Lamar Advertising Co

NASDAQ:LAMR

Earnings Call Transcript 2018-Q4

[Operator]

Excuse me, everyone. We now have Sean Reilly and Keith Istre in conference. Please be aware, each of your lines is in a listen-only mode. At the conclusion of the company's presentation, we will open the floor for questions. [Operator Instructions]

In the course of this discussion, Lamar may make forward-looking statements regarding the company, including statements about its future financial performance, strategic goals, plans and objectives, including with respect to the amount of time and -- the amount and timing and any distributions to stockholders. All forward-looking statements involve risk, uncertainties and contingencies, many of which are beyond Lamar's control and which may cause actual results to differ materially from anticipated results.

Lamar has identified important factors that can cause actual results to differ materially from those discussed in this call and the company's fourth quarter 2018 earnings release and its most recent annual report on Form 10-K, as updated or supplemented by its quarterly reports on Form 10-Q and current reports on Form 8-K.

Lamar refers you to those documents. Lamar's fourth quarter 2018 earnings release, which contains information required by Regulation G regarding certain non-GAAP financial measures was furnished to the SEC on a Form 8-K this morning and is available on the investors section of Lamar's website, www.lamar.com.

I would like to now turn the conference over to Sean Reilly. Mr. Reilly, you may begin.

[Sean Reilly, Chief Executive Officer]

Thank you, Stephanie, and good morning, everyone. Welcome to Lamar's Q4 and Year-End 2018 Earnings Call. I'm very pleased with the way we closed out 2018. Q4 organic growth was 5.6%, a number we haven't seen in some time and it's quite gratifying.

We've brought our full year organic growth to 3.4% and importantly drove our AFFO per share to level that exceeded our expectations. Full year AFFO per share for 2018 ended up at $5.50 a share, easily exceeding our guidance.

Same-board digital performance continues to shine, up 10.8% in Q4 and up 7.1% for the full year. We continue to add digital capacity as quickly as possible, adding over 220 units in 2018 and targeting a goal of 250 units in 2019.

And, of course, we closed on the Fairway transaction in December. The integration with the Fairway asset is going well. Indeed, the $4 million in promised synergies are already largely in place and we are looking forward to significant contributions from these new assets to our 2019 AFFO per share growth.

Turning to our AFFO per share guidance for 2019. Please note the range provided in our release of $5.67 to $5.83 per share. The midpoint of the range reflects 3% pro forma top-line growth and 2% pro forma expense growth.

Our full year pacings are actually stronger than 3% and as of today position us towards the top end of that range. Regarding Q1 2019 guidance -- Q1 guidance, pacings are softer than 3%, let's call it 2%-and-some-change. We had one major advertiser ship several million dollars around and while they will spend as much or more with us for the full year, a chunk fell out of Q1 and moved to the rest of 2019.

So again, midpoint of 2019 AFFO per share guidance reflects 3% pro forma growth, full year pacings are presently north of that, Q1 pacings are presently south of that at 2%-and-some-change. Keith will give you some color on expected Q1 expenses which will come in a little heavier than 3%. However, we are confident that we will close out 2019 expenses for the full year will come in around the familiar 2% range. Keith?

[Keith Istre, Treasurer and Chief Financial Officer]

Good morning, everyone. As Sean mentioned, our first quarter was really strong organic revenue EBITDA growth. As such, organic expense growth was up 5%. On our last earnings call we stated that we expected our Q4 expenses to be higher than our usual 2%. This was primarily due to the additional bonuses and sales commissions because of the strong revenue growth in the quarter.

For the full year 2018, organic revenue growth, as Sean said, was 3.4%. Organic EBITDA growth was 4.9%, and organic expense growth was 2.2%, which is our normal range somewhere between 1% and 2% on expense growth.

Free cash flow for 2018 after dividends was $110 million. We expect something similar in 2019. We had mentioned earlier in a press release that the company was planning on asking the board to increase the dividends for 2019 by 5%, and we will have that board meeting on February 28, and hopefully, they will approve that.

We expect organic consolidated expense growth in Q1 of 2019 to be approximately 4%. Two things that contribute to that number: number one, Q1 2018 expense growth if you will recall was negative 1.1% last year; and secondly, there are some one-time expenses that were in Q1 related to the Fairway acquisition that we closed on December 21 of 2018.

