In the end, the benefits of political advertising proved stronger than the headwinds facing Cumulus Media attributed to underperformance of some of the Citadel Broadcasting stations it acquired in 2011. The company is looking for improvement in Q2 2013 after consumers held on to their cash in Q1.
Cumulus placed net revenue for Q4 20120at $284.2M, a $2.9M, 1% increase over the same period in 2011. Cumulus leader Lew Dickey said that a beneficial $13M in political advertising was offset by underperformance at some of the Citadel stations.
Expenses were down primarily thanks to the absence of costs associated with bringing Cumulus Media Partners and Citadel Broadcasting Corporation stations into the Cumulus Media fold, which took place in August and September of 2011 respectively.
For the full year on a pro forma basis, the company realized $395.3M in revenue, representing a 7.4% growth rate, and leaving the company with 6.8x net leverage.
Things are said to be looking up. Lethargic consumer spending had a negative effect on income during the first quarter of 2013, but that is starting to change Q2. April is pacing up about 5%. Dickey said the company’s focus is to grow free cash flow and reduce debt.
Cumulus is very happy with its Big Apple country radio initiative. Nash FM is getting a positive reception in New York, and the Nash Bash event was a success.
The company is also very happy with its participation in Clear Channel’s iHeart Radio service. Dickey noted it has moved from the #9 to the #3 radio company in terms on streamed listening.
Cumulus is pleased with its sports radio network initiative with CBS, with hundreds of affiliates, and a great talent lineup. Sales are expected to exceed budgets this year, but upfront costs are still outweighing results.
Asked if Cumulus would follow the lead of the more aggressive television groups that are currently acquiring stations, Dickey said his company was more focused on making what it has work. From the advertiser perspective, they’re looking for cross-platform exposure, and that’s where Cumulus’s focus is. It is not looking to acquire stations at the moment. He did add that there may be a case for more scale long-term.
On the infamous 10 stations that have been problematic for Cumulus, Dickey said they are continuing to bleed cash. However, by the back half of 2013, the company is expecting them to start generating positive numbers.
