EX-99.1 2 cmls09302017earningsrelease.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
image0a14.jpg

CUMULUS MEDIA INC.

Cumulus Reports Operating Results for Third Quarter 2017

ATLANTA, GA — November 9, 2017: Cumulus Media Inc. (NASDAQ: CMLS) (the “Company,” “we,” “us,” or “our”) today announced operating results for the three and nine months ended September 30, 2017.  

For the three months ended September 30, 2017, the Company reported net revenue of $287.2 million, up 0.4% from the three months ended September 30, 2016, net income of $1.3 million and Adjusted EBITDA of $61.8 million which was up 40.7% from the three months ended September 30, 2016. For the nine months ended September 30, 2017, the Company reported net revenue of $841.8 million, net loss of $0.4 million and Adjusted EBITDA of $167.9 million which was up 12.7% from the nine months ended September 30, 2016. Adjusted EBITDA for the three and nine months ended September 30, 2016 included the impact of $14.4 million of expenses incurred to resolve previously disputed syndicated programming and network inventory expenses with CBS Radio Inc.

Mary Berner, President and Chief Executive Officer of Cumulus Media Inc. said, “As we noted when we announced our preliminary results in October, our strong third quarter performance plainly demonstrates that our operational turnaround plan is working. The entire Cumulus team has shown great commitment to maintaining our momentum. By executing our foundational operating initiatives and continuing to develop growth opportunities, we are confident that we can build on our success despite the challenging industry environment.”

Ms. Berner continued, “We are also focused on addressing our excessive debt load on a parallel track to our operational turnaround plan. As previously disclosed, we are working with our advisors to proactively explore a range of alternatives to restructure our balance sheet, and we are continuing productive discussions with our creditors. Regardless of the path forward, we have ample cash to operate our business. Our goal remains to reduce our debt so we can focus our time and resources on investments in our people, key technologies and initiatives that will ultimately drive sustainable, long-term growth.”

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

 
Three Months Ended September 30,
 
2017
 
2016
 
% Change
Net revenue
$
287,240

 
$
286,136

 
0.4
 %
Net income
$
1,274

 
$
46,321

 
(97.2
)%
Adjusted EBITDA (1)
$
61,765

 
$
43,884

 
40.7
 %
Basic and diluted income per share
$
0.04

 
$
1.58

 
 
 
Nine Months Ended September 30,
 
2017
 
2016
 
% Change
Net revenue
$
841,801

 
$
841,859

 
—
 %
Net (loss) income
$
(449
)
 
$
32,958

 
**

Adjusted EBITDA (1)
$
167,899

 
$
148,998

 
12.7
 %
Basic and diluted (loss) income per share
$
(0.02
)
 
$
1.12

 
 





 
 
September 30, 2017
 
December 31, 2016
 
% Change
Cash and cash equivalents
 
$
69,431

 
$
131,259

 
(47.1
)%
 
 
 
 
 
 
 
     Term loan (2)
 
$
1,728,614

 
$
1,810,266

 
(4.5
)%
     7.75% senior notes (3)
 
610,000

 
610,000

 
—
 %
Total debt
 
$
2,338,614

 
$
2,420,266

 
(3.4
)%


 
Three Months Ended September 30,
 
2017
 
2016
 
% Change
Capital expenditures
$
7,442

 
$
5,242

 
42.0
%
 
Nine Months Ended September 30,
 
2017
 
2016
 
% Change
Capital expenditures
$
20,645

 
$
16,704

 
23.6
%

(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 $23,054 and $29,909 at September 30, 2017 and December 31, 2016, respectively.
(3) 7.75% senior notes exclude debt issuance costs/discounts of $4,335 and $6,200 at September 30, 2017 and December 31, 2016, respectively.

**
Calculation not meaningful



2



Results for Three Months Ended September 30, 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 both of the Company’s reportable segments, including programming, finance, legal, human resources and information technology functions.

The following tables present our net revenue by segment (dollars in thousands).

