Cumulus Media Inc. (NASDAQ:CMLS) (the “Company,” “we,” “us,” or
“our”) today announced operating results for the three and nine
months ended September 30, 2016.
For the three months ended September 30, 2016, the Company
reported net revenue of $286.1 million, down 1.1% from the three
months ended September 30, 2015, net income of $46.3 million
and Adjusted EBITDA of $43.9 million, down 37.9% from the quarter
ended September 30, 2015. For the nine months ended
September 30, 2016, the Company reported net revenue of $841.9
million, down 2.1% from the nine months ended September 30,
2015, net income of $33.0 million and Adjusted EBITDA of $149.0
million, down 24.0% from the nine months ended September 30,
2015.
Excluding the impact of $14.4 million of expenses incurred
during the quarter ended September 30, 2016, to resolve previously
disputed syndicated programming and network inventory expenses with
CBS Radio Inc., Adjusted EBITDA declined 17.5% from the quarter
ended September 30, 2015 and 16.7% from the nine months ended
September 30, 2015.
Mary Berner, President and Chief Executive Officer of Cumulus
Media Inc. said, “A year into our turnaround effort, we have
made considerable progress against our operational priorities while
leading the industry in ratings growth. Though our performance
in the quarter was negatively impacted by headwinds which have
challenged us all year, we see evidence that our work is paying off
financially as we gained share this quarter for the first time in
at least four years. As we seek to maintain the momentum of
our initial strategies, we have now also launched a focused effort
to improve sales execution as the next logical step in our
turnaround plan.”
Operating Summary (in thousands, except percentages and
per share data):
| |
Three Months Ended September 30, |
| |
2016 |
|
2015 |
|
% Change |
| Net revenue |
$ |
286,136 |
|
|
$ |
289,441 |
|
|
(1.1 |
)% |
| Net income (loss) |
$ |
46,321 |
|
|
$ |
(542,179 |
) |
|
** |
|
| Adjusted EBITDA (1) |
$ |
43,884 |
|
|
$ |
70,620 |
|
|
(37.9 |
)% |
| Basic and diluted income
(loss) per share |
$ |
1.58 |
|
|
$ |
(18.57 |
) |
|
|
| |
|
|
|
|
|
|
|
|
|
| |
Nine Months Ended September 30, |
| |
2016 |
|
2015 |
|
% Change |
| Net revenue |
$ |
841,859 |
|
|
$ |
859,854 |
|
|
(2.1 |
)% |
| Net income (loss) |
$ |
32,958 |
|
|
$ |
(541,895 |
) |
|
** |
|
| Adjusted EBITDA (1) |
$ |
148,998 |
|
|
$ |
196,098 |
|
|
(24.0 |
)% |
| Basic and diluted income
(loss) per share |
$ |
1.12 |
|
|
$ |
(18.58 |
) |
|
|
| |
|
|
|
|
|
|
|
|
|
** Calculation is not meaningful
| |
|
September 30, 2016 |
|
December 31, 2015 |
|
% Change |
| Cash and cash
equivalents |
|
$ |
157,601 |
|
|
$ |
31,657 |
|
|
397.8 |
% |
| |
|
|
|
|
|
|
|
| Term loans |
|
1,838,940 |
|
|
$ |
1,838,940 |
|
|
— |
% |
| 7.75% Senior Notes |
|
610,000 |
|
|
610,000 |
|
|
— |
% |
| Total debt |
|
$ |
2,448,940 |
|
|
$ |
2,448,940 |
|
|
— |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Three Months Ended September 30, |
| |
2016 |
|
2015 |
|
% Change |
| Capital expenditures |
$ |
5,242 |
|
|
$ |
957 |
|
|
447.8 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| |
Nine Months Ended September 30, |
| |
2016 |
|
2015 |
|
% Change |
| Capital expenditures |
$ |
16,704 |
|
|
$ |
15,817 |
|
|
5.6 |
% |
| |
|
|
|
|
|
|
|
|
|
|
(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”.
Results for Three Months Ended September 30,
2016
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 information technology, human resources, legal,
finance and administrative functions.
