Lamar Advertising (LAMR) 8 Aug 242024 Q2 Earnings call transcript

Excuse me, everyone. We now have Sean Reilly and Jay Johnson in conference. [Operator Instructions] At the conclusion of the company's presentation, we will open the floor for questions [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 of timing of any distributions to stockholders and the impacts and effects of general economic conditions of the company's business, financial condition 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. Lamar has identified important factors that can cause actual results and differ materially from those discussed in this call in the company's Second Quarter 2024 earnings release and in its most recent annual report on Form 10-K.

those to you refers documents. Lamar form XXXX Lamar's the required furnished Investors which morning a information section of www.lamar.com. release, Regulation Second on is G on SEC was Quarter by measures regarding contains financial this website, earnings certain available X-K of Lamar's the and non-GAAP

the over Reilly. Mr. like you may I'd conference to Reilly, turn to begin.

in demand that and XXXX Earnings Thank local QX we in advertisers you, offset Lamar's observed Natalie. more strong us revenue welcome softness national Good to deliver QX, QX and regional in growth. held morning solid consolidated from customers, The trends and to all, than Call. allowing some

improvement managed expansion Board revenues billboards, strong $X.XX our EBITDA will us to of QX point of share. expenses with increased quarter, that recommending XXXX. on performance, an on basis increase AFFO growth QX EBITDA the by be increased of distribution Because our transit acquisition-adjusted acquisition-adjusted per the expand particularly across growth and XX% the to X.X% basis to to share led and be basis to a we well, Both over X.X%. For logos XXX margin an adjusted allowing X.X% . Meanwhile, margin EBITDA that management and to growth per airports.

forward, of drag. a the look same with bit a solid we of we see more demand As still local and national regional

QX half that it reflected there in today, past, sit slightly coming not has some with second we revenues than As our pacing be pacing. upside the the QX. mid-single are should in up as in if yet for stronger pacing QX for political is Also, digits

growth. construction per Political to to previously our year guidance provided points for and weakness. top XX of and QX, adding included and it end AFFO to we was to the automotive, while As a care reach financial relative about Back categories health basis building continue showed strong track services, full is, to share. our tailwind

year, about XXXX. we full XXXX the for on political, ahead the of have books of ahead well For XX% million $XX and

for year Both about when full $XX spending was years the million.

up Meanwhile, hot, For were million. earlier versus approximately sales to $X.X million up the period the quarter, increasing was local programmatic year nearly about red nicely, $X.X X%.

some and up pharma to quarter. stabilize are demand programmatic from also picked the began existing the category the which have like customers and new insurance in we We some advertisers, including CPG, category, in seeing

We due expect less programmatic the continue, in comps. to likely though strength growth to year-over-year to tougher is be

national business of reminder, national, a offset so the helps is programmatic broader all As weakness. our growth there

X.X%. anticipate national including decline At about we off QX. single-digit this another in Overall, point, programmatic, was low national in

we form will However, as we been activity hopeful from see up head has we national recently, customers in that business and are RFPs XXXX. the turn of into that

same-store X.X% handful a basis, the platform. strength which $XX Programmatic line our Rate in platform, by as the It digital helped grew quiet on million increase of a buoy in spent about front on way, we the QX. across analog quarter deals. M&A was up, on with a was also the

million to $XX million. year, is $XX around likely full to the For spending be acquisition

the We will the up corner think we continue as XXXX. to turn pick M&A market into

shape. saw, the you already industry best sheet in term paid our put loan even balance in As last week, off which we better the the

So we should be at market. well hit positioned to attractive assets participate the

Jay to I you to over now particulars. it turn will walk through the

short-term half a EBITDA. the and stable interest more marked and pleased ahead on us. adjusted of were are quarter growth We thank had of second third double-digit consecutive with everyone, rates was for revenue morning, solid Good you both internal quarter QX our first slightly in which results, and John. AFFO the expectations of Thanks, joining XXXX. near as

of mid-single-digit benefited We the first months during line X the top from the on growth also year. have

the last over Our quarter year. billboard regions of second all and growth experienced EBITDA revenue

levels. addition, had traffic continues growth in set strong In XX.X% QX a record revenue growing quarter, XX% to as air airport our business another following

