Lamar Advertising (LAMR) 8 May 202020 Q1 Earnings call transcript

Excuse me, everyone. We now have Sean Reilly and Jay Johnson in conference. Please be aware that each of your lines is in a listen-only mode. At the conclusion of the company's presentation today, we will then open the floor for questions.

In the course of this discussion, Lamar may make forward-looking statements regarding the company, including investments about its future financial performance, strategic goals, plans, and objectives, including with respect to the amount of timing of any distributions and stockholders and impacts and effects of the novel coronavirus, on the company's business, financial conditions, and results of operations. anticipated risks, control contingencies, actual and differ from involve are of results statements materially Lamar's beyond which the forward-looking uncertainties, many and which to All results. may cause

on XX-Q, or that reports annual Lamar first Lamar you has materially current those required XX-K site, Web report and release, first those quarter on section in discussed this and cause certain furnished on to company's XXXX G updated X-K is information results www.lamar.com. Form which non-GAAP call, the XXXX morning, Regulation Investors to Form Form from in of could supplemented this quarter contains to available identified quarterly refers differ the X-K. actual on the its documents. Form the financial by factors its measures, Lamar earnings important Lamar's release, by earnings reports SEC most regarding as which recent on

Sean turn I Reilly, would to begin. like you now over the Reilly. may Mr. to conference

mind. communities shareholders first of serve in and constituents, employees, amplify Thank health earnings important through our to the yours XXXX have are dedication communities industry safety employees and resilience you, well. their that Lamar, across have healthcare times. you and trying has to QX kept and Lamar's donated and everyone. and the we unprecedented morning, We, for Welcome to colleagues amounts distinguished at We in I by public Carrie. of responders, themselves our thanking safe want and of frontline workers begin messages our out-of-home inventory the our trust They as the these customers, call. to top and I all honor practices Good country. about industry. all

the all necessary our fade and as recovers. crisis steps we We ever are to stronger economy that than emerge ensure taking

million in stronger $X business which revenue. Our in $X QX cost million we midway us believe been not strong, have March, would turned or were had results and through

out-of-home ability question As it prices ball an consecutive has Our the is, advertisers. back, deliver everyone's our business, large that XXth revenue on was, are powerful with to audiences "What's by affordable the prized growth, quarter is no QX of us to set was our COVID-XX Obviously, and than mind and the ahead?" messages indication anyone fundamental clearer at crystal else's.

by XXXX, new can cash However, to $XXX completed we approximately I full-year digital were a provide April in call, replace think April, approximately we we in generated we of be forma to month that April million, how revenues withdrew the even able you AFFO went, will the net small from guidance acquisitions. projects and decline August though for some guidance but pro we now, and XX% some had tell

April May road not little tougher April, extrapolate That the caution through said, and a into the we I would will ahead, look data April signs. you tough point, encouraging than a also, but we windshield all month to of be QX. at just is see likely a as

site each the been Geopath. updates Go their the down yourself can tell by well. their in provided can I at activity compared helpful drivers in by Our in this audience on and managers me you updating tool, scroll data traffic to and hitting ago, of traffic and of is tracking virtually year. is to Investor from our site a is you many, compared using can to markets see attest market driving of last up-to-date we began, at or true you We go geopath.com, weekly. market markets, traffic roads as contribution real-time many XXXX of way status many our our experience, and encourage its again. it. our our from a to is I Since of the its by bad a markets, have to to plan look called the same Web and personal Web percentage for public, year, orders are month up the link It and lamar.com, see last Daily to Mobility, section, at revenues this driving

hit two one, markets, sharply, far far The travel traffic Number Baton our activity is in New two, City COVID-XX. data DMAs markets across in quicker so typical reveal York has Tallahassee by like and Rouge top Lamar and were dramatic. rebounded the felt things. Land like that than rebound Number the less middle Boise hard unfortunately and

traffic those XX% revenues, average As we rising of to noted traffic is in in and of the that XXXX back XX% is year's generated fast. our markets collectively billboard already markets release, last

week, As to every so market. can update you going I are by progress mentioned, data see this we

