Cumulus Media Inc. Second Quarter Net Revenue Up 36.7% to $62.6 Million; BCF Increases 20.6% to $16.4 Million; $12.4 Million of EBITDA After $1.2 Million of Non-Recurring Overhead.ATLANTA--(BUSINESS WIRE)--August 14, 2000 $ 9.3 million Restructuring Charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. for Corporate Office Consolidation and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the Related Businesses Cumulus Media Cumulus Media, Inc. (also known as Cumulus Broadcasting) NASDAQ: CMLS is a large owner of radio stations in markets in the United States with 307 stations in 61 markets as of December 31, 2005. Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CMLS CMLS Central Minnesota Legal Services CMLS Chemical Movement in Layered Soils CMLS Centralized Mail List Services (GSA) CMLS Contractor Maintenance & Logistics Support ), the nation's third largest owner-and-operator of radio stations, today reported results for the three and six month periods ending June June: see month. 30, 2000. The quarterly period, as expected, was marked by strong historical growth due to acquisitions, but negative growth in same-store revenues and cash flows. For the three months ended June 30, 2000, net revenues increased 36.7% to $62.6 million. Broadcast cash flow increased 21.0% to $16.4 million. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become was $ 12.4 million after approximately $1.2 million in non-recurring corporate costs including severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when , professional fees, and other miscellaneous corporate expenses. Our Board of Directors has also made the decisions i) to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: the Internet related activities that were becoming a growing part of our corporate infrastructure; and ii) to consolidate the Company's corporate functions in Atlanta Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. , GA. As result of these actions, the Company has recorded a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge in the second quarter of $9.3 million. This charge, which is comprised of employee costs, lease abandonment costs, and asset write-offs will allow us to report on future performance net of the quarterly impact of these actions. For the three months ended June 30, 2000 net revenues increased $16.8 million, or 36.7%, to $62.6 million, from $45.8 million for the three months ended June 30, 1999. Broadcast Cash Flow (defined as station operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (loss) before depreciation, amortization, LMA LMA left mentoanterior (position of fetus). fees, non-cash stock compensation expense and other non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. ) increased $2.8 million, or 20.6%, to $16.4 million for the three months ending June 30, 2000, compared to $13.6 million for the three months ended June 30, 1999. EBITDA increased $0.6 million, or 5.1%, to $12.4 million for the three months ending June 30, 2000, compared to $11.8 million for the three months ended June 30, 1999. Basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss per share was $0.51 for the three months ending June 30, 2000, compared to $0.35 for the three months ended June 30, 1999 On a same station basis, net revenues for the 212 stations in 39 markets operated for at least a full year decreased $1.6 million or 3.5% to $43.6 million for the three months ending June 30, 2000, compared to net revenues of $45.1 million for the three month period ending June 30, 1999. Same Station broadcast cash flow decreased $3.5 million, or 25.7%, to $10.1 million for the three months ending June 30, 2000, compared to $13.6 million for the three months ended June 30, 1999. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, after all announced acquisitions and divestitures, net revenues for the 271stations in 54 markets decreased $5.4 million or 8.1% to $61.5 million for the three months ending June 30, 2000, compared to net revenues of $66.9 million for the three month period ending June 30, 1999. Pro forma broadcast cash flow decreased $4.9 million, or 25.0%, to $14.9 million for the three months ending June 30, 2000, compared to $19.8 million for the three months ended June 30, 1999. For the six months ended June 30, 2000 net revenues increased $33.2 million, or 43.2%, to $110.3 million, from $77.1 million for the six months ended June 30, 1999. Broadcast Cash Flow (defined as station operating income (loss) before depreciation, amortization, LMA fees, non-cash stock compensation expense and other non-cash charges) increased $3.9 million, or 21.3%, to $21.9 million for the six months ending June 30, 2000, compared to $18.0 million for the six months ended June 30, 1999. EBITDA decreased $1.4 million, or 9.9%, to $13.2 million for the six months ending June 30, 2000, compared to $14.6 million for the three months ended June 30, 1999. Basic and diluted loss per share was $1.06 for the six months ending June 30, 2000, compared to $0.94 for the six months ended June 30, 1999 On a same station basis, net revenue for the 212 stations in 39markets operated for at least a full year were $79.0 million for the six months ending June 30, 2000, unchanged when compared to net revenues of $79.0 million for the six month period ending June 30, 1999. Same Station broadcast cash flow decreased $6.5 million, or 34.7%, to $12.3 million for the six months ending June 30, 2000, compared to $18.8 million for the six months ended June 30, 1999. On a pro forma basis, after all announced