Cumulus Media Inc. (NASDAQ: CMLS) (the "Company," "Cumulus Media,"
"we," "us," or "our") today announced operating results for the
three and six months ended June 30, 2024.
Mary G. Berner, President and Chief Executive
Officer of Cumulus Media, said, "In the context of a challenging
advertising environment, second quarter total revenue finished in
line with our pacing guidance, down 2.5% year-over-year. However,
our unrelenting focus on areas of the business that are in our
control helped us to mitigate the impact of soft demand while also
driving tangible progress in key priority areas. During the
quarter, we grew our digital marketing services business by 24%;
reduced fixed costs by $4 million; and continued to strengthen our
balance sheet through the successful completion of our exchange
offer, ABL upsizing, and the buyback of a portion of our remaining
2026 maturity debt."
Berner continued, "Looking ahead, while the
advertising outlook remains uncertain, our advertisers continue to
be focused on when – not if – they’re going to return to more
typical spending levels. Fortunately, thanks to our success at
extending our debt maturities, we have time on our side and the
flexibility to pursue multiple paths to create shareholder
value."
Q2 Key Highlights:
- Posted total net revenue of $204.8
million, a decline of 2.5% year-over-year
- Generated digital revenue of $39.4
million, up 5.0% year-over-year
- Digital marketing services grew 24% driven by an increase in
new customers, improved customer retention and higher average order
size
- Radio-only customers adding digital marketing services
increased by 25% year-over-year
- Digital revenue increased to 19% of total company revenue
- Recorded net loss of $27.7 million
compared to net loss of $1.1 million in Q2 2023 and Adjusted
EBITDA(1) of $25.2 million compared to $30.7 million in Q2
2023
- Continued to improve operating
leverage by reducing fixed costs by approximately $4 million
year-over-year
- Used $7.9 million of cash in
operations, or generated $8.3 million of cash from operations when
excluding execution costs related to the completed exchange offer
of $16.3 million(1)
- Completed the exchange offer for
our Senior Notes due 2026 and Term Loan due 2026 with favorable
terms and aggregate participation of approximately 96% of debt
outstanding
- Debt obligations under our debt instruments reduced by
approximately $33 million
- Debt maturities extended from 2026 to 2029
- Amended ABL Facility, increasing
capacity to $125 million from $100 million and extending maturity
to 2029
- Retired $0.5 million face value of
Senior Notes due 2026
- Reported total debt(2)(3) of $674.4
million, total debt at maturity(1)(2)(3) of $642.1 million, and net
debt less total unamortized discount(1)(2)(3) of $588.6 million at
June 30, 2024, including total debt due in 2026(3) of $23.9
million
Operating Summary (dollars in thousands, except
percentages and per share data):
For the three months
ended June 30, 2024, the Company reported net revenue
of $204.8 million, a decrease of 2.5% from the three
months ended June 30, 2023, net loss of $27.7
million and Adjusted EBITDA of $25.2 million.
For the six months ended June 30,
2024, the Company reported net revenue of $404.9 million, a
decrease of 2.6% from the six months
ended June 30, 2023, net loss of $41.9 million and
Adjusted EBITDA of $33.6 million.
