LAMR - Earnings call transcript Q1 2018 | Lamar Advertising Company

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Operator

Excuse me, everyone. We now have Sean Reilly and Mr. Keith Istre 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. including this including may financial any statements goals, and of regarding forward-looking performance, distributions course the plans company, to the about objectives, to the stockholders. discussion, timing make Lamar statements strategic amount In and respect of with its future All involve differ to materially and anticipated results. risks, contingencies, are of which results forward-looking Lamar's cause control actual statements beyond and uncertainties many which may from in differ important and identified cause that call, materially first from company's factors XX-Q discussed annual its report release, to has Lamar on as actual quarter those X-K. its by and Form on could supplemented quarterly this recent earnings Form the reports in current XX-K, Form results XXXX or reports updated most on documents. to you refers Lamar those Lamar's and information on earnings the available regarding furnished first Regulation G measures contains morning non-GAAP SEC Investors to of the website, release, this by is which certain X-K www.lamar.com. required financial was Lamar's on section Form XXXX a quarter like I would Sean to to over now Reilly. conference the turn Mr. may you begin. Reilly,

Sean Eugene Reilly

nice forma Good came Shontelle. at and XXXX have in up you, I up call. mention morning, things excluding QX seeing welcome pro QX Rico. to to earnings are a morning, we Puerto our several but X.X% everyone, foremost, top-line this first growth. Lamar's and acceleration Thank X.X%, in

Now, we are seeing approximately growth for X.X% pro QX. forma

AFFO are forma guidance. the on expense pro assets QX beat of month, outstanding we tracking it so handily AFFO our longer or Thanks last share a full-year sold top there share Speaking on of Rico, drag our at in we our we Puerto will no bottom-line and per control, be per to top-line performance.

of those senior to balance $XXX of notes interest quarter, are we addition two, savings, two that In we common for indebtedness. rating last program. earned in especially ATMs last that instituted REIT, us. investment million one, small note. considerable acquisitions and have first-ever very Number equity high mid-sized items at-the-market Number offering XXXX. due yield Lamar its refinanced our like night, process, complete grade sheet multiple on an our We

We we toolbox, the markets, are to our the be the to seeing this many XX another in not the in a robust pipeline accretive Keith? XX acquisition unless is until use finance will ATM next addition months gives that tool Again, credit months, intention it accretive over to is the with coming us and opportunities to coupled believe and way. our ATM acquisition. acquisition

Keith Istre

everybody. good Hey, morning,

the the on first X.X% couple highlights. saw a quarter and in consolidated of Number release. of first metrics adjusted notes Just expenses acquisition one, the point the under in press color declined bullet a the couple you as

one, our Just flat. largest to the our approximately million. on give was lease $XXX expense, came and expense we was about. landlords, our color that how is that you paid some to Number year, expense That last rent which was it

was that very helpful. So

Our health $X.X and workman's comp down insurance million. was

was fees at and is expenses labor corporate, timing that illumination generally is our lean first adjusted million quarter, the that which legal for difference. seasonal to we just At to that to grow $XX due acquisition off had we're budgeted nice that $XXX,XXX slightly that company was and metric. level. XX%, the for was that and quarter. approximately propelled CapEx grew excess very in quarter. XXXX, down Our and growth $X pretty the was know, X% our maintenance on it maintenance were EBITDA on first and very was tracking year strong full AFFO the a which in CapEx This surprise the touch behind of you last approximately year's savings, EBITDA, operating of Because AFFO we extraordinary To of as start share down and per But that a expense quarter with to from run direct million. a means

full annualize don't QX the year. to estimate So

at And CapEx million. year that come $X $X company the should to We maintenance cash exchange to expecting about in in because just redemption, about save Sean? what to are the refinancing, approximately of $XX Sean million million touch mentioned this interest. on

Sean Eugene Reilly

Great. Thanks, Keith.

on. hit a me that we usually couple operating metrics Let of touch

that Puerto the First, we real digital good end That during with deployment quarter, sign. built the subtract that digital the closed ended quarter, total. the so in X,XXX and air. We units. units XX of digital after units the XX quarter includes because deal from a We Rico,

and up Our same-board a performance that XXX digital in digital as north ramp we number revenue this unit growth a to view to of deployment new was our QX. strong again intend units. We X.X% year

little us So, pace a deployment. for our bit to up digital the on look

local revenue slightly local We're growth, local/national of national up with both Regarding north X%, stronger. a and see little to happy being that.

