NEW YORK — It wasn’t posted to the company’s SEC filings as of 4:20pm. It also wasn’t on their corporate website. The only place Cumulus Media, the nation’s No. 3 owner and operator of radio properties by station count, decided to share its third-quarter results was by way of a GlobeNewswire press release.
So, how did Cumulus do on a day it declared it is now offering a “lead guarantee”?
The first full quarter of operations post-bankruptcy.
“We are now squarely focused on our future,” said CEO Mary Berner. That means tackling “a tougher local market,” she said in the company’s earnings call, which started at 4:30pm Eastern Tuesday.
With big former ABC Radio markets of New York, Chicago and Minneapolis-St. Paul pacing Cumulus’ revenue, along with Nashville and Fresno, Cumulus saw net revenue of $282.25 million in Q3.
That’s off 1.7% from the predecessor company’s Q3, reflecting financial figures of a different Cumulus — one that had yet to seek Chapter 11 bankruptcy protection and obtain approval of a reorganization plan designed to half its outstanding debt.
Net income was $12.71 million (63 cents per diluted share), compared to the predecessor company’s $1.27 million (4 cents).
Adjusted EBITDA was statistically flat at $62.1 million, compared to $61.77 million in Q3 2017.
Speaking to financial analysts on the Cumulus Q3 call, Berner noted that Westwood One saw its sixth straight quarter of revenue growth. At the radio stations, home improvement category advertising was up; home furnishings and food and beverage dollars were the weakest categories.
She added that pacing is up mid-to-low single digits, ex-political, in Q4, with 2019 offering Cumulus investors a “unique opportunity to offset market challenges.” This will be done by way of digital efforts at Cumulus’ local digital marketing services and streams.
Podcasting and continued expense management will be drivers to lead Cumulus to success, too, Berner said.
Meanwhile, Berner said that Cumulus delivered “another quarter of Adjusted EBITDA growth” of approximately 50 basis points on a reported basis and 3.9% when adjusting for the impact of USTN and the company’s exit from WLUP-FM in Chicago.
Since mid-September, a new agreement with Total Traffic & Weather network helped lessen the impact of USTN’s woes — totaling $1.8 million in Q3. This means Cumulus has largely replaced the lost USTN revenue, the company’s CFO, John Abbot, told those on the call.
Ahead of the earnings release, CMLS dipped another 3.9%, to $13.50, for a fresh post-bankruptcy low on Wall Street. However, just 78 shares were traded, indicating that Cumulus shares are very lightly traded.
The Q3 8-K filing was made as Cumulus’ earnings call was in progress. As of 5pm Eastern the company’s website had not yet posted its results.
A LOCAL BUSINESS ‘LEAD GUARANTEE’
The Q3 earnings results came as Cumulus Media earlier on Tuesday “doubled down” on the ROI guarantee of its Westwood One division by launching an innovative program leveraging “the proven effectiveness and reach of broadcast radio, combined with the precise targeting capabilities of its digital products.”
The program, overseen by Dave Milner and Bob Walker, EVPs of Operations of Cumulus Media’s Radio Station Group, “will support local advertisers’ number one objective— attracting more customers,” the company states.
Cumulus will guarantee participating local advertisers a minimum number of Engaged Potential Customers (“EPCs”): listeners who have contacted the business as a result of the coordinated program. Should the program not deliver the guaranteed results, the business will receive free advertising.
“Marketers took notice of our commitment to results when we debuted the Westwood One ROI Guarantee and challenged us to deliver something similar to our local advertisers. After touting the benefits of a combined radio and digital campaign, we’re now putting our money where our mouth is in our local markets with the EPC Guarantee,” said Milner.
Walker added, “Using radio’s exceptional 10:1 ROI, and a proven 19% lift when messages are coordinated between media platforms, we are delivering a hyper-efficient brand building and customer generation program all in one. We’ve known all along that we can be an advertiser’s one-stop shop for results; now we guarantee it.”
Jeff Abbott, EVP/Media Director at Chemistry Advertising, is already endorsing it.
“As a long-time buyer of radio, I’ve always known what an effective and efficient medium radio is, but this program delivers a new kind of confidence,” said Abbott. “By combining radio and digital solutions, Cumulus is taking attribution to the next level by guaranteeing what every business actually wants – engaged potential customers.”
The EPC Guarantee will launch in 65 Cumulus markets later this month, in the home and professional services categories, and will be available in all 90 Cumulus markets in 2019.
