Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Date of Report (Date of earliest event reported): February 23, 2005
LAMAR ADVERTISING COMPANY
(Exact name of registrant as specified in its charter)
| Delaware | 0-30242 | 72-1449411 | ||
| (State or other jurisdiction | (Commission File | (IRS Employer | ||
| of incorporation) | Number) | Identification No.) |
5551 Corporate Boulevard, Baton Rouge, Louisiana 70808
(Address of principal executive offices and zip code)
(225) 926-1000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 Results of Operations and Financial Condition. | ||||||||
| Item 9.01 Financial Statements and Exhibits. | ||||||||
| SIGNATURES | ||||||||
| EXHIBIT INDEX | ||||||||
| Press Release | ||||||||
Table of Contents
Item 2.02 Results of Operations and Financial Condition.
On February 23, 2005, Lamar Advertising Company announced via press release its results for the fourth quarter and the year ended December 31, 2004. A copy of Lamar’s press release is hereby furnished to the Commission and incorporated by reference herein as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
| Exhibit | ||
| No. | Description | |
99.1
|
Press Release of Lamar Advertising Company, dated February 23, 2005, reporting Lamar’s financial results for the fourth quarter and the year ended December 31, 2004. |
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: February 23, 2005 | LAMAR ADVERTISING COMPANY |
|||
| By: | /s/ Keith A. Istre | |||
| Keith A. Istre | ||||
| Treasurer and Chief Financial Officer | ||||
Table of Contents
EXHIBIT INDEX
| Exhibit | ||
| No. | Description | |
99.1
|
Press Release of Lamar Advertising Company, dated February 23, 2005, reporting Lamar’s financial results for the fourth quarter and the year ended December 31, 2004. |
EXHIBIT 99.1
5551 Corporate Boulevard
Baton Rouge, LA 70808
Lamar Advertising Company Announces
Fourth Quarter and Year End 2004 Operating Results
Baton Rouge, LA — Wednesday, February 23, 2005 — 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 and the year ended December 31, 2004.
Fourth Quarter Results
Lamar reported net revenues of $224.0 million for the fourth quarter of 2004 versus $206.0 million
for the fourth quarter of 2003, an 8.7% increase. Operating income for the fourth quarter of 2004
was $23.0 million as compared to $13.0 million for the same period in 2003. There were net
earnings of $0.8 million for the fourth quarter of 2004 compared to a net loss of $7.0 million for
the fourth quarter of 2003. In the fourth quarter the Company incurred additional depreciation and
amortization of approximately $4.0 million for the remaining net book value of structures destroyed
by the storms in the third quarter.
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 fourth quarter of 2004 was $96.5 million versus $88.1 million for the fourth quarter of 2003, a 9.5% increase.
Free cash flow (defined as 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 2004 was $51.8 million as compared to $51.1 million for the same period in 2003, a 1.4% increase. During the fourth quarter the Company spent approximately $6.0 million in additional capital expenditures to replace billboard structures destroyed or damaged in Florida and Alabama by the hurricanes in the third quarter. This additional capital expenditure is reflected in the 2004 fourth quarter free cash flow calculation.
On a pro forma basis, net revenue for the fourth quarter of 2004 increased 6.7% as compared to the fourth quarter of 2003. Pro forma EBITDA increased 7.4% as compared to the fourth quarter of 2003. Pro forma net revenue 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 as well as a table that reconciles operating income to outdoor operating income.
Year End Results
Lamar reported net revenues of $883.5 million for the year ended December 31, 2004 versus $810.1
million for the same period in 2003, a 9.1% increase. Operating income for the year ended December
31, 2004 was $100.0 million as compared to $63.6 million for the same period in 2003. EBITDA
increased 13.4% to $393.0 million for the year ended December 31, 2004 versus $346.6 million for
the same period in 2003. There were net earnings of $13.2 million for the year ended December 31,
2004 as compared to a net loss of $80.0 million for the same period in 2003. For the year, the
Company incurred combined additional depreciation and amortization in the third quarter and fourth
quarter totaling approximately $9.0 million for the remaining net book value of structures
destroyed by the storms in the third quarter.
