EX-99.1 2 d59189exv99w1.htm PRESS RELEASE exv99w1
Exhibit 99.1
(LAMAR LOGO)
5551 Corporate Boulevard
Baton Rouge, LA 70808
Lamar Advertising Company Announces
Second Quarter 2008 Operating Results
Baton Rouge, LA — Wednesday, August 6, 2008 — 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, 2008.
Three Month Results
Lamar reported net revenues of $323.8 million for the second quarter of 2008 versus $315.2 million for the second quarter of 2007, a 2.7% increase. Operating income for the second quarter of 2008 was $66.6 million as compared to $74.6 million for the same period in 2007. There was net income of $14.3 million for the second quarter of 2008 compared to net earnings of $18.4 million from the second quarter of 2007.
Adjusted EBITDA, which we refer to herein as 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 second quarter of 2008 was $149.8 million versus $152.4 million for the second quarter of 2007, a 1.7% decrease.
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 second quarter of 2008 was $52.8 million as compared to $39.7 million for the same period in 2007, a 33.0% increase.
Pro forma net revenue, excluding the Vista markets, for the second quarter of 2008 increased 0.3% and pro forma EBITDA, excluding the Vista markets, decreased 4.5 % as compared to the second quarter of 2007. Pro forma net revenue and EBITDA include adjustments to the 2007 period for acquisitions and divestitures for the same time frame as actually owned in the 2008 period. In addition, our presentation of pro forma net revenue and EBITDA excludes the operating results from the markets acquired as a result of the acquisition of Vista Media (“Vista”), which closed on May 16, 2008. As a result, our pro forma results for the 2008 period exclude the operating results from the Vista markets and no adjustment has been made to the 2007 period with respect to the Vista markets. 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 Month Results
Lamar reported net revenues of $606.6 million for the six months ended June 30, 2008 versus $590.4 million for the same period in 2007, a 2.7% increase. Operating income for the six months ended June 30, 2008 was $102.7 million as compared to $106.1 million for the same period in 2007. EBITDA decreased slightly to $264.0 million for the six months ended June 30, 2008 versus $266.3 million for the same period in 2007. There was net income of $12.8 million for the six months ended June 30, 2008 as compared to net income of $27.2 million for the same period in 2007.
Free Cash Flow for the six months ended June 30, 2008 remained relatively constant at $77.0 million as compared to $77.3 million for the same period in 2007.

 

 

Stock Repurchase Program
During the quarter ended June 30, 2008, the Company repurchased 1,103,676 shares of its Class A common stock for an aggregate purchase price of approximately $40.4 million. As of June 30, 2008, the Company had approximately $127 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.
Guidance
Beginning with the third quarter 2008, guidance will include revenue for the Vista acquisition which closed on May 16, 2008. For the third quarter of 2008 the Company expects net revenue to be approximately $309 million. On a pro forma basis this represents a decrease of approximately 5% over the same period in 2007.
Forward Looking Statements
This press release contains forward-looking statements, including the statements regarding guidance for the third quarter of 2008, the timing of and revenues related to the Vista acquisition 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 strength of the economy generally and the demand for advertising in particular; (4) regulation of the outdoor advertising industry that could adversely affect us; (5) our need for and ability to obtain additional funding for acquisitions or operations; (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 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 Wednesday, August 6, 2008 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:
  1-877-919-4059
Passcode:
  35667419
 
  Available through Monday, August 11, 2008 at 11:59 p.m. eastern time
 
    
Live Webcast:
  www.lamar.com
 
    
Webcast Replay:
  www.lamar.com
 
    
 
  Available through Monday, August 11, 2008 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, Canada and Puerto Rico, logo businesses in 19 states and the province of Ontario, Canada and over 65 transit advertising companies 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     Six months ended  
    June 30,     June 30,  
    2008     2007     2008     2007  
Net revenues
   $ 323,819     $ 315,225     $ 606,595     $ 590,410  
 
                        
 
                                
Operating expenses (income)
                                
