Exhibit 99.1
Cumulus Reports Second Quarter 2005 Results
ATLANTA--(BUSINESS WIRE)--Aug. 4, 2005--Cumulus Media Inc.
(NASDAQ:CMLS) today reported financial results for the three and six
months ended June 30, 2005.
Historical results are attached. Historical or "as reported"
financial data of Cumulus Media Inc. may not be comparable from year
to year because of the acquisition of radio stations by the Company
during certain of the periods covered. Financial highlights (in
thousands, except per share data and percentages) are as follows:
Three Months Ended
June 30, %
2005 2004 Change
---------------------------------
As Reported:
Net revenues $ 87,440 $ 86,314 1.3%
Station operating expenses 54,506 52,620 3.6%
Station operating income (1) 32,934 33,694 (2.3)%
Station operating income margin (2) 37.7% 39.0%
Adjusted EBITDA (3) 29,084 29,824 (2.5)%
Free cash flow (4) 20,823 24,119 (13.7)%
Same Station Results: (5)
Net revenue $ 80,357 $ 79,288 1.3%
Station operating income (1) 30,516 31,231 (2.3)%
Station operating income margin (2) 38.0% 39.4%
Pro Forma Results: (6)
Net revenue $ 86,827 $ 85,850 1.1%
Station operating income (1) 32,909 33,604 (2.1)%
Station operating income margin (2) 37.9% 39.1%
Adjusted EBITDA (3) 29,059 29,734 (2.3)%
Adjusted EBITDA margin (7) 33.5% 34.6%
Six Months Ended
June 30, %
2005 2004 Change
---------------------------------
As Reported:
Net revenues $ 159,563 $ 151,764 5.1%
Station operating expenses 105,024 98,915 6.2%
Station operating income (1) 54,539 52,849 3.2%
Station operating income margin (2) 34.2% 34.8%
Adjusted EBITDA (3) 46,944 45,423 3.3%
Free cash flow (4) 31,894 32,567 (2.1)%
Same Station Results: (5)
Net revenue $ 146,776 $ 143,198 2.5%
Station operating income (1) 50,581 50,191 0.8%
Station operating income margin (2) 34.5% 35.1%
Pro Forma Results: (6)
Net revenue $ 158,536 $ 155,335 2.1%
Station operating income (1) 54,459 53,481 1.8%
Station operating income margin (2) 34.4% 34.4%
Adjusted EBITDA (3) 46,864 46,055 1.8%
Adjusted EBITDA margin (7) 29.6% 29.6%
(1) Station operating income is defined as operating income before
depreciation and amortization, LMA fees, corporate general and
administrative expenses, non-cash stock compensation and
restructuring charges (credits). Station operating income is not a
measure of performance calculated in accordance with accounting
principles generally accepted in the United States ("GAAP").
Please see the attached table for a reconciliation of station
operating income to the most directly comparable GAAP financial
measure.
(2) Station operating income margin is defined as station operating
income as a percentage of net revenues.
(3) Adjusted EBITDA is defined as operating income before depreciation
and amortization, LMA fees, non-cash stock compensation and
restructuring charges (credits). Adjusted EBITDA is not a measure
of performance calculated in accordance with GAAP. Please see the
attached table for a reconciliation of Adjusted EBITDA to the most
directly comparable GAAP financial measure.
(4) Free cash flow is defined as Adjusted EBITDA less LMA fee expense,
net interest expense, income taxes paid and maintenance capital
expenditures. Free cash flow is not a measure of performance
calculated in accordance with GAAP. Please see the attached table
for a reconciliation of free cash flow to the most directly
comparable GAAP financial measure.
(5) Same station results include the 275 stations in 56 markets owned
and operated since January 1, 2004.
(6) Pro forma results include the results of i) all acquisitions
entered into during the period that were operated under the terms
of local marketing agreements; and ii) all acquisitions and
dispositions consummated during the period, as if such
acquisitions and dispositions were completed at the beginning of
each period presented and exclude the results of Broadcast
Software International. As of June 30, 2005, the pro forma totals
include the results of 310 stations in 61 markets.
