CMLS - Earnings call transcript Q3 2018

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Operator

Ladies and gentlemen, my name is Shannon and I'll be your operator for today's conference. At this time, I'd like to welcome everyone to the Cumulus Media Quarterly Earnings Conference Call. All lines have been placed on mute to present background noise. After the speaker's there will be a question-and-answer session. [Operator Instructions] I'll now turn the call over to Collin Jones, Senior Vice President of Corporate Development and Strategy. proceed. may you Sir,

Collin Jones

appreciate Welcome I’m our President joined and Abbot. Mary operator. call joining earnings today. and quarter conference Berner; We John CFO, call. today our of everyone you, you third the to XXXX CEO, all Thank by our

SEC please forward-looking certain press materially laws. as securities of in we our you. number Mary, or reconciliations These discussed may replay can today’s A as differ this and uncertainties. it the based current statements filings, Actual can be about press A results on non-GAAP release. to implied that, well full federal start, our on risks risks for of and turn these assessments website. after Before this month that XX-Q for of statements call under in call. be to statements third are and available release financial description Details from and expressed over With will I’ll and how a on they’re our today's statements. may note in that constitute a forward-looking management’s to call quarter to terms subject including results recording our be found found access assumptions,

Mary Berner

on improved Thanks, and said with financial usual, us full the us. and resume behind last quarter happy much Colin. Good we're have and thank truly first that I afternoon, call, posture. joining This business of bankruptcy our our everyone, you for as operations to to post as certainly

with businesses identifying the and expense the our you and I into our provide expanding some market improve insights to our tough pricing along and number additional through key making efforts the third and both efficiency We'll of update future, progress flow on sales on of to free business. profile We generating in and also are opportunities digital the on debt. substantial quarter a John particular, local down on initiatives strategies, fourth of quarter cash now and outlook. corporate our share goal inventory effectiveness Today a for color squarely stronger will pay focused the tackling

which strides group's and was in gained results from One Despite our quarter for impacts, still revenue also spot and reflect EBITDA gaining digital the a or last is with on XX On from One operate point those the and with straight the The and X.X% the affected revenue quarter negatively just basis down quarter. headline which same again the exit share year in Group and in adjusting the we partially starting WLUP first exit markets in a is in we results, local FM, the share companywide environment decline reported group seventh Westwood in the total. offset top our station X.X%. increased in by EBITDA for by in the once basis, station USTN, while from period the half that national, Chicago same So, by WLUP a Westwood declined X.X% our of transition. One quarter approximately both the revenues up increased quarter points Westwood by station our Total impact X.X% Adjusting and for the USTN, was by in X.X% Station WLUP-FM quarter. with percentage for USTN basis.

quarter. performances in day day of deliver the want proud While continue exceedingly our your attention, out, some who particularly call to employees in strong am I to to I and

the of a positive has Westwood its and last quarter with USTN trajectory year New and and revenue York, top One quarter QX Fresno our delivered this were despite growth. tough quarter Chicago, double-digits. sixth Nashville strong One maintained for Normalizing in positive grew five largest contributors EBITDA a the Minneapolis, straight by issue, comparison to EBITDA it's strong Westwood revenue

the revenue $X.X advertising that year, million. given categories was the included an homebuilding like Other home-improvement storage political strong of provide clubs, lift general about is course and quarter includes election third Of this strong, and services, category related the of drycleaners, a which which facilities. in health in quarter us businesses

we On the and flip by is home driven side, and experienced retail, weakness food automotive. beverage largely furnishings,

produce early generated prepayment million a to loan, from with Turning our cash operations, debt ability October, $XX cash cash in and which pay down flow our using that our commitment term to flow completed significant of free demonstrate to we cash.

