Lamar(US:LAMR)2021-11-03 17:31Financial Data and Key Metrics Changes - The company reported a significant recovery in the advertising market, with full-year AFFO per share expected to be between $6.35 and $6.50, up from initial guidance of $5.20 to $5.50 [7][31] - Adjusted EBITDA for Q3 was $230.7 million, a 35.2% increase from $170.7 million in Q3 2020, with adjusted EBITDA margins at a record 48.4% [21][10] - AFFO growth was 43.9% to $1.90 per share on a fully diluted basis compared to Q3 2020 [17] Business Line Data and Key Metrics Changes - Billboard billing increased by over 6% compared to Q3 2019, with digital billing up 20% in absolute dollars and nearly 8% on a same-store basis [8] - The strongest categories in Q3 were gaming, healthcare, and real estate, all up more than 20% versus Q3 2019 [11] - Transit operations have returned to pre-COVID levels, with expectations for U.S. airport and Canadian transit businesses to recover fully in 2022 [9] Market Data and Key Metrics Changes - National revenue growth outpaced local revenue growth by over 2x, with local and regional sales accounting for 76% of billboard revenue [22] - The Western and Northeast regions, which were heavily impacted by COVID, saw growth of 30% and EBITDA increases of over 50% year-over-year [40] Company Strategy and Development Direction - The company is focusing on deploying additional digital units despite supply chain challenges, with 135 digital units added organically this year and 90 units on order [12][13] - The company is actively pursuing acquisitions, having closed 22 acquisitions for over $100 million and expecting total deal value to exceed $250 million by year-end [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fourth quarter and the overall outlook for 2022, with bookings running ahead of pre-pandemic levels [58] - The company is well-positioned to take advantage of opportunities due to a strong balance sheet and improved credit ratings from Moody's and S&P [27][37] Other Important Information - The company increased its cash dividend by 33% in Q3 to $1 per share, with plans to recommend the same for Q4, subject to Board approval [35] - The company anticipates a potential special dividend to return to a full-year dividend of $4 per share as soon as possible [36] Q&A Session Summary Question: Impact of inflation on revenue and rent growth - Management indicated that inflation has historically been beneficial, with fixed ground leases and flexible revenue contracts allowing for repricing [50][51] Question: Insights on programmatic advertising growth - Management reported strong growth in programmatic advertising, expecting to exceed $25 million to $30 million in billing for the year [52] Question: Operating expenses growth in Q4 - Operating expenses are expected to grow in the low double digits, approximately 13% compared to 2020, but remain flat against 2019 [54] Question: Visibility into 2022 and special dividend timing - Bookings for 2022 are ahead of pre-pandemic levels, and a special dividend of $0.50 per share is anticipated to be proposed in December, with payment expected in January [60]