Free cash flow for the year ended December 31, 2004 was $236.8 million as compared to $180.8 million for the same period in 2003, a 31.0% increase. Total hurricane related capital expenditures for the third quarter and fourth quarter were approximately $8.0 million. This additional capital expenditure is reflected in the 2004 year end free cash flow calculation.
Guidance
For the first quarter of 2005 the Company expects net revenue to be approximately $219 million. On
a pro forma basis this represents an increase of approximately 6% over the same period in 2004. On
this level of net revenue, EBITDA on a pro forma basis should be approximately 8% over the same
period in 2004.
On January 18, 2005 the Company acquired Obie Media. As a result, Lamar has added one new stand alone billboard market and 36 stand alone transit markets in the United States and Canada.
The above guidance does not include the operating estimates for the Obie markets. The Company intends to include estimates on a pro forma basis for these markets in its guidance after it has owned and operated them for 12 months. The Company does plan, however, to give separate quarterly revenue guidance for the Obie Media assets during this 12-month period. As such, the Company estimates the net revenue from the newly acquired Obie assets will be approximately $8 million for the first quarter of 2005.
Forward Looking Statements
This press release contains forward-looking statements, including the statements regarding our
guidance for the first quarter of 2005. 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 extent
and length of the tightness in the 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, 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 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 at the end of this release.
Conference Call Information
A conference call will be held to discuss the Company’s operating
results Wednesday, February
23, 2005 at 10:00 a.m. eastern time. Instructions for the conference call and Webcast are provided
below:
Conference Call |
||
All Callers:
|
1-706-643-3436 | |
Conference ID #
|
3925286 | |
Replay:
|
1-706-645-9291 | |
Conference ID #
|
3925286 | |
| Will run through Monday, February 28, 2005 at 11:59 p.m. eastern time | ||
Webcast Information |
||
Live Webcast:
|
www.lamar.com | |
Webcast Replay:
|
www.lamar.com | |
| Available through Monday, February 28, 2005 at 11:59 p.m. eastern time |
General Information on Lamar
Lamar Advertising Company is a leading outdoor advertising company currently operating 153 outdoor
advertising companies in 43 states, logo businesses in 20 states and the province of Ontario,
Canada and 73 transit advertising franchises in the United States and Canada.
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 | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
Net revenues |
$ | 223,997 | $ | 206,020 | $ | 883,510 | $ | 810,139 | ||||||||
Operating expenses (income) |
||||||||||||||||
Direct advertising expenses |
77,614 | 72,528 | 302,157 | 292,017 | ||||||||||||
General and administrative expenses |
41,670 | 38,356 | 158,161 | 145,971 | ||||||||||||
Corporate expenses |
8,263 | 7,008 | 30,159 | 25,549 | ||||||||||||
Depreciation and amortization |
76,180 | 75,539 | 294,056 | 284,947 | ||||||||||||
Gain on disposition of assets |
(2,684 | ) | (431 | ) | (1,067 | ) | (1,946 | ) | ||||||||
