Cumulus Reports Third Quarter 2004 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 nine months ended September September: see month. 30, 2004. Lew a. 1. Lukewarm; tepid. Dickey, Chairman, President and Chief Executive Officer, commented, "We are pleased to announce strong results for the third quarter of 2004. The quarter was marked by solid top line growth and tremendous free cash flow growth as we continue to demonstrate the significant operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. of our platform." Historical results are attached. Historical or "as reported" financial data of Cumulus Media Inc. are not comparable from year to year because of the acquisition of radio stations by the Company during the periods covered. Financial highlights (in thousands, except per share data and percentages) are as follows:
Three Months Ended Nine Months Ended
September 30, % September 30, %
2004 2003 Change 2004 2003 Change
------- ------ ------ ------ ------ -------
As Reported:
Net revenues $ 83,976 $ 74,564 12.6%$235,741 $207,060 13.9%
Station operating
expenses 51,588 46,774 10.3% 150,503 131,895 14.1%
Station operating
income (1) 32,388 27,790 16.5% 85,238 75,165 13.4%
Station operating
income margin (2) 38.6% 37.3% 36.2% 36.3%
Adjusted EBITDA (3) 28,448 24,659 15.4% 73,872 65,184 13.3%
Income (loss) per
common share:
Basic income (loss)
per common share $ 0.13 $ 0.11 $ 0.30 $ (0.03)
Diluted income (loss)
per common share $ 0.13 $ 0.10 $ 0.29 $ (0.03)
Free cash flow (4) 21,383 16,827 27.1% 53,952 39,422 36.9%
Same Station Results: (5)
Net revenue $ 71,368 $ 68,727 3.8%$203,468 $193,558 5.1%
Station operating
income (1) 28,228 25,997 8.6% 75,651 69,439 8.9%
Station operating
income margin (2) 39.6% 37.8% 37.2% 35.9%
Pro Forma Results: (6)
Net revenue $ 83,573 $ 81,053 3.1%$238,908 $228,831 4.4%
Station operating
income (1) 32,303 29,373 10.0% 85,785 78,169 9.7%
Station operating
income margin (2) 38.7% 36.2% 35.9% 34.2%
Adjusted EBITDA (3) 28,363 26,242 8.1% 74,419 68,189 9.1%
Adjusted EBITDA
margin (7) 33.9% 32.4% 31.1% 29.8%
(1) 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. is defined as operating income before depreciation and amortization, LMA LMA left mentoanterior (position of fetus). fees, corporate general and administrative expenses, non-cash stock compensation and restructuring charges 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. (credits). Station operating income is not a measure of performance calculated 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 accounting principles generally accepted 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. ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). Please see the attached table for a reconciliation of station operating income to operating income, the most directly comparable GAAP financial measure. (2) Station operating income margin is defined as station operating income as a percentage of net revenues. (3) 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 is defined as operating income before depreciation and amortization, LMA fees, non-cash stock compensation and restructuring charges (credits). Adjusted EBITDA is not a measure of performance calculated in accordance with GAAP. Please see the attached table for a reconciliation of Adjusted EBITDA to operating income, the most directly comparable GAAP financial measure. (4) Free cash flow is defined as Adjusted EBITDA less LMA fee expense, net interest expense, dividends on the Series A Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , income taxes paid and maintenance capital expenditures. Free cash flow is not a measure of performance calculated in accordance with GAAP. Please see the attached table for a reconciliation of free cash flow to operating income, the most directly comparable GAAP financial measure. (5) Same station results include the 260 stations in 53 markets owned and operated since January January: see month. 1, 2003. (6) 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 results include the results of i) all acquisitions entered into during the period that were operated under the terms of local marketing agreements; and ii) all acquisitions and dispositions consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. during the period, as if such acquisitions and dispositions were completed at the beginning of each period presented and exclude the results of Broadcast Software International. As of September 30, 2004, the pro forma totals include the results of 303 stations in 61 markets. (7) Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of net revenues. Results of Operations Three Months Ended September 30, 2004 Compared to Three Months Ended September 30, 2003 Net revenues for the third quarter of 2004 increased $9.4 million to $84.0 million, a 12.6% increase from the third quarter of 2003, primarily as a result of revenues associated with station acquisitions completed subsequent to September 30, 2003 and stations operated under the terms of local marketing agreements during periods subsequent to September 30, 2003. 