Now, Disney the Middle- nation's We've about our more quick-serve sales contracts. more identified it meaning that are Pennsylvania. and World, renewed travel roadside and and conversations audience customers, activities XX improvement, renewals markets with I-XX and recovering Hershey, only also we release, and services, add do with or management summer, To businesses clear markets and the and regional going this to well, regional the the than wine. corridor top and Myrtle Far country. about hit eyeballs air beer It's showing clear list, online will healthcare, institutions the summer. it [Ph] It's are also is to flexible but are corner, relief, that but this with fewer as and for maybe than would I few activity be them. going road Vegas the on [stalwarts] It new discussions our the West. contract Beach smaller-sized there home that think is the education, economically faster road several we're less not or a traditional such in from And more clear of including heartland calls not customer front, like tourism, education. the people in that having travel or have cancellations, verticals campaign the financial showing restaurants, things starts deferrals invoicing, are we turned be

In are terms adjusting also CapEx, of and reality. the OpEx post-COVID we to

final million, approximately approximately we expenses XXXX's the reduce least from $XX in forma $XX We transit even cuts $X.X OpEx more that big lease portfolio our out million million. to in the and payments million are savings QX Keep impactful million in pro entertainment, bonuses, year. and total items sales mind CapEx from $XXX the to quarters $XXX at of like. when the of spread reduced commissions, and and $X have in million The in approximately are reduced $XX.X so airport are million in and and these least $XX at million by reduction and travel, CapEx OpEx expect door, the to ticket three budget consolidated authorities, in executive management over

Jay?

and morning, begin current with comments economy. and and focus first only share. an $XXX.X AFFO the time then a with was debt consolidated taking $X.XX for EBITDA EBITDA Thanks, call million revenue brief covenants. I everyone, X.X%. position particular obligations of adjusted increased the Sean. XX.X% growth per with quarter, XXXX, time and join million of thank In for our discussion first grew was X.X% adjusted fully some our quarter, acquisition our to the during Adjusted diluted increased our will financial and this acquisition first quarter you on Good our of expenses X.X%, company's society in our review to to while on extraordinary the increase financial conclude compared X.X%, compliance sheet, $XXX.X with balance and the

approximately CapEx of over and million, million $XX to CapEx, total comprised quarter for $XX in the Moving maintenance of spend $XX growth CapEx. was approximately million

XX% approximately growth growth As $XX million reduced representing the for our Sean budget projects remaining the $XX be year we're CapEx to expenditures between significantly split of million. and maintenance evenly with will CapEx over mentioned, and that to contractually we've complete. XXXX obligated balance by pretty of CapEx approximately

should Turning the we to scheduled for both stability the during lowering and balance while quarter interest steps took expense amortization. greater provide debt our sheet, first

under credit sheet revolving of $XXX cash hand debt-to-EBITDA the facility. we even liquidity, the net $XXX capital million facility. Lamar access of and years than as defined and to on availability million ended our approximately balance times X.XX enjoys of Furthermore, The of million recent now our debt comprised continue $XXX company Our credit quarter of both under had and believe with is markets. stronger equity total leverage to we in

drew $XXX million on have and March, our In outstanding. $XXX of abundance million revolver currently we caution out of an

the month had cash we For company April, was $XXX approximately and quarter-end. positive. our net the cash April of remains of from And unchanged XX, of revolver availability million as

liquidity, lowering advantage and took strengthening as significant within company unprecedented These economic our backdrop markets, the we refinancing debt, constructive quarter, our balance under first and of of further maturities, favorable at benefits a covenant current structure. extending enhancing provide conditions, transactions terms sheet. the debt cost the adding the our flexibility face During capital

million of scheduled cycle. result did the in savings flexibility wanted while XXXX. and financial greater maintaining amortization throughout economic this withstand of current we of Altogether, year will cost $XX.X the the weakness had that Though even to not the in we anticipate pandemic-related downturn, re-financings possible lowest ensure of we debt million $XX savings the to periods

even allow While steps company endure analysis, period for time. an taken if to our the economic the current the will current extended environment was persists the of environment we in believe not

future withstand crisis the ample amortization this once growth cut and well savings to pandemic-related economic ends. have we positioned expenses, we taking we're we're the steps are for With and that upside revolver, to confident downturn liquidity this

