NASDAQ:CMLS Cumulus Media Q1 2024 Earnings Report $0.20 -0.07 (-24.86%) As of 04/24/2025 03:59 PM Eastern Earnings History Cumulus Media EPS ResultsActual EPS-$0.85Consensus EPS -$1.33Beat/MissBeat by +$0.48One Year Ago EPSN/ACumulus Media Revenue ResultsActual Revenue$200.05 millionExpected Revenue$200.30 millionBeat/MissMissed by -$250.00 thousandYoY Revenue GrowthN/ACumulus Media Announcement DetailsQuarterQ1 2024Date5/3/2024TimeN/AConference Call DateFriday, May 3, 2024Conference Call Time8:30AM ETUpcoming EarningsCumulus Media's Q1 2025 earnings is scheduled for Thursday, May 1, 2025, with a conference call scheduled at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Cumulus Media Q1 2024 Earnings Call TranscriptProvided by QuartrMay 3, 2024 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00Welcome to the Cumulus Media Quarterly Earnings Conference Call. I'll now turn it over to Colin Jones, Executive Vice President of Strategy and Development and President of Westwood One. Sir, you may proceed. Speaker 100:00:11Thank you, operator. Welcome everyone to our Q1 2024 earnings conference call. I'm joined today by our President and CEO, Mary Boerner and our CFO, Frank Lopez Balboa. Before we start, please note that certain statements in today's press release and discussed on this call may constitute forward looking statements under federal securities laws. Actual results may differ materially from the results expressed or implied in forward looking statements. Speaker 100:00:36These statements are based on management's current assessments and assumptions and they're subject to a number of risks and uncertainties as discussed in our filings with the SEC. In addition, we will also use certain non GAAP financial measures. We believe the supplementary information is useful to investors, although it should not be considered superior to the measures presented in accordance with GAAP. A full description of these risks as well as financial reconciliations to non GAAP terms are in our press release and SEC filings, and that press release can be found in the Investor Relations portion of our website and our Form 10 Q was also filed with the SEC shortly before this call. A recording of today's call will be available for about a month via a link in the Investor portion of the website. Speaker 100:01:17Now with that, I'll turn it over to our President and CEO, Mary Berner. Mary? Speaker 200:01:22Thanks, Colin, and good morning, everyone. This morning, I'm very pleased to let you know that we've refinanced our capital structure to secure 5 year maturities with very favorable terms through a successful debt exchange and ABL facility upside and extension, which is an excellent outcome for the company given the generally difficult financing environment for legacy media companies. Specifically, with the completion of these transactions, we have extended maturities to 2029, reduced the principal amount of debt outstanding by approximately 33,000,000 dollars secured attractive interest rates, maintained covenant like terms and increased our ABL facility availability by 25%. Importantly, by addressing the 2026 maturity wall, we now have considerable additional runway with which to continue executing against our strategic, operational and financial priorities, including: accelerating digital growth through ongoing investments, particularly in digital marketing services reducing fixed costs to further enhance our operating leverage, which will be a big benefit to us as broadcast radio demand improves and continuing to reduce debt to delever. Since our last call, in parallel to refinancing our debt capital structure, we continue to make considerable progress against these priority areas with the benefit of that progress reflected in our Q1 results. Speaker 200:02:51In Q1, in line with pacing guidance, total company revenue was down 2.7%, which represents a marked improvement from 2023 trends and EBITDA was $8,400,000 Overall, digital continues to be an area of strong growth, increasing 7% year over year. Once again, our digital marketing services revenue was the lead growth driver, up 25% in the quarter, clearly demonstrating the positive impact of the investments we've made to date. These investments included the expansion of our digital sales force to capture more of the growing DMS space and the ramp up of Qumulus Boost, our portfolio of presence products, which serves as a low price entry point for advertisers who are new to the company and as 2 thirds of our originally Boost only clients have added broadcast radio or other digital products to their buys, the benefit of the Boost strategy are compelling. Our digital results also reflect our differentiated go to market strategy, which centers on a versatile and well connected feet on the street sales team offering a suite of digital, audio and digital marketing solutions. Our ability to walk this full product set into the customer's door continues to pay off as our customers value personal relationship and our sales people's ability to tailor and adapt solutions that fit their particular business needs, while remaining responsive to the continually changing dynamics of the digital ad market. Speaker 200:04:21This approach is yielding impressive increases in both new clients and the proportion of formerly radio only clients who now buy digital products as well from us. Specifically in the Q1, we increased total DMS customers by over 25%. Additionally, we drove a 12% improvement in the percentage of our previously radio only customers who now buy DMS as well, And we continue to see the ability to upsell these legacy advertisers is a very large opportunity. While we're still in the