OUTFRONT Media Reports Second Quarter 2024 Results

Revenues of $477.3 million

Operating income of $229.1 million

 Net income attributable to OUTFRONT Media Inc. of $176.8 million

Adjusted OIBDA of $126.0 million

AFFO attributable to OUTFRONT Media Inc. of $84.8 million

Quarterly dividend of $0.30 per share, payable September 27, 2024

NEW YORK, Aug. 6, 2024 /PRNewswire/ — OUTFRONT Media Inc. (NYSE: OUT) today reported results for the quarter ended June 30, 2024.

“Our U.S. Media business continued to display solid growth during the quarter, with revenue up 4% and Adjusted OIBDA up nearly double that, demonstrating the operating leverage in our business” said Jeremy Male, Chairman and Chief Executive Officer of OUTFRONT Media. “Also, we were pleased to complete the sale of our Canadian business in June, leaving us with an entirely focused domestic U.S. business.”

Second Quarter 2024 Results

Sale of Canadian Business
On June 7, 2024, we sold all of our equity interests in Outdoor Systems Americas ULC and its subsidiaries (the “Transaction”), which hold all of the assets of our outdoor advertising business in Canada (the “Canadian Business”).

In connection with the Transaction, we received C$410.0 million in cash, which is subject to certain purchase price adjustments. The following reported results include the historical results of the Canadian Business through the date of sale.

Consolidated
Reported revenues of $477.3 million increased $8.5 million, or 1.8%, for the second quarter of 2024 as compared to the same prior-year period. Organic revenues of $461.0 million increased $16.1 million, or 3.6%.

Reported billboard revenues of $373.4 million increased $1.8 million, or 0.5%, compared to the same prior-year period due to an increase in average revenue per display (yield), and the impact of new and lost billboards in the period, including insignificant acquisitions, partially offset by the impact of the Transaction. Organic billboard revenues, which exclude revenues associated with the impact of the Transaction and foreign currency exchange rates, of $360.2 million increased $8.0 million, or 2.3%.

Reported transit and other revenues of $103.9 million increased $6.7 million, or 6.9%, compared to the same prior-year period, due primarily to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts in the period. Organic transit and other revenues, which exclude revenues associated with the impact of the Transaction, of $100.8 million increased $8.1 million, or 8.7%.

Total operating expenses of $239.8 million decreased $6.1 million, or 2.5%, compared to the same prior-year period, due primarily to lower billboard property lease costs and the impact of the Transaction, partially offset by higher posting, maintenance, and other expenses. Selling, General and Administrative expenses (“SG&A”) of $119.1 million increased $10.5 million, or 9.7%, compared to the same prior-year period, primarily due to higher compensation-related expenses, including salaries and commissions, higher professional fees, as a result of a management consulting project, higher rent related to new offices and a higher provision for doubtful accounts.

Adjusted OIBDA of $126.0 million increased $3.8 million, or 3.1%, compared to the same prior-year period.

Segment Results

U.S. Media
Reported revenues of $460.9 million increased $17.9 million, or 4.0%, due primarily to higher transit and other revenues, as well as higher billboard revenues. Billboard revenues increased 2.3% and Transit and other revenues increased 10.9%.

Operating expenses decreased $1.9 million, or 0.8%, primarily driven by lower variable property lease expenses and the net impact of new and lost transit franchise contracts, partially offset by higher guaranteed minimum annual payments to the New York Metropolitan Transportation Authority (the “MTA”), higher compensation-related expenses, higher posting and rotation costs, and higher maintenance and utilities costs. SG&A expenses increased by $7.4 million, or 9.0%, primarily driven by higher compensation-related expenses, a higher provision for doubtful accounts, higher rent related to new offices and higher insurance costs, partially offset by lower professional fees.

Adjusted OIBDA of $140.5 million increased $12.4 million, or 9.7%, compared to the same prior-year period.

Other
Reported revenues of $16.4 million decreased $9.4 million, or 36.4%, primarily driven by the impact of the Transaction and a decline in third-party digital equipment sales, partially offset by an increase in average revenue per display (yield). Canada revenues of $16.3 million decreased $7.6 million, or 31.8%, due primarily to the Transaction. Organic revenues decreased $1.8 million, or 94.7%.

Operating expenses decreased $4.2 million, or 31.3%, due primarily to the impact of the Transaction, as well as lower costs related to third-party digital equipment sales. SG&A expenses decreased $0.1 million, or 1.8%, driven primarily by the impact of the Transaction.

Adjusted OIBDA of $1.6 million decreased $5.1 million, or 76.1%, compared to the same prior-year period.

Corporate
Corporate costs, excluding stock-based compensation, increased $3.5 million, or 27.8%, to $16.1 million, due primarily to higher professional fees, as a result of a management consulting project, and higher compensation-related expenses.

