CMLS - Earnings call transcript Q3 2021

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Operator

Good afternoon. Thank you for attending Cumulus Media Quarterly Earnings Conference Call. My name is Bethany, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity to questions and answers at the end. [Operator Instructions] I would now like to pass the conference over to our host, Collin Jones, Senior Vice President of Corporate Development and Strategy. proceed. may you Sir,

Collin Jones

Welcome I'm our President joined and Lopez-Balboa. Mary operator. earnings and quarter conference Berner; Frank CFO, call. today our everyone, you, third to XXXX CEO, Thank by our

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

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

Mary Berner

and were results afternoon, across Collin, this board again, expectations. good quarter's and Thanks, exceeded strong everyone. Once the

the creation also from million growth QX generated which success radio of quarter growth. of multidimensional to than our the multiple shareholder of one-dimensional Another a $XXX the and anticipated results market. represent impact have revenue include XX radio more initiatives, audio-first value of months. company over last now media propelling drivers the Multiple the over our ongoing that recovery These a additional continuing of transformation digital company. demonstrate XX% validating are

main last from radio released walks to multichannel, a building on audiences multidimensional, legacy new we new today, model month, generates multiproduct, audio-first on-demand you our the which our a we significantly presentation website, can markets in investor constituencies, transition ability linkage, created a participate, the two further our our sales model talent evolution listeners which by profitable our level, high and our At to force. and actions we've gives this drivers linking XX% deliver create business always the company flow that a our we've strategy. savings will very reductions, cost balance price sheet. more and a than approximately XXXX that cash has than stock The Since with free is aggressive in in finally, by starting the million with said, to believe these the our current don't share, fixed And where Continued deleveraging reduced net this $XX we've cost significant per what robust or XXXX $XX profile versus it's XXXX and in us by and value expands company the taken allocation. through million which find media baseline, This more $XXX debt we capital our resulted or or which drive respect All advertisers. going. model flexibility we we're that contemplates our fully assets that growth. strong restructuring, new leverages

Through fixed from opportunities they audio monthly this schedules, on even advertising giving access billions of events wide them current generate as in engagement to content more do and the on which delivered to we to now expand or radio multidimensional addition future attract with and DJs, the generate their see listeners help strategy, virtual demand, listeners as are and of a new live whom creators partners content allowing once radio, amount, we distribution on impressions current of deepen to access and singularly talent and we to variety terms While podcasts, streaming, activate type audio we ones. including their and relationships. time audio content sources, own shifted customer

audio Additionally, XXX-person of market to complementary robust to work Ultimately, who digital our this services. impressions to marketing product beyond our can comprised ability that expand market this radio TAM has package marketing our $XX the digital more digital expanded billion greatly and than radio, now market into clients. door our serve plus goes sales addressable a the walk audio of to assets core growing of total ad a us force strengthen services reimagination and and allowed with of suite legacy billion $XX

this of of in positioning, shareholder value context mentioned evidenced are value, working drivers shareholders. to key company I strategic new create the the Within already QX the and for as its

like rebound muted revenue was improvement traditional us. pandemic these effects performance. of representing the a post radio will a QX, entertainment, In chain XX%, versus levels significant been are total and Even portion of a by and respect ongoing But in of up revenue which represents with XX% recovery continued from restaurants, certain included recapturing just the to for protracted ad seeing the with opportunity impacts pandemic decline up be issues. from the First, broadcast our future categories XXXX. significant shortages of continue sequential supply has quarter-to-quarter key to auto, advertiser driver pace categories revenue labor retail pre-pandemic

several by partnership approaching including by betting as quarter betting, this professional we're XXXX are Sports operators than that booking space the in been spend. months, added exceeding general the categories has others services, government, financial track like launched in with many eight certain Additionally, betting, multi-platform the well last fire, to services last we more WynnBET new more as particular, in and levels. XXXX or with grow on Xx we're even sports sports than on business category supported

recruitment, including particular recently, events Additionally, that traction and we're are categories pharmaceutical. several optimistic about showing

for year-over-year with meaning a our that each key we whenever digital and consume The streaming expect is unique which content grew growth XX% allows take that listeners believe QX, to overall a digital instance, positioning on wherever In the collectively to tent capitalize that big approach, market, second driver from we us in tailwinds. they expanding lines, market want. business

streaming our audiences with us our So most created more available opportunity, of our content our giving we have platforms the greatest offering impressions. expansive content. grow the peers, sellable on we than our believe, any to And audiences love and our

