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8-K - FORM 8-K - LAMAR ADVERTISING CO/NEWd534293d8k.htm

Exhibit 99.1

 

LOGO

5321 Corporate Boulevard

Baton Rouge, LA 70808

Lamar Advertising Company Announces

First Quarter 2013 Operating Results

Baton Rouge, LA – May 8, 2013 — 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.

 

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

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.

 

Selected Balance Sheet Data:

   March 31,
2013
     December 31,
2012
 

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