early stages of executing our DMS growth plan, we remain very bullish about this strategy. Our other 2 digital revenue streams, podcasting and streaming also grew in the quarter, up low single digits year over year. Speaker 200:05:10Podcasting revenue performance continued to improve sequentially on a quarter over quarter basis. As we mentioned on our last call, 1st quarter streaming revenue was impacted by the expiration of a 3rd party fixed rate ad sales contract. However, we remain confident that taking back sales responsibility for our station streaming inventory is a smart move, both strategically and financially, especially given our successful experience with taking control of the NFL streaming inventory 2 years ago. In fact, by applying the same approach that drove our success with the NFL stream to the management of our NCAA streaming rights, we increased our streaming affiliates by almost 60% during March Madness and the Final Four run. In aggregate, despite the difficult comp from the expired sales contract, our streaming revenue grew in the quarter, an indication that our new streaming strategy is working. Speaker 200:06:03Moving to Broadcast Radio, the Q1 trends in our national spot and network business significantly improved in 2023. In aggregate, these 2 national businesses were down mid single digits during the quarter. As a reminder, our national spot revenue is embedded in the spot revenue line in our earnings press release and the combination of it and network revenue makes up about approximately 50% of our total broadcast revenue. Spending by advertisers in certain key categories, including consumer packaged goods and insurance, continued to show meaningful growth. In insurance specifically, a top vertical within the financial category, which is top 5 category for us, we are encouraged by the return of several large clients who sat out most, if not all, in 2023. Speaker 200:06:50Additionally, we saw strong increases in the food and restaurant, pharmaceutical and retail categories, as well as the heightened interest in live sports given its strong listener trends. As mentioned on our last earnings call, we booked the most revenue ever for the Super Bowl and after that we achieved similar levels of success with the NCAA Men's and Women's March Madness Championships. However, despite these positive indicators, the recovery in national advertising remains very choppy as advertisers across several key categories, including mortgage, banking and home improvement, continue to cite the overall interest rate environment as a significant obstacle to spending. With respect to local spot while still down, the revenue performance improved from Q4 of 2023. Given historical trends, we would expect that local broadcast radio, which does not drop off as quickly and as significantly as our national radio broadcast revenue, we'll see a recovery that is more gradual and muted than the rebound we may be starting to see in national. Speaker 200:07:54Regarding political, revenue for the quarter was $2,200,000 down 55 percent from 2020, reflecting less competitive presidential primaries. Looking ahead, national advertisers are continuing to voice a desire to increase spending, but many still cite the uncertain macro environment as an impediment to a consistent return to more normal spending patterns. Further, as we saw in the Q1, both local and national broadcast clients continue to book quite late, reflecting their lack of visibility into the course of the economy. With that backdrop, our revenue is currently pacing down low single digits for Q2. In this context, we remain acutely focused on disciplined expense reductions. Speaker 200:08:38In Q1 results included approximately $4,000,000 of fixed cost reductions versus the prior year, which was on top of the $120,000,000 or 26 percent of our total fixed costs we had already taken out since the pandemic through the end of 20 23. We significantly improved the operating leverage of the company, which will drive EBITDA growth as the advertising environment continues to recover and reducing expenses across multiple facets of our business continues to be one of our primary operating goals. To wrap up, I want to emphasize that given the continued uncertainty of the advertising outlook, our successful completion of what is effectively a full capital refinancing was a critical step and a big achievement for the company. Again, we extended maturities to 2029, reduced the principal amount of debt outstanding by approximately $33,000,000 secured attractive interest rates, maintained covenant like terms and increased our available ABL liquidity by 25%. Our new capital structure provides us with additional time and flexibility to execute against our key business priorities, celebrating digital growth, reducing fixed costs and continuing to delever our balance sheet, each of which is foundational to our ability to build long term shareholder value. Speaker 200:10:00And with that, I will turn it over to Frank. Speaker 300:10:04Thank you, Mary. Revenue in Q1 was $200,000,000 down 2.7% year over year, consistent with the pacing guidance from our last call. While still a decline, it represented an improvement versus 2023's performance. These results were driven in part by better trends within our broadcast business, particularly those tied to national advertisers as well as growth in digital. Within digital, digital marketing services revenue grew 25%, while podcasting and streaming each increased low single digits. Speaker 300:10:37From a category perspective, consumer packaged goods, insurance and pharmaceutical were our top performing key national categories, while our weakest were