LAMR - Earnings call transcript Q4 2018 | Lamar Advertising Company

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Operator

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

Sean Reilly

for X.X%, Thank Call. year we you, our XXXX to full ended out a continues organic X.X% Year-End Welcome Stephanie, our organic AFFO the everyone. and our share exceeded our the year. seen XX.X% way up at per up it's with drove to guidance. exceeding growth in was expectations. Same-board Full up gratifying. morning, number and QX and QX We've closed full digital share, quite to and Lamar's brought in some for good a AFFO shine, I'm per XXXX. to easily level $X.XX we time year pleased and X.X% share importantly that XXXX haven't performance very Earnings QX growth

the our in looking a going to integration synergies digital significant in these the from Fairway well. per we in in are in to largely contributions XXX share goal XXXX $X add Fairway course, the promised with new forward The transaction place and AFFO we growth. is million asset already XXX assets are quickly over Indeed, units closed units And, of continue possible, and capacity as as XXXX. on to targeting adding December. of XXXX We

$X.XX The Turning to pro provided for forma of share. per the our guidance note our and top-line forma $X.XX range pro X% release X% the XXXX. AFFO Please midpoint per share growth. expense range to growth in of reflects

pacings year today actually top X% that the us of end of and position towards as range. full Our than are stronger

rest guidance Regarding while are it of as major X%-and-some-change. let's XXXX spend -- around QX more QX QX than they dollars advertiser the full to X%, will fell and pacings with had XXXX. softer several guidance, year, out We million and of much chunk call a for ship the us or one moved

XXXX growth, color some Keith heavier that little reflects per of again, of are pacings pro on expenses are QX a south will QX at expected guidance come midpoint share X% pacings in presently which forma will X%. give presently X%-and-some-change. AFFO of So full than north year that, you

we confident come around are out close familiar X% expenses the full will we for in Keith? However, XXXX the that year will range.

Keith Istre

everyone. morning, Good

As was first Sean growth. EBITDA organic revenue strong mentioned, really our quarter

X%. call our in to organic This higher X%. bonuses than and growth the was because last expense sales was expected we the earnings our usual we due stated up revenue strong expenses additional such, As our QX quarter. On the be of to primarily that commissions growth

and our was XXXX organic EBITDA XXXX, cash after was organic was normal Organic Free revenue is growth. $XXX flow on X.X%, as million. X.X%, Sean was X.X%. growth, which somewhere X% year growth for range full the said, growth expense X% expense For and dividends between

February we board was that will approve similar XXXX hopefully, the on in have a meeting expect in company by press XX, XXXX. increase release the that. mentioned X%, they We had that board to asking for on We the planning and earlier will something dividends and

number closed expenses number: we on XXXX some Two were XXXX. X%. QX consolidated are year; one-time to December growth to last there organic recall things the secondly, X.X% expense of XXXX approximately that acquisition if be you expense and that QX XX expect that that one, QX of negative was in growth will in Fairway to We contribute related

year, for million consolidated help X%. in the CapEx, for the call organic budget internal $XX our CapEx. total, XXXX $XXX To budget maintenance and For expense our projections of is in full million CapEx model, with growth growth you $XX million in

TRS taxes projecting We subsidiary. that's taxable REIT million. $XXX the Cash Sean? approximately to $XX are interest will at be it. Anyway, approximately about million. cash be is TRS expense our

