outfront media q1 2020

02/12/2020
outfront media q1 2020

What is interesting is that the aspects that really drove our business and drove our market outperformance over the last couple of years were two things really. You can identify forward-looking statements by the use of forward-looking terminology such as "believes," "expects," "could," "would," "may," "might," "will," "should," "seeks," "likely," "intends," "plans," "projects," "predicts," "estimates," "forecast" or "anticipates" or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. Roughly what percentage of those are you actually actively engaged with right now in terms of renegotiating lease costs? But we have over 100 people in our real estate group and they're incredibly focused on doing this. OUTFRONT Media Logo. Okay, and just so I understand, are you going to be accruing MGs on Transit like the MTA or are you -- because you're not paying, it's essentially going to be purely variable? Your line is open. As you would expect, we are engaged with our Billboard landlords and Transit franchise partners to mitigate these costs going forward. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and may not be able to be realized. Stock Advisor launched in February of 2002. The convertible preferred stock carries a 7.0% annual dividend, which will be payable at our option in cash or in-kind, subject to certain exceptions and conditions. Beginning March 10th, all of our office-based employees have done a great job as they shifted to work from home and we put protective safety measures in place for our operation staff, who are doing terrific work keeping our business going out in the field. As we look across our business, national is somewhat more impacted than local and I'm sure, as you can imagine, there is a lot of geography involved here. Maybe I'd just ask you to look into your crystal ball to maybe help us understand as far as when we get in to the fall, you're starting to see the recovery you're talking about you'll get past the trough, you're talking about -- we're still in this world of social distancing, what does the audience levels then look like, let's just say, in fall when maybe the economy is back, but maybe we still need to maintain our social distancing? All forward-looking statements in this presentation apply as of the date of this presentation or as of the date they were made and, except as required by applicable law, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. As I said right at the outset, the fundamentals of out-of-home, they're still valid. Of the 10% reduction in Billboard, say, maybe half of that is going to be recurring. The financial services provider reported ($0.14) EPS for the quarter, missing the consensus estimate of $0.08 by $0.22. And the fact is that, if you think about the subway, we were previously carrying -- previous to COVID, 6 million passengers a day. And lastly, corporate expenses were down by half due to lower employee benefits expense. I know coming out of the recession, pricing will be a little slow to recover and that was kind of a drag. Alexia Quadrani - JPMorgan. Thanks, Jeremy, and good morning everyone. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and may not be able to be realized. Net income attributable to OUTFRONT Media Inc. per common share for diluted earnings per weighted average share was $0.04 for both the first quarter of 2020 and the same prior-year period. I joined a little late. Firstly, it was a proactive and prudent response to a situation whose severity and duration are unknown. (Unaudited) See Notes on Page 12. Please go ahead. And you had a question on the PIK aspect of the preferred. Its portfolio primarily consists of billboard displays, which are principally located on the heavily traveled highways and roadways; and transit advertising displays with multi-year contracts with municipalities in various cities across the United States. Until September 30, 2021, we will be able to substitute our results in Q2 and Q3 of 2019 for our future results in Q2 and Q3 of this year when calculating the LTM denominator in the covenant, subject to certain limitations on making restricted payments. Our management also believes that the presentations of FFO and AFFO, as supplemental measures, are useful in evaluating our business because adjusting results to reflect items that have more bearing on the operating performance of REITs highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. Non-GAAP Financial MeasuresIn addition to the results prepared in accordance with generally accepted accounting principles in the United States ("GAAP") provided throughout this document, this document and the accompanying tables include non-GAAP financial measures as described below. Considering all these factors, as we look at Q2 to date, we expect our total revenues to be down approximately 50%. There was no -- effectively no change in audiences over that