Cumulus Media Inc. (NASDAQ:CMLS) (the “Company,” “we,” “us,” or
“our”) today announced operating results for the three months ended
March 31, 2017.
For the three months ended March 31, 2017, the Company
reported net revenue of $264.0 million, down 1.7% from the three
months ended March 31, 2016, net loss of $7.4 million and
Adjusted EBITDA of $38.7 million, down 7.6% from the three months
ended March 31, 2016.
Mary Berner, President and Chief Executive Officer of Cumulus
Media Inc. said, "Our first quarter represents a clear
inflection point in our turnaround, as the downward trajectory of
recent years has been reversed. With clear evidence that
our strategy is working, we remain committed to the rigorous
execution of the initiatives that are critical to keeping the
Company on a sustained growth path."
Operating Summary (in thousands, except percentages and
per share data):
| |
Three Months Ended March 31, |
| |
2017 |
|
2016 |
|
% Change |
| Net revenue |
$ |
264,030 |
|
|
$ |
268,530 |
|
|
(1.7 |
)% |
| Net loss |
$ |
(7,395 |
) |
|
$ |
(14,429 |
) |
|
48.7 |
% |
| Adjusted EBITDA
(1) |
$ |
38,733 |
|
|
$ |
41,933 |
|
|
(7.6 |
)% |
| Basic and diluted loss
per share |
$ |
(0.25 |
) |
|
$ |
(0.49 |
) |
|
|
| |
|
March 31, 2017 |
|
December 31, 2016 |
|
% Change |
| Cash and cash
equivalents |
|
$ |
151,153 |
|
|
$ |
131,259 |
|
|
15.2 |
% |
| |
|
|
|
|
|
|
| Term loan (2) |
|
$ |
1,810,266 |
|
|
$ |
1,810,266 |
|
|
— |
% |
| 7.75% senior notes
(3) |
|
610,000 |
|
|
610,000 |
|
|
— |
% |
| Total debt |
|
$ |
2,420,266 |
|
|
$ |
2,420,266 |
|
|
— |
% |
| |
Three Months Ended March 31, |
| |
2017 |
|
2016 |
|
% Change |
| Capital
expenditures |
$ |
5,736 |
|
|
$ |
4,161 |
|
|
37.9 |
% |
(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 and Definition”.(2)
Term loan excludes debt issuance costs/discounts of $27,914 and
$29,909 at March 31, 2017 and December 31, 2016, respectively.(3)
7.75% senior notes exclude debt issuance costs/discounts of $5,591
and $6,200 at March 31, 2017 and December 31, 2016,
respectively.
Results for Three Months Ended March 31,
2017
Net Revenue
The Company operates in two reportable segments, the Radio
Station Group and Westwood One. The Radio Station Group
revenue is derived primarily from the sale of broadcasting time to
local, regional and national advertisers. Westwood One
revenue is generated primarily through network advertising.
Corporate and Other includes overall executive, administrative
and support functions for each of the Company’s reportable
segments, including programming, finance, legal, human resources,
information technology and administrative functions.
The following tables present our net revenue by segment (dollars
in thousands).
| |
|
Three Months Ended March 31,
2017 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Net revenue |
|
$ |
173,603 |
|
|
$ |
89,855 |
|
|
$ |
572 |
|
|
$ |
264,030 |
|
| % of total revenue |
|
65.8 |
% |
|
34.0 |
% |
|
0.2 |
% |
|
100.0 |
% |
| $ change from three
months ended March 31, 2016 |
|
$ |
(2,873 |
) |
|
$ |
(1,710 |
) |
|
$ |
83 |
|
|
$ |
(4,500 |
) |
| % change from three
months ended March 31, 2016 |
|
(1.6 |
)% |
|
(1.9 |
)% |
|
17.0 |
% |
|
(1.7 |
)% |
| |
|
Three Months Ended March 31,
2016 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Net revenue |
|
$ |
176,476 |
|
|
$ |
91,565 |
|
|
$ |
489 |
|
|
$ |
268,530 |
|
| % of total revenue |
|
65.7 |
% |
|
34.1 |
% |
|
0.2 |
% |
|
100.0 |
% |
|
|
Net income (loss)
The following tables present our net income (loss) by segment
(dollars in thousands).