(7) Adjusted EBITDA margin is defined as Adjusted EBITDA as a
percentage of net revenues.
Results of Operations
Three Months Ended June 30, 2005 Compared to Three Months Ended
June 30, 2004
Net revenues for the second quarter of 2005 increased $1.1 million
to $87.4 million, a 1.3% increase from the second quarter of 2004,
primarily as a result of a 5.2% increase in local advertising revenue,
offset by a 17.7% decrease in national advertising revenue. For the
quarter, revenue grew in 33 of the Company's 61 markets.
Station operating expenses increased $1.9 million to $54.5
million, an increase of 3.6% over the second quarter of 2004. During
the second quarter of 2005, the Company launched its second station in
Houston, Texas (acquired on March 31, 2005). The increased expenses
associated with the new Houston station, coupled with promotional
expenses associated with the first quarter launch of the Company's
rock station in Houston, were significant drivers of the second
quarter station operating expense increase. Excluding the effect of
expenses attributable to the Houston, Texas market, station operating
expenses would have increased by $1.1 million or 2.2% for the quarter.
Station operating income (defined as operating income before
depreciation and amortization, LMA fees, corporate general and
administrative expenses, non-cash stock compensation and restructuring
charges (credits)) decreased $0.8 million to $32.9 million, a decrease
of 2.3% from the second quarter of 2004, for the reasons discussed
above.
On a pro forma basis, which includes the results of all stations
operated during the period under the terms of local marketing
agreements and station acquisitions completed during the period as if
each were consummated at the beginning of the periods presented and
excludes the results of Broadcast Software International, net revenues
for the second quarter of 2005 increased $1.0 million to $86.8
million, an increase of 1.1% from the second quarter of 2004. In terms
of revenue composition, pro forma local advertising revenues increased
approximately 5.2%, offset by a 17.7% decrease in pro forma national
advertising revenues.
Pro forma station operating expenses increased $1.7 million to
$53.9 million, an increase of 3.2% over the second quarter of 2004.
This increase was primarily due to 1) expenses incurred associated
with the second quarter launch of the Company's new station in
Houston, Texas, 2) promotional expenses incurred in the second quarter
associated with the first quarter launch of the Company's rock station
in Houston and 3) general expense increases associated with operating
the Company's station portfolio. Excluding the effect of expenses
attributable to the Houston, Texas market during the second quarter,
pro forma station operating expenses would have increased by $0.9
million or 1.8% for the second quarter.
Pro forma station operating income (defined as operating income
(loss) before depreciation, amortization, LMA fees, corporate general
and administrative expenses, non-cash stock compensation and
restructuring charges (credits); and excluding the results of
Broadcast Software International) decreased $0.7 million to $32.9
million, a decrease of 2.1% from the second quarter of 2004.
Non-cash stock compensation expense increased to $1.7 million for
the second quarter of 2005, as compared with a $0.1 million non-cash
stock compensation credit in the prior year. Non-cash stock
compensation recorded in the current period is primarily comprised of
1) expense associated with 250,000 restricted shares of Class A Common
Stock awarded to Lewis W. Dickey, Chairman and CEO, in April 2005,
pursuant to his employment agreement dated October 14, 2004 ; 2)
expense associated with the additional 250,000 restricted shares of
Class A Common Stock to be awarded to Mr. Dickey in each of 2006 and
2007, again pursuant to his employment agreement dated October 14,
2004; and 3) expense associated with 145,000 restricted shares of
Class A Common Stock issued to certain other officers of the Company
during the second quarter of 2005.
Interest expense increased by $2.0 million or 43.2% to $6.6
million for the three months ended June 30, 2005 as compared with $4.6
million in the prior period. This increase was primarily due to 1) a
$0.8 million loss recorded in the current quarter as an increase to
interest expense related to the adjustment of the fair value of
certain derivative instruments and 2) a higher average cost of bank
debt and increased levels of bank debt outstanding during the current
quarter. The current quarter interest expense increase is also
amplified by the effect of a $0.8 million gain recorded in the prior
year as a reduction of interest expense related to the adjustment of
the fair value of certain derivative instruments during that period.