– That of book. a Education and couple – vertical up was going late know, up a of now in we're recovering X% that is estate verticals, was and local been you As rejoined our challenged had education. dwarfing national On of to X%. in years. slightly, XXXX. this of the through sign saw strength constitutes see we of And QX. our service, good think continue verticals, We X% and been course trend strength glad in XX and last has top we X% saw is lot to real the local up

up negative With the was XX% Shontelle, retail it open and that, X%. down gaming side, for On let's questions. down was

Operator

open gentlemen, at for to floor time, very this Ladies like much. you Thank we would questions. up the and

question first from come Our Marci Ryvicker, Fargo. Wells will

Marci L. Ryvicker

your all? so it how around a XXX. to like plus it's Any I Is Rico impact have X.X%, this you. accelerated much important did And be QX the Puerto I really guess question Thank at in will feels political guess the in here? is from acceleration helpful. plus X% there most color you

Sean Eugene Reilly

a we're acceleration, obviously Marci. last our Thanks, of drag, political year story the nice seeing I and political XXXX, was think real We it is Rico, a is definitely into the May, through cycle, just of that tracking ahead came to XX% the small – helping. which Sure. XX% but Puerto mid-term sale the comping cycle. to was I Yeah, the think is

looking forward we're nicely year and sets for robust pretty political the it up So a back definitely half. to

Marci L. Ryvicker

an QX for you provide? pace that ex-political could you Do have

Sean Eugene Reilly

I out. able figure try We'll certainly don't. don't. on to us I do that call be August. But it to let the in

Marci L. Ryvicker

cause X.X%, totally And you little a balance worries will digital I the to I is Okay. supply/demand what me need adding units, then same-board units. backwards digital Because that a and become new is but there's increase maybe keep. that the go always in that weaker? that understand like feel up to

Sean Eugene Reilly

question. good That's a

not this bottom-up, you do As top-down. know, we

XXX-plus a our there's demand read there. really local markets in that it's So

didn't So local finger demand. be think on have local was there. again, units, GMs demand that They wouldn't the the the their of the for if asking they pulse

confident. we're So

Marci L. Ryvicker

comment Okay. imminent, question, I And any anything M&A, sale? last to – on upcoming Channel, guess, up AMT can then were maybe the (sic) is come [ATM], the for assets Clear if anything it's make think I signaled you for you those

Sean Eugene Reilly

looks $XX we're of million, So place months like to for forward, that next in look really acquisitions. this north putting million last few in for, Recall $XX we million activity is Marci, XX that did see these the year, that million, we pipeline over like a we $XXX $X looks pipeline really what And months. years. next XX the that that, as an annual tuck-in

of felt leverage, the prudent that to goal can below So given tool put see in, our to those it utilize execute down staying we acquisitions that this expressed X:X pipe. it we on we our so on accretive coming

Marci L. Ryvicker

you. Okay. Great. Thank

Sean Eugene Reilly

Yeah.

Operator

you much. very Thank

Quadrani, JPMorgan. from come Alexia next will Our question

Alexia S. Quadrani

Thank you.

couple a Just of questions.

are in you it's First M&A. pipeline a lot question on on on saw questions It specifically going do Netflix up pacings guess, than sounds market? on there activity coming year. local of sounds new see a in demand. dynamic earlier what headline then the all? hopefully we interested more into the you're the a any competitive I changing guess follow-up the then entrants this know like on. like potentially pickup And at color is a accelerated on QX, -following national about I probably and it Marci's of in also, I terms also and robust stronger driven, for

Sean Eugene Reilly

Let of through help we going actually me hit that is political questions probably pacing as to is course is out, go One the year, reason local. local that the coded the first. us

to to nice So, when a going of tailwind be book local business. comes our it that's

we're On million, $X the negotiated only acquisition buyer. And pipeline where see again, $XX the of We these that million oftentimes a lot. these are small multiple series transactions, a $XX are transactions. million,

is our up, performance they activity. the clearly can that they all single first you also difference out. amount. meaningful saw them last up performance year, you quarter, as to And be can will pro-forma But, much a extremely reported our and in add one no accretive, like in mean the as due So, transaction to stand I when acquisition add

Alexia S. Quadrani

of follow-up in assets like a where Puerto just Rico. That dispositions? sale other your you're potential evaluating that then also, there can – And see portfolio one on, off. sounds that's you Are the one

Sean Eugene Reilly

it got a No, been been last that just from love outstanding down and We did as it us, was behind an for I Hurricane not the the drag do Hurricane and folks – island and there. to the there. actually. that a we're do was well Maria. us devastative, Recession. Great know our hitting it the looking But, was – – straw to else performance. Recession, performer island weren't has We holding We recovered extremely sale. really been on for Maria we one-off. until really the that We it's a pre definitely hated It's down no, was never our it's anything Great

Alexia S. Quadrani

much. very you Thank right. All

Operator

Thank you.

from Handler, next Eric Our come MKM will question Partners.

