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Press release from GlobeNewswire (a Nasdaq OMX company)

Lamar Advertising Company Announces Third Quarter 2012 Operating Results

Wednesday, November 07, 2012

Lamar Advertising Company Announces Third Quarter 2012 Operating Results03:00 EST Wednesday, November 07, 2012BATON ROUGE, La., Nov. 7, 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 third quarter ended September 30, 2012.Three Months Results Lamar reported net revenues of $306.3 million for the third quarter of 2012 versus $296.7 million for the third quarter of 2011, a 3.2% increase. Operating income for the third quarter of 2012 was $63.5 million as compared to $55.4 million for the same period in 2011. Lamar recognized $11.5 million in net income for the third quarter of 2012 compared to net income of $4.0 million for the third 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 at the end of this release) for the third quarter of 2012 was $140.6 million versus $132.6 million for the third quarter of 2011, a 6.0% 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 third quarter of 2012 was $77.7 million as compared to $66.0 million for the same period in 2011, a 17.8% increase. Pro forma net revenue for the third quarter of 2012 increased 2.0% and pro forma Adjusted EBITDA increased 4.9% as compared to the third 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.Nine Months Results Lamar reported net revenues of $877.4 million for the nine months ended September 30, 2012 versus $845.2 million for the same period in 2011, a 3.8% increase. Operating income for the nine months ended September 30, 2012 was $153.8 million as compared to $140.5 million for the same period in 2011. Adjusted EBITDA for the nine months ended September 30, 2012 was $378.6 million versus $361.3 million for the same period in 2011. There was net income of $2.6 million for the nine months ended September 30, 2012 as compared to net income of $2.2 million for the same period in 2011. Free Cash Flow for the nine months ended September 30, 2012 increased 21.6% to $195.6 million as compared to $160.8 million for the same period in 2011.Liquidity As of September 30, 2012, Lamar had $265.7 million in total liquidity that consists of $227.3 million available for borrowing under its revolving senior credit facility and approximately $38.4 million in cash and cash equivalents.Recent Developments On October 30, 2012 Lamar announced that its wholly owned subsidiary, Lamar Media Corp., closed a private placement of $535 million in aggregate principal amount of 5% Senior Subordinated Notes due 2023. The proceeds of the offering to Lamar Media, after the payment of fees and expenses, were approximately $527.1 million. On October 31, 2012 Lamar Media Corp. closed its previously announced acquisition of NextMedia Outdoor, Inc., which has outdoor operations in Colorado, Kansas, Nebraska, North Carolina, South Carolina, Virginia, Wyoming and Wisconsin.Guidance As noted above, Lamar Media Corp. acquired NextMedia Outdoor, Inc. effective October 31, 2012. Due to the timing of the closing of the transaction, guidance for Q4 2012 does not include expected revenue from the NextMedia assets during November and December. Guidance for Q1 2013 will include revenue from the NextMedia assets and will be pro forma comparative. For the fourth quarter of 2012 the Company expects net revenue to be approximately $298 to $301 million. On a pro forma basis this represents an increase of approximately 2% to 3%.Forward Looking Statements This press release contains forward-looking statements, including the statements regarding guidance for the fourth quarter of 2012. 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, 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, November 7, 2012 at 10:30 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:37477136   Available through Monday, November 12, 2012 at 11:59 p.m. eastern time    Live Webcast: www.lamar.com    Webcast Replay: www.lamar.com   Available through Monday, November 12, 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 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 Nine months ended   September 30, September 30,   2012 2011 2012 2011           Net revenues  $ 306,286  $ 296,701  $ 877,396  $ 845,248           Operating expenses (income)         Direct advertising expenses   103,845  103,200  312,339  305,809 General and administrative expenses   50,167  49,534  151,071  145,359 Corporate expenses   11,707  11,320  35,338  32,804 Non-cash compensation  3,869  2,660  10,902  7,338 Depreciation and amortization  73,915  75,171  219,283  221,454 Gain on disposition of assets  (739)  (609)  (5,309)  (7,967)    242,764  241,276  723,624  704,797 Operating income   63,522  55,425  153,772  140,451           Other expense (income)         Loss on extinguishment of debt  1,984  451  31,956  451 Interest income  (147)  (428)  (270)  (511) Interest expense  38,534  