Income tax expense increased by $0.5 million or 6.9% to $7.0
million for the three months ended June 30, 2005 as compared with $6.6
million in the prior period. Tax expense in the current and prior year
is comprised entirely of deferred tax expense and relates primarily to
the establishment of valuation allowances against net operating loss
carry-forwards generated during the periods.
Excluding the effects of non-cash stock compensation expense,
basic income per common share was $0.15 for the three months ended
June 30, 2005. Diluted income per common share, excluding the effect
of non-cash stock compensation, was also $0.15. As-reported basic
income per common share was $0.13 for the three months ended June 30,
2005 as compared with basic income per common share of $0.19 during
the prior year. As-reported diluted income per common share was $0.12
for the three months ended June 30, 2005 as compared with diluted
income per common share of $0.18 in the prior year.
Six Months Ended June 30, 2005 Compared to Six Months Ended June
30, 2004
Net revenues for the six months ended June 30, 2005 increased $7.8
million to $159.6 million, a 5.1% increase from the same period in
2004, primarily as a result of revenues associated with station
acquisitions completed in March 2004 (Rochester, Minnesota and Sioux
Falls, South Dakota).
Station operating expenses increased $6.1 million to $105.0
million, an increase of 6.2% over the same period in 2004, primarily
as a result of expenses associated with station acquisitions completed
in March 2004. Station operating expenses also increased due to 1)
expenses incurred associated with the second quarter launch of the
Company's new station in Houston, Texas, 2) promotional expenses
incurred in the second quarter associated with launch of the Company's
rock station in Houston, Texas and 3) general expense increases
associated with operating the Company's station portfolio. Excluding
the effect of expenses attributable to the Houston, Texas market,
station operating expenses would have increased by $5.4 million or
5.6% for the six months ended June 30, 2005.
Station operating income (defined as operating income before
depreciation and amortization, LMA fees, corporate general and
administrative expenses, non-cash stock compensation and restructuring
charges (credits)) increased $1.7 million to $54.5 million, an
increase of 3.2% from the same period in 2004, for the reasons
discussed above.
On a pro forma basis, which includes the results of all stations
operated during the period under the terms of local marketing
agreements and station acquisitions completed during the six month
period as if each were consummated at the beginning of the periods
presented and excludes the results of Broadcast Software
International, net revenues for the six months ended June 30, 2005
increased $3.2 million to $158.5 million, an increase of 2.1% from the
same period in 2004. In terms of revenue composition, pro forma local
advertising revenues increased approximately 5.4% for the period,
offset by a 11.3% decrease in pro forma national advertising revenues.
Pro forma station operating expenses increased $2.2 million to
$104.1 million, an increase of 2.2% over the same period in 2004. This
increase was primarily due to 1) expenses incurred associated with the
second quarter launch of the Company's new station in Houston, Texas,
2) promotional expenses incurred in the second quarter associated with
the first quarter launch of the Company's rock station in Houston,
Texas and 3) general expense increases associated with operating the
Company's station portfolio. Excluding the effect of expenses
attributable to the Houston, Texas market, pro forma station operating
expenses would have increased by $1.6 million or 1.6% for the six
months ended June 30, 2005.
Pro forma station operating income (defined as operating income
(loss) before depreciation, amortization, LMA fees, corporate general
and administrative expenses, non-cash stock compensation and
restructuring charges (credits); and excluding Broadcast Software
International) increased $1.0 million to $54.5 million, an increase of
1.8% from the same period in 2004.
Non-cash stock compensation expense increased to $1.7 million for
the six months ended June 30, 2005, as compared with a $0.2 million
non-cash stock compensation credit in the prior year. Non-cash stock
compensation recorded in the current period is primarily comprised of
1) expense associated with 250,000 restricted shares of Class A Common
Stock awarded to Lewis W. Dickey, Chairman and CEO, in April 2005,
pursuant to his employment agreement dated October 14, 2004; 2)
expense associated with the additional 250,000 restricted shares of
Class A Common Stock to be awarded to Mr. Dickey in each of 2006 and
2007, again pursuant to his employment agreement dated October 14,
2004; and 3) expense associated with 145,000 restricted shares of
Class A Common Stock issued to certain other officers of the Company
during the second quarter of 2005.
