Lamar Advertising CEO Sean Reilly used words like “challenging” and “jitters” to describe what advertisers are thinking during yesterday’s Lamar conference call.  Here are the results of the Lamar Advertising 1Q 23 earnings release and conference call.

• Revenue increased by 4.4% to $451 million due primarily to acquisitions.  Organic revenue only grew 1.5% as gains in local revenue were offset by weak national revenue.  Reilly expects national revenues to be flat at best for the year.
• Adjusted cashflow increased by 3.5% to $198 million.
• The company is in strong financial condition.  Lamar Advertising CFO Jay Johnson said Lamar is considering plans to fix approximately 75% of its debt.  The company’s leverage (Total Debt/EBIDTA) is a low 3.27.  The weighted average cost of debt is 4.7% and the weighted average maturity is 5 years.

Reilly on a decline in digital billboard yields

On a same board basis digital was down 3.5% so we’re going to monitor that going forward…Our team in the field doesn’t believe that is a reason to slow our digital deployment.  They are seeing what I would call jitters and caution amongst our customers.  They are tending to commit later and buy a little shorter…

Reilly says M&A is quiet 

The year is off to a quiet start.  We closed 11 deals for about $14 million in the first quarter.  We have some additional transactions in the diligence and closing stages but continue to anticipate that this will be a modest acquisition year for us with spend in the $100-150 million range.

Reilly on what’s down and what’s up

Real estate which tends to be local and insurance which is more national.  Another one we’ve talked about of late is gaming…that has continued to tail off.  Service continues to be strong and really carrying us – up 17%…restaurants are also strong – up 6%…

Billboard Insider’s take:  Lamar dropped 4.4% on a day when the S&P 500 dropped 0.7%, OUTFRONT dropped 8% and Clear Channel Outdoor dropped 9%.  Investors are pricing a recession and a reduction in national ad spending into out of home stocks.

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