For the full year, our internal budget projections call for consolidated organic expense growth of 2%. To help you with the model, our CapEx budget for 2019 is $128 million in total, $80 million in growth CapEx, and $48 million in maintenance CapEx. We are projecting cash interest expense to be approximately $148 million. Cash taxes at the TRS will be approximately $10 million. TRS is our taxable REIT subsidiary.

Anyway, that's about it. Sean?

[Sean Reilly, Chief Executive Officer]

Great. Thanks, Keith. I'll touch on a couple of metrics that we commonly call out on this call, and then I'm going to talk about a couple of initiatives we have going there. I think you're going to find that interest.

So I mentioned a digital and account with the Fairway acquisition, we acquired 149 and we added organically about, again, a little over 220 in 2018. So that brings our year-end 2018 total digital in here to 3,220. Again, our goal for 2019 is to add 250 more given that we're seeing such strong same-board performance.

National and local, please note we core political, local, so this number is a little bit skewed for that reason. But Q4 local increased 8.1%, national increased 3.1%. Regarding political, in Q4, it added about 1% -- a little over 1% to that 5.6% organic growth so the core was right around 4.5%. For the full year, political added about 0.6% to 0.7% to otherwise organic growth.

Verticals, some real strong performance, obviously, in the fourth quarter. I'd point out hospitals at -- up 8%, education up 8%, financial up 9%. Here is an outlier, insurance was up 82%, that's a lot of small numbers, but GEICO did pop into our top 10 advertisers for the first time in a while.

Auto for Q4 was down 2% and I want to pause and think with you a little out loud about what's going on with auto. Last year we hired a consultant to help us do a deep dive into local auto dealer vertical. Through that effort we developed some insights into how their business model is changing, how they are viewing their ad spend across all media, and how they view out-of-home.

As you know all other media are struggling with the decline in auto ad spend. These insights helped us roll out some initiatives targeted directly at the local auto dealers early this year and the early results are promising.

Auto for us Q1 is pacing up 3% and as you know it's down for most other verticals. And interestingly it's pacing up 4.5% for the full year. Now it's early yet and -- but this is against a backdrop of declining auto ad spend in other platforms. So, I look forward to giving you updates on that and how it progresses through the year. But again, early returns are promising.

Number two, 2019 looks to be the year when programmatic automated buying begins to bring digital dollars to our platform in a way that will make real incremental contributions to our pro forma growth. We have expanded our number of partners in this endeavor from one to four to go after these dollars and we've made the necessary investments last year to make sure our platform is truly plug-and-play. And again I look forward to updating you on our progress in this programmatic initiative as the year moves along as well.

With that Stephanie happy to open it up for questions. Stephanie?

[Operator]

Thank you. At this time, we'll open the floor for questions. [Operator Instructions] Our first question comes from David Miller with Imperial Capital.

[David Miller, Imperial Capital]

Yes, hey guys. Congratulations on the stellar results. A couple for you Sean. So, on the Fairway integration, how would you characterize like how that's going so far? And how do you think that integration so far is different than some of the other acquisitions that you guys have done say over the last two or three years?

And then also -- and maybe Keith if you want to chime in. I've got -- if you have an end-of-year digital board count of 3,220 then that means, at least by my models, you installed 336 digitals in 2018 which would be a record for installation 2018. Do I have that number right? And then I have a follow-up. Thanks.

[Sean Reilly, Chief Executive Officer]

Sure. Hey thanks David. Let me hit the digital thing real quick. I think you may be comparing the ones we acquired with the ones we built organically. Yes, so with Fairway we acquired -- let me give you that number again, a 149.

[David Miller, Imperial Capital]

Okay, very good.

[Keith Istre, Treasurer and Chief Financial Officer]

And regarding Fairway -- on the integration of Fairway, it's going very, very well. Typically the low-hanging fruit is on the expense side and that happens pretty quickly. And as I mentioned those promised synergies are largely in place and going fine. And then usually there's a little lift on the top line as we bring sort of a different philosophy of sales management and sales and how we go about going after new business to the platform. That takes a little longer and that will happen over the next let's call it 12 to 18 months, but the $4 million that we noted when we released the transaction, that's again largely in place because it's largely on the expense side.

[David Miller, Imperial Capital]

Okay. And then I would be remiss if I didn't say to Keith congratulations on your retirement. We will miss you. You were wonderful to work with over the years.

[Sean Reilly, Chief Executive Officer]

Thanks David.

[Keith Istre, Treasurer and Chief Financial Officer]

Thank you very much David. I appreciate that.

