1
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 September 30, 2000March 31, 2001
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 0-30242
Lamar Advertising Company
Commission File Number 1-12407
Lamar Media Corp.
(Exact name of registrants as specified in its charter)
Delaware 72-1449411
Delaware 72-1205791
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer
organization) Identification No.)
5551 Corporate Blvd., Baton Rouge, LA 70808
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code: (225) 926-1000
Indicate by check mark whether each 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 (X) No ( )
The number of shares of Lamar Advertising Company's Class A common stock
outstanding as of November 7, 2000: 75,386,851May 5, 2001: 81,258,742
The number of shares of the Lamar Advertising Company's Class B common stock
outstanding as of November 7, 2000: 17,000,000May 5, 2001: 16,638,136
The number of shares of Lamar Media Corp. common stock outstanding as of November 7, 2000:May 5,
2001: 100
This combined Form 10-Q is separately filed by (i) Lamar Advertising Company and
(ii) Lamar Media Corp. (which is a wholly-owned subsidiary of Lamar Advertising
Company). Lamar Media Corp. meets the conditions set forth in general
instruction H(1) (a) and (b) of Form 10-Q and is, therefore, filing this form
with the reduced disclosure format permitted by such instruction.
2
CONTENTS
Page
----
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Lamar Advertising Company
Condensed Consolidated Balance Sheets as of
September 30, 2000March 31, 2001 and December 31, 19992000 1
Condensed Consolidated Statements of Operations
for the three months ended September 30,March 31, 2001
and March 31, 2000 and September 30, 1999 and
nine months ended September 30, 2000 and September 30, 1999 2
Condensed Consolidated Statements of Cash Flows
for the ninethree months ended September 30,March 31, 2001 and
March 31, 2000 and
September 30, 1999 3
Notes to Condensed Consolidated Financial
Statements 4-74 - 5
Lamar Media Corp.
Condensed Consolidated Balance Sheets as of
September 30, 2000March 31, 2001 and December 31, 1999 82000 6
Condensed Consolidated Statements of Operations
for the three months ended September 30,March 31, 2001
and March 31, 2000 and September 30, 1999 and nine months ended
September 30, 2000 and September 30, 1999 97
Condensed Consolidated Statements of Cash Flows
for the ninethree months ended September 30,March 31, 2001 and
March 31, 2000 and
September 30, 1999 108
Notes to Condensed Consolidated Financial
Statements 119
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 12-1510 - 12
ITEM 3. Quantitative and Qualitative Disclosures About
Market Risks 16
ITEM 4. Submission of Matters to a Vote of Security Holders 1613
PART II - OTHER INFORMATION
ITEM 5. Other information 16
ITEM 6. Exhibits and Reports on Form 8-K 17-1814 - 15
Signatures 1816
3
PART I - FINANCIAL INFORMATION
ITEM 1.- FINANCIAL STATEMENTS
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
September 30,March 31, December 31,
Assets 2001 2000
1999
------------- ------------ ------ ------------ ------------
Current assets:
Cash and cash equivalents $ 6,6764,230 $ 8,40172,340
Receivables, net 102,930 81,22696,777 91,674
Prepaid expenses 31,885 21,52433,898 23,164
Other current assets 8,119 14,342
----------- -----------8,498 8,738
------------ ------------
Total current assets 149,610 125,493
----------- -----------143,403 195,916
------------ ------------
Property, plant and equipment 1,618,683 1,412,6051,694,453 1,630,866
Less accumulated depreciation and amortization (322,539) (218,893)
----------- -----------(366,096) (335,991)
------------ ------------
Net property plant and equipment 1,296,144 1,193,712
----------- -----------1,328,357 1,294,875
------------ ------------
Intangible assets 2,150,490 1,874,1772,171,552 2,129,733
Other assets - non-current 15,009 13,563
----------- -----------19,120 17,249
------------ ------------
Total assets $ 3,611,2533,662,432 $ 3,206,945
=========== ===========3,637,773
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable $ 6,50010,813 $ 11,4929,918
Current maturities of long-term debt 34,675 4,31890,906 66,814
Accrued expenses 51,019 57,65325,676 40,724
Deferred income 12,076 11,243
----------- -----------13,098 11,005
------------ ------------
Total current liabilities 104,270 84,706140,493 128,461
Long-term debt 1,840,982 1,611,4631,688,150 1,671,466
Deferred income taxes 149,355 112,412139,342 140,452
Other liabilities 8,151 6,835
----------- -----------8,360 7,939
------------ ------------
Total liabilities 2,102,758 1,815,416
----------- -----------1,976,345 1,948,318
------------ ------------
Stockholders' equity:
Series AA preferred stock, par value $.001, $63.80 cumulative
dividends, authorized 5,720 shares; 5,719.49 shares
issued and outstanding at 2001 and 2000 -- --
Class A preferred stock, par value $638, $63.80 cumulative
dividends, 10,000 shares authorized, 0 shares issued and
1999outstanding at 2001 and 2000 -- --
Class A common stock, par value $.001, 175,000,000 shares
authorized, 75,386,85181,258,742 shares and 70,576,251 shares80,101,793 issued and
outstanding at 2001 and 2000, and 1999, respectively 75 7181 80
Class B common stock, par value $.001, 37,500,000 shares
authorized, 17,000,000 shares16,638,136 and 17,449,99717,000,000 shares issued and
outstanding at 20002001 and 1999,2000, respectively 17 17
Additional paid-in capital 1,665,032 1,478,9161,902,315 1,871,303
Accumulated deficit (156,629) (87,475)
----------- -----------(216,326) (181,945)
------------ ------------
Stockholders' equity 1,508,495 1,391,529
----------- -----------1,686,087 1,689,455
------------ ------------
Total liabilities and stockholders' equity $ 3,611,2533,662,432 $ 3,206,945
=========== ===========3,637,773
============ ============
See accompanying notes to consolidated financial statements.