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. increased $4.8 million to $51.6 million, an increase of 10.3% over the third quarter of 2003, primarily as a result of expenses associated with station acquisitions completed subsequent to September 30, 2003 and stations operated under the terms of local marketing agreements during periods subsequent to September 30, 2003. Station operating income (defined as operating income before depreciation and amortization, LMA fees, corporate general and administrative expenses, non-cash stock compensation and restructuring charges (credits)) increased $4.6 million to $32.4 million, an increase of 16.5% from the third quarter of 2003, for the reasons discussed above. Corporate general and administrative expenses for the third quarter of 2004 increased by $0.8 million to $3.9 million, a 25.8% increase from the third quarter of 2003, primarily as a result of audit and other professional fee expenses incurred related to the Company's Sarbanes-Oxley compliance efforts. On a pro forma basis, which includes the results of all stations operated during the period under the terms of local marketing agreements and station acquisitions completed during the period as if each were operated from or consummated at the beginning of the periods presented and excludes the results of Broadcast Software International, net revenues for the third quarter of 2004 increased $2.5 million to $83.6 million, an increase of 3.1% from the third quarter of 2003. Pro forma station operating income (defined as operating income (loss) before depreciation, amortization, LMA fees, corporate general and administrative expenses, non-cash stock compensation and restructuring charges (credits); and excluding the results of Broadcast Software International) increased $2.9 million to $32.3 million, an increase of 10.0% from the third quarter of 2003. Pro forma station operating income margin (defined as pro forma station operating income as a percentage of pro forma net revenues) increased to 38.7% for the third quarter of 2004 from 36.2% for the third quarter of 2003. Interest expense increased by $0.2 million or 4.3% to $5.0 million for the three months ended September 30, 2004 as compared with $4.8 million in the prior period. Losses on early extinguishments of debt were $2.1 million for the three months ended September 30, 2004 as compared with $1.0 million during the prior year. Losses in the current year relate to the completion of an amendment and restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of the Company's credit agreement and the related retirement and replacement of its existing term loan facilities. Losses during the prior year related to redemption premiums redemption premium See call premium. paid and debt issue costs written off in connection with the redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of $13.7 million of the 10 3/8% Senior Subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. Notes Due 2008 ("Notes"). Income tax expense increased by $0.6 million or 11.0% to $6.5 million for the three months ended September 30, 2004 as compared with $5.9 million in the prior period. Tax expense in the current and prior year is comprised entirely of deferred tax expense and relates primarily to the establishment of valuation allowances against net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. carry-forwards generated during the periods. 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. income per common share was $0.16 for the three months ended September 30, 2004, excluding the effect of losses incurred during the quarter on early extinguishments of debt,. On an as reported basis, basic income per common share was $0.13 for the three months ended September 30, 2004 as compared with a basic income per common share of $0.11 during the prior year. Diluted income per common share was $0.13 for the three months ended September 30, 2004 as compared with diluted income per common share of $0.10 during the prior year. Nine Months Ended September 30, 2004 Compared to Nine Months Ended September 30, 2003 Net revenues for the nine months ended September 30, 2004 increased $28.7 million to $235.7 million, a 13.9% increase from the same period in 2003, primarily as a result of revenues associated with station acquisitions completed subsequent to September 30, 2003 and stations operated under the terms of local marketing agreements during periods subsequent to September 30, 2003. Station operating expenses increased $18.6 million to $150.5 million, an increase of 14.1% over the same period in 2003, primarily as a result of expenses associated with station acquisitions completed subsequent to September 30, 2003 and stations operated under the terms of local marketing agreements during periods subsequent to September 30, 2003. Station operating income (defined as operating income before depreciation and amortization, LMA fees, corporate general and administrative expenses, non-cash stock compensation and restructuring charges (credits)) increased $10.1 million to $85.2 million, an increase of 13.4% from the same period in 2003, for the reasons discussed above. Corporate general and administrative expenses for the nine months ended September 30, 2004 increased by $1.4 million to $11.4 million, a 13.9% increase from the prior year, primarily as a result of audit and other professional fee expenses incurred related to the Company's Sarbanes-Oxley compliance efforts. On a pro forma basis, which includes the results of all stations operated