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Press release from GlobeNewswire (a Nasdaq OMX company)

Lamar Advertising Company Announces First Quarter 2013 Operating Results

Wednesday, May 08, 2013

Lamar Advertising Company Announces First Quarter 2013 Operating Results

03:00 EDT Wednesday, May 08, 2013

BATON ROUGE, La., May 8, 2013 (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 first quarter ended March 31, 2013.

First Quarter Results

Lamar reported net revenues of $283.5 million for the first quarter of 2013 versus $266.2 million for the first quarter of 2012, a 6.5% increase. Operating income for the first quarter of 2013 remained relatively constant over the same period in 2012 at $25.9 million. During the quarter ended March 31, 2013, the Company recognized a net loss of $6.1 million as compared to a net loss of $22.8 million for the first quarter of 2012.

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 2013 was $110.0 million versus $99.8 million for the first quarter of 2012, a 10.2% 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 2013 was $49.9 million as compared to $44.2 million for the same period in 2012, an increase of 13.0%.

Pro forma net revenue for the first quarter of 2013 increased 2.4% and pro forma Adjusted EBITDA increased 5.2% as compared to the first quarter of 2012. Pro forma net revenue and Adjusted EBITDA include adjustments to the 2012 period for acquisitions and divestitures for the same time frame as actually owned in the 2013 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, 2013, Lamar had $318.5 million in total liquidity that consists of $243.0 available for borrowing under its revolving senior credit facility and $75.5 million in cash and cash equivalents.

Real Estate Investment Trust Update

As previously disclosed, we are actively considering an election to real estate investment trust (REIT) status. We submitted a private letter ruling request to the Internal Revenue Service on November 16, 2012 in conjunction with our review regarding a potential REIT election. If we receive a favorable response and decide to proceed with a REIT election, we intend to make the election for the taxable year beginning January 1, 2014, subject to the approval of our board of directors. A favorable IRS ruling, if received, does not guarantee that we would succeed in qualifying as a REIT and 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 second quarter of 2013 the Company expects net revenue to be approximately $322 million to $325 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 second quarter of 2013 and consideration of an election to real estate investment trust 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) our ability to qualify as a REIT. For additional information regarding factors that may cause actual results to differ materially from those indicated in our forward-looking statements, we refer you the risk factors included in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012, 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 8, 2013 at 10:00 a.m. central time. Instructions for the conference call and Webcast are provided below:

Conference Call

All Callers: 1-334-323-0520 or 1-334-323-9871
Passcode: Lamar
   
Replay: 1-334-323-7226
Passcode: 73357093
  Available through Monday, May 13, 2013 at 11:59 p.m. eastern time
   
Live Webcast: www.lamar.com
   
Webcast Replay: www.lamar.com
  Available through Monday, May 13, 2013 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,
  2013 2012
     
Net revenues $ 283,479 $ 266,238
     
Operating expenses (income)    
Direct advertising expenses  106,519 103,423
General and administrative expenses  54,262 51,314
Corporate expenses  12,701 11,659
Non-cash compensation 10,773 2,612
Depreciation and amortization 73,901 72,373
Gain on disposition of assets (606) (936)
  257,550 240,445
     
Operating income  25,929 25,793
     
Other expense (income)    
Loss on extinguishment of debt 29,972
Interest income (28) (58)
Interest expense 36,700 39,914
  36,672 69,828
Loss before income tax  (10,743) (44,035)
Income tax benefit  (4,673) (21,219)
     
Net loss (6,070) (22,816)
Preferred stock dividends 91 91
Net loss applicable to common stock ($ 6,161) ($ 22,907)
     
Loss per share:    
Basic and diluted loss per share ($ 0.07) ($ 0.25)
     
Weighted average common shares outstanding:    
- basic 93,974,956 93,114,125
- diluted 94,350,240 93,457,603
     
OTHER DATA     
Free Cash Flow Computation:    
Adjusted EBITDA $ 109,997 $ 99,842
Interest, net (excluding amortization of debt issuance costs) (33,766) (35,359)
Current tax expense  (413)  (445)
Preferred stock dividends  (91)  (91)
Total capital expenditures (1) (25,788) (19,747)
Free cash flow $ 49,939 $ 44,200
(1)See the capital expenditures detail included    
 below for a breakdown by category.    
     
