1
Exhibit 99.1
LAMAR ADVERTISING COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
The following sets forth the unaudited pro forma condensed consolidated
statement of earnings (loss) for the year ended December 31, 1997 giving effect
to the acquisitions of Penn Advertising, Inc. ("Penn") and National Advertising
Company ("3M"), as if each had occurred on January 1, 1997. For purposes of the
pro forma financial information, the statement of earnings of the Company for
its fiscal year ended December 31, 1997 has been combined with the statements of
earnings of Penn for the three months ended March 31, 1997 (the period prior to
the acquisition) and the statement of revenues and direct expenses for the
assets acquired in the 3M Acquisition for the six month period ended June 30,
1997.
The unaudited pro forma condensed consolidated financial statement
gives effect to each of the acquisitions under the purchase method of
accounting. All references to share and per share information contained herein
reflect the 3-for-2 split of shares of the Company's common stock effected by
means of a 50% stock dividend paid on February 27, 1998.
The unaudited pro forma condensed consolidated financial statement
has been prepared by the Company's management. The unaudited pro forma data
are not designed to represent and do not represent what the Company's results
of operations or financial position would have been had the aforementioned
transactions been completed on or as of the dates assumed, and are not intended
to project the Company's results of operations for any future period or as of
any future date.
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LAMAR ADVERTISING COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (LOSS)
YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Penn 3M Pro Forma
Acquisition Pro Forma Acquisition Combined as
Lamar Penn Adjustments Combined 3M Adjustments Adjusted for 3M
--------- ------- ----------- --------- -------- ------------ ---------------
Revenues:
Outdoor advertising, net ......... $ 200,508 $ 6,480 $ (639)(1) $ 206,349 $ 10,560 $ $ 216,909
Other income ..................... 554 20 (4)(1) 570 570
--------- ------- ------- --------- -------- ---------
Total net revenues .............. 201,062 6,500 (643) 206,919 10,560 217,479
--------- ------- ------- --------- -------- ---------
Direct advertising expenses ...... 63,390 2,412 488(1)(2) 66,290 7,364 (1,539)(7) 72,115
General and administrative
expenses ........................ 45,368 2,240 (1,195)(1)(2) 46,413 533 (533)(7) 46,413
Depreciation and amortization .... 48,037 727 1,709(3) 50,473 738 3,817(8) 55,028
--------- ------- ------- --------- -------- --------- ---------
Total operating expenses ........ 156,795 5,379 1,002 163,176 8,635 1,745 173,556
--------- ------- ------- --------- -------- --------- ---------
Operating income .................. 44,267 1,121 (1,645) 43,743 1,925 (1,745) 43,923
--------- ------- ------- --------- -------- --------- ---------
Non-operating expense (income):
Interest income .................. (1,723) 1,045(1)(5) (678) (678)
Interest expense ................. 38,230 976 (93)(4) 39,113 4,275(9) 43,388
Loss (gain) on disposition of
assets........................... (15) 3(1) (12) (12)
Other expenses ................... 280 287 (287)(1) 280 280
--------- ------- ------- --------- --------- ---------
Total non-operating expense ..... 36,772 1,263 668 38,703 4,275 42,978
--------- ------- ------- --------- --------- ---------
Earnings (loss) before income
taxes ........................... 7,495 (142) (2,313) 5,040 1,925 (6,020) 945
Income tax expense (benefit) ...... 4,654 (50) (483)(6) 4,121 (1,638)(6) 2,483
--------- ------- ------- --------- -------- --------- ---------
Net earnings (loss) ............... $ 2,841 $ (92) (1,830) $ 919 $ 1,925 $ (4,382) $ (1,538)
========= ======= ======= ========= ======== ========= =========
Preferred stock dividends.......... (365) (365) (365)
--------- --------- ---------
Net earnings (loss) applicable to
common stock...................... 2,476 554 (1,903)
========== ========== ==========
Net earnings (loss) per
common share - basic.............. $ 0.05 $ 0.01 $ (0.04)
========== ========== ==========
Net earnings (loss) per
common share - diluted............ $ 0.05 $ 0.01 $ (0.04)
========== ========== ==========
Weighted average number of common
shares outstanding................ 47,037,497 47,037,497 47,037,497
========== ========== ==========
Incremental common shares from
dilutive stock options............ 363,483 363,483 363,483
========== ========== ==========
Weighted average number of common
shares outstanding assuming
dilution......................... 47,400,980 47,400,980 47,400,980
========== ========== ==========
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NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
For purposes of determining the pro forma effect of the Penn and 3M
acquisitions on the Company's unaudited Condensed Consolidated Statement of
Earnings (Loss) for the year ended December 31, 1997, the following adjustments
have been made:
Year Ended
December 31, 1997
-----------------
(1) To reclassify amounts in order to conform to the
Company's presentation:
Outdoor advertising, net . . . . . . . . . . . . . . . . . . . $ (639)
Other income . . . . . . . . . . . . . . . . . . . . . . . . . (4)
Direct expenses . . . . . . . . . . . . . . . . . . . . . . . . 559
General and administrative expenses . . . . . . . . . . . . . . (914)
Interest income . . . . . . . . . . . . . . . . . . . . . . . . (4)
Loss on disposition of assets . . . . . . . . . . . . . . . . . 3
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . (287)
(2) To eliminate management fees charged by Penn's former
parent company included in the historical financial
statements that would not have existed had the
transaction taken place in the beginning of the
period:
Direct expenses . . . . . . . . . . . . . . . . . . . . . . . . (71)
General and administrative . . . . . . . . . . . . . . . . . . (281)
(3) Represents incremental amortization and
depreciation due to the application of purchase
accounting. Depreciation and amortization are
calculated using accelerated and straight line
methods over the estimated useful lives of the
assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,709
(4) Represents the net effect on interest expense
resulting from (i) additional borrowings assumed in
the acquisitions and (ii) the elimination of interest
expense on debt not assumed in the acquisitions . . . . . . . . . (93)
(5) To eliminate interest income on the Company's
historical financial statements that would
not have existed had the Recent Acquisitions taken
place at the beginning of the period . . . . . . . . . . . . . . . 1,049
(6) To record the tax effect on pro forma statements
for:
Penn Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . (483)
3M Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . (1,638)
(7) To record (a) a decrease in payroll and payroll related
costs in direct advertising and general and administrative
expense categories due to the termination of employees in
the following functions; and (b) the elimination of general
corporate allocations not considered attributable to assets
acquired as follows:
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Direct Advertising:
Elimination of production and sales overhead functions
and corporate overhead allocations . . . . . . . . . . . . . (1,053)
Elimination of national sales and marketing costs . . . . . . . (486)
---------
Total direct advertising . . . . . . . . . . . . . . . . . . (1,539)
=========
General and Administrative:
Elimination of national office function, accounting
and administrative personnel and corporate
allocations . . . . . . . . . . . . . . . . . . . . . . . . (533)
=========
(8) Represents incremental amortization and depreciation due to
the application of purchase accounting in recording the 3M
Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,817
=========
(9) Represents the incremental interest expense resulting from
the borrowing of $114 million used to finance the 3M
Acquisition, as if the transaction had taken place at the
beginning of the period . . . . . . . . . . . . . . . . . . . . . 4,275
=========