Q2 2024 Lamar Advertising Co Earnings Call

August 8, 2024

Hello.

[music].

Speaker Change: Excuse me everyone. We now have gene Reilly and Jay Johnson in conference. Please be aware that each of your lines is in a listen only mode.

Operator: Excuse me, everyone.

Operator: Excuse me, everyone, we now have Sheen Reilly and Jay Johnson in conference. At the conclusion of the company's presentation, we will open the floor to questions. To ask a question, please press star and one on your telephone keypad. In the course of the discussion, Lamar may make forward-looking statements regarding the company, including statements about its future, financial performance, strategic goals, plans, and objectives, including with respect to the amount and timing of any distributions to stockholders and the impacts and effects of general economic conditions on the company's business, financial conditions, and results of operations.

Operator: Excuse me, everyone; we now have Sheen Reilly and Jay Johnson in conference. Please be aware that each of your lines is in a listen-only mode. At the conclusion of the company's presentation, we will open the floor for questions. To ask a question, please press star> and one on your telephone keypad.

Operator: We now have Shane Reilly and Jay Johnson in conference. Please be aware that each of your lines is in a listen-only mode.

Operator: At the conclusion of the company's presentation, we will open the floor for questions. To ask a question, please press star and one on your telephone keypad.

Speaker Change: At the conclusion of the company's presentation, we will open the floor for questions to ask a question. Please press star and one on your telephone keypad.

Operator: In the course of the discussion, Lamar may make sure we're looking statements regarding the company, including statements about its future financial performance, strategic goals, plans and objectives, including with respect to the amount of timing of any distributions to stockholders and the impacts and effects of general economic conditions on the company's business, financial condition and results of operations. All four are looking statements involve risk and circumstances and contingencies, many of which are beyond Lamar's control and which may cause actual results to differ materially from anticipated results. Lamar has identified important factors that can cause actual results in differ material from those discussed in this call in the company's second quarter, 2021 earnings release, and its most recent annual report on form PINK.

Operator: In the course of the discussion, Lamar may make forward-looking statements regarding the company, including statements about its future, financial performance, strategic goals, plans, and objectives, including with respect to the amount and timing of any distributions to stockholders and the impacts and effects of general economic conditions on the company's business, financial conditions, and results of operations. All forward-looking statements involve risk, uncertainties, and contingencies, many of which are beyond Lamar's control and which may cause actual results to differ materially from anticipated results.

Speaker Change: In the course of this discussion Lamar may make forward looking statements regarding the company, including statements about its future financial performance strategic goals plans and objectives, including with respect in the amount of timing of any distributions to stockholders and the impacts and effects of general economic conditions of the company's business financial condition.

Speaker Change: And results of operation.

Speaker Change: All forward looking statements involve risks uncertainties and contingencies, many of which are beyond the mark control and which may cause actual results to differ materially from anticipated results.

Operator: Lamar has identified important factors that can cause actual results to differ materially from those discussed in this call in the company's second quarter 2024 earnings release and its most recent annual report on Form 10-K. It refers you to those documents. Lamar's second quarter 2024 earnings release, which contains information required by Regulation G regarding certain non-GAAP financial measures, was furnished on a form of 8-K this morning and is available on the investor section of Lamar's website, www.lamarreal.com. I'd like to turn the conference over to Mr. Reilly. Mr. Reilly, you may begin.

Speaker Change: Lamar has identified important factors that can cause actual results to differ materially from those discussed in this call in the company's second quarter 2020 earnings release and in this most recent annual report on Form 10-K Lamar refers you to those documents Lamar second quarter 2024 earnings release, which contains information required.

Operator: Lamar refers you to those documents. Lamar's second quarter, 2021 earnings release, which contains information required by a regulation, G-regarding certain non-GAAP financial measures, was furnished on this second on a form of 8-K this morning and is available on the investor section of Lamar's website, www.lamar.com.

Speaker Change: By regulation G regarding certain non-GAAP financial measures was furnished on the second on a form 8-K. This morning and is available on the investors section of the March website Www Dot com.

Operator: And I'd like to turn the conference over to Shelley.

Operator: Lamar has identified important factors that can cause actual results to differ materially from those discussed in this call in the company's second quarter 2024 earnings release and its most recent annual report on Form 10-K. It refers you to those documents. Lamar's second quarter 2024 earnings release, which contains information required by Regulation G regarding certain non-GAAP financial measures, was furnished on a form of 8-K this morning and is available on the investor section of Lamar's website, www. Lamar.com I'd like to turn the conference over to Mr. Reilly. Mr. Reilly, you may begin.

Speaker Change: And I'd like to turn the conference over to Kelly Mr. Riley you may begin.

Natalie: Mr. Riley, you may begin. Thank you, Natalie.

Speaker Change: Yeah.

Sean Reilly: Thank you, Natalie. Good morning, all, and welcome to Lamar's Q2 2024 earnings call. The trends that we observed in Q1 held in Q2, strong demand from local and regional advertisers more than offset softness in some national customers, allowing us to deliver solid, consolidated revenue growth. For the quarter, revenues increased 3.9% on an acquisition-adjusted basis, with growth across billboards, transit, logos, and particularly airports. Meanwhile, we managed expenses well, allowing us to increase EBITDA by 6.3% on an acquisition adjusted basis and to expand our adjusted EBITDA margin to 48%, a 100 basis point improvement over Q2 of 2020. Both the EBITDA growth and margin expansion led to AFFO per share growth of 9.5%. Because of that strong performance, management will be recommending to the board that our Q3 distribution be increased to $1.40 a share.

Speaker Change: Thank you Natalie and good morning, all and welcome to Lamar's Q2, 2024 earnings call the.

Shane Reilly: Good morning, all, and welcome to Lamar's Q2 2024 earnings call. The trends that we observed in Q1 held in Q2; a strong demand from local and regional advertisers more than offset softness in some national customers, allowing us to deliver solid consolidated revenue growth. For the quarter, revenues increased 3.9% on an acquisition-adjusted basis, with growth across billboards, transit logos, and particularly airports. Meanwhile, we managed expenses well, allowing us to increase EBITDA by 6.3% on an acquisition adjusted basis and to expand our adjusted EBITDA margin to 48%, a 100 basis point improvement over Q2 of 2021. Both the EBITDA growth and margin expansion led to AFFO per share growth of 9.5%.

Sean Reilly: The trends that we observed in Q1 held in Q2, strong demand from local and regional advertisers more than offset softness in some national customers, allowing us to deliver solid, consolidated revenue growth. For the quarter, revenues increased 3.9% on an acquisition-adjusted basis, with growth across billboards, transit, logos, and particularly airports.

Speaker Change: The trends we observed in Q1 held in Q2 strong demand from local and regional advertisers more than offset softness in some national customers.

Speaker Change: Being us to deliver solid consolidated revenue growth for the quarter revenues increased three 9% on an acquisition adjusted basis with growth across Billboards transit logos and particularly airports means.

Speaker Change: Meanwhile, we managed expenses well, allowing us to increase EBITDA by six 3% on an acquisition adjusted basis and to expand our adjusted EBITDA margin to 48% 100 basis point improvement over Q2 of 2020.

Speaker Change: Most of the EBITDA growth and margin expansion led to a <unk> <unk> per share growth of nine 5%.

Shane Reilly: Because of that strong performance, management will be recommending to the board that our Q3 distribution be increased to $1.40 a share. As we look forward, we see more of the same: solid local and regional demand, with national still a bit of a drag. As we sit today, revenues are pacing up mid-single digits for the second half, with Q4 pacing slightly stronger than Q4.

Speaker Change: Because of that strong performance management will be recommending to the board that our Q3 distribution be increased to $1 40 a share.

Sean Reilly: As we look forward, we see more of the same, solid local and regional demand, with national still a bit of a drag. As we sit today, revenues are pacing up mid-single digits for the second half, with Q4 pacing slightly stronger than Q3. Also, if political comes in for Q4, as it has in the past, there should be some upside that is not yet reflected in our pace. As it is, we continue to track to reach the top end of our previously provided guidance for full year AFF Overshare.

Sean Reilly: As we look forward, we see more of the same, solid local and regional demand, with national still a bit of a drag. As we sit today, revenues are pacing up mid-single digits for the second half, with Q4 pacing slightly stronger than Q2. Also, if political comes in for Q4, as it has in the past, there should be some upside that is not yet reflected in our pace. Political was a tailwind, too, adding about 60 basis points to our growth.

Sean Reilly: As we look forward, we see more of the same, solid local and regional demand, with national still a bit of a drag. As we sit today, revenues are pacing up mid-single digits for the second half, with Q4 pacing slightly stronger than Q2. Also, if political comes in for Q4, as it has in the past, there should be some upside that is not yet reflected in our pace. As it is, we continue to track to reach the top end of our previously provided guidance for full year AFF Overshare.

Speaker Change: As we look forward, we see more of the same solid local and regional demand with national still a bit of a drag as.

Speaker Change: As we sit today revenues are pacing up mid single digits for the second half with Q4 pacing slightly stronger than Q3.

Shane Reilly: Advisory. Also, if political comes in for Q4 as it has in the past, there should be some upside that is not yet reflected in our past. As it is, we continue to track to reach the top end of our previously provided guidance for full-year AFFO per share. Back to Q2, strong categories included services, building and construction, and automotive, while healthcare and financial should show relatively weakness. Political was a tailwind too, adding about 60 basis points to our growth. For the full year, we have 15 million on the books for political, about 10% ahead of 2022 and well ahead of 2020.

Speaker Change: Also if political comes in for Q4 as it has in the past there should be some upside that is not yet reflected in our pacings.

Speaker Change: As it is we continue to track to reach the top end of our previously provided guidance for full year <unk> per share.

Speaker Change: Back to Q2 strong categories included services building and construction and automotive while health care and financial showed relatively weakness.

Sean Reilly: Back to Q2, strong categories included services, building and construction, and automotive, while health care and financial showed relative weakness. Political was a tailwind too, adding about 60 basis points to our growth. For the full year, we have $15 million on the books for political, about 10 percent ahead of 2022 and well ahead of 2020, both years when spending for the full year was about $20 million.

Sean Reilly: Back to Q2, strong categories included services, building and construction, and automotive, while health care and financial showed relatively weak. Political was a tailwind too, adding about 60 basis points to our growth. For the full year, we have $15 million on the books for political, about 10 percent ahead of 2022 and well ahead of 2020, both years when spending for the full year was about $20 million.

Speaker Change: Political was a tailwind to adding about 60 basis points to our growth for.

Speaker Change: For the full year, we have $15 million on the books for political about 10% ahead of 2022 and well ahead of 2020, both years when spending for the full year was about $20 million.

Shane Reilly: Both years when spending for the full year was about 20 million. For the quarter, local sales were up nicely, increasing nearly 5%. Meanwhile, programmatic was red hot, up about 3.6 million versus the year earlier period, to approximately 8.6 million. We have picked up some new customers in the programmatic category, like Pharma and CPG, and we are also seeing demand from some existing advertisers, including the insurance category, which began to stabilize in the quarter. We expect the strength and programmatic to continue, though year-over-year growth is likely to be less due to tougher cops. As a reminder, all of our programmatic businesses are national, so the growth there helps offset broader national weakness.

Speaker Change: For the quarter local sales were up nicely, increasing nearly 5%. Meanwhile, programmatic was red hot up about $3 6 million versus the year earlier period to approximately $8 6 million, we have picked up some new customers in the programmatic category like pharma and CPG and we are.

Sean Reilly: For the quarter, local sales were up nicely, increasing nearly 5%. Meanwhile, programmatic was red hot, up about 3.6 million versus the year-earlier period to approximately 8.6 million. We have picked up some new customers in the programmatic category, like Pharma and CPG, and we are also seeing demand from some existing advertisers, including the insurance category, which began to stabilize in the quarter. We expect the strength in programmatic to continue, though year-over-year growth is likely to be less due to tougher competition.

Sean Reilly: For the quarter, local sales were up nicely, increasing nearly 5%. Meanwhile, programmatic was red hot, up about 3.6 million versus the year-earlier period to approximately 8.6 million. We have picked up some new customers in the programmatic category, like Pharma and CPG, and we are also seeing demand from some existing advertisers, including the insurance category, which began to stabilize in the quarter. We expect the strength and programmatic to continue, though year-over-year growth is likely to be less due to tougher costs.

