Lamar Advertising Company Announces Third Quarter Ended September 30, 2024 Operating Results
Three Month Results
• Net revenues was $564.1 million• Net income was $147.8 million• Adjusted EBITDA was $271.2 million
Nine Month Results
• Net revenues was $1.63 billion• Net income was $363.9 million• Adjusted EBITDA was $754.6 million
BATON ROUGE, La., Nov. 08, 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 third quarter ended September 30, 2024.
"Our third quarter results came in largely as expected, with particular strength in local and programmatic sales. Expenses were slightly elevated but as we move through Q4, we see that correcting and see full year consolidated EBITDA margins coming in right around 47%," chief executive Sean Reilly said. "In addition, Q4 revenue growth is pacing ahead of Q3. Consequently, we are raising full year guidance for diluted AFFO to a range of $7.85 to $7.95 per share."
Third Quarter Highlights
• Net revenues increased 4.0%• Net income increased 5.3%• Adjusted EBITDA increased 2.1%• AFFO increased 5.7%
Third Quarter Results
Lamar reported net revenues of $564.1 million for the third quarter of 2024 versus $542.6 million for the third quarter of 2023, a 4.0% increase. Operating income for the third quarter of 2024 decreased $1.6 million to $186.6 million as compared to $188.1 million for the same period in 2023. Lamar recognized net income of $147.8 million for the third quarter of 2024 as compared to net income of $140.4 million for the same period in 2023, an increase of $7.4 million. Net income per diluted share was $1.44 and $1.37 for the three months ended September 30, 2024 and 2023, respectively.
Adjusted EBITDA for the third quarter of 2024 was $271.2 million versus $265.7 million for the third quarter of 2023, an increase of 2.1%.
Cash flow provided by operating activities was $227.4 million for the three months ended September 30, 2024 versus $222.5 million for the third quarter of 2023, an increase of $4.8 million. Free cash flow for the third quarter of 2024 was $198.1 million as compared to $181.0 million for the same period in 2023, a 9.4% increase.
For the third quarter of 2024, funds from operations, or FFO, was $214.0 million versus $210.0 million for the same period in 2023, an increase of 1.9%. Adjusted funds from operations, or AFFO, for the third quarter of 2024 was $220.7 million compared to $208.8 million for the same period in 2023, an increase of 5.7%. Diluted AFFO per share increased 5.4% to $2.15 for the three months ended September 30, 2024 as compared to $2.04 for the same period in 2023.
Acquisition-Adjusted Three Months Results
Acquisition-adjusted net revenue for the third quarter of 2024 increased 3.6% over acquisition-adjusted net revenue for the third quarter of 2023. Acquisition-adjusted EBITDA for the third quarter of 2024 increased 1.8% as compared to acquisition-adjusted EBITDA for the third 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.
Nine Month Results
Lamar reported net revenues of $1.63 billion for the nine months ended September 30, 2024 versus $1.56 billion for the nine months ended September 30, 2023, a 4.7% increase. Operating income for the nine months ended September 30, 2024 increased $11.7 million to $495.4 million as compared to $483.7 million for the same period in 2023. Lamar recognized net income of $363.9 million for the nine months ended September 30, 2024 as compared to net income of $347.5 million for the same period in 2023, an increase of $16.4 million. Net income per diluted share was $3.54 and $3.39 for the nine months ended September 30, 2024 and 2023, respectively.
Adjusted EBITDA for the nine months ended September 30, 2024 was $754.6 million versus $717.6 million for the same period in 2023, an increase of 5.2%.
Cash flow provided by operating activities was $594.3 million for the nine months ended September 30, 2024, an increase of $64.9 million as compared to the same period in 2023. Free cash flow for the nine months ended September 30, 2024 was $540.3 million as compared to $453.5 million for the same period in 2023, a 19.1% increase.