The following tables present our net revenue by segment (dollars
in thousands).
| |
|
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 |
% |
| $ change from three months
ended September 30, 2015 |
|
$ |
1,522 |
|
|
$ |
(4,658 |
) |
|
$ |
(169 |
) |
|
$ |
(3,305 |
) |
| % change from three months
ended September 30, 2015 |
|
0.7 |
% |
|
(5.5 |
)% |
|
(24.4 |
)% |
|
(1.1 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended September 30,
2015 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Net revenue |
|
$ |
204,677 |
|
|
$ |
84,071 |
|
|
$ |
693 |
|
|
$ |
289,441 |
|
| % of total revenue |
|
70.7 |
% |
|
29.1 |
% |
|
0.2 |
% |
|
100.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
The following tables present our net income (loss) by segment
(dollars in thousands).
| |
|
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 |
|
| $ change from three months
ended September 30, 2015 |
|
$ |
522,257 |
|
|
$ |
134,470 |
|
|
$ |
(68,227 |
) |
|
$ |
588,500 |
|
| % change from three months
ended September 30, 2015 |
|
|
** |
|
|
92.5 |
% |
|
(784.5 |
)% |
|
|
** |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended September 30,
2015 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Net loss |
|
$ |
(388,138 |
) |
|
$ |
(145,344 |
) |
|
$ |
(8,697 |
) |
|
$ |
(542,179 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Calculation is not meaningful
Adjusted EBITDA
The following tables present our Adjusted EBITDA by segment
(dollars in thousands).
| |
|
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 |
|
| $ change from three months
ended September 30, 2015 |
|
$ |
(6,795 |
) |
|
$ |
(18,809 |
) |
|
$ |
(1,132 |
) |
|
$ |
(26,736 |
) |
| % change from three months
ended September 30, 2015 |
|
(10.8 |
)% |
|
|
** |
|
|
(13.3 |
)% |
|
(37.9 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended September 30,
2015 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Adjusted EBITDA |
|
$ |
63,032 |
|
|
$ |
16,120 |
|
|
$ |
(8,532 |
) |
|
$ |
70,620 |
|
** Calculation is not meaningful
Results for Nine Months Ended September 30,
2016
Net Revenue
The following tables present our net revenue by segment (dollars
in thousands).
| |
|
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 |
% |
| $ change from nine months
ended September 30, 2015 |
|
$ |
2,797 |
|
|
$ |
(19,880 |
) |
|
$ |
(912 |
) |
|
$ |
(17,995 |
) |
| % change from nine months
ended September 30, 2015 |
|
0.5 |
% |
|
(7.4 |
)% |
|
(34.8 |
)% |
|
(2.1 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Nine Months Ended September 30,
2015 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Net revenue |
|
$ |
589,843 |
|
|
$ |
267,387 |
|
|
$ |
2,624 |
|
|
$ |
859,854 |
|
| % of total revenue |
|
68.6 |
% |
|
31.1 |
% |
|
0.3 |
% |
|
100.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
The following tables present our net income (loss) by segment
(dollars in thousands).
| |
|
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 |
|
| $ change from nine months
ended September 30, 2015 |
|
$ |
514,301 |
|
|
$ |
126,113 |
|
|
$ |
(65,561 |
) |
|
$ |
574,853 |
|
| % change from nine months
ended September 30, 2015 |
|
|
** |
|
|
90.7 |
% |
|
(69.8 |
)% |
|
|
** |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Nine Months Ended September 30,
2015 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Net loss |
|
$ |
(309,038 |
) |
|
$ |
(138,985 |
) |
|
$ |
(93,872 |
) |
|
$ |
(541,895 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Calculation is not meaningful
Adjusted EBITDA
The following tables present our Adjusted EBITDA by segment
(dollars in thousands).
| |
|
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 |
|
| $ change from nine months
ended September 30, 2015 |
|
$ |
(20,203 |
) |
|
$ |
(25,058 |
) |
|
$ |
(1,839 |
) |
|
$ |
(47,100 |
) |
| % change from nine months
ended June 30, 2015 |
|
(11.3 |
)% |
|
(58.2 |
)% |
|
(7.0 |
)% |
|
(24.0 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Nine Months Ended September 30,
2015 |
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Adjusted
EBITDA |
$ |
179,481 |
|
|
$ |
43,056 |
|
|
$ |
(26,439 |
) |
|
$ |
196,098 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents our net revenue by segment for each
quarter during the year ended December 31, 2015 (dollars in
thousands).