Speaker Change: Also seeing demand from some existing advertisers, including the insurance category, which began to stabilize in the quarter we.

Speaker Change: We expect the strength in programmatic to continue though year over year growth is likely to be less due to tougher comps.

Sean Reilly: As a reminder, all of our programmatic business is national, so the growth there helps offset Broader National Week. It was a quiet quarter on the M&A front, as we spent about $10 million on a handful of deals. For the full year, acquisition spending is likely to be around $40 to $50 million. We continue to think the M&A market will pick up as we turn the corner into 2025.

Sean Reilly: As a reminder, all of our programmatic business is national, so the growth there helps offset Broader National Week. Overall, including programmatic, National was off about 2.5%. At this point, we anticipate another low single-digit decline in national and Q3.

Sean Reilly: As a reminder, all of our programmatic business is national, so the growth there helps offset broader national. Overall, including programmatic, National was off about 2.5%. At this point, we anticipate another low single-digit decline in national and Q3.

Speaker Change: As a reminder, all of our programmatic business is national so the growth of their health offset.

Speaker Change: Broader national weakness overall, including programmatic national was off about two 5%.

Shane Reilly: Overall, including programmatic, national was off about 2.5%. At this point, we anticipate another low single-digit decline in national and Q3. However, activity from national customers in the form of RFPs has been up recently, and we are hopeful that we will see that business turn as we head into 2025. Programmatic strength also helped buoy our digital platform, which grew 2.6% on the same store basis in line with the increase in Q1. RATE was up by the way across the analog platform.

Speaker Change: At this point, we anticipate another low single digit decline in national in Q3.

Sean Reilly: However, activity from national customers in the form of RFPs has been uprising, and we are hopeful that we will see that business turn as we head into 2025. Programmatic strength also helped Bowie our digital platform, which grew 2.6% on a same store basis in line with the increase in Q1. Raid was up by the way across the analog plot.

Sean Reilly: However, activity from national customers in the form of RFPs has been up recently, and we are hopeful that we will see that business increase as we head into 2025. Programmatic strength also helped buoy our digital platform, which grew 2.6% on a same store basis, in line with the increase in Q1. Rate was up, by the way, across the analog platform. It was a quiet quarter on the M&A front, as we spent about $10 million on a handful of deals. For the full year, acquisition spending is likely to be around $40 to $50 million.

Speaker Change: However activity from national customers in the form of RF piece has been up recently and we are hopeful that we will see that business turn as we head into 2025.

Speaker Change: Programmatic strength also helped to buoy, our digital platform, which grew two 6% on a same store basis in line with the increase in Q1 rate was up by the way across the analog platform.

Shane Reilly: It was a quiet quarter on the M&A front, as we spent about 10 million dollars on a handful of deals. For the full year, acquisition spending is likely to be around 40 to 50 million. We continue to think the M&A market will pick up as we turn the corner into 2025. As you saw, we paid off the term loan last week, which put our balance sheet already the best in the industry in even better shape, so we should be well positioned to participate if attractive assets hit the market.

Speaker Change: It was a quiet quarter on the M&A front as we spent about $10 million on a handful of deals for the full year acquisition spending is likely to be around $40 million to $50 million. We continue to think the M&A market will pick up as we turned the corner into 2025.

Sean Reilly: It was a quiet quarter on the M&A front, as we spent about $10 million on a handful of deals. For the full year, acquisition spending is likely to be around $40 to $50 million. We continue to think the M&A market will pick up as we turn the corner into 2025. As you saw, we paid off the term loan last week, which put our balance sheet, already the best in the industry, in even better shape. So we should be well-positioned to participate if attractive assets hit the market. I will turn it over to Jay now to walk you through the process.

Sean Reilly: We continue to think the M&A market will pick up as we turn the corner into 2025. As you saw, we paid off the term loan last week, which put our balance sheet, already the best in the industry, in even better shape. So we should be well-positioned to participate if attractive assets hit the market. I will turn it over to Jay now to walk you through the particulars.

Speaker Change: As you saw we paid off the term loan last week, which put our balance sheet already the best in the industry and even better shape. So we should be well positioned to participate if attractive assets hit the market.

Jay Johnson: I will turn it over to Jay now to walk you through the particulars.

Speaker Change: I will turn it over to Jane now to walk you through the particulars. Thanks.

Jay Johnson: Thanks, Sean. Good morning, everyone, and thank you for joining us. We had a solid second quarter and are pleased with our results, which were slightly ahead of internal expectations on both revenue and adjusted EBITDA. Q2 marked the third consecutive quarter of near double-digit AFFO growth, and short-term interest rates were more stable in the first half of 2024. We have also benefited from mid-single-digit growth on the top line during the first six months of the year. Our billboard regions all experienced revenue and EBITDA growth over the second quarter of last year.

Jay Johnson: Thanks, Sean. Good morning, everyone, and thank you for joining us.

Jay Johnson: Thanks, John.

Jane: Thanks, Shawn good morning, everyone and thank you for joining US we had a solid second quarter and are pleased with our results, which was slightly ahead of internal expectations on both revenue and adjusted EBITDA.

Jay Johnson: Good morning, everyone, and thank you for joining us. We have a solid second quarter and are pleased with our results, which were slightly ahead of internal expectations on both revenue and adjusted EBITDA. Q2 marked the third consecutive quarter of near double-digit AFFO growth, and short-term interest rates were more stable in the first half of 2024. We have also benefited from mid-single digit growth on the top line during the first six months of the year. Our billboard regions all experienced revenue and EBITDA growth over the second quarter of last year. In addition, our airport business had another strong quarter, growing 21.7%, following 20% revenue growth in Q1, as our traffic continues to set record levels.

Sean Reilly: We had a solid second quarter and are pleased with our results, which were slightly ahead of internal expectations on both revenue and adjusted EBITDA. We have also benefited from mid-single-digit growth on the top line during the first six months of the year. As you may recall, in 2023, we benefited from COVID-19 relief grants in our airport business that will not repeat this year and primarily impact the first and third quarters.

Jay Johnson: We had a solid second quarter and are pleased with our results, which were slightly ahead of internal expectations on both revenue and adjusted EBITDA. Q2 marked the third consecutive quarter of near double-digit AFFO growth, and short-term interest rates were more stable in the first half of 2024. We have also benefited from mid-single-digit growth on the top line during the first six months of the year. Our billboard regions all experienced revenue and EBITDA growth over the second quarter of last year.

Jane: Q2 marked the third consecutive quarter of near double digit <unk> growth in short term interest rates were more stable in the first half of 2024.

Jane: We have also benefited from mid single digit growth on the top line during the first six months of the year.

Speaker Change: Our Billboard regions, all experienced revenue and EBITDA growth over the second quarter of last year.

Jay Johnson: In addition, our airport business had another strong quarter, growing 21.7% following 20% revenue growth in Q1 as air traffic continues to set record levels. Acquisition Adjusted Operating Expenses increased 1.9 percent in the second quarter, which was slightly better than anticipated, and down from 4.4 percent in the first quarter. As you may recall, in 2023, we benefited from COVID-19 relief grants in our airport business that will not repeat this year and primarily impact the first and third quarters.

Speaker Change: In addition, our airport business had another strong quarter growing at 21, 7% following a 20% revenue growth in Q1.

Speaker Change: Air traffic continues to set record levels.

Speaker Change: Acquisition adjusted operating expenses increased one 9% in the second quarter, which was slightly better than anticipated.

Jay Johnson: Acquisition adjusted operating expenses increased 1.9% in the second quarter, which was slightly better than anticipated, and down from 4.4% in the first quarter. As you may recall, in 2023, we benefited from COVID-19 relief grants in our airport business that will not repeat this year and primarily impact the first and third quarters. Adjusted EBITDA for the quarter was $271.6 million, compared to $253.9 million in 2023, which was an increase of 6.9%. On an acquisition of adjusted bases, adjusted EBITDA increased 6.3%. Adjusted EBITDA margin for the quarter remains strongly 48%, one of the strongest second quarters in recent history, and despite inflationary pressures over the last few years, the company's adjusted EBITDA margin remains well above pre-pandemic levels.

Speaker Change: And down from four 4% in the first quarter.

Jay Johnson: As you may recall, in 2023, we benefited from COVID-19 relief grants in our airport business that will not repeat this year and primarily impact the first and third quarters. Adjusted EBITDA for the quarter was $271.6 million compared to $253.9 million in 2023, which was an increase of 6.9%. On an acquisition-adjusted basis, adjusted EBITDA increased 6.3%.

Speaker Change: As you May recall in 2023, we benefited from COVID-19 relief variance in our airport business that will not repeat this year and primarily impact the first and third quarters.

Speaker Change: Adjusted EBITDA for the quarter was $271 $6 million.

Jay Johnson: Adjusted EBITDA for the quarter was $271.6 million, compared to $253.9 million in 2023, which was an increase of 6.9%. On an acquisition-adjusted basis, adjusted EBITDA increased 6.3%. Adjusted EBITDA margin for the quarter remains strongly at 48%, one of the strongest second quarters in recent history. And despite inflationary pressures over the last few years, the company's adjusted EBITDA margin remains well above pre-pandemic levels. Adjusted funds from operations totaled $213.5 million in the second quarter compared to $194.4 million last year, an increase of 9.8%.

Jay Johnson: Adjusted EBITDA for the quarter was $271.6 million compared to $253.9 million in 2023, which was an increase of 6.9%. Adjusted EBITDA margin for the quarter remains strongly at 48%, one of the strongest second quarters in recent history. And despite inflationary pressures over the last few years, the company's adjusted EBITDA margin remains well above pre-pandemic levels. Local and regional sales grew for the 13th consecutive quarter, but softness in national sales continues to be a headwind to our overall revenue growth. Programmatic sales, however, outperformed again this quarter, growing 73% versus Q2 of 2023.

Speaker Change: Compared to $253 $9 million in 2023, which was an increase of six 9%.

Speaker Change: On an acquisition adjusted basis, adjusted EBITDA increased six 3% adjusted.

Jay Johnson: Adjusted EBITDA margin for the quarter remains strongly at 48%, one of the strongest second quarters in recent history. And despite inflationary pressures over the last few years, the company's adjusted EBITDA margin remains well above pre-pandemic levels. Adjusted funds from operations totaled $213.5 million in the second quarter compared to $194.4 million last year, an increase of 9.8%. Diluted AFFO per share increased 9.5% to $2.08 per share versus $1.90 in the second quarter of 2023.

Speaker Change: Adjusted EBITDA margin for the quarter remained strong at 48% one of the strongest second quarters in recent history and.

Speaker Change: Despite inflationary pressures over the last few years, the company's adjusted EBITDA margin remains well above pre pandemic levels.

Jay Johnson: Adjusted funds from operations totaled $213.5 million in the second quarter, compared to $194.4 million last year, an increase of 9.8%. Diluted AFFO increased 9.5% to $2.8 per share versus $1.90 in the second quarter of 2023. Local and regional sales grew for the 13th consecutive quarter, but softness in national sales continues to be a headwind to our overall revenue growth. Programmatic sales, however, I'll perform again this quarter, growing 73% versus Q2 of 2023. In spite of the national backdrop, we're encouraged by the resilience of local and regional sales, which accounted for approximately 79% of billboard revenue in the second quarter.

Speaker Change: Adjusted funds from operations totaled $213 $5 million in the second quarter compared to $194 $4 million last year, an increase of nine 8% Duluth.

Jay Johnson: Diluted AFFO per share increased 9.5% to $2.08 per share versus $1.90 in the second quarter of 2023. Local and regional sales grew for the 13th consecutive quarter, but softness in national sales continues to be a headwind to our overall revenue growth. Programmatic sales, however, performed again this quarter, growing 73% versus Q2 of 2023. In spite of the national backdrop, we are encouraged by the resilience of local and regional sales, which accounted for approximately 79% of billboard revenue in the second quarter.

Speaker Change: Diluted <unk> per share increased nine 5% to $2.08 per share versus $1 90 in the second quarter of 2023.

Speaker Change: Local and regional sales grew for the 13th consecutive quarter, but softness in national sales continues to be a headwind to our overall revenue growth.

