You can think of a town as a circle drawn on a map, with the shops and the station in the middle. 'Out-of-town' points at anything sitting outside that middle. Sometimes the thing is completely outside the circle — a visitor who lives in a different town, a meeting two hours away. Sometimes it is just out at the rim, where the land is cheap and the car parks are big. The hyphens are what let the whole little phrase stand in front of a noun and describe it.