"The challenges that COVID-19 has created for advertisers and consumers has impacted iHeart’s revenue in recent weeks, creating a less clear business outlook in the near term," the audio giant said.
Radio and audio giant iHeartMedia on Thursday withdrew its 2020 financial guidance "due to heightened uncertainty related to the novel coronavirus pandemic" and said it has shored up its liquidity by $350 million by tapping into a revolving credit facility to boost its financial flexibility.
Citing "the ongoing uncertainty surrounding the duration and magnitude of the COVID-19 pandemic and its impact on the U.S. economy," chairman and CEO Bob Pittman said: "While we cannot determine the full extent of COVID-19’s impact on our business at this time, we are monitoring this rapidly evolving situation closely and look forward to discussing our business in greater detail as part of our first-quarter 2020 earnings results investor call."
Added president and COO Rich Bressler: “iHeartMedia had a strong January and February before the effects of COVID-19 began to unfold into a global pandemic in early March. The challenges that COVID-19 has created for advertisers and consumers has impacted iHeart’s revenue in recent weeks, creating a less clear business outlook in the near term."
He also addressed the question of liquidity. “To maintain maximum financial flexibility during this period, we have drawn $350 million on our $450 million senior secured asset-based revolving credit facility," Bressler explained. "We believe that the additional funds from drawing on our...facility, in combination with our cash balance, provides us with a prudent level of liquidity at this time." The company said the proceeds "will be available if needed to fund iHeartCommunications’ future working capital requirements or other general corporate purposes."
Bressler concluded: "We fully appreciate the unprecedented challenges posed by this crisis, however, we remain confident in our business, our employees and our strategy."
Discovery on Tuesday similarly withdrew its earnings guidance and said it has down $500 million from a revolving credit facility to shore up its balance sheet.
