Delaware | 000-24525 | 36-4159663 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS employer Identification No.) | ||
3280 Peachtree Road, N.W., Suite 2300, Atlanta GA | 30305 | |||
(Address of principal executive offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(d) | Exhibits. |
Number | Exhibit | |
99.1 | Unaudited pro forma condensed consolidated balance sheet of Cumulus Media Inc. as of September 30, 2013 and unaudited pro forma condensed consolidated statements of operations of Cumulus Media Inc. for the nine months ended September 30, 2013 and for the years ended December 31, 2012, 2011 and 2010, and notes related thereto. |
CUMULUS MEDIA INC. | ||||
By: | /s/ J.P Hannan | |||
Name: J.P. Hannan | ||||
Title: Senior Vice President, Treasurer and Chief Financial Officer |
Number | Exhibit | |
99.1 | Unaudited pro forma condensed consolidated balance sheet of Cumulus Media Inc. as of September 30, 2013 and unaudited pro forma condensed consolidated statements of operations of Cumulus Media Inc. for the nine months ended September 30, 2013 and for the years ended December 31, 2012, 2011 and 2010, and notes related thereto. |
• | an unaudited pro forma condensed consolidated balance sheet as of September 30, 2013, giving effect to the completion of the Townsquare Transaction as if it had occurred on September 30, 2013; | |||
• | unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2013 and for the years ended December 31, 2012, 2011 and 2010, giving effect to the completion of the Townsquare Transaction as if it had occurred on January 1, 2010; and | |||
• | notes to the unaudited pro forma condensed consolidated financial information. |
As Reported (A) | Less: Discontinued Operations (B) | Add: Cash Proceeds and Assets Acquired (C) | Pro Forma Combined | ||||||||||||
Assets | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 64,170 | $ | (4 | ) | $ | 238,000 | (D) | $ | 302,166 | |||||
Restricted cash | 3,729 | — | — | 3,729 | |||||||||||
Accounts receivable, less allowance for doubtful accounts of $3,728 | 194,872 | (10,979 | ) | (G) | 2,036 | (G) | 185,929 | ||||||||
Trade receivable | 7,821 | (1,036 | ) | — | 6,785 | ||||||||||
Deferred income taxes | 30,575 | 6,502 | 189 | 37,266 | |||||||||||
Prepaid expenses and other current assets | 23,640 | (287 | ) | 134 | 23,487 | ||||||||||
Total current assets | 324,807 | (5,804 | ) | 240,359 | 559,362 | ||||||||||
Property and equipment, net | 240,915 | (11,370 | ) | 5,434 | 234,979 | ||||||||||
Broadcast licenses | 1,640,829 | (61,384 | ) | 17,539 | 1,596,984 | ||||||||||
Other intangible assets, net | 194,653 | (8,957 | ) | 854 | 186,550 | ||||||||||
Goodwill | 1,205,195 | (66,808 | ) | 8,469 | 1,146,856 | ||||||||||
Other assets | 70,740 | — | 100 | 70,840 | |||||||||||
Total assets | $ | 3,677,139 | $ | (154,323 | ) | $ | 272,755 | $ | 3,795,571 | ||||||
Liabilities and Stockholders’ Equity | |||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable and accrued expenses | $ | 91,728 | $ | (1,200 | ) | $ | 199 | $ | 90,727 | ||||||
Trade payable | 7,107 | (1,080 | ) | — | 6,027 | ||||||||||
Current portion of long-term debt | 38,092 | — | — | 38,092 | |||||||||||
Other current liabilities | 3,714 | — | 288 | 4,002 | |||||||||||
Total current liabilities | 140,641 | (2,280 | ) | 487 | 138,848 | ||||||||||
