Cumulus Reports Fourth Quarter 2008 Results.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. -- 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 ) today reported financial results for the three and twelve months ended December December: see month. 31, 2008. Financial highlights (in thousands, except per share data and percentages) are as follows: [TABLE OMITTED] [TABLE OMITTED] Results of Operations Three Months Ended December 31, 2008 Compared to the Three Months Ended December 31, 2007 Net revenues for the fourth quarter decreased from $84.4 million to $75.1 million, a decrease of 11.1% versus the fourth quarter of 2007, primarily due to pressures the Company's client base is facing during the current economic recession. Cash revenues for the fourth quarter decreased from $79.0 million to $70.8 million a decrease of 10.5% and barter barter: see exchange. barter Direct exchange of goods or services without the use of money or any other intervening medium of exchange. Barter is conducted either according to established rates of exchange or by bargaining. revenue decreased $1.06 million, or 19.8%, as we continue to deemphasize barter transactions. Station operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. decreased from $53.2 million to $48.3 million, a decrease of 9.2% from the fourth quarter of 2007. This decrease was primarily attributable to general expense decreases, including a decline in variable cost of sales related to revenue reductions across our station platform. 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. decreased from $31.2 million to $26.8 million, a decrease of 14.3% from the fourth quarter of 2007, for the reasons discussed above. 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, which excludes the results of the Company's Caribbean stations (sold in November 2007), for the period October 1, 2007 through November 31, 2007, net revenues for the three months ended December 31, 2008 decreased from $84.1 million to $75.1 million, a decrease of 10.8% from the same period in 2007. This decrease is primarily due to pressures the Company's client base is facing during the current economic recession. Pro forma cash revenues for the fourth quarter decreased from $78.7 million to $70.8 million, a decrease of 10.2% and barter revenues decreased $1.06 million, or 19.8% as we continue to deemphasize barter transactions. Pro forma station operating income decreased $4.4 million, a decrease of 14.2% from the same period in 2007 primarily due to the decrease in net revenues offset by reduced station operating expenses. Corporate expenses (excluding non-cash stock compensation and terminated transaction expense) for the three months ended December 31, 2008 did not change over the comparative period in 2007. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123R, Share Based Payment, effective January 1, 2006, non-cash stock compensation expense was $0.8 million for the three months ended December 31, 2008, as compared with $2.4 million non-cash stock compensation expense in the prior year three month period. Interest expense, net of interest income, increased by $1.0 million for the three months ended December 31, 2008 as compared with net expense of $18.3 million in the prior year's period. Net accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. expense associated with outstanding debt decreased by $3.7 million to $8.6 million as compared to $12.3 million in the prior year's period. This decrease was due to a lower average cost of bank debt and decreased levels of bank debt outstanding during the current quarter. The remaining $4.7 million increase was primarily due to the change in the fair value and amortization of certain derivative instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. . For the three months ended December 31, 2008, the Company recorded income tax benefit of $130.0 million, as compared to an income tax benefit of $33.4 million for the fourth quarter of 2007. Twelve Months Ended December 31, 2008 Compared to the Twelve Months Ended December 31, 2007 Net revenues for the twelve months ended December 31, 2008 decreased from $328.3 million to $311.5 million, a decrease of 5.1% from the same period in 2007. This decrease is primarily due to pressures the Company's client base is facing during the current economic recession. Cash revenues for the twelve months ended December 31, 2008 decreased from $310.4 million to $296.7 million, a decrease of 4.4% and barter revenues decreased 17.1% to $14.8 million from $17.9 million as we continue to deemphasize barter transactions. Station operating expenses decreased from $210.6 million to $203.2 million, a decrease of 3.5% from the same period in 2007. This decrease was primarily attributable to general expense decreases across our station platform partially offset by our continued investment in local sales personnel. Station operating income decreased from $117.7 million to $108.3 million, a decrease of 8.0% from the same period in 2007, for the reasons discussed above. On a pro forma basis, which excludes the results of the Company's Caribbean stations (sold in November 2007), for the period January 1, 2007 through November 31, 2007, net revenues for the twelve months ended December 31, 2008 decreased $15.0 million to $311.5 million, a decrease of 4.6% from the same period in 2007. This decrease is primarily due to pressures the Company's client base is facing during the current economic recession. Pro forma cash revenues for the first twelve months decreased from $308.7 million to $296.7 million, a decrease of 3.9% and barter revenues decreased 17.1%, from $17.9 million as we continue to deemphasize barter transactions. Pro forma station operating income decreased $8.9 million, a decrease of 7.6% from the same period in 2007 primarily due to the decrease in net revenues partially offset by reduced station operating expenses. Corporate expenses (excluding non-cash stock compensation and terminated transaction expense) for the twelve months ended December 31, 2008 decreased $1.9 million over the comparative period in 2007, due primarily to the reduction and timing of certain expenses. In accordance with SFAS No. 123R, Share Based Payment, effective January 1, 2006, non-cash stock compensation expense was $4.7 million for the twelve months ended December 31, 2008, as compared with $9.5 million non-cash stock compensation expense in the prior year twelve month period. Interest expense, net of interest income, decreased by $13.2 million to $47.3 million for the twelve months ended December 31, 2008 as compared with $60.4 million in the prior year's period. Net accrued interest expense associated with outstanding debt decreased by $11.7 million to $37.1 million as compared to $48.9 million in the prior year's period. This decrease was due to a lower average cost of bank debt and decreased levels of bank debt outstanding during the twelve month period. The net $1.4 million decrease was primarily due to the change in the fair value and amortization of certain derivative instruments. For the twelve months ended December 31, 2008, the Company recorded a one-time termination fee termination fee The one-time charge for terminating or transferring an individual retirement account. If a financial institution charges a termination fee, the fee must be spelled out in the original agreement that is signed when the account is opened. in the amount of $15.0 million from the investor group as a result of the termination of the Merger Agreement. Please see our current report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. filed with the Securities & Exchange Commission on May 12, 2008. For the twelve months ended December 31, 2008, the Company recorded income tax benefit of $117.9 million, as compared to a $38.0 million benefit for the same period during 2007. Share Repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. Program In May 2008 the Board of Directors granted authority for a $75.0 million share repurchase program. During the fourth quarter the Company purchased 1,375,139 shares of Class A Common Stock at an average per-share price of $1.09, or an aggregate of approximately $1.5 million. During the twelve months ended December 31, 2008 the Company purchased 2,967,949 shares of Class A Common Stock at an average per-share price of $2.20, or an aggregate of approximately $6.52 million. Cumulus Media Partners For the three and twelve months ended December 31, 2008, the Company recorded approximately $23.9 million and $22.2 million in equity losses of affiliate attributable to its investment in Cumulus Media Partners, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("CMP CMP (cytidine monophosphate): see cytosine. (1) (CMP Media LLC, Manhasset, NY, www.cmp.com) Part of United Business Media, CMP is a leading integrated media company that offers a wide variety of publications and services in the information "). For the three and twelve months ended December 31, 2008, the Company recorded as net revenues approximately $1.0 million and $4.0 million, respectively, in management fees from CMP. Leverage and Financial Position Net leverage was 6.87 times at December 31, 2008. Capital expenditures for the three and twelve months ended December 31, 2008 totaled $0.9million and $6.1million, respectively. Capital expenditures during the quarter were comprised of $ 0.5 million of expenditures related to 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. and the purchase of equipment related to studio facilities and tower structures, and $ 0.4 million of maintenance capital expenditures. Non-GAAP Financial Measures The Company utilizes certain financial measures that are not calculated in accordance with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). to assess financial performance and profitability. The non-GAAP financial measures used in this release are station operating income, adjusted 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 and free cash flow. Station operating income consists of operating income before LMA LMA left mentoanterior (position of fetus). fees, depreciation and amortization, non-cash stock compensation, impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge, terminated transaction expense and corporate general and administrative expenses. Adjusted EBITDA is defined as operating income before LMA fees, depreciation and amortization, non-cash stock compensation, impairment charge and transaction expense. Free cash flow is defined as operating income before non-cash stock compensation, impairment charge, depreciation and amortization, terminated transaction expense, less net interest expense (excluding non-cash charge/credit for change in value and amortization of swap arrangements Swap arrangements Short-term reciprocal lines of credit between the Federal Reserve and 14 foreign centeral banks as well as the Bank for International Settlements. Through a swap transactions, the Federal Reserve can, in effect, borrow foreign currency in order to purchase dollars and amortization of debt issuance