CMLS - Earnings call transcript Q4 2021

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Operator

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

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.

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

Mary Berner

our executed a XXXX core reduced strong leverage, rightsizing achieved primary This to value. on substantial done sheet, putting once-in-a-lifetime recovery revenue our flexibility XXXX, greatly digital, I is that. relentlessly that the sustainable additional in these our have Collin, good just our in hopefully, second, grow meaningful say bolstered company year by global is massive fixed the maximize accomplishment. a and delevered of reflected a shareholder because company, and today, further materially a progress efforts, why which for financial many improved disruption we balance pandemic, position we true position to operating which in performance pivotal our can sheet caused our trajectory; and believe growth we delivered media And despite shareholders. to in balance and in a business, of audio-first value initiatives, Cumulus, we've XXXX Since year good two significant the in goals: radio are was and on Thanks, costs a and focused first, everyone. that afternoon, significantly as we growth particularly for our generate restructuring

flexibility strongest acquisitions delever our With to liquidity, our execute to compromising among by the return year-end, capital second significant positions in to half to peers expect without the we accelerate growth. which and us shareholders Xx below balance to accretive sheet to

that's and So and punch potential cash repositioning. and leverage, the strategic flexibility high investment audio-first Revenue return conversion flow growth, capital line. with EBITDA of free growth, lower

year hard business our variant drill capped headwinds develop the improved strong to opportunities. shortages performance continued of was Broadcast of excluding revenue in versus To political. and new and year up fourth quarter the we combat year Total performance to chain bit the surges, comparable worked a than major two for period off a successive X% and XX%, growth. more, for and XXXX. the each recover find labor down substantial So and grew and supply especially more XX% solid to quarter revenue

national and generate premium, sports including example growing betting assets the multi-asset, local our do how outsized partnership WynnBET to pursued category, aggressively constructing we with and a of multi-platform perfect in can mid-XXXX, example, For a we value. package

more strategy space. early can relationship down shift, in our the later, merger this as subsequent to failed deal value WynnBET's provide of is the touch and platforms result on illustrative of that SPAC whole partners a will a as wound which While Frank

this from XXXX. partnerships nearly than developed XXXX, growing In operators number fact, category, with in we more XX the betting tripled sports in

in of bright performance revenue. of generated growth more spot year the businesses, XXXX company's XX% XX% the digital was representing than $XXX revenue, our which of and banner Another year-over-year total million

Just scale. in content was do which up across the we as top aggregate our commercial one. as billion on only services that podcast podcast operations, streaming, the We audio-first generates over and Dan annually. within and networks downloads X.X with at to broadcaster shows is growing our of distribution monetizing, in five in personality-driven as organically podcasting, part Shapiro all and of were Starting XX% notable, continue top the we broadcast one Cumulus XXXX from biggest in Ben more space names what and successfully podcasts. profitable some which represent And and we're of built multiple Bongino, the strategy, And network, The these expanded the like include platform podcast-native genres. than of best: expand into with broader promoting talent already digital in marketing XX has placing were podcasting podcasting. day

we out local our mid-XXXX, podcast rolled strategy. in Additionally,

with growing. this strong of start January, Entertainment, sports journalist, we're podcasts and Kent, reality of After studio, Eisen, the TV successful to million rate are As already Lala XXX Imperative award-winning local a downloads our achieving aggregate Rich launches in podcast podcast new in XXXX. off run six personality, and with a

ago, analysis Bulwark, we and Just a Sykes. partnership political conservative new Kristol leading a weeks commentators, with news launched Charlie founded The by Bill and network, few a

expand premium ways For to our and our content. distribution inventory extensive the of exclusive of streaming continue platform, we find to leverage

XXXX, to we iconic addition station also many in distributing radio additional well outlets increased as new our local as of use distribution them through our the developing Many are our Odyssey content to In broadcast already we other and by brands to aggregation generate streams adding instance, existing platform. impressions. of For the content platforms.

