Lamar Advertising (LAMR) 2 May 242024 Q1 Earnings call transcript

Excuse me, everyone. We now have Sean Reilly and Jay Johnson in conference. [Operator Instructions]

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

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

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

Michael. to Lamar's you, QX morning, Call. Thank and Good XXXX welcome Earnings

thanks had a helped that pleased internal spend. revenue offset our expectations growth report we first growth, in ad successful both on both exceeded continued sales local a to I'm renewed digital strength and our weakness one quarter, platform, for national to EBITDA in very and

on relief airport [ XXth largest revenue same the a an of acquisition-adjusted on grew basis, the the of quarter a basis. also consecutive ] ago For X growth. year increased pro forma X.X% COVID despite comps tough X.X% as quarter, received our expense EBITDA acquisition-adjusted result some revenue the grants and This in since increase the business.

is of the are our year guidance to full $X.XX up materially the for last share shaping the Therefore, to XXXX for range raising we're Overall, AFFO per stronger nicely. time rest of Pacings year. than this $X.XX year share. per

it will us Board perhaps in dividend year out distribution QX. also distribution at the for a that you August plays recommending share see special the appears it pay But are another approve the and per $X.XX We year-end. raise as if will,

the and relatively ahead over XXXX Revenue nearly included XXXX. service, for million QX, building first $X up the were health political the while strong attractions, of to care of and first from weaker. slightly was quarter Back million, and of insurance and $X.X and total amusements construction, categories quarter

political to to a continue tailwind be this expect year. We

up X.X% mentioned, strong, As I whole, our quarter. earlier year first up local was versus National very on was X.X% the Programmatic versus XXXX. of But quarter the XX%. extremely strong, was down about the business also

accounts to spend, continue foresee in cautious QX, to taking decline their maybe a QX. better ad larger in and another than approach some see though we a tad We in National

will are We pitching and certain reselling good accounts, up are strong are we've success had QX. national the by firm we that which of panels will in we the saw unfolds. I is how numbers the reflected hopeful some note national tweaking as advertisers, the in very National that year vacated we local

On help account the now platform strength a billboard for same-store grow billing. Digital our side, that Programmatic basis. about in revenues of on XX% X.X% Digital

as a M&A we on front a of million. It the total X quarter for deals was $XX quiet closed

expect We to that continue.

period for Our to year what sheet flow paying cash our loan, to which XXXX A deals further balance plan remains dedicate be off we this free a ahead more $XXX will after the Term our of active our anticipate of beyond. will million strengthen bulk and in dividends

of and Jay, very a optimism see a appreciate capabilities. us. here to up game, what's in place. to working the know relevant, memorable local at It California. the of out-of-home's I'm is excited energy our the to upbeat enhance returned at landscape deliver our meeting to I level, it lots time conference industry at industry particularly rates opportunities turn competitive and initiatives personal in the I the our we're in Before some heartened in and clearly Advertisers, was audience right I hear contextually about position hard I to to their from right night and was of media the to undertaking messaging ability those ahead. over at Lamar with the last note, about front

more an walk our give Jay, With will some that, update numbers through and on project. ERP

Thanks, thank Sean. morning, for you Good joining everyone, us. and

quarter only top adjusted are EBITDA, are solid surpassing short-term we well. of seen stable, pleased our on and revenue the a growth reacceleration rates operating strong AFFO results, AFFO and QX the have line. on not second with budget had but and double-digit expenses first near consecutive interest marked quarter more We as and for as

the essentially of Our billboard flat growth top the regions mid-single-digit was year-over-year. with experienced line Midwest, exception which

below coming driven normal. primarily by in to airport minimum returning to operating X.X%, budget, increased While partners expenses guarantees acquisition-adjusted our

Airport from we COVID-XX benefited As repeat our in you this not will in recall, third the quarters, in especially which grants relief business, may XXXX, and first year.

