Cumulus Media(CMLS) - 2021 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents Cumulus Media Inc.'s unaudited condensed consolidated financial statements for Q2 and H1 2021, including balance sheets, operations, equity, cash flows, and notes Condensed Consolidated Balance Sheets Total assets decreased to $1.68 billion and total liabilities to $1.30 billion by June 30, 2021, driven by reduced cash and debt repayments Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $124,978 | $271,761 | | Total current assets | $352,623 | $502,964 | | Total assets | $1,676,306 | $1,859,738 | | Liabilities & Equity | | | | Total current liabilities | $123,841 | $129,036 | | Term loan due 2026, net | $353,586 | $460,311 | | Total liabilities | $1,304,631 | $1,462,147 | | Total stockholders' equity | $371,675 | $397,591 | Condensed Consolidated Statements of Operations Q2 2021 net revenue increased to $224.7 million, with net loss narrowing to $5.9 million, reflecting recovery from COVID-19 impacts Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Net revenue | $224,718 | $146,022 | $426,446 | $373,936 | | Operating income (loss) | $12,625 | $(32,342) | $4,046 | $(24,082) | | Net loss | $(5,891) | $(36,316) | $(27,809) | $(43,667) | | Diluted loss per share | $(0.29) | $(1.79) | $(1.36) | $(2.15) | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity decreased to $371.7 million by June 30, 2021, primarily due to the $27.8 million net loss for the six-month period - Total stockholders' equity declined from $397.6 million at December 31, 2020, to $371.7 million at June 30, 2021, mainly due to the net loss incurred during the first half of the year[18] Condensed Consolidated Statements of Cash Flows Net cash from operations decreased to $20.7 million, while financing activities used $156.3 million, leading to a cash balance of $125.0 million Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $20,691 | $51,989 | | Net cash (used in) provided by investing activities | $(11,130) | $72,758 | | Net cash (used in) provided by financing activities | $(156,344) | $55,160 | | (Decrease) increase in cash | $(146,783) | $179,907 | | Cash and cash equivalents at end of period | $124,978 | $196,914 | Notes to Condensed Consolidated Financial Statements Detailed notes support the financial statements, covering business nature, revenue, assets, debt, fair value, taxes, equity, loss per share, and contingencies - The company is a media, advertising, and marketing services company with 413 owned-and-operated stations, the Westwood One audio network, and the CUMULUS Podcast Network[26] Revenue by Source (in thousands) | Revenue Source | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Advertising revenues | $220,764 | $142,873 | $417,200 | $367,413 | | Non-advertising revenues | $3,954 | $3,149 | $9,246 | $6,523 | | Total revenue | $224,718 | $146,022 | $426,446 | $373,936 | Long-Term Debt Summary (in thousands) | Debt Instrument | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Term Loan due 2026 | $356,240 | $469,411 | | 6.75% Senior Notes | $449,695 | $452,836 | | 2020 Revolving Credit Facility | $— | $60,000 | | PPP Loans | $20,000 | $— | | Long-term debt, net | $818,246 | $967,661 | - In Q1 2021, certain subsidiaries received unsecured loans totaling $20.0 million under the Paycheck Protection Program (PPP); the company intends to apply for forgiveness of these loans[72][74] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 and H1 2021 financial performance, highlighting revenue recovery, operating expenses, liquidity, capital resources, and debt management post-COVID-19 - Net revenue for Q2 2021 exceeded the comparable period in 2020, but overall results remain lower than pre-COVID-19 levels; Q3 2021 revenue is expected to continue increasing[105] - The company defines and utilizes Adjusted EBITDA, a non-GAAP measure, to assess financial performance, excluding items like interest, taxes, depreciation, amortization, stock-based compensation, and restructuring costs from net loss[112][113] Consolidated Results of Operations Q2 2021 net revenue increased 53.9% to $224.7 million, resulting in operating income of $12.6 million and Adjusted EBITDA of $36.9 million Q2 2021 vs Q2 2020 Results (in thousands) | Metric | Q2 2021 | Q2 2020 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net revenue | $224,718 | $146,022 | $78,696 | 53.9% | | Operating income (loss) | $12,625 | $(32,342) | $44,967 | N/A | | Net loss | $(5,891) | $(36,316) | $30,425 | 83.8% | | Adjusted EBITDA | $36,857 | $(6,375) | $43,232 | N/A | H1 2021 vs H1 2020 Results (in thousands) | Metric | H1 2021 | H1 2020 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net revenue | $426,446 | $373,936 | $52,510 | 14.0% | | Operating income (loss) | $4,046 | $(24,082) | $28,128 | N/A | | Net loss | $(27,809) | $(43,667) | $15,858 | 36.3% | | Adjusted EBITDA | $45,789 | $21,350 | $24,439 | 114.5% | - The increase in Q2 revenue was driven by strengthening national and local broadcast advertising, growth in streaming and podcasting, and the return of sporting events canceled in 2020[121] - Corporate expenses increased in Q2 2021 due to a legal settlement and higher personnel costs, including incentive compensation, reflecting improved performance and the absence of prior-year cost-saving actions[127] Liquidity and Capital Resources The company held $125.0 million in cash, with $20.7 million from operations, and managed liquidity through debt prepayments and balance sheet strengthening actions - As of June 30, 2021, the company held $125.0 million in cash and cash equivalents, with cash from operating activities for the first six months of 2021 at $20.7 million[153] - Net cash used in financing activities for H1 2021 was $156.3 million, primarily due to a $115.0 million mandatory debt prepayment from asset sale proceeds and a $60.0 million voluntary paydown of the revolving credit facility, partially offset by PPP loan proceeds[167] - The company believes its business model, cash reserves, and recent balance sheet strengthening actions (asset sales, PPP loans) will help manage its business and liquidity needs despite COVID-19 uncertainty[155][156] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period[171] - No material changes to internal control over financial reporting occurred during the three months ended June 30, 2021[172] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section details legal proceedings, including a settled NCAA dispute, an ongoing 401(k) class action lawsuit, and past litigation concerning pre-1972 sound recordings - A putative class action lawsuit filed in February 2020 alleges the company breached its fiduciary duties under ERISA in the oversight of its 401(k) Plan; the company is defending the case vigorously and cannot reasonably estimate the outcome[176] - On August 1, 2021, the company and the NCAA settled competing lawsuits related to broadcast rights fees for events canceled in 2020 due to the COVID-19 pandemic, concluding the litigation[177] - The company was previously involved in lawsuits regarding public performance rights for sound recordings made before February 15, 1972; cases against the company were dismissed, but related litigation continues in the Ninth Circuit with an indeterminable effect[175] Item 1A. Risk Factors No material changes to risk factors were identified from those previously disclosed in the company's 2020 Annual Report on Form 10-K - The report refers to Part I, Item 1A, "Risk Factors," in the company's 2020 Form 10-K for information on known material risks, indicating no material updates in this quarterly filing[180] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including amended bylaws, CEO/CFO certifications, and Inline XBRL documents - On August 3, 2021, the Board of Directors approved an amendment and restatement of the company's bylaws, revising procedures for director nominations and stockholder proposals, among other administrative updates[181][182] - Exhibits filed include amended bylaws (Exhibit 3.1), CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1), and various Inline XBRL files for financial reporting[184]