Collin Jones - Head of M&A / Corporate Development / Investor Relations Mary G. Berner - President and Chief Executive Officer Joseph Patrick Hannan - Senior Vice President, Treasurer & Chief Financial Officer.

Welcome to the Cumulus Media Quarterly Earnings Release Conference Call. I'll now turn it over to Collin Jones, Director of Corporate Strategy, M&A and Investor Relations. Sir, you may proceed..

Thank you, operator. Welcome all to our first quarter 2016 earnings call. Thank you for joining. Before we kick off, please note 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. These statements are based on management's current assessments and assumptions and they're subject to a number of risks and uncertainties.

A full description of these risks as well as financial reconciliations to non-GAAP terms can be found in our press release and Form 10-Q, both of which were filed earlier this afternoon. This call will be accompanied by a slide presentation which can be access through a link in the Investor portion of our corporate website.

The address to find this link, if you haven't already, is www.cumulus.com/investors. After this call, the same link can be used for an encore version, and the presentation will be released via 8-K as well. With that, I'll now turn the call over to our Chief Executive Officer, Mary Berner.

Mary?.

Thanks, Collin. Good afternoon, everyone. Thanks for joining us today. I'll kick off the call by briefly characterizing our operating results for the first quarter, which J.P. will discuss in greater detail.

Then, I'll update you on the key initiatives we highlighted on our last call that are designed to move the company from decline to stability and ultimately to growth. The first quarter finished with revenue down approximately 1% and adjusted EBITDA down 6% from $44.7 million in 2015 to $42 million in 2016.

Our revenue growth at the radio station group was driven by strong results in March, as well as $3.2 million of political spending. However, Westwood One offset this growth with a $3 million decline in the quarter due to a noteworthy fall off in scatter demand as the quarter progressed.

While this total performance was in line with the pacing commentary provided during the Q4 call, it does reflect market share declines at both the station group and Westwood One. Our continued underperformance highlights the challenges that we are addressing, challenges that are significant, but fixable with time.

In the same way that our company's issues did not develop overnight, they won't be fixed overnight either. We are starting to make identifiable and significant progress on our turnaround strategies. Given time, we expect this progress to manifest itself in better revenue performance and with continued discipline around costs adjusted EBITDA growth.

My first five months leading up to the Q4 call were all about identifying the issues and developing and launching our turnaround strategies.

To remind you, they are organized around four priorities; enhancing operational blocking and tackling, instituting initiatives to improve the company's culture, driving ratings growth, and addressing the balance sheet.

As it was the case in the first quarter, our activities going forward will be driven by the execution of various initiatives within these priorities and a relentless focus on optimizing the business in ways that provide the greatest financial impact. In these early days of our efforts, we're seeing demonstrable results.

First, we've enhanced our company's ability to conduct fundamental operations giving us the building blocks we need to succeed. In the past, Cumulus's had many good ideas, but it often had issues prioritizing and executing them.

By focusing on operational blocking and tackling, simply making sure that the day-to-day activities of the company are performed efficiently and that our employees' efforts are effectively and consistently directed and supported, we are much better positioned to make the right decisions and implement those decisions to get positive results.

The most critical elements of this strategy are clearly and logically aligning authority with accountability, tying compensation for senior leadership to a single adjusted EBITDA goal and deliberately shifting our decision-making structure from one of command and control to one where local markets are responsible for running their businesses with corporate providing appropriate oversight and support.

Let me give you an example of how each of these had paid-off during Q1. Historically, the CapEx planning function was orphaned within the organization. Markets were responsible for the maintenance of their buildings and towers, but had little, if any, input into the allocation of capital expenditures.

As a result, year after year, the company would spend $15 million to $20 million on CapEx, that was too often not the highest and best use of those dollars. This year we ran a first-ever process to identify all the CapEx needs across the entire organization with input across functions from local markets and Westwood One.

By gaining insights directly from the markets, we were able to intelligently prioritize the allocation of those dollars toward projects that are the most mission critical or could provide a short-term ROI. Additionally, we developed strategies for leveraging scale for common needs and will be able to enhance our purchasing power as a result.

