Lamar Advertising (LAMR) 24 Feb 232022 Q4 Earnings call transcript

Please standby, your program is about to begin. [Operator Instructions]. 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 we will open the floor for questions. Instructions]. [Operator

uncertainties the of and which and distributions economic of including and statements of operations. materially including Lamar may financial beyond this inflationary statements on on which goals, has and could All course are regarding forward-looking those materially and may in performance, results. discussion, differ including financial its business, risks, and that identified the the in plans refers effects company, anticipated to discussed many the recent release, about to forward-looking differ call timing Form cause those objectives, annual of company's stockholders you report contingencies, of to condition, company's documents. impacts any pressures to fourth Lamar's this the to actual make general conditions, Lamar and important factors XX-K. involve cause control, actual from the from statements strategic amount most In results results Lamar and results quarter earnings respect XXXX with its future

may the fourth on this XXXX available Lamar's over www.lamar.com. I the contains to the regarding Sean to like certain Form turn begin. release, you information a non-GAAP Investors conference quarter to financial which of morning furnished was Mr. and Regulation Lamar's website, by X-K measures, required earnings is section G on SEC Reilly, would now Reilly.

the and what revenues EBITDA record and last XX% reached in places XXXX of of proud On in businesses X customers and Shelby continued history. uncertainty grew to the good at the and our advertising's the EBITDA to space of deliver delivered most times. powerful call. year inflationary basis of, of first levels in the the AFFO. for strong This their was out acquisition the amidst topping you Thank successful home messages in earnings all have right nearly north the adjusted Perhaps time right confidence face billion year's that broader an pressures. performance to XX% QX most I'm in we welcome media Lamar’s morning the team consolidated margins demonstrated ability in XXXX company's

quarter, basis, fourth an guidance into allowing nice expenses moderate or increasing continued grew XXXX translated on leverage, full X.X% the year adjusted combination of share. the AFFO on X.X% our to acquisition For basis. at over us for top end $X.XX while revenue X.X% exceed an acquisition adjusted That operating range to per

advertisers weakening sales line local with the in elsewhere the trends in national from strong For quarter, evident demand world. offset media

quarter, local the than and included online a service, gaming, sales and and pullback up part retail weak Categories each revenue For accounts. relative national more relatively some X%. from education, and included reflecting health while X.X%, of down notably insurance, large programmatic strength national in Categories were X%. were which channels approximately amusements were in were auto QX from and up care,

year. local revenue it anticipate significant the last business that QX saw carrying one, year solid will Main be resilient. of QX of QX we three, activity approximately this to few QX. remains as Turning anticipate like into will Number to this full this two, the is of national the our from Number said, is down expense also a in Book and modestly same I'd carrying are year. moderation year. has highlight be growth up remains we over persisted national That picking for trends over and as we Street into of weakness year positive QX into in Number XXXX,

expense XXXX. for to margins XX% again press growth the range for reflects Forma in that $X.XX approximately year. guidance Pro approximately once per AFFO release. The our of growth math EBITDA saw X.X% exceed consolidated would X% of to get share us $X.XX the midpoint that revenue our in year That You and

product guidance, our our Regarding We of modest weakness in by QX XXXX. year share to resulting channel. aggressively was Jay another explain interest digital same now are extremely our XXX customers intend AFFO in growth AFFO being billboard increased growth. is full into XX% due slightly per which organic and will programmatic expense, in remain AFFO to accounts detail, for On as only a to in our revenue. XXXX store targeting digital, about continue But the in largely enthusiastic down in significantly revenue invest basis, the conversions we affected more roughly XXXX,

front. spring picked a quieter the will acquisitions we expect nearly South in course and the Kentucky The two-year the as Meanwhile, in Eastern deal and largely Burkhart Valdosta such and focus us in over transaction new which ramping assets XXXX to million million digesting which and to and We the up Fairway year new total we Bend bringing XXXX closed M&A in $XXX on the markets for XXX completed on of XXXX. the be XXXX, up December. Fort last came deal in Wayne

XX% over Lamar our tilted acquisition of last activity sweet year spot oriented mid-sized and of in inventory. and towards fill about fact, markets local small In

of to their over want for I in Before I to employees contributions all turn our it XXXX. Jay, thank

