Cumulus Swings to Profit on Expense Cuts
ATLANTA, Ga. (
) -- U.S. radio broadcasting company
Cumulus Media
(CMLS) - Get Report
swung to a profit during the third quarter as a result of significant corporate and interest expense cuts.
For the quarter ended September 30, the company saw earnings of $9.7 million, or 23 cents per diluted share, compared with a loss of $144 million, or $3.56 per diluted share, in the same period a year ago.
Corporate expenses decreased 17.5% to $4.7 million from $5.7 million in 2009, attributable largely to a $700,000 decrease in legal and professional fees. Interest expense was down 31.3% to $7.6 million compared with $11.1 million for the same period a year earlier.
Revenue rose 3.6% to $67.4 million from $65.1 million during the quarter due to an increase in national accounts revenue, rising political revenue generated by mid-term elections, and growth in Internet related revenues.
Management believes that the growth in advertising revenue will carry over into the fourth quarter and will be driven by increases in national revenue and political spending.
"We continue to innovate the radio business model to achieve industry leading EBITDA growth," chairman and CEO Lew Dickey said. "Our management systems are directing scores of new sellers generating thousands of new advertisers across our platform while keeping cost of sales in check. Our low cost of capital and expanding margins combine to enable us to generate considerable free cash flow to accelerate our de-leveraging."
For the nine months ended September 30, the company swung to a profit of $21.9 million, or 52 cents a share, compared with a loss of $133.2 million, or $3.29 a share, in the same period a year ago.
Total revenue was up 3.8%, to $193.6 million from $186.4 million.
The company paid down $9.2 million of senior debt in the third quarter and has paid down a total of $30.4 million year to date.
Cumulus shares closed up 2.6% to $3.14 today with an unusually high volume. 109,265 shares traded hands today compared to the stock's average 3-month volume of 46,205.
-- Written by Theresa McCabe in Boston.
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