This year, we will deliver the same CapEx spend that we've had historically, approximately $20 million as a platform, and we've identified future spend to the next two years. And I've confidence that in both 2016 and going forward, we will get much more bang for our buck.

Next, we were able to get the entire senior executive team, 12 for 12, to voluntarily align their compensation to one common adjusted EBITDA goal. This replaced individual targets that perpetuated siloed decision-making, impeded collaboration, and generated counterproductive competition for resources.

Now, senior management has a financial incentive to make operating decisions that maximize the benefit to the entire company and our stakeholders.

Perhaps the most illustrative example of the impact of this compensation alignment is how we've distributed our high impact programming funds, which we highlighted on the last call, given the need to invest in order to drive ratings.

The high impact investment process begins with our senior vice presidents, who each oversee approximately 20 markets a piece and who identify the best opportunities within their own regions. As a group, first, they review all of the opportunities and analyze and debate their risk and reward potential.

The results of this highly collaborative and interactive process is a mutually agreed upon allocation of funds to the stations that can leverage those funds the most.

During the first four months of this year, the group directed investment into more than 15 high-impact opportunities, which they believe represented the company's best opportunities to drive ratings and eventually the adjusted EBITDA number to which they are now all aligned.

Simply put, compensation alignment broadened their focus to the greater good of the company rather than to the narrow needs of their own markets.

The last key strategy in operational blocking and tackling bucket is one where we have fundamentally shifted from corporate command and control to local markets running their businesses with corporate support. Since this is a philosophical change, it manifests itself in many ways, small and large, across the entire company.

For example, when I joined Cumulus, one of the top pain points was Engage, our home grown CRM system.

Engage was built from the top down and contained a litany of user input requirements, which while useful on some level tied up our salespeople in many extra hours a week of excessive documentation that was not producing enough benefit to them, their managers and certainly not the top line.

So in Q4 of last year, we embarked on a reboot of Engage and have now launched a beta version of our new system. The new system was built solely based on feedback from markets and prioritizes keeping our sellers on the streets and giving them tools to make their own activity more efficient.

The initial feedback has been quite positive and once we are fully rolled out, we will have a powerful management tool. It not only should improve the productivity of our sales force, but it will also generate pipeline and activity metrics that we currently don't have at scale, giving us greater insights into operating trends across the company.

Moving onto culture, it's hard to over state the impact our new cultural values framework has had. The word FORCE which stands for Focused, Responsibility, Collaboration and Empowerment has become a railing cry across the company.

I'm not surprised that the organization has embraced FORCE, but the speed and depth of the buy-in has been both surprising and heartening. I know from experience that this kind of momentum does not develop without an employee base that is eager to embrace change. Of course, it should also go without saying, the cultural change is not a one-shot deal.

If these new cultural drivers are really to move the bottom line, they have to be institutionalized and continuously reinforced through consistent communication and tactical efforts.

We've talked previously about some of the tactical measures we've instituted to reinforce our broader cultural strategy, while also producing tangible operational benefit.

These include a 48-hour response time, enhanced communication with quarterly town hall meeting, revised vacation and leave policies, and, importantly, the first merit increase in nearly a decade to demonstrate investment in our people. These changes have very clearly positively impacted the organization.

As I hear in markets and it's supported by data we've gathered through surveys, the excitement across the organization is obvious, pride is returning and the hope for continued positive progress is palpable.

These set result from actively moving from a culture that drives its employees from the top to one which helps our employees drive themselves to be more productive and to make better decisions. It's particularly important at this stage to look at turnover as a representative metric of the impact of culture change.

Year-to-date our numbers are encouraging. On an annualized basis through April, our total turnover was reduced to 29% from 34% in full-year 2015 and 36% during the same period in 2015. Our full-time turnover was down to 23% from 30% in full-year 2015 and 32% during the same period in 2015.

Isolating the data to sales alone, our voluntary annualized turnover for April year-to-date was down to 27%, a significant improvement from 36% in full year 2015 and 42% during the same period in 2015.

