Cumulus Q4 up 4.5%; FY up 2.4%

0

CumulusNet revenues for the quarter were up $11.9 million, or 4.5%, to $275.5 million, compared to $263.6 million for Q4 2012. This bump was attributable to a $10.1 million increase in revenue due to the December buy of WestwoodOne and a $1.6 million increase attributable to the five stations Cumulus bought in Fresno in November as part of the 2013 Townsquare buy. A decrease in political revenue was offset by other increases in local and national ad revenue.


Direct operating expenses for the quarter increased $17.9 million, or 10.7%, to $185.9 million, compared to $168.0 million for Q4 2012. The increase was primarily attributable to $7.9 million of ongoing investments in national content initiatives and sales infrastructure, a $9.0 million increase due to the WestwoodOne buy, and a $1.0 million increase attributable to the 5 Fresno stations.

FY net revenues were up $23.8 million, or 2.4%, to $1.026 billion, compared to $1.002 billion made in 2012. This increase was attributable to a $11.5 million increase in local spot revenue, an increase of $15.5 million in national advertising and live event revenue, a $10.1 million increase in revenue due to the December 2013 acquisition of WestwoodOne, a $1.6 million increase attributable to the 5 stations in Fresno and a $5.9 million increase attributable to the addition of stations in the Bloomington and Peoria markets which we acquired 7/12, partially offset by a decrease of $20.8 million in political comps.

Direct operating expenses for the year increased $45.4 million, or 7.3%, to $668.3 million, compared to $622.9 million for 2012. The increase was primarily attributable to a $31.3 million increase in national content initiatives, as well as ongoing investments in sales infrastructure, a $9.0 million increase due to WestwoodOne, a $1.0 million increase attributable to Fresno and a $4.1 million increase in expenses due to Bloomington and Peoria.

Said Lew Dickey, Cumulus CEO, in the call: “The fourth quarter capped off a strong year of performance by our team in the face of very tough political comps. Additionally in the quarter, we closed two significant transactions, completed the first equity offering our industry has been in nine years, and refinanced our credit facilities leaving us with a simplified capital structure consisting of first lien bank debt and senior subordinated notes, again while significantly reducing our borrowing costs.

…we invested an Rdio, an already exciting online music service that holds tremendous potential upside for Cumulus and serve as a worldwide distribution platform for our newly acquired content engine, WestwoodOne. Now, our sale of 68 radio stations to Townsquare Media closed on November 14. That provided us with the capital to purchase WestwoodOne, which we closed on December 12. The Westwood acquisition is important part of our forward growth strategy as it provides our company with a significant amount of exclusive and proprietary audio content, particularly in the areas of sports, entertainment, news and talk and some of the key assets include CBS Sports Radio Network, NBC Sports Radio Network, the NFL, the NCAA including the Final Four, the Olympics, NASCAR, the Masters. And then on the entertainment front, the Grammys, the AMAs, the Billboard Music Awards, the ACMs along with information services, including NBC News, CBS News, ABC News and CNBC.

Now, with premier and exclusive national content brands, a strong owned and operated station group now more than 10,000 local broadcast station affiliates nationwide, Cumulus has become a powerful national advertising platform. The acquisition of WestwoodOne greatly accelerates that strategy, but it doesn’t attract from our stated imperative of deleveraging our balance sheet. In fact, in addition to the WestwoodOne acquisition being capital neutral, because of the sale of the small market radio assets to Townsquare, WestwoodOne will actually be a net deleveraging transaction, because of the $40 million in expense synergies that we expect to achieve over the next couple of years. As part of this overall transaction, we also traded additional small market radio stations to Townsquare for attractive assets in Fresno which further focuses our owned and operated platform on the top 100 U.S. radio markets.

Now, moving on to our results for the fourth quarter and full year 2013, I am pleased to report that on a same station basis, we met our EBITDA guidance for the quarter and we exceeded the top end range of our revenue guidance. This revenue beat was through core performance alone without any impact of M&A. Further, despite tough 2012 political comps of over $20 million, we achieved full year revenue growth on a same station basis as well. And this is a significant achievement for our team last year as we hit a very important internal goal, which was to post positive growth in spite of the political comp.”

 


SHARE
Previous articleCurtis Media buys Sanford NC translator
Next articleSpotify may be readying for IPO
Carl has been with RBR-TVBR since 1997 and is currently Managing Director/Senior Editor. Residing in Northern Virginia, he covers the business of broadcasting, advertising, programming, new media and engineering. He’s also done a great deal of interviews for the company and handles our ever-growing stable of bylined columnists.