Lamar(US:LAMR)2024-05-02 10:50Operating Results and Corporate Overview First Quarter 2024 Operating Results Lamar Advertising reported strong first-quarter 2024 results that surpassed internal expectations, driven by robust local sales and a return to same-store growth in digital. Net revenue increased by 5.7% to $498.2 million, and Adjusted EBITDA grew by 7.1% to $211.9 million. Diluted Adjusted Funds From Operations (AFFO) per share saw a significant increase of 9.2% to $1.54, prompting the company to raise its full-year guidance - The company's Q1 results exceeded internal expectations, with notable strength in local sales and a return to same-store growth in the digital segment3 Q1 2024 Key Financial Metrics (vs. Q1 2023) | Metric | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Revenues | $498.2 million | $471.3 million | 5.7% | | Operating Income | $124.6 million | $118.8 million | 4.9% | | Net Income | $78.5 million | $76.2 million | 3.0% | | Adjusted EBITDA | $211.9 million | $198.0 million | 7.1% | | Free Cash Flow | $138.7 million | $113.3 million | 22.4% | | Diluted AFFO per share | $1.54 | $1.41 | 9.2% | - On an acquisition-adjusted basis, which normalizes for the impact of acquisitions and divestitures, net revenue increased by 5.3% and Adjusted EBITDA increased by 6.5% year-over-year7 Liquidity and Financial Position As of March 31, 2024, Lamar maintained a strong liquidity position with $634.8 million in total liquidity, composed primarily of availability under its revolving senior credit facility, supplemented by cash and cash equivalents Liquidity as of March 31, 2024 | Component | Amount | | :--- | :--- | | Available under revolving credit facility | $598.4 million | | Cash and cash equivalents | $36.4 million | | Total Liquidity | $634.8 million | - As of the quarter-end, the company had $143.0 million in borrowings outstanding under its revolving credit facility and $235.7 million outstanding under its Accounts Receivable Securitization Program9 Revised Full-Year 2024 Guidance Following the strong first-quarter performance, the company raised its full-year 2024 guidance, anticipating diluted AFFO per share to be in the range of $7.75 to $7.90 Updated Full-Year 2024 Guidance | Metric | Low Estimate | High Estimate | | :--- | :--- | :--- | | Net Income per Diluted Share | $4.95 | $5.01 | | Diluted AFFO per Share | $7.75 | $7.90 | Company and Investor Information Lamar Advertising, founded in 1902, is a leading outdoor advertising company in North America with over 360,000 displays, including the largest network of digital billboards in the U.S. The company held a conference call on May 2, 2024, to discuss its Q1 results - Lamar operates over 360,000 displays across the U.S. and Canada, including approximately 4,800 digital billboards, serving both local and national advertisers18 Conference Call Details | Item | Details | | :--- | :--- | | Date | Thursday, May 2, 2024 | | Time | 8:00 a.m. Central Time | | Phone | 1-800-420-1271 or 1-785-424-1634 | | Passcode | 63104 | Financial Statements Condensed Consolidated Statements of Income For the first quarter of 2024, Lamar's net revenues were $498.2 million, an increase from $471.3 million in the prior-year period. Operating income rose to $124.6 million, and net income applicable to common stock was $78.1 million, resulting in diluted earnings per share of $0.76 Q1 2024 Condensed Consolidated Statements of Income (in millions) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net revenues | $498.2 | $471.3 | | Total operating expense | $373.6 | $352.5 | | Operating income | $124.6 | $118.8 | | Income before income tax expense | $80.0 | $78.0 | | Net income | $78.5 | $76.2 | | Net income applicable to common stock | $78.1 | $76.0 | | Diluted earnings per share | $0.76 | $0.74 | Selected Balance Sheet and Cash Flow Data As of March 31, 2024, Lamar reported total assets of $6.53 billion and total debt of $3.40 billion. For the first quarter, cash flows from operating activities were $110.6 million, a slight increase from the prior year Selected Balance Sheet Data (in millions) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $36.4 | $44.6 | | Total assets | $6,525.1 | $6,563.6 | | Total debt, net | $3,401.3 | $3,341.1 | | Total stockholders' equity | $1,183.6 | $1,216.8 | Selected Cash Flow Data (in millions) | Account | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Cash flows provided by operating activities | $110.6 | $108.7 | | Cash flows used in investing activities | $45.0 | $52.7 | | Cash flows used in financing activities | $73.6 | $75.2 | Non-GAAP Measures and Reconciliations Overview of Non-GAAP Financial Measures The company utilizes several non-GAAP financial measures to evaluate performance, including Adjusted EBITDA, Free Cash Flow, Funds from Operations (FFO), and Adjusted Funds from Operations (AFFO). Management believes these metrics provide useful supplemental information for investors by excluding non-operational items and offering a clearer view of core operating results and period-over-period performance - Key non-GAAP measures used by management include Adjusted EBITDA, Free Cash Flow, FFO, and AFFO to assess operating performance12 - AFFO is calculated by starting with FFO and adjusting for items such as straight-line revenue, stock-based compensation, non-real estate depreciation, and maintenance capital expenditures1314 Key Reconciliations The report provides detailed reconciliations for its non-GAAP measures. For Q1 2024, Net Income of $78.5 million was reconciled to Adjusted EBITDA of $211.9 million. Total capital expenditures for the quarter were $29.5 million, a decrease from $42.3 million in Q1 2023, with digital billboards representing the largest category of investment Reconciliation of Net Income to Adjusted EBITDA (Q1 2024, in millions) | Line Item | Amount | | :--- | :--- | | Net income | $78.5 | | Interest expense, net & other | $44.6 | | Income tax expense | $1.5 | | Operating income | $124.6 | | Stock-based compensation | $14.5 | | Depreciation and amortization | $75.2 | | Other adjustments | ($2.4) | | Adjusted EBITDA | $211.9 | Capital Expenditure Detail (in millions) | Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Billboards - traditional | $7.1 | $13.5 | | Billboards - digital | $13.4 | $17.4 | | Logo | $1.3 | $3.1 | | Total capital expenditures | $29.5 | $42.3 | Reconciliation of Reported to Acquisition-Adjusted Results (Q1 2024 vs Q1 2023) | Metric | Reported % Change | Acquisition-Adjusted % Change | | :--- | :--- | :--- | | Net Revenue | 5.7% | 5.3% | | Outdoor Operating Income | 7.4% | 6.9% | | Adjusted EBITDA | 7.1% | 6.5% | Reconciliation of REIT Measures (FFO & AFFO) For Q1 2024, Funds from Operations (FFO) increased 3.5% to $148.5 million. After further adjustments for items like stock-based compensation and maintenance capital expenditures, Adjusted Funds from Operations (AFFO) rose 9.8% to $158.2 million, or $1.54 per diluted share Reconciliation to FFO and AFFO (Q1 2024 vs Q1 2023, in millions) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income | $78.5 | $76.2 | | D&A related to real estate | $71.7 | $70.4 | | Other adjustments | ($1.7) | ($3.1) | | Funds from operations (FFO) | $148.5 | $143.5 | | Adjustments (Stock comp, capex, etc.) | $9.7 | $0.6 | | Adjusted funds from operations (AFFO) | $158.2 | $144.1 | | Diluted AFFO per share | $1.54 | $1.41 |