Lamar’s rural billboard plant is recovering fastest from Covid and the company is resuming capital expenditures and acquisitions.  Here are the results of  Lamar’s fourth quarter 2020 earnings release and conference call.

• Revenues declined by 7% to $429 million. CEO Sean Reilly said fourth quarter revenues came in better than expected due to $11 million in political and strength in gaming (up 1%), automotive (up 3%), insurance and healthcare.
• Cashflow (adjusted EBIDTA) decreased by 4% to $208 million.
• Lamar is moderately leveraged with net debt to EBIDTA of 3.96 times at December 2020 versus a company target of 3.5 to 4.0 times.  The company’s debt has a 7.5 year weighted average maturity and a 3.3% weighted average interest rate.

CEO Sean Reilly on the company’s plan to ramp up capital expenditures

…we are pushing hard to deploy new digitals with a goal of adding 300 units in 2021. We began ramping our approval of new digital units in Q4, and I continue to feel good that we’ll hit our goals in terms of digital deployment to 2021.

Reilly sees a weak first quarter but expects 5% revenue growth in 2021

The first quarter is proving to be a little choppy as the post holiday surge in coronavirus slowed advertiser commitments for the first part of Q1…the country has not fully recovered yet either from a health perspective or an economic perspective. So on a year-over-year basis, expect revenue to be down in Q1 2021, perhaps even a tad more than Q4 2020. But the Q2 and Q3 comps are, of course, very different and our internal budget implies that by the end of 2021, revenues will be up a little north of 5%.

Reilly says Lamar is resuming tuck-in billboard acquisitions

…if you run the free cash flow through all of the demands on the company’s capital that Jay laid out and circle around our EBITDA expectations, you’ll see that we have about $140 million to $150 million left over in 2021 after all the demand from the company’s capital. It’s that $140 million to $150 million that we hope to use to do those accretive tuck in acquisitions that we normally do in a normalized year.

Insider’s take:  Lamar is the only one of the big three out of home companies whose cashflow has declined less in percentage terms than revenues.  Lamar took $75 million out of expenses during Covid.  Clear Channel Outdoor is struggling to take $32 million out of expenses. Lamar is more disciplined when it comes to expenses than OUTFRONT or Clear Channel Outdoor and it shows in lean times.  Lamar cuts faster and deeper in order to preserve cash.

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