LAMR - Earnings call 1 2023 | Lamar Advertising Company

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Operator

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 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 could cause actual results to differ materially from those discussed in this call in the company's first quarter 2023 earnings release and its most important -- and its most recent annual report on Form 10-K. those to you refers documents. Lamar

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

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

Sean Reilly

in of XXXX morning and business you, welcome Quarter media for I'm and have Good industry challenging in general First all, remains Earnings Nikki. how quite performed proud Thank Lamar's to Call. owners a generally. our environment our what operating

weakness first and national, the in in as adjusted on Our an as particularly we QX, expenses up quarter. Activity buys tone from went largely quarter RFPs all up consolidated and offset constructive. slightly local picked on revenue, the in largely national from in unfolded EBITDA, remains the Strength customers acquisition-adjusted early expected, quarter basis. and with sales customers local

release, towards Meanwhile, However, fine. range. and year given our up, continue be as should of mentioned in the good so provided QX trajectory AFFO of pace have that, April saw seemed year about And to June to guidance full slight feel firmed the really May we middle expenses. softening. some previously we the full

a while Real primarily QX. bulletins and Categories is analog local predominantly estate, slightly vertical, was occupancy restaurants. category, entertainments amusements, insurance, up was down. was weak. and which Rate to Back weak; both sports of particular services, was strength posters and on relatively and also included national

is reliant our way. and end total in Gulf on The national were quarter large-format We and our X,XXX the Northeast, XX other bringing regions digital added regions. Coast units. strongest trailed net continue billboards quarter, to Our to Atlantic advertising, trend that more in which the

was down same in XXX outdoor a working digital going X.X%, toward slightly but goal that still period same going to full generated On digital XXXX. a our digital faces of we're XX% board year QX, monitor in Our revenue up forward, about are conversions. basis, the from we so of

the first a quiet deals the off On start. quarter. the in for is We XX $XX about million M&A front, closed to year

additional that transactions continue to $XXX will modest closing acquisition be We and million for range. stages, spend $XXX have but the to in in diligence this some year us with anticipate the million a

have for up, all, most our remains but sheet, and beyond. things sum the I confident assets team portfolio the To am our of macro of outlook that XXXX balance well our us of positioned local operators and strong uncertain, of balance

With that, I will to turn Jay color to more Jay? QX. it over provide on

Jay Johnson

Sean. for morning, for expenses and Good joining had operating the solid you made exceeded We've expectations us. both results internal everyone, thank EBITDA. line in top and Thanks, expectations We adjusted and the on quarter.

rising to environment, of due quarter declined rate XXXX. the the since However, year-over-year third AFFO for the interest first time

the the In increased X.X% revenue of the XX.X% first forma revenue comparison, against which quarter XXXX. year was growth pro last difficult from a same period first in in quarter, acquisition-adjusted

digits with single exception a region, advertising. Our as contracted billboard which the exposure year-over-year national its low flat of to the essentially regions of in to up came Northeast result

full as Operating range expense in operating in on acquisition-adjusted X% Billboard partners. anticipated for the airport COVID-XX year basis. due to our to X% our be than well first from controls Acquisition-adjusted better quarter, X.X% should grants in the increased expenses relief division growth expense the an as

of was EBITDA an an million increase Adjusted EBITDA to X.X%. in adjusted quarter XX expanded compared for points. million $XXX XXXX, was Adjusted for past EBITDA XX contracting basis inflationary the held XXXX in margins the environment and approximately acquisition-adjusted quarter which basis, at the On most points from basis strong $XXX.X in perhaps remained quarter our the the Notably, QX only XX years. margin XX%.