Interest expense increased by $1.7 million or 16.4% to $11.8
million for the six months ended June 30, 2005 as compared with $10.1
million in the prior period. This increase was primarily due to 1) a
higher average cost of bank debt and increased levels of bank debt
outstanding during the current year and 2) a $0.7 million loss
recorded in the current year as an increase to interest expense
related to the adjustment of the fair value of certain derivative
instruments. The current year interest expense increase is also
amplified by a $0.4 million gain recorded in the prior year as a
reduction of interest expense related to the adjustment of the fair
value of certain derivative instruments during the period.
Income tax expense increased $0.7 million to $13.5 million during
the six months ended June 30, 2005, as compared with $12.8 million
during the prior year. Tax expense incurred in the current and prior
year, comprised entirely of deferred tax expense, was recorded to
establish valuation allowances against net operating loss
carry-forwards generated during the periods.
Excluding the effects of non-cash stock compensation expense,
basic and diluted income per common share was $0.16 for the six months
ended June 30, 2005. As-reported basic and diluted income per common
share was $0.14 for the six months ended June 30, 2005 as compared
with as-reported basic and diluted loss per common share of $0.16
during the prior year.
Share Repurchase Program
On September 28, 2004, the Company announced that its Board of
Directors had authorized the purchase, from time to time, of up to
$100 million of its Class A Common Stock.
Since March 31, 2005, the Company completed the repurchase of
2,452,159 shares of Class A Common Stock for $30.0 million, at an
average repurchase price per share of $12.21. Including repurchases
completed in prior periods, the Company has cumulatively repurchased a
total of 3,456,588 shares of Class A Common Stock for $44.6 million
under the Board authorized program.
New $800 Million Credit Facility
On July 14, 2005, the Company completed the arrangement and
syndication of a new $800.0 million credit facility with J.P. Morgan
Securities Inc. and Bank of America Securities LLC as joint arrangers.
The new credit facility provides for a revolving credit commitment
of $400.0 million and a $400.0 million term loan. The proceeds of the
term loan facility, fully funded on July 14, 2005, and drawings on
that date of approximately $123.0 million on the revolving credit
facility, were used primarily to refinance amounts outstanding under
the Company's pre-existing credit facility.
Leverage and Financial Position
Capital expenditures for the three months ended June 30, 2005
totaled $1.9 million and were comprised entirely of maintenance
related capital expenditures. For the full year of 2005, we continue
to expect capital expenditures to total approximately $7.0 million.
Leverage, defined under the terms of the Company's credit facility
as total indebtedness divided by trailing 12-month Adjusted EBITDA as
adjusted for certain non-recurring expenses, was 4.9x at June 30,
2005.
Including borrowings to fund the share repurchases completed in
July and August 2005, the ratio of net long-term debt to trailing
12-month pro forma Adjusted EBITDA as of June 30, 2005 is
approximately 5.2x.
Outlook
The following statements and data are based on current
expectations. These statements are forward looking and actual results
may differ materially.
Cumulus expects third quarter 2005 pro forma net revenue to grow
2% versus the prior year. We also expect third quarter 2005 pro forma
station operating expenses to grow by 2%. Further, the following table
summarizes selected projected financial results for the third quarter
of 2005 (dollars in thousands):
Estimated
Q3 2005
-----------
Depreciation and amortization $5,600
LMA fees $150
Non-cash stock compensation $850
Interest expense $6,100
Interest income $(100)
Loss on early extinguishments of debt $1,300
Income tax expense (non cash) $7,200
Non-GAAP Financial Measures
Cumulus Media Inc. utilizes certain financial measures that are
not calculated in accordance with GAAP to assess financial performance
and profitability. The non-GAAP financial measures used in this
release are Station Operating Income, Adjusted EBITDA and Free Cash
Flow. Station operating income is defined as operating income before
depreciation and amortization, LMA fees, corporate general and
administrative expenses, non-cash stock compensation and restructuring
charges (credits). Adjusted EBITDA is defined as operating income
before depreciation and amortization, LMA fees, non-cash stock
compensation and restructuring charges (credits). Free Cash Flow is
defined as Adjusted EBITDA less LMA fee expense, net interest expense,
income taxes paid and maintenance capital expenditures.
