LAMR - Earnings call transcript Q2 2023 | Lamar Advertising Company

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

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

In the course of this discussion, Lamar may make forward-looking statements regarding the company, including statements about its 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 second quarter 2023 earnings release and its most recent annual report on Form 10-K. those to you refers documents. Lamar

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

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

Sean Reilly

improvement growth Earnings Britney. that Call. QX. basis and welcome into Quarter That on to shy you, basis EBITDA from Lamar's quarter acquisition-adjusted and with on an combination adjusted Good second accelerated of all, just revenue had X%, an from We good of an XXXX the morning a discipline translated solid Thank expense acquisition-adjusted in Second QX growth on side. also

logos, activity. the QX, corner hesitation is quarter. contracts. airports businesses, each up was our and renewals in the into on turn the part Revenue customers for new slowdown Unfortunately, There of we a to transit and pull as of trigger more on the observed billboards we in

we programmatic top shaping hurt as with the XXXX. results also we the it month, but the softening that mean balance not through not year. weak fewer that the As current rippled combined of for would second from just line the dollars, is the channel booked That of anticipated up half

adjusted of the of coupled to you we have acquisition-adjusted release. full side, as approximately growth approximately for AFFO our now seeing revised expense per year growth of acquisition a with range full While Pacing's on X.X%. we $X.XX we're X%, year in year like still guidance full to revenue expense saw what indicate share, our $X.XX

we included that still the the included than at amusement/entertainment, gaming, revenue set outlook just XX% and we when financial. the full thought we bottom line not second was we as of guidance categories QX, year service, in Weaker education insurance. and quarter February. half would to So Back as well in categories are on which real strength the pace growing, estate up is more

lesser Southwest was Coast Pacific quarter. was Midwest, and region Atlantic X.X%, Local saw in QX up for national which and growth, to a X.X% Northeast The revenue good extent, and revenue includes up the Northwest while Gulf lagged. regions the

XX% QX Digital our X% accounted Programmatic sales, which drag, on up for same-store saw been nevertheless, of improving has we for a revenue. but for the digital June. down X% were quarter, but trends

organic track had we and meet end, billboards X,XXX conversions this on are our we quarter of approximately of As to operating, year. XXX digital goal

has anticipated M&A quiet half relatively be. as the been on front would we first The that it

We Happily, are but competition the fewer do now, get market. for still assets there in is for pursuing sellers the we are there to review. also less deals,

million. total $XX The XXXX As we for closed volume XX, a pick XX likely the work transactions had June a we of deals to of dollar under contract. half up as of have through in is bit we second

and For is somewhere million. the likely be $XXX year, spend to between million $XXX acquisition full

over turn the With to that, you Jay walk numbers. will through it to I

Jay Johnson

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

second We growth continue during modest portfolio to experience the our in quarter.

year the the to revenue the declined forma XXXX. growth did second AFFO pro second in revenue increased quarter acquisition-adjusted the which interest rising XX.X% due However, of period QX. X.X% in rate year-over-year In as same it quarter, last was comparison a in environment, from difficult against

We year operating national the advertising. growth exception X.X% low now than contracted expense with in Acquisition-adjusted around acquisition-adjusted slightly single the the in which to the basis. result X.X% quarter, of and operating their an increased of in on exposure digits, grew the regions better was Midwest, full to for as billboard expenses second a Our year-over-year Northeast anticipated. come expect which

XXXX, essentially which Adjusted increase EBITDA quarter in was quarter strong the acquisition-adjusted of adjusted $XXX.X increased On was which last the an X.X%. $XXX.X the remains flat inflationary only basis compared well to was for company's remained XX for adjusted basis, X.X%. XX above contracting EBITDA despite year, an levels. Adjusted margin last EBITDA over XX.X%, million at months, million QX X pressures to the XXXX. EBITDA to points And margin from pre-pandemic

