Cumulus Reports Revenues, Expenses Down
Updates Merger With Citadel
August 12, 2011 at 6:12 AM (PT)
CUMULUS MEDIA TODAY (8/12) reported financial results for the three and six months ended JUNE 30th, 2011.
Chairman/CEO LEW DICKEY stated, "Q2 presented a challenging environment for our markets. Our cash revenues declined 0.4%, but our team did an excellent job of defending cash flow. Our Adjusted EBITDA has grown by 7.1% year-to-date, excluding one-time transaction costs. As we move into Q3, we are pleased to have announced our AUGUST 1st closing of CMP and expect to close on our acquisition of CITADEL BROADCASTING in SEPTEMBER. Our team is looking forward to executing our integration and operating plans for this exciting new platform of 570 stations and a radio network serving more than 4,000 station affiliates."
Net revenues for the three months ended JUNE 30th, 2011 decreased $0.5 million, or 0.8%, to $69.2 million compared to $69.7 million for the three months ended JUNE 30, 2010. "This decline was primarily attributable to a reduction in political advertising in the second quarter of 2011," wrote CUMULUS.
Station Operating Expenses, Excluding Depreciation, Amortization And LMA Fees
Station operating expenses for the three months ended JUNE 30, 2011 decreased $1.2 million, or 3.1%, to $39.2 million, compared to $40.4 million for the three months ended June 30, 2010. "This decrease is primarily due to a reduction in fixed sales expenses resulting from the restructuring of a major vendor contract in DECEMBER 2010," the Company noted.
Corporate, General And Administrative Expenses Including Non-cash Stock Compensation
Corporate, general and administrative expenses, including non-cash stock compensation expense for the three months ended JUNE 30th 2011, increased $4.0 million, or 79.9%, to $9.1 million compared to $5.1 million for the three months ended JUNE 30th, 2010. "This increase was primarily due to an increase of $3.5 million in one-time costs associated with the acquisition of CUMULUS MEDIA PARTNERS and the pending merger with CITADEL BROADCASTING CORPORATION. We also experienced an increase of $0.4 million in corporate salaries and related expenses, and an increase of $0.1 million attributable to investments in new digital initiatives," wrote CUMULUS.
Acquisition Of Cumulus Media Partners, LLC
Wrote CUMULUS, "On AUGUST 1, 2011, we completed the previously announced acquisition of the remaining 75.0% of the equity interests of CMP that we did not already own. In connection with this acquisition, we issued 9,945,714 shares of our common stock to affiliates of the three private equity firms that had collectively owned 75.0% of CMP -- BAIN CAPITAL PARTNERS, LLC ("Bain"), THE BLACKSTONE GROUP L.P. ("Blackstone") and THOMAS H. LEE PARTNERS, L.P. ("THL"). Blackstone received 3.3 million shares of our Class A common stock and, in accordance with FEDERAL COMMUNICATIONS COMMISSION broadcast ownership rules, BAIN and THL each received 3.3 million shares of a new authorized Class D non-voting common stock. We have owned the remaining 25.0% of CMP's equity interests since we, together with BAIN, BLACKSTONE and THL, formed CMP in 2005. Pursuant to a management agreement, we have operated CMP's business since 2006. Also in connection with the acquisition, currently outstanding warrants to purchase common stock of a subsidiary of CMP were amended to instead become exercisable for up to 8,267,968 shares of our common stock."
Update On Pending Merger With Citadel
"As previously announced," the company notes, "on MARCH 9th, 2011, we entered into a definitive merger agreement to acquire CITADEL, pursuant to which we would acquire all of the outstanding common stock and warrants of CITADEL at a price equal to $37.00 per share, payable in a combination of cash and shares of our common stock. CITADEL owns and operates 225 radio stations in over 50 markets and also operates the CITADEL MEDIA business, which is among the largest radio networks in the U.S.
"Consummation of the CITADEL acquisition is subject to various customary closing conditions. These include, but are not limited to, regulatory approval by THE FEDERAL COMMUNICATIONS COMMISSION, requisite approval of CITADEL's stockholders, the expiration or termination of the waiting period under the HART-SCOTT-RODINO Antitrust Improvement Act of 1976, as amended, and the absence of any material adverse effect on CITADEL. We currently expect to obtain the regulatory and stockholder approvals and to close the CITADEL acquisition in SEPTEMBER."