[Operator]

Thank you. Our next question comes from Alexia Quadrani with JPMorgan.

[Alexia Quadrani, JPMorgan]

Hi, thank you. Just a few questions. First off, I apologize if I missed it, but did you give us what the local was in the fourth quarter ex political? And then I just wanted to see if you had a sense of when you look at the pacings for Q1 kind of -- where the strength is in national versus local. And then I have one more.

[Sean Reilly, Chief Executive Officer]

Sure. So local Q4 was up 8.1% and national Q4 was up 3.1%. I don't have it expressed as a percentage of local but I have it expressed -- political expressed as a percentage of total organic growth and that would be a little over 1%. So if you look at again 5.6% minus a little over 1%, let's call the all other core growing at about 4.5%. I don't have a local national number for you yet for the first. So we'll have to just -- we'll have to wait till the next call.

[Alexia Quadrani, JPMorgan]

And then just looking at Q1, you talked about the major advertisers sort of pushed off into the rest of the year. You guys tend to have pretty good visibility. It sounds like you're pretty convinced that there is -- you are going to see it materialize for us here, I guess any color on your level of confidence of that? And just -- and also just on political, you had a great political year in 2018. I guess did you see anything different from political spending in this past cycle that may have us look at political differently going forward?

[Sean Reilly, Chief Executive Officer]

Sure. So that large advertiser you can probably guess who they are. They have contracted with -- so these dollars are actually in billing so that's -- that is visible as you can get. And as of now they are contracted for slightly more than they contracted in 2018. It's just the timing of when next spend is going to come in. And then as we look at our pacings, pacings or pacings they are snapshot in time. Right now we're pleased with full year pacing. And you still have to settle in the period, for the period, to make the period as that reach to our folks every day. But things are looking good as we sit here today.

The other question was about -- Alexia what…

[Alexia Quadrani, JPMorgan]

Political, you had such a great political year in 2018, I wondered if anything was different that you learned about it, how we should think of it differently going forward?

[Sean Reilly, Chief Executive Officer]

Well, one thing we learned is that if you really focus on a vertical you can make a difference, and we made a concerted effort to go after those dollars last year and it paid off.

I will note that it's an odd year this year it's not an even year. What do we usually get in political in an odd year? We usually get between $2.5 million and $3 million. So if you're trying to think about what's the delta that Lamar needs to make up, let's call it $7.5 million to $8 million. But we're scrambling after and we feel good about making up if that's helpful.

[Alexia Quadrani, JPMorgan]

Yeah, that’s very helpful. Thanks so much.

[Operator]

Thank you. Our next question comes from Marci Ryvicker with Wolfe Research.

[Marci Ryvicker, Wolfe Research]

Thank you. A couple of questions. First, Sean, that 10.8% I think same-board digital, does that have any political in it or is that totally core?

[Sean Reilly, Chief Executive Officer]

It probably had some political in it, Marci. I haven't -- I don't have it broken out I can probably get it for you though, but one thing that politics seems to be about these days is tit for tat and our digital platform is pretty good at that because they can change it at their whim. It's a very responsible medium.

[Marci Ryvicker, Wolfe Research]

And then can you tell us what percent auto is of your book category at this point?

[Sean Reilly, Chief Executive Officer]

Yeah, let me turn to that real quick. So I'm glad you highlighted auto because we're making a concerted effort at targeting that vertical this year in ways that we haven't in the past and I think it's going to bear fruit.

So automotive is now 5% and as you know historically it's been 6% and it's headed -- and that's why we're going after it. And then like I said, I'm going to give you guys update how we're doing there as the year progresses, because I think that it's an important vertical across a whole lot of advertising platforms and we intend to get our share.

[Marci Ryvicker, Wolfe Research]

Got it. And then the last one's either for you or for Keith. There were two one-time item in the guide reconciliation for AFFO and FFO. Can you just talk a little bit about that $15 million to $20 million one-time non-cash tax adjustments. I think it's related to Fairway. And then the $11 million re-class from this revenue to something else. We're just trying to figure out how that is impacting the AFFO guide?

[Sean Reilly, Chief Executive Officer]

Marci, I'm going to let our corporate controller address that question. Obviously as of January 1 of 2019, all companies have to comply with a new FASB rule, concerning the capitalization of their leases out front clear us, anybody that has lease obligations. And it is a non -- we will capitalize lease obligations. It will add about $1.3 billion in assets to our balance sheet and $1.3 billion capitalized debt. It's not debt according to any of our credit agreements; it's just a debt measurement similar to asset retirement obligations.

