Cumulus Media Inc. today reported financial results for the three and six months ended June 30, 2012.

Lew Dickey, Chairman & CEO stated, "The Integration of Citadel, investment in growth and de-leveraging are our top priorities. We are making excellent progress on all three fronts."

Net Revenues 

Net revenues for the three months ended June 30, 2012 increased $218.8 million, or 351.5%, to$281.0 million, compared to $62.2 million for the three months ended June 30, 2011. This increase reflects the impact of net revenues from Cumulus Media Partners, LLC ("CMP") andCitadel Broadcasting Corporation ("Citadel"), as well as a $2.7 million increase in political advertising. Revenue growth was partially offset by short term revenue impacts resulting from strategic format changes in some markets, general downward trends in the overall macroeconomic environment and reduced use of trade advertising on acquired stations. Additionally, management fee income decreased $0.8 million primarily related to the completion of the CMP Acquisition and related discontinuation of the CMP management agreement.

Direct Operating Expenses, Excluding Depreciation and Amortization

Direct operating expenses for the three months ended June 30, 2012 increased $133.4 million, or 378.3%, to $168.7 million, compared to $35.3 million for the three months ended June 30, 2011. This increase reflects the impact of direct operating expenses from Citadel and CMP in addition to a $1.3 million increase in broadcast rights. Previously announced synergies resulted in expense decreases due to reduced compensation costs, discretionary spending related to promotions and nontraditional revenue generating events, and enhanced expense controls.

Corporate, General and Administrative Expenses, Including Stock-based Compensation Expense

Corporate general and administrative expenses, including stock-based compensation expense, for the three months ended June 30, 2012 increased $7.7 million, or 83.8%, to $16.8 million, compared to $9.1 million for the three months ended June 30, 2011. This increase is primarily comprised of a $5.3 million increase in stock-based compensation expense and $2.5 millionrelated to the restructuring and consolidation of leased properties which is included in acquisition-related costs.

Interest Expense, net

Total interest expense, net of interest income, for the three months ended June 30, 2012 increased$40.4 million, or 440.6%, to $49.6 million compared to $9.2 million for the three months endedJune 30, 2011. Interest expense associated with outstanding debt increased by $38.9 million to$47.7 million as compared to $8.8 million in the prior year period. Interest expense increased due to a higher average amount of indebtedness outstanding during 2012 as a result of the acquisition of CMP and Citadel and the related refinancing (the "Refinancing") in the third quarter of 2011. For further discussion regarding the acquisitions and the Refinancing refer to the Company's Form 10-Q for the quarterly period ended June 30, 2012.

Capital Expenditures

Capital expenditures for the three months ended June 30, 2012 totaled $0.8 million which represented routine capital expenditures. Capital expenditures during the three months endedJune 30, 2011 were $1.0 million.

Six Months Ended June 30, 2012 Compared to Six Months Ended June 30, 2011

Net Revenues 

Net revenues for the six months ended June 30, 2012 increased $403.1 million, or 353.9%, to$517.0 million, compared to $113.9 million for the six months ended June 30, 2011. This increase reflects the impact of net revenues from CMP and Citadel, as well as a $4.7 millionincrease in political advertising. Revenue growth was partially offset by short term revenue impacts resulting from strategic format changes in some markets, general downward trends in the overall macroeconomic environment and reduced use of trade advertising on acquired stations. Additionally, management fee income decreased $1.9 million primarily related to the completion of the CMP Acquisition and related discontinuation of the CMP management agreement.

Direct Operating Expenses, Excluding Depreciation and Amortization

Direct operating expenses for the six months ended June 30, 2012 increased $253.4 million, or 367.4%, to $322.4 million, compared to $69.0 million for the six months ended June 30, 2011. This increase reflects the impact of direct operating expenses from Citadel and CMP. Previously announced synergies resulted in expense decreases due to reduced compensation costs, discretionary spending related to promotions and nontraditional revenue generating events, and enhanced expense controls.

Corporate, General and Administrative Expenses, Including Stock-based Compensation Expense

Corporate, general and administrative expenses, including stock-based compensation expense, for the six months ended June 30, 2012, increased $16.2 million, or 93.9%, to $33.5 million, compared to $17.3 million for the six months ended June 30, 2011. This increase is primarily comprised of a $11.7 million increase in stock-based compensation expense, additional personnel costs of $3.5 million, a $1.1 million decrease in professional fees, and a $0.1 millionreduction in acquisition costs since the prior year period included costs associated with the CMP and Citadel acquisitions.

Interest Expense, net

Total interest expense, net of interest income, for the six months ended June 30, 2012 increased$84.9 million, or 548.1%, to $100.4 million compared to $15.5 million for the six months endedJune 30, 2011. Interest expense associated with outstanding debt increased by $81.0 million to$95.7 million as compared to $14.7 million in the prior year period. Interest expense increased due to a higher average amount of indebtedness outstanding during 2012 as a result of the CMP and Citadel acquisitions and the Refinancing in the third quarter of 2011. 

Earnings (Loss) Per Share

Basic earnings (loss) per share ("EPS") is calculated for the three and six months ended June 30, 2012 by dividing undistributed net loss from continuing operations of $1.8 million and $14.4 million, respectively, adjusted for dividends declared on preferred stock for the three and six months ended June 30, 2012 of $4.4 million and $7.7 million, respectively, and the accretion of redeemable preferred stock for the three and six months ended June 30, 2012 of $1.9 million and$4.6 million, respectively, by the weighted average number of shares of common stock outstanding during the applicable period, which was 157,710,861 shares and 153,540,006 shares for the three and six months ended June 30, 2012, respectively. Diluted EPS for the three and six months ended June 30, 2012 is equal to basic EPS due to the exclusion of 56.2 million and 57.6 million of potentially dilutive securities, respectively.  The potentially dilutive securities consisted of shares of common stock underlying certain outstanding warrants that were excluded because their impact was antidilutive. Basic and diluted EPS for discontinued operations is computed in the same manner as EPS for continuing operations, excluding any adjustments for dividends accrued and accreted. Basic and diluted EPS for net income (loss) is computed in the same manner as EPS for continuing operations.

Capital Expenditures

Capital expenditures for the six months ended June 30, 2012 totaled $1.9 million, which represented routine capital expenditures. Capital expenditures during the six months ended June 30, 2011 were $1.5 million.

Subsequent Event

On July 31, 2012, the Company completed its previously announced sale of 55 stations in eleven non-strategic markets to Townsquare Media, LLC ("Townsquare") in exchange for ten of Townsquare's radio stations in Bloomington, IL and Peoria, IL, plus approximately $115.8 million in cash. The transaction is part of the Company's ongoing efforts to focus on radio stations in top markets and geographically strategic regional clusters. The stations sold by the Company operated in the following markets: Augusta, ME; Bangor, ME; Binghamton, NY;Bismarck, ND; Grand Junction, CO; Killeen-Temple, TX; New Bedford, MA; Odessa-Midland, TX; Presque Isle, ME; Sioux Falls, SD and Tuscaloosa, AL. Accordingly the results of operations associated with these stations were separately reported, net of the related tax impact, for all periods presented. The Company used a majority of the proceeds to repay outstanding borrowings under its Revolving Credit Facility, which amounts are available for future reborrowing, and to repurchase and redeem a portion of its outstanding Series A Preferred Stock.