| 201,043 | 193,000 | 783,466 | 746,538 | |||||||||||||
Operating income |
22,954 | 13,020 | 100,044 | 63,601 | ||||||||||||
Other expense (income) |
||||||||||||||||
Loss on extinguishment of debt |
— | 4,151 | — | 33,644 | ||||||||||||
Interest income |
(260 | ) | (219 | ) | (495 | ) | (502 | ) | ||||||||
Interest expense |
19,871 | 21,308 | 76,079 | 93,787 | ||||||||||||
| 19,611 | 25,240 | 75,584 | 126,929 | |||||||||||||
Income (loss) before income tax expense (benefit)
and cumulative effect of a change in accounting principle |
3,343 | (12,220 | ) | 24,460 | (63,328 | ) | ||||||||||
Income tax expense (benefit) |
2,521 | (5,204 | ) | 11,305 | (23,573 | ) | ||||||||||
Income (loss) before cumulative effect of a change in
accounting principle |
822 | (7,016 | ) | 13,155 | (39,755 | ) | ||||||||||
Cumulative effect of a change in accounting principle, net of tax |
— | — | — | 40,240 | ||||||||||||
Net income (loss) |
822 | (7,016 | ) | 13,155 | (79,995 | ) | ||||||||||
Preferred stock dividends |
92 | 92 | 365 | 365 | ||||||||||||
Net income (loss) applicable to common stock |
$ | 730 | $ | (7,108 | ) | $ | 12,790 | $ | (80,360 | ) | ||||||
Earnings (loss) per share: |
||||||||||||||||
Basic: |
||||||||||||||||
Before cumulative effect of a change in accounting principle |
$ | 0.01 | $ | (0.07 | ) | $ | 0.12 | $ | (0.39 | ) | ||||||
Cumulative effect of a change in accounting principle |
— | — | — | (0.39 | ) | |||||||||||
Basic net income (loss) per share |
$ | 0.01 | $ | (0.07 | ) | $ | 0.12 | $ | (0.78 | ) | ||||||
Diluted: |
||||||||||||||||
Before cumulative effect of a change in accounting principle |
$ | 0.01 | $ | (0.07 | ) | $ | 0.12 | $ | (0.39 | ) | ||||||
Cumulative effect of a change in accounting principle |
— | — | — | (0.39 | ) | |||||||||||
Diluted net income (loss) per share |
$ | 0.01 | $ | (0.07 | ) | $ | 0.12 | $ | (0.78 | ) | ||||||
Weighted average common shares outstanding |
||||||||||||||||
– basic |
104,359,241 | 103,321,656 | 104,041,030 | 102,686,780 | ||||||||||||
– diluted |
104,909,185 | 103,321,656 | 104,571,483 | 102,686,780 | ||||||||||||
OTHER DATA |
||||||||||||||||
Free Cash Flow Computation: |
||||||||||||||||
EBITDA |
$ | 96,450 | $ | 88,128 | $ | 393,033 | $ | 346,602 | ||||||||
Interest, net of interest income and amortization of financing
costs |
(18,277 | ) | (19,660 | ) | (70,254 | ) | (87,248 | ) | ||||||||
Current tax (expense) benefit |
(2,181 | ) | (268 | ) | (3,557 | ) | 42 | |||||||||
Preferred stock dividends |
(92 | ) | (92 | ) | (365 | ) | (365 | ) | ||||||||
Total capital expenditures |
(24,056 | ) | (16,976 | ) | (82,031 | ) | (78,275 | ) | ||||||||
Free cash flow |
$ | 51,844 | $ | 51,132 | $ | 236,826 | $ | 180,756 | ||||||||
| December 31, | December 31, | |||||||
| Selected Balance Sheet Data: | 2004 | 2003 | ||||||
Cash and
cash equivalents |
$ | 44,201 | $ | 7,797 | ||||
Working capital |
34,476 | 69,902 | ||||||
Total assets |
3,689,472 | 3,669,373 | ||||||
Total debt (including current maturities) |
1,659,934 | 1,704,863 | ||||||
Total stockholders’ equity |
1,736,347 | 1,689,661 | ||||||
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
Other Data: |
||||||||||||||||
Cash flows provided by operating activities |
$ | 113,693 | $ | 88,945 | $ | 323,164 | $ | 260,075 | ||||||||
Cash flows used in investing activities |
82,656 | 26,688 | 263,747 | 210,041 | ||||||||||||
