“We were off to a strong start to 2020. Then over course the coronavirus pandemic adversely affected us and our customers in late March and through April. We have used that time to prepare the company for the downturn and ensure we emerge even stronger on the other side.” That’s how Sean Reilly introduced Lamar’s first quarter 2019 financials. Here are the results of Lamar’s first quarter 2020 earnings release and conference call.
- Net revenue increased 6% to $407 million during the first quarter of 2020. Reilly said that April revenues are off 20%, May will be a little worse than that and June will start to show recovery. The company’s revenue mix is 79% local, 21% national. The company is seeing increased demand right now from attorneys, services and healthcare.
- Operating Expenses increased by 4% to $247 million for the first quarter of 2020. Reilly said Lamar will reduce consolidated 2020 operating expense by at least $50 million (5%) from 2019’s proforma total of approximately $980 million. Cuts include:
- reduced executive salaries and management bonuses ($16.5 million)
- lease portfolio savings and reduced payments to transit and airport authorities ($13 million)
- lower sales commissions ($9 million)
- lower travel and entertainment ($6.5 million).
- Adjusted EBITDA increased 9.4% to $160 million during the first quarter of 2020 due to increased revenues.
- Debt/Cashflow was a moderate 4.03 at March 31, 2020. CFO Jay Johnson said the company does not anticipate having to approach the bank group to seek relief from any financial covenants for the forseeable future.
- To save cash Lamar has reduced the 2020 capexp budget by over 50%. Capital spending for the balance of the year projected at $32 million, evenly split between growth and maintenance.
Insider’s take: Lamar is well positioned to take advantage of the recovery with low leverage and less exposure to transit and large DMA’s which have been most severely impacted by COVID. Lamar finished up 18% on a day when the S&P 500 was up 1%, OUTFRONT was up 12% and Clear Channel Outdoor was up 14%.
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