XXXX opportunities. will XXXX testament team in our and work to most confident the hard Jay. whatever make I'm that of a was holds, Our their success our

achieved results, ninth and us. Sean. $X.XX X.X% Thanks, pleased for improving for a on another joining and our to morning, expectations diluted quarter EBITDA, had quarter, you quarterly growth everyone across share are with per The fully revenue, solid adjusted exceeded consecutive Good basis. internal We the thank which and company AFFFO AFFO.

year outlook, a may above interest in environment, rate despite upward end our the you the revised the In ended company challenging was recall, addition, May. as AFFO high of which

fourth operating continuing X.X% the XX% the of of adjusted In the against revenue increased X.X% the quarter normalization. in fourth revenue same Acquisition Forma acquisition last operating quarter, the in year adjusted comp trend the from increased Pro in period fourth expense quarter, XXXX. difficult which grew expenses

team expected, The on portfolio. almost traditional of strong decelerate company the COVID. in in did Throughout the not quarter by As our XX.X%, industry. EBITDA large XXXX, job a sales for and each a lead which our impacted X% margin our X% by continued growth across expense by to increased Rates last the continues format against rates with comparison maintained growing good full more home in operations bulletins the to quarter of out managing year. normal quarter year, fourth over adjusted

outdoor portfolio remains our occupancy. addition, In historically at high

of to $XXX.X EBITDA the Adjusted was $XXX.X was X.X%. XXXX, in quarter compared million which million an for increase

cash also improved, basis, adjusted the increase the year. quarter X.X% same over X.X%. last Free flow On in was the acquisition increasing the period

billion following For year, $X.XX million, which represents in pressure an strong an the XXXX. year-over-year revenue billion to the the on operating XXXX, compared basis Adjusted was to exceeding for time X.X% essentially billion acquisition $X of company's with history. expenses was in adjusted increase margin adjusted acquisition acquisition XXXX. increase $X.XX XX.X% EBITDA first for growing full year, Adjusted $XXX.X increased EBITDA despite XX.X% flat XX.X% was roughly in in adjusted inflationary full the which X%

$X.XX revised of which the our ended share, above The top guidance. of was AFFO the per year diluted $X.XX year the company full slightly end with at

share December revenue XX% accounted in XX-months regional sales to XXst, of fourth for quarter. the compared XX% billboard per XXXX. and diluted AFFFO the full ended approximately For increased Local year

seventh for increasing for sales in by first regional concentrated since structure business, and grew local persist, soft and XXXX. QX over fourth decreased X.X%, While includes which from quarter of quarter, the with the the billboards on programmatic, local impact national time consecutive our the XXXX X% mitigate advertisers model on demand If heavily markets. of operating national focused portfolio should the our an declined

million, $XX front, was million of approximately total the $XX.X On capital including maintenance for the expenditure quarter spend CAPEX.

year, quarter The CAPEX. million, experienced million totaled acquisitions For robust included past which years. CAPEX closed full Acquisition XX over of has front. million of $XX in on transactions. the the $XXX two active across the We the been another company quarter $XXX activity maintenance acquisition

XXXX, totaled the million. past almost $XXX acquisitions our year totaled $XXX XX%. months, the XXXX over acquisitions million, For exceeding XX have And over full by

heightened activity, a landscape modest Given made we more level of in XXXX. this recent anticipate in

to balance our sheet. Turning

took of to profile. we QX, extended million the AR improve $XXX the maturity liquidity amount maturity During liquidity a and million steps We well July to in $XXX our closing in facility we $XXX to June, extend new improve XXXX, as acquisition In to activity A from further XXXX. securitization loan the increased on term support as XXXX. robust million

maturities the XXXX. AR and the until securitization maturity followed XXXX We facility of A term in we by maturities have credit well revolving no laddered a and that year bond with in schedule have February July no until debt loan

