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Press release from GlobeNewswire (a Nasdaq OMX company)

Lamar Advertising Company Announces Second Quarter 2011 Operating Results

Thursday, August 04, 2011

Lamar Advertising Company Announces Second Quarter 2011 Operating Results03:00 EDT Thursday, August 04, 2011BATON ROUGE, La., Aug. 4, 2011 (GLOBE NEWSWIRE) -- 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 second quarter ended June 30, 2011.Three Months Results Lamar reported net revenues of $293.3 million for the second quarter of 2011 versus $286.4 million for the second quarter of 2010, a 2.4% increase. Operating income for the second quarter of 2011 was $59.4 million as compared to $49.3 million for the same period in 2010. Lamar recognized $11.4 million in net income for the second quarter of 2011 compared to a net loss of $8.9 million for the second 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 income (loss) at the end of this release) for the second quarter of 2011 was $133.5 million versus $131.0 million for the second quarter of 2010, a 1.9% 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 second quarter of 2011 was $68.2 million as compared to $80.7 million for the same period in 2010, a 15.4% decrease. The decrease in free cash flow is a result of the Company's $18.5 million increase in capitalized expenditures over the comparable period in 2010. Pro forma net revenue for the second quarter of 2011 increased 2.1% and pro forma Adjusted EBITDA increased 1.9% as compared to the second 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.Six Months Results Lamar reported net revenues of $548.5 million for the six months ended June 30, 2011 versus $530.5 million for the same period in 2010, a 3.4% increase. Operating income for the six months ended June 30, 2011 was $85.0 million as compared to $60.1 million for the same period in 2010. Adjusted EBITDA for the six months ended June 30, 2011 was $228.6 million versus $221.8 million for the same period in 2010. There was a net loss of $1.8 million for the six months ended June 30, 2011 as compared to a net loss of $33.8 million for the same period in 2010. Free Cash Flow for the six months ended June 30, 2011 decreased 19.0% to $94.9 million as compared to $117.1 million for the same period in 2010.Liquidity As of June 30, 2011, Lamar had $259.1 million in total liquidity that consists of $240.4 million available for borrowing under its revolving senior credit facility and approximately $18.7 million in cash and cash equivalents. Guidance For the third quarter of 2011 the Company expects net revenue to be approximately $293 million. On a pro forma basis this represents an increase of approximately 2%.Forward Looking Statements This press release contains forward-looking statements, including the statements regarding guidance for the third 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 state of the economic recovery and the effect of the recent recession 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 Form 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 income (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 Thursday, August 4, 2011 at 9:00 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:     29146435    Available through Monday, August 8, 2011 at 11:59 p.m. eastern time    Live Webcast:   www.lamar.com    Webcast Replay:     www.lamar.com   Available through Monday, August 8, 2011 at 11:59 p.m. eastern timeGeneral 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 Six months ended   June 30, June 30,   2011 2010 2011 2010           Net revenues $ 293,345 $ 286,366 $ 548,547 $ 530,469           Operating expenses (income)         Direct advertising expenses 103,058 99,825 202,609 198,377 General and administrative expenses 46,472 45,608 95,825 90,368 Corporate expenses  10,351 9,904 21,484 19,926 Non-cash compensation 2,546 5,039 4,678 7,800 Depreciation and amortization 72,410 78,165 146,283 156,507 Gain on disposition of assets (911) (1,446) (7,358) (2,619)   233,926 237,095 463,521 470,359 Operating income 59,419 49,271 85,026 60,110           Other expense (income)         Loss on extinguishment of debt — 17,137 — 17,398 Interest income (51) (87) (83) (176) Interest expense 43,307 46,640 86,927 95,970   43,256 63,690 86,844 113,192           Income (loss) before income tax 16,163 (14,419) (1,818) (53,082) Income tax expense (benefit) 4,737 (5,482) (4) (19,318)           Net income (loss) 11,426 (8,937) (1,814) (33,764) Preferred