eastunder
4 years ago
Lamar Advertising Company Announces First Quarter Ended March 31, 2020 Operating Results
6:00 AM ET, 05/07/2020 - GlobeNewswire
Three Month Results
Net revenue increased 5.8% to $406.6 millionNet income was $40.5 millionAdjusted EBITDA increased 9.4% to $159.8 million
Three Month Acquisition-Adjusted Results
Acquisition-adjusted net revenue increased 4.4%Acquisition-adjusted EBITDA increased 8.7%
BATON ROUGE, La., May 07, 2020 (GLOBE NEWSWIRE) -- Lamar Advertising Company (Nasdaq: LAMR), a leading owner and operator of outdoor advertising and logo sign displays, announces the Company’s operating results for the first quarter ended March 31, 2020.
"As our first quarter results indicate, we were off to a strong start to 2020. Then, of course, the coronavirus pandemic adversely affected us and our customers in late March and through April. We have used that time to prepare the company for the downturn and ensure we emerge even stronger on the other side," said CEO Sean Reilly. "While we do not yet have sufficient visibility to reissue guidance for 2020, I am encouraged by several signs we are seeing. First, traffic is rebounding rapidly across the vast majority of our markets. Second, business activity has picked up. Cancellations have slowed, and we’ve begun to write new business again. And finally, while it is clear that a few of our verticals will remain challenged, we are optimistic based on our conversations with customers that many categories will rebound soon."
“Meanwhile, I’ve never been prouder of the out-of-home industry, as we’ve donated unprecedented amounts of our inventory in communities across the country to support front-line health-care workers and first responders and to encourage safe practices. I’ve also never been prouder of the people of Lamar as they continue to selflessly support each other, our clients and our communities through these challenging times.”
COVID-19 Updates
Our audience is the driving public, and in markets representing approximately 80% of our 2019 billboard revenues, travel activity is back to at least 75% of last year’s average.1April 2020 acquisition-adjusted net revenues were down approximately 20% from April 2019.Our liquidity position is strong. We ended the first quarter with approximately $497 million of cash on hand and $112 million in additional revolver capacity.Categories showing signs of renewed activity include services, quick service restaurants, health care, financial institutions, education and beer/wine.We presently anticipate that full year 2020 acquisition-adjusted consolidated expenses will be approximately 5% lower than in 2019. Acquisition-adjusted consolidated expenses were down approximately 6% in April 2020 compared to April 2019.We have reduced our total 2020 capital expenditure budget from an expected $130 million to approximately $58 million.We anticipate announcing our plans for the Q2 2020 dividend distribution at the end of May.We intend to reissue 2020 AFFO guidance with our Q2 2020 earnings release in August.
First Quarter Results
Lamar reported net revenues of $406.6 million for the first quarter of 2020 versus $384.5 million for the first quarter of 2019, a 5.8% increase. Operating income for the first quarter of 2020 increased $5.8 million to $96.6 million as compared to $90.8 million for the same period in 2019. Lamar recognized net income of $40.5 million for the first quarter of 2020 as compared to net income of $51.3 million for same period in 2019, a decrease of $10.8 million, due to the $18.2 million loss on debt extinguishment related to the prepayment of Lamar Media’s 5 3/8% Senior Notes due 2024 and Term Loan A under its senior credit facility. Net income per diluted share was $0.40 and $0.51 for the three months ended March 31, 2020 and 2019, respectively.
1 Source: Geopath data
Adjusted EBITDA for the first quarter of 2020 was $159.8 million versus $146.1 million for the first quarter of 2019, an increase of 9.4%.
Cash flow provided by operating activities was $62.9 million for the three months ended March 31, 2020, an increase of $2.2 million as compared to the same period in 2019. Free cash flow for the first quarter of 2020 was $97.1 million as compared to $82.7 million for the same period in 2019, a 17.4% increase.
For the first quarter of 2020, funds from operations, or FFO, was $97.6 million versus $105.0 million for the same period in 2019, a decrease of 7.1% which was impacted by the loss on extinguishment of debt. Adjusted funds from operations, or AFFO, for the first quarter of 2020 was $113.3 million compared to $98.9 million for the same period in 2019, an increase of 14.5%. Diluted AFFO per share increased 13.1% to $1.12 for the three months ended March 31, 2020 as compared to $0.99 for the same period in 2019.