Sean Reilly

then a on touch Great. there. out going couple of I'll Keith. about call, to we we and I'm talk call going initiatives commonly this couple Thanks, on a that of metrics have

think going that find to interest. I you're

and mentioned little I XXX a Fairway acquisition, acquired XXX a about, organically we we the again, digital So and over in added with XXXX. account

note number national brings this given digital XXXX and to that we're little XXXX X.X%, bit But in our for to X.X%. So XXX for increased more that reason. skewed Again, X,XXX. we year-end local, political, such add core is please goal local here increased total so that is strong same-board National our local, a performance. QX seeing

it about to the growth organic a was Regarding so QX, -- X.X% in core X% added around right that political, X% little X.X%. over

real financial -- year, performance, the X%, fourth out education the point up full X%. I'd X.X% For up at X%, otherwise hospitals up to to organic about obviously, added growth. some quarter. X.X% strong political Verticals, in

going help they into into changing, that a developed out we they XX%, an auto view a and all is while. the dealer dive year pop how I a X% effort what's us a was for QX insurance time and first advertisers of consultant loud down numbers, did small local GEICO was up outlier, top hired how some ad on and vertical. about with deep for out-of-home. pause media, spend Auto Last to model business their our in that's insights want a to Here XX Through are is we viewing you across lot do their with into little auto. but think how

in and insights and helped These early spend. auto the for down out for other Auto us full pacing is all as know some you dealers verticals. QX up struggling interestingly roll local the it's at X% targeted As directly the media are And ad are initiatives it's year. this us with decline the for auto know early promising. X.X% year most other you up pacing results

it's early Now this other ad yet and declining of but auto against spend platforms. a backdrop -- is in

will promising. digital to forward year. our to growth. pro XXXX to I the updates programmatic how our look be two, platform returns and to bring begins looks that real the in contributions incremental a Number it automated forma through year So, dollars giving again, on that you But are to early when progresses make buying way

With investments year We have of is to to platform these initiative endeavor And this this moves sure well. our four again expanded look made to partners make last go you to our the up after we've along number Stephanie plug-and-play. I in to from open forward and as programmatic truly the as necessary dollars one progress Stephanie? for it our year happy updating in that on questions.

Operator

Thank comes this time, we'll open floor from Capital. At first Instructions] with you. the Imperial question Miller [Operator for David questions. Our

David Miller

the couple results. on Congratulations guys. A Sean. hey you for Yes, stellar

of And be over you And you acquisitions then the Keith in means, how count different like want do maybe the is some end-of-year record have far Fairway I've of three XXX an you which models, going two -- other to years? far? how have have guys than if digital for follow-up. X,XXX a integration you that's last got I XXXX that or that characterize in. by least XXXX. you a chime would digitals how I also -- my Thanks. if And would then on then Do right? the installation board done So, number that installed at say that and you so integration, so think have

Sean Reilly

Sure. Hey thanks David.

digital Let the thing quick. me hit real

I we organically. give acquired a the think may you that built number acquired me again, let we with ones ones Yes, you the comparing -- Fairway XXX. so be with we

David Miller

very Okay, good.

Keith Istre

because and the Fairway on are bring I the expense call noted largely it let's takes it's happens and after philosophy new low-hanging is very, there's longer going we business how of That XX little of sales the and and on on to as regarding largely different going fruit as we going quickly. when over that's lift the fine. to top a a the management place in it's but platform. -- the side well. next go And that happen And XX released And then little largely sales the we sort mentioned the about the those line and on in pretty integration place million side. usually of expense that promised transaction, months, synergies a again Typically very that Fairway, will $X we

David Miller

retirement. your if And I didn't remiss be Okay. Keith on I to then say congratulations would

We will miss you.

to You the were years. over wonderful with work

Sean Reilly

Thanks David.

Keith Istre

much Thank appreciate that. I David. you very

Operator

Thank you.

Alexia from comes JPMorgan. question next Our with Quadrani

Alexia Quadrani

you. thank Hi,

questions. few a Just

First is in And the you apologize ex -- if wanted for it, one of was QX but have give local. national the fourth what sense I see just at local if of in kind a then you quarter off, when to political? I I And had look you more. the missed then pacings did the us versus where strength I

Sean Reilly

Sure.

