LMRK - Earnings call transcript Q2 2018 | Landmark Infrastructure Partners LP

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

Operator

Good day, ladies and gentlemen. And welcome to the Landmark Infrastructure Partners' LP Q2 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Following management's prepared remarks, we will host a question-and-answer session, and our instructions will be given at that time. [Operator Instructions] As a reminder, this conference call may be recorded for replay purposes. pleasure the my Mr. over now is to conference hand to It Choi, Relations. President, Marcelo Investor Vice may you Sir, begin.

Marcelo Choi

earnings remind Financial will and are call cause Officer. of on to that I overview expectations. risks and take Landmark all George periods Chief quarter to your welcome include which participants uncertainties Brazy, actual you, comments of like today statements, and you Today, Thank Doyle, good we Officer future current the our Executive subject to to are Infrastructure will morning. the today business, could Chief questions Partners' Tim in factors and number will our materially would and differ following an the our certain results operating share We'd and uncertainties. like call. financial forward-looking we also A second to Presenting from presentation.

risks, partnerships' SEC. documents you discussion For encourage to we complete file the read on of a and release with these earnings the

we to measures Additionally, flow GAAP Please of definitions non-GAAP non-GAAP call. reconciliations EBITDA, most as their that, and the during distributable over such refer EBITDA and measures and Tim. measures. call earnings public adjusted And to filings cash release these the turn for refer comparable with I'll to the may to the

Tim Brazy

strategic give our Marcelo, much. g Dividend. update an you on and and various our about activities our our our results include markets very thanks and Landmark quarter Today, we're talk infrastructure going second sponsor, operating financing initiatives, to outlook,

in of portfolio. grew the growth of Rental posted strong months quarter, and second quarter XX% acquisitions the financial our led profile and XX revenue we consistent the the year-over-year For last and by operating we completed solid results. another

low. growth to XXst, to by their extremely XXX Our communication, assets flows deliver $XXX the million. increasing sustainable rents strong. quarterly seven power Those wireless increasing our July our results and very sponsor quite growing escalators, of quality annual through high million comprised the Year-to-date well-positioned We acquisition continue generation XXX at contractual we're the acquisitions. advertising markets, of to portfolio in we've lease of while remains another and were on With opportunities in partnership. steady perform churn from for total cash and consideration outdoor and acquisition had contribute continue consistent, XX renewable assets quarter acquired level, expected $X.X activity assets assets. to are At busy approximately is driven

XXXX. contract in increased As of XX% June than signed more XXth, by half first volume acquisition of year-over-year the

partnership to prior partnership. progress outlined partnerships, and grid multiple calls initiatives for accretion assets efforts focus alternatives to that opportunity cap be attractively significant dynamics continued acquire to see business drive on rate we on overall at our focus a the in Our market structural regard on continues are of can our continue focusing strategy, the for strong. fronts, partnership. we've on to With flex we're growth assets higher the and development very portfolio priced the We international support the substantial making to number on and our strategic opportunities,

look evaluating in over activities countries the We're year. U.K. million since to First, of XXst joint Through we year, regarding Europe of making Western and advertising substantial many invested second our this see our also inception European in European to we've this other acquisition and there. July half our development continues grow western expand outdoor we acquisition progress growth approximately in opportunities portfolio anticipate the and venture, attractive considerable time. $XX and

leverage our to markets. portfolio estate continue we to real relationships activities, Regarding additional new at footprint, to our LMRK benefit will evaluate other growth. that We're looking partnership continue and and accretive expand existing strategic drive enter ways

great be to regard a relationships we owners. With and select initiatives, to in strategic partners with specifically and to of make look one both to continue pursue FlexGrid, Ericsson, estate the North and in partnerships opportunities. number technology existing strategic proven in our we partnership partners, for additional of property successful U.K. tenants progress very our America real continue Wildstone to Our areas have with

we're three and transportation before, mentioned initial we've focusing As municipalities, owners. estate on real segments, commercial authorities

very Our to and FlexGrid well potential solution expand. has the been pipeline of received opportunities continues