As Reported |
|
Three Months Ended June 30, 2024 |
|
Three Months Ended June 30, 2023 |
|
% Change |
|
Net revenue |
|
$ |
204,849 |
|
|
$ |
210,136 |
|
|
(2.5 |
)% |
Net loss |
|
$ |
(27,699 |
) |
|
$ |
(1,068 |
) |
|
(2,493.5 |
)% |
Adjusted EBITDA |
|
$ |
25,213 |
|
|
$ |
30,676 |
|
|
(17.8 |
)% |
Basic loss per share |
|
$ |
(1.64 |
) |
|
$ |
(0.06 |
) |
|
(2,633.3 |
)% |
Diluted loss per share |
|
$ |
(1.64 |
) |
|
$ |
(0.06 |
) |
|
(2,633.3 |
)% |
As Reported |
|
Six Months Ended June 30, 2024 |
|
Six Months Ended June 30, 2023 |
|
% Change |
|
Net revenue |
|
$ |
404,902 |
|
|
$ |
415,828 |
|
|
(2.6 |
)% |
Net loss |
|
$ |
(41,853 |
) |
|
$ |
(22,535 |
) |
|
(85.7 |
)% |
Adjusted EBITDA |
|
$ |
33,618 |
|
|
$ |
41,005 |
|
|
(18.0 |
)% |
Basic loss per share |
|
$ |
(2.49 |
) |
|
$ |
(1.25 |
) |
|
(99.2 |
)% |
Diluted loss per share |
|
$ |
(2.49 |
) |
|
$ |
(1.25 |
) |
|
(99.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Detail Summary (dollars in
thousands):
As Reported |
|
Three Months Ended June 30, 2024 |
|
Three Months Ended June 30, 2023 |
|
% Change |
Broadcast radio revenue: |
|
|
|
|
|
|
Spot |
|
$ |
101,806 |
|
$ |
107,065 |
|
(4.9 |
)% |
Network |
|
|
34,306 |
|
|
39,698 |
|
(13.6 |
)% |
Total broadcast radio
revenue |
|
|
136,112 |
|
|
146,763 |
|
(7.3 |
)% |
Digital |
|
|
39,397 |
|
|
37,538 |
|
5.0 |
% |
Other |
|
|
29,340 |
|
|
25,835 |
|
13.6 |
% |
Net revenue |
|
$ |
204,849 |
|
$ |
210,136 |
|
(2.5 |
)% |
As Reported |
|
Six Months Ended June 30, 2024 |
|
Six Months Ended June 30, 2023 |
|
% Change |
Broadcast radio revenue: |
|
|
|
|
|
|
Spot |
|
$ |
192,379 |
|
$ |
204,778 |
|
(6.1 |
)% |
Network |
|
|
83,468 |
|
|
89,995 |
|
(7.3 |
)% |
Total broadcast radio
revenue |
|
|
275,847 |
|
|
294,773 |
|
(6.4 |
)% |
Digital |
|
|
73,844 |
|
|
69,627 |
|
6.1 |
% |
Other |
|
|
55,211 |
|
|
51,428 |
|
7.4 |
% |
Net revenue |
|
$ |
404,902 |
|
$ |
415,828 |
|
(2.6 |
)% |
|
Balance Sheet Summary (dollars in
thousands):
|
|
June 30, 2024 |
|
December 31, 2023 |
Cash and cash equivalents |
|
$ |
53,492 |
|
$ |
80,660 |
Term Loan due 2026 (3) |
|
$ |
1,203 |
|
$ |
329,510 |
Senior Notes due 2026 (3) |
|
$ |
22,697 |
|
$ |
346,245 |
Term Loan due 2029 (2)
(3) |
|
$ |
327,873 |
|
$ |
— |
Senior Notes due 2029 (2)
(3) |
|
$ |
322,591 |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2024 |
|
|
Three Months Ended June 30, 2023 |
Capital expenditures |
|
$ |
4,387 |
|
$ |
6,603 |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2024 |
|
|
Six Months Ended June 30, 2023 |
Capital expenditures |
|
$ |
12,553 |
|
$ |
13,975 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted EBITDA, operating cash flow
excluding execution costs related to the completed exchange offer,
total debt at maturity and net debt less total unamortized discount
are not financial measures calculated or presented in accordance
with accounting principles generally accepted in the United States
of America (“GAAP”). For additional information, see "Non-GAAP
Financial Measures."
(2) The exchange offer was accounted for as a
debt modification resulting in a prospective yield adjustment and
the carrying value was not changed. The $33.1 million difference
between the principal amounts exchanged and the resulting principal
amounts will be amortized to interest expense (thereby reducing
interest expense) over the life of the debt. As of June 30, 2024,
$16.0 million and $16.2 million of unamortized difference for the
Term Loan due 2029 and the Senior Notes due 2029, respectively,
remain.
(3) Excludes any debt issuance costs.
Earnings Conference Call
Details The Company will host a conference call today
at 8:30 AM ET to discuss its second 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 044716. 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.
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 credit agreements.
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.
The Company presents the non-GAAP financial
measure total debt at maturity which is total debt principal,
gross, less total unamortized debt discount. In addition, the
Company presents the non-GAAP financial measure net debt less total
unamortized discount which is total debt at maturity less cash and
cash equivalents. Management believes that total debt at maturity
and net debt less total unamortized discount are important measures
to monitor leverage and evaluate the balance sheet.