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

focused the decline cash the concentrated the in AFFO acceleration model our billboards and experienced across national We heavily business business Local for in grew local ninth against a consecutive on of both resilience $X.XX portfolio. and local An our underscores $X.XX interest with increasing regional markets. of X.X%. portfolio sales headwind quarter,

for growth QX In time approximately the X.X%. and saw programmatic, since sales includes in national increasing which year, last of the addition, regional accounted we for our quarter. of second XX% returned Local revenue first to billboard business,

front, million for quarter maintenance million, was of expenditure the $XX total CapEx. capital the On approximately spend including $XX.X

total expected, half year, CapEx with maintenance totaled million. active And CapEx $XX of Volume extremely acquisition pipeline of X the $XX maintenance. the following years was first our million, the as year, for moderated of full M&A which the comprising on $XXX has we about For X/X in anticipate million front.

closed a in $XX we million. level $XX.X XXXX. of have XX, and quarter, totaled approximately more acquisitions on of should the During activity regular million June Through acquisitions

our Now to turning sheet. balance

company's Earlier revolving credit and bank the year. amendment by in best-in-class in and have well-laddered the XXXX. we was our week, and maturity continue July received our on of closed the have maturities of $XXX We a million group, structure. extension followed on well facility, securitization A schedule The matures which now debt this transaction that July by existing focus AR in Loan into February to XXXX, we no Term capital the

average approximately X% average maturities fixed Based weighted at end, a income no have interest we our outstanding was until debt debt years. maturity on addition, rate XXXX. with of X.X In weighted quarter

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

secured of compliance coverage test leverage cash debt interest with in in end, current debt near year and and current Xx debt year total to maintenance guidance, Xx adjusted covenants end rise the over and EBITDA and against quarter interest. both our rates at X.XXx we're X.Xx, was secured the the Our sharp past based should on and interest Despite our comfortably respectively.

strength the on total sheet At debt had under ability and approximately not financial end $XXX $XX.X $XXX exemplifies of of important its and to debt. securitization. monitor cash million do of the revolver our in $X comprised our an While available interest AR covenant agreements, have metric. do of million of million service hand, in balance we million availability the company's of the interest this coverage we our the quarter, on any liquidity, we coverage Healthy

to rate This includes $X.XX $X.XX $XXX year share. hike morning, $X.XX and we year revised in cash per Full XX guidance in share and expect for interest our year the finish last versus full basis an point a million, additional the headwind now September. totals year per between AFFO and guidance

dividend projected share come the is declare in a CapEx maintenance quarter This well. communicate are to And to be cash dividend. subject is for $X.XX dividend touched on the our will $X.XX and recommendation of Management's third the quarter. this Board we as Board's decision second approval, later per will recommendation month. $XX million. taxes around I a of in and earlier, budgeted per We finally, $XX to share As cash cash million, for paid

still The a policy forma Again, we year, growth foresees $X accelerating And company's the dividend remains per XXXX income. full distribute of with dividend revenue in of XXX% had quarter. results subject share, Board also management our to taxable solid to for the pro approval.

efforts are and focus our particularly continue on the the expense year. we'll half around in We to pleased with second of control expenses,

the turn over call back I will to Sean. now

Sean Reilly

focus Thanks, expenses. again Jay. again, And on

recall, our again, expenses last finish pro expense at And expect anticipated QX, on we're growth year full forma you year running X.X% approximately around Year-to-date X.X%. call, the with we forma. we be consolidated full up year As through pro X.X%. would to the

A second XXXX, compares and of than more on the before half I political in last The of million. year, political a word a little nonpolitical year quick that $X get was back million, $XX.X a the to half impact question. about

creating $X-plus it, replaced million have is headwind with weaker would but back we macro, it stronger in not So a a so our macro, half. this With much.

