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Cumulus shares slump
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March 17, 2000: 2:25 p.m. ET
Radio operator reports weak 4Q, exec switch; denies fraud rumors
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NEW YORK (CNNfn) - Shares of radio station operator Cumulus Media Inc. fell more than 25 percent Friday, bruised by disappointing fourth-quarter results, its restatement of revenue in previous quarters, and downbeat comments from Wall Street analysts.
Shares of Milwaukee-based Cumulus, a leading radio operator in small to mid-sized markets, fell 4-1/8, or about 25 percent, to 12-13/16 on volume of 8 million shares. Earlier, the stock touched 10-1/4, its lowest in the past year, and down 75 percent since mid-December.
Late Thursday, the company reported a fourth-quarter pro-forma loss of 20 cents a share, versus a 15-cent loss in the year-earlier period, before special items. Wall Street analysts had predicted a loss of 15 cents a share.
Broadcast cash flow, a figure analysts use to judge media company performance, was $12.3 million, short of estimates which ranged at about $17 million.
The report comes after weeks of speculation that the company would disclose accounting irregularities, a charge the company denies. Still, it did restate some revenue over the first three quarters of 1999, citing the misallocation of the revenue recorded in a different time period than the corresponding airing of its customers' advertising.
In addition, the company said Executive Vice Chairman Lew Dickey was named president of Cumulus Broadcasting Inc., the company's broadcast operating subsidiary. He succeeds William Bungeroth, who left to pursue other interests.
His departure follows that of chief financial officer Richard Bonick, whose exit in January was not officially announced, a fact that roiled the already active rumor mill.
Addressing the issue, Cumulus Executive Chairman Richard Weening told a telephone press conference, "Rick Bonick was not in substance or in function the senior financial officer of the company. The senior officers are Dan O'Donnell and myself." O'Donnell is Cumulus' director of corporate finance.
"At the time he resigned, as much to protect his privacy as anyone else, we didn't announce it," Weening added.
Wall Street analysts roundly jeered the results. Salomon Smith Barney analyst Niraj Gupta cut his investment opinion to hold from buy, stating in a note to clients, Cumulus "will need to re-earn trust of investors over the next years."
"The stock is likely to stay depressed on the near-term," he added.
Goldman Sachs analyst Richard Rosenstein cut his rating on Cumulus to a market performer rating from a market outperformer rating. Also, Banc of America analyst Tim Wallace cut the company's rating to market performer from buy.
Cumulus trails only AMFM and Clear Channel, which are in the process of merging, in number of stations. But its sales are far below its rivals. 
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Cumulus
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