Lamar Advertising Company Announces First Quarter Ended March 31, 2024 Operating Results

Three Month Results

  • Net revenue was $498.2 million
  • Net income was $78.5 million
  • Adjusted EBITDA was $211.9 million

BATON ROUGE, La., May 02, 2024 (GLOBE NEWSWIRE) -- Lamar Advertising Company (the “Company” or “Lamar”) (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, 2024.

"Our first-quarter results exceeded our internal expectations, with particular strength in local sales. In addition, we returned to same-store growth in digital, and the rest of 2024 is shaping up well," Lamar chief executive Sean Reilly said. "As a result, we are raising our guidance for full-year diluted AFFO to a range of $7.75 to $7.90 per share."

First Quarter Highlights

  • Net revenue increased 5.7%
  • Adjusted EBITDA increased 7.1%
  • Diluted AFFO per share increased 9.2%

First Quarter Results

Lamar reported net revenues of $498.2 million for the first quarter of 2024 versus $471.3 million for the first quarter of 2023, a 5.7% increase. Operating income for the first quarter of 2024 increased $5.8 million to $124.6 million as compared to $118.8 million for the same period in 2023. Lamar recognized net income of $78.5 million for the first quarter of 2024 as compared to net income of $76.2 million for the same period in 2023, an increase of $2.3 million. Net income per diluted share was $0.76 and $0.74 for the three months ended March 31, 2024 and 2023, respectively.

Adjusted EBITDA for the first quarter of 2024 was $211.9 million versus $198.0 million for the first quarter of 2023, an increase of 7.1%.

Cash flow provided by operating activities was $110.6 million for the three months ended March 31, 2024 versus $108.7 million for the first quarter of 2023, an increase of $1.9 million. Free cash flow for the first quarter of 2024 was $138.7 million as compared to $113.3 million for the same period in 2023, a 22.4% increase.

For the first quarter of 2024, funds from operations, or FFO, was $148.5 million versus $143.5 million for the same period in 2023, an increase of 3.5%. Adjusted funds from operations, or AFFO, for the first quarter of 2024 was $158.2 million compared to $144.1 million for the same period in 2023, an increase of 9.8%. Diluted AFFO per share increased 9.2% to $1.54 for the three months ended March 31, 2024 as compared to $1.41 for the same period in 2023.

Acquisition-Adjusted Three Months Results

Acquisition-adjusted net revenue for the first quarter of 2024 increased 5.3% over acquisition-adjusted net revenue for the first quarter of 2023. Acquisition-adjusted EBITDA for the first quarter of 2024 increased 6.5% as compared to acquisition-adjusted EBITDA for the first quarter of 2023. Acquisition-adjusted net revenue and acquisition-adjusted EBITDA include adjustments to the 2023 period for acquisitions and divestitures for the same time frame as actually owned in the 2024 period. See “Reconciliation of Reported Basis to Acquisition-Adjusted Results”, which provides reconciliations to GAAP for acquisition-adjusted measures.

Liquidity

As of March 31, 2024, Lamar had $634.8 million in total liquidity that consisted of $598.4 million available for borrowing under its revolving senior credit facility and $36.4 million in cash and cash equivalents. There were $143.0 million in borrowings outstanding under the Company’s revolving credit facility and $235.7 million outstanding under the Accounts Receivable Securitization Program as of the same date.

Revised Guidance

We are updating our 2024 guidance issued in February 2024. We now expect net income per diluted share for fiscal year 2024 to be between $4.95 and $5.01, with diluted AFFO per share between $7.75 and $7.90. See “Supplemental Schedules Unaudited REIT Measures and Reconciliations to GAAP Measures” for reconciliation to GAAP.

Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding sales trends. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among others: (1) our significant indebtedness; (2) the state of the economy and financial markets generally, and the effect of the broader economy on the demand for advertising; (3) the continued popularity of outdoor advertising as an advertising medium; (4) our need for and ability to obtain additional funding for operations, debt refinancing or acquisitions; (5) our ability to continue to qualify as a Real Estate Investment Trust (“REIT”) and maintain our status as a REIT; (6) the regulation of the outdoor advertising industry by federal, state and local governments; (7) the integration of companies and assets that we acquire and our ability to recognize cost savings or operating efficiencies as a result of these acquisitions; (8) changes in accounting principles, policies or guidelines; (9) changes in tax laws applicable to REITs or in the interpretation of those laws; (10) our ability to renew expiring contracts at favorable rates; (11) our ability to successfully implement our digital deployment strategy; and (12) the market for our Class A common stock. For additional information regarding factors that may cause actual results to differ materially from those indicated in our forward-looking statements, we refer you to the risk factors included in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, as supplemented by any risk factors contained in our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. We caution investors not to place undue reliance on the forward-looking statements contained in this document. These statements speak only as of the date of this document, and we undertake no obligation to update or revise the statements, except as may be required by law.

Use of Non-GAAP Financial Measures

The Company has presented the following measures that are not measures of performance under accounting principles generally accepted in the United States of America (“GAAP”): adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), free cash flow, funds from operations (“FFO”), adjusted funds from operations (“AFFO”), diluted AFFO per share, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense. Our management reviews our performance by focusing on these key performance indicators not prepared in conformity with GAAP. We believe these non-GAAP performance indicators are meaningful supplemental measures of our operating performance and should not be considered in isolation of, or as a substitute for their most directly comparable GAAP financial measures.

Our Non-GAAP financial measures are determined as follows:

  • We define adjusted EBITDA as net income before income tax expense (benefit), interest expense (income), loss (gain) on extinguishment of debt and investments, equity in (earnings) loss of investee, stock-based compensation, depreciation and amortization, loss (gain) on disposition of assets and investments, transaction expenses and investments and capitalized contract fulfillment costs, net.
  • Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenues.
  • Free cash flow is defined as adjusted EBITDA less interest, net of interest income and amortization of deferred financing costs, current taxes, preferred stock dividends and total capital expenditures.
  • We use the National Association of Real Estate Investment Trusts definition of FFO, which is defined as net income before (gain) loss from the sale or disposal of real estate assets and investments, net of tax, and real estate related depreciation and amortization and including adjustments to eliminate unconsolidated affiliates and non-controlling interest.
  • We define AFFO as FFO before (i) straight-line revenue and expense; (ii) capitalized contract fulfillment costs, net; (iii) stock-based compensation expense; (iv) non-cash portion of tax provision; (v) non-real estate related depreciation and amortization; (vi) amortization of deferred financing costs; (vii) loss on extinguishment of debt; (viii) transaction expenses; (ix) non-recurring infrequent or unusual losses (gains); (x) less maintenance capital expenditures; and (xi) an adjustment for unconsolidated affiliates and non-controlling interest.
  • Diluted AFFO per share is defined as AFFO divided by weighted average diluted common shares outstanding.
  • Outdoor operating income is defined as operating income before corporate expenses, stock-based compensation, capitalized contract fulfillment costs, net, transaction expenses, depreciation and amortization and loss (gain) on disposition of assets.
  • Acquisition-adjusted results adjusts our net revenue, direct and general and administrative expenses, outdoor operating income, corporate expense and EBITDA for the prior period by adding to, or subtracting from, the corresponding revenue or expense generated by the acquired or divested assets before our acquisition or divestiture of these assets for the same time frame that those assets were owned in the current period. In calculating acquisition-adjusted results, therefore, we include revenue and expenses generated by assets that we did not own in the prior period but acquired in the current period. We refer to the amount of pre-acquisition revenue and expense generated by or subtracted from the acquired assets during the prior period that corresponds with the current period in which we owned the assets (to the extent within the period to which this report relates) as “acquisition-adjusted results”.
  • Acquisition-adjusted consolidated expense adjusts our total operating expense to remove the impact of stock-based compensation, depreciation and amortization, transaction expenses, capitalized contract fulfillment costs, net, and loss (gain) on disposition of assets and investments. The prior period is also adjusted to include the expense generated by the acquired or divested assets before our acquisition or divestiture of such assets for the same time frame that those assets were owned in the current period.

