Lamar Advertising (LAMR) Q2 2011 Earnings Call August 04, 2011 10:00 am ET Executives Sean Reilly - Chief Executive Officer Keith Istre - Chief Financial Officer, Principal Accounting Officer and Treasurer
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Keith IstreOkay. Welcome, everybody. Just a couple of quick comments. As you know, we've guided to approximately $296 million revenue for Q2. You saw we came in at $293 million and some change, so we were obviously a little light, and that's disappointing. Sean will get more into the details of what drove that. But accordingly, based on our bookings and our Q2 performance, our guidance for Q3 revenue is identical to our actual loss for Q2, and that's $293 million, which is up 2%. In our fiscal years, our Q2 and Q3 revenues on a pro forma basis are pretty much identical. So FYI, our Q3 pro forma revenue from last year is identical to our last year's Q2 pro forma revenue, which we show in our press release that you have. The only other comment is on expense growth. Our consolidated expenses, including corporate overhead, were up 2.2%, that's on an actual-to-actual basis. If you pro forma the end some of the benefit costs that weren't there last year, we would be up about 1%. So for the rest of the year, we do expect our expense growth to remain in the low single-digits. Sean? Sean Reilly Thanks, Keith. And I'll hit some of the highlights and also point out some areas of weakness. On the highlights, Keith mentioned the expense controls. Obviously, we saw that the economic tailwinds weren't as strong as we had hoped, and we've began to manage expenses accordingly, and we'll continue to do that. On the digital front, as Kevin mentioned, we've got a lot of confidence in how we're doing on the digital front. As of the end of July, we had 674 bulletins in the air, and 629 posters in the air, for a total of 1,303 units. That's an increase of 134 units since we announced our goal of getting 300 in the air last November.
We were slowed down a little bit by the winds and the weather in the first half. I estimate now that we'll end the year with approximately 250 additional units in the air since we announced that goal, so we may come up with tad short, not because we don't want to put more in the air, but we are getting them up as fast as we're physically able.Digital has grown to 13% of our book of business. It was up 15% in the first half of the year. So again, that indicates to us that we need to keep pedal to the metal when it comes to growing our digital footprint. Rate and occupancy stats for Q2 -- we're in an environment now where it's very difficult to push rate with our local customers. And paired up in the rates statistics, Q2 2011 average poster rate of 437, Q2 2010 average poster rate of 431, an increase of only 1%. On the bulletin side, Q2 2011 average rate, $1,112, versus Q2 2010, $1,111, or absolutely flat. And that's a little bit of disappointing and I think reflects the economic environment. On the occupancy side, we continue to see a little bit of struggle on the poster side of our business. Q2 2010 occupancy was 73%. Q2 2011 occupancy was 72%. The news is a little better on the bulletin side. Occupancy is up 3 points on the bulletin inside. Q2 2010, occupancy of 74%; Q2 2011 occupancy of 77%. Read the rest of this transcript for free on seekingalpha.com