mortgage, home improvement and banking. In local spot, home products and general services were our best performing categories, while professional services and retail were our weakest. We generated $2,200,000 of political revenue in Q1 versus $4,900,000 in the same period of 2020, with a decrease reflecting less competitive presidential primaries this year. However, given what is shaping up to be a heavily contested general election accompanied by a large number of down ballot races across our footprint, we're expecting robust political revenue in late Q3 Q4. Moving to expenses. Speaker 300:11:24Total expenses in the quarter decreased by approximately $4,000,000 year over year, largely driven by fixed cost reductions, partially offset by higher variable expenses associated with a shift in revenue mix. As always, we continue to focus on disciplined cost reduction to improve operating leverage, which will benefit EBITDA as the advertising environment continues to recover. Turning to the balance sheet, as Mary mentioned, with the completion of the exchange offer, we reduced debt outstanding by 33,000,000 extended approximately 97% of our maturities to 20.29 from 20.26, secured attractive interest rates and maintained covenant light terms. Following the exchange, we have only approximately $22,000,000 of debt maturing in 2026, which is very manageable. The exchange will not result in cancellation of debt income for tax purposes. Speaker 300:12:17Additionally, we completed an amendment of our ABL facility, which extends the existing maturity to 2029, increases the facility to $125,000,000 from $100,000,000 for the same interest rate terms. In combination, the completed exchange offer and the amended and extended ABL facility provide the company with the ability to focus on our strategic, operational and financial objectives, including debt reduction, which remains our priority. Looking ahead to the Q2, while we're seeing an increase in demand from advertisers in select categories, the uncertain macro environment continues to weigh on many others. As a result, total company revenue is currently pacing down low single digits. With that, we can now open the line for questions. Speaker 300:13:00Operator? Operator00:13:03Thank you. Our first question comes from Michael Kupinski from Noble Capital Markets. Michael, please go ahead. Your line is open. Speaker 300:13:22Thank you. Thanks for taking the questions and good morning. Historically, you stated that your digital businesses were a third, a third, a third represented by direct marketing service, podcast and streaming. I was wondering with the strong performance of direct marketing services, if you can kind of give us some thought about the breakout of your digital businesses. And then given your 2nd quarter guide of pacing data, I was wondering if you can kind of give us some thoughts on how the digital businesses are pacing? Speaker 300:13:53Hi, Michael. It's Frank. I'll take that. Our businesses are still roughly a third, a third, a third and varies from quarter to quarter. I mean, I think this quarter, you'll find given the strong growth in the DMS revenues, that's rough a little bit more than the third. Speaker 300:14:11I'll also note in our DMS growth for this quarter, we're now including some of our e commerce third party digital platform revenues, which was reported previously in other income and we're now reporting that on the DMS line. And that probably represented something like 6% of that growth for the quarter. In terms of pacing for the quarter, we're pacing in digital right now in the mid single digits, extremely strong in DMS, consistent with the results we have in the Q1. And in podcasting is also pacing up nicely. Too early to tell where the quarter is going to be in digital, but I expect it won't be too dissimilar from the Q1 results in terms of growth on an aggregate basis. Speaker 300:15:04Got you. And then on I was wondering if you can provide some color on the $4,000,000 fixed cost reduction. You indicated that there were further opportunities there. I was wondering if you can just give us a little bit more color on the prospects for additional fixed cost reductions that you think that you can take out there? Good question, Michael. Speaker 300:15:24I know every quarter, I'd say it's harder and harder to take out fixed costs and we keep on doing that. If you look at the quarter, most of the fixed cost reductions were in areas of the use of outside contractors, renegotiating fixed price contracts in addition people savings. We were more efficient this year in terms of our production costs for sports. I think that's going to be a near potential area of opportunity as we continue to realign the opportunity there with sports. And it's an incremental approach. Speaker 300:16:00There's not one single large item that we look across the footprint. It's really a battle on a month to month basis when we look at where we're spending our fixed costs and where we can reduce it. And as a reminder, when we look at our business now, roughly 55% to 60% of our cost base is fixed. So it talks to the operating leverage we have for the company with the return of improved advertising revenue in particular. Operator00:16:30Yes. Speaker 200:16:35And I'll add something to that. Yes. We also we're continuously looking for ways to improve functions through technology implementations, better process. And other buckets that we have a keen eye on is real estate. As Frank said, there's not no big anything, but we incrementally, hack at it every month. Speaker 300:16:59Got you. You. Operator00:17:07Next question comes from Jim Goss of Barrington Research. Jim, your line is open. Please