Lamar(US:LAMR)2020-05-08 05:25Financial Data and Key Metrics Changes - Q1 2020 marked the 40th consecutive quarter of revenue growth, although business was impacted by COVID-19, costing approximately $4 million to $5 million in revenue [6] - Adjusted EBITDA increased by 9.4% to $159.8 million compared to $146.1 million in Q1 2019, while fully diluted AFFO rose 13.1% to $1.12 per share [12] - April revenues were approximately $116 million, a decline of about 20% from pro forma April 2019 [6][12] Business Line Data and Key Metrics Changes - Digital unit revenue was up 5.9% in Q1, with a total of 3,589 digital units, an increase of 47 units [21] - The top three verticals—services, hospitals, and restaurants—are performing well, with services seeing increased demand from attorneys and cleaning services [22][23] - The education vertical was notably strong, up 70% in Q1, driven by online education and fall enrollment [28] Market Data and Key Metrics Changes - Traffic activity in markets that generated 80% of 2019 billboard revenues is already back to 75% of last year's average, with many smaller markets rebounding faster than larger DMAs [9][10] - The oil patch is struggling, particularly in areas like Tulsa and Oklahoma City, due to macroeconomic challenges [36] Company Strategy and Development Direction - The company has reduced its CapEx budget from $130 million to approximately $58 million, focusing on essential projects [11][13] - Management is optimistic about emerging stronger from the crisis, with plans to maintain REIT status and distribute at least 90% of NOI [47] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about recovery, noting that car travel is expected to increase significantly as people avoid air travel [44] - The company anticipates a good political advertising season in Q3 and Q4, with political pacing up 32% from the 2018 cycle [60] Other Important Information - The company ended Q1 with total leverage of 4.03 times net debt-to-EBITDA, with approximately $609 million in liquidity [14][19] - Significant cost reductions are expected, including $16.5 million in executive bonuses and $13 million in lease portfolio savings [11] Q&A Session Summary Question: Considering the results were not significantly affected by COVID-19 in Q1, would the company consider M&A? - Management indicated a willingness to explore M&A opportunities as the company aims to emerge as a strong player in the industry [32] Question: How is the Q2 trend shaping up, and how has the oil patch fared? - Management noted that May is expected to be slightly worse than April, with the oil patch facing challenges [36] Question: How does the company view the recovery compared to the 2008/2009 downturn? - Management feels more optimistic this time due to a stronger balance sheet and broader platform, anticipating increased car travel [44] Question: How is the company balancing dividend distribution and leverage? - The Board aims to maintain REIT status and distribute at least 90% of NOI, while also considering liquidity [47] Question: What data supports the expectation of increased car travel this summer? - Management cited traffic activity data showing significant increases in smaller markets, with many areas already seeing traffic up to 75% of last year's levels [54]