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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 8, 2006
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))
 
 

 


TABLE OF CONTENTS

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 August 8, 2006, Lamar Advertising Company announced via press release its results for the quarter ended June 30, 2006. 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.
(d) Exhibits
     
Exhibit    
No.   Description
 
   
99.1
  Press Release of Lamar Advertising Company, dated August 8, 2006, reporting Lamar’s financial results for the quarter ended June 30, 2006.

 


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: August 8, 2006   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 August 8, 2006, reporting Lamar’s financial results for the quarter ended June 30, 2006.

 

exv99w1
 

EXHIBIT 99.1
(LAMER LOGO)
5551 Corporate Boulevard
Baton Rouge, LA 70808
Lamar Advertising Company Announces
Second Quarter 2006 Operating Results
Baton Rouge, LA – Tuesday, August 8, 2006 — 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, 2006.
Second Quarter Results
Lamar reported net revenues of $287.6 million for the second quarter of 2006 versus $264.7 million for the second quarter of 2005, an 8.6% increase. Operating income for the second quarter of 2006 was $59.2 million as compared to $53.9 million for the same period in 2005. There were net earnings of $18.4 million for the second quarter of 2006 compared to net earnings of $18.7 million for the second quarter of 2005.
Adjusted EBITDA, which we refer to herein as EBITDA (defined as operating income before non-cash compensation, depreciation and amortization and (gain) loss on disposition of assets — see reconciliation to net income at the end of this release), for the second quarter of 2006 was $135.4 million versus $125.4 million for the second quarter of 2005, a 8.0% 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 second quarter of 2006 was $35.8 million as compared to $72.1 million for the same period in 2005, a 50.3% decrease. The decline in free cash flow was primarily due to an increase in capital expenditures of $36.7 million as compared to the second quarter of 2005. Of this increase, approximately $19.0 million was for the deployment of new digital billboards. Interest, net of interest income and amortization of financing costs also increased by approximately $5.4 million due to rising interest rates and increased indebtedness. Current taxes increased by approximately $4.4 million related to Canadian and U.S. state and federal income taxes.
Pro forma net revenue for the second quarter of 2006 increased 6.8% and pro forma EBITDA increased 6.8% as compared to the second quarter of 2005. Pro forma net revenue and EBITDA include adjustments to the 2005 period for acquisitions and divestitures for the same time frame as actually owned in the 2006 period. Tables that reconcile reported results to pro forma results and operating income to outdoor operating income are included at the end of this release.
Six Months Results
Lamar reported net revenues of $540.9 million for the six months ended June 30, 2006 versus $497.6 million for the same period in 2005, an 8.7% increase. Operating income for the six months ended June 30, 2006 was $86.5 million as compared to $83.1 million for the same period in 2005. EBITDA increased 7.0% to $237.3 million for the six months ended June 30, 2006 versus $221.8 million for the same period in 2005. There was net income of $19.9 million for the six months ended June 30, 2006 as compared to net income of $23.8 million for the same period in 2005.
Free Cash Flow for the six months ended June 30, 2006 was $64.9 million as compared to $128.8 million for the same period in 2005, a 49.6% decrease.

 


 

Stock Repurchase Program
In November 2005, we announced the adoption of a $250 million stock repurchase program. Through June 30, 2006, we spent approximately $228.4 million to repurchase 4.4 million shares of our Class A common stock. At June 30, 2006, $21.6 million remained available for repurchase under the repurchase plan. The repurchase plan was completed in July 2006. We repurchased a total of 4,852,541 shares under the plan.
Guidance
For the third quarter of 2006 the Company expects net revenue to be approximately $286 to $288 million. On a pro forma basis this represents an increase of approximately 6% to 7% over the same period in 2005.
Forward Looking Statements
This press release contains forward-looking statements, including the statements regarding our guidance for the third quarter of 2006. 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 strength of 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 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 Tuesday, August 8, 2006 at 10:00 a.m. eastern time. Instructions for the conference call and Webcast are provided below:
Conference Call
             
 
  All Callers:   1-334-323-9871 or 1-334-323-9872
 
  Passcode:   Lamar
 
           
 