during the period under the terms of local marketing agreements and station acquisitions completed during the six month period as if each were consummated at the beginning of the periods presented and excludes the results of Broadcast Software International, net revenues for the nine months ended September 30, 2004 increased $10.1 million to $238.9 million, an increase of 4.4% from the same period in 2003. Pro forma station operating income (defined as operating income (loss) before depreciation, amortization, LMA fees, corporate general and administrative expenses, non-cash stock compensation and restructuring charges (credits); and excluding Broadcast Software International) increased $7.6 million to $85.8 million, an increase of 9.7% from the same period in 2003. Pro forma station operating income margin (defined as pro forma station operating income as a percentage of pro forma net revenues) increased to 35.9% for the nine months ended September 30, 2004 from 34.2% for the nine months ended September 30, 2003. Interest expense decreased by $2.3 million or 13.3% to $15.2 million for the nine months ended September 30, 2004 as compared with $17.5 million in the prior year. This decrease was primarily due to lower interest expense associated with the 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. and redemption of all of the outstanding Notes and a lower average cost of debt during 2004 on borrowings under the Company's credit facility. Losses on early extinguishments of debt were $2.5 million for the nine months ended September 30, 2004 as compared with $15.2 million during the prior year. Losses during the current year period were the result of 1) fees paid in connection with the completion of an amendment and restatement of the Company's credit facility in January 2004 ($0.5 million) and 2) fees paid and debt issue costs written off in connection with the completion of an amendment and restatement of the Company's credit facility in July July: see month. 2004 ($2.0 million). Losses in the prior year period relate to 1) the repurchase of $30.1 million of the Notes on the open market, 2) the repurchase of $88.8 million of the Notes as part of a tender offer and consent solicitation Consent Solicitation A solicitation by one party to the stakeholders of a particular security for the consent of a material change. Notes: Should the majority of stakeholders provide valid consent prior to the consent expiry date, the issuer may then follow through with completed in April 2003, 3) the redemption of the remaining outstanding $13.7 million of the Notes in July 2003 and 4) the retirement of the Company's then existing $175.0 million eight-year term loan facility in connection with refinancing Refinancing An extension and/or increase in amount of existing debt. activities also completed in April 2003. Income tax expense increased $2.2 million to $19.3 million during the nine months ended September 30, 2004, as compared with $17.1 million during the prior year. Tax expense incurred in the current and prior year, comprised entirely of deferred tax expense, was recorded to establish valuation allowances against net operating loss carry-forwards generated during the periods. Basic and diluted income per common share was $0.34 and $0.32, respectively, for the nine months ended September 30, 2004, excluding the effect of losses incurred during the period on early extinguishments of debt. Basic income per common share was $0.30 for the nine months ended September 30, 2004 as compared with a basic loss per common share of $(0.03) during the prior year. Diluted income per common share was $0.29 for the three months ended September 30, 2004. Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. Program On September 28, 2004, the Company announced that its Board of Directors had authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the purchase, from time to time, of up to $100 million of its Class A Common Stock, subject to the terms of the Company's credit facility. The Company's existing credit facility limits the Company's ability to repurchase shares having an aggregate value in excess of $15 million. The Company has commenced negotiations with its lenders to amend that provision of the credit facility, but there can be no assurance as to the timing or terms of such amendment or whether it will be obtained. In October October: see month. 2004, the Company completed the repurchase of 1,004,429 shares of Class A Common Stock for $14.6 million, at an average repurchase price per share of $14.56. Leverage and Financial Position Capital expenditures for the three months ended September 30, 2004 totaled $3.9 million. Leverage, defined under the terms of the Company's credit facility as total indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. divided by trailing 12-month Adjusted EBITDA as adjusted for certain non-recurring expenses, was 4.6x at September 30, 2004. Including the results of all pending acquisitions operated as of September 30, 2004 and pro forma for borrowings made in October in connection with the stock repurchases , the ratio of net long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. to trailing 12-month pro forma Adjusted EBITDA as of September 30, 2004 is approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 5.15x. Outlook The following statements and data are based on current expectations. These statements are forward looking and actual results may differ materially. Cumulus cumulus: see cloud. expects fourth quarter 2004 pro forma net revenue to grow by 2-4% based on Q4 2003 pro forma net revenue of $81.0 million. We expect fourth quarter 2004 pro forma station operating expenses to grow by 1% based on Q4 2003 pro forma station operating expenses of $52.6 million. Further, the following table summarizes selected projected financial results for the fourth quarter of 2004 (dollars in millions):
