CUMULUS MEDIA Reports Operating Results for the Second Quarter 2020 and Announces Definitive Agreement to Monetize Tower Portfolio for $213 Million
08/10/2020 - 08:00 AM
ATLANTA, Aug. 10, 2020 (GLOBE NEWSWIRE) -- 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, 2020.
Mary G. Berner, President and Chief Executive Officer of CUMULUS MEDIA, said, "Despite the COVID-19 pandemic’s material impact on revenue, the Company generated over $90 million of cash in the quarter through quick and decisive expense actions, strong working capital management and the completion of the sale of land in Bethesda, MD. Ending the quarter with nearly $200 million of cash, we have also entered into an agreement to monetize our tower portfolio for more than $210 million , proceeds which will further add to our liquidity and contribute to significant incremental debt paydown. Our demonstrated ability to rise to a challenge, strong liquidity position and resilient balance sheet are critical assets as we operate through this uncertain environment, and we believe we remain very well-positioned to drive long-term shareholder value through continued aggressive debt reduction and the execution of our growth initiatives."
Key Highlights:
Meaningfully mitigated pandemic’s Q2 impacts through significant fixed cost expense reductionsNearly $36 million realized in Q2 Total reductions of more than $85 million expected in 2020 Delivered sequential monthly revenue and EBITDA improvement through the quarter Continued to deliver profitable growth in digital Posted positive EBITDA in June Substantially increased liquidity and strengthened balance sheet Grew cash balance to $197 million , up $91 million from Q1 Achieved net debt reduction of approximately 10% since March Generated $28 million of cash from operations and netted $66 million of additional cash from completion of the sale of land in Bethesda, MD in Q2 Maintained balance sheet flexibility with no funded debt maturity prior to 2026 or financial maintenance covenants Executed agreement to monetize tower portfolio and related assets for $213 million Expect funds from deal completion to permit substantial debt paydown and provide additional liquidity Anticipate first closing for 85% or more of proceeds in Q4 Operating Summary (dollars in thousands, except percentages and per share data):
For the three months ended June 30, 2020, the Company reported net revenue of $146.0 million , a decrease of 47.8% from the three months ended June 30, 2019, net loss of $36.3 million and Adjusted EBITDA of $(6.4) million .
For the three months ended June 30, 2020, the Company reported same station net revenue of $146.0 million , a decrease of 46.6% from the three months ended June 30, 2019, and same station Adjusted EBITDA of $(6.3) million .
For the six months ended June 30, 2020, the Company reported net revenue of $373.9 million , a decrease of 31.7% from the six months ended June 30, 2019, net loss of $43.7 million and Adjusted EBITDA of $21.4 million .
For the six months ended June 30, 2020, the Company reported same station net revenue of $372.5 million , a decrease of 29.5% from the six months ended June 30, 2019, and same station Adjusted EBITDA of $22.2 million , a decrease of 78.3% from the six months ended June 30, 2019.