   March 31,   December 31,
  2013 2012
Selected Balance Sheet Data:    
Cash and cash equivalents $ 75,474 $ 58,911
Working capital  136,709 103,778
Total assets 3,510,658 3,514,030
Total debt (including current maturities) 2,154,872 2,160,854
Total stockholders' equity 880,741 874,833
   
   Three months ended
   March 31,
  2013 2012
     
Other Data:    
Cash flows provided by operating activities $ 51,721 $ 36,702
Cash flows used in investing activities 29,355 24,040
Cash flows used in financing activities 5,451 10,595
     
     
Reconciliation of Free Cash Flow to Cash Flows Provided by Operating Activities:    
Cash flows provided by operating activities $ 51,721 $ 36,702
Changes in operating assets and liabilities 25,374 28,299
Total capital expenditures (25,788) (19,747)
Preferred stock dividends (91) (91)
Other (1,277) (963)
Free cash flow $ 49,939 $ 44,200
     
     
Reconciliation of Adjusted EBITDA to Net loss:    
Adjusted EBITDA $ 109,997 $ 99,842
Less:    
Non-cash compensation 10,773 2,612
Depreciation and amortization 73,901 72,373
Gain on disposition of assets (606) (936)
Operating Income 25,929 25,793
     
Less:    
Loss on extinguishment of debt 29,972
Interest income (28) (58)
Interest expense 36,700 39,914
Income tax benefit (4,673) (21,219)
Net loss ($ 6,070) ($ 22,816)
     
     
  Three months ended  
  March 31,  
  2013 2012 % Change
Reconciliation of Reported GAAP results to Pro Forma (a) results:      
Net revenue $ 283,479 $ 266,238 6.5%
Acquisitions and divestitures 10,722  
Pro forma net revenue $ 283,479 $ 276,960 2.4%
       
Direct advertising and G&A expenses $ 160,781 $ 154,737 3.9%
Acquisitions and divestitures 6,046  
Pro forma direct advertising and G&A expenses $ 160,781 $ 160,783 0.0%
       
Outdoor operating income $ 122,698 $ 111,501 10.0%
Acquisitions and divestitures 4,676  
Pro forma outdoor operating income $ 122,698 $ 116,177 5.6%
       
Corporate expenses $ 12,701 $ 11,659 8.9%
Acquisitions and divestitures  
Pro forma corporate expenses $ 12,701 $ 11,659 8.9%
       
Adjusted EBITDA $ 109,997 $ 99,842 10.2%
Acquisitions and divestitures 4,676  
Pro forma Adjusted EBITDA $ 109,997 $ 104,518 5.2%

(a) Pro forma net revenues, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses and Adjusted EBITDA include adjustments to 2012 for acquisitions and divestitures for the same time frame as actually owned in 2013.

  Three months ended
  March 31,
  2013 2012
Reconciliation of Outdoor Operating Income to Operating Income:    
Outdoor operating income $ 122,698 $ 111,501
Less: Corporate expenses 12,701 11,659
Non-cash compensation 10,773 2,612
Depreciation and amortization 73,901 72,373
Plus: Gain on disposition of assets 606 936
Operating income $ 25,929 $ 25,793
   
  Three months ended
  March 31,
  2013 2012
Capital expenditure detail by category    
Billboards - traditional $ 6,218 $ 5,066
Billboards - digital 11,623 7,910
Logo 1,863 1,319
Transit 20 21
Land and buildings 2,784 1,685
Operating equipment 3,280 3,746
Total capital expenditures $ 25,788 $ 19,747
CONTACT: Keith A. Istre
Chief Financial Officer
(225) 926-1000
KI@lamar.com

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