views. monetization a as increased driving substantially We strong local Zone in digital marketing X creating us and allows leverage Facebook, its original audiences, as valuable These the their strong has meet new YouTube suite generated in The million video-live digital and Twitter increased more new case, services that natural year-over-year. broadcast on substantially kinds up and needs. our source XXX.X sports full content relationships well deliver stations. services to Nashville, than products, grew distribution of XX% of programming as know-how single local XXXX for to our extensions which of opportunities in streaming Twitch, more which brands Local its as by example, our campaign well, act digital and For than marketing to SMB sports

able develop to five ad than bought be drivers employees to revenue solutions we the Cumulus, nice year. were market SMBs Additionally, a X% growing that can fewer XX this unique of from year XX% This know-how, with to given estimated segment, be that were around $XX only constitutes approximately billion which growth. and

lot products of such, partnerships. existing as ourselves a this take to we that or as see we in to room area local have who and add market So we access run through create additional sellers digital can to

XX% reductions. our growth and So on EBITDA moving from but not basis, to by XXX% driven ex-political revenue meaningful also an revenue improvement year-over-year cost in XXXX, by only was expenses, up

impact and benefited year continue progressed baseline, we our increase the personnel fixed million no Overall, We than we technology actions came costs to XXXX, and point reductions have more improvements, reductions guidance back achieved XXXX our to implementations, business actions. as process in from year-over-year. by fixed contract reduced to cost taken as the of a half these basis on $XX facility compared virtually EBITDA cost with XXXX the renegotiations with importantly, margin rationalization, in XXX throughout increase Most revenue.

we mid-XXXX, during net to balance reduction that million by Moving XX% approximately we year have $XXX reduced of debt million past the down million debt COVID-impacted over sheet. the and $XXX Since paid the of two more In of finished $XXX million cash. $XXX or with occurring than years. XXXX, with debt

executed one-dimensional multidimensional, has business a from multichannel, of also further sponsored the audio-first from and Martin, leverage multiyear over dozen exclusive delighted media talent, like a year. X.Xx repositioning network at hundreds of and Instagram an partnerships, of one as create deleveraging XXx our top Remy of and I one On its like speaking a and a brands we company. new unique our utilizing and mentioned multiple strategic devices declined major local NCAA. schedule podcasts radio highest relationship pandemic were exclusive social on we at with multiproduct, national net Ring.com. in also earlier, significant of on our with, advancement of podcast to ExpressVPN local on-demand, consumed distributed expectation to multi-year on bespoke product, a the was renewal of assets, a set rapid leveraging to particular, to in brands way during And radio-first for consummate end YouTube year platforms and our XXXX of the live broadcasts talent content assets, as XXXX the this Our

we licensing content As to position across NCAA this March exclusive broadcast One's and NCAA Westwood into partner all deal as distribution the head the digital sports. maintains radio, audio, Madness, across

these believe shareholders that detail. to market call multi-market in Additionally, in return the sheet evolution. the revenue. multi-platform is new we're more increase this there in to tremendous a will are balance ad and developed our strategic the solid With national for upside the With and examples and financial through rock to over Frank local in several back our XXX% numbers capital half, shareholders. our And outlook, to clients, of positioning, that, a progress in we to and brought continue turn now results and package strong making than more I products just Frank? few go for we our resulting outlook to potential

Frank Lopez-Balboa

Mary. again. It's you, all with you great speak to of Thank

small was Cumulus. was QX I'll $XXX more numbers quarter political, increase More continued year XXXX by a mentioned, from quarter in the versus compared X% and revenue XX% the up be total base details. we in a through a which in XX% finished more of Professional as our versus from significantly pivotal revenue was and XX% continued revenue explained down Mary services was XXXX. This basis down third most a remained Auto, year-over-year standpoint, to about quarter's million the reflecting coming improvement represented our million, we're We strength on still up category XXXX a periods. XXXX. X% Digital prior Political off-cycle As year. versus improvement excluding off is in year-over-year. finished are fourth From of also as the catalyst about weak direction. we in this to total XXXX, quarter for quarter than right be in above an revenue, QX betting, its year. with to walking strong notably, XXXX XX% quarter XXXX. comparable sequential down start the as the down versus $XX.X sports travel, as the and growth, continue which, entertainment continued year-over-year which well previously, course, saw trending increasing down