Estimated
Q4 2004
---------------
Depreciation and amortization 5,300
LMA fees 800
Non-cash stock compensation 150
Interest expense 5,200
Interest income (200)
Income tax expense (non cash) 6,800
Non-GAAP Financial Measures Cumulus Media Inc. utilizes certain financial measures that are not calculated in accordance with GAAP to assess financial performance and profitability. The non-GAAP financial measures used in this release are station operating income, Adjusted EBITDA and free cash flow. Station operating income is defined as operating income before depreciation and amortization, LMA fees, corporate general and administrative expenses, non-cash stock compensation and restructuring charges (credits). Adjusted EBITDA is defined as operating income before depreciation and amortization, LMA fees, non-cash stock compensation and restructuring charges (credits). Free cash flow is defined as Adjusted EBITDA less LMA fee expense, net interest expense, dividends on the Series A Preferred Stock, income taxes paid and maintenance capital expenditures. Although station operating income, Adjusted EBITDA and free cash flow are not measures calculated in accordance with GAAP, management believes that they are useful to an investor in evaluating the Company because they are measures that are widely used in the broadcasting industry to evaluate a radio company's operating performance. Further, we use these measures as the key measurements of operating efficiency, overall financial performance and profitability. More specifically, station operating income measures the amount of income generated each period solely from the operations of the Company's stations that is available to be used to service debt, pay taxes, fund capital expenditures and fund acquisitions. Adjusted EBITDA measures the amount of income generated each period that could be used to service debt, pay taxes, fund capital expenditures and fund acquisitions 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. Free cash flow measures the amount of income generated each period that is available and could be used to make future payments of contractual obligations, fund acquisitions or make discretionary repayments of debt, after the incurrence of station and corporate expenses, funding of capital expenditures, payment of LMA fees and debt service. Nevertheless, these measures should not be considered in isolation or as substitutes for net income (loss), 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 these measures are not calculated in accordance with GAAP, they may not be comparable to similarly titled measures employed by other companies. 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. Statements in this release, including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the integration of acquisitions and any earnings or revenue projections, are "forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. " statements, which are statements that relate to Cumulus Media Inc.'s future plans, revenues, station operating income, earnings, objectives, expectations, performance, and similar projections, as well as any facts or assumptions underlying these statements or projections. Actual results may differ materially from the results expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in these forward-looking statements, due to various risks, uncertainties or other factors. These factors include competition within the 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. industry, advertising demand in our markets, the possibility that advertisers may cancel (character) Cancel - (CAN, Control-X) ASCII character 24. 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 Cumulus Media Inc.'s 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 December: see month. 31, 2003. 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 based on station count. Giving effect to the completion of all announced pending acquisitions and divestitures, Cumulus Media Inc. will own and operate 305 radio stations in 61 mid-size and smaller 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 Media Inc. shares are traded on the NASDAQ National Market under the symbol CMLS. Cumulus Media Inc. will host a teleconference later today at 10:00 a.m. Eastern Time to discuss third quarter results. To access this teleconference live, please visit the company's web site at www.cumulus.com or dial (484) 630-8922 for domestic and international callers. The pass code for the call is CUMULUS. Approximately one hour after completion of the call, a replay can be accessed until 11:59 PM ET November November: see month. 19, 2004. Domestic and international callers can access the replay by dialing (402) 220-4189.
