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Lamar Advertising Company Announces Fourth Quarter and Year End 2012 Operating Results

(February 27, 2013)

BATON ROUGE, La., Feb. 27, 2013 (GLOBE NEWSWIRE) -- 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 fourth quarter ended December 31, 2012.



Fourth Quarter Results



Lamar reported net revenues of $305.5 million for the fourth quarter of 2012 versus $288.2 million for the fourth quarter of 2011, a 6.0% increase. Operating income for the fourth quarter of 2012 was $63.9 million as compared to $45.9 million for the same period in 2011. Lamar recognized $7.2 million in net income for the fourth quarter of 2012 compared to net income of $6.4 million for the fourth quarter of 2011.


Adjusted EBITDA, (defined as operating income before non-cash compensation, depreciation and amortization and gain on disposition of assets - see reconciliation to net income at the end of this release) for the fourth quarter of 2012 was $135.8 million versus $125.8 million for the fourth quarter of 2011, a 7.9% 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 fourth quarter of 2012 was $71.9 million as compared to $63.9 million for the same period in 2011, a 12.6% increase.



Pro forma net revenue for the fourth quarter of 2012 increased 2.6% and pro forma Adjusted EBITDA increased 3.6% as compared to the fourth quarter of 2011. Pro forma net revenue and Adjusted EBITDA include adjustments to the 2011 period for acquisitions and divestitures for the same time frame as actually owned in the 2012 period, excluding new markets acquired as a result of the acquisition of NextMedia Outdoor, Inc., (the "Next markets"), which closed on October 31, 2012. As a result, our pro forma results for the 2012 period exclude the operating results from the Next markets and no adjustment has been made to the 2011 period with respect to the acquisition of the Next markets. Tables that reconcile reported results to pro forma results and operating income to outdoor operating income are included at the end of this release.



Twelve Months Results



Lamar reported net revenues of $1.2 billion for the twelve months ended December 31, 2012 versus $1.1 billion for the same period in 2011, a 4.4% increase. Operating income for the twelve months ended December 31, 2012 was $217.7 million as compared to $186.4 million for the same period in 2011. Adjusted EBITDA for the twelve months ended December 31, 2012 was $514.4 million versus $487.1 million for the same period in 2011. There was net income of $9.8 million for the twelve months ended December 31, 2012 as compared to net income of $8.6 million for the same period in 2011.



Free Cash Flow for the twelve months ended December 31, 2012 increased 19.0% to $267.5 million as compared to $224.8 million for the same period in 2011.



Liquidity



As of December 31, 2012, Lamar had $301.2 million in total liquidity that consists of $242.3 million available for borrowing under its revolving senior credit facility and approximately $58.9 million in cash and cash equivalents.



Recent Significant Transactions



Notes Offering. On October 30, 2012, Lamar's wholly owned subsidiary, Lamar Media Corp., closed a private placement of $535 million in aggregate principal amount of 5% Senior Subordinated Notes due 2023, which resulted in net proceeds to Lamar Media of approximately $527 million.



NextMedia Acquisition. On October 31, 2012, the Company used a portion of the proceeds from the 5% Senior Subordinated Notes offering to purchase all of the outstanding common stock of NextMedia Outdoor, Inc. for $145 million in cash.



Early Extinguishment of Debt. During November 2012, Lamar Media used a portion of the proceeds from the 5% Senior Subordinated Notes offering to redeem in full all its outstanding 6 5/8% Senior Subordinated Notes due 2015 (approximately $137.2 million in aggregate principal amount) at a redemption price of 101.104% plus accrued and unpaid interest up to but not including the applicable redemption date for an aggregate redemption price of approximately $141.1 million. In addition, on December 14, 2012, Lamar Media repaid $295 million of the Term B loan outstanding under its senior credit facility. Approximately $22 million remains outstanding under the Term B loan as of December 31, 2012.



In connection with the prepayments described above, the Company recorded a loss on early extinguishment of debt of $9.7 million for the fourth quarter of 2012, of which $4.3 million related to the write off of previously capitalized and unamortized debt issuance fees.



Real Estate Investment Trust Update



As previously disclosed, we are actively considering an election to real estate investment trust (REIT) status. On November 16, 2012, in conjunction with our review regarding a potential REIT election, we submitted a private letter ruling request to the Internal Revenue Service. If we receive a favorable response and decide to proceed with a REIT election, we intend to make the election for the taxable year beginning January 1, 2014, subject to the approval of our board of directors. A favorable IRS ruling, if received, does not guarantee that we would succeed in qualifying as a REIT and there is no certainty as to the timing of a REIT election or whether we will ultimately decide to make a REIT election.