Station Operating Income
Station Operating Income serves as a starting point for our
management to analyze the cash flow generated by our business by
measuring the profitability of our station portfolio and its
contribution to the funding of our other operating expenses and to the
funding of debt service and acquisitions. Station Operating Income
isolates the amount of income generated solely by our stations and
assists our management in evaluating the earnings potential of our
station portfolio.
In deriving this measure, we exclude depreciation and amortization
due to the insignificant investment in tangible assets required to
operate our stations and the relatively insignificant amount of
intangible assets subject to amortization. We exclude LMA fees from
this measure, even though it requires a cash commitment, due to the
insignificance and temporary nature of such fees. Corporate expenses,
despite representing an additional significant cash commitment, are
excluded in an effort to present the operating performance of our
stations exclusive of the corporate resources employed. We believe
this is important to our investors because it highlights the gross
margin generated by our station portfolio. Finally, we exclude non
cash stock compensation and restructuring and impairment charges
(credits) from the measure as they do not represent cash payments
related to the operation of the stations.
We believe that Station Operating Income, although not a measure
that is calculated in accordance with GAAP, nevertheless is the most
frequently used financial measure in determining the market value of a
radio station or group of stations. We have observed that Station
Operating Income is commonly employed by firms that provide appraisal
services to the broadcast industry in valuing radio stations. Further,
in each of the more than 140 radio station acquisitions we have
completed since our inception, we have used Station Operating Income
as our primary metric to evaluate and negotiate the purchase price to
be paid. Given its relevance to the estimated value of a radio
station, we believe, and our experience indicates, that investors
consider the metric to be extremely useful in order to determine the
value of our portfolio of stations. We believe that Station Operating
Income is the most commonly used financial measure employed by the
investment community to compare the performance of radio station
operators.
Finally, Station Operating Income is the primary metric that our
management uses to evaluate the performance and results of our
stations. Our management uses the measure to assess the performance of
our station managers and our board of directors uses it to determine
the relative performance of our executive management. As a result, in
disclosing Station Operating Income, we are providing our
stockholders, and the public, with an analysis of our performance that
is consistent with that utilized by our management.
Station Operating Income should not be considered in isolation or
as a substitute for net income, operating income (loss), cash flows
from operating activities or any other measure for determining our
operating performance or liquidity that is calculated in accordance
with GAAP.
Adjusted EBITDA
Adjusted EBITDA is also utilized by our management to analyze the
cash flow generated by our business. This measure isolates the amount
of income generated by our stations after the incurrence of corporate
general and administrative expenses. Management uses this measure to
determine the contribution of our station portfolio, including the
corporate resources employed to manage the portfolio, to the funding
of our other operating expenses and to the funding of debt service and
acquisitions.
In deriving this measure, we exclude depreciation and amortization
due to the insignificant investment in tangible assets required to
operate our stations and corporate office and the relatively
insignificant amount of intangible assets subject to amortization. We
exclude LMA fees from this measure, even though it requires a cash
commitment, due to the insignificance and generally temporary nature
of such fees. Finally, we exclude non cash stock compensation and
restructuring and impairment charges (credits) from the measure as
they do not represent cash payments related to the operation of the
stations.
We believe 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 a radio company. We have also observed that Adjusted EBITDA
is routinely employed to evaluate and negotiate the potential purchase
price for radio broadcasting companies. Given the relevance to the
overall value of the Company, we believe 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 (loss), cash flows from
operating activities or any other measure for determining our
operating performance or liquidity that is calculated in accordance
with GAAP.