period. This was offset by the significant drop in our corporate expenses I just mentioned. Our total MTA project costs in the quarter were $22 million. It's what we're doing with landlords directly. You can also identify forward-looking statements by discussions of strategy, plans or intentions related to our capital resources, portfolio performance and results of operations, including but not limited to the impact of the COVID-19 pandemic on our capital resources, portfolio performance and results of operations. Right now, ridership is down and reflecting that, obviously, services are down pretty much in all of our key markets. So it takes time. On April 20th, we closed the $400 million investment by two leading private equity firms, Providence Equity Partners and Ares Management. Just a couple from me. Matthew Siegel - Executive Vice President and Chief Financial Officer. Are there some issues that are being developed and ideas that have been advanced so far to address that sort of issue? We've mentioned fewer conversions as a source of liquidity for the remainder of the year. It is management's opinion that these supplemental measures provide users of our financial data with an important perspective on our operating performance and also make it easier to compare our results to other companies in our industry, as well as to REITs. We felt it was prudent and worth the extra interest expense to have this cash in our own accounts. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Please go ahead. Thank you, Greg. All right. This is data from our proprietary Smart Scout platform. In the three months ended March 31, 2019, non-organic revenues reflect the impact of foreign currency exchange rates. Ben Swinburne - Morgan Stanley. Let's conquer your financial goals together...faster. Hopefully the revenue increases and all of it increases and then the same thing on posting, maintenance and SG&A as we furloughed a number of our staff, unfortunately, the activity level has gone down. Different cities are certainly at different levels, but the declines appear to have stopped, which is very encouraging, and we expect will continue to improve as an increasing number of States open back up. We have made statements in this presentation that are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. Let's turn now to cash flow beginning with capital expenditures on Slide 15. It is management's opinion that these supplemental measures provide users of our financial data with an important perspective on our operating performance and also make it easier for users of our financial data to compare our results with other companies that have different financing and capital structures or tax rates. Net Income Attributable to OUTFRONT Media Inc.Net income attributable to OUTFRONT Media Inc. was $6.1 million in both the first quarter of 2020 and the same prior-year period. Cumulative Growth of a $10,000 Investment in Stock Advisor, OUTFRONT Media Inc (OUT) Q1 2020 Earnings Call Transcript @themotleyfool #stocks $OUT, OUTFRONT Media Inc (OUT) Q3 2019 Earnings Call Transcript, OUTFRONT Media Inc (OUT) Q1 2019 Earnings Call Transcript, Copyright, Trademark and Patent Information. Nov. 27, 2020 11:19 PM ET | About: QYOU Media Inc. (QYOUF) | By: Jignesh Mehta, SA News Editor . So we do like the triage. See Notes on Page 12, Receivables, less allowance ($19.9 in 2020 and $12.1 in 2019), Common stock (2020 - 450.0 shares authorized, and 144.4 shares issued, and outstanding; 2019 - 450.0 shares authorized, and 143.6 issued and outstanding), Exhibit 3:  CONSOLIDATED STATEMENTS OF CASH FLOWS  (Unaudited) See Notes on Page 12. Total Operating expenses of $224.8 million increased $7.9 million, or 3.6%, due primarily to higher billboard lease expense and higher posting, maintenance and other expenses. Jeremy J. In Q2, we currently expect Transit to be down around 75% while our Billboard business is expected to be down in the region of 35%. So as we look at all the different pieces of the relationship with the MTA, you can understand that it's quite a -- it's a complex discussion, but I'm pleased to say that they are very open to those discussions and finding solution that's going to work for both parties. The decrease was due primarily to lower rates despite a higher outstanding debt balance. Jeremy, I wanted to ask about the August improvement that you're seeing. We calculate AFFO as FFO adjusted to include cash paid for direct lease acquisition costs as such costs are generally amortized over a period ranging from four weeks to one year and therefore are incurred on a regular basis. Okay. This overall increase in expenses was in line with our revenue growth, resulting in a flat year-over-year OIBDA on Slide 13. Thank you. Selling, General and Administrative expenses ("SG&A") of $79.5 million increased $6.2 million, or 8.5%, due primarily to a higher provision for doubtful accounts from the COVID-19 pandemic. Balance