Tuesday, June 18, 2024

Outfront reports a 20%+ revenue growth in 2022

Wednesday, February 22, 2023

Fourth Quarter Revenues of $494.7 million. 

Operating Income of $105.0 million. 

Net Income attributable to OUTFRONT Media Inc. of $59.2 million, $0.34 earnings per diluted share. 

Adjusted OIBDA of $153.7 million. 

AFFO attributable to OUTFRONT Media Inc. of $96.1 million. 

Quarterly dividend of $0.30 per share, payable March 31, 2023. 

OUTFRONT Media Inc. (NYSE: OUT) has reported results for the quarter and full year ended December 31, 2022.

“Our fourth quarter results capped off another great year for OUTFRONT. In 2022, we grew revenues over 20%, Adjusted OIBDA nearly 40%, and added a record amount of digital inventory.” said Jeremy Male, Chairman and Chief Executive Officer of OUTFRONT Media. “We’re especially proud to have delivered such significant growth despite some headwinds created by the ongoing macroeconomic uncertainty. Looking forward, we believe we are in good position to continue growing revenues, Adjusted OIBDA, and AFFO in 2023.”

Three Months Ended
December 31,

Twelve Months Ended
December 31,

$ in Millions, except per share amounts

2022

2021

2022

2021

Revenues

$494.7

$464.5

$1,772.1

$1,463.9

Organic revenues

490.5

462.7

1,761.1

1,460.5

Operating income

105.0

105.2

287.7

168.3

Adjusted OIBDA

153.7

151.1

472.4

340.3

Net income before allocation to non-controlling interests

59.5

71.5

149.1

36.4

Net income1

59.2

71.1

147.9

35.6

Net income per share1,2,3

$0.34

$0.41

$0.84

$0.05

Funds From Operations (FFO)1

103.0

111.2

325.2

195.1

Adjusted FFO (AFFO)1

96.1

111.0

311.3

205.1

Shares outstanding3

172.7

171.8

161.8

146.1

Notes: See exhibits for reconciliations of non-GAAP financial measures; 1) References to “Net income”, “Net income per share”, “FFO” and “AFFO” mean “Net income attributable to OUTFRONT Media Inc.”, “Net income attributable to OUTFRONT Media Inc. per common share”, “FFO attributable to OUTFRONT Media Inc.” and “AFFO attributable to OUTFRONT Media Inc.,” respectively; 2) “Per share” means per common share for diluted earnings per weighted average share; 3) Diluted weighted average shares outstanding.

Fourth Quarter 2022 Results

Consolidated
Reported revenues of $494.7 million increased $30.2 million, or 6.5%, for the fourth quarter of 2022 as compared to the same prior-year period.  Organic revenues of $490.5 million increased $27.8 million, or 6.0%.

Reported billboard revenues of $377.5 million increased $23.5 million, or 6.6%, due to higher average revenue per display (yield) compared to the same prior-year period. Organic billboard revenues of $373.3 million increased $20.9 million, or 5.9%.

Reported transit and other revenues of $117.2 million increased $6.7 million, or 6.1%, due primarily to an increase in yield compared to the same prior-year period. Organic transit and other revenues of $117.2 million increased $6.9 million, or 6.3%.

Total operating expenses of $239.5 million increased $22.5 million, or 10.4%, due primarily to higher variable costs associated with higher billboard revenues and higher transit franchise expense.

Selling, General and Administrative expenses (“SG&A”) of $110.3 million increased $6.0 million, or 5.8%, due primarily to higher professional fees and higher compensation-related costs.

Adjusted OIBDA of $153.7 million increased $2.6 million, or 1.7%.

Segment Results

U.S. Media
Reported revenues of $469.2 million increased $30.6 million, or 7.0%, due to higher average revenue per display (yield) compared to the same prior-year period. Billboard revenues increased 7.4% and Transit and other revenues increased 5.7% for the same reason. Organic revenues increased $26.4 million, or 6.0%.

