Updated at 5:45pm Eastern with additional financial results and after-hours trading details.
Cumulus Media released its much-anticipated fourth-quarter and full-year 2016 results just after the Closing Bell on Wall Street Thursday (3/16), and the results aren’t good.
Cumulus’ net loss widened in Q4 to a whopping $543.68 million ($18.57 per share), from $4.6 million (16 cents) in the year-ago period.
At the same time, Cumulus’ net revenue dipped 3% to $299.5 million, from $308.8 million.
On a full-year basis, Cumulus’ net loss decreased, however — to $510.7 million ($17.45 per share) from $546.5 million ($18.72). Full-year net revenue was statistically flat at $1.14 billion, down from $1.17 billion.
Meanwhile, for the full-year, Cumulus’ all-important total debt decreased — by exactly 1.2%, to $2.42 billion.
“We entered 2016 with a singular objective: to fix the core business problems – poor culture, poor ratings and poor operational execution – which was essential to establishing a foundation on which to build improved financial results,” Cumulus President/CEO Mary Berner said in prepared remarks. “Throughout the year we made significant progress addressing each of these areas, most visibly in ratings growth where we’ve outperformed the industry for 15 straight months. In fact, with two back-to-back quarters of revenue share increases on the station side, a trend which continued through January, we have early evidence that, despite a tough industry environment, our foundational work is beginning to translate into improved financial performance.”
These thoughts comprised the bulk of her comments made during a 30-minute call that reviewed Cumulus’ financial performance in the final three months of 2016, and for the full year, in limited detail.
Neither Berner nor other company executives took queries from analysts on the call, noting that the majority of their questions were addressed during prepared remarks. Instead, Berner declared that while the results on the whole “were not a surprise,” she said they were “not representative” of the company’s assets and the overall turnaround efforts that are still in progress.
EXPENSES SOAR IN Q4
One key reason for Cumulus Media’s fourth-quarter meltdown was a significant rise in expenses, to $868.1 million from $280 million.
That played a key role in Cumulus swinging to an operating loss of $568.6 million, compared to operating income of $28.8 million.
However, impairment of intangible assets and goodwill of $603.15 million in the quarter is perhaps the other main reason why the final three months of 2016 were so challenging for Cumulus.
Adjusted EBITDA tells a much different story: On a consolidated basis, it came in at $56.9 million for Q4. But, that’s off 9.8% from roughly $63.1 million a year-earlier.
CORE RADIO REVENUE RISES
If there is one positive to pull from Cumulus’ Q4 results, it is this: The AM and FM stations it owns saw an 1.6% increase in station revenue, to $209.76 million. The Radio Station Group contributes some 67% of all Cumulus revenue, and the gain is encouraging.
Where Cumulus appeared to fall flat was in its Westwood One syndicated programming arm. For the quarter, WW1 saw net revenue of $89.1 million — a 12.3% year-over-year dip from $101.6 million. Even so, Westwood One swung to net income of $1.8 million, from a net loss of $2.2 million in Q4 2015.
SHARES SINK IN AFTER-HOURS TRADING
Following a flat close in Thursday’s trading on Wall Street, Cumulus media shares were off 20.7%, to 46 cents, as investors digested the Q4 and full-year 2016 results.
The tough Q4 comes as the latest frustration for Cumulus. On February 24, Katherine Polk Failla, U.S. District Judge for Southern District of New York, put a stop to Cumulus’ attempt to move forward with a plan to eliminate $305 million in debt.
That triggered a sell-off of Cumulus shares that sees its after-hours value at a historic low. If not for the company’s mid-October 2015 1-for-8 reverse stock split, Cumulus shares would presently be trading at 5.75 cents per share.