SAN ANTONIO, Texas (Top40 Charts) iHeartMedia, Inc. (Nasdaq: IHRT) announced today that it is withdrawing its full-year 2020 financial guidance provided on its fourth quarter earnings call on February 27, 2020 due to heightened uncertainty related to the novel coronavirus pandemic ("COVID-19"), its impact on the operating and economic environment and related, near-term advertiser spending decisions.
"Given the ongoing uncertainty surrounding the duration and magnitude of the COVID-19 pandemic and its impact on the U.S. economy, we believe it is appropriate to withdraw our full-year 2020 guidance. 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," said Bob Pittman, iHeart's Chairman and Chief Executive Officer. "At iHeartMedia, our listeners rely on us as a trusted voice for companionship and calm and as a source for critically important information, especially during times of crisis and need, and we remain fully committed to fulfilling this mission."
"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," said Rich Bressler, iHeart's President, Chief Operating Officer and Chief Financial Officer. "To maintain maximum financial flexibility during this period, we have drawn $350 million on our $450 million senior secured asset-based revolving credit facility ("ABL Facility"). We believe that the additional funds from drawing on our ABL Facility, in combination with our cash balance, provides us with a prudent level of liquidity at this time. We fully appreciate the unprecedented challenges posed by this crisis, however, we remain confident in our business, our employees and our strategy. With our experienced management team and our leadership position in the audio sector, we are committed to navigating this period while serving our audiences and other constituents."
The company will provide an update on its first quarter earnings call.
Asset-based Revolving Credit Facility due 2023
On May 1, 2019, iHeartCommunications, Inc., a wholly-owned indirect subsidiary of iHeartMedia ("iHeartCommunications"), as borrower, entered into a Credit Agreement (the "ABL Credit Agreement") with iHeartMedia Capital I, LLC, the direct parent of iHeartCommunications, as guarantor, certain subsidiaries of iHeartCommunications, as guarantors, Citibank, N.A., as administrative and collateral agent, and the lenders party thereto from time to time. The ABL Credit Agreement governs our ABL Facility, which has an aggregate principal amount of up to $450.0 million, with amounts available from time to time equal to the lesser of (a) the borrowing base and (B) the aggregate revolving credit commitments. As of December 31, 2019, iHeartCommunications had a facility size of $450.0 million, had no outstanding borrowings and had $48.1 million of outstanding letters of credit, resulting in $401.9 million of availability.
On March 13, 2020, iHeartCommunications drew $350.0 million principal amount under the ABL Facility as a precautionary measure to preserve iHeartCommunications' financial flexibility in light of the current uncertainty in the global economy resulting from COVID-19. The proceeds will be available if needed to fund iHeartCommunications' future working capital requirements or other general corporate purposes.