And in our AFFO calculation it is an item that we do use to reconcile. But again, it's a non-cash item like depreciation and amortization. Keith, do you want to upgrade a little bit?

[Keith Istre, Treasurer and Chief Financial Officer]

Yes. Marci, on the lease accounting revenue again our revenue contract currently accounted for as a lease and under the new standard they won't be. So under rev rec, we have to capitalize installed costs and for modeling purposes you would rollout $11 million of the credit in direct labor throughout the year it's like probably over 10 months nine or 10 months since the average life of our contract. So it's a onetime event. Of course, our revenue portfolio would change a lot. But we're treating it as non-cash for AFFO.

So lease standard non-Fairway adjustment had any effect on AFFO for the year. So they both got quite many. On the Fairway is strictly related to the fact that the Fairway company didn't elect to REIT status in 2018. They're going to elect it in 2019. And when they do they have the right obviously to defer tax liability similarly the way we did it. So that's we're estimating between $15 million and $20 million will be a tax benefit in the period they elect REIT status. So -- you have now over 10 months and looking forward it just depends when they elect REIT status in 2019.

[Sean Reilly, Chief Executive Officer]

And just to clarify none of these charges or benefits will affect our EBITDA. Our EBITDA will be accounted for as we have always accounted for it. So it will be comparative apples-to-apples quarter-over-quarter year-over-year for 2019.

[Marci Ryvicker, Wolfe Research]

Got it. Thank you so much.

[Operator]

Thank you. Our next question comes from Eric Handler with MKM Partners.

[Eric Handler, MKM Partners]

Good morning. Thank you very much for the question. Wondered if you could talk a little bit about how your acquisition pipeline is shaping up for 2019?

[Sean Reilly, Chief Executive Officer]

So we have about $230 million -- $240 million under various stages of agreement some under better agreement some actual under APA teed up for this year. So it's going to be another active year in my opinion. You'll note just for -- to highlight that we raised $250 million in a fairly attractive high-yield tack on to one of our existing notes for purposes of recharging our revolvers so that we have the capacity to take care of the opportunities as they come in this year. But -- as of right now, that's what it looks like and they're all very attractive and we certainly have the power to do it.

[Eric Handler, MKM Partners]

Great. Thank you very much.

[Operator]

Thank you. Our next question comes from Jason Bazinet with Citi.

[Jason Bazinet, Citi]

I think it was maybe four years ago you all used to give sort of the utilization and the rate. And if I remember correctly if you went into sort of the full economic cycle if things got weak utilization dropped and pricing dropped and utilization came back and then pricing came back as sort of the last chapter of the cycle. And -- you guys put up just such good numbers. I was wondering if you could give any sort of qualitative I don't need the precise numbers of much of what you're seeing will be more pricing versus utilization. Thanks.

[Sean Reilly, Chief Executive Officer]

Sure good question. Just to refresh your memory on why we stopped doing it? We moved from monthly revenue recognition to daily revenue recognition about that time Jason and it just created white noise in these latent occupancy figures they made them noncompetitive.

But that being said, it's pretty clear to me that the gains we are making today are primarily rate driven. I would argue that given where we are in the cycle our occupancy is normalized and pretty much is what it is and where it needs to be and where we're getting the gains is in rate.

[Jason Bazinet, Citi]

Okay. Thank you.

[Operator]

Thank you. Our next question comes from Ben Swinburne with Morgan Stanley.

[Ben Swinburne, Morgan Stanley]

Thank you. Sean, I know it's always hard to have a direct sort of causal relationship between adding digital capacity and driving revenue. But I'm just wondering given the strength of the business now and the growth in digital boards, if you could update us on how you think about that supply of inventory impacting revenue?

You seem to be seeing a lot of demand in the marketplace, but I know at the same time I'm sure you'd acknowledge that to make sure you're balancing that and not creating too much supply that impacts pricing. So just any update on sort of today's marketplace and the ability to drive more digital into your footprint?

[Sean Reilly, Chief Executive Officer]

Great. Yes, thanks Ben. Great question. So I would start with the fact that as I've said in the past, Lamar is a highly decentralized organization. Yield management takes place at the local level. So you've got 200 some-odd professionals that run our profit centers that are gauging local demand because they have their finger on the pulse of local ad spend in a way that I could never replicate here in that move.