Encouragingly, in the first quarter, we saw that in markets which grew revenue or EBITDA, our voluntary sales turnover was 7% percentage points to 8% percentage points better than in markets that had flat or declining revenue or EBITDA in the quarter.

It is because of this kind of association between turnover and financial results that we spend time focusing on culture. Of course, improving turnover alone will not resolve our issues or produce by themselves the financial performance we hope to eventually achieve.

But by tracking turnover, which is something the company never historically did, we are now capturing a key metric we believe will be part of the solution over time. On to ratings, which is our most significant challenge and greatest opportunity.

Ratings success, particularly in local markets, is often the product of hundreds of little nuanced decisions that we make or don't make in dynamic competitive environments.

Collectively, these small moves can be just as important as the big decisions and they suggest that our historical command and control strategy was a misguided approach simply because it did not allow room for those many small changes.

To address what we perceive to be a systemic issue, we have sought to create and execute a systemic solution based upon the conviction that increased local input, authority and accountability will result in a better product and ratings outcome and ultimately stronger revenue performance.

As we outlined in the last call, the execution of this strategy began with our creation of the Office of Programming in late December. This office contains a reorganized corporate programming infrastructure that supports rather than manages the local markets.

It is accompanied by a new programming strategy that incorporates new processes for faster and smarter decision-making and rigorous analysis of those decisions and their results.

Additionally, we are bolstering the Office of Programming's efforts with the high impact investment pool I mentioned earlier by allocating funds to station opportunities that has the potential to create and sometimes save ratings and to produce revenue upside over time.

We discussed on our last call some early rating successes in KLOS in LA, WSM in Nashville, and WRQX in Washington DC. Those successes continue and I'm going to tell you about a few more because I believe they're indicative of real improvements in programming that are beginning to play out broadly across the entire company.

Starting in Cincinnati, WFTK-FM moved up from tenth to fourth in its target demo since October due solely to the station's ability to act locally instead of its hearing to a nationally mandated playlist.

According to our rock format specialist "the market sometimes calls for blue collar rock versus alternative rock." Simply being more in touch with the local market music environment and allowing the station to make those changes on its own has reaped meaningful benefits quickly. In Houston, we stand alone with one large FM station in KRBE.

We've got a great product but we lack the ability to package with other assets in the market. So we're vulnerable against our competitors who have large clusters. It's incredibly important that we always have a rating story to tell. So Kirby was a natural choice for high impact investment funds.

As a result of our funding of KRBE's well crafted new programming initiative, including changes to music strategy, to clean up our clocks and reduce clutter, listener's share was up nearly 30% year-over-year in Q1 and the station is pacing up 36% in Q2 on the strength of improved ratings.

In Grand Rapids on WLAV-FM, the local strategy was completely revisited by a program director who felt he had his hands tied before. Changes across the board were made to music, imaging and staff set placement resulting in a tri-sector of growth in AQH, time spent listening in CUME.

This is a rare achievement which indicates the stations changes the resonating meaningfully in the marketplace. To be clear, our early efforts and most of our high impact investments to-date have been in the PPM markets, which make up about half of the revenue generated at the station group.

This is where we can see the most immediate impact from our initiatives and investments. The signs here are encouraging as the PPM index we showed you eight weeks ago continue to grow in both February and March.

In fact, this is the first time that this index has shown growth from February to March since 2012, indicating nice momentum and a meaningful change in trajectory. We are now starting to monetize this trend for the business we're riding in late Q2 and into Q3.

So the financial impact is yet to be realized and won't be felt meaningfully until the back half of the year. The timing of converting ratings to revenue aside, we are clearly making progress in the PPM markets and expect our strategies to continue to deliver sustained growth in ratings.

However, the other half of our revenue at the station group is driven by ratings in the diary markets. By their nature these ratings take much longer to affect and ultimately monetize.

In the case of four-book markets, ratings come out quarterly, and in the instance of two-book markets, ratings come out semi-annually compared to PPM markets, where ratings are issued monthly allowing performance changes to be seen more quickly.