| |
|
Three Months Ended March 31,
2017 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Net income (loss) |
|
$ |
28,538 |
|
|
$ |
2,265 |
|
|
$ |
(38,198 |
) |
|
$ |
(7,395 |
) |
| $ change from three
months ended March 31, 2016 |
|
$ |
3,799 |
|
|
$ |
5,150 |
|
|
$ |
(1,915 |
) |
|
$ |
7,034 |
|
| % change from three
months ended March 31, 2016 |
|
15.4 |
% |
|
178.5 |
% |
|
(5.3 |
)% |
|
48.7 |
% |
| |
|
Three Months Ended March 31,
2016 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Net income (loss) |
|
$ |
24,739 |
|
|
$ |
(2,885 |
) |
|
$ |
(36,283 |
) |
|
$ |
(14,429 |
) |
|
|
Adjusted EBITDA
The following tables present our Adjusted EBITDA by segment
(dollars in thousands).
| |
|
Three Months Ended March 31,
2017 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Adjusted EBITDA |
|
$ |
39,042 |
|
|
$ |
8,969 |
|
|
$ |
(9,278 |
) |
|
$ |
38,733 |
|
| $ change from three
months ended March 31, 2016 |
|
$ |
(4,677 |
) |
|
$ |
1,211 |
|
|
$ |
266 |
|
|
$ |
(3,200 |
) |
| % change from three
months ended March 31, 2016 |
|
(10.7 |
)% |
|
15.6 |
% |
|
2.8 |
% |
|
(7.6 |
)% |
| |
|
Three Months Ended March 31,
2016 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Adjusted EBITDA |
|
$ |
43,719 |
|
|
$ |
7,758 |
|
|
$ |
(9,544 |
) |
|
$ |
41,933 |
|
|
|
On March 21, 2017, the Company received a notification from the
NASDAQ Stock Market LLC (“NASDAQ”) indicating that the Company was
not in compliance with NASDAQ Listing Rule 5550(b)(1) (the "Equity
Listing Rule") because the Company's stockholder's equity was below
the minimum required amount, and because the Company did not meet
the alternative continued listing standards of that Rule.
Separately, on April 5, 2017, the Company received a
notification from the NASDAQ indicating that the Company was not in
compliance with NASDAQ Listing Rule 5550(a)(2) (the "Bid Price
Rule") because the bid price of the Company’s Class A common stock
had closed below $1.00 per share for 30 consecutive business
days.
On May 5, 2017, the Company submitted to NASDAQ a plan to regain
compliance with the Equity Listing Rule. We remain in discussions
with NASDAQ regarding this plan and, if accepted, NASDAQ could
provide us a period up to September 17, 2017 to regain compliance
with the Equity Listing Rule. In the event NASDAQ does not
accept our plan, our Class A common stock will be subject to
delisting from NASDAQ. In addition, in accordance with NASDAQ
Listing Rule 5810(c)(3)(A) and assuming no prior action is taken to
delist our Class A common stock pursuant to noncompliance with the
Equity Listing Rule, the Company has until October 2, 2017 to
regain compliance with the requirements under the Bid Price Rule.
If, at any time before that date the bid price of the Company’s
Class A common stock closes at $1.00 per share or more for a
minimum of 10 consecutive business days, the Company will be deemed
to be in compliance with the Bid Price Rule.
We continue to evaluate alternatives to regain compliance with
applicable listing rules. Our inability to maintain the
listing of our Class A common stock on the NASDAQ stock market may
adversely affect the liquidity and market price of our Class A
common stock.
Earnings Call InformationCumulus Media Inc.
will host a teleconference today at 4:30 PM eastern time to discuss
its first quarter 2017 operating results.
The conference call dial-in number for domestic callers is
877-830-7699. International callers should dial 574-990-0924 for
conference call access. If prompted, the conference ID is
16848955. Please call five to ten minutes in advance to ensure that
you are connected prior to the presentation.
Following completion of the call, a replay can be accessed until
11:30 PM eastern time, June 15, 2017. Domestic callers can access
the replay by dialing 800-585-8367 or 855-859-2056, replay code
16848955. International callers should dial +44 (0)145255000 for
conference replay access. An archive of the webcast will be
available beginning 24 hours after the call for a period of 30
days.
A link to the live audio webcast of the conference call and the
related earnings presentation will be available on the investor
section of the Cumulus Media Inc. website
(www.cumulus.com/investors).
