Cumulus Media Inc. (CMLS) filed Quarterly Report for the period ended 2009-09-30.
Cumulus Media Inc. is a radio broadcasting company focused on acquiring operating and developing radio stations in mid-size radio markets in the United States. They provide sales and marketing services under local marketing management and consulting agreements. Cumulus Media Inc. has a market cap of $91.6 million; its shares were traded at around $2.2 with and P/S ratio of 0.3. Cumulus Media Inc. had an annual average earning growth of 9.2% over the past 10 years.
Highlight of Business Operations:
Net Revenues. Net revenues decreased $14.8 million or 18.5% to $65.1 million for the three months ended September 30, 2009 compared to $79.9 million for the three months ended September 30, 2008, primarily due to the impact the current economic recession has had across our entire station platform. We believe that while this negative trend will continue through the fourth quarter of 2009, the rate of decline should begin to become less severe sometime during the fourth quarter. However, a more specific projection is extremely difficult to provide at this time as one of the new trends we have noticed is a significant decrease in the lead time with respect to writing sales orders for the sale of advertising time. Prior to the current economic crisis, the majority of radio station advertising inventory was being sold three to six months prior to being run on the air. Recently, we have noted that a much larger portion of our inventory is being sold in the quarter it is being aired. At this time it is unknown if this trend will be permanent or represent a short term change. We believe this new trend represents, for some of our clients, their increased scrutiny over their advertising budgets and cash management in response to the current economic crisis.
Station Operating Expenses Excluding Depreciation, Amortization and LMA Fees. Station operating expenses excluding depreciation, amortization and LMA fees decreased $10.6 million, or 20.9%, to $40.2 million for the three months ended September 30, 2009 from $50.8 million for the three months ended September 30, 2008, primarily due to our continued efforts to contain operating costs, such as employee reductions and continued scrutiny of all operating expenses. We will continue to monitor all our operating costs as well as implement additional cost saving measures as necessary in an attempt to remain in compliance with current and future debt covenant requirements.
Depreciation and Amortization. Depreciation and amortization decreased $0.3 million, or 10.6%, to $2.7 million for the three months ended September 30, 2009, compared to $3.0 million for the three months ended September 30, 2008 resulting from a decrease in our asset base due to assets becoming fully depreciated and a decrease in capital expenditures.
Corporate, General and Administrative Expenses Including Non-cash Stock Compensation. Corporate, general and administrative expenses increased $0.7 million, or 13.4%, to $5.7 million for the three months ended September 30, 2009 compared to $5.0 million for the three months ended September 30, 2008, primarily due to non-recurring severance costs and other professional fees associated with corporate restructuring of approximately $0.6 million, professional fees related to interim impairment analysis of $0.2 million and professional fees related to the defense of certain lawsuits. This was partially offset by a decrease in non-cash compensation expense of approximately $0.6 million as certain option awards were fully amortized in the prior year period.
Non-operating Income (Expense). Interest expense, net of interest income increased by $3.1 million to $11.1 million expense for the three months ended September 30, 2009 as compared with $8.0 million income in the three months ended September 30, 2008. Interest expense associated with outstanding debt, decreased by $0.8 million to $7.1 million as compared to $7.9 million in the three months ended September 30, 2008. Interest expense, net increased primarily due to the $3.2 million increase in the yield-adjustment associated with our interest rate swap. The purpose of the May 2005 Option was to create a fixed interest rate on $400.0 million of our term loan. The opton was entered into assuming interest rates would continue to increase however, in light of the economic crisis, our
Station Operating Income. As a result of the factors described above, Station Operating Income decreased $4.2 million, or 14.4%, to $25.0 million for the three months ended September 30, 2009, compared to $29.2 million for the three months ended September 30, 2008.
CMLS is in the portfolios of Wallace Weitz of Weitz Wallace R & Co.
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