Lamar Advertising (LAMR) 8-K Lamar Advertising Company Announces Second Quarter 2004 Operating Results

Exhibit 99.1

5551 Corporate Boulevard
Baton Rouge, LA 70808

Lamar Advertising Company Announces
Second Quarter 2004 Operating Results

Baton Rouge, LA — Thursday, August 5, 2004 — Lamar Advertising Company (Nasdaq: LAMR), a leading owner and operator of outdoor advertising and logo sign displays, announces the Company’s operating results for the second quarter ended June 30, 2004.

Second Quarter Results
Lamar reported net revenues of $226.9 million for the second quarter of 2004 versus $208.2 million for the second quarter of 2003, a 9.0% increase. Operating income for the second quarter of 2004 was $31.9 million as compared to $25.5 million for the same period in 2003. There was net income of $8.9 million for the second quarter of 2004 compared to a net loss of $2.2 million for the second quarter of 2003.

Adjusted EBITDA, which we refer to herein as EBITDA, (defined as operating income before depreciation and amortization and loss (gain) on disposition of assets — see reconciliation to net income (loss) at the end of this release) for the second quarter of 2004 was $106.9 million versus $94.2 million for the second quarter of 2003, a 13.4% increase.

Free cash flow (defined as EBITDA less interest, current taxes, preferred stock dividends and total capital expenditures — see reconciliation to net cash provided by operating activities at the end of this release) for the second quarter of 2004 was $70.3 million as compared to $49.0 million for the same period in 2003, a 43.5% increase.

On a pro forma basis for the second quarter of 2004 compared to the second quarter of 2003, net revenue increased 7.7% and EBITDA increased 11.4%. Pro forma net revenue, direct and general and administrative expenses, outdoor operating income, corporate expenses and EBITDA include adjustments to 2003 for acquisitions and divestitures for the same time frame as actually owned in 2004. A table that reconciles reported results to pro forma results is included below, as well as a table that reconciles operating income to outdoor operating income.

Six Months Results
Lamar reported net revenues of $427.9 million for the six months ended June 30, 2004 versus $392.4 million for the same period in 2003, a 9.0% increase. Operating income for the six months ended June 30, 2004 was $45.3 million as compared to $27.8 million for the same period in 2003. EBITDA increased 15.0% to $188.7 million for the six months ended June 30, 2004 versus $164.1 million for the same period in 2003. There was net income of $6.4 million for the six months ended June 30, 2004 as compared to a net loss of $34.5 million for the same period in 2003.

Free Cash Flow for the six months ended June 30, 2004 was $118.3 million as compared to $77.2 million for the same period in 2003, a 53.2% increase.

Guidance Q3 2004
For the third quarter of 2004 the Company expects net revenue to be approximately $228 million. On a pro forma basis this equates to an increase of approximately 7% over the same period in 2003. On this level of net revenue, EBITDA on a pro forma basis should be approximately 11% over the same period in 2003.

Forward Looking Statements
This press release contains forward-looking statements, including the statements regarding our guidance for the third quarter of 2004. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among others, (1) our significant indebtedness; (2) the continued popularity of outdoor advertising as an advertising medium; (3) the regulation of the outdoor advertising industry; (4) our need for and ability to obtain additional funding for acquisitions or operations; (5) the integration of companies that we acquire and our ability to recognize cost savings or operating efficiencies as a result of these acquisitions; (6) the performance of the United States economy generally and the demand for advertising in particular; and (7) other factors described in the reports on Forms 10-K and 10-Q and the registration statements that we file from time to time with the SEC. We caution investors not to place undue reliance on the forward-looking statements contained in this document. These statements speak only as of the date of this document, and we undertake no obligation to update or revise the statements, except as may be required by law.

