‘Significant Distraction’: Now In Cumulus’ Rear-View Mirror


In three weeks, Cumulus Media‘s official Q4 2018 and full-year results will be known.

If the company’s widely dispersed preliminary operating results, released late Monday, are on target, investors will be undoubtedly pleased with the trajectory the nation’s No. 2 commercial radio broadcasting company by number of stations is performing — even as it pares down assets as part of its new plan of action under President/CEO Mary Berner.

As Cumulus today, post-bankruptcy, is a “successor company” to the one that elected for debtor-in-possession status, revenue results comparing Q4 2018 to the year-ago period are tied to the predecessor company.

That said, Cumulus expects net income of $42 million-$44 million. While Cumulus saw a net loss of $206.12 million in Q4 2018, a comparison should not be taken into account given the significant restructuring seen in bankruptcy.

What can be judged as comparable is Cumulus’ net revenue and adjusted EBITDA — both are up in a healthy way. Cumulus expects its net revenue to climb by 4.5%-5.2%, to between $307 million and $309 million. Adjusted EBITDA is expected to leap by 28.4%-32.4%, to between $64 million and $66 million.

The non-GAAP numbers for the full fiscal year reflect flat net revenue of $1.14 billion; adjusted EBITDA on a non-GAAP basis is projected to rise by between 6.9%-7.8%, to $232.7 million-$234.7 million.

Meanwhile, all eyes continue to be drawn toward Cumulus’ debt. Yes, it just sliced a big portion of it off. But, it is widely speculated that further debt-slicing is to occur with the divestment of radio stations in such markets as Los Angeles and Detroit.

Total debt is now $1.24 billion, down from a pre-bankruptcy $2.33 billion. The 7.75% senior notes, valued at $610 million, seen in Q4 2017 are gone. The term loan debt is $478,910 thinner.

This means Cumulus’ total debt is less than that of Entercom, which has $1.47 billion in debt, according to that company’s Q4 financial results.

It’s an important focal point for Cumulus and Berner, who will discuss their official Q4 and full-year results after the Closing Bell on Monday, March 18.

For the first quarter of 2019, Cumulus is currently pacing approximately flat, with continued strength in national and digital offset by local and political.

Why the sneak peek at its Q4 results? Perhaps Cumulus wanted to excite investors: CMLS opened on Tuesday at $16.64.

But, it is likely tied to the sale of six radio stations to Educational Media Foundation. The preliminary results are not adjusted to reflect the impact of the sale. “If the stations subject to this transaction were excluded for the twelve months ended December 31, 2018, preliminary unaudited net revenue would have been lower by $23 million to $25 million and preliminary unaudited Adjusted EBITDA would have been lower by $5 million to $7 million,” Cumulus said.

Commenting on the pre-release of Cumulus’ Q4 and year-end 2018 fiscal report, Berner said, “Throughout 2018, despite the significant distraction of bankruptcy, we remained focused on the execution of our strategic priorities – maximizing operating performance, growing our digital businesses, and optimizing our asset portfolio. Collectively, we believe these will help us meet our key financial goals of generating as much as $100 million of free cash flow per year, reducing our net leverage to below 4.0X as quickly as possible and reinvesting in opportunities with meaningful growth potential.

“Our fourth quarter and full year 2018 results reflect solid execution against these priorities and great progress toward achieving our financial goals. The company delivered the first full year of revenue growth in four years and the second consecutive year of EBITDA growth, following a five-year decline. Our digital revenue grew over 60% in the year, accelerating each quarter, which supported a string of eight straight quarters of revenue market share gains. As a result of our EBITDA growth and a $50 million voluntary debt prepayment in October, we expect our net leverage at year end will be reduced to approximately 5.2x. And, importantly, we took meaningful steps toward optimizing our portfolio with two recently announced transactions, which will further reduce net leverage. I am exceedingly proud of the entire Cumulus team for delivering on the promises we have made to our stakeholders to date and look forward to more progress in the months and years ahead.”


  1. The finances have stabilized, but now where will the growth come from?!? Cumulus badly lags both iHeart and Entercom in building a unified digital presence. Any real growth will come from leveraging station content on digital platforms. Ms. Berner is a smart lady, and was a great choice to steer the company away from the excesses of the Dickey’s and get the finances stable, but now the Board really needs to consider getting a leader who has a vision to grow the company while being smart with the money. I’m not sure Ms. Berner fits that description.

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