Adjusted EBITDA, FFO, AFFO, diluted AFFO per share, free cash flow, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense are not intended to replace other performance measures determined in accordance with GAAP. Free cash flow, FFO and AFFO do not represent cash flows from operating activities in accordance with GAAP and, therefore, these measures should not be considered indicative of cash flows from operating activities as a measure of liquidity or of funds available to fund our cash needs, including our ability to make cash distributions. Adjusted EBITDA, free cash flow, FFO, AFFO, diluted AFFO per share, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense are presented as we believe each is a useful indicator of our current operating performance. Specifically, we believe that these metrics are useful to an investor in evaluating our operating performance because (1) each is a key measure used by our management team for purposes of decision making and for evaluating our core operating results; (2) adjusted EBITDA is widely used in the industry to measure operating performance as it excludes the impact of depreciation and amortization, which may vary significantly among companies, depending upon accounting methods and useful lives, particularly where acquisitions and non-operating factors are involved; (3) adjusted EBITDA, FFO, AFFO, diluted AFFO per share and acquisition-adjusted consolidated expense each provides investors with a meaningful measure for evaluating our period-over-period operating performance by eliminating items that are not operational in nature and reflect the impact on operations from trends in occupancy rates, operating costs, general and administrative expenses and interest costs; (4) acquisition-adjusted results is a supplement to enable investors to compare period-over-period results on a more consistent basis without the effects of acquisitions and divestitures, which reflects our core performance and organic growth (if any) during the period in which the assets were owned and managed by us; (5) free cash flow is an indicator of our ability to service debt and generate cash for acquisitions and other strategic investments; (6) outdoor operating income provides investors a measurement of our core results without the impact of fluctuations in stock-based compensation, depreciation and amortization and corporate expenses; and (7) each of our Non-GAAP measures provides investors with a measure for comparing our results of operations to those of other companies.

Our measurement of adjusted EBITDA, FFO, AFFO, diluted AFFO per share, free cash flow, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense may not, however, be fully comparable to similarly titled measures used by other companies. Reconciliations of adjusted EBITDA, FFO, AFFO, diluted AFFO per share, free cash flow, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense to the most directly comparable GAAP measures have been included herein.

Conference Call Information

A conference call will be held to discuss the Company’s operating results on Thursday, May 2, 2024 at 8:00 a.m. central time. Instructions for the conference call and Webcast are provided below:

Conference Call

All Callers:1-800-420-1271 or 1-785-424-1634
Passcode:63104
  
Live Webcast:www.lamar.com/About/Investors/Presentations
  
Webcast Replay:www.lamar.com/About/Investors/Presentations
 Available through Thursday, May 9, 2024 at 11:59 p.m. eastern time
  
Company Contact:Buster Kantrow
 Director of Investor Relations
 (225) 926-1000
 bkantrow@lamar.com
 

General Information

Founded in 1902, Lamar Advertising (Nasdaq: LAMR) is one of the largest outdoor advertising companies in North America, with over 360,000 displays across the United States and Canada. Lamar offers advertisers a variety of billboard, interstate logo, transit and airport advertising formats, helping both local businesses and national brands reach broad audiences every day. In addition to its more traditional out-of-home inventory, Lamar is proud to offer its customers the largest network of digital billboards in the United States with approximately 4,800 displays.

 
LAMAR ADVERTISING COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 
 Three Months Ended
March 31,
  2024   2023 
Net revenues$498,150  $471,332 
Operating expenses (income)   
Direct advertising expenses 175,829   167,758 
General and administrative expenses 83,095   80,882 
Corporate expenses 27,304   24,740 
Stock-based compensation 14,466   8,040 
Capitalized contract fulfillment costs, net (184)  674 
Depreciation and amortization 75,228   73,125 
Gain on disposition of assets (2,188)  (2,688)
Total operating expense 373,550   352,531 
Operating income 124,600   118,801 
Other expense (income)   
Interest income (467)  (461)
Interest expense 44,487   41,444 
Equity in loss (earnings) of investee 559   (178)
  44,579   40,805 
Income before income tax expense 80,021   77,996 
Income tax expense 1,522   1,798 
Net income 78,499   76,198 
Net income attributable to non-controlling interest 275   157 
Net income attributable to controlling interest 78,224   76,041 
Preferred stock dividends 91   91 
Net income applicable to common stock$78,133  $75,950 
Earnings per share:   
Basic earnings per share$0.77  $0.75 
Diluted earnings per share$0.76  $0.74 
Weighted average common shares outstanding:   
Basic 102,115,159   101,792,317 
Diluted 102,447,333   101,963,563 
OTHER DATA   
Free Cash Flow Computation:   
Adjusted EBITDA$211,922  $197,952 
Interest, net (42,389)  (39,341)
Current tax expense (1,276)  (2,950)
Preferred stock dividends (91)  (91)
Total capital expenditures (29,482)  (42,285)
Free cash flow$138,684  $113,285 
 


