CMLS - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Cumulus Quarterly -- Media Quarterly Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker for today, Collin Jones, Senior Vice President, Corporate Development and Strategy. Sir, you may begin.

Collin Jones

operator. you, Thank our Conference to and Year Full Welcome Fourth Earnings Call. XXXX everyone Quarter today and I'm and our by joined President Frank our CEO, Lopez-Balboa. CFO, Berner; Mary

and release certain Before forward-looking forward-looking and constitute statements. are implied a based from federal they results are in note the start, Actual under on on that These number laws. assessments differ we today's call statements please statements and press to management's in may risks and securities may results discussed this or assumptions, statements subject current of materially expressed uncertainties.

use portion our be and In before President this Relations our Berner. month, in I'll and be that A shortly recording addition, today's of release replay to it Investor we non-GAAP filings. full our risks, website, as A our description the are be how measures turn financial We for to will that, on SEC can XX-K will about is SEC for over call our The was filed found and a to press investors, in the superior call. also believe information the website. of of to although these access useful the presented considered to non-GAAP as With available Mary? also terms with certain details now also supplementary Form press well it in GAAP. measures. Mary with can reconciliations and be not release should financial accordance found CEO,

Mary Berner

the entered by that we've paying growth since the strong in front were top straight two both EBITDA line. were off executing bottom year with XXXX And this months of We'd we maintained year year a XXXX optimistic on morning, mid-XXXX XXXX same-station as very the the about Last everyone. Thanks, us. momentum, been year the straight political. fact we in evidenced for we continuing through and excluding the strategies with strong performance good third grew second the line at Collin, for on and and that of revenue basis, time, first

in run operations executed that do impact result $XX million takeouts reductions, a cost rate will non-core and expense our permanent completed $XX generating We of of operations, million annualized generated $XX proceeds, million divestitures we of two that not $XXX gross ongoing significant value. perform cash think us us benefit. from including these million flexibility a of the and to the have to the but balance positioned deliver actions $XXX only COVID revenue then year cash Collectively, revenue we mitigating given than respond and one revenue delivered and points cash, our course reducing all XX sheet. maximizing specifically so the areas with podcasting posted our to growth on pleased share, digital We our employees' balance plans. I'm and Job Of basis. nearly down strengthening these our sequential XXXX protecting a grateful XX% we efforts. a materially and extremely which unwavering success We QX year-over-year swiftly improvement of of led pandemics We focus year-over-year. bolstering I'm QX expenses, proud our became better finished also well that on economy, outcomes hit, pivoted million impact, have to asset in with another for quarter opportunities derailed XX% by same-station and with not of XX%. sheet. growth recovering of shareholder in

nice driver. Sports food is products and of a betting worth noting. government, perspective, uncertainty improving, beverages the impacted a and From our end, be growth While COVID to new by are categories some encouraging top pandemic signs holiday many that do so see the about far are continued will financial revenue spike services, we we in include advertising QX, performers when utilities. and

for a which grew been more for did business revenue and that strong on believe performing in we Digital, much January. on betting Mark legal as as strong We which XX% best to to all continues Not One. sports massive the momentum we almost in betting[ph]. as share forward Dan I in and and up in has Shapiro, the where the be our our audio than top road at terrific is channel. online to assets I of -- have space in growth XXXX as revenue is driving a are promotional the as XXXX the currently and we currently coming This Ben positioned spend the states and fourth our marquee is year news mentioned given to out states of the We Levin podcast today, mention we driven legalize in category's top quarter. pacing more drafting sports in category Bongino, QX move year by legalization. among national of three Apple heft podcast category talent more momentum to mentioned podcasts in in the in our XX XX on ranking well For full entire is had committed or deregulatory growing Westwood QX, capture this healthy

For the increase full noteworthy XXXX, year than milestone, XX% one billion an for a XXXX. of downloads we the more achieving passed year, from

with this including two and Angle, Rolling whose with Kurt Rich gold our launch. add to launch Apple debuted stable sports veteran Olympic of early Eisen, in podcast Stone, February wrestler medal-winning sports on journalist, continued also partnerships podcast We the to number

medium an the and expect more noting what attractive strong. steady this also It's of for Looking worth that ahead, we advertising radio of business, growth. many components remains profitable same makes such

pre-pandemic radio year-over-year nearly for in the more And unchanged ad look for supported ad consumption, of the Streaming smart listening in audio three XX% of example, at with supported of now than the AM, time car, a still total listenership seeing than Cumulus for streaming total XX% streaming if with listening speakers up quarter quarter now industry consistent nice accounts is streaming. our roughly periods. itself For remains in fourth listenership. the accounting share listenership also in just XX%. more quarters FM virtually we platform We're growth for about hours radio approximately accounts at and

are so we cost continue past to pandemic of the have the years. efforts reduction not so However, us woods that we over will to few valuable focus on proven yet, out the

