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| 8-K - 8-K - CUMULUS MEDIA INC | cmls20170630investorpresen.htm |
August 14, 2017
CUMULUS MEDIA INC.
2017 Second Quarter
Earnings Call Presentation
Safe Harbor Statement
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this presentation may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform
Act of 1995 and other federal securities laws. Such statements are statements other than historical fact and relate to our intent, belief or current
expectations, primarily with respect to our future operating, financial and strategic performance. Any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties. Actual results may differ from those contained in or implied by the forward-
looking statements as a result of various factors including, but not limited to, risks and uncertainties relating to the need for additional funds to
service our debt and to execute our business strategy; our ability to access borrowings under our revolving credit facility; our ability from time to
time to renew one or more of our broadcast licenses; changes in interest rates; changes in the fair value of our investments; the timing of, and our
ability to complete, any acquisitions or dispositions pending from time to time; costs and synergies resulting from the integration of any completed
acquisitions; our ability to effectively manage costs; our ability to effectively drive and manage growth; the popularity of radio as a broadcasting and
advertising medium; changing consumer tastes; the impact of general economic conditions in the United States or in specific markets in which we
currently do business; industry conditions, including existing competition and future competitive technologies and cancellation, disruptions or
postponements of advertising schedules in response to national or world events; our ability to generate revenues from new sources, including local
commerce and technology-based initiatives; the impact of regulatory rules or proceedings that may affect our business or any acquisitions; our
ability to continue regain compliance with the listing standards for our Class A common stock to continue to be listed for trading on the NASDAQ
stock market; the write-off of a material portion of the fair value of our FCC broadcast licenses and goodwill from time to time; or other risk factors
described from time to time in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31,
2016 (the “2016 Form 10-K”) and any subsequent filings. Many of these risks and uncertainties are beyond our control, and the unexpected
occurrence or failure to occur of any such events or matters could significantly alter the actual results of our operations or financial condition.
Cumulus Media Inc. assumes no responsibility to update any forward-looking statement as a result of new information, future events or otherwise.
CUMULUS MEDIA INC.
2017 Second Quarter
Earnings Call Presentation
• Second quarter results provide further
evidence of financial inflection point
• Net revenue increased year-over-year by
1.2%, despite tough market
• Adjusted EBITDA grew 6.7%, for the first
time in over three years(1)
• Share gains achieved in every major ad
channel, including Westwood One
• Company currently pacing approximately flat
for Q3, excluding political
Key
Highlights
(1) Adjusted EBITDA still positive even when adjusting
for items affecting comparability in Q2 2016
Foundational Initiatives
Ratings
Culture
Operational Blocking &
Tackling
Sales Execution
Foundational Initiatives
Ratings
Culture
Operational Blocking &
Tackling
Sales Execution
• PPM ratings share growth continued,
marking seven straight quarters of
outperformance
• PPM ratings share growth converted
into revenue share growth in Q2
• Following two quarters of growth, 4-
Book ratings share declined in Spring
2017, driven entirely by six of 27
markets
Foundational Initiatives
Ratings
Culture
Operational Blocking &
Tackling
Sales Execution
• Be a LEADer has generated nearly
500 new advertisers and millions of
incremental revenue
• Positive sentiment facilitating
recruitment of high-quality talent
• Survey statistics remain compelling –
92% are proud to work at Cumulus
and 91% believe Cumulus is
changing for the better
• Turnover statistics continue to beat
internal goals
Foundational Initiatives
Ratings
Culture
Operational Blocking &
Tackling
Sales Execution
• Reduced expenses year-over-year
while still funding critical series of
investments
• For the full year, expect contractual
escalators will be meaningfully
mitigated
• Upcoming systems overhaul and
establishment of formal revenue
management function will provide
future opportunity
Foundational Initiatives
Ratings
Culture
Operational Blocking &
Tackling
Sales Execution
1. Talent
2. Training & Tools
3. Sales Analytics
4. Platform Growth
Products & Tactics
5. Digital
Foundational Initiatives
Ratings
Culture
Operational Blocking &
Tackling
Sales Execution
Foundational Initiatives
Ratings
Culture
Operational Blocking &
Tackling
Sales Execution
Foundational Initiatives
Ratings
Culture
Operational Blocking &
Tackling
Sales Execution
Foundational Initiatives
Ratings
Culture
Operational Blocking &
Tackling
Sales Execution
WESTWOOD ONE
PODCASTS
• Revenue growth of 6.1% year-over-year
• Adjusted EBITDA growth of 31.0% year-
over-year
• Benefit of a single leader driving strategy
and execution across the platform
• More mature go-to-market strategy and new
business development effort
• Fine-tuned stable of content partnerships
focused on our key strengths
Key
Highlights
• Over-levered capital structure must be addressed to achieve the full
potential of our assets
• Exploring all available options with a focus on maintaining the
momentum of the turnaround effort
Continued focus on our debt level...
