CMLS - Earnings call 3 2023 | Cumulus Media Inc.

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Operator

Good morning. Welcome to the Cumulus Media Quarterly Earnings Conference Call.I will now turn it over to Collin Jones, Executive Vice President of Strategy and Development. Sir, you may proceed.

Collin Jones

Thank you, operator. Welcome everyone to our third quarter 2023 earnings conference call. and our Lopez-Balboa.Before CEO, that under we in press by our Berner; certain federal today call today's Frank this CFO, start, release securities joined laws. President forward-looking Mary and and statements may I'm constitute on statements discussed please note Actual differ the materially results in or implied results statements. may forward-looking from expressed SEC.In and assumptions, addition, filings to a subject These based statements they're our use also on are will in of we management's uncertainties risks certain and with measures. discussed current the assessments and financial as number non-GAAP supplementary although with the to GAAP. be believe the information should superior We is useful investors, considered accordance it to measures in presented not and well A financial in non-GAAP reconciliations SEC full to release are filings. of description risks, as as terms press these our be Relations shortly Press and filed found our website, was Investor Form SEC with the in of the our call. portion XX-Q also this release before can be link I'll portion about today's Mary A for a available Berner. of it turn now our via month President of to over call and recording our CEO, Investor the website.With will in that, Mary?

Mary Berner

performances. the good Collin, dichotomy In quarter, national revenue local met Thanks, ongoing everyone. expectations, with and the morning, EBITDA and results and reflecting between third

at non-revenue debt reductions, the million And our each an revenue While peers that to $X period. our strategic ongoing we and debt when environment over executed balance best advertising $XXX causing further the X%, reducing a accreted continued the decline, specifically, streaming, additional $X improving weak a and fixed-cost investing uncertainty in since network to through operating position growing for the reason categories. in businesses, and for marketing strongly approximately and balance us our particularly spending.Our podcasting, and company's reduction.More improves. costs, total bringing can annualized during improved of continued highly persisted, XX% broadcasts, of positioned million during main macro by citing and profile, million and revenue sheet, base the increased to said, optionality, as softness value asset retiring the digital in collectively liquidity impact XXXX. ongoing sale maintain sheet services we be professional asset advertising account control, focus environment and an national in clients completing revenue QX, digital That that to among insurance the national flexibility, total million we growth lower We impact advertising national revenue, discount.These overall top-line non-core impacting saw mitigated quarter, services, areas financial, we for the both $XX in with rebound and sales national our on actions businesses financial in we the our of a non-core digital leverage, and

they increased budgets.Another shoots as some commitment same scale, radio QX. of to key value the However, indicating their July show there to to a reach, P&G spend, appreciate mentioning retail. In noting. and spending early in continue their start worth are new goods vein, advertisers worth on and set continuing the is ROI particular, desire ramped upfront green and are improvement normal they continue to ad their national for In Xst, category note, high into more that QX conversations, of of and levels spending in ROI were since who our return XXXX home packaged up year to citing products and fiscal us their bookings consumer year-over-year.Of

and revenue returned first with strong spot network and revenue pressures. these categories several the despite our see growth started of podcast up broadcast half being radio with ad and spending was Local have down back which into avoid alienating sentiment in macro Thus we local year trends listeners same uncertainty in which the XXXX. impacted heading to continued pulled QX, holiday with Continuing advertising, auto big been strikes remains and audience were have economy. X%, growth local out spending after quarters. the our been for the in in retailers the currently last by also workers, box down local have down in was far, national advertising have cautious the example, Several last to in XX%.While markets QX, for the dealers from theme revenue, national impacted more quarters, digital mostly insulated pacing QX, up optimism line is of a quarter spending SMBs where considerable commentary supported improving So for streams, better in X% to while call.As down have in our Total the September that the category have auto trends. notably and fourth compared and will to which strikes as local downloads, season, where advertising negatively local aggregate. both spot declined, tone recent markets environment have and XX% positive of down, pulled broader X% again this strikes. shut up other was markets businesses growth includes continued back give factories us local effective QX. the local Ditto about most show from striking spending two national, and

