EX-99.1 2 d51384exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1
(LAMAR LOGO)
5551 Corporate Boulevard
Baton Rouge, LA 70808
Lamar Advertising Company Announces
Third Quarter 2007 Operating Results
Baton Rouge, LA – Thursday, November 8, 2007 — 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, 2007.
Third Quarter Results
Lamar reported net revenues of $314.3 million for the third quarter of 2007 versus $292.0 million for the third quarter of 2006, a 7.6% increase. Operating income for the third quarter of 2007 was $70.4 million as compared to $59.4 million for the same period in 2006. There were net earnings of $14.5 million for the third quarter of 2007 compared to net earnings of $16.8 million for the third quarter of 2006.
Adjusted EBITDA, which we refer to herein as EBITDA (defined as operating income before non-cash compensation, depreciation and amortization and (gain) loss on disposition of assets — see reconciliation to net income at the end of this release), for the third quarter of 2007 was $150.3 million versus $134.2 million for the third quarter of 2006, a 12.0% increase.
Free cash flow (defined as 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 2007 was $33.4 million as compared to $32.9 million for the same period in 2006, a 1.5 % increase.
Pro forma net revenue for the third quarter of 2007 increased 7.0% and pro forma EBITDA increased 11.4% as compared to the third quarter of 2006. Pro forma net revenue and EBITDA include adjustments to the 2006 period for acquisitions and divestitures for the same time frame as actually owned in the 2007 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 $904.7 million for the nine months ended September 30, 2007 versus $832.9 million for the same period in 2006, an 8.6% increase. Operating income for the nine months ended September 30, 2007 was $176.5 million as compared to $145.9 million for the same period in 2006. EBITDA increased 12.1% to $416.6 million for the nine months ended September 30, 2007 versus $371.5 million for the same period in 2006. There was net income of $41.7 million for the nine months ended September 30, 2007 as compared to net income of $36.8 million for the same period in 2006.
Free Cash Flow for the nine months ended September 30, 2007 was $110.7 million as compared to $97.8 million for the same period in 2006, a 13.2% increase.

 

 

Stock Repurchase Program
During the quarter ended September 30, 2007, the Company repurchased 2,810,483 shares of its Class A common stock for an aggregate purchase price of approximately $143 million. As of September 30, 2007, the Company had approximately $264 million of authorized repurchase capacity remaining under its repurchase program. Share repurchases under the program may be made on the open market or in privately negotiated transactions. The timing and amount of any shares repurchased is determined by Lamar’s management based on its evaluation of market conditions and other factors. The repurchase program may be suspended or discontinued at any time. Any repurchased shares will be available for future use for general corporate and other purposes.
Senior Subordinated Note Offering
On October 11, 2007, Lamar Media Corp. completed an institutional private placement of $275 million aggregate principal amount of 6 5/8% Senior Subordinated Notes due 2015—Series C (the “Notes”). A portion of the net proceeds of approximately $256.7 million from the offering of the Notes was used to repay a portion of the amounts outstanding under Lamar Media’s revolving bank credit facility. The Notes mature on August 15, 2015 and bear interest at a rate of 6 5/8% per annum, which is payable semi-annually on February 15 and August 15 of each year, beginning February 15, 2008.
Guidance
For the fourth quarter of 2007 the Company expects net revenue to be between $301 million and $304 million. On a pro forma basis this represents an increase of between 5% and 6% over the same period in 2006.
Forward Looking Statements
This press release contains forward-looking statements, including the statements regarding guidance for the fourth quarter of 2007 and the Company’s ongoing stock repurchase plan. 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 continued popularity of outdoor advertising as an advertising medium; (3) the regulation of the outdoor advertising industry; (4) our need for and ability to obtain additional funding for acquisitions or operations; (5) the integration of companies that we acquire and our ability to recognize cost savings or operating efficiencies as a result of these acquisitions; (6) the strength of the economy generally and the demand for advertising in particular; (7) the market for our Class A common stock and our management’s allocation of working capital to fund our stock repurchase program as opposed to other uses and (8) other factors described in the reports on Forms 10-K and 10-Q and the registration statements that we file from time to time with the SEC. 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
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 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 Thursday, November 8, 2007 at 10:00 a.m. central time. Instructions for the conference call and Webcast are provided below:
Conference Call
     
