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Press release from Business Wire

Lamar Advertising Company Announces Fourth Quarter and Year End 2010 Operating Results

Wednesday, February 23, 2011

Lamar Advertising Company Announces Fourth Quarter and Year End 2010 Operating Results06:00 EST Wednesday, February 23, 2011 BATON ROUGE, La. (Business Wire) -- Lamar Advertising Company (Nasdaq: LAMR), a leading owner and operator of outdoor advertising and logo sign displays, announces the Company's operating results for the fourth quarter ended December 31, 2010. Fourth Quarter Results Lamar reported net revenues of $275.7 million for the fourth quarter of 2010 versus $262.3 million for the fourth quarter of 2009, a 5.1% increase. Operating income for the fourth quarter of 2010 was $32.8 million as compared to $20.4 million for the same period in 2009. There was a net loss of $7.1 million for the fourth quarter of 2010 compared to a net loss of $19.7 million for the fourth quarter of 2009. Adjusted EBITDA (defined as operating income before non-cash compensation, depreciation and amortization and gain on disposition of assets - see reconciliation to net loss at the end of this release) for the fourth quarter of 2010 was $115.4 million versus $106.8 million for the fourth quarter of 2009, an 8.0% increase. Free cash flow (defined as Adjusted EBITDA less interest, net of interest income and amortization of financing costs, current taxes, preferred stock dividends and total capital expenditures - see reconciliation to cash flows provided by operating activities at the end of this release) for the fourth quarter of 2010 was $59.2 million as compared to $50.4 million for the same period in 2009, a 17.5% increase. Pro forma net revenue for the fourth quarter of 2010 increased 4.4% and pro forma Adjusted EBITDA increased 7.6% as compared to the fourth quarter of 2009. Pro forma net revenue and Adjusted EBITDA include adjustments to the 2009 period for acquisitions and divestitures for the same time frame as actually owned in the 2010 period. Tables that reconcile reported results to pro forma results and operating income to outdoor operating income are included at the end of this release. Twelve Months Results Lamar reported net revenues of $1.09 billion for the twelve months ended December 31, 2010 versus $1.06 billion for the same period in 2009, a 3.4% increase. Operating income for the twelve months ended December 31, 2010 was $139.5 million as compared to $97.6 million for the same period in 2009. Adjusted EBITDA increased to $465.2 million for the twelve months ended December 31, 2010 versus $441.4 million for the same period in 2009. There was a net loss of $40.1 million for the twelve months ended December 31, 2010 as compared to a net loss of $58.0 million for the same period in 2009. Free cash flow for the twelve months ended December 31, 2010 increased 4.3% to $251.5 million as compared to $241.1 million for the same period in 2009. Liquidity As of December 31, 2010, Lamar had $331.6 million in total liquidity that consists of $239.9 million available for borrowing under its revolving senior credit facility and $91.7 million in cash. Guidance For the first quarter of 2011 the Company expects net revenue to be approximately $256 million. On a pro forma basis this represents an increase of approximately 4.5%. Forward Looking Statements This press release contains forward-looking statements, including the statements regarding guidance for the first quarter of 2011. 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 length and severity of the current recession and the effect that it has 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) the regulation of the outdoor advertising industry; (6) the integration of companies that we acquire and our ability to recognize cost savings or operating efficiencies as a result of these acquisitions; (7) the market for our Class A common stock and (8) other factors described in the reports on Forms 10-K and 10-Q and the registration statements that we file from time to time with the SEC. 