Acquisition-Adjusted Three Months Results
Acquisition-adjusted net revenue for the first quarter of 2020 increased 4.4% over acquisition-adjusted net revenue for the first quarter of 2019. Acquisition-adjusted EBITDA for the first quarter of 2020 increased 8.7% as compared to acquisition-adjusted EBITDA for the first quarter of 2019. Acquisition-adjusted net revenue and acquisition-adjusted EBITDA include adjustments to the 2019 period for acquisitions and divestitures for the same time frame as actually owned in the 2020 period. See “Reconciliation of Reported Basis to Acquisition-Adjusted Results”, which provides reconciliations to GAAP for acquisition-adjusted measures.
Liquidity
As of March 31, 2020, Lamar had $608.5 million in total liquidity that consisted of $111.9 million available for borrowing under its revolving senior credit facility and approximately $496.6 million in cash and cash equivalents.
Recent Developments
On February 6, 2020, Lamar Media completed a $2.35 billion refinancing transaction involving (i) the issuance of an additional $1.00 billion in aggregate principal amount of new senior notes, consisting of $600.0 million in aggregate principal amount of 3 3/4% Senior Notes due 2028 and $400.0 million in aggregate principal amount of 4% Senior Notes due 2030 and (ii) the amendment and restatement of its senior credit facility. The Fourth Amended and Restated Credit Agreement consists of (i) a new 5-year $750.0 million senior secured revolving credit facility, (ii) a new 7-year $600.0 million Term B loan facility and (iii) an incremental facility pursuant to which Lamar Media may re quest additional term loan tranches or increase its revolving credit facility subject to certain conditions and lender approval.
Proceeds from the refinancing transactions, after the payment of fees and expenses, were used to (1) redeem on February 20, 2020 all $510.0 million of the 5 3/8% Senior Notes due 2024 and (2) repay amounts outstanding under the Third Amended and Restated Senior Credit Agreement, including the existing Term Loan A and Term Loan B thereunder.
Lamar is actively monitoring the effects of the COVID-19 pandemic on our business and the business of our advertisers. In response to the virus’s effect on the overall economy and Lamar, as disclosed previously, we have withdrawn our full-year 2020 financial guidance. In addition, the Company has taken the following measures in response to the COVID-19 pandemic:
Borrowed $535 million under its revolving credit facility. The Company had remaining availability of approximately $112 million.Sharply curtailed spending on capital projects, including new digital displays. We anticipate our capital expenditures for 2020 to be approximately $58 million.Suspended its acquisition activity.Instituted a hiring freeze.Initiated discussions with many billboard ground lessors about amending their agreements to reduce future fixed lease expenses and amending payment terms from annual prepayment to monthly payments.Engaged in conversations with our airport and transit franchise partners about temporary relief from current and future annual contractual guarantees.
As previously disclosed on April 2, 2020, Lamar’s Board of Directors is continuing to evaluate our dividend plans for the remainder of 2020.
The Company has also been able to utilize portions of the CARES Act enacted on March 27, 2020, which included an allowance for delaying employer portions of payroll taxes, as well as additional benefits for maintaining our workforce during state issued “stay-at-home” orders.
We will continue to actively monitor the situation and may take further actions to alter our business operations as may be required by federal, state or local authorities, or that we determine are in the best interest of our employees, customers, partners and shareholders
investora2z
11 years ago
The stock seems to be stable, and is looking to make an attempt to cross hurdles. The volumes are not too high, but there is no reason to be too negative on the stock in the short term. The recent earnings were better than expected with 6.5% growth in revenues and 53% rise in net income. The conservative forecast for the third quarter dampened the sentiments a bit, and the reaction to the good earnings was not too positive. In any case, the stock has done well over the last one year. It has appreciated by around 34% despite a 8% correction from the 52 week high made in May. It can resume the uptrend, but may need some positive news flow to get things going. It continues to acquire smaller billboard companies, including substantial acquisitions in California and the Southwest. The "in-fill" acquisitions, totaling $24 million include local companies like Empire Outdoor which owns hundreds of billboards. Its efforts to convert into an REIT may take a bit of time as the IRS is reviewing its policy on the matter. The conversion will help the investors more if the fundamentals continue to improve. The current valuations are high if seen in isolation, as the trailing P/E is 122 and the forward P/E is 47. However, the low PEG of 0.66 indicates expectation of growth in earnings over the next few years. The competition is fragmented, with direct competition from companies like Clear Channel Outdoors (CCO) and other segments like online advertising. Social media sponsorship / native advertising is gaining popularity. IZEA (IZEA), a company operating in this space, reported results of a survey which showed increasing preference of advertisers for using celebrity influence. Lamar is a strong brand, and is likely to do well provided it remains dynamic to take on the competition.