Cash flows provided by (used in) financing activities |
1,178 | (60,952 | ) | (23,013 | ) | (57,847 | ) | |||||||||
Reconciliation of Free Cash Flow to Cash Flows Provided by
Operating Activities: |
||||||||||||||||
Cash flows provided by operating activities |
$ | 113,693 | $ | 88,945 | $ | 323,164 | $ | 260,075 | ||||||||
Changes in operating assets and liabilities |
(35,092 | ) | (18,600 | ) | 3,830 | 7,920 | ||||||||||
Total capital expenditures |
(24,056 | ) | (16,976 | ) | (82,031 | ) | (78,275 | ) | ||||||||
Preferred stock dividends |
(92 | ) | (92 | ) | (365 | ) | (365 | ) | ||||||||
Other |
(2,609 | ) | (2,145 | ) | (7,772 | ) | (8,599 | ) | ||||||||
Free cash flow |
$ | 51,844 | $ | 51,132 | $ | 236,826 | $ | 180,756 | ||||||||
Reconciliation of EBITDA to Net income (loss): |
||||||||||||||||
EBITDA |
$ | 96,450 | $ | 88,128 | $ | 393,033 | $ | 346,602 | ||||||||
Less: |
||||||||||||||||
Depreciation and amortization |
76,180 | 75,539 | 294,056 | 284,947 | ||||||||||||
Gain on disposition of assets |
(2,684 | ) | (431 | ) | (1,067 | ) | (1,946 | ) | ||||||||
Operating income |
22,954 | 13,020 | 100,044 | 63,601 | ||||||||||||
Less: |
||||||||||||||||
Loss on extinguishment of debt |
— | 4,151 | — | 33,644 | ||||||||||||
Interest income |
(260 | ) | (219 | ) | (495 | ) | (502 | ) | ||||||||
Interest expense |
19,871 | 21,308 | 76,079 | 93,787 | ||||||||||||
Income tax expense (benefit) |
2,521 | (5,204 | ) | 11,305 | (23,573 | ) | ||||||||||
Cumulative effect of a change in accounting principle, net of tax |
— | — | — | 40,240 | ||||||||||||
Net income (loss) |
$ | 822 | $ | (7,016 | ) | $ | 13,155 | $ | (79,995 | ) | ||||||
| Three Months Ended | ||||||||||||
| December 31, | ||||||||||||
| Reconciliation of Reported Basis to Pro Forma (a) Basis: | 2004 | 2003 | % Change | |||||||||
Reported net revenue |
$ | 223,997 | $ | 206,020 | 8.7 | % | ||||||
Acquisitions and divestitures |
— | 3,945 | ||||||||||
Pro forma net revenue |
$ | 223,997 | $ | 209,965 | 6.7 | % | ||||||
Reported direct advertising and G&A expenses |
$ | 119,284 | $ | 110,884 | 7.6 | % | ||||||
Acquisitions and divestitures |
— | 2,285 | ||||||||||
Pro forma direct advertising and G&A expenses |
$ | 119,284 | $ | 113,169 | 5.4 | % | ||||||
Reported outdoor operating income |
$ | 104,713 | $ | 95,136 | 10.1 | % | ||||||
Acquisitions and divestitures |
— | 1,660 | ||||||||||
Pro forma outdoor operating income |
$ | 104,713 | $ | 96,796 | 8.2 | % | ||||||
Reported corporate expenses |
$ | 8,263 | $ | 7,008 | 17.9 | % | ||||||
Acquisitions and divestitures |
— | — | ||||||||||
Pro forma corporate expenses |
$ | 8,263 | $ | 7,008 | 17.9 | % | ||||||
Reported EBITDA |
$ | 96,450 | $ | 88,128 | 9.4 | % | ||||||
Acquisitions and divestitures |
— | 1,660 | ||||||||||
Pro forma EBITDA |
$ | 96,450 | $ | 89,788 | 7.4 | % | ||||||
| (a) | Pro forma net revenues, direct advertising 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 | ||||||||
| December 31, | ||||||||
| Reconciliation of Outdoor Operating Income to Operating Income: | 2004 | 2003 | ||||||
Outdoor operating income |
$ | 104,713 | $ | 95,136 | ||||
Less: Corporate expenses |
(8,263 | ) | (7,008 | ) | ||||
Depreciation and amortization |
(76,180 | ) | (75,539 | ) | ||||
Gain on disposition of assets |
2,684 | 431 | ||||||
Operating income |
$ | 22,954 | $ | 13,020 | ||||