Exhibit 99.1
5321 Corporate Boulevard
Baton Rouge, LA 70808
Lamar Advertising Company Announces
Third Quarter 2011 Operating Results
Baton Rouge, LA — November 3, 2011 — Lamar Advertising Company (Nasdaq: LAMR), a leading owner and operator of outdoor advertising and logo sign displays, announces the Company’s operating results for the third quarter ended September 30, 2011.
Three Months Results
Lamar reported net revenues of $296.7 million for the third quarter of 2011 versus $286.1 million for the third quarter of 2010, a 3.7% increase. Operating income for the third quarter of 2011 was $55.4 million as compared to $46.6 million for the same period in 2010. Lamar recognized $4.0 million in net income for the third quarter of 2011 compared to net income of $0.8 million for the third quarter of 2010.
General and administrative expenses for the third quarter of 2011 were $49.5 million versus $48.6 million for the third quarter of 2010, an increase of $0.9 million. General and administrative expenses for the current period include a charge of $1.2 million related to the settlement of two unrelated claims, both of which were resolved during the period. In addition, corporate overhead for the third quarter of 2011 was $11.3 million, $0.6 million of which represents legal fees associated with these settlements.
Adjusted EBITDA, (defined as operating income before non-cash compensation, depreciation and amortization and gain on disposition of assets — see reconciliation to net income (loss) at the end of this release) for the third quarter of 2011 was $132.6 million versus $128.0 million for the third quarter of 2010, a 3.7% increase.
Free cash flow (defined as Adjusted EBITDA less interest, net of interest income and amortization of financing costs, current taxes, preferred stock dividends and total capital expenditures — see reconciliation to cash flows provided by operating activities at the end of this release) for the third quarter of 2011 was $66.0 million as compared to $75.2 million for the same period in 2010, a 12.3% decrease. The decrease in free cash flow is a result of the Company’s $16.5 million increase in capitalized expenditures over the comparable period in 2010.
Pro forma net revenue for the third quarter of 2011 increased 3.2% and pro forma Adjusted EBITDA increased 3.3% as compared to the third quarter of 2010. Pro forma net revenue and Adjusted EBITDA include adjustments to the 2010 period for acquisitions and divestitures for the same time frame as actually owned in the 2011 period. Tables that reconcile reported results to pro forma results and operating income to outdoor operating income are included at the end of this release.
Nine Months Results
Lamar reported net revenues of $845.2 million for the nine months ended September 30, 2011 versus $816.6 million for the same period in 2010, a 3.5% increase. Operating income for the nine months ended September 30, 2011 was $140.5 million as compared to $106.7 million for the same period in 2010. Adjusted EBITDA for the nine months ended September 30, 2011 was $361.3 million versus $349.8 million for the same period in 2010. There was net income of $2.2 million for the nine months ended September 30, 2011 as compared to a net loss of $33.0 million for the same period in 2010.
Free Cash Flow for the nine months ended September 30, 2011 decreased 16.3% to $160.8 million as compared to $192.3 million for the same period in 2010, primarily due to the increase in capital expenditures of $55.5 million over the comparable period in 2010.
Liquidity
As of September 30, 2011, Lamar had $281.9 million in total liquidity that consists of $240.4 million available for borrowing under its revolving senior credit facility and approximately $41.5 million in cash and cash equivalents.
Guidance
For the fourth quarter of 2011 the Company expects net revenue to be approximately $284 million. On a pro forma basis this represents an increase of approximately 2.5%.
Forward Looking Statements
This press release contains forward-looking statements, including the statements regarding guidance for the fourth quarter of 2011. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among others; (1) our significant indebtedness; (2) the state of the economy and financial markets generally and the effect of the broader economy on the demand for advertising; (3) the continued popularity of outdoor advertising as an advertising medium; (4) our need for and ability to obtain additional funding for operations, debt refinancing or acquisitions; (5) the regulation of the outdoor advertising industry; (6) the integration of companies that we acquire and our ability to recognize cost savings or operating efficiencies as a result of these acquisitions; (7) the market for our Class A common stock and (8) other factors described in our filings with the Securities and Exchange Commission, including the risk factors in item 1A of our 2010 Annual Report on Form 10-K, as supplemented by any risk factors contained in our Quarterly Reports on Form 10-Q. We caution investors not to place undue reliance on the forward-looking statements contained in this document. These statements speak only as of the date of this document, and we undertake no obligation to update or revise the statements, except as may be required by law.
