LAMR - Earnings call 4 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, objectives, including with respect to the amount and 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 also identified important factors that could cause actual results to differ materially from those discussed in this call in the company's fourth quarter 2023 earnings release and its most recent annual report on the Form 10-K. those to you refers documents. Lamar on XXXX Lamar's on required was the which this SEC information Investors section website, release, the fourth furnished and Regulation www.lamar.com. available the measures quarter by financial G contains non-GAAP X-K Lamar's earnings regarding is Form a of to morning certain

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

Sean Reilly

QX morning, XXXX and you, good all, and to Savannah, Call. Earnings Lamar's Thank welcome

was growth what while on I it the be. we would characterize as would revenue hoped XXXX solid, whole, not

for prouder As a a controlled adjusted with managers front. not company, ended margin spend, I environment we well could sales our in successfully distinguish navigated local XX.X%. of EBITDA the year an expenses recession us incredibly to record and throughout uncertain macro encouraging at the ad be for the helping XXXX. themselves our and momentum on in national year, Meanwhile, how team they set company another we

on accelerating X.X%, were and any month on quarter, Expenses, meanwhile, X% for strongest for on of quarter revenue acquisition-adjusted result an That For the forma with year-over-year in December, acquisition-adjusted of each an grew in the growth pro month our fourth flat translated of growth X.X% EBITDA basis, acquisition-adjusted the basis. basis XX.X% margin an into EBITDA an for basically again XXXX. quarter.

we AFFO the top exceeded revised for the end easily range per share. As release, a in as result, our guidance noted of

interest more that original about headwinds basically faced. last range an provided fact, to the In that AFFO of the have given we that share was what Jay we at $X.XX guidance say will the achievement February. at XXXX, rate per midpoint of for were we

off AFFO per issued increase to end of, same-store that of almost towards a in $X.XX upper guidance basis tracking the to share. for the we share. outlook are good in give of the into approximately that Also expectation $X.XX range a saw, is that Being to of point year, and start, take, X.X% are of That XXXX on equates we you an we As two months embedded per or for mid-ish an said, growth revenue X.X%. range.

are expenses business more should that that same. acquisition-adjusted comp X.X% comps in basis. on we the note should growth expense received roughly of up business relief I be the Outdoor grants as expected result like growth a expense COVID the last The Consolidated Transit of to be year. against some an is we higher

up Retail, categories QX services, insurance and Strong backed QX. gaming and to for somewhat. included entertainment. Back and automotive amusement

of weaker the was was to categories indexed X.X%. local which over Some those national, down quarter, in up X.X% while

into seen we and that local national slightly continue to the first national be have quarter. We XXXX, down divergence expect in

by $X of be Programmatic you into in would has Political, year. ] about was a versus should off spot QX, momentum a XXXX. political that the way, XXXX. up fourth off in expect carried [ of nice Conversely, quarter million was and bright XX% political in tailwind back the half XXXX, as an

-- I'm XX% Digital XX% on but was slightly approximately in it sorry, versus accounted XXXX. basis down in was same-store aggregate billboard XXXX the and of QX QX up for billing, a

likely conversions a you through internal somewhat and screens and have XXXX. past see in digital several over We the rollout years, of added acquisitions slower will lot a

the and XXXX. XXX targeting roughly this in deployed that organic between XXX than somewhere are We additions we XXX year rather

expense to is a that ] often year do. the $XXX expect, for purchase acquisition front $XX we way acquisitions total plays those We spread a year [ as market, than the we use believe to term significant on price the we deals to be down floating million, rate completed XXXX worth and loan our XXXX say our exposure plan for coming is likely of A. Doing the on interest XXXX XXXX, If our cash assets balance out fewer us there outstanding so, our bid/ask are of there in opportunities beyond. a and reduced our would quieter to a flow XX $XXX have QX. position free in including and and million For chunk our well million of pay our to about more will plans Jay for come for sheet. that we any may way

Before XXXX, I our set have the up year out-of-home. again growth in Jay, of believe want has best thank employees it to in for their over us for which really XXXX. I team to another once turn do I in We efforts

Jay?

