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Press release from Business Wire

Lamar Advertising Company Announces First Quarter 2011 Operating Results

Wednesday, May 04, 2011

Lamar Advertising Company Announces First Quarter 2011 Operating Results06:00 EDT Wednesday, May 04, 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 first quarter ended March 31, 2011. First Quarter Results Lamar reported net revenues of $255.2 million for the first quarter of 2011 versus $244.1 million for the first quarter of 2010, a 4.5% increase. Operating income for the first quarter of 2011 was $25.6 million as compared to $10.8 million for the same period in 2010. There was a net loss of $13.2 million for the first quarter of 2011 compared to a net loss of $24.8 million for the first quarter of 2010. 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 first quarter of 2011 was $95.2 million versus $90.8 million for the first quarter of 2010, a 4.8% 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 first quarter of 2011 was $26.7 million as compared to $36.4 million for the same period in 2010, a decrease of 26.8%. The decrease in free cash flow for the first quarter of 2011 is a result of the Company's $20.5 million increase in capital expenditures for the quarter over the comparable period in 2010. Pro forma net revenue for the first quarter of 2011 increased 4.2% and pro forma Adjusted EBITDA increased 5.3% as compared to the first quarter of 2010. Pro forma net revenue and Adjusted EBITDA include adjustments to the 2010 period for acquisitions and divestitures for the same time frame as actually owned in the 2011 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. Liquidity As of March 31, 2011, Lamar had $272.8 million in total liquidity that consists of $240.4 available for borrowing under its revolving credit facility and $32.4 million in cash on hand. Guidance For the second quarter of 2011 the Company expects net revenue to be approximately $296 million. On a pro forma basis this represents an increase of approximately 3%. Forward Looking Statements This press release contains forward-looking statements, including the statements regarding guidance for the second 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 our filings with the Securities and Exchange Commission, including the risk factors in Item 1A of our 2010 Annual Report on Forms 10-K, as supplemented by any risk factors contained in our Quarterly Reports on Form 10-Q. 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, May 4, 2011 at 8:30 a.m. central time. Instructions for the conference call and Webcast are provided below: Conference Call         All Callers:1-334-323-0520 or 1-334-323-9871Passcode:Lamar   Replay:1-334-323-7226Passcode:68683765 Available through Monday, May 9, 2011 at 11:59 p.m. eastern time   Live Webcast: www.lamar.com   Webcast Replay: www.lamar.com Available through Monday, May 9, 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 March 31, 20112010   Net revenues $ 255,202 $ 244,103   Operating expenses (income) Direct advertising expenses 99,551 98,552 General and administrative expenses 49,353 44,760 Corporate expenses 11,133 10,022 Non-cash compensation 2,132 2,761 Depreciation and amortization 73,873 78,342 Gain on disposition of assets ( 6,447 ) ( 1,173 ) 229,595 233,264 Operating income 25,607 10,839   Other expense (income) Loss on extinguishment of debt — 261 Interest income ( 32 ) ( 89 ) Interest expense 43,620 49,330 43,588 49,502 Loss before income tax ( 17,981 ) ( 38,663 ) Income tax benefit ( 4,741 ) ( 13,836 )   Net loss ( 13,240 ) ( 24,827 ) Preferred stock dividends 91 91 Net loss applicable to common stock ($ 13,331 ) ($ 24,918 )   Earnings per share: Basic and diluted loss per share ($ 0.14 ) ($ 0.27 )   Weighted average common shares outstanding: - basic 92,681,351 91,983,549 - diluted 93,157,052 92,498,159   OTHER DATAFree Cash Flow Computation: Adjusted EBITDA $ 95,165 $ 90,769 Interest, net ( 39,054 ( 45,292 ) Current tax expense ( 534 ) ( 611 ) Preferred stock dividends ( 91 ) ( 91 ) Total capital expenditures (1) ( 28,813 ) ( 8,341 ) Free cash flow $ 26,673 $ 36,434 (1)See the capital expenditures detail included below for a breakdown by category.       March 31, December 31, 2011 2010 Selected Balance Sheet Data: Cash and cash equivalents $ 32,441 $ 91,679 Working capital 125,603 155,829 Total assets 3,577,463 3,648,961 Total debt (including current maturities) 2,356,580 2,409,140 Total stockholders' equity   806,097   818,523   Three months ended March 31, 2011   2010   Other Data: Cash flows provided by operating activities $ 25,826 $ 7,651 Cash flows used in investing activities 28,335 8,042 Cash flows used in financing activities 57,005 79,131     Reconciliation of Free Cash Flow to Cash Flows Provided by Operating Activities: Cash flows provided by operating activities $ 25,826 $ 7,651 Changes in operating assets and liabilities 30,926 39,226 Total capital expenditures ( 28,813 ) ( 8,341 ) Preferred stock dividends ( 91 ) ( 91 ) Other ( 1,175 ) ( 2,011 ) Free cash flow $ 26,673 $ 36,434     Reconciliation of Adjusted EBITDA to Net loss: Adjusted EBITDA $ 95,165 $ 90,769 Less: Non-cash compensation 2,132 2,761 Depreciation and amortization 73,873 78,342 Gain on disposition of assets ( 6,447 ) ( 1,173 ) Operating Income 25,607 10,839   Less: Loss on extinguishment of debt — 261 Interest income ( 32 ) ( 89 ) Interest expense 43,620 49,330 Income tax benefit ( 4,741 ) ( 13,836 ) Net loss ($ 13,240 ) ($ 24,827 )               Three months ended        March 31, 2011  2010 % Change   Reconciliation of Reported Basis to Pro Forma (a) Basis: Net revenue $ 255,202 $ 244,103 4.5% Acquisitions and divestitures — 910 Pro forma net revenue $ 255,202 $ 245,013 4.2%   Direct advertising and G&A expenses $ 148,904 $ 143,312 3.9% Acquisitions and divestitures — 1,299 Pro forma direct advertising and G&A expenses $ 148,904 $ 144,611 3.0%   Outdoor operating income $ 106,298 $ 100,791 5.5% Acquisitions and divestitures — (389) Pro forma outdoor operating income $ 106,298 $ 100,402 5.9%   Corporate expenses $ 11,133 $ 10,022 11.1% Acquisitions and divestitures — — Pro forma corporate expenses $ 11,133 $ 10,022 11.1%   Adjusted EBITDA $ 95,165 $ 90,769 4.8% Acquisitions and divestitures — (389) Pro forma Adjusted EBITDA $ 95,165 $ 90,380 5.3%    (a)  Pro forma net revenues, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses and Adjusted EBITDA include adjustments to 2010 for acquisitions and divestitures for the same time frame as actually owned in 2011. Reconciliation of Outdoor Operating Income to Operating Income:     Three months ended March 31,   2011 2010 Outdoor operating income $ 106,298 $ 100,791 Less: Corporate expenses 11,133 10,022 Non-cash compensation 2,132 2,761 Depreciation and amortization 73,873 78,342 Plus: Gain on disposition of assets 6,447 1,173 Operating income $ 25,607 $ 10,839                 Three months ended March 31, 2011         2010 Capital expenditure detail by category Billboards - traditional $ 8,681 $ 1,636 Billboards - digital 8,433 1,733 Logo 2,158 2,087 Transit 208 636 Land and buildings 599 579 Operating equipment 8,734 1,670 Total capital expenditures $ 28,813 $ 8,341 Lamar Advertising CompanyKeith A. Istre, Chief Financial Officer, 225-926-1000KI@lamar.com