Also, the diary markets rating methodology relies on unaided recall versus the electronic measurement used in PPM markets.

As a result, it tends to favor big heritage brands, which benefit from their historic relevance in a market and nuanced changes to a diary station's positioning tend to have less impact over the short-term than more significant strategy shifts.

We naturally expect it will take longer for our diary markets strategies to take hold as we will need to make positive changes over a significantly longer period of time to get the ratings benefits.

As we sit today, our four-book markets and our two-book markets, which collectively represent 46% of radio station group revenue, are still indexing with mid- to high-single digit declines year-over-year.

While we do expect our strategies to stabilize and ultimately reverse this trajectory, the lag in diary market performance will continue to be a meaningful headwind for our radio station group at least for the remainder of the year. Finally, we are acutely aware that the challenges we face with the balance sheet are significant.

We are reviewing all available options to maximize value for the company and give us the time and the operational runway needed to turn around the business. In addition to the pressure our debt obligations create, they also have very tangible impacts on business operations.

Contracts are getting squeezed, recruitment can be challenging, and normal course business activities are becoming increasingly difficult or expensive. Putting aside the distraction of time and focus for senior leadership and that distraction is considerable, the operational and P&L impact on the business is real and unavoidable.

Until we address the balance sheet, we will continue to be hindered in our ability to capitalize on the early progress we've made on our turnaround initiatives. Several weeks ago, we released an 8-K announcing we were in discussions with certain debt holders regarding a potential discounted exchange of our senior notes.

This transaction or a similar transaction would provide significant benefit to the company through the deleveraging of our balance sheet and the extension of maturities, giving us additional time to allow our operational initiatives to take hold, to stabilize the business, and to drive toward growth again.

Over the coming weeks and months, we will continue conversations to explore strategies that can reduce debt and secure the runway we need to effect a turnaround. Before I turn over to J.P. to go through our financial results, I would summarize the first quarter's activity by simply saying that we're in the early innings of a multi-year turnaround.

Though we've made meaningful progress in executing the initiatives that will provide a foundation for growth and we remain relentlessly focused on the operating strategies that can deliver better financial performance over time, the challenges before us are substantial. As we look ahead to Q2, total revenue is currently pacing down mid-single digits.

This reflects continued underperformance against the market, as we had expected it would, and as we communicated on our earlier calls. Our radio station group is pacing down low-single digits, behind its performance in Q1, but was less political on the books at this stage.

National spot is a bright spot as it's performing better than we've seen in recent quarters reflecting the national agency's tendency to react quickly to PPM changes, in our case, the positive PPM ratings that we're now delivering.

Local spot remains choppy, but at this stage of the turnaround, we would not have expected to see any meaningful financial impact, particularly in the diary markets as I said from our initiatives.

Turing to the network, Westwood One is facing difficulties in the second quarter currently pacing down high-single digits, with virtually all upfront account in at this stage we saw a pretty meaningful weakening demand in the scatter market with limited dollars in the pipeline in relation to what we saw during the same period a year prior.

While some of this weakness appears to be market driven, our challenges in the network have some unique elements which will take more time to address given the new leadership of the business and the much longer sale cycle.

At this stage, we're working to tactically influence the back half of the year while more strategically positioning the business for the 2017 upfront cycle. Now, I'd like to turn the call over to J.P. and after he finishes his comments, we'll jump into Q&A.

J.P.?.

Thank you, Mary. Before going to our performance today, I wanted to highlighted a change in the presentation of the financial results in our press release. You may have noticed that we have now broken out revenue and adjusted EBITDA by operating units, the radio station group, Westwood One, corporate and other.

As Mary has put our management team in place and has clearly aligned authority and accountability across operating units versus across ad channels, this change in presentation better reflects how the business is being run, and how we will talk about it going forward. And with that let's jump into Q1 results.

For the quarter, total revenue was $268.5 million versus $271.1 million in Q1 of 2015, it's a decline of 0.9%. Radio station group revenue increased $800,000 to $176.5 million from $175.7 million in Q1 2015, an increase about 0.5%.