to facility times the March. to times. end level on agreement. which debt leverage debt from our from on two maintenance first to was of new draw for the the the and revolver are of even X.X the would increased X.XX full-year February a XX-month times, outstanding, in total was secured credit transactions, seven net secured covenant only to $XXX closing flexibility, contains company our latest based was X the debt which of credit Both our XXXX times, secured as Prior greater credit debt test our trailing senior approximately the covenant was draw incurrence At financial debt its forma test under EBITDA Shifting At debt in defined XX% and current million leverage. on X.X EBITDA maximum of reach trailing secured refinancing times. covenants; also the the the for agreement increased XX-month quarter, secured structure, secured our have a tests debt pro which times, to decline X.X of after provides from

the no covenant financial crisis repaid longer Term To this revolver. our of apply Loan only year-end should remained to cancelled, It line applicable put XX% EBITDA our is credit covenant outstanding. our context, B approximately XXXX debt secured year-end the the that XXXX. would be if noted in If global this and to declined even from during is

EBITDA. any to result Our our total debt incurrence Unlike a relative on is much company second financial our if and leverage would how test, have covenant is which may an in of additional debt limit default to a test, under agreements. not limit ability secured debt debt not our met, the only outstanding raise total

total the from balances are netting year the was approximately maximum points As up of its Under our to reach of not fully of trailing the $XXX flexibility against present increase quarter, deducted of provides Hopefully total economic debt from full-year mentioned, on and to limit for leverage. current the clarity end in our total the this outstanding, due decline cash level revolver at company XX-month the total terms million. level Lamar first or as some is our X.XX secured debt of our balances cash draw uncertainty. the approximately on XX% credit March face XXXX have debt times, to maximum the latest our basis hand. of cash EBITDA financial debt XX of from to end would a to At to EBITDA agreement, our we debt

bank or stand do financial the relief not the to our of amendment foreseeable our anticipate to circumstances any As approach future. we covenants need for today, seeking group

call With to now that, the over will Sean. turn I back

we're verticals. Jay. going to dive familiar little seeing of of what in do the color terms going and deeper Thanks, I'm to with, a then you're our I'm few in cover metrics that a on

that think might I be helpful.

new quarter count, ended few up with digital digital quarter. X,XXX units, digital put those of the the increase So, were first XX Greenfield units, by in XX an of actually XX acquisition. we a that's We

Our X.X% digital in revenue QX. up unit same was

national XX% national problematic for Our XXXX. sales XX% mix local local QX and

So in that's rearview mirror. the looking

the through verticals and granularly our windshield some about more look of little a Let's them. talk at

in-bounds a course, as verticals, We're service look would one, strong is and three you're hospitals of our and lot are attorneys. So primarily looking with, the and are I two that top through say good Service, familiar three as getting and restaurants, of windshield. to we also expanding attorneys like services other that good we about expand that. are we slightly because home fall control, that from in cleaning. about feel that feel office are their relationships there services and to things But looking pest category good

As of you as can is elective about and great the opened service imagine. in activity that, also demand, and we and Hospitals so demand seeing cleaning we're visits, you strong and the seeing category. surgeries. very pent-up doctor demand are in up imagine, services healthcare and for good feel can like We're increased surgeries is states as clinic things there and elective visits, some

restaurant Barrel, vast service business and are they restaurant our The and fine. category. to of Let's like talk Cracker is majority about chains quick be going the national

miles to there's that this America quick service are of a I mentioned, do In open fact, across and well. Restaurants, number summer as national going to country. the going as believe this the hits driven record believe road I summer, be chains I

largest It's have more to Certainly recovery. were it stores fourth our close -- book. of of retail. May. is is vertical issued keep closely. macro closed on we going tied lot the X% determined of eye take retail eye to we're and about credits -- a to month by that Our it, watch in what a Retail going April It's close to to the is be a

jewelry retail local the things The environment of stores be small back. going As is in going retailers, are that And and watching and reopen, QX QX? to we're local they're what's question macro like. closely. our to Most the businesses come

tough though category, regional venues. a renewed mentioned your as see open think rebound It's I course, amusement year summer to shutdown. think that of Another is we're like hit the places And We seeing up. Disney like. World, this for America when in road. Vegas necessarily activity. really amusement. little is took things QX more the Definitely next recovery hits in be probably The I the sort amusement a Hershey some amusement again, of not quarter, going and open and we'll real it's fourth

to Automotive, there. was from most hanging in their dealers will use down not probably a is in the in come QX. actually advertise auto serviced. asking up automotive X% that It color and in variety they're the ways. But us their I'm on Automotive field they in the be it's getting new of get selling cars, If likely QX. service car offering, people

going hang to there. So, in we that's feel like

Gaming; market in an gaming is environment. likewise pretty taking shutdown is a challenged a hit. is Vegas important to us and good