On year-over-year, million The combined and in the in temporary for costs in increased expense the expenses revenue. reductions which performance approximately by and is XXXX. driven total the higher to primarily the costs quarter approximately $X the as quarter higher related $XX million, million return by well resulted quarter of up EBITDA $XX variable of as revenue fourth expense side, of from

Excluding up of $XX EBITDA political, or the impact XX%. million over by was

said basis. third our ex-political digital businesses year-over-year up to XX% or quarter led revenue, on of fourth Historically, our our a growing year digital about million we was results, $XXX the full Moving results. total generated represented an XX% way each which to on have revenue. three We Similar digital of our XX% a that basis. year-over-year

the up that of making third with the than with fast-paced C-suite number, streaming now So more growth business that podcasting, represents a balance. in and

total increased approximately expense On side, the year-over-year. expenses million $XX by

quarter, increased with These by increased part the well as during cost costs offset fixed and year higher reductions the the the temporary As variable we aggressively reversal fourth in were increase have driven was by for the costs in as implemented the reductions cost revenue. quarter.

XX% continuing to $XX approximately baseline more growth continue ways $XX As and on to was look Mary expenses XXXX an costs than now $XXX XXX% down ex-political to invest basis. or versus year approximately million we the in are to our our compared million an XXXX, fixed EBITDA in of for million while initiatives. reduce our as increase mentioned, for

variant the challenges to Omicron extent chain auto has variant XXXX, ahead year while first still ago. Delta nearly we're did of supply the experiencing business to shortages, impacted labor not from the Looking the a the that and quarter

We low versus are XXXX. currently teens pacing up the

Mary to our partnership As concluded earlier, than alluded WynnBET sooner expected.

and as payment relationship as well free sponsorships return the in committed that the to preserve QX, we through While of unwind previously of much we're the resell. inventory a resulted in QX termination now

earnings EBITDA due expect would $XX the of expect provide WynnBET delay We be $XXX will Also, auto modeling, means on with XXXX. harder to in range XXXX. comparison to around CapEx issues supply relatively in in you detail $X approximately remains of of our pay flat termination XXXX, to million million $XXX next the taxes the to $XX while comparison taxes the million to partnership continued of of more of cash in unchanged, XXXX, we be the guidance cash we XXXX total the achieve. range upper Copy for call. range in half million And in to million and our chain with to recovery

quarter was from quarter operations to million. for approximately Now million. the the CapEx $XX moving cash sheet. for $X.X our was balance on Cash

million cash of the with from PPP year and $XXX performance, of $XXX the million received and $XX a cash down full from For of Combined of operations with debt. our generated We loans. X.Xx ago. year, we million year ended forgiveness with million X.Xx of finished net the strong leverage of net $XX.X we operating year

we revising long-term are to our we As continue below below Xx. to target and delever, leverage X.Xx to on focus net

mentioned, strong the the potentially liquidity end year be the in flexibility to to our this As by new clarification, shareholders questions. reach we are for is that, X.Xx the target of expect open able positioned and not please a With leverage the at a of to time, as end our we new for below moderator, half Mary of return and at maintain line the year, to being M&A. to Notwithstanding target, Xx. position expectation the the second but below accretive same capital year,

