Lamar’s CEO Sean Reilly summarized the second quarter as follows: “The trends that we observed in Q1 held in Q2 strong demand from local and regional advertisers more than offset softness in some national customers allowing us to deliver solid consolidated revenue growth.” Here are the results of Lamar’s 2Q 2024 earnings release and conference call, sponsored and analyzed by SignValue
- Revenues grew by 4.5% to $565 million. Local revenues were up 5%, national declined 2.5% and programmatic grew 72% to $8.6 million. The South Atlantic region was the strongest performer and Southern California was the weakest performer.
- Adjusted EBIDTA grew 7% to $272 million.
- At June 30, 2024 Lamar had $3.5 billion in total debt with a weighted average costs of 5% and a weighted average maturity of 3.8 years. Debt/Cashflow was a low 2.9 times. The company paid off its $350 million term loan on July 31, 2024 which will free up cashflow for acquisitions and capexp.
- Capital expenditures totaled $23 million for the quarter, including $14 million of maintenance. Capexp was down from prior years as the company used free cash to retire a term loan.
Lamar CEO Sean Reilly on a slowdown in acquisitions
We spent about $10 million on a handful of deals for the full year acquisition spending is likely to be around 40 to 50 million we continue to think the M&A market will pick up as we turn the corner into 2025…we paid off the term loan last week which put our balance sheet already the best in the industry in even better shape so we should be well positioned to participate if attractive assets hit the market..I think as rates go down and valuations reflect that sellers will want to take advantage of that you know that change in in the rate cycle because it does have an impact on valuation cycles…a lot of the M&A that we do is generated from within our footprint by our folks on the ground…when we put out the word that we were going to slow things down a little bit because we wanted to take out the term a loan people took that signal and they said OK we’ll we’ll come talk to you in 2025…
Reilly on Growing Programmatic
Two things are happening. #1 programmatic for digital out of home is growing on its own right. It’s a channel that’s being embraced by digital buyers …the other thing that is happening is it’s becoming clear that not all out of home screens are equal and what I mean by that is advertisers are beginning to see that large format digital out of home is…achieving their goals better than sort of the smaller formats that you may see in different venues so there is a little bit of share shift going on as advertisers come to understand the power of the larger format digital
SignValue’s Take: Lamar has another good quarter with reasonable local revenue growth, good expense controls and a tidied up balance sheet which clears the decks for more acquisitions and capexp in 2025. Lamar closed the day up 1.5%, S&P 500 up 1.7%, OUTFRONT up 1.4%, Clear Channel Outdoor up 0.4%
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