Free Cash Flow
Free Cash Flow is also utilized by management to analyze the cash
generated by our business. Free Cash Flow measures the amount of
income generated each period that could be used to fund acquisitions
or repay debt, after funding station and corporate expenses, capital
expenditures and payment of LMA fees and debt service.
We believe that Free Cash Flow, although not a measure that is
calculated in accordance with GAAP, is commonly employed by the
investment community to evaluate a company's ability to pay down debt,
pay dividends, repurchase stock and/or facilitate the further growth
of a company through acquisition or internal development. We further
believe that Free Cash Flow is also utilized by investors as a measure
in determining the market value of a radio company.
Free Cash Flow should not be considered in isolation or as a
substitute for net income, operating income (loss), cash flows from
operating activities or any other measure for determining our
operating performance or liquidity that is calculated in accordance
with GAAP.
As Station Operating Income, Adjusted EBITDA and Free Cash Flow
are measures that are not calculated in accordance with GAAP, they may
not be comparable to similarly titled measures employed by other
companies. See the quantitative reconciliation of these measures to
their most directly comparable financial measure calculated and
presented in accordance with GAAP that follows below.
Forward-Looking Statements
Certain statements in this release, including statements relating
to the integration of acquisitions and any earnings or revenue
projections, are "forward-looking" statements, which are statements
that relate to Cumulus Media Inc.'s future plans, revenues, station
operating income, earnings, objectives, expectations, performance, and
similar projections, as well as any facts or assumptions underlying
these statements or projections. Actual results may differ materially
from the results expressed or implied in these forward-looking
statements, due to various risks, uncertainties or other factors.
These factors include competition within the radio broadcasting
industry, advertising demand in our markets, the possibility that
advertisers may cancel or postpone schedules in response to national
or world events, competition for audience share, our success in
executing and integrating acquisitions, our ability to generate
sufficient cash flow to meet our debt service obligations and finance
operations, and other risk factors described from time to time in
Cumulus Media Inc.'s filings with the Securities and Exchange
Commission, including its Form 10-K for the year ended December 31,
2004. Cumulus Media Inc. assumes no responsibility to update the
forward-looking statements contained in this release as a result of
new information, future events or otherwise.
Cumulus Media Inc. is the second largest radio company in the
United States based on station count. Giving effect to the completion
of all announced pending acquisitions and divestitures, Cumulus Media
Inc. will own and operate 310 radio stations in 61 mid-size and
smaller U.S. media markets. The Company's headquarters are in Atlanta,
Georgia, and its web site is www.cumulus.com. Cumulus Media Inc.
shares are traded on the NASDAQ National Market under the symbol CMLS.
Cumulus Media Inc. will host a teleconference later today at 11:00
a.m. Eastern Time to discuss second quarter results. To access this
teleconference live, please visit the company's web site at
www.cumulus.com or dial (800) 819-9193 for domestic and international
callers. Approximately one hour after completion of the call, a replay
can be accessed until 11:59 PM August 18, 2005. Domestic and
international callers can access the replay by dialing (719) 457-0820,
pass code 4210747.
