• Outfront Revenues up 12% in 4Q 2018

    “Very strong financial results in the fourth quarter were driven by great execution and our digital investments…” was how Outfront’s CEO Jeremy Male summarized fourth quarter 2018 financials.  Here are the highlights from the earnings release and conference call.

    • Revenues increased by 12% to $452 million in the fourth quarter of 2018.  Transit revenues up 19%.  Billboard revenues up 9%.  Local was 55% of Outfront’s business for the quarter and national was 45%.  Local and national revenues both grew 11% in the quarter.
    • Adjusted OBIDA (operating income before interest, depreciation and amortization) increased 19% to $144 million during the fourth quarter of 2018.  This is a departure from the past where Outfront’s expenses have tended to increase as fast as revenue.
    • Debt was $2.3 billion at December 31, 2018.  The company’s Net Leverage Radio (Debt-Cash divided by EBIDTA) was 4.7 which suggests to Insider that the company is slightly below the sustainable level for debt.  The company has cash of $53 million and $379 million of availability under credit facilities with which to finance future growth.
    • Capexp of $20 million in the fourth quarter included $15 million for growth (including 20 digital billboard conversions) and $5 million for maintenance capexp.
    • The company added 879 subway displays and 55 station displays under its contract with the MTA, bringing MTA displays to 1,229.  It’s still early days. The MTA contract requires the company to install 46,000 displays. Equipment outlays on the contract were $30 million during the fourth quarter of 2018.  The total MTA outlays are projected in excess of $800 million.

    Insider’s take:  Outfront had a great quarter.  Double digit revenue growth.  Cashflow increased faster than revenue which suggests expenses are under control.  Outfront stock finished up 1.4% to $21.84 on a day when the S&P 500 was -0.08%, Clear Channel Outdoor was -1.07% and Lamar was -0.17%.


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