
$ |
200,053 |
|
|
$ |
205,692 |
|
Political revenue |
|
|
(2,199 |
) |
|
|
(405 |
) |
As reported net revenue,
excluding impact of political revenue |
|
$ |
197,854 |
|
|
$ |
205,287 |
|
|
|
Three Months Ended March 31, 2024 |
|
Three Months Ended March 31, 2023 |
As reported Adjusted EBITDA |
|
$ |
8,405 |
|
|
$ |
10,329 |
|
Political EBITDA |
|
|
(1,979 |
) |
|
|
(365 |
) |
As reported Adjusted EBITDA,
excluding impact of political EBITDA |
|
$ |
6,426 |
|
|
$ |
9,964 |
|
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