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Press release from GlobeNewswire (a Nasdaq OMX company)

Lamar Advertising Company Announces Second Quarter 2012 Operating Results

Wednesday, August 08, 2012

Lamar Advertising Company Announces Second Quarter 2012 Operating Results03:00 EDT Wednesday, August 08, 2012BATON ROUGE, La., Aug. 8, 2012 (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, 2012.Three Months Results Lamar reported net revenues of $304.9 million for the second quarter of 2012 versus $293.3 million for the second quarter of 2011, a 3.9% increase. Operating income for the second quarter of 2012 was $64.5 million as compared to $59.4 million for the same period in 2011. Lamar recognized $13.9 million in net income for the second quarter of 2012 compared to a net income of $11.4 million for the second quarter of 2011. 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 2012 was $138.2 million versus $133.5 million for the second quarter of 2011, a 3.6% 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 2012 was $73.7 million as compared to $68.2 million for the same period in 2011, an 8.1% increase. Pro forma net revenue for the second quarter of 2012 increased 3.6% and pro forma Adjusted EBITDA increased 3.7% as compared to the second quarter of 2011. Pro forma net revenue and Adjusted EBITDA include adjustments to the 2011 period for acquisitions and divestitures for the same time frame as actually owned in the 2012 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 $571.1 million for the six months ended June 30, 2012 versus $548.5 million for the same period in 2011, a 4.1% increase. Operating income for the six months ended June 30, 2012 was $90.3 million as compared to $85.0 million for the same period in 2011. Adjusted EBITDA for the six months ended June 30, 2012 was $238.1 million versus $228.6 million for the same period in 2011. There was a net loss of $8.9 million for the six months ended June 30, 2012 as compared to a net loss of $1.8 million for the same period in 2011. Free Cash Flow for the six months ended June 30, 2012 increased 24.3% to $117.9 million as compared to $94.9 million for the same period in 2011.Recently Announced Redemption of Notes On July 30, 2012, Lamar Media announced its intention to redeem $122.76 million of its 6 5/8% Senior Subordinated Notes due 2015 (CUSIP NO. 513075AM3) (the "notes") at a redemption price equal to 101.104% of the principal amount of outstanding notes, plus accrued and unpaid interest up to, but not including, August 29, 2012 (the "redemption date"). The redemption price will be due and payable on the redemption date upon surrender of the notes in accordance with the term of the indenture governing the notes. Lamar Media intends to use cash on hand as well as borrowings under its revolving credit facility to fund the redemption. Following the redemption, Lamar Media will have approximately $137.2 million in aggregate principal amount of its 6 5/8% Senior Subordinated Notes due 2015—Series B and 6 5/8% Senior Subordinated Notes due 2015—Series C outstanding.Liquidity As of June 30, 2012, Lamar had $340.6 million in total liquidity that consists of $241.7 million available for borrowing under its revolving senior credit facility and approximately $98.9 million in cash and cash equivalents.     REIT Election Lamar is currently considering an election to real estate investment trust (REIT) status. In conjunction with our review regarding a potential REIT election, we intend to seek a private letter ruling from the Internal Revenue Service. If we proceed with a REIT election, we would likely make the election for the taxable year beginning January 1, 2014 during 2013, subject to the approval of our board of directors. There is no certainty as to the timing of a REIT election or whether we will ultimately decide to make a REIT election.Guidance For the third quarter of 2012 the Company expects net revenue to be approximately $303 million to $306 million. On a pro forma basis this represents an increase of approximately 1% to 2%.Forward Looking Statements This press release contains forward-looking statements, including the statements regarding guidance for the third quarter of 2012 and our consideration of an election to REIT status. 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 economy and financial markets generally and the effect of the broader economy 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 included in Item 1A of our 2011 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 Wednesday, August 8, 2012 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:42398158   Available through Monday, August 13, 2012 at 11:59 p.m. eastern time    Live Webcast: www.lamar.com    Webcast Replay: www.lamar.com   Available through Monday, August 13, 2012 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 approximately 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,   2012 2011 2012 2011           Net revenues $ 304,872 $ 293,345 $ 571,110 $ 548,547           Operating expenses (income)         Direct advertising expenses (exclusive of depreciation and amortization) 105,071 103,058 208,494 202,609 General and administrative expenses (exclusive of depreciation and amortization and non-cash compensation) 49,590 46,472 100,904 95,825 Corporate expenses (exclusive of depreciation and