So it's really the sum wisdom of 200 folks that have their finger on the pulse of local ad spend that drives this decision on how many boards get booked. Another check on making sure we don't get too far ahead of ourselves is those local managers -- that local management is held accountable for how their boards perform. And so that's sort of your check and balance on getting it right.

And then finally as I've also said before because we're such a dominant provider of digital out-of-home in most of our markets, we can modulate supply in a way that it meets demand just because in many places we're the only large foreman digital provider. And so when we put all that together, we feel pretty confident that we can match up supply with demand that even fall once for a while. Sometimes we don't get it right and same-board performance will reflect that.

And we can pause hitting the pause button. I think you saw us do that a few years ago. So again it's a decentralized exercise. It's not something that happens by mandate or dictate from Baton Rouge. It is truly an exercise of a bottom up, not top-end.

[Ben Swinburne, Morgan Stanley]

Got it. And if I can just ask Keith, in your control a couple of quick other number questions: one, Keith ever if you have the political number for Q1, 2018 just so we know what we're comping against for the first quarter? And then if you don't mind just going back to the items on your AFFO build, the onetime tax adjustment in the ASG A42.

I think what's happening here is that net income is benefiting from these two and then you're adjusting them out from net income to AFFO, is that accurate? I just wanted to come back to the explanation you gave before to make sure we understand it correctly.

[Unidentified Company Representative]

Yes, that's exactly right. The $11 million will be in direct labor and the other will be on the income tax line for Fairway.

[Keith Istre, Treasurer and Chief Financial Officer]

But again that's for GAAP purposes, that will not be reflected in our press release for the next earnings call as a plus to EBITDA.

[Ben Swinburne, Morgan Stanley]

Okay. Is there any revenue impact from these?

[Unidentified Company Representative]

No.

[Keith Istre, Treasurer and Chief Financial Officer]

No.

[Unidentified Company Representative]

No.

[Ben Swinburne, Morgan Stanley]

No. Okay. Thanks.

[Keith Istre, Treasurer and Chief Financial Officer]

And as far -- okay. As far as with the political in Q1 of last year, it was irrelevant. Most of the -- I don't have the exact numbers in front of me, but I can tell you that bulk of the political spend came in the back half of last year, the third and fourth quarters.

[Sean Reilly, Chief Executive Officer]

Mostly fourth actually.

[Keith Istre, Treasurer and Chief Financial Officer]

Yeah.

[Ben Swinburne, Morgan Stanley]

Gotcha. Thank you all.

[Operator]

Thank you. Our next question comes from Drew Borst from Goldman Sachs.

[Drew Borst, Goldman Sachs]

Hi. Thanks for taking the question. Sean, I was wondering if you could give us some color on geographic revenue growth, organic revenue growth for 4Q and whether there are any sort of outliers plus or minus in terms of the regions?

[Sean Reilly, Chief Executive Officer]

Sure. So you've heard me say this in the past that perhaps the flyover states aren't doing quite as well. Happy to report Q4 that the Midwest region was actually pretty strong. Their revenue growth was up 7.3% which is nice. Slightly behind the Western region which was the strongest. That's California and Oregon and Washington and Nevada. They were up 8.2%. The Northeast was up 7.1%. So, it's still sort of a bicoastal phenomenon, but it was nice to see the Midwest have a really good strong quarter.

The oil patch is recovering, Drew, a little bit. You've probably reading about what's going on in the Permian basin in Texas and the like. Our Southwest region was up 5.8%. So, again, that was pleasant to see.

The Atlantic Coast was up 5.4%. Central region which for us is kind of Tennessee Ohio around in there was up 5.4%. The region that struggled the most was the Gulf Coast, that's Louisiana, Mississippi, Alabama and the Florida Panhandle. Couple of things going on there. While the Permian has recovered for the oil patch, but Gulf has not, and there's still some struggling economies along the Gulf Coast that rely on good strong activity in the Gulf of Mexico.

[Drew Borst, Goldman Sachs]

Was that Gulf region still positive, or was it actually declining?

[Sean Reilly, Chief Executive Officer]

Yeah. It was positive. It was 0.3%, up 0.3%. There is a little bit of performance, but the rest of the regions were quite strong.

[Drew Borst, Goldman Sachs]

Yeah, it seems pretty broad based with the exception of the Gulf and maybe the oil patch a little bit.

Another question I have for you, the CapEx guidance of $128 million. I know that's a little bit higher than you guys have been doing in the past, could you explain maybe why it's ticking up a little bit this year?