investora2z
11 years ago
The earnings were better than expected as the company posted a net profit of $21.3 million or 22 cents per share in Q2'13 compared to $13.9 million or 15 cents per share in Q2'12, an increase of nearly 53%. The analyst average forecast by Thomson Reuters was for 21 cents per share. Revenue increased by 6.5% to $324.7 million in Q2'13 compared to $304.9 million in Q2'12. This was at the high end of Lamar's estimate of $322 million to $325 million. The operating margin increased slightly from 21.2% to 21.6%. The forecast for Q3'13 was not too robust as the company expects revenue between $320 million and $323 million. This was perhaps one of the reasons for a muted response to the otherwise good earnings. Sequentially, the revenue increased nearly 15% from $283.48 million in Q1'13. In Q1'13, the company had posted a net loss of $6.16 million or 7 cents per share. Cash was around $118 million as on June 30, and the debt was $2.15 billion. Current ratio remained below one. The stock is up nearly 33% on a 52 week basis, and is significantly up from its 52 week low of $31.33 made in September. However, it has corrected from the 52 week high of $49.61 made in May. The company continues to try for a conversion to REIT, though the IRS is likely to take more time to decide. IRS is reviewing its policy on the matter. The company faces competition from companies like Clear Channel Outdoors (CCO) and from other segments of the advertising market, especially online advertising. Social media sponsorship / native advertising is gaining popularity, and IZEA (IZEA), a company operating in this space, posted record numbers for Q2'13 recently. Lamar is an established player, but needs to remain flexible and aggressive to maintain its competitive advantage.
investora2z
11 years ago
The last earnings had led to a correction in the stock as the company had reported a larger than expected net loss. However, on a yoy basis the net loss had declined substantially. In Q4'12 it had reported a profit of $7.22 million and in Q1'13 the loss was $6.07 million. For the full fiscal 2013, the company expects an EPS of $0.52. This implies that it will be able to report a net profit for the third year in succession. Based on the expected EPS, the valuations are likely to remain stretched, and the net margins are likely to remain low. The Q2'13 earnings are going to be released this week, and if the company can deliver some positive surprises, then the stock can regain momentum on the upside. Despite the recent correction in the stock, it is still up significantly on a 52 week basis. There have been analyst upgrades and downgrades recently. Citigroup increased the price target from $49 to $53, while Thomson Reuters/ Versus downgraded the stock to a sell. The average rating is hold and the average price target is $49, which indicates an upside of 11% from current levels. Growth in revenues is not easy as Lamar faces competition from the likes of Clear Channel Outdoors (CCO). The outdoor advertising segment itself is under pressure, and faces competition from online advertising and other forms of media. Though outdoor advertising will continue to have its place in the world of advertising, threat from concepts like social media sponsorship / native advertising cannot be ignored. IZEA (IZEA) helps advertisers leverage the power of celebrity and peer influence to attract customers. IZEA runs a marketplace wherein advertisers can pay celebrities and other influencers to blog, pin, tweet, YouTube, Instagram, etc. Other forms of advertising are also providing competition, and Lamar has to remain aggressive to continue on the growth path. Earnings will be an important trigger.
investora2z
11 years ago
There has been improvement in fundamentals over the years, and the stock has moved accordingly. In 2011 & 2012 it reported profits, and there are expectations that it may report an EPS of $0.52 for the full fiscal 2013. The stock has appreciated by more than 75% over the last two years. Last earnings were below analyst estimates, and hence the stock corrected sharply from the 52 week high, but it has stabilized a bit after that. The loss had declined sharply from $22.8 million to $6 million on a yoy basis. Valuations are a bit stretched because the ttm EPS is $0.28, but the forward P/E is 47 (fye. 2014). The PEG ratio is 0.68 which indicates that there are expectations good earnings growth over the next five years. The debt of $2.15 billion is a matter of worry, and the revenue growth is also going to be difficult. There are challenges from companies like Clear Channel Outdoors (CCO), and new forms of media are becoming increasingly popular. Social media is a preferred channel for advertising, and concepts like social media sponsorship are gaining in importance. IZEA (IZEA) is a company in the social media sponsorship space which runs a marketplace wherein advertisers can pay celebrities and other influencers to blog, pin, tweet, YouTube, Instagram, etc. There are other forms of advertising which may yield better results. However, outdoor advertising, especially with digital billboards is likely to remain relevant and will keep growing. Lamar is also increasing the number of the digital billboards to adapt to the change. If Lamar can improve the margins over the next few quarters, then the outlook can become much better. Even the conversion to REIT will be beneficial for shareholders if the profits increase. Slippages will not be taken too kindly as the stock has already appreciated a lot.
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