$XXX years expect and the cash as million As we debt to paying of priority. generate on flow we as to call, year be flow cash with continue a down will our free much a for high said last few next that

and spot halfway local This is resulting in despite fourth from see company to is the excluding in low weakness and ahead, to quarter pacing operational still through political mid-single we're as of spending. we Looking market, from the our well initiatives benefits the up financial digits, continued strong continue as the in pacing political quarter. current

we Beyond to initiatives last in are described believe business. to offset provide us the market avenues call, quarter, provided of as for unique operational fourth which the of our our our for challenges we growth and opportunities, many

the under at marketing strings C-Suite efforts of sales services radio these our well cumulus our the among the of umbrella. station as predominantly First monetization are as digital local digital group,

management within Second, pricing and inventory across and business segments. is

fourth expense Third, is management. is our podcast network and

through marketing digital the outpace streaming As occurring through contracts whether our growth these now emphasis added XX% of we organic was year-over-year. of in our to in speakers the recent revenue features successful also help C-Suite factors, and force and products our thousands that's in on services, increase Cumulus We're radio. in we initiative has with the impressions sells increased and a we as expansion become efficiencies. from segment our in tens local our product streaming continue account impressions customers. our smart our them reducing our C-Suite year devices. can more of our seeing grow initiative that through to of all listening industry our relationships C-Suite can of resulted to growth digital and by distribution continuously over focused other experienced we're into XX% continues one XX do into Starting base local Among digital and tune you with and and businesses renegotiation just we streaming QX will Station we that from with how taps digital, through find be million the business, to increasing valued been to through with new technology-enabled add of our increase our and or we we've sales for effectively substantially that just with Critically, significantly believe radio our migrating see, that as monthly ways of audience cost believe are Group significantly we C-Suite platform Radio sales that our one on hours that over and more to sellers just products

Customers impact which level. ever launch guarantee. the the marketing Westwood The on and lead EPC developing marketing national a forward distinct at few guarantees local is of local noting a businesses, our we based will it announced One providers of digital believe months. digital next program we gives commitment at advantage it out we and the guarantee ROI a our roll the Potential and over radio's on us the or other level, advertisers we EPC for operations Today first fact, the a our and In the Engage local performance for guarantee call have impact we coordinated radio -- local we're radio over it for to advertising services and advertising as looking focus customers

value advertising both the Westwood and inventory next station One. improving is management focused of perishable Our our group initiative, and at our inventory maximizing on pricing the at

us As both of we're and inventory previous replacing now working converted for tools opportunities more calls, provide. allowing whether us should inventory our between some improving stage, move any opportunities our for of while improving segments XX that traffic information At dynamically economic delivers XX radio intelligence new visibility business discussed monetizing our we've critical enabling on by and new markets the management revenue building greater dollar bidding function, we determining legacy time power these position this systems to starting in systems be and on management our drive to about to of competitive effective reducing our and we to the pitching in to elements been track new and results. circumstance platform combination, maximize early station are see types We inventory in purposes and year. or these launch pricing quarters three Westwood last markets. In tools accounts new group, of efficiency by lodes essential rolled group unsold our at the ratings. drivers pricing are value and billing revenue be billing of into out efforts These initial our and One station systems we by and traffic tools next core on tangible at inventory at for spot system fully planning the on intelligence the business impact or to for competitiveness have given which the and network our segments and giving us at as trends capacity

are our given is One. date incubating very to well-positioned growth podcast we player our opportunity here be is The meaningful initiative Westwood believe network, business a The market capabilities, third unique podcasting to our in we and within significant space. been and we've key which a is the experience

discovery promotional Our content podcast listeners space challenge to in helping rapidly. their allows today, the power more issue help while audiences us solve our this a partners grow massive, multiplatform that's

monetization a core and podcasters give to with are themselves. as today buying advertisers those well the of Our immediate us who to relationships connections podcasting lap for podcasting, who strong starting consider sales as are set who national those capabilities agencies

within importantly, vice course creators of content a differentiator own offer content and to extend for Our our for ability most reach expanding in talent and the and our podcasters ability capabilities versa, continues and from of key business. our and been valuable a brand opportunities has creation. And to is high-quality to monetization audiences production broadcast feature be process, of also to podcast supportive

expanded including XX be of in broadcast April, now XXXX. on given XX launched launch. Shapiro we leading example, driving seen a clearing that live we that will Shapiro of starting on point, syndications success recently an instance since markets. two-hour XX% January show For of additional Podcast, that over has top radio show the on has ratings we WABC-AM, in country's announced Ben as the Ben success, well, one-hour include up growth ratings since tremendous are the the rapidly to expanding And and broadcast the podcast eight in It station. stations each This in conservative for