stakeholders. in on we ongoing tenants solution. negotiations very deployment infrastructure MNOs to support the networks. sites, ranging upgrade It we mobile solution quarter needs be continue of those way estate regard source equipment Similarly, Discussions FlexGrid host and infrastructure other owners and three controlling with attachments deploying finding the the strategic existing the in are massive without we is telecom challenging see needs that customizable is needs the and equipment specific to they all to installations. collocation meet solutions serve. meet sales for parties challenging for to lease FlexGrid mobile of to FlexGrid meet the for can highly find in to as the working significant existing it The third and can in anticipate in ideal appropriate currently can FlexGrid network of wireless that that neutral the a ideal all ongoing more an network ways With starting needs deployment objectives involved. and development operators With significant a densification small both of growth method the are two programs as deployments FlexGrid to expect the cluttering and the multiple of and our solution real and by of from be on LMRK. of and densify the an for they solution more their the of to We're is municipalities and deployed network the environment MNOs infrastructure. infrastructure. interest several locations be The of are because MNOs operators, level projects leasing needs and rights focused the the it's to the solution significant meets deploy of communities quickly macro project

internally Finally, mentioned rate. managed regarding we previously, as our be structure, corporate ultimately our partnership optimal an structure we've think will

to we'll consider However, sponsor. did to as markets. to our we an that goal currently need a least with managed to to significant by improve to to EBITDA years we'll in after the that ongoing evaluate in and in very us approximately the was of we'll an be generate completed a for increasingly provided REIT two at cost REIT managed IPO, operations believe continue active the the within position believe that structure, to cover halfway acquisitions developments of years, consider $XXX internally in million Three able interim, the three our converting to we're opportunities with reorganization internally multiple to in next and be XXXX. we our structure We pipeline

we have the Looking and of review and that holders. us grow our provide remainder confident who'll the that business, development and execute And of the portfolio value a to purchase, and financial Large us call our opportunities flexibility long-term of the our continue partnership with the I'll with to unit the give we that turn markets we're to the assets The ahead that strong. our detailed financial to year, very this of for deliver over quarter. available growing capabilities George relationships George. we encouraged the of extremely pipeline business to clear acquisition performance fundamentals the by strong see. with continued be feel

George Doyle

you, Thank Tim.

continues and with additional Rental quarter through to by the Our first of growth. primarily X% revenue strong revenue driven portfolio well second activity. acquisition the perform occupancy year quarter increased in over rates this

the at cap range remainder to cap or we rate we call, the as been of are the higher in reimbursement we during have XXXX, XXXX. for to majority for than see as That of visibility rate G&A accretively the our given entire north note $X.X reduction earlier acquired capital acquisitions the quarter. of contribution capital sponsor acquisitions in a not that last mentioned QX June to were of of assets, opportunities million. the acquisitions quarter Tim as $X.X expenses this development did from our for reflected activity The per X% quarter, before and in direct rate acquisition a As significant remainder the the of year-to-date rather that contribute the both fully assets G&A pipeline higher We through The to XXXX. cap accretive. and our the of average deploy said, XX, targeting continue from anticipate month is reimbursement were the more our expense. G&A million of sponsor it

organizational quarter the costs items, implementation G&A year-over-year our EBITDA, to Adjusted change total a gain related ended We several acquisition-related X,XXX the an for primarily sites. out occupancy $XX.X expenses, non-cash of which at with quarter, of Our tenant increased last and of structure on to derivatives sites increase excludes including year. due unrealized year-over-year. second decreased leased XX%. the remained million X,XXX for rate the the to And expenses tenant quarter available XX%

continue churn the are $XXX with credit seeing of of anticipate course borrowing additional XXXX, We and under the our opportunities. to second we portfolio quarter minimal finished lease revolving over million We the up in outstanding facility.

in of three our outdoor had financing quarters, last November, changed wireless we our financing the communications with and in our of the advertising financing structure, renewables April, Over our in debt completion June. significantly composition the

at $X.XXXX cash weighted million, communication through Our annualized approximately financing, our unit or The of June, basis. debt swaps. is of been On its approximately average an distribution July on XXX% common interest $XXX fixed quarter $X.XX and attractive unit coupon the of per X.XX%. announced was completed XXth, debt hedged have pushed out, per rate wireless common second an rate of in maturities Partnership or rate

mentioned flat reported declared. the last catches keep call, distribution with until we earnings As distribution up on investments the to from we revenue our our plan quarter's quarterly

in quarter. Our distributions the coverage declared quarter is outstanding second divided on flow by average is as during defined X.XX units which the common distributable times weighted ratio, the cash

Our this issuance C preferred coverage units. of to ratio Series declined the the quarter due slightly

the acquisition which in and As in to improve ratio Series our guidance. We quarter our first July, on we C needed conference with million coverage XXXX completed capital the our essentially offering raised call, approximately will have we into of heading meet preferred all discussed QX. acquisitions June $XX

We take your questions. now will

Operator

And you, come [Operator Instructions] sir. our Raymond James. Prentiss Thank with of Ric question will the from first line

open. is Your line now

Ric Prentiss

Hey, guys.