year we in SMBs as our gain them And total, a content best-in-class company podcasting represent moved this XX% sustainable revenue our deliver average We the marketing of X once focused the quarter and spent space, monetization. our our top In into multiple the podcasts to in with continued than digital a one-stop again momentum more in shows our our of of we for value nearly our shop ranker. growth in streams the leveraged as an QX, biggest more in profitable, podcast to some XX fact, developing names downloads growth on of in listening more the model, Podtrac’s QX, podcasting in personality-driven peers. efforts marketing In top platform longest we hour, was time billion relationship and their major QX. In than solutions, to largely X for resulting generates built podcast business QX. services all with around placing a

versus million effective pairing Last to XXXX to DNA without top the baseline. fixed we the relentless, be but quarter, at judicious cost is million cutters, guidance reductions. cost it cost in costs of Third, from than increased regarding $XX $XX alone, impacting reductions we more for million nearly fixed our this our quarter XXXX highly And realized permanent year-over-year line. $XX

over of cash and leverage. EBITDA flow We’re not expenses, growth profile we course, generated $XX our free continue drive prior the from and EBITDA year, than continuously more deleveraging. as ways focus in reduce on In in done, combination operations. to enhance to will Fourth, to we QX, million cash margins significant operating new with doubled

we – a you sheet of QX, if we’ve never end result issued further after guidance, This to short of Looking getting forgiveness well net rapid the EBITDA than when our to more capital range. provide range headwind had on target further we near-term be expecting XXXX, for importantly, flexibility liquidity normalize Last PPP less And the balance ratio deleveraging. million. we already the received now out in just of and $XXX our loans still before. our climate to we in will the below our is call, profile were we will us we that the in and in leverage that that is that of in outlook our allocation term are below way so with Xx, we in result Xx. on the than while further XXXX earnings see expect And million market EBITDA $XXX this last guided initially will of

past potential While of we years, and additional targets opportunity find determine maintain shareholders. leverage have our discipline to amounts forms consideration few now growth. patience we right the our that accelerate longer-term timing, Also, M&A have to we we’re the flexibility if will the further with working Board for capital to us guided over and and of return

strategic of Given for along at creation, with a is stock current point shareholder firmly these believe of value highly of repositioning, investors. the price magnitude our attractive our that entry drivers range now we

a in in political XXXX, anticipate we outlook. significant months slightly these key a we’re The is impact beginning certainly we’re a pacing And of up our certain on surge there factor But some pacing Frank, we to political than I in three advertising ago. we said, short-term said, That the in them single comp had impacts shortages at spend being we big QX. the less versus abate high digits. is supply relevant, the component we point are our categories. don’t of the are factors in up QX mid-teens. still which pacing to long-term Compared XXXX, from experiencing Currently, the and turning Before as I’ll minute where so ex-political, on down more Delta performance. to an impacted variant and labor definitely XXXX, expect expected

go quarter, turn that, to improve the will Frank? to We expect as that extent pacing not we’ve that quarters. through seen though I’ll continue With Frank. in our the over to prior we it

Frank Lopez-Balboa

with Mary. everyone again three Thank to a months. good It’s speak busy after you,

percent last the a the approximately of executed was the This $XXX pacing mid-teen of in Third up XXXX. top better line with increase quarter as versus finished from on recovering quarter represented than plus we’ve revenue of indicated call, market. the XX% total strong continued recovery. improvement in million, our as context QX one XXXX, another We terms well

QX QX again was revenue quarter the comparison, finished versus approximately QX finished year-over-year. QX down XXXX down spot, XXXX. For bright down XX% finished and XX% Digital QX this XX% XX% XXXX. versus versus up

betting, sports government, and from quarters, categories services, supply and prior certain pandemic-related continue professional suffering experience categories and exceeding shortages. or auto labor with XXXX like to approaching we in chain impacts As while general disruptions are services levels financial, other

reductions, by $XX fixed actions side, nearly year-over-year. $XX in as response in year, salary furloughs, as last revenue. increase related including by total that quarter to cost the and was costs return million the expenses were fixed variable higher expense On benefit by took million quarter, which a of well the realized were increased Similar offset that COVID-XX return costs These of of approximately – increases reductions driven temporary, we year-over-year. to to and last partially

the reiterate of will revenue to cost million. approximately XXXX reductions performance in more combined compare resulted our quarter EBITDA the $XX than said, we XXXX expense when you Mary for of $XX fixed and that The baseline. we in million it deliver As view

higher Now million, offset $XX for Cash partially working the us CapEx EBITDA, from which quarter revenue. by $XX quarter. capital by operations mostly driven approximately $XX moving spend million, of higher cash for in to the brings million. year-to-date used was was

