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Lamar Advertising Company : Announces Fourth Quarter and Year End 2011 Operating Results

02/23/2012 | 06:13am US/Eastern
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5321 Corporate Boulevard Baton Rouge, LA 70808 Lamar Advertising Company Announces Fourth Quarter and Year End 2011 Operating Results

Baton Rouge, LA - February 22, 2012 - 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 ended December 31, 2011.

Fourth Quarter Results

Lamar reported net revenues of $288.2 million for the fourth quarter of 2011 versus $275.7 million for the fourth quarter of
2010, a 4.6% increase. Operating income for the fourth quarter of 2011 was $45.9 million as compared to $32.8 million for the same period in 2010. Lamar recognized $6.4 million in net income for the fourth quarter of 2011 compared to a net loss of $7.1 million for the fourth quarter of 2010.
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 fourth quarter of 2011 was
$125.8 million versus $115.4 million for the fourth quarter of 2010, a 9.1% 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 fourth quarter of 2011 was $63.9 million as compared to $59.2 million for the same period in 2010, a 7.9% increase.
Pro forma net revenue for the fourth quarter of 2011 increased 4.0% and pro forma Adjusted EBITDA increased 8.5% as compared to the fourth quarter of 2010. Pro forma net revenue and Adjusted EBITDA include adjustments to the 2010 period for acquisitions and divestitures for the same time frame as actually owned in the 2011 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.

Twelve Months Results

Lamar reported net revenues of $1,133.5 million for the twelve months ended December 31, 2011 versus $1,092.3 million for the same period in 2010, a 3.8% increase. Operating income for the twelve months ended December 31, 2011 was
$186.4 million as compared to $139.5 million for the same period in 2010. Adjusted EBITDA for the twelve months ended December 31, 2011 was $487.1 million versus $465.2 million for the same period in 2010. There was net income of $8.6 million for the twelve months ended December 31, 2011 as compared to a net loss of $40.1 million for the same period in
2010.
Free Cash Flow for the twelve months ended December 31, 2011 decreased 10.6% to $224.8 million as compared to $251.5 million for the same period in 2010, primarily due to the increase in capital expenditures of $63.6 million over the comparable period in 2010.

Liquidity

As of December 31, 2011, Lamar had $274.1 million in total liquidity that consists of $240.6 million available for borrowing under its revolving senior credit facility and approximately $33.5 million in cash and cash equivalents.

Recent Significant Transactions

Notes Offering. On February 9, 2012, Lamar's wholly owned subsidiary, Lamar Media Corp., closed a private placement of $500 million in aggregate principal amount of 5 7/8% Senior Subordinated Notes due 2022, which resulted in net

proceeds to Lamar Media of approximately $489 million.

Tender Offer. Also, on February 9, 2012, Lamar Media announced the results of the early settlement of its tender offer to purchase, for cash, up to $700 million of its outstanding 6 5/8% Senior Subordinated Notes due 2015, 6 5/8% Senior Subordinated Notes due 2015-Series B and 6 5/8% Senior Subordinated Notes due 2015-Series C (collectively, the "6 5/8% Notes"). As of February 8, 2012, the early settlement date of the tender offer, Lamar Media received tenders in respect of $582.9 million aggregate principal amount of 6 5/8% Notes, $483.7 million of which were accepted for purchase on February 9, 2012 by Lamar Media for a total cash payment (including accrued and unpaid interest up to but excluding February 9, 2012) of $511.6 million. The tender offer will expire at midnight, New York City time, on February 24, 2012, unless extended or earlier terminated.

Guidance

For the first quarter of 2012 the Company expects net revenue to be approximately $264 million. On a pro forma basis this represents an increase of approximately 3%.

Forward Looking Statements

This press release contains forward-looking statements, including the statements regarding guidance for the first quarter of
2012. 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) other factors described in our filings with the Securities and Exchange Commission, including the risk factors in item 1A of our 2011 Annual Report on Form 10-K, 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 Wednesday, February 22, 2012 at 9:00 a.m. central time. Instructions for the conference call and Webcast are provided below:

Conference Call All Callers: 1-334-323-0520 or 1-334-323-9871 Passcode: Lamar Replay: 1-334-323-7226 Passcode: 25176810

Available through Monday, February 27, 2012 at 11:59 p.m. eastern time

Live Webcast: www.lamar.com Webcast Replay: www.lamar.com

Available through Monday, February 27, 2012 at 11:59 p.m. eastern time

Company Contact: Keith A. Istre
Chief Financial Officer
(225) 926-1000
KI@lamar.com

General Information

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.

LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Three months ended Twelve months ended

December 31, December 31,

2011 2010 2011 2010

Net revenues $ 288,239 $ 275,684 $ 1,133,487 $ 1,092,291

Operating expenses (income)

Direct advertising expenses 103,243 100,495 409,052 398,467

General and administrative expenses 48,495 49,283 193,854 188,202

Corporate expenses 10,662 10,522 43,466 40,472

Non-cash compensation 4,312 5,124 11,650 17,839

Depreciation and amortization 78,185 78,579 299,639 312,703

Gain on disposition of assets ( 2,581 ) ( 1,144 ) ( 10,548 ) ( 4,900 )

242,316 242,859 947,113 952,783

Operating income 45,923 32,825 186,374 139,508

Other expense (income)

Loss on extinguishment of debt 226 - 677 17,398

Interest income ( 58 ) ( 177 ) ( 569 ) ( 367 ) Interest expense 41,636 44,726 171,093 186,048

41,804 44,549 171,201 203,079

Income (loss) before income tax 4,119 ( 11,724 ) 15,173 ( 63,571 ) Income tax (benefit) expense ( 2,253 ) ( 4,605 ) 6,623 ( 23,469 )

Net income (loss) 6,372 ( 7,119 ) 8,550 ( 40,102 ) Preferred stock dividends 92 92 365 365

Net income (loss) applicable to common stock $ 6,280 ($ 7,211 ) $ 8,185 ($ 40,467 )

Earnings per share:

Basic income (loss) per share $ 0.07 ($ 0.08 ) $ 0.09 ($ 0.44 )

Diluted income (loss) per share $ 0.07 ($ 0.08 ) $ 0.09 ($ 0.44 )

Weighted average common shares outstanding:

- basic

- diluted

92,976,771

93,171,888

92,491,327

92,959,871

92,851,067

93,173,785

92,261,157

92,673,650

OTHER DATA

Free Cash Flow Computation:

Adjusted EBITDA Interest, net

Current tax expense

Preferred stock dividends

$ 125,839 $ ( 36,881 ) (

( 1,072 ) ( ( 92 ) (

115,384 $

40,194 ) (

150 ) (

92 ) (

487,115 $

152,007 ) (

2,921 ) (

365 ) (

465,150

168,747 )

1,119 )

365 )

Total capital expenditures (1) (

23,888 ) (

15,740

) ( 107,070

) ( 43,452 )

Free cash flow $ 63,906 $ 59,208 $

(1)See the capital expenditures detail included below for a breakdown by category.

Selected Balance Sheet Data:

224,752

December 31,

2011

$ 251,467

December 31,

2010

Cash and cash equivalents

Working capital

Total assets

Total debt (including current maturities) Total stockholders' equity

$ 33,503

95,281

3,427,353

2,158,528

838,998

$ 91,679

155,829

3,648,961

2,409,140

818,523

Three months ended Twelve months ended

December 31, December 31,

2011 2010 2011 2010

Other Data:

Cash flows provided by operating activities

$ 96,116

$ 132,641

$ 318,821

$ 322,820

Cash flows used in investing activities

29,263

16,553

117,255

41,480

Cash flows used in financing activities

75,015

63,036

259,442

302,429

Reconciliation of Free Cash Flow to Cash Flows Provided by

Operating Activities:

Cash flows provided by operating activities

$ 96,116

$ 132,641

$ 318,821

$ 322,820

Changes in operating assets and liabilities

( 5,185 )

( 54,222 )

20,957

( 18,800 )

Total capital expenditures

( 23,888 )

( 15,740 )

( 107,070 )

( 43,452 )

Preferred stock dividends

( 92 )

( 92 )

( 365 )

( 365 )

Other

( 3,045 )

( 3,379 )

( 7,591 )

( 8,736 )

Free cash flow

$ 63,906

$ 59,208

$ 224,752

$ 251,467

Reconciliation of Adjusted EBITDA to Net income (loss):

Adjusted EBITDA

$ 125,839

$ 115,384

$ 487,115

$ 465,150

Less:

Non-cash compensation

4,312

5,124

11,650

17,839

Depreciation and amortization

78,185

78,579

299,639

312,703

Gain on disposition of assets

( 2,581 )

( 1,144 )

( 10,548 )

( 4,900 )

Operating Income

45,923

32,825

186,374

139,508

Less:

N

Reconciliation of Reported Basis to Pro Forma (a) Basis:

Three months ended

December 31,

2011 2010 % Change

Reported net revenue $ 288,239 $ 275,684 4.6% Acquisitions and divestitures - 1,555

Pro forma net revenue $ 288,239 $ 277,239 4.0%

Reported direct advertising and G&A expenses

Acquisitions and divestitures

Pro forma direct advertising and G&A expenses

Reported outdoor operating income

Acquisitions and divestitures

Pro forma outdoor operating income

Reported corporate expenses $ 10,662 $ 10,522 1.3% Acquisitions and divestitures - -

Pro forma corporate expenses $ 10,662 $ 10,522 1.3%

Reported Adjusted EBITDA Acquisitions and divestitures

Pro forma Adjusted EBITDA

(a) Pro forma net revenues, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses and

Adjusted EBITDA include adjustments to 2010 for acquisitions and divestitures for the same time frame as actually owned in 2011.

Reconciliation of Outdoor Operating Income to Operating Income:

Three months ended

December 31,

2011 2010

Outdoor operating income

$

136,501

$

125,906

Less: Corporate expenses

10,662

10,522

Non-cash compensation

4,312

5,124

Depreciation and amortization

78,185

Capital expenditure detail by category

Three months ended Twelve months ended

December 31, December 31,

2011 2010 2011 2010

Billboards - traditional

$

9,514

$

4,165

$

34,425

$

9,506

Billboards - digital

9,169

4,639

41,250

13,214

Logo

2,684

2,296

10,141

8,483

Transit

177

150

817

876

Land and buildings

663

1,810

4,501

2,531

Operating equipment

1,681

2,680

15,936

8,842

Total capital expenditures

$

23,888

$

15,740

$

107,070

$

43,452

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