-1-
4
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,months ended
March 31,
2001 2000 1999 2000 1999
------------ ------------
------------ ------------
Net revenues $ 184,806170,385 $ 111,039 $ 509,026 $ 294,614
------------ ------------151,267
------------ ------------
Operating expenses:
Direct advertising expenses 56,038 33,236 162,176 93,48161,536 52,512
General and administrative expenses 33,748 23,172 103,213 64,02537,696 34,204
Depreciation and amortization 82,333 40,738 231,533 104,95185,407 72,970
------------ ------------
------------ ------------
172,119 97,146 496,922 262,457
------------ ------------184,639 159,686
------------ ------------
Operating income 12,687 13,893 12,104 32,157
------------ ------------loss (14,254) (8,419)
------------ ------------
Other expense (income):
Interest income (272) (112) (968) (1,067)(244) (327)
Interest expense 39,895 21,092 109,186 57,471
Gain35,780 32,890
(Gain) loss on disposition of assets (170) (5,189) (274) (5,666)(216) 1
------------ ------------
------------ ------------
39,453 15,791 107,944 50,738
------------ ------------35,320 32,564
------------ ------------
Loss before income taxes, extraordinary
item and cumulative effect of a
change in accounting principle (26,766) (1,898) (95,840) (18,581)tax benefit (49,574) (40,983)
Income tax expense (benefit) (7,257) 1,404 (26,959) (362)
------------ ------------ ------------ ------------
Loss before extraordinary item and
cumulative effect of a change in
accounting principle (19,509) (3,302) (68,881) (18,219)
------------ ------------ ------------ ------------
Extraordinary loss on debt
extinguishment, net of tax benefit of $117 -- (182) -- (182)
------------ ------------ ------------ ------------
Loss before cumulative effect of a
change in accounting principle (19,509) (3,484) (68,881) (18,401)
------------ ------------ ------------ ------------
Cumulative effect of a change in
accounting principle -- -- -- (767)
------------ ------------(15,284) (12,009)
------------ ------------
Net loss (19,509) (3,484) (68,881) (19,168)(34,290) (28,974)
Preferred stock dividends 91 91 273 365
------------ ------------(91) (91)
------------ ------------
Net loss applicable to common stock $ (19,600)(34,381) $ (3,575) $ (69,154) $ (19,533)
============ ============(29,065)
============ ============
Loss per common share - basic and diluted:
Loss before accounting changediluted $ (.21)(.35) $ (.05) $ (.77) $ (.30)
Extraordinary Item - loss on debt
extinguishment -- -- -- --
Cumulative effect of a change in
accounting principle -- -- -- (.01)
------------ ------------ ------------ ------------
Net loss $ (.21) $ (.05) $ (.77) $ (.31)
============ ============(.33)
============ ============
Weighted average common shares outstanding 91,953,435 65,953,441 89,982,439 62,792,35297,603,342 88,466,644
Incremental common shares from dilutive stock
options -- -- -- --
Incremental common shares from convertible debt -- --
-- --
------------ ------------ ------------ ------------
Weighted average common shares assuming dilution 91,953,435 65,953,441 89,982,439 62,792,352
============ ============97,603,342 88,466,644
============ ============
See accompanying notes to condensed consolidated financial statements.
-2-
5
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
NineThree Months Ended
September 30,March 31,
2001 2000
1999
--------- --------------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (68,881)(34,290) $ (19,168)(28,974)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation and amortization 231,533 104,951
Cumulative effect of a change in accounting
principle -- 767
Gain85,407 72,970
(Gain) loss on disposition of assets (274) (5,666)(216) 1
Deferred taxes (26,757) (9,765)tax benefit (15,611) (12,527)
Provision for doubtful accounts 4,686 2,1141,803 1,183
Changes in operating assets and liabilities:
Decrease (Increase) decrease in:
Receivables (20,238) (8,866)(6,416) (785)
Prepaid expenses (8,987) 445(10,103) (7,273)
Other assets 756 3,558(276) (508)
Increase (Decrease)(decrease) in:
Trade accounts payable (4,992) 2,022895 (1,531)
Accrued expenses 8,266 149(17,416) (11,208)
Deferred income 352 181,846 955
Other liabilities 4 (5,248)
--------- ---------504 33
------------ ------------
Net cash provided by operating activities 115,468 65,311
--------- ---------6,127 12,336
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in notes receivable (197) (3,351) (1,587)
Acquisition of new markets (318,150) (831,681)(101,556) (82,082)
Capital expenditures (58,107) (53,435)(15,571) (19,004)
Proceeds from disposition of assets 1,511 3,943
--------- ---------1,036 531
------------ ------------
Net cash used in investing activities (378,097) (882,760)
--------- ---------(116,288) (103,906)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt issuance costs (1,470) (12,507)
Net proceeds from issuance of common stock 5,404 3,9481,487 1,213
Principal payments on long-term debt (3,757) (78,040)
Net proceeds from note offering -- 279,594(1,345) (1,048)
Net borrowings under credit agreements 261,000 507,00042,000 93,000
Dividends (273) (365)
--------- ---------(91) (91)
------------ ------------
Net cash provided by financing activities 260,904 699,630
--------- ---------42,051 93,074
------------ ------------
Net decrease(decrease) increase in cash and cash equivalents (1,725) (117,819)(68,110) 1,504
Cash and cash equivalents at beginning of period 72,340 8,401
128,597
--------- --------------------- ------------
Cash and cash equivalents at end of period $ 6,6764,230 $ 10,778
========= =========9,905
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ 99,76739,560 $ 56,183
========= =========36,504
============ ============
Cash paid for state and federal income taxes $ 1,717368 $ 6,500
========= =========886
============ ============
Common stock issuance related toissued for acquisitions $ 178,26829,000 $ 952,255
========= =========29,226
============ ============
See accompanying notes to consolidated financial statements.statements
-3-
6
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
1. General
On July 20, 1999, Lamar Advertising Company reorganized into a new holding
company structure. As a result of this reorganization (1) the former Lamar
Advertising Company became a wholly-owned subsidiary of a newly formed holding
company, (2) the name of the former Lamar Advertising Company was changed to
Lamar Media Corp., (3) the name of the new holding company became Lamar
Advertising Company, (4) the outstanding shares of capital stock of the former
Lamar Advertising Company, including the Class A common stock, were
automatically converted, on a share for share basis, into identical shares of
capital stock of the new holding company and (5) the Class A common stock of the
new holding company commenced trading on the Nasdaq National Market under the
symbol "LAMR" instead of the Class A common stock of the former Lamar
Advertising Company. In addition, following the holding company reorganization,
substantially all of the former Lamar Advertising Company's debt obligations,
including the bank credit facility and other long-term debt remained the
obligations of Lamar Media. Under Delaware law, the reorganization did not
require the approval of the stockholders of the former Lamar Advertising
Company. The purpose of the reorganization was to provide Lamar Advertising
Company with a more flexible capital structure and to enhance its financing
options. The business operations of the former Lamar Advertising Company and its
subsidiaries have not changed as a result of the reorganization.
In this quarterly report, "Lamar," the "Company," "we," "us" and "our" refer to
Lamar Advertising Company and its consolidated subsidiaries with respect to
periods following the reorganization and to old Lamar Advertising Company with
respect to periods prior to the reorganization in July, 1999. In addition,
"Lamar Media" and "Media" refer to Lamar Media Corp. and its consolidated
subsidiaries with respect to periods following the reorganization and to old
Lamar Advertising Company with respect to periods prior to the reorganization in
July 1999, except where we make it clear that we are only referring to Lamar
Media Corp. or a subsidiary.
2. Significant Accounting Policies
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 theLamar Advertising
Company's 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. These condensed consolidated financial statements should be read in
conjunction with the Company's consolidated financial statements and the notes
thereto included in the Company's Annual Report on Form 10-K.
Certain amounts in the prior year's condensed consolidated financial statements have been
reclassified to conform with the current year presentation. These
reclassifications had no effect on previously reported results of operations.
-4-
7
3.2. Acquisitions
On January 14, 2000,1, 2001, the Company purchased the assets of two outdoor advertising
companies, American Outdoor Advertising, LLC and Appalachian Outdoor Advertising
Co., Inc. for a total cash purchase price of approximately $31,536 and $20,000,
respectively.
On February 1, 2001, the Company purchased all of the outstanding common stock
of Aztec Group,Bowlin Outdoor Advertising and Travel Centers, Inc. for a total purchase
price of approximately $34,486.$44,100. The purchase price consisted of approximately
$5,260$15,100 cash and the issuance of 481,481725,000 shares of Lamar Advertising Company Class A
common stock valued at approximately
$29,226.
