UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A
[X] Amendment No. 1 to Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended September 30, 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 their charters)
Delaware 72-1449411
Delaware 72-1205791
(State or other jurisdiction of incorporation or (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 5, 2001: 82,586,076
The number of shares of the Lamar Advertising Company's Class B common stock
outstanding as of November 5, 2001: 16,611,835
The number of shares of Lamar Media Corp. common stock outstanding as of
November 5, 2001: 100
EXPLANATORY NOTE
This Amendment No. 1 to the Form 10-Q for the quarterly period ended September
30, 2001 for Lamar Advertising Company and Lamar Media Corp. is being filed to
amend and restate Item 2 of the report. This amendment and restatement is
necessary due to a financial printer error that resulted in typographical errors
in the third and fourth sentences of the third paragraph appearing under the
caption "Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Liquidity and Capital Resources."
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LAMAR ADVERTISING COMPANY
The following is a discussion of the consolidated financial condition and
results of operations of the Company for the nine-month and three-month periods
ended September 30, 2001 and 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
"Factors Affecting Future Operating Results" included in the Company's Annual
Report on Form 10K for the year ended December 31, 2000 filed with the
Securities and Exchange Commission on March 23, 2001.
RESULTS OF OPERATIONS
Nine Months Ended September 30, 2001 Compared to Nine Months Ended September 30,
2000
Net revenues increased $41.5 million or 8.2% to $550.5 million for the nine
months ended September 30, 2001 as compared to the same period in 2000. This
increase was primarily attributable to the Company's acquisitions during 2001
and 2000.
Operating expenses, exclusive of depreciation and amortization and gain on
disposition of assets, increased $33.8 million or 12.7% for the nine months
ended September 30, 2001 as compared to the same period in 2000. This was
primarily the result of additional operating expenses related to operations of
acquired outdoor advertising assets.
Depreciation and amortization expense increased $32.1 million or 13.9% from
$231.5 million for the nine months ended September 30, 2000 to $263.6 million
for the nine months ended September 30, 2001 as a result of an increase in
capitalized assets resulting from the Company's recent acquisition activity.
Due to the above factors, the Company's operating loss increased $24.0 million
to an operating loss of $11.6 million for the nine months ended September 30,
2001 from operating income of $12.4 million for the nine months ended September
30, 2000.
Interest expense decreased $10.0 million from $109.2 million for the nine months
ended September 30, 2000 to $99.2 million for the same period in 2001 as a
result of declining interest rates during the nine months ended September 30,
2001 as compared to the same period in 2000.
Income tax benefit increased $4.2 million creating a tax benefit of $31.2
million for the nine months ended September 30, 2001 as compared to $27.0
million for the same period in 2000. The effective tax rate for the nine months
ended September 30, 2001 is 28.3% which is less than statutory rates due to
permanent differences resulting from non-deductible amortization of goodwill.
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As a result of the above factors, the Company recognized a net loss for the nine
months ended September 30, 2001 of $79.1 million, as compared to a net loss of
$68.9 million for the same period in 2000.
Three Months Ended September 30, 2001 Compared to Three Months Ended September
30, 2000
Revenues for the three months ended September 30, 2001 increased $3.5 million or
1.9% to $188.3 million from $184.8 million for the same period in 2000.
Operating expenses, exclusive of depreciation and amortization and gain on
disposition of assets, for the three months ended September 30, 2001 increased
$12.4 million or 13.8% over the same period in 2000.
Depreciation and amortization expense increased $7.1 million or 8.6% from $82.3
million for three months ended September 30, 2000 to $89.4 million for the three
months ended September 30, 2001.
Operating income decreased $16.5 million to an operating loss of $3.6 million
for the three months ended September 30, 2001 as compared to an operating income
of $12.9 million for the same period in 2000.
Interest expense decreased $9.5 million from $39.9 million for the three months
ended September 30, 2000 to $30.4 million for the same period in 2001.