CUMULUS MEDIA INC.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share data)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
----------- ----------- --------- ---------
Net revenues 87,440 86,314 159,563 151,764
Operating expenses:
Station operating
expenses, excluding
depreciation,
amortization
and LMA fees 54,506 52,620 105,024 98,915
Depreciation and
amortization 5,455 5,065 10,812 10,059
LMA fees 198 710 546 1,297
Corporate general
and administrative
(excluding non-cash
stock compensation
expense) 3,850 3,870 7,595 7,426
Non-cash stock
compensation 1,697 (125) 1,668 (216)
Restructuring
charges (credits) (215) (21) (215) (21)
----------- ----------- --------- ---------
Total operating
expenses 65,491 62,119 125,430 117,460
----------- ----------- --------- ---------
Operating
income 21,949 24,195 34,133 34,304
----------- ----------- --------- ---------
Nonoperating income
(expense):
Interest expense (6,575) (4,593) (11,796) (10,134)
Interest income 459 188 793 296
Loss on early
extinguishments of
debt -- -- -- (462)
Other income
(expense), net (19) (14) (21) 13
----------- ----------- --------- ---------
Total
nonoperating
expenses, net (6,135) (4,419) (11,024) (10,287)
----------- ----------- --------- ---------
Income before
income taxes 15,814 19,776 23,109 24,017
Income tax expense (7,008) (6,557) (13,480) (12,782)
----------- ----------- --------- ---------
Net income $ 8,806 $ 13,219 $ 9,629 $ 11,235
=========== =========== ========= =========
Income per common
share:
Basic income per
common share $ 0.13 $ 0.19 $ 0.14 $ 0.16
=========== =========== ========= =========
Diluted income per
common share $ 0.12 $ 0.18 $ 0.14 $ 0.16
=========== =========== ========= =========
Weighted average basic
common shares
outstanding 69,128 69,877 69,108 68,122
=========== =========== ========= =========
Weighted average
diluted common shares
outstanding 70,541 72,861 70,583 71,264
=========== =========== ========= =========
Reconciliation of Non-GAAP Financial Measures to GAAP Counterparts
The following table reconciles net cash provided by operating
activities, the most directly comparable financial measure calculated
and presented in accordance with GAAP, to station operating income and
Adjusted EBITDA (dollars in thousands).
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
--------- --------- --------- --------
Net cash provided by operating
activities $15,642 $12,528 $32,534 $27,528
Cash payments for LMA fees 198 710 546 1,297
Excess of accrual based
station operating expenses to
cash payments 8,400 10,814 4,268 1,964
Cash payments/(receipts) for
Corporate general and
administrative expenses in
excess of accrual based
expense (3,756) 1,044 (2,455) 3,619
Cash payments for interest
expense 8,784 4,230 12,581 11,081
Cash interest income (459) (188) (793) (296)
Other cash
payments/adjustments 275 686 263 230
Adjusted EBITDA $29,084 $29,824 $46,944 $45,423
--------- --------- --------- --------
Add: Accrual based Corporate
general and administrative
expenses 3,850 3,870 7,595 7,426
--------- --------- --------- --------
Station Operating Income $32,934 $33,694 $54,539 $52,849
========= ========= ========= ========
The following table reconciles operating income, the most directly
comparable financial measure calculated and presented in accordance
with GAAP, to free cash flow (dollars in thousands).
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
-------- -------- -------- --------
Operating income $21,949 $24,195 $34,133 $34,304
Add:
Non cash stock compensation 1,697 (125) 1,668 (216)
Restructuring charges (215) (21) (215) (21)
Depreciation and amortization 5,455 5,065 10,812 10,059
Less:
Interest expense, net of
interest income (6,116) (4,405) (11,003) (9,838)
Maintenance capital
expenditures (1,947) (590) (3,501) (1,721)
Free cash flow $20,823 $24,119 $31,894 $32,567
======== ======== ======== ========
Cumulus Media Inc.
Reconciliation between Historical GAAP Results
And Pro Forma Results for the Three Months Ended
June 30, 2005
(dollars in thousands)
Historical Pro Forma
GAAP Adjustments Results
---------- ----------- ----------
Net revenue $87,440 $(613)(1) $86,827
Station operating expenses $54,506 $(588)(2) $53,918
Station operating income $32,934 $(25) $32,909
Corporate overhead $3,850 -- $3,850
Adjusted EBITDA $29,084 $(25) $29,059
(1) Reflects the elimination of revenues from Broadcast Software
International.
(2) Reflects the elimination of operating expenses from Broadcast
Software International.
Cumulus Media Inc.
Reconciliation between Historical GAAP Results
And Pro Forma Results for the Six Months Ended
June 30, 2005
(dollars in thousands)
Historical Pro Forma
GAAP Adjustments Results
---------- ----------- ---------
Net revenue $159,563 $(1,027)(3) $158,536
Station operating expenses $105,024 $(947)(4) $104,077
Station operating income $54,539 $(80) $54,459
Corporate overhead $7,595 -- $7,595
Adjusted EBITDA $46,944 $(80) $46,864
(3) Reflects the elimination of revenues from Broadcast Software
International.
