FEB 16, 1999 

CUMULUS MEDIA INC. REPORTS RECORD FOURTH QUARTER RESULTS - Same-Station Revenue up 31%; Broadcast Cash Flow up 166%, Margins Double from 15% to 31%

MILWAUKEE,  February 16, 1999 -- Cumulus Media Inc. (NASDAQ: CMLS), the nation’s third largest owner and operator of radio stations (based upon the number of stations owned or to be acquired pursuant to pending acquisition agreements), today reported record-breaking increases in revenue, broadcast cash flow and margins for the fourth quarter and the year ended December 31, 1998.

Fourth Quarter ended December 31, 1998

Consolidated net revenue on a historical basis was $35.7 million, up from $7.5 million for the fourth quarter in 1997.  Broadcast cash flow was $10.7 million, up from $1.8 million.  Due to non-cash depreciation and amortization expense, and interest expense related to the acquisition of 164 stations since the Company’s inception on May 22, 1997, the Company reported a net loss, attributable to common stock of $7.3 million, during the fourth quarter of 1998, or  <$ .37> per share.

The Company’s historical results of operations from period to period are not comparable because the Company commenced operations on May 22, 1997 and because of the impact of various acquisitions and dispositions that the Company has completed since its inception.

Same-station net revenue (defined as the 59 stations in completed market clusters owned and operated since January 1, 1998) was $14.2 million, up 30.5% from fourth quarter 1997 cash net revenue of $10.8 million.  Broadcast cash flow was $4.4 million, up 166% from $1.66 million.   Broadcast cash flow margins doubled from 15.3% to 31.2%

On a Pro-forma basis (assuming all 195 stations owned or operated under an LMA agreement at any time during the applicable period were owned or operated under an LMA agreement for the full period), consolidated net revenues increased 18.1% to $37.2 million and broadcast cash flow increased 81.4% to $10.9 million compared to the quarter ended December 31, 1997, when revenues and cash flow were $31.5 million and $6.0 million respectively.  Broadcast cash flow margins increased from 19.1% to 29.3%. 

Twelve months ended December 31, 1998

For the full year, Cumulus reported consolidated net revenue on a historical basis of $98.8 million, up from $9.2 million for the period from the Company’s inception, May 22, 1997, through December 31,1997.  Broadcast cash flow for the twelve months was $26.6 million versus $2.0 million for the period from the Company’s inception, May 22, 1997, through December 31,1997.  Due to non-cash depreciation and amortization expense and interest expense related to the acquisition of 164 stations since the Company’s inception through the end of 1998 and taking into account the non-cash dividends on preferred stock, the Company reported a net loss attributable to common stock of $<27.3> million, or $<1.70> per share ($<1.38> per share on a pro forma basis) for the twelve months ended December 31, 1998 versus a net loss of $<3.9> million for the period from the Company’s inception, May 22, 1997 through December 31, 1997. 

The Company’s historical results of operations from period to period are not comparable because the Company commenced operations on May 22, 1997 and because of the impact of various acquisitions and dispositions that the Company has completed since its inception.

Same Station Performance

On a “same station” basis (as defined above), cash net revenues (excluding trade revenue) for the twelve months were up 21.3% to $50.9 million with broadcast cash flow up 48.2% to $13.4 million. 

Pro-forma Performance

Pro forma (as defined above) net revenue for the year  was $131.1million, representing an increase of 12.1% from 1997 pro forma net revenues of $117.0 million for the 1997.  Pro forma broadcast cash flow was $32.6 million, an increase of 31.4% versus $24.8 million for the pro forma broadcast cash flow period a year ago.

1998 Objectives surpassed…Smaller market business strategy validated. 

Commenting on the Company’s results, Richard W. Weening, Executive Chairman of Cumulus Media Inc., said, “These outstanding results tell our shareholders that Cumulus Media has met and exceeded their goals and our goals for the Company in 1998.  We are very proud of our operating managers and each of the 2,271 Cumulus professionals who helped make this happen.” 

“The results also validate the core business strategy,” Weening continued.  “Cumulus’s exceptional top and bottom line growth, the best in the industry, combined with significant margin expansion demonstrates the power and potential of multi-station clusters in the mid-size and smaller markets.”