acquisitions and divestitures, net revenue for the 271stations in 54 markets decreased $ 6.4 million or 5.4% to $ 111.7 million for the six months ending June 30, 2000, compared to net revenues of $118.1 million for the six month period ending June 30, 1999. Pro forma broadcast cash flow decreased $ 7.7 million, or 27.1%, to $20.5 million for the six months ending June 30, 2000, compared to $28.2 million for the six months ended June 30, 1999. During June 2000 the Company implemented two separate Board-approved restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). programs. These restructuring programs were designed to improve the Company's competitive position as well as to enhance the Company's allocation of resources allocation of resources Apportionment of productive assets among different uses. The issue of resource allocation arises as societies seek to balance limited resources (capital, labour, land) against the various and often unlimited wants of their members. . These June 2000 restructuring programs were implemented to (i) focus the Company's operations on its core business, radio broadcasting The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , by terminating several Internet service pilot projects and Internet infrastructure development projects, and (ii) make the Company's corporate infrastructure more efficient and responsive to our markets by relocating, effective October October: see month. 1, 2000, all corporate services Activities that combine or consolidate certain enterprise-wide needed support services, provided based on specialized knowledge, best practices, and technology to serve internal (and sometimes external) customers and business partners. currently conducted in Milwaukee, WI and Chicago, IL to Atlanta, GA. The June 2000 restructuring programs were the result of Board-approved mandates to discontinue the operations of Cumulus cumulus: see cloud. Internet Services and to centralize cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. the Company's corporate administrative organization and employees in Atlanta. The program included severance and related costs, and costs for vacated leased facilities, impaired leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. at vacated leased facilities, and impaired assets Impaired Asset An asset with a market value that is worth less than its book value. Notes: If the sum of all estimated future cash flows is less than the carrying value of the asset, then the asset would be considered impaired and would have to be written down to its fair related to the Internet businesses. These restructuring programs also resulted in the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. assets associated with Internet Service proprietary software and systems infrastructure, and severance and related costs for corporate positions in Milwaukee and Chicago as well as costs for vacating the leased facilities in Milwaukee and Chicago. The reduction in work force primarily affected employees in Milwaukee and Chicago. Total costs incurred as a result of the restructuring were $9.3 million, which include severance and related charges associated with the reduction in force and charges related to vacating leased facilities. As of August 11, 1999, $5.2 million remains accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. and is expected to be paid by the end of fiscal 2003. Newly appointed Cumulus CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Lew Dickey, noted, "During the second quarter, we identified the company's problems and developed a plan to fix them. That plan is now being implemented and should be firmly in place by the end of the third quarter. We expect to see some results in Q4, particularly in the area of cost reduction on the station side. We don't expect to see measurable growth in revenue until Q1 2001 due to the large number of annual contracts for this calendar year sold at below market rates during Q4 '99 and Q1 of this year. Below market rates, especially given our ratings success, are enjoyed by many of our primary clients, but all annual deals will expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. by the end of this year and we expect to return to market level pricing at that time." Cumulus Media Inc. is the parent Company of Cumulus Broadcasting Inc., which along with its other subsidiaries, owns and operates station clusters in mid-size markets. The Company commenced operations May 22, 1997. Cumulus is the third largest U.S. radio operating company operating company A business that engages in transactions with outsiders. based upon the number of stations owned or to be acquired pursuant to pending acquisition agreements. Pro forma the completion of all pending acquisitions and divestitures, Cumulus Media will own and operate 271 radio stations in 54 mid-size and smaller U.S. media markets. After giving pro forma effect for the pending acquisitions, the Company will own, on average, over 5 radio stations per market. In addition, the Company owns and operates a multi-market radio network in the English-speaking Caribbean. This news announcement contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Key risks are described in the Company's reports filed with the U.S. Securities and Exchange Commission. Readers should note that these statements may be impacted by several factors including changes in the economic climate and the in the business of radio broadcasting. Accordingly, the Company's actual performance may vary from those stated or implied herein.
