Cumulus Significantly Trims Its Net Loss In Q1


There’s light at the end of a long, long tunnel for Cumulus Media.

The nation’s No. 2 owner of AMs and FMs by station count saw its Q1 2017 net revenue slip by 1.7%, to $264 million.

But, its net loss was sliced by 49%, coming in at “just” $7.4 million (25 cents per share).

This compares to $14.5 million (49 cents) in Q1 2016.

Furthermore, the results released following the Closing Bell on Wall Street today (5/15) indicate that its Westwood One arm is not so much a problem area anymore. Radio Station Group revenue was off 1.6%, to $173.6 million, while Westwood One revenue slipped 1.9%, to $89.5 million.

However, Radio Station Group net income was up 15.4%, to $28.6 million. WW1 saw net income of $2.23 million, swinging from a net loss of $2.89 million in Q1 ’16.

The results also show that “corporate and other” expenses are still significant. In Q1 2017, they widened to 5.3%, to $38.2 million.

Noting that the radio industry was down 2% to 3% in Q1, Cumulus President/CEO Mary Berner said, “Our first quarter represents a clear inflection point in our turnaround, as the downward trajectory of recent years has been reversed.  With clear evidence that our strategy is working, we remain committed to the rigorous execution of the initiatives that are critical to keeping the Company on a sustained growth path.”

Adjusted EBITDA was down 7.6%, to $38.7 million.

Speaking on her company’s quarterly call with financial analysts, Berner played up Cumulus employee retention being at a new high, along with the introduction of new training materials, and a new intranet platform to facilitate greater collaboration among sales people.

Meanwhile, Cumulus has a bit more cash on hand — some 15% more based on a quarter-by-quarter look. The total cash as of March 31: Some $151.2 million.

Total debt is unchanged and continues to stand at $2.42 billion.

“Our company continues to be overleveled,” Berner says, noting that she and her company is intent “on looking all available options” in ways that do not derail its efforts in addressing that steep overleverage.

How is Cumulus pacing in Q2? It’s looking flat, Cumulus CFO and EVP/Treasurer John Abbot revealed in closing the 24-minute call, not taking questions from analysts over the phone or via prepared questions.

Costs are still negatively impacting Cumulus, and Content Costs rose to $101.8 million, from $100 million, in Q1.

Lastly, Cumulus notes that it submitted to Nasdaq on May 5 a plan to regain compliance with the Equity Listing Rule.

“We remain in discussions with Nasdaq regarding this plan and, if accepted, Nasdaq could provide us a period up to Sept. 17, 2017 to regain compliance with the Equity Listing Rule,” the company said.

In the event Nasdaq rejects Cumulus’ plan, the company’s Class A common stock will be subject to delisting.

Cumulus has until October 2 to regain compliance with the requirements under Nasdaq’s Bid Price Rule. This means that, should CMLS shares stay at $1.00 per share or more for a minimum of 10 consecutive business days, it will regain Nasdaq compliance with this rule.