Cumulus CEO Mary Berner has now been on the job for five months and she put her cards on the table yesterday, laying out her entire plan to turn around the company. Berner’s had a chance to look under the hood in more detail and, as they say, the baby is ugly. However, Berner says given time, Cumulus has the assets to be one of the winners in the radio industry. Thursday afternoon, she detailed operational and cultural changes she hopes will steady the Cumulus ship. The big question is does she have enough time to execute her plan.
Berner is attempting to change the operational structure by allowing more local decision-making, rather than pushing decisions down from corporate. That was a big complaint about the previous administration. Her battle plan involves: focus, responsibility, collaboration, and empowerment. And she’s trying to create an atmosphere where good employees want to stay with the company and create a culture where talented people want to come to work for the company. Berner says the previous culture was toxic with muddled thinking.
Can the company increase ratings in its largest markets and turn this declining revenue trend around in time? Not only was 2015 an awful year for revenue, Q1 2016 is pacing down in the single digits. Even Treasurer J.P. Hannan said Thursday the company has cut close to the bone and Berner admitted there are no more non-core assets to sell off.
Berner said the challenges Cumulus faces with the balance sheet are significant. “We are reviewing all available options to maximize value for the company that give us the time and operational runway needed to turn around the business. We will continue to explore opportunistic debt-reduction strategies. We have begun to implement a strategy that we believe will lead to sustainable success. The challenges are significant but fixable given time.”
Cumulus has $31.7 million cash in the bank. The company posted an annual net loss of $546.5 million in 2015, $4.6 million in Q4 of 2015. The stock is in a 180-day de-listing grace period, for being below $1.00, which expires on May 2. Cumulus has a total of $2.4 billion in debt. $1.84 billion outstanding on senior-secured term loans and $610 million of unsecured notes outstanding due in May of 2019.
Is there enough time?