CUMULUS MEDIA INC. Overview
The following discussion of our financial condition and results of operations should be read in conjunction with the other information contained in this Form 10-Q, including our unaudited Condensed Consolidated Financial Statements and notes thereto included elsewhere in this Form 10-Q, as well as our audited Consolidated Financial Statements and notes thereto contained in our Annual Report on Form 10-K for the year endedDecember 31, 2021 ("2021 Form 10-K"), filed with theSecurities and Exchange Commission ("SEC"). This discussion, as well as various other sections of this Form 10-Q, contain and refer to statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Such statements are any statements other than those of historical fact and relate to our intent, belief or current expectations primarily with respect to our future operating, financial and strategic performance. Any such forward-looking statements are not guarantees of future performance and may involve risks and uncertainties. These risks and uncertainties include, but are not limited to, those described in Part I, "Item 1A. Risk Factors," and elsewhere in our 2021 Form 10-K and elsewhere in this report, and those described from time to time in other reports filed with theSEC from time to time. Actual results may differ from those contained in or implied by the forward-looking statements as a result of various factors, including the evolving and uncertain nature of the COVID-19 pandemic and its impact on the Company, the media industry, and the economy in general. For more information, see "Cautionary Statement Regarding Forward-Looking Statements" in our 2021 Form 10-K.
Recent Events and Company Outlook
As a result of the COVID-19 pandemic, we experienced a disruption in events we
produce, including the cancellation or postponement of certain sporting events
in 2020, which had an adverse impact on our financial and operating results.
While these events have mostly returned, our financial and operating results may
continue to be impacted as a result of the COVID-19 pandemic and the impact of
governmental regulations and other restrictions that have been or may be imposed
in response to the on-going pandemic. Our business could also continue to be
impacted by the disruption from COVID-19 and resulting adverse changes in
advertising customers and consumer behavior. In light of the evolving health,
social, economic and business environment, governmental regulations or mandates,
and business disruptions that could occur in response to the COVID-19
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pandemic, the impact that COVID-19 could have on our business, financial condition and operating results remains highly uncertain. We will continue to monitor the ongoing COVID-19 pandemic and will consider actions as deemed necessary.
Non-GAAP Financial Measure
From time to time, we utilize certain financial measures that are not prepared
or calculated in accordance with GAAP to assess our financial performance and
profitability. Consolidated adjusted earnings before interest, taxes,
depreciation, and amortization ("Adjusted EBITDA") is the financial metric by
which management and the chief operating decision maker allocate resources of
the Company and analyze the performance of the Company as a whole. Management
also uses this measure to determine the contribution of our core operations to
the funding of our corporate resources utilized to manage our operations and our
non-operating expenses including debt service and acquisitions. In addition,
consolidated Adjusted EBITDA is a key metric for purposes of calculating and
determining our compliance with certain covenants contained in our Refinanced
Credit Agreement.
In determining Adjusted EBITDA, we exclude the following from net loss:
interest, taxes, depreciation, amortization, stock-based compensation expense,
gain or loss on the exchange, sale, or disposal of any assets or stations or
early extinguishment of debt, local marketing agreement fees, restructuring
costs, expenses relating to acquisitions and divestitures, non-routine legal
expenses incurred in connection with certain litigation matters, and non-cash
impairments of assets, if any.
Management believes that Adjusted EBITDA, although not a measure that is
calculated in accordance with GAAP, is commonly employed by the investment
community as a measure for determining the market value of a media company and
comparing the operational and financial performance among media companies.
Management has also observed that Adjusted EBITDA is routinely utilized to
evaluate and negotiate the potential purchase price for media companies. Given
the relevance to our overall value, management believes that investors consider
the metric to be extremely useful.
Adjusted EBITDA should not be considered in isolation or as a substitute for net
loss, operating income (loss), cash flows from operating activities or any other
measure for determining our operating performance or liquidity that is
calculated in accordance with GAAP. In addition, Adjusted EBITDA may be defined
or calculated differently by other companies, and comparability may be limited.
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Consolidated Results of Operations
Analysis of Consolidated Results of Operations
The following selected data from our unaudited Condensed Consolidated Statements
of Operations and other supplementary data provides information that our
management believes is relevant to an assessment and understanding of our
results of operations and financial condition. This discussion should be read in
conjunction with our unaudited Condensed Consolidated Statements of Operations
and notes thereto appearing elsewhere herein (dollars in thousands).
Three Months Ended September 30,
2022 2021 2022 vs 2021 Change
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