of close at represents to strikes, attention category While we spending effects still believe services recovery knock-on digital XXXX given our still any marketing business. paying opportunity from this to levels.Turning QX high the margin long-term, that local a only were XX% we is

force and tripled digital we beyond. resources opportunity area business by growth business resources digits in market to we been growth the be ad the our driven up business.Meanwhile, doing since in as and into this services organization. reduce continue our of call, and as highlighted to to for business, us the services the last we about further payoff recent investments, our for leveraging our the meaningfully that digital this make presence drive mitigate we've this by trajectory grew to quarter, build marketing add ramp remain to further depressed free as expect the inroads that in middle additional Overall, costs. to our very we've products call, digital for investment the we a process expect digital last subscriber this mid-single revenue the XXXX we billion sales from Cumulus To quarters of we Digital marketing launched significant unique $XX-plus continue national TAM continuing pressures in Boost, earnings to are and sales growth As sales year.We point, suite to we up last of optimistic particularly in we growing on growth in serves.

During an costs executed accretive XXXX. with of and quarter, without remain through focused WDRQ-FM again, maintaining million our the growth.And our a to quarter, in impacting finally, station million million this de third $XX disciplined total sale leverage the positions sheet In revenue year reflect million best company's additional on to the $X we balance the operating but allocation. of since These third to cost bringing $XX completed among annualized $XXX and improve capital EBITDA. highly we Detroit, minimis we peers fixed the aggressive reductions, actions, reducing approach thoughtful liquidity

over million par.Since in discounted completed million, a at loans, to retiring of of over of lowest debt beginning it's down a retired of XX.X% and net base we in of the $X.X $XXX our term been the bringing total last $XXX base value million. also debt prepayment million debt value We year, debt, to $XXX decade,

weakness believe time, QX, financial tough what as ahead is with political best to both choppy, a pacing remains I in flexibility national in strategic advertising the point comparison. to a way Additionally, recovery at low-double we the reducing mentioned, optionality the into this by impacted down and revenue we be debt digits will and headed year.Looking hope market maximize continuing

Frank, conversion, net flow reduction, EBITDA While regardless you. we our cost free maintaining optimistic environment.With record, performance circumstance, and Since among to pandemic, that, are for leverage are what improve on track XXXX, turn has the driven over takeouts, that we comes. and that any of I'll the the team peers prepared committed management environment we are recovery, under margin to cash in will cautiously best it

Francisco Lopez-Balboa

Mary. you, Thank

driven commentary worsen decreased as ex-political, in compared from revenue national while X.X% expenses, is a will was perspective, spot services the of of digits.From sports our a our in weakest $XX political low-double were Third by of digital the with contributing a tough cost factor XX%, fixed revenue you auto and services, down packaged $X quarter, revenue of businesses line basis, as grew total our professional relative booking some $X.X during of reductions down declined revenue. were betting well last approximately businesses of as in the last in in political General our were quarter, QX came million the also from our million financial, political million. we a at while down on revenue gave That professional categories, insurance. by first and we national in were over where and $X.X while pacing by in in differential that in had the variable local benefited each home in comparison and including standpoint, the impacted the continue by quarter lower goods year-over-year, our the EBITDA outperform earnings to political $XXX,XXX local call, last top-performing note, million QX during XXXX. to from year our in weakest.Turning Of costs and quarter of year. major consumer this That the revenue of top-performing financial, quarter category products half comparison year.We're categories, QX podcasting as services, our pacing lower to expenses and our businesses

million.The seasonal largely the to debt capital, total since $XXX balance million first from to cost by impact we we year.Also, was to the by of fixed year of offset our quarter sweep over of we $XXX to of $XXX million. to impact reduced million have the was with repay the QX, mentioned, par. Mary since million term down cash last an earned reductions of might authorized In our otherwise net the Board continue discounted interest approximately balances point XXXX.Moving cash need discounted largely expire total $X.X $X our a at prepayment negative shortly. the of on repurchase the plus Overall, during plan, share reduce working on set bringing will to this year, through in executed basis, income flow utilized reduction $XXX debt to annualized months is rates debt basis last the cash driven positive cash which our and sheet, operations This prepayment $X the have loan, through work the this million any was year cash nine we debt XXX while As in $XX $XX excess in net approximately program debt that million from million. quarter the beginning that bringing since Directors increase million new of replace existing million, in implemented reductions operations $XX a short-term to offset our

focus efforts near-term to expect debt on we However, reduction. allocation capital our