Use of Non-GAAP Measures
Adjusted EBITDA, free cash flow, pro forma results and outdoor operating income are not measures of performance under accounting principles generally accepted in the United States of America (“GAAP”) and should not be considered alternatives to operating income, net income (loss), cash flows from operating activities, or other GAAP figures as indicators of the Company’s financial performance or liquidity. The Company’s management believes that Adjusted EBITDA, free cash flow, pro forma results and outdoor operating income are useful in evaluating the Company’s performance and provide investors and financial analysts a better understanding of the Company’s core operating results. The pro forma acquisition adjustments are intended to provide information that may be useful for investors when assessing period to period results. Our presentations of these measures may not be comparable to similarly titled measures used by other companies. Reconciliations of these measures to GAAP are included at the end of this release.
Conference Call Information
A conference call will be held to discuss the Company’s operating results on Thursday, November 3, 2011 at 10:00 a.m. central time. Instructions for the conference call and Webcast are provided below:
Conference Call
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All Callers:
Passcode: | | 1-334-323-0520 or 1-334-323-9871
Lamar |
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Replay:
Passcode: | | 1-334-323-7226
22963712 |
| | | Available through Monday, November 7, 2011 at 11:59 p.m. eastern time |
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Live Webcast: | | www.lamar.com |
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Webcast Replay: | | www.lamar.com |
| | | Available through Monday, November 7, 2011 at 11:59 p.m. eastern time |
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| Company Contact: | | Keith A. Istre
Chief Financial Officer
(225) 926-1000
KI@lamar.com |
General Information
Lamar Advertising Company is a leading outdoor advertising company currently operating over 150 outdoor advertising companies in 44 states, Canada and Puerto Rico, logo businesses in 21 states and the province of Ontario, Canada and over 60 transit advertising franchises in the United States, Canada and Puerto Rico.
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, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| Net revenues | | $ | 296,701 | | | $ | 286,138 | | | $ | 845,248 | | | $ | 816,607 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Operating expenses (income) | | | | | | | | | | | | | | | | |
| Direct advertising expenses | | | 103,200 | | | | 99,595 | | | | 305,809 | | | | 297,972 | |
| General and administrative expenses | | | 49,534 | | | | 48,551 | | | | 145,359 | | | | 138,919 | |
| Corporate expenses | | | 11,320 | | | | 10,024 | | | | 32,804 | | | | 29,950 | |
| Non-cash compensation | | | 2,660 | | | | 4,915 | | | | 7,338 | | | | 12,715 | |
| Depreciation and amortization | | | 75,171 | | | | 77,617 | | | | 221,454 | | | | 234,124 | |
| Gain on disposition of assets | | | ( 609 | ) | | | ( 1,137 | ) | | | ( 7,967 | ) | | | ( 3,756 | ) |
| | | | | | | | | | | | | |
| | | | 241,276 | | | | 239,565 | | | | 704,797 | | | | 709,924 | |
| | | | | | | | | | | | | |
| Operating income | | | 55,425 | | | | 46,573 | | | | 140,451 | | | | 106,683 | |
| | | | | | | | | | | | | | | | | |
| Other expense (income) | | | | | | | | | | | | | | | | |
| Loss on extinguishment of debt | | | 451 | | | | — | | | | 451 | | | | 17,398 | |
| Interest income | | | ( 428 | ) | | | ( 14 | ) | | | ( 511 | ) | | | ( 190 | ) |
| Interest expense | | | 42,530 | | | | 45,352 | | | | 129,457 | | | | 141,322 | |
| | | | | | | | | | | | | |
| | | | 42,553 | | | | 45,338 | | | | 129,397 | | | | 158,530 | |
| | | | | | | | | | | | | |
| Income (loss) before income tax | | | 12,872 | | | | 1,235 | | | | 11,054 | | | | ( 51,847 | ) |
