Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 8, 2007
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)
(Address of principal executive offices and zip code)
(225) 926-1000
(Registrant’s telephone number, including area code)
(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 November 8, 2007, Lamar Advertising Company announced via press release its results for the
quarter ended September 30, 2007. 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 November 8, 2007, reporting Lamar’s financial results for the quarter ended September 30, 2007. |
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: November 8, 2007 | 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 November 8, 2007, reporting Lamar’s financial results for the quarter ended September 30, 2007. |
Exhibit 99.1
5551 Corporate Boulevard
Baton Rouge, LA 70808
Baton Rouge, LA 70808
Lamar Advertising Company Announces
Third Quarter 2007 Operating Results
Third Quarter 2007 Operating Results
Baton Rouge, LA – Thursday, November 8, 2007 — 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 third quarter ended September 30, 2007.
Third Quarter Results
Lamar reported net revenues of $314.3 million for the third quarter of 2007 versus $292.0 million
for the third quarter of 2006, a 7.6% increase. Operating income for the third quarter of 2007 was
$70.4 million as compared to $59.4 million for the same period in 2006. There were net earnings of
$14.5 million for the third quarter of 2007 compared to net earnings of $16.8 million for the third
quarter of 2006.
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 third quarter of 2007 was $150.3
million versus $134.2 million for the third quarter of 2006, a 12.0% 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
third quarter of 2007 was $33.4 million as compared to $32.9 million for the same period in 2006, a
1.5 % increase.
Pro forma net revenue for the third quarter of 2007 increased 7.0% and pro forma EBITDA increased
11.4% as compared to the third quarter of 2006. Pro forma net revenue and EBITDA include
adjustments to the 2006 period for acquisitions and divestitures for the same time frame as
actually owned in the 2007 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.
Nine Months Results
Lamar reported net revenues of $904.7 million for the nine months ended September 30, 2007 versus
$832.9 million for the same period in 2006, an 8.6% increase. Operating income for the nine months
ended September 30, 2007 was $176.5 million as compared to $145.9 million for the same period in
2006. EBITDA increased 12.1% to $416.6 million for the nine months ended September 30, 2007
versus $371.5 million for the same period in 2006. There was net income of $41.7 million for the
nine months ended September 30, 2007 as compared to net income of $36.8 million for the same period
in 2006.
Free Cash Flow for the nine months ended September 30, 2007 was $110.7 million as compared to $97.8
million for the same period in 2006, a 13.2% increase.
Stock Repurchase Program
During the quarter ended September 30, 2007, the Company repurchased 2,810,483 shares of its
Class A common stock for an aggregate purchase price of approximately $143 million. As of
September 30, 2007, the Company had approximately $264 million of authorized repurchase
capacity remaining under its repurchase program. Share repurchases under the program may be
made on the open market or in privately negotiated transactions. The timing and amount of
any shares repurchased is determined by Lamar’s management based on its evaluation of market
conditions and other factors. The repurchase program may be suspended or discontinued at any
time. Any repurchased shares will be available for future use for general corporate and
other purposes.
Senior Subordinated Note Offering
On October 11, 2007, Lamar Media Corp. completed an institutional private placement of $275
million aggregate principal amount of 6 5/8% Senior Subordinated Notes due 2015—Series C (the
“Notes”). A portion of the net proceeds of approximately $256.7 million from the offering of
the Notes was used to repay a portion of the amounts outstanding under Lamar Media’s revolving
bank credit facility. The Notes mature on August 15, 2015 and bear interest at a rate of 6
5/8% per annum, which is payable semi-annually on February 15 and August 15 of each year,
beginning February 15, 2008.
Guidance
For the fourth quarter of 2007 the Company expects net revenue to be between $301 million and
$304 million. On a pro forma basis this represents an increase of between 5% and 6% over the
same period in 2006.
Forward Looking Statements
This press release contains forward-looking statements, including the statements regarding
guidance for the fourth quarter of 2007 and the Company’s ongoing stock repurchase plan.
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; (7) the market
for our Class A common stock and our management’s allocation of working capital to fund our
stock repurchase program as opposed to other uses and (8) 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 Thursday, November
8, 2007 at 10:00 a.m. central 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:
|
44894035 | |
| Available through Monday, November 12, 2007 at 11:59 p.m. eastern time | ||
Live Webcast:
|
www.lamar.com | |
Webcast Replay:
|
www.lamar.com Available through Monday, November 12, 2007 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 and Puerto Rico, logo businesses in 19 states and the
province of Ontario, Canada and over 70 transit advertising franchises in the United States, Canada
and Puerto Rico.