CUMULUS MEDIA INC.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share data)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2004 2003 2004 2003
Net revenues $ 83,976 $ 74,564 $235,741 $207,060
Operating expenses:
Station operating expenses,
excluding depreciation,
amortization and LMA fees 51,588 46,774 150,503 131,895
Depreciation and amortization 5,213 4,848 15,272 14,325
LMA fees 762 577 2,059 1,208
Corporate general and
administrative (excluding non-
cash stock compensation
expense) 3,940 3,131 11,366 9,981
Non-cash stock compensation (221) (41) (437) 218
Restructuring charges (credits) (21) (85) (42) (268)
-------- ------- -------- --------
Total operating expenses 61,261 55,204 178,721 157,359
-------- ------- -------- --------
Operating income 22,715 19,360 57,020 49,701
-------- ------- -------- --------
Nonoperating income (expense):
Interest expense (5,028) (4,823) (15,162) (17,488)
Interest income 196 110 493 501
Loss on early extinguishments of
debt (2,074) (1,010) (2,536) (15,243)
Other expense, net (21) (100) (9) (256)
-------- ------- -------- --------
Total nonoperating
expenses, net (6,927) (5,823) (17,214) (32,486)
-------- ------- -------- --------
Income before income taxes 15,788 13,537 39,806 17,215
Income tax expense (6,506) (5,862) (19,288) (17,072)
-------- ------- -------- --------
Net income 9,282 7,675 20,518 143
Preferred stock dividends and
redemption premiums -- 659 -- 1,908
-------- ------- -------- --------
Net income (loss) attributable
to common stockholders $ 9,282 $ 7,016 $ 20,518 $ (1,765)
======== ======= ======== ========
Income (loss) per common share
Basic income (loss) per common
share $ 0.13 $ 0.11 $ 0.30 $ (0.03)
======== ======= ======== ========
Diluted income (loss) per common
share $ 0.13 $ 0.10 $ 0.29 $ (0.03)
======== ======= ======== ========
Weighted average basic common
shares outstanding 69,915 64,877 68,724 63,897
======== ======= ======== ========
Weighted average diluted common
shares outstanding 71,760 67,656 71,462 63,897
======== ======= ======== ========
Reconciliation of Non-GAAP Financial Measures to GAAP Counterparts The following table reconciles operating income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to station operating income and Adjusted EBITDA (dollars in thousands).
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2004 2003 2004 2003
--------------------------------------
Operating income $ 22,715 $ 19,360 $ 57,020 $49,701
Non cash stock compensation (221) (41) (437) 218
Restructuring charges (21) (85) (42) (268)
LMA fees 762 577 2,059 1,208
Depreciation and amortization 5,213 4,848 15,272 14,325
Adjusted EBITDA $ 28,448 $ 24,659 $ 73,872 $65,184
Corporate general and
administrative 3,940 3,131 11,366 9,981
Station operating income $ 32,388 $ 27,790 $ 85,238 $75,165
======== ======== ======== =======
The following table reconciles operating income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to free cash flow (dollars in thousands).
Three Three Nine Nine
Months Months months months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2004 2003 2004 2003
--------------------------------------
Operating income $ 22,715 $ 19,360 $ 57,020 $ 49,701
Add:
Non cash stock compensation (221) (41) (437) 218
Restructuring charges (21) (85) (42) (268)
Depreciation and amortization 5,213 4,848 15,272 14,325
Less:
Interest expense, net of
interest income (4,832) (4,713) (14,669) (16,987)
Maintenance capital
expenditures (1,471) (2,521) (3,192) (6,756)
Income taxes paid -- -- -- (153)
Preferred stock dividends -- (21) -- (658)
-------- -------- -------- --------
Free cash flow $ 21,383 $ 16,827 $ 53,952 $ 39,422
======== ======== ======== ========
Cumulus Media Inc.
Reconciliation between Historical GAAP Results
And Pro Forma Results for the Three Months Ended
September 30, 2004
(dollars in thousands)
Historical Adjustments Pro
GAAP Forma
Results
---------- --------- --------
Net revenue $83,976 $(403)(1) $83,573
Station operating expenses $51,588 $(318)(2) $51,270
Station operating income $32,388 $(85) $32,303
Corporate overhead $3,940 -- $3,940
Adjusted EBITDA $28,448 $(85) $28,363
(1) Reflects the elimination of revenues from Broadcast Software
International.
(2) Reflects the elimination of operating expenses from Broadcast
Software International.
Cumulus Media Inc.
Reconciliation between Historical GAAP Results
And Pro Forma Results for the Nine months Ended
September 30, 2004
(dollars in thousands)
Historical Adjustments Pro Forma
GAAP Results
----------- ---------- ---------
Net revenue $235,741 $3,167 (3) $238,908
Station operating expenses $150,503 $2,620 (4) $153,123
Station operating income $85,238 $547 $85,785
Corporate overhead $11,366 -- $11,366
Adjusted EBITDA $73,872 $547 $74,419
(3) Reflects the addition of revenues from Blacksburg, Virginia and
Columbia-Jefferson City, Missouri, both of which the Company
commenced operation of under the terms of a local marketing agreement
during Q1 2004 ($4,477), offset by the elimination of revenues from
Broadcast Software International ($1,310).
