iHeartMedia(US:IHRT)2022-08-03 16:00Financial Performance - Consolidated revenue for the second quarter of 2022 was $954.0 million, an increase of $92.4 million, or 10.7%, compared to $861.6 million in the prior year's second quarter[112] - Operating income rose to $82.9 million, up $54.8 million from $28.1 million in the prior year's second quarter[112] - Net income for the quarter was $15.2 million, an increase of $47.2 million from a net loss of $32.0 million in the prior year's second quarter[112] - Cash provided by operating activities increased to $155.8 million from $29.1 million in the prior year's second quarter[112] - Adjusted EBITDA for the quarter was $237.2 million, up $52.7 million from $184.5 million in the prior year's second quarter[112] - Free cash flow improved to $106.1 million from a negative $3.0 million in the prior year's second quarter[112] - For the six months ended June 30, 2022, consolidated revenue rose by $229.2 million, or 14.6%, totaling $1.797 billion, up from $1.568 billion in 2021[115] - Operating income for the six months ended June 30, 2022, was $95.2 million, compared to a loss of $48.2 million in the prior year[146] - Adjusted EBITDA for the six months ended June 30, 2022, was $382.4 million, up from $286.8 million in the prior year[146] - Free cash flow for the six months ended June 30, 2022, was $31.4 million, compared to $49.8 million in the prior year[149] Revenue Breakdown - Revenue from the Multiplatform Group increased by $27.5 million, while Segment Adjusted EBITDA rose by $13.1 million compared to the prior year's second quarter[112] - Revenue from the Digital Audio Group increased by $54.6 million, with Segment Adjusted EBITDA up by $24.6 million compared to the prior year's second quarter[112] - Revenue from the Audio & Media Services Group increased by $9.9 million, with Segment Adjusted EBITDA rising by $1.6 million compared to the prior year's second quarter[112] - Digital Audio Group revenue surged by $54.6 million, or 27.6%, for the three months ended June 30, 2022, driven by increased demand for digital advertising and podcasting[114] - Revenue from the Multiplatform Group increased by $100.7 million year-over-year, with Broadcast revenue up by $70.1 million (8.7%) and Networks revenue up by $6.4 million (2.7%) [133] - Digital Audio Group revenue increased by $111.3 million year-over-year, with Digital revenue (excluding Podcast) growing by $48.9 million (18.5%) and Podcast revenue increasing by $62.4 million (68.0%) [138] - Revenue from the Audio & Media Services Group increased by $15.6 million year-over-year, attributed to higher political advertising revenue [144] Expenses - Direct operating expenses increased by $44.9 million, or 12.5%, to $365.4 million for the three months ended June 30, 2022, primarily due to higher variable content costs[116] - SG&A expenses rose by $6.4 million, or 1.7%, to $379.1 million for the three months ended June 30, 2022, driven by increased employee compensation and sales commission expenses[118] - Operating expenses for the Digital Audio Group rose by $74.2 million, driven by higher employee compensation, talent costs, and increased content and production costs [139] - Operating expenses for the Audio & Media Services Group increased by $13.0 million, primarily due to higher employee compensation related to seasonal staffing [145] Tax and Impairment - The effective tax rate for the Company was 10.5% for the three months ended June 30, 2022, influenced by a forecasted increase in valuation allowance against certain deferred tax assets[127] - Impairment charges recognized during the six months ended June 30, 2022, were $1.6 million, a decrease from $37.7 million in the same period of 2021[122] Cash Flow and Liquidity - Cash provided by operating activities for the six months ended June 30, 2022, was $103.6 million, an increase from $100.9 million in the same period of 2021, primarily due to recovery from COVID-19 impacts[156] - Cash used for investing activities was $49.7 million during the six months ended June 30, 2022, primarily reflecting $72.2 million in capital expenditures[157] - Total available liquidity as of June 30, 2022, was approximately $715 million, consisting of $294.8 million in cash and cash equivalents and $420.6 million in borrowing base availability[161] Debt and Interest - As of June 30, 2022, total debt was $5.6 billion, with $294.8 million in cash and cash equivalents, resulting in net debt of approximately $5.3 billion[166] - Approximately 40% of the company's long-term debt bore interest at floating rates as of June 30, 2022, with an estimated interest expense change of $2.5 million for a 50% change in LIBOR[173] - The company anticipates approximately $168 million in cash interest payments for the remainder of 2022[163] Future Outlook and Risks - The company expects to continue funding operations and capital expenditures for at least the next twelve months, despite potential economic challenges[164] - The company is involved in various legal proceedings and has accrued estimates for probable costs related to these claims[169] - Inflation has impacted the company through higher costs for employee compensation, equipment, and third-party services, but the overall effect on historical results is believed to be immaterial[175] - Forward-looking statements regarding future performance are subject to risks and uncertainties, including economic trends, COVID-19 impacts, and competition from alternative media platforms[177] - Factors affecting future performance include weak global economic conditions, intense competition, and the impact of substantial indebtedness[178] - The company acknowledges the risks associated with technological changes and innovations that could affect its business[178] - Legislative and regulatory requirements, as well as ongoing litigation related to music licensing and royalties, are potential risks to future performance[178] - The company has a significant number of outstanding warrants related to its Class A common stock, which presents additional risks[178] - The impact of shifts in population demographics is recognized as a factor that could influence future business performance[178] - The company does not intend to update any forward-looking statements, emphasizing the uncertainty of future events[177]