costs), and maintenance capital expenditures. Station Operating Income Station operating income isolates the amount of income generated solely by the Company's stations and assists management in evaluating the earnings potential of the Company's station portfolio. In deriving this measure, management excludes LMA fees, even though it requires a cash commitment, due to the insignificance in·sig·nif·i·cance n. The quality or state of being insignificant. Noun 1. insignificance - the quality of having little or no significance unimportance - the quality of not being important or worthy of note and temporary nature of such fees. Management excludes depreciation and amortization due to the insignificant investment in tangible assets Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. required to operate the stations and the relatively insignificant amount of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. subject to amortization. Management excludes non-cash stock compensation and impairment charges from the measure as they do not represent cash payments for activities related to the operation of the stations. Management excludes terminated transaction expense as it is unrelated to the operation of the stations. Corporate expenses, despite representing an additional significant cash commitment, are excluded in an effort to present the operating performance of the Company's stations exclusive of the corporate resources employed. Management believes this is important to its investors because it highlights the gross margin generated by its station portfolio. Management believes that station operating income is the most frequently used financial measure in determining the market value of a radio station or group of stations. Management has observed that station operating income is commonly employed by firms that provide appraisal services to the broadcasting industry in valuing radio stations. Further, in each of the more than 140 radio station acquisitions the Company has completed since its inception, it has used station operating income as the primary metric to evaluate and negotiate the purchase price to be paid. Given its relevance to the estimated value of a radio station, management believes, and its experience indicates that investors consider the measure to be extremely useful in order to determine the value of its portfolio of stations. Management believes that station operating income is the most commonly used financial measure employed by the investment community to compare the performance of radio station operators. Finally, station operating income is one of the measures that management uses to evaluate the performance and results of its stations. Management uses the measure to assess the performance of the Company's station managers and the Company's Board of Directors uses it as part if its assessment of the relative performance of the Company's executive management. As a result, in disclosing station operating income, the Company is providing its investors with an analysis of its performance that is consistent with that which is utilized by its management and its Board. Station operating income is not a recognized term under GAAP and does not purport To convey, imply, or profess; to have an appearance or effect. The purport of an instrument generally refers to its facial appearance or import, as distinguished from the tenor of an instrument, which means an exact copy or duplicate. PURPORT, pleading. to be an alternative to operating income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, station operating income is not intended to be a measure of free cash flow available for dividends, reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. in the Company's business or other management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Station operating income should be viewed as a supplement to, and not a substitute for, results of operations presented on the basis of GAAP. Management compensates for the limitations of using station operating income by using it only to supplement the Company's GAAP results to provide a more complete understanding of the factors and trends affecting the Company's business than GAAP results alone. Station operating income has its limitations as an analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. tool, and investors should not consider it in isolation or as a substitute for analysis of the Company's results as reported under GAAP. Adjusted EBITDA Adjusted EBITDA is also utilized by management to analyze the cash flow generated by the Company's business. This measure isolates the amount of income generated by its stations after the incurrence In`cur´rence n. 1. The act of incurring, bringing on, or subjecting one's self to (something troublesome or burdensome); as, the incurrence of guilt, debt, responsibility, etc. s> Noun 1. of corporate general and administrative expenses (exclusive of terminated transaction expense which is non-recurring and unrelated to the operation of the stations). Management uses this measure to determine the contribution of the Company's station portfolio, including the corporate resources employed to manage the portfolio, to the funding of its other operating expenses and to the funding of debt service and acquisitions. In deriving this measure, management excludes LMA fees, even though it requires a cash commitment, due to the insignificance and temporary nature of such fees. Management also excludes depreciation and amortization due to the insignificant investment in tangible