Tim Brazy

Ric. Hey,

George Doyle

Ric. Hi,

Ric Prentiss

we I first keep million couple July. think just should that million questions. and for Hey, so $XX all was details; trying $XX of the numbers had about a splitting? to you done George, in How thought that Thanks my quarter And June mentioned quarter, I straight. the in those

George Doyle

Sure.

The in in roughly first first we remainder a And million. part quarter June, believe the about then would and they were $XX of acquisitions, through did $XX lower July. little million were been the worth of acquisitions I I March. think have

Ric Prentiss

that the Okay. FlexGrid first And as on does million, include that quarter capital well? $XX

George Doyle

it No, does not.

Ric Prentiss

Okay.

for FlexGrid FlexGrid was million $XX capital? for about XQ in XQ. So How had I much in

George Doyle

It pretty limited. was

was I think million. about $X it

Ric Prentiss

Okay. X% And you cap when the over then acquisitions? that excludes mentioned July was through June rate the

George Doyle

yes. correct, That's

Ric Prentiss

Okay.

to all quarter those trying straight. model the for Sorry, just keep details,

George Doyle

Sure, no problem.

Ric Prentiss

as we And it look some. I came at ratio, the think mentioned, as coverage down you

had Why What change the funded the came making the the pacing You C far in then the capital… as you capital in second-half year Obviously pacing are preferred slow but was the of slipping late then? on some they in now June, quarter, it, issue July. the really if acquisitions. the into

George Doyle

capital Sure. designated of C preferred activities. for that Yes, one is we development the raised

the we be the kick we as and are start pick fourth in of between revenue a delaying will to the probably in. planning activity of on the spending and up quarter, a so And those bit will as when on a comes acquisition developments, little when in acquisition then so developments money delay little well. some spend there that activity bit capital

Ric Prentiss

time you thought a and at but how than had something other actually that? assets cap the is think ratio. there there might that about the that the Is Tim Okay. and I we one been that you're And there coverage be point the should that some consider to you might selling you had there I on X think some, still the rates marketplace table, some help possibility, should thought in given think seeing higher mentioned, be

George Doyle

which value the market look greater basis, standpoint. quarter you our The at from than we've greater of generally it is we're acquiring portfolio here. Sure. the what asset the Much been on when course where assets doing of second an assets much during is a individual

for the assets sale. we of some So selectively of assets, opportunities essentially We end potentially held surrounding are did some capital, to the of there's some subset the venture opportunity of an of a are or dispose that dispose to recycle assets for quarter, certainly those at joint assets well. the think a partnership and as small identify

look a for of over of issuing than or more and attractive depend we'll rather It's growing the common certainly So units on opportunities we much time will it company means certainly what forms this, like capital. other identify.

opportunities like we'll So look continue that. at to

Ric Prentiss

answering good. sounds for Thanks Okay, the questions.

George Doyle

Absolutely.

Operator

next Thank FBR. you. of with from the And question Liam come line Burke B. our will Riley

line is open. now Your

Liam Burke

thank Yes, Good you. morning, Tim.

Tim Brazy

Good morning.

Liam Burke

Tim, are attractive. cap have George the statements assets on for competition adding Are any to additional fairly you you potential assets rates environment open seeing still prepared that in this mentioned acquisitions do your to or these portfolio? a

Tim Brazy

don't No, entrants we see the really in market.

we we before, have difficult a opportunities. in said is of entire And to we're level position As the at business execute. to the dominant access the since sponsor runway

that's in actually that industry. the today it's In fact, quarter-after-quarter ever years three we've true better of in being the better history active said that market been that we the well. is And -- better over feel and the as past our

Liam Burke

ramp FlexGrid, with your you're comfortable up that's And how rental on Great. going?

