Outfront Organic Revenue up 2.8% in 4Q 2016

Here are the highlights from Outfront’s  fourth quarter 2016 financials and Seeking Alpha Earnings call.

  • Revenues decreased 0.3% to $397 million during the fourth quarter of 2016 as a 2.9% acquisition adjusted increase in revenues was offset by the disposition of the company’s Latin American business.  The 2.8% increase in organic revenues is higher than Lamar’s 2.0% figure and well in excess of GDP growth.   The increase was due to higher pricing and additional revenue from the conversion of static billboards to digital.
  • Adjusted cashflow decreased 0.3% to $117 million due to reduced revenue.  The company’s cashflow margin was 29.5%.
  • Outfront added 76 digital billboards during 2016 and expects to add 100 digital billboards in 2017.   Jeremy Male said that the company sees revenues increase by three or four times after it switches a static board to digital.
  • The company’s Debt/Cashflow is 4.6 times slightly above the company’s target of 3.5-4 times.
  • Outfront spent $3.8 million on professional fees during the fourth quarter of the year for advice relating to corporate restructuring.  Perhaps the company would like to move its margin closer to Lamar’s.  Donald Shassian, Outfront’s treasurer said the restructuring is expects to result in $16 million in annualized expense savings at the company.
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