Jay Johnson: Local and regional sales grew for the 13th consecutive quarter, but softness in national sales continues to be a headwind to our overall revenue growth. Programmatic sales, however, performed again this quarter, growing 73% versus Q2 of 2023. In spite of the national backdrop, we are encouraged by the resilience of local and regional sales, which accounted for approximately 79% of billboard revenue in the second quarter.

Speaker Change: Programmatic sales, however, outperformed again this quarter growing 73% versus Q2 of 2023.

Speaker Change: In spite of the national backdrop, we're encouraged by the resilience of local and regional sales, which accounted for approximately 79% of Billboard revenues in the second quarter.

Jay Johnson: On the capital expenditure front, total speed for the quarter was approximately $22.6 million, including $13.6 million of maintenance capbacks. For the first half of the year, CapEx total $52.1 million, with maintenance accounting for $24.5 million. Our CapEx outlook for the four-year remains unchanged, and we anticipate total CapEx of $125 million, maintenance comprising $50 million.

Speaker Change: On the capital expenditure front total spend for the quarter was approximately $22 $6 million.

Jay Johnson: On the capital expenditure front, total spend for the quarter was approximately $22.6 million, including $13.6 million of maintenance cap pay. For the first half of the year, CapEx totaled $52.1 million, with maintenance accounting for $24.5 million. Our CapEx outlook for the full year remains unchanged, and we anticipate total CapEx of $125 million, with maintenance comprising $50 million. On July 31st, we repaid the company's $350 million term loan aid in full, retiring the debt with a draw on our revolving credit facility and cash on hand.

Speaker Change: Clothing, $13 $6 million of maintenance Capex.

Jay Johnson: For the first half of the year, CapEx totaled $52.1 million, with maintenance accounting for $24.5 million. On July 31st, we repaid the company's $350 million term loan aid in full, retiring the debt with a draw on our revolving credit facility and cash on hand. As defined under our credit facility, we ended the quarter with total leverage of 2.98 times net debt to EBITDA, which remains amongst the lowest in the history of the company.

Speaker Change: For the first half of the year Capex totaled $52 $1 million with maintenance accounting for $24 5 million.

Speaker Change: Our capex outlook for the full year remains unchanged and we anticipate total capex of $125 million.

Jay Johnson: with maintenance comprising $50 million. On July 31st, we repaid the company's $350 million term loan aid in full, retiring the debt with a draw on our revolving credit facility and cash on hand. We continue to maintain a well-ladder debt maturity schedule, and following repayment of the term loan, have no maturities until the $250 million AR securitization maturity in July 2025. We plan to address the AR securitization maturity later this year or early in 2025, most likely through an extension of the existing facility. Once extended, our newest maturity will be the $600 million term loan B in 2027, with no bond maturities until 2028.

Jay Johnson: <unk> comprising $50 million.

Jay Johnson: On July 31st, we repay the company's $350 million term loan aid in full, retiring the debt with a draw on our revolving credit facility and cash on hand. We continue to maintain a well-lettered debt maturity schedule. And following repayment of the term loan, having no maturities until the $250 million AR securitization in July 2025. We plan to address the AR securitization maturity later this year, or early in 2025, most likely through an extension of the existing facility. Once extended, our newest maturity will be the $600 million term loan being in 2027, with no bond maturities until 2028.

Speaker Change: On July 31, we repaid the company's $350 million term loan a in full retiring the debt with the draw on our revolving credit facility and cash on hand.

Jay Johnson: We continue to maintain a well-ladder debt maturity schedule, and following repayment of the term loan, have no maturities until the $250 million AR securitization maturity in July 2025. We plan to address the AR securitization maturity later this year or early in 2025, most likely through an extension of the existing facility. Once extended, our newest maturity will be the $600 million term loan B in 2027, with no bond maturities until 2028. Based on debt outstanding at quarter end, our weighted average interest rate was approximately 5%, with a weighted average debt maturity of 3.8 years. As defined under our credit facility, we ended the quarter with total leverage of 2.98 times net debt to EBITDA, which remains amongst the lowest in the history of the company.

Speaker Change: We continue to maintain a well lettered debt maturity schedule and following repayment of the term loan have no maturities until the $250 million securitization in July 2025.

Speaker Change: We plan to address the AAR securitization maturity later this year or early in 2025, most likely through an extension of the existing facility.

Speaker Change: Once extended our nearest maturity will be the $600 million term loan b in 2027 with no bond maturities until 2028.

Jay Johnson: Based on debt outstanding a quarter in, our weighted average interest rate was approximately 5 percent, with a weighted average debt maturity of 3.8 years. As defined under our credit facility, we ended the quarter with total leverage of 2.98 times net debt to EBITDA, which remains amongst the lowest in the history of the company. Our secured debt leverage was 0.94 times a quarter in, and we were comfortably in compliance with both our total debt and currents, and secured debt maintenance tests against covenants of seven times in 4.5 times, respectively. Despite the sharp rise in interest rates over the past few years, and based on current expectations, our interest coverage should end the year north of six times adjusted EBITDA to cash interest.

Speaker Change: Based on debt outstanding at quarter end, our weighted average interest rate was approximately 5% with a weighted average debt maturity of three eight years.

Jay Johnson: Based on debt outstanding at quarter end, our weighted average interest rate was approximately 5%, with a weighted average debt maturity of 3.8 years. As defined under our credit facility, we ended the quarter with total leverage of 2.98 times net debt to EBITDA, which remains amongst the lowest in the history of the company. Our Secured Debt Leverage was 0.94 times at quarter end, and we are comfortably in compliance with both our Total Debt and Currents and Secured Debt Maintenance Test against covenants of 7 times and 4.5 times, respectively.

Speaker Change: As defined under our credit facility, we ended the quarter with total leverage of 298 times net debt to EBITDA, which remains amongst the lowest in the history of the company.

Jay Johnson: Our secured debt leverage was 0.94 times at quarter end, and we're comfortably in compliance with both our total debt incurrence and secured debt maintenance test against covenants of seven times and 4.5 times, respectively. Despite the sharp rise in interest rates over the past few years, and based on current expectations, our interest coverage should end a year north of six times adjusted EBITDA to cash interest. While we do not have an interest coverage covenant in any of our debt agreements, we do monitor this important financial metric.

Speaker Change: Our secured debt leverage with 0.94 times at quarter end.

Speaker Change: We are comfortably in compliance with both our total debt incurrence and secured that maintenance test against covenant of seven times and four five times respectively.

Speaker Change: Despite the sharp rise in interest rates over the past few years and based on current expectations. Our interest coverage should end the year north of six times adjusted EBITDA to cash interest.

Jay Johnson: Despite the sharp rise in interest rates over the past few years, and based on current expectations, our interest coverage should end a year north of six times adjusted EBITDA to cash interest. While we do not have an interest coverage covenant in any of our debt agreements, we do monitor this important financial metric.

Jay Johnson: Despite the sharp rise in interest rates over the past few years, and based on current expectations, our interest coverage should end a year north of six times adjusted EBITDA to cash interest. With repayment of the term loan aid, the company's liquidity was approximately $450 million as of July 31, which included the same dollar amount and expired in June. We still expect an AFFO range of $7.75 to $7.90 per share in 2024.

Jay Johnson: While we do not have an interest coverage covenant in any of our debt agreements, we do monitor this important financial metric. Healthy interest coverage exemplifies the strength of our balance sheet and the company's ability to service its debt. Our liquidity and access to capital remains strong. As the company continues to enjoy access to both the debt and equity capital markets. At the end of the quarter, we had approximately $744 million in total liquidity, comprised of $78 million of cash on hand and $666 million available under our revolver. The AR securitization was fully drawn at the end of the quarter, a balance of $250 million.

Speaker Change: While we do not have an interest coverage covenant in any of our debt agreements. We do monitor this important financial metrics.

Jay Johnson: Healthy interest coverage exemplifies the strength of our balance sheet and the company's ability to service its debt. Our liquidity and access to capital remain strong, as the company continues to enjoy access to both the debt and equity capital markets. At the end of the quarter, we had approximately $744 million in total liquidity, comprised of $78 million of cash on hand and $666 million available under our revolver. The AR securitization was fully drawn at the end of the quarter, leaving a balance of $250 million.

Jay Johnson: Healthy interest coverage exemplifies the strength of our balance sheet and the companys ability to service its debt.

Jay Johnson: Our liquidity and access to capital remains strong as the company continues to enjoy access to both the debt and equity capital markets.

Jay Johnson: At the end of the quarter, we had approximately $744 million in total liquidity comprised of $78 million of cash on hand, and $666 million available under our revolver.

Speaker Change: They are securitization was fully drawn at the end of the quarter a balance of $250 million.

Jay Johnson: With repayment of the term loan A, the company's liquidity was approximately $450 million as of July 31st.

Jay Johnson: With repayment of the term loan aid, the company's liquidity was approximately $450 million as of July 31. Subsequent to QuarterEd, we established a new $400 million ATM program. The new agreement replaces the prior program, which included the same dollar amount and expired in June.

Jay Johnson: With repayment of term loan A, the company's liquidity was approximately $450 million as of July 31. Subsequent to Quarter End, we established a new $400 million ATM program. The new agreement replaces the prior program, which included the same dollar amount and expired in June.

Jay Johnson: With repayment of the term loan a the company's liquidity was approximately $450 million as of July 31.

Speaker Change: Subsequent to quarter end, we established a new $400 million ATM program.

Jay Johnson: Subsequent to quarter end, we established a new $400 million ATM program. The new agreement replaces the prior program, which includes the same dollar amount and expired in June. While we do not anticipate issuing under the program in the near term, we view maintaining an ATM program as part of our corporate financial strategy and key to preserving financial flexibility with respect to the company's capital needs.

Speaker Change: New agreement replaces the prior program, which.

Speaker Change: Which include the same dollar amount and expired in June.

Speaker Change: While we do not anticipate issuing under the program in the near term, we view maintaining an ATM program as part of our corporate finance strategy and key to preserving financial flexibility with respect to the Companys capital needs.

Jay Johnson: While we do not anticipate issuing under the program in the near term, we view maintaining an ATM program as part of our corporate finance strategy and key to preserving financial flexibility with respect to the company's capital needs. This morning, we affirmed our revised guidance, which was increased following first quarter results and based on our outlook for the balance of the year. We still expect an AFFO range of $7.75 to $7.90 per share in 2024.

Jay Johnson: This morning, we affirmed our revised guidance, which was increased following first quarter results and based on our outlook for the balance of the year. We still expect an AFFO range of $7.75 to $7.90 per share in 2024. Full year interest in our guidance totaled $166 million, which assumed short-term interest rates are unchanged for the remainder of the year. As I mentioned earlier, maintenance cap X is budgeted for $50 million, and cash taxes are projected to come in around $10 million.

Jay Johnson: This morning, we reaffirmed our revised guidance, which was increased following first quarter results and based on our outlook for the balance of the year.

Jay Johnson: We still expect an <unk> range of $7 75 to $7 19 per share in 2024.

Jay Johnson: Full-year interest in our guidance totaled $166 million, which assumed short-term interest rates were unchanged for the remainder of the year. As I mentioned earlier, Maintenance Cap X is budgeted for $50 million, and cash taxes are projected to come in around $10 million. Finally, the company paid a cash dividend of $1.30 per share in each of the first and second quarters.

Jay Johnson: Full-year interest in our guidance totals $166 million, which assumes short-term interest rates are unchanged for the remainder of the year. As I mentioned earlier, Maintenance Cap X is budgeted for $50 million, and cash taxes are projected to come in around $10 million. Finally, the company paid a cash dividend of $1.30 per share in each of the first and second quarters, and our recommendation to increase the distribution is subject to board approval.

Jay Johnson: Full year interest in our guidance totaled $166 million.

Which assume short term interest rates are unchanged for the remainder of the year.

Jay Johnson: As I mentioned earlier maintenance Capex is budgeted for $50 million.

Speaker Change: And cash taxes are projected to come in around $10 million.

Speaker Change: Finally.

Jay Johnson: Finally, the company paid a cash dividend of $1.30 per share in each of the first and second quarters, and our recommendation to increase the distribution is subject to board approval. The company's dividend policy has not changed, and based on current expectations, we may consider a special dividend at year-end to ensure we distribute 100% of our taxable income. Again, we are pleased with this quarter's performance, particularly our strong local and regional sales, as well as our performance in the airport business. We look forward to executing on our operating strategy during the second half of the year. I will now turn the call back over to Sean for closing remarks.