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Net revenue Q1
2015 |
|
$ |
175,668 |
|
|
$ |
94,549 |
|
|
$ |
862 |
|
|
$ |
271,079 |
|
| Net revenue Q2
2015 |
|
|
209,498 |
|
|
|
88,767 |
|
|
|
1,069 |
|
|
|
299,334 |
|
| Net revenue Q3
2015 |
|
|
204,677 |
|
|
|
84,071 |
|
|
|
693 |
|
|
|
289,441 |
|
| Net revenue Q4
2015 |
|
|
206,540 |
|
|
|
101,581 |
|
|
|
704 |
|
|
|
308,825 |
|
| Net revenue FY
2015 |
|
$ |
796,383 |
|
|
$ |
368,968 |
|
|
$ |
3,328 |
|
|
$ |
1,168,679 |
|
| |
|
|
|
|
|
|
|
|
The following table presents our net income (loss) by segment
for each quarter during the year ended December 31, 2015 (dollars
in thousands).
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Net income (loss) Q1
2015 |
|
$ |
26,533 |
|
|
$ |
(1,208 |
) |
|
$ |
(37,340 |
) |
|
$ |
(12,015 |
) |
| Net income (loss) Q2
2015 |
|
52,567 |
|
|
7,568 |
|
|
(47,836 |
) |
|
12,299 |
|
| Net loss Q3 2015 |
|
(388,139 |
) |
|
(145,345 |
) |
|
(8,695 |
) |
|
(542,179 |
) |
| Net income (loss) Q4
2015 |
|
43,776 |
|
|
(2,195 |
) |
|
(46,180 |
) |
|
(4,599 |
) |
| Net (loss) income FY
2015 |
|
$ |
(265,263 |
) |
|
$ |
(141,180 |
) |
|
$ |
(140,051 |
) |
|
$ |
(546,494 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents our Adjusted EBITDA by segment for
each quarter during the year ended December 31, 2015 (dollars in
thousands).
| |
|
Radio Station Group |
|
Westwood One |
|
Corporate and Other |
|
Consolidated |
| Adjusted EBITDA Q1
2015 |
|
$ |
45,416 |
|
|
$ |
8,424 |
|
|
$ |
(9,177 |
) |
|
$ |
44,663 |
|
| Adjusted EBITDA Q2
2015 |
|
71,033 |
|
|
18,512 |
|
|
(8,730 |
) |
|
80,815 |
|
| Adjusted EBITDA Q3
2015 |
|
63,032 |
|
|
16,120 |
|
|
(8,532 |
) |
|
70,620 |
|
| Adjusted EBITDA Q4
2015 |
|
62,192 |
|
|
9,902 |
|
|
(9,047 |
) |
|
63,047 |
|
| Adjusted EBITDA FY
2015 |
|
$ |
241,673 |
|
|
$ |
52,958 |
|
|
$ |
(35,486 |
) |
|
$ |
259,145 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As previously disclosed, on November 3, 2015, we received a
notification from the Listing Qualifications Department of The
NASDAQ Stock Market LLC (“NASDAQ”) indicating that we were not in
compliance with NASDAQ Listing Rule 5450(a)(1) (the “Rule”) because
the minimum bid price of our Class A common stock had closed below
$1.00 per share for 30 consecutive business days.
On October 27, 2016 we received notification from NASDAQ that we
had regained compliance with the Rule in order for our Class A
common stock to remain listed on the NASDAQ Capital Market.
Earnings Call InformationCumulus Media Inc.
will host a teleconference today at 4:30 PM eastern time to discuss
its third quarter 2016 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 98715812.
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, December 8, 2016. Domestic callers can
access the replay by dialing 800-585-8367 or 855-859-2056, replay
code 98715812. 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, 2015 (the “2015 Form 10-K”) and any
subsequently filed Forms 10-Q. 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 (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 people reached each week through its
approximately 450 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. For more information,
visit www.cumulus.com.