 
 
Three Months Ended September 30, 2017
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
Net revenue
 
$
202,852

 
$
83,778

 
$
610

 
$
287,240

% of total revenue
 
70.6
 %
 
29.2
%
 
0.2
%
 
100.0
%
$ change from three months ended September 30, 2016
 
$
(3,347
)
 
$
4,365

 
$
86

 
$
1,104

% change from three months ended September 30, 2016
 
(1.6
)%
 
5.5
%
 
16.4
%
 
0.4
%

 
 
Three Months Ended September 30, 2016
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
Net revenue
 
$
206,199

 
$
79,413

 
$
524

 
$
286,136

% of total revenue
 
72.1
%
 
27.8
%
 
0.1
%
 
100.0
%

Net income (loss)

The following tables present our net income (loss) by segment (dollars in thousands).

 
 
Three Months Ended September 30, 2017
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
Net income (loss)
 
$
42,702

 
$
11,107

 
$
(52,535
)
 
$
1,274

$ change from three months ended September 30, 2016
 
$
(91,417
)
 
$
21,981

 
$
24,389

 
$
(45,047
)
% change from three months ended September 30, 2016
 
(68.2
)%
 
**

 
31.7
%
 
(97.2
)%

**    Calculation not meaningful

 
 
Three Months Ended September 30, 2016
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
Net income (loss)
 
$
134,119

 
$
(10,874
)
 
$
(76,924
)
 
$
46,321







3





Adjusted EBITDA

The following tables present our Adjusted EBITDA by segment (dollars in thousands).

 
 
Three Months Ended September 30, 2017
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
Adjusted EBITDA
 
$
54,660

 
$
17,082

 
$
(9,977
)
 
$
61,765

$ change from three months ended September 30, 2016
 
$
(1,577
)
 
$
19,771

 
$
(313
)
 
$
17,881

% change from three months ended September 30, 2016
 
(2.8
)%
 
**

 
(3.2
)%
 
40.7
%

**    Calculation not meaningful

 
 
Three Months Ended September 30, 2016
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
Adjusted EBITDA
 
$
56,237

 
$
(2,689
)
 
$
(9,664
)
 
$
43,884


Results for Nine Months Ended September 30, 2017

Net Revenue

The following tables present our net revenue by segment (dollars in thousands).

 
 
Nine Months Ended September 30, 2017
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
Net revenue
 
$
585,050

 
$
254,867

 
$
1,884

 
$
841,801

% of total revenue
 
69.5
 %
 
30.3
%
 
0.2
%
 
100.0
 %
$ change from nine months ended September 30, 2016
 
$
(7,590
)
 
$
7,360

 
$
172

 
$
(58
)
% change from nine months ended September 30, 2016
 
(1.3
)%
 
3.0
%
 
10.0
%
 
—
 %

 
 
Nine Months Ended September 30, 2016
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
Net revenue
 
$
592,640

 
$
247,507

 
$
1,712

 
$
841,859

% of total revenue
 
70.4
%
 
29.4
%
 
0.2
%
 
100.0
%

4




Net income (loss)

The following tables present our net income (loss) by segment (dollars in thousands).

 
 
Nine Months Ended September 30, 2017
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
Net income (loss)
 
$
118,043

 
$
24,348

 
$
(142,840
)
 
$
(449
)
$ change from nine months ended September 30, 2016
 
$
(87,220
)
 
$
37,220

 
$
16,593

 
$
(33,407
)
% change from nine months ended September 30, 2016
 
(42.5
)%
 
**

 
10.4
%
 
**


**    Calculation not meaningful

 
 
Nine Months Ended September 30, 2016
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
Net income (loss)
 
$
205,263

 
$
(12,872
)
 
$
(159,433
)
 
$
32,958


Adjusted EBITDA

The following tables present our Adjusted EBITDA by segment (dollars in thousands).

 
 
Nine Months Ended September 30, 2017
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
Adjusted EBITDA
 
$
153,571

 
$
42,993

 
$
(28,665
)
 
$
167,899

$ change from nine months ended September 30, 2016
 
$
(5,707
)
 
$
24,995

 
$
(387
)
 
$
18,901

% change from nine months ended September 30, 2016
 
(3.6
)%
 
**

 
(1.4
)%
 
12.7
%

**    Calculation not meaningful

 
 
Nine Months Ended September 30, 2016
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
Adjusted EBITDA
 
$
159,278

 
$
17,998

 
$
(28,278
)
 
$
148,998







5



Earnings Call Information
Cumulus Media Inc. will host a teleconference today at 8:00 AM eastern time to discuss its third quarter 2017 operating results.

