Cumulus Media Inc. (NASDAQ: CMLS) (the “Company,” “Cumulus Media,” “we,” “us,” or “our”) today announced operating results for the three months and year ended December 31, 2023.
Mary G. Berner, President and Chief Executive Officer of Cumulus Media, said, “While 2023 was a tough year across the media landscape, we were able to offset some of the effects of the weak national advertising climate through strong execution in our key focus areas. Specifically, we grew our digital businesses, meaningfully reduced fixed costs, and improved our balance sheet. Looking ahead, though national advertisers are expressing interest in increasing their radio buys, as of yet, ad demand remains choppy, reducing our visibility into the rest of 2024. That said, our industry-leading performance during similarly weak macro environments gives us significant confidence in our ability to navigate through this one and rebound strongly when the advertising market improves.”
2023 Key Highlights:
- Posted total net revenue of $844.5 million, a decline of 11.4% year-over-year, or 10.0% on an ex-political basis
- Generated digital revenue of $146.4 million, an increase of 2.9% year-over-year – representing 17% of total revenue
- Increased streaming revenue by 16% driven by audience growth from NFL streaming
- Grew local digital marketing services 13% driven by the addition of new products and investment in our digital sales capabilities
- Recorded net loss of $117.9 million compared to net income of $16.2 million in 2022 reflecting a 2023 pre-tax non-cash impairment charge of $65.3 million compared to a pre-tax non-cash impairment of $15.5 million in 2022, both primarily all reflecting FCC related charges
- Recorded Adjusted EBITDA(1) of $90.7 million compared to $166.0 million in 2022
- Generated cash to support debt paydown and share buybacks
- Generated cash flow from operations of $31.7 million and completed accretive non-core asset sales of $17.8 million
- Retired $43.6 million face value of debt at an average price of 77.4% of par, bringing total debt retired to $130.2 million, or 16.2% of total debt since the beginning of 2022
- Repurchased $7.2 million of shares, bringing shares repurchased to $39.0 million, or 22.5% percent of shares outstanding since the beginning of 2022
- Reported total debt of $675.8 million at December 31, 2023, and net debt(1) of $595.1 million
- Received $14.8 million in cash proceeds from the closing of the previously announced sale of Broadcast Music, Inc.
Debt Exchange Offering
The Company is separately announcing an exchange offer for Cumulus Media New Holdings Inc.’s (the “Issuer”) outstanding 6.750% Senior Secured First-Lien Notes due 2026 for new 8.750% Senior Secured First-Lien Notes due 2029 (“New Notes”) to be issued by the Issuer. Concurrently, the Issuer is also offering lenders under the Issuer’s senior secured term loans (the “Old Term Loans”) borrowed under its credit agreement, dated as of September 26, 2019, the opportunity to exchange their Old Term Loans for new senior secured term loans (the “New Term Loans”) issued under a new credit agreement.
Operating Summary (dollars in thousands, except percentages and per share data):
For the three months ended December 31, 2023, the Company reported net revenue of $221.3 million, a decrease of 11.9% from the three months ended December 31, 2022, net loss of $98.1 million and Adjusted EBITDA of $22.8 million.
For the year ended December 31, 2023, the Company reported net revenue of $844.5 million, a decrease of 11.4% from the year ended December 31, 2022, net loss of $117.9 million and Adjusted EBITDA of $90.7 million.
As Reported Three Months Ended
December 31, 2023Three Months Ended
December 31, 2022% Change Net revenue $ 221,301 $ 251,270 (11.9 )% Net loss $ (98,066 ) $ (54 ) 181,503.7 % Adjusted EBITDA $ 22,798 $ 42,717 (46.6 )% Basic loss per share $ (5.94 ) $ (0.00 ) N/A Diluted loss per share $ (5.94 ) $ (0.00 ) N/A
As Reported Year Ended
December 31, 2023Year Ended
December 31, 2022% Change Net revenue $ 844,548 $ 953,506 (11.4 )% Net (loss) income $ (117,879 ) $ 16,235 N/A Adjusted EBITDA $ 90,728 $ 165,982 (45.3 )% Basic (loss) income per share $ (6.83 ) $ 0.83 N/A Diluted (loss) income per share $ (6.83 ) $ 0.81 N/A
Revenue Detail Summary (dollars in thousands):
As Reported Three Months Ended
December 31, 2023Three Months Ended
December 31, 2022% Change Broadcast radio revenue: Spot $ 101,379 $ 124,099 (18.3 )% Network 52,148 63,525 (17.9 )% Total broadcast radio revenue 153,527 187,624 (18.2 )% Digital 39,583 37,708 5.0 % Other 28,191 25,938 8.7 % Net revenue $ 221,301 $ 251,270 (11.9 )%
As Reported Year Ended
December 31, 2023Year Ended
December 31, 2022% Change Broadcast radio revenue: Spot $ 412,047 $ 479,834 (14.1 )% Network 182,503 229,772 (20.6 )% Total broadcast radio revenue 594,550 709,606 (16.2 )% Digital 146,425 142,312 2.9 % Other 103,573 101,588 2.0 % Net revenue $ 844,548 $ 953,506 (11.4 )%
Balance Sheet Summary (dollars in thousands):
December 31, 2023 December 31, 2022 Cash and cash equivalents $ 80,660 $ 107,433 Term loan due 2026 (2) $ 329,510 $ 338,452 6.75% Senior notes (2) $ 346,245 $ 380,927
Year Ended
December 31, 2023Year Ended
December 31, 2022Capital expenditures $ 24,814 $ 31,062
Three Months Ended
December 31, 2023Three Months Ended
December 31, 2022Capital expenditures $ 3,788 $ 12,502 (1) Adjusted EBITDA and net debt are not financial measures calculated or presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). For additional information, see “Non-GAAP Financial Measures.”