As Reported Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 % Change Net revenue $ 146,022 $ 279,673 (47.8 )% Net (loss) income $ (36,316 ) $ 42,861 N/A Adjusted EBITDA (1) $ (6,375 ) $ 61,819 N/A Basic (loss) income per share $ (1.79 ) 2.13 N/A Diluted (loss) income per share $ (1.79 ) 2.11 N/A
Same Station (2) Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 % Change Net revenue $ 146,012 $ 273,451 (46.6 )% Adjusted EBITDA (1) $ (6,274 ) $ 62,496 N/A
As Reported Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 % Change Net revenue $ 373,936 $ 547,169 (31.7 )% Net (loss) income $ (43,667 ) $ 43,312 N/A Adjusted EBITDA (1) $ 21,350 $ 103,623 (79.4 )% Basic (loss) income per share $ (2.15 ) 2.16 N/A Diluted (loss) income per share $ (2.15 ) 2.14 N/A
Same Station (2) Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 % Change Net revenue $ 372,485 $ 528,511 (29.5 )% Adjusted EBITDA (1) $ 22,155 $ 102,266 (78.3 )%
Revenue Detail Summary (dollars in thousands):
As Reported Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 % Change Broadcast radio revenue: Spot $ 72,437 $ 163,111 (55.6 )% Network 41,767 72,877 (42.7 )% Total broadcast radio revenue 114,204 235,988 (51.6 )% Digital 20,341 20,208 0.7 % Other 11,477 23,477 (51.1 )% Net revenue $ 146,022 $ 279,673 (47.8 )%
Same Station (2) Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 % Change Broadcast radio revenue: Spot $ 72,466 $ 158,741 (54.3 )% Network 41,767 72,504 (42.4 )% Total broadcast radio revenue 114,233 231,245 (50.6 )% Digital 20,341 19,636 3.6 % Other 11,438 22,570 (49.3 )% Net revenue $ 146,012 $ 273,451 (46.6 )%
As Reported Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 % Change Broadcast radio revenue: Spot $ 194,380 $ 302,690 (35.8 )% Network 107,450 158,041 (32.0 )% Total broadcast radio revenue 301,830 460,731 (34.5 )% Digital 42,227 37,049 14.0 % Other 29,879 49,389 (39.5 )% Net revenue $ 373,936 $ 547,169 (31.7 )%
Same Station (2) Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 % Change Broadcast radio revenue: Spot $ 193,280 $ 289,565 (33.3 )% Network 107,450 156,800 (31.5 )% Total broadcast radio revenue 300,730 446,365 (32.6 )% Digital 42,156 35,703 18.1 % Other 29,599 46,443 (36.3 )% Net revenue $ 372,485 $ 528,511 (29.5 )%
Balance Sheet Summary (dollars in thousands):
June 30, 2020 December 31, 2019 Cash and cash equivalents $ 196,914 $ 15,142 Term loan due 2026 (3) $ 521,063 $ 523,688 6.75% Senior notes (3) $ 500,000 $ 500,000 2020 Revolving credit facility $ 60,000 $ —
Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Capital expenditures $ 5,575 $ 10,715
(1) Adjusted EBITDA is not a financial measure calculated or presented in accordance with GAAP. For additional information, see “Non-GAAP Financial Measures.”
Earnings Conference Call Details
Following completion of the call, a recording of the call can be accessed via a link at www.cumulusmedia.com/investors.
Forward-Looking Statements
About CUMULUS MEDIA
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 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.
Because of 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, both 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 period in the prior year, as indicated. 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, 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, both with and excluding the impact of political advertising, may be defined or calculated differently by other companies and, therefore, comparability may be limited.
For further information, please contact: Cumulus Media Inc. Supplemental Financial Data and Reconciliations
CUMULUS MEDIA INC. Unaudited Condensed Consolidated Statements of Operations (Dollars in thousands)
