Chapter 11 Talk Clouds Future For Cumulus

It’s now a possibility at the second-biggest radio broadcasting company by number of stations, based on comments made by CFO John Abbot during Cumulus Media‘s Q3 2017 earnings call held prior to Thursday’s Opening Bell on Wall Street.

While consolidated net revenue was statistically flat, moving to $287.24 million, from $286.14 million, consolidated net income slid by 97.2%, to $1.27 million (4 cents per share) from $46.3 million ($1.58).

“Regardless of the path forward, we have ample cash to operate our business.”

That statement came from Cumulus President/CEO Mary Berner ahead of the company’s Q3 earnings call.

Cumulus officials acknowledge that its $2.4 billion debt is hurting turnaround efforts despite third quarter 2017 earnings results that seem to indicate the major group owner is making gains on ratings and revenue.

Now the broadcaster is weighing options for restructuring — either outside of court through a pre-arranged agreement with creditors, or in a court-supervised Chapter 11 process.

Cumulus CEO Mary Berner said Thursday on its Q3 earnings call that the broadcaster continues to explore a range of alternatives to restructure its balance sheet.

John Abbott

“Our heavy debt load restrains our ability to do business in the short term and achieve full potential in the long term. We are using this time to continue to develop and we hope to commence the implementation of a restructuring with one or both of our creditor groups that will allow us to continue the momentum of our turnaround efforts,” Berner said.

According to RadioWorld, John Abbot, executive VP, treasurer and CFO of Cumulus, was more direct in his comments about Cumulus moving forward with or without a Chapter 11 filing.

“We have been using this period (since November 1) to continue our discussions and we hope to develop and begin implementation of a restructuring process that could be effectuated either out of court or through a court-supervised Chapter 11 process.”

He continued, “It’s our intention to restructure our debt in a way that balances our goal of minimizing disruption to our business while maintaining the momentum of our turnaround effort while maximizing the benefit of a significantly deleveraged capital structure.”