assets required to operate its stations and corporate office and the relatively insignificant amount of intangible assets subject to amortization. Management excludes non-cash stock compensation and impairment charges from the measure as they do not represent cash payments for activities related to the operation of the stations. Finally, management excludes terminated transaction expense as it is unrelated to the operation of the stations. Management believes that adjusted EBITDA, although not a measure that is calculated in accordance with GAAP, nevertheless is commonly employed by the investment community as a measure for determining the market value of a radio company. Management has also observed that adjusted EBITDA is routinely employed to evaluate and negotiate the potential purchase price for 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. companies. Given the relevance to the overall value of the Company, management believes that investors consider the metric to be extremely useful. Adjusted EBITDA should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating activities or any other measure for determining the Company's operating performance or liquidity that is calculated in accordance with GAAP. Free Cash Flow Free cash flow is also utilized by management to analyze the cash generated by our business. Free cash flow measures the amount of income generated each period that could be used to fund acquisitions or repay debt, after funding station and corporate expenses (excluding transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). ), maintenance capital expenditures, payment of LMA fees and debt service. Management believes that free cash flow, although not a measure that is calculated in accordance with GAAP is commonly employed by the investment community to evaluate a company's ability to pay down debt, pay dividends, repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. stock and/or facilitate the further growth of a company through acquisition or internal development. Management further believes that free cash flow is also utilized by investors as a measure in determining the market value of a radio company. Free cash flow should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating activities or any other measure for determining the Company's operating performance or liquidity that is calculated in accordance with GAAP. As station operating income, adjusted EBITDA and free cash flow are measures that are not calculated in accordance with GAAP, they may not be comparable to similarly titled measures employed by other companies. See the quantitative reconciliation of these measures to their most directly comparable financial measure calculated and presented in accordance with GAAP that follows below. 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. Certain statements in this release may constitute "forward-looking" statements, which are statements that involve risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from the results expressed or implied in these forward-looking statements, due to various risks, uncertainties or other factors. These factors include, but are not limited to, competition within the radio broadcasting industry, advertising demand in our markets, the possibility that advertisers may cancel or postpone post·pone tr.v. post·poned, post·pon·ing, post·pones 1. To delay until a future time; put off. See Synonyms at defer1. 2. To place after in importance; subordinate. schedules in response to national or world events, competition for audience share, our success in executing and integrating acquisitions, our ability to generate sufficient cash flow to meet our debt service obligations and finance operations The execution of the joint finance mission to provide financial advice and guidance, support of the procurement process, providing pay support, and providing disbursing support.See also financial management. , and other risk factors described from time to time in Cumulus Media Inc.'s filings with the Securities and Exchange Commission, including its Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2007 and its Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 30, 2008. Cumulus Media Inc. assumes no responsibility to update the forward-looking statements contained in this release as a result of new information, future events or otherwise. Cumulus Media Inc. is the second-largest radio company in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. based on station count. Following the completion of all pending acquisitions and divestitures, Cumulus cumulus: see cloud. , directly and through its investment in Cumulus Media Partners, will own or operate 347 radio stations in 68 U.S. media markets. The Company's headquarters are in Atlanta, Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. , and its web site is www.cumulus.com. Cumulus shares are traded on the NASDAQ Global Select Market under the symbol CMLS. Cumulus Media Inc. will host a teleconference later today at 4:30 PM Eastern Time to discuss fourth quarter results. To access this teleconference live, please visit the Company's web site at www.cumulus.com or dial (888) 801-6502 for both domestic and international callers. Immediately after completion of the call, a replay can be accessed until 11:59 PM Eastern Time March 31, 2009. Domestic and international callers can access the replay by dialing (888) 203-1112, pass code 8460129. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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