Eric O. Handler

question. very Hi, much you thank for the

if boards how Given static refresh in digital is the these wonder us, the of units ratio you're between of of the again, billboards, long revenue taking the the expecting and now payback versus what sort you're now? for seeing year, go could sort growth what of digital or payback digital terms the type over this from you

Sean Eugene Reilly

we CapEx. Sure. terms the on possibly spend Great the At conversion in end get growth the our we of return quite day, is digital dollar of best a question.

see of an outstanding our more dramatic. be estate job we larger very real under you managing formats, the can Because contribution On portfolio, Xx, can Xx, upwards the digital Xx, do the EBITDA revenue.

bigger. as multiplier can On the smaller but formats, the the numbers aren't big, be revenue

XXX taken something expect down do maybe can month and a doing X,XXX, a X,XXX month. that's to You've you

outstanding getting on we're it's return. format deployments poster larger and deployments, So both

and in glad same-board improvement to confidence XXXX. gives So deployment ramp-up digital a little us see we're our to And again, growth returning. that our bit

Eric O. Handler

these Great. what's upgrade a as cost of follow-up, the just And digital a days?

Sean Eugene Reilly

and on around and give is (XX:XX), Depends call -let's size. or x $XX,XXX, $XX,XXX cost posters take the $XX,XXX. XX' it XX' about $XXX

Eric O. Handler

Thank very much. you

Operator

Thank you.

from Swinburne, will Our Stanley. next question come Morgan Ben

Benjamin Daniel Swinburne

most the us could biggest of the sort you you're Sean, across and guys. morning, from performance regional QX the to more a Good QX seeing where maybe you give where on when little Hey. the color – look geographies? your acceleration

Sean Eugene Reilly

I'm a in when the bit. to a like going this broken bit sound Ben, the record, a same little we answer last little had Sure. we've question because – to

region and So bicoastal on quite The there it's yet. the X.X%. trend up In region The Western phenomenon, it of can't is patch up Western QX, and X% X.X%, a the for again do is QX company but QX, but was up continuing. oil for Northeast the was bicoastal you phenomenon. for rest the fire. not is sort improving, of a was it's I

QX down So was region X.X%. our Southwest

We are directly actually Basin, they like up places Permian the Texas – the that mid-teens. of are sort direct Midland-Odessa, seeing by West are the markets and in Amarillo markets, in affected

we're rest of going as the we the oil So that to recovers, see in patch Southwest. a the really lift believe

Benjamin Daniel Swinburne

is me, in remind you And your Western Vegas, region? – that Las Great. do

Sean Eugene Reilly

Yes, it is.

Benjamin Daniel Swinburne

Okay.

So like? well, sounds that's it doing

Sean Eugene Reilly

is it, is park, doing the well. of out Southern Vegas it knocking killing is Yeah, and well, California Seattle is doing it

Benjamin Daniel Swinburne

would do do that M&A, compare debt your yield your When and Sean, your then, straightforward using to help dividend acquisitions how year about of your And calculation, stock stock about think pretty or these equity and of obviously this to about I your versus how cost debt your buy that is the talk mechanism cost new given yield sort within your And equity equity? to accretive comparing funding you've us debt look Yeah. at think you after-tax assets. think versus of – approach you of might in debt. think you cost this is you about place. of how to you a range, put This leverage

Sean Eugene Reilly

is is now Certainly, think I our not much immediately we we that question. when pay where great our the financing now, I debt at would yield attention things hard is a you a not cost if pretty equity. analysis, debt That's doing attractive, relatively above. of do especially the say On to REIT, but to cost you investment and of of of Sure. – ratio, to all AFFO as all they're rocket have it we're a acquisitions, cost accretive that what share. debt we're These assure dilution science, hypothetical accretion can comparing we distribution stop it's can these we more on not the leverage of grade. Xx per And

investment So require being in time-to-time debt as – the to good of grade that does that we on is opportunities these we these ever down maturities cost but have from advantage that refinance future, we is news use our coming to of may ATM. take the

Benjamin Daniel Swinburne

that? raise with of cash, or plan do debt balance to buy without to revolver if could million some replace – going if available know, on to I a term pull of want got have or using Keith, cash and a you've ended you're think bonds loan. is deal in you just the or what in like stock? you Yeah. outstanding for to sort wanted guys $XX something sheet, don't sort And to then remind you trigger us term And loan maybe with, keep tomorrow, if your this that the you something the to IG I Is I of place there the

Keith Istre

$XXX a got we've Yes, million revolver.

of $XXX we've got it. drawn As million right now, on about

you're as debt, you're intention I'm you're talking Term now A – assuming B the no or Term about refinance the the have when of – We both? talking talking to or right about term about

Benjamin Daniel Swinburne

keep if guys this planning bank like know one, you are. and you Neither were don't want outstanding, debt to I sounds if much it -- just you

Keith Istre

think Yes, place, the We it I is at time, at point in sentiment this put brand least in new, in of here. it's terms years.