Guidance



For the first quarter of 2013 the Company expects net revenue to be approximately $282 million to $285 million. On a pro forma basis this represents an increase of approximately 2% to 3%.



Forward Looking Statements



This press release contains forward-looking statements, including the statements regarding guidance for the first quarter of 2013 and our consideration to elect real estate investment trust status. 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; and (7) the market for our Class A common stock. For additional information regarding factors that may cause actual results to differ materially from those indicated in our forward-looking statements, we refer you to the information contained in Item 1A of our Form 10-K for the year ended December 31, 2011. 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 management believes that excluding the operating results related to the Next markets from our pro forma results is useful to investors during the initial integration. 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 Wednesday, February 27, 2013 at 10:00 a.m. central time. Instructions for the conference call and Webcast are provided below:


























































Conference Call

 

 

 

All Callers:

1-334-323-0520 or 1-334-323-9871

Pass Code:

Lamar

 

 

Replay:

1-334-323-7226

Pass Code:

20435467

 

Available through Monday, March 4, 2013 at 11:59 p.m. eastern time

 

 

Live Webcast:

www.lamar.com

 

 

Webcast Replay:

www.lamar.com

 

Available through Monday, March 4, 2013 at 11:59 p.m. eastern time


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 22 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

Twelve months ended

 

 December 31,

 December 31,

 

2012

2011

2012

2011

 

 

 

 

 

Net revenues

$ 305,505

$ 288,239

$ 1,182,901

$ 1,133,487

 

 

 

 

 

Operating expenses (income)

 

 

 

 

Direct advertising expenses 

106,199

103,243

418,538

409,052

General and administrative expenses 

51,994

48,495

203,065

193,854

Corporate expenses 

11,537

10,662

46,875

43,466

Non-cash compensation

3,564

4,312

14,466

11,650

Depreciation and amortization

76,800

78,185

296,083

299,639

Gain on disposition of assets

(8,508)

(2,581)

(13,817)

(10,548)

 

241,586

242,316

965,210

947,113

Operating income 

63,919

45,923

217,691

186,374

 

 

 

 

 

Other expense (income)

 

 

 

 

Loss on extinguishment of debt

9,676

226

41,632

677

Interest income

(61)

(58)

(331)

(569)

Interest expense

40,012

41,636

157,093

171,093

 

49,627

41,804

198,394

171,201

 

 

 

 

 

Income before income tax 

14,292

4,119

19,297

15,173

Income tax expense (benefit) 

7,073

(2,253)

9,476

6,623

 

 

 

 

 

Net income

7,219

6,372

9,821

8,550

Preferred stock dividends

92

92

365

365

Net income applicable to common stock

$ 7,127

$ 6,280

$ 9,456

$ 8,185

 

 

 

 

 

Earnings per share:

 

 

 

 

 Basic income per share

$ 0.08

$ 0.07

$ 0.10

$ 0.09

 Diluted income per share

$ 0.08

$ 0.07

$ 0.10

$ 0.09

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

93,717,650

92,976,771

 93,379,246

92,851,067

 - basic

94,075,642

93,171,888

93,666,641

93,173,785

 - diluted

 

 

 

 

 

 

 

 

 

OTHER DATA 

 

 

 

 

Free Cash Flow Computation:

 

 

 

 

Adjusted EBITDA

$ 135,775

$ 125,839

$ 514,423

$ 487,115

Interest, net

(35,311)

(36,881)

(139,021)

(152,007)

Current tax expense 

(622)

(1,072)

(1,926)

(2,921)

Preferred stock dividends

(92)

(92)

(365)

(365)

Total capital expenditures (1)

(27,823)

(23,888)

(105,570)

(107,070)

Free cash flow

$ 71,927

$ 63,906

$ 267,541

$ 224,752

(1)See the capital expenditures detail included  

 

 

 

 

below for a breakdown by category.

 

 

 

 

 

 

 

December 31,

 December 31,

 

 

 

2012

2011

Selected Balance Sheet Data:

 

 

 

 

Cash and cash equivalents

 

 

$ 58,911

$ 33,503

Working capital

 

 

103,778

95,281

Total assets

 

 

3,514,030

3,427,353

Total debt (including current maturities)

 

 

2,160,854

2,158,528

Total stockholders' equity

 

 

874,833

838,998

























































































































































































































































 

 

 

 

 

 

 

Three months ended

Twelve months ended

 

 December 31,

    December 31,

 

2012

 2011

2012

 2011

 

 

 

 

 

Other Data:

 

 

 

 

Cash flows provided by operating activities

$ 122,560

$ 96,116

$ 375,909

$ 318,821

Cash flows used in investing activities

176,055

29,263

303,399

117,255

Cash flows provided by (used in) financing activities

74,165

(75,015)

(47,417)

(259,442)

 

 

 

 

