UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended April 30,July 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______ to _______
Commission file number 33-596240-20833
LAMAR ADVERTISING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 72-1205791
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
5551 Corporate Blvd.,
Baton Rouge, LA 70808 70806
(Address of principal (Zip Code)
executive officers)
Registrant's telephone number, including area code (504) 926-1000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes No X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding as of
Class June 11,September 14, 1996
Voting
Class A Common Stock,
no$ .001 par value 31,432.4614,953,426
Class B Common Stock,$ .001 par value 13,822,639
CONTENTS
Page
PART I - FINANCIAL INFORMATION
ITEM I.1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
April 30,July 31, 1996 (unaudited) and October
31, 1995 1 - 2
Condensed Consolidated Statements of Earnings
Three Months ending April 30,July 31, 1996 and 1995
and SixNine Months ending April 30,July 31, 1996 and
1995 (unaudited) 3
Condensed Consolidated Statements of Cash Flows
SixNine Months ending April 30,July 31, 1996 and 1995
(unaudited) 4 - 5
Notes to Condensed Consolidated Financial
Statements 6 - 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 1011
PART II - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders 1112
ITEM 6. Exhibits and Reports on Form 8-K 1112
Signatures 1112
PART I - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
LAMAR ADVERTISING COMPANY AND
SUBSIDIARYSUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
April 30,July 31, October 31,
1996 1995
(Unaudited)
ASSETS
Cash and cash equivalents $ 1,7521,965 5,886
Receivables
Trade accounts 14,00015,573 11,292
Affiliates, related parties
and employees 450531 583
Other 81433 109
Less allowance for doubtful accounts ( 872)1,046) ( 551)
Net receivables 13,65915,491 11,433
Prepaid expenses 1,1451,112 1,247
Other current assets 1,6891,793 1,266
Total current assets 18,24520,361 19,832
Property, plant and equipment 183,270189,115 168,402
Less accumulated depreciation
and amortization ( 81,888)83,930) ( 77,524)
Net property, plant and equipment 101,382105,185 90,878
Intangible assets 14,54816,891 13,406
Receivables 806751 918
Deferred taxes 4,0433,680 5,951
Other assets 3,3363,399 2,900
$142,360 133,885
$150,267 133,885
======= =======
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Trade accounts payable $ 2,1913,115 2,435
Accrued expenses 7,0145,575 9,733
Current maturities of long- termlong-term
debt 4,6175,326 3,479
Deferred income 3,2594,866 2,448
Total current liabilities 17,08118,882 18,095
Long termLong-term debt 151,673154,681 142,572
Deferred income 754779 749
Other liabilities 1,1401,214 623
Total liabilities 170,648175,556 162,039
- 1 --1-
LAMAR ADVERTISING COMPANY AND
SUBSIDIARYSUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
April 30,July 31, October 31,
1996 1995
(Unaudited)
STOCKHOLDERS' DEFICIT (Note 3)
Class A preferred stock, par
value $638, 63.80$63.80 cumulative,
authorized 10,000 sharesshares; issued
and outstanding, 5,719.49 shares
and 0 shares at April 30,July 31, 1996
and October 31, 1995, respectively 3,649 0
Class A common stock, no$.001 par
value, $10 stated value.
Authorized 100,00050,000,000 shares;
issued and outstanding 31,432.4610,180,483
shares and 41,599.3615,657,623 shares
outstanding at April 30,July 31, 1996 and October 31,
1995, respectively 315 41610 16
Class B common stock, no$.001 par
value, $10 stated value.
