Cumulus Media (NASDAQ:CMLS) reported net revenues of $328M for the fourth quarter. 4Q revenue was positively impacted by healthy advertising trends across auto, healthcare and financial services, slightly offset by weakness across retail, tracking weaker holiday sales. EBITDA was $96M (+6% yoy), mostly driven by investments that took place earlier in the year, improving margins by lowering content costs. Management expects Q1 revenues and EBITDA to be flat in Q1 with solid revenue pacing for February and March, offset by a sluggish January.

Cumulus has been investing to bolster its own Radio Network with new initiatives such as Nash FM, CBS Sports and Traffic (see our in-depth report on Cumulus Radio Network published on 10/4/12) and we believe the integration with Dial (the old Westwood One network business) only accelerates that effort. In our view, the combination provides a real competitor to Clear Channel’s market leader Premiere Networks. The deal has interesting revenue growth opportunities, but the cost savings are also a major driver. Management continues to expect at least $40M in cost synergies.

Cumulus continues to make significant progress with its NashFM brand. The country format has become a national country brand with 21 stations reaching 25M listeners per week. Management expects to expand the number of NashFM stations to 50 by year-end and 100 by the end of 2015. Furthermore, the company expects the revenues and EBITDA from Nash initiative (including Magazine, TV) to surpass CBS Sports, Traffic and SweetJack combined. The effort is a good example of how Cumulus is breaking the mold of the traditional radio business and finding ways to build and monetize a brand.