don't national percentage have growth be and expressed that percentage -- little X%. would was have of I as I expressed organic over as up of QX local up total but QX a X.X%. it local So political expressed was X.X% it and a a

call let's I all X.X% first. for look at yet core the X.X%. you the about for have growing little X%, you other over local don't minus if So a at national number again a

have next So we'll have to just -- the wait call. till to we'll

Alexia Quadrani

talked about the of into rest And at off then major the of QX, looking advertisers year. pushed sort just you the

any pretty pretty that It on different like there political You -- color us have guess convinced guys to look you going And at -- I sounds a differently are XXXX. political, is did here, see for on confidence past had have political forward? see that? of materialize tend it political guess your you in and going in this anything that also to us I good of spending you're level just visibility. just year may cycle great you from

Sean Reilly

Sure.

to -- then when so have going they dollars in can than as these contracted slightly is It's -- that's large can come advertiser And that of you in that more are. contracted who And And just contracted they spend pacings make settle is get. sit they as today. so XXXX. for every actually So timing are to billing of you are now probably next the period visible we now are guess They as with to as for Right period, you as in day. look with we're the our full our year time. still good pacings, in. reach pleased pacings looking folks they are in or the things to at snapshot But here that period, we have pacing. the

The Alexia other what… question was about --

Alexia Quadrani

different was anything such great you it, had a differently think that it XXXX, in you I if of year should forward? going Political, we learned political about wondered how

Sean Reilly

learned one will difference, political Well, note an get really off. get usually those make after million thing I you on and you to it effort made it's we is we do year What concerted $X.X We odd focus it's that an this we a a million. between go that paid year? last even a usually odd not and and year dollars year can vertical an year. $X in in if

But So we let's making about delta after that's call $X what's if up and needs million. million about up, good if feel it to we're trying you're $X.X to Lamar think that the helpful. to make scrambling

Alexia Quadrani

very so Thanks much. that’s helpful. Yeah,

Operator

you. Thank

comes question Marci with next Wolfe from Our Ryvicker Research.

Marci Ryvicker

questions. couple Thank of you. A

have think any or I XX.X% in digital, same-board that that that core? is does Sean, political totally First, it

Sean Reilly

about had tit a I -- politics can because though, I pretty haven't you one whim. responsible in is broken at medium. It's change can their I digital seems get good days it, thing that don't at platform have out for they probably but these some that it for it tat be our and it It Marci. to political very probably is

Marci Ryvicker

then can book auto what is us tell of point? percent category you your this at And

Sean Reilly

that Yeah, let turn me to quick. real

bear we fruit. vertical highlighted and year you it's the glad concerted haven't think we're because past ways in that targeting at that going I'm this auto I in effort So to making a

there and advertising you So like why going that's historically -- lot as X% share. headed intend because doing update that know I now think and guys platforms our X% and whole and an we're it's how important is vertical a it's automotive progresses, as I it. And it's said, been year after we to of to across the get going I'm we're then give you

Marci Ryvicker

one-time that There it. $XX non-cash for either tax you Got $XX last two for Keith. about the And then to million one's million talk just a guide were one-time AFFO for FFO. the item bit Can in adjustments. and you little reconciliation or

I We're out to from trying think to re-class that AFFO guide? then it's related to impacting the just $XX else. the Fairway. how is revenue figure million And something this

Sean Reilly

upgrade little our and depreciation reconcile. $X.X retirement a according to use our sheet let with But January $X.X similar non a X to our It capitalized their FASB It's assets to that an about address just it to concerning going do obligations. credit calculation front all have we Keith, obligations. billion again, of of us, balance debt. lease and AFFO And will amortization. that companies as is add agreements; in to a comply not debt capitalization I'm a has of you item Marci, lease question. to And controller measurement any that bit? it's to corporate Obviously the our will clear in of leases asset we new out capitalize -- XXXX, rule, like a obligations. it is item non-cash anybody debt billion do want it's

Keith Istre

Yes. currently lease on our they new again revenue for accounting won't as lease accounted standard under and Marci, revenue the the be. contract a

average So like credit direct in have under our rev months it's months XX labor or year over rec, throughout would since of probably capitalize for to the modeling you purposes nine costs of rollout and contract. million $XX XX installed the the we life

a So it's onetime event.

portfolio our as change we're treating lot. non-cash revenue for it would AFFO. course, Of But a

non-Fairway the any year. on So adjustment standard lease AFFO had for effect

got So quite they both many.