proceeds Loan our new fixed in despite at lieu A The has pullback the TLA was funded notes our of weeks. past high-yield we in Most senior XXXX more originated time. issuance view Term rate with revolver, recent income from and acquisition for favorable over as the the of the two been given continue Loan to bridge of our market in bring the we approximately in of debt XX% the XX% bonds high-yield debt A proceeds We the coupons a market XXXX, transaction activity target in could and XX%, to transaction should to capital repay improve, range a our of markets the will debt to issue rate fixed a structure. full. capitalX fixed using Term midpoint our Such to

weighted a average debt debt our average of outstanding, X.X current X.X% with maturity is interest Based on years. weighted rate

our defined to As of total for times is ended the with level net the the X.XX we ever company. EBITDA, debt facility, which credit under lowest quarter leverage amongst

in both and test our of times one X based times comfortably incurrence leverage above covenants our past secured Our rates guidance, debt on cash times should over debt remain quarter was Notably, secured adjusted X with EBITDA rise year and we times total compliance against despite interest sharp end, and the are debt at to X.X maintenance the today's in interest. interest coverage and respectively.

strength this covenant do we any ability debt to coverage of an level balance and do sheet we in coverage interest service the our monitor agreements, the our metric. important have our healthy financial exemplifies The not of debt. While

million had of $XXX At of December XXst, hand available million million comprised $XX our approximately on we under cash and $XXX of revolver. liquidity

each a topline As and will growth interest our we following year two growth more for in point this $X.XX the which years. release, double-digit rate consecutive of reflects $X.XX cash guidance post-COVID, provided expense a Acquisition-adjusted though growth. AFFO Operating will per will as next well, revenue million, in totaled included of impact grow rate month. share. moderate AFFO basis modest in morning's year mentioned offset $XXX to Sean the full year and XX at third past interest guidance Full while hike

undertaking are the notably transformation are in our and is systems. go an implementation include of later in and information at capabilities, billion come year relationship XXXX, XXXX. Furthermore, The $XX year year, corporate system process most financial $XX our last and this maintenance scheduled ERP, live which million. phase taxes as continue the initiatives, planning first in last anticipated rationalizing year cash customer the with technology same enterprise to resource or CAPEX we for budget to will be business projected approximately began this the We to launching modernizing and

We and are customers, our efficiently well journey on more future. serve the our embarking to this about scale for position excited Lamar business, better

Now moving of per full a and Yesterday, of a dividend distribution share Directors $X.XX first our Board dividend. to $X approved year management our XXXX quarter share. anticipates of per

Board taxable reminder, income. is of and debt our programs. our our and XXX% approval dividend the subject share Also remains to distribute the approved yesterday's policy a quarterly company's to dividend company's repurchase Directors at extension both of Board meeting, As

over are While of maintain our I guidance above fourth to XXXX quarter policy and will with flexibility. high as finishing the pleased slightly our of in performance Once Sean. that range. activity call turn near-term, the back our part it view we not do we end financial now anticipate again, the we to

some hit the we of that I'll operating familiar touch metrics on Jay. Thanks, quarterly.

mentioned I on it digital slightly As QX, X.X%. was in same-board down performance, negative

exclude we was was you for if exclude was X%. programmatic mentioned, down QX if up X.X%. as you National, digital programmatic, However, down national QX same-board performance

our to call, year, This some seem programmatic for to up noise as digital programmatic, ecosystem. was good XX% last broader over programmatic to challenged be start we by we that we're in the a goal. mentioned budgeting channel on last off be Regarding XXXX, towards year our white and

the new highly last that very local, conversions again, XXX full the of represented up of this with performance for air, up XXX new We customers are and product. net our for the national we're units net of year. year in Business to year X,XXX digital year XXXX year for ended the year and confident conversions that units. targeting receptive Same-board as we was last mix, that both X.X% remain QX XX% XX% digital

categories quieter for mentioned, down and we in year As by see up amusements, gaming, million Again, acquisition X%; up $XXX X%. strength, this on somewhat highlighted was last year down front. local this year. acquisitions did the a XX%; we up were education, I of the full XX%; Jay year already and insurance, services XX%; offset

So any with to has. answer that, happy anybody questions Shelby,

Stanley. with [Operator Instructions]. We'll question first from take Morgan Ben our Swinburne

Thanks. morning Hope you morning guys well. Good Sean, are good Jay.