As navigate previously, we in out year. I which in XXXX was took pandemic mentioned $XX ability factor million successfully critical last a costs to in our the

costs permanent generate leverage. savings. and of new identify any also the portion we to further pandemic, operating cost permanent has working our economic leverage pulp to improved these protect Additionally, are -- of expand And further that the impacts of those additional opportunities to against

is quarter the currently for I'll sheet are Frank, March however, was look our be and detail to we balance proved in of and quarter pandemic. Frank? continuing challenge the result better XX%, sheet. global of year, With years that that more the hand about we couple ways down of to to a attention pacing our who give final regard to And the than given QX will significantly the defense current last the the the to the of expect a with balance outlook. QX previously unimaginable that, business it's on you and anything year call sustained will strengthen XXXX -- indicates. impacted pacing to If be derisking past over deleveraging importantly, our against to proved As us, crucial

Frank Lopez-Balboa

Mary. you, Thank

the financial start move with the then I'll quarter First, year's highlights. to and

down prior I'll were basis. total QX. $XXX from in usual, XXXX. XX.X% As less half represented XX.X% was nice saw This sequential revenue a million from quarter. we on speak [ph] the we Ex-political, was also a same-station QX, what than QX improvement down decline In of which

expected, had received a As record Senate orders five for as markets that offs political well political in from by as national those we us this strength the quarter election run races. where both Georgia the set driven

comparison, $XX.X $X this was million For and XXXX QX, QX, quarter million in political XXXX. in $XX.X million versus

was prior the reductions. million the in key basis in both the EBITDA another driver in was on XX.X% for for and change. declined costs related by QX, $XX.X digital, quarter revenue us in terms XX%, quarter million $XX fixed which a growth in XXXX, was much or nominal to XX% down variable profitable and than mentioned quarters driven declines Mary year-over-year active for of trajectory. in which podcast from Expenses by reductions led continues its quarter As by result a better XXXX cost up

down Moving revenue million was to year XX% Total the XXXX. political was $XXX for the in year; full total million. $XX.X

$XX So and semi-variable $XXX XXXX. in of year cost we'll performance XXXX. this a XX% More be of against expense versus reductions. million strong Expenses comping decline full a fixed than million active the result for or declined was

temporary, reductions again XXXX. that additional higher will while actions, And the the cost about $XX benefit from You'll a we increased in on of operations of which expenses $XX generated above the approximately working million an $XX reductions expense million the call of note with us from capital than on number that $XX rate million annualized the we or will year million during the and million. million Nearly $XX our for recovery in With XXXX. bit million communicated $XX rest we $XX the $XX an in return million run temporary of to EBITDA the depend cost giving have up management, were year. on last talked the finished relate level last we just reduction permanent at so of permanent earnings though $XX million call. In revenue pick cash total, aggressive has cost actions those

finishing budgeted CapEx. cut million to of less that taxes of throughout year. CapEx we the $XX.X cash spend the potential did than pay million our $XX half with out year original $X.X [ph] million Additionally, of We XXXX of

year-end split nearly total both full that operations offset but half all sizable would $XXX backdrop are that bond a the In the net our gross transaction the down that flows results million, proud DC land loan of cash million a to reflects purposes, which go Tower $XXX half a down be transaction. the regard of $XXX these in $XXX required between The for proceeds reduction in of net ride debt. was summer asset Tower during million of cash operating that net proceeds, NOL and challenging the term sum tax term sale more and not million very we really our cash and loan tax June the timeframe. sale-leaseback debt other loss course of of. the if would about are with normal than Our reinvested balance a pay pay generated of sales, would the generated year balance, But closed to from of in on for by in September-October gain have only

reflects Another draw. $XX revolver ABL million [ph] of the our cash balance

property to a pursue revert competitive. that will well location NCAA calls, previous property some first Well, contract questions. very dispute we up open With of for DC we continue anticipate to for do still agreed ready with year the $XX the XXXX, court, the do to and won't on other this to our that XXXX. in the NCAA piece that to we items be intend million XXXX. cash in amount catch attractive mentioned from the of can on fetch we items from expect we And sale to historical our sizable we free tournament As XXXX Touching spend Moderator, the and on of level we're NCAA, land to relate that, regard update call. in our couple we flow, to sale you in will line deferred have carry we our generated around the a in monetize process CapEx the that a Nashville.