the inflationary first pre-pandemic XXX one adjusted points recent in and EBITDA approximately levels. strongest ahead our Despite basis was of the quarter pressures, history of for margin

of operations in cash last Cash increasing first per XXXX. over from the totaled decrease million to funds result per $X.XX was and compared interest approximately in quarter $XXX.X per diluted decreased Adjusted million X.X% interest headwind million AFFO to by share the $XX.X first of of of versus $X.XX the QX a share year, as X% quarter XXXX. $X.XX a $XXX.X share

national programmatic, sales percentage. the by grew eighth roughly for declined the We business, and quarter our regional includes X.X%. consecutive increasing Local saw same which

be In with QX. the national our but resilience of sales, in in the more last XX% which the direction appears the decline backdrop, began to regional moving right sales accounted of spite QX modest and business local encouraged a year first quarter, in Softness carried into billboard we first the approximately and in national revenue are the quarter. of for than by in

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

Volume acquisition moderated, on pipeline expected, M&A active extremely front. the X years as in our has following

$XX acquisitions. the regular in which we in activity should flow of closed in our XXXX, distribution free after redeploy on and form of of quarter, million acquisitions level During we the cash tuck-in more have a

our Now balance sheet. turning to

of Loan by Term the with originated in of A the lieu we credit coupons the time. February XXXX, In until We last Loan bond July Term given no year, securitization we have at schedule revolving in a followed well-laddered fixed no maturities and facility a July notes, have that XXXX. AR of until senior A and year, debt maturities maturity income in

favorable QX, issuance more and uncertainty in been into high-yield the market XXXX. new for volatility has market Although carried

our we issuance as market of midpoint capital the will the range. debt XX%, continue consider in the targeted transaction. debt recall, Such improve, a TLA Loan a to transaction fixed you markets rate a bring a Should Term high-yield will approximately view using may repay bridge to As we proceeds to full. our A the to bond

a maturity of our debt debt weighted Based at X rate X.X% quarter with average years. was on outstanding end, weighted interest average

As history the the of credit of with which ended under company. we our defined the in debt-to-EBITDA, remains leverage lowest the net total facility, quarter X.XXx amongst

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

over to in sharp the year based and or rise the interest above guidance, interest. should Despite at rates past remain EBITDA coverage on interest Xx current adjusted our cash

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

in cash on hand, of of million $XX.X the of quarter, total and At had securitization. the available we million comprised the of $XXX end liquidity our million revolver $XXX on under AR availability approximately million $X.X

of $XXX $X.XX includes point We XX the per $X.XX are share million, guidance announced midpoint tracking the the Full range. our to year our are basis guidance rate and which reaffirming in full totaled year of week. this to AFFO hike interest

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

following approval, Board Board's quarter meeting declare per this And Directors' dividend Board for the be cash This recommendation $X.XX decision the month. meeting later dividend subject finally, paid cash $X.XX a we We upcoming in Board dividend. our to will of first recommendation the as Management's per a at second well. communicate and will of to of the is share quarter. share the

control remainder full management XXX% quarter's look distribute to the remains policy forward Board $X and dividend year, of And for approval. foresees dividend expense also a of our company's income. of pleased particularly per subject around the taxable our Again, operating performance, we this for still executing share, on are The to strategy to XXXX. XXXX with

I Sean. the turn will call over back now to

Sean Reilly

Jay. Thanks,

inventory Let an in acquisition the slightly operating A quick year we me due year some up to standards. do bring Lamar to to we color some on provide statistics. had closed little late a on elevated last and note CapEx to spending QX, familiar in that

digital was noted I X.X% QX. down our in Digital. same-board that

As that Obviously, not our closely, we we let how of changes digitals that we this XXX. view you change year. we'll there. know deploy to many deploy if about now, still there's we're going We going should and should on any believe to monitor are cause to

good in as up April But going QX, That did us On in of to in change course our during was as play April, quick. caused year. but out how a national. Q-over-Q. performance digits -- faltered national double Programmatic programmatic, mentioned, to recovered national view solid the on real I and was slightly the

first view has year. you quarter full around the we changed If for on for down recall, to to year, full That X% would, X%. national maybe in flat like come the the now call, up felt

we some million that, wrap believe To around $XXX about or X% won't X% on that's that materialize this year. numbers

expenses, controlling up mentioned, We're through on momentum great the plan side. though, start that and a we As that off the we making year. we continuing to expense see on

it open that for will with So up questions. color, Nikki? I

Operator

Citi. first We'll take Instructions] [Operator with question Jason our from Bazinet