For the nine months ended September 30, 2024, funds from operations, or FFO, was $571.7 million versus $554.2 million for the same period in 2023, an increase of 3.2%. Adjusted funds from operations, or AFFO, for the nine months ended September 30, 2024 was $592.5 million compared to $547.3 million for the same period in 2023, an increase of 8.3%. Diluted AFFO per share increased 7.8% to $5.78 for the nine months ended September 30, 2024 as compared to $5.36 for the same period in 2023.
Liquidity
As of September 30, 2024, Lamar had $450.7 million in total liquidity that consisted of $421.2 million available for borrowing under its revolving senior credit facility and $29.5 million in cash and cash equivalents. There were $320.0 million in borrowings outstanding under the Company's revolving credit facility and $249.8 million outstanding under the Accounts Receivable Securitization Program as of the same date.
Recent Developments
On October 15, 2024, the Company amended its Accounts Receivable Securitization Program to extend the Program's maturity date from July 21, 2025 to October 15, 2027, with a springing maturity date under certain conditions. All other significant terms and conditions were unchanged.
Revised Guidance
We are updating our 2024 guidance issued in May 2024. We now expect net income per diluted share for fiscal year 2024 to be between $4.97 and $4.99, with diluted AFFO per share between $7.85 and $7.95. 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 income and expense; (ii) capitalized contract fulfillment costs, net; (iii) stock-based compensation expense; (iv) non-cash portion of tax expense (benefit); (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 Friday, November 8, 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 Friday, November 15, 2024 at 11:59 p.m. eastern time
Company Contact:
Buster Kantrow
Director of Investor Relations
(225) 926-1000
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 over 4,800 displays.
LAMAR ADVERTISING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2024
2023
2024
2023
Net revenues
$
564,135
$
542,609
$
1,627,536
$
1,555,078
Operating expenses (income)
Direct advertising expenses
182,717
175,305
542,001
515,606
General and administrative expenses
86,111
79,201
253,540
248,392
Corporate expenses
24,148
22,414
77,360
73,520
Stock-based compensation
12,097
3,916
37,713
16,362
Capitalized contract fulfillment costs, net
(132
)
(117
)
(506
)
(203
)
Depreciation and amortization
75,112
74,636
227,531
222,919
Gain on disposition of assets
(2,474
)
(879
)
(5,486
)
(5,243
)
Total operating expense
377,579
354,476
1,132,153
1,071,353
Operating income
186,556
188,133
495,383
483,725
Other expense (income)
Loss on extinguishment of debt
270
115
270
115
Interest income
(662
)
(621
)
(1,701
)
(1,559
)
Interest expense
42,937
45,070
131,761
130,163
Equity in earnings of investee
(2,642
)
(699
)
(2,087
)
(1,326
)
39,903
43,865
128,243
127,393
Income before income tax (benefit) expense
146,653
144,268
367,140
356,332
Income tax (benefit) expense
(1,169
)
3,843
3,225
8,821
Net income
147,822
140,425
363,915
347,511
Net income attributable to non-controlling interest
346
408
849
833
Net income attributable to controlling interest
147,476
140,017
363,066
346,678
Preferred stock dividends
91
91
273
273
Net income applicable to common stock
$
147,385
$
139,926
$
362,793
$
346,405
Earnings per share:
Basic earnings per share
$
1.44
$
1.37
$
3.55
$
3.40
Diluted earnings per share
$
1.44
$
1.37
$
3.54
$
3.39
Weighted average common shares outstanding:
Basic
102,307,059
101,960,356
102,223,918
101,890,573
Diluted
102,617,515
102,130,614
102,547,490
102,085,016
OTHER DATA
Free Cash Flow Computation:
Adjusted EBITDA
$
271,159
$
265,689
$
754,635
$
717,560
Interest, net
(40,716
)
(42,823
)
(125,230
)
(123,684
)
Current tax expense
(2,124
)
(2,588
)
(6,582
)
(7,911
)
Preferred stock dividends
(91
)
(91
)
(273
)
(273
)
Total capital expenditures
(30,140
)
(39,145
)
(82,270
)
(132,152
)
Free cash flow
$
198,088
$
181,042
$
540,280
$
453,540
