Cumulus Media Beats Q2 Expectations

• Revenue Declined

Cumulus Media Thursday posted a wider net loss in Q2 as revenue slipped more than 7%, but narrowly beat earnings expectations and cut content costs more than 7% as well.EBITDA of $44.66M missed expectations for $46.68M.

Revenue by segment:

• Broadcast advertising, $251.2M (down 7%)
• Digital Advertising, $8.1M (down 16.4%)
• Political advertising, $702K (down 67.7%)
• License fees and other, $11.1M (up 9.1%).

Broadcast advertising further broke down into $141.6M local, $22.8M national, and $86.7M network.

Capex was $10.1M, mainly $6M for a new office and studio in San Francisco and $2M in platform-wide computer upgrades.

On rthe earnings conference call, it was disclosed that the two previously announced asset dispositions - land in Los Angeles and Washington - are proceeding toward the closing process with proceeds now indicated at $210 million, up 5% from earlier expectations. Both transactions are expected to be finalized in 2016.

Management spent a lot of time on the Q2 conference call discussing its recent priority of maximizing its sales skills and operating personnel. One analyst noted this is good - it's always best to have your "A" team on the field - but it does call into question why this effort wasn't undertaken earlier. And can even the best salesperson sell a product whose listenership and competitive position - indeed, relevance - are in sharp decline?

High hopes were again expressed for thr NASH country music format initiative and certainly there are some incremental ad dollars, brand awareness and operating efficiencies to be captured from a national rollout of NASH. It's a nice product, according to some analysts, but it's not likely to move the revenue needle meaningfully.