Jay Johnson

you had adjusted and quarter revenue, EBITDA internal Thanks, everyone, thank and Sean. Good AFFO. us. We fourth our pleased exceeded with results, across and expectations are for joining morning, a solid which

growth since improving second the basis. AFFO XXXX, the share fully achieved was quarter The $X.XX to per on strongest X.X% of diluted a

ended environment, In outlook. company our a high the addition, of despite year interest the revised AFFO challenging rate above end the

X.X% the last period increased from In year. the revenue fourth same quarter, acquisition-adjusted

an XXXX fourth historically an with for margin acquisition-adjusted Adjusted XX.X%, increase the to basis fourth the high As company of only the quarter increase operating remaining levels. decelerate EBITDA to million million XXXX, $XXX.X quarter by at expenses the basis was in XXX of of acquisition-adjusted which continued basis, X.X%. EBITDA $XXX.X compared XX expected, X.X%. was adjusted and was On margins The in strong expense increasing points a quarter. expanding maintained growth over points

flow period cash in quarter, year. XX.X% growing last same the improved also Free the over

in an growing well billion margin X.X% basis XXXX, from grants $X.XX the ago. which over during $XXX.X relief following XXXX increase business compared For due in year, received was acquisition-adjusted to XXXX. revenue million, basis, primarily full COVID-XX increased driven This Billboard growth XX.X% represents Adjusted in to airport EBITDA of a strong the was same in Adjusted was versus X.X% the an year. period expanding expense for points partners. our the year, operating billion XX year XX.X% full as on expenses with EBITDA acquisition-adjusted approximately as X% $X.XX controls our to

share, with guidance. XXXX company The revised top AFFO end $X.XX per above the was our of of ended full diluted which year

For cash which million despite interest This the December full share was ended AFFO. the $XX.X approximately a AFFO year, compared XX per year to $X.XX of headwind growth increased increasing XX, to was diluted months X.X% share per XXXX. for

regional quarter. and for accounted of revenue fourth approximately XX% the Billboard sales in Local

for consecutive regional While grew X.X%, quarter, quarter. sales the our increasing declined, in local fourth XXth X.X% the and National by business decreasing

the total And included million, totaled On the for was CapEx. CapEx $XX.X $XX quarter CapEx. of which capital million year, maintenance including of $XX expenditure $XXX.X the front, million full spend million, for maintenance approximately

to our turning Now balance sheet.

a a our distribution cash plan the no Loan remaining have and A outstandings to revolving We under maturity flow amount until maturities term the our This anticipate to in A facility. substantial repay on well-laddered of after balance use a draw with XXXX. credit schedule loan any year, through debt Term repaying we

of In in addition, through half matures the the likely and company second Loan most early After an in July the year AR securitization XXXX. debt Term next the until XXXX, AR securitization, no will A we in extension our of repayment year. extension maturity or that and address this full maturities will of have

approximately total expect defined if acquisition we Sean end year ] year planned, net leverage credit as less with below materializes under on or target end while And of EBITDA below XXXX we X.X remaining focus active sheet a This net to $X As Xx our investment debt-to-EBITDA. billion balance should Xx debt as leverage our of on at the resulting of front. the will agreement. the facility mentioned, [ high the in our capacity, well, to position range company

average a our Based is weighted interest with approximately rate years. X% outstanding, on average debt current weighted of X.X debt maturity

total a remains defined the our have of debt amongst As net EBITDA, ] level [ -- facility, reported to in lowest ever leverage for we X.Xx the credit which company.