Jason Bazinet

just question a verticals sort you weakness over-index quick weak? be sense a Or of more that function into digital just digital? lengths might I your on weakness out. on shorter on called like dig given is specific broader harbinger that to if a had the of digital that, that's Is it of that that that contract you happen

Sean Reilly

color that doesn't to our again, our the in deployment. the as getting that view team reason from Jason, we're we a Right field field, that, should latter the now, the believe slow is

that buy our like feel for of tending little what shorter. premium a little time it. with a and that's longer to so seeing to That have do we something given has and customers. a we continue amongst the later are they deploy. our been should that Now jitters I product commit and strong period over it that call again, But would caution They're demand could to

Operator

will McVeigh Stanley. move next Cameron Morgan Instructions] We with with [Operator

Cameron McVeigh

has negative? about vertical, color are forma there -- quarter? how color second more on any positive you on then guys incrementally, Or color just per been pro either growth call out And in advertiser you thinking on Curious how shaping up? any the have or if demand trending anything secondly, that's to more how

Sean Reilly

April those firming for feel really did of, us. up where what little start it I'll sort like the should. QX was we second in June, disappointing May and numbers going solve into and we come Well, April. would And when because point in the a Sure. we to call, I with highlight is dug

Verticals.

national. out estate, more insurance, So it real to to side, weaker be tends on the again, be local more I and tends which which, singled

gaming. traditional we've going customers. that talked casino late, regional of online gaming, what's to not of necessarily about and on with is course, the tends one That Another be national our

a So little off continued tail that has bit. to

up quarter-over-quarter. up On very, also And for strong, be particularly were now, the just really strength services, Restaurants continues us right quarter-over-quarter category. XX% X% our side, largest service carrying to very strong.

the as sort just are is that the book steady those of the of rest goes. ones So highlight and she

Operator

with We will next Richard JPMorgan. Instructions] move with [Operator Choe

Richard Choe

those on bit just little questions. I follow to wanted up a

comments, the Or programmatic looks the given be to non-national down and part driven in doing programmatic Is the better? by driving national softness? for kind national side. we is the should that So a on XQ really it of mostly online like programmatic of this the that's seems looking the be gaming

Sean Reilly

what's programmatic it don't of spend, in we book. businesses a channel then our terms X the So of all terms on I be might have of programmatic is is quarters going in can't there. way, the on national. yet. recession all And ad declines, with of pin just We programmatic our definition national accessing straight local by If national

-- it's seeing. sort pulling of national that back, few really a I are it of accounts is large think, what no, is So you're sort

Richard Choe

the is I side, But kind still year comps anything it lapping that local strength. the the given it's assume of kind on there how in pretty been, healthy, strong local tough And particular the are and but last growth was just it. of side? on just going Got

Sean Reilly

our with local on a base what would Street. management, not they touching In Main deem they're seeing recession

just local mentioned, I caution a right, bit of to local there. tough flashing a you when that caution a of just, mentioned, buying. mentioned, they And little And we They're There a jitters, or Street. as But Main out as bit is ad it spend. But as little nothing of feeling our be still little bit caution just red. to seeing buying. comps seems have customers. little they're However, comes of still do on bit just are amongst I

Operator

I time. over we turn this closing call the any Sean for remarks. like Reilly back And show questions to no further at to would

Sean Reilly

and time, convene all will again quarter. you thank for Thanks, next Well, Nikki. your we

Operator

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

at You time. may disconnect any

Lamar Advertising (LAMR) 4 May 232023 Q1 Earnings call transcript