Direct advertising expenses
     110,105       102,769       214,892       203,552  
General and administrative expenses
     50,136       48,506       101,120       97,382  
Corporate expenses
     13,780       11,587       26,570       23,138  
Non-cash compensation
     5,959       6,145       7,369       15,592  
Depreciation and amortization
     79,303       73,150       156,996       146,468  
Gain on disposition of assets
     (2,069 )     (1,519 )     (3,012 )     (1,831 )
 
                        
 
     257,214       240,638       503,935       484,301  
 
                        
Operating income
     66,605       74,587       102,660       106,109  
 
                                
Other expense (income)
                                
Gain on disposition of investment
     —       —       (1,533 )     (15,448 )
Interest income
     (231 )     (251 )     (680 )     (744 )
Interest expense
     39,165       43,292       79,933       75,137  
 
                        
 
     38,934       43,041       77,720       58,945  
 
                        
 
                                
Income before income tax expense
     27,671       31,546       24,940       47,164  
Income tax expense
     13,327       13,166       12,130       19,945  
 
                        
 
                                
Net income
     14,344       18,380       12,810       27,219  
Preferred stock dividends
     91       91       182       182  
 
                        
Net income applicable to common stock
   $ 14,253     $ 18,289     $ 12,628     $ 27,037  
 
                        
 
                                
Earnings per share:
                                
Basic earnings per share
   $ 0.15     $ 0.19     $ 0.14     $ 0.27  
 
                        
Diluted earnings per share
   $ 0.15     $ 0.19     $ 0.14     $ 0.27  
 
                        
Cash dividends declared per share of common stock
   $ —     $ —     $ —     $ 3.25  
 
                        
 
                                
Weighted average common shares outstanding:
                                
- basic
     92,172,492       97,647,094       92,801,232       98,430,517  
- diluted
     92,409,086       98,487,257       93,024,414       99,215,975  
 
                                
OTHER DATA
                                
Free Cash Flow Computation:
                                
EBITDA
   $ 149,798     $ 152,363     $ 264,013     $ 266,338  
Interest, net
     (37,693 )     (41,924 )     (76,767 )     (72,186 )
Current tax expense
     (1,826 )     (10,704 )     (2,447 )     (6,710 )
Preferred stock dividends
     (91 )     (91 )     (182 )     (182 )
Total capital expenditures (1)
     (57,368 )     (59,941 )     (107,613 )     (110,005 )
 
                        
Free cash flow
   $ 52,820     $ 39,703     $ 77,004     $ 77,255  
 
                        
 
(1)   See the capital expenditures detail included below for a breakdown by category.
                 
    June 30,   December 31,
Selected Balance Sheet Data:   2008   2007
Cash and cash equivalents
     12,059       76,048  
Working capital
     131,568       155,229  
Total assets
     4,189,301       4,081,763  
Total debt (including current maturities)
     2,911,220       2,725,770  
Total stockholders’ equity
     861,579       931,007  

 

 

                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2008     2007     2008     2007  
Other Data:
                                
Cash flows provided by operating activities
   $ 108,959     $ 110,149     $ 131,318     $ 143,501  
Cash flows used in investing activities
     179,125       84,339       292,417       165,557  
Cash flows provided by (used in) financing activities
     59,822       (13,325 )     97,232       23,008  
 
                                
Reconciliation of Free Cash Flow to Cash Flows Provided by Operating Activities:
                                
Cash flows provided by operating activities
   $ 108,959     $ 110,149     $ 131,318     $ 143,501  
Changes in operating assets and liabilities
     4,454       (10,254 )     59,074       38,457  
Total capital expenditures
     (57,368 )     (59,941 )     (107,613 )     (110,005 )
Preferred stock dividends
     (91 )     (91 )     (182 )     (182 )
Other
     (3,134 )     (160 )     (5,593 )     5,484  
 
                        
 
Free cash flow
   $ 52,820     $ 39,703     $ 77,004     $ 77,255  
 
                        
 
                                
Reconciliation of EBITDA to Net income:
                                
EBITDA
   $ 149,798     $ 152,363     $ 264,013     $ 266,338  
Less:
                                