Operator

from Janedis of first Our line John comes the with Wolfe Instructions] [Operator Research. question

Your open. line is

John Janedis

one start two, sports sports on one then and that on had the you I year, morning. good on betting, to cost. Mary. betting, about But Thanks, talked

you states the look have size As top to runway and category the cost year going category are radio? and good that changed, over fixed just cost, about reductions and separately, time, of how quickly much comments, value has you programming the five are at you more And early or, on today, legalize think growth betting? do of you think[ph] category how more be Is permanent place? looking the we're budgets for a sports given your rights at you the of as in the a the then

Mary Berner

is even still regard still this There category the -- are Thanks Good states. the is And not are terrific With Pennsylvania, and half morning. it's a have states for that legal of And there be footprint handful to the Michigan. question. as said, think seen. the remains upside. point, many I those of at we Tennessee, to we

But does category, it radio, the pretty you have As the think big with will I big, network big but there to we be both potential momentum. have relates regulatory if in And to properties our locally, footprint, we both at framework. and with how legal think it our have is but for I a point a navigating complexity also again, vehicles. channel, do strong some pretty station

So we're focused on that.

it it lots us As sports positioning, about there how makes content relates to our is there. of synergies and think

encouraging, picture. one that's the category so it's And spot bright in

we've efficient new has of the mostly fat, ways normal performing asked a new -- dealing of think think operations are about second quo. we last be the our about more lot I operate I we the status year, said is reductions, us remote prepared work of continuing of but the always don't focused with question remarks, some the in than as are you said on that, we shown cost with to over that

yes. buckets, T&E we then the by we improvement the how be work short and on is and is focused obvious the third second So real three efficiencies technology. work, enabled answer business would is process and estate, the We're where

those we're are the so focusing And on. areas

John Janedis

much. right. you Thank All very

Operator

you. Thank

line open. from line Markets, of with question comes next NOBLE the Kupinski Capital Our is Michael your

Michael Kupinski

have I of couple a questions here. you. Thank

costs. You where us costs give being question, up John's out sense that you a plan you at of additional indicated to take those just this And following can point? cut on are

Frank Lopez-Balboa

of our million this talked in focusing. quarter and middle summary[ph] for was was Hi, that saying the almost earnings process the Michael, a very that answer it's her went that our we is XXXX the rate and run to by about and of we're indicated the exercise. year. first for the million, $XX us. call, through a increased process cuts for In of through Mary third third a we start Frank. by to cost cost specific In continual some that she I'll what for normal expense be going budgeting areas $XX

As we a opportunity, are lot us difference. improvements the continual gives of go scene in behind a things from us opportunities, are gives business Remote that workforce through process. -- process there will XXXX, real make estate terms it's of a but that

to but going highlight numbers, our point year, of possible this update affecting be as So we're part to our try as and our at without this in not will to ethos lean our of throughout assured, terms rest is running the business revenue growth.

Michael Kupinski

lot of political -- sense lot a Okay. year? forth. for I pro us know got of And year, basis Bloomberg of cap a in a -- political Radio Can a terms last of you what so was that [ph] last QX on Station give what money forma and

Frank Lopez-Balboa

bit Last million. was QX year little over $X a

Michael Kupinski

versus of down you national? is Okay. is And -- of us the that in that what XX%. terms indicated you Can then, so far a sense pacing network, give local,

Frank Lopez-Balboa

a point. We saw the year. I at is towards of won't than And the second that give and better you national are that's doing but half local -- the this last the that pattern network breakdown, network specifics would say we and

Michael Kupinski

economies performing the I country of just a specific that can happening? sense of this general give a better I your -- of kind you -- mean there what's areas of markets. of us you mean are what geography sense the than the -- of terms of In others. is

Frank Lopez-Balboa

narrowed, we're as narrowing quarter markets It's PPM is interesting. consistent which but gap our and a that diary Last going saw we between year first the markets, gap our fairly nice. into has

states California, and shutdowns that part the we're the that in they're pleased I but where New York impact -- are a that's trend not that you're be PPM at not that and seeing this with of not biggest like we're exclusively or point. seeing, generate but think of fact markets our could and the

Michael Kupinski

later. appears this at Do you. know up? at Got that's quarter on to booking advertising point, be thoughts any booking into people later I And that and there this second have any shaping you Is indication how time. the

Frank Lopez-Balboa

should, too from did this the we robust terms indicated some network, Mary of the two year. flows environment, get. than normal point No, any of get March in which our second pacing no, we obviously things be Mark quarter we half months Mary be mean first expect more to as [ph] as quarter, to a But interesting it's the point. the because early it's indicated going we in for to and the -- stopped And this the first monies we talked for of it a our then make expecting very so of move at to way results upfront is I about, second always and one representation just why listen reasons at had which we're better our

Michael Kupinski

then And size rank it year, very category relative at the you. in Got betting the would the top it this the like-- sports betting, would small for point on of it where -- rank sports would on really is this just at XX last it you point? or just

Frank Lopez-Balboa

-- for top was an it's the XX. us in was emerging not It and it certainly space

Michael Kupinski

have. Okay. all Thanks. you. All thank I right, That's

Operator

Thank you.

next comes with B. Zack Our Riley. the from question line Silver of

Your line is open.