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

over rates Despite our today's adjusted the sharp based remain EBITDA interest. coverage and cash on year interest guidance, rise the Xx past in around should to interest

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

to December on Our At liquidity equity of revolver. the million capital approximately million $XX $XXX and capital strong enjoy company under to million $XXX access had to hand of as continues and of cash the we markets. comprised access debt XX, our liquidity, and both remains available

we press full X.X% to AFFO morning's $X.XX per this share, provided release, of $X.XX growth year AFFO In XXXX. to X.X% guidance of reflecting over

more this level. normalized reacceleration also a We expense year growth returned in with expect to acquisition-adjusted operating revenue

in several quarters I repeat $X.X approximately in of This guarantees, we and from partners credits our minimum in and COVID-XX not relief grants the XXXX. XXXX. against in received first of our As mentioned, resulted million third will primarily airport

policy if fiscal from for later to interest, we benefit interest cash may year. less this begin stringent As rates short-term decline

our ] remains is keeping million, guidance SOFA in at unchanged flat the year. conservative full However, we throughout are year $XXX [ and interest assumes which

Our CapEx are for budget in be in cash anticipated to the year to taxes $XX million. projected is and approximately million at XXXX $XX maintenance come

our dividend. stock per annualized which a Board dividend approved Directors represents yield of price. Yesterday, share, on And quarter closing finally, based of yesterday's $X.XX dividend our first an of X.X%

dividend our quarterly approval, Board income. dividend our of to subject company's and is remains distribute the taxable XXX% reminder, a policy As to

early fourth Again, strong as we in well and as experiencing the quarter our momentum are are XXXX with to finish performance the pleased we XXXX.

to the Sean. turn over I will now call back

Sean Reilly

it cover up and questions. Jay, some Thanks, metrics for open and then I'll familiar

In underperformed. to and the pro that outperformed across over-indexed Coast as regions forma terms the Gulf you those and like under-indexed of Central growth expect, Atlantic Northeast regions, [ might to performance national ] like regions national those that

Jay We XX.X% static year as QX, mentioned, revenue. of while our of Digital X,XXX represented the faces. with digital our For revenue, XX.X% represented ended Billboard

for a remains was in in slightly on the down basis, it aggregate while digital the mentioned, I QX. As up year same board billing

national local business national regional XX.X%. split, was QX XX.X%, of terms programmatic In was for local

QX, programmatic local in mentioned, X.X%, was Jay was X.X%. up down As national

on of national XX.X%, year, the of on X.X%. increase our the of programmatic a was front, programmatic regional local year decrease national representing an and XX.X% the local front, represented business, X.X% for For the the

categories I mentioned strength. of

Relative up X.X% national, those gaming XX.X%, wrap to by Relative over-indexed down some X.X%. me category, of weakness, categories, X.X%, which strength around X.X%. Let Again, service up down exhibited explains up some down relative amusements insurance X.X%, automotive, categories, which numbers weakness. their that. was retail our and

open With questions. I it for that, up will Savannah,

Operator

Cameron Morgan McVeigh come question first with Our from Stanley. Instructions] will [Operator

Cameron McVeigh

Thanks, a year it's -- Jay. political Curious on in this as you today's vertical guide from macro well. year a And recovery as Sean. standpoint. Thanks, a mentioned, standpoint

you could would if I size curious that impact. So try be and

Sean Reilly

Sure.

field and We with up don't macro. touch leadership with start in points really really our seeing, we the our on then come with that's me guidance. what and the with Let move actually around we're make -- how pacings we and to start our we assumptions

Regarding it political, to show up late. tends

that is pacings spent yet. good reflected be of political most I to a money of So that not in By would it should amounts year. guess all year. are The be -- our record accounts, this going

back looking a tailwind we half. nice So are in for the

Cameron McVeigh

And And impact do on then margins I just point, expect account initiative secondly, growth, that was it. timing the provide longer-term from you a and Got in where size guess, normal conversions and update And to both, just trend term? to leverage you the business model. I digital ERP on trying both into near terms within of in the the top hoping taking operating line an perspective, could margin margins. on

Sean Reilly

it hit the tip the spear turn it going I'm Great. then Jay. He's that over I'll on to of to quick, initiative. and

spend are at for year, -- or this for that peak initiative. approaching we, So

So growth, corporate think expenses to that expense little this our our when of in you year. a you're going see about

forward, the go growth. one of expense on headwinds we that's As the

will XX approaching dividends alluded a live you pay XX, and it date certainly good we're months from as And I'm it. But feeling as now. we go about speak, to,

over Let me it to turn Jay.