| Income tax expense (benefit) | | | 8,880 | | | | 454 | | | | 8,876 | | | | ( 18,864 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | | 3,992 | | | | 781 | | | | 2,178 | | | | ( 32,983 | ) |
| Preferred stock dividends | | | 91 | | | | 91 | | | | 273 | | | | 273 | |
| | | | | | | | | | | | | |
| Net income (loss) applicable to common stock | | $ | 3,901 | | | $ | 690 | | | $ | 1,905 | | | $ | ( 33,256 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Earnings per share: | | | | | | | | | | | | | | | | |
| Basic income (loss) per share | | $ | 0.04 | | | $ | 0.01 | | | $ | 0.02 | | | $ | ( 0.36 | ) |
| | | | | | | | | | | | | |
| Diluted income (loss) per share | | $ | 0.04 | | | $ | 0.01 | | | $ | 0.02 | | | $ | ( 0.36 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding: | | | | | | | | | | | | | | | | |
| - basic | | | 92,901,470 | | | | 92,315,046 | | | | 92,808,705 | | | | 92,183,591 | |
| - diluted | | | 93,076,619 | | | | 92,728,863 | | | | 93,171,700 | | | | 92,649,166 | |
OTHER DATA | | | | | | | | | | | | | | | | |
| Free Cash Flow Computation: | | | | | | | | | | | | | | | | |
| Adjusted EBITDA | | $ | 132,647 | | | $ | 127,968 | | | $ | 361,276 | | | $ | 349,766 | |
| Interest, net | | | ( 37,423 | ) | | | (40,801 | ) | | | ( 115,126 | ) | | | ( 128,553 | ) |
| Current tax (expense) benefit | | | ( 646 | ) | | | 119 | | | | ( 1,849 | ) | | | ( 969 | ) |
| Preferred stock dividends | | | ( 91 | ) | | | ( 91 | ) | | | ( 273 | ) | | | ( 273 | ) |
Total capital expenditures(1) | | | ( 28,529 | ) | | | ( 12,024 | ) | | | ( 83,182 | ) | | | ( 27,712 | ) |
| | | | | | | | | | | | | |
| Free cash flow | | $ | 65,958 | | | $ | 75,171 | | | $ | 160,846 | | | $ | 192,259 | |
| | | | | | | | | | | | | |
| | |
| (1) | | See the capital expenditures detail included below for a breakdown by category. |
| | | | | | | | | |
| | | September 30, | | | December 31, | |
| Selected Balance Sheet Data: | | 2011 | | | 2010 | |
| Cash and cash equivalents | | $ | 41,516 | | | $ | 91,679 | |
| Working capital | | | 110,191 | | | | 155,829 | |
| Total assets | | | 3,501,751 | | | | 3,648,961 | |
| Total debt (including current maturities) | | | 2,223,160 | | | | 2,409,140 | |
| Total stockholders’ equity | | | 826,632 | | | | 818,523 | |
| | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Nine months ended | |
| | | September 30, | | | September 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| Other Data: | | | | | | | | | | | | | | | | |
| Cash flows provided by operating activities | | $ | 112,266 | | | $ | 97,009 | | | $ | 222,705 | | | $ | 190,179 | |
| Cash flows used in investing activities | | | 33,631 | | | | 11,808 | | | | 87,992 | | | | 24,927 | |
| Cash flows used in financing activities | | | 55,109 | | | | 73,794 | | | | 184,427 | | | | 239,393 | |
| | | | | | | | | | | | | | | | | |
| Reconciliation of Free Cash Flow to Cash Flows Provided by Operating Activities: | | | | | | | | | | | | | | | | |
| Cash flows provided by operating activities | | $ | 112,266 | | | $ | 97,009 | | | $ | 222,705 | | | $ | 190,179 | |
| Changes in operating assets and liabilities | | | ( 15,858 | ) | | | ( 8,145 | ) | | | 26,142 | | | | 35,422 | |
| Total capital expenditures | | | ( 28,529 | ) | | | ( 12,024 | ) | | | ( 83,182 | ) | | | ( 27,712 | ) |
| Preferred stock dividends | | | ( 91 | ) | | | ( 91 | ) | | | ( 273 | ) | | | ( 273 | ) |
| Other | | | ( 1,830 | ) | | | ( 1,578 | ) | | | ( 4,546 | ) | | | ( 5,357 | ) |
| | | | | | | | | | | | | |
| Free cash flow | | $ | 65,958 | | | $ | 75,171 | | | $ | 160,846 | | | $ | 192,259 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Reconciliation of Adjusted EBITDA to Net income (loss): | | | | | | | | | | | | | | | | |
| Adjusted EBITDA | | $ | 132,647 | | | $ | 127,968 | | | $ | 361,276 | | | $ | 349,766 | |
| Less: | | | | | | | | | | | | | | | | |
| Non-cash compensation | | | 2,660 | | | | 4,915 | | | | 7,338 | | | | 12,715 | |
| Depreciation and amortization | | | 75,171 | | | | 77,617 | | | | 221,454 | | | | 234,124 | |