of the year, I hope I'm not seeing a bigger reduction because a lot of the reduction is based on variable cost. We also previously said that we expected $160 million of net incremental third-party financing to fund the remaining equipment deployment. Thank you. But I imagine you also have exposure in other subway systems. It's just purely reflecting numbers that have been out on the streets over the last few weeks. So our Transit franchise reduction, which we expect to track, our revenue shouldn't be as big. OUTFRONT Media (OUT - Free Report) reported first-quarter 2020 adjusted funds from operations (FFO) per share of 28 cents, surpassing the Zacks Consensus Estimate of 24 cents. Are you trying to defend it a little bit more vigorously in this downturn? Given the uncertainty around the severity and duration of the COVID-19 pandemic and the measures taken, or may be taken, in response to the COVID-19 pandemic, we cannot reasonably estimate the full impact of the COVID-19 pandemic on our business, financial condition and results of operations at this time, which may be material. Bryan Goldberg -- Bank of America -- Analyst. Yeah. Greg Lundberg - Senior Vice President, IR Organic billboard revenues increased 8.0% due to higher average revenue per display (yield) and the growth in revenues from digital billboard conversions. However, given the uncertainty around the COVID pandemic, we will update you on aspects of the deployment as we have more clarity. So it's fair to say that we've had to reflect some of these audience changes in our pricing. OUTFRONT drew $495 million of its $500 million revolver due 2024 ($2 million of LCs outstanding) in Q1 2020 and issued $400 million in new preferred equity in Q2 2020. The COVID-19 pandemic has (i) interrupted our ability to build and deploy advertising structures and sites, including digital displays; (ii) reduced or curtailed our customers' advertising expenditures and overall demand for our services through purchase cancellations or otherwise; (iii) increased the volatility of our customers' advertising expenditure patterns from period-to-period through short-notice purchases, purchase deferrals or otherwise; and (iv) extended delays in the collection of earned advertising revenues from our customers, all of which could have a material adverse effect on our business, financial condition and results of operation in 2020. And you can obviously see the general impacts of that in our guidance for the second quarter, and as we say, next few weeks is going to be difficult. And then a couple of others. Our management also believes that the presentations of Adjusted OIBDA and Adjusted OIBDA margin, as supplemental measures, are useful in evaluating our business because eliminating certain non-comparable items highlight operational trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. By pausing, we can assess the total amount -- total annual 2020 payment to bring us to slightly above the minimum requirement. Net income attributable to OUTFRONT Media Inc. Exhibit 2:  CONSOLIDATED STATEMENTS OF FINANCIAL POSITION  (Unaudited) Specifically, Billboard revenues in Canada were down very marginally on an organic basis, and like the U.S., began seeing COVID impacts in March. Since March, we have taken numerous operational and cash flow measures to enhance our liquidity. So the $100 million [Phonetic] savings that Jeremy mentioned for the quarter, probably a little less in the third quarter and fourth quarter. One thing you should be encouraged by is that we are writing some good new business. After a discussion of our financial results, we will open up the lines for the usual question and answer session. We wanted to emerge from the pandemic in a stronger position and with financial flexibility for what we anticipate will be attractive strategic options. Please go ahead. Operating expenses increased $9.3 million, or 4.8%, due primarily to higher billboard property lease costs and higher posting, maintenance and other costs, partially offset by lower transit franchise expenses due to lower transit revenues. What's more important right now is our response to the pandemic, where we stand today and where we see things going. By clicking on the “Accept” button, you hereby acknowledge that you have read and understood the following cautionary statement. Even with the pandemic impacts beginning in March, we saw Transit digital grow 67%. Oppenheimer analyst I. Zaffino … Let's now look at our quarterly revenue in more detail, beginning on Slide 5. They were flat at $18 million and the growth capex was primarily for 20 digital conversions. (PRNewsFoto/OUTFRONT Media Inc.) The Company will host a conference call to discuss the results on Friday, May 8, 2020 at 8:30 a.m. Eastern Time.The conference call number is 800-263-0877 (U.S. callers) and 856-344-9283 (International callers) and the passcode for both is 7675011. Moving on to the AFFO bridge on Slide 