Jay Johnson

as So is recall, really -- two phases. the really Cameron, it's may rollout in you

of ERP April the think the sort to, the this X. really of And phase, first is that live that go of operations, back is house The on of which finance, that. automating all alluded you Sean

go we'll our And result it began peak year see journey labor quoting the a house it, billing, We operating at so last from sales XXXX initiatives mean, this all and The and we of through year, XXXX of the benefits the expansion is that our we perspective second way year. a elevated of mid-next alluded live configuring year, the expenses price is these and have year, of to then engagement did business, have tail to, -- a have these next as front and corporate. really Sean as should a phase result initiatives. off. a Because we'll in as margin begin little should this I of

Operator

And our next with question will come from Citi. Jason Bazinet

Jason Bazinet

and the quick of recasting to your growth you for total I just year the just question. acquisition for or my expense Would reframing revenue guidance ones growth That's adjusted? have two through Jay. first opposed lens mind as total

on second, swing AFFO to that factor growth is then for sort of range? sort And is the say the that fair it organic year, in key range of of terms the rev on the

Jay Johnson

Yes.

So I'll one. take first the

the there lot. terms pro In of forma between acquisition, difference really a isn't and

may we going to divert we're be A. recall, acquisitions muted down year pay to this to As you Loan are cash mentioned going that that free flow Term and

$XX I right million budget think approximately the of acquisitions. we in now, have

of up point, national front. So well. more and about really been a it performance it's business. the think you really, XX growth that customer, really local has straight organic And We've quarters think, is around year, The business when national growth. hold on continued our inflection next on little focused challenging had to the I is

Operator

[Operator Instructions] Richard next will come from question JPMorgan. with Choe Our

Richard Choe

national programmatic, of to kind back seeing expect do to follow as of or higher you was this finish, Do drive some of up shift wanted Just think terms what in that in programmatic that? Or a worse? on year? kind flat do strong -- just think you're coming that bit then And commentary. as it helped is better relatively gets in you little the 'XX? a you it And negative

Sean Reilly

Yes.

hit carry looking momentum Richard, year. was programmatic the the represented for So the first. I'll one QX we're to in really throughout that

platform. expectation So our is programmatic increases for is what low our double-digit

a had into we one and encouraging. come and often goods, that that see would that's platform, vertical really be we the very important it's QX, and packaged In don't really

and utilizers big you know, not As and out-of-home. of typically they have budgets far reach they're

very in was that encouraging So QX.

I national general the think I'll think we and see good we'll to for the what looking stabilization. And stabilize, to goals, take that, national would for the such hit our because at which that year we're we're tenor, is going we if performance call seeing In what through and I'm that are what front we local get just regional can I sure. seeing

Richard Choe

Got of longer-term allocation it. then kind question. more of And a capital

incremental if comes stuff the kind As we year? beyond environment pay think this and how about near-term your cash you should stays generating down, M&A you'll of leverage the floating the low that down be

Sean Reilly

team, When step about -- away whittle will we're to, let's this accelerate. to that to as Jay So see reasons, to XXXX mentioned first consolidation beyond, sheet out call I a decided so and conscious next, to we a -- prepping take in think Term 'XX a beyond believe the XX over I And down is one we're debt as and alluded months. that I happen and the was the the for as little going and A., our and balance at of going it. XX decision what think it, we pay industry, you're

Jay Johnson

year calculated sheet, expect north the leverage facility will credit billion year. focus we Richard, below this debt as what as my under the down comments, $X we and on our Xx EBITDA mentioned you tick if to this generate may in recall, I of pay balance

of we means investment that $X an end of leverage and exceed is range. of have What we the north -- not could our billion capacity top

So front. come sheet excited positioning pretty we acquisition transformative for think the we're could about be to on balance things what some the

Operator

any I'd time, like to session. conference conclude Reilly this that remarks. back At question-and-answer And closing will the to Sean our for turn

Sean Reilly

you Thank interest you, Lamar. your Savannah, all and thank in for

May. We visit will a lot. come again Thanks

Operator

may And now today's Thank conference. you you participation, that will your and for conclude disconnect.

Lamar Advertising (LAMR) 23 Feb 242023 Q4 Earnings call transcript