  Replay:   1-877-919-4059    
 
  Passcode:   63694686    
 
      Available through Friday, August 11, 2006 at 11:59 p.m. eastern time
 
           
 
  Live Webcast:   www.lamar.com
 
           
 
  Webcast Replay:   www.lamar.com
 
      Available through Friday, August 11, 2006 at 11:59 p.m. eastern time

 


 

General Information on Lamar
Lamar Advertising Company is a leading outdoor advertising company currently operating over 150 outdoor advertising companies in 44 states, logo businesses in 20 states and the province of Ontario, Canada and over 70 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     Six months ended  
    June 30,     June 30,  
    2006     2005     2006     2005  
Net revenues
  $ 287,577     $ 264,743     $ 540,910     $ 497,572  
 
                       
 
                               
Operating expenses (income)
                               
Direct advertising expenses
    96,415       86,744       191,624       171,220  
General and administrative expenses
    45,804       43,569       92,118       86,324  
Corporate expenses
    9,918       9,074       19,897       18,263  
Non-cash compensation
    2,912             5,910        
Depreciation and amortization
    74,089       71,916       147,267       141,154  
Gain on disposition of assets
    (712 )     (485 )     (2,390 )     (2,443 )
 
                       
 
                               
 
    228,426       210,818       454,426       414,518  
 
                       
Operating income
    59,151       53,925       86,484       83,054  
 
                               
Other expense (income)
                               
Interest income
    (378 )     (263 )     (605 )     (715 )
Interest expense
    27,126       21,757       51,969       42,619  
 
                       
 
    26,748       21,494       51,364       41,904  
 
                       
 
                               
Income before income tax expense
    32,403       32,431       35,120       41,150  
Income tax expense
    14,031       13,687       15,208       17,371  
 
                       
 
                               
Net income
    18,372       18,744       19,912       23,779  
Preferred stock dividends
    91       91       182       182  
 
                       
 
                               
Net income applicable to common stock
  $ 18,281     $ 18,653     $ 19,730     $ 23,597  
 
                       
 
                               
Earnings per share:
                               
Basic earnings per share
  $ 0.18     $ 0.18     $ 0.19     $ 0.22  
 
                       
Diluted earnings per share
  $ 0.18     $ 0.18     $ 0.19     $ 0.22  
 
                       
 
                               
Weighted average common shares outstanding:
                               
- basic
    103,277,889       105,565,241       104,138,905       105,410,772  
- diluted
    104,348,078       106,031,171       105,101,056       105,884,073  
 
                               
OTHER DATA
                               
Free Cash Flow Computation:
                               
EBITDA
  $ 135,440     $ 125,356     $ 237,271     $ 221,765  
Interest, net
    (25,533 )     (20,162 )     (48,936 )     (39,239 )
Current tax expense
    (6,864 )     (2,451 )     (9,465 )     (2,525 )
Preferred stock dividends
    (91 )     (91 )     (182 )     (182 )
Total capital expenditures (1)
    (67,195 )     (30,529 )     (113,753 )     (51,026 )
 
                       
Free cash flow
  $ 35,757     $ 72,123     $ 64,935     $ 128,793  
 
                       
 
(1)   See the capital expenditures detail included in this release for a breakdown by category.
                 
    June 30,   December 31,
    2006   2005
Selected Balance Sheet Data:
               
Cash and cash equivalents
  $ 5,446     $ 19,419  
Working capital
    147,901       93,816  
Total assets
    3,860,519       3,737,079  
Total debt (including current maturities)
    1,797,525       1,576,326  
Total stockholders’ equity
    1,664,535       1,817,482  

 


 

                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2006     2005     2006     2005  
Other Data:
                               
Cash flows provided by operating activities
  $ 121,959     $ 104,882     $ 156,880     $ 129,338  
Cash flows used in investing activities
    108,797       44,236       220,568       124,139  
Cash flows provided by (used in) financing activities
    (14,855 )     49,108       49,715       (30,311 )
 
                               
Reconciliation of Free Cash Flow to Cash Flows Provided by Operating Activities:
                               