XX% with casinos, regional example, The and many of Coast their However, has business the like Gulf Mississippi X for I that outside are the Vegas June Gulf beginning is be would our like for Mississippi gaming of Coast, is of places and and announced. to and openings in that note sticking announced business openings us.

we're you there: are XX% to The in looking to was seeing student schools online and two that vertical there. notion as up also be they're and Telecom, themes open they It The a It's getting going education, thinking main that environment. that's strong there, but uptick have the category reinforcing strong. stronger. home and the tremendously fall And that population their are QX and That's QX. imagine in then, be can the speak. improvement, finally, furnishings XX, that enrollment to for want number tell strong is world education is there and a we and household the stay-at-home we reassure nice going them.

the and as recovery speed I'm possibly it think which could is the and encouraged. our about from happen, verticals I So, across coming where with look

Carrie, up open that, questions. for with it So, we'll

Quadrani be Instructions] Alexia from our JPMorgan. from [Operator question first will And you. Thank

great as for [Anna] you This Thank Hi. on the the so [Ph] much Alexia. question, for is commentary on call well.

came has Just as strategic that would affected terms market? on in assets maintain certain commentary in given been much of results QX, COVID-XX in ability as your very were consider the you by not to M&A and upbeat your business QX,

tough hopefully, taught the me decades, through I've long will business one for managed business and know thing one the a for times, father as question, of time. I not come and three this times through been been recover, in outdoor "You we and and always And brother that one you I've players strongest way. industry, emerge as told buy strongest. as have me my good doing is, Thank if the we over thing the they the my in that cycles." the Hopefully will opportunities the Anna. our

tuned. stay So

much. thanks Great, so

you. Thank

be will Bisson Stephan Wolfe from question Research. next Our from

Good just afternoon. on June? you got worse. late? lot the or of guys comprehensive. a in and guess, directionally May, it all it Middle trend significantly bit early your QX then said for a And worse, have I how is on the then, is questions patch is, Is of Thanks little that America, for was commentary. bit given little in the amazingly further commentary you down, oil first troubles me, know all the as Two things a industry I and fared, the It

questions. Good Sure.

So, the is and oil and and to difficult, manage that something challenging Tulsa, and Midland and in the through. to struggle, patch City, is commentary like going Texas. have The going is to and macro we're there places Oklahoma color just is

to May. little activity world the when most me period, shut the XX the before, out period April you've means right? to a that heard So, a for more month, days the in just unfolds make felt for down say into that selling our from probably of when was impact business month, in the goes this we're way of the XX that's So,

than June have as have net Now into would get are May we're dramatically. I tad for we for Don't as but can That business not June think to that writing categorize want new -- said, yet, in believe as May month May business we we're month progresses. worse to the And a speak. up. it will the June, May hopes that be for April, in as the we month pick going selling I in we

So, it analysts had. to I as as certainly don't the we see but quarter, to dire don't some of the guide

that's then, one much out follow-up, help you doing the and faring, air Understood, programmatic where can that how to are environment is really selling in so an is that date? something closer

Yes.

quicker shorter bounce, is that a it's good broaden shortest I'm little a question, it's our in business. our quicker but right. So, kind cycle, the downturn and the is a it of also in instances, the the the that Programmatic going bit cycle because really axiomatic to many -- business a a nanosecond. It's

hit bad in So, programmatic are pretty April.

we interstate has guarantee Now, wherein in two channel that data number progress picked for sell we we're inventory are, that. up, I reasons a to of April, don't not When it's by, extremely the we and we there May, so, believe demographics to there's year. that programmatic, believe traffic one, digital going that. what set and see the programmatic report to really data in In from impression, and but driving we and through short buy right. do guarantee could a allows have tomorrow, who's activity do that -- buy as the for going lift lots two, on we a inventory are I'm of, of to as us happy were the I month, Number but it's the impressions. number impression, guarantee only the cycle, we bulletin the around

three pacing is -- So, from Political have I a we political. speaking a our next I shoe cycle hit half, the faster. back mention of the sale four and is To that see one shortest it in green our broadly little about, took coming than XX% little the rest broaden didn't digital is and up good cycle. question. also bit, and bigger platform it April it talked XXXX back for Qs is which should out

much. you Well, so thank

Stanley. Thank you. question Morgan next [Operator Your will from be Instructions] Swinburne Benjamin from

