“The year is off to an excellent start,” was how Lamar CEO Sean Reilly introduced the company’s 1Q 2022 earnings.  Here are the results of Lamar’s first quarter 2022 earnings release and conference call.

• Revenues increased 22% to $451 million. Billboard revenues are up 17%.  Digital revenues are up 20%.  Reilly said average daily rates on analog panels were up mid to high single digits and he expects the company to continue to drive rate.  Local revenue increased 22%.  National revenue increased 9%.
• Cashflow (adjusted EBIDTA) increased 26% to $191 million.
• Capital expenditures totaled $29 million.  Maintenance capex was $13 million.  Growth capex was $16 million  The company added 90 new digital billboards through conversions and acquisitions and has over 100 digital billboards on order.  The company has 4,025 digital units.
• Acquisitions were $55 million in the second quarter of 2022.
• Leverage (Debt/EBIDTA) is a low 3.26.  The company’s weighted average interest rate was 3.3%.  65% of the company’s debt is fixed rate.

CEO Sean Reilly says Lamar will raise the dividend

Sales pacings are strong and we are not seeing any macro slowdown in our book…management will recommend a $0.10 per share increase in our distribution to $1.20 per share beginning in Q2

Reilly on strong sectors

Service, retail, gaming, financial and education.  Importantly, amusement and entertainment is back to 80% of pre-pandemic levels

Reilly on M&A

We remain active in the M&A market…this week we acquired Burkhart Advertising, the leading out of home platform in South Bend…Burkhart is one of the oldest and most highly regarded companies in our industry and we were honored that the Miller family trusted Lamar to build on what they have established.  With that deal we have completed more than $200 million worth of transactions so far in 2022 and there’s more in the pipeline…

CFO Jay Johnson says Lamar is converting to an upREIT to provide better tax benefits to sellers.

Lamar is in the process of converting to an upREIT…upREIT transactions can provide an attractive tax deferred exit strategy for owners with a low tax basis who may recognize a significant taxable gain in the sale of real estate.  We anticipate this conversion will be complete by the end of the second quarter.

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