Authorized 100,00025,000,000 shares;
issued and outstanding 014,301,537
shares and 19816,897,379 shares at
April 30,July 31, 1996 and October 31, 1995,
respectively 0 214 17
Accumulated deficit ( 32,252)28,962) ( 28,572)28,187)
Stockholders' Deficit ( 28,288)25,289) ( 28,154)
Total liabilities and
stockholders' deficit $142,360$ 150,267 133,885
======= =======
- 2 -
LAMAR ADVERTISING COMPANY AND
SUBSIDIARYSUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Three Months SixNine Months
Ending April 30,July 31, Ended April 30,July 31,
1996 1995 1996 1995
Revenues
NetOutdoor advertising, revenue $28,838 25,390 56,261 49,686net $31,386 26,609 87,647 76,295
Rental income 180 154 354 298119 110 473 408
Management fees from related
and affiliated parties 15 7 30 15
29,033 25,551 56,645 49,9998 45 23
31,520 26,727 88,165 76,726
Operating expenses
Outdoor advertising:
Direct advertising
expenses 10,049 9,043 20,893 18,184
Selling, general10,076 8,380 30,969 26,564
General and administrative
expenses 7,004 6,667 14,695 13,2438,147 7,393 22,842 20,636
Depreciation and
amortization 3,641 3,609 7,028 6,768
20,694 19,319 42,616 38,1953,540 3,186 10,568 9,954
21,763 18,959 64,379 57,154
Operating income 8,339 6,232 14,029 11,804
Non-operating income
(expense)9,757 7,768 23,786 19,572
Other expense (income):
Interest income 48 40 101 81( 39) ( 52) ( 140)( 133)
Interest expense ( 4,025) ( 3,957) ( 7,852)( 7,857)4,105 4,091 11,957 11,948
Loss on disposition
of assets ( 493) ( 635) ( 581)( 816)237 188 818 1,004
Other expenses ( 94) ( 138) ( 246)( 410)
( 4,564) ( 4,690) ( 8,578)( 9,002)8 274 254 684
4,311 4,501 12,889 13,503
Earnings before
income taxes 3,775 1,542 5,451 2,8025,446 3,267 10,897 6,069
Income tax(expense)benefittax expense (benefit) 2,230 ( 1,515) 751713) 4,420 ( 2,190) 1,7672,480)
Net earnings $ 2,260 2,293 3,261 4,569
======= ======= ======= =======3,216 3,980 6,477 8,549
Preferred stock dividends ( 91) 0 ( 182)274) 0
Net incomeearnings applicable to
common stock 2,169 2,293 3,079 4,5693,125 3,980 6,203 8,549
======= ======= ======= =======
EarningsNet earnings per common
share Primary $ 65.76 52.88 84.53 105.36.13 $ .12 $ .23 $ .26
======= ======= ======= =======
Weighted average common
shares outstanding 32,981 43,364 36,429 43,364
======= ======= ======= =======24,482,020 33,775,222 27,068,544 33,775,222
========== ========== ========== ==========
- 3 -
LAMAR ADVERTISING COMPANY AND
SUBSIDIARYSUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
SixNine Months Ending
April 30,July 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings:earnings $ 3,261 4,5696,477 8,549
Adjustments to reconcile net earnings
to net cash provided by
operating activities:
Depreciation and amortization 7,028 6,76810,568 9,954
Loss on disposition of assets 581 816818 1,004
Deferred taxes 1,9082,271 ( 2,208)3,312)
Provision for doubtful accounts 621 203550 330
Changes in operating assets and
liabilities:
Increase in receivables ( 2,608)3,988) ( 2,854)2,062)
(Increase) Decrease in prepaid
expenses 6797 ( 192)
(Increase) decrease198)
Increase in other assets ( 323)282) ( 296)965)
Increase (decrease) in trade accounts payable ( 243) 1680 384
Decrease in accrued expenses ( 2,718)4,157) ( 1,880)3,475)
Increase (decrease) in other liabilities 95 ( 1)113 26
Increase in deferred income 817 512,448 517
Net cash provided by operating
activities 8,486 4,97715,595 10,752
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in notes receivable ( 206)675) 0
Acquisitions of new markets ( 4)
Outdoor acquisitions9,445) ( 7,043) ( 2,329)2,353)
Capital expenditures ( 10,557)17,653) ( 5,044)8,780)
Proceeds from disposition of assets 236 558500 629
Purchase of intangible assets ( 833)1,525) ( 211)545)
Net cash used in investing
activities ($18,403)28,798) ($ 7,030)11,049)
- 4 -
LAMAR ADVERTISING COMPANY AND
SUBSIDIARYSUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
SixNine Months Ending
April 30,July 31,
1996 1995
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt ($ 1,821)2,605) ( 3,605)5,376)
Proceeds from issuance of notes
payable to banks 16,000 1,00027,000 4,000
Principal payments on notes payable to
banks ( 5,000) 011,500) ( 4,000)
Stock redemption ( 2,964) 0
Dividends ( 432)649) ( 250)375)
Net cash provided by (used in)
financing activities 5,7839,282 ( 2,855)5,751)
Net decrease in cash and cash
equivalents ( 4,134)3,921) ( 4,908)6,048)
Cash and cash equivalents at beginning
of year 5,886 8,016
Cash and cash equivalents at end of
period $ 1,752 3,1081,965 1,968
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ 7,917 7,87914,744 14,728
======== =======
Cash paid for state and
federal income taxes $ 542 4901,991 803
======== =======
- 5 -
LAMAR ADVERTISING COMPANY AND
SUBSIDIARYSUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ACCOUNTING POLICYPOLICIES
The information included in the foregoing interim financial statements
is unaudited. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of financial
position and results of operations for the interim periods presented have
been reflected herein. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the entire year.