A link to the 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). The conference call dial-in number for domestic callers is 877-830-7699, and international callers should dial 574-990-0924 for call access. If prompted, the conference ID number is 4899108. Please call five to ten minutes in advance to ensure that you are connected prior to the call. Following completion, a replay can be accessed until 11:30 PM EST on December 9, 2017. Domestic callers can access the replay by dialing 855-859-2056 or 404-537-3406, replay code 4899108. International callers should dial +44 (0)1452550000 for conference replay access. An archive of the webcast will be available beginning 24 hours after the call for a period of 30 days.

Forward-Looking Statements
Certain statements in this presentation 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 relating to the need for additional funds to service our debt and to execute our business strategy; our need to restructure or refinance our debt and the terms on which any such restructuring or refinancing may be completed, including through any court-approved restructuring; 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 effectively drive 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 or any acquisitions; our ability  successfully appeal the notice of delisting of our Class A common stock from the NASDAQ stock market; the write-off of a material portion of the fair value of our FCC broadcast licenses and goodwill from time to time; or 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 the actual results of our 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 Media
A leader in the radio broadcasting industry, Cumulus Media (NASDAQ:CMLS) combines high-quality local programming with iconic, nationally syndicated media, sports and entertainment brands to deliver premium content choices to the 245 million million people reached each week through its 446 owned-and-operated stations broadcasting in 90 US media markets (including eight of the top 10), approximately 8,000 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. For more information, visit www.cumulus.com.

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

6



CUMULUS MEDIA INC.
Unaudited Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share data)
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2017
 
2016
 
2017
 
2016
Net revenue
 
$
287,240

 
$
286,136

 
$
841,801

 
$
841,859

Operating expenses:
 
 
 
 
 
 
 
 
Content costs
 
96,321

 
115,348

 
291,390

 
312,526

Selling, general and administrative expenses
 
119,293

 
117,387

 
354,189

 
352,474

Depreciation and amortization
 
15,208

 
21,957

 
47,610

 
68,023

Local marketing agreement fees
 
2,717

 
2,481

 
8,137

 
10,351

Corporate expenses
 
10,000

 
9,675

 
28,743

 
28,388

Stock-based compensation expense
 
354

 
735

 
1,422

 
2,403

Acquisition-related and restructuring costs
 
499

 
(450
)
 
2,116

 
3,237

Gain on sale of assets or stations
 
(83
)
 
(94,014
)
 
(2,585
)
 
(97,155
)
Impairment of intangible assets
 
—

 
—

 
—

 
1,816

Total operating expenses
 
244,309

 
173,119

 
731,022

 
682,063

Operating income
 
42,931

 
113,017

 
110,779

 
159,796

Non-operating expense:
 
 
 
 
 
 
 
 
Interest expense
 
(35,335
)
 
(34,929
)
 
(103,742
)
 
(103,896
)
Interest income
 
34

 
139

 
106

 
364

Loss on early extinguishment of debt
 
(1,063
)
 
—

 
(1,063
)
 
—

Other (expense) income, net
 
(36
)
 
882

 
(64
)
 
1,598

Total non-operating expense, net
 
(36,400
)
 
(33,908
)
 
(104,763
)
 
(101,934
)
Income before income taxes
 
6,531

 
79,109

 
6,016

 
57,862

Income tax expense
 
(5,257
)
 
(32,788
)
 
(6,465
)
 
(24,904
)
Net income (loss)
 
$
1,274

 
$
46,321

 
$
(449
)
 
$
32,958

Basic and diluted earnings (loss) per common share:
 
 
 
 
 
 
 
 
Basic: Earnings (loss) per share
 
$
0.04

 
$
1.58

 
$
(0.02
)
 
$
1.12

Diluted: Earnings (loss) per share
 
$
0.04

 
$
1.58

 
$
(0.02
)
 
$
1.12

Weighted average basic common shares outstanding
 
29,306,374

 
29,275,111

 
29,306,374

 
29,268,885

Weighted average diluted common shares outstanding
 
29,306,374

 
29,275,111

 
29,306,374

 
29,268,885


        



7



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 local marketing agreement 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 local marketing agreement 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.




