amortization and non-cash compensation) 11,972 10,351 23,631 21,484 Non-cash compensation 4,421 2,546 7,033 4,678 Depreciation and amortization 72,995 72,410 145,368 146,283 Gain on disposition of assets (3,634) (911) (4,570) (7,358)   240,415 233,926 480,860 463,521 Operating income 64,457 59,419 90,250 85,026           Other expense (income)         Loss on extinguishment of debt — — 29,972 — Interest income (65) (51) (123) (83) Interest expense 38,633 43,307 78,547 86,927   38,568 43,256 108,396 86,844           Income (loss) before income tax 25,889 16,163 (18,146) (1,818) Income tax expense (benefit) 11,967 4,737 (9,252) (4)           Net income (loss) 13,922 11,426 (8,894) (1,814) Preferred stock dividends 91 91 182 182 Net income (loss) applicable to common stock $ 13,831 $ 11,335 ($9,076) ($1,996)           Earnings per share:         Basic income (loss) per share $ 0.15 $ 0.12 ($0.10) ($0.02) Diluted income (loss) per share $ 0.15 $ 0.12 ($0.10) ($0.02)           Weighted average common shares outstanding:         - basic 93,257,798 92,840,263 93,186,036 92,760,807 - diluted 93,543,471 93,196,805 93,498,748 93,180,174          OTHER DATA         Free Cash Flow Computation:         Adjusted EBITDA $ 138,239 $ 133,464 $ 238,081 $ 228,629 Interest, net (34,294) (38,649) (69,653) (77,703) Current tax expense (338) (669) (783) (1,203) Preferred stock dividends (91) (91) (182) (182) Total capital expenditures (1) (29,795) (25,840) (49,542) (54,653)  Free cash flow $ 73,721 $ 68,215    $ 117,921  $ 94,888(1)See the capital expenditures detail included below for a breakdown by category.               June 30, 2012  December 31, 2011 Selected Balance Sheet Data:         Cash and cash equivalents     $ 98,922 $ 33,503 Working capital     51,544 95,281 Total assets     3,460,550 3,427,353 Total debt (including current maturities)     2,189,714 2,158,528 Total stockholders' equity     839,633 838,998                Three months ended  Six months ended   June 30,   June 30,   2012 2011 2012 2011           Other Data:         Cash flows provided by operating activities $ 97,321 $ 84,613 $ 134,023 $ 110,439 Cash flows used in investing activities 35,054 26,026 59,094 54,361 Cash flows provided by (used in) financing activities 1,143 (72,313) (9,452) (129,318)                     Reconciliation of Free Cash Flow to Cash Flows Provided by Operating Activities:         Cash flows provided by operating activities $ 97,321 $ 84,613 $ 134,023 $ 110,439 Changes in operating assets and liabilities 8,063 11,074 36,362 42,000 Total capital expenditures (29,795) (25,840) (49,542) (54,653) Preferred stock dividends (91) (91) (182) (182) Other (1,777) (1,541) (2,740) (2,716) Free cash flow $ 73,721 $ 68,215 $ 117,921 $ 94,888                     Reconciliation of Adjusted EBITDA to Net income (loss):         Adjusted EBITDA $ 138,239 $ 133,464 $ 238,081 $ 228,629 Less:         Non-cash compensation 4,421 2,546 7,033 4,678 Depreciation and amortization 72,995 72,410 145,368 146,283 Gain on disposition of assets (3,634) (911) (4,570) (7,358) Operating Income 64,457 59,419 90,250 85,026           Less:         Interest income (65) (51) (123) (83) Loss on extinguishment of debt — — 29,972 — Interest expense 38,633 43,307 78,547 86,927 Income tax expense (benefit) 11,967 4,737 (9,252) (4) Net income (loss) $ 13,922 $ 11,426 ($8,894) ($1,814)                   Three Months Ended June 30,     2012 2011 % Change Reconciliation of Reported Basis to Pro Forma (a) Basis:       Reported net revenue $ 304,872 $ 293,345 3.9% Acquisitions and divestitures — 924   Pro forma net revenue $ 304,872 $ 294,269  3.6%         Reported direct advertising and G&A expenses $ 154,661 $ 149,530 3.4% Acquisitions and divestitures — 1,021   Pro forma direct advertising and G&A expenses $ 154,661 $ 150,551 2.7%         Reported outdoor operating income $ 150,211 $ 143,815 4.4% Acquisitions and divestitures — (97)   Pro forma outdoor operating income $ 150,211 $ 143,718 4.5%         Reported corporate expenses $ 11,972 $ 10,351 15.7% Acquisitions and divestitures — —   Pro forma corporate expenses $ 11,972 $ 10,351 15.7%         Reported Adjusted EBITDA $ 138,239 $ 133,464 3.6% Acquisitions and divestitures — (97)   Pro forma Adjusted EBITDA $ 138,239 $ 133,367 3.7%   (a) Pro forma net revenues, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses and Adjusted EBITDA include adjustments to 2011 for acquisitions and divestitures for the same time frame as actually owned in 2012.       Three months ended   June 30,   2012 2011 Reconciliation of Outdoor Operating Income to Operating Income:     Outdoor operating income $ 150,211 $ 143,815 Less: Corporate expenses 11,972 10,351 Non-cash compensation 4,421 2,546 Depreciation and amortization 72,995 72,410 Plus: Gain on disposition of assets 3,634 911 Operating income $ 64,457 $ 59,419               Three months ended Six months ended   June 30, June 30,   2012 2011 2012 2011 Capital expenditure detail by category         Billboards - traditional $ 9,955 $ 8,621 $ 15,021 $ 17,302 Billboards - digital 12,152 11,665 20,062 20,098 Logo 1,961 2,522 3,280 4,680 Transit 63 264 84 472 Land and buildings 3,230 213 4,915 812 Operating equipment 2,434 2,555 6,180 11,289 Total capital expenditures $ 29,795 $ 25,840 $ 49,542 $ 54,653CONTACT: Keith A. Istre Chief Financial Officer (225) 926-1000 KI@lamar.com