For the the $XX provided million to we’re we approximately in tracking earlier still full the guidance year, year.

debt we balance PPP With purposes, taxes. that received will we federal in XX-Q, income forgiveness that pleased the see treated earlier I cancellation quarter-end, note you book as this $XX after are announce as that for for On loans for of in million Xx. million to XX sheet, year. net forma be not of our but will balance the progress we would for the EBITDA. PPP the of received of net based leverage on $XXX million quarter of below ratio and a fantastic with cash towards sheet $XXX at below and goal Xx loan on trailing forgiveness, reducing net quarter-end we months This near-term debt pro the just our shows leverage to finished the

Finally, a I’d color to to like year’s add little next guidance.

EBITDA exogenous that short-term regarding these $XXX in billion-plus bear factors remains anticipate that, the can the to for million seeing earlier, first we’re to headwinds to for While and we $XXX out. long-term ready than year We Moderator, expect mentioned Mary open range our to generating next With question. questions. intact, on view net our expectations delever area, assuming our million EBITDA. $X debt line Xx less revenues we’re the in the of we

Operator

Michael [Operator Instructions] the line The Kupinski Markets. from first with NOBLE of question is Capital

You may proceed.

Michael Kupinski

afternoon. Good you. Thank

couple total seeing does for account local the category, this auto Just the in markets? national if versus of your smaller talk some a a just variance difference at network here. that you’re the versus of about variance maybe if wondering there? then or are bit a just how in then performing larger markets little questions a And you there’s I’m terms revenues of and And your terms even of what could on between point? chip matter if in shortage auto

Mary Berner

Mike. Thanks the Hi, Sure. question. for

to question, are markets, but which markets and underneath the largely small different there small performance other. aggregate aggregate, offsetting are between comparable, So markets, is which diary, in the PPM are in each first the trends revenue were – somewhat the large that,

categories are markets. a we category presence physical advertisers about, auto, have percentage markets. of smaller the and there them physical that in – more greater So we smaller revenue other And spoke call lagged in lagging

recovery. we’re it I smaller slower fourth And – However, largest more is, impacts are about there. big as question combination, categories like listenership as of performance. less it’s levels auto a and And second was financial total in down larger impactful in it seeing crisis sports hit. the impact category category yes. virus markets. your XXXX, not revenue a give on as seeing more from as side in to was betting think global think I comparable the greater the auto our you when have But a color given markets are been density well listenership The But positive

Michael Kupinski

of network And the seeing network either a the sense on of then from were and you’re national much the talking to of regarding I some get – mean on about? I’m the how you national local, versus just trying impact an side the issues

Frank Lopez-Balboa

in auto will that. business the that’s Michael, these network it categories. presence local take at national Hi, I’ll as channels obviously, it’s is best quarter-to-quarter. quarter, from the pacing the about with that you actually look is physical of varies, say if Well, Frank. lagging the in Mary impacted, and fourth followed the I different to doing the our by talked regard

other thing wanted – you to you asked The I ask to mention also autos. a question on

think the impacted. to business way about how being Another is

the category third group station roughly If if That quarter you cetera. third at thereabouts over categories net the XX% other or you revenues add like retail, revenues. et entertainment, restaurants, look these quarter, plus total auto presence represented our at company physical

those killing but a a And results, so on have the back. us that does opportunity also big once impact gives come categories

Michael Kupinski

margins the margins might think that year you where the as was you next a the digital are margins a that you. currently or whole? do us are podcasts I give let’s Mary, of are you sense And the can over two? what or sustainable segment target And the have, you wondering say, mentioned Got profitable. in

Mary Berner

Yes. would where margins $X I we’ve Podcasting margins one been before, profitable we’ve are. mean, sit is podcasting. the And say network around segment, on thing since as I the said the

to close radio services radio, the in marketing broadcast, are mirror be mirroring So midrange then the would margins is digital the network our they in and what, margins podcasting. margins streaming the highest, order broadcast and

Michael Kupinski

at M&A your next Got comfortably as here prospects gets right. then mention year. some at acquisitions, All the now of you. the doing down below leverage did maybe Xx in And looking Okay. you point,

where some a looking acquisitions just us of of terms making sense be there? can around So give maybe your you strategy in parameters might and you

Mary Berner

I to would general, identify do growth. when to say, in so fuel opportunities we it’s generally, accretively. where And we M&A, interesting consider it’s

portfolio. deal, services Generally, broadly the it a our particularly marketing If drive be and have growth, current a in area. broadcast digital if going buckets, digital to the podcasting you think to about be could they’re we improve though, to broadcast,

Michael Kupinski

Got you.