Tim Brazy

accelerating wished a the our set but opportunity but time, And effort faster, complex Well, in we is this bit of And was it we forward. well had see initiatives. a tremendous going takes opinion. it worth

So, fourth quarter, at deployment. of point And point now we'll certainly that in we're reaching the opportunities are as results finally the and said, where of XXXX. the in the significant see George

Liam Burke

organic Okay. And adjust rental it's way was George, with acquisitions, if the much historically. been pretty in line I revenue

George Doyle

churn, seeing Yes, invest We're that's and little that across all very segments in. right. that's we

activity modifications on We related are equipment seeing of by carriers additional some the sites. to

as organic expect, well. we So looking growth that would have I forward, rates healthy

Liam Burke

Great. Tim. Thank you, Thank George. you,

George Doyle

Certainly.

Operator

line question come next of from our Gyure Mike Janney. with the will And you. Thank

line is open. Your now

Mike Gyure

on Yes, there. that you type little on it, stuff can bit of bit kind could you I just on little going a I touched talk lease and of a Sprint give telecom think or guys color a -- up opportunities. you the little -- a about more guess George, T-Mobile lot what's Is

George Doyle

become T-Mobile. say, building Sure. it in networks starting It's in not MNOs their out XG. Sprint I more I more would the would are What just to general, so say, much, is in for preparation active

activities You going see densification on.

deployments. You see a small-cell type of lot

a what with the holders and in entrants of of order in about they their need are past we've and talked deploy We the the that spectrum starting next their retain type licenses also certain of to for in see doing may market. to some to spectrum years of number the Certainly that, into IoT the big spectrum. couple be

leading activity. combination to leasing whole of a it's So factors that are telecom

most be we're be good should a over, at years that the environment optimistic next would next couple So on going say, to pretty the I that's front. the least likely of years. strong leasing five But

Mike Gyure

site as on think I of per maybe number you of number $XX are a guided then that capital at cost expected down of or that And you you locations Great. point? year. thinking million to looking how Can or roughly the this FlexGrid, at, to, the sites break or this that just the guess, about I you're just

George Doyle

site. going to site cost per Sure. little a range We're It is bit. around vary thinking the will still $XXX,XXX-$XXX,XXX per

deployments, effectively by deployments Some maybe MNOs. macro sites multiple of are these macro-type

end up with exceed So costs could $XXX,XXX. you that

them could that. it's be small-sale be a number average going out that be range. And of types would well of could sites about think Some so deployments, $XXX,XXX -- which $XXX,XXX to below we smaller to

of remainder So over expect to for you're we deploying looking course the somewhere of be XXX the our sites guidance to the in XXX around total year.

Mike Gyure

last that look whether sort talked to then Great. about at a prepared or how think and it of anticipating overseas, break maybe down the Tim get Can you're And forward? out spending that it's bucket to I going the that his one, you acquisition, in capital flavor of remarks. maybe just

George Doyle

Sure.

in around it'll little higher. acquisition roughly, the, a the think range, possibly bit side XX% On we that

seen remains investments. little for a how of side some development well opportunities it FlexGrid we be out. the countries bit On roll do But opportunities as still to of infrastructure to a development type some of as different couple some our as other in see

hopefully, end a provide, able third the quarter. update at be that we'll on So to of good the

Mike Gyure

very much Thanks guys. Great.

George Doyle

Thanks.

Tim Brazy

Certainly.

Operator

come next Rodgers of you. our Thank from And the will Dave Baird. question line with

Your open. is now line

Dave Rodgers

comments you, I in in fourth various coming FlexGrid guys. mentioned good points the out revenues online your the of had think, NOI the from or there Yes, morning Both at quarter.

talk from hoping far delivered could is expectation revenues terms maybe that what you has was for then So is so in that quarter if come anything FlexGrid, about what the fourth just XXXX? of online, into and running

George Doyle

Sure.

