Lamar Advertising Company Announces Second Quarter Ended June 30, 2023

Three Month Results

• Net revenue was $541.1 million
• Net income was $130.9 million
• Adjusted EBITDA was $253.9 million

Six Month Results

• Net revenue was $1.01 billion
• Net income was $207.1 million
• Adjusted EBITDA was $451.9 million

Baton Rouge, LA – August 3, 2023 – Lamar Advertising Company (the “Company” or “Lamar”) (Nasdaq: LAMR), a leading owner and operator of outdoor advertising and logo sign displays, announces the Company’s operating results for the second quarter ended June 30, 2023.

“As we moved into the third quarter, we observed a slowdown in business activity,” Lamar chief executive Sean Reilly said. “Although we still feel positive about our efforts to control expenses, revenue for the second half of 2023 is not shaping up as we anticipated it would. As a result, we are revising our guidance for full-year diluted AFFO to a range of $7.13 to $7.28 per share.”

Second Quarter Highlights

• Net revenue increased 4.5%
• Adjusted EBITDA increased 4.3%
• Diluted AFFO per share decreased 2.1%

Second Quarter Results
Lamar reported net revenues of $541.1 million for the second quarter of 2023 versus $517.9 million for the second quarter of 2022, a 4.5% increase. Operating income for the second quarter of 2023 increased $10.3 million to $176.8 million as compared to $166.5 million for the same period in 2022. Lamar recognized net income of $130.9 million for the second quarter of 2023 as compared to net income of $134.2 million for the same period in 2022, a decrease of $3.3 million, primarily related to an increase in interest expense of $14.2 million over the same period in 2022. Net income per diluted share was $1.28 and $1.32 for the three months ended June 30, 2023 and 2022, respectively.

Adjusted EBITDA for the second quarter of 2023 was $253.9 million versus $243.4 million for the second quarter of 2022, an increase of 4.3%.

Cash flow provided by operating activities was $198.2 million for the three months ended June 30, 2023 versus $210.6 million for the second quarter of 2022, a decrease of $12.4 million. Free cash flow for the second quarter of 2023 was $159.2 million as compared to $166.6 million for the same period in 2022, a 4.4% decrease.

For the second quarter of 2023, funds from operations, or FFO, was $200.6 million versus $197.6 million for the same period in 2022, an increase of 1.6%. Adjusted funds from operations, or AFFO, for the second quarter of 2023 was $194.4 million compared to $196.9 million for the same period in 2022, a decrease of 1.3%. Diluted AFFO per share decreased 2.1% to $1.90 for the three months ended June 30, 2023 as compared to $1.94 for the same period in 2022.

Acquisition-Adjusted Three Months Results
Acquisition-adjusted net revenue for the second quarter of 2023 increased 2.7% over acquisition-adjusted net revenue for the second quarter of 2022. Acquisition-adjusted EBITDA for the second quarter of 2023 increased 2.9% as compared to acquisition-adjusted EBITDA for the second quarter of 2022. Acquisition-adjusted net revenue and acquisition-adjusted EBITDA include adjustments to the 2022 period for acquisitions and divestitures for the same time frame as actually owned in the 2023 period. See “Reconciliation of Reported Basis to Acquisition-Adjusted Results”, which provides reconciliations to GAAP for acquisition-adjusted measures.

Six Month Results
Lamar reported net revenues of $1.01 billion for the six months ended June 30, 2023 versus $969.2 million for the six months ended June 30, 2022, a 4.5% increase. Operating income for the six months ended June 30, 2023 increased $8.6 million to $295.6 million as compared to $287.0 million for the same period in 2022. Lamar recognized net income of $207.1 million for the six months ended June 30, 2023 as compared to net income of $226.4 million for the same period in 2022, a decrease of $19.3 million, primarily related to an increase in interest expense of $28.8 million over the same period in 2022. Net income per diluted share was $2.02 and $2.23 for the six months ended June 30, 2023 and 2022, respectively.

Adjusted EBITDA for the six months ended June 30, 2023 was $451.9 million versus $434.6 million for the same period in 2022, an increase of 4.0%.

Cash flow provided by operating activities was $306.9 million for the six months ended June 30, 2023, a decrease of $5.8 million as compared to the same period in 2022. Free cash flow for the six months ended June 30, 2023 was $272.5 million as compared to $301.1 million for the same period in 2022, a 9.5% decrease.

For the six months ended June 30, 2023, funds from operations, or FFO, was $344.1 million versus $353.9 million for the same period in 2022, a decrease of 2.8%. Adjusted funds from operations, or AFFO, for the six months ended June 30, 2023 was $338.5 million compared to $348.8 million for the same period in 2022, a decrease of 3.0%. Diluted AFFO per share decreased 3.2% to $3.32 for the six months ended June 30, 2023 as compared to $3.43 for the same period in 2022.

Liquidity
As of June 30, 2023, Lamar had $661.1 million in total liquidity that consisted of $608.3 million available for borrowing under its revolving senior credit facility, $5.0 million under its Accounts Receivable Securitization Program and $47.8 million in cash and cash equivalents. There were $133.0 million in borrowings outstanding under the Company’s revolving credit facility and $234.9 million outstanding under the Accounts Receivable Securitization Program as of the same date.