And elect it. they Fairway do liability On REIT to similarly the in XXXX. XXXX. the have that Fairway to tax to going related didn't in is company did elect obviously the the when it they right to the They're strictly we way defer status fact

they So be that's period $XX status. we're million and in REIT a estimating between $XX million elect will the tax benefit

you XX REIT over months elect have status forward -- XXXX. So in it when and looking they depends now just

Sean Reilly

charges these EBITDA. to And will of affect clarify none benefits our just or

always we Our for EBITDA will have for as accounted be accounted it.

will be So year-over-year for quarter-over-quarter it apples-to-apples comparative XXXX.

Marci Ryvicker

much. Got it. Thank so you

Operator

you. Thank

MKM question Partners. Eric Our with Handler from comes next

Eric Handler

Good morning. up acquisition shaping for a the talk Thank if your little how Wondered could you question. you is very bit about much XXXX? for pipeline

Sean Reilly

we have teed $XXX stages some So under actual for agreement about year. under million million this up under of various better some $XXX -- APA agreement

year another to going it's in active So opinion. be my

as so that the as year. highlight we what opportunities -- power of one million that's we a of have note You'll it $XXX to all the they high-yield raised our right of care for on purposes and just recharging this attractive for our looks take they're notes to -- we fairly of tack now, to revolvers attractive in that to do existing come the like in But very and it. certainly have capacity

Eric Handler

Great. you very much. Thank

Operator

you. Thank

comes Bazinet Our Jason with next Citi. from question

Jason Bazinet

And sort into weak I And and four cycle rate. if if back think dropped used then pricing qualitative up give remember just it of you be pricing good I you of of of full will -- the and sort the ago maybe sort of of need to went could I numbers last utilization guys dropped give as the precise the if the you I any was and and such wondering much numbers. all pricing years you're sort Thanks. was cycle. more you got what things seeing came correctly versus utilization of chapter back utilization. if came economic utilization don't the put

Sean Reilly

question. good Sure

to are recognition to that created pretty it? monthly occupancy just memory latent your much I in doing what Just are is where that But being we normalized noise be why that is to and primarily revenue today where it it daily and and rate. we're noncompetitive. we occupancy figures moved where that them to it's argue the making from cycle me it needs pretty would We Jason time they about recognition is these in stopped the getting we given and is our refresh said, are driven. clear the made gains on revenue white rate in gains

Jason Bazinet

Okay. Thank you.

Operator

Thank you.

comes question next Stanley. with Morgan from Our Ben Swinburne

Ben Swinburne

revenue? a of if always boards, revenue. digital adding relationship but and it's us capacity be growth acknowledge strength wondering Sean, Thank in the driving and sure you the that balancing sure that now direct update make to the just you have hard I'm think business You inventory given on to to But and same you'd I'm demand pricing. I a not impacting I in know of creating causal about time of that lot seeing marketplace, how at sort know could seem that you're supply digital the too supply much you. of between the impacts

today's of the sort on update any more into and ability just digital footprint? to your marketplace So drive

Sean Reilly

Yes, Great. Ben. question. Great thanks

fact at as a would that Yield is place I management highly with the organization. So local Lamar I've decentralized past, said level. in the start the takes

XXX are that in their because they could that run a got gauging professionals ad that local never way move. here spend on have local finger replicate the that you've some-odd of centers our So I profit in pulse demand

XXX So of it's finger that pulse boards of spend how decision ad wisdom folks the really have on drives the many sum their this booked. that get local on

sure those making held of local we how too is is boards managers far for management get accountable don't on their perform. that check ourselves Another ahead -- local