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 Measures Adjusted EBITDA, free cash flow, pro forma results and outdoor operating income are not measures of performance under accounting principles generally accepted in the United States of America (“GAAP”) and should not be considered alternatives to operating income, net loss, cash flows from operating activities, or other GAAP figures as indicators of the Company's financial performance or liquidity. The Company's management believes that Adjusted EBITDA, free cash flow, pro forma results and outdoor operating income are useful in evaluating the Company's performance and provide investors and financial analysts a better understanding of the Company's core operating results. The pro forma acquisition adjustments are intended to provide information that may be useful for investors when assessing period to period results. Our presentations of these measures may not be comparable to similarly titled measures used by other companies. Reconciliations of these measures to GAAP are included at the end of this release. Conference Call Information A conference call will be held to discuss the Company's operating results on Wednesday, February 23, 2011 at 10:00 a.m. central time. Instructions for the conference call and Webcast are provided below: Conference CallAll Callers:   1-334-323-0520 or 1-334-323-9871Passcode:Lamar   Replay:1-334-323-7226Passcode:45161860 Available through Monday, February 28, 2011 at 11:59 p.m. eastern time.   Live Webcast: www.lamar.com   Webcast Replay: www.lamar.com Available through Monday, February 28, 2011 at 11:59 p.m. eastern time. General Information Lamar Advertising Company is a leading outdoor advertising company currently operating over 150 outdoor advertising companies in 44 states, Canada and Puerto Rico, logo businesses in 22 states and the province of Ontario, Canada and over 60 transit advertising franchises in the United States, Canada and Puerto Rico.             LAMAR ADVERTISING COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)       Three months ended     December 31, Twelve months ended December 31,   2010200920102009   Net revenues $ 275,684 $ 262,315 $ 1,092,291 $ 1,056,065   Operating expenses (income) Direct advertising expenses 100,495 99,670 398,467 397,725 General and administrative expenses 49,283 46,064 188,202 177,947 Corporate expenses 10,522 9,753 40,472 39,014 Non-cash compensation 5,124 2,775 17,839 12,462 Depreciation and amortization 78,579 83,933 312,703 336,725 Gain on disposition of assets ( 1,144 ) ( 329 ) ( 4,900 ) ( 5,424 ) 242,859 241,866 952,783 958,449 Operating income 32,825 20,449 139,508 97,616   Other expense (income) Gain on disposition of investment — — — ( 1,445 ) Loss (gain) on extinguishment of debt, net — 350 17,398 ( 3,320 ) Interest income ( 177 ) ( 85 ) ( 367 ) ( 527 ) Interest expense 44,726 51,962 186,048 197,047 44,549 52,227 203,079 191,755 Loss before income tax ( 11,724 ) ( 31,778 ) ( 63,571 ) ( 94,139 ) Income tax benefit ( 4,605 ) ( 12,096 ) ( 23,469 ) ( 36,101 )   Net loss ( 7,119 ) ( 19,682 ) ( 40,102 ) ( 58,038 ) Preferred stock dividends 92 92 365 365 Net loss applicable to common stock ($ 7,211 ) ($ 19,774 ) ($ 40,467 ) ($ 58,403 )   Earnings per share: Basic loss per share ($ 0.08 ) ($ 0.22 ) ($ 0.44 ) ($ 0.64 ) Diluted loss per share ($ 0.08 ) ($ 0.22 ) ($ 0.44 ) ($ 0.64 )   Weighted average common sharesoutstanding: - basic 92,491,327 91,880,167 92,261,157 91,730,109 - diluted 92,959,871 92,394,975 92,673,650 91,836,094 OTHER DATAFree Cash Flow Computation: Adjusted EBITDA $ 115,384 $ 106,828 $ 465,150 $ 441,379 Interest, net of interest income ( 44,549 ) ( 51,877 ) ( 185,681 ) ( 196,520 ) Amortization included in interest expense 4,355 3,719 16,934 19,442 Current tax (expense) benefit ( 150 ) 1,627 ( 1,119 ) 15,981 Preferred stock dividends ( 92 ) ( 92 ) ( 365 ) ( 365 ) Total capital expenditures (1) ( 15,740 ) ( 9,805 ) ( 43,452 ) ( 38,815 ) Free cash flow $ 59,208 $ 50,400 $ 251,467 $ 241,102   (1)See the capital expenditures detail included below for a breakdown by category.       