Long-term debt, excluding 7.75% senior notes | 1,966,230 | — | — | 1,966,230 | |||||||||||
7.75% senior notes | 610,000 | — | — | 610,000 | |||||||||||
Series B cumulative redeemable preferred stock | 77,241 | — | — | 77,241 | |||||||||||
Other liabilities | 39,587 | (107 | ) | — | 39,480 | ||||||||||
Deferred income taxes | 575,007 | (17,003 | ) | 2,512 | 560,516 | ||||||||||
Total liabilities | 3,408,706 | (19,390 | ) | 2,999 | 3,392,315 | ||||||||||
Stockholders’ equity: | |||||||||||||||
Class A common stock, par value $0.01 per share; 750,000,000 shares authorized; 191,473,932 shares issued and 167,300,363 shares outstanding | 1,914 | — | — | 1,914 | |||||||||||
Class B common stock, par value $0.01 per share; 600,000,000 shares authorized; 15,424,944 shares issued and outstanding | 154 | — | — | 154 | |||||||||||
Class C common stock, par value $0.01 per share; 644,871 shares authorized issued and outstanding | 6 | — | — | 6 | |||||||||||
Treasury stock, at cost, 24,173,569 shares | (250,917 | ) | — | — | (250,917 | ) | |||||||||
Additional paid-in-capital | 1,510,329 | — | — | 1,510,329 | |||||||||||
Accumulated deficit | (993,053 | ) | (134,933 | ) | (F) | 269,756 | (F) | (858,230 | ) | ||||||
Total stockholders’ equity | 268,433 | (134,933 | ) | 269,756 | 403,256 | ||||||||||
Total liabilities and stockholders’ equity | $ | 3,677,139 | $ | (154,323 | ) | $ | 272,755 | $ | 3,795,571 |
As Reported (A) | Less: Discontinued Operations (E) | Add: Acquired Fresno Operations (H) | Pro Forma Combined | ||||||||||||
Broadcast revenues | $ | 802,704 | $ | (52,941 | ) | $ | 10,536 | $ | 760,299 | ||||||
Management fees | 917 | — | — | 917 | |||||||||||
Net revenues | 803,621 | (52,941 | ) | 10,536 | 761,216 | ||||||||||
Operating expenses: | |||||||||||||||
Direct operating expenses (excluding depreciation, amortization and LMA fees) | 509,972 | (27,631 | ) | 8,034 | 490,375 | ||||||||||
Depreciation and amortization | 86,809 | (3,996 | ) | 712 | 83,525 | ||||||||||
LMA fees | 2,356 | (62 | ) | — | 2,294 | ||||||||||
Corporate, general and administrative expenses (including stock-based compensation expense of $2,259) | 33,365 | — | — | 33,365 | |||||||||||
Gain on sale of stations | (3,662 | ) | — | — | (3,662 | ) | |||||||||
Gain on derivative instrument | (2,672 | ) | — | — | (2,672 | ) | |||||||||
Total operating expenses | 626,168 | (31,689 | ) | 8,746 | 603,225 | ||||||||||
Operating income | 177,453 | (21,252 | ) | 1,790 | 157,991 | ||||||||||
Non-operating expense: | |||||||||||||||
Interest expense, net | (133,279 | ) | — | — | (133,279 | ) | |||||||||
Loss on early extinguishment of debt | (4,539 | ) | — | — | (4,539 | ) | |||||||||
Other expense, net | (400 | ) | 1 | — | (399 | ) | |||||||||
Total non-operating expense, net | (138,218 | ) | 1 | — | (138,217 | ) | |||||||||
Income from continuing operations before income taxes | 39,235 | (21,251 | ) | 1,790 | 19,774 | ||||||||||
Income tax expense | (14,087 | ) | 8,607 | (I) | (725 | ) | (I) | (6,205 | ) | ||||||
Income from continuing operations | 25,148 | (12,644 | ) | 1,065 | 13,569 | ||||||||||
Net income | 25,148 | (12,644 | ) | 1,065 | 13,569 | ||||||||||
Less: dividends declared and accretion of redeemable preferred stock | 10,676 | — | — | 10,676 | |||||||||||
Income attributable to common shareholders | $ | 14,472 | $ | (12,644 | ) | $ | 1,065 | $ | 2,893 | ||||||