Certain amounts in the prior periods consolidated financial statements
have been reclassified to conform with the current year presentation.
These reclassifications had no effect on previously reported net earnings.
Separate financial statements of the guarantor subsidiaries are
not included because such subsidiaries are jointly and severally
liable, and that the aggregate assets, liabilities, earnings and
equity of the guarantor subsidiaries are substantially equivalent
to the assets, liabilities, earnings and equity of the parent on a
consolidated basis.
2. INCOME TAXES
Lamar Advertising Company files a consolidated Federal income tax return
which includes all of its qualifying subsidiaries. Income tax expense for
the period is based on the estimates of the Company's annual effective tax
rate applied to net income for the
period.rate.
3. STOCK TRANSACTIONS
On December 30, 1995, the Certificate of Incorporation of the Company
was amended to authorize 10,000 shares of Class A preferred stock with a par
value of $638 and no voting rights. The Class A preferred stock dividends
are cumulative and are priorityprior to Class A and Class B common stock dividends
at the rate of $15.95 per share per quarter.
As of December 30, 1995, 5,719.494,454,779 shares of Class A common stock with
a $10$.001 per share statedpar value were converted into 5,719.49 shares of Class A
preferred stock with a $638 per share par value. This conversion resulted
in a $3.6 million charge to accumulated deficit.
On March 1, 1996, 4,447.413,463,985 shares of Class A common stock and 198154,218
shares of then authorized Class B common stock, $10 stated$.001 par value, were
redeemed at a price of $638$.82 per share. This redemption resulted in a $3.0
million charge to accumulated deficit.
In July 1996, the Board of Directors of the Company authorized the
issuance of up to 5,445,250 shares of Class A common stock, $.001 par value
per share, to be registered under the Securities Act of 1933 (the
"Offering"). In connection with the Offering, the Company effected a
recapitalization consisting of an approximate 778.9-for-1 stock split and an
exchange of common stock for new Class A and Class B common stock which is
equal in all respects, except holders of Class B common stock have ten votes
per share and holders of Class A common stock have one vote per share. Class B
common stock converts automatically into Class A common stock upon the sale or
tranfer to persons other than permitted transferees. All share information
has been adjusted to reflect the recapitalization.
- 6 -
4. SUBSEQUENT EVENTS
TheOn August 7, 1996, the Company is preparing forconsummated an initial public offering
(the Offering) in which 4,735,000 shares of its Class A common stock were
sold at a price of $16.00 per share, of which 4,000,000 shares were sold by
the Company and on
June 7,735,000 shares were sold by selling stockholders.
On August 15, 1996, as requiredthe Underwriters exercised their 30 day over-
allotment option to purchase 710,250 shares at the $16.00 per share Offering
price. Of such 710,250 shares sold, 294,041 were sold by the Company and
416,209 were sold by selling stockholders.
In connection with the Offering the Company paid additional
consideration of $1.38 per share in cash and $5.52 per share in ten-year
subordinated notes to stockholders whose shares were redeemed in October 1995
and March 1996 in satisfaction of their right to an additional payment.
This additional consideration resulted in an additional charge to
stockholders' equity of $25 million in the fourth quarter of fiscal 1996.