The Company recognized a net loss for the three months ended September 30, 2001
of $24.4 million.
The results for the three months ended September 30, 2001 were affected by the
same factors as the nine months ended September 30, 2001. 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.
During the nine months ended September 30, 2001, the Company financed the cash
portion of its acquisition activity of approximately $275 million with
borrowings under the Company's bank credit facility. At September 30, 2001,
following these acquisitions, the Company had $220 million available under the
revolving 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 $2.5 million
from $115.5 million for the nine months ended September 30, 2000 to $118.0
million for the nine months ended September 30, 2001 due primarily to an
increase in noncash items of $27.0 million, which includes an increase in
depreciation and amortization of $32.1 million offset by a increase in deferred
tax benefit of $5.5 million. The increase in noncash items was offset by a
decrease in net earnings of $10.2 million, a decrease in accrued expenses of
$24.2 million and an increase in receivables of $1.1 million and an increase in
prepaid expenses of $2.1 million offset by an increase in trade accounts payable
of $8.2 million and in increase in deferred
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income of $2.1 million. Net cash used in investing activities decreased $47.5
million from $378.1 million for the nine months ended September 30, 2000 to
$330.6 million for the same period in 2001. This decrease was due to a $43.6
million decrease in acquisition of outdoor advertising offset by a $1.9 million
increase in capital expenditures, a $2.4 million increase in proceeds from
disposition of assets, and a $3.4 million decrease in notes receivable. Net
cash provided by financing activities for the nine months ended September 30,
2001 is $146.3 million primarily due to $130.0 million in net borrowings under
credit agreements used to finance acquisition activity and working capital
requirements during the period and $51.7 million net proceeds from issuance of
common stock which includes $48.0 million related to the issuance of 1.2 million
shares of Lamar Advertising Class A common stock in June 2001 offset by $35.2
million principal payments on long-term debt.
NEW ACCOUNTING PRONOUNCEMENTS
In June 2000, the FASB issued SFAS No. 138, "Accounting for Derivative
Instruments and Hedging Activities - an amendment of FASB No. 133", which
established accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging 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 Company adopted SFAS No. 133.
The Company's adoption of SFAS No. 133 did not have any affect on the financial
position or results of operations in 2001.
In July 2001, the FASB issued SFAS No. 141, "Business Combinations", and SFAS
No. 142, "Goodwill and Other Intangible Assets". SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001 as well as all purchase method business combinations
completed after June 30, 2001. SFAS No. 142 will require that goodwill and
intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance with the
provisions of SFAS No. 142. SFAS No. 142 will also require that intangible
assets with estimable useful lives be amortized over their respective estimated
useful lives to their estimated residual values, and reviewed for impairment in
accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of". The adoption of SFAS No.
141 as of July 1, 2001 had no impact on the Company's financial statements.
The Company is required to adopt the provisions of SFAS No. 142 effective
January 1, 2002. Furthermore, goodwill and intangible assets determined to have
an indefinite useful life acquired in a purchase business combination completed
after June 30, 2001, but before SFAS No. 142 is adopted in full will not be
amortized but will continue to be evaluated for impairment in accordance with
the appropriate pre-Statement 142 literature. Because of the extensive effort
needed to comply with adopting SFAS No. 142, the impact of adoption on the
Company's financial statements has not been determined, including whether any
transitional impairment losses will be required to be recognized as the effect
of a change in accounting principle. As of September 30, 2001, the Company had
unamortized goodwill of $1.2 billion, which will be subject to the transition
provisions of SFAS No. 142. Amortization expense related to goodwill was
approximately $68.1 million and $57.3 million for the nine months ended
September 30, 2001 and September 30, 2000, respectively, and $23.3 million and
$20.6 million for the three months ended September 30, 2001 and 2000,
respectively. In accordance with the transition provisions of SFAS No. 142,
effective July 1, 2001, any goodwill resulting from acquisitions closed after
July 1, 2001 is currently not being amortized.