Jay Johnson: The company paid a cash dividend of $1 30 per share in each of the first and second quarters and a recommendation to increase the distribution subject to board approval.

Jay Johnson: The company's dividend policy has not changed, and based on current expectations, we may consider a special dividend at year-end to ensure we distribute 100% of our taxable income. Again, we are pleased with this quarter's performance, particularly our strong local and regional sales, as well as our performance in the airport business. We look forward to executing on our operating strategy during the second half of the year. I will now turn the call back over to Sean for closing remarks.

Jay Johnson: The company's dividend policy has not changed and based on current expectations. We may consider a special dividend at year end to ensure we distribute 100% of our taxable income.

Speaker Change: Again, we are pleased with this quarter's performance, particularly our strong local and regional sales as well as outperformance in the airport business.

Jay Johnson: We look forward to executing on our operating strategy during the second half of the year.

Sean Reilly: I will now turn the call back over to Sean for closing remarks.

Jay Johnson: I will now turn the call back over to Sean for closing remarks. Thank you Jay I'll hit a couple of familiar data points before opening it up for questions.

Sean Reilly: Thank you, Jay. I'll hit a couple of familiar data points before opening it up for questions. In terms of relative regional strength and weakness, our strongest region in Q2 was the Atlantic region, which includes states like Florida, Georgia, and the Carolinas. While our southeast region showed relative weakness, especially Southern California, places like San Bernardino, LA, and San Diego were a little bit soft.

Sean Reilly: Thank you, Jay. I'll hit a couple of familiar data points before opening it up for questions. In terms of relative regional strength and weakness, our strongest region in Q2 was the Atlantic region, which includes states like Florida, Georgia, and the Carolinas. While our southeast region showed relative weakness, especially southern California, places like San Bernardino, LA, and San Diego were a little bit softer.

Sean Reilly: Thank you, Jay. I'll hit a couple of familiar data points before opening it up for questions. In terms of regional, relative regional strength and weakness, our strongest region in Q2 was the Atlantic Region. That includes states like Florida, Georgia, and the Carolinas. While our Southeast region showed relative weakness, especially Southern California, places like San Bernardino, LA, and San Diego were a little bit soft. In terms of our mix of business, static versus digital, digital grew to be 30.6% of our book in Q2; static was 69.4%. And for the full year, digital has grown to be 29.7% of our book, where static is 70.3% of our book. This compares to last year-to-date: static 71%, digital 29%.

Speaker Change: In terms of regional relative regional strength and weakness our strongest region. In Q2 was the Atlantic region that includes states like Florida, Georgia and the Carolinas.

Jay Johnson: While our Southeast region showed relative weakness, especially in Southern California, we ended the quarter with 4,842 digital units in the air. That is an increase year-to-date of 83 units. And, as I mentioned, Q2 same-board digital grew 2.6%. In terms of the local-national mix, of our book, with local up 4.8%. As I mentioned, national, including programmatic, was down 2.5% in Q2. Q2, and in the financial category, down 3.7%.

Jay Johnson: While our southeast region showed relative weakness, especially southern California.

Speaker Change: Places like San Bernardino L, a and San Diego were a little bit soft.

Jay Johnson: In terms of our mix of business static versus digital digi.

Sean Reilly: In terms of our mix of business static versus digital, digital grew to be 30.6% of our book in Q2, while static was 69.4%. And for the full year, Digital has grown to be 29.7% of our book, where static is 70.3% of our book. This compares to last year to date, static 71%, and digital 29%. We ended the quarter with 4,842 digital units in the air.

Sean Reilly: In terms of our mix of business static versus digital, digital grew to be 30.6% of our book in Q2 while static was 69.4% and for the full year. Digital has grown to be 29.7% of our book, where static is 70.3% of our book. This compares to last year to date, static 71%, and digital 29%. We ended the quarter with 4,842 digital units in the air.

Jay Johnson: Digital grew to be 36% of our book in Q2, all static was 69, 4% and for the full year.

Jay Johnson: Digital has grown to be 29, 7% of our book.

Speaker Change: Uh huh.

Jay Johnson: We're static is 73% of our book this compares to last year to date static 71% digital 29%.

Sean Reilly: We ended the quarter with 4,842 digital units in the air. That was an increase a year-to-date of 83 units. And as I mentioned, Q2 same-board digital grew 2.6%. In terms of local national mix, local in Q2 was 79% of our book of business. National 4.8%. As I mentioned, national including programmatic was down 2.5% in Q2. Still negative, but sequentially better than Q1. And of course, this was led by programmatic, which was up 73% in Q2. In terms of verticals and relative strength and weakness in our book, service was strong, up 14.6% in Q2. Automotive was up 5.5%; gaming up 4.2%; and building and construction was up 24.6% in Q2.

Jay Johnson: We ended the quarter with 40 842 digital units in the air that is an increase year to date of 83 units and as I mentioned Q2 same board digital grew two 6%.

Sean Reilly: That is an increase year-to-date of 83 units. And as I mentioned, Q2 same board digital grew 2.6% in terms of the local-national mix. Local in Q2 was 79% of our book of business, national slash programmatic was 21% of our book, with local up 4.8%. As I mentioned, national, including programmatic, was down 2.5% in Q2. Still negative, but sequentially better than Q1. And, of course, this was led by programmatic, which was up 73%.

Sean Reilly: That is an increase year-to-date of 83 units. And, as I mentioned, Q2 same-board digital grew 2.6%. In terms of local and national, Local in Q2 was 79% of our book of business, national slash programmatic was 21% of our book, with local up 4.8%. As I mentioned, national, including programmatic, was down 2.5% in Q2. Still negative, but sequentially better than Q1. And, of course, this was led by programmatic, which was up 73%.

Jay Johnson: In terms of local national mix.

Jay Johnson: Local in Q2 was 79% of our book of business National Slash programmatic was 21%.

Jay Johnson: <unk> of our book with local up four 8% as I mentioned national including programmatic was down two 5% in Q2.

Jay Johnson: Still negative but sequentially better than Q1 and of course. This was led by our programmatic which was up 73%.

Jay Johnson: In Q2.

Jay Johnson: In terms of our verticals and relative strength and weakness in our book.

Sean Reilly: Q2. In terms of verticals and relative strength and weakness in our book, service was strong, up 14.6% in Q2, automotive was up 5.5%, gaming up 4.2%, and building and construction was up 24.6% in Q2. Relative weakness, as I mentioned, was shown in the health care category, down 5.8%, and in the financial category, down 3.7%. Well, with that, Natalie, we can open it up for questions.

Sean Reilly: Q2. In terms of verticals and relative strength and weakness in our book, service was strong, up 14.6% in Q2. Automotive was up 5.5%, gaming up 4.2%, and building and construction was up 24.6% in Q2. Relative weakness, as I mentioned, was shown in the healthcare category, down 5.8%, and in the financial category, down 3.7%. Well, with that, Natalie, we can open it up for questions.

Speaker Change: Service was strong up 14, 6% in Q2 automotive was up five 5% gaming up four 2% and building and construction was up 24, 6%.

Jay Johnson: Q2 relative weakness as I mentioned was shown in the health care category down five 8%.

Sean Reilly: Relative weakness, as I mentioned, was shown in the healthcare category, down 5.8%, and in the financial category, down 3.7%.

Jay Johnson: And in the financial category down three 7%.

Operator: With that, Natalie, we can open it up for questions. Thank you. At this time, if you would like to ask a question, please press the star in one on your telephone keypad. You may remove yourself from the queue at any time by pressing Star 2. And once again, that is star 1 to ask a question.

Jay Johnson: Well with that Natalie we can open it up for questions.

Speaker Change: Thank you at this time, if you would like to ask a question. Please press the star and one on your telephone keypad.

Operator: Thank you. At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may remove yourself from the queue at any time by pressing star two. And once again, that is star one to ask a question. We will now pause for a moment to allow questions to queue, and we will take our first question from Cameron McVeigh with Morgan Stanley. Please go ahead.

Operator: Thank you. At this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2. And once again, that is star 1 to ask a question. We will now pause for a moment to allow questions to queue, and we will take our first question from Cameron McVeigh with Morgan Stanley. Please go ahead.

Operator: You may remove yourself from the queue at any time by pressing star and.

Operator: And once again that is star one to ask a question we will now pause for a moment to allow questions to queue.

Operator: We will now pause for a moment to allow questions to queue.

Cameron McZayne: And we will take our first question from Cameron McZayne with Morgan Stanley. Please go ahead. Great. Thank you. Good morning, Sean and Jay.

Operator: And we will take our first question from Kevin Mcveigh with Morgan Stanley.

Operator: Please go ahead.

Cameron McVeigh: Good morning, Sean and Jay. I'm curious if you expect that to continue. And then, secondly, does the guide currently assume that national ad spend accelerates in the back half of the year? Thanks.

Cameron McVeigh: Great, thank you. Good morning, Sean and Jay. Uh... Cameron...

Cameron McVeigh: Great, thank you. Good morning, Sean and Jay.

Cameron McVeigh: Great. Thank you good morning, Sean and Jay.

Sean Reilly: Cameron, I guess to start, you know, how much of the growth this quarter was due to the locals' absorption of any national softness? I'm curious if you expect that to continue. And then, secondly, does the guide currently assume national ad spend accelerates in the back half of the year? Thanks.

Speaker Change: Hey, Erin.

Cameron McZayne: I guess the start, how much of the growth this quarter was due to the local absorption of any national softness? I'm curious if you expect that to continue.

Sean Reilly: I guess to start, you know, how much of the growth this quarter was due to the locals' absorption of any national softness? I'm curious if you expect that to continue. And then, secondly, does the guide currently assume national ad spend accelerates in the back half of the year? Thanks.

Cameron McVeigh: I guess to start yeah, how much of the growth this quarter was due to the locals absorption of any national softness.

Cameron McVeigh: Im curious if you expect that to continue and then secondly.

Cameron McZayne: And then secondly, does the guide currently assume national ad spends accelerates in the back half of the year? Thanks.

Cameron McVeigh: Does the guide currently assume national AD spend accelerates in the back half of the year.

Shane Reilly: Yeah, thanks, Cameron. The God basically assumes, as I mentioned, low single-digit declines in national, kind of continuing with local taking up the slack. And, as your first question implied, that's a usual phenomenon. I mean, if we can see that national is going to be soft and there's inventory available, then our folks get busy and they're knocking on doors, and they're going to sell it to local customers. So, yeah, that absorption is clearly one of the things that's causing the relative outperformance of local. Yeah, it makes sense.

Sean Reilly: The guy basically assumes, as I mentioned, low single-digit declines in national, kind of continuing, with local taking up the slack. And as your first question implied, you know, that's a usual phenomenon. I mean, you know, if... We can see that National is going to be soft, and there's inventory available. Then our folks get busy, and they're knocking on doors, and they're going to sell it to local customers. So yeah, that absorption is clearly one of the things that's causing the relative outperformance of local.

Sean Reilly: Yeah, thanks Cameron. Now, the guy basically assumes, as I mentioned, low single-digit declines in national, kind of continuing, with local taking up the slack. And as your first question implied, you know, that's a usual phenomenon. I mean, you know, if... We can see that National is going to be soft, and there's inventory available. Then our folks get busy, and they're knocking on doors, and they're going to sell it to local customers. So yeah, that absorption is clearly one of the things that's causing the relative outperformance of local.

Speaker Change: Yes, Thanks Kamran.

Speaker Change: That basically assumes.

Speaker Change: As I mentioned.

Speaker Change: Low single digit declines in national kind of continuing.

Sean Reilly: Low single-digit declines in national, kind of continuing, with local taking up the slack. And as your first question implied, you know, that's a common phenomenon. I mean, you know, if

Sean Reilly: With local taken up the slack and that's.

Speaker Change: As your first question implied.

Sean Reilly: Yes.

Sean Reilly: That's unusual phenomenon I mean, you know if we.

Speaker Change: We can see that that national is going to be soft and there is inventory available then.

Speaker Change: Our folks get busy and they're knocking on doors and theyre going to sell it to to local customers. So yes that absorption is clearly one of the things that's.

Sean Reilly: Causing that the relative outperformance of local.

Speaker Change: Yes, it makes sense.

Sean Reilly: Yeah, makes sense. Sean, in your view, what's driving the outsized strength in programmatic? Some of those numbers were surprising in a good way to see.