Also in connection with the offering, the Company adopted the 1996
Equity Incentive Plan (the "1996 Plan"). The purpose of the 1996 Plan is to
attract and retain key employees and consultants of the Company. The 1996
Plan authorizes the granting of stock options, stock appreciation rights and
restricted stock to employees and consultants of the Company capable of
contributing to the Company's performance. The Company has reserved an
aggregate of 2,000,000 shares of Class A Common Stock for awards under the Securities Act1996
Plan, of 1933, filed
a Registration Statement on Form S-1 with the Securities and
Exchange Commission.which options for 1,181,500 shares were granted in August, 1996 at an
exercise price of $16.00 per share.
-7-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
For the six months ended April 30, 1996, net cash provided by
operating activities was $8.5 million, a $3.5 million increase from
$5.0 million in the corresponding period of 1995. The increase was
due primarily to a $4.1 million increase in deferred taxes due to
the benefit of the Company's net operating loss carryforward having
been fully recognized at year end October 31, 1995, and a $0.8
million increase in accrued expenses offset by a $1.3 million
decrease in net earnings for the six months ended April 30, 1996
compared to the same period in fiscal 1995. Net cash used in
investing activities increased $11.4 million for the six months
ended April 30, 1996 as compared to the same period in 1995 due to
a $5.5 million increase in capital expenditures, a $4.7 million
increase in purchase of new markets and a $0.6 million increase in
purchase of intangible assets. Net cash provided by financing
activities increased $8.6 million for the six months ended April
30, 1996 as compared to the same period in 1995. The increase was
due to the increase in borrowings of $10.0 million under revolving
credit facilities to finance capital expenditures, purchase new
markets and meet seasonal operating requirements. A $1.8 million
decrease in principal payments on long-term debt was partially
offset by a $3.0 million stock redemption.
During fiscal year 1995, the Company was awarded new state
logo franchises in the following four states: Georgia, Minnesota,
South Carolina and Virginia. In addition, during fiscal 1996, the
state of Texas expanded its existing program, which is currently
run by the Company, and awarded the expansion contract to the
Company. Due to the capital needed in 1996 to fund these new
franchises, the Company amended its existing bank credit agreement
effective October 1995, partially deferring short-term principal
payments. In December 1995, the Company entered into a $15 million
reducing credit line with its bank group. This line may only be
used to finance the cost of new logo franchises awarded to the
Company. As of April 30, 1996, the Company had borrowed
approximately $6.5 million to fund the development of additional
logo franchises in Georgia, Minnesota, South Carolina and Virginia.
-8-
RESULTS OF OPERATIONS
SixNine Months Ended April 30,July 31, 1996 Compared to SixNine Months Ended April
30,July 31, 1995
Net revenues increased $6.6$11.4 million or 13.3%14.9% to $56.6$88.2 million for the
sixnine months ended April 30, 1996 compared to $50.0 million
for the same period in 1995.July 31, 1996. This increase was primarily athe result of the $4.1a $6.8
million increase in outdoor advertising net revenues.
In addition, revenues from theprincipally
attributable to a net increase in number of displays of approximately 600
and advertising rates at an average of 6%, with occupancy percentages
remaining relatively steady, and a $4.5 million increase in logo sign business increased $2.2
millionrevenue due
to the continued development of that program. Net outdoor revenue for the
period was $77.5 million and logo revenue was $9.0 million.
Operating expenses, exclusive of depreciation and amortization,
increased $4.2$6.6 million or 13.2%14.0% for the sixnine months ended April 30,July 31, 1996 as
compared to the same period in 1995. This increase was the result of an
increase in health insurance rates, increases in personnel costs, sign site
rent, graphics expense, other costs related to the increase in revenue and
additional operating expenses related to outdoor asset acquisitions and the
continued development of the logo sign business.
Depreciation and amortization expense increased $0.3$0.6 or 3.8%6.2% from $6.8$10.0
million for the sixnine months ended April 30,July 31, 1995 to $7.0$10.6 for sixnine months
ended April 30,July 31, 1996. Interest expense remained
constant for both periods.
Due to the above factors, operating income increased $2.2$4.2 million or
18.8%21.5% to $14.0$23.8 million for sixnine months ended April 30,July 31, 1996 from $11.8$19.6
million for the same period in 1995.
Interest expense remained relatively consistent for both periods.