(2) Excludes unamortized debt issuance costs.
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Cumulus Media Inc. (NASDAQ: CMLS) (the “Company” or “Cumulus”) today announced that its subsidiary, Cumulus Media New Holdings Inc. (the “Issuer”), has commenced an offer to exchange (the “Exchange Offer”) any and all of the Issuer’s outstanding 6.750% Senior Secured First-Lien Notes due 2026 (the “Old Notes”) for new 8.750% Senior Secured First-Lien Notes due 2029 (“New Notes”) to be issued by the Issuer, upon the terms of and subject to the conditions set forth in the confidential offering memorandum and consent solicitation statement dated February 27, 2024 (the “Offering Memorandum”). All capitalized terms not defined herein are defined in the Offering Memorandum, unless otherwise noted.
The table below summarizes the principal economic terms of the Exchange Offer:
Consideration per $1,000 Principal Amount of Old Notes
TenderedOld Notes
CUSIP Number or ISINPrincipal Amount of Old
Notes OutstandingTotal Consideration if
Tendered Prior to the Early
Deadline(1)Late Consideration if
Tendered After the Early
Deadline23110AAA4
U1269CAA2
US23110AAA43
USU1269CAA28$346,245,000 $800.00 principal amount of
New Notes$770.00 principal amount of
New Notes__________________
(1) Includes the Early Tender Premium (as defined below).The New Notes will mature on March 15, 2029 and will be fully and unconditionally guaranteed on a senior secured basis on the same basis and by the same guarantors that guarantee the Old Term Loans (as defined below) and the Old Notes. The New Notes and related guarantees will be secured by substantially all of the Issuer’s and the guarantors’ assets, including (i) a first-priority lien on the Term Loan Priority Collateral and (ii) a second-priority lien on the ABL Priority Collateral, subject to permitted liens and certain exceptions described in the Offering Memorandum, which assets will also secure the New Term Loans (as defined below) and the Company’s existing revolving credit facility, and will not secure the Old Notes (assuming the Total Collateral Release Requisite Consents (as defined below) are obtained). The ABL Priority Collateral includes substantially all of the Issuer’s and the guarantors’ present and future assets which secure their obligations under the ABL Credit Agreement on a first lien basis, including accounts receivable, bank accounts (and funds on deposit therein) and other related assets and all proceeds thereof, subject to permitted liens and certain exceptions. The Term Loan Priority Collateral includes substantially all of the tangible and intangible assets of the Issuer and the guarantors (other than the ABL Priority Collateral), including pledges of all capital stock of the Issuer and the Issuer’s wholly-owned material restricted subsidiaries or of any of the guarantors.
In addition, the New Notes will be either:
(i) guaranteed by the Additional Specified Subsidiary Guarantees and secured by the Additional Specified Subsidiary Collateral, in accordance with the lien priority set forth in the immediately preceding sentence in the event (x) the Proposed Amendments (as defined below) are adopted and (y) the Term Loan Exchange Offer (as defined below) is consummated (in which case the New Term Loans and the ABL Revolver will also have the benefit of the Additional Specified Subsidiary Guarantees and the Additional Specified Subsidiary Collateral); or
(ii) secured by a first-priority pledge of equity of the Operating Specified Subsidiaries in favor of the New Notes (the “Operating Specified Subsidiary Equity Pledge”) in the event (x) the Proposed Amendments are not adopted or (y) the Term Loan Exchange Offer is not consummated.
In either case, the Old Notes and the Old Term Loans will not have the benefit of the Additional Specified Subsidiary Guarantees, the Additional Specified Subsidiary Collateral and/or the Operating Specified Subsidiary Equity Pledge, as applicable.