This growth was driven predominantly by political advertising, which increased $2.5 million to $3.2 million from $700,000 in Q1 of 2015. Westwood One revenue declined $3 million to $91.6 million from $94.5 million in Q1 2015, a decrease of 3.2%.

The decrease in revenue was driven predominantly by upfront performance, as well as lighter demand in the scatter market, particularly as the quarter progressed. Corporate and other revenue declined $400,000 in the quarter on a base of small dollars.

On the expense side, radio station group expenses increased $2.5 million to $132.8 million from $130.3 million, an increase of 1.9%. That was driven by contractual escalators and new sports rights costs, as well as our targeted investments to drive ratings.

Westwood One expenses decreased $2.3 million to $83.8 million from $86 million, a decrease of 2.7%, driven by the lower cost of sales from revenue declines, as well as the last benefits of the broadcast reductions that were executed in 2015. Corporate and other expenses were flat, yielding total expenses up slightly by $200,000.

This yields total adjusted EBITDA of $41.9 million versus $44.7 million in Q1 2015, a decline of 6.1%. Radio station group adjusted EBITDA declined $1.7 million or 3.7%, and Westwood One adjusted EBITDA declined $700,000 or 7.9%.

Below adjusted EBITDA, in the quarter, we booked $2.3 million of restructuring costs related to the senior management turnover, which happened in 2015, as well as costs related to exploring balance sheet alternatives.

LMA fees in the quarter were $5.4 million, although $2.5 million of this number was a one-time termination fee related to the option arrangement that we chose not to execute for KFJO-FM in San Jose, which we discussed on the last call.

Excluding this fee, LMA fees were $2.9 million for the quarter, slightly higher than the $2.5 million reported in the first quarter. We continue to enjoy a sizable NOL carry forward benefit, and as such are not currently a federal cash tax payer.

We believe we will fully deplete these tax attributes next year and expect to become a full cash tax payer on a federal basis in 2017, in addition to the state taxes that we now pay across various jurisdictions.

In the quarter, we incurred capital expenditures of $4.2 million, predominantly related to the studio move and consolidation project that we are nearing completion of in our Chicago market. We finished the quarter with $58.9 million of cash on hand, and had no change to our debt balance of just over $2.4 billion.

Now, I want to update you on our land sales. First, in regards to our studio and tower location in Los Angeles that is under contract for $125 million, there is no revision to the timetable for likely close to this transaction since our last earnings call.

We continue to believe this land sale will close by late 2016 based upon the current timeline of necessary hearings and approvals. Second, in regard to WMAL-AM tower location outside of D.C., that is under contract for up to $95 million. There is no revision to the timetable for likely close to this transactions since our last earnings call.

Now process remains on track, the preliminary plan to be filed within upcoming months, which kicks off the more formal process of hearings and necessary approvals. We continue to encourage you to model $75 million of sale proceeds and to close sometime in 2017.

To give you an update regarding the notice of non compliance that we received in Q4 from the NASDAQ, the 180-day initial grace period regarding our non-compliance with NASDAQ's minimum listing standards was set to expire on this past Monday May 2.

As we were not able to regain compliance organically during the grace period by achieving a stock price greater than $1 for 10 consecutive trading days prior to that date, we chose to apply the NASDAQ Capital Market tier.

Along with our acceptance to this tier which occurred on May 4, we were given an additional 180-day grace period to achieve compliance with the minimum bid price requirement. Should we not reach this target, we will be evaluating all potential avenues to achieve compliance which could include a reverse stock split in the near future.

Before we go to Q&A, Mary gave you the pacing numbers in our early remarks of down mid-single digits second quarter at this stage and I'd like to reiterate a couple of our other points on the balance sheet.

Following the 8-K that outline the potential exchange option with our bondholders, we have been in and are continuing discussions to explore all available options to address our leverage. Reducing leverage and increasing runway will give us the flexibility needed to execute our operational strategies, as such critical elements of our turnaround plan.

As Mary mentioned, while the company is making clear in measurable progress as demonstrated by operating metrics like our PPM ratings and our overall turnover trends, the nature of our business is such that these positive moves will take time to result in better financial performance.