Forward-Looking StatementsCertain 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 certain historical and our
future operating, financial, and strategic performance. Any such
forward-looking statements are not guarantees of future performance
and may 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 relating to the need for
additional funds to service our debt and to execute our business
strategy, our ability to access borrowings under our revolving
credit facility, our ability from time to time to renew one or more
of our broadcast licenses, changes in interest rates, changes in
the fair value of our investments, the timing of, and our ability
to complete any acquisitions or dispositions pending from time to
time, costs and synergies resulting from the integration of any
completed acquisitions, our ability to effectively manage costs,
our ability to generate and manage growth, the popularity of radio
as a broadcasting and advertising medium, changing consumer tastes,
the impact of general economic conditions in the United States or
in specific markets in which we currently do business, industry
conditions, including existing competition and future competitive
technologies and cancellation, disruptions or postponements of
advertising schedules in response to national or world events, our
ability to generate revenues from new sources, including local
commerce and technology-based initiatives, the impact of regulatory
rules or proceedings that may affect our business from time to
time, our ability to continue to meet the listing standards for our
Class A common stock to continue to be listed for trading on the
NASDAQ stock market, the write off of a material portion of the
fair value of our FCC broadcast licenses and goodwill, and other
risk factors described from time to time in our filings with
the Securities and Exchange Commission, including our Form 10-K for
the year ended December 31, 2016 (the “2016 Form 10-K”) and
any subsequent filings. 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
Inc. assumes no responsibility to update any forward-looking
statement as a result of new information, future events or
otherwise.
About Cumulus MediaA leader in the radio
broadcasting industry, Cumulus Media combines high-quality
local programming with iconic, nationally syndicated media, sports
and entertainment brands to deliver premium content choices to the
245 million people reached each week through its 447
owned-and-operated stations broadcasting in 90 US media markets
(including eight of the top 10), more than 8,200 broadcast radio
stations affiliated with its Westwood One network and numerous
digital channels. Together, the Cumulus/Westwood One platforms make
Cumulus Media one of the few media companies that can provide
advertisers with national reach and local impact. Cumulus/Westwood
One is the exclusive radio broadcast partner to some of the largest
brands in sports, entertainment, news and talk, including the NFL,
the NCAA, the Masters, the Olympics, the GRAMMYs, the Academy of
Country Music Awards, the American Music Awards, the Billboard
Music Awards, Westwood One News, and more. Additionally, it is the
nation's leading provider of country music and lifestyle content
through its NASH brand, which serves country fans nationwide
through radio programming, exclusive digital content, and live
events.
| CUMULUS MEDIA INC.Unaudited
Condensed Consolidated Statements of
Operations(Dollars in thousands, except per share
data) |
| |
|
|
| |
|
Three Months Ended March 31, |
| |
|
2017 |
|
2016 |
| Net revenue |
|
$ |
264,030 |
|
|
$ |
268,530 |
|
| Operating
expenses: |
|
|
|
|
| Content
costs |
|
101,780 |
|
|
100,045 |
|
| Selling,
general and administrative expenses |
|
114,390 |
|
|
117,227 |
|
|
Depreciation and amortization |
|
16,282 |
|
|
23,097 |
|
| LMA
fees |
|
2,707 |
|
|
5,388 |
|
| Corporate
expenses |
|
9,267 |
|
|
9,510 |
|
|
Stock-based compensation expense |
|
538 |
|
|
878 |
|
|
Acquisition-related and restructuring costs |
|
1,150 |
|
|
2,266 |
|
| (Gain)
loss on sale of assets or stations |
|
(2,606 |
) |
|
5 |
|
| Total
operating expenses |
|
243,508 |
|
|
258,416 |
|
| Operating
income |
|
20,522 |
|
|
10,114 |
|
| Non-operating
expense: |
|
|
|
|
| Interest
expense |
|
(34,063 |
) |
|
(34,481 |
) |
| Interest
income |
|
37 |
|
|
85 |
|
| Other
income, net |
|
83 |
|
|
720 |
|
| Total
non-operating expense, net |
|
(33,943 |
) |
|
(33,676 |
) |
| Loss
before income taxes |
|
(13,421 |
) |
|
(23,562 |
) |
| Income tax benefit |
|
6,026 |
|
|
9,133 |
|
| Net
loss |
|
$ |
(7,395 |
) |
|
$ |
(14,429 |
) |
| Basic and
diluted loss per common share: |
|
|
|
|
| Basic: Loss per
share |
|
$ |
(0.25 |
) |
|
$ |
(0.49 |
) |
| Diluted: Loss per
share |
|
$ |
(0.25 |
) |
|
$ |
(0.49 |
) |
| Weighted average basic
common shares outstanding |
|
29,306,374 |
|
|
29,256,227 |
|
| Weighted average
diluted common shares outstanding |
|
29,306,374 |
|
|
29,256,227 |
|
| |
Non-GAAP Financial Measure and
Definition
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. Adjusted EBITDA is the
financial metric utilized by the Company to analyze the cash flow
generated by our business. This measure isolates the amount of
income generated by our core operations after the incurrence of
corporate, general and administrative expenses. The Company 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 our non-operating expenses including debt
service and acquisitions. In addition, consolidated Adjusted
EBITDA, excluding the impact of LMA fees, is a key metric for
purposes of calculating and determining our compliance with certain
covenants contained in our Credit Agreement.