Hey, you. Thank morning. Sean. Good

Hey, Ben.

has when know there's sense and you, timing I the no It I'm also mean, we the how it coming for things I you out I have 'XX/'XX snapback but questions, kind just from changed is the you know could recovery, a but of have thoughts terms way that to take feels balance have lot and you to I'd versus or And again, confidence bit I'm and in was -- about if know know you a share since one this two to thinking business dividend or unknown, the are and like wondering then. I you're first I an that. is really okay wasn't about I'll of -- the relative that didn't the team this guys is just the last it's it decision, but to unknown, probably think and an but trying was your this, in sure -- -- frustration. a business what's know this one, the to the think Board maybe a leverage, time love get then, on I but also of how trying to recovery. of strike? the share you there the guys.

Sure, great questions.

'XX/'XX, company was a the then. I course, Officer just six walked that a It's you dread on So, of Operating the feeling and -- for will of And stomach. with I months, my of Chief pit around tell back I

can Morgan imagine at so how work I felt. Stanley, I you

Yes.

sort highlight felt feel way back a to throughout that as not of say almost existential. then that not There's that. it for of that reasons I have It I So, couple felt does this.

is more bigger, far, is far scale our is is broader, platform better. Our sheet our our demand, balance in inventory

to to that If V, dramatically. of more have the went at are time. they in you and my is mind some of, a back predict and all a at I And to around but it There rebound beginning. levered is travel were it car in doubt that the L, was U, up just an a no go thing much and is it my pick that commentary to I'll it we running is terms to recall, going It fewer is covenant stuff. had getting we times It are more to this Grand overseas We vacation going fewer cars the road going make a going doesn't the to flying. major metros the valuable. say and to in commuting that's how far of most to don't the going That driving trip is to country. good but for know going feel far but transit. by indications, people turn be the family people Canyon in be more by on affect people billboards. all mass to more That X exactly into difficult makes space hard about of there's take to scramble our relief patterns, our me

There to headwinds the are top, be other sped-up going going streaming, in linear over to less think, watching business. I secular of more to some to be us there's be trends, the be going others cord-cutting, a be for there's terms going are there's more television. in that going tailwinds for to more and media There's

It going that's doesn't us. local newspapers is me local accelerate to get the accelerating going come that they're network make us. to to trends going think way. to this. our come feel advertisers going extent, their that the say to the away, trend move advertisers benefit I affiliate to affect to and TV to by their wonderful also That are crushed and, That's extent,

wind how way that's in pretty at materialize, be it's it's but hard for take and the blowing, going to to clear the that to trends, going long it's and our that of to back. The So, these secular say is -- terms it's

Yes. leverage? Dividend

Yes.

second to period. the will the they look distribution -- maintain one, we going for over quarter second to our status primarily Number year. but is quarter the the mull just two plans So, as rest not REIT obviously, of things Board the

to distribute least it, right it as know, be don't So, seems in of will it us year-end now, that to but is is probably our we to XX%, XXX% intent what you know at be, that and going our NOI cash.

As of very know, very, stock a times distribute very, lot lieu cash. tough in of you in REIT

that We a of company. in in You've stock, go status do the of REIT protect don't the particularly and we liquidity as terms two, distributing REITs space your number And one, but the number will believe seen a there already. that. among the need of then, number we it's to lodging

So And the rest at of what we the it to enough plan. to we'll for believe, just like for August, have year. the world May visibility by quarter the see looks end have the speak we'll distribution to of second

you Thank much. very

Thank you.