the Acquisition-adjusted in operating in expenses first X.X% than anticipated which down the and second increased quarter. quarter, was better from X.X% slightly

may from XXXX, this in for grants benefited the an COVID-XX recall, relief quarters. acquisition-adjusted will not EBITDA Adjusted and X.X%. primarily an business to airport that and adjusted in was increase XXXX, $XXX.X compared year. you basis, increased $XXX.X On was As X.X%. third first million we repeat quarter the of impact EBITDA our in million which

the margin quarter EBITDA pre-pandemic recent And strongest the for quarters Adjusted the above of EBITDA levels. company's few X despite years, second history. in XX%, the remains pressures last remained well the margin inflationary adjusted strongly over

from in be second sales Local XXXX. grew XXth consecutive the $X.XX our $XXX.X funds of national last quarter operations the headwind continues share per year to $X.XX a X.X%. Diluted softness million to of $XXX.X and but X.X% per to sales compared totaled AFFO versus increase second Adjusted million for increased overall revenue the quarter, growth. quarter share in in an regional to

outperformed of of quarter, million, however, XX% for versus in XXXX. again sales, quarter which CapEx. of including the quarter. total second and of by are In this expenditure local sales, backdrop, regional for revenue the $XX.X the billboard accounted front, QX national Capital the of was approximately XX% resilience Programmatic spend $XX.X maintenance million spite encouraged growing we approximately

totaled half $XX.X accounting $XX.X for million the For million. CapEx of with the first year, maintenance

the comprising remains of for CapEx we and full unchanged, million. total outlook $XX CapEx anticipate with Our million $XXX year maintenance

million debt revolving loan our full, July with XX, the cash draw a term repaid retiring company's on on hand. in facility $XXX and the credit On we

loan, AR maturities repayment in of We continue term July $XXX securitization XXXX. debt maturity a to well-laddered million and maintain no until the schedule having following the

of Based X.X maturity XXXX years. in be securitization debt existing the likely was the this nearest in weighted XXXX quarter approximately most extension maturity an AR maturity of no outstanding a We address through year weighted B interest Once plan debt average maturities with our XXXX. our the or later term bond loan extended, million with end, to at until facility. $XXX early on average rate will X%

under our credit defined facility, As

gap] [Audio the industry. across

other is to that sort different in format The of advertisers I are that achieving And not that is happening beginning large it's see formats is equal. screens become goals smaller the than that mean digital may you their venues. that all better are thing by is clear what outcome out-of-home see

So there share bit of little is the a understand as shift on format to of going power the come digital. advertisers larger

on forward? this the the timing but I Great. last that just And NOL expected further earlier, of going the then usage the if may and for don't there know I X me. is color distribution any how missed impact

Sure.

of available. year. have the that those we $XX this year So million And will be about we NOLs remaining have this last year

that what in my distribute alluded our dividend, consider see comments, pressure upward you'll to result, But as a some dividend may income. As taxable I as of make think sure we the special growth was XXXX, XXX% about you about dividend, to we a context the I and with of low growth. year, double-digit NOLs it in more it AFFO double-digit and this there year, be should low . in the another next then no of And normalize in line year would think growth. in

of permanent? sort it the for history. those run relative is question to it's . Or that it goes have it sort specific you of to think something verticals and it's X it more is a if bit unusual, just noise endure. obvious things that's you this -- back, trace back do statistical local unlikely this long dichotomy if a this so arc much you. of sort very I for so, business unusual have you You to just national of And so Is of as and strike high-level well if I bit history. a guys

it's Yes. a Good volatile. in XX years question, which compliment. long has Jason. I higher I And is time. noise thanks think statistical a the is national, a Jason, think, and -- out you And look if I for the that smooth more . Yes, mean, beta back

You'll see where time moments stronger national is than in local.

see And you'll time national. in than stronger local is where moments

and are a spend go with or with and and time, be change client, about you'll what So smooth come similar, CMO of they'll sort a spend, come feel are just that less right? key If can and say out find they'll in more in would of in very they a moments rates they'll reexamining you us couple those over a of verticals where media us. doing it with with X is there the I and this they're of how they'll yes, time growth out their

So . Again, just flows. it ebbs and of sort

just ask I can follow-up. so X And

strategy You're skewed of competitors. sort towards some relative to on of endemic . just that overt Would you your to markets that that, opposed local part go local dollars? your an you to is the serve as to after say

one, Let our a Number address it that yes, ways. consequence of me footprint. is X

of pride No But in DMAs, question middle that to you markets meet markets it Main do below and a point land when than being is touching some we of comes skew it tend to executives As the anybody. able needs which account dominate Street, that. -- customers our about local. strong thousand to know, it better Lamar local troops top XX of the absolutely

So we in take do . pride that.

