MAY 15, 2000

FIRST QUARTER NET REVENUE OF $47.7 MILLION; $5.4 MILLION IN BCF; $0.7 MILLION OF EBITDA AFTER $2.0 MILLION OF NON-RECURRING OVERHEAD
 

MILWAUKEE, WI May 15, 2000 -- Cumulus Media Inc. (NASDAQ: CMLS), the nation’s third largest owner-and-operator of radio stations, today reported first quarter 2000 results. The quarterly period was marked by moderate growth in total and same-store revenues. For the three months ended March 31, 2000, net revenues were $47.7 million. Broadcast cash flow was $5.4 million. EBITDA was $0.7 million after $2.0 million of non-recurring expense. 

"After a comprehensive review of operations, which began in March, we believe that our sales performance relates to a practice of large discount sales which drove down our average unit rate," said Lew Dickey, Executive Vice Chairman and newly appointed President of Cumulus Broadcasting. "I have met with all of our managers to implement a sales culture that fosters rate integrity and long-term selling, coupled with systems for recruiting, training, developing and retaining sales personnel. As our efforts gain traction, we expect to see the average unit rate move upward and to achieve higher rates of growth in the second half of the year." 

"We have identified the root cause of our same-station net revenue and broadcast cash flow performance issues," stated Executive Chairman Richard Weening. "Company-wide systems and procedures are being implemented to ensure substantial improvement in these areas. In addition, we are focused on actions to keep leverage within manageable and expected limits as we complete all our pending acquisitions and move the business ahead." 

THREE MONTHS ENDED MARCH 31, 2000 VERSUS THE THREE MONTHS ENDED MARCH 31, 1999. 

Net Revenues. Net revenues increased $16.5 million, or 52.9%, to $47.7 million for the three months ended March 31, 2000, from $31.2 million for the three months ended March 31, 1999. This increase was primarily attributable to the acquisition of radio stations and revenues generated from local marketing, management and consulting agreements entered into during the period from April 1, 1999 through March 31, 2000. 

In addition, on a same station basis, net revenue for the 195 stations in 36 markets operated for at least a full year increased $2.3 million or 7.3% to $33.0 million for the three months ending March 31, 2000, compared to net revenues of $30.7 million for the three month period ending March 31, 1999. The increase in same station net revenue is the result of additional local revenue generated from improved spot utilization from the sale of radio spots, combined with increases in promotional and event revenue. 

Station Operating Expenses, excluding Depreciation, Amortization and LMA Fees. Station operating expenses excluding depreciation, amortization and LMA fees increased $15.5 million, or 58.0%, to $42.3 million for the three months ending March 31, 2000, from $26.8 million for the three months ending March 31, 1999. This increase was primarily attributable to 1) the acquisition of radio stations and operating expenses incurred from local marketing, management and consulting agreements entered into during the period from April 1, 1999 through 

March 31, 2000; and to 2) the $5.1 million increase in same station operating expenses discussed below. 

On a same station basis, for the 195 stations in 36 markets operated for at least a full year, station operating expenses excluding depreciation, amortization and LMA fees increased $5.1 million, or 19.3%, to $31.4 million for the three months ending March 31, 2000, compared to $26.3 million for the three months ending December 31, 1999. The increase in same station operating expenses excluding depreciation, amortization and LMA fees is attributable to the additional sales and programming personnel added subsequent to March 31, 1999 in substantially all of the markets we operated during the three months ended March 31, 1999, in addition to the increased variable selling costs, and promotional and event costs associated with additional same station net revenue discussed above. 

Depreciation and Amortization. Depreciation and amortization increased $2.8 million, or 39.4%, to $9.9 million for the three-month period ending March 31, 2000, compared to $7.1 million for the three-month period ending March 31, 1999. This increase was primarily attributable to depreciation and amortization relating to radio station acquisitions consummated subsequent to the three months ended March 31, 1999 and a full quarter of depreciation and amortization on radio station acquisitions consummated during the three month period ended March 31, 1999. 

