Cumulus Media Reports 1Q 2024 Revenue Drop

Cumulus Media Inc. today announced operating results for the three months ended March 31, 2024. 

Mary G. Berner, President and Chief Executive Officer of Cumulus Media, said, “We are thrilled to have refinanced our capital structure to secure five-year maturities with favorable terms through a successful debt exchange and ABL Facility upsize and extension. This is an excellent outcome for the Company especially given the generally difficult financing environment for legacy media companies. Specifically, we extended maturities to 2029, reduced the principal amount of outstanding debt by approximately $33 million, obtained attractive interest rates, maintained a structure free of financial maintenance covenants, and increased capacity on our ABL Facility by 25%.”

Mary Berner

Berner continued, “The importance of these transactions is underscored by the continuing choppiness in the macroeconomic environment. While our Q1 revenue was in line with guidance and a marked improvement from 2023 trends, it is also reflective of the uncertainty that continues to weigh on advertisers. With the advertising environment still unsettled, these new terms provide us additional time and flexibility to execute against our key business priorities - accelerating digital growth, reducing fixed costs, and continuing to de-lever our balance sheet - each of which is foundational to our ability to build long-term shareholder value." 

Q1 Performance Summary: 

• Posted total net revenue of $200.1 million, a decline of 2.7%, a sequential improvement versus Q4 2023's year-over-year performance 
• Generated digital revenue of $34.4 million, an increase of 7.3% year-over-year
• Digital revenue comprising 17% of total company revenue
• Digital marketing services growth of 25% driven by the addition of new products and investment in our digital sales capabilities 
• Recorded first quarter net loss of $14.2 million compared to net loss of $21.5 million in Q1 2023 and Adjusted EBITDA(1) of $8.4 million compared to $10.3 million in Q1 2023
• Continued to improve operating leverage by reducing fixed costs by approximately $4 million

Updated Capital Structure Activity:

• Consummated the exchange offer for our 6.75% Senior Notes and First Lien Term Loans due 2026 on May 2, 2024, with favorable terms and aggregate participation of approximately 97% of debt outstanding Total debt reduced by approximately $33 million 
• Existing debt maturities extended from 2026 to 2029 
• Interest rate modified on exchanged Notes to 8.00% and exchanged Term Loans to SOFR + 500 basis points
• Amended ABL Facility, increasing capacity to $125 million from $100 million and extending maturity to 2029

What Cumulus Is Not Reporting

At Cumulus Media’s Annual General Meeting, shareholders made their stance clear by rejecting the current executive compensation. A significant 64.87% of stockholders expressed disapproval of the compensation package for the company’s executives1. This rejection highlights the importance shareholders place on aligning executive pay with company performance.

CEO Mary Berner has been at the center of this discussion. Let’s take a closer look at her compensation and the company’s performance:

Total Compensation for Mary Berner:

• In 2023, Mary Berner received total annual compensation worth US$4.5 million. This includes a salary of US$1.5 million and other components.
• Notably, her total compensation is 467% above the industry average for American media companies with similar market capitalizations.

Company Performance: Over the past three years, Cumulus Media’s earnings per share (EPS) declined by 6.7% per year. In the last year, the company’s revenue decreased by 11%2. Given this relatively weak performance, shareholders are understandably concerned about high compensation for the CEO.