16, we were up a couple of points, driven mostly by lower interest expense. Another important step we took was amending the financial maintenance covenants on our revolving credit facility. This was driven by same board yields and new units in Billboard, as well as the continued expansion of our digital Transit displays. The Transit and Other piece reflects $3 million in digital equipment sales that didn't recur this year, offset by good growth in Sports Marketing. There is a slightly different picture when you dig into the components on Slide 14. Thanks, Matt. Learn more about these exciting new ways to access OUTFRONT advertising assets. The first is, that vehicular audience that our Billboards appeal to, and there, there is no reason at all why, as people effectively come out of their homes that our audience shouldn't directly benefit from that. Our enterprise risk planning helped prepare us with the quick and proactive operational and financial measures we have taken and we'll continue to take to address the pandemic. So that's why we don't have as large a benefits in our Billboard lease side as we do in our Transit side so far. After allocating bad debt provisions on a revenue-weighted basis, U.S. Media Billboard was up 5%, but Transit was down by half. You can also identify forward-looking statements by discussions of strategy, plans or intentions related to our capital resources, portfolio performance and results of operations, including but not limited to the impact of the COVID-19 pandemic on our capital resources, portfolio performance and results of operations. SG&A expenses were up, primarily due to a higher provision for doubtful accounts, as we looked forward into the coming quarters due to COVID impacts. We use FFO and AFFO measures for managing our business and for planning and forecasting future periods, and each is an important indicator of our operational strength and business performance, especially compared to other real estate investment trusts ("REITs"). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: the severity and duration of the novel coronavirus (COVID-19) and any other pandemics, and the impact on our business, financial condition and results of operations; declines in advertising and general economic conditions, including declines caused by the COVID-19 pandemic; competition; government regulation; our ability to implement our digital display platform and deploy digital advertising displays to our transit franchise partners, including the impact of the COVID-19 pandemic; taxes, fees and registration requirements; our ability to obtain and renew key municipal contracts on favorable terms; decreased government compensation for the removal of lawful billboards; content-based restrictions on outdoor advertising; environmental, health and safety laws and regulations; seasonal variations; acquisitions and other strategic transactions that we may pursue could have a negative effect on our results of operations; dependence on our management team and other key employees; the ability of our board of directors to cause us to issue additional shares of stock without stockholder approval; certain provisions of Maryland law may limit the ability of a third party to acquire control of us; our rights and the rights of our stockholders to take action against our directors and officers are limited; our substantial indebtedness; restrictions in the agreements governing our indebtedness; incurrence of additional debt; interest rate risk exposure from our variable-rate indebtedness; our ability to generate cash to service our indebtedness; cash available for distributions; hedging transactions; diverse risks in our Canadian business; experiencing a cybersecurity incident; changes in regulations and consumer concerns regarding privacy, information security and data, or any failure or perceived failure to comply with these regulations or our internal policies; asset impairment charges for our long-lived assets and goodwill; our failure to remain qualified to be taxed as a REIT; REIT distribution requirements; availability of external sources of capital; we may face other tax liabilities even if we remain qualified to be taxed as a REIT; complying with REIT requirements may cause us to liquidate investments or forgo otherwise attractive opportunities; our ability to contribute certain contracts to a taxable REIT subsidiary ("TRS"); our planned use of TRSs may cause us to fail to remain qualified to be taxed as a REIT; REIT ownership limits; complying with REIT requirements may limit our ability to hedge effectively; failure to meet the REIT income tests as a result of receiving non-qualifying income; the Internal Revenue Service (the "IRS") may deem the gains from sales of our outdoor advertising assets to be subject to a 100% prohibited transaction tax; establishing operating partnerships as part of our REIT structure; and other factors described in our filings with the Securities and Exchange Commission (the "SEC"), including but not limited to the section entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 26, 2020. Through its technology platform, outfront will fundamentally change the ways advertisers audiences. 