IHEARTMEDIA, INC. (OTCMKTS:IHRT) Files An 8-K Results of Operations and Financial Condition
Item 2.02
The Company’s preliminary financial results for the second quarter of 2019 set forth in Item 7.01 below are hereby incorporated by reference into this Item 2.02.
Preliminary Results for the Second Quarter of 2019
The Company’s preliminary results of operations for the second quarter of 2019 are as indicated below:
Revenue, Operating income and Adjusted EBITDA:
We define “Adjusted EBITDA” as consolidated operating income adjusted to exclude restructuring and reorganization expenses included within direct operating expenses, selling, general and administrative expenses, (“SG&A”) and corporate expenses and share-based compensation expenses included within corporate expenses, as well as the following line items presented in our Statements of Operations: depreciation and amortization; and other operating income (expense), net. We use Adjusted EBITDA, among other measures, to evaluate the Company’s operating performance. This measure is among the primary measures used by the Company’s management for the planning and forecasting of future periods, as well as for measuring performance for compensation of executives and other members of the Company’s management. We believe this measure is an important indicator of our operational strength and performance of our business because it provides a link between operational performance and operating income.
We are not able to reconcile our expected Adjusted EBITDA for the Predecessor Period from April 1, 2019 to May 1, 2019 and the Successor Period from May 2, 2019 to June 30, 2019 to net income (loss), the most directly comparable GAAP financial measure, without unreasonable effort because we have not yet completed the financial close process for the second quarter of 2019. Given the complexity of accounting for our emergence from Chapter 11 Bankruptcy, certain items impacting net income (loss) for the second quarter of 2019, particularly income taxes, require additional analyses which are not complete as of the date of this Form 8-K. Accordingly, we have presented a reconciliation of expected Adjusted EBITDA to operating income, the next most directly comparable GAAP financial measure. We anticipate presenting a reconciliation from Adjusted EBITDA to net income in our June 30, 2019 Form 10-Q which is expected to be filed in August 2019.
2019 Full Year Guidance
For the year ended December 31, 2019, on a consolidated and combined basis, the Company expects total revenue growth in the low single digits and Adjusted EBITDA margins in the range of 26% to 29%.
Adjusted EBITDA margin is a non-GAAP financial measure. We are unable to reconcile our Adjusted EBITDA margin guidance to the corresponding GAAP measure because the amount and timing of future changes that might impact these measures (such as amortization of future acquired intangible assets, impairment charges and provision or benefit for income taxes) are variable, uncertain or out of our control and therefore cannot be reasonably predicted without unreasonable effort, if at all. As a result, we are unable to provide a reconciliation of this measure. In addition, we believe such reconciliations could imply a degree of precision that might be confusing or misleading to investors. For the same reasons, we are unable to address the probable significance of the unavailable information, which could have a potentially unpredictable, and potentially significant, impact on future GAAP financial results.
Investor Presentation Materials
As noted in the Introductory Note above, the Company intends to participate in certain investor presentations prior to Listing. Copies of selected presentation slides to be used in those meetings are attached as Exhibit 99.1 hereto and incorporated by reference into this Item 7.01 in their entirety.
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