go ahead. Speaker 400:17:13Good morning. This is Pat on for Jim. On the digital marketing services side, are you the client additions that you're getting, are you winning clients from other DMS providers? Or are these generally kind of like just generally new to the space or kind of more self serve businesses? Speaker 200:17:37It's generally a combination of both. There are a lot of small digital agencies that have built those capabilities and there's also large several large providers of single point solutions. But there are very few companies that can successfully offer small and medium sized businesses the full spectrum of digital marketing solutions. And so that's our angle. We're able to do that profitably and at scale. Speaker 200:18:02So we go in and provide advertisers with unique packages that combine audio and digital advertising seamlessly. And as we do that, because we're able to pack them together, the ROIs tend to be better. So I'd say it's many of them are new. I don't know at the top of my head. I'm not sure how many. Speaker 200:18:21I think it's probably if I remember correctly, it's probably 70% of them are new advertisers. Of those, probably half of them are we pull from another agency or somebody else that they're doing business with. So it's a very it's a good business for us. Speaker 400:18:41Okay. Within podcasting, can you maybe talk about some of the improvement in ad trends there? Is that just a national recovery? Are you sort of expanding kind of like the sales efforts to include local in that as well? Speaker 200:18:58Well, we have a yes, both. A lot of it is what the product is and we hit another milestone recently with 47 of our shows charting on the Apple Podcast. And that's the most of the history of our podcast network. That for the first time also includes 12 local podcasts, which is the most ever. So, we have a nice trajectory on the listening side of our podcast. Speaker 200:19:21And as we're podcasting national obviously was hit with the same national headwinds that we saw with broadcast radio. But it's starting to rebound, and local continues to gain traction generally around the power brands that we have like the ticket in Dallas or the Bird Show in Atlanta. So the podcast effort is both local and national and growth the revenue growth comes first from the listenership growth. Speaker 400:19:57Okay. And then just around your pacing guidance or your pacing commentary, I guess, are you kind of seeing just like consistent trends in the Q2 with the first for the core broadcast side? Is it kind of just a slower, I guess, trend of, I guess, improvement there for on the national side? Or can you say we talk about like what your pacing is seeing on the on broadcast? Speaker 300:20:31Sure. I'll take that. So on podcasts, I'm sorry, on broadcast, the pacing within broadcasting right now when you combine both the local spot, the spot as reported and network is combined is down in mid single digits, but there is a lot to unpack there at this point. First on local, we're seeing more and more business booking late in month. And so as an example, in April, we picked up significant pace from the beginning of the April through the end of April in our local spot businesses. Speaker 300:21:18And it remains to be seen if that's going to be the same trend for the rest of the quarter. And if it is, that obviously would be good news. When it comes to national, which impacts both a combination of our spot revenues, as a reminder, part of our spot revenue has our local national and the network, which is all national. That tends to be very, very lumpy. And in the Q2, as a reminder, we don't have other than the finals of the NCAA, which fell into April, it's a very light sports quarter for us. Speaker 300:21:57And when we saw the trends in the Q1, Mary talked about this in her prepared remarks, the Super Bowl and the NFL did very well as well as the NCAA. We don't have that same factor in the Q2. So that may impact national in the second quarter, but it's too early to tell. So the national market continues to be pretty lumpy, but you have to look at what we have on the air, sports, non sports and local pacing improving throughout the month. These are factors that we'll just have to see in the next 2 months. Speaker 300:22:35And I'll add then when we had our last earnings call, we had that basically 2 months into the quarter. We had roughly a month to go before the final results. Here we are with 2 months ago in the quarter. So we'll have more to talk about it obviously on our next earnings call. Speaker 400:22:55Okay. Thank Operator00:23:00you. I'll now turn it back over to the company for any closing remarks. Speaker 200:23:05Well, thank you, everybody. I appreciate your time and we look forward to speaking to you again next quarter.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallCumulus Media Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Cumulus Media Earnings HeadlinesRadio Group Cumulus Media Officially Delisted from NASDAQ After Repeatedly Dipping Below $1April 24 at 3:30 PM | msn.comCumulus to stop trading shares on NASDAQ in MayApril 23 at 9:01 PM | msn.comTrump’s betrayal exposed Trump’s Final Reset Inside the shocking plot to re-engineer America’s financial system…and why you need to move your money now.April 25, 2025 | Porter & Company (Ad)Cumulus Media Inc. Announces Conference Call to Discuss First Quarter 2025 Operating ResultsApril 23 at 4:00 PM | nasdaq.comStockNews.com Initiates Coverage on Cumulus Media (NASDAQ:CMLS)April 23 at 3:13 AM | americanbankingnews.comCumulus Media Announces Conference Call to Discuss First Quarter 2025 Operating ResultsApril 21, 2025 | globenewswire.comSee More Cumulus Media Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Cumulus Media? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Cumulus Media and other key companies, straight to your email. Email Address About Cumulus MediaCumulus Media (NASDAQ:CMLS), an audio-first media company, owns and operates radio stations in the United States. It owns and operates stations in various markets, as well as affiliated stations through Westwood One. The company's content portfolio includes sports, news, talk, and entertainment programming from various brands, including the NFL, the NCAA, the Masters, CNN, AP News, the Academy of Country Music Awards, and other partners. In addition, the company provides digital marketing services, such as email marketing, geo-targeted display and video solutions, website and microsite building, hosting, social media management, reputation and listing management, and search engine marketing and optimization; influencers, audio solutions, research and insights, and live event services; and advertising performance guarantee services. The company serves advertisers through broadcast and on-demand digital, mobile, social, and voice-activated platforms. Cumulus Media Inc. was founded in 2002 and is based in Atlanta, Georgia.View Cumulus Media ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Tesla Earnings Miss, But Musk Refocuses and Bulls ReactQualcomm’s Range Narrows Ahead of Earnings as Bulls Step InWhy It May Be Time to Buy CrowdStrike Stock Heading Into EarningsCan IBM’s Q1 Earnings Spark a Breakout for the Stock? 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There are 5 speakers on the call. Operator00:00:00Welcome to the Cumulus Media Quarterly Earnings Conference Call. I'll now turn it over to Colin Jones, Executive Vice President of Strategy and Development and President of Westwood One. Sir, you may proceed. Speaker 100:00:11Thank you, operator. Welcome everyone to our Q1 2024 earnings conference call. I'm joined today by our President and CEO, Mary Boerner and our CFO, Frank Lopez Balboa. Before we start, please note that certain statements in today's press release and discussed on this call may constitute forward looking statements under federal securities laws. Actual results may differ materially from the results expressed or implied in forward looking statements. Speaker 100:00:36These statements are based on management's current assessments and assumptions and they're subject to a number of risks and uncertainties as discussed in our filings with the SEC. In addition, we will also use certain non GAAP financial measures. We believe the supplementary information is useful to investors, although it should not be considered superior to the measures presented in accordance with GAAP. A full description of these risks as well as financial reconciliations to non GAAP terms are in our press release and SEC filings, and that press release can be found in the Investor Relations portion of our website and our Form 10 Q was also filed with the SEC shortly before this call. A recording of today's call will be available for about a month via a link in the Investor portion of the website. Speaker 100:01:17Now with that, I'll turn it over to our President and CEO, Mary Berner. Mary? Speaker 200:01:22Thanks, Colin, and good morning, everyone. This morning, I'm very pleased to let you know that we've refinanced our capital structure to secure 5 year maturities with very favorable terms through a successful debt exchange and ABL facility upside and extension, which is an excellent outcome for the company given the generally difficult financing environment for legacy media companies. Specifically, with the completion of these transactions, we have extended maturities to 2029, reduced the principal amount of debt outstanding by approximately 33,000,000 dollars secured attractive interest rates, maintained covenant like terms and increased our ABL facility availability by 25%. Importantly, by addressing the 2026 maturity wall, we now have considerable additional runway with which to continue executing against our strategic, operational and financial priorities, including: accelerating digital growth through ongoing investments, particularly in digital marketing services reducing fixed costs to further enhance our operating leverage, which will be a big benefit to us as broadcast radio demand improves and continuing to reduce debt to delever. Since our last call, in parallel to refinancing our debt capital structure, we continue to make considerable progress against these priority areas with the benefit of that progress reflected in our Q1 results. Speaker 200:02:51In Q1, in line with pacing guidance, total company revenue was down 2.7%, which represents a marked improvement from 2023 trends and EBITDA was $8,400,000 Overall, digital continues to be an area of strong growth, increasing 7% year over year. Once again, our digital marketing services revenue was the lead growth driver, up 25% in the quarter, clearly demonstrating the positive impact of the investments we've made to date. These investments included the expansion of our digital sales force to capture more of the growing DMS space and the ramp up of Qumulus Boost, our portfolio of presence products, which serves as a low price entry point for advertisers who are new to the company and as 2 thirds of our originally Boost only clients have added broadcast radio or other digital products to their buys, the benefit of the Boost strategy are compelling. Our digital results also reflect our differentiated go to market strategy, which centers on a versatile and well connected feet on the street sales team offering a suite of