Operating expenses increased $22.9 million, or 11.3%, due primarily to higher variable costs associated with higher billboard revenues and higher transit franchise expense. The increase in transit franchise expense was driven primarily by higher transit franchise expenses paid to the New York Metropolitan Transportation Authority (the “MTA”).

SG&A expenses increased $5.3 million, or 7.2%, due primarily to higher professional fees and higher compensation-related costs.

Adjusted OIBDA of $163.7 million increased $2.4 million, or 1.5%.

Other
Reported revenues of $25.5 million decreased $0.4 million, or 1.5%, due primarily to foreign exchange headwinds related to the Canadian Dollar, partially offset by higher revenues in Canada. Organic revenues increased $1.4 million, or 5.8%, due primarily to an increase in yield compared to the same prior-year period, as we have experienced an increase in demand for our services.

Operating expenses decreased $0.4 million, or 2.9%, due again due to changes in foreign exchange rates.

SG&A expenses decreased $0.4 million, or 6.3%, driven primarily by changes in foreign exchange rates.

Adjusted OIBDA of $6.4 million increased $0.4 million, or 6.7%.

Corporate
Corporate costs, excluding stock-based compensation, increased $0.2 million, or 1.2%, to $16.4 million, due primarily to higher compensation-related expenses.

Full Year 2022 Results

Consolidated
Reported revenues of $1,772.1 million increased $308.2 million, or 21.1%, for the year December 31, 2022 as compared to the same prior-year period.  Organic revenues of $1,761.1 million increased $300.6 million, or 20.6%.

Reported billboard revenues of $1,384.7 million increased $202.4 million, or 17.1%, due to higher average revenue per display (yield) compared to the same prior-year period, as we have experienced an increase in demand for our services, and due to the impact of acquisitions. Organic billboard revenues increased 16.5%.

Reported transit and other revenues of $387.4 million increased $105.8 million, or 37.6%, due to higher average revenue per display (yield) compared to the same prior-year period, as we have experienced an increase in demand for our services, partially offset by the loss of a transit franchise contract.  Organic transit and other revenues increased $106.3 million, or 37.8%.

Total operating expenses of $911.4 million increased $127.4 million, or 16.3%, due primarily to higher billboard and transit revenue and higher guaranteed minimum annual payments to the MTA.

SG&A expenses of $422.1 million increased $53.9 million, or 14.6%, primarily due to higher compensation-related costs, including commissions and salaries, driven by both business performance improvements during the period and the impact of COVID-19 on the prior year, a higher provision for doubtful accounts, increased post-pandemic travel resulting in higher travel and entertainment expenses, and higher professional fees, partially offset by the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees.

Adjusted OIBDA of $472.4 million increased $132.1 million, or 38.8%.

Segment Results

U.S. Media
Reported revenues of $1,673.9 million increased $291.9 million, or 21.1%, due to higher average revenue per display (yield) compared to the same prior-year period.  Organic billboard revenues increased 16.3% and organic transit and other revenues increased 37.3%. Organic revenues of $1,662.9 million, increased $280.9 million, or 20.3%.

Operating expenses increased $123.2 million, or 16.8%, due primarily to higher transit franchise expense and billboard lease costs associated with the increase in revenue, higher minimum guarantee payments to the MTA, and other various costs associated with greater business activity.

SG&A expenses increased $50.4 million, or 19.0%, due primarily to higher compensation-related costs including commissions and salaries, a higher provision for doubtful accounts, increased business travel resulting from higher travel and entertainment costs and higher professional fees, partially offset by the impact of market fluctuations on an equity-linked retirement plan offered by the company to certain employees.

Adjusted OIBDA of $501.2 million increased $118.3 million, or 30.9%.

Other
Reported revenues of $98.2 million increased $16.3 million, or 19.9%, due primarily to higher average revenue per display (yield) in our Canada business. Organic revenues increased $19.7 million, or 25.1%.

Operating expenses increased $4.2 million, or 8.3%, driven by increases in variable costs associated with higher revenues in our Canada business.

