Cumulus accumulates massive growth


CumulusWhen you assimilate a large number of large-market stations into your portfolio, the affect on a broadcast company’s bottom line is downright gaudy. Such is the case of Cumulus Media Inc., which recently brought both Citadel Broadcasting Corp. and Cumulus Media Partners into its fold.

Net revenues for Q1 2012 came home at $245.3M. Pro forma revenues were $254.2M, resulting in a decline of 3.5%. But the new total compares to the as-reported figure of $57.6M, and constitutes an increase of 324%.

The pro forma results were considerably better in the EBITDA category. It came home at $76.9M, a 12.2% increase of the pro forma total of $68.5M and 502.2% better than the as-reported total of 502.2%.

Free cash flow numbers were through the roof in both categories. $37M was the take, a 94.5% improvement over the pro forma total of $19M and 1865.7% better than the as-reported total of $1.9M.

Lew Dickey, Chairman & CEO stated, “The first quarter of 2012 was marked by significant progress in our integration of Citadel as we build Cumulus into a robust platform company that strategically monetizes content, distribution and technology. Complementing this progress was the continued deleveraging of our balance sheet, as well as strategic portfolio management that will enable us tremendous financial flexibility going forward.”

Citadal said it picked up a $2.4M increase in political advertising over the same quarter in 2011, but lost other revenues, including money it made for management services for Cumulus Media Partners stations that are now part of the group.

Lew Dickey said there was a slight decline in earnings toward the end of the quarter. It was partly due to the loss of income suffered by Rush Limbaugh after actions against him in the wake of his Sandra Fluke comments. He said Limbaugh is a fixture on many of the former ABC Radio stations that are now part of the Cumulus portfolio, which created a significant exposure for the group. The whole thing was said to have cost about $2M in Q1 and another $2M in Q2.

Dickey is the latest exec to note the continued return of the automotive category.

The assimilation of Citadel stations was said to be just about completed.

He said the company has financial flexibility and no need to seek credit in the near future.
Revenue for Q2 is placing flat, but much of this can be laid at the doorstep of the company’s relationship with the Los Angeles Dodgers and KABC, which has been discontinued. Meanwhile, it is expecting to bring in $30M in political advertising by year’s end.

The SweetJack daily deals platform is expected to be a player in the space. It’s part of the digital platform that gives the company a high degree of upside potential. And even though Cumulus expects to start seeing success with it this year, its main focus is to point it to an even bigger future down the road.

Cumulus Media Networks: Mike Huckabee is up to 200 affiliates, and Right Now Traffic is exceeding expectations.

On M&A, Dickey said the strategic station swap with Townsquare allows concentration of larger market consolidation and deleveraging of the balance sheet.

Dickey preached a sermon on the ongoing value of radio – the one to many format is great for branding, and radio remains one of the very few media that provide that model. Add on the relatively low production costs and it remains an attractive medium with which to operate.