digital, audio and digital marketing solutions. Our ability to walk this full product set into the customer's door continues to pay off as our customers value personal relationship and our sales people's ability to tailor and adapt solutions that fit their particular business needs, while remaining responsive to the continually changing dynamics of the digital ad market. Speaker 200:04:21This approach is yielding impressive increases in both new clients and the proportion of formerly radio only clients who now buy digital products as well from us. Specifically in the Q1, we increased total DMS customers by over 25%. Additionally, we drove a 12% improvement in the percentage of our previously radio only customers who now buy DMS as well, And we continue to see the ability to upsell these legacy advertisers is a very large opportunity. While we're still in the early stages of executing our DMS growth plan, we remain very bullish about this strategy. Our other 2 digital revenue streams, podcasting and streaming also grew in the quarter, up low single digits year over year. Speaker 200:05:10Podcasting revenue performance continued to improve sequentially on a quarter over quarter basis. As we mentioned on our last call, 1st quarter streaming revenue was impacted by the expiration of a 3rd party fixed rate ad sales contract. However, we remain confident that taking back sales responsibility for our station streaming inventory is a smart move, both strategically and financially, especially given our successful experience with taking control of the NFL streaming inventory 2 years ago. In fact, by applying the same approach that drove our success with the NFL stream to the management of our NCAA streaming rights, we increased our streaming affiliates by almost 60% during March Madness and the Final Four run. In aggregate, despite the difficult comp from the expired sales contract, our streaming revenue grew in the quarter, an indication that our new streaming strategy is working. Speaker 200:06:03Moving to Broadcast Radio, the Q1 trends in our national spot and network business significantly improved in 2023. In aggregate, these 2 national businesses were down mid single digits during the quarter. As a reminder, our national spot revenue is embedded in the spot revenue line in our earnings press release and the combination of it and network revenue makes up about approximately 50% of our total broadcast revenue. Spending by advertisers in certain key categories, including consumer packaged goods and insurance, continued to show meaningful growth. In insurance specifically, a top vertical within the financial category, which is top 5 category for us, we are encouraged by the return of several large clients who sat out most, if not all, in 2023. Speaker 200:06:50Additionally, we saw strong increases in the food and restaurant, pharmaceutical and retail categories, as well as the heightened interest in live sports given its strong listener trends. As mentioned on our last earnings call, we booked the most revenue ever for the Super Bowl and after that we achieved similar levels of success with the NCAA Men's and Women's March Madness Championships. However, despite these positive indicators, the recovery in national advertising remains very choppy as advertisers across several key categories, including mortgage, banking and home improvement, continue to cite the overall interest rate environment as a significant obstacle to spending. With respect to local spot while still down, the revenue performance improved from Q4 of 2023. Given historical trends, we would expect that local broadcast radio, which does not drop off as quickly and as significantly as our national radio broadcast revenue, we'll see a recovery that is more gradual and muted than the rebound we may be starting to see in national. Speaker 200:07:54Regarding political, revenue for the quarter was $2,200,000 down 55 percent from 2020, reflecting less competitive presidential primaries. Looking ahead, national advertisers are continuing to voice a desire to increase spending, but many still cite the uncertain macro environment as an impediment to a consistent return to more normal spending patterns. Further, as we saw in the Q1, both local and national broadcast clients continue to book quite late, reflecting their lack of visibility into the course of the economy. With that backdrop, our revenue is currently pacing down low single digits for Q2. In this context, we remain acutely focused on disciplined expense reductions. Speaker 200:08:38In Q1 results included approximately $4,000,000 of fixed cost reductions versus the prior year, which was on top of the $120,000,000 or 26 percent of our total fixed costs we had already taken out since the pandemic through the end of 20 23. We significantly improved the operating leverage of the company, which will drive EBITDA growth as the advertising environment continues to recover and reducing expenses across multiple facets of our business continues to be one of our primary operating goals. To wrap up, I want to emphasize that given the continued uncertainty of the advertising outlook, our successful completion of what is effectively a full capital refinancing was a critical step and a big achievement for the company. Again, we extended maturities to 2029, reduced the principal amount of debt outstanding by approximately $33,000,000 secured attractive interest rates, maintained covenant like terms and increased our available ABL liquidity by 25%. Our new capital structure provides us with additional time and flexibility to execute against our key business priorities, celebrating digital growth, reducing fixed costs and