And large so because dominant also digital it provider your meets provider. that's balance modulate many markets, we're we of of because such the our can getting of only demand as just that it then sort I've And digital before on finally a in a most said foreman supply in out-of-home in places right. we're and check way

even a up feel with that we match together, supply demand so when we confident And we that for fall pretty while. put all can that once

will get that. same-board we the pause button. hitting and performance right it pause we And Sometimes can don't reflect

few that you think I ago. saw do us a years

or mandate not is top-end. by Rouge. happens of dictate a that something not It's exercise. an exercise decentralized from up, truly a it's It bottom again Baton So

Ben Swinburne

mind control number a then back ASG can comping And we're to build, the what the if if for don't quick just Got if And so your AXX. you one, we Keith quarter? going have the questions: against for just of onetime items adjustment you number XXXX in couple know AFFO other it. tax the your political ask ever the in I just QX, first on Keith,

happening income gave net we it out that to and you explanation correctly. benefiting I come two then income wanted I back just them think AFFO, to is you're from from net accurate? sure what's make here the is to is that to before adjusting understand these

Unidentified Company Representative

in The Fairway. tax be on for right. will exactly direct line the and other will million that's be Yes, $XX the income labor

Keith Istre

that's press as will that reflected purposes, But for earnings GAAP be the call for not EBITDA. again plus in our next release to a

Ben Swinburne

Okay. any impact revenue Is these? there from

Unidentified Company Representative

No.

Keith Istre

No.

Unidentified Company Representative

No.

Ben Swinburne

No.

Thanks. Okay.

Keith Istre

And -- okay. as far

As I far you -- in was it and year, tell front as of numbers Most the of with political last the of that third political don't QX exact came spend half quarters. back the irrelevant. but in of have I the bulk the of can year, fourth the in me, last

Sean Reilly

Mostly fourth actually.

Keith Istre

Yeah.

Ben Swinburne

all. you Gotcha. Thank

Operator

you. Thank

question next Drew from from comes Borst Our Sachs. Goldman

Drew Borst

for geographic regions? give in are of taking terms wondering XQ Thanks Hi. and whether of minus any some growth question. plus organic color the could outliers there if I revenue for was you sort the or us Sean, growth, on revenue

Sean Reilly

Sure.

Their Slightly The nice. X.X%. you've Northeast the aren't to me up say X.X%. which X.X% growth report strongest. the is was heard strong. Western that Happy California up Midwest region was the that So states was and this up actually was in They pretty Washington as the flyover and were Nevada. Oregon and That's which behind revenue well. past region perhaps quite doing QX the

a good patch recovering, phenomenon, still but nice a was bicoastal oil is little really sort bit. have So, a Drew, quarter. Midwest to The see of the strong it it's

the Texas about going basin reading in the probably what's on in Permian You've like. and

region Our X.X%. Southwest was up

region that Mississippi, things to Ohio there. the see. Tennessee and up of region X.X%. around was is Central for kind So, Gulf the The was Couple Alabama pleasant Coast was Louisiana, on which us the Florida was Coast, again, Atlantic struggled of there in most up that X.X%. The going that's Panhandle.

Gulf for good strong along economies has some Permian on the not, Gulf there's and While that still the rely struggling of patch, activity oil recovered but the has Coast Gulf in the Mexico.

Drew Borst

declining? or region positive, it Gulf that was Was actually still

Sean Reilly

bit of were the of positive. strong. regions performance, was up but was It rest is It There X.X%, the X.X%. a Yeah. little quite

Drew Borst

pretty based it Gulf and Yeah, little exception the broad seems patch of bit. a with the the maybe oil

why for this million. ticking past, have guidance that's you, you could CapEx Another bit I question little a I $XXX been than bit a it's of the little guys the doing explain higher up have year? you in know maybe

Sean Reilly

which Sure. budgeting digital, put we're to XXX. be XXX, will last year's up more Well, than

have. It's, don't So we than a on that maintenance much CapEx some we digital is get obviously, bit as couple year, all won't that. years. them we little of The is of be it goal if previous spending the in higher that

so rollout We is are have that. a a needing now XXXX, that the bit would is falling say, little into replacement, primary XXXX vintage digital I those drivers.