Basic and diluted income per common share | |||||||||||||||
Basic: Income from continuing operations per share | $ | 0.06 | $ | 0.02 | |||||||||||
Income per share | $ | 0.06 | $ | 0.02 | |||||||||||
Diluted: Income from continuing operations per share | $ | 0.06 | $ | 0.02 | |||||||||||
Income per share | $ | 0.06 | $ | 0.02 | |||||||||||
Weighted average basic common shares outstanding | 176,994,583 | 176,994,583 | |||||||||||||
Weighted average diluted common shares outstanding | 180,032,349 | 180,032,349 |
As Reported (A) | Less: Discontinued Operations (E) | Add: Acquired Fresno Operations (H) | Pro Forma Combined | ||||||||||||
Broadcast revenues | $ | 1,073,901 | $ | (74,310 | ) | $ | 15,602 | $ | 1,015,193 | ||||||
Management fees | 2,681 | — | — | 2,681 | |||||||||||
Net revenues | 1,076,582 | (74,310 | ) | 15,602 | 1,017,874 | ||||||||||
Operating expenses: | |||||||||||||||
Direct operating expenses (excluding depreciation, amortization and LMA fees) | 661,511 | (38,627 | ) | 11,068 | 633,952 | ||||||||||
Depreciation and amortization | 142,143 | (6,568 | ) | 703 | 136,278 | ||||||||||
LMA fees | 3,556 | (91 | ) | — | 3,465 | ||||||||||
Corporate, general and administrative expenses (including stock-based compensation expense of $18,779) | 57,438 | — | — | 57,438 | |||||||||||
Gain on derivative instrument | (12 | ) | — | — | (12 | ) | |||||||||
Impairment of intangible assets | 127,141 | (1,156 | ) | — | 125,985 | ||||||||||
Total operating expenses | 991,777 | (46,442 | ) | 11,771 | 957,106 | ||||||||||
Operating income | 84,805 | (27,868 | ) | 3,831 | 60,768 | ||||||||||
Non-operating (expense) income: | |||||||||||||||
Interest expense, net | (198,628 | ) | — | — | (198,628 | ) | |||||||||
Loss on early extinguishment of debt | (2,432 | ) | — | — | (2,432 | ) | |||||||||
Other expense, net | (2,474 | ) | (5 | ) | — | (2,479 | ) | ||||||||
Total non-operating expense, net | (203,534 | ) | (5 | ) | — | (203,539 | ) | ||||||||
(Loss) income from continuing operations before income taxes | (118,729 | ) | (27,873 | ) | 3,831 | (142,771 | ) | ||||||||
Income tax benefit (expense) | 26,552 | 11,289 | (I) | (1,552 | ) | (I) | 36,289 | ||||||||
(Loss) income from continuing operations | (92,177 | ) | (16,584 | ) | 2,279 | (106,482 | ) | ||||||||
Income from discontinued operations, net of taxes | 59,448 | — | — | 59,448 | |||||||||||
Net (loss) income | (32,729 | ) | (16,584 | ) | 2,279 | (47,034 | ) | ||||||||
Less: dividends declared and accretion of redeemable preferred stock | 21,432 | — | — | 21,432 | |||||||||||
(Loss) income attributable to common shareholders | $ | (54,161 | ) | $ | (16,584 | ) | $ | 2,279 | $ | (68,466 | ) | ||||
Basic and diluted (loss) income per common share | |||||||||||||||
Basic: Loss from continuing operations per share | $ | (0.70 | ) | $ | (0.79 | ) | |||||||||
Income from discontinued operations per share | $ | 0.37 | $ | 0.37 | |||||||||||
Loss per share | $ | (0.33 | ) | $ | (0.42 | ) | |||||||||
Diluted: Loss from continuing operations per share | $ | (0.70 | ) | $ | (0.79 | ) | |||||||||
Income from discontinued operations per share | $ | 0.37 | $ | 0.37 | |||||||||||
Loss per share | $ | (0.33 | ) | $ | (0.42 | ) | |||||||||
Weighted average basic common shares outstanding | 162,603,882 | 162,603,882 | |||||||||||||
Weighted average diluted common shares outstanding | 162,603,882 | 162,603,882 |
