Here are the highlights from Lamar’s 2Q 2017 earnings release and conference call:

• Net revenue increased 2.5% to $397 million.  Acquisition adjusted net revenue increased 1.7%.  National revenue increased 4.5% and local revenue increased 1.5%.  CEO Sean Reilly said that the company’s coast regions are doing well.  It’s the middle part of the country that’s lagging.

• Acquisition adjusted expenses increased 1.0% to $215 million.

• Acquisition adjusted Cashflow (EBIDTA) increased by 2.4% to $182 million.

• Debt/Cashflow was a moderate 3.28 at June 30, 2017.  During the quarter the company closed a $450 million term loan and a $450 million revolver at a 25 basis point drop in borrowing costs

• CEO Sean Reilly adjusted down expectations for the rest of the year:”… due to what we now see as a sluggish ad environment for the rest of the year, we are reducing our full year AFFO (Adjusted Funds From Operations) per share guidance…”

• Reilly said digital screens are growing:  “Our digital platform continues to outperform the rest of the platform…Digital grew 2.3% in Q2.  We ended the quarter with 2,672 digital units in the air.  That’s an increase of 60 quarter to quarter and 98 digital boards year over year.”

• Reilly on the Steen Acquisition:  “On Friday we announced the acquisition of Steen in Philadelphia.  That’s just an outstanding property and a great acquisition for us.  It makes us a real player in the #4 DMA in the country…They are an old line outdoor family that has been in the industry since the late 30’s.  They’ve built a wonderful company.  We’re proud to have in in the Lamar fold.”

Insider’s take:  A decent revenue quarter and good expense control but the last half of the year looks flat.  Lamar closed the day down 4% to $65.54.

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