Let me touch programmatic. impact of quickly the on

it going to mentioned, has full It XX% a we've or down programmatic last XX% be As year year. looks it's our under for for like channel. year, been the disappointing

impact on on plus a June. QX, digital the same-board national And actually drag, mentioned, for book. even you was our of was I If had up exclude it it Similarly, an impact X% X.X%. with programmatic as programmatic as it our for

we look X.X%. you national was as up If mentioned, at QX,

national And national programmatic, in If the actually you we of exclude down full X% to to be was for X% up the X.X% year. do expect impact still QX.

I XX%. business. up Education X%, our was almost put mentioned XX%. a That of about category is strength financial them. particularly and strong, those up numbers weakness. X%. Amusement/entertainment about was categories and reiterate some few of mentioned I'll I and was service, largest of around up up

a insurance for down down gaming was XX% On little than QX. to laggard and more more down Real be a us, downside, little the a X%. than almost was in estate continues X%

All right.

it open can questions. you Britney, that, with So up to

Operator

question first will from Ben we Swinburne with Instructions] And [Operator Stanley. our Morgan take

Benjamin Swinburne

year getting at questions. of natural its you Sean, we think the -- 'XX, the is environment it's the probably of heading about given the kind way most but is feels landing. hearing which Do share field of It's through economist local consumer first as your accelerate obviously the a am sort working sort think us ability of interesting got interesting hunch you'd towards Or some, for just is from people's this an all, in that couple what little of up. this environment else we're on unprecedented think I like business. the anything question. the business that guess you It soft kind I the is are confidence might I business an better. be rate system? how That's we've of majority not of lag to shaping for a this the with because

Sean Reilly

question. Yes, sure. Good

yesterday, pressing. fairly Of and read out, we it came was note that your course,

ad spread put call single level. call finger I it softening. field. general softening. So our And spend local I a And not -- what hearing of can it's And call has like that's say even Main general a wouldn't recession. recession. would to we're on wouldn't just that call a of I it we local -- sort a thing. would that would sort I it just Street has the this I a from the it

to seemed a as -- now. customers that it's relegated mentioned, well. was to it the are clear and I right is just it on it was as the that us they national, softening Just call, And level of little local become that have us to little last to -- spread hesitancy a

Benjamin Swinburne

Okay. to quarter sort the And reiterate especially QX? a X% I little on mean was actually X% this you'd the was QX Anything year add pretty national. ex nice surprised expectation. improvement then programmatic, I to you to positive after from hear a of down good,

Sean Reilly

seeing and this there Yes. put little one touch year. the customers on there. Again, they gaming finger their aside, they the that to disappointing folks wouldn't insurance really Activity it, single is thing. is a online out still being activity those still categories our any and We're would okay. if customers, But ask as you

wheels fall out. sort coming again, bit. bottom seeing not softening a We're So any that's off. little It's spread general the of, a just seeing we're of sort not

Benjamin Swinburne

an you that delaying Or the things? be maybe of movie area are. Okay. this and is grand factor releases. don't a which they Warner strikes? have as book on the your strike think obviously, of their how going at maybe But of small risk film and we morning, should that listened just entertainment labor what some sort in I thinking amusement, XX%. and in scheme about you big know is don't that to, And Is lastly, of then pieces but call in terms kind that just the TV had I

Sean Reilly

Yes.

movie So big a your our sort things It's release X% business. and of is book not roadside It's tends attractions, of which for gravitate us, amusement number fifth parks, stuff. New that. over L.A. for category for quite theatrical the to really us. a one, That of very not frankly, presence York, like It's concerts, largest much little towards us. it's your

Operator

next our with take will Citi. We Jason Bazinet question from

Jason Bazinet

on maybe think your guide I line but year, it, originally, the X%, I I I revenue for expectations missed growth. old think think, the top was AFFO

Sean Reilly

Correct.

Jason Bazinet

line growth year? top new for for expectation What's the the

Sean Reilly

the year. for is $X The approximately new expectation million

Jason Bazinet

X%.