Zachary Silver

thank question. the Thanks taking Yes, you. for

The were impacted that this And revenue of year? what to of last you the your some more percentage entertainment, guys heavily travel, categories that recover first hospitality, for for in around expectations just are that XXXX? one by was what is year, COVID-XX

Frank Lopez-Balboa

all the trend having and talked restaurants are, quarter some a Look, breakdown are which said that impacted, but includes for what most the categories us they we give in of for we and that, entertainment, about categories when the are in Company. categories the don't pacing not large under we each entire looked that of are terms still our automotive, of surprising individual pressure below first

that to XX%. pacing down of at some to point stronger stronger us the brings a areas by total this offset that's So relatively --

entire depends it where difficult very and been of a to the stimulus, has the for year year, our small period our be, going out lot business For of in hard a on the of vaccines country, it's the time business to is entire the and success the employees. our the environment tell what transition of

Zachary Silver

us sense lot And in big the podcasting, assets just terms don't And and hands of there around you exchange where it. metrics get or more are from if a if bucket I that we've how guys? mechanisms know to that of give any know of a Got you excess prepared is credit you you that digital podcasting maybe values in big kind have but I seen then plans podcasting us you disposal can maybe the remarks, those disclose of have the don't multiples well in of market around other overall how to -- for own? you your assets mentioned some is more

Frank Lopez-Balboa

we as as is that a and our third, three the and said in in at podcasting of XX% and we've at purposes, historically podcasting on roughly won't larger the or businesses than we've infrastructure. talent mean to about regard we've in -- may our all doesn't line the opposed the talked we with Mary our but that and money third. our surprisingly, flows spending not of whether lines grown that focused as third, point, a in [ph] And smart growth get our that reporting consistent, reported With you and on going on see generally we other. of bet are assets, So arrangements business it's been acquisitions And now on to in a made for virtually with this for IT as the segment organically streaming, growth, digital podcasting is podcasting market lot there which strategy achieving know, this point C-Suite broadcast out that partnership at you or look a podcasting growth. and the has occur the and strong largest are and [ph] of transactions depending our we're the past, we've digital component profitably, know, organic

our now, key focus. that's our And so that's strategy and

Zachary Silver

much. makes Thank you very sense. That

Operator

Thank you.

the Point question from Capital. next with Kato comes of Our line Allen Beach

open. is line Your

Allen Kato

for thanks right, question. All my taking

Just the catch two the details ones. use I One, of proceeds. quick pending didn't on

then going between bonds term Did was loan term the in there said to down loan you catch think in paid split would the I correctly? a spring. be be fall. that the and the And So I

Frank Lopez-Balboa

me let repeat that. Yes,

the we turn use $XXX that reinvestment investment with[Phonetics] of So is remind we back do Allen, that broad. reinvestment million. bucket can and for acquisitions. pretty have We CapEx you

third and put it down, But we in this I've go The fourth was term we done then and DC half of and bonds other spent So, beginning quarter, ratably roughly term place. -- at of as loan the to the absent that negotiated any the why the reinvestment directly we first proceeds the -- the loan was the don't be a is use -- -- loan to pay the end when million first in the the timing, balance by it sale-leaseback term of is between which closed will that goes and which land the closing of if that transaction. and is mentioned the quarter reinvestment. $XXX virtue which

Allen Kato

around political Got a it. question the the at disclosure in And like got $XX political million close million EBITDA, then when second a quarter, to look seems I contributor contributor. fourth like it, but EBITDA looks revenue $XX and on revenue it then

high cause what's margin between the the being for So there? so --

Frank Lopez-Balboa

high revenue you margin for see the a what it's a just -- and that's product industry. It's high entire

basically And put is cost cost obviously on it so a marginal and just our to the year. are cost-of-sale

that's it's high a margin lumpy very at when So frankly, just very way. look in for but economics margin came the high out very you radio, our very us, of identifiable It as of a our local unit well. book[ph] lumpy,

Allen Kato

Got it, sense. makes okay. That

you. had. I Thank So

Operator

for management the you. that's remarks. and the gentleman, the all turn back Ladies now will over we call questions have closing day. Thank for to I

Mary Berner

We with everyone today. day. to Have forward All you right, soon. speaking again great for a joining look thanks

Operator

for conference Ladies Thank participating. call. today's and gentlemen, this you concludes

disconnect. now may You

Collin Jones	Senior Vice President, Corporate Development & Strategy
Mary Berner	President, Chief Executive Officer & Director
Frank Lopez-Balboa	Executive Vice President, Treasurer & Chief Financial Officer
John Janedis	Wolfe Research
Michael Kupinski	NOBLE Capital Markets
Zack Silver	B. Riley
Allen Kato	Beach Point Capital

Cumulus Media (CMLS) 23 Feb 212020 Q4 Earnings call transcript