The Company also presents operating cash flow
excluding execution costs related to the completed exchange offer.
Management believes that operating cash flow excluding execution
costs related to the completed exchange offer is an important
measure to evaluate the Company’s operating performance in light of
the cost of the execution of the exchange offer that management
deems one time or non-operational in nature.
We refer to Adjusted EBITDA, with and excluding
the impact of political advertising, net revenue, excluding the
impact of political revenue, total debt at maturity, net debt less
total unamortized discount and operating cash flow excluding the
execution costs related to the completed exchange offer 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 EndedJune 30, |
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net revenue |
|
$ |
204,849 |
|
|
$ |
210,136 |
|
|
$ |
404,902 |
|
|
$ |
415,828 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Content costs |
|
|
73,631 |
|
|
|
73,533 |
|
|
|
158,688 |
|
|
|
162,199 |
|
Selling, general & administrative expenses |
|
|
94,359 |
|
|
|
94,401 |
|
|
|
189,119 |
|
|
|
188,702 |
|
Depreciation and amortization |
|
|
14,680 |
|
|
|
15,146 |
|
|
|
29,549 |
|
|
|
29,830 |
|
Corporate expenses |
|
|
12,122 |
|
|
|
11,899 |
|
|
|
24,752 |
|
|
|
24,497 |
|
Stock-based compensation expense |
|
|
1,336 |
|
|
|
1,492 |
|
|
|
2,408 |
|
|
|
2,618 |
|
Restructuring costs |
|
|
1,988 |
|
|
|
10,716 |
|
|
|
4,118 |
|
|
|
11,007 |
|
Debt exchange costs |
|
|
16,271 |
|
|
|
— |
|
|
|
16,271 |
|
|
|
— |
|
Loss (gain) on sale of assets or stations |
|
|
45 |
|
|
|
(272 |
) |
|
|
54 |
|
|
|
(7,281 |
) |
Total operating expenses |
|
|
214,432 |
|
|
|
206,915 |
|
|
|
424,959 |
|
|
|
411,572 |
|
Operating (loss) income |
|
|
(9,583 |
) |
|
|
3,221 |
|
|
|
(20,057 |
) |
|
|
4,256 |
|
Non-operating expense: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(17,626 |
) |
|
|
(17,940 |
) |
|
|
(34,986 |
) |
|
|
(35,606 |
) |
Interest income |
|
|
146 |
|
|
|
712 |
|
|
|
492 |
|
|
|
1,081 |
|
Gain on early extinguishment of debt |
|
|
170 |
|
|
|
8,389 |
|
|
|
170 |
|
|
|
9,006 |
|
Other (expense) income, net |
|
|
(27 |
) |
|
|
(268 |
) |
|
|
14,806 |
|
|
|
(286 |
) |
Total non-operating expense, net |
|
|
(17,337 |
) |
|
|
(9,107 |
) |
|
|
(19,518 |
) |
|
|
(25,805 |
) |
Loss before income taxes |
|
|
(26,920 |
) |
|
|
(5,886 |
) |
|
|
(39,575 |
) |
|
|
(21,549 |
) |
Income tax (expense)
benefit |
|
|
(779 |
) |
|
|
4,818 |
|
|
|
(2,278 |
) |
|
|
(986 |
) |
Net loss |
|
$ |
(27,699 |
) |
|
$ |
(1,068 |
) |
|
$ |
(41,853 |
) |
|
$ |
(22,535 |
) |
|
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 June 30, 2024 |
|
Three Months Ended June 30, 2023 |
GAAP net loss |
|
$ |
(27,699 |
) |
|
$ |
(1,068 |
) |
Income tax expense (benefit) |
|
|
779 |
|
|
|
(4,818 |
) |
Non-operating expense, including net interest expense |
|
|
17,507 |
|
|
|
17,496 |
|
Depreciation and amortization |
|
|
14,680 |
|
|
|
15,146 |
|
Stock-based compensation expense |
|
|
1,336 |
|
|
|
1,492 |
|