Additionally, we $XX agreements, down sale factors $X CapEx sale CapEx. can on completed impact including the in to WFAS-FM for we the our areas, year, QX.Under QX for of or received $XX was highly and million in year-to-date, million, the use pay of the the laid million previously these the the out either in several range consistent the accretive earlier million million into debt proceeds credit top be $X.X continue quarter, the we ahead, we in WDRQ-FM for of guidance of announced year.Looking $XX quarter, was will in macroeconomic to reinvest results. which though, with

the in see shoots meantime, In open to our Operator? rebound that and in continue improving operating that, a mentioned, and could market for digital can flexibility.With by that the national position advertising recovery the investing Mary pointing starting our are strongly next to year. we will be maximizing As we businesses, to to some us financial line actions green we leverage, questions. take strategic now the

Operator

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

Michael Kupinski

add -- if just I a about bit could me where to about you operates the radio it's of wondering cost you're little And thin surprising that. taking and there. staff just and forth. out more Appreciate because such always you bit talk was so talk a Can little kind color

Francisco Lopez-Balboa

external areas a Well, and Michael. in estate, first, ours. get that that's are reducing the actually that, very in take rates. we the continuously in terms We're key look at very efficiencies different not off areas way, force, sales like we're start renegotiating use successful and I'll being and of footprint of I'll around where revenue, we impacting increasing continue and our and are of also costs country. by our The focus at we're been our areas we've and contracts external contracts a real and operating judicious where contractors to possible, better

Michael Kupinski

go cost opportunities in what as Got think you. go the the QX? much Frank, give you sounds would that continues into might could little or you QX? we Are softer. little further the into you a a opportunities it And bit talk as be us you QX, now might to color on like, you especially what Or you've cost-cut for do as about some like as just can cut be, be outlook which there

Francisco Lopez-Balboa

QX process We're on year. update next an our you now. give going budgeting through We'll

basically we did on discussed and up, in million process. out the will these diminishing, out million the to XXXX. top look our as far. reductions, be part we've mantra of that imagine, magnitude compared cuts, this again, are is costs all and cost to be equates $XX previously. of year, what cost can Our this budgeting ground XX% And fixed will taken But our of at $XX take our more And as to base you fixed from we script, cost approximately cuts, the these of given cost beforehand it

Michael Kupinski

thoughts of I wondering digital that kind of there. know us forth and XXXX? sales staff some and just you. just in digital marketplace especially been of kind perform, you've in can Got hiring -- us give Can rebounding into sense we kind as quarter, you of have digital thoughts some of And if and thoughts a so give rebounded you the you on itself the we're just kind go that general, in should your is how if

Mary Berner

Yes. I I that. can mean, take

very Our the the nice growth. in first vibrant remarks, consistent to and prepared in of digital We've at very, is marketing continues XXXX, in services continuing grow said pace had XX% XX% grew business, as this grow. we quarter. it's half and a It year, this to over

we're very bullish. So

investing prepared said we are business. the we in As in remarks, this

us. last buying We have now half for our tripled something else great our what's the sales force that, us customers, digital since our of also call.And new is are customers, from

example, for So, radio. broadcast

products, selling with getting which we're more the entire more to and we're So customers sellers, is really them more strategy. relevant

the XXXX we're there's the beyond. nice So, very very, on business, in and business of terms and bullish believe a that growth in there

Operator

C. The next James question Goss comes line with Barrington from the Research. of

James Goss

change? advantage. question is, services how might Okay. rapidly. services, ad tended digital time X/X, and more might Earlier I greater be would the thinking certain X/X, changes you thought that ones have to it roughly podcasting, you mix look it terms at mix relative digital traditionally, over grow between be One have marketing on, but of marketing be in that How you sales, where I'm thinking are digital businesses, I if the as X/X that digital podcasting,