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LAMAR MEDIA CORP.
The following is a discussion of the consolidated financial condition and
results of operations of Lamar Media for the nine month and three month periods
ended September 30, 2001 and 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, 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
"Factors Affecting Future Operating Results" included in Lamar Media's Annual
Report on Form 10-K for the year ended December 31, 2000 filed with the
Securities and Exchange Commission on March 23, 2001.
RESULTS OF OPERATIONS
Nine Months Ended September 30, 2001 Compared to Nine Months Ended September 30,
2000
Net revenues increased $41.5 million or 8.2% to $550.5 million for the nine
months ended September 30, 2001 as compared to the same period in 2000. This
increase was attributable to Lamar Media's acquisitions during 2001 and 2000 and
internal growth within Lamar Media's existing markets.
Operating expenses, exclusive of depreciation and amortization and gain on
disposition of assets, increased $34.4 million or 13.0% for the nine months
ended September 30, 2001 as compared to the same period in 2000. This was
primarily the result of additional operating expenses related to operations of
acquired outdoor advertising assets.
Depreciation and amortization expense increased $31.0 million or 13.5% from
$229.9 million for the nine months ended September 30, 2000 to $260.9 million
for the nine months ended September 30, 2001 as a result of an increase in
capitalized assets resulting from Lamar Media's recent acquisition activity.
Due to the above factors, Lamar Media's operating income decreased $23.5 million
to an operating loss of $8.7 million for nine months ended September 30, 2001
from operating income of $14.8 million for the same period in 2000.
Interest expense decreased $20.1 million from $109.2 million for the nine months
ended September 30, 2000 to $89.1 million for the same period in 2001 as a
result of declining interest rates during the nine months ended September 30,
2001 and the reduction in interest expense due to the cancellation of the $287.5
million note payable to Lamar Advertising Company in January 2001.
The effective tax rate for the nine months ended September 30, 2001 is 27.0%
which is less than statutory rates due to permanent differences resulting from
non-deductible amortization of goodwill.
As a result of the above factors, Lamar Media recognized a net loss for the nine
months ended September 30, 2001 of $71.1 million, as compared to a net loss of
$67.4 million for the same period in 2000.
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Three Months Ended September 30, 2001 Compared to Three Months Ended September
30, 2000
Net revenues increased $3.5 million or 1.9% to $188.3 million for the three
months ended September 30, 2001 as compared to the same period in 2000.
Operating expenses, exclusive of depreciation and amortization and gain on
disposition of assets, increased $12.1 million or 13.5% for the three months
ended September 30, 2001 as compared to the same period in 2000.
Depreciation and amortization expense increased $6.1 million or 7.4% from $82.4
million for the three months ended September 30, 2000 to $88.5 million for the
three months ended September 30, 2001.
Due to the above factors, operating income decreased $15.3 million to an
operating loss of $2.6 million for three months ended September 30, 2001 from
operating income of $12.7 million for the same period in 2000.
Interest expense decreased $13.3 million from $39.9 million for the three months
ended September 30, 2000 to $26.6 million for the same period in 2001.
There was an income tax benefit of $7.7 million for the three months ended
September 30, 2001 as compared to an income tax benefit of $7.4 million for the
same period in 2000.
As a result of the above factors, Lamar Media recognized a net loss for the
three months ended September 30, 2001 of $21.4 million, as compared to a net
loss of $19.6 million for the same period in 2000.
The results for the three months ended September 30, 2001 were affected by the
same factors as the nine months ended September 30, 2001. Reference is made to
the discussion of the nine months results.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
LAMAR ADVERTISING COMPANY
DATED: November 26, 2001 BY: /s/ Keith A. Istre
--------------------------------
Keith A. Istre
Chief Financial and Accounting
Officer, Treasurer and Director
LAMAR MEDIA CORP.
BY: /s/ Keith A. Istre
--------------------------------
Keith A. Istre
Chief Financial and Accounting
Officer, Treasurer and Director
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