The last time the company turned a profit was in late 2009 — the same year President Barack Obama was sworn in to office and Michael Jackson died, according to The Express-News in San Antonio.
According to the report, iHM has lost money every year and nearly every quarter since two Boston private-equity firms acquired 70 percent of the company in 2008 with a $24 billion leveraged buyout that established a debt of more than $20 billion.
The company’s remaining shares are publicly traded, closing Tuesday at $1.30 a share, which is close to penny-stock territory. Equity analysts stopped covering the company long ago.
Instead, the question will be whether iHeartMedia’s cash flow and revenues remain sufficient to service its crushing debt load, with some bondholders becoming increasingly restless about the the company’s long-term outlook.
The quarterly earnings report comes against a backdrop of litigation with the company’s debt investors.
iHeartMedia last week filed its second lawsuit this year against a group of rebellious bondholders to head off the chances of being forced into default on some of its debt. The bondholders question the company’s complex strategy of transferring assets between units to repurchase its own bonds at a discount. The group has previously threatened to issue so-called default notices on the company.
Meanwhile, iHeartMedia continues to pay off its debts and interest on time, while big payments loom through 2019.
The best news for iHeartMedia expected out of its quarterly report would be that its radio unit received more revenue than expected. “It could mean radio is stabilizing and doing well. The company needs to continue to cut costs for faster growth. Will that happen? I’m not sure,” stated Seth Crystall, Debtwire senior credit analyst.
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