Francisco Lopez-Balboa

take that. I'll Jim,

growing in The a correct. in growth we the business pleased year. you're podcasting first the half and after business, So, the quarter, of some we're to returned third decline is

would our lines still largest sales But business, And on And of X of still will digital business lines. roughly so, and grow. continue services there's X/X, business the execute But part very now, buckets. our expect. strategy services we're the we we the from X/X, the really will are is that become business, digital that X/X our part marketing fastest-growing business as that between that we digital the the marketing to base focused growing digital naturally on and

James Goss

to not some by targets be enough the work be of to economy client services And marketing that have would might some a make been the with? extent less challenge that Or engaging that point, you? big the having impacted challenges at Okay. the base all this to digital them really likely is to

Mary Berner

on It can depending -- is always the businesses, we're of those on because there's because small and are really in market, new so local pile of space Frank, business, I say there, kind Yes. depending -- the category, depending always a you on on the And here. there dynamics starting. been affected, growth businesses, much and very hasn't the sitting businesses. of dynamic would businesses medium-sized mostly the

for a as seen we've so, business said, -- And I it's us. subscription also

revenue this So the great recurring model is foot a in door.

So once Frank, have know, -- I we strategy the sell are sign relevant it's of view products.So, you them do able point another them is that up, more been that is we don't or... to

Francisco Lopez-Balboa

say even businesses we're base enormous No, from where that other economy, an impacted starting be I is agree. some opportunity. think it And the there's the though to thing may I from about

we're so, concerned excited very not open business. which about that for the space a scale at It's we're about. And yet we're white us, really new a field marginal big

James Goss

of raised Well, interesting in an that Okay. and you sort base. a point customer this isn't one-size-fits-all

advantages customers have also penetration within can You with services. increasing additional by existing your

I I if appreciated don't that think much. as I know

Francisco Lopez-Balboa

Yes.

James Goss

a will usually early new some you your not such or podcasting, within over time? the particular hitting to on within think, we wall grow more as is lot radio to substantially room there your Or point any view? great as from Are rapidly of might phase run it, podcasting, it's of relative grown, comps. category do the in that Also of advantage a be than poor or

Mary Berner

Well, average the focus -- advertising we're it's -- really monetization. and our on is

other content. rep we generally, So, people's

or and what us, in develop So what, for rep failure we sits we success ourselves. who

bold in us that on talk well the personality-driven served news or So, niche. very voices. focused big quite we're And that

we're happens, X podcasts we have we audience grow -- to in able the XX% top the we as expansion, XXX. up pretty again, starting that to as remarks, September. our as mentioned so, have And much prepared And in in monetize.So

and ], upside and Mark Wallace is Gubben and Rich -- really, got radio Levin inventory. shows, us into also Ryan voices. good Eisen non-conservative Wire big and Bongino of Daily we've non-talk bold talk developing got and into the other Shawn really [ bunch a have We for But -- we've --

So that we're well. on as pretty bullish

advertisers, other at back. seems be growth rate be but like the the very in national it of pressured to I'll with coming half, Although first very, -- the was

James Goss

between any One of a So, one. between ad it Station national be there a the and national advertising? Group's versus Okay. a difference guess, of I last national would one spot. advertising Westwood appreciable And national Is more ton

Francisco Lopez-Balboa

all It's difference. real no There's national.

James Goss

Okay. All right. Appreciate it.

Operator

final Securities. B. of Dan the question Riley line from Day The with comes

Daniel Paul Day

the you Yes. Appreciate question. taking

a question and Westwood X-part segment. got the I One So in on then network

seeing ability put first, then, there One, One.And whether back sports just it's a back talk to improving on some anything where sell in Westwood it about you that's to a more that measurement to moving macro good is this attribution feel that feel get So, can and was Westwood there few the rights Maybe to performance live or years year to that just need I'm in the with you you the to there's or second ago? content to about can between other radio. growth? inventory invest anything if to your get your the One live different control do technology, specifically if programmatically, you better Just side, and you your invest in the we been the on versus things been nationally forward syndicated impacts all content? has on whether sports materially talk at wondering decision Westwood a there ratings dichotomy live less sports

