Baton Rouge, LA – August 8, 2013 - 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, 2013.
Three Months Results
Lamar reported net revenues of $324.7 million for the second quarter of 2013 versus $304.9 million for the second quarter of 2012, a 6.5% increase. Operating income for the second quarter of 2013 was $70.3 million as compared to $64.5 million for the same period in 2012. Lamar recognized $21.3 million in net income for the second quarter of 2013 compared to a net income of $13.9 million for the second quarter of 2012.
Adjusted EBITDA, (defined as operating income before non-cash compensation, depreciation and amortization and gain on disposition of assets - see reconciliation to net income (loss) at the end of this release) for the second quarter of 2013 was $148.4 million versus $138.2 million for the second quarter of 2012, a 7.3% 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 second quarter of 2013 was $86.7 million as compared to $73.7 million for the same period in 2012, a 17.7% increase.
Pro forma net revenue for the second quarter of 2013 increased 2.7% and pro forma Adjusted EBITDA increased 3.5% as compared to the second quarter of 2012. Pro forma net revenue and Adjusted EBITDA include adjustments to the 2012 period for acquisitions and divestitures for the same time frame as actually owned in the 2013 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 $608.2 million for the six months ended June 30, 2013 versus $571.1 million for the same period in 2012, a 6.5% increase. Operating income for the six months ended June 30, 2013 was $96.2 million as compared to $90.3 million for the same period in 2012. Adjusted EBITDA for the six months ended June 30, 2013 was $258.4 million versus $238.1 million for the same period in 2012. In addition, Lamar recognized net income of $15.2 million for the six months ended June 30, 2013 as compared to a net loss of $8.9 million for the same period in 2012.
Free Cash Flow for the six months ended June 30, 2013 increased 15.9% to $136.7 million as compared to $117.9 million for the same period in 2012.
As of June 30, 2013, Lamar had $361.9 million in total liquidity that consists of $243.0 million available for borrowing under its revolving senior credit facility and approximately $118.9 million in cash and cash equivalents.
Real Estate Investment Trust Update
As previously announced, we are actively considering an election to real estate investment trust (REIT) status and are currently evaluating the steps necessary to implement conversion to a REIT. In conjunction with this review, we submitted a private letter ruling request to the U.S. Internal Revenue Service (the ―IRS‖) in November of 2012 regarding a potential REIT election. As disclosed in June 2013, we have been advised by the IRS that it has decided to study the current legal standards it uses to define ―real estate‖ for purposes of the REIT provisions of the U.S. Internal Revenue Code. We have received no additional information from the IRS to date with respect to the status of our private letter ruling request and the duration of the IRS’s study could delay the issuance of the private letter ruling. Based on current information, we have no reason to conclude that we will not be in a position to convert to a REIT effective for the taxable year beginning January 1, 2014.
Our decision to proceed with a REIT election is 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. We may not ultimately pursue a conversion to a REIT, and we can provide no assurance that a REIT conversion, if completed, will be successfully implemented or achieve the intended benefits.
For the third quarter of 2013 the Company expects net revenue to be approximately $320 million to $323 million. On a pro forma basis this represents an increase of approximately 1% to 2%.
Forward Looking Statements
This press release contains forward-looking statements, including the statements regarding guidance for the third quarter of 2013 and our consideration of an election to 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; (7) the market for our Class A common stock and (8) our ability to qualify as a REIT. 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 risk factors included in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012, as supplemented by any risk factors contained in our Quarterly Reports on Form 10-Q. 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 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 Thursday August 8, 2013 at 10:00 a.m. central time. Instructions for the conference call and Webcast are provided below:
1-334-323-0520 or 1-334-323-9871
Available through Tuesday, August 13, 2013 at 11:59 p.m. eastern time
Live Webcast: www.lamar.com
Webcast Replay: www.lamar.com
Available through Tuesday, August 13, 2013 at 11:59 p.m. eastern time
Keith A. Istre
Chief Financial Officer
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 approximately 60 transit advertising franchises in the United States, Canada and Puerto Rico.