Sean Reilly: Yeah, makes sense. Sean, in your view, what's driving the outside strength in programmatic? Some of those numbers were surprising in a good way to see.

Cameron McZayne: Sean, what's driving the outside strength in programmatic?

Sean Reilly: Sean in your view, what's driving the outsized strength in programmatic some of those numbers were.

Cameron McZayne: Some of those numbers were surprising in a good way to see? You know, I think it's something that Al Front is seeing as well if I read their release correctly.

Sean Reilly: Surprising in a good way to see.

Sean Reilly: And you know, I think it's something that the front is seeing as well, if I read their release correctly. Um, so the main thing, two things are happening.

Sean Reilly: I think it's something that.

Sean Reilly: Our front is seeing as well if I read their release correctly.

Operator: Excuse me, everyone. We now have Shane Reilly and Jay Johnson in conference. Please be aware that each of your lines is in a listen-only mode.

Sean Reilly: So.

Shane Reilly: So the main thing, two things are happening. Number one, programmatic for digital out of home is growing on its own. Right? It's a channel that's being embraced by digital buyers that buy across other digital screens, including your iPhone. So that's growing relatively quickly across the industry.

Sean Reilly: The main thing two things are happening number one programmatic for digital out of home is growing.

Sean Reilly: Number one, programmatic for digital out of home is growing on its own. Right, it's a channel that's being embraced by digital buyers that buy across other digital screens, including, you know, your iPhone. So that's growing relatively quickly across the industry. The other thing that is happening is that it's becoming clear that not all out-of-home screens are equal. And what I mean by that is advertisers are beginning to see that large format digital out-of-home is a program that is designed to help people with their financial needs.

Sean Reilly: Number one, programmatic for digital out of home is growing on its own. Right, it's a channel that's being embraced by digital buyers that buy across other Digital Screens, right? Including, you know, your iPhone.

Operator: At the conclusion of the company's presentation, we will open the floor for questions. To ask a question, please press star and one on your telephone keypad. In the course of the discussion, Lamar may make sure we're looking statements regarding the company, including statements about its future financial performance, strategic goals, plans and objectives, including with respect and the amount of timing of any distributions to stockholders and the impacts and effects of general economic conditions of the company's business, financial condition and results of operations.

Sean Reilly: Good morning, Sam.

Sean Reilly: Right.

Sean Reilly: It's a channel that is being embraced by digital buyers that buy across other.

Operator: All four are looking statements involve risk and circumstances and contingencies, many of which are beyond Lamar's control and which may cause actual results to differ material from anticipated results. Lamar has identified important factors that can cause actual results in differ material from those discussed in this call in the company's second quarter, 2021 earnings release, and it is most recent annual report on form PINK. Lamar refers you to those documents.

Sean Reilly: So that's growing relatively quickly across the industry. The other thing that is happening is that it's becoming clear that not all out-of-home screens are equal. And what I mean by that is advertisers are beginning to see that large format digital out-of-home is achieving their goals better than sort of the smaller formats that you may see in different venues. So there is a little bit of share shift going on as advertisers come to understand the power of larger format digital.

Sean Reilly: Digital screens right.

Sean Reilly: Including your iPhone.

Sean Reilly: So thats growing relatively quickly across the industry. The other thing that is happening is it.

Shane Reilly: The other thing that is happening is it's becoming clear that not all out-of-home screens are equal. And we see that large format digital out-of-home is achieving their goals better than sort of the smaller formats that you may see in different venues. So there is a little bit of share shift going on as advertisers come to understand the power of the larger format digital.

Sean Reilly: Great. And then just the last one for me, I don't know if I missed this earlier, but is there any further color on the expected timing of NOL usage and how that may impact distribution going forward?

Sean Reilly: It's becoming clear that not all out of home screens are equal and what I mean by that is advertisers are beginning to see that large format digital out of home.

Sean Reilly: Is.

Sean Reilly: Achieving their goals better than sort of the smaller formats.

Sean Reilly: That you may see.

Sean Reilly: And different venue so there.

Sean Reilly: There is a little bit of share shift going on.

Sean Reilly: So today we're going to be talking about the program that we have in place, and we're going to be talking about achieving their goals better than sort of the smaller formats that you may see in different venues. So there is a little bit of share shift going on as advertisers come to understand the power of the larger format digital.

Speaker Change: As advertisers come to understand the power of the larger format digital.

Jay Johnson: Great. And then just the last one for me. I don't know if I missed this earlier, but is there any further color on the expected timing of NOL usage and how that may impact distribution going forward?

Jay Johnson: Let me kick that one over to Jay. Sure. So we have about 35 minutes.

Cameron McZayne: Great.

Speaker Change: Great and then just the last one for me.

Jay Johnson: And then just the last one for me, I don't know if I missed this earlier, but is there any further color on the expected timing of the NOL usage and how that may impact the distribution going forward? Let me kick that one over to Jay. Sure. So we have about 35 million of NOLs remaining this year. And this year will be the last year that we have those available. As a result, what you'll see is some upward pressure in the dividend, as our alluded to.

Speaker Change: I don't know if I missed this earlier, but is there any further color on the expected timing of the NOL usage and how that may impact the distribution going forward.

Operator: Lamar's second quarter, 2021 earnings release, which contains information required by a regulation, g-regarding certain non-gap financial measures, was furnished on this second on a form of 8K this morning and is available on the investor section of Lamar's website, www.lamar.com.

Sean Reilly: So let me kick that one over to Jay sure. So.

Jay Johnson: Let me kick that one over to Jay. Sure, so we have about 35...

Jay Johnson: Sure, so we have about 35 million NOLs remaining this year, and this year will be the last year that we have those available. As a result, what you'll see is some upward pressure on the dividend, as I alluded to in my comments. We may consider a special dividend to make sure that we distribute 100 percent of our taxable income, but as you think about the dividend, I would think about it in the context of low double-digit growth this year and with no NOLs next year, another year of low double-digit growth. And then in 2026, it should normalize and be more in line with AFO.

Jay Johnson: Sure, so we have about $35 million of NOLs remaining this year, and this year will be the last year that we have those available. As a result, what you'll see is some upward pressure on the dividend, as I alluded to in my comments. We may consider a special dividend to make sure that we distribute 100 percent of our taxable income, but as you think about the dividend, I would think about it in the context of low double-digit growth this year and with no NOLs next year, another year of low double-digit growth. And then in 2026, it should normalize and be more in line with AFO.

Jay Johnson: Sure, so we have about 35 million NOLs remaining this year, and this year will be the last year that we have those available. As a result, what you'll see is some upward pressure on the dividend, as I alluded to in my comments. We may consider a special dividend to make sure that we distribute 100 percent of our taxable income, but as you think about the dividend, I would think about it in the context of low double-digit growth this year and with no NOLs next year, another year of low double-digit growth, and then in 2026, it should normalize and be more in line with AFM.

Speaker Change: We have about $35 million of Nols remaining this year.

Jay Johnson: This year will be the last year that we have those available.

Operator: And I'd like to turn the conference over to Shelley.

Jay Johnson: As a result, what youll see some upward pressure in the dividend as I alluded to in my comments, we may consider a special dividend to make sure that we distribute 100% of our taxable income, but as you think about the dividend I would think about it in the context of a low low double digit growth this year and with no Nols next year another year of double digit.

Operator: Mr. Riley, you may begin. Thank you, Natalie.

Shane Reilly: Good morning all and welcome to Lamar's Q22024 earnings call. The trends that we observed in Q1 held in Q2, a strong demand from local and regional advertisers more than offset softness in some national customers, allowing us to deliver solid consolidated revenue growth. For the quarter, revenues increased 3.9% on an acquisition adjusted basis with growth across billboards, transit logos and particularly airports. Meanwhile, we managed expenses well, allowing us to increase EBITDA by 6.3% on an acquisition adjusted basis and to expand our adjusted EBITDA margin to 48%, a 100 basis point improvement over Q2 of 2021. Both the EBITDA growth and margin expansion led to AFFO per share growth of 9.5%.

Jay Johnson: In my comments, we may consider a special dividend to make sure that we distribute 100% of our taxable income. But as you think about the dividend, I would think about it in the context of a low-double-digit growth this year. And with no NOLs next year, another year of low-double-digit growth. And then in 2026, it should normalize and be more in line with AFFO growth.

Shane Reilly: Because of that strong performance, management will be recommending to the board that our Q3 distribution be increased to $1.40 a share. As we look forward, we see more of the same, solid local and regional demand with national still a bit of a drag. As we sit today, revenues are pacing up mid-single digits for the second half with Q4 pacing slightly stronger than Q4.

Jay Johnson: Low double digit growth and then in 2026, it should normalize and be more in line with <unk> growth.

Speaker Change: Makes sense. Thank you both.

Cameron McZayne: Excellent.

Cameron McZayne: Thank you both.

Jay Johnson: Yes.

Speaker Change: And we will take our next question from Jason Bazinet with Citi. Please go ahead.

Jason Bazinet: We will take our next question from Jason Bezos. City, please go ahead. You guys run this business so well and have so much history. I just have a very high-level question for you. Is this local-national dichotomy strike you as sort of a bit unusual relative to the sort of long arc of history? And if so, if it is unusual, do you think it obvious for something that's a bit more permanent? Or is this, if you sort of trace it back, it goes back to specific verticals. And it's just one of those statistical noise things that is unlikely to endure.

Jason Bazinet: And we will take our next question from Jason Bazinet, Citi. Please go ahead.

Operator: And we will take our next question from Jason Bazinet, Citi. Please go ahead.

Jason Bazinet: And we will take our next question from Jason Bazinet, Citi. Please go ahead.

Jason Bazinet: You guys ran this business, so well and have so much history I just have a very high level question for you.

Jason Bazinet: You guys run this business so well and have so much history. I just have a very high-level question for you.

Jason Bazinet: Is this local national dichotomy strike, you as sort of unusual relative to the sort of long arc of history.

Sean Reilly: Is this local national dichotomy strike you as sort of a bit unusual relative to the sort of long arc of history? And if so, if it is unusual, do you think it augers for something that's a bit more permanent? Or is this, if you sort of trace it back, it goes back to specific verticals, and it's just one of those? statistical noise, things that are unlikely to happen

Sean Reilly: Is this local national dichotomy strike you as sort of a bit unusual relative to the sort of long arc of history? And if so, if it is unusual, do you think it augers for something that's a bit more permanent? Or is this, if you sort of trace it back, it goes back to specific verticals, and it's just one of those statistical noise things that is unlikely to endure?

Speaker Change: And if so if it is unusual.

Jason Bazinet: Do you think it augurs for something that's a bit more permanent or is this if you sort of trace it back.

Speaker Change: It goes back to specific verticals and that's just one of those.

Speaker Change: Statistical noise things that.

Speaker Change: Likely to endure.

Sean Reilly: Yeah, good question, Jesse. And thanks for the compliment. Yeah, I think the latter, Jason. I mean, I think that it's a statistical noise. You know, I've been doing this a long time. And if you look back 20 years and smooth out the beta in national, which has a higher, is more volatile, you'll see moments in time where national is stronger than local and you'll see moments in time where local is stronger than national. If you smooth it out over time, you'll find that the growth rates are very similar, right? So, yeah, I would say this is just one of those moments in time where a couple of verticals are sort of re-examining how they feel about what they're doing with their media spend.

Jason Bazinet: Yeah. Good question, you're asking and thanks for the compliment.

Sean Reilly: Yeah, good question, Jason, and thanks for the compliment. Yeah, I think the latter.

Operator: Yes, I think the latter Jason I mean, I think that it's just a statistical noise you know.

Sean Reilly: I mean, I think that it's statistical noise, you know. I've been doing this a long time, and if you look back 20 years and smooth out the beta in national, which has a higher, is more volatile. You'll see moments in time where national is stronger than local, and you'll see moments in time where local is stronger than national. If you smooth it out over time, you'll find that the growth rate is very similar, right?

Shane Reilly: Advisory. Also, if political comes in for Q4 as it has in the past, there should be some upside that is not yet reflected in our past. As it is, we continue to track to reach the top end of our previously provided guidance for full-year AFFO per share. Back to Q2, strong categories included services, building and construction, and automotive, while healthcare and financial should relatively weakness. Political was a tailwind too, adding about 60 basis points to our growth.

