AUGUST 14, 2000

Second Quarter Net Revenue Up 35.7% to $62.6 Million; BCF Increases 20.6% to $16.4 Million; $12.4 Million of EBITDA after $1.2 Million of Non-Recurring Overhead, $9.3 Million Restructuring Charge for Corporate Office Consolidation and Internet Related Businesses
 

ATLANTA, GA August 14, 2000 -- Cumulus Media Inc. (NASDAQ: CMLS), the nation’s third largest owner-and-operator of radio stations, today reported results for the three and six month periods ending June 30, 2000. The quarterly period, as expected, was marked by strong historical growth due to acquisitions, but negative growth in same-store revenues and cash flows. For the three months ended June 30, 2000, net revenues increased 36.7% to $62.6 million. Broadcast cash flow increased 21.0% to $16.4 million. EBITDA was $ 12.4 million after approximately $1.2 million in non-recurring corporate costs including severance, professional fees, and other miscellaneous corporate expenses.

Our Board of Directors has also made the decisions i) to discontinue the Internet related activities that were becoming a growing part of our corporate infrastructure; and ii) to consolidate the Company's corporate functions in Atlanta, GA. As result of these actions, the Company has recorded a one-time charge in the second quarter of $9.3 million. This charge, which is comprised of employee costs, lease abandonment costs, and asset write-offs will allow us to report on future performance net of the quarterly impact of these actions. 

For the three months ended June 30, 2000 net revenues increased $16.8 million, or 36.7%, to $62.6 million, from $45.8 million for the three months ended June 30, 1999. Broadcast Cash Flow (defined as station operating income (loss) before depreciation, amortization, LMA fees, non-cash stock compensation expense and other non-cash charges) increased $2.8 million, or 20.6%, to $16.4 million for the three months ending June 30, 2000, compared to $13.6 million for the three months ended June 30, 1999. EBITDA increased $0.6 million, or 5.1%, to $12.4 million for the three months ending June 30, 2000, compared to $11.8 million for the three months ended June 30, 1999. Basic and diluted loss per share was $0.51 for the three months ending June 30, 2000, compared to $0.35 for the three months ended June 30, 1999

On a same station basis, net revenues for the 212 stations in 39 markets operated for at least a full year decreased $1.6 million or 3.5% to $43.6 million for the three months ending June 30, 2000, compared to net revenues of $45.1 million for the three month period ending June 30, 1999. Same Station broadcast cash flow decreased $3.5 million, or 25.7%, to $10.1 million for the three months ending June 30, 2000, compared to $13.6 million for the three months ended June 30, 1999.

On a pro forma basis, after all announced acquisitions and divestitures, net revenues for the 271stations in 54 markets decreased $5.4 million or 8.1% to $61.5 million for the three months ending June 30, 2000, compared to net revenues of $66.9 million for the three month period ending June 30, 1999. Pro forma broadcast cash flow decreased $4.9 million, or 25.0%, to $14.9 million for the three months ending June 30, 2000, compared to $19.8 million for the three months ended June 30, 1999.

For the six months ended June 30, 2000 net revenues increased $33.2 million, or 43.2%, to $110.3 million, from $77.1 million for the six months ended June 30, 1999. Broadcast Cash Flow (defined as station operating income (loss) before depreciation, amortization, LMA fees, non-cash stock compensation expense and other non-cash charges) increased $3.9 million, or 21.3%, to $21.9 million for the six months ending June 30, 2000, compared to $18.0 million for the six months ended June 30, 1999. EBITDA decreased $1.4 million, or 9.9%, to $13.2 million for the six months ending June 30, 2000, compared to $14.6 million for the three months ended June 30, 1999. Basic and diluted loss per share was $1.06 for the six months ending June 30, 2000, compared to $0.94 for the six months ended June 30, 1999

On a same station basis, net revenue for the 212 stations in 39markets operated for at least a full year were $79.0 million for the six months ending June 30, 2000, unchanged when compared to net revenues of $79.0 million for the six month period ending June 30, 1999. Same Station broadcast cash flow decreased $6.5 million, or 34.7%, to $12.3 million for the six months ending June 30, 2000, compared to $18.8 million for the six months ended June 30, 1999.

On a pro forma basis, after all announced acquisitions and divestitures, net revenue for the 271stations in 54 markets decreased $ 6.4 million or 5.4% to $ 111.7 million for the six months ending June 30, 2000, compared to net revenues of $118.1 million for the six month period ending June 30, 1999. Pro forma broadcast cash flow decreased $ 7.7 million, or 27.1%, to $20.5 million for the six months ending June 30, 2000, compared to $28.2 million for the six months ended June 30, 1999.

During June 2000 the Company implemented two separate Board-approved restructuring programs. These restructuring programs were designed to improve the Company's competitive position as well as to enhance the Company's allocation of resources.

These June 2000 restructuring programs were implemented to (i) focus the Company's operations on its core business, radio broadcasting, by terminating several Internet service pilot projects and Internet infrastructure development projects, and (ii) make the Company's corporate infrastructure more efficient and responsive to our markets by relocating, effective October 1, 2000, all corporate services currently conducted in Milwaukee, WI and Chicago, IL to Atlanta, GA. 

The June 2000 restructuring programs were the result of Board-approved mandates to discontinue the operations of Cumulus Internet Services and to centralize the Company's corporate administrative organization and employees in Atlanta. The program included severance and related costs, and costs for vacated leased facilities, impaired leasehold improvements at vacated leased facilities, and impaired assets related to the Internet businesses.

These restructuring programs also resulted in the write-off of capitalized assets associated with Internet Service proprietary software and systems infrastructure, and severance and related costs for corporate positions in Milwaukee and Chicago as well as costs for vacating the leased facilities in Milwaukee and Chicago.

The reduction in work force primarily affected employees in Milwaukee and Chicago. Total costs incurred as a result of the restructuring were $9.3 million, which include severance and related charges associated with the reduction in force and charges related to vacating leased facilities. As of August 11, 1999, $5.2 million remains accrued and is expected to be paid by the end of fiscal 2003.

Newly appointed Cumulus CEO, Lew Dickey, noted, "During the second quarter, we identified the company's problems and developed a plan to fix them. That plan is now being implemented and should be firmly in place by the end of the third quarter. We expect to see some results in Q4, particularly in the area of cost reduction on the station side. We don't expect to see measurable growth in revenue until Q1 2001 due to the large number of annual contracts for this calendar year sold at below market rates during Q4 '99 and Q1 of this year. Below market rates, especially given our ratings success, are enjoyed by many of our primary clients, but all annual deals will expire by the end of this year and we expect to return to market level pricing at that time."

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 271 radio stations in 54 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:

Lew Dickey (404) 949-0700 or
Marty Gausvik, (404) 949-0700
 

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