December 31, December 31, Selected Balance Sheet Data:20102009 Cash and cash equivalents 91,679 112,253 Working capital 155,829 104,229 Total assets 3,648,961 3,943,541 Total debt (including current maturities) 2,409,140 2,674,912 Total stockholders' equity $ 818,523 $ 831,798           Three months ended Twelve months ended December 31, December 31, 2010     20092010   2009   Other Data: Cash flows provided by operating activities $ 132,641 $ 102,321 $ 322,820 $ 293,743 Cash flows used in investing activities 16,553 10,212 41,480 29,039 Cash flows used in financing activities 63,036 28,972 302,429 168,349     Reconciliation of Free Cash Flow to Cash Flows Provided by Operating Activities: Cash flows provided by operating activities $ 132,641 $ 102,321 $ 322,820 $ 293,743 Changes in operating assets and liabilities ( 54,222 ) ( 37,799 ) ( 18,800 ) ( 798 ) Total capital expenditures ( 15,740 ) ( 9,805 ) ( 43,452 ) ( 38,815 ) Preferred stock dividends ( 92 ) ( 92 ) ( 365 ) ( 365 ) Other ( 3,379 ) ( 4,225 ) ( 8,736 ) ( 12,663 ) Free cash flow $ 59,208 $ 50,400 $ 251,467 $ 241,102     Reconciliation of Adjusted EBITDA to Net loss: Adjusted EBITDA $ 115,384 $ 106,828 $ 465,150 $ 441,379 Less: Non-cash compensation 5,124 2,775 17,839 12,462 Depreciation and amortization 78,579 83,933 312,703 336,725 Gain on disposition of assets ( 1,144 ) ( 329 ) ( 4,900 ) ( 5,424 ) Operating Income 32,825 20,449 139,508 97,616   Less: Interest income ( 177 ) ( 85 ) ( 367 ) ( 527 ) Gain on disposition of investment — — — ( 1,445 ) Loss (gain) extinguishment of debt — 350 17,398 ( 3,320 ) Interest expense 44,726 51,962 186,048 197,047 Income tax benefit ( 4,605 ) ( 12,096 ) ( 23,469 ) ( 36,101 ) Net loss ($ 7,119 ) ($ 19,682 ) ($ 40,102 ) ($ 58,038 )               Three months ended     December 31, Reconciliation of Reported Basis to Pro Forma (a) Basis:2010  2009  % Change Net revenue $ 275,684 $ 262,315 5.1 % Acquisitions and divestitures — 1,841 Pro forma net revenue $ 275,684 $ 264,156 4.4 %   Direct advertising and G&A expenses $ 149,778 $ 145,734 2.8 % Acquisitions and divestitures — 1,432 Pro forma direct advertising and G&A expenses $ 149,778 $ 147,166 1.8 %   Outdoor operating income $ 125,906 $ 116,581 8.0% Acquisitions and divestitures — 409 Pro forma outdoor operating income $ 125,906 $ 116,990 7.6%   Corporate expenses $ 10,522 $ 9,753 7.9% Acquisitions and divestitures — — Pro forma corporate expenses $ 10,522 $ 9,753 7.9%   Adjusted EBITDA $ 115,384 $ 106,828 8.0% Acquisitions and divestitures — 409 Pro forma Adjusted EBITDA $ 115,384 $ 107,237 7.6% (a) Pro forma net revenues, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses and Adjusted EBITDA include adjustments to 2009 for acquisitions and divestitures for the same time frame as actually owned in 2010.       Three months ended     December 31, Reconciliation of Outdoor Operating Income to Operating Income: 2010       2009   Outdoor operating income $ 125,906 $ 116,581 Less: Corporate expenses 10,522 9,753 Non-cash compensation 5,124 2,775 Depreciation and amortization 78,579 83,933 Plus: Gain on disposition of assets 1,144 329 Operating income $ 32,825 $ 20,449   Three months ended         Twelve months ended December 31, December 31, 2010         2009 2010         2009 Capital expenditure detail by category   Billboards - traditional $ 4,165 $ 954 $ 9,506 $ 7,401 Billboards - digital 4,639 3,586 13,214 15,178 Logo 2,296 1,999 8,483 5,275 Transit 150 2,365 876 5,488 Land and buildings 1,810 29 2,531 578 Operating equipment 2,680 872 8,842 4,895 Total capital expenditures $ 15,740 $ 9,805 $ 43,452 $ 38,815 Lamar Advertising CompanyKeith A. Istre, Chief Financial Officer, 225-926-1000KI@lamar.com