8



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 and nine months ended September 30, 2017 and 2016 (dollars in thousands):
 
 
Three Months Ended September 30, 2017
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
GAAP net income (loss)
 
$
42,702

 
$
11,107

 
$
(52,535
)
 
$
1,274

Income tax expense
 
—

 
—

 
5,257

 
5,257

Non-operating (income) expense, including net interest expense
 
(1
)
 
132

 
35,205

 
35,336

LMA fees
 
2,717

 
—

 
—

 
2,717

Depreciation and amortization
 
9,349

 
5,443

 
416

 
15,208

Stock-based compensation expense
 
—

 
—

 
354

 
354

(Gain) loss on sale of assets or stations
 
(107
)
 
—

 
24

 
(83
)
Loss on early extinguishment of debt
 
—

 
—

 
1,063

 
1,063

Acquisition-related and restructuring costs
 
—

 
400

 
99

 
499

Franchise and state taxes
 
—

 
—

 
140

 
140

Adjusted EBITDA
 
$
54,660

 
$
17,082

 
$
(9,977
)
 
$
61,765



 
 
Three Months Ended September 30, 2016
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
GAAP net income (loss)
 
$
134,119

 
$
(10,874
)
 
$
(76,924
)
 
$
46,321

Income tax expense
 
—

 
—

 
32,788

 
32,788

Non-operating (income) expense, including net interest expense
 
(2
)
 
59

 
33,851

 
33,908

Local marketing agreement fees
 
2,481

 
—

 
—

 
2,481

Depreciation and amortization
 
13,653

 
7,782

 
522

 
21,957

Stock-based compensation expense
 
—

 
—

 
735

 
735

Gain on sale of assets or stations
 
(94,014
)
 
—

 
—

 
(94,014
)
Acquisition-related and restructuring costs
 
—

 
344

 
(794
)
 
(450
)
Franchise and state taxes
 
—

 
—

 
158

 
158

Adjusted EBITDA
 
$
56,237

 
$
(2,689
)
 
$
(9,664
)
 
$
43,884



9



 
 
Nine Months Ended September 30, 2017
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
GAAP net income (loss)
 
$
118,043

 
$
24,348

 
$
(142,840
)
 
$
(449
)
Income tax expense
 
—

 
—

 
6,465

 
6,465

Non-operating (income) expense, including net interest expense
 
(4
)
 
407

 
103,297

 
103,700

LMA fees
 
8,137

 
—

 
—

 
8,137

Depreciation and amortization
 
30,004

 
16,346

 
1,260

 
47,610

Stock-based compensation expense
 
—

 
—

 
1,422

 
1,422

(Gain) loss on sale of assets or stations
 
(2,609
)
 
—

 
24

 
(2,585
)
Loss on early extinguishment of debt
 
—

 
—

 
1,063

 
1,063

Acquisition-related and restructuring costs
 
—

 
1,892

 
224

 
2,116

Franchise and state taxes
 
—

 
—

 
420

 
420

Adjusted EBITDA
 
$
153,571

 
$
42,993

 
$
(28,665
)
 
$
167,899


 
 
Nine Months Ended September 30, 2016
 
 
Radio Station Group
 
Westwood One
 
Corporate and Other
 
Consolidated
GAAP net income (loss)
 
$
205,263

 
$
(12,872
)
 
$
(159,433
)
 
$
32,958

Income tax expense
 
—

 
—

 
24,904

 
24,904

Non-operating expense, including net interest expense
 
14

 
226

 
101,694

 
101,934

Local marketing agreement fees
 
10,351

 
—

 
—

 
10,351

Depreciation and amortization
 
40,780

 
25,657

 
1,586

 
68,023

Stock-based compensation expense
 
—

 
—

 
2,403

 
2,403

Gain on sale of assets or stations
 
(97,130
)
 
—

 
(25
)
 
(97,155
)
Impairment of intangible assets
 
—

 
1,816

 
—

 
1,816

Acquisition-related and restructuring costs
 
—

 
3,171

 
66

 
3,237

Franchise and state taxes
 
—

 


 
527

 
527

Adjusted EBITDA
 
$
159,278

 
$
17,998

 
$
(28,278
)
 
$
148,998



10