All Callers:
  1-334-323-9871 or 1-334-323-9872
Passcode:
  Lamar
 
    
Replay:
  1-877-919-4059
Passcode:
  44894035
 
  Available through Monday, November 12, 2007 at 11:59 p.m. eastern time
 
    
Live Webcast:
  www.lamar.com
 
    
Webcast Replay:
  www.lamar.com
Available through Monday, November 12, 2007 at 11:59 p.m. eastern time
General Information on Lamar
Lamar Advertising Company is a leading outdoor advertising company currently operating over 150 outdoor advertising companies in 44 states and Puerto Rico, logo businesses in 19 states and the province of Ontario, Canada and over 70 transit advertising franchises in the United States, Canada and Puerto Rico.
         
 
  Company Contact:   Keith A. Istre
Chief Financial Officer
(225) 926-1000
KI@lamar.com

 

 

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,  
    2007     2006     2007     2006  
Net revenues
   $ 314,253     $ 292,038     $ 904,663     $ 832,948  
 
                        
Operating expenses (income)
                                
Direct advertising expenses
     102,121       98,550       305,673       290,174  
General and administrative expenses
     50,004       48,394       147,386       140,512  
Corporate expenses
     11,854       10,881       34,992       30,778  
Non-cash compensation
     6,162       6,302       21,754       12,212  
Depreciation and amortization
     74,352       76,030       220,820       223,297  
Gain on disposition of assets
     (675 )     (7,504 )     (2,506 )     (9,894 )
 
                        
 
     243,818       232,653       728,119       687,079  
 
                        
Operating income
     70,435       59,385       176,544       145,869  
 
                                
Other expense (income)
                                
Gain on disposition of investment
     —       —       (15,448 )     —  
Interest income
     (302 )     (374 )     (1,046 )     (979 )
Interest expense
     42,537       29,763       117,674       81,732  
 
                        
 
     42,235       29,389       101,180       80,753  
 
                        
 
                                
Income before income tax expense
     28,200       29,996       75,364       65,116  
Income tax expense
     13,675       13,157       33,620       28,365  
 
                        
 
                                
Net income
     14,525       16,839       41,744       36,751  
Preferred stock dividends
     91       91       273       273  
 
                        
Net income applicable to common stock
   $ 14,434     $ 16,748     $ 41,471     $ 36,478  
 
                        
 
                                
Earnings per share:
                                
Basic earnings per share
   $ 0.15     $ 0.16     $ 0.42     $ 0.35  
 
                        
Diluted earnings per share
   $ 0.15     $ 0.16     $ 0.42     $ 0.35  
 
                        
Cash dividends declared per share of common stock
   $ —     $ —     $ 3.25     $ —  
 
                        
 
                                
Weighted average common shares outstanding:
                                
- basic
     96,194,236       101,994,265       97,676,898       103,416,169  
- diluted
     97,088,195       102,908,772       98,478,178       104,390,668  
 
                                
OTHER DATA
                                
Free Cash Flow Computation:
                                
EBITDA
   $ 150,274     $ 134,213     $ 416,612     $ 371,484  
Interest, net
     (41,102 )     (27,939 )     (113,288 )     (76,875 )
Current tax expense
     (12,206 )     (13,488 )     (18,916 )     (22,953 )
Preferred stock dividends
     (91 )     (91 )     (273 )     (273 )
Total capital expenditures (1)
     (63,440 )     (59,837 )     (173,445 )     (173,590 )
 
                        
Free cash flow
   $ 33,435     $ 32,858     $ 110,690     $ 97,793  
 
                        
 
(1)   See the capital expenditures detail included in this release for a breakdown by category.
                 
    September 30,   December 31,
    2007   2006
Selected Balance Sheet Data:
                
Cash and cash equivalents
   $ 10,758     $ 11,796  
Working capital
     99,038       119,791  
Total assets
     4,005,037       3,924,228  
Total debt (including current maturities)
     2,639,526       1,990,468  
Total stockholders’ equity
     956,322       1,538,533  

 

 

                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2007     2006     2007     2006  
Other Data:
                                
Cash flows provided by operating activities
   $ 102,103     $ 107,025     $ 245,604     $ 263,905  
Cash flows used in investing activities
     83,754       103,092       249,311       323,660  
Cash flows (used in) provided by financing activities
     (20,159 )     (2,440 )     2,849       47,275  
 