We still do not have clear visibility into how long it will take to deliver sustained improvement in our financial results. However, the timeframe within which we need to address our capital structure is certain.

By the end of 2017, if we have not addressed our bonds and avoided the springing maturity on our senior secured term loan, our options will be limited. This timeline underscores why we're exploring all options now. And with that, I'll turn it over to Collin to moderate our Q&A.

Collin?.

Thanks, J.P. We're continuing to take questions in advance given positive feedback on the structure this from the last call. We don't normally get a lot of questions on Q1 given its proximity to Q4 and we hit a lot of these during prepared remarks. So, to be relatively quick let's jump in.

So we got several questions on Westwood One, particularly Aaron Watts from Deutsche Bank asked how the year is setting up for Westwood One, can you give some color on Westwood One. It was performing relatively well particularly in Q4, but it's hit some bumps.

Mary?.

Thanks Collin. Yes, first off, thanks for all the questions that came in from the analysts. On Westwood One, I would say – I would characterize it as the challenges are somewhat a microcosm of those at Cumulus, and in some ways worse.

The company has had 11 leaders in 10 years with all of the turmoil and consequences that go with that kind of revolving door. And in the past three years, there was no one – one person, one Westwood executive in-charge which perpetuated what we found to be systemic issues that mirror what we see at Cumulus.

So the team at Westwood One, particularly the sales team is relatively new on the job, but more than that the strategy was essentially to build a team that almost exclusively services the transactional direct-to-agency business. And the vast majority of the revenue that we generate today comes from this transactional process.

And when there is demand in the marketplace, we execute very well in that environment, we showed that in Q3 and Q4 of last year.

But when demand drops off as we have started to see late Q1, and continuing to Q2, it highlights what we believe to be a real deficiency at Westwood One, which is the lack of demand relating (32:38) activity that you might see in a more developed go-to-marketing strategy – market strategy, which is the reason why we brought Suzanne Grimes on among others because she has that expertise to develop that kind of sophisticated go-to-market strategy.

As she begins to effect change her immediate priority is to enhance that, is to do just that, so that we not only manage the transactional business and service it well, but also it's incredibly important that we create unique differentiated solutions for advertisers that leverage our entire platform that bring new business into the space that stimulate demand.

And this effort is going to be critical to the long-term success of Westwood One, and really essential if we're going to insulate the business from the kind of air pockets like we're experiencing today. It's a heavy lift and there's a lot of work to be done to get it right.

And on top of refining the go-to-market strategy, we also need to enrich our product set for sure. We estimate Cumulus and Westwood One work better together and we have to optimize the yields on inventory that we do have.

So, as I said before in our prepared remarks, we're looking to tactically address certain of these issues in the back half, but for the remainder of 2016, we're likely to be at the mercy of a choppy demand environment.

Our opportunity at Westwood, I believe really begins in 2017 and the 2017 upfronts will start in just two short months, so we're positioning for that right now..

Thanks, Mary and thanks, Aaron, for that question. As we move over to the station side, David Phipps with Citi asks, since we commented on the last call, how the D.C. market and the New York market specifically were trending..

Sure. As we said earlier on the call, those markets are looking to be success stories for us in 2016. Mix in D.C. with the return of Jack Diamond continues to perform very well. Its share increased from 2.2% in January to – at about 2.1% average in 2015 to 3.1% in February and 3.4% in March.

We've got endorsement business back, which is great and as we start monetizing these raising trends, we're pretty excited about the future for WRQX. In New York City, with consistent ratings, particularly with WPLJ now teetering very close to 0.4% rating. We beat prior-year cash flow in Q1 by nearly $400,000.

It's also on track to deliver both a better year-over-year revenue and cash flow performance in Q2 as well. So all told both of those continue – the progress continues quite well..

Thanks. Andrew Gadlin of Odeon Capital asked about political and the outlook for the second half, J.P.

would you take that?.

Sure. Political was strong in Q1, $3.2 million. It's ahead of our expectations. It's largely driven by the presidential primaries, but now that's going to slow down into Q2 as the primary settle, and then will ramp again in September, and then full force in October.