As Reported (A) | Less: Discontinued Operations (E) | Pro Forma Combined | |||||||||
Broadcast revenues | $ | 517,171 | $ | (53,919 | ) | $ | 463,252 | ||||
Management fees | 2,792 | — | 2,792 | ||||||||
Net revenues | 519,963 | (53,919 | ) | 466,044 | |||||||
Operating expenses: | |||||||||||
Direct operating expenses (excluding depreciation, amortization and LMA fees) | 316,253 | (31,332 | ) | 284,921 | |||||||
Depreciation and amortization | 51,148 | (2,418 | ) | 48,730 | |||||||
LMA fees | 2,525 | (100 | ) | 2,425 | |||||||
Corporate, general and administrative expenses (including stock-based compensation expense of $10,744) | 90,761 | — | 90,761 | ||||||||
Gain on exchange of assets or stations | (15,278 | ) | 1,061 | (14,217 | ) | ||||||
Realized loss on derivative instrument | 3,368 | — | 3,368 | ||||||||
Total operating expenses | 448,777 | (32,789 | ) | 415,988 | |||||||
Operating income | 71,186 | (21,130 | ) | 50,056 | |||||||
Non-operating (expense) income: | |||||||||||
Interest expense, net | (86,989 | ) | — | (86,989 | ) | ||||||
Loss on early extinguishment of debt | (4,366 | ) | — | (4,366 | ) | ||||||
Other expense, net | 39 | 22 | 61 | ||||||||
Gain on equity investment in Cumulus Media Partners, LLC | 11,636 | — | 11,636 | ||||||||
Total non-operating expense, net | (79,680 | ) | 22 | (79,658 | ) | ||||||
(Loss) income from continuing operations before income taxes | (8,494 | ) | (21,108 | ) | (29,602 | ) | |||||
Income tax benefit (expense) | 3,313 | 8,549 | (I) | 11,862 | |||||||
(Loss) income from continuing operations | (5,181 | ) | (12,559 | ) | (17,740 | ) | |||||
Income from discontinued operations, net of taxes | 69,041 | — | 69,041 | ||||||||
Net income | 63,860 | (12,559 | ) | 51,301 | |||||||
Less: dividends declared and accretion of redeemable preferred stock | 6,961 | — | 6,961 | ||||||||
Income attributable to common shareholders | $ | 56,899 | $ | (12,559 | ) | $ | 44,340 | ||||
Basic and diluted (loss) income per common share | |||||||||||
Basic: Loss from continuing operations per share | $ | (0.17 | ) | $ | (0.34 | ) | |||||
Income from discontinued operations per share | $ | 0.97 | $ | 0.97 | |||||||
Income per share | $ | 0.80 | $ | 0.63 | |||||||
Diluted: Loss from continuing operations per share | $ | (0.17 | ) | $ | (0.34 | ) | |||||
Income from discontinued operations per share | $ | 0.97 | $ | 0.97 | |||||||
Income per share | $ | 0.80 | $ | 0.63 | |||||||
Weighted average basic common shares outstanding | 70,890,393 | 70,890,393 | |||||||||
Weighted average diluted common shares outstanding | 70,890,393 | 70,890,393 |
As Reported (A) | Less: Discontinued Operations (E) | Pro Forma Combined | |||||||||
Broadcast revenues | $ | 232,494 | $ | (47,199 | ) | $ | 185,295 | ||||
Management fees | 4,146 | — | 4,146 | ||||||||
Net revenues | 236,640 | (47,199 | ) | 189,441 | |||||||
Operating expenses: | |||||||||||
Direct operating expenses (excluding depreciation, amortization and LMA fees) | 143,717 | (28,625 | ) | 115,092 | |||||||
Depreciation and amortization | 8,214 | (1,002 | ) | 7,212 | |||||||
LMA fees | 2,054 | (144 | ) | 1,910 | |||||||
Corporate, general and administrative expenses (including stock-based compensation expense of $2,451) | 18,519 | — | 18,519 | ||||||||
Realized loss on derivative instrument | 1,957 | — | 1,957 | ||||||||