Second Quarter 2017
Financial Results
See Press Release and 10-Q for More Detail
www.cumulus.com/investors
APPENDIX:
Financial Summary &
Reconciliation to Non-GAAP Term
Non-GAAP Financial Measure
Definition of Adjusted EBITDA
Adjusted EBITDA is the financial metric utilized by management to analyze the cash flow generated by our business. This measure isolates the
amount of income generated by our core operations before the incurrence of corporate expenses. Management also uses this measure to
determine the contribution of our core operations to the funding of our corporate resources utilized to manage our operations and our non-operating
expenses including debt service. In addition, Adjusted EBITDA is a key metric for purposes of calculating and determining our compliance with
certain covenants contained in our credit facility. We define Adjusted EBITDA as net income (loss) before any non-operating expenses, including
depreciation and amortization, stock-based compensation expense, gain or loss on sale of assets or stations (if any), gain or loss on derivative
instruments (if any), impairment of assets (if any), acquisition-related and restructuring costs (if any) and franchise and state taxes. In deriving this
measure, management excludes depreciation, amortization, and stock-based compensation expense, as these do not represent cash payments for
activities directly related to our core operations. Management excludes any gain or loss on the exchange or sale of any assets or stations and any
gain or loss on derivative instruments as they do not represent cash transactions nor are they associated with core operations. Expenses relating
to acquisitions and restructuring costs are also excluded from the calculation of Adjusted EBITDA as they are not directly related to our core
operations. Management excludes any non-cash costs associated with impairment of assets as they do not require a cash outlay. 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 media companies. Management has also observed that Adjusted EBITDA
is routinely employed to evaluate and negotiate the potential purchase price for media companies and is a key metric for purposes of calculating
and determining compliance with certain covenants in our credit facility. Given the relevance to our overall value, 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. In addition,
Adjusted EBITDA may be defined or calculated differently by other companies and comparability may be limited.
2nd Quarter 2017 Adjusted EBITDA
Reconciliation Table
The following table reconciles net income (loss), the most directly comparable financial measure calculated and presented in accordance with
GAAP, to Adjusted EBITDA for the three months ended June 31, 2017 (dollars in thousands):
Three Months Ended June 30, 2017
Radio Station
Group Westwood One
Corporate
and Other Consolidated
GAAP net income (loss) $ 46,803 $ 10,976 $ (52,107) $ 5,672
Income tax expense — — 7,234 7,234
Non-operating (income) expense, including net
interest expense (1) 133
34,288 34,420
Local marketing agreement fees 2,713 — — 2,713
Depreciation and amortization 10,251 5,449 420 16,120
Stock-based compensation expense — — 530 530
Loss on sale of assets or stations 104 — — 104
Acquisition-related and restructuring costs — 384 83 467
Franchise and state taxes — — 140 140
Adjusted EBITDA $ 59,870 $ 16,942 $ (9,412) $ 67,400
2nd Quarter 2016 Adjusted EBITDA
Reconciliation Table
The following table reconciles net income (loss), the most directly comparable financial measure calculated and presented in accordance with
GAAP, to Adjusted EBITDA for the three months ended June 31, 2016 (dollars in thousands):
Three Months Ended June 30, 2016
Radio Station
Group Westwood One
Corporate
and Other Consolidated
GAAP net income (loss) $ 46,405 $ 887 $ (46,226) $ 1,066
Income tax expense — — 1,249 1,249
Non-operating expense, including net interest
expense 17 63
34,270 34,350
Local marketing agreement fees 2,482 — — 2,482
Depreciation and amortization 13,538 8,894 537 22,969
Stock-based compensation expense — — 790 790
Gain on sale of assets or stations (3,121) — (25) (3,146)
Impairment of intangible assets — 1,816 — 1,816
Acquisition-related and restructuring costs — 1,268 153 1,421
Franchise and state taxes — — 183 183
Adjusted EBITDA $ 59,321 $ 12,928 $ (9,069) $ 63,180