So carriers. a way a on as in far in lease much number this what launch as developing countries greater in expenditures multiple date, the We're with focused a to larger some initial is of they're And sites. development predominantly negotiations project. to is

they progress made permitting, built. but of period once on the commence get the it'll the at done, get the kickoff, we've where solution get substantial would to contracting revenue the a built, developments, work point and those time And So it's take those. FlexGrid

but we we from fourth date, revenue it's seen any the haven't from around coming to the going revenue So activity, do we quarter. that in to any activity, anticipate development start the seen development but haven't

Dave Rodgers

an contracts have that the be to you there for you of is any customers sense year? contractual number or give from that would what of estimate end a of going kind out you have Do by where do is that the obligations or

George Doyle

Sure.

development the around the roughly going initial going average acquiring to spend, to returns are where we average around assets So on -- we're think today. it's

as year they're collocation well. are really start Most in the quarter fourth will throughout know, These quarter. roughly that first development tenant. multi-tenant you in flexible So the million you cap rate into $XX the know, you the structures. be at seven, to in spend. -- And six, revenue then looking at so range, to about initial roughly and kick can that's to that we're seven six likely, next put it seven deployments, for spill -- It cap it grow spending will going know, on you that's

time So to on multiple think but structures do the we there's fairly and expect some have have will we in also that collocation, opportunity in tenants with as the tenants The Anchor only of the well. quickly. these right the we over two, now we And good structures. tenants, have these not second know, going are third discussions tenants three some you

Dave Rodgers

this a first kicking X%-X% in 'XX? So in of perspective, quarter thought year, deployed $XX on for the beginning million and modeling mostly

George Doyle

I Yes, that's think fair.

Dave Rodgers

comments. out Okay. with year, remaining to to tie regard the rest just throughout guess, of the And the then, wanted I couple spends a of

at you First, need Flex, midpoint it care over -- bridges Is seems towards for your and kind in take like capital to you I so I geared it spending, so the gap you XXX, the $XXX or of million dropdowns? debt you just FlexGrid the acquisitions. fourth wanted is would additional between that then remaining acquisitions spend the be the some will of to of do more of preferred, know, by the but said guess, the quarter was that just what raise mostly purely and that traditional most

George Doyle

Sure. pushing just The start those. why little the recognizing associated with you leverage there's reason on development acquisitions the no bit activities revenue we're is and commence leases a out until that the

why the will follow. be development starts then in acquisitions that to that's will So financed And the as initially. kick

targeting equity with assets. and we capital. when cap rate we So less now, right we're our look where our much at liquidity far require These capital higher are

out. raises, the likely ratios with kind You still year. little our out UEP you in half That bit as how as raise will course not a the that There large quarter of second possible, capital the coming know, more the stay type But do targeting. half can far over capital little shakes with that's finance the be equity some major another the be raised of a leverage of of more second within we'll of debt bit could year. -- we're of bit I as little ATMs, see a capital anticipate or

Dave Rodgers

guys. you, Thank Okay.

George Doyle

Sure.

Operator

RBC And our next Capital with Thank line the from will come you. question Bora of Lee Markets.

now is line open. Your

Bora Lee

Thank you.

on from believe, into your tack wondering, you you're pursuing. I Validus quarter, fits is the planning question, that one purchased during how in that a that Just an strategy Carter datacenter was second Milwaukee, wondering I just and so additional

Tim Brazy

of that a an pick actually on not that here being at been within long-term up not focus critical if is know, or -- a for But quality, line. percentage the asset activity focus point. intending accretive the credit there, the LMRK; sponsor. investment may tenancy, total two about, general of you partnership. the in talked it's part or where has We're done we That's be We infrastructure. very a leases, for at revenue. business really partnership But datacenters developing the It's major the it thesis an to this small the asset fit it's

George Doyle

the the the actually I a would we as that well, to the quarter And of and actually the very we well. have have of as held portion for we at is have some past. portfolio datacenters our sale add are owned that end It owned is one small that that that in previously of assets

Bora Lee

you very Thank much. it. Got

Tim Brazy

Thank you.

George Doyle

Certainly.

Operator

Thank you. today. for Ladies and gentlemen, this concludes our question-and-answer session

So conference to Tim remarks. back to it hand comments some my now over closing quick Brazy the Mr. is for or pleasure

Tim Brazy

I have extremely what advantage is as Great. to Well, company. full and take the market for George in incredible really confident ability our think an said, we of Thanks. we are

on this will progress year, [technical share and progress Our We've perform very for continue plan portfolio and new continues to initiatives, execute initiatives tremendous on going we business difficulty]. on we are the our development made to to the well.

speak And time we we this morning. quarter. to you So next appreciate your will

Operator

and today's does your on gentlemen, This for thank Ladies program. conference. participation you conclude our

have wonderful You day. may now Everybody disconnect. a

Landmark Infrastructure Partners (LMRK) 1 Aug 182018 Q2 Earnings call transcript