 

 

 

 

 

 

Reconciliation of Free Cash Flow to Cash Flows Provided by Operating Activities:

 

 

 

 

Cash flows provided by operating activities

$ 122,560

$ 96,116

$ 375,909

$ 318,821

Changes in operating assets and liabilities

(21,542)

(5,185)

3,051

20,957

Total capital expenditures

(27,823)

(23,888)

(105,570)

(107,070)

Preferred stock dividends

(92)

(92)

(365)

(365)

Other

(1,176)

(3,045)

(5,484)

(7,591)

Free cash flow

$ 71,927

$ 63,906

$ 267,541

$ 224,752

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted EBITDA to Net income (loss):

 

 

 

 

Adjusted EBITDA

$ 135,775

$ 125,839

$ 514,423

$ 487,115

Less:

 

 

 

 

Non-cash compensation

3,564

4,312

14,466

11,650

Depreciation and amortization

76,800

78,185

296,083

299,639

Gain on disposition of assets

(8,508)

(2,581)

(13,817)

(10,548)

Operating Income

63,919

45,923

217,691

186,374

 

 

 

 

 

Less:

 

 

 

 

Interest income

(61)

(58)

(331)

(569)

Loss on extinguishment of debt

9,676

226

41,632

677

Interest expense

40,012

41,636

157,093

171,093

Income tax expense (benefit)

7,073

(2,253)

9,476

6,623

Net income

$ 7,219

$ 6,372

$ 9,821

$ 8,550

 

 

 

 

 






















































































































































































 

 

 

 

 

Three months ended

 

 

 

December 31,

 

 

 

2012

2011

% Change

Reconciliation of Reported Basis to Pro Forma (a) Basis:

 

 

 

Reported net revenue

$ 305,505

$ 288,239

6.0%

Acquisitions and divestitures, excluding the Next markets


4,517

 

Less net revenue – Next markets

5,156


 

Pro forma net revenue, excluding the Next markets

$ 300,349

$ 292,756

 2.6%

 

 

 

 

Reported direct advertising and G&A expenses

$ 158,193

$ 151,738

4.3%

Acquisitions and divestitures, excluding the Next markets


2,734

 

Less direct advertising and G&A expenses – Next markets

1,546


 

Pro forma direct advertising and G&A expenses, excluding the Next markets

$ 156,647

$ 154,472

1.4%

 

 

 

 

Reported outdoor operating income

$ 147,312

$ 136,501

7.9%

Acquisitions and divestitures, excluding the Next markets


1,783

 

Less outdoor operating income – Next markets

3,610


 

Pro forma outdoor operating income, excluding the Next markets

$ 143,702

$ 138,284

3.9%

 

 

 

 

Reported corporate expenses

$ 11,537

$ 10,662

8.2%

Acquisitions and divestitures, excluding the Next markets



 

Pro forma corporate expenses, excluding the Next markets

$ 11,537

$ 10,662

8.2%

 

 

 

 

Reported Adjusted EBITDA

$ 135,775

$ 125,839

7.9%

Acquisitions and divestitures, excluding the Next markets


1,783

 

Less EBITDA – Next markets

3,610


 

Pro forma Adjusted EBITDA, excluding the Next markets

$ 132,165

$ 127,622

3.6%

 

 

 

 

(a) Pro forma net revenues, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses and Adjusted EBITDA include adjustments to 2011 for acquisitions and divestitures for the same time frame as actually owned in 2012, excluding the operating results of the Next markets. As a result, our pro forma results for the 2012 period  excludes the operating results from the Next markets and no adjustment has been made to the 2011 period with respect to the acquisition of the Next markets.

























































 

 

 

    Three months ended

 

   December 31, 

 

   2012   

2011

Reconciliation of Outdoor Operating Income to Operating Income:

 

 

Outdoor operating income

$ 147,312

$ 136,501

Less: Corporate expenses

11,537

10,662

Non-cash compensation

3,564

4,312

Depreciation and amortization

76,800

78,185

Plus: Gain on disposition of assets

8,508

2,581

Operating income

$ 63,919

$ 45,923



















































































 

 

 

 

Three months ended   

Twelve months ended

 

    December 31, 

December 31, 

 

2012  

2011

2012

2011

Capital expenditure detail by category

 

 

 

 

Billboards - traditional

$ 8,123

$ 9,514

$ 29,061

 $  34,425

Billboards - digital

9,800

9,169

42,134 

 41,250

Logo

3,157

2,684

8,704

10,141

Transit

149

177

259

817

Land and buildings

3,396

663

12,797

4,501

Operating equipment

3,198

1,681

12,615

15,936

Total capital expenditures

$ 27,823

$ 23,888

$ 105,570

 $ 107,070

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

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