Cumulus Media Eases Debt Pressure As Q1 Leans On Digital


Following a frosty annual shareholders meeting, Cumulus Media has reported its financial results for the first quarter of 2024, indicating some financial improvements despite ongoing challenges felt by the vast majority of the traditional broadcast sector.

As forecasted, Cumulus’ revenue for the quarter was slightly below expectations, coming in at $200.0 million against a consensus estimate of $200.3 million. This figure represents a decline from the prior year’s revenue of $205.69 million. Expenses for the quarter increased to $210.53 million from $204.66 million.

The company recorded a reduced net loss of $14.15 million, down from $21.47 million the previous year.

Diving into specifics, digital revenue showed a positive trend, increasing by 7% to $34.45 million from $32.09 million. However, traditional broadcast radio revenue continues to struggle, with spot revenue decreasing by 7.3% year-over-year to $90.57 million, and network revenue falling by 2.3% to $49.16 million. Overall, combined broadcast radio revenue saw a decrease of 5.6% to $139.74 million.

On the earnings call, CEO Mary Berner addressed the “very choppy” state of the advertising market, due to high interest rates and lingering economic uncertainty. She noted that while there is a resurgence in client activity, particularly in the insurance sector, the market’s unpredictability is impacting booking patterns and overall sales momentum.

CFO Frank López-Balboa provided further insight into the company’s financial trajectory, indicating that revenue is expected to continue its decline in the low single digits for the upcoming quarter.

Cumulus did have more details on its successful refinancing of debt, extending the maturity of its obligations and adjusting the interest terms. This move comes as part of Cumulus’s strategy to manage a looming 2026 debt maturity crisis by proposing an exchange of old debt for new under more favorable conditions.

This financial reshuffling is part of Cumulus’s broader strategy to stabilize its capital structure in the face of potential takeovers, such as the interest from Manoj Bhargava, founder of 5-Hour Energy, in acquiring control of the company.

On May 2, Cumulus ended the debt exchange offer, which saw 94% of the old 6.750% Senior Secured First-Lien Notes due 2026 being tendered for new notes.  Despite falling just short of the 95% target, Cumulus decided to proceed by waiving the minimum participation condition.

The restructuring extended debt maturities to 2029, decreased the principal amount by approximately $33 million, and raised the interest rate to 8%.


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