(4) Reflects the addition of expenses from Blacksburg, Virginia and
Columbia-Jefferson City, Missouri, both of which the Company
commenced operation of under the terms of a local marketing agreement
during Q1 2004 ($3,668), offset by the elimination of operating
expenses from Broadcast Software International ($1,048).
CAPITALIZATION
(dollars in thousands)
September 30, September 30,
2004 2004
Actual Pro Forma(1)
--------------------------
Cash and cash equivalents $ 1,418 $ 1,418
============ ==========
Long-term debt, including current
maturities:
Bank Debt 454,942 511,974
------------ ----------
Total Stockholders' equity 879,561 864,941
------------ ----------
Total capitalization $ 1,334,503 $1,376,915
============ ==========
(1) Pro forma for (a) cash borrowings needed to complete pending
acquisitions operated during the nine months ended September 30, 2004
and (b) cash borrowings made to complete the $14.6 million of common
stock repurchases in October 2004.
Net Debt to TTM Pro Forma Adjusted EBITDA (2) 5.15x
(2) Ratio calculated as (dollars in thousands):
Funded bank debt as of September 30, 2004 $454,942
Plus: Debt borrowings to complete October 2004
common stock
Repurchases 11,000
Plus: Cash required to complete pending
acquisitions operated at September 30, 2004 47,450
Less: Cash balance as of September 30, 2004 (1,418)
Net Debt as of September 30, 2004 511,974
Divided by Trailing Twelve Months Pro Forma Adjusted
EBITDA (includes the results of all pending
acquisitions) 99,428
Ratio 5.15x
CUMULUS MEDIA INC.
2004 Quarterly Results
Station Operating Income Margin Composition Analysis
(dollars in thousands)
The following analysis of our market portfolio separates each
market into one of six categories based upon trailing twelve month
Station Operating Income performance for analytical purposes only. We
believe this analytical distribution of our markets is helpful in
assessing the portfolio's financial and operational development.
Pro Forma for the Trailing Twelve months ended September 30, 2004:
Avg
Station Station
# of Operating Operating
Station Operating Income Margin % Markets Revenue Income Income %
----------------------------------------------------------------------
greater than 35.0% 27 $180,809 $83,713 46.3%
25.0% to 34.9% 19 77,011 23,224 30.2%
20.0% to 24.9% 1 4,653 1,142 24.5%
10.0% to 19.9% 8 21,802 3,621 16.6%
0.0% to 9.9% 1 1,997 189 9.5%
less than 0.0% 5 8,353 (1,684) -20.2%
-------------------------------------
Subtotal 61 $294,625 $110,205 37.4%
Trade, Other -- 25,303 3,982 15.7%
-----------------------------
Totals 61 $319,928 $114,187 35.7%
Pro Forma for the Trailing Twelve months In commerce, the trailing twelve months (TTM) is a moving measurement (for example, an average or a sum) over the 12 previous months, using the most recent data available. Also sometimes known as last twelve months (LTM). ended June June: see month. 30, 2004:
Avg
Station Station
# of Operating Operating
Station Operating Income Margin % Markets Revenue Income Income %
----------------------------------------------------------------------
greater than 35.0% 28 $178,980 $81,762 45.7%
25.0% to 34.9% 14 61,816 19,076 30.9%
20.0% to 24.9% 5 19,457 4,417 22.7%
10.0% to 19.9% 9 24,083 3,835 15.9%
0.0% to 9.9% 1 1,144 76 6.6%
less than 0.0% 4 7,304 (1,532) -21.0%
-------------------------------------
Subtotal 61 $292,784 $107,634 36.8%
Trade, Other -- 24,624 3,623 14.7%
-----------------------------
Totals 61 $317,408 $111,257 35.1%
Activity for Q3 2004
Net
Markets Markets Markets Change Markets
Station Operating Income Margin at Moving Moving In at
% 6/30/04 Out In Category 9/30/04
----------------------------------------------------------------------
greater than 35.0% 28 2 1 (1) 27
25.0% to 34.9% 14 1 6 5 19
20.0% to 24.9% 5 4 -- (4) 1
10.0% to 19.9% 9 1 -- (1) 8
0.0% to 9.9% 1 1 1 -- 1
less than 0.0% 4 -- 1 1 5
Total 61 9 9 -- 61
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