Good Ben. morning

correct you two biggest is in the if and bit shaping Hello. late on or And one of just Sean, staying quarter the national QX, me for growth category, we're book, made Pro I about first I here your soft. for but had services think sort think Forma Feb? color the how wrong. your thinking any since I more a you, then about is What in I'm Jay. up which you then are On a in comment quarter

said, wondering unpack how in in cyclical I can the of I business be services what's frankly, it's, think that Lamar just piece big probably stable, was there world, particular. seems is, think I than think and to if cyclical a debate that's Maybe just so was why broadly speaking, because and certainly REIT category. always so your largest unpack you a XX%. But up others it category just local. sort the of your strong? in you topic the less market you and could That's I

Great. Yes, thanks.

is of going pacings. we our -- be probably think QX the Ben, into cadence the when we weakest about see our to year, as quarter look So

is I the X% softer a to approximately to we guided that mentioned, going of let's little Forma for As midpoint QX be that, range than full the is up Pro year. the And it which again, the it we as that's was singles. last QX drag year. anticipate, in QX about created same primarily by be being down in low that's the will call national, of

activity anticipate national year enhanced this seeing through the actually up we book year, and are end We will modestly. that the

Regarding many catch-up for services. is Services a services. local different

attorneys. the that predominantly very, ad think of strong environment. soft. the was I in I that is QX And car recession-proof. or argue still in it the economy economy People whether the services evidenced strong in very However, is represented softening is would it's And get wrecks growth relatively that whether face by

year, for some We their it. are anticipate verticals So under all I about softness based they're we going to feel we in good Healthcare the had get our last some when actuarial had to, really come is about going legs that insurance. into regular where good at drunken feel challenges category on I of the they they're looking. they into of Last to they year. back of come some them well. they just just as that of think what us. going is sort back the I sort of of gaming, beginning then last -- going and -- a were online I believe, And normalize normalize the it's like to spending year, believe were year, sailors,

months. beta the had XX, the that but not XX last they've with Solid big

Just as weak? something betting, that that you is group in is national part follow-up, is of national, a guys is why sports

another in they of that XXXX. Yes. the they then The DraftKings, would kind And States I were benefited and they they tended to in try landscape, -- and to pull in to back they were jump state. early from FanDuel, on in we would said, as and legalized grab where then move share. XXXX that normalize, as where state And

the they time? is something will if things than just ERP most longer we world, this to from taking money okay. this up financial implement the companies running could weren't we've got up more than Jay, better you on and Lamar thought topic exciting wondering question, in these and talk I'm then, a end you thought. about over expecting externally it, probably the then to you seen they at lot Is itself into what manifest benefits once performance but know not of spending Yes, an And look think XXXX. I in

XX more ERP. But three I sort prepare it's XX grow think quo in to business, just a able efficiency being and to for really been we on ultimately, point where at this getting to probably an to we're and from at of status a implement we've months, now can journey, five-year our about about ultimately, maintain scale the and expense and it's terms perspective. to

So it's really more becoming efficient. about

journey, we very very In XXXX. terms We've think see to the in said, the going right We're We're methodically. this advisers. the of like very, really begin about We impact timing, just you'll very, slow, we've team feel as I thoughtful the been beginning place in months. been XX but right about at have that. very I with

then is first go-live Our our early second is XXXX. mid-XXXX, and go-live

So year XXXX. we'll see start to and in XXXX, sure, full for impact an

of that's me Lamar a let and because Ben, this really as Yes, little for well color give something bit is our important shareholders.

year, will expensive. and growth These is there year this for and effort. you are expense attached an there For see things at the ROI are corporate reason. But that and they complicated to is a payback elevated next

touched will I because IT up have here. just our I We here done we more corporate, in At IT decades. talk And IT about that's we'll state-of-the-art. customer-facing is when Back paper fewer our -- efficient push get office embarrassed people. probably definitely less get before. this never two hasn't with been

going some corporate it's dividends. and elevated pay So project, I again, see I'm growth going expense level. to But at and you're the the know time, excited it's to about

was the consolidated. about mentioned for That's a growth X.X% of fact, of I that this expense year. As matter the representing midpoint range

