Friday, February 26, 2016

Analyst: iHM Should Be Able To Meet Debt Obligations

iHeartMedia Inc.’s loss in the fourth-quarter widened to $93.3 million as the company paid out higher sales commissions and other expenses, the company reported Thursday.

iHeartMedia, which also owns 90 percent of Clear Channel Outdoor Holdings Inc., lost $68.08 million during the same period in 2014, the company said. For the year, iHeartMedia narrowed its losses to $754.62 million from $793.76 million in 2014. iHeartMedia is one of the largest owners of radio stations in the world.

“Their (quarterly and annual) numbers showed real strength. They were much better than I expected. I was pleased with the progress from the operating and liquidity standpoint,” Lance Vitanza, a stock analyst who follows the company for CRT Capital Group in Stamford, Connecticut, said in an interview following the company’s conference call with analysts.

iHeartMedia generated about $1.8 billion in revenue during the fourth quarter, after adjusting for foreign exchange rates, which was slightly higher than the fourth quarter of 2014. For the year, consolidated revenues fell 1 percent to $6.5 billion.

Companywide debt increased during the year to $20.87 billion as of Dec. 31, up from $20.33 billion the year before. Much of the debt stems from 2008 when two Boston-based private equity firms, Bain Capital Partners LLC and THL Partners purchased 70 percent of the company, then called Clear Channel Communications.

According to, the company is in talks with its biggest lenders for a standstill agreement in which iHeartMedia would pause asset sales and won’t talk to other creditors about debt deals, according to Bloomberg News. In exchange, the top lenders would agree not to file default notices, Bloomberg reported.

Vitanza said the company should not have trouble meeting its debt obligations.

The company is banking on the 2016 presidential election to increase revenue from political advertising this year.

iHeartMedia generated $105 million in new revenue from political advertising alone in the 2012 presidential election. In the congressional election year of 2014, advertising sales were $87 million from political ads.

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