42,530  117,081  129,457    40,371  42,553  148,767  129,397           Income before income tax   23,151  12,872  5,005  11,054 Income tax expense   11,655  8,880  2,403  8,876           Net income   11,496  3,992  2,602  2,178 Preferred stock dividends  91  91  273  273 Net income applicable to common stock  $ 11,405  $ 3,901  $ 2,329  $ 1,905           Earnings per share:         Basic income per share  $ 0.12  $ 0.04  $ 0.02  $ 0.02           Diluted income per share  $ 0.12  $ 0.04  $ 0.02  $ 0.02           Weighted average common shares outstanding:         - basic  93,423,063  92,901,470  93,265,621  92,808,705 - diluted  93,729,512  93,076,619  93,550,891  93,171,700          OTHER DATA          Free Cash Flow Computation:         Adjusted EBITDA  $ 140,567  $ 132,647  $ 378,648  $ 361,276 Interest, net  (34,057)  (37,423)  (103,710)  (115,126) Current tax expense   (521)  (646)  (1,304)  (1,849) Preferred stock dividends  (91)  (91)  (273)  (273) Total capital expenditures (1)  (28,205)  (28,529)  (77,747)  (83,182) Free cash flow  $ 77,693  $ 65,958  $ 195,614  $ 160,846(1)See the capital expenditures detail included below for a breakdown by category.                         September 30,  December 31,       2012 2011 Selected Balance Sheet Data:         Cash and cash equivalents      $ 38,448  $ 33,503 Working capital      100,836  95,281 Total assets      3,393,194  3,427,353 Total debt (including current maturities)      2,075,608  2,158,528 Total stockholders' equity      860,931  838,998             Three months ended Nine months ended   September 30, September 30,   2012 2011 2012 2011           Other Data:         Cash flows provided by operating activities  $ 119,326  $ 112,266  $ 253,349  $ 222,705 Cash flows used in investing activities  68,250  33,631  127,344  87,992 Cash flows used in financing activities  112,130  55,109  121,582  184,427                     Reconciliation of Free Cash Flow to Cash Flows Provided by Operating Activities:         Cash flows provided by operating activities  $ 119,326  $ 112,266  $ 253,349  $ 222,705 Changes in operating assets and liabilities  (11,769)  (15,858)  24,593  26,142 Total capital expenditures  (28,205)  (28,529)  (77,747)  (83,182) Preferred stock dividends  (91)  (91)  (273)  (273) Other  (1,568)  (1,830)  (4,308)  (4,546) Free cash flow  $ 77,693  $ 65,958  $ 195,614  $ 160,846                     Reconciliation of Adjusted EBITDA to Net income:         Adjusted EBITDA  $ 140,567  $ 132,647  $ 378,648  $ 361,276 Less:         Non-cash compensation  3,869  2,660  10,902  7,338 Depreciation and amortization  73,915  75,171  219,283  221,454 Gain on disposition of assets  (739)  (609)  (5,309)  (7,967) Operating Income  63,522  55,425  153,772  140,451           Less:         Interest income  (147)  (428)  (270)  (511) Loss on extinguishment of debt  1,984  451  31,956  451 Interest expense  38,534  42,530  117,081  129,457 Income tax expense   11,655  8,880  2,403  8,876 Net income   $ 11,496  $ 3,992  $ 2,602  $ 2,178             Three months ended      September 30,      2012 2011 % Change Reconciliation of Reported Basis to Pro Forma (a) Basis:       Reported net revenue  $ 306,286  $ 296,701 3.2% Acquisitions and divestitures  —   3,633   Pro forma net revenue  $ 306,286  $ 300,334 2.0%         Reported direct advertising and G&A expenses  $ 154,012  $ 152,734 0.8% Acquisitions and divestitures  —   2,314   Pro forma direct advertising and G&A expenses  $ 154,012  $ 155,048 (0.7%)         Reported outdoor operating income  $ 152,274  $ 143,967 5.8% Acquisitions and divestitures  —   1,319   Pro forma outdoor operating income  $ 152,274  $ 145,286 4.8%         Reported corporate expenses  $ 11,707  $ 11,320 3.4% Acquisitions and divestitures  —   —    Pro forma corporate expenses  $ 11,707  $ 11,320 3.4%         Reported Adjusted EBITDA  $ 140,567  $ 132,647 6.0% Acquisitions and divestitures  —   1,319   Pro forma Adjusted EBITDA  $ 140,567  $ 133,966 4.9%         (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   September 30,    2012 2011 Reconciliation of Outdoor Operating Income to Operating Income:     Outdoor operating income  $ 152,274  $ 143,967 Less: Corporate expenses  11,707  11,320 Non-cash compensation  3,869  2,660 Depreciation and amortization  73,915  75,171 Plus: Gain on disposition of assets  739  609 Operating income  $ 63,522  $ 55,425         Three months ended Nine months ended   September 30, September 30,   2012 2011 2012 2011 Capital expenditure detail by category         Billboards - traditional  $ 5,917  $ 7,609  $ 20,938  $ 24,911 Billboards - digital  12,272  11,983  32,334  32,081 Logo  2,267  2,777  5,547  7,457 Transit  26  168  110  640 Land and buildings  4,486  3,026  9,401  3,838 Operating equipment  3,237  2,966  9,417  14,255 Total capital expenditures  $ 28,205  $ 28,529  $ 77,747  $ 83,182CONTACT: Company Contact: Keith A. Istre Chief Financial Officer (225) 926-1000 KI@lamar.com