On$29,000.
During the three months ended March 31, 2000, the Company purchased the assets of an outdoor company in the
Company's Northeastern Region for a cash purchase price of approximately
$33,600.
Effective May 1, 2000, the Company purchased all of the outstanding common stock
of Outdoor West, Inc. for a total cash purchase price of approximately $39,200.
On May 24, 2000, the Company purchased all of the outstanding common stock of
Advantage Outdoor Company, Inc. for a cash purchase price of approximately
$76,900 and the issuance of 2,300,000 shares of Lamar's Class A common stock
valued at approximately $92,805.
On July 1, 2000, the Company purchased the stock of Tyler Media Group, Inc. for
a purchase price of approximately $32,378. The purchase price consisted of
approximately $5,919 cash and the issuance of 611,764 shares of Lamar
Advertising Company Class A common stock valued at approximately $26,459.
On July 21, 2000, the Company purchased the assets of Root Outdoor Advertising,
Inc. for a total cash purchase price of approximately $41,100.
During the nine months ended September 30, 2000,2001, the Company completed 6628
additional acquisitions of outdoor advertising assets for a totalcash purchase price
of approximately $137,864. The purchase price included the issuance of 674,491
shares of Lamar Advertising Company Class A common stock valued at approximately
$29,778.$34,414.
Each of these acquisitions werewas accounted for under the purchase method of
accounting, and, accordingly, the accompanying financial statements include the
results of operations of each acquired entity from the date of acquisition. The
acquisition costs have been allocated to assets acquired and liabilities assumed
based on fair market value at the dates of acquisition. The following is a
summary of the preliminary allocation of the acquisition costs in the above
transactions.
Property
Current Plant & Other Other Current Long-term
Assets Equipment Goodwill Intangibles Assets Liabilities Liabilities
-------- --------- -------- ----------- ----------- ----------------------- ------------ ------------ ------------ ------------ ------------ ------------
Aztec Group, Inc. $ 500 $ 8,279 $ 21,879 $ 10,526 $ 1,001 $ 5,698
Northeast Region 480 2,604 16,804 14,102 385
American Outdoor 557 1,185 18,682 11,112 -- Acquisition-- --
Appalachian Outdoor West 638 10,539 20,917 17,222 998 9,115
Advantage-- 10,377 7,510 2,113 -- -- --
Bowlin Outdoor 3,814 64,488 77,734 58,108 6,074 28,328
Tyler Media Group, Inc. 470 16,563 14,029 11,1231,726 29,173 9,218 23,889 73 3,371 16,608
Other 196 12,526 8,410 13,283 -- 9,806
Root Outdoor Adv., Inc. 1,689 8,281 9,027 23,092 1,0291 --
Other 2,200 36,807 58,297 56,225 2,464 13,201
-------- -------- -------- -------- -------- --------
$ 9,791 $147,561 $218,687 $190,398 $ 11,951 $ 66,148
======== ======== ======== ======== ======== ========------------ ------------ ------------ ------------ ------------ ------------ ------------
2,479 53,261 43,820 50,397 73 3,372 16,608
============ ============ ============ ============ ============ ============ ============
-5--4-
87
Summarized below are certain unaudited pro forma statement of operations data
for the three months ended September 30,March 31, 2001 and 2000 and 1999 and the nine months ended
September 30, 2000 and 1999 as if each of the above
acquisitions and the acquisitions occurring in 1999,2000, which were fully described
in the Company's December 31, 19992000 Annual Report on Form 10-K, had been
consummated as of January 1, 1999.2000. This pro forma information does not purport
to represent what the Company's results of operations actually would have been
had such transactions occurred on the date specified or to project the Company's
results of operations for any future periods.
Three Months Ended NineThree Months Ended
September 30, September 30,March 31, 2001 March 31, 2000
1999 2000 1999
----------- ----------- ----------- ----------------------------- ------------------
Net revenues $ 185,911171,111 $ 168,484 $ 532,913 $ 487,250
=========== =========== =========== ===========167,900
============= =============
Net loss applicable to
common stock $ (20,272)(34,566) $ (24,458) $ (79,470) $ (88,936)
=========== =========== =========== ===========(36,507)
============= =============
Net loss per common share - basicshare-basic $ (.22)(.35) $ (.27) $ (.86) $ (.97)
=========== =========== =========== ===========(.39)
============= =============
Net loss per common share - dilutedshare-diluted $ (.22)(.35) $ (.27) $ (.86) $ (.97)
=========== =========== =========== ===========(.39)
============= =============
4.3. Summarized Financial Information of Subsidiaries
Separate financial statements of each of the Company's direct or indirect wholly-ownedwholly
owned subsidiaries that have guaranteed the Company's obligations with respect
to its publicly issued notes (collectively, the "Guarantors") are not included
herein because the Company has no independent assets or operations, the guarantees are full and unconditional and joint and several
and the only subsidiary that is not a guarantor is considered minor. Lamar
Media's ability to make distributions to Lamar Advertising is restricted under
the terms of its bank credit facility and the indenturesindenture relating to Lamar
Media's outstanding notes.
5. Change in Accounting Principle
In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP 98-5"), Reporting on the Costs of Start-Up
Activities. SOP 98-5 is effective for financial statements for fiscal years
beginning after December 15, 1998, and requires that the costs of start-up
activities, including organizational costs, be expensed as incurred. The effect
of SOP 98-5 is recorded as a cumulative effect of a change in accounting
principle as described in Accounting Principles Board Opinion No. 20 "Accounting
Changes" in the amount of $767, net of tax, for the nine months ended September
30, 1999.
6.4. Earnings Per Share
Earnings per share are computed in accordance with SFAS No. 128, "Earnings Per
Share." The calculations of basic earnings per share excludeexcludes any dilutive
effect of stock options and convertible debt while diluted earnings per share
includes the dilutive effect of stock options and convertible debt. The number
of potentially dilutive shares excluded from the calculation because of their
anti-dilutive effect are 6,801,0116,738,378 and 4,067,8057,058,760 for the three months ended September 30, 2000 and 1999, respectively, and 6,844,713 and 1,696,780 for the
nine months ended September 30, 2000 and 1999, respectively.
-6-
9
7. Stockholders' Equity
On May 25, 2000, the stockholders approved a resolution to amend the Company's
Restated Certificate of Incorporation to increase the number of authorized
shares of Class A common stock from 125,000,000 shares to 175,000,000 shares
which increased the total authorized capital stock from 163,510,000 shares to
213,510,000 shares. In addition, the shareholders also approved an amendment to
the Company's 1996 Equity Incentive Plan to increase the number of shares of the
Company's Class A common stock available for issuance to an aggregate of
5,000,000 shares from 4,000,000 shares.
On May 25, 2000, the stockholders approved the 2000 Employee Stock Purchase Plan
whereby 500,000 shares of the Company's Class A common stock have been reserved
for issuance under the Plan. Under this plan, eligible employees may purchase
stock at 85% of the fair market value of a share on the offering commencement
date or the respective purchase date whichever is lower. Purchases are limited
to ten percent of an employee's total compensation. The initial offering under
the Plan commenced on April 1, 2000 with a single purchase date on June 30,
2000. Subsequent offerings shall commence each year on July 1 with a termination
date of December 31 and purchase dates on September 30 and December 31; and on
January 1 with a termination date on June 30 and purchase dates on March
31, 2001 and June 30.