Lew Dickey, Cumulus Vice Chairman noted that “For the third straight quarter our internal same-station growth makes Cumulus the fastest growing among the major radio groups with revenues up 31% and cash flow up 166% exclusive of any acquisition-related increases.” 
“Pro-forma margin growth was exceptional,” Dickey added.  “For 195 stations pro-forma, broadcast cash flow margins increased from 19.1% to 29.3% despite the heavy integration work and expense of 28 new stations in 9 markets during the quarter and significant developmental spending on the 74 new stations and 15 markets we integrated in the previous quarter.  On a same-station basis, margins doubled to over 31%.”

Looking ahead, Weening said, “We have integrated 195 of the 220 stations we have pending.  Our goal in 1999 will be to continue to outperform our peers in terms of real, internal revenue and cash flow growth while continuing to selectively acquire new stations in new mid-size and smaller markets within our traditional pricing discipline.” 

“The outlook continues to be positive for steady revenue and cash flow growth in each of our markets where we are usually the leading media company and always have considerable room for internal growth.” 

Cumulus Media is the parent Company of Cumulus Broadcasting Inc., which along with its other subsidiaries, owns and operates multiple station clusters in mid-size and smaller markets.  The Company commenced operations May 22, 1997.  Upon completion of pending acquisitions, Cumulus will be the third largest U.S. radio operating company in terms of stations owned.  Pro forma for the completion of all pending acquisitions, Cumulus Media will own and operate 220 radio stations in 42 mid-size and smaller U.S. media markets.  After giving pro forma effect for pending acquisitions, the Company will own, on average, over 5 radio stations per market and will enjoy either the first or second position in terms of revenue share in 38 of its markets and is number one in 25 of those markets.  In addition, the Company owns and operates a multi-market radio network in the English-speaking Caribbean.

Liquidity and Capital Resources

On July 1, 1998, the Company completed an initial public offering of its common stock, raising $109.4 million in net proceeds, including the underwriters over allotment option, which was exercised on July 31, 1998.  Concurrently, the Company also sold $125,000,000 of 13.75% Series A Cumulative Exchangeable Redeemable Preferred Stock due 2009; and $160,000,000 10.375% Senior Subordinated Notes due 2008.  In connection with the completion of the offerings, the Company entered into a new senior credit facility with its existing lender in the amount of  $150,000,000.  Since July 1, 1998, the Company has repaid $79 million in senior debt and employed $ 239 million in completing acquisitions of 91 stations in 27 markets, including Abilene, TX; Amarillo, TX; Augusta, GA; Bangor, ME; Bismarck, ND; Chattanooga, TN; Dubuque, IA; Faribault, MN; Grand Junction, CO; Green Bay, WI; Kalamazoo, MI; Lake Charles, LA; Mankato, MN; Marion-Carbondale, IL; Mason City, IA; Monroe, MI; Montgomery, AL; Myrtle Beach, SC; New Ulm/Springfield, MN; Odessa-Midland, TX; Owatonna, MN; Rochester, MN; Salisbury-Ocean-City, MD; Savannah, GA; Topeka, KS; Tupelo, MS; and Waseca, MN.

This news announcement contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.  Key risks are described in the Company’s reports filed with the U.S. Securities and Exchange Commission.  Readers should note that these statements may be impacted by several factors including changes in the economic climate and the in the business of radio broadcasting.  Accordingly, the Company’s actual performance may vary from those stated or implied herein.
 
 

	Three Months Ended December 31		Twelve Months ended December 31
	1998	1997	1998	1997
Historical:
Net Revenues	$35,662	$7,529	$98,787	$9,163
Broadcast Cash Flow	$10,744	$1,821	$26,633	$2,016
BCF Margins	30.1%	24.2%	27.0%	22.0%
Same Station (59 Stations):
Net Revenues	$14,158	$10,846	$50,850	$41,926
Broadcast Cash Flow	$4,421	$1,663	$13,415	$9,053
BCF Margins	31.2%	15.3%	26.4%	21.6%
Pro Forma (195 Stations):
Net Revenues	$37,175	$31,489	$131,099	$116,987
Broadcast Cash Flow	$10,900	$6,010	$32,546	$24,771
BCF Margins	29.3%	19.1%	24.8%	21.2%

 
 
 

(1) Pro forma for the shares issued in connection with the Company’s Initial Public Offering, which was completed on 
July 1, 1998, and including the exercise of the underwriters’ over allotment of 800,000 shares on July 31, 1998.
 
 

Contact:  Suzanne Duecker,  414-615-2800 
 

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