X.X-ish coming is in you growth division, we sort this operations, our of outdoor took our billboard expense year the in believe. just range, for If their

to back is is that doing office. we're modernize our So that delta what

helpful. that’s Thanks it, got guys. Yup,

Jason from next with And Bazinet Citi. we'll take our question

of little if I missed think acquisitions a reason by if no sort year you quarter, sort question then know AFFO, it line? of help got the And if don't much full XXXX do would number attribution just was know growth was you if how benefit in that guys next is, XXXX, something? of sort year, up Thanks. your the of put but in the you any the there, there top doesn't of I there's did D&A surprised for just organic I whatever sort took I in you that color second my affect and

second question question. the hit I'll the Yes. let D&A hit and Jay

will over and So X.X% from would what provide growth above activity organic. additional the last acquisition revenue approximately year be

So do arithmetic we And pretty that's the year, the sort right. the when of happen ratably there. much things, these they throughout

So some benefit then, full of of your you the last and this the course, benefit year. in get year,

That’s perfect.

cap. And ARO, associated it as Retirement our on our estimates Obligation front, D&A impacting was the you about a and GAAP from then weighted cost our with just of really perspective inflation think average a in when well change Asset

Okay.

you there? a D&A so And the like sort on no one-timers rate think side, that of forward that's decent there's going run in

It's adjustment. a onetime

It time, you. is okay, one alright. Thank

our J.P. [Operator with from Choe question Instructions]. take Morgan. Richard next We'll

on year, a this budgeting I follow-up and I XX% say, the you confidence side. increase Hi, what you programmatic you're there? wanted to the Did don't gives know

question. Good

is digital that weakness, lot rapid there's the a What buyers showing year ecosystem our sensing very Place that in off the the than started We January little internally. start and work good of only traditional it in the to like was that hearing now through. last very So way broader up disruption its interest channel better account programmatic, buy has this really don't and a our renewed doubling bit. phone programmatic last customers from they programmatic programmatic. growth. go I and traditional some worked we're Exchange, -- pulled a everybody fans that of again, channel. year inventory, that back that markedly digital back partners, excited. turned some that through Vistar, a The is use digital the that some exceeded They channel executives of year into budgeted pick over carried is call and this feel enablers corner or channels. buy what real into a through They the our and we few be increase. We of And if ecosystem The tripling were going that way agencies. don't are and years, we're they to Actually, use

normal a is or said on then And you quite up not which...? you to you on? that Are follow you you've as Anything recession in expected with pick start. course And this thinking think normal in a there slow that, the I about recessions. national course the side, yet, at particular year going past, to guess up talked

Sure.

own lot our on in book. going touching second quarter. strength and the comes saw you and front and own base their we them when feel our seem like the be lot national base Those stronger release In checks a our channel touching the of So to relative front. points, the with and a quarter with land there's third it national activity. to quarters It's to touch

we're us, only national. XX% For

the couple sort we And confident book move singled of but of online back accounts insurance And accounts so around. in. to they're that going out feel accounts, a come big gaming can that and I

through -- again, the we and see we So just get activity, February. need and to can

going see You're there. nice a it, believe, pickup to I

Any and are earning of everyone and local adjusting signs floating that mentioned some local rate gone increases is the some as strength maybe very businesses it. finally, is exposure flowing Got there. a rate smaller level? And the strong, and and higher rates have the maybe you then through to

X% a we all to year, really one, expected much and and people decade of aggressively. with the us it when and driving of we pushback a for And for the a for ask getting went rate lived We're ask. where weren't number number world we -- expectation it's we last two, in we think a inflation rate, I Number not factor things. lived

And out-of-home thousand the was that per would three, lowest is. remind time. it cost I everybody then So number advertising medium is there that

$X to per impressions. $X we're when -- So cost we thousand

see quite in they channels. would when other the we rate, drive not same as what it's So

Great, thank you.

we will Reilly turn have now this Sean over I to further or closing that remarks. no the back at program additional for questions time. appears any It

your next Well, look forward thank and quarter. we interest all Lamar, in you for to visiting

Thank you. concludes today's teleconference. for you your Thank That participation.

now disconnect. may You