                                
Reconciliation of Free Cash Flow to Cash Flows Provided by Operating Activities:
                                
Cash flows provided by operating activities
   $ 102,103     $ 107,025     $ 245,604     $ 263,905  
Changes in operating assets and liabilities
     (3,448 )     (12,920 )     35,009       11,558  
Total capital expenditures
     (63,440 )     (59,837 )     (173,445 )     (173,590 )
Preferred stock dividends
     (91 )     (91 )     (273 )     (273 )
Other
     (1,689 )     (1,319 )     3,795       (3,807 )
 
                        
 
                                
Free cash flow
   $ 33,435     $ 32,858     $ 110,690     $ 97,793  
 
                        
 
                                
Reconciliation of EBITDA to Net income:
                                
EBITDA
   $ 150,274     $ 134,213     $ 416,612     $ 371,484  
Less:
                                
Non-cash compensation
     6,162       6,302       21,754       12,212  
Depreciation and amortization
     74,352       76,030       220,820       223,297  
Gain on disposition of assets
     (675 )     (7,504 )     (2,506 )     (9,894 )
 
                        
 
                                
Operating Income
     70,435       59,385       176,544       145,869  
 
                                
Less:
                                
Gain on disposition of investment
     —       —       (15,448 )     —  
Interest income
     (302 )     (374 )     (1,046 )     (979 )
Interest expense
     42,537       29,763       117,674       81,732  
Income tax expense
     13,675       13,157       33,620       28,365  
 
                        
 
                                
Net income
   $ 14,525     $ 16,839     $ 41,744     $ 36,751  
 
                        

 

                         
    Three months ended        
    September 30,        
    2007     2006     % Change  
Reconciliation of Reported Basis to Pro Forma (a) Basis:
                        
Reported net revenue
   $ 314,253     $ 292,038       7.6 %
Acquisitions and divestitures
     —       1,763          
 
                    
Pro forma net revenue
   $ 314,253     $ 293,801       7.0 %
 
                        
Reported direct advertising and G&A expenses
   $ 152,125     $ 146,944       3.5 %
Acquisitions and divestitures
     —       856          
 
                    
Pro forma direct advertising and G&A expenses
   $ 152,125     $ 147,800       2.9 %
 
                        
Reported outdoor operating income
   $ 162,128     $ 145,094       11.7 %
Acquisitions and divestitures
     —       907          
 
                    
Pro forma outdoor operating income
   $ 162,128     $ 146,001       11.0 %
 
                        
Reported Corporate expenses
   $ 11,854     $ 10,881       8.9 %
Acquisitions and divestitures
     —       224          
 
                    
Pro forma Corporate expenses
   $ 11,854     $ 11,105       6.7 %
 
                        
Reported EBITDA
   $ 150,274     $ 134,213       12.0 %
Acquisitions and divestitures
     —       683          
 
                    
Pro forma EBITDA
   $ 150,274     $ 134,896       11.4 %
 
                    
 
(a)   Pro forma net revenues, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses, and EBITDA include adjustments to 2006 for acquisitions and divestitures for the same time frame as actually owned in 2007.
                 
    Three months ended  
    September 30,  
    2007     2006  
Reconciliation of Outdoor Operating Income to Operating Income:
                
 
                
Outdoor Operating income
   $ 162,128     $ 145,094  
 
                
Less: Corporate expenses
     (11,854 )     (10,881 )
 
                
Non-cash compensation
     (6,162 )     (6,302 )
 
                
Depreciation and amortization
     (74,352 )     (76,030 )
 
                
Plus: Gain on disposition of assets
     675       7,504  
 
            
 
                
Operating income
   $ 70,435     $ 59,385  
 
            
                                 
    Three months ended     Nine months ended  
    September 30,     September 30,  
    2007     2006     2007     2006  
Capital expenditure detail by category
                                
Billboards — traditional
   $ 17,581     $ 22,682     $ 54,674     $ 57,151  
Billboards — digital
     35,382       25,185       76,171       62,236  
Logo
     2,772       2,025       7,571       5,978  
Transit
     517       154       1,103       507  
Land and buildings
     3,614       6,728       22,424       18,287  
Operating equipment
     3,574       2,607       11,502       19,283  
Storm reconstruction
     —       456       —       10,148  
 
                        
Total capital expenditures
   $ 63,440     $ 59,837     $ 173,445     $ 173,590