Benjamin Daniel Swinburne

Yes.

Keith Istre

hike the very the on grade. yesterday debt, that Feds meeting, good was we that course and came and next a got yesterday keep came trigger wait they'll is I floating were we've something was at out but the term and that were because of out Feds debt on investment rate reading I going reading rate the pull not said they a it And to And steady. something things their

positive that's always But keep still is for it high is But, me. what place there's fairly there. a I that bankers now, on inexpensive I in of So mean think as us based yield that to option, and our it's regard. in right plan tell the

Benjamin Daniel Swinburne

Thank you.

Operator

Thank you.

Bazinet, Jason from come will question next Our Citi.

Jason Boisvert Bazinet

I of now? at the high-XXs chart, had as look one-year Why question sort this just sort potential -- a sort now? what pull raise. the I Yes, now on of you're the of equity high I when the – why sort of mean I mid-XXs, just trigger as and you're in

Sean Eugene Reilly

Well, point. not think I mean that's I now. trigger pulling the the we're

backlog We trigger we've accretive will acquisitions fund. of got the a nice pull when to

it. willy-nilly out not we going just we there we're equity, need raising So, because think

Jason Boisvert Bazinet

this And window? Understood. long this how last, does

Sean Eugene Reilly

It's a three-year ATM.

Jason Boisvert Bazinet

Okay.

Sean Eugene Reilly

So, be time the we've and of got survey the acquisition front. plenty to landscape opportunistic on

Jason Boisvert Bazinet

you. thank Perfect,

Operator

Thank you.

come will question next Drew Our Sachs. Goldman from Borst,

Drew Borst

if Great. have couple might. Thanks a for question. I the I

bit the a decipher to try political. to little want I First,

numbers I of $X looking this correct to is you revenue $XX maybe that of right, for think million if it of political I are have kind million year? the

Sean Eugene Reilly

you're code there. $X.X million I that. significantly about the nearest and comp the look that we we XXXX, in to. And through could right was of think again, In zip May, we're ahead pacing mid-term did

up So, I you think arithmetic are. right end where the

Drew Borst

the being you and year? And first next that, elaborate the mention sustainable lease thanks. least rest what it remarks, just was on driving you at couple quarter. the or the the in your then of expense Great, for flat in of quarters, prepared Could is

Keith Istre

the inflation. range the a in on generally with basis for has Yes. years. Drew, past several that's acquisition X% It generally year-to-year adjusted grows been

that portfolio really – have focused various expense. over on they – Our recession guys, we XX,XXX largest of during the it's that approximately years. periods our of And a the of great after since recession, great these mature

focused on because renew but So, our not managed side we have only is don't time it or every managed on well, year. they and all

the a it quarter. So, experienced, X% flat better the this little it in was for ballpark, than we normally the that was was but

Drew Borst

than does you be could in it near closer it sound like to term. plus So the think X% flat

Keith Istre

on Yes, history, yes. based our

Drew Borst

you've ability in hindrance rate inflation to for price a pro have bit little on and and a U.S. question recent inflation Sean, about of lack the last then Sean. being moved to we boards, drive economy And your us of the Okay. a in the more your past, talked into to environment.

forward? I So if you're you was that's guess I helping start more a wondering even or – to going extract if bit recently rate little

Sean Eugene Reilly

more comes right. to going that have now can't with whole and I'll QX data I when by guess that get my be it's to think QX driven will today, answer lot If it's we think in okay, till great, we'll together I we gather a wait confidence be to QX in say rate, have able in three to Drew. be it not is that a was months, with confidence where of going great in, come we I deal but August. The

Drew Borst

Fair questions. Thanks for Okay. enough. the

Sean Eugene Reilly

Yes.

Operator

much. you further this Thank at have Speakers, time, questions. we very no

turn to the like would I over Sean. call back So, to

Sean Eugene Reilly

all Well. on getting all together Thank in call. our QX and again forward look you listening, with for to Thanks. August you I

Operator

Thank at you Ladies now very concluded. much. and this time has conference this gentlemen,

rest you. and disconnect a may the week. lines Thank You phone great your have of

Lamar Advertising (LAMR) 2 May 182018 Q1 Earnings call transcript