Non-cash compensation
     5,959       6,145       7,369       15,592  
Depreciation and amortization
     79,303       73,150       156,996       146,468  
Gain on disposition of assets
     (2,069 )     (1,519 )     (3,012 )     (1,831 )
 
                        
Operating Income
     66,605       74,587       102,660       106,109  
 
                                
Less:
                                
Interest income
     (231 )     (251 )     (680 )     (744 )
Gain on disposition of investment
     —       —       (1,533 )     (15,448 )
Interest expense
     39,165       43,292       79,933       75,137  
Income tax expense
     13,327       13,166       12,130       19,945  
 
                        
 
Net income
   $ 14,344     $ 18,380     $ 12,810     $ 27,219  
 
                        

 

 

                         
    Three Months Ended        
    June 30,     %  
    2008     2007     Change  
Reconciliation of Reported Basis to Pro Forma (a) Basis:
                        
 
                        
Reported net revenue
   $ 323,819     $ 315,225       2.7 %
Acquisitions and divestitures, excluding the Vista markets
     —       170          
Less net revenue -Vista markets
     (7,530 )     —          
 
                    
Pro forma net revenue, excluding the Vista markets
   $ 316,289     $ 315,395       0.3 %
 
                        
 
                        
Reported direct advertising and G&A expenses
   $ 160,241     $ 151,275       5.9 %
Acquisitions and divestitures, excluding the Vista markets
     —       (193 )        
Less direct advertising and G&A expenses -Vista markets
     (3,638 )     —          
 
                    
Pro forma direct advertising and G&A expenses, excluding the Vista markets
   $ 156,603     $ 151,082       3.7 %
 
                        
Reported outdoor operating income
   $ 163,578     $ 163,950       (0.2 %)
Acquisitions and divestitures, excluding the Vista markets
     —       363          
Less outdoor operating income — Vista markets
     (3,892 )     —          
 
                    
Pro forma outdoor operating income, excluding the Vista markets
   $ 159,686     $ 164,313       (2.8 %)
 
                        
Reported corporate expenses
   $ 13,780     $ 11,587       18.9 %
Acquisitions and divestitures, excluding the Vista markets
     —       —          
 
                    
Pro forma corporate expenses, excluding the Vista markets
   $ 13,780     $ 11,587       18.9 %
 
                        
Reported EBITDA
   $ 149,798     $ 152,363       (1.7 %)
Acquisitions and divestitures, excluding the Vista markets
     —       363          
Less EBITDA — Vista markets
     (3,892 )     —          
 
                    
Pro forma EBITDA, excluding the Vista markets
   $ 145,906     $ 152,726       (4.5 %)
 
                    
 
(a)   Pro forma net revenues, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses, and EBITDA include adjustments to 2007 for acquisitions and divestitures for the same time frame as actually owned in 2008, excluding the operating results of the Vista markets. As a result, our pro forma results for the 2008 period exclude the operating results from the Vista markets, and no adjustment has been made to the 2007 period with respect to the acquisition of the markets.
                 
    Three months ended  
    June 30,  
    2008     2007  
Reconciliation of Outdoor Operating Income to Operating Income:
                
 
                
Outdoor Operating income
   $ 163,578     $ 163,950  
Less: Corporate expenses
     (13,780 )     (11,587 )
Non-cash compensation
     (5,959 )     (6,145 )
Depreciation and amortization
     (79,303 )     (73,150 )
Plus: Gain on disposition of assets
     2,069       1,519  
 
            
 
                
Operating income
   $ 66,605     $ 74,587  
 
            

 

 

                                 
    Three months ended     Six months ended  
    June 30,     June 30,  
    2008     2007     2008     2007  
Capital expenditure detail by category
                                
Billboards — traditional
   $ 21,338     $ 16,568     $ 39,790     $ 37,093  
Billboards — digital
     24,794       25,003       50,036       40,789  
Logo
     1,462       3,025       3,116       4,799  
Transit
     258       147       348       586  
Land and buildings
     5,173       9,710       6,156       18,810  
Operating equipment
     4,343       5,488       8,167       7,928  
 
                        
Total capital expenditures
   $ 57,368     $ 59,941     $ 107,613     $ 110,005