[Sean Reilly, Chief Executive Officer]

Sure. Well, digital, we're budgeting to put up 250, which will be more than last year's 220. So some of it is that digital goal that we have. It's, obviously, if we don't get them all in the year, we won't be spending as much on that.

The maintenance CapEx is a little bit higher than previous couple of years. We have a 2008, 2009 vintage digital rollout that is now needing replacement, so a little bit is falling into that. I would say, those are the primary drivers.

[Drew Borst, Goldman Sachs]

Okay. And then, just lastly, can you remind us how much visibility you have into full year revenue? I think in the past you used to talk about maybe somewhere around a-quarter of the full year revenue maybe being sort of booked. Do you have visibility on? And is that kind of what you have at this point for 2019?

[Sean Reilly, Chief Executive Officer]

No. We're actually -- as we closed out January, we're right at 50% booked to that goal.

[Drew Borst, Goldman Sachs]

Okay. That's great. And is that pretty consistent from prior years?

[Sean Reilly, Chief Executive Officer]

Yes. I'd say the last five, six years it's been right around 50%, as we close out January and that's when we can take a real good snapshot of how the year is going to turn out. If I go back further in time, go back maybe 15 years that number used to be around, I'd say, 65% would be booked.

But a greater percentage of our contracts back then were 12 month. And as the Great Recession cycled through, we got leaner and meaner and taught our customers how to give a shorter notice and quicker turnarounds and that number fell at about 50% and it stayed there really, I'd say, since the Great Recession.

[Drew Borst, Goldman Sachs]

Okay. Great. I appreciate the color. Thanks so much.

[Operator]

Thank you. Our next question comes from George Smith with Devonport Asset Management.

[George Smith, Devonport Asset Management]

Hi. Good morning. You guys seem to have momentum right now that a lot of other mediums do not and I'm trying to figure out if this is just general economic strength, or if you're seeing renewed interest in the category, given disruption that we're seeing elsewhere? Or do you sense that there are even new types of buyers coming into the medium, maybe driven by digital or again, the disruption we're seeing in other areas?

[Sean Reilly, Chief Executive Officer]

Great question. So let me start by just saying that one of the things that's driving out-of-home is the fundamental fact that our audience is growing. More people are spending more time in their commutes than ever before. They're spending more time out-of-home. They're interacting with our medium more than ever before. So it kind of starts there.

And you've got other local media that are struggling with their audience. Their audience is either becoming fragmented or they're turning away and that's nearing to our benefit to some degree. I can tell you that there are certain categories that are using us in lieu of other media that they used to use.

I would point to, for example, in the service category, that's attorneys and accountants and the like, that used to use the Yellow Pages. Yellow Pages don't exist, so they're coming to us. And service is quite frankly our fastest growing vertical right now.

Our digital platform is also making us responsive to the needs of advertisers in a way that is causing them to steer dollars our way.

Clearly, news, entertainment, and sports is fast-growing in our book and it's primarily because digital is so responsive to their needs that they have time-sensitive or price-sensitive information they need to get out right away. They can use us in a way they haven't been able to before and I would argue that some of those categories used to rely on radio more because of the way radio could be responsive to their needs. And as radio listenership dwindles, they're coming to us. So, those are some of the factors that are resulting in out-of-home being a growth medium where a lot of other local media are struggling.

[George Smith, Devonport Asset Management]

And do you see in discussions with some of the bigger buyers I mean are they generally making bigger buys or even broader buys in terms of geography the blanket more the country or any -- and actually the pricing's obviously going up. How about any change to the contract duration?

[Sean Reilly, Chief Executive Officer]

We did have some large customers commit earlier in 2018 for their buy in 2019 and also buy a little longer. But I would say that you need to keep in mind that we are intensely local, 77% of our business is local and that book is built by the sum effect of 1,000 local account executives touching 30,000, 40,000, 50,000 local customers. So, it's really sort of that sum effect. So, I would point more to if other local media continue to struggle with their audience, it can only neutral our benefit.

[George Smith, Devonport Asset Management]

Thank you very much.

[Operator]

Thank you. There are no additional questions at this time. I'd like to turn it now to Mr. Reilly for closing remarks.

[Sean Reilly, Chief Executive Officer]

Well great. Thank you all for listening and thank you for your interest in Lamar. And as I mentioned in the press release, we're looking forward to a solid 2019. Thank you all.

[Operator]

Thank you. Ladies and gentlemen, this concludes today's presentation. You may now disconnect.