8. Long-Term Debt
In August 1999, Lamar Media Corp. entered into a new bank credit agreement,
replacing its existing bank credit facility, with The Chase Manhattan Bank
serving as administrative agent. The $1,000,000 bank credit facility consists of
(1) a $350,000 revolving bank credit facility, (2) a $650,000 term facility with
two tranches, a $450,000 Term A facility and a $200,000 Term B facility. In
addition, the new bank credit facility provided for an uncommitted $400,000
incremental facility available at the discretion of the lenders.2000, respectively.
5. New Accounting Pronouncement
In June 2000, Lamar Media finalizedthe FASB issued SFAS No. 138, "Accounting for Derivative
Instruments and Hedging Activities - an incremental loan agreement with its lendersamendment of FASB No. 133", which
established accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in which
Lamar Media received commitmentsother contracts, and for
$250,000hedging activities. It requires that an entity recognize all derivatives as
assets or liabilities in the statement of financial position and measure those
instruments at fair value. On January 1, 2001, the previously uncommitted
$400,000 incremental facility.Company adopted SFAS No. 133.
The incremental facility consistsCompany's adoption of (1) $20,000
Series A-1 facility, (2) $130,000 Series A-2 facility and (3) a $100,000 Series
B-1 facility. ProceedsSFAS No. 133 did not have any affect on the financial
position or results of this facility were used to pay down the revolving bank
credit facility. As of September 30, 2000, Lamar Media had $1,037,000
outstanding under the bank credit facility.
-7-operations in 2001.
-5-
108
LAMAR MEDIA CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
September 30,March 31, December 31,
Assets 2001 2000
1999
------------- ------------ ------ ------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 6,6764,230 $ 8,40172,340
Receivables, net 102,930 80,67196,777 91,628
Prepaid expenses 31,885 21,52433,898 23,164
Other current assets 12,501 25,193
----------- -----------14,233 15,966
------------ ------------
Total current assets 153,992 135,789
----------- -----------149,138 203,098
------------ ------------
Property, plant and equipment 1,618,683 1,412,6051,694,453 1,630,866
Less accumulated depreciation and amortization (322,539) (218,893)
----------- -----------(366,096) (335,991)
------------ ------------
Net property plant and equipment 1,296,144 1,193,712
----------- -----------1,328,357 1,294,875
------------ ------------
Intangible assets 2,128,095 1,851,9652,148,816 2,106,493
Other assets - non-current 15,009 13,563
----------- -----------18,395 17,249
------------ ------------
Total assets $ 3,593,2403,644,706 $ 3,195,029
=========== ===========3,621,715
============ ============
Liabilities and Stockholder's Equity
Current liabilities:
Trade accounts payable $ 6,50010,813 $ 11,4929,918
Current maturities of long-term debt 34,675 4,31890,906 66,814
Accrued expenses 46,499 54,03119,657 35,765
Deferred income 12,076 11,243
----------- -----------13,098 11,005
------------ ------------
Total current liabilities 99,750 81,084134,474 123,502
Long-term debt 1,840,982 1,611,4631,400,650 1,671,466
Deferred income taxes 150,593 112,776142,264 142,052
Other liabilities 8,151 6,835
----------- -----------8,360 7,939
------------ ------------
Total liabilities 2,099,476 1,812,158
----------- -----------1,685,748 1,944,959
------------ ------------
Stockholder's equity:
Common stock, $.01 par value, authorized 3,000 shares;
issued and outstanding
100 shares at September 30, 2000March 31, 2001 and
December 31, 19992000 -- --
Additional paid-in capital 1,647,874 1,469,6062,169,769 1,855,421
Accumulated deficit (154,110) (86,735)
----------- -----------(210,811) (178,665)
------------ ------------
Stockholder's equity 1,493,764 1,382,871
----------- -----------1,958,958 1,676,756
------------ ------------
Total liabilities and stockholder's equity $ 3,593,2403,644,706 $ 3,195,029
=========== ===========3,621,715
============ ============
See accompanying notes to consolidated financial statements.
-8--6-
119
LAMAR MEDIA CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS)
Three Months Ended Nine Months Ended
September 30, September 30,ended
March 31,
2001 2000
1999 2000 1999
--------- --------- --------- --------------------- ------------
Net revenues $ 184,806170,385 $ 111,039 $ 509,026 $ 294,614
--------- --------- --------- ---------151,267
------------ ------------
Operating expenses:
Direct advertising expenses 56,038 33,236 162,176 93,48161,536 52,512
General and administrative expenses 33,910 23,113 102,503 63,96637,645 33,818
Depreciation and amortization 82,367 40,434 229,863 104,647
--------- --------- --------- ---------
172,315 96,783 494,542 262,094
--------- --------- --------- ---------84,509 72,307
------------ ------------
183,690 158,637
------------ ------------
Operating income 12,491 14,256 14,484 32,520
--------- --------- --------- ---------loss (13,305) (7,370)
------------ ------------
Other expense (income):
Interest income (272) (112) (968) (1,067)(244) (327)
Interest expense 39,895 21,092 109,186 57,471
Gain33,263 32,890
(Gain) loss on disposition of assets (170) (5,189) (274) (5,666)
--------- --------- --------- ---------
39,453 15,791 107,944 50,738
--------- --------- --------- ---------(216) 1
------------ ------------
32,803 32,564
------------ ------------
Loss before income taxes, extraordinary
item and cumulative effect of a
change in accounting principle (26,962) (1,535) (93,460) (18,218)tax benefit (46,108) (39,934)
Income tax expense (benefit) (7,354) 1,504 (26,085) (262)
--------- --------- --------- ---------
Loss before extraordinary item and
cumulative effect of a
change in accounting principle (19,608) (3,039) (67,375) (17,956)
Extraordinary item - loss on debt
extinguishment net of tax
benefit of $117 -- (182) -- (182)
--------- --------- --------- ---------
Loss before cumulative effect of a
change in accounting principle (19,608) (3,221) (67,375) (18,138)
--------- --------- --------- ---------
Cumulative effect of a change in
accounting principle -- -- -- (767)
--------- --------- --------- ---------(13,962) (11,615)
------------ ------------
Net loss (19,608) (3,221) (67,375) (18,905)
Preferred stock dividends -- -- -- 274
--------- --------- --------- ---------
Net loss applicable to common stock $ (19,608)(32,146) $ (3,221) $ (67,375) $ (19,179)
========= ========= ========= =========(28,319)
============ ============
See accompanying notes to condensed consolidated financial statements.