Operator

Our goes is question to line Instructions] open. with [Operator Absolutely. B. Dan, Dan Day your Securities. first Riley

go You ahead. can

Dan Day

my just the Hi, guys flow taking to the questions. for EBITDA free one, on Mary cash and bridge. first Frank. Yes, down Thanks

flow CapEx, about sort expense, just so free So through can expectations of went so we the is expense just any the that, tax then the to know through of working you that straightforward run down time. more could from cash cash you one for if should pretty sort where things interest and that one-time I think missed I get year, land EBITDA XXXX. to just for capital for And

Frank Lopez-Balboa

It's I'll Frank. take it, Dan, the for and thank question. you

million the will range out. tax range the expense mention interest the that cash where is that million, We this on taxes we on fairly model and year, EBITDA and straightforward So of $XX in did in earnings. will based to and end CapEx be year of $XX up cash actually vary

capital to Now the the of year use slight reverse as this and as with levels the our as regard of increases would revenue we working normal of through go recovers. the to collections should I working through that a revenue off, itself. expect small cycle we have working But capital year saw a But earlier what capital, in part year. use will early similar of

Dan Day

just Great stronger I strong, slightly network modeled. on The line The than side. really one at year-over-year. and network thank the revenue least you. broadcast And looks had down then

how should of thinking in anything there the about to point Just national and of quarter network and spot local forward? to kind we moving versus be modeling sort

Frank Lopez-Balboa

Right.

middle So on on also, long and time slower. a but of Southeast, of Northeast type really terms you quarter, would the mix quarter, guys Omicron we in that feels the the in And impacted the fourth it definitely based business. network ago, the of being particularly band fourth in network had say had, a and like I and is the

in And I [indiscernible] as a the categories as down I which in basis the It all it's not to decline we're would think teens, a view network teens, but would as low really total was up, pacing improvement mentioned, on our well. So of I mix. was significant. quarter anything up in low fourth the include

Dan Day

Great. just me. And one last then for

lowering down Just target on Xx. the leverage to

walk down it you or on Just more could on sustainable did than why just think you that? just you of Is thinking cyclicality decision if a you provide the that's the to business else anything that us your the through bit? can and Xx walk

Frank Lopez-Balboa

Sure.

me our is all, Let leverage the mentioned Xx. clarify net X.Xx, new remarks, my target and prepared at from I of end down for

that. please So note

we thinking achieves stakeholders of and way it. let our think lower me the objectives So that look, all about go through benefits many that leverage we're

time, flexibility that and gives arise; M&A lowest second we've through dealing with our audio as also more industry, not we the First, lower having the is stock; fourth, further do flexibility risk value in add half third, it leverage to in And gives unforeseen and capital. accretive in buffer the shareholders lower only of should the the learned potential financial with our combined lower in positions the premium distinguishes us returning additional the leverage events; around shareholder lower price pandemic, secondly, risk on over if having produce which believe leverage flexibility the us opportunities having to provides us and return leverage stock with having levels, from all from but more well year, us undervalued. enhance together, we cash the to us peers, equity

Dan Day

Well, I for over. time. turn your will guys. Awesome, it thanks

Operator

you, Thank Dan.

Markets. Mike Mike, Our open. question NOBLE goes to your line with next Kupinski Capital is

You can ahead. go

Mike Kupinski

some into of the – kind quarter. has you particular up you're the fourth as your things of a the curious, spot quarter give quarter? in Thank table that picked maybe if on advertising And the and kind was were first just just Do that categories I flush some first and feel core quarter. momentum going you out like quarter. that seeing in congratulations on the of from particularly the you left go kind can given of the seeing to and was QX, you money strengthening that on there in Omicron have things momentum sense in that of you're me

Mary Berner

Thanks Hi, the Sure. Mike. for question.

Frank Lopez-Balboa

Great.

