Lamar(LAMR) - 2024 Q2 - Quarterly Results

Operating Results and Highlights This section provides an overview of Lamar Advertising's financial performance and key operational achievements for the second quarter and first half of 2024 Second Quarter 2024 Performance Lamar Advertising reported solid Q2 2024 growth, driven by strong advertiser demand and expense management, leading to increased net revenue, Adjusted EBITDA, and diluted AFFO per share - CEO Sean Reilly highlighted that strong demand from local and regional advertisers, combined with expense discipline, drove the quarter's positive results. The company is pacing at the top end of its full-year diluted AFFO per share guidance of $7.75 to $7.90[2] Q2 2024 Key Financial Metrics (YoY) | Metric | Q2 2024 ($M) | Q2 2023 ($M) | % Change | | :--- | :--- | :--- | :--- | | Net Revenue | $565.3 | $541.1 | +4.5% | | Operating Income | $184.2 | $176.8 | +4.2% | | Net Income | $137.6 | $130.9 | +5.1% | | Adjusted EBITDA | $271.6 | $253.9 | +6.9% | | Free Cash Flow | $203.5 | $159.2 | +27.8% | | Diluted AFFO per Share | $2.08 | $1.90 | +9.5% | Q2 2024 Acquisition-Adjusted Results (YoY) | Metric | % Change | | :--- | :--- | | Acquisition-Adjusted Net Revenue | +3.9% | | Acquisition-Adjusted EBITDA | +6.3% | Six Month 2024 Performance For the first six months of 2024, Lamar demonstrated consistent growth with a 5.0% increase in net revenue, leading to a 7.0% rise in Adjusted EBITDA and a 9.3% increase in diluted AFFO per share Six Months Ended June 30, 2024 Key Financial Metrics (YoY) | Metric | H1 2024 | H1 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Revenue | $1.06B | $1.01B | +5.0% | | Operating Income | $308.8M | $295.6M | +4.5% | | Net Income | $216.1M | $207.1M | +4.3% | | Adjusted EBITDA | $483.5M | $451.9M | +7.0% | | Free Cash Flow | $342.2M | $272.5M | +25.6% | | Diluted AFFO per Share | $3.63 | $3.32 | +9.3% | Financial Condition and Liquidity As of June 30, 2024, the company maintained a strong liquidity position of $744.3 million, comprising available credit and cash, while managing outstanding borrowings - Total liquidity stood at $744.3 million as of June 30, 2024[7] Liquidity Breakdown (as of June 30, 2024) | Component | Amount ($M) | | :--- | :--- | | Available under Revolving Credit Facility | $666.4 | | Cash and Cash Equivalents | $77.9 | | Total Liquidity | $744.3 | Recent Developments Subsequent to quarter-end, Lamar repaid $350.0 million in Term A loans and established a new ATM offering agreement for up to $400.0 million of Class A common stock - On July 31, 2024, the company paid in full its $350.0 million in Term A loans using borrowings from its revolving credit facility and cash on hand[8] - The company entered into a new At-the-Market (ATM) offering agreement to potentially issue and sell up to $400.0 million of Class A common stock[8] Financial Statements This section presents the condensed consolidated statements of income, balance sheet, and cash flow data, detailing the company's financial position and performance Condensed Consolidated Statements of Income The income statement details year-over-year revenue increases for Q2 and H1 2024, with net income rising to $137.6 million for Q2, while diluted EPS remained stable Condensed Income Statement (in thousands) | Metric | Q2 2024 ($K) | Q2 2023 ($K) | H1 2024 ($K) | H1 2023 ($K) | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | $565,251 | $541,137 | $1,063,401 | $1,012,469 | | Operating Income | $184,227 | $176,791 | $308,827 | $295,592 | | Net Income | $137,594 | $130,888 | $216,093 | $207,086 | | Diluted EPS | $1.34 | $1.28 | $2.10 | $2.02 | Selected Balance Sheet and Cash Flow Data As of June 30, 2024, total assets were $6.58 billion and total debt $3.35 billion, with cash and cash equivalents increasing and operating cash flow showing significant improvement Selected Balance Sheet Data (in thousands) | Metric | June 30, 2024 ($K) | Dec 31, 2023 ($K) | | :--- | :--- | :--- | | Cash and cash equivalents | $77,932 | $44,605 | | Total assets | $6,582,421 | $6,563,622 | | Total debt, net | $3,349,177 | $3,341,127 | | Total stockholders' equity | $1,198,409 | $1,216,788 | Selected Cash Flow Data (in thousands) | Metric | Q2 2024 ($K) | Q2 2023 ($K) | H1 2024 ($K) | H1 2023 ($K) | | :--- | :--- | :--- | :--- | :--- | | Cash flows from operating activities | $256,342 | $198,162 | $366,904 | $306,874 | Non-GAAP Financial Measures and Reconciliations This section defines and reconciles key non-GAAP financial measures, including Adjusted EBITDA, Free Cash Flow, FFO, and AFFO, to their most comparable GAAP figures Use and Definition of Non-GAAP Financial Measures The company uses non-GAAP measures like Adjusted EBITDA, Free Cash Flow, FFO, and AFFO as key performance indicators, providing supplemental information for investor evaluation and peer comparison - Key non-GAAP measures presented include Adjusted EBITDA, Free Cash Flow, Funds from Operations (FFO), and Adjusted Funds from Operations (AFFO)[11] - These measures are used by management for decision-making and are believed to help investors evaluate core operating results, compare period-over-period performance, and assess the company's ability to service debt and fund investments[13] Reconciliations of Non-GAAP Measures This section provides detailed tabular reconciliations of the company's non-GAAP financial measures to their most directly comparable GAAP figures, offering transparency into the adjustments made Reconciliation to Adjusted EBITDA and Free Cash Flow Net Income is reconciled to Adjusted EBITDA by adding back non-operating items, with Q2 2024 Adjusted EBITDA reaching $271.6 million, and Free Cash Flow derived after deducting capital expenditures Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Q2 2024 ($K) | Q2 2023 ($K) | | :--- | :--- | :--- | | Net Income | $137,594 | $130,888 | | Adjustments (Interest, Taxes, D&A, etc.) | $133,960 | $123,031 | | Adjusted EBITDA | $271,554 | $253,919 | Total Capital Expenditures by Category (in thousands) | Category | Q2 2024 ($K) | Q2 2023 ($K) | | :--- | :--- | :--- | | Billboards - traditional | $3,865 | $15,423 | | Billboards - digital | $11,195 | $24,109 | | Total Capital Expenditures | $22,648 | $50,722 | Reconciliation to Acquisition-Adjusted Results Acquisition-adjusted results provide a clearer view of organic growth, showing Q2 2024 net revenue growth of 3.9% and EBITDA increase of 6.3% year-over-year Acquisition-Adjusted Results Reconciliation (Q2 2024 vs Q2 2023) | Metric | Reported % Change | Acquisition-Adjusted % Change | | :--- | :--- | :--- | | Net Revenue | 4.5% | 3.9% | | Adjusted EBITDA | 6.9% | 6.3% | Reconciliation of REIT Measures (FFO & AFFO) As a REIT, Lamar reports FFO and AFFO, with Q2 2024 FFO increasing 4.3% to $209.3 million and AFFO growing 9.8% to $213.5 million, resulting in a 9.5% rise in diluted AFFO per share Reconciliation of Net Income to FFO and AFFO (Q2, in thousands) | Metric | Q2 2024 ($K) | Q2 2023 ($K) | % Change | | :--- | :--- | :--- | :--- | | Net Income | $137,594 | $130,888 | +5.1% | | Funds from Operations (FFO) | $209,273 | $200,640 | +4.3% | | Adjusted Funds from Operations (AFFO) | $213,517 | $194,399 | +9.8% | Diluted AFFO Per Share (YoY) | Metric | Q2 2024 ($) | Q2 2023 ($) | % Change | | :--- | :--- | :--- | :--- | | Diluted AFFO per share | $2.08 | $1.90 | +9.5% | Other Information This section includes important disclosures regarding forward-looking statements and details for the upcoming conference call to discuss Q2 2024 results Forward-Looking Statements The press release includes a safe harbor statement, cautioning that forward-looking statements are subject to risks and uncertainties, including indebtedness, economic conditions, and REIT status - The document contains forward-looking statements and warns investors not to place undue reliance on them[9] - Key risks identified include: significant indebtedness, economic effects on advertising demand, ability to maintain REIT status, and government regulation[9] Conference Call Information Lamar Advertising will host a conference call on August 8, 2024, at 8:00 a.m. central time to discuss its second-quarter 2024 operating results - A conference call is scheduled for Thursday, August 8, 2024, at 8:00 a.m. central time to discuss the results[15]