(4) Reflects the elimination of operating expenses from Broadcast
Software International.
CAPITALIZATION
(dollars in thousands)
June 30, June 30,
2005 2005
Actual Pro Forma(1)
----------- -----------
Cash and cash equivalents $2,669 $2,669
=========== ===========
Long-term debt, including current maturities:
Bank Debt 507,064 534,681
Total Stockholders' equity 887,693 887,693
----------- -----------
Total capitalization $1,394,757 $1,422,374
=========== ===========
(1) Pro forma for cash borrowings needed to complete share repurchases
completed in July and through August 3, 2005.
Net Debt to TTM Pro Forma Adjusted EBITDA (2) 5.2x
(2) Ratio calculated as (dollars in thousands):
Funded bank debt as of June 30, 2005 $507,064
Plus: Cash required to complete share
repurchases through August 3, 2005 29,986
Plus: Cash required to complete
acquisitions, net of dispositions 300
Less: Cash balance as of June 30, 2005 (2,669)
---------
Net Debt as of June 30, 2005 534,681
Divided by Trailing Twelve Months Pro
Forma Adjusted EBITDA (includes the
results of all pending acquisitions) 103,297
Ratio 5.2x
CUMULUS MEDIA INC.
2005 Quarterly Results
Station Operating Income Margin Composition Analysis
(dollars in thousands)
The following analysis of our market portfolio separates each market
into one of six categories based upon trailing twelve month Station
Operating Income performance for analytical purposes only. We believe
this analytical distribution of our markets is helpful in assessing
the portfolio's financial and operational development.
Pro Forma for the Trailing Twelve months ended June 30, 2005:
Avg
Station Station
Station Operating Income # of Operating Operating
Margin % Markets Revenue Income Income %
- ----------------------------- -------- --------- ---------- ----------
greater than 35.0% 28 $181,008 $84,338 46.6%
25.0% to 34.9% 15 71,319 21,569 30.2%
20.0% to 24.9% 5 16,950 3,785 22.3%
10.0% to 19.9% 8 22,911 3,761 16.4%
0.0% to 9.9% 1 2,509 194 7.7%
less than 0.0% 4 6,286 (1,376) (21.9)%
-------- --------- ---------- ----------
Subtotal 61 $300,983 $112,271 37.3%
Trade, Other -- 25,047 6,832 27.3%
--------- ---------- ----------
Totals 61 $326,030 $119,103 36.5%
Pro Forma for the Trailing Twelve months ended March 31, 2005:
Avg
Station Station
Station Operating Income # of Operating Operating
Margin % Markets Revenue Income Income %
- ----------------------------- -------- --------- ---------- ----------
greater than 35.0% 29 $188,822 $88,331 46.8%
25.0% to 34.9% 15 68,916 21,050 30.5%
20.0% to 24.9% 5 16,221 3,517 21.7%
10.0% to 19.9% 6 14,914 2,435 16.3%
0.0% to 9.9% 2 5,742 491 8.6%
less than 0.0% 4 5,485 (1,337) (24.4)%
-------- --------- ---------- ----------
Subtotal 61 $300,100 $114,488 38.2%
Trade, Other -- 24,952 5,307 21.3%
--------- ---------- ----------
Totals 61 $325,052 $119,795 36.9%
Activity for Q2 2005
Markets Markets Markets Net Markets
Station Operating at Moving Moving Change In at
Income Margin % 3/31/05 Out In Category 6/30/05
- -------------------- --------- --------- --------- ---------- --------
greater than 35.0% 29 1 (1) 28
25.0% to 34.9% 15 1 1 -- 15
20.0% to 24.9% 5 3 3 -- 5
10.0% to 19.9% 6 2 4 2 8
0.0% to 9.9% 2 1 (1) 1
less than 0.0% 4 -- -- -- 4
--------- --------
Total 61 8 8 0 61
CONTACT: Cumulus Media Inc., Atlanta
Marty Gausvik, 404-949-0700