| 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, |
| |
|
|
|
|
|
|
|
|
| |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| Net revenue |
|
|
|
|
|
|
|
|
| Operating expenses: |
$ |
286,136 |
|
$ |
289,441 |
|
$ |
841,859 |
|
$ |
859,854 |
|
| Content costs |
|
115,348 |
|
|
94,829 |
|
|
312,526 |
|
|
286,655 |
|
| Selling, general &
administrative expenses |
|
117,387 |
|
|
115,562 |
|
|
352,474 |
|
|
350,417 |
|
| Depreciation and amortization |
|
21,957 |
|
|
25,547 |
|
|
68,023 |
|
|
76,582 |
|
| LMA fees |
|
2,481 |
|
|
2,515 |
|
|
10,351 |
|
|
7,585 |
|
| Corporate expenses |
|
9,675 |
|
|
8,186 |
|
|
28,388 |
|
|
27,004 |
|
| Stock-based compensation
expense |
|
735 |
|
|
12,304 |
|
|
2,403 |
|
|
20,047 |
|
| Acquisition-related and
restructuring costs |
|
(450 |
) |
|
13,763 |
|
|
3,237 |
|
|
13,160 |
|
| (Gain) loss on sale of assets or
stations |
|
(94,014 |
) |
|
57 |
|
|
(97,155 |
) |
|
792 |
|
| Impairment of intangible assets and
goodwill |
|
— |
|
|
565,584 |
|
|
1,816 |
|
|
565,584 |
|
| Impairment charges - equity
interest in Pulser Media Inc. |
|
— |
|
|
18,308 |
|
|
— |
|
|
19,364 |
|
| Total operating expenses |
|
173,119 |
|
|
856,655 |
|
|
682,063 |
|
|
1,367,190 |
|
| Operating income (loss) |
|
113,017 |
|
|
(567,214 |
) |
|
159,796 |
|
|
(507,336 |
) |
| Non-operating (expense)
income: |
|
|
|
|
|
|
|
|
| Interest expense |
|
(34,929 |
) |
|
(35,691 |
) |
|
(103,896 |
) |
|
(106,087 |
) |
| Interest income |
|
139 |
|
|
22 |
|
|
364 |
|
|
407 |
|
| Other income (expense), net |
|
882 |
|
|
(151 |
) |
|
1,598 |
|
|
12,601 |
|
| Total non-operating expense,
net |
|
(33,908 |
) |
|
(35,820 |
) |
|
(101,934 |
) |
|
(93,079 |
) |
| Income (loss) before income
taxes |
|
79,109 |
|
|
(603,034 |
) |
|
57,862 |
|
|
(600,415 |
) |
| Income tax (expense)
benefit |
|
(32,788 |
) |
|
60,855 |
|
|
(24,904 |
) |
|
58,520 |
|
| Net income (loss) |
|
$ |
46,321 |
|
|
$ |
(542,179 |
) |
|
$ |
32,958 |
|
|
$ |
(541,895 |
) |
| Basic and diluted
income (loss) per common share: |
|
|
|
|
|
|
|
|
| Basic: Income (loss) per
share |
|
$ |
1.58 |
|
|
$ |
(18.57 |
) |
|
$ |
1.12 |
|
|
$ |
(18.58 |
) |
| Diluted: Income (loss) per
share |
|
$ |
1.58 |
|
|
$ |
(18.57 |
) |
|
$ |
1.12 |
|
|
$ |
(18.58 |
) |
| Weighted average basic
common shares outstanding |
|
29,275,111 |
|
|
29,194,508 |
|
|
29,268,885 |
|
|
29,165,188 |
|
| Weighted average
diluted common shares outstanding |
|
29,275,111 |
|
|
29,194,508 |
|
|
29,268,885 |
|
|
29,165,188 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measure and
DefinitionFrom 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 management 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. 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 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 facility.
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 excludes any gain or loss on the exchange
or sale of any assets as it does not represent a cash transaction.
