Lamar is recovering from covid faster than OUTFRONT, Clear Channel Outdoor or JCDecaux and will aggressively deploy digital billboards in 2021. Here are the results of the Lamar 3rd quarter earnings release and conference call.
- Revenues declined 15% to $386 million during the third quarter of 2020. This was an improvement from the second quarter 2020 when revenues declined 22%. Local revenue declined 9%. National revenue declined 30%. Strong categories were insurance, gaming, hospitals, automotive and beverages (Miller-Coors and Anheuser-Busch). Weak categories were sports, events and amusements.
- Adjusted cashflow (EBIDTA) declined 21% to $171 million in the third quarter of 2020 due to lower revenues.
- At September 30, 2020 Lamar had $771 million in total liquidity including $667 available under a revolving senior credit facility, and $35 million available under an Accounts receivable program.
Lamar CEO Sean Reilly was upbeat about the company’s current and projected performance.
Our business continues to rebound with momentum building from July through September and I can tell you that October, helped by what will be a record setting year for us in political advertising, was exceptionally strong. A number of our plants and even our regions exceeded their October 2019 sales in October 2020. Another strong data point was the recovery of our programmatic channel as October had a record setting month…
Reilly says national revenues are still down but activity is resuming.
And while national advertising lagged local advertising again in Q3 national activity measured by the number of RFP’s we’re asked to respond to returned to 2019 levels toward the end of the quarter.
Lamar will resume an aggressive digital billboard deployment in 2021 after a 2020 pause.
With business improving we are back on our front foot regarding digital deployment. We are moving forward in the final 2 months of 2020 with some of the digital conversions we put on hold in the spring and I’ve challenged out team to deploy over 300 new digitals in 2021.
Lamar CFO Jay Johnson commented on the lack of acquisition activity.
Beginning in March we curtailed acquisitions and have been limited activity through the third quarter. Acquisitions completed in the third quarter included only $2.6 million. However, given our strong financial position in the past several weeks we have considered a few smaller opportunities…it is pretty clear there remains a valuation gap between buyers and sellers…
Insider’s take: A good story for Lamar. Local is recovering. National activity is picking up. Political will provide a boost in the fourth quarter. The company’s confidence in the future is evident in the fact that it has resumed digital billboard deployment. Lamar finished the day up 5% on a day when OUTFRONT was up 6.6%, Clear Channel Outdoor was up 4.1% and the S&P 500 was up 2%.
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