Okay. right. then one All Yes. And can question. ask I

only over that number, can big book sort X% your change in I One is to back not time. didn't was the of a on? of of always verticals one I show it's or in But where about this your think of I've it's cyclical but business, this or the things show top And marveled such your insurance used business of Is is of insurance to going X% that's be time, it a happening more historically. something XX up insurance is the going -- those XX top Or as going sort up category? things drop. not

Sean Reilly

accounts. our So it mind on you're was insurance, keep bit X.X% right. big with predominantly year, book today. bigger. in a of What Last It's about X it's national little goes

they'll it, up periods of about have they'll come just your So not on year. last big finger been. in in as we're our quarter as third they in It you one was great they of And out they're and where swing book, the book those out. go our until in, can put of

We said, it's on Like expect the back. accounts they'll primarily come very level. I to national large

Operator

Instructions] [Operator

next We'll Choe with from take question JPMorgan. Richard our

Richard Choe

stay I hesitancy, said go is people that does bit you follow that. if, I guess, away there than little follow-up guess could And a more wanted up have hesitancy side. after I the the think? local to on I a economy stronger

Sean Reilly

going going question, day, it. a extent anticipation good to to to are that to That's Richard. it's of well. as to be headwind, certain would Yes. a feel our feel as end At a extent the the tethered we're to tailwind, we're the a for serves that And And And GDP extent. it sure. we the

local little see some would that then led be performance the I So the corner strength by anticipate that better, year, into that a of assuming macro us. turning good at next you'll gets out will the level. And

Richard Choe

their parks the little Got levels. they entertainment, theme of Are amusement I pressure can that you on spend it. seeing are and the all more And changing guess high see? a bit at some very from

Sean Reilly

park. much Dollywood the theme are fly These Pennsylvania mean, and I so happens in about and you It's necessarily Hershey, more and that with Orlando not No. what regional of but with more drive theme in because not Hershey what in the what like when Branson, happens things Lamar kind theme are parks happens destination, World to. Missouri theme Disney in you think parks Universal. parks, it's and

Richard Choe

for one Great. And last me.

On low? very seeing of low that's there -- been getting the the year other advertising Are to has the the expense, direct categories. relative expense that pressure you rest in the or

Sean Reilly

Are you our expenses? talking about direct

Richard Choe

yes. expense advertising direct The line,

Sean Reilly

Yes.

you line at So there's you when you a you good with know about that ways for followed a control. us at one, about couple expense Lamar. direct are while, Number There if pretty revenue. think of think expenses the that that need flex some to we're

things will flow in sales then revenue commissions, it like So in if management expenses the to like management well. a down Those come leases. anticipate, And hitting our are to than extent revenue goals, little not coming is we will a through we're bonuses. lighter as lighter things little share

also are related out our ERP some And that with there's the low-hanging conversion. well. and some the There's we're field we're what then benefit of of realizing expenses been had. filtering And as that's some to that the IT we've into initiatives fruit doing

side. expense things X on are those helping out the really, us So

Operator

take will with we Avraham And from our JPMorgan. next Steiner question

Avi Steiner

Just one follow-up.

the revenue think AFFO. guide guess, had now you is the in full that for I I embedded growth, mentioned year X%

plus that plus the I on X% X% now? of organic we're ago, mean side inorganic. quarters you as the think a disaggregate X% Does would couple organic flat

Sean Reilly

acquisition organic. pro adjusted That forma. X% is It's No.

X.XX%, more like X.X%, acquisitions, you the of it's If like that. going to impact something be include

Operator

further I queue program back closing have this the over in remarks. to or the turn additional at questions We no Reilly will any time. Sean for

Sean Reilly

listening, Great. next and Thank you, quarter. talk Britney, and thank for you all again we'll

Operator

This does conclude today's program.

may disconnect a day. have time, at any and You wonderful

Lamar Advertising (LAMR) 3 Aug 232023 Q2 Earnings call transcript