Income tax expense for the sixnine months ended April 30,July 31, 1996 increased
$4.0$6.9 million over the same period in 1995. For the past several years the
Company has had a substantial net operating loss carryforward. The benefit
of the Company's net operating loss carryforward was fully recognized as of
October 31, 1995.
As a result primarily of the foregoing factors,increase in income tax expense, net
earnings for the sixnine months ended April 30,July 31, 1996 decreased $1.3$2.1 million as
compared to the same period in 1995.
-9-
Second- 8 -
Third Quarter Ended April 30,July 31, 1996 Compared to SecondThird Quarter Ended April 30,July 31, 1995
RevenuesNet revenues for the secondthird quarter ended April 30,July 31, 1996 increased $3.5$4.8
million or 13.6%17.9% to $29.0$31.5 million from $25.6$26.7 million for the same period in
1995.
Operating expenses, exclusive of depreciation and amortization, for the
secondthird quarter ended April 30,July 31, 1996 increased $1.3$2.5 million or 8.5%15.5% over the
same period in 1995.
Depreciation and amortization expense increased $0.4 million or 11.1%
from $3.2 million for the third quarter ended July 31, 1995 to $3.5 million
for the third quarter ended July 31, 1996.
Due to the above factors, operating income before depreciation
and amortization increased $2.1$2.0 million or
21.7%25.6% to $11.9$9.8 million compared to $9.8$7.8 million for the secondthird quarter ended
April 30,July 31, 1996 as compared to the same period in 1995.
Interest expense remained constant for the period increased $0.1 million over
the same period in 1995.both periods.
Income tax expense for the period increased $2.3$2.9 million over the same
period in 1995.
As a result of the foregoing factors, net earnings for the secondthird quarter
ended April 30,July 31, 1996 remained fairly constantdecreased $0.8 million as compared to the same period in
1995.
The explanation of these results is identical to the
explanation of the results for the sixthree months ended April 30,July 31, 1996 were affected by
the same factors as the nine months ended July 31, 1996. They areReference is made
to the discussion of the nine month results.
-9-
LIQUIDITY AND CAPITAL RESOURCES
For the nine months ended July 31, 1996, net cash provided by operating
activities was $15.6 million, a $4.8 million increase from $10.8 million in
the corresponding period of 1995. The increase occurred, despite a $2.1
million decrease in net earnings, due primarily to a $5.6 million increase
in deferred taxes due to the benefit of the Company's net operating loss
carryforward having been fully recognized at year end October 31, 1995, and
a $1.9 million increase in deferred income generated by the additional logo
sign franchises offset by a $1.9 million increase in receivables. Net cash
used in investing activities increased $17.7 million for the nine months
ended July 31, 1996 as compared to the same period in 1995 due to an $8.9
million increase in outdoor advertising revenue acrosscapital expenditures primarily due to the board, anbuild out of
the new logo awards, a $7.1 million increase in various directpurchase of new markets, a
$1.0 million increase in purchase of intangible assets and general and
administrative expensesa $0.7 million
increase in ordernotes receivable. Net cash provided by financing activities
increased $15.0 million for the nine months ended July 31, 1996
as compared to accommodatethe same period in 1995. The increase was due to the increase
in revenue,borrowings of $15.5 million under revovling credit facilities to finance
capital expenditures, primarily logo related and purchase new markets. A
$2.8 million decrease in principal payments on long-term debt was offset by
a $3.0 million stock redemption.
During fiscal year 1995, the acquisition of additional outdoor assets,Company was awarded new state logo
franchises in the increased developmentfollowing four states: Georgia, Minnesota, South Carolina
and Virginia. During fiscal 1996, the Company was awarded new contracts in
New Jersey and Michigan as well as the expansion of the logoexisting Texas
program which it currently operates. It also acquired the Kansas and
an increase in
income tax expense dueTennessee franchises from one of its competitors. Due to the extinguishmentcapital needed
to fund these new franchises, the Company amended its existing bank credit
agreement effecctive October 1995, partially deferring short-term principal
payments. In December 1995,the Company entered into a $15 million reducing
credit line with its bank group. This line may only be used to finance the
cost of new logo franchises awarded to the Company. As of July 31, 1996, the
Company had borrowed approximately $9.5 million to finance the cost of these
logo sign franchises.