continuing to delever our balance sheet, each of which is foundational to our ability to build long term shareholder value. Speaker 200:10:00And with that, I will turn it over to Frank. Speaker 300:10:04Thank you, Mary. Revenue in Q1 was $200,000,000 down 2.7% year over year, consistent with the pacing guidance from our last call. While still a decline, it represented an improvement versus 2023's performance. These results were driven in part by better trends within our broadcast business, particularly those tied to national advertisers as well as growth in digital. Within digital, digital marketing services revenue grew 25%, while podcasting and streaming each increased low single digits. Speaker 300:10:37From a category perspective, consumer packaged goods, insurance and pharmaceutical were our top performing key national categories, while our weakest were mortgage, home improvement and banking. In local spot, home products and general services were our best performing categories, while professional services and retail were our weakest. We generated $2,200,000 of political revenue in Q1 versus $4,900,000 in the same period of 2020, with a decrease reflecting less competitive presidential primaries this year. However, given what is shaping up to be a heavily contested general election accompanied by a large number of down ballot races across our footprint, we're expecting robust political revenue in late Q3 Q4. Moving to expenses. Speaker 300:11:24Total expenses in the quarter decreased by approximately $4,000,000 year over year, largely driven by fixed cost reductions, partially offset by higher variable expenses associated with a shift in revenue mix. As always, we continue to focus on disciplined cost reduction to improve operating leverage, which will benefit EBITDA as the advertising environment continues to recover. Turning to the balance sheet, as Mary mentioned, with the completion of the exchange offer, we reduced debt outstanding by 33,000,000 extended approximately 97% of our maturities to 20.29 from 20.26, secured attractive interest rates and maintained covenant light terms. Following the exchange, we have only approximately $22,000,000 of debt maturing in 2026, which is very manageable. The exchange will not result in cancellation of debt income for tax purposes. Speaker 300:12:17Additionally, we completed an amendment of our ABL facility, which extends the existing maturity to 2029, increases the facility to $125,000,000 from $100,000,000 for the same interest rate terms. In combination, the completed exchange offer and the amended and extended ABL facility provide the company with the ability to focus on our strategic, operational and financial objectives, including debt reduction, which remains our priority. Looking ahead to the Q2, while we're seeing an increase in demand from advertisers in select categories, the uncertain macro environment continues to weigh on many others. As a result, total company revenue is currently pacing down low single digits. With that, we can now open the line for questions. Speaker 300:13:00Operator? Operator00:13:03Thank you. Our first question comes from Michael Kupinski from Noble Capital Markets. Michael, please go ahead. Your line is open. Speaker 300:13:22Thank you. Thanks for taking the questions and good morning. Historically, you stated that your digital businesses were a third, a third, a third represented by direct marketing service, podcast and streaming. I was wondering with the strong performance of direct marketing services, if you can kind of give us some thought about the breakout of your digital businesses. And then given your 2nd quarter guide of pacing data, I was wondering if you can kind of give us some thoughts on how the digital businesses are pacing? Speaker 300:13:53Hi, Michael. It's Frank. I'll take that. Our businesses are still roughly a third, a third, a third and varies from quarter to quarter. I mean, I think this quarter, you'll find given the strong growth in the DMS revenues, that's rough a little bit more than the third. Speaker 300:14:11I'll also note in our DMS growth for this quarter, we're now including some of our e commerce third party digital platform revenues, which was reported previously in other income and we're now reporting that on the DMS line. And that probably represented something like 6% of that growth for the quarter. In terms of pacing for the quarter, we're pacing in digital right now in the mid single digits, extremely strong in DMS, consistent with the results we have in the Q1. And in podcasting is also pacing up nicely. Too early to tell where the quarter is going to be in digital, but I expect it won't be too dissimilar from the Q1 results in terms of growth on an aggregate basis. Speaker 300:15:04Got you. And then on I was wondering if you can provide some color on the $4,000,000 fixed cost reduction. You indicated that there were further opportunities there. I was wondering if you can just give us a little bit more color on the prospects for additional fixed cost reductions that you think that you can take out there? Good question, Michael. Speaker 300:15:24I know every quarter, I'd say it's harder and harder to take out fixed costs and we keep on doing that. If you look at the quarter, most of the fixed cost reductions were in areas of the use of outside contractors, renegotiating fixed price contracts in addition people savings. We were more efficient this year in terms of our production costs for sports. I think that's going to be a near potential area of opportunity as we continue to realign the opportunity there with sports. And it's an incremental approach. Speaker 300:16:00There's not one single large item