Impairment of intangible assets | 671 | — | 671 | ||||||||
Total operating expenses | 175,132 | (29,771 | ) | 145,361 | |||||||
Operating income | 61,508 | (17,428 | ) | 44,080 | |||||||
Non-operating (expense) income: | |||||||||||
Interest expense, net | (30,307 | ) | — | (30,307 | ) | ||||||
Terminated transaction expense | (7,847 | ) | — | (7,847 | ) | ||||||
Other expense, net | 108 | — | 108 | ||||||||
Total non-operating expense, net | (38,046 | ) | — | (38,046 | ) | ||||||
Income from continuing operations before income taxes | 23,462 | (17,428 | ) | 6,034 | |||||||
Income tax (expense) benefit | (1,505 | ) | 7,058 | (I) | 5,553 | ||||||
Income from continuing operations | 21,957 | (10,370 | ) | 11,587 | |||||||
Income from discontinued operations, net of taxes | 7,445 | — | 7,445 | ||||||||
Net income | $ | 29,402 | $ | (10,370 | ) | $ | 19,032 | ||||
Basic and diluted income per common share | |||||||||||
Basic: Income from continuing operations per share | $ | 0.52 | $ | 0.29 | |||||||
Income from discontinued operations per share | $ | 0.18 | $ | 0.18 | |||||||
Income per share | $ | 0.70 | $ | 0.47 | |||||||
Diluted: Income from continuing operations per share | $ | 0.51 | $ | 0.29 | |||||||
Income from discontinued operations per share | $ | 0.17 | $ | 0.17 | |||||||
Income per share | $ | 0.68 | $ | 0.46 | |||||||
Weighted average basic common shares outstanding | 40,341,011 | 40,341,011 | |||||||||
Weighted average diluted common shares outstanding | 41,189,161 | 41,189,161 |
A. | Includes the results of the Company’s radio stations sold and swapped in the Townsquare Transaction, which were not historically reported as discontinued operations. | ||
B. | Represents the elimination of the assets and liabilities attributable to the Company's radio stations sold and swapped in the Townsquare Transaction. | ||
C. | Represents the pro forma purchase price allocation based upon the estimated fair values attributable to the five Fresno, CA radio stations acquired in the Townsquare Transaction. | ||
D. | Represents cash proceeds received from the sale of the Company's radio stations in the Townsquare Transaction. | ||
E. | Represents the historical financial results of the Company’s radio stations sold and swapped in the Townsquare Transaction. | ||
F. | Represents a pre-tax book gain of $110.2 million for which the related tax expense will be offset by the release of valuation allowance associated with the consumption of available net operating loss carryforwards. In addition to these items, these adjustments include a deferred tax benefit associated with the release of valuation allowance in the amount of $24.6 million with respect to sources of taxable income from the settlement of deferred tax liabilities associated with the Company's disposition of indefinite lived intangibles and the acquisition of certain deferred tax liabilities associated with the five Fresno, CA radio stations acquired in the Townsquare Transaction. | ||
G. | Less allowance for doubtful accounts of $0.3 million and $0.1 million for the discontinued operations and assets acquired, respectively. | ||
H. | Represents the financial results of the five Fresno, CA radio stations acquired in the Townsquare Transaction. | ||
I. | Reflects the tax effect at a blended federal and state statutory rate of 40.5%. |