On August 1, 1996, the Company completed an initial public offering (the
Offering) whereby the Company sold 4,000,000 shares of its Class A common
stock and selling stockholders sold 735,000 shares at a price of $16.00 per
share. The net proceeds to the Company from the sale of the 4,000,000 shares
was approximately $58.8 million after deducting estimated expenses and
underwriting discounts.
-10-
The Company used a portion of the net operating
loss carryforwards.
-10-proceeds from the Offering to
repay existing indebtedness in the aggregate principal amount of
approximately $43.8 million, consisting of (i) bank term loans, of $37.8 million
and (ii) $6.0 million of outstanding loans under a revolving credit facility.
The Company used approximately $5.0 million of the net proceeds from the
Offering to pay a portion of the contingent consideration payable to
stockholders whose shares of common stock were repurchased by the Company in
October 1995 and March 1996. The Company issued to such stockholders $20.0
million aggregate principal amount of ten-year subordinated notes as the
balance of the contingent consideration.
In addition, on August 15, 1996, the Underwriters over-allotment option
to purchase an additional 294,041 shares from the Company was exercised
yielding net proceeds of approximately $4.4 million.
The remaining net proceeds from the Offering are available for general
corporate purposes, including possible acquisitions and repayment of
indebtedness. In August 1996, the Company used net proceeds from the
Offering to purchase certain outdoor advertising properties for an aggregate
cash price of $11.2 million.
The Company did not receive any proceeds from the sale of Class A Common
Stock by the Selling Stockholders.
REGULATION OF TOBACCO ADVERTISING
In August, 1996, President Clinton signed an executive order adopting
rules proposed by the U.S. Food and Drug Administration regulating the
advertising of certain tobacco products. These rules, which will become
effective on August 22, 1997, prohibit the placement of tobacco products
advertising within 1,000 feet of playgrounds and primary and secondary
schools and limit such advertising to a format consisting of black text on a
white background.
Certain advertising industry and tobacco industry organizations have
filed lawsuits challenging these regulations seeking an injunction to keep
them from going into effect. In addition, some members of Congress have
indicated that they may sponsor legislation to prevent the regulations from
going into effect. If these regulations are not modified or nullified by
legislative or judicial action, the Company's outdoor advertising revenues
could be adversely affected.
The Company's revenues from tobacco products advertising, as a
percentage of total net revenues, has declined from 17% in fiscal 1991 to 9%
in fiscal 1995. During this period, the Company has replaced tobacco
advertising by diversifying its customer base and increasing sales to local
advertisers. In addition, the Company has maintained for many years a policy
prohibiting placement of billboards containing tobacco product advertising
within 500 feet of schools and playgrounds.
-11-
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Resolutions adoptedThe Company submitted the following proposals to the stockholders of the
Company in an action by the Board of Directors of Lamar
Advertising Company dated December 13, 1995 and a unanimous written consent of action in lieu of a special meeting, each of
which was unanimously adopted as of July 31, 1996:
VOTED: To adopt the Amended and Restated Certificate of Incorporation
of the shareholders
of Lamar Advertising Company executed on December 30, 1995 approved
an amendment toCompany.
VOTED: To approve the certificate of incorporation of Lamar
Advertising Company. This action created ten thousand (10,000)
shares of Class A preferred stock having a par value of $638 per
share with no voting rights. This action did not change the
authorized number of shares or voting rights of previously
authorized capital stock. The payment of Class A preferred
dividends are cumulative and in priority to Class A and Class B
common stock dividends. In addition, the case of voluntary
dissolution or liquidation of the corporation the holders of Class
A preferred stock are entitled to receive the sum of par value of
their shares plus a further amount equal to any accrued and unpaid
dividends to date before any payment shall be made to the holders
of Class A and Class B common stock. As of the most recent
information available, 5,719 shares of Class A common stock were
converted to Class A preferred stock.Company's 1996 Equity Incentive Plan.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
______________________
(a) Exhibits: None27.1 Financial Data Schedule.
(b) No reports on Form 8-K were filed during the period ended April 30, 1996July 31, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LAMAR ADVERTISING COMPANY
DATED: June 11,September 12, 1996 BY s/Keith Istre
Keith A. Istre
Vice President and Chief
Financial Officer, Treasurer
and Assistant Secretary
(Principal Financial Officer)
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