SG&A expenses increased $1.9 million, or 9.2%, driven primarily by higher expenses in Canada.

Adjusted OIBDA of $20.6 million increased $10.2 million from $10.4 million in 2021.

Corporate
Corporate costs, excluding stock-based compensation, decreased $3.6 million, or 6.8%, primarily due to the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the company to certain employees.

Interest Expense
Net interest expense in the fourth quarter of 2022 was $35.9 million, including amortization of deferred financing costs of $1.6 million, as compared to $31.9 million in the same prior-year period, including amortization of deferred financing costs of $1.6 million.  The increase was due primarily to higher interest rates compared to the same prior-year period, partially offset by the impact of interest rate swaps in the fourth quarter of 2021.  The weighted average cost of debt at December 31, 2022 was 5.2% compared to 4.3% in the prior-year period.

Income Taxes
The income tax provision increased $8.0 million in the fourth quarter of 2022 as compared to the same prior-year period. This increase is primarily related to the recording of a valuation allowance against our U.S. taxable real estate investment trust subsidiary’s deferred tax assets in the fourth quarter of 2022. Cash paid for income taxes in the year ended December 31, 2022 was $3.3 million.

Net Income Attributable to OUTFRONT Media Inc.
Net income attributable to OUTFRONT Media Inc. was $59.2 million in the fourth quarter of 2022, which decreased $11.9 million, or 16.7%, compared to the same prior-year period. Diluted weighted average shares outstanding were 172.7 million for the fourth quarter of 2022 and 171.8 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 $0.34 for the fourth quarter of 2022 as compared to $0.41 in the same prior-year period.

FFO & AFFO
FFO attributable to OUTFRONT Media Inc. was $103.0 million in the fourth quarter of 2022, a decrease of $8.2 million, or 7.4%, from the same prior-year period, driven primarily by a decrease in net income, partially offset by higher amortization.  AFFO attributable to OUTFRONT Media Inc. was $96.1 million in the fourth quarter of 2022, a decrease of $14.9 million, or 13.4%, from the same prior-year period due primarily to the impact of the non-cash effect of straight-line rent related to the acquisition of billboard leases, partially offset by lower maintenance capital expenditures and higher amortization.

Cash Flow & Capital Expenditures
Net cash flow provided by operating activities of $254.1 million for the year ended December 31, 2022 increased $155.3 million, or 157.2%, compared to $98.8 million during the same prior-year period, primarily due to higher net income. Total capital expenditures increased 21.7% to $89.8 million for the year ended December 31, 2022, compared to the same prior-year period.

Dividends
In the year ended December 31, 2022, we paid cash dividends of $205.8 million, including $196.9 million on our common stock and vested restricted share units granted to employees, $0.1 million on our Class A equity interests of a subsidiary that controls our Canadian business, and $8.8 million on our Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”). We announced on February 22, 2023, that our board of directors has approved a quarterly cash dividend on our common stock of $0.30 per share payable on March 31, 2023, to stockholders of record at the close of business on March 3, 2023.

Balance Sheet and Liquidity
As of December 31, 2022, our liquidity position included unrestricted cash of $40.4 million and $493.6 million of availability under our $500.0 million revolving credit facility, net of $6.4 million of issued letters of credit against the letter of credit facility sublimit under the revolving credit facility and $120.0 million of additional availability under our accounts receivable securitization facility.  During the three months ended December 31, 2022, 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 December 31, 2022, 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 December 31, 2022 was $2.7 billion, excluding $22.6 million of deferred financing costs, and includes a $600.0 million term loan, $2.1 billion of senior unsecured notes, net of discount, 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 February 22, 2023 at 4:30 p.m. Eastern Time. The conference call numbers are 866-580-3963 (U.S. callers) and 786-697-3501 (International callers) and the password for both is Outfront.  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 North America. Through its technology platform, OUTFRONT will fundamentally change the ways advertisers engage audiences on-the-go.

Published on Wednesday, February 22, 2023 at 11:14 PM

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