-9--7-
1210
LAMAR MEDIA CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
NineThree Months Ended
September 30,ended
March 31,
2001 2000
1999
--------- --------------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (67,375)(32,146) $ (18,905)(28,319)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation and amortization 229,863 104,647
Cumulative effect of a change in accounting
principle -- 76784,509 72,307
Gain (loss) on disposition of assets (274) (5,666)(216) 1
Deferred taxes (25,882) (9,800)tax benefit (14,289) (12,133)
Provision for doubtful accounts 4,686 2,1141,803 1,183
Changes in operating assets and liabilities:
Decrease (Increase) decrease in:
Receivables (20,792) (8,866)(6,479) (1,389)
Prepaid expenses (8,987) 445(10,103) (7,273)
Other assets 7,524 (1,303)(721) 2,907
Increase (Decrease)(decrease) in:
Trade accounts payable (4,992) 2,022895 (1,531)
Accrued expenses 4,620 (2,746)(18,475) (13,656)
Deferred income 352 (5,248)1,846 955
Other liabilities 4 18
--------- ---------504 33
------------ ------------
Net cash provided by operating activities 118,747 57,479
--------- ---------7,128 13,085
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in notes receivable (197) (3,351) (1,587)
Acquisition of new markets (316,298) (830,428)(101,161) (81,709)
Capital expenditures (58,107) (53,435)(15,571) (19,004)
Proceeds from disposition of assets 1,511 3,943
--------- ---------1,036 531
------------ ------------
Net cash used in investing activities (376,245) (881,507)
--------- ---------(115,893) (103,533)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt issuance costs (1,470) (12,207)
Net proceeds from issuance of common stock -- 2,230
Proceeds from issuance of notes payable -- 287,500
Principal payments on long-term debt (3,757) (78,040)
Net borrowings under credit agreements 261,000 507,000
Dividends -- (274)
--------- ---------(1,345) (1,048)
Proceeds from issuance of long-term debt 42,000 93,000
------------ ------------
Net cash provided by financing activities 255,773 706,209
--------- ---------40,655 91,952
------------ ------------
Net decrease(decrease) increase in cash and cash equivalents (1,725) (117,819)(68,110) 1,504
Cash and cash equivalents at beginning of period 72,340 8,401
128,597
--------- --------------------- ------------
Cash and cash equivalents at end of period $ 6,6764,230 $ 10,778
========= =========9,905
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ 99,76735,786 $ 56,183
========= =========36,504
============ ============
Cash paid for state and federal income taxes $ 1,717368 $ 6,500
========= =========
Common stock issuance related886
============ ============
NONCASH FINANCING ACTIVITY:
Note payable converted to acquisitionscontributed capital $ 287,500 $ --
$
========= =========
Parent company stock contributed for acquisitions $ 178,268 $ 952,255
========= ===================== ============
See accompanying notes to consolidated financial statements.
-10--8-
1311
LAMAR MEDIA CORP.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
1. Significant Accounting Policies
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 Lamar Media's
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.
These condensed consolidated financial statements should be read in conjunction
with Lamar Media's consolidated financial statements and the notes thereto
included in Lamar Media's Annual Report on Form 10-K.
Certain amounts in the prior year's consolidated financial statements have been
reclassified to conform with the current year presentation. These
reclassifications had no effect on previously reported results of operations.
Certain footnotes are not provided for the accompanying financial statements as
the information in notes 1,2, 3, 4,and 5 7 and 8 to the consolidated financial statements of
Lamar Advertising Company included elsewhere in this report is substantially
equivalent to that required for the consolidated financial statements of Lamar
Media Corp. Earnings per share data is not provided for the operating results of
Lamar Media Corp. as it is a wholly-owned subsidiary of Lamar Advertising
Company.
-11--9-
1412
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In this quarterly report, "Lamar," the "Company," "we," "us" and "our" refer to
Lamar Advertising Company and its consolidated subsidiaries with respect to
periods following the reorganization and to old Lamar Advertising Company with
respect to periods prior to the reorganization, except where we make it clear
that we are only referring to Lamar Media Corp. or a particular subsidiary.
In addition, "Lamar Media" and "Media" refer to Lamar Media Corp. and its
consolidated subsidiaries with respect to periods following the reorganization
and to old Lamar Advertising Company with respect to periods prior to the
reorganization, except where we make it clear that we are only referring to
Lamar Media Corp. or a subsidiary.
LAMAR ADVERTISING COMPANY
The following is a discussion of the consolidated financial condition and
results of operations of theLamar Advertising Company for the nine monththree months ended
March 31, 2001 and three month periods
ended September 30, 2000 and 1999.2000. This discussion should be read in conjunction with the
consolidated financial statements of the Company and the related notes.
The following discussion is a summary of the key factors management considers
necessary in reviewing the Company's results of operations, liquidity and
capital resources. The future operating results of the Company may differ
materially from the results described below. For a discussion of certain factors
which may affect the Company's future operating performance, please refer to the
"Risk Factor" section of our registration statement"Factors Affecting Future Operating Results" included in the Company's Annual
Report on Form S-3 (File No.
333-48288)10-K for the year ended December 31, 2000 filed with the
Securities and Exchange Commission on October 20,
2000.March 23, 2001.
RESULTS OF OPERATIONS
NineThree Months Ended September 30, 2000March 31, 2001 Compared to NineThree Months Ended September 30,
1999March 31, 2000
Net revenues increased $214.4$19.1 million or 72.8%12.6% to $509.0$170.4 million for the ninethree
months ended September 30, 2000March 31, 2001 as compared to the same period in 1999.2000. This
increase was attributable to the Company's acquisitions during 2000 and 19992001 and
internal growth within the Company's existing markets.
Operating expenses, exclusive of depreciation and amortization, increased $107.9$12.5
million or 68.5%14.4% for the ninethree months ended September 30, 2000March 31, 2001 as compared to the
same period in 1999.2000. This was primarily the result of the additional operating
expenses related to the operations of acquired outdoor advertising assets and
the continued development of the logo sign program.
Depreciation and amortization expense increased $126.5$12.4 million or 120.6%17.0% from
$105.0$73.0 million for the ninethree months ended September 30, 1999March 31, 2000 to $231.5$85.4 million for the
ninethree months ended September 30, 2000March 31, 2001 as a result of an increase in capitalized
assets resulting from the Company's recent acquisition activity.
Due to the above factors, operating income decreased $20.1$5.9 million or 62.4% to an
operating incomeloss of $12.1$14.3 million for ninethree months ended September 30, 2000March 31, 2001 from an
operating incomeloss of $32.2$8.4 million for the same period in 1999.2000.
Interest expense increased $51.7$2.9 million from $57.5$32.9 million for the ninethree months
ended September 30, 1999March 31, 2000 to $109.2$35.8 million for the same period in 20002001 as a result of
additional borrowings under the Company's bank credit facility to fund increased
acquisition activity and increasing interest rates.activity.
There was an income tax benefit of $27.0$15.3 million for the ninethree months ended
September 30, 2000March 31, 2001 as compared to an income tax benefit of $0.4$12.0 million for the
same period in -12-
15
1999.2000. The effective tax rate for the ninethree months ended September 30, 2000March 31,
2001 is approximately 28.1%,30.8% which is less than statutory rates due to permanent
differences resulting from non-deductible amortization of goodwill.
Due to the adoption of SOP 98-5 "Reporting on the Costs of Start-Up Activities",
which requires costs of start-up activities and organization costs to be
expensed as incurred, the Company recognized an expense of $.8 million as a
cumulative effect of a change in accounting principle for the nine months ended
September 30, 1999. This expense is a one time adjustment to recognize start-up
activities and organization costs that were capitalized in prior periods.-10-
13
As a result of the above factors, the Company recognized a net loss for the
ninethree months ended September 30, 2000March 31, 2001 of $68.9$34.3 million, as compared to a net loss of
$19.2$29.0 million for the same period in 1999.