So…

Mary Berner

sentiment. would sorry. seeing Yes, I improving say definitely we're advertising

As got you exceeding And very that we could categories mentioned, are several pacing. now XXXX or in to our see level. that we've close

an seeing think, in sports I financial upsurge one. you're services, big is betting, professional I mentioned, general So government, services, as another

then big categories, also leading and physical you've that seeing category. one, in to tell continue but some that and big in course, and we're of are is And terms would sluggish, auto, sure And grow larger there markets potential what categories over, ones The in I is So more some the is deliveries. of – those which restaurants. it big I'm quarter, shoots get betting sports emerging first are to you green presence-based way a crypto it's there seeing we we're more – but be certainly the then continues as not it's – left start pacing. got year-over-year events, to they seeing

say hit I nice seeing. sentiment middle in that And the – would change in it's Omicron So hard, December, the a country. mentioned, Frank parts the of certain of in suddenly especially right we're as

a bit is pent-up there. there of demand little So

Mike Kupinski

will prided in the a and us XXXX know, all thoughts you Can fixed you going about I cost how on go about you and XXXX. if in yourself Particularly And I anticipate talk Mary, costs inflation we see as can little the you expenses forward? XXXX? you your give we into XXXX was that that just that see, are – things you expense growth that reducing view how pressures wondering bit significantly given

Mary Berner

I managing contracts. our negotiations about forward expense are growth right of thousands expenses, now. thousands that But process is looking say now the our focused footprint. going real process disciplined we on would We're are in at contract and and relentlessly improvements, of very, estate We're very on at what not guiding we

reduction. We're we're terms of we're executing – in at disciplined. So good expense very

as say, do lot uncontrollable way variable… continue to we you expense focus there inflationary we of a than But other what as or expense a not anticipate obviously, to certain increases. offset – So growth,

Mike Kupinski

for those as can much debt to that teardown. then you further you I real sales? the of spring terms terms sales, allowed idea us accelerate teardown, of sense And of debt as as not you kind terms already your further of which us kind real that Can – mentioned real you your estate? But impactful may imagine give in in real sold. yes, of give or have in the estate has estate of us of thought estate some the you've would some magnitude you of

Mary Berner

– we've mean, the the your already of. Yes. opportunities to taken of I point, most advantage the big

when lot lot XX-something got a So a you've leases, you've we've markets, of lot of of got them of got buildings, many owned. – a are

scrubbing could opportunity every we work where reduction single to a differently. learned just its else, in and Like is So of space. we see lot everybody that just we're market the

sales And entire that's so, for people. our organization now And example, largely works remotely. XXX-plus

kind to I of thing the you want to do know, don't that's at. Frank, that? we're anything looking So add

Frank Lopez-Balboa

would our related reducing Yes. release, we you'll of million. restructuring press in of did the The $X was excess the charges fourth I to only in in thing quarter, Most really add that have and footprint. note estate real

the we that so a may it's same be to a of cost just actions this right need. more the but for what took and last look space lot improving not continuous at there's size, And we're a at getting structure, we our look year, lot year, going

Mike Kupinski

ways be that. ask are in of And that Got favorite not What I thought may terms I your that capital? I you. question, return great you think it's it Obviously, might contemplating of are to answer this anyway. able but know you I

any that And so, preferred are you are at point? this there considering ways

Frank Lopez-Balboa

that question. dividends the capital repurchase of if you ways stock to includes have capital, as can at right return and the ready we'll standard publicly, Thank ready evaluate asking for talk time. which we're you we'll it. the more and But to all we're But discussion about return imagine, once

Mike Kupinski

would but I you anyway. I Thank much. I suspected that, thought ask so

Operator

Mike. you, Thank

Steiner JPMorgan. Avi to is Avi, goes open. your with line question next Our

You ahead. can go

Avi Steiner

A good of questions and everybody. you here. afternoon couple Thank

get I want to off, First just a sense.

sports of gaming continues to a mentioned couple you'd think I grow. times

there's given trying other got Caesars I've maybe wondering about those that more. the kind I'm day. talked a any couple pullback within And also WynnBET you're – then terminating, understand of seeing and comments if You category, I'm those different from to And factors.