next Our question from Capital. be Miller Imperial will from David

then, conducting hope Hey, everyone's questions and for Jay, guys. want the Yes. to in. two maybe there. safe call Thanks today. you Sean, I for over you, chime

you the the you filed April and pulled the phraseology talking So, guidance, you for had then, to know guys in about then leases invest cash thinking million cut Am and update just you. that curtailing follow-up. maintaining us recognizing, paid the I I The cutting the flow the you've or that. and to bone, have way. some $X And where on And just not another free Thank of on zero maybe between $X, this at that dividend of choice X-K already means to leases. struggling you can want about CapEx, ground fact are guys still thinking dividend that the to the in Maybe the you me in the $X, future. that you if renegotiating of and guys some you're way? ground CapEx about there right using sort the $XX that right I of potential of course, your

the and portfolio estate question question. the Sure. hit I'll real capex

that, the spent these was about measures of $XX quarter that out we capex door, had first quarter first We wouldn't too -- million the and So, to the the end read given David. the into that already first take quarter. at in had much I first. we

it's million pretty cut $XX the being glean So, for deeply. the of full-year, just can sort you that

highway our projects we logo some division contractually our have particularly under obligated in that were We complete, with departments. to contract state

we work-in-progress We off. have on that had certain cannot side. put the requirements, digital capex We those some

projects building I Vegas. little all the with. signage wait had can't We with That's a that buildings through our on go projects and that relationship show really to construction to We in arena around are we of Las have one-off a had one some of off the -- the progress Vegas great now few example new around country. day. the Raiders an

So, the rather glean it more really rest categorize -- CapEx remaining I the for work-in-progress, distribution. trying we're on year of as it's to the what would than

lease actually we successful not renegotiate. of number some in primary we cost lease very in cutting our that portfolio, takes in so where, altogether lease one, and XXXX-XXXX been our that it take productive costs and elevated, necessarily for units were eliminate have are Regarding a portfolio two variety costs we that these reasons, cases in down directions,

and we relief side, and And from so, activities the year. $XX save of about those between think the two minimum we're on million going airport our this transit through to annual end guarantees

sort Okay. you happy road are I'm what your and to whatever to gut eschew summer, or about you. And that people hit or going the Europe have to Hawaii of that feeling Cabo talk maybe or then, trip hear this

America to time. the there volume call over other data last that call And so. be for As guess, your we've of so that going you. extensively writing you today know on how at been commentary. about you give you that versus just we more to ask cite experience out know, cars based or obviously is a having us will a in agree. long North to of do or this the of any record that I is I that can done weeks want there gut folks the probably is six certain just just comfort Thank on Appreciate the you eight that,

David. Sure,

in XX%, where year, miles said, billboard year's I to on traffic how I bit traffic on is eyes. They're last up website. that's your as in gut go speak. go average. collectively will little and encourage a but Go headline smaller it. at to conjecture markets look good road astounding activity mentioned, you their last travel as XX%, in contributed I It we up our our also some that to really XX% our and section XX%, would solid that XX% of will XX% markets. there's are It's open number, revenue you driven The look of really we is in got markets that's markets. many are XX%. our today. that, It as rural website and activity at is as already the yes, today, These some We've highlights speak there's Investor the data. people So, astound

number, of XX%of activity year's average. where cite markets I least, at Another in are little XX% you. travel headline billboards last our is, could

with I'll where market, got we and go traffic speak, list… the it ask tell me ahead. can I've is you as You a

how about Grand is Canyon, not Thank Grand the Canyon much. you Grand it. Canyon? very Appreciate there.

yes. yes, Yes,

very it. Appreciate much. Thank you

Yes.

you. Thank

next Eric question MKM Our from be will Handler Partners. from

from the little thanks cycle, was could the with what you talk Yes. the if surprised Good happened given you was I that and up a Democratic primaries. morning about XXXX Wondered pacing said political, XX% question. bit for

been driving in I'm the strength So, what's just curious political.

That's a good question.

but today. up one, the The So, number cycle, primary, 'XX than probably Democratic the book that built the the was felt the QX that's and would better shaping as very in quickly was of first button so we have political dramatically. that and hit to QX have the quarter sit very, up be effect been pause

and year battle QX, political and when you come start. the and quoting around. -- and there's off the when September October is QX it's of that I'm That's time gloves what roll So

a anticipate political having season. we So good

very you thank Great, much.

I'm showing you. no time. Thank questions this further at

listening. Thank in August. look visiting we great. for to forward Well, all you safe Stay and

today's gentlemen, Thank concludes teleconference. this you. and Ladies

You now may disconnect.