Speaker Change: I've been doing this a long time.

Jason Bazinet: And if you.

Speaker Change: Look back 20 years.

Speaker Change: Smooth out the beta in national which has a higher.

Speaker Change: More volatile.

Operator: Youll see moments in time, where national is stronger than local and Youll see moments in time, where local is stronger than national if you smooth it out over time, you will find that the growth rates.

Speaker Change: Are very similar right.

Shane Reilly: For the full year, we have 15 million on the books for political, about 10% ahead of 2022 and well ahead of 2020. Both years when spending for the full year was about 20 million. For the quarter, local sales were up nicely, increasing nearly 5%. Meanwhile, programmatic was red hot up about 3.6 million versus the year earlier period, to approximately 8.6 million. We have picked up some new customers in the programmatic category, like Pharma and CPG, and we are also seeing demand from some existing advertisers, including the insurance category, which began to stabilize in the quarter.

Sean Reilly: So yeah, I would say this is just one of those moments in time where a couple of verticals are sort of re-examining how they feel about what they're doing with their media spend. And they'll come in and they'll go out, and they'll come in, and there can be a change of CMO with a key client. They'll spend more time with us or less time with us. So again, it's just sort of ebbs and flows.

Speaker Change: So yes, I would say this is just one of those moments in time, where a couple of verticals that are sort of re examining how they feel about what theyre doing with their media spend and they'll come in and they'll go out and they'll come in and there can be a change of the CMO with a key client and they'll spend more with us or less with us.

Sean Reilly: And they'll come in and they'll go out and they'll come in. And there can be a change of a CMO with a key client. and they'll spend more with us or less with us. Again, it's just sort of, it just sort of adds and flows.

Speaker Change: Again, that's just sort of.

Speaker Change: It just sort of ebbs and flows.

Sean Reilly: And so can I ask just one follow-up? You're skewed towards local relative to some of your competitors. Would you say that that is sort of just endemic to the markets that you serve as opposed to an overt strategy on your part to go after local talent?

Jason Bazinet: And so, can I ask just one follow-up?

Jason Bazinet: So can I ask just one follow up.

Jason Bazinet: You're skewed towards local relative to some of your competitors.

Jason Bazinet: Skewed towards towards local relative to some of your competitors would you say that that is sort of just endemic to the markets that you serve.

Sean Reilly: Would you say that that is sort of just endemic to the markets that you serve as opposed to an overt strategy on your part to go after local dollars? Let me address that two ways. Number one, yes, it is a consequence of our footprint. As you know, we tend to absolutely dominate middle markets, markets below the top 20 DMAs, which skew local. No question about that.

Shane Reilly: We expect the strength and programmatic to continue, though year over year growth is likely to be less due to tougher cops. As a reminder, all of our programmatic businesses are national, so the growth there helps offset broader national weakness. Overall, including programmatic, national was off about 2.5%. At this point, we anticipate another low single digit decline in national and Q3. However, activity from national customers in the form of RFPs has been up recently, and we are hopeful that we will see that business turn as we head into 2025. Programmatic strength also helped buoy our digital platform, which grew 2.6% on the same store basis in line with the increase in Q1. RATE was up by the way across the analog platform.

Speaker Change: As opposed to an overt strategy on your part.

Speaker Change: To go after local dollars.

Speaker Change: Let me, let me address that two ways number one yes. It is.

Sean Reilly: Let me address that in two ways. Number one, yes, it is a consequence of our footprint. As you know, we tend to absolutely dominate middle markets, markets below the top 20 DMAs, which skew local. There is no question about that. But it is a point of pride in Lamar Land that when it comes to touching local customers and being able to meet the needs of Main Street, you know, our Some thousand strong troops of account executives do it better than anybody, so we do take pride in that.

Jason Bazinet: Okay, thank you so much.

Jason Bazinet: It is.

Speaker Change: A consequence of our footprint as you know we tend to absolutely dominate middle markets markets below the top 20, dnas, which skew local.

Speaker Change: No question about that.

Speaker Change: But it is a point of pride in Lamar land that when it comes to touching local customers and being able to meet the needs of main street.

Sean Reilly: But it is a point of pride in Lamar land that when it comes to touching local customers and being able to meet the needs of Main Street, you know, our some thousand strong troops of account executives do it better than anybody. So, you know, we do take pride in that.

Operator: Sure.

Speaker Change: Some thousand strong troops of account executives do it better than anybody so.

Speaker Change: We do take pride in that.

Sean Reilly: Okay, thank you so much. Yep.

Jason Bazinet: Okay, thank you so much. Yep.

Jason Bazinet: Okay. Thank you so much.

Sean Reilly: Okay, thank you so much.

Jason Bazinet: Okay, thank you so much.

Jason Bazinet: And we will take our next question from David Karnofsky with Morgan Stanley. Please go ahead.

David Kuronsky: And we will take our next question from David Kuronsky with Morgan Stanley. Please go ahead. Sean, just want to follow up on your comments about marketers moving away from the small format digital screens.

David Karnovsky: And we will take our next question from David Karnovsky with Morgan Stanley. Please go ahead.

David Karnovsky: Hi Sean, I just wanted to follow up on your comments about marketers moving away from small format digital screens. You and your peers have kind of discussed this previously, but I want to understand better what's finally kind of driving the shift to large format. And then just on the ATM program, should we just view this as the normal course of business, or is there anything to read into with regards to potential M&A opportunities? And on that, it would be great to just kind of get a refresh of the landscape for deals as you see it currently.

Sean Reilly: Hi Sean, I just wanted to follow up on your comments about marketers moving away from small format digital screens. You and your peers have kind of discussed this previously, but I want to understand better what's finally kind of driving the shift to large format. And then just on the ATM program, should we just view this as the normal course of business, or is there anything to read into with regards to potential M&A opportunities? And on that, it would be great to just kind of get a refresh of the landscape for deals as you see it currently.

Jason Bazinet: Sean just wanted to follow up on your comments about market is moving away from the small format digital screens.

David Kuronsky: You and viewers have kind of discussed this previously, but want to understand better what's finally kind of driving the shift to large format.

Jason Bazinet: You appear to have kind of discussed this previously but want to understand.

Speaker Change: Better what's finally kind of driving the shift to large format and then.

David Kuronsky: And then just on the ATM program, should we just view this as normal course of business or?

Jay Johnson: I will turn it over to Jay now to walk you through the particulars. Thanks, John.

Jason Bazinet: On the ATM program should we just view this as normal course of business or is there anything to read into with regards to potential M&A opportunities on that would be great to just kind of get a refresh of the landscape for deals as you see it.

Shane Reilly: Is there anything to read into with regards to potential MNA opportunities and on that to be created to just kind of get a refreshable landscape for deals. You see it currently. Sure. Let me take the second question first. It really is normal course of business. You know, we've had one in place. As Jay mentioned, an ATM in place for quite some time, and we just renewed it. So, I wouldn't read anything into that.

Jason Bazinet: Currently.

Sean Reilly: Sure, um... Let me take the second question first. It really is the normal course of business. We've had one in place, as Jay mentioned, an ATM in place for quite some time, and we just renewed it. So I wouldn't read anything into that. As I did mention, though, this was a slow year in M&A, and we do think it's going to pick up next year. However, we were not anticipating that we would need to issue equity or some sort of deal of that size.

Jason Bazinet: Sure.

Speaker Change: Let me take the second question first.

Speaker Change: It really is normal course of business you know we've had one in place as Jay mentioned, an ATM in place for quite some time and we just renewed it so I wouldn't read anything into that.

Jay Johnson: Our billboard regions all experienced revenue and EBITDA growth over the second quarter of last year. In addition, our airport business had another strong quarter, growing 21.7%, following 20% revenue growth in Q1, as our traffic continues to set record levels. Acquisition adjusted operating expenses increased 1.9% in the second quarter, which was slightly better than anticipated, and down from 4.4% in the first quarter. As you may recall in 2023, we benefited from COVID-19 relief grants in our airport business that will not repeat this year and primarily impact the first and third quarters.

Jason Bazinet: As I did mentioned this was a slow year in M&A and we do think it is going to pick up next year.

Shane Reilly: As I did mention, though, this was a slow year in MNA, and we do think it's going to pick up next year. Not anticipating that we would need to issue equity or some sort of deal of that size. If you look at what we've done to the balance sheet without issuing equity, we've got a little over a billion dollars in powder. So, yeah, that's sort of the, like I said, it's ordinary run, of course, I'd say.

Jason Bazinet: Not anticipating that we would need to issue equity or some sort of deal of that size. If you look at what we've done to the balance sheet without issuing equity we've got a little over $1 billion in powder.

Sean Reilly: If you look at what we've done to the balance sheet without issuing equity, we've got a little over a billion dollars in powder. So yeah, that's sort of, like I said, it's an ordinary run, I'd say.

Jason Bazinet:

Speaker Change: So, yes, that's sort of the like I said its.

Speaker Change: Ordinary run of course, I would say.

Sean Reilly: What happened last year, you may recall this time last year we were talking about a little bit of weakness in programmatic that had been going on for about 12 months, and that had been the result of a number of smaller screens coming into the programmatic digital out-of-home world. And by smaller screens, I'm talking about things like, you know, the gas pump TV screens and screens you might find in bars and things like that, right? Um, and so they were actually coming online and taking a little bit of share from us as they came online and entered the digital out of home programmatic universe.

Sean Reilly: If you look at what we've done to the balance sheet without issuing equity, we've got a little over a billion dollars in powder. So yeah, that's sort of the, like I said, it's an ordinary run, I'd say. What happened last year, you may recall this time last year we were talking about... a little bit of weakness in programmatic that had been going on for about 12 months, and that had been the result of a number of smaller screens coming into the programmatic digital out-of-home world. And by smaller screens, I'm talking about things like, you know, the gas pump TV screens and screens you might find in bars and things like that, right?

Speaker Change: What happened last year, you may recall this time last year, we were talking about a little bit of weakness in programmatic that had been going on for.

Shane Reilly: What happened last year? You may recall this time last year, we were talking about a little bit of weakness in programmatic that had been going on for about 12 months. And that had been the result of a number of smaller screens coming into the programmatic digital out-of-home world. And by smaller screens, I'm talking about things like, you know, the gas pump TV screens and screens you might find in bars and things like that, right? And so, they were actually coming online and taking a little bit of share from us as they came online and entered the digital out-of-home programmatic universe.

Speaker Change: For about 12 months.

Jay Johnson: Adjusted EBITDA for the quarter was $271.6 million, compared to $253.9 million in 2023, which was an increase of 6.9%. On an acquisition of adjusted bases, adjusted EBITDA increased 6.3%. Adjusted EBITDA margin for the quarter remains strongly 48%, one of the strongest second quarters in recent history, and despite inflationary pressures over the last few years, the company's adjusted EBITDA margin remains well above pre-pendemic levels. Adjusted funds from operations totaled $213.5 million in the second quarter, compared to $194.4 million last year, an increase of 9.8%, diluted AFFO, increased 9.5% to $2.8% per share versus $1.90 in the second quarter of 2023.

Speaker Change: That had been the result of a number of smaller screens coming into the programmatic digital out of home world and by smaller screens I'm talking about things like that.

Speaker Change: Gas pump television screens and screens, you might find in bars and things like that right.

Sean Reilly: Um, and so they were actually coming online and taking a little bit of share from us as they came online and entered the digital out of home programmatic universe. What has happened since is that some of the ratings, and Media Measurement has proven that large format roadside, if you will, digital out of home, is more powerful. It reaches more eyeballs, it has better measurement, and better demographics, and as that proved out, we started getting more share. So that's the story there.

Speaker Change: And so they were actually.

Speaker Change: Coming online and taking a little bit of share from us as they came online and entered the digital out of home programmatic universe.

Shane Reilly: What has happened since is that some of the ratings and media measurement has proven out that large format roadside, if you will, digital out of home, is more powerful. It reaches more eyeballs; it has better measurement, better demographics, and as that proved out, we started getting more share, so that's the story there.

Speaker Change: What has happened since is that some of the ratings.

Sean Reilly: What has happened since is that some of the ratings, and Media Measurement has proven that large format roadside, if you will, digital out of home, is more powerful. It reaches more eyeballs, it has better measurement, better demographics, and as that proved out, we started getting more share. So that's the story there.