Frank Lopez-Balboa

Sure.

in sports the by in first nicely XXX% partly we our pace WynnBET, over fourth quarter, the quarter, category. the in And very the just look, continue up in quarter driven category. So betting fourth to was in the growth

So – but business – sponsorships of more most we states financial I'll WynnBET in terms online. are importantly, and resell. quarter first to over the of have do with XX about sports inventory We implication betters. in the talk impact, we'll the More coming

We that unique assets the operators. group to have a can of value deliver the

we And same of to we're that or so feel component inventory be inventory that comfortable sell large that to able going the and not way. exactly

one how been for things and be Now the category. how of and we advertising predict the will long robust how can't is large – has the

top And category so there's we WynnBET. will be that's and something that changed that still but to a remain to hasn't us, believe going be regardless for all seen, XX of

Avi Steiner

that unique certainly category. base is asset for certainly appreciate and noted, the I Sure, that

kind characterize side, podcast of I as I third heard now growth. digital of than obviously, more the a you commentary the it's if can, it's correctly, On And it. good think I opening if

profile industry business as podcasting So the some margin as around has curious evolving the bulking has I'm well, for grown you evolved that up. how has and your been business. and is evolved there

Frank Lopez-Balboa

Yes.

as So stable, an component a business, consistent stories we've sales do we broadcasters we on and we've represent large podcasting have partnership our talent, with of our and the grown advertiser but specifically podcasters, from – O&O we them own basically it's – been perspective. that it's

studio. of of in or production ton money So terms that a not spending greenfield in the gives us of a be benefit

we've podcasting and And continue profitable from as consistent in day the we've margins this, one. be grown saying grown been to so fairly steady grow. And we we've

any add terms of but of margin incremental grown for in the but the there catch given part important more to of margin that and to the support that, of nature sometimes growth than and profile infrastructure to it's rep said have is Now a nicely profitable the business, it's the business. it's an and revenues we'll different the investments, business. broadcast Having the that our to profile while change been up hasn't the material profile take business

Avi Steiner

pointing which your credit then of low leverage, Great. noticed And kind to certainly sector community. hasn't the

again, don't the callable, you around You've in the the think is I I to that time, but rates what, got here, And how if right moving notes you. stack for I'm are your quarter Obviously, you're cap you. [indiscernible] opportunity. want questions. direction. And optimal Thank that comment know, potential over about appreciate leverage all is have you moved curious on Frank, taking your

Frank Lopez-Balboa

net look, Well, leverage we about talked Sure. target. our

have one lot a of – I sheet. in the of flow things also in leverage on we've of We things the addition all reducing of increases about the And earlier balance leverage reducing business. cash the cash the terms to answer, an is mentioned

of so that. And we're confident

either exception with And so we're secured ABL to it's July right now, stack, very to the have that, then, later, we'll the refinance, we're the aware the obviously and at can all and top more reduce of closely. at And just on of bonds regard are X. With capital we debt mind, as following callable structure. you imagine, that cap very time market those look

You know our pretty inventors well.

lower indentures We and our and debts under and have our flexibility secured of lots going lower lower.

for leverage to secured your key unsecured seen, if that going to needs I So dramatically, between be generate to lower, cycle good going is our and net our us. growing but flow virtuous the creates don't thing absolute leverage things is is more and a leverage going net cash it's change know and lower, question – we

Avi Steiner

Thank you for the all time.

Operator

There Avi. are registered you, questions time. Thank no this at further

pass the closing remarks. management any I'll over for conference to So team the back

Mary Berner

quarter. again good a all look you Thank to we your everybody. and evening. next speaking time forward Okay. Have Appreciate

Operator

call. participation. Thank concludes for That your today's you

You now line. your can disconnect

Cumulus Media (CMLS) 24 Feb 222021 Q4 Earnings call transcript