Use of Non-GAAP Measures
EBITDA, free cash flow, pro forma results and outdoor operating income are not measures of performance under accounting principles generally accepted in the United States of America (“GAAP”) and should not be considered alternatives to operating income, net loss, net cash flow from operating activities, or other GAAP figures as indicators of the Company’s financial performance or liquidity. The Company’s management believes that EBITDA, free cash flow, pro forma results and outdoor operating income are useful in evaluating the Company’s performance and provide investors and financial analysts a better understanding of the Company’s core operating results. The pro forma acquisition adjustments are intended to provide information that may be useful for investors when assessing period to period results. Our presentations of these measures, however, may not be comparable to similarly titled measures used by other companies. Reconciliations of these measures to GAAP are included in the last page of this release.

Conference Call and Webcast Information
A conference call will be held to discuss the Company’s operating results Thursday, August 5, 2004 at 10:30 a.m. central time. Instructions for the conference call and Webcast are provided below:

Conference Call —

All Callers:	1-706-643-3436
Replay:	1-706-645-9291
Conference ID #	8850383
	Will run through Tuesday, August 10, 2004 at 11:59 p.m. eastern time

Webcast Information —

Live Webcast:	www.lamar.com
Webcast Replay:	www.lamar.com
	Available through Tuesday, August 10, 2004 at 11:59 p.m. eastern time

General Information on Lamar
Lamar Advertising Company is a leading outdoor advertising company currently operating 152 outdoor advertising companies in 43 states, logo businesses in 20 states and the province of Ontario, Canada and 34 transit advertising franchises in 12 states.

Company Contact: Keith A. Istre
Chief Financial Officer
(225) 926-1000
KI@lamar.com

LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2004			2003			2004			2003
Net revenues	$	226,915		$	208,178		$	427,891		$	392,399
Operating expenses (income)
Direct advertising expenses		74,362			73,361			148,153			144,918
General and administrative expenses		38,437			35,216			76,713			71,517
Corporate expenses		7,214			5,364			14,373			11,910
Depreciation and amortization		71,519			69,560			140,839			137,073
Loss (gain) on disposition of assets		3,461			(828	)		2,532			(858	)
		194,993			182,673			382,610			364,560
Operating income		31,922			25,505			45,281			27,839
Other expense (income)
Loss on extinguishment of debt		—			5,754			—			16,927
Interest income		(62	)		(66	)		(121	)		(184	)
Interest expense		16,833			22,587			34,403			46,347
		16,771			28,275			34,282			63,090
Income (loss) before income tax expense (benefit) and cumulative effect of a change in accounting principle		15,151			(2,770	)		10,999			(35,251	)
Income tax expense (benefit)		6,286			(569	)		4,581			(12,457	)
Income (loss) before cumulative effect of a change in accounting principle		8,865			(2,201	)		6,418			(22,794	)
Cumulative effect of a change in accounting principle, net of tax		—			—			—			11,679
Net income (loss)		8,865			(2,201	)		6,418			(34,473	)
Preferred stock dividends		91			91			182			182
Net income (loss) applicable to common stock	$	8,774		$	(2,292	)	$	6,236		$	(34,655	)
Earnings (loss) per share:
Basic:
Before cumulative effect of a change in accounting principle	$	0.08		$	(0.02	)	$	0.06		$	(0.23	)
Cumulative effect of a change in accounting principle		—			—			—			(0.11	)
Basic earnings (loss) per share	$	0.08		$	(0.02	)	$	0.06		$	(0.34	)
Diluted:
Before cumulative effect of a change in accounting principle	$	0.08		$	(0.02	)	$	0.06		$	(0.23	)
Cumulative effect of a change in accounting principle		—			—			—			(0.11	)
Diluted earnings (loss) per share	$	0.08		$	(0.02	)	$	0.06		$	(0.34	)
Weighted average common shares used in computed earnings (loss) per share:
Basic		103,902,268			102,481,555			103,754,925			102,076,725
Incremental common shares		592,146			—			519,641			—
Diluted		104,494,414			102,481,555			104,274,566			102,076,725
OTHER DATA
Free Cash Flow Computation:
EBITDA	$	106,902		$	94,237		$	188,652		$	164,054
Interest, net		(16,771	)		(22,521	)		(34,282	)		(46,163	)
Current tax (expense) benefit		(512	)		354			(822	)		260
Preferred stock dividends		(91	)		(91	)		(182	)		(182	)
Total capital expenditures		(19,184	)		(22,959	)		(35,075	)		(40,767	)
Free cash flow	$	70,344		$	49,020		$	118,291		$	77,202