Revised Guidance
We are updating our 2023 guidance issued in February 2023. We now expect net income per diluted share for fiscal year 2023 to be between $4.72 and $4.80, with diluted AFFO per share between $7.13 and $7.28. See “Supplemental Schedules Unaudited REIT Measures and Reconciliations to GAAP Measures” for reconciliation to GAAP.

Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding sales trends. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among others: (1) our significant indebtedness; (2) the state of the economy and financial markets generally, including inflationary pressures and the effect of the broader economy on the demand for advertising; (3) the continued popularity of outdoor advertising as an advertising medium; (4) our need for and ability to obtain additional funding for operations, debt refinancing or acquisitions; (5) our ability to continue to qualify as a Real Estate Investment Trust (“REIT”) and maintain our status as a REIT; (6) the regulation of the outdoor advertising industry by federal, state and local governments; (7) the integration of companies and assets that we acquire and our ability to recognize cost savings or operating efficiencies as a result of these acquisitions; (8) changes in accounting principles, policies or guidelines; (9) changes in tax laws applicable to REITs or in the interpretation of those laws; (10) our ability to renew expiring contracts at favorable rates; (11) our ability to successfully implement our digital deployment strategy; and (12) the market for our Class A common stock. For additional information regarding factors that may cause actual results to differ materially from those indicated in our forward-looking statements, we refer you to the risk factors included in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, as supplemented by any risk factors contained in our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. We caution investors not to place undue reliance on the forward-looking statements contained in this document. These statements speak only as of the date of this document, and we undertake no obligation to update or revise the statements, except as may be required by law.

Use of Non-GAAP Financial Measures
The Company has presented the following measures that are not measures of performance under accounting principles generally accepted in the United States of America (“GAAP”): adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), free cash flow, funds from operations (“FFO”), adjusted funds from operations (“AFFO”), diluted AFFO per share, outdoor operating income, acquisition-adjusted results and acquisition-adjusted consolidated expense. Our management reviews our performance by focusing on these key performance indicators not prepared in conformity with GAAP. We believe these non-GAAP performance indicators are meaningful supplemental measures of our operating performance and should not be considered in isolation of, or as a substitute for their most directly comparable GAAP financial measures.

Our Non-GAAP financial measures are determined as follows:

• We define adjusted EBITDA as net income before income tax expense (benefit), interest expense (income), loss (gain) on extinguishment of debt and investments, equity in earnings (loss) of investees, stock-based compensation, depreciation and amortization, gain or loss on disposition of assets, transaction expenses and investments and capitalized contract fulfillment costs, net.
• Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenues.
• Free cash flow is defined as adjusted EBITDA less interest, net of interest income and amortization of deferred financing costs, current taxes, preferred stock dividends and total capital expenditures.
• We use the National Association of Real Estate Investment Trusts definition of FFO, which is defined as net income before gains or losses from the sale or disposal of real estate assets and investments and real estate related depreciation and amortization and including adjustments to eliminate unconsolidated affiliates and non-controlling interest.
• We define AFFO as FFO before (i) straight-line revenue and expense; (ii) capitalized contract fulfillment costs, net; (iii) stock-based compensation expense; (iv) non-cash portion of tax provision; (v) non-real estate related depreciation and amortization; (vi) amortization of deferred financing costs; (vii) loss on extinguishment of debt; (viii) transaction expenses; (ix) non-recurring infrequent or unusual losses (gains); (x) less maintenance capital expenditures; and (xi) an adjustment for unconsolidated affiliates and non-controlling interest.
• Diluted AFFO per share is defined as AFFO divided by weighted average diluted common shares outstanding.
• Outdoor operating income is defined as operating income before corporate expenses, stock-based compensation, capitalized contract fulfillment costs, net, transaction expenses, depreciation and amortization and loss (gain) on disposition of assets.
• Acquisition-adjusted results adjusts our net revenue, direct and general and administrative expenses, outdoor operating income, corporate expense and EBITDA for the prior period by adding to, or subtracting from, the corresponding revenue or expense generated by the acquired or divested assets before our acquisition or divestiture of these assets for the same time frame that those assets were owned in the current period. In calculating acquisition-adjusted results, therefore, we include revenue and expenses generated by assets that we did not own in the prior period but acquired in the current period. We refer to the amount of pre-acquisition revenue and expense generated by or subtracted from the acquired assets during the prior period that corresponds with the current period in which we owned the assets (to the extent within the period to which this report relates) as “acquisition-adjusted results”.
• Acquisition-adjusted consolidated expense adjusts our total operating expense to remove the impact of stock-based compensation, depreciation and amortization, transaction expenses, capitalized contract fulfillment costs, net, and loss (gain) on disposition of assets and investments. The prior period is also adjusted to include the expense generated by the acquired or divested assets before our acquisition or divestiture of such assets for the same time frame that those assets were owned in the current period.

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