Elaina plays arena, Smith coin, On broadcast Live of York. from of & podcast many in and Jay expanded replicated today the growth The talent other believe we've talker, broadcast been of native Savage continue conservative and Nash broadcast podcast to Jayde us behalf show monetization side Jim Nights podcast co-host space; seeing sets other sports country model apart in has on content Michael Todd podcast can with in Rome the significant. that we New genres WPLJ-FM's that in the to launched other in We and to from and an space. are revenue podcasting represents in others the the be

excited that last off to forward. said we're At estimate base more XXXX. million now earnings $XX XXXX, our tracking we're in than our in we on of stage, I a expected revenue call and we of that prospects in this going XX% said As about ahead XXX,XXX

indications podcast we For the upfront, this first been XXXX participated. which upfront we've initial by from particular, was which the encouraged in in year's

to future while financial address from to update to in podcasting inventory pay without us our we over the pre-bankruptcy digital perhaps prioritize this line go are flow returns across years. we group, a assets sacrificing will levered importantly, and fulsome through debt, draw segments, In the trajectory. expense total, and our although continue down up questions, John and the to today cash Importantly, our of initiatives, over of maintaining pricing much EBITDA positions others next that next the possible these invest and sheet I'll of profitability be portfolio business while now some grow in scale the it and more platforms and space, help again so market-leading which opportunity few built be continued would important we and both more business we our as will us enhance generate intend generation management situations given equity create from to we the open us us years. resources we where And of ahead we've value on plan profitability this to for our or radio to success then over challenging differentiating strong and initiatives drivers we'll management at believe several And more station John? the as we may these for optimizing continue is improved balance long-term. to pursue to focused do days,

John Abbot

Great. in you, made of in our also to like discount, to I'd step our October, our back first the growth early million. loan May And $X,XXX.X These We remarks. a to billion and in is our mandatory bankruptcy. a usual your be as of full in term Thank Mary. solid loan. a It's and as at echo took a of slight maturity payments amortization quarter on balance $X.XX the $XX.X September, of business current great result term prepayment payment we resulting to delivery executing quarter first again In de-lever XX, paying reduce $XX million in -- commitment the we debt term opening reminder, and importantly EBITDA loan XXXX. a million to were cash pleased voluntary in post debt, first down

cash strong still revolving used fully term to ABL operations facility the down our million loan, remained liquidity $XX from pay we While undrawn. our credit with

that new Since One, impact operating us with for to our deeper expense troubles wanted quarter, the been Traffic the the new USTA is Total this we where allowed Net million. Westwood or of minimal I which revenue a impact agreement which from revenue this results United under and the QX. some in we've the QX everyone out the with on Traffic Before impact in offset well-publicized to Weather had into States USTN that remind There was was some book negative dive deal, Network associated network, of of financial of revenue quarter. USTN mid-September, $X.X revenue. I to

also Westwood Weather with is in and the deal quarter. $X.X we've USTN So replaced revenue from impact the in million forward. going the lost USTN One Traffic new from to net With our place, EBITDA Total largely

the a Now quarter in in $X -- total XXXX third revenues to results; third revenue quarter X.X% million, QX were of XXXX. the third million our decline quarter from total or $XXX.X

we from expenses in million or longer QX Chicago, of impact which operate, the in from declined X.X% last or the as Excluding you USTN, know last million revenue year's $X.X revenue $X.X loop year. Total declined no X.X%.

expenses or the $X.X last year, at Excluding WLUP declined expenses million X.X%.