The Company also excludes any gain or loss on the exchange or sale
of any assets and any gain or loss on derivative instruments as
they do not represent cash transactions nor are they 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 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. The Company has also observed
that Adjusted EBITDA is routinely employed to evaluate and
negotiate the potential purchase price for media companies and is a
key metric for purposes of calculating and determining compliance
with certain covenants in our credit facility. 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 and nine
months ended September 30, 2016 and 2015 (dollars in
thousands):
| |
|
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 |
|
| Income tax expense |
|
— |
|
|
— |
|
|
32,788 |
|
|
32,788 |
|
| Non-operating (income) expense,
including net interest expense |
|
(2 |
) |
|
59 |
|
|
33,851 |
|
|
33,908 |
|
| LMA 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 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended September 30, 2015 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Radio
Station Group |
|
|
Westwood
One |
|
|
Corporate
and Other |
|
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
$ |
(388,138 |
) |
$ |
(145,344 |
) |
$ |
(8,697 |
) |
$ |
(542,179 |
) |
| Income tax benefit |
|
— |
|
|
— |
|
|
(60,855 |
) |
|
(60,855 |
) |
| Non-operating (income) expense,
including net interest expense |
|
(3 |
) |
|
313 |
|
|
35,510 |
|
|
35,820 |
|
| LMA fees |
|
2,515 |
|
|
— |
|
|
— |
|
|
2,515 |
|
| Depreciation and amortization |
|
15,900 |
|
|
9,092 |
|
|
555 |
|
|
25,547 |
|
| Stock-based compensation
expense |
|
— |
|
|
— |
|
|
12,304 |
|
|
12,304 |
|
| (Gain) loss on sale of assets or
stations |
|
(50 |
) |
|
— |
|
|
107 |
|
|
57 |
|
| Impairment of intangible
assets |
|
432,808 |
|
|
132,672 |
|
|
104 |
|
|
565,584 |
|
| Impairment charges - equity
interest in Pulser Media Inc. |
|
— |
|
|
18,308 |
|
|
— |
|
|
18,308 |
|
| Acquisition-related and
restructuring costs |
|
— |
|
|
1,079 |
|
|
12,684 |
|
|
13,763 |
|
| Franchise and state taxes |
|
— |
|
|
— |
|
|
(244 |
) |
|
(244 |
) |
| Adjusted EBITDA |
|
$ |
63,032 |
|
|
$ |
16,120 |
|
|
$ |
(8,532 |
) |
|
$ |
70,620 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
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 |
|
| Income tax expense |
|
— |
|
|
— |
|
|
24,904 |
|
|
24,904 |
|
| Non-operating expense, including
net interest expense |
|
14 |
|
|
226 |
|
|
101,694 |
|
|
101,934 |
|
| LMA 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 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Nine
Months Ended September 30, 2015 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Radio
Station Group |
|
|
Westwood
One |
|
|
Corporate
and Other |
|
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
$ |
(309,038 |
) |
$ |
(138,985 |
) |
$ |
(93,872 |
) |
$ |
(541,895 |
) |
| Income tax benefit |
|
— |
|
|
— |
|
|
(58,520 |
) |
|
(58,520 |
) |
| Non-operating (income) expense,
including net interest expense |
|
(5 |
) |
|
955 |
|
|
92,129 |
|
|
93,079 |
|
| LMA fees |
|
7,585 |
|
|
— |
|
|
— |
|
|
7,585 |
|
| Depreciation and amortization |
|
47,448 |
|
|
27,562 |
|
|
1,572 |
|
|
76,582 |
|
| Stock-based compensation
expense |
|
— |
|
|
— |
|
|
20,047 |
|
|
20,047 |
|
| Loss on sale of assets or
stations |
|
685 |
|
|
— |
|
|
107 |
|
|
792 |
|
| Impairment of intangible
assets |
|
432,806 |
|
|
132,671 |
|
|
107 |
|
|
565,584 |
|
| Impairment charges -- equity
interest in Pulser Media Inc. |
|
— |
|
|
19,364 |
|
|
— |
|
|
19,364 |
|
| Acquisition-related and
restructuring costs |
|
— |
|
|
1,489 |
|
|
11,671 |
|
|