Speaker Change: And media measurement has proven out that large format roadside.

Sean Reilly: If you will, digital out of home is more powerful. It reaches more eyeballs, it has better measurement, better demographics, and as that proved out.

Speaker Change: If you will.

Speaker Change: Digital out of home is more powerful it reaches more eyeballs it has.

Jay Johnson: Local and regional sales grew for the 13th consecutive quarter, but softness in national sales continues to be a head and wind to our overall revenue growth. Programmatic sales, however, I'll perform again this quarter, growing 73% versus Q2 of 2023. In spite of the national backdrop, we're encouraged by the resilience of local and regional sales, which accounted for approximately 79% of billboard revenue in the second quarter. On the capital expenditure front, total speed for the quarter was approximately $22.6 million, including $13.6 million of maintenance capbacks.

Jason Bazinet: Better measurement better demographics and as that proved out.

Speaker Change: We started getting more share so that's the story there.

Jason Bazinet: Thank you.

David Kuronsky: Thank you.

Sean Reilly: Yes.

David Kuronsky: Yep.

Speaker Change: And once again, ladies and gentlemen that is star one if <unk> like to ask a question.

Operator: And once again, ladies and gentlemen, that is star one if you would like to ask a question.

Lance Vitanza: And once again, ladies and gentlemen, that is Star 1 if you would like to ask a question. We will now take our next question from Lance Vitanza with the TD Cohen, please go ahead.

Operator: And once again, ladies and gentlemen, that is Star 1 if you would like to ask a question. We will now take our next question from Lance Vitanza with the TD Cohen, please go ahead.

Speaker Change: We will now take our next question from Lance Vitanza with TD Cowen. Please go ahead.

Lance Vitanza: We will now take our next question from Lance Vitanza with the PD Cohen. Please go ahead. Thanks, guys; a nice job on the quarter. A couple of questions here, if I may, the first on the political benefit that you're seeing. And I know you called out some numbers earlier in the prepared remarks. But I'm just wondering, are you perhaps also, I assume that that's all political advertising around local races. But are you perhaps experiencing any benefit from other non-political advertising that might be coming in from TV crowding out? Is that something that you experienced? Good question.

Jason Bazinet: Thanks, guys and nice job on the quarter a couple of questions here, if I may the.

Lance Vitanza: Thank you, guys. Nice job on the quarter. A couple of questions here, if I may. The first is the political benefit that you're seeing, and I know you called out some numbers earlier in the prepared remarks, but I'm just wondering, are you perhaps also, I assume that that's all political advertising around local races, but are you perhaps experiencing any benefit from other nonpolitical advertising that might be coming in from TV crowding out? Is that something that you have experienced?

Lance Vitanza: Thanks, guys, and nice job on the quarter. I have a couple of questions here, if I may. The first on the political benefit that you're seeing, and I know you called out some numbers earlier in the prepared remarks, but I'm just wondering, are you perhaps also, I assume that that's all political advertising around local races, but are you perhaps experiencing any benefit from other non-political advertising that might be coming in from TV crowding out? Is that something that you experience?

Jay Johnson: For the first half of the year, CapEx total $52.1 million, with maintenance accounting for $24.5 million. Our CapEx outlook for the four-year remains unchanged, and we anticipate total CapEx of $125 million, maintenance comprising $50 million. On July 31st, we repay the company's $350 million term loan aid in full, retiring the debt with a draw on our revolving credit facility and cash on hand. We continue to maintain a well-lettered debt maturity schedule.

Speaker Change: First on on the political benefit that Youre seeing Ed.

Jason Bazinet: I know you called out some numbers earlier in the prepared remarks, but I'm. Just wondering are you perhaps also I assume that that's all.

Speaker Change: Political advertising around local races, but are you, perhaps experiencing any benefit from other non political advertising that might be coming in from TV crowding out is that something that you experience.

Jay Johnson: And following repayment of the term loan, having no maturities until the $250 million AR securitization in July 2025. We plan to address the AR securitization maturity later this year, or early in 2025, most likely through an extension of the existing facility. Once extended, our newest maturity will be the $600 million term loan being in 2027, with no bond maturities until 2028. Based on debt outstanding a quarter in, our weighted average interest rate was approximately 5 percent, with a weighted average debt maturity of 3.8 years.

Sean Reilly: Good question; anecdotally, we believe that that happens, and it's, as you're probably aware, a phenomenon that happens every two years. It's hard for us to measure that, but I think there's no question but that it happens because, as you know, TV becomes a war zone right around now. To your point about it being mostly local, I would say yes, but... We do think that with the new excitement around the Democratic presidential ticket, we may see some extra activity. So that's sort of a wait and see. It's early on in what's happening there, and it certainly has been an eventful month if you follow presidential politics. That's for sure.

Sean Reilly: Good question; anecdotally, we believe that that happens, and it's, as you're probably aware, a phenomenon that happens every two years. It's hard for us to measure that, but I think there's no question but that it happens because, as you know, TV becomes a war zone right around now. You know, to your point about it being mostly local, I would say yes, but... We do think that with the new excitement around the Democratic presidential ticket, we may see some extra activity. So that's sort of a wait and see. It's early on in what's happening there, and it certainly has been an eventful month if you follow presidential politics. That's for sure.

Speaker Change: Good question.

Shane Reilly: We, anecdotally, believe that that happens, and it's, as you're probably aware, a phenomenon that happens every two years. It's hard for us to measure that, but I think there's no question but that it happens because, as you know, TV becomes a war zone right around now. You know, to your point about it being mostly local, I would say yes, but we do think that with the new excitement around the Democratic presidential ticket, that we may see some extra activity. So that's sort of a wait and see. It's early on in what's happening there, and it certainly has been an eventful month if you follow presidential politics, as for sure.

Sean Reilly: Anecdotally.

Speaker Change: We believe that that happens and it's as you are probably aware.

Speaker Change: A phenomenon that happens every two years.

Speaker Change: It's hard for us to measure that.

Speaker Change: But I.

Speaker Change: I think theres no question, but that it happens because as you know television.

Speaker Change: Becomes a war zone.

Jason Bazinet: We're at now.

Speaker Change: To your point about it being.

Speaker Change: Mostly local I would say, yes, but.

Speaker Change: We do think.

Speaker Change: That with the new excitement around the <unk>.

Jay Johnson: As defined under our credit facility, we ended the quarter with total leverage of 2.98 times net debt to EBITDA, which remains amongst the lowest in the history of the company. Our secured debt leverage was 0.94 times a quarter in, and we were comfortably in compliance with both our total debt and currents, and secured debt maintenance tests against covenants of seven times in 4.5 times respectively. Despite the sharp rise in interest rates over the past few years, and based on current expectations, our interest coverage should end the year north of six times adjusted EBITDA to cash interest.

Speaker Change: The Democratic presidential ticket that we may see some some extra activity. So that's sort of a wait and see it's early on and what's happening there.

Speaker Change: It certainly hasn't been.

Speaker Change: An eventful month, if you're if you've followed presidential politics, that's for sure.

Jay Johnson: No doubt. And then my other question is just back on the M&A environment that you're expecting to improve next year. I'm wondering, is that view, the improving view, is that based on anything specific? And, you know, I don't know, is it tied into maybe a thought that interest rates are going to come down or, for some other reason, is there a change in the tax code that could make it more likely for people to want to sell assets? Or are you just expecting that the cycle is going to turn?

Jason Bazinet: No doubt and then my other question is just back on the M&A environment that youre expecting to improve next year. I'm wondering is that view the improving is that based on anything specific and I don't know is it tied into maybe a thought that interest rates are going to come down or for some other reason is there a change in the tax code that could make it more likely for people.

Shane Reilly: It goes out.

Lance Vitanza: No doubt. And then my other question is just back on the M&A environment that you're expecting to improve next year. I'm wondering, is that view, the improving view, is that based on anything specific? And I don't know, is it tied into maybe the thought that interest rates are going to come down? Or, for some other reason, is there a change in the tax code that could make it more likely for people to want to sell assets? Or are you just expecting that the cycle is going to turn?

Sean Reilly: No doubt. And then my other question is just back on the M&A environment that you're expecting to improve next year. I'm wondering, is that view, the improving view, is that based on anything specific? And I don't know, is it tied into maybe the thought that interest rates are going to come down? Or, for some other reason, is there a change in the tax code that could make it more likely for people to want to sell assets? Or are you just expecting that the cycle is going to turn?

Lance Vitanza: And then my, my, my other question is just back on the M&A environment that you're expecting to improve next year.

Lance Vitanza: I'm wondering, is that view the improvement? Is that based on anything specific and, you know, I don't know, is it tied into maybe a thought that interest rates are going to come down or for some other reason? Is there a change in the tax code that could make it more likely for people to want to sell assets, or are you just expecting that the cycle's going to turn? So I think there's a couple of things going on. I think as rates go down and valuations reflect that, sellers will want to take advantage of that, you know, that change in the rate cycle because it does have an impact on valuation cycles.

Jay Johnson: Don't want to sell assets or are you just expecting that the cycle is going to turn.

Speaker Change: So I think Theres, a couple of things going on.

Sean Reilly: So I think there's a couple of things going on, reflect that. Sellers will want to take advantage of that, you know, that change.

Sean Reilly: So I think there's a couple of things going on. I think rates are going down, and valuations reflect that. Sellers will want to take advantage of that, you know, that change in the rate cycle because it does have an impact on the valuation cycle. You know, the other thing is, as you know, a lot of the M&A that we do is actually generated from within our footprint by our folks on the ground.

Speaker Change: Think as rates go down in.

Speaker Change: And valuations.

Speaker Change: Reflect that.

Sean Reilly: Sellers will want to take advantage of that, you know, that change in the rate cycle because it does have an impact on the valuation cycle. People took that signal, and they said, okay, we'll come talk to you in 2025. I mean, that's just what happened out there in Lamar land when I started to receive some sims.

Speaker Change: Sellers will want to take advantage of that.

Sean Reilly: That change in the rate cycle.

Sean Reilly: Because it does have an impact on valuation cycles.

Shane Reilly: You know, the other thing is, is you know, a lot of the M&A that we do, we actually, it's generated from within our footprint by our folks on the ground. And, you know, when we put out the word that we were going to slow things down a little bit because we wanted to take out the term A, learn. People took that signal and they said, okay, we'll come talk to you in 2025. I mean, you know, that's just what happens out there in Lamarland. So yeah, we think things are going to pick up in 2025.

Sean Reilly: The other thing is as you know.

Sean Reilly: A lot of the.

Jay Johnson: The AR securitization was fully drawn at the end of the quarter, a balance of $250 million. With repayment of the term loan A, the company's liquidity was approximately $450 million as of July 31st. Subsequent to quarter end, we established a new $400 million ATM program. The new agreement replaces the prior program, which includes the same dollar amount and expired in June. While we do not anticipate issuing under the program in the near term, we view maintaining an ATM program as part of our corporate financial strategy and key to preserving financial flexibility with respect to the company's capital needs.

Speaker Change: M&A that we do we actually.

Sean Reilly: It's generated from within our footprint by our folks on the ground.

Sean Reilly: And, you know, when we put out the word that we were going to slow things down a little bit because we wanted to take out the Term A loan, people took that signal, and they said, okay, we'll come talk to you in 2025. I mean, that's just what happens out there in Lamar land. So yeah, we think things are going to pick up in 2025, and we've actually started to receive some sims, with an eye towards, you know, a Q1 closing if we decide to pull the trigger.

Sean Reilly: And when we put out the word that we were going to slow things down a little bit because we wanted to take out the term a.

Sean Reilly: Loan.

Sean Reilly: People took that signal and they said, okay. We'll come talk to you in 2025.

Sean Reilly: That's just what happens out there in Lamar land.

Sean Reilly: So yes, we think things are going to pick up in 2025 and we've.

Shane Reilly: We've actually...

Speaker Change: We've actually.

Lance Vitanza: He started to receive some sims with an eye towards a Q1 closing if we decide to pull the trigger. Great understood.

Sean Reilly: <unk> started to receive some.

Sean Reilly: <unk>.

Sean Reilly: With an eye towards.

Jay Johnson: This morning, we affirmed our revised guidance, which was increased following first quarter results and based on our outlook for the balance of the year. We still expect an AFFO range of $7.75 to $7.90 per share in 2024. Full year interest in our guidance totaled $166 million, which assumed short-term interest rates are unchanged for the remainder of the year. As I mentioned earlier, maintenance cap X is budgeted for $50 million and cash taxes are projected to come in around $10 million.