	June 30,		December 31,
Selected Balance Sheet Data:	2004		2003
Cash and cash equivalents	$	17,775	$	7,797
Working capital		84,259		69,902
Total assets		3,618,336		3,637,347
Total debt (including current maturities)		1,661,368		1,704,863
Total stockholders’ equity		1,757,850		1,722,805

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2004			2003			2004			2003
Other Data:
Cash flows provided by operating activities	$	81,633		$	77,260		$	117,231		$	98,314
Cash flows used in investing activities		46,286			117,615			82,090			141,123
Cash flows (used in) provided by financing activities		(23,692	)		43,177			(25,163	)		37,891
Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities:
Net cash provided by operating activities	$	81,633		$	77,260		$	117,231		$	98,314
Changes in operating assets and liabilities		10,198			(3,247	)		39,777			24,105
Total capital expenditures		(19,184	)		(22,959	)		(35,075	)		(40,767	)
Preferred stock dividends		(91	)		(91	)		(182	)		(182	)
Other		(2,212	)		(1,943	)		(3,460	)		(4,268	)
Free cash flow	$	70,344		$	49,020		$	118,291		$	77,202
Reconciliation of EBITDA to Net income (loss):
EBITDA	$	106,902		$	94,237		$	188,652		$	164,054
Less:
Depreciation and amortization		71,519			69,560			140,839			137,073
Loss (gain) on disposition of assets		3,461			(828	)		2,532			(858	)
Operating Income		31,922			25,505			45,281			27,839
Less:
Loss on extinguishment of debt		—			5,754			—			16,927
Interest income		(62	)		(66	)		(121	)		(184	)
Interest expense		16,833			22,587			34,403			46,347
Income tax expense (benefit)		6,286			(569	)		4,581			(12,457	)
Cumulative effect of a change in accounting principle, net of tax		—			—			—			11,679
Net income (loss)	$	8,865		$	(2,201	)	$	6,418		$	(34,473	)

	Three Months Ended
	June 30,
Reconciliation of Reported Basis to Pro Forma (a) Basis:	2004		2003		% Change
Reported Net revenue	$	226,915	$	208,178		9.0	%
Acquisitions and Divestitures		—		2,541
Pro forma Net revenue	$	226,915	$	210,719		7.7	%
Reported Direct advertising and General and administrative expenses	$	112,799	$	108,577		3.9	%
Acquisitions and Divestitures		—		777
Pro forma Direct advertising and General and administrative expenses	$	112,799	$	109,354		3.2	%
Reported Outdoor Operating income	$	114,116	$	99,601		14.6	%
Acquisitions and Divestitures		—		1,764
Pro forma Outdoor Operating income	$	114,116	$	101,365		12.6	%
Reported Corporate expenses	$	7,214	$	5,364		34.5	%
Acquisitions and Divestitures		—		—
Pro forma Corporate expenses	$	7,214	$	5,364		34.5	%
Reported EBITDA	$	106,902	$	94,237		13.4	%
Acquisitions and Divestitures		—		1,764
Pro forma EBITDA	$	106,902	$	96,001		11.4	%

(a) Pro forma net revenues, direct and general and administrative expenses, outdoor operating income, corporate expenses, and EBITDA include adjustments to 2003 for acquisitions and divestitures for the same time frame as actually owned in 2004.

	Three Months Ended
	June 30,
Reconciliation of Outdoor Operating Income to Operating Income:	2004			2003
Outdoor Operating income	$	114,116		$	99,601
Less:    Corporate expenses		(7,214	)		(5,364	)
Depreciation and amortization		(71,519	)		(69,560	)
Plus:    (Loss) gain on disposition of assets		(3,461	)		828
Operating income	$	31,922		$	25,505