 
SUPPLEMENTAL SCHEDULES
SELECTED BALANCE SHEET AND CASH FLOW DATA
(IN THOUSANDS)
 
 March 31,
2024
 December 31,
2023
 (Unaudited)  
Selected Balance Sheet Data:   
Cash and cash equivalents$36,405  $44,605 
Working capital deficit$(616,535) $(340,711)
Total assets$6,525,067  $6,563,622 
Total debt, net of deferred financing costs (including current maturities)$3,401,336  $3,341,127 
Total stockholders’ equity$1,183,637  $1,216,788 
 


 Three Months Ended
March 31,
  2024   2023 
 (Unaudited)
Selected Cash Flow Data:    
Cash flows provided by operating activities$110,562  $108,712 
Cash flows used in investing activities$45,016  $52,664 
Cash flows used in financing activities$73,626  $75,155 
 


 
SUPPLEMENTAL SCHEDULES
UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES
(IN THOUSANDS)
 
 Three Months Ended
March 31,
  2024   2023 
Reconciliation of Cash Flows Provided by Operating Activities to Free Cash Flow:   
Cash flows provided by operating activities$110,562  $108,712 
Changes in operating assets and liabilities 58,191   47,672 
Total capital expenditures (29,482)  (42,285)
Preferred stock dividends (91)  (91)
Capitalized contract fulfillment costs, net (184)  674 
Other (312)  (1,397)
Free cash flow$138,684  $113,285 
    
Reconciliation of Net Income to Adjusted EBITDA:   
Net income$78,499  $76,198 
Interest income (467)  (461)
Interest expense 44,487   41,444 
Equity in loss (earnings) of investee 559   (178)
Income tax expense 1,522   1,798 
Operating income 124,600   118,801 
Stock-based compensation 14,466   8,040 
Capitalized contract fulfillment costs, net (184)  674 
Depreciation and amortization 75,228   73,125 
Gain on disposition of assets (2,188)  (2,688)
Adjusted EBITDA$211,922  $197,952 
    
Capital expenditure detail by category:   
Billboards - traditional$7,148  $13,538 
Billboards - digital 13,413   17,432 
Logo 1,336   3,140 
Transit 351   719 
Land and buildings 2,316   4,174 
Operating equipment 4,918   3,282 
Total capital expenditures$29,482  $42,285 
 


 
SUPPLEMENTAL SCHEDULES
UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES
(IN THOUSANDS)
 
 Three Months Ended
March 31,
 2024 2023 % Change
Reconciliation of Reported Basis to Acquisition-Adjusted Results(a):     
Net revenue$498,150 $471,332 5.7%
Acquisitions and divestitures   1,694  
Acquisition-adjusted net revenue 498,150  473,026 5.3%
Reported direct advertising and G&A expenses 258,924  248,640 4.1%
Acquisitions and divestitures   592  
Acquisition-adjusted direct advertising and G&A expenses 258,924  249,232 3.9%
Outdoor operating income 239,226  222,692 7.4%
Acquisition and divestitures   1,102  
Acquisition-adjusted outdoor operating income 239,226  223,794 6.9%
Reported corporate expense 27,304  24,740 10.4%
Acquisitions and divestitures   66  
Acquisition-adjusted corporate expenses 27,304  24,806 10.1%
Adjusted EBITDA 211,922  197,952 7.1%
Acquisitions and divestitures   1,036  
Acquisition-adjusted EBITDA$211,922 $198,988 6.5%
 
(a)   Acquisition-adjusted net revenue, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses and EBITDA include adjustments to 2023 for acquisitions and divestitures for the same time frame as actually owned in 2024.
 