| Company Contact: | Keith A. Istre Chief Financial Officer (225) 926-1000 KI@lamar.com |
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
Net revenues |
$ | 314,253 | $ | 292,038 | $ | 904,663 | $ | 832,948 | ||||||||
Operating expenses (income) |
||||||||||||||||
Direct advertising expenses |
102,121 | 98,550 | 305,673 | 290,174 | ||||||||||||
General and administrative expenses |
50,004 | 48,394 | 147,386 | 140,512 | ||||||||||||
Corporate expenses |
11,854 | 10,881 | 34,992 | 30,778 | ||||||||||||
Non-cash compensation |
6,162 | 6,302 | 21,754 | 12,212 | ||||||||||||
Depreciation and amortization |
74,352 | 76,030 | 220,820 | 223,297 | ||||||||||||
Gain on disposition of assets |
(675 | ) | (7,504 | ) | (2,506 | ) | (9,894 | ) | ||||||||
| 243,818 | 232,653 | 728,119 | 687,079 | |||||||||||||
Operating income |
70,435 | 59,385 | 176,544 | 145,869 | ||||||||||||
Other expense (income) |
||||||||||||||||
Gain on disposition of investment |
— | — | (15,448 | ) | — | |||||||||||
Interest income |
(302 | ) | (374 | ) | (1,046 | ) | (979 | ) | ||||||||
Interest expense |
42,537 | 29,763 | 117,674 | 81,732 | ||||||||||||
| 42,235 | 29,389 | 101,180 | 80,753 | |||||||||||||
Income before income tax expense |
28,200 | 29,996 | 75,364 | 65,116 | ||||||||||||
Income tax expense |
13,675 | 13,157 | 33,620 | 28,365 | ||||||||||||
Net income |
14,525 | 16,839 | 41,744 | 36,751 | ||||||||||||
Preferred stock dividends |
91 | 91 | 273 | 273 | ||||||||||||
Net income applicable to common stock |
$ | 14,434 | $ | 16,748 | $ | 41,471 | $ | 36,478 | ||||||||
Earnings per share: |
||||||||||||||||
Basic earnings per share |
$ | 0.15 | $ | 0.16 | $ | 0.42 | $ | 0.35 | ||||||||
Diluted earnings per share |
$ | 0.15 | $ | 0.16 | $ | 0.42 | $ | 0.35 | ||||||||
Cash dividends declared per share of common stock |
$ | — | $ | — | $ | 3.25 | $ | — | ||||||||
Weighted average common shares outstanding: |
||||||||||||||||
- basic |
96,194,236 | 101,994,265 | 97,676,898 | 103,416,169 | ||||||||||||
- diluted |
97,088,195 | 102,908,772 | 98,478,178 | 104,390,668 | ||||||||||||
OTHER DATA |
||||||||||||||||
Free Cash Flow Computation: |
||||||||||||||||
EBITDA |
$ | 150,274 | $ | 134,213 | $ | 416,612 | $ | 371,484 | ||||||||
Interest, net |
(41,102 | ) | (27,939 | ) | (113,288 | ) | (76,875 | ) | ||||||||
Current tax expense |
(12,206 | ) | (13,488 | ) | (18,916 | ) | (22,953 | ) | ||||||||
Preferred stock dividends |
(91 | ) | (91 | ) | (273 | ) | (273 | ) | ||||||||
Total capital expenditures (1) |
(63,440 | ) | (59,837 | ) | (173,445 | ) | (173,590 | ) | ||||||||
Free cash flow |
$ | 33,435 | $ | 32,858 | $ | 110,690 | $ | 97,793 | ||||||||
| (1) | See the capital expenditures detail included in this release for a breakdown by category. |
| September 30, | December 31, | |||||||
| 2007 | 2006 | |||||||
Selected Balance Sheet Data: |
||||||||
Cash and cash equivalents |
$ | 10,758 | $ | 11,796 | ||||
Working capital |
99,038 | 119,791 | ||||||
Total assets |
4,005,037 | 3,924,228 | ||||||
Total debt (including current maturities) |
2,639,526 | 1,990,468 | ||||||
Total stockholders’ equity |
956,322 | 1,538,533 | ||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
Other Data: |
||||||||||||||||
Cash flows provided by operating activities |
$ | 102,103 | $ | 107,025 | $ | 245,604 | $ | 263,905 | ||||||||
Cash flows used in investing activities |
83,754 | 103,092 | 249,311 | 323,660 | ||||||||||||
Cash flows (used in) provided by financing activities |
(20,159 | ) | (2,440 | ) | 2,849 | 47,275 | ||||||||||
Reconciliation of Free Cash Flow to Cash Flows
Provided by Operating Activities: |
||||||||||||||||
Cash flows provided by operating activities |
$ | 102,103 | $ | 107,025 | $ | 245,604 | $ | 263,905 | ||||||||
Changes in operating assets and liabilities |
