Lamar Advertising Company Announces Second Quarter 2006 Operating Results.
BATON ROUGE, La. -- 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
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.
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Three months ended
June 30,
2006 2005
------------ ------------
Net revenues $ 287,577 $ 264,743
------------ ------------
Operating expenses (income)
Direct advertising expenses 96,415 86,744
General and administrative expenses 45,804 43,569
Corporate expenses 9,918 9,074
Non-cash compensation 2,912 --
Depreciation and amortization 74,089 71,916
Gain on disposition of assets ( 712 ) ( 485 )
------------ ------------
228,426 210,818
------------ ------------
Operating income 59,151 53,925
Other expense (income)
Interest income ( 378 ) ( 263 )
Interest expense 27,126 21,757
------------ ------------
26,748 21,494
------------ ------------
Income before income tax expense 32,403 32,431
Income tax expense 14,031 13,687
------------ ------------
Net income 18,372 18,744
Preferred stock dividends 91 91
------------ ------------
Net income applicable to common stock $ 18,281 $ 18,653
============ ============
Earnings per share:
-------------------
Basic earnings per share $ 0.18 $ 0.18
============ ============
Diluted earnings per share $ 0.18 $ 0.18
============ ============
Weighted average common shares
outstanding:
- basic 103,277,889 105,565,241
- diluted 104,348,078 106,031,171
OTHER DATA
Free Cash Flow Computation:
---------------------------
EBITDA $ 135,440 $ 125,356
Interest, net ( 25,533 ) ( 20,162 )
Current tax expense ( 6,864 ) ( 2,451 )
Preferred stock dividends ( 91 ) ( 91 )
Total capital expenditures (1) ( 67,195 ) ( 30,529 )
------------ ------------
Free cash flow $ 35,757 $ 72,123
============ ============
(1)See the capital expenditures detail
included in this release for a
breakdown by category.
Six Months Ended
June 30,
2006 2005
------------- -------------
Net revenues $ 540,910 $ 497,572
------------- -------------
Operating expenses (income)
Direct advertising expenses 191,624 171,220
General and administrative expenses 92,118 86,324
Corporate expenses 19,897 18,263
Non-cash compensation 5,910 --
Depreciation and amortization 147,267 141,154
Gain on disposition of assets ( 2,390 ) ( 2,443 )
------------- -------------
454,426 414,518
------------- -------------
Operating income 86,484 83,054
Other expense (income)
Interest income ( 605 ) ( 715 )
Interest expense 51,969 42,619
------------- -------------
51,364 41,904
------------- -------------
Income before income tax expense 35,120 41,150
Income tax expense 15,208 17,371
------------- -------------
Net income 19,912 23,779
Preferred stock dividends 182 182
------------- -------------
Net income applicable to common stock $ 19,730 $ 23,597
============= =============
Earnings per share:
-------------------
Basic earnings per share $ 0.19 $ 0.22
============= =============
Diluted earnings per share $ 0.19 $ 0.22
============= =============
Weighted average common shares
outstanding:
- basic 104,138,905 105,410,772
- diluted 105,101,056 105,884,073
OTHER DATA
Free Cash Flow Computation:
---------------------------
EBITDA $ 237,271 $ 221,765
Interest, net ( 48,936 ) ( 39,239 )
Current tax expense ( 9,465 ) ( 2,525 )
Preferred stock dividends ( 182 ) ( 182 )
Total capital expenditures (1) ( 113,753 ) ( 51,026 )
------------- -------------
Free cash flow $ 64,935 $ 128,793
============= =============
(1)See the capital expenditures detail
included in this release for a
breakdown by category.
June 30, December 31,
Selected Balance Sheet Data: 2006 2005
---------------------------- ------------- -------------
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,
Reconciliation of Reported Basis to Pro
Forma (a) Basis: 2006 2005 % Change
----------------------------------------- -------- -------- ---------
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,
Reconciliation of Outdoor Operating Income to
Operating Income: 2006 2005
--------------------------------------------- -------- --------
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 Six months
ended ended
June 30, June 30,
Capital expenditure detail by
category 2006 2005 2006 2005
--------------------------------- -------- ------- -------- -------
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
-------- ------- -------- -------
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