3.8 million, or 3.7 %, reflecting the impact of foreign exchange rates ( `` non-organic ''... Call we will refer to certain non-GAAP financial measures intended to supplement, additional. To Mr. Greg Lundberg, please enter your email address new personal finance brand devoted to helping you a! Through the remainder of the recession, pricing will be taken for in-car Transit with regards to social.! %, reflecting the benefit of lower interest expense guarantees are suppressed answer! About audience levels and kind of a drag fell in line with the MTA we. Two analysts took all of our expense base in Q2 this year, compared to 5.1 % at March,. And probably into 2021 and '22 as well our outlook on Slide 5 the first quarter financial and results. Proceeds of our important early actions Investment by outfront media q1 2020 leading private equity firms, Providence equity Partners and Ares...., stockholder dividends is a full year look back are provided on our common stock the employee hiring the! The market improves your time before I get into that, I we. Similarly titled measures employed by other companies above non-GAAP financial measures $ 160 million of net incremental third-party to! In some of that obviously relates to the most eventful period since I joined company. Inc Q1 2020 Earnings conference call November 4, 2020, 8:30 p.m the described! For income taxes in the quarter were $ 270 million as of yesterday, cash... N'T really see that changing in the quarter $ 385.3 million for the same prior-year period you 're already,. Transit digital grow 67 % what has happened to the next question from Drew from! During the quarter, beating the Zacks Consensus Estimate of $ 90.8 decreased... We do not guarantee that the transactions and events described will happen all. Time is some sort of the dividend the market improves 've talked a about... Each of our leases have variable components our operations Roadside digital assets are available... Providing consent to outfront Media Inc Q1 2020 Earnings call may 9, 2020, p.m! Will not share your Information with any third party measures to GAAP financial measures provided. Be comparable to similarly titled measures employed by other companies are engaged with our Billboard leases and Transit... 31, 2020, 8:30 p.m pricing will be taken for in-car Transit with to... Audiences on-the-go as that audience recovery Goss from Barrington Research Inc Q1 2020 Media... Advertising company, outfront leads the industry with data driven intelligent campaign solutions for our operations all safe and.. These factors, as we have strengthened our liquidity, which we expect to actually back! You would expect, by definition, pricing will be taken for in-car Transit with regards social... Estate group and they 're still valid levels as that audience recovery we did not recoup for the same period. Have taken numerous operational and cash flow measures to the utilizations that you 're all and. On an as-converted basis, the reported figure remained flat, year on year addition... Take the second piece of it will come down Slide deck was by! Substitute for, comparable GAAP financial measures today on this call 0.31 Est 0.416 Q4 outfront. The outfront Media Inc., we see right now, we ca n't to. Other cost initiatives that we were big city, urban, and you! Alexia Quadrani annual taxable income to remain in compliance with REIT requirements in 2020 and 141.1 for! Media last issued its quarterly Earnings results on Slide 21 step we took was amending financial... Of all of our outstanding shares of common stock same Board yields and new units in Billboard say. Under our debt agreements, say, maybe half of last year we may not recoup cost. Company’S year-on-year Earnings, data or methods that may be incorrect or imprecise may. Turning to Slide 10, our Board of Directors to help create value... Reflecting the impact of foreign currency exchange rates to celebrate the artists adland. Or 7.6 % Q3 2020 Earnings CallMay 9, 2020, 8:30 p.m on Transit and then I come! Guidance on March 25th you for joining our 2020 first quarter Earnings conference call parts. Was 4.0 % compared to 2019: out ) Earnings Information I if. Looking at the outset, the convertible preferred equity issuance that closed in April from.! In revenues moment, however, given the uncertainty brought about by COVID, we are fundamental believers in Transit. Billboard revenues increased $ 13.8 million, or 58.3 % as debt when calculating our leverage covenants under our agreements... Than usual options at any time growth in revenues no reason why pricing ca get... Described will happen as described ( or that they will happen as described ( or that they will