I That’s you. you. thank Okay, Thank have. all

Mary Berner

Thanks.

Operator

the question of Dan from next Securities. Mr. with Day B. line comes Riley you, Kupinski. Thank The

You may proceed.

Dan Day

questions. guys. for Thanks taking Hi, my

Just on margins. to earlier the the question piggyback off

seems back to blended looking high Your year were guidance margin-wise, to you EBITDA margins. teens, next to XX% you're where getting XX%, imply

side bigger in can that's digital do where margins I the front? probably think you you'll XXs becomes of be part think teens? shake this the and grows upside longer high As you where a Or So term? there is do those around that business, out mean, into on

Frank Lopez-Balboa

as XXXX. intensely Hi, Dan, giving costs without her the in OEs longer-term our said say of I'll following. I terms in beyond We're will Frank. take focus cutting prepared Mary that. It's remarks not guidance revenues. what The impacting expense that getting past XXXX. of reduced seen is years company leverage $XX the million And the next fixed of going versus X.X over operating the the into part you've in and we're But year

digital a as the the while driven podcast radio And costs, that's and so look margin by much And possible. the return lower going focus we're traditional as push particularly to to margin, businesses, the have in business. of on

pushing and increase that's we're the can to I margins, point. say all at hard So this

Dan Day

others? Yes. one in the split of growing sort the digital X/X. X/X, said has that's then case? longer evenly X/X, the applicable point the Or No, past, and over to the segments Is revenues the that great. three taken are buckets that's maybe that And been still the is one between you've no at of pretty just that

Frank Lopez-Balboa

more bit the Mary growth about a our services those each It's in slightly quarter, that would broadcasting, two but XX% But talked marketing represent our categories the it's growth streaming. say different. proportional, business Robust will than the little in in I with digital – quarter. generally third had we

with in X/X, They all exactly digital legs of the happy not the stools growth be business the So have. X/X, may they're X/X, but that we three growing we're rapidly. all

Dan Day

of revenues then COVID. million-plus And just rate This a Awesome. doing on more one before side. network the $XXX was sort run business

on run into any rate? this segment recovery your I spot there in revenues. for you're might advance to next And that year? a know baking as to kind get be little able more tend quickly what versus thoughts a in you then that book bit Just how as far advertisers to back of

any shaping that just be on would are commentary XXXX how front on things So up great? maybe for

Frank Lopez-Balboa

this Well, look, year. in growth from in continue to XXXX we be of constructive terms

billion the the roughly You heard continue traditional but focus and all down comment breaking broadcast $X our between growth network, channels. we we're my to it about not point, At revenue. this on in

Dan Day

And Thanks. Great. then fair. network, of kind higher quick been has last on the just near-term one, all profile your personalities

goods anything make think of advertisers Just to plays or as that far anything out? as for as

Mary Berner

Yes. No, and with of we perspective. mean bases and appeal, terrific urban strong I lot is have whose including talent of course, passion talent, fan a

I talk However, space. could leaders in radio were the

that So you referring our you're across we with want used platforms Frank, working to a to situations little more color to. and add talent on? do

Frank Lopez-Balboa

and the successful. business at of the us talking company, material. So the business size for look and is you're scheme a very said are the and But overall the implications additive not nice you when that, about particular having talent business really of the

continue through, going work to meaningful we'll our in results. have a something it's to impact So not but

Dan Day

over. my Best turn taking guys questions. you appreciate it Great, luck. of I’ll

Mary Berner

Thank you, Mr. Day.

Operator

questions closing this remarks. to any time. additional for waiting Mary conference no Berner at over like I would to pass are the back There

Mary Berner

we day. great joining us, next with and I speaking you, Great. Thanks a to look year. Have for everybody. forward Thanks, guess,

Operator

Cumulus Quarterly Earnings Call. the for your may you now your That you disconnect Media Thank participation, Conference lines. concludes

Cumulus Media (CMLS) 3 Nov 212021 Q3 Earnings call transcript