Lamar(US:LAMR)2020-05-07 15:53PART I — FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial information, management's discussion, market risk, and controls ITEM 1. FINANCIAL STATEMENTS This section presents unaudited condensed consolidated financial statements for Lamar Advertising Company and Lamar Media Corp., detailing financial position, performance, and cash flows Lamar Advertising Company - Condensed Consolidated Balance Sheets Lamar Advertising Company's balance sheet as of March 31, 2020, shows a significant increase in cash and cash equivalents and long-term debt compared to December 31, 2019, while total stockholders' equity experienced a slight decrease | Metric | March 31, 2020 (in millions) | December 31, 2019 (in millions) | | :-------------------------- | :------------------------------ | :------------------------------- | | Cash and cash equivalents | $496.6 | $26.2 | | Total assets | $6,393.0 | $5,941.2 | | Total liabilities | $5,255.2 | $4,760.8 | | Long-term debt | $3,382.2 | $2,753.6 | | Stockholders' equity | $1,137.8 | $1,180.3 | Lamar Advertising Company - Condensed Consolidated Statements of Income and Comprehensive Income For the three months ended March 31, 2020, Lamar Advertising Company reported increased net revenues but a decrease in net income compared to the same period in 2019, primarily due to a significant loss on debt extinguishment | Metric | Three months ended March 31, 2020 (in millions) | Three months ended March 31, 2019 (in millions) | | :---------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net revenues | $406.6 | $384.5 | | Operating income | $96.6 | $90.8 | | Loss on extinguishment of debt | $18.2 | $— | | Net income | $40.5 | $51.3 | | Basic earnings per share | $0.40 | $0.51 | | Cash dividends declared per share | $1.00 | $0.96 | Lamar Advertising Company - Condensed Consolidated Statements of Stockholders' Equity This statement outlines the changes in Lamar Advertising Company's stockholders' equity for the three months ended March 31, 2020, and 2019, reflecting the impact of net income, common and preferred stock dividends, and treasury stock purchases | Metric | March 31, 2020 (in millions) | December 31, 2019 (in millions) | | :------------------------------------ | :------------------------------ | :------------------------------- | | Total Stockholders' Equity | $1,137.8 | $1,180.3 | | Net income (Q1 2020) | $40.5 | | | Dividends/distributions to common shareholders (Q1 2020) | $(100.7) | | | Purchase of treasury stock (Q1 2020) | $(10.1) | | Lamar Advertising Company - Condensed Consolidated Statements of Cash Flows Lamar Advertising Company's cash flow statement for the three months ended March 31, 2020, shows a significant increase in cash from financing activities, primarily due to debt refinancing, which led to a substantial net increase in cash and cash equivalents | Metric | Three months ended March 31, 2020 (in millions) | Three months ended March 31, 2019 (in millions) | | :------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Net cash provided by operating activities | $62.9 | $60.7 | | Net cash used in investing activities | $(35.6) | $(91.1) | | Net cash provided by financing activities | $443.6 | $41.6 | | Net increase in cash and cash equivalents | $470.5 | $11.3 | | Cash and cash equivalents at end of period | $496.6 | $32.8 | Lamar Advertising Company - Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering significant accounting policies, revenue recognition, leases, stock-based compensation, long-term debt, and the impact of new accounting pronouncements and the COVID-19 pandemic - The Company updated its goodwill qualitative assessment as of March 31, 2020, due to COVID-19 related changes, but concluded that goodwill was not impaired26 - Lamar Media entered into a Fourth Amended and Restated Credit Agreement on February 6, 2020, establishing a new $750 million revolving credit facility and a $600 million Term B loan facility56 - Additionally, Lamar Media issued $1.0 billion in new senior notes (3 3/4% due 2028 and 4% due 2030) to repay existing debt and redeem its 5 3/8% Senior Notes, resulting in an $18.2 million loss on debt extinguishment57173 - The Company adopted Topic 842, Leases, effective January 1, 2019, recognizing $1.2 billion in additional operating liabilities and corresponding right-of-use assets88 - ASU 2016-13, Financial Instruments – Credit Losses, was adopted on January 1, 2020, with no material impact, but the allowance for credit losses now considers COVID-19 impacts89 Lamar Media Corp. - Condensed Consolidated Balance Sheets Lamar Media Corp.'s balance sheet largely mirrors Lamar Advertising's consolidated figures due to its wholly-owned subsidiary status, showing similar increases in cash and long-term debt as of March 31, 2020, compared to December 31, 2019 | Metric | March 31, 2020 (in millions) | December 31, 2019 (in millions) | | :-------------------------- | :------------------------------ | :------------------------------- | | Cash and cash equivalents | $496.1 | $25.7 | | Total assets | $6,376.3 | $5,924.4 | | Total liabilities | $5,249.0 | $4,754.9 | | Long-term debt | $3,382.2 | $2,753.6 | | Stockholder's equity | $1,127.2 | $1,169.5 | Lamar Media Corp. - Condensed Consolidated Statements of Income and Comprehensive Income Lamar Media Corp.'s income and comprehensive income statement reflects similar trends to its parent company for the three months ended March 31, 2020, with increased net revenues but a decrease in net income due to the debt extinguishment loss | Metric | Three months ended March 31, 2020 (in millions) | Three months ended March 31, 2019 (in millions) | | :----------------------------- | :--------------------------------------- | :--------------------------------------- | | Net revenues | $406.6 | $384.5 | | Operating income | $96.7 | $90.9 | | Loss on extinguishment of debt | $18.2 | $— | | Net income | $40.6 | $51.4 | Lamar Media Corp. - Condensed Consolidated Statements of Stockholder's Equity This statement shows changes in Lamar Media Corp.'s stockholder's equity for the three months ended March 31, 2020, and 2019, influenced by net income, dividends to the parent company, and contributions from the parent | Metric | March 31, 2020 (in millions) | December 31, 2019 (in millions) | | :-------------------------- | :------------------------------ | :------------------------------- | | Total Stockholder's Equity | $1,127.2 | $1,169.5 | | Net income (Q1 2020) | $40.6 | | | Dividend to parent (Q1 2020) | $(110.8) | | | Contribution from parent (Q1 2020) | $29.4 | | Lamar Media Corp. - Condensed Consolidated Statements of Cash Flows Lamar Media Corp.'s cash flow activities for the three months ended March 31, 2020, largely mirror the parent company's, with a significant increase in cash from financing due to debt refinancing, leading to a substantial net increase in cash and cash equivalents | Metric | Three months ended March 31, 2020