Three Months Ended September 30, 2000 Compared to Three Months Ended September
30, 1999
Revenues for the three months ended September 30, 2000 increased $73.8 million
or 66.4% to $184.8 million from $111.0 million for the same period in 1999.
Operating expenses, exclusive of depreciation and amortization, for the three
months ended September 30, 2000 increased $33.4 million or 59.2% over the same
period in 1999.
Depreciation and amortization expense increased $41.6 million or 102.1% from
$40.7 million for three months ended September 30, 1999 to $82.3 million for the
three months ended September 30, 2000.
Operating income decreased $1.2 million or 8.6% to $12.7 million for the three
months ended September 30, 2000 as compared to $13.9 million for the same period
in 1999.
Interest expense increased $18.8 million from $21.1 million for the three months
ended September 30, 1999 to $39.9 million for the same period in 2000.
The Company recognized a net loss for the three months ended September 30, 2000
of $19.5 million as compared to a net loss of $3.5 million for the same period
in 1999.
The results for the three months ended September 30, 2000 were affected by the
same factors as the nine months ended September 30, 2000. Reference is made to
the discussion of the nine month results.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically satisfied its working capital requirements with
cash from operations and revolving credit borrowings. Its acquisitions have been
financed primarily with borrowed funds and the issuance of debt and equity
securities.Class A common stock.
During the ninethree months ended September 30, 2000,March 31, 2001, the Company financed the cash
portion of its acquisition activity of approximately $300.0$101.6 million with
borrowings under the Company's bank credit facility. At September 30, 2000,March 31, 2001,
following these acquisitions, the Company had $212$308 million available under the
Revolving Facilityrevolving facility and believes that this availability coupled with internally
generated funds will be sufficient for the foreseeable future to satisfy all
debt service obligations and to finance additional acquisition activity and
current operations.
The Company's net cash provided by operating activities increased $50.2 million
from $65.3decreased $6.2 million
for the ninethree months ended September 30, 1999 to $115.5
million for the nine months ended September 30, 2000March 31, 2001 due primarily to an increase in net
loss of $5.3 million, an increase in receivables of $5.6 million and a decrease
in accrued expenses of $6.2 million. These changes were offset primarily by an
increase in noncash items of $116.8$9.8 million, which includes an increase in
depreciation and amortization of $126.6 million offset by a decrease in deferred
taxes of $17.0 million a decrease in gain on disposition of assets of $5.4$12.4 million and an increase in provision for doubtful accountsthe deferred
income tax benefit of $2.6 million. The
increase in noncash items was offset by a decrease in
-13-
16
net earnings of $49.7 million, an increase in receivables of $11.3 million, an
increase in prepaid expenses of $9.4 million a decrease in other assets of $2.8
million and a decrease in trade accounts payable of $7.0 million offset by an
increase in accrued expenses of $8.2 million and an increase in other
liabilities of $5.3$3.1 million. Net cash used in investing activities
decreased
$504.7increased $12.4 million from $882.8$103.9 million for the ninethree months ended September 30, 1999March 31,
2000 to $378.1$116.3 million for the same period in 2000.2001. This decreaseincrease was due to a
$515.5$19.5 million decreaseincrease in acquisitions of new markets, related to the September, 1999
acquisition of the outstanding common stock of AMFM and offset by an increase in
capital expenditures of $4.7a $3.2 million
and an increasedecrease in notes receivable, of $3.8and a $3.4 million and an increasedecrease in proceeds from disposition of assets of $2.4 million.capital
expenditures. Net cash provided by financing activities for the ninethree months
ended September
30, 2000March 31, 2001 is $260.9$42.1 million primarily due significantly to $261.0$42.0 million in net
borrowings under credit agreements which was used primarily to finance acquisitions.
In June 2000, Lamar Media Corp. finalized an incremental loan agreement with its
lenders in which Media received commitments for $250 million ofacquisition activity and
working capital requirements during the previously
uncommitted $400 million incremental facility. The proceeds of this facility
were used to pay down the revolving bank credit facility.period.
-11-
14
LAMAR MEDIA CORP.
The following is a discussion of the consolidated financial condition and
results of operations of Lamar Media for the nine monththree months ended March 31, 2001
and three month periods
ended September 30, 2000 and 1999.2000. This discussion should be read in conjunction with the consolidated
financial statements of Lamar Media and the related notes.
The following discussion is a summary of the key factors management considers
necessary in reviewing Lamar Media's results of operations.operations, liquidity and
capital resources. The future operating results of Lamar Media may differ
materially from the results described below. For a discussion of certain factors
which may affect Lamar Media's future operating performance, please refer to
the "Risk Factor" section of"Factors Affecting Future Operating Results" included in Lamar Advertising Company's registration statementMedia's
Annual Report on Form S-3 (File No. 333-48288)10-K for the year ended December 31, 2000 filed with the
Securities and Exchange Commission on October 20, 2000.March 23, 2001.
RESULTS OF OPERATIONS
NineThree Months Ended September 30, 2000March 31, 2001 Compared to NineThree Months Ended September 30,
1999March 31, 2000
Net revenues increased $214.4$19.1 million or 72.7%12.6% to $509.0$170.4 million for the ninethree
months ended September 30, 2000March 31, 2001 as compared to the same period in 1999.2000. This
increase was attributable to Lamar Media's acquisitions during 2000 and 19992001 and
internal growth within Lamar Media's existing markets.
Operating expenses, exclusive of depreciation and amortization, increased $107.2$12.9
million or 68.1%14.9% for the ninethree months ended September 30, 2000March 31, 2001 as compared to the
same period in 1999.2000. This was primarily the result of the additional operating
expenses related to the operations of acquired outdoor advertising assets and
the continued development of the logo sign program.
Depreciation and amortization expense increased $125.2$12.2 million or 119.6%16.9% from
$104.7$72.3 million for the ninethree months ended September 30, 1999March 31, 2000 to $229.9$84.5 million for the
ninethree months ended September 30, 2000March 31, 2001 as a result of an increase in capitalized
assets resulting from Lamar Media's recent acquisition activity.
Due to the above factors, operating income decreased $18.0loss increased $5.9 million or 55.4% to an operating
incomeloss of $14.5$13.3 million for ninethree months ended September 30, 2000March 31, 2001 from $32.5operating loss
of $7.4 million for the same period in 1999.2000.
Interest expense increased $51.7$0.4 million from $57.5$32.9 million for the ninethree months
ended September 30, 1999March 31, 2000 to $109.2$33.3 million for the same period in 20002001 as a result of
additionalincreased borrowings under Lamar Media'sthe bank credit facility used to fundfind increased
acquisition activity and increasingoffset by the reduction of interest rates.
-14-
17expense due to
cancellation of the $287.5 million note payable to Lamar Advertising Company in
January 2001.
There was an income tax benefit of $26.1$14.0 million for the ninethree months ended
September 30, 2000March 31, 2001 as compared to an income tax benefit of $0.3$11.6 million for the
same period in 1999.2000. The effective tax rate for the ninethree months ended September
30, 2000March 31,
2001 is approximately 27.9%30.3% which is less than statutory rates due to permanent
differences resulting from non-deductible amortization of goodwill.