LMA Fees. LMA fees increased $.7 million, or 118.7%, to $1.2 million for the three months ending March 31, 2000, from $.5 million for the three months ending March 31, 1999. This increase was primarily attributable to local marketing, management and consulting fees paid to sellers in connection with the commencement of operations, management of or consulting services provided to radio stations subsequent to March 31, 1999. 

Corporate, General and Administrative Expenses. Corporate, general and administrative expenses increased $3.0 million, or 180.0%, to $4.7 million for the three months ending March 31, 2000, compared to $1.7 million for the three months ended December 31, 1999. The increase in corporate general and administrative expense was primarily attributable to $2.0 million of non-recurring expense recorded in the first quarter of 2000 comprised of 1) $0.9 million in severance related expense associated with the management reorganization announced on March 16, 2000; 2) $0.5 million in travel related expense associated with diligence, capital raising and corporate related initiatives; 3) $0.3 million in professional fees related to the Company's restatement of 1999 quarterly financial information; and 4) $0.3 in other miscellaneous corporate charges. The increase in corporate general and administrative expense over the prior year is also partially attributable to corporate resources added subsequent to the three month ending March 31, 1999 to effectively manage the Company's growing radio station portfolio.

Other Expense (Income). Interest expense, net of interest income, decreased by $0.4 million, or 6.8%, to $5.5 million for the three months ending March 31, 2000, compared to $5.9 million for the three months ended March 31, 1999. This decrease was primarily attributable to higher debt levels incurred to finance the Company's acquisitions, offset by higher interest income earned during the three months ended March 31, 2000 on cash balances held as a result of capital raising activities subsequent to the three months ended March 31, 1999. 

Income Tax Expense (Benefit). Income tax benefits decreased by $3.6 million, or 100.0%, to $0 million for the three months ending March 31, 2000, compared to $3.6 million for the three months ended March 31, 1999. This decrease was attributable to the Company's current assessment of the probability of realization of its deferred tax asset, which will be considered further in subsequent periods

Preferred Stock Dividends, Accretion of Discount and Premium on Redemption of Preferred Stock. Preferred stock dividends, accretion of discount and premium on redemption of preferred stock decreased $1.0 million, or 22.2%, to $3.5 million for the three months ending March 31, 2000, compared to $4.5 million for the three months ended March 31, 1999. This decrease was attributable to the on the redemption of 43,750 shares of the Company's Series A Preferred Stock on October 1, 1999, resulting in a lower aggregate liquidation preference on the Company's Series A Preferred Stock subsequent to the redemption.

Net Income (Loss) Attributable to Common Stock. As a result of the factors described above, net loss attributable to common stock increased $7.7 million, or 65.8%, to $19.4 million for the three months ending March 31, 2000, compared to $11.7 million for the three months ended March 31, 1999. 

Broadcast Cash Flow. As a result of the factors described above, Broadcast Cash Flow increased $1.0 million, or 22.7%, to $5.4 million for the three months ending March 31, 2000, compared to $4.4 million for the three months ended March 31, 1999. 

EBITDA. As a result of the increase in broadcast cash flow, offset by the increase in corporate, general and administrative expenses described above, EBITDA decreased $2.1 million, or 75.0%, to $0.7 million for the three months ending March 31, 2000, compared to $2.8 million for the three months ended March 31, 1999. 

Cumulus Media Inc. is the parent Company of Cumulus Broadcasting Inc., which along with its other subsidiaries, owns and operates station clusters in mid-size markets. The Company commenced operations May 22, 1997. Cumulus is the third largest U.S. radio operating company based upon the number of stations owned or to be acquired pursuant to pending acquisition agreements. 

Pro forma the completion of all pending acquisitions and divestitures, Cumulus Media will own and operate 304 radio stations in 60 mid-size and smaller U.S. media markets. After giving pro forma effect for the pending acquisitions, the Company will own, on average, over 5 radio stations per market. In addition, the Company owns and operates a multi-market radio network in the English-speaking Caribbean.

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.

Contact:
Richard Weening (414) 615-2800, or
Dan O'Donnell (414) 615-2800
 

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