Cash flows provided by operating activities
  $ 121,959     $ 104,882     $ 156,880     $ 129,338  
Changes in operating assets and liabilities
    (13,305 )     (392 )     24,478       54,021  
Total capital expenditures
    (67,195 )     (30,529 )     (113,753 )     (51,026 )
Preferred stock dividends
    (91 )     (91 )     (182 )     (182 )
Other
    (5,611 )     (1,747 )     (2,488 )     (3,358 )
 
                       
Free cash flow
  $ 35,757     $ 72,123     $ 64,935     $ 128,793  
 
                       
 
                               
Reconciliation of EBITDA to Net income:
                               
EBITDA
  $ 135,440     $ 125,356     $ 237,271     $ 221,765  
Less:
                               
Non-cash compensation
    2,912             5,910        
Depreciation and amortization
    74,089       71,916       147,267       141,154  
Gain on disposition of assets
    (712 )     (485 )     (2,390 )     (2,443 )
 
                       
Operating Income
    59,151       53,925       86,484       83,054  
 
                               
Less:
                               
Interest income
    (378 )     ( 263 )     (605 )     (715 )
Interest expense
    27,126       21,757       51,969       42,619  
Income tax expense
    14,031       13,687       15,208       17,371  
 
                       
Net income
  $ 18,372     $ 18,744     $ 19,912     $ 23,779  
 
                       

 


 

                         
    Three months ended        
    June 30,        
    2006     2005     % Change  
Reconciliation of Reported Basis to Pro Forma (a) Basis:
                       
Reported net revenue
  $ 287,577     $ 264,743       8.6 %
Acquisitions and divestitures
          4,429          
 
                 
Pro forma net revenue
  $ 287,577     $ 269,172       6.8 %
 
                       
Reported direct advertising and G&A expenses
  $ 142,219     $ 130,313       9.1 %
Acquisitions and divestitures
          2,919          
 
                 
Pro forma direct advertising and G&A expenses
  $ 142,219     $ 133,232       6.7 %
 
                       
Reported outdoor operating income
  $ 145,358     $ 134,430       8.1 %
Acquisitions and divestitures
          1,510          
 
                 
Pro forma outdoor operating income
  $ 145,358     $ 135,940       6.9 %
 
                       
Reported Corporate expenses
  $ 9,918     $ 9,074       9.3 %
Acquisitions and divestitures
                   
 
                 
Pro forma Corporate expenses
  $ 9,918     $ 9,074       9.3 %
 
                       
Reported EBITDA
  $ 135,440     $ 125,356       8.0 %
Acquisitions and divestitures
          1,510          
 
                 
Pro forma EBITDA
  $ 135,440     $ 126,866       6.8 %
 
                 
 
(a)   Pro forma net revenues, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses, and EBITDA include adjustments to 2005 for acquisitions and divestitures for the same time frame as actually owned in 2006.
                 
    Three months ended  
    June 30,  
    2006     2005  
Reconciliation of Outdoor Operating Income to Operating Income:
               
Outdoor Operating income
  $ 145,358     $ 134,430  
Less: Corporate expenses
    (9,918 )     (9,074 )
Non-cash compensation
    (2,912 )      
Depreciation and amortization
    (74,089 )     (71,916 )
Plus: Gain on disposition of assets
    712       485  
 
           
Operating income
  $ 59,151     $ 53,925  
 
           
                                 
    Three months ended     Six months ended  
    June 30,     June 30,  
    2006     2005     2006     2005  
Capital expenditure detail by category
                               
Billboards — traditional
  $ 24,209     $ 22,548     $ 34,393     $ 34,587  
Billboards — digital
    19,024       65       37,051       369  
Logo
    2,348       1,422       3,953       2,807  
Transit
    139       324       353       462  
Land and buildings
    4,286       2,760       11,559       7,330  
Operating equipment
    14,498       3,410       16,676       5,471  
Storm reconstruction
    2,691             9,768        
 
                       
Total capital expenditures
  $ 67,195     $ 30,529     $ 113,753     $ 51,026