Cumulus reports 1st quarter 2014 results

http://www.marketwatch.com/story/cumulus-reports-operating-results-for-first-quarter-2014-2014-04-29?reflink=MW_news_stmp

Net loss before the effect of income taxes was a loss of $16 million. The concept of “pro forms” is important to understand to get the big picture. In the last year, Cumulus acquired control of Westwood One, which increased revenue, but also increased expenses. Pro forma attempts to show what the finances would have been like if the two companies had been merged a year ago. It is not just adding together two sets of numbers – you also have to remove transactions between the two companies (Cumulus buying programming from Westwood One, for example)

The number that stands out is a drastic drop in interest expense – which is logical. Westwood One was on the brink of bankruptcy, so borrowing money got very expensive. The implication from the numbers is Cumulus paid off the Westwood One debt and added it to their existing debt, currently around $2 billion.

The deal for Westwood One also involved selling a bunch of small stations to Townsquare Media. Oaktree Capital owns Townsquare and also owned a big chunk of Westwood One, so it was more an asset swap than an arm’s length sale.

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