Holders that validly tender and do not validly withdraw their Old Notes at or prior to 5:00 p.m., New York City time, on March 11, 2024 (the “Early Tender Time”) will be eligible to receive $800.00 principal amount of New Notes per $1,000 principal amount of Old Notes tendered (the “Total Consideration”), which includes an early tender premium of $30.00 in principal amount of New Notes per $1,000 principal amount of Old Notes tendered (the “Early Tender Premium”). Holders that validly tender and do not validly withdraw their Old Notes after the Early Tender Time and at or prior to the Expiration Time will not be eligible to receive the Early Tender Premium and will only be eligible to receive $770.00 principal amount of New Notes. The Issuer will pay accrued and unpaid interest to, but excluding, the Settlement Date, which is as soon as practicable after the Expiration Time, in cash, to holders of Old Notes accepted for exchange pursuant to the Exchange Offer.
In conjunction with the Exchange Offer, the Issuer is also soliciting consents (the “Consent Solicitation”) to amend certain provisions in the Old Notes Indenture (the “Proposed Amendments”). If consents from holders representing at least 50.1% of the Old Notes (the “Majority Noteholder Consents”) are received, the Proposed Amendments would eliminate substantially all restrictive covenants, eliminate certain events of default, modify or eliminate certain other provisions, subordinate the lien on the collateral securing the Old Notes (in the event the Total Collateral Release does not occur), and permit release of certain guarantors from their guarantees of the Old Notes and such guarantors’ assets from the lien securing the Old Notes. If consents from holders representing at least 66.67% of the Old Notes (the “Total Collateral Release Requisite Consents”) are received, all the collateral securing the Old Notes will be released. Holders may not tender their Old Notes pursuant to the Exchange Offer without delivering a consent with respect to such Old Notes tendered pursuant to the Consent Solicitation, and holders may not deliver a consent pursuant to the Consent Solicitation without tendering the related Old Notes pursuant to the Exchange Offer.
The consummation of the Exchange Offer is not subject to, or conditioned upon, any minimum amount of Old Notes being tendered pursuant to the Exchange Offer, the receipt of the Majority Noteholder Consents, the consummation of the Term Loan Exchange Offer or the receipt of any consents to the proposed amendments to the Old Term Loan Credit Agreement. The consummation of the Term Loan Exchange Offer is not conditioned on the consummation of the Exchange Offer. The Issuer reserves the right in its sole and absolute discretion, to consummate the Exchange Offer in the event the Issuer does not receive Majority Noteholder Consents. The Exchange Offer and the Consent Solicitation may be amended, extended, terminated or withdrawn by the Issuer, in its sole and absolute discretion, at any time and for any reason. However, the Exchange Offer may not be amended, modified or waived in a manner that would remove or materially impair the value of the Additional Specified Subsidiary Guarantees, the Additional Specified Subsidiary Collateral or the Operating Specified Subsidiary Equity Pledge without extending the Withdrawal Deadline.
The Offer begins today, February 27, 2024, and will expire at 5:00 p.m., New York City time, on March 26, 2024 (the “Expiration Time”), unless such time is extended as required by law or otherwise by the Issuer in its sole discretion or earlier terminated.
Concurrently with the Exchange Offer, the Issuer is also offering lenders under its senior secured term loans (the “Old Term Loans”) borrowed under its credit agreement dated as of September 26, 2019 (the “Old Term Loan Credit Agreement”), to exchange their Old Term Loans for new senior secured term loans (the “New Term Loans”) issued under a new credit agreement (such exchange, the “Term Loan Exchange Offer”), and in connection therewith deliver consents for certain proposed amendments to the Old Term Loan Credit Agreement. The consummation of the Term Loan exchange is conditioned on participation from at least 50% in principal amount of the Old Term Loans, but is not conditioned on the consummation of the Exchange Offer.
Only holders who have duly completed and submitted an eligibility letter (which may be found at www.dfking.com/cumulus) will be authorized to receive the Offering Memorandum and related letter of transmittal (the “Exchange Offer Documents”) and participate in the Exchange Offer. The eligibility letters will include certifications that the holder is either (1) a “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933 (the “Securities Act”) or (2) a non-“U.S. person” (as defined in Rule 902 under the Securities Act) located outside of the United States who is (i) not acting for the account or benefit of a U.S. person, (ii) a “non-U.S. qualified offeree” (as defined in the Exchange Offer Documents), and (iii) not a resident in Canada.
D.F. King & Co., Inc. will act as the Information Agent and the Exchange Agent for the Exchange Offer. Questions or requests for assistance related to the Exchange Offers or for additional copies of the Exchange Offer Documents may be directed to D.F. King & Co., Inc. at (800) 431-9643 (toll free) or (212) 269-5550 (collect) or cumulus@dfking.com (email). You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer.
The New Notes have not been and will not be registered under the Securities Act or the securities laws of any state, and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act and applicable state securities laws.
This announcement is not an offer to purchase or sell, a solicitation of an offer to purchase or sell or a solicitation of consents with respect to any securities. The Exchange Offer is being made solely by the Offering Memorandum. The Exchange Offer is not being made to holders of Old Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.
This story first appeared on radioinsight.com