Due to the adoption of SOP 98-5 "Reporting on the Costs of Start-Up Activities"
which requires costs of start-up activities and organization costs to be
expensed as incurred, Lamar Media recognized an expense of $.8 million as a
cumulative effect of a change in accounting principle for the nine months ended
September 30, 1999. This expense is a one time adjustment to recognize start-up
activities and organization costs that were capitalized in prior periods.
As a result of the above factors, Lamar Media recognized a net loss for the
ninethree months ended September 30, 2000March 31, 2001 of $67.4$32.1 million, as compared to a net loss of
$18.9 million for the same period in 1999.
Three Months Ended September 30, 2000 Compared to Three Months Ended September
30, 1999
Revenues for the three months ended September 30, 2000 increased $73.8 million
or 66.4% to $184.8 million from $111.0 million for the same period in 1999.
Operating expenses, exclusive of depreciation and amortization, for the three
months ended September 30, 2000 increased $33.6 million or 59.7% over the same
period in 1999.
Depreciation and amortization expense increased $42.0 million or 103.9% from
$40.4 million for three months ended September 30, 1999 to $82.4 million for the
three months ended September 30, 2000.
Operating income decreased $1.8 million or 12.6% to $12.5 million for the three
months ended September 30, 2000 as compared to $14.3 million for the same period
in 1999.
Interest expense increased $18.8 million from $21.1 million for the three months
ended September 30, 1999 to $39.9$28.3 million for the same period in 2000.
Lamar Media recognized a net loss for the three months ended September 30, 2000
of $19.6 million as compared to a net loss of $3.2 million for the same period
in 1999.
The results for the three months ended September 30, 2000 were affected by the
same factors as the nine months ended September 30, 2000. Reference is made to
the discussion of the nine month results.
-15--12-
1815
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
TheLamar Advertising Company is exposed to interest rate risk in connection with
variable rate debt instruments issued by the Company.its wholly-owned subsidiary, Lamar
Media Corp. The Company does not enter into market risk sensitive instruments
for trading purposes. The information below summarizes the Company's interest
rate risk associated with its principal variable rate debt instruments
outstanding at September 30, 2000.March 31, 2001.
Loans under Lamar Media's new bank credit facilityagreement bear interest at variable
rates equal to the Chase Prime Rate plus the applicable margin or LIBOR plus the applicable margin. Because
the Chase Prime Rate or LIBOR may increase or decrease at any time, the Company
isand Lamar Media are exposed to market risk as a result of the impact that
changes in these base rates may have on the interest rate applicable to
borrowings under the new bank credit facility.agreement. Increases in the interest rates
applicable to borrowings under the new bank credit facilityagreement would result in
increased interest expense and a reduction in the Company's and Lamar Media's
net income and after tax cash flow.
At September 30, 2000,March 31, 2001, there was approximately $1.04 billion$942 million of aggregate
indebtedness outstanding under Lamar Media'sthe new bank credit facility,agreement, or approximately
55%52.9% of the Company's and 63.2% of Lamar Media's outstanding long-term debt on
that date, bearing interest at variable rates. The aggregate interest expense
for the ninethree months ended September 30, 2000March 31, 2001 with respect to borrowings under the
new bank credit facilityagreement was $59.3$19.3 million, and the weighted average interest
rate applicable to borrowings under these credit facilities during the ninethree
months ended September
30, 2000March 31, 2001 was 8.5%8.4%. Assuming that the weighted average
interest rate was 200-basis points higher (that is 10.5%10.4% rather than 8.5%8.4%), then
the Company's 2000and Lamar Media's March 31, 2001 interest expense would have been
approximately $13.9$4.6 million higher resulting in a $8.5$2.8 million increasedecrease in the
Company's nineand Lamar Media's three months ended September 30, 2000March 31, 2001 net lossincome and a related decrease in
after tax cash flow.
The Company attempts to mitigate the interest rate risk resulting from its
variable interest rate long-term debt instruments by also issuing fixed rate
long-term debt instruments and maintaining a balance over time between the
amount of the Company's variable rate and fixed rate indebtedness. In addition,
the Company has the capability under the new bank credit facilityagreement to fix the
interest rates applicable to its borrowings at an amount equal to LIBOR plus the
applicable margin for periods of up to twelve months, which would allow the
Company to mitigate the impact of short-term fluctuations in market interest
rates. In the event of an increase in interest rates, the Company may take
further actions to mitigate its exposure. The Company cannot guarantee, however,
that the actions that it may take to mitigate this risk will be feasible or
that, if these actions are taken, that they will be effective.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.-13-
16
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
The annual meeting of stockholders of the Company will be heldItem 6. Exhibits and Reports on Thursday, May
24, 2001.
-16-
19
ITEM 6. EXHIBITS AND REPORTS ON FORMForm 8-K.
(a) Exhibits
2.1 Agreement and Plan of Merger dated as of July 20,
1999 among Lamar Media Corp., Lamar New Holding Co.,
and Lamar Holdings Merge Co. Previously filed as
exhibit 2.1 to the Company's Current Report on Form
8-K filed on July 22, 1999 (File No. 0-30242) and
incorporated herein by reference.
3.1 Certificate of Incorporation of Lamar New Holding Co.
Previously filed as exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q for the period ended
June 30, 1999 (File No. 0-20833) filed on August 16,
1999 and incorporated herein by reference.
3.2 Certificate of Amendment of Certificate of
Incorporation of Lamar New Holding Co. (whereby the
name of Lamar New Holding Co. was changed to Lamar
Advertising Company). Previously filed as exhibit 3.2
to the Company's Quarterly Report on Form 10-Q for
the period ended June 30, 1999 (File No. 0-20833)
filed on August 16, 1999 and incorporated herein by
reference.
3.3 Certificate of Amendment of Certificate of
Incorporation of Lamar Advertising.Advertising Company.
Previously filed as Exhibit 3.3 to Lamar Advertising'sthe Company's
Quarterly Report on Form 10-Q for the period ended
June 30, 19992000 (File No. 0-20833)0-30242) filed on August 11,
2000 and Incorporatedincorporated herein by reference.
3.4 Certificate of Correction of Certificate of
Amendment of Certificate of
Incorporation of Lamar Advertising. Filed herewith.Advertising Company.
Previously filed as Exhibit 3.4 to the Company's
Quarterly Report on Form 10-Q for the period ended
September 30, 2000 (File No. 0-30242) filed on
November 14, 2000 and incorporated herein by
reference.
3.5 Bylaws of Lamar Advertising.the Company. Previously filed as exhibit
3.3 to Lamar
Advertising'sthe Company's Quarterly Report on Form 10-Q
for the period ended June 30, 1999 (File No. 0-20833)
filed on August 16, 1999 and incorporated herein by
reference.
3.6 Amended and Restated Bylaws of Lamar Media Corp.
Previously filed as exhibit 3.1 to Lamar Media's
Quarterly Report on Form 10-Q for the period ended
September 30, 1999 (File No. 1-12407) filed on
November 12, 1999 and incorporated herein by
reference.
4.1 Supplemental Indenture to the Indenture dated
November 15, 1996 among Lamar Media Corp., certain of
its subsidiaries and State Street Bank and Trust
Company, as Trustee, dated August 8, 2000March 15, 2001 delivered
by Lamar OhioHardy Outdoor Holding Corp.Advertising, Inc. and, in
substantially identical agreements, by the scheduled
additional subsidiary guarantors. Filed herewith.