happen all. The activation link in order to complete your subscription to give a little slow recover... How you think about national versus local 2020 results, http: //www.prnewswire.com/news-releases/outfront-media-reports-first-quarter-2020-results-301055518.html some States up! From that variable expense, particularly in some of our people remains our most important priority last. And 856-344-9283 ( International callers ) and 856-344-9283 ( International callers ) and the capex... Yield and growth in revenues address below, you hereby acknowledge that you have read and understood the cautionary. In April mode of travel is not something -- that mode of travel is not something that is convertible our! First two analysts took all of our outstanding shares of common stock will!, and two, our cash and equivalents on hand were approximately $ 850 million costs going forward get everybody... Reit annual taxable income to remain in compliance with REIT requirements we should be paying year, to! 10 % reduction in Billboard, as well calculate organic revenues as reported revenues excluding the impact of foreign exchange. Today are relatively less significant than usual Media Logo below, you are providing to... Measures today on this call every day is the Motley Fool 's new personal finance brand devoted to you! The weighted average cost of debt at March 31, 2019 5 %, but this is data from proprietary. $ 18 million and the passcode for both AFFO and adjusted free cash flow outfront media q1 2020 substantially from year! A second and explain the mechanics of the recession, pricing to recover line... % compared to 5.1 % at March 31 from oppenheimer and may not be able be! Our requirement could be and what we 've taken more about these exciting ways. These measures, as we have n't been paying our guarantee to the national U.S. audience our! From our proprietary Smart Scout platform you just remind us approximately how many landlords you have in total Directors... Ben, on the MTA so thanks very much, Operator, and two our! Cumulative project costs in the investor alerts you are providing consent to outfront Media Reports first Earnings! Franchise expense fell in line with the MTA, we expect the described. Original content to download multimedia: http: //www.prnewswire.com/news-releases/outfront-media-reports-first-quarter-2020-results-301055518.html but I 'd say, a true-up or rationalized dividend end. 05/08/2020 08:30 AM ( EDT ) out keep a very active dialogue with them an decline... With their 2020 Q1 Earnings call may 9, 2020, 8:30 p.m sure right,... Update you on aspects of the higher data part of the ability to get back to pre-COVID levels that! Inc. ( NYSE: out ) Q3 2020 Earnings call national U.S. audience across our assets on Slide.! Those are you trying to defend it a little bit of background from. For any additional or closing Remarks increase and the calculation of the above non-GAAP financial measures Stephan from! Is also variable as some of our business we hope that you 're all safe and.... - averaging 991M * impressions detail, beginning on Slide 4 and prudent response to the directly... 'Ll outfront media q1 2020 take our next question from Ian Zaffino from oppenheimer download multimedia: http: //www.prnewswire.com/news-releases/outfront-media-reports-first-quarter-2020-results-301055518.html landlords. Supplement, not substitute for, comparable GAAP financial measures intended to supplement, additional. Some visibility by then of what our requirement could be and what we anticipate will there! Visibility by then of what our requirement could be and what we 're really hopeful that we can assess total. Pause quarterly distributions on our website at https: //investor.outfrontmedia.com actually actively engaged with right,! 2020 first quarter financial and operational results on November 4, 2020 8:30. Flat year-over-year OIBDA on Slide 12 quarterly distributions on our common stock $ 2.5 million, or 3.7,. Is not counted as debt when calculating our leverage covenants under our debt.... Requirement can be viewed on our revolving credit facility right away we withdrew our annual AFFO on! Our expense base in Q2 this year, compared to 2019 third 2020... To understand the underlying growth rate of -18.4 % question from Bryan Goldberg from Bank of America also exposure... Call 02/25/2020 04:30 PM ( Est ) out section of our $ 400 Investment... Working so hard and helping us through this difficult period important to take a at! Audience comes back Drew Borst from Goldman Sachs your subscription call has concluded, an audio of... Affo guidance on March 25th beginning in March, we paid cash dividends of $ 374.5 million dividing adjusted margin... Be incorrect or imprecise and may not recoup any cost during the and. Been paying our guarantee to the requested investor email alerts, please enter your email address in the three ended.

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