 
SUPPLEMENTAL SCHEDULES
UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES
(IN THOUSANDS)
 
 Three Months Ended
March 31,
  2024   2023  % Change
Reconciliation of Net Income to Outdoor Operating Income:     
Net income$78,499  $76,198  3.0%
Interest expense, net 44,020   40,983   
Equity in loss (earnings) of investee 559   (178)  
Income tax expense 1,522   1,798   
Operating income 124,600   118,801  4.9%
Corporate expenses 27,304   24,740   
Stock-based compensation 14,466   8,040   
Capitalized contract fulfillment costs, net (184)  674   
Depreciation and amortization 75,228   73,125   
Gain on disposition of assets (2,188)  (2,688)  
Outdoor operating income$239,226  $222,692  7.4%
 


 
SUPPLEMENTAL SCHEDULES
UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES
(IN THOUSANDS)
 
 Three Months Ended
March 31,
  2024   2023  % Change
Reconciliation of Total Operating Expense to Acquisition-Adjusted Consolidated Expense:     
Total operating expense$373,550  $352,531  6.0%
Gain on disposition of assets 2,188   2,688   
Depreciation and amortization (75,228)  (73,125)  
Capitalized contract fulfillment costs, net 184   (674)  
Stock-based compensation (14,466)  (8,040)  
Acquisitions and divestitures    658   
Acquisition-adjusted consolidated expense$286,228  $274,038  4.4%
 


 
SUPPLEMENTAL SCHEDULES
UNAUDITED REIT MEASURES
AND RECONCILIATIONS TO GAAP MEASURES
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 
 Three Months Ended
March 31,
  2024   2023 
Adjusted Funds from Operations:   
Net income$78,499  $76,198 
Depreciation and amortization related to real estate 71,729   70,350 
Gain from sale or disposal of real estate, net of tax (2,094)  (2,720)
Adjustments for unconsolidated affiliates and non-controlling interest 372   (335)
Funds from operations$148,506  $143,493 
Straight-line expense 1,273   957 
Capitalized contract fulfillment costs, net (184)  674 
Stock-based compensation expense 14,466   8,040 
Non-cash portion of tax provision 246   (1,152)
Non-real estate related depreciation and amortization 3,498   2,775 
Amortization of deferred financing costs 1,631   1,642 
Capitalized expenditures-maintenance (10,827)  (12,692)
Adjustments for unconsolidated affiliates and non-controlling interest (372)  335 
Adjusted funds from operations$158,237  $144,072 
Divided by weighted average diluted common shares outstanding 102,447,333   101,963,563 
Diluted AFFO per share$1.54  $1.41 
 


 
SUPPLEMENTAL SCHEDULES
UNAUDITED REIT MEASURES
AND RECONCILIATIONS TO GAAP MEASURES
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 
Revised projected 2024 Adjusted Funds From Operations:
 Year ended December 31, 2024
 Low High
Net income$508,185  $514,185 
Depreciation and amortization related to real estate 288,000   288,000 
Gain from sale or disposal of real estate, net of tax (5,000)  (5,000)
Adjustments for unconsolidated affiliates and non-controlling interest (4,500)  (4,500)
Funds from operations$786,685  $792,685 
Straight-line expense 4,200   4,200 
Capitalized contract fulfillment costs, net 500   500 
Stock-based compensation expense 30,000   40,000 
Non-cash portion of tax provision 500   500 
Non-real estate related depreciation and amortization 12,000   12,000 
Amortization of deferred financing costs 6,200   6,200 
Loss on extinguishment of debt 315   315 
Capitalized expenditures-maintenance (50,000)  (50,000)
Adjustments for unconsolidated affiliates and non-controlling interest 4,500   4,500 
Adjusted funds from operations$794,900  $810,900 
Weighted average diluted common shares outstanding 102,600,000   102,600,000 
Diluted earnings per share$4.95  $5.01 
Diluted AFFO per share$7.75  $7.90 
 

The guidance provided above is based on a number of assumptions that management believes to be reasonable and reflects our expectations as of May 2, 2024. Actual results may differ materially from these estimates as a result of various factors, and we refer to the cautionary language regarding “forward-looking statements” included in the press release when considering this information.


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