XX.X% in growth on a with consolidated and grew expense core Acquisition-adjusted of respectively, and XX.X%, percentage growth portfolio. contracts Transit versus increased revenue to operating contributed both heavier our which a rent Airport, expenses billboard concentration also Solid basis.

declining However, division basis by approximately the XX expectations expenses its control, points on Billboard our continued year-over-year. with exceeding focus expense

to for quarters an by at expanding in year, XX X.X%. over remained points in the the recent On of XXXX. adjusted, EBITDA EBITDA quarter expense Adjusted the should expanded quarter X.X%. XXXX, growth was compared adjusted the Consolidated margin strong X% EBITDA the be in XX.X%, million one basis, $XXX.X the was full strongest basis history which of Adjusted of range. $XXX increase X.X% million acquisition-adjusted to operating for quarter acquisition for an first first and

per rising $X.XX to million X.X% from the totaled an versus in X.X% of XXXX. $X.XX first of per year, compared a $XXX.X $X.XX increase share $XXX.X interest increased funds headwind last cash quarter Diluted of first in operations approximately Adjusted per $X million, million despite to quarter by the AFFO share share.

quarter in last of we encouraged regional of the consecutive from Local business softness also local continues our quarter, of national but be fourth the of resilience up headwind backdrop, our and spite In revenue accounted which approximately national sales grew to the XX% in in the are billboard sales, and quarter, for sales regional for XXth to the by growth. a year. overall revenue first XX%

the full total anticipate capital $XX.X comprising the expenditure And CapEx total million million. spend front, of of for $XXX approximately we CapEx million for CapEx. $XX.X year, $XX quarter maintenance with million, maintenance was On including the

And our now to balance sheet. turning

will AR matures likely the year. maturity, any The repaying revolving second a remaining have to through no year, until that use maturities A debt and this We XXXX. securitization cash schedule repay half flow most substantial Loan well-laddered or Term This the Term a our A distribution next an address facility. anticipate of amount and we outstandings extension to balance year the July of credit withdraw on early in plan on in we with maturity after XXXX, to Loan company's in

no addition, company maturities XXXX. has bond In until the

X debt We history average leverage quarter average ended total was X.X% in company. X.XXx, quarter with the interest on remains with the end, at Based the of outstanding weighted maturity which amongst lowest our of a debt of weighted the years. rate

we're leverage both and Our and comfortably compliance X.XXx, test total secured secured covenants in and of our X.Xx, was debt Xx incurrence debt maintenance respectively. with against debt

current end as remaining focus over year $X cash to X.X will coverage to and out adjusted should roughly sharp the debt range the to based of XX billion to on our leverage we with of capacity, planned, This debt plays while our at balance end result the defined Xx our facility should our Despite total guidance, year the EBITDA months agreement. debt high in sheet below EBITDA Xx credit interest under on approximately leverage XXXX below If past rise end adjusted EBITDA net target to the interest as of investment or rates -- at Xx net EBITDA. interest. in

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

comprised of securitization. drawn of approximately access and the ended credit our markets. Our the We of hand in with liquidity, million million the cash $XX.X and $XXX company the liquidity as to and million to facility. capital and quarter to $XXX.X under the access enjoy outstanding At on quarter, million million we had total the continues capital strong revolver $XXX debt the equity revolving remains on both company's AR $XXX.X available on end

the outlook are in interest our now full an $X.XX remainder which $X.XX our We results expect to QX With $XXX year of increased have our midpoint. we and $X.XX AFFO guidance of the of at range year. by strong million, Full the AFFO the guidance remainder year, rates year XXXX. the for interest per totaled the short-term unchanged in share for assumes

are for million, $XX I maintenance taxes $XX cash around to and CapEx million. As come projected in is earlier, budgeted mentioned

enhancement And initiative. finally, our technology

well as year go-live thank worked our would on this X with announce to pleased tirelessly technology the to April our complete are is ensure We was the I that of of past transformation to the who partners like success. the a at project over new team ERP Lamar system company's X. have Phase as

on technical begin across the of as QX, rationalize focused finance our scheduled which deferred revenue look and side is business early to Phase modernize focus the to phase X, systems. first addressing primarily QX, and our and The late we'll debt on maintenance accounting within we sales technology platform.

bringing to engage and to the the our transformation sales making this efficiencies customers We are of to with begin easier next process journey, phase it excited for Lamar.

our We and operating this pleased top sales strong Airport as look the Again, XXXX. regional particularly we're with as well quite to for strategy local the Transit the executing of and of forward performance, line. on our quarter's outperformance remainder on

now will call turn I the Sean. over to back

Thanks, Jay.

growth, strength had out and has Also, which the exceptional of national shout to regions. mentioned, strong about Transit, face growth. Airports, really As one regions, we in game sales mentioned, to and but relative They local all proud in Seattle. which I'm on Jay New particularly showed their across thinking as particularly Jay Canada, raised York returned our of to of softness.