Morgan question will Karnovsky . David with we Stanley. our And take next from

follow away screens. from format Sean, I moving your digital the to wanted markers comments just up on small about

shift what's You finally driving but and previously, of format. understand the kind peers have kind this to I want to of discussed large better

opportunities we . a to great of And just course then and with it currently? be of refresh regards the this read Or ATM of anything to you just get would just that on deals into is should for view see M&A there potential program, the minimal as kind business? as on landscape to

Sure.

as it some the first. we business. We've time, place, in normal Let ATM for it. course Jay just me had place renewed -- quite question really in X mentioned, an It's of second a take is and

So into that. I wouldn't anything read

in do was As up this a to I we though, mention, think next M&A, and it's pick year. going year slow did

would issue of we that of that deal or anticipating equity Not to some size. need sort

over in look sheet to you we've the billion at equity, done balance a little without $X If we've what got issuing powder.

sort that's said, of course, I'd I it's yes, of run, say. -- ordinary like So the

in coming smaller time going And out-of-home last and for of right? a had months. happened talking in by weakness pump recall What might been year, little the this about result number you gas of we like and programmatic screens you were bit about I'm of find been year, like that, that And the bars screens the had things last things world. TV XX digital smaller screens, about a into screens may on that programmatic talking

they roadside universe. coming out they is is bit were since little powerful. large more measurement of What taking if home entered proven the as from the digital so will, digital out-of-home actually has came media you online format online of and out share that that and some and a of And us ratings happened has programmatic

measurement, more share. eyeballs, getting out, started And more reaches demographics. it better better we It has proved that as

story So that's the there.

We Lance Vitanza will [Operator TD Instructions] next now from question Cowen. our take with

of questions if couple A A quarter. job here, I nice on the may.

political political all on coming -- benefit that I perhaps local that But in seeing. first The perhaps assume advertising you out are But prepared you And any just you something experiencing some wondering, in numbers earlier out? are I'm around experience? called benefit the know advertising also be from crowding that you're from remarks. that TV you might races. other that Is that's nonpolitical I

Good years. know, as X as now. every question. TV for that aware, worsened you're and Anecdotally, a measure you happens to around probably it's right happens, a because, little we but that, happens there's But no us believe It's I that question think hard that. becomes phenomenon it that

presidential new point excitement yes. But do some may we mostly see that extra say would around your ticket being about activity. the Democratic that local, think it the I with To we

of see. follow if presidential politics, early it It's month that's certainly there. been on in that's So And what's a for happening eventful an and you wait sort has sure.

question don't going sell going into the for that tied change on just other to down is environment M&A And want just the on or are that come maybe are it turn. a thought likely wondering, rates to some I people to to doubt. Or expecting assets? specific? No view next my that tax improving is make is is then there anything that other expecting a interest cycle improve is that -- back to more reason, I'm you the you're And code in year. based for could that know

I a think So couple things there's of going on.

and have it cycle valuations impact will down as take to think does cycle. rate of go rates that change the Sellers want advantage that. an on because in reflect valuation I

within ground. you know, the -- is, that folks the of generated do, we thing from we as other by M&A a our actually The footprint lot it's our on

they loan, said, things take people there in when word just that and little took what happens because to to out were Lamar in I term put you And out we signal okay, that's that the we going we down land. slow the a talk out wanted we'll bit to come mean XXXX.

pick XXXX. think going So up to are things yes, we in

actually trigger. if an we've with to closing started decide SIMs QX some And we towards to eye receive a pull the

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

again, Natalie. forward interest Well, And Lamar. thank November. We your thank for you you, look in to visiting in all

today's program. conclude your participation. does this And you Thank for

disconnect. now may You