Loss (gain) on sale or disposal of assets or stations |
|
|
45 |
|
|
|
(272 |
) |
Gain on early extinguishment of debt |
|
|
(170 |
) |
|
|
(8,389 |
) |
Restructuring costs |
|
|
1,988 |
|
|
|
10,716 |
|
Debt exchange costs |
|
|
16,271 |
|
|
|
— |
|
Non-routine legal expenses |
|
|
280 |
|
|
|
173 |
|
Franchise taxes |
|
|
196 |
|
|
|
200 |
|
Adjusted EBITDA |
|
$ |
25,213 |
|
|
$ |
30,676 |
|
As Reported |
|
Six Months Ended June 30, 2024 |
|
Six Months Ended June 30, 2023 |
GAAP net loss |
|
$ |
(41,853 |
) |
|
$ |
(22,535 |
) |
Income tax expense |
|
|
2,278 |
|
|
|
986 |
|
Non-operating expense, including net interest expense |
|
|
19,688 |
|
|
|
34,811 |
|
Depreciation and amortization |
|
|
29,549 |
|
|
|
29,830 |
|
Stock-based compensation expense |
|
|
2,408 |
|
|
|
2,618 |
|
Loss (gain) on sale or disposal of assets or stations |
|
|
54 |
|
|
|
(7,281 |
) |
Gain on early extinguishment of debt |
|
|
(170 |
) |
|
|
(9,006 |
) |
Restructuring costs |
|
|
4,118 |
|
|
|
11,007 |
|
Debt exchange costs |
|
|
16,271 |
|
|
|
— |
|
Non-routine legal expenses |
|
|
888 |
|
|
|
176 |
|
Franchise taxes |
|
|
387 |
|
|
|
399 |
|
Adjusted EBITDA |
|
$ |
33,618 |
|
|
$ |
41,005 |
|
|
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 June 30, 2024 |
|
Three Months Ended June 30, 2023 |
As reported net revenue |
|
$ |
204,849 |
|
|
$ |
210,136 |
|
Political revenue |
|
|
(1,909 |
) |
|
|
(502 |
) |
As reported net revenue,
excluding impact of political revenue |
|
$ |
202,940 |
|
|
$ |
209,634 |
|
|
|
Three Months Ended June 30, 2024 |
|
Three Months Ended June 30, 2023 |
As reported Adjusted EBITDA |
|
$ |
25,213 |
|
|
$ |
30,676 |
|
Political EBITDA |
|
|
(1,718 |
) |
|
|
(451 |
) |
As reported Adjusted EBITDA,
excluding impact of political EBITDA |
|
$ |
23,495 |
|
|
$ |
30,225 |
|
|
|
Six Months Ended June 30, 2024 |
|
Six Months Ended June 30, 2023 |
As reported net revenue |
|
$ |
404,902 |
|
|
$ |
415,828 |
|
Political revenue |
|
|
(4,108 |
) |
|
|
(907 |
) |
As reported net revenue,
excluding impact of political revenue |
|
$ |
400,794 |
|
|
$ |
414,921 |
|
|
|
Six Months Ended June 30, 2024 |
|
Six Months Ended June 30, 2023 |
As reported Adjusted EBITDA |
|
$ |
33,618 |
|
|
$ |
41,005 |
|
Political EBITDA |
|
|
(3,697 |
) |
|
|
(816 |
) |
As reported Adjusted EBITDA,
excluding impact of political EBITDA |
|
$ |
29,921 |
|
|
$ |
40,189 |
|
|
The following table reconciles total debt
principal, gross, the most directly comparable financial measure
calculated and presented in accordance with GAAP, to total debt at
maturity and net debt less total unamortized discount (dollars in
thousands):
|
|
As of June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
Total debt principal,
gross |
|
$ |
674,364 |
|
|
$ |
680,947 |
|
Less: Total unamortized
discount |
|
|
(32,242 |
) |
|
|
— |
|
Total debt at maturity |
|
|
642,122 |
|
|
|
680,947 |
|
Less: Cash and cash
equivalents |
|
|
(53,492 |
) |
|
|
(92,420 |
) |
Net debt less total
unamortized discount |
|
$ |
588,630 |
|
|
$ |
588,527 |
|
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