Lamar(US:LAMR)2024-08-08 16:04Financial Performance - The company's net revenues increased by $50.9 million or 5.0% to $1.06 billion for the six months ended June 30, 2024, compared to $1.01 billion for the same period in 2023[119]. - Billboard net revenues contributed an increase of $41.1 million, while transit net revenues increased by $9.1 million over the same period in 2023[119]. - Operating income rose by $13.2 million to $308.8 million for the six months ended June 30, 2024, compared to $295.6 million for the same period in 2023[121]. - Net income for the six months ended June 30, 2024, was $216.1 million, an increase from $207.1 million for the same period in 2023[122]. - Adjusted EBITDA increased by 7.0% to $483.5 million for the six months ended June 30, 2024, primarily due to a gross margin increase of $31.9 million[125]. - Net income for the six months ended June 30, 2024, increased by 4.3% to $216.1 million compared to $207.1 million for the same period in 2023[127]. - FFO for the six months ended June 30, 2024, rose to $357.8 million, reflecting a 4.0% increase from $344.1 million in 2023[127]. - AFFO for the six months ended June 30, 2024, increased by 9.8% to $371.8 million compared to $338.5 million for the same period in 2023[127]. - Net revenues for the three months ended June 30, 2024, increased by 4.5% to $565.3 million from $541.1 million in 2023, driven by a $18.9 million increase in billboard net revenues[128]. - Operating income for the three months ended June 30, 2024, increased by $7.4 million to $184.2 million compared to $176.8 million in 2023[130]. - Net income for the three months ended June 30, 2024, was $137.6 million, up from $130.9 million in 2023, representing a 5.1% increase[131]. - Adjusted EBITDA for the three months ended June 30, 2024, increased by 6.9% to $271.6 million, attributed to a $13.2 million increase in gross margin[134]. Operating Expenses - Total operating expenses, excluding depreciation and amortization, increased by $32.2 million or 5.6% to $605.2 million for the six months ended June 30, 2024[120]. - Total operating expenses for the three months ended June 30, 2024, rose by 4.7% to $304.7 million, with a $7.0 million increase in direct, general, and administrative expenses[129]. - Operating expenses (excluding stock-based compensation, gain on disposition of assets, and depreciation and amortization) rose by $19.0 million, and interest expense increased by $3.7 million during the same period[138]. - Total operating expenses increased by $32.1 million or 5.6% to $604.8 million for the six months ended June 30, 2024, compared to $572.7 million for the same period in 2023[182]. Cash Flow and Liquidity - Cash provided by operating activities increased to $366.9 million for the six months ended June 30, 2024, up from $306.9 million in the same period of 2023, primarily due to a revenue increase of $50.9 million[138]. - Total liquidity as of June 30, 2024, was $744.3 million, consisting of $77.9 million in cash and $666.4 million available under the revolving credit facility[137]. - The working capital deficit increased to $623.8 million as of June 30, 2024, primarily due to an increase in current maturities of long-term debt[137]. - Cash flows provided by operating activities increased by $60.0 million to $366.9 million for the six months ended June 30, 2024[175]. - Cash flows used in financing activities were $256.7 million for the six months ended June 30, 2024, compared to $181.8 million for the same period in 2023, primarily due to cash paid for dividends[176]. Debt and Financing - The company completed multiple acquisitions for a total cash purchase price of approximately $28.2 million during the six months ended June 30, 2024[112]. - As of June 30, 2024, there was $250.0 million in outstanding borrowings under the Accounts Receivable Securitization Program, with no additional availability[141]. - The senior credit facility totaled $1.03 billion as of June 30, 2024, consisting of $600.0 million in Term B loans, $350.0 million in Term A loans, and $75.0 million in outstanding borrowings under the revolving credit facility[152]. - The company has approximately $666.4 million of unused capacity under the revolving credit facility as of June 30, 2024[153]. - The company has the ability to incur additional indebtedness up to $2.0 billion under the senior credit facility, subject to certain conditions[157]. - Total payments due for future debt maturities and contractual obligations as of June 30, 2024, amount to $4,923.9 million[171]. - Lamar Media's outstanding debt includes $600.0 million in 3 3/4% Senior Notes and $550.0 million in 4% Senior Notes, among others[155]. - The company completed the repayment of $350.0 million in Term A loans on July 31, 2024, using a combination of borrowings under its revolving credit facility and cash on hand[155]. Taxation - The effective tax rate for the six months ended June 30, 2024, was 2.0%, primarily due to the company's qualification for taxation as a REIT[122]. - The effective tax rate for the six months ended June 30, 2024, was 2.0%, differing from the federal statutory rate due to REIT qualification[184]. Future Outlook - The company expects to generate cash flows from operations during 2024 in excess of its cash needs for operations, capital expenditures, and dividends[138]. - Lamar Media expects to generate cash flows from operations during 2024 in excess of its cash needs for operations, capital expenditures, and dividends[154]. - The company plans to continue expanding its outdoor advertising display portfolio through new construction and strategic acquisitions[174]. Capital Expenditures - Capital expenditures totaled $52.1 million for the six months ended June 30, 2024, compared to $93.0 million for the same period in 2023[112]. - Capital expenditures, excluding acquisitions, were approximately $52.1 million for the six months ended June 30, 2024, with total capital expenditures for 2024 anticipated to be approximately $125.0 million[166]. Interest Rate Risk - The company had approximately $1.27 billion of variable-rate indebtedness outstanding, representing about 37.8% of its total long-term debt as of June 30, 2024[200]. - The aggregate interest expense for 2024 related to variable-rate borrowings was $42.8 million, with a weighted average interest rate of 6.7%[200]. - If the weighted average interest rate increased by 200 basis points to 8.7%, the company's interest expense would have increased by approximately $12.5 million for the first half of 2024[200]. - The company aims to mitigate interest rate risk by issuing fixed-rate long-term debt and maintaining a balance between variable and fixed-rate indebtedness[201]. - The company has the capability to fix interest rates on borrowings under its senior credit facility for periods of up to twelve months, subject to lender consent[201].