13,160 |
|
| Franchise and state taxes |
|
— |
|
|
— |
|
|
320 |
|
|
320 |
|
| Adjusted EBITDA |
|
$ |
179,481 |
|
|
$ |
43,056 |
|
|
$ |
(26,439 |
) |
|
$ |
196,098 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2015, June 30, 2015 and December 31, 2015, respectively
(dollars in thousands):
| |
|
Three Months Ended March 31, 2015 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Radio
Station Group |
|
|
Westwood
One |
|
|
Corporate
and Other |
|
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
$ |
26,533 |
|
$ |
(1,208 |
) |
$ |
(37,340 |
) |
$ |
(12,015 |
) |
| Income tax expense (benefit) |
|
35 |
|
|
— |
|
|
(10,392 |
) |
|
(10,357 |
) |
| Non-operating (income) expense,
including net interest expense |
|
(1 |
) |
|
320 |
|
|
33,928 |
|
|
34,247 |
|
| LMA fees |
|
2,498 |
|
|
— |
|
|
— |
|
|
2,498 |
|
| Depreciation and amortization |
|
15,532 |
|
|
9,312 |
|
|
467 |
|
|
25,311 |
|
| Stock-based compensation
expense |
|
— |
|
|
— |
|
|
3,863 |
|
|
3,863 |
|
| Loss on sale of assets or
stations |
|
819 |
|
|
— |
|
|
— |
|
|
819 |
|
| Franchise and state taxes |
|
— |
|
|
— |
|
|
297 |
|
|
297 |
|
| Adjusted EBITDA |
|
$ |
45,416 |
|
|
$ |
8,424 |
|
|
$ |
(9,177 |
) |
|
$ |
44,663 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three
Months Ended June 30, 2015 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Radio
Station Group |
|
|
Westwood
One |
|
|
Corporate
and Other |
|
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
$ |
52,567 |
|
$ |
7,568 |
|
$ |
(47,836 |
) |
$ |
12,299 |
|
| Income tax (benefit) expense |
|
(35 |
) |
|
— |
|
|
12,729 |
|
|
12,694 |
|
| Non-operating expense,
including net interest expense |
|
(2 |
) |
|
320 |
|
|
22,693 |
|
|
23,011 |
|
| LMA fees |
|
2,572 |
|
|
— |
|
|
— |
|
|
2,572 |
|
| Depreciation and amortization |
|
16,014 |
|
|
9,158 |
|
|
551 |
|
|
25,723 |
|
| Stock-based compensation
expense |
|
— |
|
|
— |
|
|
3,880 |
|
|
3,880 |
|
| Gain on sale of assets or
stations |
|
(84 |
) |
|
— |
|
|
— |
|
|
(84 |
) |
| Impairment charges - equity
interest in Pulser Media Inc. |
|
— |
|
|
1,056 |
|
|
— |
|
|
1,056 |
|
| Acquisition-related and
restructuring costs |
|
— |
|
|
410 |
|
|
(1,013 |
) |
|
(603 |
) |
| Franchise and state taxes |
|
— |
|
|
— |
|
|
267 |
|
|
267 |
|
| Adjusted EBITDA |
|
$ |
71,032 |
|
|
$ |
18,512 |
|
|
$ |
(8,729 |
) |
|
$ |
80,815 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three
Months Ended December 31, 2015 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Radio
Station Group |
|
|
Westwood
One |
|
|
Corporate
and Other |
|
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
$ |
43,776 |
|
$ |
(2,195 |
) |
$ |
(46,180 |
) |
$ |
(4,599 |
) |
| Income tax expense |
|
— |
|
|
— |
|
|
12,680 |
|
|
12,680 |
|
| Non-operating (income) expense,
including net interest expense |
|
(2 |
) |
|
293 |
|
|
33,671 |
|
|
33,962 |
|
| LMA fees |
|
2,541 |
|
|
— |
|
|
3 |
|
|
2,544 |
|
| Depreciation and amortization |
|
15,894 |
|
|
8,976 |
|
|
653 |
|
|
25,523 |
|
| Stock-based compensation
expense |
|
— |
|
|
— |
|
|
986 |
|
|
986 |
|
| (Gain) loss on sale of assets or
stations |
|
(17 |
) |
|
2,081 |
|
|
— |
|
|
2,064 |
|
| Acquisition-related and
restructuring costs |
|
— |
|
|
747 |
|
|
2,733 |
|
|
3,480 |
|
| Franchise and state taxes |
|
— |
|
|
— |
|
|
(371 |
) |
|
(371 |
) |
| Gain on early extinguishment of
debt |
|
— |
|
|
— |
|
|
(13,222 |
) |
|
(13,222 |
) |
| Adjusted EBITDA |
|
$ |
62,192 |
|
|
$ |
9,902 |
|
|
$ |
(9,047 |
) |
|
$ |
63,047 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For further information, please contact:
Cumulus Media Inc.
Collin Jones
Investor Relations
collin@cumulus.com
404-260-6600