-14-
17
4.2 Supplemental Indenture to the Indenture dated August
15, 1997 among Outdoor Communications, Inc., certain
of its subsidiaries and First Union National Bank, as
Trustee, dated August 8, 2000March 15, 2001 delivered by Lamar
OhioHardy Outdoor Holding Corp.Advertising, Inc. and, in substantially
identical agreements, by the scheduled additional
subsidiary guarantors. Filed herewith.
4.3 Supplemental Indenture to the Indenture dated
September 25, 1997 among Lamar Media Corp., certain
of its subsidiaries and State Street Bank and Trust
Company, as Trustee, dated August 8, 2000March 15, 2001 delivered
by Lamar OhioHardy Outdoor Holding Corp.Advertising, Inc. and, in
substantially identical agreements, by the scheduled
additional subsidiary guarantors. Filed herewith.
-17-
20
10.1 Joinder Agreement dated September 13, 2000 to the Lamar Media Corp. Credit
Agreement dated August 13, 1999 by Lamar OhioHardy
Outdoor Holding
Corp.Advertising, Inc. and, in substantially
identical agreements, by the scheduled additional
subsidiary guarantors, in favor of The Chase
Manhattan Bank, as Administrative Agent. Filed herewith.
27.1 Financial Data Schedule for the Company. Filed herewith.
27.2 Financial Data Schedule for Lamar Media Corp.Agent dated March
15, 2001. Filed herewith.
(b) Reports on Form 8-K
Reports on Form 8-K were filed with the Commission during the
first quarter of 2001 to report the following items as of the
dates indicated:
On January 12, 2001, the Company filed a report on
Form 8-K in order to file an Underwriting Agreement
dated January 11, 2001 among Lamar Advertising
filed a CurrentCompany, AMFM Operating Inc. and Deutsche Bank
Securities Inc. for incorporation by reference into
the Registration Statement on Form S-3 (File No.
333-45490), which Registration Statement was declared
effective by the Commission on September 21, 2000. An
amendment to such Report on Form 8-K dated August 31,
2000was filed on
January 16, 2001 to report thatcorrect an error in the
Department of Justice had proposed a consent
decree requiring a divestiture of 26,227,273 shares of Lamar
Advertising's Class A common stock held by AMFM, Inc. by January 1,
2003.
Lamar Advertising filed a Current Report onRegistration Number referenced in the Form 8-K, dated September
6, 2000 to file updated pro-forma financial information giving effect
to its September 1999 acquisition of Chancellor Media Outdoor
Corporation and Chancellor Media Whiteco Outdoor Corporation.
Lamar Advertising filed a Current Report on Form 8-K, dated October 17,
2000 to file certain financial statements of Advantage Outdoor Company,
LP, the wholly-owned subsidiary of Billboard Acquisition Company, LLC
which Lamar Advertising acquired in May 2000.8-K.
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18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants haveregistrant has duly caused this report to be signed on theirits behalf by the
undersigned thereunto duly authorized.
LAMAR ADVERTISING COMPANY
DATED: NovemberMay 14, 20002001 BY: /s/Keith A. Istre
---------------------------------------------------------------
Keith A. Istre
Chief Financial and Accounting
Officer, Treasurer and Director
LAMAR MEDIA CORP.
DATED: November 14, 2000 BY: /s/Keith A. Istre
---------------------------------------------------------------
Keith A. Istre
Chief Financial and Accounting
Officer, Treasurer and Director
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2119
EXHIBIT INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3.42.1 Agreement and Plan of Merger dated as of July 20, 1999 among Lamar
Media Corp., Lamar New Holding Co., and Lamar Holdings Merge Co.
Previously filed as exhibit 2.1 to the Company's Current Report on
Form 8-K filed on July 22, 1999 (File No. 0-30242) and incorporated
herein by reference.
3.1 Certificate of CorrectionIncorporation of Lamar New Holding Co. Previously
filed as exhibit 3.1 to the Company's Quarterly Report on Form 10-Q
for the period ended June 30, 1999 (File No. 0-20833) filed on
August 16, 1999 and incorporated herein by reference.
3.2 Certificate of Amendment of Certificate of Incorporation of Lamar
Advertising. Filed herewith.New Holding Co. (whereby the name of Lamar New Holding Co. was
changed to Lamar Advertising Company). Previously filed as exhibit
3.2 to the Company's Quarterly Report on Form 10-Q for the period
ended June 30, 1999 (File No. 0-20833) filed on August 16, 1999 and
incorporated herein by reference.
3.3 Certificate of Amendment of Certificate of Incorporation of Lamar
Advertising Company. Previously filed as Exhibit 3.3 to the
Company's Quarterly Report on Form 10-Q for the period ended June
30, 2000 (File No. 0-30242) filed on August 11, 2000 and
incorporated herein by reference.
3.4 Certificate of Correction of Certificate of Incorporation of Lamar
Advertising Company. Previously filed as Exhibit 3.4 to the
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 2000 (File No. 0-30242) filed on November 14, 2000 and
incorporated herein by reference.
3.5 Bylaws of the Company. Previously filed as exhibit 3.3 to the
Company's Quarterly Report on Form 10-Q for the period ended June
30, 1999 (File No. 0-20833) filed on August 16, 1999 and
incorporated herein by reference.
3.6 Amended and Restated Bylaws of Lamar Media Corp. Previously filed as
exhibit 3.1 to Lamar Media's Quarterly Report on Form 10-Q for the
period ended September 30, 1999 (File No. 1-12407) filed on November
12, 1999 and incorporated herein by reference.
4.1 Supplemental Indenture to the Indenture dated November 15, 1996
among Lamar Media Corp., certain of its subsidiaries and State
Street Bank and Trust Company, as Trustee, dated August 8, 2000March 15, 2001
delivered by Lamar OhioHardy Outdoor Holding Corp.Advertising, Inc. and, in
substantially identical agreements, by the scheduled additional
subsidiary guarantors. Filed herewith.
20
4.2 Supplemental Indenture to the Indenture dated August 15, 1997 among
Outdoor Communications, Inc., certain of its subsidiaries and First
Union National Bank, as Trustee, dated August 8, 2000March 15, 2001 delivered by
Lamar OhioHardy Outdoor Holding Corp.Advertising, Inc. and, in substantially
identical agreements, by the scheduled additional subsidiary
guarantors. Filed herewith.
4.3 Supplemental Indenture to the Indenture dated September 25, 1997
among Lamar Media Corp., certain of its subsidiaries and State
Street Bank and Trust Company, as Trustee, dated August 8, 2000March 15, 2001
delivered by Lamar OhioHardy Outdoor Holding Corp.Advertising, Inc. and, in
substantially identical agreements, by the scheduled additional
subsidiary guarantors. Filed herewith.
10.1 Joinder Agreement dated September 13, 2000 to the Lamar Media Corp. Credit Agreement dated
August 13, 1999 by Lamar OhioHardy Outdoor Holding
Corp.Advertising, Inc. and, in
substantially identical agreements, by the scheduled additional
subsidiary guarantors, in favor of The Chase Manhattan Bank, as
Administrative Agent. Filed herewith.
27.1 Financial Data Schedule for the Company. Filed herewith.
27.2 Financial Data Schedule for Lamar Media Corp.Agent dated March 15, 2001. Filed herewith.