CUMULUS MEDIA INC.
Second Quarter 2000 Results
Three Months Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
---- ---- ---- ----
Historical:
Net Revenues $62,627 $45,846 $110,344 $77,057
Broadcast Cash Flow $16,441 $13,584 $21,855 $18,019
BCF Margins 26.3% 29.6% 19.8% 23.4%
Markets Operated One Year
(39 Markets; 212 Stations):
Net Revenues $43,566 $45,133 $78,979 $78,977
Broadcast Cash Flow $10,118 $13,622 $12,283 $18,811
BCF Margins 23.2% 30.2% 15.6% 23.8%
Pro Forma
(54 Markets; 271 Stations):
Net Revenues $61,548 $66,942 $111,681 $118,104
Broadcast Cash Flow $14,851 $19,789 $20,538 $28,201
BCF Margins 24.1% 29.6% 18.4% 23.9%
CAPITALIZATION
June 30, 2000 March 31, 2000
------------- --------------
Cash and cash equivalents $73,710 $143,681
======= ========
Long-term debt, including current
maturities:
Term loan facility 125,000 125,000
Senior Subordinated Notes 160,000 160,000
Other 237 222
--- ---
Total long-term debt 285,237 285,222
--------- -------
Series A Preferred Stock 109,905 106,263
Total Stockholders' equity 457,208 475,356
-------- -------
Total capitalization $852,350 $866,841
======== ========
CUMULUS MEDIA INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended Three Months Ended
June 30, 2000 June 30, 1999
------------------ ------------------
Gross broadcast revenues $ 68,095 $ 49,775
Less: Agency commissions (5,468) (3,929)
--------- ---------
Net broadcast revenues 62,627 45,846
Station operating expenses 46,186 32,262
Corporate G.& A. expense 4,014 1,736
Depreciation and amortization 10,408 7,688
LMA fees 1,663 1,097
Corporate Restructuring Charge 9,296 0
--------- ---------
Operating income (loss) ($8,940) 3,063
Other (income) expenses:
Interest expense 7,779 6,472
Interest income (2,521) (82)
Other income (expense), net 13 2
Income(loss) before income taxes (14,211) (3,329)
Income tax expense -- 1,116
Net income(loss) (14,211) (2,213)
Preferred stock dividends and
accretion of discount 3,642 4,752
Net loss attributable to
common stock (17,853) (6,965)
Basic and diluted loss per
common share:
Net loss attributable to
common stock (0.51) (0.35)
Weighted Average Shares
Common Shares 35,166 19,737
Six Months Ended Six Months Ended
June 30, 2000 June 30, 1999
---------------- ----------------
Gross broadcast revenues $ 119,950 $ 83,519
Less: Agency commissions (9,606) (6,462)
--------- ---------
Net broadcast revenues 110,344 77,057
Station operating expenses 88,489 59,038
Corporate G.& A. expense 8,698 3,410
Depreciation and amortization 20,304 14,733
LMA fees 2,842 1,651
Corporate Restructuring Charge 9,296 0
--------- ---------
Operating income (loss) ($19,285) (1,775)
Other (income) expenses:
Interest expense 15,415 12,492
Interest income (4,613) (221)
Other income (expense), net 12 2
Income(loss) before income taxes (30,099) (14,048)
Income tax expense -- 4,710
Net income(loss) (30,099) (9,338)
Preferred stock dividends and
accretion of discount 7,173 9,297
Net loss attributable to
common stock (37,272) (18,635)
Basic and diluted loss per
common share:
Net loss attributable to
common stock (1.06) (0.94)
Weighted Average Shares
Common Shares 35,111 19,737
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