In deriving this measure, the Company excludes depreciation,
amortization and stock-based compensation expense, as these do
not represent cash payments for activities directly related to our
core operations. The Company also excludes any gain or loss on
the exchange or sale of any assets and any gain or loss on
derivative instruments, early extinguishment of debt, and LMA
Fees as they are not associated with core operations. Expenses
relating to acquisitions and restructuring costs are also
excluded from the calculation of Adjusted EBITDA as they are not
directly related to our ongoing core operations. The Company
also excludes any costs associated with impairment of assets as
they do not require a cash outlay.
The Company believes that Adjusted EBITDA, 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. The Company has also observed that Adjusted EBITDA
is routinely employed to evaluate and negotiate the potential
purchase price for media companies. Given the relevance to our
overall value, the Company believes that investors consider the
metric to be extremely useful.
Adjusted EBITDA should not be considered in isolation or as a
substitute for net income (loss), 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 may be defined
or calculated differently by other companies, and comparability may
be limited.
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 three months ended
March 31, 2017 and 2016 (dollars in thousands):
| |
|
Three Months Ended March 31,
2017 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| GAAP net income
(loss) |
|
$ |
28,538 |
|
|
$ |
2,265 |
|
|
$ |
(38,198 |
) |
|
$ |
(7,395 |
) |
| Income
tax benefit |
|
— |
|
|
— |
|
|
(6,026 |
) |
|
(6,026 |
) |
|
Non-operating (income) expense, including net interest expense |
|
(1 |
) |
|
142 |
|
|
33,802 |
|
|
33,943 |
|
| LMA
fees |
|
2,707 |
|
|
— |
|
|
— |
|
|
2,707 |
|
|
Depreciation and amortization |
|
10,404 |
|
|
5,454 |
|
|
424 |
|
|
16,282 |
|
|
Stock-based compensation expense |
|
— |
|
|
— |
|
|
538 |
|
|
538 |
|
| Gain on
sale of assets or stations |
|
(2,606 |
) |
|
— |
|
|
— |
|
|
(2,606 |
) |
|
Acquisition-related and restructuring costs |
|
— |
|
|
1,108 |
|
|
42 |
|
|
1,150 |
|
| Franchise
and state taxes |
|
— |
|
|
— |
|
|
140 |
|
|
140 |
|
| Adjusted EBITDA |
|
$ |
39,042 |
|
|
$ |
8,969 |
|
|
$ |
(9,278 |
) |
|
$ |
38,733 |
|
| |
|
Three Months Ended March 31,
2016 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| GAAP net income
(loss) |
|
$ |
24,739 |
|
|
$ |
(2,885 |
) |
|
$ |
(36,283 |
) |
|
$ |
(14,429 |
) |
| Income
tax benefit |
|
— |
|
|
— |
|
|
(9,133 |
) |
|
(9,133 |
) |
|
Non-operating (income) expense, including net interest expense |
|
(2 |
) |
|
103 |
|
|
33,575 |
|
|
33,676 |
|
| LMA
fees |
|
5,388 |
|
|
— |
|
|
— |
|
|
5,388 |
|
|
Depreciation and amortization |
|
13,589 |
|
|
8,981 |
|
|
527 |
|
|
23,097 |
|
|
Stock-based compensation expense |
|
— |
|
|
— |
|
|
878 |
|
|
878 |
|
| Loss on
sale of assets or stations |
|
5 |
|
|
— |
|
|
— |
|
|
5 |
|
|
Acquisition-related and restructuring costs |
|
— |
|
|
1,559 |
|
|
707 |
|
|
2,266 |
|
| Franchise
and state taxes |
|
— |
|
|
— |
|
|
185 |
|
|
185 |
|
| Adjusted EBITDA |
|
$ |
43,719 |
|
|
$ |
7,758 |
|
|
$ |
(9,544 |
) |
|
$ |
41,933 |
|
For further information, please contact:
Cumulus Media Inc.
Collin Jones
Investor Relations
collin@cumulus.com
404-260-6600