X.X% impact the As a the result, QX consolidated EBITDA as excluding EBITDA reported, or increased however, the last USTN and million by $X.X lost from X.X%. $XXX,XXX from consolidated grew of or EBITDA year; loop,

Radio albeit saw a numbers the experience of Looking tough particularly by of Group, half market with the spot slower we Station somewhat and a at unit the year. local Cumulus in first starting continue to at business we than environment the decline pace in

Kaplan, we and operate in was increased This digital they to Miller the NTR Group quarter numbers measure, quarter, in X.X% total including quarter These down this share X.X% and markets year-to-date. revenue the that aggregate, according normalized spin the political and revenue aren’t for grew this market Station down year. slightly the in where

So year-over-year would excluding the decline steeper. political, be

are we year, no Sports Rights the to the by our had which with the market Group revenue at and Chicago loss addition Sox rejection last longer WLUP-FM, year-over-year Chicago an Chicago's but the and In of Bulls. under of LMA was operating we the affected also were the White operating performance impact, contract Station

financials the negatively nearly quarter flow the the the to positive, we'll effect for these million year. through of EBITDA $X the impact see of they of was by continue rest these and on revenues changes impact While did overall changes in

of Cumulus for Group to Loop the Station or Sox third in for offset million aspect political. As Group the revenues reported, in quarter. the Radio our Adjusted $X.X and to ability some performance million market total year. last to X% digital An Station $XXX.X less declined than weakness X.X% revenue declined the with and from the the Bulls, radio was important quarter White of impact local growth that

the digital year. political driven our Group, revenue at Station provided mentioned, and growth about continues million market of over by outpace C-Suite As a products last substantially the lift to $X.X Mary

As September Election our most election revenue all years in Day. you're aware, of hits in late political through

here So you'll our when about back about earnings. hear impact more we're talking the political QX

XX our However, we're political we that exceed books political year have to of spend team far on can say levels. pleased we the this with expect that amount and we the so revenue

to offset of digital partially expenses cost Station or in the lower down that last expense increased Moving of revenue. expenses, The decline and renegotiated expenses, Station adjusted contracts and terminated yielded from driven Group primarily higher continued or Group by quarter, we've approximately by the the EBITDA $X.X were our X.X% year the associated savings X.X% or million a seen cost impact $X.X over were in revenue personnel-related with changes, combined million quarter.

to year, quarter $X.X third core the impact, or million grew This in health increase also or million the normalized driven One, by Turning $X.X grew revenue in quarter growth but ad revenue podcasting, last for in from quarter. approximately X.X% was in Westwood the USTN the business. X% mostly by

by expenses at content and revenue about produced -- XX% was from increases for from over operating and cost of variable lower from personnel-related renegotiation million increases the $X.X another revenue, expenses. of EBITDA One or certain or year. with in expense contracts increased adjusted On and One last the Westwood increase USTN million quarter X.X%. the sales content Westwood termination $XXX,XXX growth Normalizing EBITDA the expense Combined, at $X.X partially by offset or side, increased up

just year. million $XX expenditures just measures, as financial over to at we've on this $XX point first under of spent other capital compared last million some to Turning year-to-date CapEx,

year systems our last know, up year the ramped As equipment this up and and prior we with the of you from years. many in underinvestment to some CapEx catch facilities, of

asset total next forecast implications cash The this somewhat was $XX last from year's of a We to call, we've stock, transaction structured million expenditures continue about questions our partial spend with depreciated that in but sale been certain basis be SEC partial the XX will towards next to lot received transaction and taxes. the to over about we of basis weighted the of the and to asked XX long-lived of a stepped-up decline years, as on attributable in a tax a Since assets. intangibles. because one years step-up go-forward level. as assets year's expected is our restructuring Those amortized licenses most benefit heavily or to other the result,

