Cumulus Media Inc. (NASDAQ:CMLS), a leading audio-first media company, has recently completed a strategic refinancing of its capital structure, securing favorable terms and extending maturities to 2029. This move provides the company with additional runway to execute its key priorities, including accelerating digital growth, reducing fixed costs, and continuing to deleverage its balance sheet.

In the first quarter of 2024, Cumulus Media reported net revenue of $200.0 million, down 2.7% year-over-year. This decline, while still present, represented a marked improvement from the previous year's trends. The company's digital business continued to be a bright spot, with digital marketing services revenue growing 25% and digital revenue as a whole increasing in the low single digits.

The company's digital strategy, centered on a versatile and well-connected sales team offering a suite of digital audio and digital marketing solutions, has been yielding impressive results. Cumulus has seen a 25% increase in total digital marketing services customers and a 12% improvement in the percentage of previously radio-only customers who now also buy digital products.

Broadcast radio revenue, which accounts for approximately 70% of the company's total revenue, saw a mixed performance in the quarter. National spot and network revenue, which make up around 50% of broadcast revenue, improved significantly, declining in the mid-single digits compared to the prior year. This was driven by increased spending in key categories such as consumer packaged goods, insurance, and pharmaceuticals.

However, the recovery in national advertising remains choppy, with several key categories, including mortgage, banking, and home improvement, continuing to cite the uncertain macroeconomic environment as a significant obstacle to increased spending. Local spot revenue, while still down, also showed improvement compared to the previous quarter.

On the expense side, Cumulus Media has remained focused on disciplined cost reductions, achieving approximately $4 million in fixed cost savings in the first quarter. This was on top of the $120 million, or 26%, in total fixed costs the company had already taken out since the pandemic through the end of 2023. These efforts have significantly improved the company's operating leverage, positioning it to drive EBITDA growth as the advertising environment continues to recover.

Looking ahead to the second quarter, Cumulus Media is currently pacing down low single digits, as the uncertain macroeconomic conditions continue to weigh on some advertisers. However, the company remains optimistic about its ability to navigate these challenges, thanks to its successful refinancing and the continued execution of its strategic priorities.

The refinancing, which included an exchange offer for the company's 6.75% Senior Notes and a new term loan, has extended approximately 97% of Cumulus Media's debt maturities to 2029, reduced the principal amount of debt outstanding by $33 million, secured attractive interest rates, and maintained covenant-light terms. Additionally, the company's amended and extended $125 million ABL facility provides further liquidity and flexibility to support its strategic initiatives.

Cumulus Media's focus on digital growth, cost optimization, and debt reduction remains unwavering. The company's differentiated go-to-market strategy in digital, combined with its national platform and extensive station portfolio, positions it well to navigate the evolving media landscape and build long-term shareholder value.

In the first quarter of 2024, Cumulus Media reported a net loss of $14.2 million, compared to a net loss of $21.5 million in the same period of the prior year. The company's annual net income for the fiscal year 2023 was -$117.9 million, while its annual revenue was $844.5 million. Cumulus Media's annual operating cash flow was $31.7 million, and its annual free cash flow was $6.8 million.

Overall, Cumulus Media's successful refinancing, coupled with its strategic focus on digital growth, cost optimization, and debt reduction, provides the company with the necessary runway and flexibility to navigate the current macroeconomic uncertainties and position itself for long-term success.