So, at this stage, I mean we see no reason why political shouldn't be $25 million for the full year 2016..

So, if we stick on the numbers for a little bit, Amy Yong of Macquarie asked about our visibility.

Can you speak to how the quarter progressed on a monthly basis in Q1 and then also how April shaped up for the company?.

Sure. As a whole Q1, we had sequential improvement each month. The station group fallowed that trend, they had a particularly strong March. Westwood have no case in February, but as we said dropped off pretty significantly at the end of the quarter in March.

Looking ahead to April per the question, I mean pacing in April is consistent with Mary's earlier comments, down mid-single digits in total and down low-single at station group, were down high-single digits at Westwood..

And then moving to a question on sales more generally.

David Phipps of Citi again asked about sales force trends, specifically is Cumulus higher?.

Sure. We're always looking to bring on new talent. In particular, we've got a renewed focus and effort on hiring great sales people.

In the last two months or so, we spent a considerable amount of time working on our recruiting processes, as well as ways to identify high performance inside – high performance inside of the company who want our upper mobility, but we are – especially as it relates to sales talent, we are always looking for and hiring great sales talent..

And then, as we move down the P&L, Avi Steiner of JPMorgan asked about the potential to cut cost throughout the year and what areas we're focused on in that regard?.

As I said in the last call, and I'll reiterate again more generally, costs are a challenge for us, really on two fronts, and the first is that we pay significant built-in cost escalators.

Again, cost escalators that are each year built into our contracts for things like rights fees, vendor arrangements, leased space, and even regulatory changes like minimum wage increases. And second, there've been years of underinvestment in the company, so it's challenging – that's a challenge for us.

That said, we are being very rigorous about managing expenses intelligently and we continue to work relentlessly to reduce our expense base.

For instance, we instituted in the budget process in Q4 an expense contingency tracker that I and the leadership team monitor constantly, and we look for and try to execute explicit opportunities for expense delays or reductions. And in Q1 using this discipline, we were able to reduce expenses by nearly $2 million just for that quarter.

Additionally, we continue to look at non-strategic areas of the business that burn cash flow, and we either re-visit the business model or we're discontinuing operations. A couple of weeks ago, we discontinued the print version of NASH Country Weekly in favor of a digital version, which we're calling NASH Country Daily.

And the economic profile for us here is very, very favorable.

And so, what we're able to do is retain the elements of NASH Country Weekly that made it strategic for us by continuing its operation digitally, but at the same time very, very favorable economics on that move and that's the kind of thing we're doing across the company in every nook and cranny of the company..

So, a couple of questions left. Just got one from Lance Vitanza at CRT Capital about working capital in Q1. He asked if our cash position was driven higher by anything unusual in the quarter. So, we finished the quarter about $59 million in cash, nothing unusual in the quarter generally it was just driven by good Q1 collections.

Each year we see that after we get squeezed at the end of the year. And moving onto a question on debt discussions, in fact, we got a lot of those. Mike Kupinski of Noble Financial asks specifically if we could update on those debt discussions and that we announced in the 8-K earlier. I'll quickly address that.

At this stage, there is not much more to highlight other than we're continuing to explore our options. Mary and J.P. hit this in their prepared remarks that the focus we have is looking for solutions that allow us to reduce leverage and also give runway necessary to better execute our operational turnaround. And with that I'll wrap up the call.

So, I'll send it over to you Mary for any last thoughts..

Yes, sure. Thanks Collin. And thanks to everyone again who joined the call. As I said earlier, we are clearly in the early innings of what I believe will be a multiyear turnaround.

The continued financial challenges that we see in Q1 and Q2's pacings are the result which I said before and I'll say, again, the issues that we've identified and are addressing. Our turnaround initiatives are demonstrating visible and material progress, but it's still early and it's going to take time to see the results in adjusted EBITDA.

We will continue to remain maniacally focused on the highest investor use of our capital, our time, our resources to stabilize the business and we look forward to speaking to everyone again in 90 days. Thank you very much..