| Gain on disposition of assets | | | ( 609 | ) | | | ( 1,137 | ) | | | ( 7,967 | ) | | | ( 3,756 | ) |
| | | | | | | | | | | | | |
| Operating Income | | | 55,425 | | | | 46,573 | | | | 140,451 | | | | 106,683 | |
| | | | | | | | | | | | | | | | | |
| Less: | | | | | | | | | | | | | | | | |
| Interest income | | | ( 428 | ) | | | ( 14 | ) | | | ( 511 | ) | | | ( 190 | ) |
| Loss on extinguishment of debt | | | 451 | | | | — | | | | 451 | | | | 17,398 | |
| Interest expense | | | 42,530 | | | | 45,352 | | | | 129,457 | | | | 141,322 | |
| Income tax expense (benefit) | | | 8,880 | | | | 454 | | | | 8,876 | | | | ( 18,864 | ) |
| | | | | | | | | | | | | |
| Net income (loss) | | $ | 3,992 | | | $ | 781 | | | $ | 2,178 | | | $ | ( 32,983 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | Three months ended | | | | |
| | | September 30, | | | | |
| | | 2011 | | | 2010 | | | % Change | |
| Reconciliation of Reported Basis to Pro Forma (a) Basis: | | | | | | | | | | | | |
| Reported net revenue | | $ | 296,701 | | | $ | 286,138 | | | | 3.7 | % |
| Acquisitions and divestitures | | | — | | | | 1,325 | | | | | |
| | | | | | | | | | | |
| Pro forma net revenue | | $ | 296,701 | | | $ | 287,463 | | | | 3.2 | % |
| | | | | | | | | | | | | |
| Reported direct advertising and G&A expenses | | $ | 152,734 | | | $ | 148,146 | | | | 3.1 | % |
| Acquisitions and divestitures | | | — | | | | 899 | | | | | |
| | | | | | | | | | | |
| Pro forma direct advertising and G&A expenses | | $ | 152,734 | | | $ | 149,045 | | | | 2.5 | % |
| | | | | | | | | | | | | |
| Reported outdoor operating income | | $ | 143,967 | | | $ | 137,992 | | | | 4.3 | % |
| Acquisitions and divestitures | | | — | | | | 426 | | | | | |
| | | | | | | | | | | |
| Pro forma outdoor operating income | | $ | 143,967 | | | $ | 138,418 | | | | 4.0 | % |
| | | | | | | | | | | | | |
| Reported corporate expenses | | $ | 11,320 | | | $ | 10,024 | | | | 12.9 | % |
| Acquisitions and divestitures | | | — | | | | — | | | | | |
| | | | | | | | | | | |
| Pro forma corporate expenses | | $ | 11,320 | | | $ | 10,024 | | | | 12.9 | % |
| | | | | | | | | | | | | |
| Reported Adjusted EBITDA | | $ | 132,647 | | | $ | 127,968 | | | | 3.7 | % |
| Acquisitions and divestitures | | | — | | | | 426 | | | | | |
| | | | | | | | | | | |
| Pro forma Adjusted EBITDA | | $ | 132,647 | | | $ | 128,394 | | | | 3.3 | % |
| | | | | | | | | | | |
| | |
| (a) | | Pro forma net revenues, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses and Adjusted EBITDA include adjustments to 2010 for acquisitions and divestitures for the same time frame as actually owned in 2011. |
| | | | | | | | | |
| | | Three months ended | |
| | | September 30, | |
| | | 2011 | | | 2010 | |
| Reconciliation of Outdoor Operating Income to Operating Income: | | | | | | | | |
| Outdoor operating income | | $ | 143,967 | | | $ | 137,992 | |
| Less: Corporate expenses | | | 11,320 | | | | 10,024 | |
| Non-cash compensation | | | 2,660 | | | | 4,915 | |
| Depreciation and amortization | | | 75,171 | | | | 77,617 | |
| Plus: Gain on disposition of assets | | | 609 | | | | 1,137 | |
| | | | | | | |
| Operating income | | $ | 55,425 | | | $ | 46,573 | |
| | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Nine months ended | |
| | | September 30, | | | September 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| Capital expenditure detail by category | | | | | | | | | | | | | | | | |
| Billboards — traditional | | $ | 7,609 | | | $ | 2,832 | | | $ | 24,911 | | | $ | 5,341 | |
| Billboards — digital | | | 11,983 | | | | 3,905 | | | | 32,081 | | | | 8,575 | |
| Logo | | | 2,777 | | | | 2,119 | | | | 7,457 | | | | 6,187 | |
| Transit | | | 168 | | | | 52 | | | | 640 | | | | 726 | |
| Land and buildings | | | 3,026 | | | | 142 | | | | 3,838 | | | | 721 | |
| Operating equipment | | | 2,966 | | | | 2,974 | | | | 14,255 | | | | 6,162 | |
| | | | | | | | | | | | | |
| Total capital expenditures | | $ | 28,529 | | | $ | 12,024 | | | $ | 83,182 | | | $ | 27,712 | |
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