mentioned, that to also to at gains there QX's X.X%. rate, of but all revenue for year, proud full we -- from same-board digital On the growth came saw Most I last was X.X%. as Recall in we're same-board for year, down some growth digital, occupancy. return

again. see to positive good number So that

local, versus local, in roughly up that in QX, In terms national, stat. local shows of national up programmatic, XX% tick a XX% regional in it

just of approximately touched if top across the XX $XX.X look you the strength QX revenue book. is that thousands X,XXX totaled in illustrate is really That our fact, which customers, across with executives million, by our to goes country. of their than at customers of local account In tens less our X% us

services Again, this up and up a is continue and construction, on relative in insurance Relative building XX.X%, care XX.X%. we to lag. up here, weakness, number attractions course, health up and as verticals, great X%, XX.X%, were mentioned, restaurants was and strength amusement of

open questions. it we'll that, up for With

with And from will first [Operator come Morgan Instructions] Cameron our Stanley. McVeigh question

with especially as how cadence election of up, remainder of expect Just the back year? consideration a to of growth in the look year, the couple of to the the questions half the you here. you to organic To start, do shape

Sure.

So already we have growth same its as April in-house and roughly QX. the was

in In lift Again, QX you get terms cadence a being growth mentioned. lower we from of but materially going be that QX, playing quarterly, as might forma than pro its see better. the out back half to political, tad we're

wouldn't -- be going much look quarterly So actually. ballpark. in same but I to relatively all variation to the They're too

$XX noticed it. secondly, year. I expected comp you about what tied than the million for that And grants just Is had then stock-based more budgeted expected? or the performance versus was originally maybe Got increased to by

there. and are less awards. internal Last our goals, going stock right didn't year, to it nailed we internal you performance hit we exceed year, had goals. our This we That,

difference. the that's so And

then And -- it. okay. Got

color further of Finally, going NOL how the impact and any usage the do distribution you might expected forward? have on that the timing

will I'll out with see And that speak. a back comment as the that in jump of it the reason you'll that is running we basically -- distribution to the that we Jay one kick the half. over in we're

right, Cameron. That's

taxable think If to you using and be as last time we I plays anticipate, If able NOLs been a to out year use to in our this since REIT NOLs. year the be will income. we recall, that we've we this that XXXX, converted moderate will

compliance in upper pressure of on distribution seek forward, our XXX% an to policy. we what distribute our see taxable you'll as with is income our Going

question, David JPMorgan. next our have Karnovsky we And with

David. to wanted cost just This Ken for XXXX. for on about is guidance I ] [ ask

grants and assume it You the between X.X% end it ERP takes plus spending. roll-off push of of puts the either you guys relief that to X% to of range. wanted just to or growth X.X%. that I to low the peak I to that contemplates expense high will added X% normalized ask COVID about and

So could would that shed that on -- you any helpful. be color

the Sure. comp... than Yes. you understand Yes. question, on or If a -- all's I you're the model growth little X% modeling more

take Top what to you X would X, to...

it. got I it. got I Okay.

in it. Look, Got steady the like we we it. What have in end sales Got model what And We'll get on. performance the recovery QX side, and in top of demonstrated is of just you there. takes if it growth. end Okay. your to get local really that to range. think upper a to national. modest, modest We'll the I on the X% expense said spot then

right. major you're It's COVID-XX ERP drivers. return well as are the spend grants think I as of relief the peak

And Instructions] from Jason [Operator Bazinet Citi. our question with next comes

been This numbers of be signs sort of strange commentary you it inflation don't put about? wages aggregate that on consumers have aggregate are up. as Or aren't the there pretty strong. when going the They getting you're the may I top But but sort Are that's a your the are that economy. the keeping as upset and health sort the like like sales sort of question, force, constructive press, more the feels looking of from all of the numbers that read the at you're you ad talking showing areas are up line of stress? is that any guys at and

Jason, relative Lamar's of in X%, I consumer. least the of strength book, they strength was data news talking points about So all we're course, over would book I the up the that. say not were And been mentioned restaurants. the at our of they've business, that one seeing of of in in terms But right? the quick-service

remarks. Sean the And for will that turn to today's over conclude I back closing Q&A Reilly does session. now call

for Michael, all in and your thanks, thanks again forward chatting Lamar. in to look interest August. We Well,

conclude participation. does for teleconference. This you. Thank Thank today's you your

now disconnect. may You