Although the benefit the term near much in new tax the rules. the they in get transaction expense whose of smaller, we'll for assets was an treatment the that tangible and value of up under also immediate stepped qualified

federal transaction under NOLs, a the of our of we up Lastly, that gain any will from have used. might would’ve but creates use which structure existing cancellation the indebtedness, all happened almost

Our obviously equation, then future the next three and XXXX. results across we least XXXX for course very XXXX years, low over be taxes and operating the XXXX this $XX tax to expect and of amount of will in federal aggregate in million but factor approximately, cash into exposure with the increasing

you the to consequences our restructuring but state of We taxes have low state finalized. I per taxes cash XXXX. been tax incredibly in the million remain XXXX into We year cash reiterate also of thereafter wanted that some $X XXXX, to expect complicated cash to tax not with provide would visibility picture, in and be $X million XXXX and

update future views if we in guidance those So the evolve. may this

earnings of structure, driver of ruling that for and separate last Series which Class the ruling Class two This rule. rule warrants. made ownership we part B to normal more and an We filing Department to of our has that interest be the filing. foreign Security. less We and ad major equity declaratory behind doesn't petition Justice Another declaratory within granted. received hoc current Series XX. of have July through a Department consists filed approvals of the A six key our Department Unfortunately, One request petition approved of shares, ownership waiver is been process SEC. shares, months understand branch, other was There and a the go for item through offices share various warrant be petition of This comprised albeit on are with in X approximately the order the the X committee committee Homeland for a course probably our SEC is the call to been including in departments complicated the another executive the the have timeline. definitive and from of latter that petitions process State, similar is have since

next decision. an in at So looking case, case receive scenario. take QX of a beyond more before be to best we absolute that our into this that's likely a probably It's timeline or we'll final year

to we'll you more question callers view remind property open you efficiently prior up can we enter have wanted asset the a to the to for this to project would that that pay I the this can an was potential cash there regarding With number pass updated development and into Finally, a the our delays the We we Operator, appeals queue this raise result, still buyer and and At share. line potential best line the share, down On forward. be our for DC we've monetize as we valuable progress question. we please that, the debt continuing as enter or update and to open Q&A. with as to on last up on for negotiate to continue keep and we land how sale. first exploring like -- and sold that no call, but referred update calls of is additional or face provide Brothers, property stage, in possible. related to to our what as value to Toll indicated were a the buyer options

Operator

[Operator Research. the from Marci of have Instructions] Wolfe question from Ryvicker one We line

Your line is open.

Marci Ryvicker

for is a have I for Thank in the today. or QX the entire if that things coming Hi. is QX? and for other you first QX questions right-off you thank million that couple, have one, taking I just guess USTN and year the $X.X you for

John Abbot

the was just and been joining Yeah hi, -- Marci. That for impact QX that's in net Thanks really thanks for just been and question. QX. that's

we bit quarter So we got and but the offset of revenue in that, so mid-September the a deal Total an the sort from and up underway to had lost with Traffic signed is which revenue impact really shared net the million. was lost the in will that my off and the you of if we quarter information order some head. QX, In about it's top impact new $X.X that of in the little the

it that we was recognize $X.X prior $X.X debt think another then write-off revenue I million, of and of periods was in from bad $XXX,XXX didn't that June.

Marci Ryvicker

what Okay. elsewhere? is? cost, this And the cap issue that concerns advertisers they or week, outperforming, then with dollars another you're know but risk rate do it macro low know suggested interest have Is are local concerns, you I shifting it

Mary Berner

in answer marketplace can that. operate a little markets. by It's a national to XX We really bit we I don't and know. It's extent of offset stronger everything. some

really depending So answer it's the different on market. a

Marci Ryvicker

for in And Okay. then you what did remind can us political XXXX?

Mary Berner

political for million full year. the In Yeah. that were $XX we expect and outperform this about year, to we

Marci Ryvicker

much. so you Thank Okay.