that we look across the footprint. It's really a battle on a month to month basis when we look at where we're spending our fixed costs and where we can reduce it. And as a reminder, when we look at our business now, roughly 55% to 60% of our cost base is fixed. So it talks to the operating leverage we have for the company with the return of improved advertising revenue in particular. Operator00:16:30Yes. Speaker 200:16:35And I'll add something to that. Yes. We also we're continuously looking for ways to improve functions through technology implementations, better process. And other buckets that we have a keen eye on is real estate. As Frank said, there's not no big anything, but we incrementally, hack at it every month. Speaker 300:16:59Got you. You. Operator00:17:07Next question comes from Jim Goss of Barrington Research. Jim, your line is open. Please go ahead. Speaker 400:17:13Good morning. This is Pat on for Jim. On the digital marketing services side, are you the client additions that you're getting, are you winning clients from other DMS providers? Or are these generally kind of like just generally new to the space or kind of more self serve businesses? Speaker 200:17:37It's generally a combination of both. There are a lot of small digital agencies that have built those capabilities and there's also large several large providers of single point solutions. But there are very few companies that can successfully offer small and medium sized businesses the full spectrum of digital marketing solutions. And so that's our angle. We're able to do that profitably and at scale. Speaker 200:18:02So we go in and provide advertisers with unique packages that combine audio and digital advertising seamlessly. And as we do that, because we're able to pack them together, the ROIs tend to be better. So I'd say it's many of them are new. I don't know at the top of my head. I'm not sure how many. Speaker 200:18:21I think it's probably if I remember correctly, it's probably 70% of them are new advertisers. Of those, probably half of them are we pull from another agency or somebody else that they're doing business with. So it's a very it's a good business for us. Speaker 400:18:41Okay. Within podcasting, can you maybe talk about some of the improvement in ad trends there? Is that just a national recovery? Are you sort of expanding kind of like the sales efforts to include local in that as well? Speaker 200:18:58Well, we have a yes, both. A lot of it is what the product is and we hit another milestone recently with 47 of our shows charting on the Apple Podcast. And that's the most of the history of our podcast network. That for the first time also includes 12 local podcasts, which is the most ever. So, we have a nice trajectory on the listening side of our podcast. Speaker 200:19:21And as we're podcasting national obviously was hit with the same national headwinds that we saw with broadcast radio. But it's starting to rebound, and local continues to gain traction generally around the power brands that we have like the ticket in Dallas or the Bird Show in Atlanta. So the podcast effort is both local and national and growth the revenue growth comes first from the listenership growth. Speaker 400:19:57Okay. And then just around your pacing guidance or your pacing commentary, I guess, are you kind of seeing just like consistent trends in the Q2 with the first for the core broadcast side? Is it kind of just a slower, I guess, trend of, I guess, improvement there for on the national side? Or can you say we talk about like what your pacing is seeing on the on broadcast? Speaker 300:20:31Sure. I'll take that. So on podcasts, I'm sorry, on broadcast, the pacing within broadcasting right now when you combine both the local spot, the spot as reported and network is combined is down in mid single digits, but there is a lot to unpack there at this point. First on local, we're seeing more and more business booking late in month. And so as an example, in April, we picked up significant pace from the beginning of the April through the end of April in our local spot businesses. Speaker 300:21:18And it remains to be seen if that's going to be the same trend for the rest of the quarter. And if it is, that obviously would be good news. When it comes to national, which impacts both a combination of our spot revenues, as a reminder, part of our spot revenue has our local national and the network, which is all national. That tends to be very, very lumpy. And in the Q2, as a reminder, we don't have other than the finals of the NCAA, which fell into April, it's a very light sports quarter for us. Speaker 300:21:57And when we saw the trends in the Q1, Mary talked about this in her prepared remarks, the Super Bowl and the NFL did very well as well as the NCAA. We don't have that same factor in the Q2. So that may impact national in the second quarter, but it's too early to tell. So the national market continues to be pretty lumpy, but you have to look at what we have on the air, sports, non sports and local pacing improving throughout the month. These are factors that we'll just have to see in the next 2 months. Speaker 300:22:35And I'll add then when we had our last earnings call, we had that basically 2 months into the quarter. We had roughly a month to go before the final results. Here we are with 2 months ago in the quarter. So we'll have more to talk about it obviously on our next earnings call. Speaker 400:22:55Okay. Thank Operator00:23:00you. I'll now turn it back over to the company for any closing remarks. Speaker 200:23:05Well, thank you, everybody. I appreciate your time and we look forward to speaking to you again next quarter.Read morePowered by