Three Months Ended Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Net revenue $ 146,022 $ 279,673 $ 373,936 $ 547,169 Operating expenses: Content costs 65,725 93,844 154,291 197,596 Selling, general & administrative expenses 79,904 115,817 183,531 229,320 Depreciation and amortization 13,122 13,545 25,912 28,135 Local marketing agreement fees 1,006 438 2,053 1,481 Corporate expenses 7,003 8,545 15,172 17,077 Stock-based compensation expense 985 1,106 1,704 2,314 Restructuring costs 2,343 13,024 5,263 15,801 Loss (gain) on sale of assets or stations 3,767 (47,750 ) 5,583 (47,724 ) Impairment of intangible assets 4,509 — 4,509 — Total operating expenses 178,364 198,569 398,018 444,000 Operating (loss) income (32,342 ) 81,104 (24,082 ) 103,169 Non-operating expense: Interest expense (15,888 ) (21,191 ) (33,047 ) (43,347 ) Interest income 2 8 4 12 Gain on early extinguishment of debt — — — 381 Other expense, net (61 ) (34 ) (64 ) (62 ) Total non-operating expense, net (15,947 ) (21,217 ) (33,107 ) (43,016 ) (Loss) income before income taxes (48,289 ) 59,887 (57,189 ) 60,153 Income tax benefit (expense) 11,973 (17,026 ) 13,522 (16,841 ) Net (loss) income $ (36,316 ) $ 42,861 $ (43,667 ) $ 43,312
The following tables reconcile net (loss) income, 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, 2020 Three Months Ended June 30, 2019 GAAP net (loss) income $ (36,316 ) $ 42,861 Income tax (benefit) expense (11,973 ) 17,026 Non-operating expense, including net interest expense 15,947 21,217 Local marketing agreement fees 1,006 438 Depreciation and amortization 13,122 13,545 Stock-based compensation expense 985 1,106 Loss (gain) on sale of assets or stations 3,767 (47,750 ) Impairment of intangible assets 4,509 — Restructuring costs 2,343 13,024 Franchise taxes 235 352 Adjusted EBITDA $ (6,375 ) $ 61,819
Same Station (1) Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Net (loss) income $ (36,454 ) $ 45,703 Income tax (benefit) expense (11,973 ) 17,026 Non-operating expense, including net interest expense 15,947 21,217 Local marketing agreement fees 1,006 438 Depreciation and amortization 13,108 13,471 Stock-based compensation expense 985 1,106 Loss (gain) on sale of assets or stations 4,076 (49,841 ) Impairment of intangible assets 4,509 — Restructuring costs 2,287 13,024 Franchise taxes 235 352 Adjusted EBITDA $ (6,274 ) $ 62,496
As Reported Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 GAAP net loss $ (43,667 ) $ 43,312 Income tax (benefit) expense (13,522 ) 16,841 Non-operating expense, including net interest expense 33,107 43,397 Local marketing agreement fees 2,053 1,481 Depreciation and amortization 25,912 28,135 Stock-based compensation expense 1,704 2,314 Loss (gain) on sale of assets or stations 5,583 (47,724 ) Impairment of intangible assets 4,509 — Restructuring costs 5,263 15,801 Franchise taxes 408 447 Gain on early extinguishment of debt — (381 ) Adjusted EBITDA $ 21,350 $ 103,623
Same Station (1) Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Net (loss) income $ (41,706 ) $ 44,361 Income tax (benefit) expense (13,522 ) 16,841 Non-operating expense, including net interest expense 33,107 43,397 Local marketing agreement fees 2,053 1,481 Depreciation and amortization 25,738 27,828 Stock-based compensation expense 1,704 2,314 Loss (gain) on sale of assets or stations 4,690 (49,823 ) Impairment of intangible assets 4,509 — Restructuring costs 5,174 15,801 Franchise taxes 408 447 Gain on early extinguishment of debt — (381 ) Adjusted EBITDA $ 22,155 $ 102,266
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 June 30, 2020 Three Months Ended June 30, 2019 As reported net revenue $ 146,022 $ 279,673 Station dispositions and swaps (10 ) (6,222 ) Same station net revenue $ 146,012 $ 273,451 Political revenue (1,183 ) (810 ) Same station net revenue, excluding impact of political revenue $ 144,829 $ 272,641
Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 As reported Adjusted EBITDA $ (6,375 ) $ 61,819 Station dispositions and swaps 101 677 Same station Adjusted EBITDA $ (6,274 ) $ 62,496 Political EBITDA (1,065 ) (729 ) Same station Adjusted EBITDA, excluding impact of political EBITDA $ (7,339 ) $ 61,767
Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 As reported net revenue $ 373,936 $ 547,169 Station dispositions and swaps (1,451 ) (18,658 ) Same station net revenue $ 372,485 $ 528,511 Political revenue (6,109 ) (1,693 ) Same station net revenue, excluding impact of political revenue $ 366,376 $ 526,818
Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 As reported Adjusted EBITDA $ 21,350 $ 103,623 Station dispositions and swaps 805 (1,357 ) Same station Adjusted EBITDA $ 22,155 $ 102,266 Political EBITDA (5,498 ) (1,524 ) Same station Adjusted EBITDA, excluding impact of political EBITDA $ 16,657 $ 100,742