Francisco Lopez-Balboa

really pacing the we and With but for year, the quarter, you sports. fourth at on demand we quarter, Dan. actually first high sports, your flat That's know, the the that, to take to part point, your advertisers NFL, pacing look in started of have live large quarter. is regard last pretty third which close I'll as the our which which obviously, from when underscores the in in it's versus fourth question

and increase away type the to with the we'll NCAA, opportunities, business by said that and weakness sense. plus when at digital, of ways from But So, including Westwood we're that that revenue-generating looking rights, we're in analyze with the general weakness at NFL always we see this all the future, really opportunities. having any national pleased improve contract further at sports makes national seeing having at market economics point is if network portfolio.With that, look the of it our to very the market, looking and challenged is advertising regard One we're sports.Now

continuous years virtue of network revenue comes And by And a always And a in to technology advertisers looking that's programmatic sales, changed market the the us those that it all several the dramatically from market than targeted for and it's opportunity. be continue cetera, local market So something, work will et that's the over whether that's to market. forefront something to focus. at more ways and we're the has -- probably alternatives. go in maximize a progress past

Daniel Paul Day

to margins it's relationships. -- revenue. can been my podcast while since gross being that that of anything see recently about profitability profitability It's I those on the growth. to then, talked we've of improve a nice you've And a there tend it relatively provide experience, podcast back In while revisited rep mostly been done to to podcasting it's kind we've segment, revenue? update since the of know, the margins. Any have within low you you

Francisco Lopez-Balboa

] Mary large hasn't a for [ as and margin really we're by rep profile The changed podcasters. discussed, because,

like we which expensive So, studio saw perspective.One can the risk first in from we of some the the things they're we're the is, of that being advertisers, of studio which advertisers. in year half direct successful, business, had but response it's they're revenue national model, share in particular, we do a embedded because declines focused when a work don't with on the to podcasts a but of really take

perspective broader the some fixed-cost appeals business, not to the but a business. new which a And risk but that also balance a portfolio, our portfolio. advertisers. to to our our of margins of it's do we'll continue But So, are from of national XXs in talent brand back, it's coming for -- environment we're with subset low because podcasting advertising the that to the the adding we're pleased part their advertisers of growth and also

Daniel Paul Day

in last talk balance the using than the just for Got then be should this just more your other like it. quick. on anything rate there Is debt And -- point. at for the of down about just hurdle moving forward. focus mechanical, it really X X versus just has sort loan else paying that And cash balance better the anything decision the to yield, quarter Is to or there on a and those term which about notes the the think there? between is

Francisco Lopez-Balboa

necessarily It's the not better only yield.

my in flow loan a prepared mentioned a the leverage have I the at we has at remarks, once term to pay As above mechanism is end level. back that cash par any excess year, the our certain of

our strategic And focus at so, in flexibility the our on and of back flexibility, allocation, opportunities don't any, know, as is buy balance to financial the things to that end X discounted near-term having cash our be, for focused is terms did quarter, you our year. but on our the are pay sweep a of is third But with debt to we know maximize we we not around. flow and only being that counts this compelling.In to liquidity able versus that remain come from will $X.XXX of very if there to that extent back the mechanism. prepayment But is that capital not equity, sheet and reduction. Being able excess just planning par -- what at the and perspective, pay

past to of reduce of the robust, continued X equity dramatically to we're which we've X to that moved the holders. not quarter debt the is thing years, from existing quarter. the But company only holders, benefits that all accrues debt the fairly but it's over So proud the

future. and very benefit that will that's operating is something in and the -- So leverage meaningful from

Operator

this There at are no additional questions time. waiting

like now any would conference management to I remarks. the pass for team to the over or So closing back additional

Mary Berner

to time, Thanks, Thanks. appreciate we forward everybody. look your quarter. We talking very to you next will and much

Operator

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

lines. disconnect now may your You

Cumulus Media (CMLS) 27 Oct 232023 Q3 Earnings call transcript