The numbers don’t lie.
The final three months of 2020 were punishing for iHeartMedia, which enters March 2021 with the need for a new EVP of Programming for its highly important Los Angeles radio cluster and a long-term plan to replace The Rush Limbaugh Show.
How exactly was Q4 for the company led by Bob Pittman and Rich Bressler?
Net income was down 95% year-over-year as adjusted EBITDA declined by 13%.
Despite the rather dour Q4 results, Pittman struck a positive tone on the company’s quarterly earnings call held following the Closing Bell on Wall Street Thursday.
With the Q4 and 2020 financial results for iHeartMedia released following the Closing Bell on Thursday, the company says it is implementing a new operational structure that will now have its financials reported in two separate segments – digital audio and multiplatform, which includes all radio stations. CLICK HERE FOR THE FULL STORY.
He pointed to iHeartMedia’s “adaptation, innovation and intense focus,” and that, despite a major slowdown in advertising, iHeart demonstrated an ability to innovate. This, Pittman says, helped mitigate some of the downturn and helped keep digital and podcasting, now its own division for financial reporting purposes, on track.
“We are pleased with the EBITDA and revenue recovery since the second quarter,” Pittman said, adding that he expects it to return to iHeart’s 2019 performance by the end of the year.
This, assumingly, reflects the post-bankruptcy emergence figures for the iHeartMedia of today.
Today’s iHeart is saddled with $5.3 billion in debt. But, it’s a big difference from the pre-bankruptcy debt load. And, even with COVID-19 -fueled challenges that debt is down by $100 million or so, CFO Rich Bressler said on the earnings call.
Meanwhile, iHeart has a $721 million cash balance. At the end of 2019, it had just $400.3 million.
RADIO’S BIGGEST PLAYER PERFORMANCE
For the three months ending Dec. 31, 2020, iHeartMedia revenue fell by 8.8% to $935.53 million from $1.026 billion.
Operating income was down by 31.7% to $112.85 million, from $165.13 million.
Adjusted EBITDA decreased by 13%, to $265.5 million from $306.1 million.
And then there’s the net income … off a steep 95% to $2.94 million from $62.13 million.
Free Cash Flow from continuing operations slumped to $53.1 million, from $175.68 million.
Breaking out the dollars for digital vs. linear audio for the first time only exacerbated the ills that AM and FM radio continue to suffer through.
As shown above, broadcast radio was off by 19.1% in Q4.
The decline was seen even as consolidated political revenue in the quarter came in at $95.1 million, rising from $13.65 million in Q4 2019; some $54.26 million of those political dollars are attributable to “Audio.”
While Digital, “which is so important to us,” Pittman said on the earnings call, was up 53%, the difference in income between digital revenue and broadcast radio remains substantial. That said, digital overtook networks in Q4, but this is likely tied to overall ad softness tied to COVID-19 issues iHeart has yet to recover from.
Still, the podcast business is booming, and iHeart is benefiting.
Podcast revenue in Q4 2020 grew to $42 million, from $21 million a year ago.
Meanwhile, lower revenue and EBITDA came despite a 14.3% slashing of corporate expenses and a 7.8% dip in direct operating expenses — even after several rounds of downsizing across 2020. Selling, general and administrative expenses were cut by 6.6%.
The strong political ad performance and digital revenue growth appears to please iHeartMedia shareholders. In after-hours trading Thursday, IHRT was up 9% to $14.84 after tumbling 6.2% in the day’s regular trading session.
