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

Lew Dickey, Chairman & CEO stated, "This quarter marked the first anniversary of our transformative merger. We are pleased to report that the integration is largely complete, and our identified synergies were materially exceeded six months ahead of schedule. We are making excellent progress in the turnaround of 10 underperforming stations which account for 100% of our revenue decline, and expect them to post positive revenue growth in 2013."

Net Revenues 

Net revenues for the three months ended September 30, 2012 increased $150.6 million, or 120.7%, to $275.4 million, compared to $124.8 million for the three months ended September 30, 2011. This increase reflects the full period impact of net revenues from the acquisitions of Cumulus Media Partners, LLC ("CMP") in August 2011 (the "CMP Acquisition") and Citadel Broadcasting Corporation ("Citadel") in September 2011 (the "Citadel Acquisition") as well as a $4.6 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 macro economic environment for radio and reduced use of trade advertising on acquired stations.   

Direct Operating Expenses, Excluding Depreciation and Amortization

Direct operating expenses for the three months ended September 30, 2012 increased $88.0 million, or 119.4%, to $161.7 million, compared to $73.7 million for the three months ended September 30, 2011. This increase reflects the full period impact of direct operating expenses of CMP and Citadel, partially offset by a $7.1 million decrease in music licensing fees. Previously announced synergies resulted in reduced compensation costs and discretionary spending related to promotions, as well as 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 September 30, 2012 decreased $31.7 million, or 70.9%, to $13.0 million, compared to $44.7 million for the three months ended September 30, 2011. This decrease is primarily comprised of a $35.7 million decrease in acquisition and restructuring costs primarily related to the Citadel and CMP acquisitions completed in 2011, partially offset by a $1.2 millionincrease in stock-based compensation expense.

Interest Expense, net

Total interest expense, net of interest income, for the three months ended September 30, 2012 increased $30.3 million, or 155.1%, to $49.8 million compared to $19.5 million for the three months ended September 30, 2011. Interest expense associated with outstanding debt increased by$26.9 million to $46.9 million as compared to $20.0 million in the prior year period. Interest expense increased due to a higher average amount of indebtedness outstanding as a result of the CMP and Citadel acquisitions and the Company's related refinancing (the "Refinancing") in the third quarter of 2011.

Capital Expenditures

Capital expenditures for the three months ended September 30, 2012 totaled $2.7 million which represented routine capital expenditures. Capital expenditures during the three months endedSeptember 30, 2011 were $1.4 million.

Nine Months Ended September 30, 2012 Compared to Nine Months Ended September 30, 2011

Net Revenues 

Net revenues for the nine months ended September 30, 2012 increased $553.7 million, or 232.0%, to $792.4 million, compared to $238.7 million for the nine months ended September 30, 2011. This increase reflects the impact of net revenues from CMP and Citadel, as well as a $10.6 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 macro economic environment for radio and reduced use of trade advertising on acquired stations.

Direct Operating Expenses, Excluding Depreciation and Amortization

Direct operating expenses for the nine months ended September 30, 2012 increased $341.4 million, or 239.3%, to $484.1 million, compared to $142.7 million for the nine months ended September 30, 2011. This increase reflects the impact of direct operating expenses of CMP andCitadel, partially offset by a $7.1 million decrease in music license fees. Previously announced synergies resulted in reduced compensation costs and discretionary spending related to promotions, as well as 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 nine months ended September 30, 2012 decreased $15.4 million, or 25.0%, to $46.5 million, compared to $61.9 million for the nine months ended September 30, 2011. This decrease is primarily comprised of a $2.6 million reduction of certain contractual obligations assumed in the Citadel Acquisition and a $35.8 million reduction in acquisition costs since the prior year period included costs associated with the CMP and Citadel acquisitions. This was partially offset by  a$12.9 million increase in stock-based compensation expense attributed mainly to the Citadel Acquisition and additional personnel costs of $4.2 million.

Interest Expense, net

Total interest expense, net of interest income, for the nine months ended September 30, 2012 increased $115.2 million, or 329.1%, to $150.2 million compared to $35.0 million for the nine months ended September 30, 2011. Interest expense associated with outstanding debt increased by$107.4 million to $142.1 million as compared to $34.7 million in the prior year period. Interest expense increased due to a higher average amount of indebtedness outstanding as a result of indebtedness incurred to complete the CMP and Citadel Acquisitions and the Refinancing in the third quarter of 2011. 

Capital Expenditures

Capital expenditures for the nine months ended September 30, 2012 totaled $4.7 million, which represented routine capital expenditures. Capital expenditures during the nine months endedSeptember 30, 2011 were $2.9 million.

Earnings (Loss) Per Share

Basic earnings (loss) per share ("EPS") is calculated for the three and nine months ended September 30, 2012 by dividing undistributed net income from continuing operations of $26.8 million and$12.4 million, respectively, adjusted for dividends declared on preferred stock for the three and nine months ended September 30, 2012 of $3.4 million and $11.1 million, respectively, and the accretion of redeemable preferred stock for the three and nine months ended September 30, 2012 of$1.4 million and $6.1 million, respectively, by the weighted average number of shares of common stock outstanding during the applicable period, which was 169,510,007 shares and 158,902,196 shares for the three and nine months ended September 30, 2012, respectively. Diluted EPS for the three months ended September 30, 2012 was calculated in the same manner as basic EPS, after adjusting for the inclusion of 6.8 million potentially dilutive securities represented by shares of common stock underlying certain outstanding warrants. Diluted EPS for the nine months endedSeptember 30, 2012 is equal to basic EPS due to the exclusion of 53.1 million potentially dilutive securities. The potentially dilutive securities consisted of shares of common stock underlying certain outstanding warrants that were excluded because their impact was antidilutive due to the net loss reported for that period. Basic and diluted EPS for discontinued operations is computed in the same matter 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 matter as EPS for continuing operations.