Speaker Change: Q1 closing, if we decided to pull the trigger.

Speaker Change: Great understood. Thanks for the color guys.

Lance Vitanza: Great, understood. Thanks for the color, guys.

Lance Vitanza: Thanks for the color, guys.

Speaker Change: Yes. Thanks.

Operator: Yes, thanks. And it appears that we have no further questions at this time.

Sean Reilly: Yeah.

Speaker Change: And it appears that we have no further questions at this time I will now turn the floor back.

Operator: And it appears that we have no further questions at this time. I will now turn the program back over to Sean for any closing or additional remarks.

Sean Reilly: I will now turn the program back over to Sean for any closing or additional remarks. Well, thank you, Natalie, and again, thank you all for your interest in Lamar. We look forward to visiting in November.

Sean Reilly: Over to Shawn for any closing or additional remarks.

Sean Reilly: Well.

Sean Reilly: Well, thank you, Natalie, and again, thank you all for your interest in Lamar. We look forward to visiting in November.

Speaker Change: Thank you Natalie and again, thank you all for your interest in Lamar, we look forward to visiting in November.

Speaker Change: And this does conclude today's program. Thank you for your participation you may now disconnect.

Operator: And this does conclude today's program. Thank you for your participation. And again, you may now disconnect.

Operator: And this does conclude today's program. Thank you for your participation. You may now disconnect.

Jay Johnson: Finally, the company paid a cash dividend of $1.30 per share in each of the first and second quarters and our recommendation to increase the distribution is subject to board approval. The company's dividend policy has not changed, and based on current expectations, we may consider a special dividend at year end to ensure we distribute 100% of our taxable income. Again, we are pleased with this quarter's performance, particularly our strong local and regional sales, as well as our performance in the airport business. We look forward to executing on our operating strategy during the second half of the year.

Sean Reilly: Hum.

Music: [music]

Sean Reilly: [music].

Sean Reilly: Okay.

Sean Reilly: Yes.

Sean Reilly: Uh-huh.

Sean Reilly: Okay.

Sean Reilly: [music].

Sean Reilly: I will now turn the call back over to Sean for closing remarks. Thank you, Jay. I'll hit a couple of familiar data points before opening it up for questions.

Speaker Change: Got it.

Speaker Change: Uh-huh Uh-huh Hum.

Sean Reilly: Hum.

Sean Reilly: [music].

Sean Reilly: In terms of regional, relative regional strength and weakness, our strongest region in Q2 was the Atlantic region. That includes states like Florida, Georgia, and the Carolinas. While our Southeast region showed relative weakness, especially Southern California, places like San Bernardino, LA, and San Diego were a little bit soft. In terms of our mix of business, static versus digital, digital grew to be 30.6% of our book in Q2, static was 69.4%. And for the full year, digital has grown to be 29.7% of our book, where static is 70.3% of our book, this compares to last year-to-date, static 71%, digital 29%.

Sean Reilly: Hum.

Sean Reilly: Uh-huh.

Sean Reilly: Okay.

Sean Reilly: [music].

Sean Reilly: Okay.

Sean Reilly: [music].

Sean Reilly: Okay.

Sean Reilly: [music].

Sean Reilly: We ended the quarter with 4,842 digital units in the air. That was an increase a year-to-date of 83 units. And as I mentioned, Q2 same-board digital grew 2.6%. In terms of local national mix, local in Q2 was 79% of our book of business. National 4.8%. As I mentioned, national including programmatic was down 2.5% in Q2. Still negative, but sequentially better than Q1. And of course this was led by programmatic, which was up 73% in Q2. In terms of verticals and relative strength and weakness in our book, service was strong, up 14.6% in Q2. Automotive was up 5.5% gaming up 4.2% and building and construction was up 24.6% in Q2.

Sean Reilly: Uh-huh.

Sean Reilly: [music].

Sean Reilly: Relative weakness as I mentioned was shown in the healthcare category down 5.8% and in the financial category down 3.7%.

Operator: With that, Natalie, we can open it up for questions. Thank you. At this time, if you would like to ask a question, please press the star in one on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2. And once again, that is star 1 to ask a question. We will now pause for a moment to allow questions to queue.

Cameron McVeigh: And we will take our first question from Cameron McZayne with Morgan Stanley. Please go ahead. Great. Thank you. Good morning, Sean and Jay. I guess the start, how much of the growth this quarter was due to the local absorption of any national softness? I curious if you expect that to continue. And then secondly, does the guide currently assume national ad spends accelerates in the back half of the year? Thanks. Yeah, thanks, Cameron.

Cameron McVeigh: The God basically assumes, as I mentioned, low single digit declines in national kind of continuing with local taking up the slack. And as your first question, implied, that's a usual phenomenon. I mean, if we can see that national is going to be soft and there's inventory available, then our folks get busy and they're knocking on doors and they're going to sell it to local customers. So yeah, that absorption is clearly one of the things that's causing the relative outperformance of local.

Cameron McVeigh: Yeah, it makes sense. Sean, what's driving the outside strength in programmatic? Some of those numbers were surprising in a good way to see? You know, I think it's something that Al Front is seeing as well if I read their release correctly. So the main thing, two things are happening. Number one, programmatic for digital out of home is growing on its own. Right? It's a channel that's being embraced by digital buyers that buy across other digital screens, including your iPhone.

Cameron McVeigh: So that's growing relatively quickly across the industry. The other thing that is happening is it's becoming clear that not all out-of-home screens are equal. And we see that large format digital out-of-home is achieving their goals better than sort of the smaller formats that you may see in different venues. So there is a little bit of share shift going on as advertisers come to understand the power of the larger format digital.

Jay Johnson: Great. And then just the last one for me, I don't know if I missed this earlier, but is there any further color on the expected timing of the NOL usage and how that may impact the distribution going forward?

Jay Johnson: Let me kick that one over to Jay. Sure. So we have about 35 million of NOLs remaining this year.

Jay Johnson: And this year will be the last year that we have those available. As a result, what you'll see is some upward pressure in the dividend as our alluded to. In my comments, we may consider a special dividend to make sure that we distribute 100% of our taxable income. But as you think about the dividend, I would think about it in the context of a low-double-digit growth this year. And with no NOLs next year, another year of low-double-digit growth. And then in 2026, it should normalize and be more in line with AFFO growth.

Cameron McVeigh: Excellent.

Cameron McVeigh: Thank you both.

Jason Bazinet: We will take our next question from Jason Bezos. City, please go ahead. You guys run this business so well and have so much history. I just have a very high-level question for you. Is this local national dichotomy strike you as sort of a bit unusual relative to the sort of long arc of history? And if so, if it is unusual, do you think it obvious for something that's a bit more permanent? Or is this if you sort of trace it back, it goes back to specific verticals. And it's just one of those statistical noise things that is unlikely to endure.

Sean Reilly: Yeah, good question, Jesse. And thanks for the compliment. Yeah, I think the latter, Jason, I mean, I think that it's a statistical noise, you know, I've been doing this a long time. And if you look back 20 years and smooth out the beta in national, which has a higher, is more volatile, you'll see moments in time where national is stronger than local and you'll see moments in time where local is stronger than national.

Sean Reilly: If you smooth it out over time, you'll find that the growth rates are very similar, right? So, yeah, I would say this is just one of those moments in time where a couple of verticals are sort of re-examining how they feel about what they're doing with their media spend. And they'll come in and they'll go out and they'll come in. And there can be a change of a CMO with a key client, and they'll spend more with us or less with us. Again, it's just sort of, it just sort of adds and flows.

Sean Reilly: And so, can I ask just one follow-up? You're skewed towards local relative to some of your competitors. Would you say that that is sort of just endemic to the markets that you serve as opposed to an overt strategy on your part to go after local dollars?

Sean Reilly: Let me address that two ways. Number one, yes, it is a consequence of our footprint. As you know, we tend to absolutely dominate middle markets, markets below the top 20 DMAs, which skew local. No question about that. But it is a point of pride in Lamar land that when it comes to touching local customers and being able to meet the needs of Main Street, you know, are some thousand strong troops of account executives do it better than anybody. So, you know, we do take pride in that.

Jason Bazinet: Okay, thank you so much. Yep.

David Karnovsky: And we will take our next question from David Kuronsky with Morgan Stanley. Please go ahead. Sean, just want to follow up on your comments about marketers moving away from the small format digital screens.

Sean Reilly: You and viewers have kind of discussed this previously, but want to understand better what's finally kind of driving the shift to large format. And then just on the ATM program, should we just view this as normal course of business or. Is there anything to read in to with regards to potential MNA opportunities and on that to be created to just kind of get a refreshable landscape for deals. You see it currently.

Sean Reilly: Sure. Let me take the second question first. It really is normal course of business. You know, we've had one in place. As Jay mentioned, an ATM in place for quite some time, and we just renewed it. So, I wouldn't read anything into that. As I did mention, though, this was a slow year in MNA, and we do think it's going to pick up next year. Not anticipating that we would need to issue equity or some sort of deal of that size.

Sean Reilly: If you look at what we've done to the balance sheet without issuing equity, we've got a little over a billion dollars in powder. So, yeah, that's sort of the, like I said, it's ordinary run, of course, I'd say.

Operator: What happened last year? You may recall this time last year, we were talking about a little bit of weakness in programmatic that had been going on for about 12 months. And that had been the result of a number of smaller screens coming into the programmatic digital out of home world. And by smaller screens, I'm talking about things like, you know, the gas pump TV screens and screens you might find in bars and things like that, right?

Operator: And so, they were actually coming online and taking a little bit of share from us as they came online and entered the digital out of home programmatic universe. What has happened since is that some of the ratings and media measurement has proven out that large format roadside, if you will, digital out of home, is more powerful. It reaches more eyeballs, it has better measurement, better demographics, and as that proved out, we started getting more share, so that's the story there. Thank you. Yep. And once again, ladies and gentlemen, that is star one if you would like to ask a question.

Lance Vitanza: We will now take our next question from Lance Vitanza with the PD Cohen, please go ahead. Thanks guys, a nice job on the quarter. A couple of questions here, if I may, the first on the political benefit that you're seeing. And I know you called out some numbers earlier in the prepared remarks. But I'm just wondering are you perhaps also, I assume that that's all political advertising around local races. But are you perhaps experiencing any benefit from other non-political advertising that might be coming in from TV crowding out? Is that something that you experienced?

Shane Reilly: Good question. We, anecdotally, we believe that that happens, and it's, as you're probably aware, a phenomenon that happens every two years. It's hard for us to measure that, but I think there's no question but that it happens because, as you know, TV becomes a war zone right around now. You know, to your point about it being mostly local, I would say yes, but we do think that with the new excitement around the Democratic presidential ticket that we may see some extra activity. So that's sort of a wait and see. It's early on in what's happening there, and it certainly has been an eventful month if you follow presidential politics, as for sure. It goes out.

Shane Reilly: And then my, my, my other question is just back on the M&A environment that you're expecting to improve next year. I'm wondering, is that view the improvement? Is that based on anything specific and, you know, I don't know, is it tied into maybe a thought that interest rates are going to come down or for some other reason is there a change in the tax code that could make it more likely for people to want to sell assets or are you just expecting that the cycle's going to turn?

Shane Reilly: So I think there's a couple of things going on. I think as rates go down and valuations reflect that, sellers will want to take advantage of that, you know, that change in the rate cycle because it does have an impact on valuation cycles. You know, the other thing is, is you know, a lot of the M&A that we do, we actually, it's generated from within our footprint by our folks on the ground.

Shane Reilly: And, you know, when we put out the word that we were going to slow things down a little bit because we wanted to take out the term A, learn. People took that signal and they said, okay, we'll come talk to you in 2025. I mean, you know, that's just what happens out there in Lamarland. So yeah, we think things are going to pick up in 2025. We've actually... He started to receive some sims with an eye towards a Q1 closing if we decide to pull the trigger. Great understood. Thanks for the color, guys. Yes, thanks.

Operator: And it appears that we have no further questions at this time.

Operator: And this does conclude today's program. Thank you for your participation.

Operator: And again, you may now disconnect.

Q2 2024 Lamar Advertising Co Earnings Call

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