Mary Berner

Marci. Thanks

Next Avi question [ph]. I think

Operator

Your line comes question [indiscernible]. the from next of

open. Your line is

Unidentified Analyst

afternoon Good thanks taking for questions. and the

clarifier, others? repeat fourth quarter Thank was couple pacings I've and what one it. you the got just I missed Can then Just a in you.

Mary Berner

single digits single, that mid mid pacing a is to to also -- political. up the Yeah, ex low as company, pacing the

Unidentified Analyst

you question, that something can you work little that? cost doesn’t not just And may to Is be past. any this Thank that I've it's that. but bit for launched flush Thank out guarantee It a in the it the Okay. too there leap more? simple morning, EPC you. encountered a you

Mary Berner

there assurance when add we a more you the that cost and program buy buy the radio radio one it program local that is digital ROI digital around is we've designed you the that the And on lift. it because platform, well-publicized. than coordinated it's other media is It's to a so Attend is think requires for for is that. way seen program about purchases. that little and a and advertiser the what is the ROI both performance competition digital and that no to platform, program a ROI a the Essentially, the than and average designed is XX% based radio business radio leverages list and that to so another what

Unidentified Analyst

it about So just them under-delivery, for or that if that there make is is up incorrectly? giving am inventory thinking more to I

Mary Berner

program is that's designed likelihood under-delivery is than of X%. less so There the that isn’t The -- question. an excellent

Unidentified Analyst

Okay. A just on any fixed floating to stack, I more maybe unsecured secured sheet, traditional cap one appreciate more here, balance that. going couple the cap thoughts type all forward? stack debt secured,

John Abbot

Yeah question. Fair no.

bankruptcy we're are look window that sort of great We weighing debt say capital pretty good of we clip would opportunity and I bank so we the to came at of you you've It's make XXX% been at regular point debt at a down a paying lot to of possibility described. a this something look secured obviously a change we to at basis. on that short that -- and as been out different the and as structure since and pretty as seen a consider we've factors been also exactly a

Unidentified Analyst

a on it Cumulus can much. time, pitfalls I although a Mary through that of it's Thank see bit you forum a been you to public talked and and of very opportunities we've now for that, maybe is long little but I'll point, forward over, areas been a may Mary, time in this pass that that And the company since and Great. kind the add prior short bankruptcy the the turn of going as best and what maybe concern you are what with but growth do period the it's

Mary Berner

growth market control, seen that we've In them initiatives. put what general, can't scripted focused Avi. podcasting when the is are tracking is the thanks XX% tracking things growth talked about year-over-year, in initiatives streaming tough concerns us I'll year-over-year. excites are which digital the part what me. of companywide, call. that We things now said start we What local this about up talked concern Yeah, that we We the with traction in at market. the up as the our that we're spot the for like XX% and how question digital but are services the you me well and marketing on the in

strategies. about IT projects. I'd looking in we're in growth forward, our very the -- excited So and We're made progress traction we're excited about we infrastructure say, the we're our

about. said, we the see add cash engagement pay continue the excited and we turn significant are focus, end tunnel did again with free page at employee initiatives. the As employee didn’t to the it in that beat the got during to on generating And base, of to we a our I would see down We I something buyer path that bankruptcy. good debt. remiss these we We be if flow that really would miss a that. be to That's base high light

So a think tough are well-positioned. market. I we It's

I offset our know some to think core plan. plan We're have we on we that a is track initiatives. got what We with with market anticipate be that declines. we've designed plan will

we're with pleased So our progress.

Unidentified Analyst

Appreciate the and the time responses. you. Thank

Mary Berner

you. Thank

Operator

more company closing the Thank to call are you. [Operator for the now Instructions] I'll remarks. over questions moment. at the turn any There no

Mary Berner

then you today. setting Okay. in you year forward We very at look you and next Thanks. of joining Thank and much this seeing all with conferences a between couple for to now. speaking

evening thank and a have great you. everyone So

Operator

That for joining. conference. Thank today's concludes you

You disconnect. may now

Cumulus Media (CMLS) 13 Nov 182018 Q3 Earnings call transcript