stock dividends 91 91 182 182 Net income (loss) applicable to common stock $ 11,335 ($ 9,028) ($ 1,996) ($ 33,946)           Earnings per share:           Basic income (loss) per share $ 0.12 ($ 0.10) ($ 0.02) ($ 0.37)            Diluted income (loss) per share $ 0.12 ($ 0.10) ($ 0.02) ($ 0.37)           Weighted average common shares outstanding:         - basic 92,840,263 92,202,404 92,760,807 92,115,868 - diluted 93,196,805 92,714,870 93,180,174 92,627,203         OTHER DATA         Free Cash Flow Computation:         Adjusted EBITDA $ 133,464 $ 131,029 $ 228,629 $ 221,798 Interest, net (38,649) (42,460) (77,703) (87,752) Current tax expense (669) (477) (1,203) (1,088) Preferred stock dividends (91) (91) (182) (182) Total capital expenditures (1) (25,840) (7,347) (54,653)  (15,688) Free cash flow $ 68,215 $ 80,654 $ 94,888 $ 117,088(1)See the capital expenditures detail included  below for a breakdown by category.                June 30, December 31,       2011 2010 Selected Balance Sheet Data:         Cash and cash equivalents     $ 18,663 $ 91,679 Working capital     125,880 155,829 Total assets     3,538,249 3,648,961 Total debt (including current maturities)     2,285,721 2,409,140 Total stockholders' equity     820,911 818,523                Three months ended   Six months ended   June 30,  June 30,   2011 2010 2011 2010           Other Data:         Cash flows provided by operating activities $ 84,613 $ 85,519 $ 110,439 $ 93,170 Cash flows used in investing activities 26,026 5,077 54,361 13,119 Cash flows used in financing activities 72,313 86,468 129,318 165,599                     Reconciliation of Free Cash Flow to Cash Flows Provided by Operating Activities:         Cash flows provided by operating activities $ 84,613 $ 85,519 $ 110,439 $ 93,170 Changes in operating assets and liabilities 11,074 4,341 42,000 43,567 Total capital expenditures (25,840) (7,347) (54,653) (15,688) Preferred stock dividends (91) (91) (182) (182) Other (1,541) (1,768) (2,716) (3,779) Free cash flow $ 68,215 $ 80,654 $ 94,888 $ 117,088                     Reconciliation of Adjusted EBITDA to Net income (loss):         Adjusted EBITDA $ 133,464 $ 131,029 $ 228,629 $ 221,798 Less:         Non-cash compensation 2,546 5,039 4,678 7,800 Depreciation and amortization 72,410 78,165 146,283 156,507 Gain on disposition of assets (911) (1,446) (7,358) (2,619) Operating Income 59,419 49,271 85,026 60,110           Less:         Interest income (51) (87) (83) (176) Loss on extinguishment of debt — 17,137 — 17,398 Interest expense 43,307 46,640 86,927 95,970 Income tax expense (benefit) 4,737 (5,482) (4) (19,318) Net income (loss) $ 11,426 ($ 8,937) ($ 1,814) ($ 33,764)                   Three months ended     June 30,     2011 2010 % Change Reconciliation of Reported Basis to Pro Forma (a) Basis:       Reported net revenue $ 293,345 $ 286,366 2.4% Acquisitions and divestitures — 1,027   Pro forma net revenue $ 293,345 $ 287,393  2.1%         Reported direct advertising and G&A expenses $ 149,530 $ 145,433 2.8% Acquisitions and divestitures — 1,102   Pro forma direct advertising and G&A expenses $ 149,530 $ 146,535 2.0%         Reported outdoor operating income $ 143,815  $140,933 2.0% Acquisitions and divestitures — (75)   Pro forma outdoor operating income $ 143,815 $ 140,858 2.1%         Reported corporate expenses $ 10,351 $ 9,904 4.5% Acquisitions and divestitures — —   Pro forma corporate expenses $ 10,351 $ 9,904 4.5%         Reported Adjusted EBITDA $ 133,464 $ 131,029 1.9% Acquisitions and divestitures — (75)   Pro forma Adjusted EBITDA $ 133,464 $ 130,954 1.9%   (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.       Three months ended   June 30,   2011 2010 Reconciliation of Outdoor Operating Income to Operating Income:     Outdoor operating income $ 143,815 $140,933 Less: Corporate expenses 10,351 9,904 Non-cash compensation 2,546 5,039 Depreciation and amortization 72,410 78,165 Plus: Gain on disposition of assets 911 1,446 Operating income $ 59,419 $ 49,271               Three months ended Six months ended   June 30, June 30,   2011 2010 2011 2010 Capital expenditure detail by category         Billboards - traditional $ 8,621 $ 873 $ 17,302 $ 2,509 Billboards - digital 11,665 2,937 20,098 4,670 Logo 2,522 1,981 4,680 4,068 Transit 264 38 472 674 Land and buildings 213  — 812 579 Operating equipment 2,555 1,518 11,289 3,188 Total capital expenditures $ 25,840 $ 7,347 $ 54,653 $ 15,688CONTACT: Keith A. Istre Chief Financial Officer (225) 926-1000 KI@lamar.com