(3,448 | ) | (12,920 | ) | 35,009 | 11,558 | ||||||||||
Total capital expenditures |
(63,440 | ) | (59,837 | ) | (173,445 | ) | (173,590 | ) | ||||||||
Preferred stock dividends |
(91 | ) | (91 | ) | (273 | ) | (273 | ) | ||||||||
Other |
(1,689 | ) | (1,319 | ) | 3,795 | (3,807 | ) | |||||||||
Free cash flow |
$ | 33,435 | $ | 32,858 | $ | 110,690 | $ | 97,793 | ||||||||
Reconciliation of EBITDA to Net income: |
||||||||||||||||
EBITDA |
$ | 150,274 | $ | 134,213 | $ | 416,612 | $ | 371,484 | ||||||||
Less: |
||||||||||||||||
Non-cash compensation |
6,162 | 6,302 | 21,754 | 12,212 | ||||||||||||
Depreciation and amortization |
74,352 | 76,030 | 220,820 | 223,297 | ||||||||||||
Gain on disposition of assets |
(675 | ) | (7,504 | ) | (2,506 | ) | (9,894 | ) | ||||||||
Operating Income |
70,435 | 59,385 | 176,544 | 145,869 | ||||||||||||
Less: |
||||||||||||||||
Gain on disposition of investment |
— | — | (15,448 | ) | — | |||||||||||
Interest income |
(302 | ) | (374 | ) | (1,046 | ) | (979 | ) | ||||||||
Interest expense |
42,537 | 29,763 | 117,674 | 81,732 | ||||||||||||
Income tax expense |
13,675 | 13,157 | 33,620 | 28,365 | ||||||||||||
Net income |
$ | 14,525 | $ | 16,839 | $ | 41,744 | $ | 36,751 | ||||||||
| Three months ended | ||||||||||||
| September 30, | ||||||||||||
| 2007 | 2006 | % Change | ||||||||||
Reconciliation of Reported Basis to Pro Forma (a) Basis: |
||||||||||||
Reported net revenue |
$ | 314,253 | $ | 292,038 | 7.6 | % | ||||||
Acquisitions and divestitures |
— | 1,763 | ||||||||||
Pro forma net revenue |
$ | 314,253 | $ | 293,801 | 7.0 | % | ||||||
Reported direct advertising and G&A expenses |
$ | 152,125 | $ | 146,944 | 3.5 | % | ||||||
Acquisitions and divestitures |
— | 856 | ||||||||||
Pro forma direct advertising and G&A expenses |
$ | 152,125 | $ | 147,800 | 2.9 | % | ||||||
Reported outdoor operating income |
$ | 162,128 | $ | 145,094 | 11.7 | % | ||||||
Acquisitions and divestitures |
— | 907 | ||||||||||
Pro forma outdoor operating income |
$ | 162,128 | $ | 146,001 | 11.0 | % | ||||||
Reported Corporate expenses |
$ | 11,854 | $ | 10,881 | 8.9 | % | ||||||
Acquisitions and divestitures |
— | 224 | ||||||||||
Pro forma Corporate expenses |
$ | 11,854 | $ | 11,105 | 6.7 | % | ||||||
Reported EBITDA |
$ | 150,274 | $ | 134,213 | 12.0 | % | ||||||
Acquisitions and divestitures |
— | 683 | ||||||||||
Pro forma EBITDA |
$ | 150,274 | $ | 134,896 | 11.4 | % | ||||||
| (a) | Pro forma net revenues, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses, and EBITDA include adjustments to 2006 for acquisitions and divestitures for the same time frame as actually owned in 2007. |
| Three months ended | ||||||||
| September 30, | ||||||||
| 2007 | 2006 | |||||||
Reconciliation of Outdoor Operating Income to Operating Income: |
||||||||
Outdoor Operating income |
$ | 162,128 | $ | 145,094 | ||||
Less: Corporate expenses |
(11,854 | ) | (10,881 | ) | ||||
Non-cash compensation |
(6,162 | ) | (6,302 | ) | ||||
Depreciation and amortization |
(74,352 | ) | (76,030 | ) | ||||
Plus: Gain on disposition of assets |
675 | 7,504 | ||||||
Operating income |
$ | 70,435 | $ | 59,385 | ||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
Capital expenditure detail by category |
||||||||||||||||
Billboards — traditional |
$ | 17,581 | $ | 22,682 | $ | 54,674 | $ | 57,151 | ||||||||
Billboards — digital |
35,382 | 25,185 | 76,171 | 62,236 | ||||||||||||
Logo |
2,772 | 2,025 | 7,571 | 5,978 | ||||||||||||
Transit |
517 | 154 | 1,103 | 507 | ||||||||||||
Land and buildings |
3,614 | 6,728 | 22,424 | 18,287 | ||||||||||||
Operating equipment |
3,574 | 2,607 | 11,502 | 19,283 | ||||||||||||
Storm reconstruction |
— | 456 | — | 10,148 | ||||||||||||
Total capital expenditures |
$ | 63,440 | $ | 59,837 | $ | 173,445 | $ | 173,590 | ||||||||