Impairment Charges
As previously disclosed, we recorded impairment charges in 2023 with respect to our U.S. Transit and Other reporting unit, primarily representing impairment charges related to our MTA asset group. As a result of negative aggregate cash flows related to our MTA asset group, we performed quarterly impairment analyses on our MTA asset group and recorded impairment charges of $8.8 million in the three months ended June 30, 2024, and $17.9 million in the six months ended June 30, 2024, representing additional MTA equipment deployment cost spending during the periods.

Interest Expense
Net interest expense in the second quarter of 2024 was $41.1 million, including amortization of deferred financing costs of $1.5 million, as compared to $39.7 million in the same prior-year period, including amortization of deferred financing costs of $1.8 million. The increase was due primarily to higher interest rates and a higher average debt balance. The weighted average cost of debt as of June 30, 2024 was 5.6% and as of June 30, 2023 was 5.4%.

Income Taxes
The provision for income taxes was $11.1 million in the second quarter of 2024 compared to $0.4 million in the same prior-year period, due primarily to a gain on disposition related to the Transaction. Cash paid for income taxes in the six months ended June 30, 2024 was $1.2 million.

Net Income (Loss) Attributable to OUTFRONT Media Inc.
Net income attributable to OUTFRONT Media Inc. was $176.8 million in the second quarter of 2024 compared to a Net loss attributable to OUTFRONT Media Inc. of $478.9 million in the same prior-year period. Diluted weighted average shares outstanding were 174.5 million for the second quarter of 2024 compared to 165.0 million for the same prior-year period. Net income attributable to OUTFRONT Media Inc. per common share for diluted earnings per weighted average share was $1.01 in the second quarter of 2024 compared to a Net loss attributable to OUTFRONT Media Inc. per common share for diluted earnings per weighted average share of $2.92 in the same prior-year period.

FFO & AFFO
FFO attributable to OUTFRONT Media Inc. was $83.8 million in the second quarter of 2024, compared to a deficit of $59.8 million the same prior-year period, due primarily to lower impairment charges on non-real estate assets. AFFO attributable to OUTFRONT Media Inc. increased $6.8 million, or 8.7%, in the second quarter of 2024, compared to the same prior-year period, due primarily to higher Adjusted OIBDA and lower cash paid for income taxes.

Cash Flow & Capital Expenditures
Net cash flow provided by operating activities increased $13.9 million, or 15.8%, for the six months ended June 30, 2024, compared to the same prior-year period, due primarily to a smaller use of cash related to accounts payable and accrued expenses, driven by lower incentive compensation payments made in 2024, and a decrease in prepaid MTA equipment deployment costs, partially offset by the timing of receivables and lower net income in 2024 compared to 2023, due to increased SG&A expenses and higher interest expense. Total capital expenditures decreased $2.6 million, or 5.8%, to $42.3 million for the six months ended June 30, 2024, compared to the same prior-year period.

Dividends
In the six months ended June 30, 2024, we paid cash dividends of $104.4 million, including $100.0 million on our common stock and vested restricted share units granted to employees and $4.4 million on our Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”). We announced on August 6, 2024, that our board of directors has approved a quarterly cash dividend on our common stock of $0.30 per share payable on September 27, 2024, to stockholders of record at the close of business on September 6, 2024.

Balance Sheet and Liquidity
As of June 30, 2024, our liquidity position included unrestricted cash of $49.6 million and $493.7 million of availability under our $500.0 million revolving credit facility, net of $6.3 million of issued letters of credit against the letter of credit facility sublimit under the revolving credit facility, and $120.0 of additional availability under our accounts receivable securitization facility. During the three months ended June 30, 2024, no shares of our common stock were sold under our at-the-market equity offering program, of which $232.5 million remains available. As of June 30, 2024, the maximum number of shares of our common stock that could be required to be issued on conversion of the outstanding shares of the Series A Preferred Stock was approximately 7.8 million shares. Total indebtedness as of June 30, 2024 was $2.5 billion, excluding $19.2 million of deferred financing costs, and includes a $400.0 million term loan, $1.7 billion of senior unsecured notes, $450 million of senior secured notes, and $30.0 million of borrowings under our accounts receivable securitization facility.

Conference Call
We will host a conference call to discuss the results on August 6, 2024, at 4:30 p.m. Eastern Time. The conference call numbers are 833-470-1428 (U.S. callers) and 404-975-4839 (International callers) and the passcode for both is 988725. Live and replay versions of the conference call will be webcast in the Investor Relations section of our website, www.outfront.com.

Supplemental Materials
In addition to this press release, we have provided a supplemental investor presentation which can be viewed on our website, www.outfront.com.

About OUTFRONT Media Inc.
OUTFRONT leverages the power of technology, location and creativity to connect brands with consumers outside of their homes through one of the largest and most diverse sets of billboard, transit, and mobile assets in the United States. Through its technology platform, OUTFRONT will fundamentally change the ways advertisers engage audiences on-the-go.

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