Drew Borst

you you us can to remind much around XXXX? you lastly, somewhere is this of into just Do you a-quarter the for maybe have talk past of revenue? And have then, And booked. the revenue year think what full about that how of visibility at have Okay. used sort point in year I you kind being visibility maybe on? full

Sean Reilly

No. We're to we're January, actually we booked as goal. out XX% that at closed right --

Drew Borst

Okay. That's And from is great. consistent prior pretty years? that

Sean Reilly

and stayed our notice it give and I'd XX through, then and taught customers back the of since snapshot say time, when used a we XX% a of is as five, really, be go been meaner good the Recession percentage But there number take I'd back number January around cycled how how Great out booked. real shorter be XX to as to going contracts around, and turnarounds Recession. and a XX%, we year And I the back out. maybe If we to would greater fell that's in that and the further right years leaner it's years can say, at about month. quicker that Yes. go I'd Great say, were close six our XX% last turn got

Drew Borst

Okay. Great. I appreciate the Thanks color. so much.

Operator

you. Thank

with Smith Devonport Asset Our from next comes George Management. question

George Smith

morning. Good Hi.

I'm category, in new lot this given of strength, out renewed types buyers seeing again, medium, you not we're maybe by if economic seeing Or disruption You if are guys seeing driven is other there to and right just seem digital of areas? that a that even interest that in do trying momentum the into you're other the do mediums the or to general figure now sense elsewhere? disruption we're coming or have

Sean Reilly

Great question.

of driving just time things the start out-of-home before. fundamental growing. let their are that's So interacting is that with spending is spending saying fact our commutes medium one more They're by before. out-of-home. ever in time our the that people audience They're me more than More more than ever

you've frankly So either exist, with they're used it in you use. fragmented like, struggling there. in the that point using starts media lieu are service some And to kind that Pages certain are they're accountants Yellow they coming categories is that of use so that their fastest that us service vertical of to And local would Their Pages. for attorneys example, our there nearing media don't audience. turning that's I the is growing and got degree. or now. and to can category, I audience tell are other becoming that's Yellow to other to benefit to, used our quite right us. and the away

have to in listenership haven't They sports responsive able as us get a some their because it's to coming way they information in radio platform to that before primarily so to their to needs digital and entertainment, or way digital way is argue responsive is radio that price-sensitive causing use needs. them they're radio the fast-growing is our they time-sensitive and of been I our steer out us those to And dollars to needs the they in be a book away. is Clearly, of could of way. also need dwindles, advertisers more and to news, can because Our categories that on used making would rely us. right responsive

the of that out-of-home those So, resulting local other medium growth lot where a struggling. being factors are are media in a of some are

George Smith

bigger And even are in buys country in making broader the buyers pricing's about going to the of discussions geography more the some mean contract and they change blanket with do any generally you or up. terms bigger the or the I of duration? -- any buys How obviously see actually

Sean Reilly

customers to book some in for commit are is effect we sum that that XX% their in XXXX intensely customers. touching executives built XX,XXX, We in by X,XXX earlier say business need keep did our would have of But a I longer. the XX,XXX is and local, also local XXXX local large little you mind account of buy that and XX,XXX, buy local

really it's effect. So, that of sort sum

So, if other their point benefit. local only neutral more it I to would struggle audience, continue with to our can media

George Smith

very much. you Thank

Operator

to at Thank now are Mr. time. questions turn additional closing this you. no There it I'd like to for Reilly remarks.

Sean Reilly

we're Well as you solid mentioned Thank release, forward interest the for you in thank looking all for your listening you to And press and great. in Lamar. I a XXXX. Thank all.

Operator

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

disconnect. now may You

Lamar Advertising (LAMR) 20 Feb 192018 Q4 Earnings call transcript